PRU - Perseus Mining

[jman2007]

What the?!...

This is going absolutely mental this morning, touching on $1.30 as I write. Intraday trading I know, so hard to read too much into it just yet. Selling side has dried up markedly today however. Lol good to see Randgold take a custard pie right in the face, they'll be a very unhappy group of campers I'm sure.

 

[swm79]

What the?!...

This is going absolutely mental this morning, touching on $1.30 as I write. Intraday trading I know, so hard to read too much into it just yet. Selling side has dried up markedly today however. Lol good to see Randgold take a custard pie right in the face, they'll be a very unhappy group of campers I'm sure.

probably a result of this: http://www.theaustralian.news.com.au/business/story/0,28124,26081172-15023,00.html

in the australian

also Rodman and Renshaw put a $2.75 price target on it in early august - which is also linked in The Australian's website

 

[jman2007]

probably a result of this: http://www.theaustralian.news.com.au/business/story/0,28124,26081172-15023,00.html

in the australian

also Rodman and Renshaw put a $2.75 price target on it in early august - which is also linked in The Australian's website

Well I'm also wondering if this is the long awaited market re-evaluation that PRU holders have been discussing for a while, dammit those grades at Tengrela released the other day would be bonanza underground grades - but the fact that they're relatively close to surface suggests that may have hit on to some kind of high-grade shoot perhaps.

I'm pretty sure that Sissingue is currently just based on a strike length of 1km, and the main anomaly which looks to have been drilled out fairly extensively also looks like it should definitely contribute a lot more ounces by Dec09. What other people probably realise, is that the wide-spaced RAB drilling has really only just scratched the surface in terms of what might be contained further along strike to the north. Realistically, Tengrela could turn into a very significant camp.

 

[Sean K]

Well I'm also wondering if this is the long awaited market re-evaluation that PRU holders have been discussing for a while, dammit those grades at Tengrela released the other day would be bonanza underground grades - but the fact that they're relatively close to surface suggests that may have hit on to some kind of high-grade shoot perhaps.

I'm pretty sure that Sissingue is currently just based on a strike length of 1km, and the main anomaly which looks to have been drilled out fairly extensively also looks like it should definitely contribute a lot more ounces by Dec09. What other people probably realise, is that the wide-spaced RAB drilling has really only just scratched the surface in terms of what might be contained further along strike to the north. Realistically, Tengrela could turn into a very significant camp.

Hopefully re-evaluation, but not as cheap as it was a few weeks ago. Golly, remember 40c or so?

In regard to bonanza grades underground, what's the geo perspective here. Closer to surface they won't continue to depth?

Agree on exploration potential, Tengrela could end up to be a much larger resource. Maybe the 100k pa target might have to be revised up.

With the additional exploration success at Ayanfuri, they could be in a position to upgrade mills to be able to produce a few more ounces a year, lets say 250k. So, lets pluck a 500k oz producer in a few years.

With the size of the deposits why not?

LGL paid $1b for EQI, for 150k a year. Plus exploration potential.

 

[jman2007]

Hopefully re-evaluation, but not as cheap as it was a few weeks ago. Golly, remember 40c or so?

In regard to bonanza grades underground, what's the geo perspective here. Closer to surface they won't continue to depth?

Agree on exploration potential, Tengrela could end up to be a much larger resource. Maybe the 100k pa target might have to be revised up.

I think the key point here is that the hole ended in mineralisation, or is "open ended" as PRU noted. So as far as PRU and we know at this stage, the mineralisation continues unabated in the down-dip direction for some unkown distance. What is interesting is that the grades in the hole are interesting but not spectacular in their tenor to 58m, but suddenly become spectacular from that depth to the eoh. Seriously, perhaps less than 1% of Geo's would see those kind of grades in their careers!

Unfortunately the results suggest a cetain lack of undestanding and/or professionalism from the rig geologist that the hole was ended where it was, as there would certainly have been visible gold in the drill cuttings. Sometimes junior geologists lack the confidence to extend a hole past its planned depth however.

PRU didn't provide any kind of explanation as to why there was such a blow-out in the grades, it suggests either a rock type change, or more likely, that a significant structure such as a shear zone or perhaps a fault may have been intersected. It is likely that the rocks will still be quite strongly weathered at this depth, so if they twin this hole with a diamond hole it may be difficult to get meaningful orientations from the core. My guess would be that the weathering profile is well-developed in this belt, which would enable an open pit to be mined to at least 90-100m.

if they intersect this lode again at depth with diamond core, then expect to see several cheesy photos of some Board members proudly holding up bits of core with lots of nice yellow bits in it

 

[Sean K]

Quite bizaar they didn't keep drilling on SRC637. The last 2 m was at 39 g/t. Surely visual inspection would have arranted a few more meters? Is that possible? Maybe there's another reason why they stopped.

Fingers crossed that 4.5km step out hole with 4m @ 10g/t means the 4.5 between is also holding some yellow stuff.

