Within Zoom. I'll now hand over to Perseus Mining Managing Director and CEO, Jeff Quartermaine. Thank you, Jeff.
Thanks very much, Nathan, and welcome everybody to Perseus Mining's webinar to discuss the five-year production outlook that was published on the ASX earlier today. I'm joined on the call by two of my colleagues, our CFO, Lee-Anne de Bruin, and Jacob Riccardone, our Chief Development Officer. Lee-Anne requires no further introduction, I believe, but Jacob, who you may not have met before, joined Perseus earlier this year to assume specific responsibility for exploration, development, and technical services, including long-term planning. Now, both Lee-Anne and Jacob will present details of the plan and will then be available to respond to any detailed questions that you may have later in the webinar.
In terms of the agenda for today's webinar, I'll start proceedings by providing a few introductory remarks before passing to Lee-Anne and Jacob, and they will then, as I say, outline exactly what it is that Perseus is contemplating in terms of production and costs over the next five years. We'll then hold a Q&A session to dive into any specific matters that have not been addressed to your satisfaction during the presentation or indeed in the release itself. For those of you who are participating in this webinar via your computer, you should be able to track the presentation visually on your screens. Before handing over to Lee-Anne and Jacob, let me first make a couple of observations. This is the first time that Perseus has published its five-year outlook, although let me assure you, it's certainly not the first time that one has been prepared.
Now, the reason why we've chosen to publish on this occasion is because we feel we need to clear up what we believe is a major misconception about Perseus that seems to exist in certain sections of the market. According to some, while Perseus has done very well in recent years, consistently producing in excess of 500,000 ounces of gold per year at an all-in sustaining cost that's well below most in the industry, and of course, in the process, amassing a very healthy cash balance that stood at more than $801 million at the end of March. People believe that the music is about to stop as Perseus's assets have reasonably short mine lives compared to other companies, and this is a reason to look elsewhere when investing in gold equities.
Now, the latter part of this assertion is just simply not correct, and our five-year outlook goes a long way towards demonstrating that it is grossly premature to be predicting Perseus's imminent demise. In fact, today's five-year outlook is forecasting average gold production by Perseus over the next five years to ending in fiscal 2030 of 516,000-536,000 ounces of gold per year at an average all-in sustaining cost of $1,400-$1,500 an ounce. Now, this forecast is based on JORC compliant reserves, about 93% of the production is from JORC compliant reserves, while the remaining 7% is from indicated mineral resources, and these are reserves and resources that are currently owned by Perseus. In other words, this is a real and achievable plan based on real and actionable raw reserves calculated using reasonable technical parameters. There is no arm waving or smoke and mirrors or hidden costs included.
Like most things at Perseus, what you see is what you get, and what you will get is a production and cost profile of a very healthy and vibrant gold mining company, definitely not one that is in decline. Now, I should mention that the Meyas Sand Gold Project is not included in our five-year outlook, even though it contains a very sizable NI 43-101 compliant mineral resource and reserve that is likely to be expanded well beyond current estimates. Now, for obvious reasons, we do not currently have a clear line of sight on the development timeline for this project and therefore production profile. In other words, while these reserves are real, they are not currently actionable and hence are not included.
Now, our decision not to proceed as planned with the development of Meyas Sand in 2023 has impacted our short-term production outlook slightly, but once the Nyanzaga Gold Mine comes on stream, as expected in January 2027, the shortfall will be rectified and our 500 to 600,000 ounce production target will not only be restored but will be maintained well into the future if we keep doing what we are good at doing. Now, this five-year plan is aimed at establishing Perseus as a reliable long-term producer of gold. In doing this, we'll need to continue to manage our capital in a balanced and responsible manner to ensure that we genuinely achieve our mission of generating benefits for all of our stakeholders in fair and equitable proportions.
Now, we've made a fairly decent fist of this in recent years given the mix of growth and capital returns that we've delivered, and today's plan demonstrates that there is plenty more of this to come, even if gold prices are not maintained at today's levels into the future. Without any further ado, I'll hand over to you, Lee-Anne and Jacob, to present the five-year outlook in more detail. Thanks very much.
