Execution Risks Loom as Perseus Advances $524M Nyanzaga Gold Mine

Formalising the Path Forward

Perseus Mining Limited has taken a significant step forward in its Tanzanian ambitions by signing critical agreements with the Government of the United Republic of Tanzania to progress the development of the Nyanzaga Gold Project (NGP). These agreements, executed on August 20, 2025, clarify and update terms originally established with the previous project owner, smoothing the path for Perseus to advance its 80% owned asset.

The signing follows Perseus’s Final Investment Decision (FID) announced in April 2025, committing US$524 million to bring the project into production. The agreements reflect a collaborative negotiation process, with Perseus’s leadership praising the Tanzanian government’s openness to foreign investment and the professionalism of key officials.

Project Scale and Economics

Located in the Mwanza Region near Lake Victoria, the Nyanzaga project is positioned within a prolific gold belt, close to established mines operated by industry giants. The project boasts a JORC-compliant mineral resource of approximately 3.8 million ounces and a probable ore reserve of 2.3 million ounces.

Perseus forecasts average annual gold production exceeding 200,000 ounces from fiscal years 2028 through 2035, with a peak of around 246,000 ounces in FY28. Notably, the project is expected to be the lowest-cost operation within Perseus’s portfolio, with an all-in site cost (AISC) averaging US$1,211 per ounce over the mine life.

Capital expenditure is estimated at US$523 million to first gold pour, including contingencies and pre-production costs. Investment metrics are robust, with a pre-tax internal rate of return (IRR) of 26% and a net present value (NPV) of US$404 million at a gold price of US$2,100 per ounce, underscoring the project’s financial attractiveness.

Exploration and Growth Potential

Perseus is actively drilling to convert inferred resources into indicated categories, which could materially increase ore reserves and extend the mine’s life beyond the current 11-year plan. Since acquiring Nyanzaga in April 2024, the company has completed over 58,000 meters of drilling, focusing on the Tusker and Kilimani deposits.

This ongoing exploration program aims to refine the geological model and support an open-pit mining scenario, potentially unlocking additional value. Perseus’s track record of delivering projects on time and budget in Africa, including the Yaouré gold mine, lends confidence to its ability to execute at Nyanzaga.

Looking Ahead

With first gold production targeted for the first quarter of calendar year 2027, Perseus is poised to add a significant new source of low-cost gold to its portfolio. The formal agreements with Tanzania mark a milestone in securing the regulatory and operational framework necessary for success.

However, some implementation work remains to fully realise the agreed changes, and Perseus will need to maintain strong government relations and operational discipline to meet its ambitious timelines and financial targets.