Perseus Mining FY24 Results: Record Revenue, Increased Dividend & Share Buyback

• Persues Mining records FY24 revenue of US$1.026 billion, up 7% year-over-year.
• EBITDA increased by 13% to US$625.2 million, with profit after tax up 14% to US$364.8 million.
• The company increased its final dividend to A$0.0375 per share, bringing FY24 total to A$0.05 per share
• PRU  also announced a New A$100 million on-market share buyback program over the next 12 months providing an additional mechanism to return capital to shareholders.
• Perseus Mining ends June 2024 with a strong balance sheet of US$587.0 million in cash and bullion and zero debt.

Perseus Mining Limited (ASX:PRU) is an African-focused gold producer with a strong track record of operational excellence and financial performance. With three operating gold mines across Ghana and Côte d'Ivoire, Perseus has established itself as a reliable mid-tier gold producer in West Africa. The company is committed to sustainable mining practices and creating value for all stakeholders, including shareholders, employees, and host communities.

Record Financial Results Underscore Operational Strength

Perseus Mining has reported exceptional financial results for the fiscal year ending June 30, 2024 (FY24), demonstrating the company's ability to capitalize on favorable gold prices and maintain operational efficiency across its portfolio of assets.

Revenue for FY24 reached a record US$1.026 billion, representing a 7% increase from the previous year. This growth was primarily driven by higher gold prices, which offset a slight decrease in production volumes at the Edikan and Yaouré mines. The company's strategic focus on cost management and operational optimization has paid dividends, with earnings before interest, tax, depreciation, and amortization (EBITDA) surging 13% to US$625.2 million.

Profit after tax also saw a significant boost, climbing 14% to US$364.8 million. This translates to basic earnings per share of US$0.236 cents, up 12% year-over-year. The impressive financial performance has resulted in an attractive earnings yield of 13.3% and a price-to-earnings (P/E) ratio of 7.5, highlighting the company's value proposition for investors.

Strong Cash Flow Generation & Robust Balance Sheet

Perseus's operational excellence is further reflected in its strong cash flow generation. Net cash flow from operating activities remained robust at US$429.2 million, representing a slight increase of 1% from the previous year. On a per-share basis, this equates to US$0.313 cents, resulting in a price-to-operating cash flow (P/OCF) ratio of 5.7.

The company's balance sheet remains exceptionally strong, with net tangible assets of US$1.2 billion or US$0.89 per share. Perseus ended the fiscal year with a substantial cash and bullion balance of US$587.0 million and zero debt, providing significant financial flexibility for future growth initiatives and shareholder returns.

Enhanced Capital Returns to Shareholders

In recognition of its strong financial position and commitment to delivering value to shareholders, Perseus has announced two significant capital return initiatives:

• Increased Dividend: The Board has declared a final unfranked dividend of A$0.0375 per share for FY24. This brings the total dividend for the year to A$0.05 per share, representing a 2.1% yield based on the company's 20-day volume-weighted average price at June 30, 2024. This marks a substantial increase from previous years, reflecting management's confidence in the company's financial stability and future prospects.
• Share Buyback Program: Perseus has unveiled plans for an on-market share buyback program of up to A$100 million over the next 12 months. This initiative demonstrates the company's belief that its shares represent good value at current market prices and provides an additional mechanism to return capital to shareholders.

These capital return initiatives bring Perseus's total shareholder returns since August 2021 to A$268 million, underscoring the company's commitment to creating value for its investors.

Operational Highlights and Future Outlook

While the financial results take center stage, Perseus's operational performance remains solid across its three producing mines:

• Yaouré Gold Mine: Produced 116,478 ounces in the June 2024 half-year with an All-in Site Cost (AISC) of US$1,103 per ounce.
• Sissingué Gold Mine: Delivered 35,489 ounces at an AISC of US$1,578 per ounce.
• Edikan Gold Mine: Contributed 96,433 ounces with an AISC of US$999 per ounce.

Looking ahead, Perseus has maintained its production and cost guidance for the December 2024 half-year. The company expects to produce between 220,000 and 260,000 ounces of gold across its three operations, with group AISC ranging from US$1,230 to US$1,330 per ounce. Management reports that as of mid-September 2024, Perseus is on track to comfortably achieve these targets for both the half-year and the full 2024 calendar year.

Investing in Future Growth

While Perseus is focused on rewarding shareholders in the near term, the company is also strategically positioning itself for future growth. Management has highlighted several potential capital investment opportunities, including development of the Nyanzaga Gold Project in Tanzania, advancement of the CMA Underground Project in Côte d'Ivoire, and possible investment in the Meyas Sand Gold Project in Sudan. These projects represent significant opportunities for Perseus to expand its production profile and geographical diversification, potentially enhancing long-term shareholder value.

Commitment to Sustainability & Social Responsibility

Perseus Mining continues to demonstrate its commitment to sustainable and responsible mining practices. In FY24, the company made significant strides in improving its environmental, social, and governance (ESG) performance:

• Improved safety performance with a 12% reduction in the Total Recordable Injury Frequency Rate (TRIFR)
• Contributed approximately US$717 million to the economies of Ghana and Côte d'Ivoire
• Maintained high levels of local employment (96%) and procurement (89%)
• Recorded zero significant environmental events and only one significant community event
• Invested US$3.6 million in community development initiatives

These efforts underscore Perseus's dedication to maintaining its social license to operate and creating lasting positive impacts in its host communities.

Key Takeways

For investors looking at Perseus Mining, the company presents a compelling investment case:

• Strong Financial Performance: Record revenue, increasing profitability, and robust cash flow generation demonstrate Perseus's ability to capitalize on favorable market conditions and operational efficiencies.
• Attractive Shareholder Returns: The increased dividend and new share buyback program highlight management's commitment to returning value to shareholders while maintaining a strong balance sheet.
• Growth Potential: With a pipeline of development projects and exploration opportunities, Perseus is well-positioned for future growth and production expansion.
• Operational Excellence: Consistent performance across its three operating mines and a track record of meeting production guidance inspire confidence in the company's operational capabilities.
• ESG Focus: Perseus's commitment to sustainable mining practices and community development aligns with the growing importance of ESG considerations for investors.
• Strong Balance Sheet: Zero debt and a substantial cash position provide financial flexibility for growth initiatives and buffer against potential market volatility.
• Favorable Market Position: As a mid-tier gold producer in West Africa, Perseus offers exposure to a region with significant geological potential and established mining jurisdictions.

In conclusion, Perseus Mining presents an attractive opportunity for investors seeking exposure to the gold sector through a financially robust, operationally sound, and growth-oriented company. The combination of strong current performance, commitment to shareholder returns, and clear avenues for future growth make Perseus a noteworthy consideration for both value and growth-oriented investors in the precious metals space.

As with any investment in the mining sector, potential investors should consider the inherent risks associated with commodity price fluctuations, geopolitical factors, and operational challenges. However, Perseus Mining's track record of navigating these challenges and delivering value to shareholders positions it as a standout player in the gold mining industry.