PERSEUS MINING LIMITED — AGM Information 2008

Oct 27, 2008

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NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Perseus Mining Limited (“Perseus” or the “Company”) will be held on Friday, 28 November 2008 at 3.00pm at the Gascoyne Room, Level 19 – QV1 Building, 250 St George’s Terrace, Perth, Western Australia.

The enclosed Explanatory Memorandum accompanies and forms part of this Notice of Meeting.

AGENDA

ORDINARY BUSINESS

1. Financial Report for the Year Ended 30 June 2008

To receive and consider the financial report of the Company for the year ended 30th June 2008, together with the reports by the directors and auditors thereon.

To consider and, if thought fit, pass the following resolutions as ordinary resolutions

2. Resolution 1 – Adoption of Remuneration Report

“To adopt the Remuneration Report as set out in the Directors' Report section of the Annual Report for the financial year ended 30 June 2008.”

3. Resolution 2 – Re-Election of R N Gillard

“That Mr R N Gillard retires in accordance with Clause 3.6 of the Constitution of the Company and, being eligible, is hereby re-elected as a director of the Company.”

4. Resolution 3 – Re-Election of C J Carson

“That Mr C J Carson retires in accordance with Clause 3.6 of the Constitution of the Company and, being eligible, is hereby re-elected as a director of the Company.”

5. Resolution 4 - Ratification of Prior Share Issue

"That, in accordance with ASX Listing Rule 7.4, this meeting ratifies the issue of 10,714,286 ordinary fully paid shares on 27 May and 20 June 2008 on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this resolution by any person who participated in the May-June 2008 share issue, or any associate of such a person. However, the Company will not disregard a vote if:

• a) it is cast by the person as a proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• b) it is cast by the person chairing the Annual General Meeting as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form to vote as the proxy decides.

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6. Resolution 5 - Renewal of Employee Option Plan

“That, for the purposes of ASX Listing Rule 7.2, Exception 9 and all other purposes, the directors be and are hereby authorised to maintain the employee option plan, called “The Perseus Mining Limited Employee Option Plan”, upon and subject to the terms and conditions specified in the document entitled “Rules of The Perseus Mining Limited Employee Option Plan”, a summary of which forms Appendix 1 to the Explanatory Memorandum (or on such other terms and conditions as may be determined by the directors from time to time, subject to the requirements of the Listing Rules).”

Voting Exclusion

The Company will disregard any votes cast on this resolution by any director of the Company (except one who is ineligible to participate in any employee incentive scheme in relation to the Company) or any associate of such a person. However, the Company will not disregard a vote if:

• a) it is cast by the person as a proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• b) it is cast by the person chairing the Annual General Meeting as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form to vote as the proxy decides.

7. Resolution 6 - Issue of Securities as Purchase Consideration

“That, for the purpose of ASX Listing Rule 7.1 and all other purposes, this meeting approves and authorises the directors to issue to Strategic Systems Pty Ltd (or its nominees) 2,500,000 ordinary fully paid shares and 2,500,000 options ( " Initial Purchase Consideration” ) on the terms and conditions in the Explanatory Memorandum as initial consideration for the purchase of shares in Stratsys Investments Limited.”

Voting Exclusion

The Company will disregard any votes cast on this resolution by Strategic Systems Pty Ltd or any person who may participate in the proposed issue or any person who might obtain a benefit from the Initial Purchase Consideration (except a benefit solely in the capacity of a holder of ordinary securities) or any associate of those persons. However, the Company will not disregard a vote if:

• a) it is cast by the person as a proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• b) it is cast by the person chairing the Annual General Meeting as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form to vote as the proxy decides.

8. Resolution 7 – Approval for the Issue of Options to Director, Mr R B Brans

“That, for the purposes of ASX Listing Rule 10.11, Chapter 2E of the Corporations Act 2001 and all other purposes, the directors be authorised to issue up to a maximum of 600,000 options to subscribe for shares in the Company to Mr R B Brans or his nominee, the details of which are set out in the Explanatory Memorandum.”

Voting Exclusion

In accordance with the ASX Listing Rules and the Corporations Act, the Company will disregard any votes cast on this resolution by Mr R B Brans or his associates. However, the Company will not disregard a vote if:

• (a) it is cast by the person as a proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• (b) it is cast by the person chairing the Annual General Meeting as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form to vote as the proxy decides.

