If you would like to ask a question directly to the company, please use the Raise Hand function within Zoom. For those phoning in, dial star nine. Alternatively, you can enter it into the Q&A panel within Zoom. I will now hand over to Perseus Mining CEO and Managing Director, Jeff Quartermaine. Thank you, Jeff.
Thanks, Nathan, and welcome everybody to Perseus Mining's webinar to discuss our June 2023 quarter report. As in the past, I'm joined on this call tonight by our CFO, Lee-Anne de Bruin, who, along with myself, will be available to answer specific questions you may have later in the call. Both Lee-Anne and I are joining you this evening from our Yaouré Gold Mine here in Côte d'Ivoire, where we are currently undertaking our regular quarterly review of operations. While the internet and power supply at Yaouré are usually very reliable, if we do go missing partway through the seminar, it will be due to telecommunications problems. I'll apologize in advance, and hopefully, that won't be necessary.
What I intend to do today is firstly, to provide an overview of what Perseus has achieved operationally during the various periods ending 30 June 2023, and then open the floor to a Q&A session. I'll keep my presentation as brief as possible, as all the details that you need to understand what Perseus has achieved during the quarter, are fully documented in the market release that was published earlier today. Let me just highlight a few key points, and then we'll discuss it in detail, if you wish. Now, for those of you who are listening to the call on your computer, you will be able to track my comments visually through your screens with the presentation.
Before I start, though, may I say what a pleasure it is to be able to report that in line with the trend that Perseus has been following for some time, our team has delivered yet another very strong performance this quarter, and in fact, half and full financial year. Not only in terms of gold production and cost performance, as you'll see in a moment, but right across the company, our team's been delivering at the highest levels. Even in Sudan, where our resilience and adaptability have been seriously put to the test this quarter. Not all of our peers are in a position that we find ourselves today, and to be frank, going back 10 years, neither were we.
We have persevered, and we have done the hard yards, and we have delivered all that we promised. It is gratifying that all of our stakeholders are now receiving the benefits of this work in line with our corporate mission. Without further ado, let's turn to the scoreboard and see what I'm talking about. Firstly, a few cautionary statements, as you're all familiar with, and we'll have a look at our operating results. As you can see, we have had a very strong quarter. Our gold production for the quarter was 136,634 ounces, and that was comprised by about 53% came from Yaouré, 37% from Edikan, and about 10% from our Sissingué mine.
That was about 5% more than the previous quarter, where we did 130,000 odd ounces. The all-in site cost was $1,007 per ounce, just on the $1,000 mark. That was slightly higher than the March figure of 971. The average gold sale price was $1,933 per ounce, that was 6% better than the selling price in the March quarter. This resulted in a cash margin of $926 for every ounce of gold that we produced, and that was 9% more than we achieved in September.
All in all, that then resulted in a notional cash flow from operations for the quarter of $127 million, which was 14% higher than the amount achieved in the comparative figure to the end of March. I am pleased to say that very strong operating performance has continued so far in the September quarter for this month, which is pleasing indeed.
You know, what it does is it underlines that, as I said, the trend that's been in place for quite some time, in fact, barring COVID, the first six months of COVID, for the last 9.5 years, or 10.5 years, we've either achieved budget or exceeded budget, and this quarter has been no exception. Oops, sorry. If we look at the specific performance, both in the half year and full financial year relative to guidance, you can see that, you know, we've outstripped guidance in production-wise, at Yaouré and at Edikan. Sissingué was in the range.
In terms of costs, we've come in under the bottom end of the range, both at Yaouré and Edikan, and indeed at Sissingué as well. That's both in terms of the half year and the full financial year. Looking at the half year of 266,909, at $989 an ounce, that led to a full year performance of 535,281 ounces, at $959 per ounce, and that compared very favorably to the performance in the previous financial year. In fact, it was about 8% up on the fiscal 2022 production level, and costs were reasonably flat, actually, at $959.
That was very similar to what we achieved in the last year, which is a pretty reasonable effort, given the inflationary forces that we're confronting, and also given the fact that due to the higher gold price that we sold our gold at, the amount of royalty that we were paying per ounce to our host governments had also increased as well. Higher gold prices are good, but they do lift up the cost as well. Looking to the future, for the next six months, we'll be producing 242,500-272,500 ounces at about $1,008-$1,190 per ounce.
That will give us, for the calendar year, somewhere between 509,000 and 540,000 ounces at a touch over $1,000 an ounce. We are predicting a slight increase in all-in site costs across the board. That is a result of a range of factors, including increased mining at some of the mines as we're stripping pit walls, et cetera, and also some reference to inflationary factors that we are actually seeing. In looking at that forward projection, I should make the observation that not only, you know, are we looking forward to strong production and cost performance, but we do expect that our revenue line will be somewhat underwritten.