Thanks, Jeff. We appreciate you doing this call so late at night from London as you go around there telling our story. As you mentioned, we have gone through our normal life of mine processes with significant input from Jacob, and the challenge this year was to extend the Edikan and Sissingué gold mines, optimize the Yaouré and the CMA underground, and introduce the Nyanzaga Gold Project post-FID into our portfolio. This process, which Jacob will elaborate a little bit more on later, involved focusing on adding additional ounces and then considering the increased cost profile that this would introduce, obviously then against the backdrop of the current gold price environment.
As Jeff had mentioned, this is all aligned with our corporate strategy to build our portfolio to include three to four operating mines, each located on the African continent with operating lives of 10 plus years, producing in the range of 500,000-600,000 ounces of gold per year at a cash margin of not less than $500 per ounce for every ounce of gold produced. In front of you, you'll see the highlights of this Perseus' five-year gold production outlook, and our current portfolio expects to recover 2.6-2.7 million ounces at an average of 515,000-535,000 ounces per annum over the five-year period. It will produce these at an average all-in sustaining cost of between $1,400-$1,500 per ounce, and this won't vary more than plus or minus 10% year on year.
To achieve this, we will invest $878 million of development capital over the five-year period, and this includes spend for our Nyanzaga Gold project, the CMA underground development, and two large cutbacks as part of the Edikan extension at Fetish Pit and Esuajah North, and I'll refer back to this point a little bit later in the presentation. Importantly, at a long-term gold price assumption of $2,400, that's US dollars per ounce, our cash margin consistently exceeds our stated target of generating greater than $500 per ounce. Another important fact is our plans, as Jeff alluded to, are underpinned by a high level of confidence, with 93% of the ounces in the plan coming from Ore Reserves. As you can see from the graph, our five-year gold production outlook delivers very strongly on our company's strategy.
It delivers, as I said, an average of 515,000 to 535,000 ounces per annum. The production comes from 34% from Yaouré, 28% from Edikan, and 10% from Sissingué, with the introduction of Nyanzaga from early 2027 contributing 28%, and all of this is done at an all-in sustaining cost of $1,400-$1,500 per annum. In line with our previously communicated capital allocation framework, our five-year outlook continues to deliver on the targets and priorities that we set. Firstly, we're producing reliable and strong operating cash flows. Our technical and financial teams adopted a systematic process to assess and prioritize internal growth opportunities to continue our commitment to deliver these strong cash flows. Secondly, we have focused on continued growth of the strength of our balance sheet in the development of the plan, looking for ways to effectively allocate our $1.1 billion in liquidity to value-accretive investments.
Thirdly, and importantly, the process we have been able to assess our growth opportunities at all of our operating mines. At Yaouré, we have the CMA underground, which has gone through an optimization process working with Burncut, our highly experienced underground mining contractor, and this has resulted in opportunities to increase development rates, which brings forward development capital originally planned for post-commercial production to pre-commercial production and hence will now be capitalized. In addition, a review of the costs in this period has allowed for capitalization under the accounting standards of previously expensed costs, namely royalties and G&A costs. This really just relates to timing and reclassification. We will also, as we previously released to the market, invest in our Nyanzaga Gold Project at a quantum of about $520 million, and you will note that yesterday we released our NI 43-101 technical report for this project.
At Edikan, through optimization of the various pits and balancing an increase of costs with additional ounces, we've been able to extend the life of Edikan out to FY32, a great outcome for Perseus, the government of Ghana, our contractors, and our valued employees. The mining strip costs will be treated as development capital for these large cutbacks at Edikan, and this is in the region of about $168 million to reach commercial production, but it introduces about 200,000 additional ounces into the Edikan life of mine. Importantly, all of the above capital employed continues to complement ongoing returns to our shareholders through dividends and share buybacks. I'll now hand over to Jacob, our Chief Development Officer, to take you through each of the operations.
