West Africa-focused gold producer Perseus Mining says it has turned its fortunes around — yet it still made a loss in the second half of 2017.

“Underlying the improved financial results reported today is clear evidence of the significant turn-around in Perseus’s operating performance over the last 12 months and the company’s growing ability to generate positive cash flows,” managing director Jeff Quartermaine told investors.

Perseus (ASX:PRU) did narrow its loss after tax to $11.5 million, or 1.18c per share, from $25.6 million in the second half of 2016 on the back of higher revenues and lower costs.

The main reason for the company still making a loss was foreign exchange losses.

“This particular period we did have some foreign exchange losses that are outside of our control,” Mr Quartermaine told Stockhead. “We also had some write-offs that we wanted to bring to account.”

Shares gained 4 per cent to 41.5c on Thursday.

Perseus Mining shares (ASX:PRU) over the past year/
Perseus Mining shares (ASX:PRU) over the past year.

The company’s first operation, the Edikan gold mine in Ghana, produced 108,008 ounces in the half, a 42 per cent year-over-year increase – taking total production for 2017 to 208,266 ounces.

Edikan has been in production since 2012.

This led to a $32.9 million hike in revenue to $167.5 million. Production costs declined 21 per cent to $US1,007 ($1291) per ounce.

Perseus is expecting gold production for the 2018 financial year to lift to between 250,000 and 285,000 ounces, with its second mine, Sissingué in Ivory Coast, due to reach commercial production at the start of April.

Costs are tipped to be between $US950 and $US1100 per ounce.

“With the successful commissioning of our second mine at Sissingué, this positive trend is expected to continue and to translate into positive earnings in periods to come,” Mr Quartermaine noted.

At the end of 2017, Perseus had $58.1 million cash in the kitty and net working capital of $21.8 million.

But the company is still not paying a dividend.

While Mr Quartermaine could not say when he expected Perseus to be making a profit, he did say the “possibility is not far away”.

“If you look at the underlying statistics … it’s very clear that we have turned the situation around and we’re generating a good deal of cash,” he said.

“What we don’t control is things like foreign exchange movements.

“If you get a move one way or the other on the exchange rate then it can just blow you apart, or on the other hand it can give you a very falsely inflated earnings picture as it did in 2015.

“We had nearly $100 million and a significant portion of that was foreign exchange.

Meanwhile, Alex Davidson has stepped down from the board as a non-executive director to “reduce his workload”.

Perseus does not plan to fill the vacant board seat.