Good morning, and welcome to the Perseus Mining Investor Webinar and Conference Call. All attendees are in a listen-only mode. If you would like to ask a question, please enter it into the Q&A panel within Zoom. I'll now hand over to Perseus Mining Managing Director and Chief Executive, Jeff Quartermaine. Thank you, Jeff.
Thanks very much, Nathan, and welcome to Perseus Mining's webinar to discuss our June 2022 quarter report. Now, as usual, I'm joined on the call this morning by several of my senior colleagues, including Lee-Anne de Bruin from Finance, Paul Thompson, Business Growth, and Jessica Volich, Head of Sustainability. Our Head of Operations, Chris Woodall, is currently on leave, so he won't be joining us, but I'm confident that in his absence, we'll be able to address any questions you might like to ask about our operations later in the call.
In this regard, what I intend to do this morning is to firstly provide an overview of what Perseus has achieved operationally during the June quarter, half and full financial year, and then follow that up with a Q&A session to address any specific questions that you, the listeners, may have, either about our recent or for that matter, future activities. I should note that our audited fiscal 2022 financial report will be published on the August 31st after our next board meeting, at which time, details of our full year earnings, dividends, et cetera, will be made public. That's not part of today. Now, as usual, I'll keep my presentation reasonably short as all the details that you need to understand our performance are fully documented in the market release.
Let me highlight a few key points, and then let's discuss the detail if you wish. Now, it seems every time that we hold a quarterly webinar like this, you know, I say much the same thing, but it really is pleasing to be able to continue reporting that Perseus has once again delivered a very strong production and cost performance this quarter. That we're now firmly positioned on the track that we promised to follow. When we release our financials in a month's time or so, there'll be further evidence of this. In the June 2022 quarter, Perseus produced 112,327 ounces of gold, which, for the half year and the full year, we produced totals of 252,850 and 494,014 ounces respectively.
Our half-year and full-year production was comfortably within the H1 of the guidance ranges provided to the market. While the full-year production was about 1% off our internal target of 500,000 ounces for fiscal 2022, there were very good reasons for this, which I'll explain in a minute. Perhaps more importantly, in the current economic climate, our weighted average all-in site cost for the quarter of $1,004 dollars per ounce was fairly healthy, based on a production cost of $881 U.S. per ounce. This translated to all-in site costs of $955 U.S. per ounce for the half year. For the full fiscal 2022 financial year, $952 dollars U.S. per ounce, both of which were in the bottom quartile of our market guidance ranges.
Now, as reported by JP Morgan in their recent June 2022 gold sector review, these all-in site costs compare very favorably to those of most of our peers on a global basis, particularly the companies here are based here in Australia. Like everyone else, though, Perseus is battling against a global trend of rising costs, but we are managing to keep things reasonably in check for the time being. As if we or indeed the market need any convincing, the operating results that have been achieved this quarter clearly show that the corporate strategy that we've deliberately adopted some time ago that involved transitioning Perseus to become a multi-mine, multi-jurisdictional gold company is working and working well.
This strategy's enabled us to not only materially increase our production and cash flow, but to do it in a way that spreads our risk across the business. Despite plenty of challenges from both inside our business and outside, it's meant that we've been able to stay on course and deliver on our promises, which goes to the very core of the values of this company. During the quarter, our newest mine, Yaouré, performed outstandingly well, relative to both prior quarters and our internal targets, producing 81,150 ounces of gold at an all-in site cost of $641 per ounce. Which places Yaouré well down the list in terms of the global cost curve. Sissingué, with production of 12,509 ounces, performed slightly ahead of our target.
While Edikan, with 28,668 ounces, fell short of our expectations. Now, there's no escaping the disappointment of Edikan's performance this quarter, but there were a range of factors that led to the result. One of which was the fact that, and we did foreshadow this during our March quarter webinar and in the March quarter report, we deliberately brought forward a major preventative maintenance shutdown of the Edikan plant and lost 19 days of production or nearly 21% of available time during the quarter as a result. Fortunately, the overperformance of Yaouré more than compensated for the underperformance of Edikan, enabling the Perseus group to once again consistently deliver another strong quarter in terms of production and accordingly, in terms of costs.
Now looking to the future, our market guidance for production and costs for the December 2022 half year is 240,000-265,000 ounces at an all-in site cost of $1,000-$1,100 per ounce, which translates to approximately 493,000-518,000 ounces of gold at an all-in site cost of $980-$1,025 per ounce for the full calendar 2022 year. More of the same. Now, I should say that this guidance is based on our current view of the world and comes with the caveat that we don't own a crystal ball. I suspect that there could certainly be some surprises in store for us all, but we'll see.
