PERSEUS MINING LIMITED - Annual Report 2018

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Corporate Directory

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DIRECTORS

Terence Sean Harvey Non-Executive Chairman

Jeffrey Allan Quartermaine Managing Director & Chief Executive Officer

Colin John Carson Executive Director

Michael Bohm (Resigned 31 May 2018) Non-Executive Director

John Francis Gerald McGloin Non-Executive Director

Alexander John Davidson (Resigned 21 February 2018) Non-Executive Director

Sally-Anne Georgina Layman Non-Executive Director

COMPANY SECRETARY

Martijn Paul Bosboom

REGISTERED AND CORPORATE OFFICE

Level 2 437 Roberts Road Subiaco Western Australia 6008 Australia

PO Box 1578 Subiaco Western Australia 6904

Telephone: (61 8) 6144 1700 Facsimile: (61 8) 6144 1799 Email: [email protected] Website: www.perseusmining.com

GHANA OFFICE

4 Chancery Court 147A Giffard Road East Cantonments Accra – Ghana

PO Box CT2576 Cantonments Accra – Ghana

Telephone: (233) 302 760 530 Facsimile: (233) 302 760 528

CÔTE D’IVOIRE OFFICE

II Plateaux – Vallons Rue J75/J44 Lot 1438 ilot 145 06 BP 1958 Abidjan 06 Côte d’Ivoire

Telephone: (225) 22 41 9126 Facsimile: (225) 22 41 0925

SHARE REGISTRY

Computershare Investor Services Pty Limited Level 11 172 St Georges Terrace Perth Western Australia 6000 Australia

Telephone: (61 3) 9415 4000 Facsimile: (61 3) 9473 2500 Website: www.computershare.com

Computershare Investor Services Inc. Level 3 510 Burrard Street Vancouver British Columbia V6C3B9 Canada

Telephone: (1 604) 661 9400 Facsimile: (1 604) 661 9401 Website: www.computershare.com

AUDITORS

PricewaterhouseCoopers 125 St Georges Terrace Perth Western Australia 6000

STOCK EXCHANGE LISTINGS

Australian Securities Exchange (ASX – PRU)

Toronto Stock Exchange (TSX – PRU)

Frankfurt Stock Exchange (WKN: AOB7MN)

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Company highlights	3
Our strategy	5
Chairman’s address	6
Managing Director’s address	8
Review of operations	10
Sustainability report	28
Financial report	35
Directors’ report	37
Remuneration report	44
Auditor’s independence declaration	68
Financial statements	69
Directors’ declaration	129
Auditor’s independence report	130

Perseus finished the year in a strong position for future growth. We are generating strong positive cash flows that will help us fund future expansion and exploration to further add to our gold reserves and resources. “

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Company Highlights

Transitioned to a successful multi-mine, multijurisdictional gold producer

Record annual production of 255,916 ounces

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Cash and bullion on hand of A$89.8M at June 30

Production commenced at Sissingué ahead of schedule and on budget

Completed Definitive Feasibility Study for the Yaouré Gold Project

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I expect that 2018 will be judged as a watershed year for Perseus, where we moved beyond the challenges of prior years and established the platform for delivering future success and long-awaited returns. “

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Our Strategy

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Leverage team’s extensive skills and experience

Continual business improvement

Successfully develop and operate gold mines in multiple West African geo-political settings.

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Effectively deploy capital

Maintain strong ‘Social Licence’

Chairman’s Address

I am pleased to present the 2018 Annual Report for Perseus Mining Limited, reflecting on a year that we achieved important milestones as we work towards becoming a 500,000oz per year gold producer by 2022.

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Dear Fellow Shareholder,

We finished 2018 strongly, achieving record gold production of nearly 85,000oz gold in the June quarter, aided by improvements at our existing operations at Edikan Gold Mine in Ghana, and production commencing at our new operations at Sissingué in Côte d’Ivoire (Ivory Coast). We poured first gold at Sissingué in January and declared commercial production from 31 March 2018, achieving our goal of becoming a multi-mine producer with operations across two jurisdictions. Production at Sissingué was achieved on budget and ahead of schedule, demonstrating what Perseus is capable of accomplishing in West Africa.

We continued to move ahead with our third project, the Yaouré project in Côte d’Ivoire, which is in development. We completed a Definitive Feasibility Study (DFS) for Yaouré, confirming it is economically attractive and has a strong production and relatively low-cost profile over its currently-defined 8.5-year mine life, with significant potential for extension. We are now considering our options for funding Yaouré, and expect to have funding and execution plans ready by the end of December 2018 to allow a decision on proceeding with construction of the mine.

Perseus finished the year in a strong position for future growth. Becoming a multi-mine producer has lifted Perseus to a new level, and we are generating strong positive cash flows that will help us fund future expansion and exploration to further add to our gold reserves and resources.

Our Board has benefited from the addition of Sally-Anne Layman, who joined as a non-executive director in September 2017. Sally-Anne’s experience and knowledge has been of great advantage to Perseus over the past year. Directors Michael Bohm and Alex Davidson resigned from the Board during the year. Michael had served on the Board since 2009, and Alex since the acquisition of Amara Mining plc in 2016, and I thank them both for their efforts and wish them well in future endeavours.

I thank my fellow Board members and our management team, particularly our Managing Director and CEO Jeff Quartermaine, for their stellar work over the past year. I’m also grateful to our Shareholders for their continued support and belief in us achieving our goals.

Looking ahead, we will be working hard on the development of Yaouré while maintaining strong production levels from Edikan and Sissingué. It is an exciting time as we close in on our goal of developing and operating multiple gold mines in a spread of West African geo-political settings with an increased gold output.

The year ahead is going to be an important one in the growth of Perseus Mining, and I hope you will share that journey with us.

Sean Harvey Chairman

We finished 2018 strongly, achieving record gold production of nearly 85,000oz gold in the June quarter. “

Managing Director’s Address

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This financial year, our focus has been on transitioning Perseus from being a single-mine gold producer into a successful, multi-mine, multi-jurisdictional explorer, developer and producer of gold.

With the successful commissioning of our Sissingué gold mine in the March quarter of 2018, we took a major step forward in pursuit of this goal, and we are now well on track to implement our strategy in full.

Not only have we increased the number of operating mines in our asset portfolio, but with the commissioning of Sissingué and the material improvement in performance at Edikan, we have also significantly improved our ability to generate free cashflow at current gold prices.

We have reported six consecutive quarters of strong operating performance and in the June 2018 quarter, we reported a record result, producing a total of 83,881 ounces of gold at a weighted average all-in site cost of US$913 per ounce.

At Edikan, where we have produced more than 1.3 million ounces of gold since the commencement of production in 2011, we have been steadily improving our operating efficiency and are now making a very good fist of operating a challenging large-scale, low-grade operation.

Our development team in Côte d’Ivoire did a great job in getting Sissingué into production ahead of schedule and on budget, and our operating team has continued the excellent work by rapidly ramping up the operation and comfortably exceeding targets in the first full quarter of commercial operations. Not only is the mine proving to be a reliable, low-cost gold producer that is generating a significant proportion of our monthly cash flow, but its successful

development and commissioning has greatly improved our confidence to deliver a similar result when our third mine, Yaouré, moves into development in early 2019.

A positive Definitive Feasibility Study was completed for Yaouré in late 2017 and in May 2018, we started front-end engineering and design for the mine and associated infrastructure. Receiving an exploitation permit is the next key milestone for Yaouré, and we are hopeful that this will occur in the very near future. We have advanced work on putting together a funding package for the development of the mine without raising new equity capital and by the end of 2018, we are intending to have all the necessary pieces in place to consider a decision to proceed to full-scale development of Yaouré in 2019.

Meanwhile, we continue to explore across all three of our properties, confident of adding more gold Resources and Reserves to our inventory. At Sissingué, we have identified two priority exploration targets which have the potential to become satellite deposits that could extend the mine life. At Yaouré, we have achieved exploration success adjacent to the proposed open pits and we expect to announce an increase in Mineral Resources. We have also had further success in identifying additional mineralization to the north east of the one of our proposed open pits and will continue to explore in this area with the aim of delineating a further ore body in the future. In Ghana, we are focused on following up geophysical targets located at depth between the two currently known Esuajah north and south deposits. Some exciting preliminary results have

At Edikan we have produced more than 1.3 million ounces of gold since the commencement of production in 2011. “

recently been returned which materially enhance the prospect of further discoveries of gold at depth, leading to a possible extension of the currently expected life of Edikan.

Each of the above achievements is the result of outstanding efforts by our teams in Ghana, Cote d’Ivoire and Australia. While we have worked hard to improve the quality of our physical assets in 2018, a similar level of effort has gone into developing and encouraging our people, without whom the very much improved performance of our business would not have occurred. I sincerely thank each and every one of our employees for their efforts and look forward to continuing to work collaboratively to achieve our goals in periods to come.

In retrospect, I expect that 2018 will be judged as a watershed year for Perseus, where we moved beyond the challenges of prior years and established the platform for delivering future success and long-awaited returns for our very patient and supportive shareholders.

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Jeff Quartermaine Managing Director and CEO

Review of Operations

During the financial year under review, Perseus produced a record quantity of gold from its two West African mines at a materially improved All-In Site Cost (including production costs, royalties and sustaining capital) (“AISC”) relative to prior periods and in the process demonstrated the success of its corporate plan to transform from being a single mine gold producer into a successful multi-mine, multi-jurisdictional West African focussed explorer, developer and gold producer.

Gold production for the Perseus Group during the year totalled 255,916 ounces at a weighted average AISC (including production costs, royalties and sustaining capital) of US$1,039/oz. This result included 35,425 ounces of gold produced at the Sissingué Gold Mine in Cote d’Ivoire (“Sissingué” or “SGM”) at an AISC of US$520/oz and 220,491 ounces of gold produced at the Edikan Gold Mine in Ghana (“Edikan” or “EGM”) at an AISC of US$1,100/oz (Refer to details of EGM and SGM below).

Construction and commissioning of Sissingué, Perseus’s second gold mine, was completed ahead of schedule and on budget during the year. First ore was fed to the Sissingué mill on 13 January 2018, first gold poured on 26 January 2018 and mill performance tests passed on 12 February 2018. Following production ramp up, commercial production was declared with effect from 31 March 2018. At Sissingué, key management appointments were made progressively, various management systems, processes and procedures were installed, and spares and consumables procured in the lead-up to commercial production. Mining contractor, Société de Forage et de Travaux Public – Mining SA (“SFTP”) assembled its mining fleet and team on site and commenced mining activities in early November 2017.

The Definitive Feasibility Study (“DFS”) for the Yaouré Gold Project (“Yaouré”) in Côte d’Ivoire was completed on schedule during the year, confirming the high quality of the project and the significant contribution that it can potentially make as Perseus’s third gold mine. The DFS has

demonstrated that Yaouré is technically robust, with attractive operating metrics based on an estimated Ore Reserve of 26.8 Mt of ore grading 1.76g/t gold containing 1.52 million ounces of gold.

The Company’s US$20 million working capital debt facility provided to Perseus’s Ghanaian subsidiary by Macquarie Bank Limited (“Macquarie”) was converted into a US$30 million revolving line of credit during the year to improve flexibility in terms of managing working capital and funding high potential exploration activities. The amount drawn as at 30 June 2018 was US$25 million. In addition, the loan agreement for the US$40 million Sissingué project debt facility provided by Macquarie was executed in July 2017. This facility was fully drawn down during the year to partially fund the development of the SGM and US$2 million was repaid in June 2018, reducing the outstanding balance to US$38 million as at 30 June 2018.

The group’s Joint Ore Reserve Committee (“JORC”) compliant Proved and Probable Ore Reserves as at 30 June 2018 at Edikan, Sissingué and Yaouré increased to 79.8 million tonnes (“Mt”) containing 3.59 million ounces of gold after the recognition of Yaouré JORC compliant Proved and Probable Ore Reserves following the completion of the Yaouré DFS. At the end of the year, the group’s JORC compliant Measured and Indicated Mineral Resources (inclusive of Ore Reserves) were 7.20 million ounces of gold and Inferred Mineral Resources were 2.43 million ounces of gold.

Review of Operations (continued)

EGM

GHANA

The group owns a 90% beneficial interest in the EGM, a producing gold mine located in Ghana. The remaining 10% beneficial interest in the EGM is a free carried shareholding in the project company owned by the Ghanaian government.

Operations

Operating results at the EGM for the 12 months to 30 June 2018 and the corresponding period ending in 2017 were as follows:

Table 1: Key production statistics – EGM

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Twelve months to Twelve months to
Parameter Unit 30 June 2018 30 June 2017
Total ore and waste mined kt 39,916 36,732
Ore mined kt 10,190 7,632
Ore milled kt 7,135 6,828
Milled head grade g/t gold 1.15 0.96
Gold recovery rate % 83.4 83.5
Gold produced ounces 220,491 176,218
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A total of 16,750k bank cubic metres (“bcm”) of ore and waste were mined during the period from the Chirawewa, Fetish, Esuajah North and Fobinso pits, including 346k tonnes of oxide ore at 1.01g/t gold and 9,844k tonnes of fresh/ transitional ore at 1.09g/t gold. Ore stockpiles (including both high and low-grade ore but not mineralised waste) plus crushed ore increased to 5,917k tonnes grading 0.65 g/t containing approximately 124,555 oz of gold. This stockpile is comprised of approximately 22% oxide ore and 88% primary ore.

Total mill throughput for the year was 7,135k tonnes of ore grading 1.15 g/t of gold, 19.8% higher grade than the previous period. The gold recovery rate of 83.4%, was 0.1% lower than in the previous year. The improvement in milled ore grade and recovery rate reflects the fact that higher grade zones of ore were accessed, mined and processed during the year.

Gold production for the year was 220,491 ounces at an AISC of US$1,100/oz. The 25.1% increase in gold production during the period, relative to the 2017 financial year, is mainly due to a higher average head grade of processed ore along with increased tonnage of ore milled. The AISC for the period of US$1,100/oz is 16.9% lower than the previous period of US$1,324/oz. This was due to lower capital expenditure following the completion of the capital works programme during the prior year, combined with higher gold production.

Review of Operations (continued)

Table 2: Key financial operating statistics – EGM

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Twelve months to Twelve months to
Parameter Unit 30 June 2018 30 June 2017
Total gold sales Ounces 210,956 171,765
Average sales price US$/oz of gold sold 1,288 1,242
Production costs including:
• Mining cost US$/tonne of
material mined 3.30 3.00
• Processing cost US$/tonne of ore milled 9.65 9.79
• G & A cost US$M / month 1.54 1.39
Royalties US$/oz 82 86
Sustaining Capital US$/oz 24 138
All-in site cost US$/oz 1,100 1,324
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Unit mining costs increased by 10% relative to the prior period. Total mining costs increased due to adoption of a higher powder factor to improve rock breakage, greater grade control drilling density and greater haul distances as pits deepened. In unit cost terms, the effect of this increase was offset to a degree by an increase in the tonnes of material mined relative to the prior period.

Unit processing costs have decreased from the prior period due mainly to an increase in ore tonnes milled. General and administrative costs have also increased from the prior period due to the reallocation of legal fees from corporate to Edikan during the current year.

Exploration

During the period, 1,381 metres of reverse circulation (“RC”) and 2,355 metres of diamond core were drilled on various targets within the EGM project area. Drilling focussed on near-mine targets that could potentially add incremental benefit to the current operation, with limited testing of green-field targets. Auger drilling totalling 1,841 metres was also undertaken over several prospects where previous soil sampling was ineffective due to alluvial cover or disturbance from artisanal mining activity.

Exploration was largely driven by the major airborne geophysical survey and associated

targeting exercise completed by consultants Corporate Geoscience Group in late 2016. RC and diamond drilling specifically targeted a number of resistivity anomalies and structural targets indicative of possible intrusive granite bodies similar to those hosting gold mineralisation in the Fobinso, Abenabena, Fetish and Esuajah North pits.

Late in the year a mineralised granite was intersected at depth beneath the Esuajah Gap prospect, located between the Esuajah North pit and the Esuajah South deposit. Two holes were drilled into this zone, with the second, EGRDD002, intersecting Esuajah-type granite at 430 metres downhole depth (~350 metres vertical), continuing for 165 metres to the end of the hole. For around 90 metres below the intrusive contact the granite was strongly altered, with pervasive disseminated pyrite + quartzcarbonate veining ± arsenopyrite. Gold grades were generally weak (averaging 0.19g/t) but comparable with gold values in the Esuajah North and South granites at comparable depths. In both of those granites, gold grades improve in the upper parts of the mineralised system, and it is anticipated this trend may be mirrored in the Esuajah Gap body. The EGRDD002 intersection is currently being followed up in a multi-hole program designed to test the projected near-surface extensions of the granite that might represent an open-pit opportunity.

Review of Operations (continued)

EGM Mineral Resource estimate:

The Mineral Resource estimate for the EGM is prepared in accordance with the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). The Mineral Resource estimate is summarised in the following table that reports the Mineral Resources by category, deposit and deposit type. The classification categories of Measured, Indicated and Inferred under the JORC Code are equivalent to the CIM categories of the same name (CIM, 2010).

The updated Measured and Indicated Mineral Resource estimate for Edikan is now estimated as 84.9Mt grading 1.10g/t gold, containing 3,025k ounces of gold, as at 30 June 2018. A further 6.8Mt of material grading 1.25g/t gold and containing a further 267k ounces of gold are classified as an Inferred Mineral Resource.

Previous estimates of open pit Mineral Resources at Edikan have been constrained only by the extents of drill coverage at each of the deposits. The estimates reported herein have been constrained to material lying within optimal pit shells derived using US$1,800/oz gold price. The Company confirms that in all other respects there have been no material changes from the estimates of open pit Mineral Resources previously released. Readers are referred to ASX release “Perseus Updates Mineral Resource and Ore Reserve Estimates for Edikan Gold Mine” dated 21 February 2017 and the notes contained therein.

