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 CEO, Jeff Quartermaine. Thanks, Jeff.
Thanks, Nathan. Ladies and gentlemen, welcome to today's webinar. As indicated by Nathan, my name is Jeff Quartermaine, and I am the CEO and Managing Director of Perseus Mining. This morning, I'm joined on the call by Mr. Rick Clark, the President, CEO and Director for Orca Gold, and Ms Elina Wong, Vice President of Corporate Strategy. Earlier today, both Perseus and Orca published news releases on both the ASX and the TSX, announcing that Perseus had entered into a definitive arrangement agreement with Orca to acquire all of the issued and outstanding common shares of Orca that are not already owned by Perseus. This acquisition is set to take place by way of a statutory plan of arrangement under the Canada Business Corporations Act since Orca is a Canadian-domiciled company.
Now, in the next half hour or so, what I'd like to do is to provide you with an overview of the transaction, including taking you through the business rationale for the acquisition. I'll then invite my colleague, Rick, to talk in more detail about Orca, and in particular, its excellent Block 14 development project, as well as Orca's investment in another Canadian-listed company, Montage Gold, that owns the Koné Gold Project in northern Côte d'Ivoire, not far from Perseus's Sissingué Gold Mine. I'll then provide an overview on Perseus, a brief overview on Perseus Mining for the benefit of those on the call who are not so familiar with Perseus and our recent performance.
We'll then be available to answer any questions that you may have in relation to our respective companies and/or the proposed transaction between us. Turning to the transaction itself. Now, Perseus currently owns 15% of Orca's shares, having recently acquired this holding from another ASX-listed company through an off-market transaction. Perseus has now offered the holders of the remaining 85% of outstanding Orca shares 0.56 Perseus shares for every Orca share held. Based on Perseus' closing price of AUD 1.74 on Friday, Perseus' offer implies consideration of approximately CAD 0.896 per Orca share. That represents a premium of about 63% to the last closing price of Orca on Friday, which was around CAD 0.55.
The consideration to be paid by Perseus for 100% of Orca totals at CAD 215 million or about AUD 234 million, that is. This includes CAD 17 million in cash previously paid to acquire the initial 15% equity interest and CAD 198 million in Perseus' shares to acquire the outstanding 85% equity interest. Now, that means that the average entry price for Perseus into this transaction comes out at around CAD 0.83. Now, if this transaction is approved by Orca's shareholders, those shareholders will own approximately 9.1% of the enlarged issued share capital of Perseus, post the Orca acquisition.
Now, I can say that Orca's board of directors has unanimously recommended that the Orca shareholders vote in favor of the acquisition, and Orca's directors and officers and certain shareholders of Orca owning in aggregate approximately 37% of Orca's voting securities or nearly 44% of the outstanding stock have entered into voting support agreements and have agreed to vote all of the securities they own or control in favor of the acquisition. Now, aside from the approval of Orca's shareholders, and I should say that 66.7% of the eligible voters need to vote in favor of the transaction for it to be approved.
In addition to that, the transaction also requires Canadian court approval, plus a number of small other regulatory approvals along with customary closing conditions such as no material adverse change, et cetera, et cetera. The vote by Orca's shareholders is expected to take place on or about late May 2022, so in a couple of months' time, and the transaction should be closed in early June of this year. Now, why has Perseus made this offer? That's the question, I guess. What is the industrial logic behind the transaction? Why have we chosen to make this offer right now?
In a few short words, for Perseus' shareholders, the Orca acquisition is expected to be net asset value per share accretive and result in the ownership by Perseus of a robust, fully licensed development project located in a supportive mining environment that's capable of being developed into a large scale, long life mining operation. This aligns perfectly with Perseus' corporate strategy of seeking to upgrade the overall quality of our asset base. This transaction provides Perseus' asset portfolio with the following additional items. It gives us size, and by that I mean, a very material increase in Perseus' inventory of mineral resources and ore reserves. I should note that Orca has completed an NI 43-101 compliant feasibility study that validates this assertion.