We do have a hedge book at the present time that covers the next 3 years or 24% of the next 3 years of production, which is 355,000 ounces, and the weighted average selling price of that gold is $2,008 an ounce. We'll be getting $2,008 an ounce for at least 24% of our production over the next 3 years, which I'm sure you'd agree, goes to underpin projected revenues, et cetera, et cetera. That's a fairly healthy position to be in.
Speaking of that translation into financial metrics, as I noted, based on a strong gold price of $1,933, margin of $926 an ounce, and notional cash flow of $127 million for the quarter, that resulted in Perseus finishing the period to 30th of June with $522 million in the bank. That's 51%, or $51 million, or 11% up on the March quarter. I should say that $522 million is after we have paid for exploration, after we've paid for development, after we've paid something like $54 million to our bank to repay debt.
After paying something like $77 million to various host governments for taxes and dividends, and after returning $24 million to our shareholders in the form of dividends, paying withholding, paying corporate overheads, and adjusting for FX and for working capital. What that means is that we have $522 million at the end of the financial year, after generating and returning benefits to all of our stakeholders in what we think is fair and equitable proportion.
All of our stakeholders have received the benefit from our effort, and we still have $522 million in the bank and an undrawn debt, corporate debt facility of $300 million, which is available to us to continue to fund the growth of our company, and indeed, return capital to shareholders in one form or another. That's a fairly healthy operating performance for the year, I think, or for this, the period up to June, in anybody's language. Very pleasingly, we've done that. We've achieved all that in a sustainable manner that I think, you know, is as good as one can reasonably expect given the nature of our business. Safety performance across the group has been reasonably stable. We've had a slight decrease in tripper rates.
You know, safety's been a major push in the company over the last year or so. We've rolled out a safety enhancement program that we called the SHED program, Safety Home Every Day. We've been working very hard at that, and in fact, that has been a key focus of our visit around the sites over the last few days, in fact, to ensure that that program is deeply embedded in our workforce. I'm very pleased to say that it's been widely accepted and is working very well. In terms of our communities, our host communities, we've made a fairly significant economic contribution during the quarter to both Ghana and Côte d'Ivoire.
Something like $158 million has been injected into their economies, and that represents about 77% of our procurement that is done locally. We also employ very heavily from the national workforces. 94% of our employees are local people, and we're very proud of that statistic, particularly given that we've been able to train and progress people through the ranks over time and have a very good set of workers and managers that will be available for all sorts of work in future. In terms of gender diversity across the group, it was running at about 11% in the June quarter.
People in Australia or in the West may think that that's a little low, but given the countries in which we operate, I think that, you know, that is a reasonable representation, given the cultural differences between, you know, say, Australia, for instance, and Ghana and Côte d'Ivoire. We've also been able to manage our relationships very strongly, we've had no issues on the community front at all. Environmentally, we're working as best we can to reduce greenhouse gas emissions. I think we've come down slightly during the quarter and had no issues as far as our tailings dams are concerned. On a sustainability front, I think we've continued to perform to the standards that we've set ourselves.
Organic growth has been a key part of the business, going forward, because, you know, while we produce 500 odd thousand ounces a year, we need to replace that each year to ensure that we can continue at those levels. We've been involved in a number of activities. We've been doing studies on the CMA underground at the Yaouré project. A Mineral Resource and Reserve estimate will come out around August on that, and we'll be putting out an updated Life of Mine Plan on both the Yaouré underground and expanded Yaouré open pit. That should be delivered sometime in September, we expect.
We're looking forward to that, and that should, you know, indicate quite a significant extension to the Yaouré mine, which is our primary source of production at the present time. We have been working fairly hard on exploration right across the group. We've done some good work up at the Meyas Sand Project in Sudan. I'll speak of this a little further later on. Got some very good results coming through from that which confirm our theories around the quality of that ore body. In Côte d'Ivoire, as I said, we've been drilling around Yaouré, the Yaouré pit and also in doing some work on the CMA Deeps program.
We've recently undertaken or commenced a drilling program up around the Sissingué mine to see if we can't add a couple more years of life to the Sissingué operation. That's going quite well. Over in Ghana, we've got we've recently picked up some land to the north of our Edikan mine, and we've got a number of very high-quality targets identified up there, and work has gone progressively during the quarter to try and advance those targets to a point where we can start to do some drilling, to try and delineate resources and reserves, which will further add to the mine life of the Edikan operation as well. That's looking quite promising.
