Every mine rests on a story of rocks, but it is arithmetic that decides whether those rocks become revenue. Nyanzaga is no exception. Behind the images of bulldozers and tailings dams is a set of numbers that will be scrutinised more than any drill core: US$523 million upfront capital, 200–250 thousand ounces per year, and an All-In Sustaining Cost (AISC) of about US$1,200 per ounce.
These numbers are more than engineering estimates. They are promises: to Perseus shareholders of margins, to the Tanzanian Treasury of royalties and dividends, and to communities of jobs and compensation. If they hold, Nyanzaga validates Tanzania’s post-2017 mining compact. If they slip, they risk rekindling scepticism that “new mining” is just the old story with a fresh coat of paint.
Capex: the entrance fee
To enter production, Nyanzaga must pay an upfront bill of US$523 million. This figure covers the mine’s essential build: the 5 Mtpa CIL plant, the tailings storage facility, the 53 km power line to Bulyanhulu, a water pipeline from Lake Victoria, a 400-person camp, workshops, and pre-stripping the first benches of the Tusker pit.
On a per-ounce basis, this equates to roughly US$250 of capital intensity per annual ounce of production capacity, mid-range in African terms. It is lower than the giant West African builds of the past decade but higher than brownfield expansions like Geita’s. For Tanzania, it is a bold number: few projects of this size have been self-financed without development banks or syndicates.
That self-funding decision is central. Perseus chose to avoid project debt, meaning no bank covenants or mandatory hedges, but also no lender’s buffer if costs creep. The upside is speed and independence; the risk is full exposure. For government and communities, it signals both confidence and accountability: Perseus cannot blame financiers for cost overruns; it carries the risk directly.
Opex and AISC: the cost of each ounce
Once built, Nyanzaga’s value is tested in the cost of extracting each ounce. Here, the key figure is AISC of ~US$1,200 per ounce. This number blends three buckets:
- Mining costs, moving ~35–40 Mt of rock per year, stripping three to four tonnes of waste for every tonne of ore.
- Processing costs, grinding, leaching, reagents, and managing the chemistry of sulphides and deleterious elements.
- Sustaining capital & G&A, keeping fleets running, raising the TSF, community contributions, and corporate overheads.
At today’s gold price of ~US$1,900/oz, Nyanzaga’s margin is healthy, over US$600 per ounce. That margin protects it against volatility. At US$1,400/oz, the cushion narrows but remains positive. For investors, this places Nyanzaga in the lowest quartile of the Tanzanian cost curve; for the government, it increases confidence that the mine will pay royalties and dividends even in lean price cycles.
But the number is not static. Inflation in diesel, steel, and cyanide can push AISC up; so can local wage pressure as mining skills tighten. Conversely, improvements in recovery or throughput could lower unit costs. In essence, AISC is both a benchmark and a moving target, and communities should remember that it is this figure, not just ounces, that dictates whether promised benefits materialise.
Revenue and margins
With 200–250 koz per year projected, Nyanzaga’s revenue streams are easy to sketch. At US$1,900/oz gold, that is US$380–475 million annually in gross revenue. Over the planned 11-year life, the mine could gross close to US$4.5–5.0 billion in sales.
Margins are where the story sharpens. At US$1,200/oz AISC, each ounce at US$1,900 brings ~US$700 of operating margin. Multiply by 200,000 oz, and Nyanzaga generates ~US$140 million in annual free cashflow before tax and government dividends. These margins matter not just to Perseus shareholders but to the Tanzanian state, which captures them via a 6% royalty, 1% clearing fee, 20% equity dividends, and corporate tax.
At lower prices, the cushion shrinks but does not collapse. At US$1,400/oz, the mine still clears ~US$200/oz in margin, tight but sustainable. At US$2,100/oz, Nyanzaga turns into a cash gusher, doubling free cashflow. That leverage to gold price explains why investors, governments, and communities alike follow the gold chart almost as closely as the construction schedule.
Fiscal take: Tanzania’s share
The arithmetic of Nyanzaga is not only Perseus’s concern. The Tanzanian state has written itself into the ledger with multiple revenue streams.
- 6% royalty on gross gold sales, paid regardless of profitability.
- 1% clearing fee on exports, a levy designed to track every ounce.
- 20% free-carried equity, held by the Treasury Registrar in Sotta Mining Corporation, which entitles the state to one-fifth of dividends.
- 30% corporate income tax on net profit, payable once depreciation shields run out.
Layer these together and analysts estimate the government could capture ~50% of net cashflows over the mine’s life. This is a radical departure from the pre-2017 regime, when state income came almost exclusively through royalties and taxes.
For Dodoma, the significance is twofold. First, it secures a predictable revenue stream that rises with profitability. Second, it aligns incentives, the government now wants Nyanzaga to succeed as much as Perseus does. For Perseus, it means less room to manoeuvre, but also less risk of sudden fiscal surprises. The new compact has made Nyanzaga as much a public asset as a private one.
Sensitivities and stress tests
Mining economics are not static; they shift with markets and operations. Nyanzaga’s numbers are no exception.
- Gold price: At US$1,900/oz, the project thrives. At US$1,400/oz, margins shrink but remain positive. Each US$100 swing in price alters annual free cashflow by roughly US$20 million.
- Recovery rates: A slip from 88% to 85% recovery would shave ~US$15 million off annual revenue. Small percentages matter at scale.
- Power costs: Grid tariffs rising by 20% could add US$8–10/oz to AISC.
- Schedule delays: Each quarter of delay past Q1 2027 costs ~US$15–20m in deferred revenue and raises overheads.
These sensitivities are why feasibility studies include thick appendices of “tornado charts.” But for communities and policymakers, the lesson is simple: Nyanzaga’s promises are contingent. Margins can evaporate if multiple factors converge, lower prices, weaker recoveries, and cost inflation. Conversely, if gold trades above US$2,100/oz, Nyanzaga could double its free cashflow, transforming government revenues and investor dividends alike.
Economics as politics
Numbers are never neutral. They carry political weight.
For Perseus, Nyanzaga is its lowest-cost, longest-life mine, a cornerstone asset that will define its African portfolio. For the Government of Tanzania, the fiscal receipts are proof that reforms delivered a better deal, royalties, dividends, and taxes aligned with national interest. For communities, the budgeted billions justify resettlement sacrifices and environmental risks.
If the arithmetic holds, Nyanzaga becomes a showcase: proof that Tanzania can welcome capital while capturing a fairer share. If the arithmetic falters, critics will say the numbers were optimistic, the promises inflated, and the compact still untested.
When numbers become trust
In mining, numbers are contracts in disguise. They bind shareholders, governments, and communities to expectations of what a mine will deliver. Nyanzaga’s capex, AISC, revenues, and fiscal share are more than estimates; they are the foundation of trust.
If, by 2027, Perseus delivers ounces at US$1,200/oz costs, pays royalties on time, declares dividends, and maintains fiscal transparency, Tanzania’s new mining model will have its first real proof. If not, the sceptics will argue that geology is constant, but arithmetic, like politics, was never truly stable.
The stakes are thus larger than Nyanzaga itself. They are about whether Tanzania’s “win-win” mining philosophy can move from policy speeches into balance sheets that withstand both the volatility of global gold and the scrutiny of its citizens.
