Tanzania: Perseus Mining finances construction of gold mine for $523 million

Perseus Mining, the Australian gold company, has formalised the final investment decision (FID) for the development of the Nyanzaga gold mine in Tanzania. The announcement marks a key milestone for the project, acquired in 2024 through the purchase of OreCorp, and positions Perseus as a major player in the African mining industry.

The Nyanzaga project, which is due to start construction shortly, represents a total investment of $523 million. This budget breaks down into $472 million for the processing plant and infrastructure, and $51 million for pre-production costs. Perseus will finance the entire project from its cash reserves, which stood at $801 million at 31 March 2025. First production is scheduled for the first quarter of 2027.

The project promises attractive profitability, with an after-tax internal rate of return (IRR) of 19% at a gold price of $2,100 per ounce, generating a net present value (NPV) of $202 million. At a gold price of $2,700 per ounce, the IRR would rise to 34% and the NPV to $617 million. With a record gold price of $3,490 per ounce on 22 April 2025, and JP Morgan forecasting $4,000 per ounce by mid-2026, Nyanzaga's profitability could exceed expectations.

Nyanzaga is expected to produce 2 million ounces of gold over an 11-year life, or around 200,000 ounces per year. The project is part of Perseus Mining's strategy to operate three to four African mines producing between 500,000 and 600,000 ounces annually. The company already operates the Edikan mine in Ghana, as well as the Yaouré and Sissingué mines in Côte d'Ivoire.

To maximise Nyanzaga's potential, Perseus has launched exploration drilling campaigns aimed at increasing resources and extending mine life. The company holds an 80% interest in the project, while the Tanzanian government retains a 20% free interest, strengthening local partnerships.

The 30% rise in the price of gold in 2024, continuing into 2025, creates a favourable environment for Nyanzaga. This surge, fuelled by global demand and economic uncertainty, underpins the project's prospects for profitability. "Nyanzaga is a strategic asset that will strengthen our African portfolio while capitalising on the bullish momentum of the gold market," said a Perseus Mining spokesperson.

At the same time, Perseus Mining is focusing on responsible practices, working closely with the Tanzanian authorities and local communities. The company is committed to maximising the economic benefits of the project while respecting environmental and social standards.

With Nyanzaga, Perseus Mining is consolidating its leading position in the African gold sector, while preparing to take advantage of a booming gold market.