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GENERAL BUSINESS

9. To transact any other business which may lawfully be brought forward.

PROXIES

In accordance with section 249L of the Corporations Act 2001, members are advised that:

• each member has a right to appoint a proxy;

• the proxy need not be a member of the Company;

• a member who is entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If no proportion or number is specified, then in accordance with section 249X(3) of the Corporations Act 2001, each proxy may exercise half of the votes.

In accordance with section 250BA of the Corporations Act 2001, the Company specifies the following information for the purposes of receipt of proxy appointments:

Registered Office: 30 LEDGAR ROAD BALCATTA, WESTERN AUSTRALIA 6021 Facsimile Number: (61 8) 9240 2406 Postal Address: P O Box 717 BALCATTA, WESTERN AUSTRALIA 6914

Each member entitled to vote at the annual general meeting has the right to appoint a proxy to attend and vote at the meeting on his behalf. The member may specify the way in which the proxy is to vote on each resolution or may allow the proxy to vote at his discretion. The instrument appointing the proxy must be received by the Company at the address specified above at least 48 hours before the time notified for the meeting (proxy forms can be lodged by facsimile).

In accordance with regulation 7.11.37 of the Corporations Regulations 2001, the Company determines that ordinary shares held as at 5.00pm on 26 November 2008 will be taken, for the purposes of the annual general meeting, to be held by the persons who held them at that time.

BY ORDER OF THE BOARD

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S M Shah Company Secretary Perth, Western Australia 16 October 2008

Members who do not plan to attend the meeting are encouraged to complete and return a proxy form.

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PERSEUS MINING LIMITED ACN 106 808 986

EXPLANATORY MEMORANDUM

1. INTRODUCTION

This Explanatory Memorandum has been prepared for the information of shareholders of Perseus Mining Limited (“ Perseus ” or the “ Company ”) in connection with the business to be conducted at the Company’s Annual General Meeting to be held on Friday, 28 November 2008 at 3.00pm at the Gascoyne Room, Level 19 – QV1 Building, 250 St George’s Terrace, Perth, Western Australia.

This Explanatory Memorandum should be read in conjunction with the accompanying Notice of Meeting.

2. 2008 ANNUAL REPORT

In accordance with the requirements of the Company’s Constitution and the Corporations Act, the 2008 Annual Report will be tabled at the annual general meeting. Shareholders will have the opportunity of discussing the Annual Report and making comments and raising queries in relation to the Report.

Representatives from the Company’s auditors, HLB Mann Judd, will be present to take shareholders’ questions and comments about the conduct of the audit and the preparation and content of the audit report.

As you may be aware, changes to legislation mean that companies are no longer required to mail out a hard copy of their annual report to shareholders except where shareholders have made a specific election to receive a hard copy and notified the Company to that effect. If you haven’t already made an election, you can obtain a hard copy by contacting the Company. Alternatively, it is available on the Company’s website at www.perseusmining.com for you to download or read online.

3. RESOLUTION 1 – Adoption of Remuneration Report

The Annual Report for the financial year ended 30 June 2008 contains a Remuneration Report, which forms part of the Directors' Report and sets out the remuneration policy for the Company and its controlled entities, and reports the remuneration arrangements in place for executive directors, senior management and nonexecutive directors.

The Corporations Act 2001 requires listed companies to put a non-binding resolution to shareholders to adopt the Remuneration Report. In line with the legislation, this vote will be advisory only, and does not bind the Directors or the Company. However, the Board will take the outcome of the vote into consideration when considering the Company's remuneration policy.

A reasonable opportunity will be provided for discussion of the Remuneration Report at the meeting.

4. RESOLUTIONS 2 & 3 – Re-election of Directors, R N Gillard and C J Carson

In accordance with the requirements of the Company’s Constitution, ASX Listing Rules and the Corporations Act, one-third of the directors of the Company and those who were last re-elected more than three years ago retire from office at this annual general meeting of the Company and, being eligible, offer themselves for reelection. Details of Messrs Gillard’s and Carson’s qualifications and experience are available in the Annual Report.

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5. RESOLUTION 4 – Ratification of Prior Share Issue

5.1 General

On 21 May 2008 the Company announced the offer of 10,714,286 shares to raise new capital and, on 20 June 2008, the issue of those shares was completed.

Resolution 4 seeks ratification by shareholders pursuant to ASX Listing Rule 7.4 of this share issue.

Under ASX Listing Rule 7.1, a company may only issue a limited number of equity securities in any 12 month period. By issuing 10,714,286 shares the Company used part of its 15% placement capacity.

