PRU - Perseus Mining

[J.B.Nimble]

its all there in black and white maybe start with the bizzo address and the ties that leads to when seeing who else renting the joint . a bit of a search on the directors may lead you into some intresting reading too ....

Umm... you've done this already, no doubt.... The power of Google - every man and a few of his dogs seem to reside at 30 Ledgar Road, Balcatta - Contact Resources, Tiger resources, Caspian Oil & Gas, Manas Resources (not surprisingly), Goldinvest, De Beira Goldfields, Aurora Gold corporation, Spinifex Gold, Elemental Minerals, Zedex Minerals, Carnavale Resources, Moto Goldmines and on and on and on... Black and white yes, but could be a bit hard to draw any conclusions out of this lot...

 

[flyboy77]

has anyone actually looked at the grades stated ?? not worried where it is ? takes a bit of money to process them grades from the tonnage they need to go thru to make it actually viable . anyone wary of the fact that at current spending habits EVEN with mar oppies and latest cap raising they are probably only gunna have enough cash to last till june/july09 tops ?

look im not saying its not a play but geez this bunch AND there directors need a VERY close look b4 jumping into too deeply as an investment stock .

its all there in black and white maybe start with the bizzo address and the ties that leads to when seeing who else renting the joint . a bit of a search on the directors may lead you into some intresting reading too ....

anyways ............ what do i care its a trade stock ONLY in my book , nothing more

Nor sure what you're driving at here.....there is nothing wrong with ther grade, plenty of mines operate globally with lower grades.

Seems to me like you're shooting from the hip....a down ramper is a term i've seen used elsewhere....

Re the need for capital, don't let the facts get in the way. They have pulled back their MASSIVE drilling program (feel free to name ANY OTHER exploration company anywhere that drilled the metres - and successful metres at that - that PRU drilled in 2008).

From their last quarterly:

"From the Dec quarterly report:

"Program for the Next Three Months

During the March Quarter Perseus plans to:

• publish initial scoping study results for the Tengrela project;
• complete optimisation of the process route for Ayanfuri and commence final phase of DFS;
• complete a revised resource estimate on Ayanfuri; and
• continue resource and exploration drilling at Tengrela.

The Company raised $8.5M from a placement of shares in January and expects up to $2.5M from the exercise of options expiring on 31 March 2009. These funds are sufficient to cover the feasibility and exploration work planned for 2009."

So, please do your research before you come blasting rhubarb all over these pages; if you have an axe to grind with one or more of the directors, state your case but don't bag the operations!

 

[nunthewiser]

Seems to me like you're shooting from the hip....a down ramper is a term i've seen used elsewhere....

Re the need for capital, don't let the facts get in the way.
So, please do your research before you come blasting rhubarb all over these pages; if you have an axe to grind with one or more of the directors, state your case but don't bag the operations!

LOL totally agree with my old uncle chopper who said never let the facts get in the way of a good story


um not downramping as stated , i often trade this poundpup

um IF you actually researched the company , its adress and its connections to OTHER business at that adress and maybe had a squiz at some of there honchos and there connections with said businesees and previous past dealings elswhere , you would see that theres plenny custard with that rhubarb

now have aniceday and dont get stroppy because someone here regards PRU as a trade stock ONLY and not an investment

amen

 

[Sean K]

Definately no downramping regarding questioning of the grades.

You can actually objectively question the value of a stock here which I quite like.

I did ask the grade question myself a couple of pages back and jmann gave a comparison with a couple of operators with grades around 1.5g/t in the area. If you've got a shallow open pit low strip ratio operation the grade is less of concern obviously, but is always a factor. Metallurgical test work and recovery rates then come into play I suppose, but I don't have too much of a handle on that here. Both Feasability Studies came in around 95%, which sounds OK to me. Cash costs average around $350 an oz, which is at the very low end of the spectrum. Payback for both projects is 1-2 years, so if POG stays up they'll have quite a sound base to expand and develop. With a 5m oz au ish resourse, and to expand, looks pretty good.

 

[jman2007]

LOL totally agree with my old uncle chopper who said never let the facts get in the way of a good story


um not downramping as stated , i often trade this poundpup

um IF you actually researched the company , its adress and its connections to OTHER business at that adress and maybe had a squiz at some of there honchos and there connections with said businesees and previous past dealings elswhere , you would see that theres plenny custard with that rhubarb

now have aniceday and dont get stroppy because someone here regards PRU as a trade stock ONLY and not an investment

amen

I'm not exactly sure what you're trying to get at with your comment re the grades.

