Perseus Mining share price slips despite record quarter

Investors aren’t biting today despite the gold exploration company’s strong result.

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Key points

  • Shares in Perseus Mining have slipped despite a strong quarterly result posted today
  • It was a record quarter for the company in terms of production and operating cash flows
  • In the last 12 months, the Perseus share price has gained more than 47%

The Perseus Mining Ltd (ASX: PRU) share price is tracking lower today despite the company posting a record result for the past three months of activity.

In its March quarter report released today, the gold exploration company said that it “continues to set production and operating cashflow records”. Despite this, investors have sold off and/or booked profits in Perseus shares today.

At the time of writing, the Perseus share price is tracing 2.85% lower at $1.875 after earlier hitting an intraday low of $1.84.

The share price is also likely to be feeling the weight of the S&P/ASX 300 Metals & Mining Index (ASX: XMM) tracking 5.51% lower so far today. That extends the sector’s losses to 11% over the past week.

Let’s take a closer look at the company’s March quarter results.

TradingView Chart

Perseus share price dips despite record quarter

Despite a production record of 130,523 ounces, investors haven’t bitten at Perseus shares today.

The company reported quarterly gold sales jumped to 131,044 ounces, an increase of 557 ounces for the quarter. Perseus realised these sales at a weighted average sales price of US$1,701 per ounce.

It also reported its weighted average all-in sustaining costs (AISCs) decreased by 3% quarter-on-quarter to US$908 per ounce.

The average quarterly cash margin increased US$58 per ounce to US$793 per ounce of gold for the quarter. However, cash expenditures increased during the period.

“Notional cashflow from operations increased by 10% quarter-on-quarter to US$104 million, resulting in total year to date notional cashflow of US$275 million,” Perseus said.

The company also paid an interim dividend of 0.81 cents per share at the end of the quarter. That represents a 0.43% trailing yield at the current share price.

Through its proposed acquisition of Orca Gold Inc., the company intends to increase its ore reserves and boost its ore inventory. It said:

The proposed acquisition of Orca Gold Inc. through a Plan of Arrangement which, when complete, will result in the ownership of the undeveloped long-life Block 14 Gold Project in Sudan, and an indirect 31.4% interest in the Koné Gold Project, owned by TSX-V listed Montage Gold Corp, in northern Côte d’Ivoire, that is based on a large, potentially long-life undeveloped gold reserve.

What’s next for Perseus Mining?

Perseus left the quarter with available cash and bullion of US$278 million, an increase of US$66 million in its net cash position.

With respect to its half-year forecasts, Perseus made no changes to previously outlined guidance in its results today.

It also retained full-year projections of 471,164 to 506,164 ounces at an AISC of US$932 to $1,020 per ounce. The company said:

Perseus’s strong operating performance is forecast to continue with no change to the June 2022 Half Year production guidance of 230,000 to 265,000 ounces at an AISC of US$915 to US$1,085 per ounce.

In the last 12 months, the Perseus share price has gained more than 47% and is up 16% this year to date after a slight pullback.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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