Analyst Research Report Snapshot

Title:

Persues Mining Limited

Price:

$12.00

Provider:

Jennings Capital Inc.

Date:

29 Oct 2013

Pages:

3

Type:

AcrobatPDF

Companies referenced:

PRU.AX

Available for Immediate Download
Summary:

Q1 OPERATIONS UPDATE ZERO OPERATING MARGIN AS GOLD PRODUCTION AND COSTS MISS GUIDANCE – TARGET REVISED In its Quarterly Activities Report, Perseus pre-released Q1 operations results. Below, we compare these to our estimates, which were largely derived from previous Company guidance. Gold production was 11% below our estimates, at 45,830oz during the quarter. This was caused by lower mill throughput (13%) and recoveries (3%) due to inconsistent ore blends and mill operating levels, largely arising from operator error and inexperience. Partially offsetting these issues were grades that were 5% higher than expected. All-in site costs were 19% higher, at $1,342/oz, due to 19% higher mining costs ($4.16/tonne mined) 16% higher processing costs ($11.61/tonne milled), and the lower gold production cited above. Mining costs were higher as a result of lower volumes, longer haul distances, and increased grade control drilling and drill and blast costs. Cash balances at quarter-end totalled $23.1M, down from $35.5M last quarter, due to a $0 operating margin. Full year (to June 30, 2014) guidance was maintained at 190,000-210,000 ounces, at an All-In Cash Cost of $1,050-$1,250/oz ($50/oz higher than previous guidance). Catalysts: Catalysts for share price appreciation (and a re-rating to BUY) would be Perseus’ ability to: (1) reach and maintain near nameplate capacity (7.5Mtpa) throughput rates; and (2) demonstrate profitability at current gold prices under its recently implemented LOM mine plan and ongoing cost reduction initiatives. Valuation: Pending the catalysts outlined above, we are maintaining our HOLD recommendation and revising our 12-month target price to C$0.65 per share, from C$0.90 per share. Our valuation is based on a weighted average (50/50) of a 5X P/CF multiple and a .5X P/NAV multiple, reflecting the higher operational risk associated with Edikan.

Why buy analyst research?

  • Institutional quality research
  • Available for Immediate Download
  • Detailed company or industry insight
  • Print or save
  • 24 hour customer support
Return to previous page without adding this item to your cart.
Email Customer Support.

About Analyst Research

Analyst research reports are available for immediate download after purchase. You will have unlimited access to the report for 24 hours after purchase, to download, print or save it as many times as you wish. Analyst Research provided by Reuters does not constitute investment advice, and is not endorsed by Reuters Research. This information is protected by copyright and intellectual property laws. More information on Analyst Research.