Australian (ASX) Stock Market Forum

PRU - Perseus Mining

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OK .. had a BRIEF look at PRU , but not the report

why i have avoided it in the past

1. it operates in Africa ( i normally avoid Africa and PNG on perceived increased political risk

2. it hasn't paid a div. ( but according to Morningstar MIGHT in 2022 )

i am trying to build a retirement fund so yes divs are very important to me , but occasionally i do go for something i think can grow
the last one was YFZ which is sadly under take-over threat , but happily will come close to doubling my investment if the take-over completes

a VERY quick look at the PRU quarterly

things that caught my eye , higher costs on higher production , however that may be temporary , and they are still actively exploring so MIGHT need to save that cash for future development

will look in depth much later tonight ( unless the share price plunges dramatically , which i think won't happen today , with the virus hysteria who knows what happens tomorrow )
 
kennas said:
Yep. Held quite a chunk on the late naughties but sold a decade ago. If we're still in a secular bull run should keep going ok. I'm not in touch with local politics at the moment so being cautious about WA.
Click to expand...
Excellent June quarterly out this morning.. PRU added another US$50M+ to their bottom line :)

$2+ share price it seems from here imo given their increasing Gold output/margins etc. to come imo
 
PRU has been a consistent performer with a solid record of execution by management. Production has been steadily increasing with 191,000 oz produced in the recent half year at an AISC of US$1,047. The company has an ultimate goal of reaching 500,000 oz/year. Given the increasing production and exploration success, the 500,000 seems achievable in the medium term.

The one area of criticism is their hedging program. This could have been handled better and hopefully as debt is reduced (currently net $100mil) they can improve this area of weakness.
Perseus held gold forward sales contracts for 210,313 ounces of gold at a weighted average sales price of US$1,564 per ounce. These hedges are designated for delivery progressively over the period up to 30 September 2022. Perseus also held spot deferred sales contracts for a further 90,441 ounces of gold at a weighted average sales price of US$1,668 per ounce. Combining both sets of sales contracts, Perseus’s total hedged position at the end of the quarter was 300,754 ounces at a weighted average sales price of US$1,595 per ounce.​

Often under appreciated by the market, the frequent dips in price under $1.20 have undervalued the company and have proved good entry points for either a trade or investment. Holding
 
Beaches said:
PRU has been a consistent performer with a solid record of execution by management. Production has been steadily increasing with 191,000 oz produced in the recent half year at an AISC of US$1,047. The company has an ultimate goal of reaching 500,000 oz/year. Given the increasing production and exploration success, the 500,000 seems achievable in the medium term.

The one area of criticism is their hedging program. This could have been handled better and hopefully as debt is reduced (currently net $100mil) they can improve this area of weakness.
Perseus held gold forward sales contracts for 210,313 ounces of gold at a weighted average sales price of US$1,564 per ounce. These hedges are designated for delivery progressively over the period up to 30 September 2022. Perseus also held spot deferred sales contracts for a further 90,441 ounces of gold at a weighted average sales price of US$1,668 per ounce. Combining both sets of sales contracts, Perseus’s total hedged position at the end of the quarter was 300,754 ounces at a weighted average sales price of US$1,595 per ounce.​

Often under appreciated by the market, the frequent dips in price under $1.20 have undervalued the company and have proved good entry points for either a trade or investment.
Click to expand...
Held this many moons ago a spectacular rise followed by a similar decline.
Never made money from it.
Now I won’t even consider it, management at the time disappointed.
On my avoid list along with OGC another disappointing gold company that promised the earth but could never really deliver.
Good luck if you back PRU maybe this time it might deliver????
 
