PRU - Perseus Mining

[Sean K]

Some more amazing results from Ivory Coast.

DRILL RESULTS -TENGRELA GOLD PROJECT

6m at 476g/t, 6m at 429g/t, 22m at 72.1g/t and 8m at 65.7g/t Au

Perseus Mining Limited (ASX/TSX: PRU) is pleased to provide an update on exploration activities at the Company’s Tengrela Gold Project in the Ivory Coast.

Recent significant drill intercepts from resource drilling at the Sissingue prospect are summarized in Table 1 below. These included:

RC hole SLC245 - 8m at 65.7g/t Au from 50m including 2m at 252g/t Au from 54m;
RC hole SLC246 - 18m at 7.5g/t Au from 8m including 6m at 18.3g/t Au from 18m, 6m at 429g/t Au from 34m including 2m at 1,277g/t Au from 34m;
RC hole SLC247 - 6m at 476g/t Au from 56m including 2m at 1,421g/t Au from 56m and 30m at 1.6g/t from 68m;
RC hole SLC249 - 22m at 72.1g/t Au from 66m including 4m at 389g/t Au from 78m; and
RC hole SLC264 - 14m at 6.5g/t Au from 80m to the end of hole including 2m at 40.0g/t Au at the end of the hole.

This is going to be a major gold producer in the coming years, as long as the @rse doesn't fall out of the gold market.

Still relatively under the radar I think, even with a MC of $700m ish. Hard to believe the likes of GRY, RRL, EVG and TON are trading at higher numbers. Out of kilter.

Can anyone explain what the listing in Canada and the cap raising does to their overall market capitalisation?

 

[jonojpsg]

Hey kennas,
I was thinking of you the other day when the latest cap raising popped up

Still $1.94 is pretty good value to get capital at given current SP. I too saw the infill results and jaw dropped - I'm REALLY looking forward to seeing a couple of hits like that 1-2km upstrike to make my eyes water

Agreed that $700m is undervalued by at least a factor of 2 IMO - with AShanti coming online next year and Tengrela the year after, this is another I am making a cornerstone of my portfolio through to my Europe trip in 2013

 

[Sean K]

Hey kennas,
I was thinking of you the other day when the latest cap raising popped up

Still $1.94 is pretty good value to get capital at given current SP. I too saw the infill results and jaw dropped - I'm REALLY looking forward to seeing a couple of hits like that 1-2km upstrike to make my eyes water

Agreed that $700m is undervalued by at least a factor of 2 IMO - with AShanti coming online next year and Tengrela the year after, this is another I am making a cornerstone of my portfolio through to my Europe trip in 2013

Jono, if POG stays above $1000 for the coming 5-10 years then this is a sure winner and should see it's mc go at least the way you think. As a caveat, West Africa needs to stay stable and the political troubles in Ivory Coast need to be sorted. If all goes to plan they'll be producing 400k oz pa from 2 mines for some time. I think CNT is an decent peer comparison and they are just over $2b mc.

 

[JTLP]

PRU continue to get some nice drill hits at their respective projects. This time the hits have come from the Central Ashanti Gold Project (CAGP).

So what's the story behind PRU? Do they have any Australian exposure at all? They are shoring up a very hefty gold reserve...seem to be ticking all the right boxes with low opex on their projects...listing on the TSX and cash in the kitty...what gives with the MC? Shouldn't it be a fair bit higher right now? Or are sovereign risk/global factors keeping this one at bay?

 

[shag]

PRU continue to get some nice drill hits at their respective projects. This time the hits have come from the Central Ashanti Gold Project (CAGP).

So what's the story behind PRU? Do they have any Australian exposure at all? They are shoring up a very hefty gold reserve...seem to be ticking all the right boxes with low opex on their projects...listing on the TSX and cash in the kitty...what gives with the MC? Shouldn't it be a fair bit higher right now? Or are sovereign risk/global factors keeping this one at bay?

i think they are just a little unloved, plus the cap raising and spp, even tho it looks good to me.
i suspect this run past 2buks might finally be the breakout, due to a rest from a grt run, plus dosh in the bank...
i just treated it as a buying opp.
they also were quite solid during recent gfc issues etc.
look at azm, a newsheet spruik and all go....

 

[Ajax]

Macquarie Bank margin loan lvr on Perseus changes next week....

i.e. current % of holding to be held by borrower 55% (Macquarie wil lend 45%)

From mid next week current % of holding to be held by borrower 35% (Macquarie wil lend 65%).

 

[eddyeagle]

Got into PRU on Friday and it shot up almost 10% today and closed at all time highs in the face of the market getting smashed! Not a bad day’s work. A few of the African miners seem to be on a bit of a roll at the moment – AZM, GRY etc.

 

[Sean K]

I'm watching the market closely now for more panic selling which will probably effect all stocks including those still with outstanding potential. Think back to the crazy sell off of this early last year. I'm waiting patiently for that to happen again and that should create another great opportunity here. I think we all agree that PRU are looking at 10m ounce plus on their 2 main projects and at production should be rated between $120 and $200 an ounce like most producers, if they don't **** it up.

 

[Sean K]

Pretty amazing failure of the significant breakout through $2.10. Complete lack of follow through which is unusual. Must have been one of those general market panic sell off days.

$1.50 should be a significant floor if it continues that way. $2.10 now an even greater hurdle.