If you have some doubts re Afminex - PRU's predecessor, or bona fide information re questionable links to other 'Balcatta Boys' companies then please just come out and say it, and save us all a lot of time.

We already know Calderwood has been/currently is involved with CIG and MSR, if that's what you're getting at.

jman

 

[flyboy77]

Osisko Mining (TSX) - A Comparison.

Osisko (OSK on the TSX) is at a similar stage to PRU (though they have completed a feasibility study) the project has a few unique 'issues' which will slow the development path.

Their main project is in Quebec, Ontario. A good jurisdiction undoubtedly.

It has a measured and indicated resource of roughly 6.2m oz of gold with a grade ~ 1.12 g/t (vs. 1.32 g/t at Ayanfuri). Capex will be high USD700m + but the annual rate of production is over 500k oz p.a. with silver credits; cash costs around USD320/oz. Capex est'd @ USD 146/oz.

They also have to MOVE a large chunk of a town, Malartic - some 200 + houses!

First production expected around mid 2011 but likely delays given the infrastructure complexities (moving the 200+ homes) imo?

Even using 850 gold (a la Perseus) the Malartic project IRR was under 30% and the payback period near on 3 years.

They have recently completed a USD350m capital raising which was over subscribed by some $53m dollars - total raising just shy of USD403m...... this was all done in about 4 weeks.

In comparison, PRU needs USD134m for Ayanfuri yet the payback is not much more than a year and the expected IRR ~ 71%.

PRU management is confident that the development of the second project, Sissingue (Tengrela), can be done out of cashflow from Ayanfuri.

So you tell me, do you really think PRU will have trouble raising USD134m (and my view is they'll only need to raise maybe 25-35% of that through equity i.e. up to USD47m, the rest can be debt funded). Arguably, 100% could be debt funded, but banks are banks....

 

[jman2007]

Re: Osisko Mining (TSX) - A Comparison.

Osisko (OSK on the TSX) is at a similar stage to PRU (though they have completed a feasibility study) the project has a few unique 'issues' which will slow the development path.

It has a measured and indicated resource of roughly 6.2m oz of gold with a grade ~ 1.12 g/t (vs. 1.32 g/t at Ayanfuri). Capex will be high USD700m + but the annual rate of production is over 500k oz p.a. with silver credits; cash costs around USD320/oz. Capex est'd @ USD 146/oz.

[In comparison, PRU needs USD134m for Ayanfuri yet the payback is not much more than a year and the expected IRR ~ 71%.

PRU management is confident that the development of the second project, Sissingue (Tengrela), can be done out of cashflow from Ayanfuri.

Interesting flyboy,

I suppose it goes to show that the Cannucks aren't afraid of throwing a few hundred mill around when it comes to developing gold projects - in their own backyard anyway.

Their resource as a whole, being very large but low grade, looks like it has basically stood idle for a good 4 years or so waiting for it to become economic to be mined while Osisko continued to prove it up. Perhaps may become vunerable if the POG takes a dive based on those grades.

Still, I can't argue with the figures you presented. Perhaps we should also allow 15-20% capex inflation at Ayanfuri but even still, the outlay appears significantly less. I've always suspected the Canadians may yet have some part to play in the PRU story.

 

[flyboy77]

The Osisko team have been prolific drillers in the past few years often producing long intercepts (100m +) of 1 - 2 g/t material.

Malartic is a former producer and in one of Canada's great mining belts. More similarities to Ayanfuri!

The OSK capital raising just shows the apetite out there for advanced stage quality gold projects.

Perseus sits easily and very comfortably in that camp.

I do wish they would list in Canada - just increases their profile so much more..... and has the best and cheapest access to capital.

Would also like some experienced 'external' independent directors brought on to the management team at Perseus - the fear of group think is ever present.....

Like many others, I am surprised this stock has not run back through 1.00 - their does appear to be a rather persistent seller at these levels, strangely enough!

 

[flyboy77]

Location does help too.

Let's not forget many of the big boys in the gold world already have existing operations in Ghana. Relatively speaking, Ghana is a great place to operate a mine. The country has a strong and proud legacy of major discoveries – both greenfield and brownfield. An interesting story is Newmont's Ahafo mine (and Akyem project) in Ghana.

"Reserves have grown from a combined 3.3 million ounces in 2002 to 20.3 million ounces at year end 2006."

You reckon they're not watching Perseus like a hawk?