I did mention the Meyas Sand Gold Project, which is the project that we have in northern Sudan, just adjacent to the border with Egypt. As people are probably well aware, this quarter, an armed conflict broke out between the Sudanese Armed Forces and a powerful militia group. That activity was principally focused around the capital city of Khartoum, which is about 1,000 kilometers to the south of the Meyas Sand project, as well as in the Darfur and Kordofan regions, both of which are very long way away from where we are now.
From Perseus' perspective, clearly this was a very troubling development, and then the safety of our staff and contractors was at the foremost of our mind all the way through this exercise. At one point, we did temporarily suspend activity and withdrew our people from the area just to ensure that we weren't caught up in any activity which may occur. While we were away from the site, some vandalism did occur on the site by artisanal miners from the area, but we've since managed to establish order on the site, and we will most likely commence a drilling program up there as soon as supply lines can be established, and we can feel that all of our staff will be secure as we commence those activities.
Given the state of play in the country, though, the investment on the development of the Meyas Sand Project, which we were planning to take during the second half of this year, in fact, you know, not too far from now, has in fact, been postponed until peace and stability have been achieved, and that we have confidence that the country is a viable investment destination. Now, you know, where we stand today, we don't believe that is the case, and we have no line of sight as to when it actually might be. As we say, in the meantime, we'll continue to drill, we'll continue to expand the reserve. That gold's been in the ground for a very long time, and it's not going anywhere.
We'll go back to the country when things are ready to be advanced. While it has been a setback for our plans to develop our fourth mine, it's not a fatal event for us in any shape or form. It's a setback, but we'll be moving on from here, and I'm sure we'll find other things to do. Just for people's interest, to date, we've invested about $25 million in all, preparing for that investment decision, including drilling and infrastructure and various other bits and pieces.
It's not a massive amount of money, and that investment, you know, the value that that investment has created, it will continue to be available to us when we do switch on the development program at some point in the future. As you can see from that photograph, the site around the Meyas Sand Project is pretty desolate and you know, there's certainly no dwellings and no communities that are likely to erupt into conflict anytime soon. The other side of our business growth, of course, is the opportunity for inorganic growth.
I'll just briefly touch on this now, because this is a subject that many of our investors are very interested in, particularly given the cash balance and financial capacity of the company at the present time, and the fact that Sudan has been put back in the schedule, and people are wondering what we might do as a replacement for that. You know, we do need to work to keep our production levels around the 500,000 ounce level. We have been working, as I said earlier on, fairly strenuously to do this through organic means. In other words, through exploration and project development, et cetera, et cetera.
Also, we acknowledge that growth through inorganic means also represents a viable way for us to expand our reserve inventory, and potentially even expand our production profile going forward. The fact is that we do have significant financial and human capacity to involve ourselves in organic growth. However, the fact is that opportunities to deliver the economic returns that we target and to get the right balance of risk and return in our portfolio are fairly limited. We do need to maintain a very active watching brief, and we do, on all sorts of opportunities, and we do need to carefully evaluate those sorts of opportunities.
When we see something that works for us, then, you know, not only are we motivated to act, but we also have the means to do it as well. We are working in this area, and we will bring news of any development in this area to you as soon as it comes to hand. That's fairly much the state of play at Perseus. May I just say, look, you know, as I said at the start of the call, Perseus has had a very good year, both quarter, half year and financial year on all fronts. We've done it in the production area, cost area, cash generation, business development.
Pleasingly, as I said earlier on, we've achieved this in a safe and a sustainable manner, in line with the targeted standards. You know, we've comfortably beaten our gold production and cost guidance given to the market, both on the half year and the full year. In doing that, we have outperformed a lot of our peer group. Our all-in site costs are very competitive on a global scale, and pleasingly, we are managing our business quite successfully in tough economic times. You know, the all-in site costs have fractionally gone up year on year, but I think if you can hold your costs flat in the sort of inflationary environment that we're seeing, you're obviously doing something right, and we believe that we are.
As I said, we have experienced a setback in Sudan this quarter, but honestly, it will take a lot more than this to knock us off our stride. We have the human and, as I said, human and financial means to continue to grow the business and to successfully unlock value, as we've demonstrated several times in the past, and as I'm sure we'll demonstrate again in the not-too-distant future. Now, just before I draw this to a close and call for questions, I do want to acknowledge the contribution that has been made to the success of Perseus over the last 12 months by all the men and women in four countries that make up the Perseus team.