The Company wishes to restore its 15% placement capacity and accordingly under ASX Listing Rule 7.4, seeks subsequent shareholder approval for that prior share issue.

5.2 Specific Information required by ASX Listing Rule 7.5

For the purposes of ASX Listing Rule 7.5 information is provided as follows:

• i. 10,714,286 shares were issued under the May-June 2008 share issue. 1,239,000 shares were issued on 27 May 2008, with the remaining 9,475,286 shares issued on 20 June 2008.

• ii. The issue price of the shares was $1.40 each.

• iii. The shares issued are fully paid ordinary shares in the Company.

• iv. 10,714,286 shares were issued to institutional clients of BGC Capital Group Pty Ltd and Helmsec Global Capital Limited and who are not related parties of the Company.

• v. $15.0 million was raised from the share issue (prior to costs of the issue) for the purposes of funding exploration drilling campaigns on the Company’s projects in Ghana and Ivory Coast and to continue its feasibility work on the Ayanfuri and Grumesa gold projects in Ghana.

A voting exclusion statement is included in the Notice.

6. RESOLUTION 5 – Renewal of Employee Option Plan

The Perseus Mining Limited Employee Option Plan (“Plan”) was established, pursuant to shareholder approval, in November 2005. Pursuant to its rules, the Plan is to be re-presented to shareholders for approval every three years. In accordance with the rules of the Plan and ASX Listing Rule 7.2, Exception 9, shareholder approval is now being sought for the maintenance of the Plan. The key features of the Plan are set out in Appendix 1 to this Explanatory Memorandum and a full copy of the Plan may be obtained by contacting the Company.

The directors believe that the future success of the Company will depend significantly on the skills and motivation of key employees. The Plan is seen as an important tool to attract, motivate and retain key employees, especially in overseas locations. It is important to note that the Plan will also enable the Company to attract top calibre staff and at the same time conserve liquid funds, which might otherwise need to be spent on remuneration.

5,025,000 options have been issued pursuant to the Plan since its inception in November 2005, with 1,310,000 options exercised during that time and 50,000 options lapsing on cessation of employment. At the date of this Notice of Meeting, 3,665,000 options are on issue.

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7. RESOLUTION 6 - Issue of Securities as Purchase Consideration

General

On 31 May 2006, the Company announced that it had been granted an option to acquire 100% of the share capital of a Ghanaian company, Stratsys Investments Limited (“Stratsys”), with rights to two mining leases and a prospecting licence at Ayanfuri (the “Ayanfuri Mine Licences”) and the Nsuaem reconnaissance licence and the Dunkwa reconnaissance licence application (together the “Reconnaissance Licences”), covering a total project area of just over 500 sq km and located 25-65 kms south west of Obuasi on the Ashanti Gold Belt in Ghana. Stratsys is party to an agreement to acquire the Ayanfuri Mine Licences from AngloGold Ashanti (Ghana) Ltd (AGC).

In March 2007, the Company exercised the option to purchase all of the issued capital of Stratsys. The consideration payable to the vendor, Strategic Systems Pty Ltd, to acquire the Stratsys shares, as originally negotiated, is 2,500,000 Perseus shares and 2,500,000 unlisted options to acquire Perseus shares, exercisable at 40 cents each on or before 28 February 2009. This consideration has not yet been issued, although a liability has been recorded for it. The consideration is payable when all necessary Ghana Government approvals have been received with respect to both the transfer of Stratsys shares as well as transfer of the Ayanfuri Mine Licences from AGC. Following various formalities, including the entering into of environmental bond arrangements with the Ghana EPA and the renewal of the Ayanfuri Mine Licences, documentation has now been lodged with the relevant authorities for notification of the transfer of the Stratsys shares and for approval of the transfer of the Ayanfuri Mine Licences. The purchase consideration will be required to be paid as soon as these approvals are obtained and it is anticipated that this will happen within the next few weeks. Recently, the Directors have agreed to a variation in purchase terms, by extending the expiry date of 28 February 2009 to 30 November 2009 in relation to the 2.5 million options.

The majority of consideration payable upon exercise of the option for the purchase of Stratsys shares is the issue of securities in the Company as follows:

• on the exercise of the option, 2,500,000 ordinary fully paid shares and 2,500,000 unlisted options to acquire Perseus shares, exercisable at 40 cents each (“Initial Purchase Consideration”); and

• on the announcement of mining reserves on the Stratsys projects of at least 500,000 ounces of gold, a further 2,000,000 ordinary fully paid shares and 2,000,000 unlisted options to acquire Perseus shares, exercisable at 60 cents each with a 2 year life (“Further Purchase Consideration”).