The Company confirms that there have been no material changes to the Esuajah South and Heap Leach Mineral Resource estimates previously released. The above reference and the notes contained therein also apply to these estimates.

The Mineral Resource estimates for Edikan are tabulated below in Tables 3 and 4.

Table 3: Edikan Gold Mine Measured and Indicated Mineral Resources[7,8,9]

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Measured + Indicated
Measured Resources Indicated Resources
Resources
Deposit Quantity Grade Gold Quantity Grade Gold Quantity Grade Gold
Deposit Type Mt g/t gold ‘000 oz Mt g/t gold ‘000 oz Mt g/t gold ‘000 oz
AF Gap [1, 2, 3] Open Pit 7.8 1.00 253 11.1 0.95 338 19.0 0.97 591
Fobinso [1, 2, 3] Open Pit 1.0 1.15 37 4.1 0.98 130 5.1 1.01 167
Esuajah North [1, 2, 3] Open Pit 6.7 0.95 206 9.4 0.90 272 16.2 0.92 478
Fetish [1, 2, 3, 4] Open Pit 6.8 1.04 228 11.7 0.96 363 18.5 0.99 591
Bokitsi South [1, 2, 3] Open Pit 0.8 2.64 67 0.6 2.23 43 1.4 2.47 110
Sub-Total 23.2 1.06 791 37.0 0.96 1,146 60.2 1.00 1,936
Esuajah South [5] U/ground 8.5 1.9 533 6.3 1.7 353 14.8 1.8 879
Heap Leach [6] Stockpile - - - 4.3 0.6 89 4.3 0.6 89
Stockpiles Stockpile 5.7 0.67 121 - - - 5.7 0.67 121
Total 37.3 1.19 1,445 47.6 1.03 1,588 84.9 1.10 3,025
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Notes:

Based on January 2017 Mineral Resource models constrained to US$1,800/oz pit shells.
Depleted to 30 June 2018 mining surfaces.
0.4g/t gold cut-off applied.
Includes Bokitsi North lode.
At zero cut-off grade.
All Mineral Resources are current as at 30 June 2018.
Mineral Resources are inclusive of Ore Reserves.
Rounding of numbers to appropriate precisions may have resulted in apparent inconsistencies.
0.7g/t gold cut-off applied.

Review of Operations (continued)

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Table 4: Edikan Gold Mine Inferred Mineral Resources[6,7]

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Inferred Resources
Deposit Quantity Grade Gold
Deposit Type Mt g/t gold ‘000 oz
AF Gap [1, 2, 3] Open Pit 0.1 1.04 4
Fobinso [1, 2, 3] Open Pit 0.9 1.21 35
Esuajah North [1, 2, 3] Open Pit 0 1.12 1
Fetish [1, 2, 3, 4] Open Pit 0.5 0.98 14
Bokitsi South [1, 2, 3] Open Pit 0.6 1.13 20
Esuajah South [5] U/ground 4.7 1.30 192
Total 6.8 1.25 267
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Notes:

Based on January 2017 Mineral Resource models constrained to US$1,800/oz pit shells.
Depleted to 30 June 2018 mining surfaces.
0.4g/t gold cut-off applied.
Includes Bokitsi North lode.
0.7g/t gold cut-off applied.
All Mineral Resources are current as at 30 June 2018.
Rounding of numbers to appropriate precisions may have resulted in apparent inconsistencies.

EGM Ore Reserve estimate

The Ore Reserve is summarised below in Table 5 and is based on the Edikan Mineral Resources as at 30 June 2018 and updated pit optimisation, design and scheduling of the Open Pit resources and Esuajah South Ore Reserve based on underground mining methods.

All Ore Reserves are reported in accordance with the JORC Code. The Ore Reserve estimate is summarised in the following table that reports the Ore Reserves by category, deposit and type, above variable cut-off grades. The classification categories of Proved and Probable under the JORC Code are equivalent to the CIM categories of the same name (CIM, 2010).

The updated Proved and Probable Ore Reserves for Edikan are now estimated as 44.7Mt grading 1.1g/t gold, containing 1,566k ounces of gold including 18.3Mt of ore grading 1.0g/t gold and containing 587k ounces of gold in the Proved category and a further 26.4Mt of ore grading 1.2g/t gold containing 979k ounces of gold classified as Probable Ore Reserves. Details of these estimates are shown in Table 5.

Review of Operations (continued)

Table 5: Edikan Gold Mine Ore Reserves[3,6,7]

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Proved & Probable
Proved Reserves Probable Reserves Reserves
Quantity Grade Gold Quantity Grade Gold Quantity Grade Gold Strip
Deposit Mt g/t gold ‘000 oz Mt g/t gold ‘000 oz Mt g/t gold ‘000 oz Ratio [5]
AF Gap [1,4] 4.3 1.09 150 4.7 1.11 169 9.0 1.10 319 4.5
Fobinso [1,4] 0.2 1.22 7 0.5 0.98 17 0.7 1.05 24 1.1
Esuajah North [1,4] 3.0 1.07 103 4.6 0.99 148 7.6 1.02 250 1.5
Fetish [1,4] 4.7 1.09 164 7.7 1.00 248 12.4 1.03 412 2.4
Bokitsi South [1,4] 0.5 2.72 42 0.1 2.60 10 0.6 2.70 52 7.0
Subtotal 12.6 1.15 466 17.7 1.04 591 30.3 1.08 1,057 2.8
Esuajah South - - - 4.9 1.99 312 4.9 1.99 312 -
Heap Leach [5] - - - 3.8 0.6 76 3.8 0.6 76 -
Stockpile [2] 5.7 0.67 121 - - - 5.7 0.67 121 -
TOTAL 18.3 1.00 587 26.4 1.15 979 44.7 1.09 1,566 1.9
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Notes:

Based on June 2018 Mineral Resource estimate which is depleted to 30th June 2018.
Based on stockpile balance as at 30 June 2018.
All Ore Reserves current as at 30 June 2018.
Based on 0.40 g/t gold grade cut-off.
Inferred Mineral Resource is considered as waste, t : t.
Rounding of numbers to appropriate precisions may have resulted in apparent inconsistencies.
Variable gold grade cut-off based on recovery of each material type in each deposit: Oxide 0.40 – 0.55 g/t, Transition 0.55 – 0.75 g/t and Fresh 0.50 – 0.60 g/t.

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Review of Operations(continued)
SGM
CÔTE D’IVOIRE
The SGM is located in the north of Côte d’Ivoire and lies within
the Sissingué exploitation permit that covers an area of 446km²
and is bounded on one side by the international border between
Côte d’Ivoire and Mali. The exploitation permit is located along
a structural/stratigraphic corridor within the Syama-Boundiali
greenstone belt approximately 42km south-southwest of the Syama
gold mine in Mali and 65km west northwest of Randgold’s Tongon
deposit in Côte d’Ivoire. The group owns an 86% interest in the	SGM,
with the remaining 10% a free carried interest held by the Ivorian
government and 4% owned by local interests.
Project development
Construction and commissioning of Sissingué was completed ahead of schedule and on budget.
First ore was fed to the Sissingué mill on 13 January 2018, frst gold poured on 26 January 2018
and mill performance tests passed on 12 February 2018. Following this production ramp up,
commercial production was declared at the SGM effective 31 March 2018.
During the fnancial year there was a progressive build-up of key management staff, various
management systems, processes and procedures (including the important maintenance systems)
were installed, and spare parts and consumables procured in preparation for production.
Mining contractor, SFTP also assembled its mining feet and team on site and commenced mining
activities in early November 2017.
Operations
Operating results for the year to 30 June 2018 at Sissingué were as follows:
Table 6: Key production statistics – SGM
Parameter Unit Twelve months to 30 June 20181 Total ore and waste mined kt 3,541	Twelve months to 30 June 2017 -
Ore mined kt 1,019	-
Ore milled kt 678	-
Milled head grade g/t gold 1.70	-
Gold recovery rate % 96.1	-
Gold produced ounces 35,425	-
Notes:
1. Production data includes production both pre and post declaration of commercial production on 31 March 2018.

Review of Operations (continued)

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Construction and commissioning of Sissingué was completed ahead of schedule and on budget. Commercial production was declared at the SGM effective 31 March 2018. “

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Review of Operations (continued)

A total of 1,963k bcm of oxide ore and waste was mined during the year from the Sissingué pit, with the ore grading an average of 1.15g/t gold. A reconciliation of ore estimated in the Sissingué Reserve model to that which was actually fed to the mill from the commencement of mining in November 2017 to the end of the period indicated 9% more tonnes of ore was mined at a 1% lower head grade, resulting in 8% more contained ounces of gold. While it is still relatively early in the life of the mine to be drawing definitive conclusions, the results of this reconciliation study are encouraging and suggest that the Sissingué ore body is performing to expectations.

Ore stockpiles plus crushed ore increased to 312k tonnes of oxide ore at an average grade of 0.67 g/t, containing approximately 6,689 ounces of gold. Total mill throughput for the year was 678k tonnes of ore at an average grade of 1.70 g/t gold. The average gold recovery rate achieved was 96.1%. Gold production for the year was 35,425 ounces at an AISC of US$520/oz. Sissingué’s AISC was generally in line with expectations for mining (US$3.88/tonne) and processing (US$9.69/tonne) of oxide ore. General and administrative costs were approximately US$0.78 million a month during the current year.

Table 7: Key financial operating statistics – SGM

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Twelve months to Twelve months to
Parameter Units 30 June 2018 [1,2] 30 June 2017
Total gold sales Ounces 14,726 -
-
Average sales price US$/oz of gold sold 1,330
Production costs including:
• Mining cost US$/tonne of
material mined 3.88 -
• Processing cost US$/tonne of ore milled 9.69 -
• G & A cost US$M/month 0.78 -
Royalties US$/oz 57 -
Sustaining Capital US$/oz 1 -
All - in site cost US$/oz 520 -
----- End of picture text -----

Notes:

Production data includes production both pre and post declaration of commercial production on 31 March 2018.
Financial data (i.e. sales and costs) includes only data relevant to the period post-declaration of commercial production.

Exploration

Exploration on the Sissingué Exploitation Licence during the period focussed on auger geochemical drilling to further investigate bedrock sources of widespread gold-in-soil anomalism and surficial artisanal gold mining, with 4,775 metres of aircore (“AC”) drilling completed to follow this up. The review concluded that auger drilling to penetrate the upper, in many cases demonstrably transported, parts of the laterite profile to sample the lower, in-situ levels of the regolith, would provide much better definition of bedrock gold distribution. This work provided better definition of targets for follow-up AC drilling.

AC drilling was conducted in two areas on the Sissingué permit: Papara North-Tiongoli, located some 25km north of Sissingué, and Zanikan-Gbeni, located approximately 20km south of Sissingué. In both areas extensive artisanal workings and gold-in-soil anomalism had been only lightly tested by previous RAB and AC drilling. At Papara North-Tiongoli the AC drilling, guided by auger drilling, returned

Review of Operations (continued)

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encouraging results. In the Zanikan area AC drilling totalling 1,983 metres was completed to investigate quartz veining (stockwork) mineralisation hosted by Birimian metasediments (greywackes and siltstones) previously tested by shallow rotary air blast (“RAB”) drilling. The AC drilling was designed to undercut the RAB drilling and investigate the stockwork mineralisation at greater depths, with three holes returning significant results. The results appear to indicate multiple steeply west-dipping mineralised structures over 200 metres in strike and open ended. Additional AC and RC drilling is planned at both locations to further investigate the lateral and depth extent of the mineralisation.

A total of 5,586 metres of AC drilling was completed on the Mahalé licence, located 40km southwest of the SGM plant site, with drilling focussed on gold-in-soil and magnetic anomalies along the sheared margins of the Fimbiasso (previously referred to as Bélé) syenogranite. Previous RAB drilling at one of these anomalies, now termed the Fimbiasso South zone, returned further encouraging results. Immediately subsequent to the period end results were returned from follow up AC drilling.

Further AC and RC drilling is planned to infill, extend and undercut the coverage between and along strike from the existing drilling at

Fimbiasso South as well as other coincident magnetic and geochemical targets marginal to the Fimbiasso Granite. In addition to the drilling activities, consultants Southern Geoscience Consultants were retained to compile and reprocess all airborne geophysical data sets covering the Sissingué district (including Mahalé). Interpretation of this new compilation at various scales is revealing new insights into controls on regional gold distribution and geological relationships within the Syama-Sissingué region. The SGC interpretation will in turn support a targeting exercise by consultants CSA Global currently underway.

Combined SGM and Fimbiasso Mineral Resource estimate

The Mineral Resource estimate for the SGM is prepared in accordance with the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). The Mineral Resource estimate is summarised in the following table that reports the Mineral Resources by category, deposit and deposit type. The classification categories of Measured, Indicated and Inferred under the JORC Code are equivalent to the CIM categories of the same name (CIM, 2010).

Mineral Resource estimates for Sissingué have been updated by depleting them to the 30 June 2018 surveyed mining surface. Also, Mineral Resources at the Sissingué and Fimbiasso (previously Bélé) deposits have been constrained to optimal pit shells derived using a gold price of US$1,800/oz; previously US$2,400/oz was used. The Company confirms that in all other respects there have been no material changes from the estimates of Mineral Resources previously released. In respect of Sissingué, readers are referred to ASX release “Perseus Activities Update” dated 15 December 2016. In respect of the Fimbiasso deposits, readers are referred to ASX release “Perseus Updates Mineral Resource Estimate at Bélé” dated 20 February 2017.

The combined global Measured and Indicated Mineral Resource for the SGM is estimated as 12.7Mt grading 1.7g/t gold, containing 701k ounces of gold. A further 0.9Mt of material grading 2.0g/t gold, containing a further 61k ounces of gold are classified as Inferred Mineral Resources. Details of these estimates are shown below in tables 8 and 9.

Review of Operations (continued)

				Table 8: Sissingué Gold Mine Measured and	Table 8: Sissingué Gold Mine Measured and	Table 8: Sissingué Gold Mine Measured and
				Indicated Mineral Resources6,7,8,9
		Measured Resources Indicated Resources			Measured + Indicated Resources
Deposit Sissingué1, 2, 3 Fimbiasso East4, 5 Fimbiasso West4, 5 Stockpiles Total	Deposit Type Open Pit Open Pit Open Pit Open Pit	Quantity Mt 3.9 - - 0.30 4.2	Grade g/t gold 2.1 - - 0.70 2.0	Gold ‘000 oz Quantity Mt Grade g/t gold Gold ‘000 oz Quantity Mt 258 6.9 1.5 328 10.8 - 0.6 2.3 47 0.6 - 0.9 2 61 0.9 6.6 - - - 0.30 265 8.5 1.6 437 12.7		Grade g/t gold 1.7 2.3 2.0 0.70 1.7	Gold ‘000 oz 586 47 61 6.6 701
				Notes:
				1. Based on December 2016 Mineral Resource model constrained to
				US$1,800/oz pit shell.
				2. Depleted to 30 June 2018 mining surface.
				3. 0.6g/t gold cut-off applied to in situ material.
				4. Based on February 2017 Mineral Resource models constrained to
				USD1,800 pit shells.
				5. 0.8g/t gold cut-off applied.
				6. Mineral Resources current at 30 June 2018.
				7. Mineral Resources are inclusive of Ore Reserves.
				8. Rounding of numbers to appropriate precisions may have resulted in
				apparent inconsistencies.
				9. Fimbiasso East and West were previously called Bélé East and West.
				Table 9: Sissingué Gold Mine Inferred Mineral Resources6,7,8
					Inferred Resources
				Deposit Deposit Type Sissingué1, 2, 3 Open Pit Fimbiasso East4, 5 Open Pit Fimbiasso West4, 5 Open Pit Total	Quantity Mt 0.7 0.2 0.1 0.9	Grade g/t gold 2.0 1.9 2.2 2.0	Gold ‘000 oz 44 10 6 61
				Notes:
				1. Based on December 2016 Mineral Resource model constrained to
				US$1,800/oz pit shell.
				2. Depleted to 30 June 2018 mining surface.
				3. 0.6g/t gold cut-off applied.
				4. Based on February 2017 Mineral Resource estimate.
				5. 0.8g/t gold cut-off applied.
				6. Mineral Resources current at 30 June 2018.
				7. Rounding of numbers to appropriate precisions may have resulted in
				apparent inconsistencies.
				8. Fimbiasso East and West were previously called Bélé East and West respectively.

Review of Operations (continued)

SGM Ore Reserve estimate

The updated Ore Reserve estimate for Sissingué is a depletion of the previous Ore Reserve estimate with mining activities commencing at Sissingué in November 2017. The updated Ore Reserve for Sissingué incorporates the ore depleted due to mining activities between November 2017 and June 2018.

The Company confirms that other than depletion, there have been no material changes from the estimates of Ore Reserve previously released. Readers are referred to ASX release “Perseus Updates Life of Mine Plan for Sissingué Gold Mine” dated 31 March 2017 for the previous estimation.

The combined SGM and Fimbiasso project updated Ore Reserve which is summarised below in table 10 is estimated at 5.2 million tonnes of ore, grading 2.2 g/t gold and containing 363 kozs of gold Table10 reports the Ore Reserves by category, deposit, above variable cut-off grades. The classification categories of Proved and Probable under the JORC Code are equivalent to the CIM categories of the same name (CIM, 2010).