Thanks, Lee-Anne. Before we dive into each asset, I just want to highlight some of the objectives we want to achieve by putting out this five-year outlook and the technical work that underpins it. The first one is looking at the opportunities as a portfolio and how each of the mine sites complement each other over the longer period of time, resulting in the development of the production profile that was presented earlier in the presentation. The second thing that Jeff alluded to in his introduction was that really we translate this from being a plan into something that's executionable and that delivers value for our stakeholders and shareholders of Perseus.
The most tangible benefit there, the obvious thing there is that we have used a high proportion of our Ore Reserve in producing this plan, but not only that, when we've looked at growth opportunities, we've focused on the measured and indicated material. We have not used inferior material in this plan. That's not to say that we're not looking at those opportunities further on, but what we want to do was to make sure that we had a tangible practical plan moving into the future. If we focus on Yaouré now, the five-year outlook for Yaouré is primarily based on the work completed for the Yaouré LOM in September 2023. It's been updated since then to include the changes to the Ore Reserve in 2024 and the CMA underground FID that was presented in January 2025.
This plan has been updated for the assumptions and cost inputs as we see them on the ground at the moment and really understanding what that means going forward for the site. As I said, all of the mining inventory for Yaouré is part of our current Ore Reserve, so we have a strong understanding of what the plan entails going forward. As we prepare to start the underground operations next quarter, the site and operational teams with the contractor have mobilized to site and started to adapt the plan for the existing conditions. This means we've optimized some of the portal locations, adjusted some of the mining rates that we've had in our original feasibility study and some of the development sequencing, and this is added to the modified plan has brought forward some of that capital development that Lee-Anne mentioned before.
In terms of sustaining capital, primarily the Yaouré is in midlife, and so we're looking at site infrastructure improvements and TSF construction being the primary driver of that capital going forward. We have spent a lot of time in recent time looking at improving the planning and the future cost estimates, especially of the TSF structure that we have at Yaouré. Aside from the current Ore Reserve that we've got in this plan for Yaouré, we continue to test some of the brownfields exploration targets in and around the mine, down deeper of the current underground and some of the other targets we have with the brownfields team there, and we look forward to putting those into the plan as we test those extensions.
Moving on to Nyanzaga, this plan, as we put it into the five-year outlook, is as described in April's FID announcement and the NI 43-101 that was released yesterday. The project is scheduled to pour first gold in the start of, sorry, Q4 in FY27, sorry, Q3, FY27, and Nyanzaga provides growth in the group's annual gold production moving to our strategic target of 500,000-600,000 ounces per annum. It also, as it is, as we bring this into production, it starts to reduce our group's weighted all-in sustaining costs and reduce our operating margin in the medium term. The immediate priority for Perseus is to develop this project on time and on budget.
This will be the fourth mine that will be built and operated by Perseus, and many of the construction team have been with us for both our Sissingué and Yaouré project builds, so we have good capacity within the business to execute on this project. Further work is being completed to achieve operational readiness prior to construction and commissioning. This includes an infill drilling program to test the continuity of the ore body and also de-risk some of the metallurgical and geotechnical assumptions that we had in the study. This program has yielded good results and we have begun to confirm some of the initial inputs that we've had into the study. Moving on to Edikan, we had spent considerable time looking at the opportunities for Edikan. We have got an efficient mill and good operating position at Edikan.
We wanted to understand what we could do to generate leverage off that. As part of that work, we've looked at the five-year outlook, including areas in Kasaur, which we're mining at the moment, Esuajah North, and Fetish Pits, which we've mined in the past, and then contribution from the ESS underground. What we did, we did spend a lot of time looking at the opportunities in and around Edikan and how they might coalesce into a deliverable mine plan that is a large mill that demands ore supply to it. Out of this process, we really identified Esuajah North and the Fetish cutbacks extending the mine life at Edikan. While this comes at a marginal cost, it comes with relatively low operational executional risks as compared to other opportunities that we see not only within the business but outside. We have the installed capital at Edikan.