It gives us longevity. When successfully developed, the Block 14 gold mine is expected to run for quite a long time and well in excess of the lives of a couple of Perseus' existing mines. It also gives us geopolitical diversity. Now, Perseus currently operates in Ghana and Côte d'Ivoire in West Africa. The Block 14 project is located in the Nubian Shield geological structure, located in northeastern Africa in the country of Sudan. Now, furthermore, this transaction enables Perseus to benefit from the first-mover advantage gained by Orca through its presence in Sudan over nearly a decade, which has positioned Orca to become the first large-scale professional mining operation in the country. Operating under the terms of a fully executed mining lease and shareholder agreement that contains terms designed to attract foreign investment to the country.
I should also say that the government in Sudan is very supportive of Orca and is strongly in favor of this transaction. I was fortunate enough to recently visit Sudan myself as part of our due diligence effort and was granted two fairly lengthy sessions with the Minister of Minerals, His Honorable Mohamed Bashir Abdullah Abu Nammu , who confirmed this support to me in person. The combination of Perseus and Orca is a classic one plus one equals three situation. By combining Perseus's development and operating skills, along with access to our internally generated cash and strong cash flows with Orca's potentially world-class asset base, we've all the ingredients needed for one, possibly two, top-class mining operations.
While the acquisition involves a step-out in geography for Perseus, which inherently involves some additional geopolitical and technical risk, this doesn't in any shape or form threaten the existence of the company if things don't turn out exactly as we envisage. The Orca shareholders will own approximately 9.1% of the expanded capital of Perseus, and if for some chance the Sudanese project does not reach expectations, Perseus will not fail. In fact, it will be in the box seat to consider investment in Montage's Koné project as a fallback in a country that we know very, very well. Finally, the business combination creates a Pan-African company of real substance, as you can see from this slide. The pro forma market capitalization of the company is nearly AUD 2.4 billion.
Now, Perseus contributes ore, a reserve inventory of about 3.3 million ounces of gold, and Orca contributes an ore reserve inventory that at this stage sits at about 2.9 million ounces of gold, and potentially more. Together, this is a very sizable ore reserve inventory. This together creates a sizable company with tremendous upside potential, particularly in a strong gold price environment such as that we're currently experiencing. Now, I could go on citing the virtues of this, you know, what I think is actually an excellent acquisition. However, I will ask Rick in just a moment to take over and to describe to you exactly what he's built in, you know, in Orca Gold and what it is that Perseus is seeking to buy.
Just before I do turn to Rick, I guess the question of why now, as opposed to several weeks ago? Now, as we said when we acquired the initial 15% stake, at that particular juncture, we weren't quite complete on our due diligence. We have since completed that work, and we've got complete comfort across the board that this is, as I say, an excellent opportunity and an addition to our portfolio, as Rick will outline right now. Rick, would you mind giving the listeners an overview on Orca, please?
Sure. Thanks very much, Jeff. Let me say at the outset that it's a pleasure for me to be on this call with Jeff and represent Orca and talk about not only our projects, our vision for going into Sudan, but also our thinking in terms of aligning ourselves and our assets with Perseus in order to achieve the full value of those assets going forward as a Perseus shareholder. Just by way of a background for those that may not know very much about Orca. Orca is part of the Lundin Group of Companies and the management team of Orca have been part of the Lundin Group for many years. Previous to Orca, our major gold venture was a company called Red Back Mining.
We were based in West Africa. We were very successful in, as has Perseus been, in developing and operating mines in places like Ghana. In particular, though, we delved or moved into the desert, into the Sahara Desert, with an acquisition in Mauritania called Tasiast, which we recognized as having huge potential, and we had the unique position of not a lot of competition on that asset because people were a little bit reluctant to jump into the Muslim world, not understanding it very much, and certainly not understanding the potential of the geology. So again, it's first mover advantage. This is what we do. We go, and we look at where we think we can find significant gold projects or gold deposits. We then make our own assessment of political risk.