Resolution 6 seeks approval by shareholders pursuant to ASX Listing Rule 7.1 of the Initial Purchase Consideration. Approval is not being sought at this stage for issue of securities, which may be required in the future under the Further Purchase Consideration.

Specific Information required by ASX Listing Rule 7.3

For the purposes of ASX Listing Rule 7.3 information is provided as follows:

• (i) 2,500,000 ordinary fully paid shares and 2,500,000 options will be issued under the Initial Purchase Consideration.

• (ii) The issue of securities is not for cash and no funds will be raised. The deemed issue price of the shares and the options is 45 cents and 15.87 cents respectively, based on the market price of shares at the time the option was exercised in March 2007.

• (iii) The shares will rank equally with the existing ordinary shares and will be subject to quotation on the ASX. The terms and conditions of the options are set out in Appendix 2 to this Explanatory Memorandum.

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• (iv) The allottee of the Initial Purchase Consideration will be Strategic Systems Pty Ltd or its nominee.

• (v) The purpose of the securities issue under the Initial Purchase Consideration is payment for the purchase of Stratsys shares.

• (vi) The securities comprising the Initial Purchase Consideration will be issued upon receipt of all approvals by relevant authorities for the transfer of the Stratsys shares and the Ayanfuri Mine Licences and no later than 3 months after the date of the Annual General Meeting.

A voting exclusion statement is included in the Notice of Meeting.

8. RESOLUTION 7 – Issue of Options to Director

On 29 July 2008 the Directors announced their intention to seek shareholder approval for the issue of options to Mr Brans. Mr Brans, a non-executive director of the Company since May 2004, took up an executive role with the Company in July 2008. Under the terms of that appointment it was agreed that, subject to shareholder approval, 600,000 options exercisable at $1.50 each on or before 31 July 2010 would be granted to Mr Brans. In view of the rapid deterioration in equity and financial markets since July and the effect that has had on the Company’s share price, the Board, in consultation with Mr Brans, has agreed that options should be issued on revised terms ($1 exercise price, with an expiry date of 30 June 2011). Detailed terms and conditions of the options are provided in Appendix 3.

The purpose of the issue of options is to provide Mr Brans an incentive for future services. The issue of options as part of the remuneration packages of directors is an established practice of junior public listed companies and, in the case of the Company, has the benefit of conserving cash whilst properly rewarding the director. Whilst Mr Brans does not make a recommendation as he has a personal interest in the proposed issue, he believes that the quantum of options together with the cash fees that he is entitled to is reasonable in the context of the size and complexity of the Company’s activities and also by comparison to other similar-sized mineral explorers.

The ASX Listing Rules and the Corporations Act 2001 (in certain circumstances) require shareholder approval to be obtained for the issue of options to directors. Accordingly, approval for the issue of the Directors’ Options is sought in accordance with the provisions of Listing Rules 7.1 and 10.11 of the ASX Listing Rules (“ Listing Rules ”) and Part 2E of the Corporations Act 2001. If approval for the issue of the Directors’ Options is obtained under Listing Rule 10.11, approval is not required under Listing Rule 7.1.

• (A) The proposed resolution 7, if passed, will issue securities to and confer financial benefits upon Mr Brans who is a director of the Company and the Company seeks to obtain shareholder approval in accordance with the requirements of Chapter 2E of the Corporations Act and ASX Listing Rule 10.11. Accordingly, information required under the Listing Rules and the Corporations Act as well as information that will properly enable shareholders to consider Resolution 7 is presented below.

Subject to shareholder approval, the options referred to in resolution 7 will be issued free of charge and within one month after the date of this meeting.

(B) Potential Benefits – Issue of Options

If options are issued pursuant to the proposed resolution 7, the Company considers the following benefits arise:

• (i) Mr Brans will have a vested interest in the affairs of the Company, as the holder of options and as a shareholder upon exercise of the options, particularly as the Options are not transferable.

• (ii) The issue of options to Mr Brans is a non-cash form of remuneration, thus conserving the Company’s cash reserves. The issue enables the Company to provide its directors with reward for services provided and an incentive for future services they will provide to the Company.

• (iii) The exercise of the options will provide working capital for the Company at no significant cost. If all of the options proposed to be issued to Mr Brans are ultimately exercised, an amount of $600,000 would be raised.

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(C) Potential Costs – Issue of Options

The options are to be granted for nil consideration and thus no funds will be raised by the Company in granting those options.

