West Africa-focused Perseus Mining Ltd. is confident that it can achieve and maintain annual gold production rates of 500,000 ounces through most of this decade by focusing on exploration.

The Australian mining company plans to lift annualized production from its three operating mines to 500,000 ounces in fiscal 2022, CEO Jeffrey Quartermaine said Sept. 28 during the NWR Virtual Resource Series. The executive also laid out plans to add 2.4 million ounces to the company's ore reserve inventory by fiscal 2024.

While Perseus Mining has spent about US$400 million over the past four years investing in two mines in its drive to become a 500,000-ounce-per-year gold producer, it has not spent much on exploration in the field, according to the executive.

"What we have done is used that time quite wisely, we think, in terms of targeting opportunities around our existing infrastructure," Quartermaine said.

Perseus Mining has allocated US$110 million to a three-year exploration program from fiscal 2022 to fiscal 2024 to test the "pipeline of opportunities" it has identified to drill, Quartermaine said.

The CEO told investors to expect exploration updates by mid-October on the underground CMA exploration project near the Yaoure gold mine in Côte d'Ivoire and the Agyakusu license near the Edikan gold mine in Ghana. Edikan was the company's first mine.

Perseus Mining has been exploring the Agyakusu license near its Edikan mine in Ghana. Source: Perseus Mining Ltd.

Six drill rigs are running on the CMA underground site and four rigs are on the Agyakusu license, while work is also underway near the infrastructure at the Sissingue gold mine in Côte d'Ivoire, Quartermaine said.

"If we're successful in that [exploration work], we'll be running around the 500,000-ounce mark out towards the end of the decade without doing anything particularly clever or anything off the license areas, doing any acquisitions or whatever," Quartermaine said of Perseus Mining's production profile.

The company will produce an updated life-of-mine plan in October for its second gold mine, Sissingue, to extend operations to fiscal 2026, the CEO said.

Perseus Mining's 2020 acquisition of Exore Resources Ltd. included about 2,000 square kilometers of gold-prospective land near the Sissingue mine and could enable the development of the Bagoe gold project into a new mine using Sissingue infrastructure.

The ramp-up at Yaoure has been "very strong" despite some mechanical issues in the past three months, including gearbox failures, Quartermaine said. Yaoure is the company's newest and third mine, and it came onstream about five weeks ahead of schedule in December 2020.

Perseus Mining booked a net profit of A$139.4 million for fiscal 2021, which ended June 30, increasing 48% year over year, after achieving record quarterly gold production of 102,788 ounces in the June quarter. The company declared a maiden distribution in August of about A$18 million, or 1.5 Australian cents per ordinary share.

"Looking to the future, we believe that the best opportunity for us is to grow our business through organic growth, or exploration," Quartermaine said.

When asked whether Perseus Mining would look outside existing jurisdictions for further growth, the executive did not rule it out but reiterated a preference for organic growth.

"For us to go to a new jurisdiction, whether it's in northern or eastern Africa, we would be starting at the bottom of the pile and learning our way through there," the CEO said.

Any new opportunities outside existing projects would be pursued "provided the opportunity was good enough to be able to generate the sorts of returns that we were seeking and also to allow us to learn on the job," Quartermaine added.

Perseus Mining scouts new opportunities on a regular basis, Quartermaine said, noting that "executing M&A is a lot more challenging than talking about it."