It would be the easiest thing in the world for us to provide a market guidance that we could guarantee we would meet, but it would be totally meaningless, and we don't believe that doing that makes any sense. What we will do is work extremely hard to make sure that we control all of the things that we can control and that we deliver in line with this guidance in the coming periods. I am happy to report though that, you know, our strong recent performance has continued in the month of July, and this does bode well for the current quarter.
Since Edikan resumed milling operations in mid-June following the maintenance shut, the operation's been running very well, and it appears as if the challenges that we faced for most of the H1 of this year are behind us. Yaouré and Sissingué are also continuing to deliver as planned, and so far things are looking good for another solid quarter right across the group. Now, I should note that in conducting our mining and exploration activities across the company, we have generally continued to do this in a manner that's in line with the sustainability standards that we've adopted. The exact metrics of our ESG performance are documented in full in our quarterly report. However, it's worth highlighting just a few of these while we're on the call.
Now, in terms of safety, despite a tragic and very regrettable incident at Yaouré late in the quarter that resulted in the death of an employee of one of our contractors, safety performance across our operations generally improved during the quarter with our total recordable injury frequency rates, TRIFR, reducing from 1.45 at the end of March to 1.21 at the end of June, lower than the fiscal 2022 target of 1.3. Lost time injury frequency across the group also reduced from 0.36 to 0.17. Subsequent to the end of the quarter, Sissingué achieved another very significant safety milestone, celebrating 6 million man-hours or person-hours or about, I think it was, 1,146 days without a lost time incident.
That's a pretty credible performance, you know, when all said and done on the safety front at Sissingué. Now, on the social front, Perseus' significant economic contribution to our host countries of Ghana and Côte d'Ivoire continued, and for fiscal 2022, amounted to around $495 million or 61% of our revenue. This included $394 million paid to local suppliers, representing 81% of our procurement. $33 million paid as salaries and wages to local employees. $67 million in payments to government as taxes, royalties, and other payments, and around $4 million in social investment. Now, these numbers are actually quite important.
People will hear sometimes, you know, government officials whose budgets are under pressure for one reason or other make statements to the effect that mining companies or foreign investors don't pay enough dividends to their host governments or don't do enough to help the country. This is often a very shallow, and in some cases, self-serving observation, if I may say so, that conveniently overlooks the enormous injection of hard currency injected by companies like Perseus into their economies. Now, we're very proud to be able to contribute in this way, even if we don't usually take to the grandstand to highlight the work that we do. It is important. Now, local and national employment is also extremely important, and that's been maintained at above 95% of our total workforce for the quarter.
Our gender balance across the group is 13% female, 87% male, which given the industry in which we operate, but more particularly the cultural orientation of our host countries, is reasonable. I should note that the situation is quite different in our corporate office in Australia, where female to male split is 31%-69%. Within my senior management team, it's actually 40-60. Once again, reflecting the cultural orientation of the jurisdiction as much as anything. Environmentally, in absolute terms, our total Scope 1 and Scope 2 greenhouse gas emissions have increased during the year as we've increased our total gold production. However, emissions intensity, as stated on a per ounce of gold basis, have remained quite steady.
Now, also following interest from additional vendors and also resulting from our preliminary thinking about power solutions in Sudan, Perseus is now in the process of updating our valuation of the potential use of solar power across the group, and any future actions in this area will be dictated by the facts revealed by this study. Finally, on the environmental front, I guess it's worth noting that across all of our activities, we've experienced zero environmental events or significant tailings dam integrity issues during the period. On the, you know, as a whole on the ESG front, we are performing reasonably well. Despite, as I said, the tragic accident at Yaouré, we are deeply committed to continuing to incrementally improve our ESG performance relative to our internal standards.
In this respect, safety and the well-being of our employees is rightfully at the top of the priority list. Now, turning to financial matters, by selling our gold at an average price of $1,705 per ounce this quarter, we generated an average cash margin of $731, roughly AUD 1,060 per ounce for every ounce of gold produced. That resulted in net operating cash flow of $85 million or AUD 123 million for the quarter. That amounted to $361 million or AUD 523 million for the full financial year. Now, of this amount, nearly 95% of it was generated by our two Ivorian mines, with the remainder coming from the Ghanaian operation.