We do not take security risk with our people, but we will go out a little bit more adventurous on the political side, which we did in Sudan 10 years ago. What we found and what we'll go on with is when we got to Sudan, there was virtually no database at all on the country geologically. Our exploration people, headed up by Hugh Stuart, had to go in and ascertain where we might go to find a significant gold project. We were quickly attracted to the north, where a massive claim rush or a gold rush was going on. I would argue it's probably now been the largest gold rush in history in the world. It's certainly one that not very many people know about.
What that has resulted in is Sudan being one of the largest gold producers out of Africa, with essentially no Western modern gold production, Western type modern gold production. It's all artisanal. It's all small miner operations. Yet it gives you an idea of just how prolific the potential of gold is in Sudan. Quite frankly, right now I'm only talking about one small area of Sudan, which is up in the north near Egypt, where our project happens to be located. We were very lucky in going and following these artisanal miners. Hugh and his team discovered a geological formation that we thought was potentially going to be significant. We went in, we sampled it.
I can tell you, we drilled it, and we discovered GSS and what is now what we call the Block 14 project, but it's made up of two deposits, GSS and Wadi Doum, which is about 60 km away. Now, what's interesting here, though, is that when you think about it, we went into a country in effectively 2013. Here we are in 2022 with no database, and we took an exploration idea, and we've turned it into a significant gold deposit, as Jeff has talked about. That has also been during what many people have considered to be a period of significant political change in Sudan, some of which we predicted, some of which we did not.
That has delayed even so, even though this is a very rapid process of discovery, exploration, feasibility studies, proving it up to the transaction we're talking about today. That also takes into account about, you know, two and a half years where we were relatively inactive as we watched politics unfold in Sudan. You know, that the potential of this area of the world, of the Nubian Shield, whether it's Egypt, Sudan, Eritrea, Ethiopia, Saudi Arabia, is now becoming, I think, well appreciated, though virtually unexplored. You know, we're impressed with Perseus' interest in being a first mover. It is recognition of the potential of the area and the decision of its board to come in and add our project, our company to its portfolio.
As Jeff has indicated, it's a very large project. It's got indicated resources of approximately 3.3 million ounces, 3 million ounces of probable reserves. The mine life is 13-14 years. The way we've designed it, we basically were a junior developer in a bad market for junior developers over the last number of years. We stopped exploration as soon as we thought we had enough to deliver a significant feasibility study. We're fortunate that has turned out to be the case. That doesn't mean the project is not going to get bigger. We now know there's potential at depth in the main pit area, and there's numerous exploration targets that have been identified by our original exploration and most recently by new artisanal work.
As Jeff has said, we are fully licensed. Our resources are covered by mining leases. Those agreements were a process of two years of negotiations with the government. They're definitive. They're very attractive. They permit a very quick payback to the government, and us and our shareholders, mainly because of the economics of the project. It certainly is a win-win for Orca, now Perseus, and the people of Sudan, and that is more than recognized by the government of Sudan. We're now looking forward to moving to continue to do hard scientific analysis of our feasibility study in light of new potential numbers on capital, mostly as a result of COVID issues and other things in the world that everybody is familiar with now.
The work in the coming months will be to fine-tune that and get a much better handle on the numbers going forward. Also at the same time, I think, and Jeff will talk about over the coming months of how we move the project, or we plan to move the project forward. At the same time, very briefly, I think everybody in the Mining business knows about this project. They know about Orca. Everybody has always given us huge encouragement on the project. It speaks for itself. When you look at the economics of the project, you can see that we've run our resources at $1,100 gold, and we ran the financial model at $1,350.
When you plug in sensitivities, the value, the NPV value, certainly currently, based on our current feasibility is pretty staggering and goes to show why Perseus has been interested in this project and why we stuck with it and intended to put it in production. Always when talking about this project in Sudan, the elephant in the room has been what is going on with the government, what's going on with politics. I can tell you that the people of Sudan are tired of a military autocratic government. They overthrew the government a few years ago. That surprised, I think, the world. It certainly surprised the military government at the time. They've been working towards a democratic process which would culminate in elections.
