Rising gold star Perseus shakes up mining’s establishment
When Jeff Quartermaine kicks off his investor roadshow in Sydney this week, don’t be surprised if the Perseus Mining boss spends a fair bit of time talking about rival gold miners Northern Star and Evolution Mining.
Those two have been among the most familiar gold miners on the ASX over the past decade, and will become a leading Australian-based duo once Newcrest is swallowed by Newmont.
Perseus Mining managing director Jeff Quartermaine. Sovereign risk is the reason Perseus trades at a steep discount to its peers. Philip Gostelow
But Quartermaine will go into his roadshow armed with evidence why Perseus now belongs in that elite company.
The first is pretty simple: Perseus’ $476.7 million annual financial 2023 profit was bigger than the $301 million and $163.7 million underlying profits reported by Northern Star and Evolution respectively.
Perseus’ balance sheet compares well, too. Quartermaine has $US542 million ($848 million) of cash and bullion to play with, compared with Northern Star’s $362 million cash war chest and Evolution’s $1.7 billion net debt.
But when it comes to market capitalisation and valuation metrics, Perseus is the poor cousin. Perseus was worth $2.4 billion last week, trading on a price-to-earnings ratio of 5.4. Evolution’s P/E in 2023 was closer to 37.5, when Canaccord analysts did the sums on August 17.
Northern Star has a market capitalisation that is more than five times Perseus, and had a P/E of 42.7 over the past year.
“Perseus is clearly undervalued on pretty much any metric,” says Russell Delroy, whose investment company Nero Resource Funds holds Perseus shares.
Sovereign risk is the reason Perseus trades at a steep discount to its peers. While Northern Star and Evolution mine in Australia
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