Perseus Mining Grows Cash & Bullion Holdings to $827 Million on Continued Operational Excellence

• Perseus demonstrated strong operational performance by delivering 121,237 ounces at $1,417 per ounce all-in sustaining costs, generating $1,560 per ounce margins, for the June quarter.
• The company maintains a robust financial position with strong cash flows and balance sheet strength while consistently beating cost guidance over multiple years.
• Perseus has built a compelling growth pipeline through the Nyanzaga project in Tanzania, which is set for January 2027 production with potential for significant mine life extension through underground development.
• The company employs strategic hedging with a dynamic approach that provides downside protection while maintaining upside exposure in the current high gold price environment.
• Perseus has established a proven track record, with their five-year outlook demonstrating sustainable 500,000+ ounce annual production combined with disciplined cost management across African operations.

Perseus Mining's Recent Performance

Perseus Mining Limited stands as one of Australia's most successful African-focused gold producers, operating three mines across the continent with a development project and multiple exploration properties. Under CEO Jeff Quartermaine's leadership, the company has established itself as a reliable producer capable of generating substantial margins in challenging operating environments.

The company's latest quarterly results underscore this operational excellence.

"We've produced 121,237 ounces for the quarter at an all-in-site cost of $1,417 an ounce. Now, with a gold price of around $3,000 an ounce, that's giving us $1,560 US dollars per ounce margin."

For the full financial year ending June 30, Perseus achieved production of 496,551 ounces - approaching their 500,000-ounce annual target - at a weighted average all-in sustaining cost of $1,235 per ounce. With average gold prices achieved during the period, this translated to margins of approximately $1,308 per ounce, demonstrating the company's ability to generate substantial cash flows.

This performance represents more than just a single strong year. Perseus has consistently delivered operational excellence, with Quartermaine noting it's "becoming a little repetitive" to report such strong results quarter after quarter. The consistency of these results, achieved across multiple African jurisdictions, speaks to the company's operational capabilities and management expertise.

Interview with Managing Director & CEO, Jeff Quartermaine

Production Guidance & Cost Management

One of Perseus Mining's most impressive characteristics is its disciplined approach to cost management and conservative guidance practices. The company has a proven track record of beating its own cost estimates, consistently delivering results below the bottom end of their guided ranges.

"We guided the market and production to 469,709 to 505,000 ounces, finishing at 496.5. We're about in the 75% range of that guidance. On the other hand, we guided costs at $1,250 to $1,280 an ounce and a finish below the bottom end of the cost range."

The CEO presented compelling historical data showing that Perseus has consistently delivered costs below their guided ranges since 2019, despite facing inflationary pressures and rising gold prices that impact certain cost components. "You can see that in the last few years we've been consistently delivering under the guided range for a variety of reasons," he noted.

Perseus achieves cost control through continuous operational improvements and technological advances. Recent examples include implementing new modeling software for pit optimization, which has resulted in more efficient blasting, less dilution, and better breakage. The company has also upgraded explosive materials, leading to improved breakage and better recoveries when material passes through the mill.

While some costs remain outside management's control, such as freight costs affected by Middle Eastern conflicts, salary increases, and gold price-linked royalties, Perseus focuses intensively on controllable elements. Quartermaine stated:

"There is always going to be some measure of inflation and the challenge that you have is to try to minimise that by introducing efficiencies into your business."

The company's cost profile over the past five years demonstrates this discipline, with all-in sustaining costs remaining relatively static while gold prices have risen substantially, creating expanding margins for shareholders.

Hedging Strategies in a Volatile Market

Perseus Mining's approach to hedging reflects sophisticated risk management rather than speculation on gold price direction. The company's hedging strategy is specifically designed to provide downside protection while preserving upside opportunity, all while maintaining balance sheet strength.

"Our hedging program is quite specifically designed to provide us downside protection, but give us as much upside opportunity as we can have, but at the same time, not break the bank."

This approach recognizes hedging as one component of broader capital allocation decisions that include growth funding and shareholder returns.