Table 10: Sissingué Gold Mine Ore Reserves[ 6,7,9]

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Proved & Probable
Proved Reserves Probable Reserves Reserves
Quantity Grade Gold Quantity Grade Gold Quantity Grade Gold Strip
Deposit Mt g/t gold ‘000 oz Mt g/t gold ‘000 oz Mt g/t gold ‘000 oz Ratio [6]
Sissingué [1,2,7] 2.6 2.5 213 1.3 1.7 69 3.9 2.2 282 2.5
Fimbiasso East [3,4,10] - - - 0.5 2.5 39 0.5 2.5 39 5.1
Fimbiasso West [3,5,10] - - - 0.5 2.1 35 0.5 2.1 35 5.8
Subtotal 2.6 2.5 213 2.3 2.0 144 4.9 2.3 357 3.1
Stockpile [8] 0.30 0.70 7 - - - 0.30 0.70 7 -
TOTAL 2.9 2.3 219 2.3 2.0 144 5.2 2.2 363 3.0
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Notes:

Based on January 2017 Ore Reserve estimation.
Variable gold grade cut-off based on recovery of each material type: Oxide 0.45 g/t, Transition 0.85 g/t, Granite – Porphyry 0.85 g/t and Sediment 1.05 g/t.
Based on March 2017 Ore Reserve estimation.
Variable gold grade cut-off based on recovery of each material type: Oxide 0.65 g/t, Transition 0.95 g/t, Granite 1.05 g/t and Mafic 1.20 g/t.
Variable gold grade cut-off based on recovery of each material type: Oxide 0.65 g/t, Transition 1.00 g/t, Granite 1.05 g/t and Mafic 1.20 g/t.
Inferred Mineral Resource is considered as waste, t : t.
Allows for mining depletion to 30 June 2018.
Ore Reserve current as at 30 June 2018.
Rounding of numbers to appropriate precisions may have resulted in apparent inconsistencies.
Fimbiasso East and West were previously called Bélé East and West respectively.

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Review of Operations (continued)

YAOURÉ CÔTE D’IVOIRE

Yaouré is located in central Côte d’Ivoire, 40 km northwest of Yamoussoukro, the political capital, and 270 km northwest of Abidjan, the economic capital, of Côte d’Ivoire. Yaouré lies within a rural area, 22 km east-northeast of the city of Bouaflé, and 5 km west of the Kossou dam and hydroelectric power station. The nearest villages to the site are Angovia and Allahou-Bazi, which are located approximately 1 km east of the proposed mine site.

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Definitive Feasibility Study

The DFS for Yaouré, potentially Perseus’s third gold mine, was completed on schedule during the year, confirming the high quality of the project and the significant contribution that it can potentially make when in production to Perseus’s short to medium term plans. The DFS has demonstrated that Yaouré is technically very robust, with attractive operating metrics based on an estimated Ore Reserve of 26.8 Mt of ore grading 1.76g/t gold containing 1.52 million ounces of gold.

The DFS also demonstrated that Yaouré has potential for growth, being located on a prospective tenement package that provides significant potential to incrementally expand Mineral Resources and Ore Reserves and rapidly extend expected mine life through further drilling in and around the planned pits as well as systematic exploration of the surrounding 513 km[2] land holding.

Engineering

Towards the end of the year, Perseus appointed the highly regarded engineering group, Lycopodium, to perform a front-end engineering and design (“FEED”) study for Yaouré. Lycopodium is well known to Perseus having successfully engineered and built the Sissingué processing facility for Perseus ahead of schedule and on budget earlier in the year. The Yaouré FEED study, which is expected to improve the level of estimating accuracy of capital costs to a range of +/- 10%, is currently scheduled to be completed by early October 2018.

Development Funding

With the assistance of its corporate advisor, Gresham Partners, Perseus evaluated a range of alternative mechanisms for funding the development of Yaouré with the aim of identifying the optimum funding package from the perspective of Perseus’s shareholders.

Review of Operations (continued)

It was determined that provided there were no material changes in market and operating conditions at our two gold mines, the optimum result for shareholders will be achieved by Perseus using a combination of internally generated cash (possibly including proceeds from the exercise of warrants that mature in April 2019) and a quantity of debt funding to finance the development of Yaouré.

At year end, preparation of an Information Memorandum that is needed to approach and seek funding proposals from a range of pre-qualified debt providers, was well in hand. Activity associated with the arrangement of the targeted debt funding will be significantly escalated in the September 2018 quarter with the aim of having committed offers of funding to hand in the December 2018 quarter, when the board of Perseus is aiming to review all aspects of the Yaouré development and consider the full-scale development decision.

Permitting

Perseus’s application for the granting of an Exploitation Permit (“EP”) covering the Yaouré project development area was lodged in January 2018 and subsequently reviewed by the Minerals Commission and forwarded for consideration by the Government’s Inter-ministerial Committee. Final sign off and granting of the EP is expected to occur later in 2018.

YGP Mineral Resource estimate

The global Mineral Resource estimate for the YGP is prepared in accordance with the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). The Mineral Resource estimate is summarised in the following table that reports the Mineral Resources by category, deposit and deposit type. The classification categories of Measured, Indicated and Inferred under the JORC Code are equivalent to the CIM categories of the same name (CIM, 2010).

The global Measured and Indicated Mineral Resource estimate for Yaouré is estimated as 43.1 million tonnes grading 1.39 g/t gold and containing 1.93 million ounces of gold at a cut-off grade of 0.4g/t. A further 46 million tonnes of material grading at 1.0 g/t gold and containing a further 1.5 million ounces of gold is classified as Inferred Resources. Table 11 reports the Mineral Resources by category, deposit and type.

Table 11: Yaouré Gold Project Indicated & Inferred Mineral Resources

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Indicated Resources Inferred Resources
Deposit Quantity Grade Gold Quantity Grade Gold
Deposit Type Mt g/t gold koz Mt g/t gold koz
CMA Open Pit 24.8 1.81 1,440 16 1.2 600
Yaouré Open Pit 16.5 0.81 430 30 0.9 900
Sub-total Open Pit 41.3 1.41 1,870 46 1.0 1,500
Heap Leach [5] Stockpile 1.8 1.02 60 - - -
Total 43.1 1.39 1,930 46 1.0 1,500
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Notes:

Based on November 2017 Mineral Resource estimate.
Depleted for previous mining.
0.4g/t gold cut-off applied to in situ open pit material.
In situ resources constrained to US$1,800/oz pit shell
Heap leach resources are stated at 0.0g/t gold cut-off; only heap components with average grade above 0.4g/t included.
Mineral Resources current at 30 June 2018.
Indicated Mineral Resources are inclusive of Ore Reserves.
Rounding of numbers to appropriate precisions may have resulted in apparent inconsistencies.

Review of Operations (continued)

YGP Ore Reserve estimate

The Ore Reserve for Yaouré Gold Project remains unchanged from that previously reported in June 2017. Readers are referred to ASX release “Perseus Declares Initial Resource and Reserve Estimates for Yaouré Gold Project” dated 3 November 2017 and the notes thereto.

The Proved and Probable Ore Reserves for Yaouré are estimated as 26.8Mt grading 1.76g/t gold, containing 1,518k ounces of gold including. Details of these estimates are shown in table 12.

Table 12: Yaouré Gold Project Proved and Probable Reserves[4,5,6]

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Proved Probable TOTAL
Au Au Au Strip
Quantity grade Gold Quantity grade Gold Quantity grade Gold Ratio [4 ]
Deposit Mt g/t gold koz Mt g/t gold koz Mt g/t gold koz t:t
CMA [1,2] - - - 20.7 1.97 1,310 20.7 1.97 1,310 6.0
Yaouré [1,2] - - - 4.7 1.04 155 4.7 1.04 155 2.6
Subtotal - - - 25.3 1.80 1,466 25.3 1.80 1,466 5.4
Heap Leach [1,3] - - - 1.4 1.14 52 1.4 1.14 52 -
TOTAL - - - 26.8 1.76 1,518 26.8 1.76 1,518 5.1
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Notes:

Based on September 2017 Ore Reserve estimation.
Variable gold grade cut-off based on recovery of each material type: Weathered 0.40 g/t, Transition 0.45 g/t, Fresh CMA – 0.50 g/t and Fresh Yaouré – 0.65 g/t.
Inferred Mineral Resource is considered as waste, t : t.
Ore Reserve current as at 30 June 2018.
Rounding of numbers to appropriate precisions may have resulted in apparent inconsistencies.
Based on 0.45 g/t gold grade cut-off.

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Review of Operations (continued)

Exploration

Exploration at Yaouré during the year included soil sampling, augering and AC and RC drilling. AC and RC drilling was focussed on the investigation of potential strike extensions of the CMA structure to the northeast of the currently defined Yaouré deposit. In this area, termed the CMA-NE zone, airborne magnetics reveals the CMA structure trends beneath a thick carapace of transported laterite where soil geochemistry has been ineffective. AC drilling totalling over 18,000 metres was used to track the structure beneath the laterite cover for 2.5km to the limits of the Company’s tenure. Limited RC drilling totalling 570 metres was also used to undercut several of the better AC intersections. Mineralisation within this zone consists of a basalt-hosted quartz-tourmaline-pyrite vein system extending over at least 600 metres based on results received to date, with many results still pending at period end.

AC, RC and diamond drilling was continued beyond year-end to further investigate the CMA-NE zone and the prospective structural contact between the host basalt sequence and the volcaniclastic basin overlying to the north.

At the Akasou prospect, 5km southwest of the Yaouré pit, soil sampling was undertaken to infill and extend a previously identified trend of gold-in-soil anomalism. At the Sayikro prospect, 2km southwest of the Yaouré pit, just over 1,500 metres of augering was completed over an area of strong soil anomalism and intense artisanal mining. Both of these areas, as well as the Filon Akakro and Allekran North prospects, will be subjected to AC drilling following the current wet season.

Auger drilling also commenced on the Yaouré East property to investigate previously identified gold-in-soil anomalism, with 550 metres of an ongoing program drilled during the period.

Other exploration permits, Côte d’Ivoire

Soil sampling and augering programs were completed over the Kounahiri and Zouan Hounien permits respectively.

On the Kounahiri property, some 650 soil samples were collected to better define gold anomalism along the major regional shear structure traversing the length of the property. The results from this work, as well as geological mapping to identify alteration and favourable structural settings, have been disappointing and consideration is being given to farming the permit out. At Zouan-Hounien 173 auger holes totalling 1117 metres were drilled over the strongest gold-in-soil anomalies. Results were disappointing, with a maximum assay of only 69 ppb Au. As a result this property has been returned to the permit holder. The Mbengué and Napié properties were both farmed out, with Manas Resources Limited funding and managing exploration on Mbengué, and Mako Gold Limited funding and managing exploration on Napié.

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Company Highlights

GROUP ORE RESERVES AND MINERAL RESOURCES

For consistency, all open pit Mineral Resource estimates are now constrained using pit shells generated at US$1,800/oz, whereas different criteria were previously used at Edikan and Sissingué. Where applicable, Mineral Resources are depleted to 30 June 2018 mining surfaces.

Table 13: Group Mineral Resources[1,2]

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Measured Resources Indicated Resources Inferred Resources
Quantity Grade Gold Quantity Grade Gold Quantity Grade Gold
Deposit Mt g/t gold ‘000 oz Mt g/t gold ‘000 oz Mt g/t gold ‘000 oz
Edikan Gold Mine 37.3 1.19 1,445 47.6 1.03 1,588 6.8 1.25 267
Sissingué Gold Mine 4.2 2.0 265 8.5 1.6 437 0.9 2.0 61
Yaouré Gold Project - - - 43.1 1.39 1,930 46.0 1.0 1,500
Total 41.5 1.28 1,710 99.2 1.24 3,955 53.7 1.1 1,830
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Notes:

Notes to individual tables of resources presented below in respect of each project.
Measured and Indicated Mineral Resources are inclusive of Ore Reserves.

All Ore Reserves are based on Life of Mine Plans that were current at the time of reporting and are quoted from face positions as at 30 June 2018.

Table 14: Group Ore Reserves[1,2]

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Proved Reserves Probable Reserves Proved & Probable Reserves
Quantity Grade Gold Quantity Grade Gold Quantity Grade Gold
Deposit Mt g/t gold ‘000 oz Mt g/t gold ‘000 oz Mt g/t gold ‘000 oz
Edikan Gold Mine 18.3 1.00 587 26.4 1.15 979 44.7 1.09 1,566
Sissingué Gold Mine 2.9 2.3 219 2.3 2.0 144 5.2 2.2 363
Yaouré Gold Project - - - 26.8 1.76 1,518 26.8 1.76 1,518
Total [1,2] 21.2 1.18 807 55.4 1.48 2,641 76.6 1.40 3,447
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Notes:

Notes to individual tables of Ore Reserves presented below in respect of each project.
The Company holds 90% of Edikan Gold Mine (EGM), 86% of Sissingué Gold Mine (SGM) and 90% of Yaouré Gold Project (YGP) after allowing for Government equity at mining stage.

GOVERNANCE AND INTERNAL CONTROLS FOR RESERVE AND RESOURCE ESTIMATES

Perseus’ Mineral Resource and Ore Reserve estimates are prepared by suitably qualified external consultants and Perseus personnel using industry standard techniques in accordance with the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (the JORC Code) and the National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). The estimates are subject to internal controls and sign off processes both at a site and corporate level. Perseus continues to develop its internal systems and controls.

Company Highlights

An increase in revenue resulting from a 3.9% higher achieved gold sales price, and 31.4% higher gold sales following the commencement of commercial production at Sissingué and higher production at Edikan. FINANCIAL RESULTS “ The group recorded a net loss after tax of $24.9 million for the period, compared to a net loss after tax of $83.1 million in the previous and 34,763 ounces of bullion on hand financial year. This is 70.0% less than the loss recorded in the prior period, and this improvement is predominantly due to the following:

$89.8 million, (30 June 2017: $43.0 million) including cash of $31.2 million ($24.0 million) and 34,763 ounces of bullion on hand (30 June 2017: 11,741 ounces), valued at A$58.6 million (30 June 2017: $19.0 million).

The group also held additional deposits totalling $12.9 million (30 June 2017: $12.4 million) supported performance guarantees for environmental rehabilitation of the EGM as at 30 June 2018. The ramping up of production at Edikan and commencement of commercial production at Sissingué has driven the increase in the cash and bullion balance. As at 30 June 2018, Perseus held available for sale financial instruments comprising security holdings in Manas Resources Limited (“Manas”) of $0.7 million (30 June 2017: $0.5 million) and in Amani of $0.7 million (30 June 2017: $2.8 million).

An increase in revenue resulting from a 3.9% higher achieved gold sales price, and 31.4% higher gold sales following the commencement of commercial production at Sissingué and higher production at Edikan;
Offset by an impairment of asset values along with write-offs totalling $24.3 million. These related to impairment of the carrying value of the Sissingué cash generating unit, mainly due to lower future expected gold prices; write-off of exploration assets due to the nondiscovery of commercially viable deposits at the Mbengué and Napie prospects in Cote d’Ivoire; as well as impairment of the group’s investment in Amani Gold Limited (“Amani”) due to the significant decline in the fair value of Amani’s shares; and

Debt finance

The Company’s US$20 million working capital debt facility provided by Macquarie to Perseus’s Ghanaian subsidiary that owns the EGM was converted into a US$30 million revolving line of credit during the year to improve flexibility in terms of managing working capital and to fund high priority exploration activities. The amount drawn under the facility as at 30 June 2018 was US$25 million.

A depreciation and amortisation expense of $119.6 million, representing an increase of 113% during the period due to higher rates of mining and processing at Edikan, and the inclusion of the investment in Sissingué within the capital base.

Cash, bullion and investments

The US$40 million Macquarie debt facility agreement to finance the Sissingué project was executed in July 2017. This facility was fully drawn down during the year and US$2 million was repaid in June 2018, reducing the amount outstanding at 30 June 2018 to US$38 million.

Based on the gold price of US$1,250/oz (30 June 2017: US$1,242/oz) and an A$:US$ exchange rate of 0.7411 as at 30 June 2018 (30 June 2017: 0.7687), the total value of available cash and bullion on hand was

Sustainability Report 2017-2018

OHS PERFORMANCE

Across its operations, Perseus recorded zero fatalities and a total of 52 workplace injuries, including first aid injuries, with key statistics detailed in Table 1 below. Both Sissingué and Yaouré improved on their previous year’s performance, however Edikan had four Lost Time Injuries (LTIs) and four Restricted Work Injuries (RWIs) which resulted in an increase in their LTI Frequency Rate (LTIFR). One LTI and one RWI were sustained by Perseus employees, with the other six injuries sustained by contractors.

There were no Lost Time or Restricted Work Injuries at Sissingué or Yaouré this year, however Sissingué recorded nine Medical Treatment Injuries and Yaouré recorded one.

Perseus Injury Statistics by Site (12 month rolling average frequency rates)

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Edikan Sissingué Yaouré
30 June 30 June 30 June 30 June 30 June 30 June
2018 2017 2018 2017 2018 2017
TRI Frequency Rate 1.56 1.80 4.41 11.23 1.79 6.37
LTI Frequency Rate 0.69 0.33 0.00 1.12 0.00 1.06
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Frequency Rates are calculated per 1 million manhours

** TRI = Total Recordable Injuries = Fatal Injuries + Lost Time Injuries + Restricted Work Injuries + Medical Treatment Injuries

ENVIRONMENTAL PERFORMANCE

Energy Efficiency

The Edikan Gold Mine sources its electricity from the grid but has diesel-powered generators on site to produce power should the grid be impacted. This year Edikan was supplied 134,106,000kWh from the grid and self-generated 2,332,629kWh.

At Sissingué, the site does not have access to grid electricity and so produced the 9,348,655kWh of power itself from onsite diesel-powered generators. Yaouré is not milling any ore, however it consumed 647,165kWh of electricity from the grid during the year.

Energy Intensity per Tonnes Milled (kWh/t)

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----- Start of picture text -----

25
20 Edikan
15
10 Sissingué
5
0
Jul 17 Aug 17 Sept 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18
----- End of picture text -----

Total electricity only – fuel for mobile equipment not included

Sustainability Report 2017-2018

Fresh Water Abstraction

Perseus has permits to extract fresh surface and groundwater at all three project sites, however Yaouré will not need to pump surface water until the construction phase of the project.

