Call for September 2021 quarterly report. All attendees are in listen-only mode. If you would like to ask a question, please enter it into the Q&A panel within Zoom. I will now hand over to Perseus Mining Managing Director and Chief Executive, Jeff Quartermaine. Thank you, Jeff.
Thanks very much, Nathan, welcome to Perseus Mining September 2021 quarter webinar. This morning, I'm joined on this call by several members of my senior management team, including Lee-Anne de Bruin, Finance, Paul Thompson, Business Growth, Jess Vallance, Sustainability, and Doug Jones, Exploration. What we'd like to do today is to provide investors with an overview of the September 2021 quarter, as documented in the report that we released to the market earlier today. Then follow that up with a Q&A session to address any issues that aren't clear, either from the report, my presentation, or one of the many market releases that we have published earlier in the week. Now, cutting to the chase, Perseus has this quarter, once again, achieved another record operating performance. This time producing 112,796 ounces of gold, 10% more than the June quarter, or 28% more than the March quarter.
Our weighted average All-in Site Cost decreased by $81 an ounce or 8% compared to last quarter, to $966 an ounce. That included production costs of $857 per ounce. Now, by selling our gold at an average price of $1,655, $1,655 per ounce during the quarter, we generated a cash margin of roughly $689. That's about AUD 930 for every ounce of gold produced. That resulted in our net cash position increasing by over $40 million quarter-on-quarter. Our cash and bullion on hand at the end of the quarter amounted to $196 million, or approximately AUD 265 million in Australia. Simply put, this quarter, Perseus has done once again what we said we would do.
We are on course to achieve our stated aim of producing around 500,000 ounces of gold or more per year at a cash margin of AUD 400 an ounce from FY 2022 onwards. As announced recently through exploration success, we've also made strong progress towards being able to sustain this production level right out to the end of the decade. During the quarter, two of our three mines, namely the Yaouré and Sissingué in Côte d'Ivoire, performed exceptionally well. Our third mine, Edikan in Ghana, not so much, but given that we now have multiple mines in our portfolio, the impact of Edikan being a bit off target this quarter has not detracted from the overall performance of the group. We have, after all, established a new production record by increasing overall production by 10%.
What we have done, I think, is very clearly demonstrate the benefit of Perseus becoming the multi-mine, multi-jurisdiction company that we set out to become several years ago. As I've said in the past, the continuing strong performance by Perseus is a result of a lot of hard work and resilience in challenging circumstances by what is a very talented team of people that we have spread across our three operating sites, several exploration sites in West Africa, offices in Accra and Abidjan, and of course, our corporate office here in Perth. Thanks goes to all of those who contributed this quarter, including the very supportive families of our staff who are required to spend extended periods of time away from home.
What is pleasing, what's also pleasing is that everything that has been achieved this quarter has occurred in a sustainable manner, as we reported in our very comprehensive fiscal 2021 sustainability report that was released earlier this week. Both the report and the webinar that was held on Monday to discuss that report, I think, served to underline that Perseus is a well-managed company staffed by professional subject experts who are well up to the task of implementing our mission of generating benefits for all of our stakeholders in varying proportions. In summary, as a company, Perseus continues to go from strength to strength, thoroughly justifying the re-rating in the share price by the market in recent weeks.
For those of you who haven't yet had an opportunity to read the quarterly, let me talk in a little bit more depth about some of the key elements of our performance before opening up to any questions that you may have. As I said earlier, I am accompanied today by members of my senior team who are available to respond in detail to your questions as appropriate. Firstly, let's discuss Yaouré, which as you know, is our newest gold mining operation. We produced 64,588 ounces of gold at Yaouré during the quarter at a production cost of $572 per ounce, giving rise to an on-site cost of $671 per ounce for the quarter. Under the circumstances, this was quite a remarkable performance by the team at Yaouré, who experienced 715 millimeters of rain on the Yaouré site during the quarter.
As might be expected, this periodically interrupted mining activities and prevented us from mining exactly where we wanted to mine. We also experienced some unexpected mechanical failures in the plant, not surprising at this stage of its life, during the quarter, and these needed some urgent repairs. This also detracted slightly from production during the quarter. Notwithstanding these challenges, we still managed to increase gold production by 73% quarter-on-quarter and decreased our All-in Site Cost by 35%. We've set ourselves up for a very strong finish to the half year period. In that regard, I can confirm we're well on track at Yaouré to deliver on our half year guidance of 130,000 ounces- 140,000 ounces at an All-in Site Cost of AUD 6.75 to AUD 7.75 an ounce. That's very pleasing.