The company has evolved its hedging instruments based on market conditions. Previously relying on forward sales contracts, Perseus shifted to zero-cost collars (selling call options to fund put option purchases) as market conditions changed. More recently, with rising gold prices making option costs more favorable, the company has been able to purchase more put options relative to calls sold.

Currently, Perseus maintains 135,000 ounces in forward sales but holds 160,000 ounces worth of put options at $2,600 per ounce. This structure provides protection if gold falls below $2,600 while maintaining upside exposure until call options are exercised above $3,600. The company has strategically reduced its hedge coverage from 24% to 16% of three-year production, increasing upside exposure in the current high gold price environment.

Quartermaine emphasized the dynamic nature of successful hedging: "The management of a hedge book is a dynamic thing. It is not set and forget." This active management approach, combined with centralized treasury functions, allows Perseus to adapt its risk management strategies as market conditions evolve.

The CEO's experience-based perspective on hedging adds credibility:

"When you're as old as I am, you can remember those days when in fact the gold price goes down. I know it hasn't gone down for a few years, but it does go down from time to time and that's something that we're very mindful of."

Five-Year Outlook & Future Growth Plans

Perseus Mining recently published a five-year outlook addressing market misconceptions about the company's future production profile. Contrary to concerns about a "cliff" in production, the outlook demonstrates sustained production levels above 500,000 ounces annually through most of the period.

"There was a school of thought out there - an ill-informed school of thought I might say - that Perseus was going to be falling off a cliff... I can tell you absolutely that that is not the case," Quartermaine stated emphatically. The five-year projection, based 93% on JORC-compliant ore reserves, shows production maintaining strong levels through fiscal 2030.

A temporary dip in fiscal 2026 to 400,000-440,000 ounces at all-in sustaining costs of $1,460-$1,620 per ounce results from deferring the Meyas Sand project in Sudan. However, the Nyanzaga project in Tanzania more than compensates, with production recovering to strong levels by fiscal 2027.

The outlook represents a baseline rather than a ceiling. "If you think that this is all we will do, then you're denying history," Quartermaine noted, referencing Perseus's track record of acquiring four companies since 2015 and consistently growing through brownfield exploration and strategic acquisitions.

The company plans to expand beyond this baseline through multiple avenues: continued exploration adjacent to existing infrastructure, strategic acquisitions of development or producing assets, and an ambitious new greenfield exploration program.

"We are giving a lot of serious thought to that at the present time and we've identified a number of places where we would like to get going."

Perseus is also evaluating pit expansions at existing operations using higher gold price assumptions. Originally optimized at $1,300-$1,400 per ounce, these pits could be expanded using $1,800 per ounce assumptions, adding incremental ounces despite higher per-ounce costs.

Nyanzaga Project Update & Community Engagement

The Nyanzaga project in Tanzania represents Perseus's most significant near-term growth catalyst, with production scheduled to commence in January 2027. The project exemplifies Perseus's commitment to community engagement and operational excellence from the development stage.

Following the Final Investment Decision in April 2025, Perseus has made substantial progress.

"We took the FID in April 2025. We started work on the ground... working on the relocation housing camps. Many of the organizational structures that will serve the mine when it's in full steam production are being set up now as we speak"

The company has spent approximately $64 million of the $500+ million budget, including $40 million in physical expenditures and $24 million in commitments.

Community relations remain central to the project's success. Perseus is constructing replacement housing for residents whose homes occupy the mine site area, ensuring people maintain their current quality of life including electricity and other amenities. "Whatever people have enjoyed in the past they will enjoy in the future," the CEO assured.

The company's approach extends beyond housing to respecting cultural norms, including careful relocation of cemeteries and other culturally significant sites. This comprehensive community engagement has yielded positive results:

"The cooperation that we've received from the Tanzanian government has been absolutely first class and from our host communities has been really good as well."

Perseus's operational readiness approach distinguishes Nyanzaga from typical development projects. Rather than waiting until near production to establish operational systems, the company is implementing safety systems, human resources, community relations, and security infrastructure immediately.