1. Newmont (#2 in the world)
2. Anglo Ashanti (#3 in the world)
3. Goldfields (#4 in the world)
4. IAMGold (#15 in the world)
5. Golden Star (not really a big boy but...)
6. Redback Mining


http://www.goldsheetlinks.com/ptable.htm

Don't take my word for it - have a look at the Petra Capital report on Perseus on the web site....http://www.perseusmining.com/aurora/assets/user_content/File/PRU081001.pdf

Others – you name it. Lihir took out Equigold last year with its Bonkiro mine in Ivory Coast and a large suite of exploration ground.

Let’s look at Newmont briefly. Newmont forecasts gold output this year of 5.2 m to 5.5 m oz @ $400- $440/oz, compared with 5.2 m oz at a cost of $440/oz in 2008.

The big guys struggle to replace their reserve/resource base constantly (on which they are valued, hand in hand with production rates, costs et al.) - they all know the easiest way to do this is to buy emerging stories:

That means Newmont needs to FIND or ACQUIRE 5.5m oz of gold EACH and EVERY YEAR just to maintain their resource/reserve base, hence their operating life and hence their market valuation.

Further if you are a mid tier producer, you must be proactive – either you acquire or you are acquired. You cannot just sit on the sidelines…..

You still not convinced about gold companies’ desire to do deal – look no further than the Kinross- Aurelian deal last year. No reserve, just a large resource in a questionable jurisdiction – Ecuador. Kinross had also previously acquired Bema Gold which had its main attraction as the Kupol mine in Russia.

Bottom line, between Ayanfuri and Sissingue, PRU is potentially shaping up to produce 400,000 oz + p.a. (assuming Tengrela gets to 2m oz+ it too will be a 2000k oz p.a. operation) at a cost of sub $350/oz.

With gold at 960/oz (and hopefully going higher still) that's a fairly decent margin and cashflow generation....per year!

You do the maths. :

 

[jman2007]

Re: Location does help too.

Let's not forget many of the big boys in the gold world already have existing operations in Ghana. Relatively speaking, Ghana is a great place to operate a mine. The country has a strong and proud legacy of major discoveries – both greenfield and brownfield. An interesting story is Newmont's Ahafo mine (and Akyem project) in Ghana.

"Reserves have grown from a combined 3.3 million ounces in 2002 to 20.3 million ounces at year end 2006."

The big guys struggle to replace their reserve/resource base constantly (on which they are valued, hand in hand with production rates, costs et al.) - they all know the easiest way to do this is to buy emerging stories:

That means Newmont needs to FIND or ACQUIRE 5.5m oz of gold EACH and EVERY YEAR just to maintain their resource/reserve base, hence their operating life and hence their market valuation.

Bottom line, between Ayanfuri and Sissingue, PRU is potentially shaping up to produce 400,000 oz + p.a. (assuming Tengrela gets to 2m oz+ it too will be a 2000k oz p.a. operation) at a cost of sub $350/oz.

You do the maths. :

I think the lesson that companies operating in Africa should take on board is a simple one: Think Big or Go Home.

Flyboy do you have any data showing what the discovery costs per oz are for the big players in this part of the world? Being the big corporates that they are, they also have the ability to funnel in huge resources into their exploration programs which goes some way into explaining why they have been able to find the big deposits...

On the other hand, there is also no doubt that Ghana has large swathes of poorly drilled/untested greenstone belts, so if there is anywhere in the world where you're likely to find a 1Moz+ discovery, then it might as well be here.

jman

 

[flyboy77]

Was the 2.5m crossing CIG's last hurrah?

Crossing of 2.5m shares went through just after 2pm today.

Possibly, it could be CIG and possibly the end of CIG's shareholding in PRU?

No question, there has been a persistent seller in the market over the past few weeks. Maybe that seller is now gone!?

 

[flyboy77]

Perseus Mining - Added to the ASX 300.

Go PRU.

This should attract some additional interest to the story.

Good bounce by gold last night too.....

 

[Sean K]

Tossing up a few random lines on a chart here as I'm a bit bored.

Support at 55 formed up.
70 - 80 major resistance.
80 top of a huge cup and is that a handle down to 55?
Target from break up shown but seems a bit far fetched.

Boredom over.

Cheers.

 

[Sean K]

Ann out.

Not a bad upgrade and takes their resource base to over 7m oz au.

Surely a target at this stage?

NCM on the prowl.......


Gold Resources Top 5 Million Ounces Ayanfuri Gold Project - Ghana

Perseus’s gold resources at Ayanfuri now stand at 5.28 million ounces -

The 450,000 ounce (9%) increase in Inferred resources resulted from modelling of three smaller deposits.
These deposits will be incorporated in the mine plan in the feasibility study scheduled for completion in July.
Perseus’s West African total resource base has increased to 7 million ounces of gold.