It's worth noting that the average selling price for Yaouré this quarter was AUD 1,690 an ounce, which meant that our cash margin at the site was $1,019 US per ounce, or AUD 1,377 per ounce for our Australian business. Given the amount of gold that we produced, this meant that our notional cash flow for the quarter from Yaouré was $65.8 million, or about $41.6 million more than in the June quarter. That's a fairly solid result in anybody's language or currency, come to that. The other thing about Yaouré that's worth noting is that the reconciliation between our block model and ore fed to the mill remains positive. In the nine months since we started mining, we've got a positive reconciliation on contained gold of about 5%, which is very encouraging. In early August, we released an updated Life of Mine Plan for Yaouré, as we promised.
While this included modest increases in the Mineral Resources and Ore Reserves, it included encouraging information on lower operating costs than previously announced, and also increased gold production in the early years of the mine. We do expect to update that Life of Mine Plan again around the same time next year. As indicated in our market release on exploration published last Thursday, the results of infill drilling at the CMA underground prospect will be used to upgrade the current Inferred Mineral Resource estimate to indicated status, enabling a Pre-Feasibility Study for an underground mining operation to be completed by late June next year. This work will also include an initial Ore Reserve estimate that'll be reflected in the next version of our Life of Mine Plan. Yaouré averages everything that we hoped it would be and then some.
We've been running on 100% high-grade fresh ore from the CMA pit for some time. Weather permitting, this quarter we'll get a clear run at some fairly high-grade material coming from the pit. Watch this space, as they say. At our other Ivorian mines, Sissingué, we produced 16,067 ounces of gold during the quarter at an All-in Site Cost of $9.31 per ounce. Given that we sold the Sissingué gold at a weighted average price of $1,624, we had a cash margin of $6.93 an ounce and generated notional cash flow of about $11 million for the quarter. Once again, at the end of the quarter, Sissingué is well on track to deliver on the market guidance for the half year, which is set at 25,000 ounces- 35,000 ounces at an All-in Site Cost of $9.50- $10.70.
At Sissingué, just as we did at Yaouré, we experienced a very wet season this year with something like 788 millimeters of rain falling on the site. This impacted production to an extent, particularly in terms of periodically preventing access to pits for mining, which meant that for extended periods, we needed to feed the plant with ore taken from the run of mine stockpiles. The weather also impacted the rate of feeding material to the mill, and that also reduced production a little. Notwithstanding this, the results achieved this quarter at Sissingué were very much in line with our expectations as we transition from a very high grade zone of ore that we'd mined for the last few quarters to a lower grade zone this quarter.
I should also note that heavy weather I mentioned towards the end of the quarter played absolute havoc with our month-end surveys and the like, particularly since the bottom of the pit was submerged with water. The mineral resource to mill reconciliation for the last three months looks a little out of line relative to prior quarters. Nine quarters have been done. We do expect that things on this front will improve as the mine dries out and mining activities are restored. We're not overly concerned by that at this particular point in time. Of course, given that our investment into Sissingué was fully repaid quite a long time ago, the operation continues to make a very positive cash contribution to Perseus' coffers, even though the results this quarter were down a little on the previous quarter.
We do expect this production level to be sustained for the next couple of quarters while we're preparing to receive ore from the satellite deposits at Fimbiasso and Bagoé. In this regard, we have prepared a standalone DFS for the Antoinette, Juliette and Véronique deposits, which are located on the Bagoé license that we acquired last year. This DFS, together with an Environmental and Social Impact Assessment, will soon be lodged with the Minerals Commission along with an application for an exploration permit for this area. We're very confident that as the concept for satellite mining has been accepted by the Ivorian government, that we can prepare an optimized Life of Mine Plan for the combined Sissingué, Fimbiasso, Bagoé operation, rather than looking at standalone operations. Optimizing this plan does involve a little more work than we're expecting, including some additional drilling.