The potential cost to the Company of the issue of an aggregate of 600,000 Options to Mr Brans is that there will be a dilution of the issued share capital of the Company if the options are eventually exercised.

Based on 189,445,236 fully diluted shares, the exercise of the proposed options (0.6 million) would have a dilution effect of approximately 0.31% (with a corresponding increase in cash reserves of $600,000). As the Company presently has 14,660,647 options on issue with an exercise price of $1 each or less, it is appropriate to measure the dilution caused by the proposed issue of options to Mr Brans by reference to fully diluted shares rather than just ordinary shares presently on issue.

The price of the Company’s shares quoted on the ASX over the past 12 months has ranged from a low of 48 cents on 10 October 2008 to a high of $1.60 on 28 November 2007, with a closing price of 50 cents on 13 October 2008, the date on which this Explanatory Memorandum was prepared.

Accounting standard, AASB 2 “Share Based Payments” requires that these payments shall be measured at the more readily determinable fair value of the equity instrument. Under the accounting standard this amount will be expensed in the Income Statement – i.e. the value attributed to Mr Brans’s options (See Section D below) will be expensed in the profit and loss account of the Company. Where the grant date and the vesting date are different the total expenditure calculated will be allocated between the two dates taking into account the terms and conditions attached to the instruments and the counterparties as well as management’s assumptions about probabilities of payments and compliance with and attainment of the set out terms and conditions.

(D) Valuation of Options

The Company does not have any ASX-quoted options with identical or similar terms and conditions as the proposed options and as such there is no comparable market value. Each option grants the holder a right to be allotted one share upon exercise of the option and payment of the exercise price of the option. Accordingly, the proposed options arguably have a value at the date of their grant. The options may acquire future value dependent upon the extent to which the market value of shares exceeds the exercise price of the options during the term of the options.

As a general proposition, options to subscribe for ordinary fully paid shares in a company have value. Various factors impact upon the value of options including things such as:

• (i) the period outstanding before the expiry date of the options;

• (ii) the exercise price of the options relative to the underlying price or value of the securities into which they may be converted;

• (iii) the proportion of the issued capital as expanded consequent upon exercise represented by the shares issued upon exercise (ie whether or not the shares that might be acquired upon exercise of the options represent a controlling or other significant interest);

• (iv) the value of the shares into which the options may be converted; and

• (v) whether or not the options are listed (ie readily capable of being liquidated).

There are various formulae which can be applied to determining the theoretical value of options (including the formula known as the Black-Scholes Model option valuation formula).

The Company has estimated the value of the options using the Black-Scholes Model, which is the most widely used and recognised model for pricing options. The value of an option calculated by the Black-Scholes Model is a function of the relationship between a number of variables, being the share price, the exercise price, the time to expiry, the risk-free interest rate and the volatility of the Company’s underlying share price.

Inherent in the application of the Black-Scholes Model are a number of inputs, some of which must be assumed. The data relied upon in applying the Black-Scholes Model in the present case was as follows:

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(i)

• an exercise price of the Option of $1;

• (ii) length of period prior to conversion being 2 years and 7 months (December 2008 to June 2011). For the purposes of the analysis it was assumed that the options would not be exercised any earlier than the expiration date, being 30 June 2011;

• (iii) the Company has not forecast any future dividend payments. For the purposes of the analysis, it was assumed that the Company’s share price is “ex-dividend”;

• (iv) the risk free rate used for the purposes of the analysis is the Reserve Bank of Australia cash rate as at 13 October 2008 being 6.0%;

• (v) a volatility measure of 64%; and

• (vi) the valuation of the Company’s share price being 50 cents, being the value of the Company’s share price as at 13 October 2008.

Using the Black-Scholes Model and the assumed data outlined above, the directors have valued the options as at 13 October 2008 at 12 cents each.

Using this analysis (12 cents), the total value of the proposed options to be granted to Mr Brans is as follows:

Number of options	Total Value of Options
600,000	$72,000

(E) Identifying the Related Party

The related party to whom Resolution 7 would permit financial benefits to be given is Mr R B Brans.

(F) Financial Benefit

The nature of the financial benefit is the grant of 600,000 Options to Mr Brans for no consideration.

