Can you comment on Perseus’s performance in FY2024?

We have had a strong year across all aspects of the business. Perseus produced nearly 510,000 oz Au at all-in site cost of just over US$1,000/oz, resulting in exceptionally high margins. We ended the year with a profit after tax of US$365 million, up 14% compared to last year, an operating cash flow of US$429.2 million, and approximately US$587 million of cash and bullion on the balance sheet. Our strong financial position enabled us to implement two key initiatives within our capital management strategy. First, we have steadily increased our dividend since FY21, when we first began paying dividends, with the total dividend this year at 5 cents per share. Secondly, we initiated an inaugural share buyback. These two initiatives combined generated a yield of 4.2-4.3% based on the share price at the end of last year, so our long-term shareholders have seen significant returns over and above material growth in the Company’s share price.

Given Perseus’s strong financial position, what are your primary focuses for capital allocation?

There are always competing demands for capital, but our mission as a business is to generate fair and equitable benefits for all stakeholders, including in addition to shareholders, our host governments, host communities, and our employees. As part of our social license to operate, we recently committed to reconstructing a key road in Côte d’Ivoire, and we continue to fund infrastructure projects, as well as provide support for education and healthcare in our host communities. From a business perspective, delivering significant returns to shareholders is important, but we must also ensure we can meet our obligations and adhere to our long-term growth strategy in a volatile environment. In recent years, Perseus has been fairly acquisitive, acquiring the Meyas Sand gold project in Sudan and, more recently, the Nyanzaga gold project in Tanzania. We aim to make an investment decision on Nyanzaga by December this year, with the goal of developing the project in early 2025 and commencing production in 2027. Additionally, we recently swapped our 9.9% shareholding in Montage’s Koné gold project in Côte d’Ivoire for a 19.9% stake in Predictive Discovery’s Bankan gold project in Guinea. 

Our strong development pipeline has the potential to elevate Perseus to a very different level from where we are positioned today; to achieve this, we need to manage our capital deployment effectively.

What attracted Perseus to Tanzania?

Tanzania has a long history of successful mining activities, though it has faced mixed perceptions as a destination for mining investment over the past decade, both deserved and undeserved. In our view, the country has turned a corner under President Samia Suluhu Hassan, who has done an outstanding job of rebuilding Tanzania’s attractiveness for investment. Our experience so far has been first-class, with meaningful support from the government. 

How do you think the current gold price environment will influence M&A?

In theory, the valuation gap between producers and developers should create more opportunities for acquisitions. However, in reality, the same barriers that existed before still remain. Social issues can complicate deals, or companies may overvalue themselves, making it difficult to execute business combinations based purely on industrial logic. That said, as the valuation gap continues to widen, attitudes may shift. 

Why do you think Ghana has seen a shortage of greenfield developments in recent years?

One factor is the fierce competition for land, especially farmland. With cocoa prices exceptionally high in recent years, compensation prices for exploration licenses have also gone up. The other factor is the spread of illegal mining. We have experienced firsthand the damage done by illegal miners; just recently, we acquired three exploration licenses adjacent to our Edikan mine and we successfully found a deposit (Agyakusu) that we are looking to bring into our mine plan. We were offered the property between Agyakusu and Edikan but have been reluctant to commit because we would have been liable for restoring the extensive damage caused by illegal mining. Unless the government is willing to indemnify investors against damage done by others, the restoration costs are a significant deterrent. Finally, in a mature mining jurisdiction like Ghana, the government has perhaps been less accommodating compared to other countries like Côte d’Ivoire. For example, we do not have a fiscal stability agreement or similar arrangement with the Ghanaian government, even though we’ve been in the country since 2011.