It's taking some time to finalize, but we do expect that this will extend the life of the operation at Sissingué well beyond its current fiscal 2024, even if no more ore is discovered on the licenses, which at this stage seems unlikely. We expect that the wait will be well worthwhile. We'll get that out as soon as we practically can. Turning to Edikan. September quarter gold production by Edikan was 32,161 ounces at an All-in Site Cost of AUD 1,574 an ounce. That was below our expectations, both in terms of production and cost. The disappointing performance was driven principally by the grade of the ore that was fed to the mill during the quarter. All other key operating parameters including mill runtime throughput rate, quantity of ore milled and recovery were all in line with forecast, plus or minus a couple of percent.
The ore that was processed during the quarter came from the AG Pit, ROM and heap leach stockpiles, and a small amount of material mined from the remnants of the stage 2. This ore was blended in varying proportions depending on availability and fed to the mill. During the quarter, the head grade of the mill feed averaged 0.72 grams a ton, which was well below the average grade of prior quarters and certainly below what we were expecting to see. This reduced head grade was the result of several factors, including poor equipment availability by our mining contractor, Rocksure. This generated a shortfall in the availability of fresh ore from the AG Pit, which was the designated major source of ore this quarter.
Now, the reason for that, there's a variety of reasons, and a number of them can be strung back to COVID-related supply issues, which I think almost every mine in the world is experiencing. In this case, it was in the area of tires. This shortfall in the AG ore created the need for mill feed to be supplemented by low-grade material taken from the run of mine stockpile. Now, compounding this problem, the grade of the fresh ore that was mined from AG didn't reconcile well with our block model, and therefore our forecast. This was possibly a function of the fact that the MIK, Multiple Indicator Kriging modeling technique that was used, being negatively influenced by the grade of ore already mined in the last cutback of the pit.
We do believe that this is a temporary situation that'll self-correct as we go further into the ore body with our mining. This optimism is very solidly based, I should say. It's based on the fact that using the MIK model, the global estimate of gold contained in the total AG Pit mineral resource reconciles within 4%- 5% of grade control. As the global representation, MIK tonnages are fairly accurate. The grade appears to be slightly overestimated, and that's how we get to the net 5% variant. We do think that that situation will fix itself up as we go forward. There was a period of some poor mining practices as well that didn't help matters, and that was stopped pretty quickly.
In each of these areas, the cause has been addressed, and the remedial action is certainly expected to result in a significant improvement in reconciliations, and therefore operating performance in coming quarters. We're already seeing evidence of this in the latter part of the September quarter and the December quarter to date. That's very pleasing. At this stage, we do remain on track to deliver our guidance for the half year, which was set at 70,000 to 80,000 ounces at an All-in Site Cost of AUD 1,350-AUD 1,450. I've said this before, and I'll repeat it again. Edikan's never been an easy mine, but we are resilient, and we are quite practiced at analyzing problems and addressing them fairly quickly.
That said, the challenges encountered at Edikan over the years did drive us to seek diversity in our production portfolio and add additional mines located in different jurisdictions, which is what we did through the development of Sissingué and more recently, the Yaouré mine. As I said earlier, the benefit is there to be seen. Even though Edikan did underperform this quarter, the outperformance of the rest of the portfolio compensated and led to another quarterly record of production. Looking to the future, our goal of group production and cost guidance for the next six months and 12 months periods ending 31 December remains unchanged.
We predicted 225,000 ounces- 255,000 ounces at AUD 9.25-AUD 10.25 an ounce, and as noted when commenting on the individual mines, we are on track to achieve this, provided we can produce in line with our forecast between now and the end of the year. I have every confidence that our team will do just that, just as they've consistently done in the past. Now, turning to our financial position. Throughout the September quarter, we've continued to improve our balance sheet strength through generating strong cash flows and prudent financial management.
The notional cash flow from operations of $78 million that was generated this quarter allowed us to fund exploration at all three operating sites, pay all manner of taxes, including income tax in Ghana, pay dividends to the government in Côte d'Ivoire, fund a range of social programs for host communities, pay corporate overheads, and still hold cash and bullion at the end of the quarter of $196 million, giving us a net cash position of $96 million after taking into account our outstanding debt of $100 million. As I said earlier on, this net cash position was about $40 million better than the position at the end of June. Clearly, we are continuing to benefit from the strong gold price, but we are also benefiting from strong production growth at the same time.
