African Gold Producer's Record Cash Position & Clear Growth Strategy

• Perseus Mining reported an exceptional Q3 FY25 performance with cash and bullion reserves reaching US$801 million, zero debt, and an additional US$300 million in undrawn credit facilities.
• The company produced 121,605 ounces of gold at an AISC of US$1,209 per ounce, generating a healthy cash margin of US$1,253 per ounce and notional operating cashflow of US$152 million.
• Post-quarter, Perseus announced a Final Investment Decision (FID) to develop the Nyanzaga Gold Project in Tanzania, set to produce an average of 200,000 ounces per annum from FY28 to FY35, with peak production of 246,000 ounces.
• The company has committed to developing the CMA Underground operation at Yaouré, extending mine life until at least 2035.
• Perseus continues its A$100 million share buyback program while maintaining significant capital for strategic growth initiatives.

Perseus Mining's Quarterly Financial Results

Perseus Mining (ASX/TSX: PRU) has cemented its position as one of West Africa's premier gold producers, with three successful operating mines across Côte d'Ivoire and Ghana. The company's Q3 FY25 results highlight its impressive financial discipline and operational excellence, with cash and bullion balances reaching a record US$801 million.

CEO Jeff Quartermaine described the company's current financial position:

"That sum of money has been accumulated notwithstanding the fact that we've paid high dividends during the course of the quarter and we've also been busily engaged in a share buyback. So it is quite a credible performance. The gold price has certainly been a major contributor to that and we acknowledge that. Although having said that, we are producing across the board at an all-insight cost of $1,209 an ounce, which means that in global terms, we would be towards the bottom end of the cost curve. And in the current gold price environment, our cash margin is well over 100%."

Perseus's production for the quarter totalled 121,605 ounces at a weighted average all-in site cost (AISC) of US$1,209 per ounce. With gold sales averaging US$2,462 per ounce, the company generated an impressive cash margin of US$1,253 per ounce, resulting in notional operating cashflow of US$152 million for the quarter.

The company's financial health is further strengthened by zero debt and an undrawn line of credit of US$300 million, providing substantial financial flexibility for future growth. Additionally, Perseus holds US$111 million in liquid listed securities, including a 17.9% stake in Predictive Discovery Limited.

This robust financial position comes despite the company actively returning value to shareholders through both dividends and an ongoing A$100 million share buyback program, which as of quarter-end was approximately 33% complete with 11,458,975 shares purchased and subsequently canceled.

Interview with Managing Director & CEO, Jeff Quartermaine

Hedging Strategies & Cost Management

Perseus has demonstrated sophisticated financial management through its evolving hedging strategy. As Jeff Quartermaine explained:

"We have actually revised our hedging strategy to the extent that rather than using spot deferred rolling into designated hedges, which has been the preferred method of hedging in the past, what we have been doing in recent times is using zero cost collars."

This approach provides both downside protection and upside potential, with a floor price of approximately US$2,600 per ounce and call options at over US$3,000 per ounce. As Quartermaine noted, "We are getting the benefit of the Gold price between $2,600 and $3,000. So it's not like we're losing all upside here."

At quarter-end, Perseus's hedge position stood at 281,200 ounces at a weighted average sales price of US$2,440 per ounce, providing downside protection for approximately 24% of forecast production over the next three years while leaving 76% exposed to potential gold price increases.

The company has maintained disciplined cost control across its operations. While the group AISC increased slightly to US$1,209 per ounce compared to US$1,127 in the previous quarter, this remains well below the current gold price, ensuring strong margins. Perseus has confirmed its production and cost guidance for the remainder of FY25, targeting 215,000 to 250,000 ounces at an AISC of US$1,360 to US$1,435 per ounce for the June 2025 half-year.

Project Updates: Yaouré & Edikan

The Yaouré Gold Mine in Côte d'Ivoire continues to be Perseus's flagship operation, producing 68,822 ounces of gold during the quarter at an AISC of US$981 per ounce, generating notional operating cashflow of US$99 million. This represents a 3% increase in production compared to the previous quarter, supported by a 4% increase in total ore tonnes milled.