Edikan obtains most of its water for processing the ore from the Flotation Tailings Storage Facility (FTSF). In addition to the recycled water, the FTSF surface catchment area of approximately 380 hectares captures a significant amount of rainfall. Raw water and potable water is abstracted from bores, and occasionally raw water is supplemented by water pumped from mine pits.

As Sissingué commenced production in January 2018 and the Tailings Storage Facility (TSF) has been designed and constructed to store water as well as tailings, it was necessary to pump fresh water from the Bagoe River and bores into the TSF to store water for future processing. Abstracting water from the bores was also to assist with dewatering the mine pit. Bore water was also used for the raw water supply, the potable water treatment plant and for dust suppression.

Yaouré abstracted bore water to supply the site, and water at the accommodation in the town of Kossou was supplied by the national water provider.

Fresh Water Abstraction (kL)

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----- Start of picture text -----

225000 Sissingué
175000
125000
Edikan
75000
25000 Yaouré
0
Jul 17 Aug 17 Sept 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18
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PEOPLE

Local employment remains a key focus for Perseus and where feasible, personnel are employed from local communities.

Employees by Location in June 2018

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----- Start of picture text -----

100%
80%
60%
40%
20%
0%
Edikan Sissingué Yaouré
Expats Local Communities Other Nationals
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The percentage of expatriates at Edikan continues to decrease, down from 0.9% to 0.5%. 48.7% of the Sissingué workforce comes from nearby villages and towns, including the process operators, who had no previous process plant experience. At Yaouré, 95% of the workforce are Ivoirians and 77% of them are employed by contractors, including the guard force, drilling company and civil contractor.

At Sissingué, the Local Recruitment Committee (LRC) played a key role in the sourcing of local labour for Perseus and its contractors. The LRC was given 72 hours to nominate local candidates for positions.

The employing company was then able to interview and test the skills of the nominated candidates to ensure they had the relevant competencies. If no suitable local candidate was identified, then the employing company was able to employ from outside the local area.

Sustainability Report 2017-2018

Sissingué Local Recruitment Committee (LRC) Statistics

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Element Total Number
Positions advertised to the LRC 482
Candidates provided by LRC 708
Successful local candidates 292
Unsuccessful local candidates 416
Positions filled by non-local personnel 190
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Total Perseus Employment by Gender (%)

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10.9%
89.1%
Male Female
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Females continue to be employed in management positions across Perseus, including the Chief Financial Officer and Group HSE Manager in Perth, and women in superintendent or senior technical roles at both Edikan and Sissingué. Figure 10 details the split between male and female employees across Perseus at the end of June 2018.

Training

During the year twenty members of the senior management team at Edikan successfully completed the Mpontuo Leadership training course delivered by the LRMG Performance Agency from South Africa. The eleven month program consisted of four key elements:

Leading change;
Leading Self;
Leading People; and
Leading Collaboration.

Training was conducted on site, off site and via a virtual portal and included group coaching, individual coaching, individual feedback sessions and group mentoring sessions.

The program included small groups presenting business cases and implementing continuous improvement programs relevant to the Edikan Gold Mine. Groupings encouraged cross-disciplinary interaction and contributed to improved teamwork on the site.

The program was well received by participants, who commented:

It was very impressive course and good managerial and management skills were learned at the Elmina session. The getabtract materials were very useful. The whole program was very well organized.
This is one interesting training program I have experienced. It has really helped me develop useful skills in the area of Leadership.
I have really learned a lot from this training program and it will help me in leading and managing the team I work with. The getabstract material is very good and I will continue to refer to it.
The program has been very beneficial. I have learned a lot about team effectiveness and how to delegate.
This is a very good program, well thought out and helpful.
This is a wonderful program and has been well put together. Learning is progressive and I urge all participants to continue reading the getabstracts. This will help in improving leadership skills and take the company to the next level of growth.

Sustainability Report 2017-2018

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SOCIAL DEVELOPMENT

Community Support

Cash donations and in-kind support continued to be provided by Perseus Mining to its host communities. In addition to more structured programs, Edikan provided US$40,888 worth of services and equipment as well as US$89,506 in donations. Projects included:

Re-shaping of community roads;
Renovation of institutional buildings;
Providing clinic equipment to health facilities at Wassa Amenfi East;
Providing petrological microscopes to the University of Mines and Technology, Tarkwa; and

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AT SISSINGUÉ 0.5% of gold sales proceeds are paid to a Local Development Fund

Providing computer equipment to schools in the Jomoro constituency.

Two new boreholes were drilled at Ayanfuri and were mechanized to replace the Ayanfuri community water pump station that was close to the Esuajah North pit.

This year, Perseus contributed US$300,000 to the Edikan Trust Fund, which was established by Perseus to support the local communities. Some of the major projects funded during the year include the construction of school classrooms, health centres, nurse’s accommodation, community centres, an elevated water tank and student scholarships.

At Sissingué, 0.5% of gold sales proceeds are paid to a Local Development Fund to be used on projects in affected communities. In addition, funding was provided to the local communities to support initiatives such as sporting events and cultural events and ceremonies. Mosquito nets were provided to some community members and Perseus worked

EDIKAN CONTRIBUTED $300,000 to the Edikan Trust Fund in addition to $130,000 of services, equipment and donations

Sustainability Report 2017-2018

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with the National Health Authority to get free Meningitis vaccines administered to residents of Sissingué, M’Basso, Tialaka and Tengrela.

Over US$17,000 was contributed to support community activities at Yaouré, including football, cultural and other community events, the provision of school furniture and grading of roads.

Edikan community projects included:

Abenabena Health Centre.
Donation to Exploration communities and Scholarship beneficiaries from Nkonya community.
School quiz competition.
Cleanup exercise.
International Women’s Day.
Donation of mosquito nets to Pentecost Health Centre.
Friendly football games were organized for catchment communities to promote healthy living and strengthen relationships.

Community Engagement

Perseus engages with community leaders, local and district governments and community members to understand issues and respond to them promptly. A formal grievance management process allows our stakeholders across all of our operations to raise and resolve matters in a timely manner.

Community consultation committees are supported by Perseus to assist in the interaction between Perseus and its host communities.

THE VOLUNTARY PRINCIPLES ON SECURITY AND HUMAN RIGHTS (VPSHR)

Perseus developed a corporate Human Rights and Security Policy in 2017 and one of the policy commitments is to “ensure that our security contractors are trained on the VPSHR to increase their understanding of human rights considerations and to avoid security-related incidents with possible human rights implications.”

The three sites subsequently trained all security personnel, including employees, contractors and government forces, in the principles of the VPSHR and reasonable use of force.

Sustainability Report 2017-2018

OPERATIONS SUSTAINABILITY SNAPSHOT

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Enduring Prosperity Economic Contribution Social Impact
We are committed to providing Our financial contributions through We have invested in infrastructure
lasting benefits to the countries and payments to government, employees, projects which provide local
communities we operate in through suppliers and communities is a communities with services and
investment and localisation. significant driver of growth. opportunities to prosper.
95.6% local employees US$222m local supplier purchases US$4.4m community donations
99% of employees in Ghana and Perseus spent US$222 million Perseus has contributed US$4.4
91% of employees in Côte d’Ivoire with Ghanaian and Ivorian suppliers million directly to local communities
are local. and contractors in FY18, a 14% since 2010 through infrastructure,
increase on the US$194 million services and donations.
spent in FY17.
US$599m capital investment US$25m of royalties and taxes Community benefits realised
Perseus has invested US$599 million Perseus contributed US$25 million in Perseus has provided 387
in Ghana and Côte d’Ivoire. taxes and royalties to the Ghanaian scholarships, built 280 houses,
and Ivorian governments in FY18. constructed 6 schools and
established 2 health care centres
in the communities around our
operations.
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95.6% $599M local capital employees investment $222M local supplier purchases

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$4.4M community donations

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Sustainability Report 2017-2018

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Revenue and
6%
Financing Distribution (%) 16% 8%
70%
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Revenue Distribution (US$ Millions)

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250
200
150
100
50
0
Employees Taxes and government Local International Net financing
-50
(net of tax) royalties suppliers suppliers and other
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Government Revenue
6%
Breakdown (%)
14%
Government Revenue Breakdown
(US$ Millions) 20% 60%
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16
14
12
10
8
6
4
2
0
Royalties PAYE taxes Contractor withholding Other taxes
taxes and duties
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CONSOLIDATED FINANCIAL REPORT 2018

For the year ended 30 June 2018

Directors’ report Remuneration report Auditor’s independence declaration Financial statements Directors’ declaration Auditor’s independence report Mineral concession interests at 11 September 2018	37 44 68 69 129 130 137
Additional shareholder information	139

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36
Annual Report 2018
Perseus Mining Limited
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Directors’ Report

Your directors present their report on the consolidated entity (referred to hereafter as the “group”) consisting of Perseus Mining Limited (“Perseus” or the “company”) and its controlled entities for the year ended 30 June 2018 (the “period”). Perseus is a company limited by shares that is incorporated and domiciled in Australia. Unless noted otherwise, all amounts stated are expressed in Australian dollars.

DIRECTORS

The following persons were directors of Perseus during the period and up to the date of this report.

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Terence Sean Harvey Non-executive chairman
Jeffrey Allan Quartermaine Managing director and chief executive officer
Colin John Carson Executive director
Michael Bohm (Resigned 31 May 2018) Non-executive director
John Francis Gerald McGloin Non-executive director
Alexander John Davidson (Resigned 21 February 2018) Non-executive director
Sally-Anne Georgina Layman (Appointed 13 September 2017) Non-Executive Director
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PRINCIPAL ACTIVITIES

The principal activities of the group during the period were gold production, mineral exploration and gold project development in the Republic of Ghana (“Ghana”) and the Republic of Côte d’Ivoire (“Côte d’Ivoire”), both of which are located in West Africa.

REVIEW OF OPERATIONS

A review of the group’s operations during the year ended 30 June 2018 is provided in the section of this report headed ‘Review of Operations’, which immediately precedes the Directors’ Report.

FINANCIAL POSITION

At 30 June 2018, the group had net assets of $714.3 million (30 June 2017: $709.9 million) and an excess of current assets over current liabilities of $65.1 million (30 June 2017: $3.9 million). The group’s net assets remained relatively constant compared with the prior period predominately due to an increase in inventory offset by an increase in borrowings.

Directors’ Report (continued)

SUMMARY OF FINANCIAL INFORMATION

	30 June 2018 $’000	30 June 2017 (restated) $’000
Net loss after tax	(24,906)	(83,122)
Net increase / (decrease) in cash held	6,082	(128,365)
Net increase / (decrease) in bullion held1	39,664	4,200
Total assets	963,188	858,704
Shareholders’ equity	714,314	709,862

Notes:

1 Based on the 30 June 2018 gold price of US$1,250/oz (30 June 2017: US$1,242/oz, 30 June 2016: US$1,321/oz), an A$:US$ exchange rate of 0.7411 (30 June 2017: 0.7687, 30 June 2016: 0.7443), 34,763 ounces of bullion on hand (30 June 2017: 11,741 ounces, 30 June 2016: 8,322 ounces).

CORPORATE

Dividends

No dividends were paid during the period and the directors do not recommend payment of a dividend.

Equity capital raising

During the year, there were no equity capital raising activities.

Revenue protection

Of the 210,956 ounces of gold that were sold at EGM during the year at an average delivered price of US$1,288/oz, 18,000 ounces were delivered under forward sales contracts at a weighted average price of US$1,279/oz while the balance of the gold sales were made at prevailing spot prices or under short-term spot deferred contracts.

Of the 14,726 ounces of gold that were sold at SGM during the year at an average delivered price of US$1,330/oz, 4,650 ounces were delivered under forward sales contracts at a weighted average price of US$1,296/oz while the balance of the gold sales were made at prevailing spot prices or under short-term spot deferred contracts.

At 30 June 2018 there were cash flow designated hedge contracts in place for 129,350 ounces of gold with settlements scheduled between September 2018 and September 2020 with a weighted average price of US$1,312/oz. These include 62,350 ounces of cash flow designated hedge contracts at an average price of U$1,301/oz specifically to support the Sissingué project finance debt facility.

Metal Markets

From 1 July 2017 to 30 June 2018 the price of gold increased by 0.7% to US$1,250/oz, (30 June 2017: US$1,242/oz). Subsequent to 30 June 2018, the gold price has averaged at $1,224/oz in July and August 2018. The risk posed to Perseus’s business by possible downward movements in the gold price has, to a certain extent, been mitigated by hedging of a part of its gold production, as outlined above. Perseus has no reason to believe that the gold market fundamentals will not remain consistent with the current position over the short to medium term.

Directors’ Report (continued)

Outlook for financial year 2019

Parameter	Units	Production and Cost Guidance	Production and Cost Guidance	Production and Cost Guidance
		December 2018 Half Year	June 2019 Half Year	Full Fiscal Year 2019
Group Gold Production	‘000 Ounces	130-150,000	130-150,000	260-300,000
Average All-In Site Costs	$US per ounce	950-1,150	925-1,025	925-1,050

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

There were no significant changes in the state of affairs of the group during the period not otherwise disclosed in this report or the consolidated financial statements.

MATTERS SUBSEQUENT TO BALANCE DATE

Subsequent to the end of the period, the following event occurred:

On 8 August 2018, 1,366,666 performance rights that had previously been issued to employees were determined not to have vested under the terms of the Perseus’s Performance Rights Plan and as a result were cancelled.

LIKELY DEVELOPMENTS

The likely developments in the operations of the group and the expected results of those operations in the coming financial year are as follows:

The continued production of gold from the EGM and SGM in accordance with guidance;
Completion of the Yaouré FEED study, receipt of an exploitation permit, finalising financing and taking a decision to develop the Yaouré gold project; and
Ongoing mineral exploration.

Further commentary on planned activities over the forthcoming year is provided in the section of this report headed “Review of Operations”.

ENVIRONMENTAL REGULATIONS

Located in Ghana and Côte d’Ivoire, the group’s mining and processing operations, exploration and development projects are not subject to any significant Australian environmental laws. They are however, subject to environmental laws, regulations and permit conditions that apply in the relevant jurisdictions. There have been no known material breaches of environmental laws or permit conditions by the group while conducting operations in these jurisdictions during the period.

Directors’ Report (continued)

INFORMATION ON DIRECTORS

The names, qualifications, experience and special responsibilities of the directors in office during or since the end of the financial year are as follows. Directors were in office for the entire financial year unless otherwise stated.

Terence Sean Harvey – BA MA LL.B MBA – Non-executive chairman

(Appointed 2 September 2009 and Non-executive chairman effective 1 April 2017)

Mr. Sean Harvey has extensive experience in investment banking and the resources sector and brings valuable experience in capital markets to the board to assist the company as it seeks to broaden global market awareness of its growth into a West African gold producer. Mr. Harvey holds an Honours BA degree in Economics and Geography and an MA in Economics, both from Carleton University, an LLB from the University of Western Ontario and an MBA from the University of Toronto and he is a member of the Law Society of Upper Canada. Mr. Harvey is a member of the company’s audit and risk committee and remuneration committee.

During the past three years he has also served as a director of the following listed companies:

Other current directorships:

Other current directorships:
Victoria Gold Corporation	appointed 31 July 2007
Serabi Gold plc	appointed 30 March 2011
Sarama Resources Ltd	appointed 2 November 2011
Abacus Mining & Exploration Corporation	appointed 1 April 2016
Carube Copper Corp	appointed 24 May 2018

Jeffrey Allan Quartermaine – BE (Civil), MBA, FCPA – Managing director and chief executive officer

(Appointed 1 February 2013)

The managing director and chief executive officer, Mr. Jeffrey Quartermaine, was appointed on 1 February 2013 after previously serving as the group’s chief financial officer from 2010 to 2013. Jeff Quartermaine has more than 25 years of experience in senior financial and strategic management roles with ASX and TSX-listed resources companies. He is a Fellow of the Society of Certified Practising Accountant (FCPA) and holds both business management (MBA) and engineering qualifications (BE). Mr. Quartermaine has extensive experience as chief financial officer and chief operating officer of a number of Australian public companies. During the past three years he has not served as a director of any other listed companies.