They've done an outstanding job this year, and I should also mention, not only in Africa, but in Perth. Before we left on this current round of visits, we were able to, you know, to thank these people personally, both on our own behalf and on behalf of all the shareholders, many of whom are on the call today, for the great efforts that they have made in helping us to continue to deliver on our promises, which is a core value of this company. Thanks very much for your attention today. This brings the formal presentation to a close, and Lee-Anne and I are now both happy to take any questions that you might have.
Thank you, Jeff. Your first question comes from Reg Spencer at Canaccord. Please go ahead, Reg.
Thanks, Nathan, Jeff, and Lee-Anne. Just a quick question. Apologies if you did cover this. I was trying to batch away another call. With the Sudan situation, it is what it is. You've got a growing balance sheet, cash pile, you've got access to liquidity. We know that you are continuing your business development and your inorganic growth assessment or opportunity assessment throughout Africa. What happens if you do find another asset and then Sudan comes back?
I'm just trying to get an idea of your capital allocation, or given the outlook for the business over the next couple of years, you feel comfortable that should the situation in Sudan improve, and should you find another asset to look to develop, that you'll have plenty of liquidity to be able to do both parts?
I think very confident that that would be the case. Look, I think that it will take several years before we have confidence to invest the money that's required to develop Sudan, so I'm not at all concerned about, you know, having a logjam. The fact of the matter is that we do have $800 million in debt and undrawn debt and equity at our disposal. You know, based on the cash flow of last year, we're generating a lot of cash at the present time and expect to be able to continue to do that, you know, into the future. Don't think that funding is going to be the challenge for us in terms of growth. I think if anything, the bigger challenge is going to be finding the right opportunities.
Thanks, Jeff. That was actually gonna be my next question. you know, you guys have shown yourselves to be quite astute today. How do you see the M&A environment? Well, I shouldn't even say that, but do you see lots of good opportunities throughout your targeted jurisdictions at the minute? you know, is quality do you see quality being an issue for a company that's willing and able to grow?
Yeah, it is an issue. I mean, the thing is this, that there's a very large difference between the task of promoting a project, which is what companies, some companies do, and the task of converting resources into money, which is what we do.
Mm-hmm.
There's a very big gap between that. What may appear to a casual observer as a very attractive small pre-development project or large, when you actually lift the hood and look carefully at the situation, it's not always what it is represented to be. That means that the opportunities are fairly limited, and there's a lot of competition for these, for these superior situations as well. What it means is that we have to look continuously, we have to look, you know, be very diligent in the way we go about our search. As I said before, I've got every confidence that one of these days we'll come up with something that will create the sort of value that we've been creating in the past.
In the meantime, keep doing what you're doing. Good quarter. Congrats to you and the team.
Thank you.
Thanks. Thank you.
Okay. Are there any further questions?
Sorry. Your next question comes from Andrew Bowler at Macquarie. Please go ahead, Andrew.
Good day, Jeff. I think you probably covered my inorganic growth question. Just on your guidance for the first half of FY25, I mean, obviously you had a, you know, pretty stellar performance compared to your both half guidances, in FY23. Just looking at the numbers, you know, relatively flat production performance, but expecting all-in sustaining costs to tick up a little bit more than what that production performance is expected to reduce by. Can you just talk through, you know, how you got those numbers and what sort of assumptions that are baked into those all-in sustaining cost numbers for that first half guidance, please?
Look, I'd have to spend a good day talking to you about that if you want all the granular detail, because basically, it, you know, we look at it with our budgets for the year, and then we work around those budgets. You know, clearly what we do when we budget, we do bottom-up assessments of the future, taking into account all of the mining activities, et cetera, et cetera. As I say, on some of the operations where we, you know, are doing more cutback than others, or in the case of, say, Sissingué, where we, you know, we'll be working during the course of the year to open up the Bagoé deposits, which is another satellite deposit, and that does involve some additional expenditure.
They're the things that contribute to the slight uptick in cost. The other thing is that, you know, our mining contractors, we use mining contractors at each of our sites. They all have rise and fall clauses in their contracts. Now, you know, as people know that about contracting, rise and fall clauses don't necessarily match reported inflation rates. Sometimes they go higher, sometimes they go lower. We've had to make some predictions around, you know, those impacts. Things like a combination of tires, fuel, spare parts, labor, et cetera. All of those things are factored into the equation. It's a fairly well-considered set of numbers.
You could say they're conservative, and you could say that on the basis that for the last, you know, few years, we've been outperforming all of our guidance. This is the guidance that we're giving, and if people rely on these numbers, I've got every confidence that we'll deliver them or exceed them.