Our gross cash and bullion on hand at the end of the quarter amounted to $328 million. After deducting our corporate debt of $50 million, our net cash and bullion balance was $278 million, an increase in net cash of $50 million since the end of the March quarter. Now, just to put what I've said into context, I note our net cash flow from group operations during the quarter was $85 million, and our net increase in cash at the end of the quarter was $50 million.
The AUD 35 million difference between the two amounts reflects expenditure on business growth activities, including both organic growth and net transaction costs associated with the recent acquisition of Orca Gold, development capital, admin, debt servicing, taxation and dividends to shareholders, and a bit of FX movement and the like. Now, for those of you who are interested, the specific numbers associated with each of these items are shown in a detailed waterfall chart in the quarterly report, and I would refer you to that. Now, speaking of our business growth activities, this is another area in which we've been very busy and pleasingly productive this quarter.
Our offer to Orca shareholders to acquire all of the outstanding shares in their company was formally accepted in a general meeting with shareholders and in the Canadian courts in late May, clearing the way for us to start seriously planning our next steps in relation to the development of the Block 14 gold project in Sudan, that we believe is capable of being developed into our next large-scale, long-life gold mining operation. A lot of preparatory work is underway on this front, and reflecting the words of Field Marshal Erwin Rommel, who once said, "Time spent in reconnaissance is seldom wasted," and that definitely applies here.
We are getting to understand the lay of the land, and in fact, over the weekend, some important meetings were held with government officials in Khartoum to discuss the details of how we can cooperate to actually deliver this project in a cost-effective and an efficient manner. That is to say, that is to do what we said we were going to do, and that's a familiar phrase in the Perseus world. I'm told that these discussions were indeed very encouraging and we're now looking forward to starting work on the ground with an infill drilling program at Block 14 later this year, as well as undertaking confirmatory work on the water aquifer in Area Five that will ultimately supply water for the operations when they're up and running.
We're also starting to move forward on the front end engineering and design of the project, and this work will accelerate in coming quarters. We have been broadly targeting around the middle of next year for a final investment decision for the development of Block 14. Being conservative, it's probably safer to say second half of 2023 on the basis that we are charting new waters by being the first industrial-scale gold mine development in Sudan and working through logistics and other details does take some time, particularly when our hosts are not that familiar with the processes that are involved in developing a very large-scale operation such as we have in mind.
Also, as announced recently, we through organic means, based on exploration success, we've made some really strong progress towards being able to sustain the sort of production level that we're guiding for the next half year and do that out towards the end of the decade. You'll recall we recently made a market release, which you are encouraged to read, on the work that has been completed at the Nkursua deposit, which is located about 7 km from Edikan's mill in Ghana. Now, in summary, what we announced was that we'd delineated an indicated mineral resource at Nkursua of about 422,000 ounces of contained gold with some additional inferred mineral resources as well.
We also completed a feasibility study on the project, resulting in the estimation of a probable ore reserve, grading about 1.04 grams a ton, which is consistent with the material that we're processing and containing 332,000 ounces of gold. Now, based on this study, processing of the Nkursua ore reserves in the Edikan mill is expected to increase the life of the Edikan operation by 18 months-24 months or so, extending the mine life out to the end of fiscal 2027. It will take us between 18 and 24 months to convert the Agyakusu exploration license to a mining lease and to obtain the necessary environmental permit for Nkursua. After that, we'd be in a position to start mining and trucking ore to the mill for processing.
The recent delineation of this mineable deposit at Nkursua is actually a very significant achievement for Perseus, as Nkursua is our first discovery on what we believe is a mineralized zone that stretches across three contiguous, separate exploration licenses in the area to the northwest of Edikan. We recently acquired the Agyakusu license on which Nkursua is located, and we also hold options to explore and acquire the other two licenses in the fullness of time if we choose to do that. We are committed to intensive exploration of this zone, though, expecting that Nkursua will turn out to be the first of several discoveries in the area. If this is the case, further extensions of the Edikan operation beyond fiscal 2027 will be a likely outcome.
Having recently invested time and money in upgrading the Edikan plant as we did this quarter, Edikan has the potential to once again become a very important piece of our diversified asset portfolio. Now, while on the subject of organic growth, I should also mention that we have continued to make excellent progress on the delineation of a large additional mineral resource at Yaouré that can be economically mined using underground mining techniques. Now, I don't want to prematurely disclose details of this other than to say that our formal mineral resources and reserve statement will be published in the September quarter, along with a feasibility study for developing an underground operation. That'll also materially extend the life of the very profitable Yaouré gold mine.
