Perseus Mining’s board of directors has formally approved construction of the Company’s third gold mine, the Yaouré Gold Mine in Côte d’Ivoire.
With a forecast capital cost of US$265 million, Yaouré is expected to become a large scale, low-cost gold mining operation that will form an important part of Perseus’s asset portfolio for many years to come.
The Board’s affirmative decision to develop Yaouré follows the recent granting of an Exploitation Permit by the government of Côte d’Ivoire to Perseus’s Ivorian subsidiary, Perseus Yaouré SARL, and confirmation of Perseus’s development funding plan that includes deploying, in part, a US$150 million revolving credit facility, US$121 million of existing cash and bullion including US$40 million of cash recently derived from the underwritten exercise of warrants, and strong future cashflows from Perseus’s Edikan and Sissingué gold mines.
The Board’s decision to proceed with development will take immediate effect, opening the way for the execution of the Engineering and Supply Contracts between Perseus and the well credentialled engineering company, Lycopodium Limited.
Perseus has collaborated successfully with Lycopodium in the past, most notably on the ahead-of-time, on-budget development of Perseus’s Sissingué Gold Mine, also in Côte d’Ivoire, that was commissioned in early 2018.
A Notice of Award for the Engineering and Supply Contracts was issued to Lycopodium on 10 January 2019, and since then, Lycopodium and Perseus’s in-house development team, acting in anticipation of an imminent positive development decision, have worked towards commencement of full-scale development.
During this period, detailed engineering has been progressed and supply contracts, including a contract with Outotec for the manufacture and supply of the SAG and Ball mills, have been conditionally awarded to suppliers of a large proportion of the plant and equipment required for the processing facility.
These orders will now be confirmed, fixing approximately 50% of the capital budget and enabling development to proceed on schedule. Under the terms of Lycopodium’s contract, first gold is due to be poured at Yaouré by 23 January 2021, although a “stretch target” involving an earlier gold pour in December 2020 is being pursued.
Another activity on the critical path for development is payment of all outstanding crop, land and sacred site compensation.
This is well advanced with crop compensation paid in full, and approximately 80% of
landowners paid compensation at rates specified by the local Prefect’s decree. Negotiation of compensation rates for sacred sites will be finalised shortly once land compensation payments are complete.
Payment of compensation to landowners and farmers is required before clearing and preparation of the sites for the processing facility and the tailings dam can commence.
Tendering of civil work for site preparation is expected to be complete by the end of May, enabling work to advance before the onset of the peak of the wet season that typically occurs in August and September.
A specially formed committee comprising representatives of the departments of Mining, Finance, Budget and Environment will represent the Ivorian government in negotiations with Perseus for a Mining Convention to establish a stable fiscal and social environment for the project.
Finalisation and execution of the Convention is expected in the September 2019 quarter.
Concurrently with the commencement of development activities on the Yaouré site, Perseus is also planning to reactivate exploration activities adjacent to the proposed mine site.
A high priority will be placed on the advancement of work aimed at delineating further mineralisation that can be mined from below the proposed CMA open pit using underground methods.