A significant development at Yaouré is the Final Investment Decision to develop the CMA Underground mining operation. Quartermaine highlighted the importance of this project:

"The CMA Underground project will become Côte d'Ivoire's first mechanised underground mine... Based on the current estimate of Ore Reserves, together with Yaouré's open pit ore sources, the CMA Underground project will extend the Yaouré Gold Mine's operational life until at least 2035."

Perseus has appointed Byrnecut, an Australian specialist underground mining contractor, to lead the project. Mobilisation to site has already begun, with surface infrastructure construction progressing well and portal development scheduled to commence in July 2025.

At Edikan in Ghana, production reached 41,668 ounces at an AISC of US$1,177 per ounce, generating notional cashflow of US$57 million. While production was 15% lower than the previous quarter, this reflected planned transitions in mining operations.

"Edikan's Q3 FY25 operating performance reflected the planned ramp-down of mining at the AG and Fetish pits, the transition to Nkosuo operations, and two scheduled mill liner replacements," the company reported. After quarter-end, the current phase of the Fetish Pit was completed, and equipment has been reassigned to Nkosuo, with plans being developed for a future cutback of the Fetish pit.

Nyanzaga Gold Project: Investment Decision & Government Relations

Perhaps the most significant development for Perseus was the announcement, following quarter-end, of the Final Investment Decision to develop the Nyanzaga Gold Project (NGP) in Tanzania. This decision comes after constructive negotiations with the Tanzanian government to amend the Framework Agreement governing the project.

Quartermaine expressed enthusiasm about the project:

"Perseus is very excited by its decision to proceed with the development of the Nyanzaga Gold Project and is looking forward to working alongside the Government of Tanzania to deliver a world class mining operation."

The Nyanzaga project represents a major strategic expansion for Perseus, with planned investment of approximately US$523 million to develop and prepare for operations. The project is expected to produce first gold in Q1 2027, with gold production averaging over 200,000 ounces per annum from FY28 to FY35, and peak production of 246,000 ounces in FY28.

Key metrics for the project include:

• Total gold production of 2.01 million ounces over an 11-year mine life
• Average AISC of US$1,211 per ounce
• Pre-tax NPV10% of US$404 million (US$1,010 million at US$2,700/oz gold price)
• IRR of 26% pre-tax and 19% post-tax (45% pre-tax and 34% post-tax at US$2,700/oz)

Notably, Perseus has opted for a large-scale, wholly open-pit mining operation for the first phase of development, differing from the previous owners' approach of combining smaller open pit and underground operations. This decision maximises resource utilisation and operational efficiency.

The relationship with the Tanzanian government has been carefully cultivated, with Quartermaine noting:

"The government is delighted. And I've got to say that we've worked very carefully with the government from day one and forged strong relationships. What we've sought to do along the way is to ensure that all of the stakeholders get their fair share of the benefits of this project."

Exploration & Future Growth Opportunities

Perseus continues to invest in exploration across its portfolio, with US$11.5 million spent on business growth during the quarter. The company's exploration strategy focuses on both near-mine opportunities to extend existing operations and greenfield exploration to discover new deposits.

At Yaouré, exploration activities focused on drilling at the Yaouré Pit, Zain1 South, Zain2, and Labou prospects. The company reported promising results, noting: "Drilling during the quarter has infilled and extended the mineralisation towards SW, with high grade gold intercepted over economic width."

At Sissingué, drilling beneath the open pit has "confirmed continuity down dip of the high-grade mineralisation," with additional drilling planned. The company is also advancing the Bagoé Exploitation Permit in Côte d'Ivoire, with mining operations scheduled to commence at the Antoinette deposit in Q2 FY26.

Meanwhile, in Tanzania, a new resource development drilling program has commenced at Nyanzaga, comprising 28,795 meters of drilling aimed at converting Inferred to Indicated resources at the Tusker deposit and improving confidence in the Kilimani deposit. Quartermaine emphasised the potential for expanding Nyanzaga beyond the current plan:

"A second phase of resource definition drilling is currently underway at the NGP with the aim of converting Inferred Mineral Resources into Indicated Mineral Resources, which would potentially enable the Ore Reserve to be materially expanded and the life of the NGP operation extended."

Even in Sudan, where political challenges have slowed progress at the Meyas Sand Gold Project, Perseus maintains exploration activities where possible. The company is examining options to advance the project, including potentially updating the Feasibility Study to convert the current foreign Mineral Reserve estimate of 2.85 million ounces into a JORC-compliant Ore Reserve.

