Unlocking Value in African Gold Mining - Perseus Mining's Strategic Approach

• Perseus Mining has transformed from a junior exploration company into the third-largest gold company listed on the ASX, with a multi-mine, multi-jurisdictional portfolio focused on the African continent.
• Operating in Africa requires an open-minded, flexible, disciplined, and resilient approach, focusing on running the business well and adhering to the company's core values.
• Perseus Mining prioritises obtaining and maintaining a social license to operate by making meaningful contributions to host communities and empowering local people to make decisions for their communities.
• The company believes in a balance between organic growth through exploration and strategic acquisitions of pre-development assets, leveraging their financial capabilities, engineering skills, and development expertise.
• Perseus Mining is committed to empowering local professionals, transferring skills to the countries in which they operate, and generating material benefits for all stakeholders in fair and equitable proportions.

Introduction

The African continent, with its vast mineral wealth and untapped potential, presents both significant opportunities and unique challenges for gold mining companies. Success in this complex environment requires more than technical expertise and financial resources; it demands a nuanced understanding of local cultures, a commitment to sustainable practices, and the ability to navigate intricate geopolitical landscapes.

Perseus Mining (ASX: PRU) has emerged as a standout performer in this challenging arena, demonstrating how a well-executed strategy can unlock substantial value in African gold mining. The company's journey from a junior exploration entity to a mid-tier gold producer showcases the potential that exists for those who approach the continent with the right mindset and strategy.

For investors seeking exposure to the gold mining sector, particularly those interested in African resources, Perseus Mining's success story offers valuable insights. The company's approach to overcoming challenges, capitalising on opportunities, and positioning itself for long-term success provides a compelling case study in effective resource development.

Perseus Mining's strategy encompasses several key elements:

1. A multi-mine, multi-jurisdictional portfolio that mitigates single-country risks
2. A strong focus on maintaining social licenses to operate through community engagement
3. A balanced approach to growth, combining organic expansion with strategic acquisitions
4. A commitment to empowering local talent and creating shared value for all stakeholders

As Perseus Mining continues to expand its footprint across Africa, its story illuminates the broader dynamics of gold mining on the continent, the evolving relationships between mining companies and host countries, and the potential for responsible mining practices to drive both financial returns and positive social impact.

From Junior Explorer to Mid-Tier Gold Producer

Perseus Mining's transformation from a junior exploration company to a significant player in the African gold mining sector is a testament to its strategic vision and execution. The company now boasts three operating gold mines - the Edikan Mine in Ghana and the Sissingué and Yaouré Mines in Côte d'Ivoire - along with development projects in Sudan and Tanzania.

Jeff Quartermaine, President & CEO, highlights this evolution:

"We've cemented our position as a mid-tier gold producer in global terms, with strong cash and profit generation. We concluded 2023 with a cash and bullion balance of US$642 million, no debt, and an undrawn credit facility for US$300 million."

This financial strength, combined with annual gold production exceeding 500,000 ounces and an all-in sustaining cost in the bottom 10% of the global cost curve, positions Perseus Mining as a competitive force in the global gold mining industry.

Navigating the Challenges of Operating in Africa

Operating in Africa presents unique challenges, but Perseus Mining has developed a robust approach to mitigate risks and capitalise on opportunities. The company's multi-mine, multi-jurisdictional strategy helps reduce exposure to single-country risks.

Quartermaine emphasises the mindset required for success: "You really have to approach the situation by being willing to sit and talk to people, learn things, and adapt your model to suit the circumstances. Now having said that, you really must know yourself, you really must know what you're about, you really must know what you're willing to do and what you're not willing to do."

This flexible yet principled approach has enabled Perseus Mining to navigate the complex political and social landscapes of the countries in which it operates, building strong relationships with local governments and communities.