Colin John Carson – CPA, MAICD, FGIA, FCIS – Executive director

(Appointed 24 October 2003)

Mr. Colin Carson has served as a director and company secretary of a number of Australian public companies since the early 1980s. As an executive director of Perseus, Mr. Carson is responsible for the company’s compliance, corporate and legal matters. During the past three years he has also served as a director of the following listed companies:

Former directorships in the last 3 years:

Manas Resources Limited appointed 17 October 2007 and resigned 21 November 2016

Directors’ Report (continued)

Michael Andrew Bohm – B.AppSc (Mining Eng.), MAusIMM – Non executive director

(Appointed 15 October 2009 and resigned 31 May 2018)

Mr. Michael Bohm is a mining engineer with extensive experience in operations management, evaluation and project development in Australia, Northern Europe, SE Asia, North and South America. Mr. Bohm has more than 24 years minerals industry experience predominantly in the gold, nickel and diamond sectors in both open pit and underground mining environments. Mr. Bohm served on the company’s audit and risk, remuneration and technical committees. Mr. Bohm was the chairman of both the remuneration committee and the technical committee. During the past three years he has also served as a director of the following listed companies:

Other current directorships:

Ramelius Resources Limited appointed 29 November 2012 Cygnus Gold Limited appointed 30 September 2016 Mincor Resources NL appointed 1 January 2017 Former directorships in the last 3 years: Tawana Resources NL appointed 1 August 2015 and resigned 21 October 2016 Berkut Minerals Limited appointed 1 July 2016 and resigned 30 June 2017

John Francis Gerald McGloin – BEng. – Non executive director

(Appointed 19 April 2016)

Mr. McGloin is a geologist and graduate of Camborne School of Mines. He has worked for many years in Africa within the mining industry before moving into consultancy and subsequently into investment banking. Mr. McGloin joined Collins Stewart following four years at Arbuthnot Banking Group where he lead the mining team. Prior to that Mr. McGloin was the mining analyst at Evolution Securities. Over the years, Mr. McGloin has acted for many mining companies including African Platinum, Randgold Resources, Avocet Mining, European Goldfields and Titanium Resources Group. Mr. McGloin served as Executive Chairman of Amara Mining plc from 28 May 2012 to 18 April 2016 and as Chief Executive Officer of Amara from 7 August 2014 to 18 April 2016. Mr. McGloin serves on the company’s audit and risk committee and is chair of the remuneration committee. During the past three years he has also served as a director of the following listed companies:

Other current directorships:

Caledonia Mining Corporation plc appointed 26 July 2016 Former directorships in the last 3 years: Amara Mining plc appointed 28 May 2012 and resigned 18 April 2016

Alexander John Davidson – BSc., MSc. – Non executive director

(Appointed 19 April 2016 and resigned on 21 February 2018)

Mr. Davidson has held a number of senior exploration roles within major mining companies, including as executive vice president of exploration and corporate development for Barrick Gold. Prior to joining Barrick, Alex was vice president, exploration for Metall Mining Corporation and has over 25 years of experience in designing, implementing and managing gold and base metal exploration and acquisition programmes throughout the world. Mr. Davidson served as a Non-Executive Director of Amara Mining plc from 25 November 2013 to 18 April 2016. Mr. Davidson serves on the company’s technical committee. During the past three years he has also served as a director of the following listed companies:

Directors’ Report (continued)

Other current directorships:

Americas Silver Corporation appointed 23 December 2014 Yamana Gold Inc appointed 31 August 2009 Capital Drilling Ltd appointed 28 May 2010 NuLegacy Gold Corporation appointed 15 September 2014 Orca Gold Inc appointed March 2013

Former directorships in the last 3 years: Amara Mining plc appointed 25 November 2013 and resigned 18 April 2016

Sally-Anne Georgina Layman – BCom., BEng. – Non executive director

(Appointed 13 September 2017)

Ms Layman is a mining engineer and qualified accountant with over 22 years of experience in the resources sector including roles in both mining operations and corporate finance. Ms Layman has gained significant international and multi-commodity experience in these roles. Most recently, Ms Layman was a Division Director of Macquarie Group Ltd and Joint Head of the Perth office for the Metals, Mining and Agriculture Division. Ms Layman is the chair of the company’s audit and risk committee and also serves on the remuneration committee. During the past three years she has also served as a director of the following listed companies:

Other current directorships:

Imdex Ltd Gascoyne Resources Ltd Pilbara Minerals Ltd

appointed 6 February 2017 appointed 7 June 2017 appointed 20 April 2018

Former directorships in the last 3 years:

None.

Company secretary

Martijn Paul Bosboom – LL.B, LL.M, FGIA, FCIS, MAICD

(Appointed 18 November 2013)

Mr. Martijn Bosboom is also the company’s general counsel and has more than 25 years of international in-house and private practice experience in both common law and civil law jurisdictions. Mr. Bosboom holds a Bachelor of Laws from the University of Western Australia and a Master of Laws from the University of Leiden, the Netherlands. Mr. Bosboom is a fellow of the Governance Institute of Australia (“GIA”) and has completed the GIA’s Graduate Diploma of Applied Corporate Governance.

Directors’ Report (continued)

DIRECTORS’ MEETINGS

The number of meetings of the directors and the number of meetings attended by each director during the year ended 30 June 2018 were:

30 June 2018 were:
	Full meetings of		Audit committee		Remuneration committee meetings		Technical committee meetings
	directors		meetings
	A	B	A	B	A	B	A	B
T. S. Harvey	8	8	3	3	2	2	-	-
J. A. Quartermaine	8	8	-	-	-	-	-	-
C. J. Carson	8	8	-	-	-	-	-	-
M. A. Bohm	7	7	3	3	2	2	2	2
J. F. McGloin	8	8	-	-	1	1	2	2
A. J. Davidson	5	5	-	-	-	-	2	2
S.G. Layman	6	6	2	2	1	1	-	-

A = Number of meetings attended

B = Number of meetings held during the time the director held office or was a member of the relevant committee during the period.

DIRECTORS’ INTERESTS

The following relevant interests in shares, options and performance rights of the company were held directly and beneficially by the directors as at the date of this report:

	Name	Fully paid ordinary shares	Options to acquire ordinary shares	Performance rights	Warrants

Non-executive directors	T S Harvey	2,300,000	-	-	-
	J F McGloin	1,282,907	-	-	641,453
	S G Layman	-	-	-	-

Executive directors	J A Quartermaine	1,000,000	-	1,666,667	-
	C J Carson	1,482,300	-	1,300,000	-

ROUNDING

The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (unless otherwise stated) under the option available to the company under ASIC Corporations (Rounding in Financial / Directors’ Reports) Instrument 2016/191 (Rounding Instrument). The company is an entity to which the class order applies.

Directors’ Report (continued)

REMUNERATION REPORT (AUDITED)

This report outlines the remuneration arrangements in place for Perseus’s non-executive directors, executive directors and other key management personnel (“KMP”) for the financial year ended 30 June 2018 in accordance with the Corporations Act 2001 (Cth) (the “Act”) and its regulations. This information has been audited as required by section 308(3C) of the Act.

The remuneration report has been set out under the following main headings:

Principles used to determine the nature and amount of remuneration
Details of remuneration (including link to performance)
Service agreements
Share-based compensation
Additional information

1. Principles used to determine the nature and amount of remuneration

Remuneration committee

The remuneration committee (the “committee”) assists the board to fulfill its responsibilities to shareholders and other stakeholders by ensuring the group has remuneration policies for fairly and competitively rewarding executives with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive management team. The committee’s decisions on reward structures are based on the state of the market for experienced resources industry executives, remuneration packages for executives and employees performing comparative roles in other companies in the resources industry and the size and complexity of the group. The committee comprises two independent non-executive directors.

The committee is primarily responsible for making recommendations to the board on:

non-executive directors’ fees;
executive remuneration (directors and other executives); and
the over-arching executive remuneration framework and incentive plan policies.

For further information on the remuneration committee’s role, responsibilities and membership the reader is referred to the committee’s charter which is available on www.perseusmining.com.

Use of remuneration advisors

Independent remuneration consultants are engaged by the committee from time to time to ensure the group’s remuneration system and reward practices are consistent with current market practices. Various remuneration arrangements in relation to the company’s key management personnel during previous financial years were based on recommendations made by an independent remuneration consultant, PJ Kinder Consulting. Advice was last sought out from PJ Kinder Consulting in 2014. Instructions and scope of terms for the engagement of PJ Kinder Consulting were issued by the committee.

Directors’ Report (continued)

REMUNERATION REPORT (continued)

The board is satisfied that the remuneration recommendations made by PJ Kinder Consulting were made free from undue influence by the member or members of the key management personnel to whom the recommendations relate. The board’s reasons for stating so are:

(i) that the instructions and terms were issued and set by the committee;
(ii) PJ Kinder Consulting discussed its findings and recommendations with the committee only and not any members of the management;
(iii) PJ Kinder Consulting’s fees were based on a time basis at rates commensurate with such professional services; and
(iv) the committee had satisfied itself that PJ Kinder Consulting is a qualified and well-credentialed firm for the purposes of such professional advice and is independent from Perseus.

Policy and structure of non-executive directors’ remuneration

Perseus’s non-executive director remuneration policy aims to reward the directors fairly and responsibly with regards to the demands which are made on, and the responsibilities of, the directors. It seeks to set aggregate remuneration of non-executive directors at a level which provides Perseus with the ability to attract and retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.

With the assistance of external remuneration consultants from time to time, the committee reviews fees paid to non-executive directors on an annual basis and makes recommendations to the board. The committee considers fees paid to non-executive directors of comparable companies when undertaking the annual salary review process.

Any equity components of non-executive directors’ remuneration, including the issue of options or performance rights, are required to be approved by shareholders prior to award.

Directors’ fee limits

The aggregate amount of fees payable to non-executive directors is subject to periodic review and approval by shareholders. The maximum amount of directors’ fees that is currently approved for payment to non-executive directors is $900,000 per annum (excluding the value of approved share based payments). The current limit of non-executive directors’ fees was approved by shareholders at the 2016 Annual General Meeting.

Directors’ fees framework

Non-executive directors’ remuneration consists of a base fee plus 9.5% statutory superannuation where the director is covered by Australian superannuation guarantee legislation. Board fees are not paid to executive directors as the time spent on board work and the responsibilities of board membership are considered in determining the remuneration package provided to executive directors as part of their normal employment conditions.

The remuneration of the non-executive directors for the year ended 30 June 2018 is detailed below.

Directors’ Report (continued)

REMUNERATION REPORT (continued)

Table 1 – Annual board and committee fees payable to non-executive directors

Table 1 – Annual board and committee fees payable to	non-executive directors
Position	Annual fees1 from 1 July 2017 to 30 June 2018 $	Annual fees1 from 1 July 2018 $
Base fees
Chair	170,000	170,000
Other non-executive directors	85,000	85,000
Additional fees
Audit committee – chair	17,000	17,000
Audit committee – member	8,500	8,500
Remuneration committee – chair	12,750	12,750
Remuneration committee – member	6,800	6,800
Technical directors – chair2	14,785	-
Technical directors – members2	7,650	-

1 Inclusive of statutory superannuation where applicable.

2 Technical committee was disbanded on 1 June 2018.

Directors’ retirement benefits

No retirement benefits are paid to non-executive directors other than the statutory superannuation contributions (if applicable) of 9.5% for the year ending 30 June 2018, required under Australian superannuation guarantee legislation.

Policy on executive directors’ and other senior executives’ remuneration – continued

Perseus aims to reward its executive directors and other senior executives with a level of remuneration commensurate with their position and responsibilities within the group. In doing so, it aims to:

provide competitive rewards that attract, retain and motivate high calibre executives;
align executive rewards with the achievement of strategic objectives and performance of the group and the creation of value for shareholders;
ensure total remuneration is competitive and reasonable; and
comply with applicable legal requirements and appropriate standards of governance.

In consultation with external remuneration consultants, the group has developed an executive remuneration framework that is market competitive and is consistent with the reward strategy of the organisation.

Executive remuneration structure

The executive remuneration framework has two components, namely:

fixed salary package including base salary and benefits such as superannuation; and
variable remuneration.

Directors’ Report (continued)

REMUNERATION REPORT (continued)

Fixed salary package

The fixed component of an executive’s remuneration comprises base salary and superannuation contributions. The size of the executive’s salary package is based on the scope of each executive’s role, the level of knowledge, skill and experience required to satisfactorily perform the role and the individual executive’s performance in the role. The proportion of an executive’s total fixed salary package that is paid as superannuation is at the executive’s discretion, subject to compliance with relevant superannuation guarantee legislation.

The committee annually reviews each executive’s performance and benchmarks the executive’s salary package against appropriate market comparisons using information and advice provided by external consultants. There are no guarantees of salary increases included in any executive’s employment contract.

Variable remuneration

The objective of providing a variable “at risk” component within executive directors’ and senior executives’ total remuneration packages is to directly align a proportion of their remuneration to achievement of the group’s financial and strategic objectives with the objective of creating shareholder wealth. The group has a remuneration framework which sets out the basis of short term incentives (“STI”) and long term incentives (“LTI”), these are discussed further below.

Receipt of variable remuneration in any form is not guaranteed under any executive’s employment contract.

The remuneration of executive directors and senior executives including both fixed and variable remuneration components for the year ended 30 June 2018 is detailed in table 2 of this report.

Short term incentives (STI)

The STI is the annual component of the “at risk” reward opportunity, which takes the form of a cash bonus. The STI is reliant on the achievement of job related KPIs, both financial and non-financial, over a mix of group, function and individual targets. The objective of a STI is to align the performance of the individual to the short term operational and financial objectives of the group.

After the board evaluates and approves the group’s operating budget for the forthcoming financial year, a series of physical, financial and business sustainability targets are set. These are used to determine the KPIs of the CEO and executives, their direct reports and so on down the organisation structure.

These performance measures are chosen to represent the key drivers of short term success for the group with reference to the group’s long-term strategy. The CEO and executives have a target STI opportunity of 0% up to 33% of fixed remuneration.

KPIs are determined in three discrete groups: Group KPIs; Functional KPIs and Personal KPIs. These KPIs and the weighting placed on each indicator for each individual will differ depending on the role performed in the group, weightings for the CEO and executives are shown below.

	Potential STI as a percentage of fxed remuneration	Allocation Factor	Allocation Factor	Allocation Factor
		Group KPIs	Function KPIs	Personal KPIs
CEO	30%	75%	0%	25%
Executive	30%	50%	25%	25%

Group KPIs include achievement of defined targets relative to budget relating to gold production and weighted average all in site cost as well as targeted net cash flow per share and share price metrics.

Directors’ Report (continued)

REMUNERATION REPORT (continued)

Functional and personal KPIs are tailored to the individual with regard to their role in the group and may include physical, financial and social licence parameters relevant to the performance of their specific function as well as qualitative assessment of effort applied, leadership, communications, risk management etc. on a personal level.

On an annual basis the board will evaluate the group’s physical, financial and business sustainability targets to determine whether these were met, give consideration to the group’s external environment including the outlook for future years and then determine the STI pool that is available for payment to individuals. Group performance is measured on the basis of achievement of target, up to 110% of target and greater than 110% of target. Functional and Personal performance is ranked on a scale of 1 to 5, with 1 being unsatisfactory and 5 being outstanding. Each individual has a performance review conducted to measure performance against set Personal KPIs.

The remuneration committee will then, after consideration of performance against KPIs and recommendation from the CEO, determine the amount (if any) of the STI to recommend be paid to each executive. The board has discretion in the approval of STI outcomes.

STI payments are awarded after the conclusion of the assessment period and confirmation of financial results / individual performance for all eligible participants to the extent they reach specific targets that were set at the beginning of the financial year. The cash bonuses are inclusive of superannuation. Given the group has a LTI plan the board does not consider it appropriate to defer a portion of the STI.

STI payments were made in July 2017 as determined by the remuneration committee with due regard to the performance of the group and the respective individuals throughout the financial year ended 30 June 2017. These STI payments as a percentage of total remuneration in the financial year ended 30 June 2018 were as follows:

Mr Carson	7%	Ms Brown	8%	Mr Bosboom	9%
Mr Thompson	8%	Mr Scully	5%	Mr Jones	8%
Mr Woodall	7%

Although eligible to receive an STI payment under Perseus’s STI plan in respect of the financial year ended 30 June 2017, the CEO and Managing Director elected not to accept any payment.

The STI framework is subject to regular review. An updated STI framework is being implemented for the June 2019 financial year.

Long term incentives (LTI)

The LTI is the “at risk” component that takes the form of an equity based incentive designed to attract, motivate and retain high quality employees at the same time as aligning their interests with those of the group’s shareholders. LTI awards are made under the Performance Rights Plan (“PRP”) and give eligible employees rights to acquire shares in Perseus subject to vesting conditions.

The company uses both total shareholder return (“TSR”) and individual achievement of a KPI rating of 3 or more over the vesting period as the performance measure for the LTI. TSR was selected as the LTI performance measure as it links rewards of the executives to the creation of long term shareholder wealth. Furthermore vesting only occurs if the group performs in the 50[th] percentile of its peer group or above, the greater the outperformance the greater the reward to the executive. The CEO and executives have a target LTI opportunity of up to 40%.

Directors’ Report (continued)

REMUNERATION REPORT (continued)

The peer group is chosen for comparison, having considered the following factors: ASX listing; TSX listing; commodity focus; geographic focus; and business development stage. The peer group for currently outstanding performance rights is shown below:

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Acacia Mining plc [] Medusa Mining Limited Resolute Mining Limited Semafo Inc
Golden Star Resources Ltd Endeavour Mining Corp Kingsgate Consolidated Regis Resources
Teranga Gold Corporation St Barbara Mines Limited
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Formerly African Barrick Gold plc

The peer group for performance rights to be issued in the future is shown below:

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Acacia Mining plc Endeavour Mining Corp Roxgold Inc. Hummingbird Resources Ltd
Golden Star Resources Ltd Resolute Mining Limited Asanko Gold Inc. Cardinal Resources Ltd
Teranga Gold Corporation Semafo Inc West African Resources Ltd
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Subject to the performance conditions, the vesting and measurement periods for the rights range from one and a half to three years from the commencement of the period. The vesting schedule is as follows:

three years from the commencement of the period. The vesting	schedule is as follows:
Relative TSR over the vesting period	Proportion of performance rights vested
Below the 50thpercentile	0%
At the 50thpercentile	50%
Between the 50thand the 75thpercentile	Pro-rata between 50% and 100%
Above the 75thpercentile	100%

TSR performance and individual KPI performance is monitored on an annual basis. If the hurdles are not achieved during the performance period, the rights may lapse and no re-testing of rights is permitted. Table 7 provides details of rights awarded and vested during the year and table 5 provides details of the value of rights awarded, exercised and lapsed during the year.

Where a participant ceases employment for any reason, any unvested rights will lapse and be forfeited, subject to the discretion of the board in the case of death, disability, retirement or redundancy. In the event of a change of control of the group all unvested rights automatically vest and are automatically exercised.

The new performance rights that were issued on 3 August 2017 have a 3-year vesting period.

The table below shows the portion of the share-based payments expense for performance rights, illustrated at table 2, that lapsed as at the date of this report.

that lapsed as at the date of this report.
Name	Share based payments (Performance rights) $
Jeffrey Quartermaine	141,297
Colin Carson	51,175
Christopher Woodall	68,417

Directors’ Report (continued)

REMUNERATION REPORT (continued)

2. Details of remuneration (including link to performance)

Details of the remuneration of the directors and the KMP of Perseus and the group are set out in table 2 below. KMP (as defined in AASB 124 Related Party Disclosures ) of the group are those persons having authority and responsibility for planning, directing and controlling the major activities of Perseus and the group, directly or indirectly, including any director (whether executive or otherwise) of the parent company. At the date of this report, the KMP of the group are the directors of Perseus (refer to pages 40 to 42 for details) plus the following senior executives.