(G) Related Party’s Existing Interest

Excluding the options the subject of Resolution 7, the current interests of Mr Brans (and entities associated with him) in the Company’s securities are as follows:

Shares	Options
50,000	825,000

Options have previously been issued to Mr Brans as part of his remuneration package. Details of previous such issues are as follows:

Number Issued	Date issued	Number still held
400,000 (i)	Jan 2005	400,000
400,000 (ii)	Dec 2007	400,000

(i) Exercisable at 20 cents each on or before 31 March 2009

(ii) Exercisable at $1.50 each on or before 31 July 2010

(H) Director’s Emoluments

Other than the options, Mr Brans’s current remuneration as a part-time executive is as follows:

Position	Annual Remuneration
Executive Director-Engineering	$163,500

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(I) Directors' Recommendation

Mr Brans expresses no opinion and makes no recommendation in respect of this Resolution given his personal interest in the Resolution. Each of the other directors (Messrs Gillard, Calderwood, Carson and Fearis) recommend that shareholders approve Resolution 7 for the reasons set out in this Explanatory Memorandum, including:

• (i) Mr Brans will have a vested interest in the affairs of the Company, as the holder of options and as a shareholder upon exercise of the options, particularly as the options are not transferable;

• (ii) With the continuing shortage of skilled, experienced personnel in the resources sector, the Company must compete with many other industry participants in order to attract and retain personnel, including directors. Remunerations levels across the board have gone up significantly over the last 3 years and, again, the Company must keep pace in order to remain competitive. There are a number of key challenges that the Company faces over the foreseeable future as it seeks to make the transition from explorer to producer. It is important in these circumstances to ensure continuity at the Board level, as these challenges are tackled;

• (iii) The quantum of options for which approval is sought is based on a number of factors, many of which are outlined in the paragraph above. Mr Brans has taken up an executive director role since July 2008 but has not previously been issued any options as part of his new executive remuneration package; and

• (iv) The issue of options to Mr Brans is a non-cash form of remuneration, thus conserving the Company’s cash reserves. The issue enables the Company to provide an incentive to Mr Brans with respect to future services he will provide to further progress the Company,

and on the basis that, in their opinion, the proposed issue of options is fair and reasonable having regard to the terms of the options.

(J) Other Information

No stamp duty will be payable in respect of the grant of the options. No GST will be payable by the Company in respect of the grant of the options (or if it is then it will be recoverable as an input credit).

Other than the information above and otherwise set out in this Explanatory Memorandum and the accompanying cover letter, the directors believe that there is no other information known to the Company or its directors that will be reasonably required by shareholders to make a decision in relation to benefits contemplated by the proposed Resolution 7.

A voting exclusion statement is included in the Notice.

Cautionary Notes

The directors recognise and acknowledge the importance of shareholders making their decision on the basis of the best possible information. However, once this Explanatory Memorandum is prepared and despatched to shareholders, the Company has no legal obligation to continuously update the content of this material, nor is it practical or logistically possible to do that and inform each shareholder individually.

By its nature, the exploration industry is subject to numerous risks and the Company’s share price is affected by a range of factors. From the time of preparing this material to the date of the Annual General Meeting the Company’s share price may go up or down. The Company will continue to comply with its continuous disclosure obligations and make appropriate announcements to the ASX.

Shareholders are strongly encouraged to keep track of any announcements that the Company may make and of the Company’s share price up to the date of the Annual General Meeting as that information may have an effect on the calculations and the data that is provided in this Explanatory Memorandum in relation to Resolution 7. If you do not understand the effect of such information, you should consult your professional advisor.

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APPENDIX 1 SUMMARY OF THE PERSEUS MINING LIMITED EMPLOYEE OPTION PLAN

1. The offer of options under the Plan is at the discretion of the Board. The Board may invite applications for options from employees, consultants and contractors of the Company or certain associated or related companies of the Company. Directors of the Company and their associates are not eligible to participate in the Plan.

2. Offers of options must specify the terms of issue.

3. Subject to satisfaction of any exercise conditions determined by the and at the discretion of the Board at the time of grant, the options granted will be exercisable after the first anniversary of the date of grant but before the third anniversary (“Expiry Date”) of the date of grant. The period for exercise of the options is reduced in certain circumstances.

4. Any options not exercised at Expiry Date will lapse.

5. The options issued under the Plan will be issued free of charge and entitle the holder to purchase one ordinary share at an exercise price as the Directors deem appropriate in light of surrounding circumstances but not less than any price prescribed under the ASX Listing Rules from time to time. In any case, the exercise price shall be no less than 80% of the average market price for shares over the last five (5) trading days immediately preceding the date on which the options are issued.

6. No options may be granted if such options when aggregated with options previously issued under the Plan (or any other employee incentive scheme) would exceed 5% of the total number of issued shares in the Company.