In that sense, the timing of our production growth has been very fortuitous, and on that basis, we should continue to see further growth in balance sheet strength. Now, for the record, we do hedge the price of a small percentage of our gold production. This is something that people regularly ask us about. At this time, we're hedged to the extent of roughly 20% of our projected production over the next three years at a weighted average price of AUD 1,626 per ounce.
This average price is about AUD 31 an ounce more than it was at the end of the June quarter as a result of us actively managing our hedge book, which has enabled us to average up the price of the book to a level that's now well above our weighted average All-in Site Cost, even when things go slightly awry, as they did at Edikan this quarter. As I previously noted, our weighted average cash margin for the quarter was $689 an ounce. Even with hedging and even with some minor issues there at Edikan that we were still able to exceed our target of AUD 400 an ounce by well over 50%. That was a fairly healthy position.
Before moving on from financial matters, I would also like to just briefly mention the very good financial results for the financial year ending 30 June that were announced earlier in the September quarter. As listeners would be aware, FY 2021 yielded strong results with net profit after tax up 48% to AUD 140 million. Operating cash flow up 42% to AUD 302 million, and net tangible assets up 10% to AUD 965 million. The strengthening of our balance sheet has allowed us to view the future with confidence, and for the first time, return capital to our shareholders, if shareholders approve a resolution to this effect at our AGM in November. This is a significant milestone for Perseus, I think very tangible evidence that the company is coming of age and delivering tangible returns to its shareholders. That's another promise that Perseus has delivered on.
Now, speaking of the future, our plans for continued growth of our business is now a regular topic of conversation with investors. In this regard, we've been very transparent in advising those that ask that our primary focus at the moment is on growth through organic means. In other words, through exploration, success, and applying engineering skills to convert discoveries into mineral deposits that can be economically mined. Last week, as I mentioned earlier, we made two separate market releases that gave substance to the ambition that I've just stated. I'd like to strongly encourage listeners to take a close look at those market releases that were published on consecutive days on the 13th and 14th of October, respectively, as they contain far more detail than I can summarize in a few short moments on this webinar.
That said, let me give you a bit of a flavor for what the market release did cover, though. Firstly, we embarked on a successful exploration at Nkosuo, which is a deposit formerly known as Bremang. It's a target that's on the Agyakusu license, a few kilometers from the Edikan mill in Ghana. Here it appears that we've discovered a fairly large granite-hosted body of mineralization. The intercepts that have been returned to date are fairly lengthy and consistent. The ore body appears to be about 600 meters in strike length with widths up to 200 meters. To date, we've been drilling on an 80 by 80-meter grid. The focus is now on closing up the current holes facing to 40 by 40 and ultimately to 20 by 20 in local areas to support a maiden Mineral Resource estimate to be prepared in the March quarter next year.
Metallurgical testing and geotechnical drilling is also underway, so the Ore Reserve potential can be evaluated early in the September 2022 quarter. This discovery hasn't been closed off yet to the south, and it's actually looking quite decent, and our head of exploration, Douglas Jones, is on hand to take questions on this work at the end of my summary. The second drill program that we reported last week, was at the Yaouré mine, where we've been infill drilling as well as stepping out on the CMA underground target. We've also drilled on a CMA analog structure at CMA East.
Due to the imminent cutback of the CMA South open-pit and the likely loss of suitable sites for drill pads, we were forced to have the first stage of down-dip drilling focused on the southern end of the structure where grades are generally lower than at the northern end. Drilling to date, it's comprised 34 RC collared diamond holes. Infill is being on a 50 by 50 coverage, and we'll go to 25 by 25 to convert that Inferred Mineral Resource to Indicated. Results to date from the infill drilling have been quite encouraging, actually, even though we have been focusing on that lower grade end of the deposit, as I mentioned. Intercepts are generally consistent with those that have been previously encountered, both in thickness and grade.
The style of mineralization is also consistent with previous intersections, which means that this is looking very, very interesting indeed as a potential underground mine. Step-out drilling to investigate the next 300 meters down dip from the current underground resource has also started. 27 pre-collars were drilled there. The diamond tails to complete these holes down to their targeted depth has also recently kicked off. The step-out program is being guided actually by the results of Perseus' early 2020 three-dimensional seismic survey that clearly identified the CMA structure extending to depths beyond the current drill coverage. Drilling's being undertaken on an initial 100 by 200-meter pattern to better define the position of the structure and the intensity of the mineralization. If the results are encouraging as we expect, then we'll infill to 100 by 100 and allow the preparation of an initial Inferred Mineral Resource estimate.