 

[Ajax]

Perseus Mining got a mention in the Smart Money section of the Weekend Financial Review (page 40) in an article headed "Resources tipped to bounce back"...I'll quote only a small amount of the article for research purposes.

...

"Grant Craighead from independent research firm Stock Resource, sees the most attractive value in copper and gold. He recommends buying miners with offshore assets as they are not affected by the resource super profits tax"

...

"Most of the problems in the last few weeks have all been financial market turmoil, but when looking at the physical demand side of things, it's been holding up really well".

...

"(As for gold) he likes emerging West African producers such as Perseus Mining and Gryphon Minerals below $2 and 71c respectively".

 

[eddyeagle]

From announcement today:

Perseus Managing Director, Mark Calderwood’s Comments
“Now that the EPA approval is to hand, it’s ‘all systems go’ at the Central Ashanti Gold
Project.”
“We are on target for achieving a first gold pour in the third quarter of 2011.”
“The $140 million raised in recent equity issues and the project financing ensure that the
CAGP is fully funded while the Company is able to maintain its exploration effort and fast
track development of the Sissingue project at Tengrela in Ivory Coast – recent new exploration
discoveries in Ivory Coast and Ghana and progress at Sissingue demonstrate the value of this
strategy.”
“We are not expecting to draw more than US$65 million of the CAGP project loan facility
unless funds held are required to fast track Sissingue” Mr Calderwood said.

 

[Sean K]

From announcement today:

Perseus Managing Director, Mark Calderwood’s Comments
“Now that the EPA approval is to hand, it’s ‘all systems go’ at the Central Ashanti Gold
Project.”
“We are on target for achieving a first gold pour in the third quarter of 2011.”
“The $140 million raised in recent equity issues and the project financing ensure that the
CAGP is fully funded while the Company is able to maintain its exploration effort and fast
track development of the Sissingue project at Tengrela in Ivory Coast – recent new exploration
discoveries in Ivory Coast and Ghana and progress at Sissingue demonstrate the value of this
strategy.”
“We are not expecting to draw more than US$65 million of the CAGP project loan facility
unless funds held are required to fast track Sissingue” Mr Calderwood said.

It's taking a long time to get this into operation. They had enough ounces ages ago to go to production. 3rd Q 2011 is crazy. Start bloody digging boys!

 

[Sean K]

Looks to be a potential breakout again, but $2.10 is pretty solid. Would be surprised if it went through and followedf up, but if she does, is very significant. A true breakout would see it run quite freely you'd expect.

Pending world imminent implosion of course.

 

[eddyeagle]

Are you onboard at the moment Kennas or still out of equities?

Diggers and Drillers newsletter recently suggested that if PRU emulates its closest peer - Red Back Mining, PRU's market cap could be increased by 4.6 times ie. a share price of $9.55.

 

[Sean K]

Are you onboard at the moment Kennas or still out of equities?

Still completely out. The world still scares me. Very tempted to get back in to PRU and add some under $2.00 and keep adding on any major correction, but there's just so much uncertainty, I'm more happy earning 6% ish in the bank right now. Holding fast until there's some certainty about the world. It's a few years away perhaps. However, if there's a really good sell off, will be hard not to take advantage of it.

 

[Ajax]

Kennas,

it closed at $2.19 today (Thursday 17 June 2010). Starting to look interesting.

It needs to convincingly break $2.26 on my chart (which I have as resistance level)

This part of Rodman and Renshaw Research on Perseus on 11 May 2010 is still relevant:-

Lead Project Central Ghana Gold Project (Ayanfuri), Ghana

Ownership 90% ADU, Government 10% (on development)

Proven/Probable Reserve 2.1 mill. oz (100% of project)

Resources 5.2 mill. oz (100% of project)

Status Awaiting EPA approval, then construction commences

Proposed gold production Year 1, 230,000 oz p.a., Years 1-4 average 220,000 oz

First Production Q3 2011

Mine Life > 10 years

Capex US$160m for a 5.5 mtpa plant

Cash Costs Year 1 and 2 US$392/oz, Mine Average US$494/oz

Electricity Costs 8-10 ¢ kWh/hr - 4 km from a 16KV line

Hedging May hedge 170-230,000 oz, depending on debt level

Debt Finance Offer on the table for US$80m

Recent Share Issue April 2010 - placed C$91m in Canada at $1.94, and A$29m in Aust.

 

[eddyeagle]

With gold up approx 20 points today, tomorrow should be interesting for PRU.

Hopefully will bust through 2.26!

I added to my holding yesterday.

 

[eddyeagle]

Well there you go - closed today at an all time high of $2.35 on strong volume.

With no overhead resistance and POG performing strongly, I am quite excited about PRU.

 

[Sean K]

Outstanding breakout. Again.

The third biggest no brainer on the stock exchange after BRM and GIR a year ago.

With LGL and NCM getting married, you would think te likes of PRU will be walked down the isle one day.

 

[Slipperz]

Outstanding breakout. Again.

The third biggest no brainer on the stock exchange after BRM and GIR a year ago.

With LGL and NCM getting married, you would think te likes of PRU will be walked down the isle one day.

Certainly looks to be well on it's way

I tried to revisit PRU yesterday ( been in and out a few times) but I was away from my computer all day.

Wasn't too happy to see my unfilled order languishing at
2.20 and the sp at 2.36.