Perseus Sees Higher Output as Edikan Returns to Normal

Perseus Mining Ltd., an Australian gold producer with operations in Ghana and the Ivory Coast, expects to boost output next fiscal year as it accelerates expansion and production returns to normal at its Edikan mine.

Annual production may increase to more than the 265,000 ounces estimated for the current fiscal year ending June 30, Chief Financial Officer Jeff Quartermaine, who will replace Mark Calderwood as chief executive officer next month, said yesterday in a phone interview from Perth. The company produced 137,297 ounces of gold in the year ended June 30, 2012.

“We’re looking at ways to produce even more gold than what we have previously stated” by optimizing the Edikan mine in Ghana, said Quartermaine. More detailed guidance will be given after an evaluation in the next few months, he said.

Gold producers are expanding mines and boosting output to cope with rising costs and benefit from prices that have increased for 12 consecutive years. Spot gold prices gained 7 percent last year as Asian demand rose and central banks boosted purchases.

Perseus shares fell to their lowest in more than 2 1/2 years on Jan. 22 after production dropped 3 percent in the last quarter due to several equipment failures at Edikan. The problem is being rectified and it expects to resume normal production in the June quarter, said Quartermaine. The stock fell 0.5 percent to A$1.925 in Sydney trading today.

Perseus also expects to start the suspended Sissingue project in Ivory Coast by the middle of this year once the government clarifies the changes in its mining policy, he said.

Over the longer term, Perseus intends to have a third project that would add at least 150,000 ounces of new capacity a year, he said.

“In an ideal world, what we would like to do is in 2015 or 2016 be able to add an income stream, so that’s a third project or operation,” said Quartermaine. “What we are unlikely to do is to do an M&A activity with an existing producer.”

(Company corrects to clarify growth plans in last paragraph of story originally published Jan. 24.)
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