The results from the CMA underground infill and extension drilling received today demonstrate that there is real potential here for us to materially grow our gold inventory, that's a fairly pleasing thing. Drilling to test the near-surface extensions of a CMA lookalike structure in hanging wall of the main structure, we call this CMA East Prospect. That continued during the quarter as well, with 17 RC holes drilled. Some pretty reasonable results have been also achieved here as well. I think it'd be fair to say that at this stage we don't fully understand the structural geology, further work is certainly warranted here. Certainly what we've seen to date is very encouraging.
As mentioned earlier, the results from the infill drilling at CMA underground will be used to upgrade the current Inferred Mineral Resource estimate to indicated status, and we'll do the Pre-Feasibility on the underground mining operation that we completed by late June 2022 next year, allowing an Ore Reserve estimate to be done. Now, I should say at this point, too, I guess, very much that, while we have focused very heavily on our organic growth side of the business, the potential for inorganic growth opportunities involving mergers and acquisitions is also there. Our team, headed up by Paul, regularly assesses our opportunities and there's certainly things there of interest to us.
Although, as I've said before, given the challenges of implementing value accretive M&A, applying very strict financial discipline, as we do in assessing opportunities, and also reaching a landing with counterparties on social issues, we're not pinning our hopes on this activity for delivering growth in the immediate future. Preferring, as I said, to focus on near mine and early exploration growth strategies. I do stress that we are actively looking for the right opportunities, and if we are able to execute a transaction that on a risk-weighted basis is value accretive for shareholders, then you will be the first to know. In conclusion, as I said at the start of the call, the September quarter has been another very good quarter for Perseus in many respects. Across the board, our production's growing, our costs are decreasing.
We're managing our business successfully in the face of a global pandemic, and financially, we're getting stronger by the day. We are subject to shareholder approval, planning to make a maiden return of capital to our shareholders this December, having declared a maiden capital return of AUD 0.015 per share or a yield of 1% when we published our FY 2021 financial results in August. Our share price has performed reasonably strongly in recent times, and it does appear as if the quality of Perseus's performance and earnings capacity is being recognized by the market. Finally, we are looking forward very much to bringing you further news of our achievements in three months from now, inch'Allah, as they say in northern Côte d'Ivoire. I can assure you that the team is working very hard to deliver this, and we're very optimistic that that will be the case.
My colleagues and I are very happy to take any questions that you may have. Thank you.
Thank you, Jeff. If you'd like to ask a question, please enter it into the Q&A panel within Zoom. Your first two questions come from Reg Spencer at Canaccord. Firstly, he's congratulated you and the team. His first question is what had more material impact at Edikan, poor access issues or the grade reconciliation?
I think it'd be access, to be frank. The reconciliation was problematic, but not being able to mine as much material from the AG Pit was something that did let us down a little.
Second question is regarding the Nkosuo exploration. He said, subject to permitting and completion of a resource estimate, how quickly could this prospect find its way into the mine plan for Edikan? Are there any early indications of what you think the resource could look like?
I think I'll put that question to Paul Thompson, our head of growth, who's responsible for doing those studies. Paul, would you like to respond to that?
Thanks, Jeff. You'll see in the release that we put out last week that we've made an estimate, it's an Exploration Target rather than just exploration results. What we've said is that we expect around 300,000 ounces-500,000 ounces from that deposit. What we are already working on at the moment is the initial metallurgical testing, geotechnical work, to convert that to an Ore Reserve by around this time next year or a bit earlier than this time next year. That's our target, and it would then go straight into the Life of Mine Plan for Edikan.
Thanks, Paul.
Thank you. I'll just repeat. If you'd like to ask a question, please enter into the Q&A panel in Zoom. Jeff, it looks like there's no further questions at this time, so I'll hand back to you for closing remarks.
Okay. Well, look, thanks very much. I guess, hopefully the reason there's no questions is because people are busily placing their buy orders on the stock. If not, anyway, thank you very much for attending today. As I said, it was a fairly strong quarter, and we expect there's very much more to come. Thank you very much, and we'll speak to you again in three months, if not before then. Thank you.
Goodbye