7. The options must be accepted by the completion of the acceptance form.

8. Options may only be exercised by notice in writing (in the form prescribed by the Board) given by the optionholder to the Company.

9. If an optionholder ceases employment with the Company or otherwise ceases to provide services to the Company, options held at that time and capable of being exercised will lapse unless exercised within thirty days of cessation of employment (or cessation of service), except where employment / service has ceased as a result of special circumstances such as death or disablement.

10. Options must not be assigned, transferred or otherwise dealt with except with the approval of the Board or in the case of a takeover offer or a Scheme of Arrangement.

11. The options will not be listed on ASX, although the Company will apply for the official quotation of any shares which are issued as a result of exercise of options.

12. In the event of any reconstruction of the capital of the Company, the number and exercise price of options issued under the Plan will be dealt with in accordance with ASX listing rules.

13. The Corporations Act 2001 and the ASX Listing Rules have precedence over the Terms and Conditions of the Plan. Therefore, the grant or exercise of options will not be permitted if either (or both) would contravene them.

14. The Plan may be terminated at any time by the Board, but this will not affect any accrued rights of the option holders at that time.

15. There are no participating rights or entitlements inherent in the options and the holder will not be entitled to participate in new issues of capital offered or made to the shareholders during the currency of the options unless the options are first exercised prior to any record date, subject to vesting rules.

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Appendix 2 Terms and Conditions of Options the subject of Resolution 6

The options entitle the holder to subscribe for shares on the following terms:

1. Each Option entitles the holder to subscribe for and be allotted one ordinary share in the capital of Perseus Mining Limited (“the Company”). The exercise price is 40 cents per Option in the case of the 2,500,000 Options issued under the Initial Purchase Consideration.

2. The Options are exercisable at any time prior to 30 November 2009 (“Expiry Date”) in the case of the Options issued under the Initial Purchase Consideration by notice in writing to the Company accompanied by payment of the exercise price.

3. The Options are not transferable except to an offeror under a Takeover Offer or under a scheme of arrangement proposed by the Company, or except with the consent of the Directors of the Company in circumstances where the proposed transfer is to an entity wholly owned and controlled by Strategic Systems Pty Ltd.

4. Shares will be allotted and issued pursuant to the exercise of Options not more than 10 business days after receipt of a properly executed notice of exercise and payment of the requisite application moneys.

5. Shares issued upon exercise of the Options will rank pari passu in all respects with the Company’s fully paid ordinary shares. The Company will apply for Official Quotation by ASX of all Shares issued upon the exercise of Options within 3 business days after the date of allotment of those shares.

6. There are no participating rights or entitlements inherent in the Options and the holder will not be entitled to participate in new issues of capital offered or made to the shareholders during the currency of the Options. However, the Company will send a notice to the Optionholder at least 9 business days before the record date for any proposed issue of capital. This will give the Optionholder the opportunity to exercise its Options (subject to the exercise period referred to above) prior to the date for determining entitlements to participate in any such issue.

7. There are no rights to a change in the exercise price, or in the number of Shares over which the Options can be exercised, in the event of a bonus issue by the Company prior to the exercise of any Options.

8. In the event of any reorganisation of the issued capital of the Company on or prior to the Expiry Date, the rights of the Optionholder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of the reorganisation.

9. The Company will, at least 20 business days before the Expiry Date, send notices to the Optionholder stating the name of the Optionholder, the number of Options held, the number of Shares to be issued on exercise of the Options, the exercise price, the due date for payment of the exercise price, and the consequences of non-payment.

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APPENDIX 3 TERMS AND CONDITIONS OF OPTIONS (RESOLUTION 7)

The material terms and conditions of the options are as follows:

1. Each option entitles the holder to subscribe for and be allotted one ordinary share in the capital of Perseus Mining Ltd (the “Company”) at a price of $1.00 per share from 1 July 2009 until 30 June 2010 (“the Expiry Date”).

2. The options are exercisable at any time during the exercise period noted above by notice in writing to the Directors accompanied by payment of the exercise price.

3. Shares will be allotted and issued pursuant to the exercise of options not more than 10 business days after receipt of a properly executed notice of exercise and payment of the requisite application moneys.

4. The options are not transferable, except to a spouse of the Optionholder or a company wholly owned by the Optionholder and his or her spouse.

5. Shares issued upon exercise of the options will rank pari passu in all respects with the Company’s fully paid ordinary shares. The Company will apply for Official Quotation by ASX of all Shares issued upon the exercise of options within 3 business days after the date of allotment of those shares.