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Ms Elissa Brown Chief financial officer
Mr Christopher Woodall Chief operating officer
Mr Martijn Bosboom General counsel and company secretary
Mr Paul Thompson Group general manager – technical services
Mr Matthew Scully Group general manager – project development
Mr Douglas Jones Group general manager – exploration and geology
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Company performance

The board issues performance rights to the executives of the group, as well as other employees with a certain level of influence over the group’s performance. The performance measures that drive the vesting of these LTIs include Perseus’s TSR relative to its peer group and the individual’s performance over the relevant vesting period. Perseus’s performance during the 12 months to 30 June 2018 and the four previous years are set out below:

Year ended 30 June	2018	2017 (restated)	2016	2015	2014
Net (loss) / proft after income tax ($’000)	(24,906)	(83,122)	(37,546)	92,167	(32,060)
Basic (loss) / proft per share (cents)	(2.50)	(7.74)	(5.74)	16.67	(6.43)
Market capitalisation ($’000)	444,975	299,633	522,420	226,462	218,562
Closing share price ($)	0.43	0.29	0.52	0.43	0.42
TSR – 1 year (%)	41.5	(42.1)	27.0	2.4	(5.7)
TSR – 3 year rolling (%)	(2.3)	(14.7)	(33.5)	(82.7)	(84.2)
Median peer group TSR – 1 year (%)1	15.7	0.2	85.4	(22.0)	20.1
Median peer group TSR – 3 year rolling (%)1	80.4	43.1	56.4	(65.5)

Notes:

1 Only relevant for the financial years after and including 2013 as prior years would have had a different peer group.

For all performance rights granted after 1 July 2016, based on the group’s performance over the relevant period up to 30 June 2018, Perseus is below the 50[th] percentile of the peer group. If the ranking remains unchanged at the end of the measurement period of each performance right tranche granted, then, subject to the Board not exercising its discretion otherwise, performance rights would not vest regardless of achievement of minimum individual employee KPI rating requirements.

Directors’ Report (continued)

	Perfor- mance related %		- - - - - - - - - - - -		- -
	Total $		187,404 130,378 111,031 121,125 93,783 93,013 60,042 98,167 79,420 - - 138,975		531,680 581,658
Share-based payments	Performance Rights(i) $		- - - - - - - - - - - -		- -
	Termination / resignation payments $		- - - - - - - - - - - -		- -
Post- employment	Super- annuation $		- - 9,633 10,509 - - - - - - - 12,057		9,633 22,566
Long-term	Long service leave movement $		- - - - - - - - - - - -		- -
Short-term	Annual leave movement $		- - - - - - - - - - - -		- -
	Cash bonus $		- - - - - - - - - - - -		- -
	Salary / fees $	Non-executive directors	187,404 130,378 101,398 110,616 93,783 93,013 60,042 98,167 79,420 - - 126,918	Sub-total non-executive directors	522,047 559,092
			2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017		2018 2017
			Sean Harvey(ii) Michael Bohm(iii) John McGloin Alexander Davidson(iv) Sally-Anne Layman(v) Reginald Gillard(ii)

Directors’ Report (continued)

	Perfor- mance related %		27 31 32 35		29 32		22 24
	Total $		1,091,282 1,146,931 590,563 578,805		1,681,845 1,725,736		2,213,525 2,307,394
Share-based payments	Performance Rights(i) $		290,070 299,014 149,821 174,149		439,891 473,163		439,891 473,163
	Termination / resignation payments $		- - - -		- -		- -
Post- employment	Super- annuation $		25,000 35,000 24,000 24,000		49,000 59,000		58,633 81,566
Long-term	Long service leave movement $		17,298 14,653 11,940 10,695		29,238 25,348		29,238 25,348
Short-term	Annual leave movement $		43,351 37,159 11,229 (3,733)		54,580 33,426		54,580 33,426
	Cash bonus $		- 55,542 40,959 28,444		40,959 83,986		40,959 83,986
	Salary / fees $		715,563 705,563 352,614 345,250	ors	1,068,177 1,050,813		1,590,224 1,609,905
			2018 2017 2018 2017		2018 2017		2018 2017
		Executive directors	Jeffrey Quartermaine Colin Carson	Sub-total executive direct		Directors total

Directors’ Report (continued)

	Perfor- mance related %		21 34 25 30 22 37 19 41 12 37 - (30) 18 18 - (5)		20 29
	Total $		535,819 574,839 646,829 534,462 441,710 530,214 436,793 570,204 381,529 274,525 - 111,730 392,162 368,730 - 204,549		2,834,842 3,169,253
Share-based payments	Performance Rights(i) $		67,399 165,012 115,778 158,617 60,332 169,056 50,197 204,838 25,042 100,725 - (33,413) 39,377 65,370 - (60,404)		358,125 769,801
	Termination / resignation payments $		- - - - - - 26,962 - - -		- 26,962
Post- employment	Super- annuation $		20,049 19,616 25,000 27,551 25,000 35,000 25,000 35,000 25,000 13,881 - 7,359 25,000 35,000 - -		145,049 173,407
Long-term	Long service leave movement $		9,459 7,431 2,591 532 8,349 6,019 6,302 2,334 1,687 256 - (539) 2,091 470 - -		30,479 16,503
Short-term	Annual leave movement $		25,442 (5,298) 33,235 21,083 (4,770) (9,730) 5,423 9,407 10,769 13,545 - 8,080 (6,481) 2,890 - 22,023		63,618 62,000
	Cash bonus $		43,519 28,444 45,225 - 37,799 25,369 34,871 30,750 19,031 - - - 32,175 - - 49,770		212,620 134,333
	Salary / fees $		369,951 359,634 425,000 326,679 315,000 304,500 315,000 287,875 300,000 146,118 - 103,281 300,000 265,000 - 193,160		2,024,951 1,986,247
			2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017		2018 2017
		Senior executives	Elissa Brown Christopher Woodall(ii) Martijn Bosboom Paul Thompson Matthew Scully(ii) Adam Smits(iv) Douglas Jones(v) Brent Horochuk(vi)	Senior executives total

Directors’ Report (continued)

REMUNERATION REPORT (continued)

3. Service agreements

Remuneration and other terms of employment for the chief executive officer and managing director, chief financial officer and the other KMP are also formalised in employment agreements. Major provisions of the agreements relating to remuneration of the CEO are set out below.

Remuneration of the chief executive officer, Mr. Jeffrey Quartermaine

Mr. Jeffrey Quartermaine was appointed on 1 February 2013 as managing director and CEO and an employment contract with Perseus was entered outlining the terms of his employment.

Under his employment contract with Perseus, Mr. Quartermaine is currently entitled to receive fixed remuneration including a base salary and superannuation, plus variable remuneration including performance rights, options and cash bonuses determined under the STI / LTI plans and at the discretion of the board. A summary of these and other key terms of Mr. Quartermaine’s employment contract are described below and set out in table 3 below.

Fixed remuneration – Mr. Quartermaine’s annual salary is set at $740,563 per annum, inclusive of statutory superannuation entitlements.

Variable remuneration – Mr. Quartermaine is eligible to participate in the group’s STI and LTI scheme as described above.

Statutory entitlements

Mr. Quartermaine is entitled to 10 days sick leave per annum, 20 days of annual leave and long service leave of 13 weeks after 10 years of service.

Termination of contract

Perseus can terminate Mr. Quartermaine’s contract without notice under certain circumstances including but not limited to material breaches of contract, grave misconduct, dishonesty, fraud or bringing the group into disrepute. Mr. Quartermaine may terminate the contract by giving Perseus three months’ notice, whilst Perseus may terminate the contract by giving Mr. Quartermaine the greater of six months or a period that is not less than that specified by the Fair Work Act 2009 (Cth) and the National Employment Standards. In the case of Perseus, it may at its sole discretion, terminate the contract sooner than the conclusion of the notice period by choosing to pay Mr. Quartermaine in lieu of the notice period.

If the terms of Mr. Quartermaine’s employment contract are materially changed to the detriment of the chief executive officer then he is entitled to receive an amount of money from Perseus that is equivalent to two months of his originally contracted gross base salary ($850,000 per annum prior to a 15% reduction taken by directors on 1 July 2013) for each year of employment by Perseus with a minimum payment equivalent to six months of his originally contracted gross base salary and a maximum of twelve months of his originally contracted gross base salary.

Directors’ Report (continued)

Termination provision	Applicable on early termination by the company(vi) Applicable on early termination by the company(vi) Applicable on early termination by the company(vi) Applicable on early termination by the company(vi) Applicable on early termination by the company(vi) Applicable on early termination by the company(vi) Applicable on early termination by the company(vi) Applicable on early termination by the company(vi)	Notes: (i) Mr Quartermaine is required to provide 3 months’ notice on resignation; the company is required to provide 6 months’ notice. (ii) Mr Woodall was appointed Chief Operating Offcer on 19 September 2016. (iii) Mr Bosboom is required to provide 2 months’ notice on resignation; the company is required to provide 3 months’ notice. (iv) Mr Scully was appointed Project Director on 5 December 2016. (v) Represents current fxed remuneration of key management personnel from 1 July 2018. (vi) Termination benefts are payable on early termination by the company. Other than for gross misconduct, executives receive payment of between 2 to 12 months of originally contracted salary.
Variable remuneration	STI / LTI plan STI / LTI plan STI / LTI plan STI / LTI plan STI / LTI plan STI / LTI plan STI / LTI plan STI / LTI plan
Fixed remuneration (including base salary and superannuation as applicable)(v)	$740,563 $379,250 $390,000 $450,000 $340,000 $340,000 $325,000 $325,000
Notice period	6 months(i) 3 months 3 months 3 months 3 months(iii) 3 months 3 months 3 months
Contract duration	No fxed term and review annually No fxed term and review annually No fxed term and review annually No fxed term and review annually No fxed term and review annually No fxed term and review annually No fxed term and review annually No fxed term and review annually
Employing company	Perseus Mining Limited Perseus Mining Limited Perseus Mining Limited Perseus Mining Limited Perseus Mining Limited Perseus Mining Limited Perseus Mining Limited Perseus Mining Limited
Name and job title	Jeffrey Quartermaine(i) CEO & managing director Colin Carson Executive director Elissa Brown Chief fnancial offcer Christopher Woodall(ii) Chief operating offcer Martijn Bosboom(iii) General counsel and company secretary Paul Thompson Group general manager – technical services Matthew Scully(iv) Project director Douglas Jones Group general manager – exploration

Directors’ Report (continued)

REMUNERATION REPORT (continued)

4. Share based compensation

KMP are eligible to participate in Perseus’s PRP. The terms and conditions of the performance rights affecting remuneration of directors and KMP in the current or a future reporting period are set out below. Performance rights granted carry no dividend or voting rights. When exercisable, the performance rights are convertible into one ordinary share per right. Further information is set out in note 24 to the financial statements.

Table 4 – Key terms of share based compensation held by KMP and directors as at 30 June 2018

Type	Grant date	Exercise price	Fair value at grant date	End of measurement period	% of grant vested	Expiry date
Performance right(i)	20 November 2015	nil	$0.33	30 June 2018	-	31 December 2018
Performance right(ii)	25 November 2016	nil	$0.42	30 June 2018	-	31 December 2018
Performance right(ii)	12 October 2016	nil	$0.33	30 June 2018	-	31 December 2019
Performance right(ii)	12 October 2016	nil	$0.37	30 June 2019	-	31 December 2019
Performance right(iii)	25 November 2016	nil	$0.44	31 December 2018	-	30 June 2019
Performance right(iv)	25 November 2016	nil	$0.44	30 June 2019	-	31 December 2019
Performance right(v)	3 August 2017	nil	$0.22	30 June 2020	-	30 June 2027
Performance right(v)	24 November 2017	nil	$0.25	30 June 2020	-	30 June 2027

(i) The assessed fair value at grant date of performance rights granted to the individuals is allocated equally over the performance period (36 month period from 1 July 2015 to 30 June 2018 over which the individuals and the company’s performance is assessed), and the amount is included in the remuneration tables above. Fair values at grant date are determined using a Monte Carlo Simulation pricing model. Further information is set out in note 24 to the financial statements. These rights expired after the period due to vesting conditions not having been met.

(ii) The assessed fair value at grant date of performance rights granted to the individuals is allocated equally over the performance period (24 month period from 1 July 2016 to 30 June 2018 and 36 month period from 1 July 2016 to 30 June 2019 over which the individuals and the company’s performance is assessed), and the amount is included in the remuneration tables above. Fair values at grant date are determined using a Monte Carlo Simulation pricing model. Further information is set out in note 24 to the financial statements. These rights expired after the period due to vesting conditions not having been met.

(iii) The assessed fair value at grant date of performance rights granted to the individuals is allocated equally over the performance period (30 month period from 1 July 2016 to 31 December 2018 over which the individuals and the company’s performance is assessed), and the amount is included in the remuneration tables above. Fair values at grant date are determined using a Monte Carlo Simulation pricing model. Further information is set out in note 24 to the financial statements.

(iv) The assessed fair value at grant date of performance rights granted to the individuals is allocated equally over the performance period (36 month period from 1 July 2016 to 30 June 2019 over which the individuals and the company’s performance is assessed), and the amount is included in the remuneration tables above. Fair values at grant date are determined using a Monte Carlo Simulation pricing model. Further information is set out in note 24 to the financial statements.

(v) The assessed fair value at grant date of performance rights granted to the individuals is allocated equally over the performance period (36 month period from 1 July 2017 to 30 June 2020 over which the individuals and the company’s performance is assessed), and the amount is included in the remuneration tables above. Fair values at grant date are determined using a Monte Carlo Simulation pricing model. Further information is set out in note 24 to the financial statements.

Directors’ Report (continued)

REMUNERATION REPORT (continued)

Further information relating to the portion of KMP remuneration related to equity compensation for the period are set out below in table 5.

Table 5 – Value of share based compensation

Name	Percentage of remuneration consisting of:	Percentage of remuneration consisting of:	Value granted, exercised or lapsed in 12 months ended 30 June 2018	Value granted, exercised or lapsed in 12 months ended 30 June 2018	Value granted, exercised or lapsed in 12 months ended 30 June 2018	Amount paid per share on exercise
	Options	Performance rights	Granted $ Performance rights	Exercised $ Performance rights	Lapsed $ Performance rights
Executive directors
Jeffrey Quartermaine	-	27%	335,298	-	278,976	-
Colin Carson	-	25%	226,326	-	167,385	-
Senior executives
Elissa Brown	-	13%	156,514	-	100,885	-
Chris Woodall		18%	74,531	-	109,469	-
Martijn Bosboom	-	14%	139,744	-	100,885	-
Paul Thompson	-	11%	156,514	-	168,142	-
Matthew Scully		7%	111,796	161,171	40,293	-
Douglas Jones	-	11%	111,796	-	-	-

No amounts were unpaid on any shares issued on the exercise of options.

Directors’ Report (continued)

REMUNERATION REPORT (continued)

The movement in options and performance right holdings for KMP and directors during the period are set out below in table 6.

Table 6 – Movement of options and performance rights granted to KMP and directors during the period

Name		Balance at the start of the year	Granted during the period as remunera- tion	Exercised during the year	Forfeited / lapsed	Other move- ments	Balance at the end of the year	Vested during the year	Vested and exercisable at the end of the year
Non-executive	directors
Sean Harvey	Options	-	-	-	-	-	-	-	-
	Performance rights	-	-	-	-	-	-	-	-
Michael Bohm	Options	-	-	-	-	-	-	-	-
	Performance rights	-	-	-	-	-	-	-	-
John McGloin	Options	-	-	-	-	-	-	-	-
	Performance rights	-	-	-	-	-	-	-	-
Alexander Davidson	Options	-	-	-	-	-	-	-	-
	Performance rights Options	- -	- -	- -	- -	- -	- -	- -	- -
Sally-Anne Layman
	Performance rights	-	-	-	-	-	-	-	-
Executive directors
Jeffrey Quartermaine	Options	-	-	-	-	-	-	-	-
	Performance rights(i)	2,000,000	1,333,334	-	(833,334)	-	2,500,000	-	-
Colin Carson	Options	-	-	-	-	-	-	-	-
	Performance rights(i)	900,000	900,000	-	(500,000)	-	1,300,000	-	-

Directors’ Report (continued)

REMUNERATION REPORT (continued)

The movement in options and performance right holdings for KMP and directors during the period are set out below in table 6.

Table 6 – Movement of options and performance rights granted to KMP and directors during the period – continued

Name	Balance at the start of the year	Granted during the period as remunera- tion	Exercised during the year	Forfeited / lapsed	Other move- ments	Balance at the end of the year	Vested during the year	Vested and exercisable at the end of the year

Senior executives

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----- Start of picture text -----

Elissa Options - - - - - - - -
Brown
Performance
600,000 700,000 - (300,000) - 1,000,000 - -
rights
Chris Options - - - - - - - -
Woodall
Performance
1,000,000 333,334 - (333,334) - 1,000,000 - -
rights [ (i)]
Martijn Options - - - - - - - -
Bosboom
Performance
675,000 625,000 - (300,000) - 1,000,000 - -
rights
Paul Options - - - - - - - -
Thompson
Performance
800,000 700,000 - (500,000) - 1,000,000 - -
rights
Matthew Options - - - - - - - -
Scully
Performance
500,000 500,000 (400,000) (100,000) - 500,000 - -
rights
Douglas Options - - - - - - - -
Jones
Performance
500,000 500,000 - - - 1,000,000 - -
rights
----- End of picture text -----

Notes:

(i) Subsequent to the end of the financial year 833,333, 200,000 and 333,333 performance rights that had previously been issued to Mr Quartermaine, Mr Carson and Mr Woodall respectively were determined not to have vested under the terms of the Perseus’s Performance Rights Plan and as a result were cancelled.