Nice. Just, from yearly and probably obviously AUD 66, I think, if I zoom in on your release, AUD 65, maybe, in tax paid during the quarter. I mean, that's obviously a pretty chunky amount compared to recent previous periods. Can you just give us an indication of the sort of lumpiness over the next year or two, or is it expected to normalize over the next year?
Sorry, carry on, Jeff.
You go, you go, Le-Anne. It's fine.
Yeah, I mean, I think, you know, the tax paid this year is reflective of the results and that Edikan, you know, had a great performance, and so the bulk of that is being tax paid, you know, from Edikan. You know, really, if Edikan continues to perform, it will continue to pay tax. There is also withholding tax paid on dividends being declared where I've already said they've now repaid all their intercompany loans. You know, any repatriation of funds is done via dividend declarations. You know, it's not going to be lumpy, but it will be linked to the profitability of the operations.
I think the other thing we should add to that, Lee-Anne, is that Sissingué is now in a tax paying mode.
Yeah, correct.
Won't be too much longer, I suspect, before we had a five-year tax holiday on Yaouré, but it may be that taxation that should kick in before too much longer as well. I can't see the tax contribution going down a whole lot from here if we continue to produce at similar quantities and sell at similar prices.
Yeah, correct, Jeff.
No worries. That's all for me. Thanks, guys.
Okay, thanks, Andrew.
Thanks, Andrew. Your next question comes from Kate McCutcheon at Citi. Please go ahead, Alex. You're just on mute, Alex.
Hi, Jeff and Le-Anne. On the high planned cost for the December half, can you give a bit more color on the inflationary factors that you're experiencing? Is this primarily in labor or energy-based? Thanks.
No, look, I mean, the labor increase is fairly standard, actually. I think we just settled with the Ghana Mineworkers Union last Friday, I think it was, for something like a 6% increase. It's not, it's not, you know, outrageously high. That's probably fairly indicative across the board. That's had, I mean, fuel. You know, fuel isn't booming. Seems to be reasonably stable. I mean, the sorts of factors, I guess, spare parts, right, costs, things like that, they do go up and down. As I said, our mining contractors who also factor in parts, labor, tires, et cetera, they all see increase depending on where they're sourcing their material from.
One of the things that did go up during the year was explosives. you know, the crisis in Ukraine, Russia, and the like, did put some pressure on the market for explosives. we did see quite a jump at one stage of the game, although I think they're sort of starting to normalize now as people work around that situation. right across the board, you see, you know, little pieces here and there. not to mention, of course, fiscal creep as well. I mean, I think in Ghana, over the last... I think there was a 1% or 2% increase, Lee-Anne, has been introduced recently across the board in Ghana. what we do as a business is, you know, we try to backfill on those known increases.
You know, try and implement continuous improvement programs to bring down our cost base. Invariably, what we're finding is that as we achieve savings, they get filled up by inflationary forces. That does have something, you know, it's related to the fact that, you know, the costs are not going down proportionally to the increase in production.
Yep. Thanks. That's clear, good color. Just back on M&A. You've previously said that there's a focus on pre-development stage projects in Africa. How has your thinking around country risk changed following the conflict in Sudan?
Well, I mean, our view of Sudan has changed. Clearly, that it isn't ready for investment this year. We think it will be ready for investment in the future. We haven't changed our view that it is a relatively high-risk jurisdiction compared to perhaps Côte d'Ivoire, where we operate most of our operations at the present time. Our view around the risk, around the risk side of things is that all of these countries go through political cycles, which means that, you know, they sort of get, have problems at various stages, and they're fine at other stages.
Now, if you look at Côte d'Ivoire, for instance, we've been blessed by having production in a time where the political cycle has worked in our favor and the gold price cycle has worked in our favor. That's been a double win for us. There are other countries on the continent that we frankly wouldn't go to at the present time, or at least that we wouldn't, but they may well come good in years to come. There are also other countries that have had a fairly disastrous recent history, for one reason or another, that we think are starting to improve. You need to be fairly vigilant and look at these things. The other thing is, too, by having...
Trying to target projects that have a mine life that will span these cycles is also very important. I mean, if you have a short-life project that gets a down political cycle and a down commodity cycle, you're going to struggle. If you can span those cycles, then you have a chance of at least getting your capital back, if not making very, very good returns, even if things go pear-shaped.
Thanks. good color. I'll pass it on.
Thank you. There are no further questions at this time. I'll now hand back to Jeff for closing remarks.
Okay, thanks, Nathan. Well, look, as I said, thanks very much for joining us on the call today. It has been a very good quarter, and it's been very pleasing to be able to bring a report of our achievements in the last year or so. We sincerely hope that we can do this again, many, many times into the future. Thanks very much, and look forward to bringing you news as we move forward.