Ghana prospector Perseus says gets approaches
SYDNEY - Australia's Perseus Mining has received takeover approaches from North American suitors as it gets ready to develop one of West Africa's largest gold deposits and list in Canada, its top executive said.
West African nations including Ghana, Mali and Ivory Coast are increasingly attracting prospectors seeking locations where production costs are lower, sometimes by more than half the cost in Australia, despite higher risks.
"We've definitely been approached and several times by some companies," Perseus' MD Mark Calderwood told Reuters in a recent telephone interview.
"We're not chasing them, they are chasing us," he said, adding the overtures were from gold miners based in Canada.
Calderwood said a "boots and all" offer would be needed to persuade shareholders to sell and in all likelihood would come from Canadian firms "that have the corporate currency to do it."
Perseus' shareholders, about half of which are institutions including Oppenheimer Fund, US Global and Front Street, were happy to see Perseus move into production on its own, he said.
This week Perseus was granted mining leases by Ghana's government for 15 years for its 93,13 sq km Central Ashanti gold project, which has a resource of seven-million ounces of gold.
US brokerage Rodman & Renshaw said in a report on Thursday it expects the Central Ashanti resource to increase to ten-million ounces.
Perseus has already signed a loan facility for the Ashanti project with Australia's Macquarie Bank and Credit Suisse, that includes hedging of 150 000 oz. It also holds 100 000 oz in gold put options with a strike price of $850/oz.
The project still needs environmental clearance by the Ghanian government, which Calderwood expects next month, before construction work on a processing plant handling 5,5-million tons annually will begin.
The company will try to start production of between 230 000 and 250 000 ounces a year ahead of the current target start date of the third quarter of 2011, according to Calderwood.
Listing of Perseus' shares in Toronto is scheduled for the end of January, when it will join other West Africa prospectors and miners, including Red Back Mining Inc, Equinox Minerals and Andean Resources.
Perseus's Australian shares have climbed tenfold since late 2008, helped by rising bullion prices and the promise of much lower production costs than those of gold producers in Australia. The stock closed on Thursday at A$1,99.
Perseus is in the early stages of developing a second mine in Ivory Coast, and this year plans to spend A$25-million overall on exploration, Calderwood said.
