Perseus Mining (OTCPK:PMNXF) has released its financial results for the financial year 2014 which ended in June. Total revenues for the year were $240M which were lower than the year before due to the lower production of "just" 183,000 ounces of gold, compared to 200,000oz+ in the previous year. As the costs also increased, the company unfortunately showed a net loss of approximately $29M. On top of that, the company was also free cash flow negative, as the $17M operating cash flow wasn't enough to cover the $43M in expenditures on the property.
As explained in my earlier article, I am expecting a turnaround process at Perseus after the company has failed to live up to the expectations created in the feasibility study. For 2015, the company is guiding to produce 210,000-230,000 ounces of gold at a total site cost of $1100-1200/oz. Keep in mind Perseus Mining has sold forward 125,000 ounces of gold at an average price of $1468/oz, and this will result in some hedging profits over the next 18 months.
2015 should be the first year of the turnaround process, and the first step for Perseus will be to meet the production and cost guidance. Only if these conditions will be met, I'd dare to look further forward to see if the company's long-term objectives are achievable.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.