Now, I think anybody who looks at history of democracy will appreciate that this never happens smoothly. It never happens easily. That's certainly the case with Sudan. However, this is a struggle between the people and the military authorities, and they are trying to reach a compromise, and we are very, very confident that they will reach a compromise. We have had discussions on levels with both the public sector, the resistance committees and people, and also the government, and everybody is on the same side towards reaching a democratic process in short order, namely sometime next year. Now, we think that's gonna be great for the country, both internationally and internally, and it is also gonna be great for us in terms of developing our project.
That being said, at no time in the last 10 years have we had a problem operating in Sudan. Other than there was an actual uprising or resistance where, at an abundance of caution, we suspended operations until we were sure there was no security issues. It has been business as usual for Orca for pretty much the 10 years, and I can say that people are willing, they're encouraging, and everybody's behind seeing this Mine develop and a proper Gold Mining business be established in Sudan. Now we can go through the presentation. You can see, you know, exactly what the numbers are, the reserves. They're on our website as well.
I think what is most significant is to be able to tell you that all aspects of building this mine from a logistics perspective have been identified and permitted. We have water, which you can see on this slide, which, excuse me, is to the west of the project. It's about 100 km. It's a significantly large aquifer. We've tested it extensively. There is more than enough water here to supply the project. You know, some people might get daunted by the fact that it's 100 km away. In Mauritania, when we pumped in water, it was about 80 km away. In fact, this has a significant advantage over Mauritania in that the water field is 300 m in elevation higher than the mine site. We get a huge gravity feed. We are starting exploration again.
There's many targets on the exploration license, which is 1,000 sq km . This remains a huge untested land position in a significant gold environment which has already established you know two major resources, one at GSS and the other at Wadi Doum. What I'd like to leave you with on the Sudan side is that you know we have people that have been living there for 10 years. We've established a new office. We've just built an airstrip. Jeff and I have landed at that airstrip together. We've just established a new camp. We're all ready to go towards realizing the development process of Block 14. That's the main asset of Orca.
The second asset is a series of projects in Côte d'Ivoire, which were pegged by Hugh Stuart back in the Red Back days. There's a long story about how they ended up in Montage, but suffice it to say, they were in Orca. We spun them out into Montage as a separate vehicle in order to for Orca to be able to focus on Sudan and Montage to be able to focus on Côte d'Ivoire. Hugh and his team have been very successful in establishing a new discovery, another new discovery, this one on the Koné project, as Jeff has discussed. It's a very large concession, about 303,750 sq km. The Koné deposit has now got a feasibility study on the project that was tabled earlier this month.
Again, it's a significant resource, a significant probable and indicated resource. What we are looking to do there now is fine-tune the study, start fine-tuning numbers, have financing discussions. Its potential and its production profile is, quite frankly, similar to Block 14. Two very large projects, both which will produce well in excess of 200,000 ounces a year. Perseus will now own, you know, 70% of the Sudan-Sudanese assets and approximately 31% of Montage. We think with Jeff at the helm and the Perseus team, Perseus's financial strength, their technical strength, that we can realize certainly the value in Sudan and get that project into production. We also believe we can assist Montage in and be incredibly supportive in their objectives of moving their project forward as well. We'll come to questions at the end, but I'm gonna pass this back over to Jeff.
Yeah. Okay, well, thanks very much, Rick. I think it's pretty clear from that presentation that this is a company that has an extremely high-quality asset base that, when combined with the financial and operating and development capacity of Perseus, is poised to add a material amount of value to the company. Now, speaking of Perseus, as listeners would know, Perseus has become quite a compelling mid-tier gold investment opportunity. We're operating, as we said earlier, in two countries at the present time, Ghana, Côte d'Ivoire, now having moved to three. We'll hopefully be moving to three countries very shortly.
At the present time, we're producing at a rate of around 500,000 ounces a year, and our production all-in site costs last quarter was down sub AUD 950 per ounce and declining from that particular point. We do have balance sheet capacity and very strong cash flows available to fund not only our growth, but also our future dividend stream. We have actually implemented a dividend policy as of last year. We've got a very strong social license to operate and very soundly based ESG practices, an experienced board and management team. Now, as of Friday, as I mentioned earlier, our share price was sitting at around AUD 1.74, which gave us a market capitalization of about AUD 2.15 million.