 

[Sean K]

Ann out.

Not a bad upgrade and takes their resource base to over 7m oz au.

Surely a target at this stage?

NCM on the prowl.......

Trying to assess a takeover value for these guys based on the most recent large acquisition around the world and that was:

Gammon taking Capital Gold, who have about 2m oz au (from what I can assume) but usually declare 830K oz au @ .6 g/t for CAD $168m (AUD$197), and planning to produce between 250,000 and 265,000 gold equivalent ounces. Let’s take the 2m oz au as their total resource which gives them a mc to oz au value of:

MC to oz au is 197/2 = $98.5 an oz

PRU have 7m oz au @ around 1.5 g/t with MC 200m x .74 = $148m ish

MC to oz au = 148/7 = $21 an oz

If we give PRU the same MC to oz rating as the Capital takeover, that is $98.5 an ounce of gold, then PRU would be worth 7m x $98.5 = $689.5m

So, per share, a takeover may be worth $689.5m / 200m = $3.44

Obvious major problem with this is that Capital is producing, while PRU is still exploring, so maybe not fair.....


We can dream .....

 

[jman2007]

Trying to assess a takeover value for these guys based on the most recent large acquisition around the world

New BGF broker report available from PRU website now:

http://www.perseusmining.com/aurora/assets/user_content/File/PerseusBGF16March091.pdf

I think it's a little hard to ascribe a t/o value for PRU right now, I think two things need to happen to move this thing forward:

- Re-optimize the exisiting and proposed pits at Auanfuri using $US 850/oz price. As far I can tell, all the pit designs have used US$ 750/oz (will be done as part and parcel of the BFS I imagine)

- Complete the BFS for Ayanfuri (Calderwood is saying April before they can determine how many Reserve ounces they have).

This should help in reducing the resource risk substansially, which will make it more attractive as a t/o target.

The resource base is very large, but we don't know just how economic Ayanfuri is likely to be just yet. On the flip side of the coin, the re-optimization is bound to bring in substansially more tonnes into the pit shells, which will boost the resource ounces still further.

Just to clarify:

The definition of a Mineral Resource is a "concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality and quantity that there are reasonable prospects for economic extraction" (JORC Code 2004).

and

An Ore Reserve is "the economically mineable part of a Measured and/or Indicated Mineral Resource". (JORC Code 2004)

Cheers
jman

 

[Sean K]

New BGF broker report available from PRU website now:

http://www.perseusmining.com/aurora/assets/user_content/File/PerseusBGF16March091.pdf
Cheers
jman

Pretty bullish report for PRU making it look like the best value developer in Africa. Still has lots of room to move in the share price before it starts to look even on a peer to peer analysis. It looks even better now with the resource increase not included in the analysis.

I can't work out why it's so clearly undervalued. Is it the grade? Depth? Location?

All things being equal, should eventually be re-rated unless we're missing something.

 

[jonojpsg]

Pretty bullish report for PRU making it look like the best value developer in Africa. Still has lots of room to move in the share price before it starts to look even on a peer to peer analysis. It looks even better now with the resource increase not included in the analysis.

I can't work out why it's so clearly undervalued. Is it the grade? Depth? Location?

All things being equal, should eventually be re-rated unless we're missing something.

And aren't we all (holders) looking forward to when that eventuates.....................................................

 

[jman2007]

Pretty bullish report for PRU making it look like the best value developer in Africa. Still has lots of room to move in the share price before it starts to look even on a peer to peer analysis. It looks even better now with the resource increase not included in the analysis.

I can't work out why it's so clearly undervalued. Is it the grade? Depth? Location?

All things being equal, should eventually be re-rated unless we're missing something.

Yeah I have been wondering exactly the same thing.

No real answers as yet.

Perhaps it really is one that has simply slipped under the radar of the market?

Bear in mind Grigor holds shares in PRU, and BGF have recieved funds from PRU from recent capital raisings, I think Miner made this point some time back.

jman

 

[Miner]

Yeah I have been wondering exactly the same thing.

No real answers as yet.

Perhaps it really is one that has simply slipped under the radar of the market?

Bear in mind Grigor holds shares in PRU, and BGF have recieved funds from PRU from recent capital raisings, I think Miner made this point some time back.

jman

Gees

You always prove to be with outstandng knowledge (like Kennas, Kauri and few others_ but with an elephant like memory to remember what this Miner to say with shovel

Yes, you were right mate on quoting me there

I do hold PRU - disclaimer