Operational Flexibility & Risk Management

A key strength of Perseus is its operational flexibility and risk management approach. The company has demonstrated adaptability in responding to various challenges, from geopolitical issues to resource variability.

Quartermaine highlighted the company's approach to capital allocation in mine development:

"We can look at a situation and say, 'we can do this or we can do that'. Now, does this way generate a better outcome in terms of operability? And if it does, if we can demonstrate that it is going to generate a superior return, then we do the that, even if it does cost a little bit more now. We've learned that spending a little bit of money during the development phase quite often pays very, very big bonuses down the track."

This philosophy is evident in the company's approach to the Nyanzaga project, where it has opted for a large-scale open pit to maximise resource utilisation rather than the previous owners' smaller pit with underground development. Similarly, at Yaouré, the accelerated waste stripping program undertaken in Q1 FY25 has enabled increased ore mining and reduced AISC in subsequent quarters.

The company also maintains strict cost controls, with Quartermaine emphasising:

"We are putting in place very, very stringent controls from day one. And we have very clear processes that need to be followed in order to be able to invest in certain aspects of the job. We know precisely what we're going to be doing and there are very good control mechanisms in place."

Perseus's geographical diversification across multiple West African countries provides another layer of risk mitigation, allowing the company to balance political and operational risks across different jurisdictions.

Investment Thesis for Perseus Mining

• Financial Strength: With US$801 million in cash and bullion, zero debt, and an additional US$300 million in undrawn credit facilities, Perseus has unmatched financial flexibility among mid-tier gold producers.
• Production Growth: The development of Nyanzaga and CMA Underground will maintain the company's production target of 500,000-600,000 ounces per annum well beyond the end of this decade, providing long-term production visibility.
• Margin Stability: Perseus's focus on cost control and operational efficiency, combined with its hedging strategy, helps maintain strong margins even in volatile gold price environments.
• Value Creation Track Record: Management has demonstrated the ability to identify, acquire, and develop assets successfully, as evidenced by the performance of Yaouré and the strategic acquisition and planned development of Nyanzaga.
• Shareholder Returns: The company's dividend payments and share buyback program demonstrate a commitment to returning value to shareholders while maintaining growth capital.

Perseus Mining has established itself as one of the premier gold producers on the African continent, with a clear strategy for sustainable growth. As CEO Jeff Quartermaine stated, "The addition of a high-quality, long-life gold mine such as the Nyanzaga Gold Mine to Perseus's existing asset portfolio, that currently includes the Yaouré, Sissingué and Edikan gold mines, as well as the undeveloped Meyas Sand Gold Project, represents a significant upgrade for Perseus and is consistent with the Company's strategy for building a sustainable, geopolitically diversified but African-focused gold business."

Gold Market Outlook: A Favorable Macro Environment

The global macroeconomic environment provides a supportive backdrop for Perseus Mining's growth strategy. Gold prices have shown remarkable strength, trading above US$2,400 per ounce during recent quarters, significantly higher than the company's average AISC of US$1,209 per ounce.

This price environment is driven by several factors that are likely to persist in the medium term. Central banks globally continue to accumulate gold as a reserve asset, with purchases reaching record levels in recent years. This trend reflects growing concerns about currency debasement, inflation risks, and geopolitical instability.

Geopolitical tensions, including conflicts in Ukraine and the Middle East, have enhanced gold's appeal as a safe-haven asset. Additionally, the persistent uncertainty around global economic growth, particularly in major economies like China, continues to support investment demand for gold.

Inflation concerns, despite some moderation, remain on investors' radars. Even as central banks have raised interest rates to combat inflation, real interest rates (nominal rates minus inflation) have often remained negative or low in historical terms, reducing the opportunity cost of holding gold.

These factors have contributed to gold's strong performance, which directly benefits Perseus's margins. The company's decision to maintain exposure to gold price upside while implementing strategic hedging for downside protection appears well-calibrated to this environment.

With its low-cost production profile, Perseus is exceptionally well-positioned to capitalize on continued strength in gold prices while maintaining resilience should prices moderate.

For investors seeking exposure to gold with the potential for both growth and returns, Perseus Mining represents a compelling opportunity in the current macro environment.