Macquarie's Broker Report on Perseus Mining - Key Findings

This broker report on Perseus Mining has been compiled as a summary of Macquarie’s findings. It is not intended as financial or investment advice. Crux Investor does not own any shares in Perseus Mining or stand to benefit from any change in the company's share price. Investors should undertake their own research or consult a financial adviser before making investment decisions.

About Perseus Mining

Perseus Mining Limited is a leading West African gold producer with three operating mines: Edikan in Ghana, and Sissingué and Yaouré in Côte d’Ivoire. Recently, the company expanded its portfolio through the acquisition of Orca Gold, adding 70% ownership of the Meyas Sand Project in Sudan and 80% of the Nyanzaga Project in Tanzania. Perseus is distinguished by its robust balance sheet, strong operational performance, and a forward-thinking growth strategy centered on exploration and project development.

Macquarie's Analysis of Perseus Mining

Solid First Quarter FY25 Performance

Perseus Mining commenced FY25 on a strong note with notable operational and financial outcomes:

• Production Highlights:
  • Gold production totaled 121.3koz, marginally exceeding Macquarie and Visible Alpha (VA) consensus estimates.
  • Performance was consistent across its operating assets.
• Cost Management:
  • All-In Sustaining Costs (AISC) for Q1FY25 were US$1,201/oz, representing an 8-9% improvement over analyst forecasts.
  • The Yaouré mine underwent a planned high-cost stripping phase, which is expected to ease in subsequent quarters.
• Financial Position:
  • Perseus ended the quarter with a cash balance of US$563 million and additional bullion worth US$79 million, reflecting a US$29 million increase from the previous quarter.
  • The company maintains zero debt, bolstering its financial flexibility.

Production & Guidance

Perseus has retained its guidance for the first half of FY25, projecting:

• Production: 220–260koz of gold.
• AISC: US$1,230–1,330/oz.

Macquarie anticipates Perseus to achieve:

• Production of 245koz (top end of guidance).
• AISC of US$1,236 (lower end of guidance), with room for further improvement based on performance at Edikan.

Key Growth Projects

• Nyanzaga Project (Tanzania):
  • Perseus expects the Front-End Engineering Design (FEED) study to be completed by the end of CY24.
  • First gold production has been revised to 3QFY26.
• CMA Underground (Côte d’Ivoire):
  • Development remains aligned with initial timelines.

These projects underpin Perseus's strategic objective of sustaining and enhancing its production profile.

Macquarie's Recommendation

Macquarie maintains an "Outperform" rating for Perseus Mining with a 12-month target price of AUD3.40, offering an estimated 19% total shareholder return (TSR). Key drivers for the recommendation include:

• Strong operational performance and cost efficiencies.
• Robust financial health with substantial cash reserves and no debt.
• Strategic growth projects that provide long-term production and revenue visibility.

Macquarie’s valuation methodology includes:

• A 50:50 blend of 1.3x Net Asset Value (NAV) and 7.0x Operating Cash Flow (OCF).

Conclusion

Perseus Mining is well-positioned to deliver strong shareholder value through disciplined operational execution and strategic project development. With substantial cash reserves, low costs, and an expanding production pipeline, the company is poised for sustained growth. Macquarie’s “Outperform” rating reflects confidence in Perseus's ability to meet guidance and execute its strategic initiatives effectively.