Why the Perseus Mining (ASX:PRU) share price is sliding today

The Perseus Mining share price is down 4.7% in early afternoon trading. We take a look at the gold miner's latest activities report.

| More on:
Old chest filled with gold coins

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Perseus Mining Limited (ASX: PRU) share price is down 4.71% to $1.32 in early afternoon trading. This comes after the company released its September quarter activities report.

Despite falling 43% from 27 February through to 13 March during the wider COVID-19-led market rout, Perseus Mining's share price is still up 17% year-to-date. That compares the All Ordinaries Index (ASX: XAO), which is down 6%.

Investors who were fortunate enough to buy shares at the 13 March lows will be enjoying a gain of 86% today.

What does Perseus Mining do?

Perseus Mining is an Australian listed West African gold producer.

The company was originally an exploration company when it started in 2004. It acquired the historic Edikan heap leach mine in Ghana in 2006. Following successful exploration outcomes at Edikan, the company evolved from explorer to developer and then gold miner in August 2011.

Today Perseus operates 2 gold mines in West Africa. The company expects the first gold from its third mine, Yaouré, in December this year. It forecasts its gold production will increase to more than 500,000 ounces per year in 2021/2022.

Why is the Perseus Mining share price sliding?

Perseus Mining's latest activities report offered mixed results in the short term with a more positive mid-term outlook.

On the plus side, the company reported gold production increased 6% from the previous quarter, to 68,772 ounces.

However, it came at a higher cost, with production costs increasing by 2% to US$823 (AU$1,151) per ounce. All in sustaining costs (AISC) hit US$964 per ounce, up 3% over the previous quarter.

Meanwhile, Perseus Mining's gold sales declined by 23% to 60,441 ounces. This was somewhat balanced out by a 3% increase in the weighted average gold sales price, up to US$1,595 per ounce.

The company also reported a US$16.2 million decrease of its available cash and bullion on hand, down to US$147.4 million as at 30 September. Its corporate debt remains fully drawn to US$150 million, putting the company in a net debt position of US$2.6 million.

Perseus gold production and AISC guidance for the December 2020 half year was unchanged at 125,500 to 139,000 ounces at an AISC of US$940 to $1,025 per ounce.

Looking ahead, the company forecasts continued strong production at Edikan and Sissingué in the December 2020 quarter. Additionally, it stated that Yaouré was now expected "to contribute to the Perseus group's production performance in this period for the first time".

After a strong performance so far this year, the Perseus Mining share price is one to keep an eye on.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Three people in a corporate office pour over a tablet, ready to invest.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

Senior man wearing glasses and a leather jacket works on his laptop in a cafe.
Broker Notes

Should I still swap my CSL for CBA shares or has the market corrected?

The two stocks have travelled opposite directions this month.

Read more »

Man with rocket wings which have flames coming out of them.
Resources Shares

Why Macquarie expects this ASX All Ords copper stock could surge 38%

With costs coming in below expectations, this ASX All Ords copper stock could rocket higher over the coming months.

Read more »

woman holding 'hiring' sign in shop
Broker Notes

Can you guess whether Macquarie prefers REA Group, CAR Group or SEEK shares?

Which ASX online classifieds business offers the best investment opportunity today?

Read more »

An ASX shares broker analysing a chart tracking the A2 Milk share price
Share Market News

Are these two struggling ASX materials shares undervalued?

Are these buy-low candidates?

Read more »

Female miner smiling in front of a mining vehicle as the Pilbara Minerals share price rises
Broker Notes

Expert says this ASX All Ords small cap mining stock could rocket 38%

Big upside ahead?

Read more »

Happy man working on his laptop.
Share Market News

5 things to watch on the ASX 200 on Wednesday

It looks set to be another good session for Aussie investors tdaoy.

Read more »

Two laughing young women hold shopping bags and ride an escalator up to another level in a Scentre Group shopping centre.
Broker Notes

3 ASX consumer sector shares to buy in July: expert

A leading expert has named its top 3 picks.

Read more »