We have $50 million of debt, and I think that's U.S. dollars of debt. That gives us an enterprise value of AUD 1.9 million, or about $1.39 million. We do have a very excellent share register, as you can see from this slide here. There's a number of very big names in the top 10 and just outside of the top 10, there are a number of other very large names. All people who are very much specialized in focusing in the resource sector and clearly know what they're looking at. You can see some of the names there that you would be very familiar with.
As I said, we've got an experienced board and management team headed up by Sean Harvey, who's our chairman. You know, we've got a very good diverse group of people, bring a lot of excellent skills to the table. As you can see from that slide, of course, working for Perseus is not much good for the guys in terms of their hairdos. We've got the same barber. You can see all that there. Obviously, it's a good thing that that doesn't extend to our female colleagues. Now, just in terms of calendar 2021 and what we've managed to achieve. We did deliver our production at the top end of guidance range, and we generated a cash margin of in excess of $650 per ounce.
We're at that particular level. Operating cash flow from the operations was around AUD 334 million, and that left us with cash and bullion at the end of the year of something like AUD 212 million. It was a very productive year in terms of cash flow generation and also earnings, which led to the declaration of the first dividend in the company's history. Now, we've just reported again, as I say, our financial results for the half year, and they were particularly good. As you can see from the slide, we had our profit after tax at AUD 217 million, was up 92% year-on-year.
Operating cash flow AUD 440 million, up 83%, et cetera, et cetera. We were able to sustain without any kind of difficulty the 1% annual yield on the dividend. Looking forward, the production and cost to market guidance is very strong. In this current half year, we're expecting to produce between 230,000 and 265,000 ounces at an all-in sustaining cost ranging from AUD 915-AUD 1,085. Which for the financial year ending June 30 this year, that'll put us in the range of between 470,000 and 506,000 ounces at an all-in sustaining cost somewhere in the range of AUD 932-AUD 1,020.
If our performance continues on track, we'll be at the upper end of the production range and towards the bottom end of the cost range. That's very good. Now, as I said, all of this has come from three producing mines at the present time. You know, two in Côte d'Ivoire, one in Ghana. The major contributor to production is clearly the Yaouré mine. That's our most recent mine. That's a third mine brought on stream. The other two mines are making their share as well. In terms of going forward and, you know, this acquisition of Orca is obviously an inorganic growth measure.
We've certainly invested a lot in our organic growth programs, and we have very high expectations for them. We're targeting somewhere in the range of 1.7 million-2.4 million ounces of additional JORC compliant ore reserve over the next couple of years. To do that, we're looking to be drilling around 650 km of drilling. Now, at the present time, we've got ten rigs operating at the Yaouré, drilling out the CMA underground resource. We're doing infill drilling and step out drilling. We've also got four rigs operating at Edikan, where we're drilling out the discovery at Nkrasuo, which is about 10 km from the mill. We have a single rig operating at Sissingué. We're putting a lot of effort into our organic growth program.
As you can see from this chart, if we're even close to achieving what we're aiming to do from that exploration program, let alone anything else, we can get fairly close to the 500,000 ounce mark per year as we go forward. Now, this is the profile that is based on existing reserves and what we expect to be able to add through that organic growth program. If you add on top of that, the production that would come from the Block 14 project, you can see that Perseus's, the production level would be sitting well above the 500,000 ounce level going forward and be maintained well into the future. That's the you know one of the key drivers in looking at that acquisition.
Now, you know, in recent times, people will be very aware of the growth and interest in the ESG space or sustainability space. Now, for us at Perseus, this is not exactly a new thing. We've held the view very strongly that responsible gold mining can play a very progressive role in sustainable development in emerging economies and at the same time, deliver sustainable returns to our shareholders. That's what we have been setting out to do for some time. It really is a case of understanding what are the important factors, what are the key drivers, what are the key triggers, what are the global standards that really need to be delivered upon, and then putting in place programs to achieve those outcomes.