We have demonstrated capacity and approved operating performance that gives us the confidence to execute these plans. Again, the majority of this plan that forms part of this plan is part of our Ore Reserve base, and we are likely to move both the Fetish and Esuajah North into that as we update our Ore Reserve in August of this year. The additional mine life also allows us to develop Esuajah North underground. It formed part of the life of mine plan that was presented for Edikan in 2020, and the additional mine life provides the longevity for us to develop that plan. We are planning to initiate an update to the feasibility study in FY26 in support of anticipated FID. Finally, we move on to our fourth operation that makes up this forecast, Sissingué.
Again, we're looking at different opportunities to extend the life of mine at Sissingué. At the moment, we have Sissingué stage four, Airport West, and Bagway as part of the current plan, and then supplemented by another stage cutback at stage five of Sissingué that we assessed during this process. Both Bagway and Airport West are new mining areas that we will start in the new year and that provide additional ore feed to that Sissingué mill. Again, while this extends the mine plan out to 2030, it gives us some opportunity to test some brownfields exploration targets that we see as exciting opportunities in and around the Sissingué complex. That brings us to the end of the update for each of the sites. I'll hand back to Jeff to wrap up.
Okay. Thanks very much, Lee-Anne and Jacob. In conclusion, looking forward, Perseus's outlook is very solid. We have got steady production, moderate costs, and are well-positioned to generate significant cash flow, particularly if gold prices remain elevated, as some very good judges believe is the case. Furthermore, the concept of Perseus continuing to look to grow our diversified asset portfolio will remain an important feature for us. We believe that through engaging in multiple operations in multiple countries across the African continent, we are able to remove a lot of the volatility that comes from operating on the continent. We also have a very experienced and capable management team and operating teams that have learned a lot of very valuable lessons since Edikan came on stream back in 2011.
This is also critical in terms of being able to deal with the challenges before they become major problems and ensuring consistency in outcomes. Importantly, this means that as an investor, you can remain confident that your investment in Perseus will remain solid and is in very good hands. We will continue to remain receptive to new ideas, and if right value creative opportunities come along, Perseus is in a great position to execute to continue our growth journey. As a company, our focus on generating material benefits for all stakeholders, including our host governments, communities, employers, providers of goods and services, and very importantly, our investors, is as strong as ever, allowing us to consistently achieve the stated mission of our company, something of which we're very proud. Thank you very much for your attention today.
This brings to conclusion our presentation, and we are now happy to take any questions that you may have. Thank you.
Thank you, Jeff. Just a reminder, if you would like to ask a question directly to the company, please use the raise hand function within Zoom. Your first question comes from Richard Knights at Barrenjoey. Please go ahead, Richard.
Thanks for the call, Jeff, and Lee-Anne and Jacob. Nice to see Sissingué and Edikan continuing to contribute up to 2030. I'm just wondering if you can give us any color about how you're thinking about those two assets post 2030. I know this is a five-year plan, but I suppose from a modeling perspective, how should we be thinking about the prospects beyond 2030 for both of those assets?
I think we've already answered that question, Richard. As Jacob said, the life of Edikan goes to 2032 as it stands today, and Sissingué is about 2030. We also said that we'll continue to look for brownfields opportunities around the site or in proximity to infrastructure. Look, the thing is this. We're not going to be sitting on our hands passing up new opportunities. If we can extend the lives beyond those dates, then we most certainly will. I just remind you that when Edikan started back in 2011, I think it had a nine-year life ahead of it, and here we are talking about 2030 and 2032. As people will recall, when we started Sissingué back in 2018, it had about a four and a half, five-year life ahead of it, and we're talking 2030.
Look, our ability to convert brownfield opportunities into mineral resources and ore reserves is proven, and we most certainly will continue to do that as we go forward.
Okay. Thanks.
Thank you. Your next question comes from Levi Spry at UBS. Please go ahead, Levi.
Yeah. Thanks, Nate. G'day, Jeff and team. Thanks for your time. I might have missed it in the presentation pack, but I did not see it in the announcement. Can you just talk through the development CapEx sort of staging? I know that is a number over the five years, but is there any more guidance you can give on how we think about modeling that, I guess, over the five-year period?