This comprehensive preparation positions Nyanzaga for smooth production startup, with potential for mining to commence earlier than originally planned—possibly January 2026 rather than April 2026.

Drilling Results & Potential for Mine Life Extension

Recent drilling results at Nyanzaga demonstrate significant potential for extending mine life beyond the current 11-year projection based on initial resource estimates. The second phase drilling program has yielded "spectacular hits" that could substantially enhance the project's economics. Quartermaine noted:

"We put out these results the other day from the second phase of drilling and you can see that, running your eye down that list, that there are some very spectacular hits that we've achieved through that drilling program."

The drilling has identified mineralization in two key areas. First, extensions at the bottom of the proposed open pit could extend open pit mine life significantly beyond 11 years while maintaining favorable strip ratios. Second, and perhaps more importantly, drilling has intersected substantial mineralization well below the proposed pit shell, suggesting excellent potential for underground mining.

"We've also picked up a number of intercepts from mineralisation that is well below the bottom of the proposed pitch shell. And those intercepts... give cause to believe that the opportunity for mining using underground techniques at depth are excellent as well."

While emphasizing that underground resources have not yet been declared as reserves, Quartermaine expressed confidence in the potential:

"The early stage drilling says to us is that this is some very, very decent mineralisation here and we must follow that up."

The underground potential could fundamentally alter Nyanzaga's development strategy. Rather than deepening the open pit through expensive waste stripping, Perseus might transition to underground mining partway through the pit's life, potentially extending total mine life well beyond the current 11-year projection.

Perseus plans to release an updated reserve statement in the first quarter of 2026, which should increase reserves from current levels and provide clarity on the underground opportunity. This update could significantly enhance Nyanzaga's already attractive economics.

CMA Underground Development Progress

The CMA underground project at Perseus's Edikan operation represents the company's entry into underground mining, positioning it as Côte d'Ivoire's first underground gold operation. While facing recent regulatory delays, the project demonstrates strong physical progress and readiness.

"From a physical point of view, we're going very well. We've identified the locations of the various declines that we're seeking to install. And we've got everything marked out and we're moving forward on these things."

Infrastructure development has progressed substantially, with water and power services in place, ventilation equipment ordered, and administrative facilities nearing completion. The company expects to hand over mining services buildings and facilities around August 2025.

Recent regulatory complications have temporarily delayed portal cutting, with bureaucratic requirements shifting from ministerial to presidential approval levels. However, Perseus maintains close cooperation with government officials to resolve these issues.

"We're actually working very well together with the government people to get that signed off and allow us to start to cut those portals."

The underground ore body grades match those of the current open pit, as it represents the same geological structure at depth. However, underground production capacity will not fully supply the mill, requiring blending with lower-grade material from the Yaouré open pit.

This blending strategy will reduce average production at the Yaouré complex from approximately 250,000 ounces annually over the past four years to 170,000-180,000 ounces annually for the next 10-11 years. While representing a production decrease, the underground component provides higher-grade ore that enhances overall economics while extending mine life significantly.

Exploration & Growth Strategies

Perseus Mining's growth strategy balances near-term opportunities with long-term sustainability through diversified exploration and acquisition approaches. The company recognizes that current high gold prices make acquisitions expensive, prompting renewed focus on organic growth through exploration.

"At this particular time where gold prices are fairly high, the cost of acquiring anything is very high and it does cause you to pause and reflect and think about the return on funds employed."

The company is embarking on an ambitious greenfield exploration program designed to deliver new mines within a 10-year timeframe. "We are giving a lot of serious thought to that at the present time and we've identified a number of places where we would like to get going and our teams are starting to get themselves organised to begin that greenfield process," the CEO revealed.

This long-term exploration commitment complements continued brownfield exploration near existing infrastructure, where Perseus can leverage established facilities and expertise to develop satellite deposits cost-effectively.

The company also evaluates opportunities to extend existing operations through pit expansions using higher gold price assumptions. Originally optimized at $1,300-$1,400 per ounce, several pits could justify expansion at $1,800 per ounce, despite higher incremental costs.

