Business Profiles

Perseus Mining: A strong base

In 2012, Perseus Mining began operations at its first site, the Edikan Gold Mine in Ghana. Now, Perseus has branched out beyond its original ‘single-mine, single-jurisdiction’ limits; with two new sites in the Côte d’Ivoire, the company is now operating or developing three promising locations, and continues to investigate potential for even more. We spoke with Jeff Quartermaine, Managing Director and CEO, to learn about this new portfolio, and why Perseus has created such a stable position.

Perseus Mining acquired its latest project, the Yaouré Gold Project, when it took over AIM-listed company Amara Mining PLC back in April 2016. “At that time,” Jeff told us, “Amara was a junior company who had drilled this deposit out and were promoting it as the best undeveloped project in West Africa. It wasn’t quite as huge as they believed it was, but it’s still a very good project.”

Perseus spent the first two years after acquiring Amara securing licensing and double-checking Amara’s results and exploration work, which involved around 80,000 metres of confirmatory drilling. This drilling confirmed Perseus’s amended estimates on Amara’s original results, which were the estimates upon which Perseus acquired Amara. The confirmation complete, Perseus is now “very comfortable that this is a robust and accurate estimate”.

The acquisition of Amara was, Jeff told us, “part of a very deliberate strategy on our part to diversify the company away from our first operation and get multiple exposures in multiple jurisdictions. We were keen to diversify away from being a single-mine company.” At the time, Perseus was already developing its first project in Côte d’Ivoire, Sissingué, which was its second project in total, and had been its first venture into a new territory. We asked Jeff about the company’s experience in achieving its aim and reaching out into a new country:

“Côte d’Ivoire and Ghana couldn’t be more different, even though they share a common border. One was a British colony and one was a French colony. Operating in Côte d’Ivoire is more bureaucratic and more process driven than Ghana. Clearly, there are language differences there, but we work very well with them – we have very good people on the ground. However, Côte d’Ivoire is relatively under-explored and there are only about four or five operating mines in the country, as opposed to Ghana, which has years of history with mining.

Each country offers its pros and cons – what Côte d’Ivoire offers in smooth systems, Ghana offers in experience. Operating in Ghana is tried and tested, both for the country and for Perseus, but in Côte d’Ivoire, there is an opportunity to grow together as both country and company explore new horizons. Whilst mining experience is thin on the ground in Côte d’Ivoire, it seems this industry is on the rise there: “There’s been a few explorers into Côte d’Ivoire in recent years, and that’s due to a very proactive effort from the current government to open up the borders and to make investment an attractive proposition for incoming people,” Jeff says.

Building this new relationship with Côte d’Ivoire was a task Perseus took seriously, and approached through the principle of reliability. “I think having a clearly defined set of values stands us in good stead. We have a fundamental philosophy of doing what we say we’re going to do. I think we’ve earned the respect of the government with our first mine [in Côte d’Ivoire]. We said we were going to build it, we did, and did it very well. We said we were going to invest heavily in the local community and to employ people locally, we’ve done all of those things and it’s very visible. Having earned the respect of the government, getting our second property license wasn’t difficult.”

Perseus’s newest mine, Yaouré, is contracted to go into operation in January 2021, but if everything goes according to plan, Jeff expects them to deliver first gold there by December 2020. In developing Yaouré mine, Perseus not only undertook its confirmatory drilling, but also expanded its reach and conducted additional drilling around the outskirts of known deposits. The company’s findings indicate there is significant underground potential on the site, adjacent to one of the existing pits. Whilst Perseus itself currently only operates open-cut mines, many of its leadership have experience in underground mining operations, so branching the company out in this new direction would be a return to established knowledge for many.

In 2020, Perseus intends to continue exploring this underground potential with a tool that should greatly assist the accuracy of the Company’s results: technology developed by a company called HiSeis, which allows explorers to conduct accurate 3D seismic surveys in potential deposit sites. “It’s not dissimilar to what’s being used in the oil industry, except it’s being applied to hard rock. It’s being used successfully in Australia, and has been part of why the Australian mining is doing so well at the moment – these guys have been able to locate deep, deep structures and have been able to target their drilling.” Through HiSeis, Perseus will gain a far more accurate view of what underground potential its sites have, with the hope it can develop these underground sites in order to greatly extend the mine-life of its properties.

Perseus isn’t stopping there, however. The company also intends to expand exploration efforts into greenfields areas, potentially in different countries, to further expand the Companys’ portfolio. “In the longer-term, we’d like to have four of five operations, spread between three or four countries. However, the objective is not about size – it’s about profitability for all of the stakeholders that we have.

“It’s a very difficult business – there’s no two ways around it. You face many challenges, particularly when you have operations in Africa. You’ve got to be resilient, and you’ve got to be able to work your way through those issues, and if you can, it can be extremely rewarding.”

Just as Perseus’s attitude to building a relationship with the Côte d’Ivoire was based on reliability, so too is its approach to bonding with the local communities it works within. In both Ghana and Côte d’Ivoire, Perseus is actively involved in various CSR projects around their mine locations. In Côte d’Ivoire, this is mandatory – 5% of a mining company’s revenue must go into a trust fund that is then administered by a local prefect and used to help the local area. However, Perseus goes above and beyond this in all territories.

“It’s good for us. It’s very simple, really; if the community is happy, then your workforce is happy, and if your workforce is happy, then they’re productive,” Jeff says.

The communities in Côte d’Ivoire took longer to warm to Perseus than in Ghana, as there isn’t that same established history of mining, and therefore local residents didn’t know what to expect. However, by providing support and living up to their same standard of reliability, Perseus turned that around. “I think at first, the community were skeptical about what we might bring, but we’ve been able to prove that we’re worthwhile people to have in their midst. At the end of the day, if you’re not welcomed by the community, you don’t have much.”

Perseus has been involved in the construction of infrastructure such as clinics, schools, reading halls and water pumps in the areas they operate around, as well as working to establish sustainable businesses to fill the gap in the economy that will be created by the employer when the mine eventually closes. In the meantime, these businesses also help to close the economic gap between those employed by the mine and those who aren’t.

“What we’re very keen to do and administer is to create opportunities for local entrepreneurs to create businesses and to generate income, not only when we’re there, but also when we leave. So, for instance, we’ll help women, particularly, with setting up small-scale farming or cloth manufacture; we can actually buy those products from them whilst we’re there, but they can have a sustainable business after we’ve left.”

Perseus also invests in local education by sponsoring youth to go to technical college. This provides skills for tradespeople who can then be hired by Perseus and assist in the construction work around the local villages, making the aid doubly impactful.

Perseus Mining is a stable and reliable presence in these communities and economies, and it is also solidly situated in terms of its portfolio. Five years ago, it was a company with all of its eggs in one basket, and with a lot of growth that needed to take place. Now, as Jeff told us, “We’ve established a really strong operating base, and we’ve got a strong growth profile moving forwards based on the assets that we already own. We don’t have to acquire anything at the moment – we can turn Perseus into a very significant company with what we’re already got. That’s something that not a lot of companies can say. We’re very confident that the future for our shareholders is particularly good, especially in the current market environment.”