Now, for us, the S part is probably more important than the E and the G, given that we have a lot of people in these developing countries dependent on the things that we do. We're doing fairly well in that area. We're contributing very strongly to national economies through local procurement and employment. You can see we've got about 95% of the workforce comes from the local area. We've created a lot of jobs in recent times. Now, in addition to that, of course, we put a lot of attention on making sure that we act very responsibly from an environmental perspective.
Our tailings dams are designed to, you know, first world standards, and we're looking at all, at every opportunity of reducing our emissions intensity as best we can through looking at renewable sources of energy, et cetera. Governance in developing countries is a very key thing. Perseus maintains absolutely the highest standards of performance in this area, which and levels of performance which would not be out of place and are not out of place in any Western situation.
Now, looking to the future on the sustainability roadmap, we do have a very clearly defined three-year plan for ensuring that we achieve or deliver outcomes that are in line with, you know, the highest global standards, including the World Gold Council Responsible Gold Mining Principles and other standards I might add in addition to that. We are in the process right now of designing those programs and implementing them right across the group to achieve consistency across all operations and deliver those first-class outcomes. Of course, the work that we do in Sudan will be no different at all. It'll be done to the same high standards that are applied in the other mining jurisdictions.
I'm sure that will be indeed to the benefit of, all stakeholders, you know, the governments and communities in Sudan, and of course, our shareholders, employees and suppliers of goods and services. Ladies and gentlemen, that brings us to the end of our formal presentation. Before opening the floor to Q&A, may I say that the board of Perseus, and I understand from Rick, the board of Orca, are very happy about this business combination. For some time now, industry leaders have been saying that the Gold industry, and particularly in Africa, needs consolidation. In other words, it needs the formation of fewer, stronger, better managed companies that are capable of riding commodity and geopolitical cycles, and in the process, consistently generating wealth for the benefit of all stakeholders.
Now, I genuinely believe that this transaction creates such a vehicle, and both Rick and I strongly recommend that you, as either existing or prospective shareholders, carefully study our market release and presentation, and we're very confident that you'll reach the same conclusion. Thanks very much for your attention today, and we're now available to answer any questions that you may have, either, as I say, on our individual companies or the combination that we've just announced today.
Thank you, Jeff. Your first couple of questions are from Patrick Collier at Credit Suisse. First question, what are the key items to address between now and the final investment decision? Is there a possibility of a decision before June 2023?
Well, look, I mean, obviously, Rick and his team have done a very good job in producing a feasibility study, but that was done a couple of years ago. I think with movement in pricing, costs and the like across the globe, it is important that we go back and take another look and make sure that when we do take a decision to develop, that it is done on the latest possible information and that we have, in fact, designed the most optimum arrangement for that particular project.
Now, having said that, and that does take a little bit of time to deliver, and, you know, we do have some form in that regard with Amara and the Yaouré project where we did a bit of work and we came up with an excellent outcome. Now, I think in the case of Sudan, it is quite likely, though, that we will start some early works. We'll continue some early works and make sure that it's very evident to our hosts that, in fact, we are serious about taking this project forward.
Thank you. Is the local partner and government free carry for the capital requirements?
Look, I think that's a question that Rick, who negotiated all of the arrangements, it would be best to answer. I'll pass to you, Rick.
Sure. The 30% is that we do not own is what we would call quasi-carried. What that means is we get to recover the capital that we put in on their behalf on a preferential basis. The formula for that is contained in the agreement. Obviously, you know, again, going back to the robust nature of the project, that repayment actually occurs quite quickly, obviously subject to sustaining gold prices. It means it's not fully carried in the sense that the government is sitting there with a 30% interest and we put everything in and don't realize the value of the money we'll be advancing on their behalf.
Thank you. How do you perceive the CapEx risk to the AUD 320 million pre-production outlined in the 2020 study?
Well, I think I just you know mentioned that before, you know. Well, it's pretty clear that there has been cost inflation in the capital space right across the world. I mean, we finished the building of Yaouré in December 2020. What are we now? 2022. I'm losing track of time here. You know I think since then since we finished that there very definitely has been some cost inflation. That's the reason why we need to spend a little bit of time making sure we understand precisely what our capital cost is going to be and make sure that, you know, we've got adequate funding mechanisms in place.