6. There are no participating rights or entitlements inherent in the options and holders will not be entitled to participate in new issues of capital offered or made to the shareholders during the currency of the options. However, the Company will send a notice to each Optionholder at least 9 business days before the record date for any proposed issue of capital on an entitlement basis. This will give Optionholders the opportunity to exercise their options (subject to the exercise period referred to above) prior to the date for determining entitlements to participate in any such issue.

7. There are no rights to a change in the exercise price, or in the number of shares over which the options can be exercised, in the event of a bonus issue by the Company prior to the exercise of any options.

8. In the event of any reorganisation of the issued capital of the Company on or prior to the Expiry Date, the rights of an Optionholder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of the reorganisation.

9. The Optionholder is entitled to exercise the options prior to the commencement of the exercise period referred to in (1) above if a takeover bid under Chapter 6 of the Corporations Act is made for the Company and either:

10. (a) the offeror has at the time of making the takeover bid a voting power of more than 50% in the Company; or

11. (b) if sub-clause (a) does not apply, the offeror acquires a voting power of more than 50% in the Company.

12. The Optionholder (or his beneficiary) is entitled to exercise the Options prior to the commencement of the exercise period referred to in (1) above in the event of death or total and permanent disablement of the Optionholder.

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Perseus Mining Limited (ACN 106 808 986) PROXY FORM

Shareholder

Name and address of shareholder of Perseus Mining Ltd.

Name

Address

Appointment of Proxy

I/We being a member/s of Perseus Mining Ltd and entitled to attend and vote hereby appoint

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The Chairman of the Meeting OR (mark with an “X”)

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If you are not appointing the Chairman of the Meeting as your proxy please write here the full name of the individual or body corporate (excluding the registered Securityholder) you are appointing as your proxy.

Or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the Annual General Meeting of Perseus Mining Ltd to be held on 28 November 2008 and at any adjournment of that meeting.

If you do not wish to direct your proxy how to vote, please place a mark in the box �� �

By marking this box, you acknowledge that the Chairman may exercise your proxy even if he has an interest in the outcome of the resolutions and votes cast by him other than as proxy holder will be disregarded because of that interest. The Chairman of the Meeting intends to vote any such undirected proxies in favour of all the resolutions, with the exception of resolution 7, where they will be treated as abstentions .

If you do not mark the above box and you have not directed your proxy how to vote in the boxes below, the Chairman of the Meeting will not cast your votes on the resolutions and your votes will not be counted in computing the required majority if a poll is called.

Voting directions to your proxy – please mark ⌧ to indicate your directions

For Against Abstain*

Resolution 1 – Adoption of Remuneration Report

Resolution 2 – Re-Election of R N Gillard

Resolution 3 – Re-Election of C J Carson

Resolution 4 – Ratification of Prior Share Issue

Resolution 5 – Renewal of Employee Option Plan

Resolution 6 – Issue of Securities as Purchase Consideration

Resolution 7 – Approval for the Issue of Options to a Director, Mr R B Brans

• If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

PLEASE SIGN HERE - This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

Individual or Securityholder 1 Securityholder 2 Securityholder 3 Sole Director and Director Director/Company Secretary Sole Company Secretary

Dated: //2008

How to complete the Proxy Form

1 Appointment of a Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If the individual or body corporate you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the full name of that individual or body corporate in the space provided. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a securityholder of the company. Do not write the name of the issuer company or the registered securityholder in the space.

2 Votes on Items of Business

You may direct your proxy how to vote by placing a mark in one of the three boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

3 Appointment of a Second Proxy

You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company's share registry or you may copy this form.

To appoint a second proxy you must:

• (a) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.

• (b) return both forms together.

4 Signing Instructions

You must sign this form as follows in the spaces provided:

Individual: where the holding is in one name, the holder must sign.

Joint Holding: where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: to sign under Power of Attorney, you must have already lodged this document with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

If a representative of a corporate Securityholder or proxy is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be produced prior to admission. A form of the certificate may be obtained from the company's share registry.

Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below no later than 3.00 pm on 26 November 2008. Any Proxy Form received after that time will not be valid for the scheduled meeting.

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Documents may be lodged:

IN PERSON: Registered Office – 30 Ledgar Road, Balcatta, Western Australia 6021

BY MAIL: Registered Office - 30 Ledgar Road, Balcatta, Western Australia 6021 / P O Box 717, Balcatta, Western Australia 6914

BY FAX (61 8) 9240 2406