Perseus Mining Limited

This report is an updated version of the report published on the 7 February 2023 at 3:55 PM GMT+11

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Perseus Mining Limited (ASX: PRU) is an Australia-based company engaged in gold production, mineral exploration and project development in the Republic of Ghana and the Republic of Cote d’Ivoire, West Africa.     

1.2 The Key Positives, Negatives, Investment Highlights, and Risks

1.3 Top 10 Shareholders: The top 10 shareholders together form ~39.16% of the total shareholding. Van Eck Associates Corporation and T. Rowe Price Associates, Inc. hold a maximum stake in the company at ~10.97% and ~5.95%, respectively.

1.4 Key Metrics: PRU reported a high asset turnover ratio of 0.66x in FY22 compared to the industry median of 0.63x. Further, the company took lower leverage in FY22 as it reported a debt-to-equity ratio of 0.06x compared to the industry median of 0.19x. Below is captured the trend of the net margin and current ratio:

Section 2: Business Updates, Financial and Operational Highlights

2.1 Recent Updates:

2.2 Insights of 2QFY23: During 2QFY23, the All-In-Site Cost (AISC) remained around USD 930 oz as compared to USD 934 oz during 2QFY22. Further, the company has strengthened its financial position with available cash & bullion of around USD 405mn and no debt by the end of 2QFY23.

2.3 Sustainability Performance of the Company: The company continue to strengthen its sustainability governance by completing Phase 1 of the global health and safety culture program, which aims to align the business around the vision of health and safety.

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 7, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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