Lee-Anne, I think that might be one for you, if you wouldn't mind, please.
Yeah. Obviously, from the Nyanzaga perspective, you'd model that over the next sort of two years. Everything up from now, the CMA underground, similarly, is a ramp-up between now leading up to commercial production. That is over the next two and a bit years. From the cutbacks perspective, pretty much we start doing Fetish in the first half of next calendar year, and that runs for about, I think, 20 months. Esuajah North is a 30-month development, and it starts at the end of FY2026 and runs for the 30 months after that. Hope that gives you a bit more clarity. We did not put that specifically in the presentation.
That was perfect. Thank you, Lee-Anne. That was awesome. Thanks very much.
No worries, Levi.
Thank you. Your next question comes from David Radclyffe at Global Mining Research. Please go ahead, David.
Hi. Good morning, Jeff and team, and thanks for the details here. Just across this portfolio, maybe could you talk to the approvals and what's outstanding to actually deliver this plan?
Okay. If we're just running through the individual projects, Nyanzaga is fully licensed, fully approved. We're going full steam ahead on that. No approvals required. Yaouré, we are waiting for the ministerial decree specifying regulations for underground mining in Côte d'Ivoire. Now, we understand that all the approvals that are needed for that have been received, and that document is sitting on the desk of the Minister for Mines in Côte d'Ivoire at this very moment, I believe. That's imminent. In terms of Edikan, we will be looking to the government to help us along, give some approvals to some changes in blast zones for a couple of those cutbacks. As you'd appreciate, since we stopped mining them, people have moved within the 500-meter blast radius, which is the standard in Ghana, and we'll be seeking some dispensation from that in a couple of those instances.
Now, there is precedent for that. In fact, I think at Esuajah North, when we mined that the first time, I think the blast zone was down to 400 meters or something along those lines. We have all the studies, university studies, etc., etc., that prove that that is a reasonable thing to do. We are not anticipating any difficulties in those areas. As far as Sissingué is concerned, we have all our mining licenses. The things that we do not have at Sissingué at this particular point is a mining convention for the Bagoe pits, but discussions on that have commenced and will be finished shortly. We have had discussions around Mbengué. That is also in practice. Those are things that affect the fiscal regime as opposed to the licensing piece. Everything is in very good shape.
It'd be not 100% correct to say that all approvals are in place, but the very vast majority of them are, and we'll be working hand in glove with our host governments and host communities over the next couple of years. As you'd appreciate, this exercise, it provides very distinct benefits for the host governments and the host communities. We are all in the same boat. Everybody is similarly motivated to extend the lives of these operations because the longer they run, the more benefits that they create. We're not anticipating any real challenges in those outstanding approvals. We'll just need to sit down and work very closely with our colleagues in those countries.
Great. That's really helpful. Maybe if I could just follow up at Edikan and the underground there, if I could get a bit more color, because before you've talked about sort of the risk-reward not being right, but now it looks like it has come into the plan, but you're still doing a study.
No, when we did that before, I think we used a gold price of about $1,300 an ounce, if I remember correctly. Times have changed a little since then. The other thing is that there's also been some changes around governance of underground mining in the country. Actually, our contractor on the site at the present time, RockSure, is in joint venture with, I think it's Perenti or somebody at Abwasi. They've gained a lot of experience in the interim period. Yeah, the circumstances surrounding this Esuajah South underground have changed quite a lot since we did that initial study many years ago. The other point that's worth noting is that, of course, we have done a lot of work at the Yaouré underground, and we've built up our internal capacity substantially in the underground mining area.
We're bringing a heck of a lot more expertise to the table now compared to when we did the original study. God just knows how long it goes. Probably about six or seven years ago, I think.
Great. Thank you. I'll pass it on.
Thank you. Your next question comes from Reg Spencer at Canaccord. Please go ahead, Reg. Just unmute, Reg, if you unmute yourself.