The Importance of a Social License to Operate

One of the most critical aspects of Perseus Mining's approach is its dedication to obtaining and maintaining a social license to operate. The company recognises that without being welcomed by the local communities in which it operates, even the best assets and most capable workforce will not lead to success. By prioritising the social aspect of ESG (Environmental, Social, and Governance) and making meaningful contributions to host communities, Perseus Mining has built strong relationships with local stakeholders.

Quartermaine underscores this point: "If you don't have a social license to operate, if you're not welcome in that village, let alone in that country, then I can tell you you've got nothing. And we know that as a fact, and we put a lot of effort into it."

Initiatives such as safety education, community development projects, and efforts to empower local people to make decisions for their communities demonstrate Perseus Mining's commitment to being a responsible corporate citizen. Investors can take comfort in the fact that the company is focused on generating returns and creating lasting, positive impacts in the regions where it operates.

A Balanced Approach to Growth

Perseus Mining's growth strategy balances organic expansion through exploration with strategic acquisitions of pre-development assets. The company believes that finding mineral resources near existing facilities offers the best value creation for shareholders, but it also recognises the importance of supplementing this with carefully selected acquisitions.

Quartermaine explains this approach:

"The best value method of creating value for shareholders is to explore and find mineral resources next to an existing facility. Now you can do that to some degree, although ultimately it starts to wear out... The idea of acquiring assets to supplement the organic growth is pretty important really."

The company's recent acquisition in Tanzania demonstrates its ability to identify and secure value-accretive assets, leveraging its financial capabilities, engineering skills, and development expertise to create value through the acquisition and development process.

Empowering Local Talent & Generating Shared Value

Perseus Mining is committed to empowering local professionals and transferring skills to the countries it operates in. This approach contributes to local development and builds a strong, loyal workforce.

Quartermaine proudly notes: "In Ghana, for instance, we have zero expatriates on our workforce, and that includes from the general manager down. So all of the people that work for us in Ghana come from local universities."

This commitment to local talent development extends across all of Perseus Mining's operations, with a clear plan to transition from expatriate to local workforces wherever possible. By investing in local talent and contributing to the overall development of its host nations, Perseus Mining is building a strong foundation for long-term success.

The Future Outlook for Perseus Mining

As Perseus Mining looks to the future, it appears well-positioned to continue its growth trajectory and create value for its shareholders. With a strong balance sheet, a dedicated team, and a commitment to responsible mining practices, the company has the ingredients in place for long-term success.

Quartermaine expresses confidence in the company's future: "All of the ingredients that I think you need for long-term success are present, and it's up to the team to be able to take it to the next level. And that's something that we're working at very, very hard."

For investors considering Perseus Mining, the company's track record of success, strategic approach to growth, and dedication to creating shared value for all stakeholders present a compelling investment case. As Perseus Mining continues to execute its strategy and expand its presence in Africa, it has the potential to deliver significant returns for investors while positively impacting the communities and countries in which it operates.

Conclusion: The African Opportunity & Perseus Mining's Potential

For investors looking at the African gold mining sector, Perseus Mining presents a compelling case study in successfully navigating the continent's challenges and opportunities. The company's track record demonstrates that significant value can be unlocked in African gold mining with the right strategy while maintaining a commitment to responsible practices.

Perseus Mining's multi-jurisdictional approach, focus on operational excellence, and strong financial position make it a standout player in the region. The company's emphasis on social license, local talent development, and balanced growth strategy address many of the key risks associated with mining in Africa.

Potential investors should remain cognisant of the inherent risks in the mining sector and the specific challenges of operating in Africa, including political instability, regulatory changes, and commodity price volatility. Perseus Mining's strategies mitigate many of these risks, but they don't eliminate them entirely.

Ultimately, Perseus Mining offers a unique opportunity for investors seeking exposure to African gold mining. Its combination of established production, development pipeline, and exploration potential provides a balanced risk-reward profile. For those willing to embrace the opportunities and challenges of the African mining landscape, Perseus Mining represents a well-positioned vehicle to potentially capitalise on the continent's vast mineral wealth.