Perseus's growth philosophy centers on maximizing cash flow generation. "At the end of the day, it's almost like a back solving problem. How do we maximise cash flow? What do we need to do to generate as much cash as we can possibly do?" Quartermaine explained.

This cash flow focus reflects Perseus's stakeholder-oriented mission:

"Our mission as a company is to generate benefits for all stakeholders in fair and equitable proportions."

Cash generation enables tax and royalty payments to governments, community investments, employee compensation, and shareholder returns.

The company's track record supports confidence in its growth capabilities. Since 2015, Perseus has acquired four companies while consistently growing through exploration and operational improvements. This historical performance suggests the five-year outlook represents a conservative baseline rather than a growth ceiling.

Investment Thesis for Perseus Mining

• Operational Excellence: Proven track record of beating cost guidance while maintaining consistent production above 480,000 ounces annually across multiple African jurisdictions
• Strong Margins: Current all-in sustaining costs of ~$1,235/oz generate substantial margins at current gold prices, with disciplined cost management demonstrated over five years
• Growth Catalyst: Nyanzaga project delivers 500,000+ ounce production baseline from 2027, with significant upside potential from mine life extensions and underground development
• Financial Strength: Strong balance sheet supports growth investments while maintaining shareholder returns through dividends and share buybacks
• Strategic Positioning: Diversified African portfolio provides jurisdiction risk mitigation while capturing growth in underexplored regions
• Management Quality: Experienced leadership team with proven ability to deliver projects on time and budget while maintaining strong community and government relationships
• Hedging Sophistication: Dynamic risk management approach provides downside protection while preserving upside exposure in current gold price environment

Perseus Mining presents a compelling investment opportunity combining operational excellence with significant growth potential. The company's consistent delivery of strong margins, conservative guidance practices, and disciplined capital allocation create a foundation for sustained shareholder value creation. With the Nyanzaga project providing substantial production growth from 2027 and potential mine life extensions offering additional upside, Perseus appears well-positioned to capitalize on favorable gold market conditions while managing operational and financial risks effectively.

The company's African focus, once viewed as a discount factor, increasingly appears as a competitive advantage in accessing high-quality, underexplored gold resources. Combined with management's proven track record and commitment to all stakeholders, Perseus Mining offers investors exposure to a well-managed, growing gold producer with multiple catalysts for value creation.

Macro Thematic Analysis

Perseus Mining's investment appeal is amplified by several converging macro themes reshaping the gold mining sector. The sustained elevation in gold prices reflects central bank diversification away from dollar reserves, persistent inflation concerns, and geopolitical tensions driving safe-haven demand. Unlike previous gold bull markets driven primarily by Western investment flows, current demand features substantial central bank purchases from emerging economies, creating more durable price support.

Africa's emergence as the world's fastest-growing gold-producing region positions Perseus advantageously within this macro shift. While traditional mining jurisdictions face resource depletion and regulatory challenges, Africa offers vast underexplored territories with world-class geology. Countries like Tanzania, Côte d'Ivoire, and Ghana are increasingly sophisticated in their approach to mining development, offering attractive fiscal terms while demanding higher environmental and social standards - areas where Perseus excels.

The global mining industry's capital discipline, learned from previous boom-bust cycles, means fewer new projects are advancing to production despite strong gold prices. This supply constraint supports sustained margins for existing producers like Perseus. Additionally, the industry's increased focus on environmental, social, and governance (ESG) criteria favors companies with strong community relationships and operational track records - key Perseus differentiators.

Technology adoption in African mining is accelerating, enabling companies like Perseus to achieve First World operational standards while benefiting from lower input costs. The company's embrace of advanced pit optimization software, blasting technologies, and operational systems demonstrates how technology can overcome traditional African mining challenges.

Finally, the growing recognition that gold offers portfolio diversification benefits in an era of elevated geopolitical risk supports continued institutional investment in the sector, particularly favoring established producers with growth profiles like Perseus Mining.