Directors’ Report (continued)

REMUNERATION REPORT (continued)

Details of remuneration: share-based compensation benefits

The following table details the percentage of the available grant that vested in the financial year and the percentage forfeited because the person did not meet either / or service and performance criteria specified. The maximum value of the options and performance rights yet to vest has been determined as the amount of the grant date fair value of the options or performance rights.

Table 7 – Options and performance rights granted as at 30 June 2018

Name	Name	Number of performance rights	Financial period granted	Vested in current fnan- cial period	Vested in prior fnan- cial period	Forfeited in current fnancial period	Financial period in which performance rights may vest	Minimum total value of grant yet to vest	Maximum total value of grant yet to vest
		No	Yr	%	%	%	Yr	$	$
Executive directors
Jeffrey Quartermaine	Performance rights	500,000	2016	-	-	100.00	2018	-	-
	Performance rights	500,000	2016	-	-	-	2019	-	163,017
	Performance rights	333,334	2017	-	-	100.00	2018	-	-
	Performance rights	333,333	2017	-	-	-	2019	-	139,136
	Performance rights	333,333	2017	-	-	-	2019	-	148,021
	Performance rights	1,333,334	2018	-	-	-	2020	-	335,298
Colin Carson	Performance rights	300,000	2017	-	-	100.00	2018	-	-
	Performance rights	200,000	2017	-	-	100.00	2018	-	-
	Performance rights	200,000	2017	-	-	-	2019	-	83,482
	Performance rights	200,000	2017	-	-	-	2019	-	88,813
	Performance rights	900,000	2018	-	-	-	2020	-	226,326

Directors’ Report (continued)

REMUNERATION REPORT (continued)

Table 7 – Options and performance rights granted as at 30 June 2018 – continued

Name	Name	Number of performance rights	Financial period granted	Vested in current fnancial period	Vested in prior fnancial period	Forfeited in current fnancial period	Financial period in which performance rights may vest	Minimum total value of grant yet to vest	Maximum total value of grant yet to vest
		No	Yr	%	%	%	Yr	$	$
Senior executives
Elissa Brown	Performance rights	300,000	2016	-	-	100.00	2018	-	-
	Performance rights	300,000	2017	-	-	-	2019	-	130,733
	Performance rights	700,000	2018	-	-	-	2020	-	156,514
Chris Woodall	Performance rights	333,334	2017	-	-	100.00	2018	-	-
	Performance rights	333,333	2017	-	-	-	2018	-	109,468
	Performance rights	333,333	2017	-	-	-	2019	-	122,664
	Performance rights Performance rights	333,334 300,000	2018 2016	- -	- -	- 100.00	2020 2018	- -	74,531 -
Martijn Bosboom
	Performance rights	375,000	2017	-	-	-	2019	-	163,416
	Performance rights	625,000	2018	-	-	-	2020	-	139,744
Paul Thompson	Performance rights	500,000	2016	-	-	100.00	2018	-	-
	Performance rights	300,000	2017	-	-	-	2019	-	130,733
	Performance rights Performance rights	700,000 500,000	2018 2017	- 80.00	- -	- 20.00	2020 2018	-	156,514 -
Matthew Scully
	Performance rights	500,000	2018	-	-	-	2020	-	111,796
Douglas Jones	Performance rights	500,000	2017	-	-	-	2019	-	217,889
	Performance rights	500,000	2018	-	-	-	2020	-	111,796

Directors’ Report (continued)

REMUNERATION REPORT (continued)

5. Additional information

Loans to directors and executives

There were no loans outstanding at the reporting date to directors or executives.

Share options

As at the date of this report, there were no unissued ordinary shares in Perseus.

Shares issued on exercise of options

During the financial year no ordinary shares were issued by Perseus as a result of the exercise of options. None have been issued since the end of the financial year.

Share holdings

The numbers of shares in the company held during the financial year by directors and other key management personnel, including shares held by entities they control, are set out below:

	Balance at 30 June 2017	Received as remuneration	Received during the year on vesting	Shares sold	Other movements(i)	Balance at 30 June 2018
Directors
Sean Harvey	1,500,000	-	-	-	800,000	2,300,000
Jeffrey Quartermaine	881,250	-	-	-	118,750	1,000,000
Colin Carson	1,482,300	-	-	-	-	1,482,300
Michael Bohm(ii)	-	-	-	-	-	-
John McGloin	1,282,907	-	-	-	-	1,282,907
Alexander Davidson(iii)	-	-	-	-	-	-
Sally-Anne Layman(iv)	-	-	-	-	-	-
Other key management personnel
Elissa Brown	266,375	-	-	(45,000)	-	221,375
Chris Woodall	-	-	-	-	-	-
Martijn Bosboom	162,500	-	-	-	-	162,500
Paul Thompson	-	-	-	-	-	-
Matthew Scully	-	-	400,000	-	-	400,000
Douglas Jones	10,835	-	-	-	-	10,835

Notes:

(i) The remaining other movements represent on-market purchase of shares and / or participation in rights issue.

(ii) Mr Michael Bohm resigned as Non-Executive Director on 31 May 2018.

(iii) Mr Alexander Davidson resigned as Non-Executive Director on 21 February 2018.

(iv) Ms Sally-Anne Layman was appointed Non-Executive Director on 13 September 2017.

Directors’ Report (continued)

REMUNERATION REPORT (continued)

Warrant holdings

The numbers of warrants in the company held during the financial year by directors and other key management personnel, including warrants held by entities they control, are set out below:

	Balance at 30 June 2017	Received during the year	Other movements	Balance at 30 June 2018
Directors
Sean Harvey	-	-	-	-
Jeffrey Quartermaine	-	-	-	-
Colin Carson	-	-	-	-
Michael Bohm(i)	-	-	-	-
John McGloin	641,453	-	-	641,453
Alexander Davidson(ii)	-	-	-	-
Other key management personnel
Elissa Brown	-	-	-	-
Chris Woodall	-	-	-
Martijn Bosboom	-	-	-	-
Paul Thompson	-	-	-	-
Matthew Scully	-	-	-	-
Douglas Jones	-	-	-	-

Notes:

(i) Mr Michael Bohm resigned as Non-Executive Director on 31 May 2018.

(ii) Mr Alexander Davidson resigned as Non-Executive Director on 21 February 2018.

Directors’ Report (continued)

REMUNERATION REPORT (continued)

Performance rights

As at the date of this report, the total number of performance rights outstanding under the Performance Rights Plan was 16,608,334 as follows:

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Exercise
Type of security Number price Issue date Vesting date Expiry date
Performance 12 October 30 June 31 December
333,333 nil
rights 2016 2019 2019
Performance 25 November 31 December 30 June
5,000,000 nil
rights 2016 2018 2019
Performance 25 November 30 June 31 December
533,333 nil
rights 2016 2019 2019
Performance 3 August 30 June 30 June
8,508,334 nil
rights 2017 2020 2027
Performance 24 November 30 June 30 June
2,233,334 nil
rights 2017 2020 2027
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These performance rights do not entitle the holder to participate in any share issue of Perseus or any other body corporate. There are no performance rights to subscribe for shares in any controlled entity.

Shares issued on exercise of performance rights

On 2 March and 13 April 2018, 750,000 and 400,000 performance rights respectively successfully vested under their terms and converted to ordinary shares on a 1 for 1 basis on satisfaction of specified conditions. The shares were issued to employees at nil consideration as part of employee remuneration.

Performance rights issued

8,958,334 performance rights were issued to employees of the company under the terms of the company’s Performance Rights Plan approved by shareholders in November 2017. These performance rights were issued at nil consideration with an effective issue date of 3 August 2017. Each performance right will convert to an ordinary share upon satisfaction of vesting criteria.

2,233,334 performance rights were issued to employees of the company under the terms of the company’s Performance Rights Plan approved by shareholders in November 2017. These performance rights were issued at nil consideration with an effective issue date of 24 November 2017. Each performance right will convert to an ordinary share upon satisfaction of vesting criteria.

Performance rights forfeited

During the year, 7,141,668 performance rights did not vest under the terms of the company’s Performance Rights Plan.

End of remuneration report.

Directors’ Report (continued)

Indemnification and insurance of directors, officers and auditors

Perseus’s Constitution requires it to indemnify directors and officers of any entity within the group against liabilities incurred to third parties and against costs and expenses incurred in defending civil or criminal proceedings, except in certain circumstances. In April 2014, the company entered into Deeds of Indemnity, Access and Insurance with all persons who were an officer of the company at that time. Independent legal advice was received that the content of the deeds conforms with the Act and current market practice. The directors and officers of the group have been insured against all liabilities and expenses arising as a result of work performed in their respective capacities, to the extent permitted by law. The insurance premiums, paid during the year ended 30 June 2018 amounted to $182,605, and relates to:

costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and whatever the outcome; and
other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty or improper use of information or position to gain a personal advantage.

To the extent permitted by law, the company has agreed to indemnify its auditors, PriceWaterhouseCoopers, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify PriceWaterhouseCoopers during or since the financial year end.

Proceedings on behalf of the company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of Perseus or to intervene in any proceedings to which Perseus is a party, for the purposes of taking responsibility on behalf of Perseus for all or part of the proceedings. No proceeding has been brought or intervened in on behalf of Perseus with leave of the Court under section 237 of the Act.

Non-audit services

During the year PricewaterhouseCoopers, the group’s auditor, performed other non-audit services in addition to statutory duties. The non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the group, acting as an advocate for the group or jointly sharing risks and rewards. Further information is set out at note 22 of the financial statements.

Corporate governance statement

The ASX Corporate Governance Council (CGC) has developed corporate governance principles and recommendations for listed entities with the aim of promoting investor confidence and meeting stakeholder expectations. ASX listing rule 4.10.3 requires that listed entities disclose the extent to which they have followed the CGC’s recommendations and, where a recommendation has not been followed, the reasons why.

Perseus’s corporate governance statement can be found on the company’s website at the following link: http://www.perseusmining.com/aurora/assets/user_content/CorpGovStatementAug2018.pdf

Directors’ Report (continued)

Auditors’ Independence Declaration

Section 307C of the Corporations Act 2001 requires our auditors, PricewaterhouseCoopers, to provide the directors of Perseus with an Independence Declaration in relation to the review of the financial report. This Independence Declaration is set out on the next page and forms part of this directors’ report for the year ended 30 June 2018.

Signed in accordance with a resolution of directors.

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J A Quartermaine Managing Director Perth, 29 August 2018

Directors’ Report (continued)

Competent Person Statement

The information in the Annual Group Ore Reserves and Mineral Resources Statement is based on, and fairly represents information and supporting documentation prepared by competent persons in accordance with the requirements of the JORC Code. The Annual Group Mineral Resources Statement as a whole has been approved by Mr Gary Brabham, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Brabham is an employee of the Company. Mr Brabham has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’”) and to qualify as a “Qualified Person” under National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). Mr Brabham consents to the inclusion in this report of the information in the form and context in which it appears. The Annual Group Ore Reserve Statement as a whole has been approved by Mr Paul Thompson, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Thompson is an employee of the Company. Mr Thompson has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ and to qualify as a “Qualified Person” under NI 43-101. Mr Thompson consents to the inclusion in this report of the information in the form and context in which it appears.

The information in this report that relates to the Mineral Resource and Ore Reserve estimates for the EGM deposits was first reported by the Company in compliance with the JORC Code 2012 and NI43-101 in a market announcement released on 29 August 2018. The Company confirms that it is not aware of any new information or data that materially affect the information in that market release and that all material assumptions underpinning those estimates and the production targets, or the forecast financial information derived therefrom, continue to apply and have not materially changed. The Company further confirms that material assumptions underpinning the estimates of Ore Reserves described in “Technical Report — Central Ashanti Gold Project, Ghana” dated 30 May 2011 continue to apply.

The information in this report that relates to Mineral Resources for Sissingué was first reported by the Company in compliance with the JORC Code 2012 and NI43-101 in a market announcement released on 15 December 2016 and includes an update for depletion as at 30 June 2018 as well as an adjustment of the model constrained to a US$1,800/ oz pit shell which were reported in a market announcement on 29 August 2018. The information in this report that relates to Mineral Resources for Fimbiasso was first reported by the Company in compliance with the JORC Code 2012 and NI43-101 in a market announcement released on 2 0 February 2017 and includes an adjustment of the model constrained to a US$1,800/oz pit shell which was reported in a market announcement on 29 August 2018. The information in this report that relates to Ore Reserves for Sissingué and Fimbiasso was first reported by the Company in compliance with the JORC Code 2012 and NI43-101 in a market announcement released on 31 March 2017 and includes an update for depletion as at 30 June 2018 which was reported in a market announcement on 29 August 2018. The Company confirms that it is not aware of any new information or data that materially affect the information in these market releases and that all material assumptions underpinning those estimates and the production targets, or the forecast financial information derived therefrom, continue to apply and have not materially changed. The Company further confirms that material assumptions underpinning the estimates of Ore Reserves described in “Technical Report — Sissingué Gold Project, Côte d’Ivoire” dated 29 May 2015 continue to apply.

The information in this report in relation to Yaouré Mineral Resource and Ore Reserve estimates was first reported by the Company in compliance with the JORC Code 2012 and NI43-101 in a market announcement on 3 November 2017. The Company confirms that all material assumptions underpinning those estimates and the production targets, or the forecast financial information derived therefrom, in that market release continue to apply and have not materially changed. The Company further confirms that material assumptions underpinning the estimates of Ore Reserves described in “Technical Report — Yaouré Gold Project, Côte d’Ivoire” dated 18 December 2017 continue to apply.

Auditor’s Independence Declaration

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Auditor’s Independence Declaration

As lead auditor for the audit of Perseus Mining Limited for the year ended 30 June 2018, I declare that to the best of my knowledge and belief, there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (b) no contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Perseus Mining Limited and the entities it controlled during the period.

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Craig Heatley Perth
Partner 29 August 2018
PricewaterhouseCoopers
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PricewaterhouseCoopers, ABN 52 780 433 757
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Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840 T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation.

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44
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Financial Statements

Financial statements

Financial statements	Financial statements	Financial statements	Financial statements	Financial statements	Financial statements
Statement of comprehensive income 70 Statement of fnancial position 71 Statement of changes in equity 72 Statement of cash fows 74 Notes to the consolidated fnancial statements About this report 75
Performance	Operating assets and liabilities	Capital and fnancial risk management	Group structure	Other information	Unrecognised items
1. Segment information 2. Other income / expenses 3. Income tax expense 4. Loss per share	5. Cash and cash equivalents 6. Receivables 7. Inventories 8. Available for sale fnancial assets 9. Property, plant and equipment 10. Mine properties 11. Mineral interest acquisition and exploration expenditure 12. Payables and provisions 13. Deferred tax	14. Interest bearing liabilities 15. Derivative fnancial instruments 16. Financial risk management 17. Issued capital and reserves 18. Accumulated losses	19. Subsidiaries 20. Parent entity disclosures	21. Related party transactions 22. Remuneration of auditors 23. Cash fows from operating activities reconciliation 24. Share based payments 25. Summary of other signifcant accounting policies	26. Contingencies 27. Commitments 28. Events occurring after the end of the reporting period
Signed reports Directors’ declaration 129 Auditor’s independence report 130

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These financial statements are the financial statements of the consolidated entity consisting of Perseus Mining Limited and its subsidiaries. The financial statements are presented in the Australian currency.

Perseus Mining Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Perseus Mining Limited, Second Floor, 437 Roberts Road, Subiaco WA 6008 AUSTRALIA

A description of the nature of the consolidated entity’s operations and its principal activities is included in the review of operations and activities in the directors’ report on pages 10 to 25, which is not part of these financial statements.

These financial statements were authorised for issue by the directors on 29 August 2018. The directors have the power to amend and reissue the financial statements.

Through the use of the internet, we have ensured that our corporate reporting is timely, complete and available globally at minimum cost to the company. All press releases, financial statements and other information are available at our News and Reports section on our website at www.perseusmining.com.au.

Statement of Comprehensive Income

For the year ended 30 June 2018

		Consolidated	Consolidated
		2018	2017 (restated*)
	Notes	$’000	$’000
Continuing operations
Revenue		378,076	276,924
Cost of sales		(240,282)	(253,121)
Gross proft before depreciation and amortisation		137,794	23,803
Depreciation and amortisation relating to gold production	2	(119,463)	(55,925)
Gross proft / (loss) from operations		18,331	(32,122)
Other income	2	786	5,346
Other expenses		(3,660)	(28,216)
Administration and other corporate expenses		(12,729)	(17,054)
Foreign exchange gain / (loss)	2	5,707	(11,653)
Depreciation and amortisation expense		(121)	(245)
	2, 8, 9,
Impairment and write-offs	10, 11	(24,334)	(16,111)
Finance Costs	2	(3,094)	(332)
Loss before income tax expense		(19,114)	(100,387)
Income tax (expense) / beneft	3	(5,792)	17,265
Net loss after tax expense		(24,906)	(83,122)
Other comprehensive income
Items that may be reclassifed subsequently to proft or loss
Exchange differences on translation of foreign operations		24,983	(5,766)
Net changes in fair value of cash fow hedges		4,951	23,318
Net changes in fair value of fnancial assets		(673)	(1,382)
Income tax relating to components of other comprehensive loss	3	(1,942)	(7,614)
Total comprehensive proft / (loss) for the period		2,413	(74,566)
Loss attributable to:
Owners of the parent		(25,853)	(79,613)
Non-controlling interest		947	(3,509)
		(24,906)	(83,122)
Comprehensive proft attributable to:
Owners of the parent		839	(72,111)
Non-controlling interest		1,574	(2,455)
		2,413	(74,566)
Basic loss per share	4	(2.50) cents	(7.74) cents
Diluted loss per share	4	(2.50) cents	(7.74) cents

See note 25(a)(i) for details regarding the restatement as a result of a change in accounting policy. The accompanying notes form part of these financial statements.