I should say that Perseus is generating a very large amount of cash, as I indicated, in that brief overview of Perseus and funding the capital, you know, from cash flow wouldn't be a terribly difficult thing to do. Now, having said that, I dare say, we will be using other mechanisms as well.
Thank you. Your next two questions come from Andrew Bowler at Macquarie. Can you talk about mining expertise in Sudan? Will you be leaning on expat workforce early on?
Rick, you
Sure. Look, the people of Sudan, when we first went there, are surprisingly very sophisticated. They had strong industries prior to the military government. The education system is very high. I think the ability to train people is gonna be very quick. You have to keep in mind there are literally 1 million Sudanese people doing artisanal mining. When I say that, it's small scale. They operate heavy equipment. They operate drilling machines, drill and blast. They're getting more and more sophisticated and quite keen to work with us and have you know sustainable jobs.
That again being said, the development, the design and the construction of a mine of this nature is very sophisticated and requires a lot of expertise, which I believe that Sudan at this stage doesn't have. My guess is we'll be relying quite a bit on expats in terms of the construction side.
Yeah. Look, I think the pattern here is more likely than not going to follow the same path as in Côte d'Ivoire, where certainly we had expats involved in development, but and in the early stages of operations as well. We had expat trainers and the like working very hard to bring the local people up to the standards that are needed in these sorts of operations. Now, what you're able to do fairly quickly though is to localize a lot of the employment, and that's something that we would aim to do for a couple of reasons. One is that, you know, the government and the communities want employment.
Secondly, from our point of view, it's also less costly to employ people locally than ship them halfway around the world. That would certainly be our plan. It's what we've done in every other operation that we've developed, and I can't see any different here in Sudan.
Thank you. Will you be doing more drilling as part of the updated study or are you happy with Orca's database?
Well, look, I don't want to preempt the situation right now. I think there are parts of the database that we think that with a little bit of infill drilling, we could probably add materially to the measured indicated resource, which would obviously add to the reserve. Our people have done a very detailed bottom-up review of the work that has been done, and it has been done to the highest standards. That said, you know, Orca being an exploration company hasn't had you know access to the capital that perhaps they might have liked from time to time. You know, where we can perhaps do that and make a more complete job. We do certainly see some opportunity with additional drilling to expand that resource base and therefore the reserve in the fullness of time.
Thank you. Will you look at traditional debt funding or project finance for the project or project finance such as export credit finance?
Well, look, I think as I said just a few moments ago, if push came to shove, we could fund the entire development from internal sources, but that isn't the plan. We would like to get some export credit kind of money involved, maybe, well, I won't say, you know, the sorts of agencies now at this stage of the game. There's certainly Rick would tell you that there have been inquiries made by some of the multilaterals who are very keen to support the development of Sudan. A project like this, you know, fits precisely with their mandate. We do know that there is interest in that area.
Of course, if we're able to negotiate their involvement, I think it would be quite likely that the commercial lenders would be willing to look at Perseus even at a corporate level, if not at a project level, but certainly at a corporate level. Look, that's a long-winded way of saying we would more likely than not fund this through a combination of debt and equity. At this stage of the game, it's much too early to be making bold predictions about proportions or anything of that nature or precise sources of capital. You know, what I've just described would be a fairly typical, you know, funding mix for a project of this sort. You know, we expect to be able to apply it here.
Thank you. There's a couple of questions regarding the water. Is it being used by any townships or small scale agriculture at the moment, the water that you plan to use for the project?
Rick?
No. The answer is no. This is a water discovery that we have made that the Sudanese didn't even know existed. We brought in very sophisticated equipment and consultants, a combination of equipment from Denmark and consultants from South Africa that we've used in the past. This was a blind discovery that we have defined, and we don't see any competitive use for this from the particular aquifer for many years to come. Even if there is, this is a big enough water deposit for many users.
Are there artisanal mining operations in or around the Block 14 project? If so, how are you obliged to deal with that artisanal mining?