This is still looking cheapish on the rule of thumb EV to Au measure:

PRU 300m@1.32 = $396m mc - $62m cash = $334 EV / 7.1m oz = $47 an ounce for a near developer.
GRY 176m@.445 = $78m mc - $12m cash = $66 EV / 1.1m = $60 an ounce for an explorer.
AZM 154@.17 = $26 mc - $6m cas = $20 EV / .750m = $15 an ounce for a junior explorer.

Hm, actually. Perhaps it's right and GRY is overpriced and AZM is undervalued. lol

Wonder what comes next? Ayanfuri drilling results? Sissingue resource update?

Chart wise, you'd expect some significant resistance at previous all time highs. On a correction significant support is a fair way down below perhaps. It's run pretty quick since breaking $1.00.

 

[Sean K]

Nice break up from PRU on the back of POG gains and the Lihir speculation. Longer term looks like the significant resistance across 90c to $1.00 may be broken, but POG failing at $1000 could put a dampner on things. Potential for a pole and pennant to shape up which would be a nice outcome.

The pole and pennant target reached on the breakout, and exceeded. Another one on the cards here. Couldn't happen twice could it? Probably not. This is more just trianglish anyway. Watch and shoot.

 

[johannlo]

Not liking the spinning top (also forming a harami w/ Thursday's white candle) that confirms resistance at 1.36. I think we'll be sideways for the very short term.

If its forming a triangle, for what its worth I punched the stats we do know (e.g. can't know breakout volume till it happens) into Bulkowski's formulas and came up with +4 so far

 

[Sean K]

Not liking the spinning top (also forming a harami w/ Thursday's white candle) that confirms resistance at 1.36. I think we'll be sideways for the very short term.

Yes, rejection of $1.35 ish looks ominous. Did a similar thing at 1.16/17, dropped and then went through strongly though.

Market's supposed to open weaker on the back of the US and gold under a K again, so doesn't add up to a break up really does it.

Left wing impetous could be more TO speculation, or an early resource upgrade on Sissingue with numbers larger than expected. If they managed to add another million at 2.5 ish grades it would be exceptional. I'm still surprised those bonanza grades didn't send it further.

 

[johannlo]

I'm too much of a rookie to back my trading guesses w/ a great solid undervalued pick like this one, going to hold until true value unlocks.

If I was trading I would probably be bailing around 1.30 mark and looking to get back in at 1.15 or 1.20. But you're right, news or more speculation / rumours could make that a risky ploy. Fundamentals are v strong (as you of all people will know lol)

 

[TabJockey]

Announcement today, one of the directors bought another 130k of the stock.

O.O

I think there might be a few good things announced before christmas

 

[johannlo]

TSX listing pls santa!!!!!!!!!!

A decent bid by lihir would also be nice lol, not that I want to sell out (unless its silly money of course) but would be hilarious

And failing that, a stop to this falling POG

 

[Sean K]

Announcement today, one of the directors bought another 130k of the stock.

O.O

I think there might be a few good things announced before christmas

Yes this is great that Sean has forked out some real cash.

He had to really to divert attention from this options issue debarcle.

This is just highway robbery. Shareholders been taken for a ride while directors line their pockets.

What sort of incentive is this?

28 September 2009
The Manager
Company Announcements Office
ASX Ltd
4th Floor, 20 Bridge Street
SYDNEY, NSW 2000

Dear Sir

ANNUAL GENERAL MEETING AND DIRECTOR’S OPTION ISSUE

Perseus Mining Limited advises that its 2009 Annual General Meeting will be held on Friday, 27 November 2009 at the Holiday Inn City Centre, 788 Hay Street, Perth, Western Australia.

Amongst other resolutions to be put to shareholders at that AGM, the Directors will seek approval for the issue of 600,000 options, exercisable at $1.30 each on or before 31 March 2012 to newly appointed director, T Sean Harvey.


$1.30 each on or before 31 March 2012



PRU's second really piss me off action in front of their tardiness in the TSX listing. Really poor effort that.

 

[Ajax]

Agree that options exercisable at $1.30 provide no real incentive.

The shares could trade over $1.30 (again) this week.

From the 2009 Financial statements released this morning:-

Re: Ayanfuri,Ghana

"Infill drilling to upgrade the 3.1Moz of resources outside Ayanfuri’s reserve is expected to result in a reserve increase and support increased throughput scenarios which will be evaluated during the ‘Phase Two Upgrade’study."

Re: Tengrela,Ivory Coast

"There is significant upside resource potential at Sissingue. It is anticipated that resource upgrades will be released in the 2009 – 2010 financial year as resource drilling extends over the open 5 km strike of mineralisation encountered to date at Sissingue and as RC and diamond drilling commences on other prospects at Tengrela defined by RAB drilling."