Beaches said:
The one area of criticism is their hedging program. This could have been handled better and hopefully as debt is reduced (currently net $100mil) they can improve this area of weakness.
Perseus held gold forward sales contracts for 210,313 ounces of gold at a weighted average sales price of US$1,564 per ounce. These hedges are designated for delivery progressively over the period up to 30 September 2022. Perseus also held spot deferred sales contracts for a further 90,441 ounces of gold at a weighted average sales price of US$1,668 per ounce. Combining both sets of sales contracts, Perseus’s total hedged position at the end of the quarter was 300,754 ounces at a weighted average sales price of US$1,595 per ounce.​
Click to expand...

Nasty hedging. I can only guess that was part of getting debt to fund capex at some point.

I think Sissingue is going to run out gold in a few years that needs to be replaced, so they're going to have to have some good exploration success or bolt something on to get to and maintain 500k oz pa. Buying Tietto might fix that.
 
brerwallabi said:
Held this many moons ago a spectacular rise followed by a similar decline.
Never made money from it.
Now I won’t even consider it, management at the time disappointed.
On my avoid list along with OGC another disappointing gold company that promised the earth but could never really deliver.
Good luck if you back PRU maybe this time it might deliver????
Click to expand...
Most miners have teething problems in their early years, it's not unusual. However, PRU has hardly put a foot wrong in the last 5 years.
In 2016 they had 1 mine producing around 160,000oz/year. They now have 3 mines that are producing 380,000oz/year with a target of 500,000oz next year. Their current AISC is very much the same as it was 5 years ago.
I would be very happy if all the goldies I'm holding could execute that well.
 
divs4ever said:
a tiny gotcha , just remember he is talking in $US

on a highly profitable mine no big thing but on a normally marginal mine like MML a huge trap

cheers
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Good point, exchange rate movements could really affect the profit margins when you are extracting and milling the stuff in Au$ or some African currency (how about wheel barrow loads of Zimbabwe money to pay for each mining shift), and selling the end product (Oz of Gold) in US$...

1626883984492.png


1626884207677.png


and pays for...
1626884265107.png
 
All the Goldies are up a bit today :xyxthumbs

PRU has bucked the trend and gone up while most Gold stocks especially Aussie ones (eg. ALK held in spec portfolio) have been sliding south lately...
 
Gold is having a gap-up day, hence seeing green on all the Gold stocks on the asx.

1627526633714.png

Hope that continues...

Also there is another tail wind that could help local producers who produce the stuff in AUD and sell in USD...

1627526767420.png
 
PRU MC is about $1.9b and they're digging up 300K ounces ramping to 500K - maybe. They were producing 250K oz au from 2018-20. So, compare that to a TIE, or an ORR or a PDI that will be digging up around 200-250K ounces and their MCs are $300-400m. (Also WAF $1.3b and producing 280K+.) While TIE has the finance sorted, and the others have a lot of time and financing to get into production, there's something missing here. Maybe PRU is just de-risked because it's been going for a while and multi asset. Perhaps Yaoure coming on line and doing well adds good value.

There was a great looking set up late last year when POG looked like it had broken up and this was following the trend. That C&H was looking very tasty. Didn't buy it as I was focussed on juniors, and on the above comparisons thought this was overpriced.

My interest here is more on M&A action between the WA juniors and this and WAF. Would make some sense for PRU or WAF to buy out one of the others to add to the inventory and create scale. TIE is being steadily de-risked with the infill drilling and looks like a no-brainer to me. Unless the deposit is actually crap.

Screen Shot 2022-01-14 at 11.14.58 am.png
 
Overnight, PRU released some nice drilling results showing gold at depth below the current open pit at Yaoure.
May well go for a run today.
My average buy in price is 1.565, so may even be in the black.
Mick
 
mullokintyre said:
Overnight, PRU released some nice drilling results showing gold at depth below the current open pit at Yaoure.
May well go for a run today.
My average buy in price is 1.565, so may even be in the black.
Mick
Click to expand...

Mostly infill drilling.There were some interesting exploration results out yesterday near Edikan. Working towards being a 500k oz producer. I wonder what their next move is. Rely on exploration success, a merger of equals or buy a junior??
 

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