Yes. I mean, there's artisanal mining everywhere. When we first went on our concession, there was probably 10,000 of them. Obviously, when they see a whole bunch of drills going, you know, the people, and it doesn't matter whether you're in Sudan or Côte d'Ivoire or Ghana or Brazil or anywhere else, they all come. Our arrangement with them was that we would work in conjunction with them on our areas, but they couldn't use mechanized equipment, and we were very successful in that arrangement up till a couple of years ago, where they expanded their operations. However, in conjunction with the government of Sudan, all the artisanal miners that are on our resources, the two main resources, have been moved. They were moved without violence. They were moved without casualties. They were moved in cooperation.
We are now almost completed fencing both our resources at GSS and Wadi Doum. The Sudanese people are very law-abiding. You know, when they see obviously a legal barricade or impediment that is secured and people have rights, then they don't push. If it's open desert, they feel they can go anywhere. It's important to define your areas and when you're able to, and when you know you actually can move forward on a project, and that's what we've done.
Yeah. Thanks, Rick. I think just adding to that, I mean, it would be naive to believe that there wouldn't be artisanal activities in the general area going forward. In fact, we'd encourage it in a sense because, you know, artisanal mining is a form of employment for local people. It's a source of income for people. I think it's very, very important that, you know, we work hand in hand with the local community to ensure that we can all, you know, live harmoniously, just as we've done in other countries.
It's the cheapest exploration you can get.
Yeah.
Your next question comes from Adam Baker at Global Mining Research. He's asked, "Can you comment on the nature of the ore body? With a life of mine recovery at 82%, is there a refractory component?
I'm not gonna get into the actual, technical operational side in any detail. You're welcome to have a look at the feasibility study and/or happy to arrange a call with Kevin Ross or Jeff Biebel or Hugh Stuart. What I can tell you is it's not a refractory issue. The gold is very fine. We've done lots of trade-off studies as to what's the most economic, and we'll be, I'm sure, doing a lot more. I'm very confident we'll be able to tweak that. As I said, it's not a trade-off study. You've got to remember, at the prices we were using to do these studies, those were the optimum numbers we came to. If we change our gold price, things change.
If I look at feasibility studies today, most of them are now being done at $1,600 gold. You gotta remember, ours was done at $1,350. When Perseus puts its technical people on this and we start collaborating with our data and our people, I think you're gonna find that there's gonna be some, could be some significant changes to the design and everything else going forward.
That indeed is why we will take a little bit of time. In answering one of the earlier questions, we said we'll take a little bit of time to look at all this because it may well be that there are opportunities for optimization or not, as the case may be. You know, where we sit today, we're not in a position to be making, you know, assertions that are going to necessarily be, you know, the way it will work out going forward.
Jeff, on M&A, are you now comfortable with your growth profile, or are you continuing to look at further opportunities?
Well, look, I think, you know, you can see from the chart that was shown earlier on, we are, you know, well-advanced in ensuring that not only the 500,000, but above that for quite some time to come. We've put ourselves into a very strong position as we stand today. Now, in terms of future growth, never say never. I mean, you know, well, one thing that we have done is put ourselves where we can fund these opportunities if they're worth doing. Of course, you know, it'd be totally remiss of us to not keep a watching brief for opportunities to create additional value for shareholders.
We'll obviously keep our eye out, but quite clearly, what we have now done with Orca is going to involve a level of work in the next coming, you know, in the coming months or so, year or so. You know, you do have limitations to your bandwidth to be able to do a lot more than that. You know, never say never, but let's just wait and see what happens.
Thank you. There are no further questions at this time. I'll now hand back to Jeff for closing remarks.
All right. Well, look, thanks very much. I mean, as I said earlier on, I mean, we are very, very happy with this transaction. We think that there's an outstanding opportunity here to create value for shareholders and to take Perseus to its existence going forward. We have always aspired to become a you know, a leading Pan-African Gold company, and I believe that the transaction that we've announced today has put us firmly on that path. Thank you very much for your time, and we look forward to bringing you further news of development in Sudan and in Côte d'Ivoire and in Ghana as we go forward. Thank you very much.