How's that? Sorry. Sorry about that. Thanks, Nathan. Evening, Jeff, and morning, Lee-Anne. A lot of good detail in here. Thanks very much for that. A lot of my other questions have been answered. Slightly different one for you. Have you got any updates as to the change of mining code in Côte d'Ivoire? I presume your all-in sustaining cost forecasts will incorporate any potential change in royalties. Just curious as to that flagged change in mining code in Côte d'Ivoire and when that might be expected to come through. If so, are there any other additional impacts that we should be mindful of?
Actually, Lee-Anne, I think I might ask you to answer that. You're in close contact with [IRA], please.
No problem. Reg, to answer your question, the mining code is in draft form and being circulated. Importantly, the mining code in Ghana—sorry, in Côte d'Ivoire—is going to be forward-looking. It is only going to apply to newly issued permits. It will not be applied to Yaouré and Sissingué because they have stability agreements in place. Importantly, just to flag what we have done with Bagoué, because we are still finalizing the mining convention, we have made an assumption around the royalty, because the royalty actually does not come out in the mining code. It comes out through the Finance Act, and you get stability through the mining code and the mining convention. The only potential impact would be on Bagoué. The rest are all under stability agreements.
That's excellent. Thanks, Lee-Anne. Thanks, Jeff. I'll pass it on.
No problem.
Thank you. Your next question comes from Kate McCutchen at Citi. Please go ahead, Kate. Just unmute there, Kate.
Hi. Morning. Morning, Lee-Anne, and evening, Jeff. Just on the inorganic growth piece, what is the latest with your Predictive stake? Sort of what gates are you looking for next, or is there anything we should think about there?
Actually, I wish I had a dollar for every time I heard you're on mute. I'd be a pretty wealthy bloke, I think, actually. Look, just to come back to your question, Kate, there's nothing you should think about as far as that's concerned. We're not thinking about it too much at the moment. We have engaged with Predictive over time. We have not completed due diligence to a standard that we would require to make any kind of an offer. When we look at the project at the moment, in our view, at the present time, it's too expensive relative to what we can see from the public data that's available. We do have 18% of the stock, and we're happy to sit and wait and watch what goes on.
Of course, if somebody was to come and make a takeover offer that's extremely generous, then Perseus has never turned its back on making a profit in the past. Alternatively, if we can find our way clear to acquire the property at a price that can generate significant value for our shareholders, then that's something that we would consider as well. There's nothing really going on. Like everybody else, we're watching with interest the progress or otherwise that Predictive is making vis-à-vis getting their mining license. We did note the other day that the government of Guinea has taken back a number of licenses from individuals, including Predictive. We're a little bit in the dark as to what that means longer term. I guess that when Predictive is ready, they'll share their views with the market around all that.
For the time being, we're just watching.
Okay. That makes sense. Then on the five-year outlook, in terms of the all-in sustaining costs for the assets, you've given us the range. I think you've given us granular details for each of the assets around waste stripping grades, etc., but not the all-in sustaining costs. At any of those sites, are there any sort of lumpy years where we get a spike in those all-in sustaining costs to sort of call out?
No, Lee-Anne, I think I'm going to have to ask you to answer that one, if you wouldn't mind, please.
Yeah. I mean, I think sort of thinking about the overall profile, you are going to see probably Edikan in about FY2028 will have a slight spike up relative to the average. But otherwise, Nyanzaga remains pretty consistent, and Sissingué is pretty consistent as well, so.
Okay. Perfect. Thanks, Lee-Anne and Jeff.
Thank you. There are no further questions at this time, so I'll now hand back to Jeff for closing remarks.
Okay. Thank you, everybody. I think we've covered a fair bit of territory today. Thank you very much for joining us on this call. I hope that we've been able to present a convincing case to you that does show that Perseus indeed has a very bright future. We look forward to bringing you further news of our assets as we move them forward in line with this plan. We have a quarterly report coming out in July, and I think that based on production up to the 9th of June, a couple of weeks out from the end of the year, things are looking very, very good vis-à-vis our guidance and the like. We are looking forward to bringing you that short-term news and any longer-term news that comes to hand over the next couple of weeks.
Thank you very much, and we will talk to you again later.