Now, looking further ahead at Yaouré, it's also worth mentioning that we have started a program of very deep holes that extend below the CMA structure to investigate some apparent structures that were identified by the three-dimensional seismic survey of the area that we conducted a couple of years ago. Now, it's early days for sure, but I suspect that more will be said of this as drill results come to hand in coming months. All of this together suggests that Yaouré mine is gonna be around for quite some time.
In conclusion, as I said at the start of the call, the June quarter, June 2022 quarter, has been yet another very good quarter for Perseus Mining in terms of gold production, all-in site cost and cash flow generation business development, as of course has been the June half year and the full June 2022 financial year. We have delivered gold production and all-in site costs comfortably within stated guidance ranges, and in doing so, have outperformed a lot of our peer group. Our gold production rate is solid at slightly above the 250,000 ounces of gold per half year mark, meaning that our stated aim of 500,000 ounces of gold per year at a margin of not less than $400 per ounce is sustainable.
Our all-in site costs are currently very competitive in terms of our global peers, and we're managing our business successfully, you know, and financially in a pretty tough economic environment, as we're all aware. We've got some excellent growth opportunities in front of us, but as importantly, we have the team to successfully execute and to unlock value as we have demonstrated several times in the past.
Now, in an equity market sense, while our share price has come off the highs recorded early in the June quarter, we are holding up reasonably well relative to market peers, which I'd like to think is recognition of the fact that Perseus is now regarded by the markets as a reliably consistent mid-tier gold company that can be relied upon to do what it says it's going to do. Thanks very much for your attention today. This brings my presentation to a close, and now my colleagues and I are happy to take any questions that you may have.
Thank you, Jeff. Your first group of questions comes from Patrick Collier at Credit Suisse. First one is, can you please explain what the exact challenges are from processing the sedimentary material at Sissingué?
Well, the main challenge is that it slows the throughput rate down. The amount of material going into the mill has been lower than it has been in the past. I think it's also fair to say that the grade is not the same as what we were mining last year and the year prior to that, where we were going through the very high-grade zones. I guess a combination of grade and throughput rates are the real impact of that sedimentary material.
Thank you. Second question. Strip ratios have declined across the group. What's driven this, and what should we expect for the December half?
Well, they have declined across the group because we're going, you know, further into the existing pits and the like, but going into the December half and into the next financial year in total, I should say that at Sissingué in particular, there will be an increase in stripping ratio as we start to open up the Fimbiasso pit, et cetera. Yes, you know, it's just the sequence in which we're mining. There's nothing terribly magical about it. You know, when you go and open up new pits, you do have to remove a waste material, and that impacts strip ratio. I should say that on Nkursua, one of the attractions of the Nkursua deposit is that the strip ratio on that is very low. When we get that into the mine plan in a couple of years' time, that'll be a big plus for us.
Third question. Can you give a sense of how much fuel-related inflation you're seeing in your cost base? And do you have any hedging or fixed contracts to protect against this?
Okay. Well, fuel is an interesting one. The cost of fuel in Ghana at the moment is about $1.50 a liter, which is not too much different from Australia. Now, in Ghana, that has risen, you know, over the course of the last six months or so. In Côte d'Ivoire, the government there subsidizes fuel costs, and so the cost there has been running around just a touch under $1 a liter for some time now. Now, we do expect that the government's ability to continue that subsidy you know will decline in coming periods, and it is likely be that we will see some increases in the amount of well, what we're paying for our fuel there.
In answering the question, no, we don't hedge. We don't hedge the oil price. We've looked at this on many occasions, but you know, there's an imperfect hedge applying between, say, you know, Brent or WTI and the price that we actually pay in West Africa, particularly given that the government has a fair hand in the pricing of fuel there. You know, if you're gonna try and hedge it, someone's gonna be taking basis risk, and that's not our business.
Your next question comes from Andrew Grove at Macquarie. Can you talk to what the reason behind the preventative shutdown at Edikan? Was it a planned shutdown that found faults, or was it always planned to be that long?
It was always planned to be a lengthy shutdown. In fact, what we did do was it was previously scheduled to occur this financial year. We decided to bring it forward into the June financial year, purely and simply because we were recognizing that there was some wearing on the girth gear. The longer that continued, the greater the risk of catastrophic failure. Now, it would have been very easy for us to have deferred it to this financial year and reported production, you know, well over the 500,000 ounce mark, and that would have been very jolly. However, had something gone wrong, we would have quite rightly been, you know, held to account for not acting sooner.