Re: Grumesa Gold Project,Ghana

"The Grumesa gold project is located 30km east of the Ayanfuri gold project. The Kayeya deposit on the Grumesa licence is a very large low grade Tarkwaian hosted gold deposit that is amenable to heap leach gold extraction. Current resources are 30 million tonnes at 0.8g/t Au. Limited drilling (1,700m) was undertaken on the Kayeya deposit during the Year. The Company will complete the Grumesa feasibility study during the 2009-2010 financial year to assess whether Grumesa may represent a satellite production opportunity, managed from Ayanfuri"

Re: Shareholding in Manas Resources Limited

"Perseus spun out its Kyrgyz gold projects into a new ASX listed company Manas Resources Limited in July 2008, retaining a 42% interest in Manas which diluted to 28% as a result of a fundraising by Manas in July 2009. Manas has a resource base of 870,000oz and significant exploration upside."

Also from 2009 Cash Flow Statement

Cash and cash equivalents at the end of the Financial Year $79,876,095

 

[Ajax]

Goldminers targeting risky nations

From a speech by Newmont Mining Corp CEO Richard O'Brien at Melbourne Mining Club.

news.smh.com.au/breaking-news-business/gold-companies-targeting-risky-nations-20091002-ggfk.html

"There were only two gold discoveries in 2008 of more than two million ounces each, compared to four in 2007 and about 20 in 1999, Mr O'Brien told a luncheon of the Melbourne Mining Club.

"We tend to go now towards more risky, that is developing, nations or politically challenging nations, for us to find the next level of production," he told the meeting

...

"Mr O'Brien tipped the gold price to trade between $US800 and $US1,200 an ounce during the next two years.

He said the US government was printing cash to stimulate the economy, which could ultimately boost the value of gold.

"Printing money will clearly lead to inflation, it is just when,"

 

[jonojpsg]

Goldminers targeting risky nations

From a speech by Newmont Mining Corp CEO Richard O'Brien at Melbourne Mining Club.

news.smh.com.au/breaking-news-business/gold-companies-targeting-risky-nations-20091002-ggfk.html

"There were only two gold discoveries in 2008 of more than two million ounces each, compared to four in 2007 and about 20 in 1999, Mr O'Brien told a luncheon of the Melbourne Mining Club.

"We tend to go now towards more risky, that is developing, nations or politically challenging nations, for us to find the next level of production," he told the meeting

...

"Mr O'Brien tipped the gold price to trade between $US800 and $US1,200 an ounce during the next two years.

He said the US government was printing cash to stimulate the economy, which could ultimately boost the value of gold.

"Printing money will clearly lead to inflation, it is just when,"

I'm assuming that PRU was one of them? In which case that should make a compelling case for PRU to be on the radar of the biggies?

 

[Ajax]

From Perseus Mining's website

"Ayanfuri (in Ghana)
Perseus holds 650sq km of tenements centred on the Ashanti Gold Belt, including the 120sqkm Ayanfuri Project situated 25-65km south-west of the 60 million ounce Obuasi gold deposit.

Reserves and Resources

After acquiring an option over the Ayanfuri project in June 2006, Perseus increased gold resources from 200,000oz to 5.3Moz (indicated 3.15Moz; inferred 2.13Moz) by March 2009. The project has significant upside for further resource growth. A detailed feasibility study completed in July 2009 estimated:

initial gold reserves of 2.13 million ounces;
production averaging 220,000oz p.a. in the first four years;
cash costs (including government royalties) of US$494 per ounce."

There is speculation amongst some punters/forum posters that Perseus Mining's Tengrela deposit in Cote d'Ivoire may end up dwarfing Ayunfuri.

 

[Sean K]

Ann out on Ayanfuri progress, all looks on track.

AYANFURI GOLD PROJECT UPDATE

HIGHLIGHTS

• ‘Fixed lump sum’ tender prices received for process plant engineering contract - three of the four prices were within the DFS estimate.
• Indicative financing term sheets received and negotiations have commenced.
• Preferred engineer and financier expected to be selected in November.
• Draft EIS, DFS presented to Ghanaian Government Authorities.
• Recruitment of key personnel has commenced.


Even with the recent share price increase it still sits pretty undervalued in the scheme of things. Currently trading at $46.5 an ounce to EV. This is about half that of producers with an equivelant resource and even lower than GRY who are an explorer with just 1.1m ounces. The debt they will eventually go into may push their EV down quite a bit, but will it double the EV to Oz comparison. Then throw in the obvious increase in resources over the coming months especially at Sissingue.

 

[jonojpsg]

Hey kennas, just looking at your table it is a bit difficult to pick a comparison for PRU, but I thought maybe CNT might be close? Similar grades, slightly lower cash costs per oz, obviously different location, almost double the resource but PRU could certainly get there.

CNT produce by next year (a year ahead of PRU) and EV is about $130/oz compared to PRU at $50/oz.

In reality then, even if PRU didn't increase resource, by next year sometime they should be around double what they are now. That would be a somewhat conservative take on it assuming they almost definitely will move their resource up, and assuming POG maintains $900+.

Just pondering

 

[jman2007]

Something happening here...

$1.38 got smashed back this morning in early trading, pulled back to $1.30 and is now knocking on the door of $1.40 with an hour to go. I wonder if we'll see a late sell-off towards the close?