We just took the decision to close it down earlier and to do the work needed to be done. There were a few. There's some of the work that was being done, adjusting work that was done at the start of the construction of this thing. You know, it went back a fair way. What it also did was, this is a really important point, I think, is that what it also did was it allowed us to do a catch-up on all maintenance right across the site. This is not dissimilar to what occurred in 2016, actually, where we had a significant shut in 2016.
By being able to catch up on all of our maintenance and get ahead of the curve, it meant that the next, you know, four or five years we're extremely good at Edikan now, in terms of the operation of the mill. We've used the opportunity this time around to do the same thing. Certainly the results that we're seeing in terms of the performance since the mill came back online are extremely encouraging. We're seeing, you know, good throughput rates, very good run time. Recoveries and grade are in line with what we were expecting to see. You know, look, it did cost us a bit, there's no doubt about that. We think that was money well spent in terms of the future of the company and particularly the future of the Edikan operation.
Thank you. Your next question comes from Reg Spencer at Canaccord Genuity. He said, "Understand that there is an 18-month lead time for permits at Nkursua, but would this drop immediately into the production plan given the grades? Are there considerations for mine planning for existing Edikan reserves?
I'm not quite sure what the last one says, but yes, we are doing mine planning at the present time, and we would, you know, get it into the mill reasonably quickly, I would think, once we have the licensing intact. I think at this stage of the game, the scheduling has it coming in in about, I think it's about 2 years or 3 years, 2.5 years' time from now. Look, you know, we'll make adjustments as we go forward. The timing on the licensing is not 100% certain by any stretch of the imagination. Although, having said that, we did have a very productive meeting with the head of the Minerals Commission in Accra last week or the week before, I think it was.
He's given a very strong commitment to move this thing forward as promptly as he can, because it's clearly in the interests of the government and in the interests of the surrounding community to have the Edikan mine going for as long as it can possibly achieve. You know, we're all similarly motivated in that regard.
Secondly, from Reg: Is the potential reduction or removal of subsidies in CDI factored into the H1 financial 2023 guidance?
I believe that we have made an estimate of the price impact. Exactly the exact amount, off the top of my head I can't recall. Look, we're watching that situation fairly carefully. We're comfortable with the guidance that we've given. We've looked at it very carefully. We believe that we can manage within that guidance range. You know, we can't control the uncontrollable, but we can certainly control a lot of what we do. I think the challenge for us as a company is to make sure that we don't roll over and say, "Oh, gee, the world's pretty tough." You know, the costs will be what they'll be. The costs will be what we make them to a very large degree. That is the challenge for us.
Look, if at the end of the day we fail to meet guidance because of some unexpected event, well, so be it. What we will do is we can give a commitment to our shareholders that we'll be doing everything within our power to keep a lid on the costs.
Your next question comes from Alexander Papp at Citi. He's congratulated you on another strong quarter and then asked, "At Yaouré, what has been the main driver for the + 1 million tons milled over the past two quarters? Is this run rate consistent with long-term projections?
Yeah, look, I mean, right across the board, the Yaouré plant is performing, you know, slightly better than what we were anticipating it would do. I mean, I've got to say that's, you know, that's fairly common with the plant, the Lycopodium plants. I mean, certainly Sissingué's been running above nameplate from day one, as has Yaouré, I guess. No, we're reasonably comfortable with the performance, and we expect that to continue. I mean, there will, over a period of time, be, you know, different ore types put through the mill, which will impact throughput rates and things of that nature. No, Yaouré is going exceptionally well, and we certainly see no reason why we can't maintain, you know, levels around this area, throughput rates, et cetera, going into the future.
I will say this, though, that look, you know, the grade is going to go up and down over a period of time, and there will be some periods where, the grade that we process will be, lower than what we've done this quarter, which means that we won't be producing quite as much gold. Aside from that, the other factors, you know, runtime, throughput rates, recoveries, those things are things that we can control, and we don't see any reason why we should see any decline from where we are at the present time.
Thank you. There are no further questions at this time, so I'll now hand back to Je ff for closing remarks.
Okay. Well, look, thanks very much, Nathan. Thanks listeners for your attention. As I said, it's been a fairly strong quarter, but we are looking to the future with some optimism and looking forward to delivering a similar set of strong results again next time we speak. Thank you very much.