Statement of Financial Position

As at 30 June 2018

		Consolidated	Consolidated
		2018	2017	(restated*)
	Notes	$’000		$’000
Current assets
Cash and cash equivalents	5	31,166		24,027
Receivables	6	21,876		10,441
Inventories	7	124,762		58,363
Prepayments		14,905		4,290
Derivative fnancial instruments	15	5,076		490
Total current assets		197,785		97,611
Non-current assets
Receivables	6	12,857		12,375
Inventories	7	20,061		6,311
Available for sale fnancial assets	8	1,400		3,324
Derivative fnancial instruments	15	24		1,265
Property, plant and equipment	9	417,322		299,622
Mine properties	10	304,132		254,240
Mineral interest acquisition and exploration expenditure	11	9,607		183,956
Total non-current assets		765,403		761,093
Total assets		963,188		858,704
Current liabilities
Payables and provisions	12	100,064		74,040
Derivative fnancial instruments	15	-		157
Interest bearing liabilities	14	32,632		19,514
Total current liabilities		132,696		93,711
Non-current liabilities
Provision	12	18,679		19,201
Interest bearing liabilities	14	52,383		-
Deferred tax liability	13	45,116		35,930
Total non-current liabilities		116,178		55,131
Total liabilities		248,874		148,842
Net assets		714,314		709,862
Equity
Issued capital	17	720,943		720,739
Reserves	17	54,485		26,007
Accumulated losses	18	(68,567)		(42,714)
Parent entity interest		706,861		704,032
Non-controlling interest		7,453		5,830
Total equity		714,314		709,862

See note 25(a)(i) for details regarding the restatement as a result of a change in accounting policy.

The accompanying notes form part of these financial statements.

Statement of Changes in Equity

For the year ended 30 June 2018

Total equity $’000	709,862	(24,906)	24,983	(673)	4,951	(1,942)	2,413	-	-	204	1,835	714,314
Non- controlling interest $’000	5,830	947	267	-	555	(194)	1,575	-	-	-	48	7,453
Non- controlling interests reserve $’000	(258)	-	-	-	-	-	-	-	-	-	-	(258)
Hedge reserve $’000	1,902	-	-	-	4,396	(1,748)	2,648	-	-	-	-	4,550
Asset revaluation reserve $’000	1,412	-	-	(673)	-	-	(673)	-	-	-	-	739
Foreign currency translation reserve $’000	93	-	24,716	-	-	-	24,716	-	-	-	-	24,809
Share based payments reserve $’000	22,858	-	-	-	-	-	-	-	-	-	1,787	24,645
Retained earnings / (accu- mulated losses) $’000	(42,714)	(25,853)	-	-	-	-	(25,853)	-	-	-	-	(68,567)
Issued capital $’000	720,739	-	-	-	-	-	-	-	-	204	-	720,943
	Balance at 1 July 2017 (restated*)	Loss for the period	Currency translation differences	Net change in the available-for-sale fnancial assets	Net change in the fair value of cash fow hedges	Income tax relating to components of other comprehensive income	Total comprehensive proft	Shares issued during the period	Share issue expenses	Exercise of warrants	Share based payments	Balance at 30 June 2018

Statement of Changes in Equity (continued)

Total equity $’000	769,338	(83,122)	(5,766)	(1,382)	23,318	(7,614)	(74,566)	7,651	(797)	5,193	3,043	-	709,862
Non- controlling interest $’000	8,192	(3,509)	(359)	-	2,176	(762)	(2,454)	-	-	-	92	-	5,830
Non- controlling interests reserve $’000	(258)	-	-	-	-	-	-	-	-	-	-	-	(258)
Hedge reserve $’000	(12,388)	-	-	-	21,142	(6,852)	14,290	-	-	-	-	-	1,902
Asset revaluation reserve $’000	2,794	-	-	(1,382)	-	-	(1,382)	-	-	-	-	-	1,412
Foreign currency translation reserve $’000	5,500	-	(5,407)	-	-	-	(5,407)	-	-	-	-	-	93
Share based payments reserve $’000	19,907	-	-	-	-	-	-	-	-	-	2,951	-	22,858
Retained earnings / (accu- mulated losses) $’000	36,899	(79,613)	-	-	-	-	(79,613)	-	-	-	-	-	(42,714)
Issued capital $’000	708,692	-	-	-	-	-	-	7,651	(797)	5,193	-	-	720,739
	Balance at 1 July 2016	Loss for the period	Currency translation differences	Net change in the available-for-sale fnancial assets	Net change in the fair value of cash fow hedges	Income tax relating to components of other comprehensive income	Total comprehensive loss	Shares issued during the period	Share issue expenses	Exercise of warrants	Share based payments	Non-controlling interest arising from change in ownership interest	Balance at 30 June 2017 (restated*)

Statement of Cash Flows

For the year ended 30 June 2018

		Consolidated
		2018	2017
	Notes	$’000	$’000
Operating activities
Receipts in the course of operations		375,063	287,082
Payments to suppliers and employees		(307,370)	(286,877)
Interest received		598	655
Net cash from operating activities	23	68,291	860
Investing activities
Payments for exploration and evaluation expenditure		(16,371)	(15,945)
Payments for property, plant and equipment		(92)	(123)
Payments for mine properties		(25,828)	(31,566)
Payments for assets under construction		(77,387)	(111,959)
Proceeds on disposal of property, plant and equipment		-	235
Proceeds on disposal of investment in listed entity		27	316
Net cash used in investing activities		(119,651)	(159,042)
Financing activities
Proceeds from share issues		-	7,651
Proceeds from exercise of warrants		204	5,193
Repayment of borrowings		(8,976)	(6,631)
Proceeds from borrowings		70,368	26,161
Borrowing costs		(4,154)	(1,761)
Share issue expenses		-	(796)
Net cash provided by fnancing activities		57,442	29,817
Net increase / (decrease) in cash held		6,082	(128,365)
Cash and cash equivalents at the beginning of the fnancial year		24,027	151,257
Effects of exchange rate fuctuations on the balances of cash held in
foreign currencies		1,057	1,135
Cash and cash equivalents at the end of the fnancial year	5	31,166	24,027

The accompanying notes form part of these financial statements.

Notes to the Financial Statements

For the year ended 30 June 2018

ABOUT THIS REPORT

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated in note 25. The financial statements are for the consolidated entity consisting of Perseus Mining Limited and its subsidiaries (the “group” or the “consolidated entity”). Perseus Mining Limited is a listed for-profit public company, incorporated and domiciled in Australia. During the year ended 30 June 2018, the consolidated entity conducted operations in Australia, Ghana and Côte d’Ivoire.

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.

Compliance with IFRS

The consolidated financial statements of the group also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Historical cost convention

These financial statements have been prepared under the historical cost convention, except for derivative instruments and available for sale financial assets which are carried at fair value.

Critical accounting estimates

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed throughout the notes.

Rounding

The amounts contained in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) where noted ($’000) under the option available to the group under ASIC Corporations (Rounding in Financial / Directors’ Reports) Instrument 2016/191. This legislative instrument applies to the group.

SIGNIFICANT JUDGEMENTS AND ESTIMATES

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including the expectations of future events that may have a financial impact on the consolidated entity and that are believed to be reasonable under the circumstances.

The group makes estimates and assumptions concerning the future. The resulting accounting will, by definition, seldom equal the actual results. The estimates and assumptions that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed in the notes indicated below.

	Note
Depreciation and amortisation	2
Unit-of-production method of depreciation / amortisation	2
Deferred stripping expenditure	2
Impairment	2
Income tax	3
Inventory	7
Reserves and resources	10
Exploration and evaluation expenditure	11
Restoration and Rehabilitation provision	12
Derivative fnancial instruments	15
Measurement of fair value	16
Share based payments	17, 24

Notes to the Financial Statements

For the year ended 30 June 2018

1. SEGMENT INFORMATION

(a) Description of segments

Management has determined the operating segments based on the reports reviewed by the executive management team and board of directors that are used to make strategic decisions.

The group primarily reports based on a business segment basis as its risks and rates of return are affected predominantly by differences in the various business segments in which it operates, and this is the format of the information provided to the executive management team and board of directors.

The group operated principally in four segments in 2018 being Edikan, Sissingué, Yaouré and Corporate / Other. The segment information is prepared in conformity with the group’s accounting policies.

The group comprises the following main segments: Edikan Mining, mineral exploration, evaluation and development activities. Sissingué Mining, mineral exploration, evaluation and development activities. Yaouré Mineral exploration, evaluation and development activities. Corporate / Other Investing activities and corporate management.

Revenue is derived from one external customer arising from the sale of gold bullion reported under both the Edikan and Sissingué reporting segment.

(b) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive management team and board of directors of the parent entity.

Notes to the Financial Statements

For the year ended 30 June 2018

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2017 $’000 276,924 5,344 282,268 (100,387) 17,265 (83,122) (16,111) (56,170) (2,786) (11,653) 858,704 858,704 168,965 148,842 148,842
As at 30 June 2017
Consolidated 2018 $’000 378,076 786 378,862 (19,114) (5,792) (24,906) (24,334) (119,584) (1,716) 5,707 963,188 963,188 104,770 248,874 248,874
As at 30 June 2018
2017 $’000 - 346 346 (60,146) - (1,273) (2,015) (8,859) 21,145 108 596
As at 30 June 2017
Corporate / other 2018 $’000 - 377 377 (15,500) (1,750) (2,170) (1,336) 13,102 33,097 356 (118)
As at 30 June 2018
2017 $’000 - - - 3,731 - (70) - - 171,372 20,835 14,177
As at 30 June 2017
Yaouré 2018 $’000 - - - 2,495 - (2) - 9 197,154 8,906 9,449
As at 30 June 2018
2017 $’000 - - - 6,128 - - - - 182,944 85,536 12,270
As at 30 June 2017
-
Sissingué 2018 $’000 24,180 24,180 (23,327) (22,009) (17,514) (28) (10,220) 237,816 62,040 74,435
As at 30 June 2018
2017 $’000 276,924 4,998 281,922 (50,100) (16,111) (54,827) (771) (2,794) 483,243 62,486 121,799
As at 30 June 2017
Edikan
2018 $’000 353,896 409 354,305 17,218 (575) (99,900) (352) 2,816 495,121 33,468 165,108
As at 30 June 2018
Revenue and other income Revenue Other income Total revenue and other income Results Operating (loss) / profit before income tax Income tax (expense) / benefit Net loss Included within segment results: Impairment and write-offs Depreciation and amortisation Share based payments Foreign exchange gain / (loss) Assets Segment assets Total segment assets Total assets includes: Additions to non-current assets (other than financial assets) Liabilities Segment liabilities Total segment liabilities
----- End of picture text -----

Notes to the Financial Statements

For the year ended 30 June 2018

2. OTHER INCOME / EXPENSES

2. OTHER INCOME / EXPENSES
	Consolidated
	2018	2017
	$’000	$’000
Loss before income tax has been determined after:
Other income:
Unrealised gain on fair value of gold forward contracts	-	4,730
Interest revenue	786	616
	786	5,346
Foreign exchange gain / (loss):
Foreign exchange gain / (loss) on translation of inter-company loans	12,251	(9,000)
Foreign exchange loss on translation of VAT receivable	(1,300)	(4,623)
Foreign exchange (loss) / gain on other translations	(5,244)	1,970
	5,707	(11,653)
Changes in inventories of fnished goods and work in progress:
Write back / (Write down) of inventories due to increase / (decrease) in net realisable value	5,926	(6,330)
Finance costs:
Interest and fnance charges	(3,094)	(332)
Other costs:
Write-down of receivable	(335)	(532)
Legal settlement	-	(24,485)
	(335)	(25,017)
Legal settlement related to previously outstanding claims made by BCM against Amara in relation to contract mining
services provided by BCM at Amara’s now closed Kalsaka and Seguenega mines in Burkina Faso.
Depreciation and amortisation:
Amortisation of stripping asset	(30,844)	(1,880)
Other depreciation and amortisation	(88,740)	(54,290)
	(119,584)	(56,170)

RECOGNITION & MEASUREMENT

(i) Revenue recognition

The group has for the first time applied AASB 15 Revenue from Contracts with Customers with effect from 1 July 2017 which resulted in a change in the accounting policy. The impact of the change was accounted for using the full retrospective transitional provisions and as a result, prior year comparatives were restated. Refer to note 25(a)(i) for the financial impact.

Revenue is measured as the amount of consideration that the group expects to be entitled to in exchange for transferring goods to its customers. The group recognises revenue at a point-in-time when (or as) the performance obligations, as determined by contracts with the customers, have been satisfied. The following criteria are also applicable to specific revenue transactions:

Gold bullion sales

The group recognises revenue from gold bullion sales as its obligations are satisfied in accordance with an agreed contract between the group and its customers. Revenue is recognised at a point-in-time when the gold bullion has been credited to the metals account of the customer. It is at this point that control over the gold bullion has been passed to the customer and the group has fulfilled its obligations under the contract.

Interest income

Interest income is recognised in the income statement as it accrues, using the effective interest method.

(ii) Borrowing costs

Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.

Notes to the Financial Statements

For the year ended 30 June 2018

2. OTHER INCOME / EXPENSES (continued)

SIGNIFICANT JUDGEMENTS AND ESTIMATES

(i) Impairment of assets

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units or “CGU”). The group has three cash generating units, Edikan Gold Mine, the Sissingué Gold Mine and the Yaouré Gold Project. Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

In determining whether the recoverable amount of each cash generating unit is the higher of fair value less costs of disposal or value-in-use against which asset impairment is to be considered, the group undertakes future cash flow calculations which are based on a number of critical estimates and assumptions, and reflect the life of mine (“LOM”) operating and capital cost assumptions used in the group’s latest budget and LOM plans:

(i) Mine life including quantities of mineral Ore Reserves and Mineral Resources for which there is a high degree of confidence of economic extraction with given technology;
(ii) Estimated production and sales levels;
(iii) Estimate future commodity prices are based on brokers consensus forecast;
(iv) Future costs of production;
(v) Future capital expenditure;
(vi) Future exchange rates; and / or
(vii) Discount rates based on the group’s estimated before tax weighted average cost of capital, adjusted when appropriate to take into account relevant risks such as development risk etc.

Variations to expected future cash flows, and timing thereof, could result in significant changes to the impairment test results, which in turn could impact future financial results. The expected future cash flows of the cash generating units are most sensitive to fluctuations in the gold price.

At 30 June 2018 the group determined that there was an external indicator of impairment as the carrying value of its net assets exceeded its market capitalisation. As a result, an impairment assessment was conducted for the Edikan, Sissingué and Yaouré CGUs. The impairment expense was determined under AASB136 Impairment of Assets , by comparing the carrying values of CGUs to the recoverable amount as determined by the fair value less cost of disposal (“FVLCOD”) or value in use (“VIU”) of that CGU. The group applied FVLCOD for the Edikan, Sissingué and Yaouré CGUs.

Notes to the Financial Statements

For the year ended 30 June 2018

2. OTHER INCOME / EXPENSES (continued)

The key economic assumptions used in the Impairment review for the 2018 financial year are as follows:

	Units	Cash Generating Unit	Cash Generating Unit	Cash Generating Unit
		Edikan	Sissingué	Yaouré
Gold price range	US$ per ounce	1,210 – 1,298	1,210 – 1,298	1,210 – 1,298
Post-tax real discount rate	Percentage	9.70%	9.82%	11.48%
AUD:USD exchange rate	Rate	0.74	0.74	0.74
USD:XOF exchange rate	Rate	-	560	560

Gold prices

Gold prices have been estimated with reference to external analyst consensus views. These gold prices are reviewed at least semi-annually. Consideration of observable market data has also been taken into account in assessing the reasonableness of these gold prices. The gold price ranges represent forecast prices at different points in time over the life of mine of the relevant cash generating unit.

Discount rate

The post-tax real discount rate was derived from the group’s weighted average cost of capital adjusted for risks that are specific to each CGU being assessed for impairment.

Operating and capital costs

The operating and capital costs have been determined with reference to the group’s latest LOM plan.

The group conducted the impairment review of the Edikan, Sissingué and Yaouré CGUs, found the Sissingué CGU to be impaired and as a result recorded the impairment charges detailed in the table below for the financial year ended 30 June 2018.

	Note	Impairment
		Sissingué $’000
Mine properties	10	10,151
Property, plant and equipment		-
Total impairment		10,151

Notes to the Financial Statements

For the year ended 30 June 2018

2. OTHER INCOME / EXPENSES (continued)

(ii) Unit-of-production method of depreciation / amortisation

The group uses the unit-of-production basis when depreciating / amortising life of mine specific assets, which results in a depreciation / amortisation charge proportional to the depletion of the anticipated remaining life of mine production. Each item’s economic life, which is assessed annually, has due regard to both its physical life limitations and to present assessments of economically recoverable reserves of the mine property at which it is located. These calculations require the use of estimates and assumptions, including the amount of recoverable reserves and estimates of future capital expenditure. The group amortises mine property assets utilising tonnes of ore mined and mine related plant and equipment over tonnes of ore processed.

(iii) Deferred stripping expenditure

The group defers stripping costs incurred during the production stage of its operations. Significant judgement is required to distinguish between production stripping that relates to the extraction of inventory and what relates to the creation of a deferred waste asset. The group also identifies the separate components of the ore body. An identifiable component is a specific volume of the ore body that is made more accessible by the stripping activity. Significant judgement is required to identify these components, and to determine the expected volumes of waste to be stripped and ore to be mined in each component and a suitable production measure to be used to allocate production stripping costs between inventory and any stripping activity asset(s) for each component. The group considers that the ratio of the expected waste to be stripped for an expected amount of ore to be mined, for a specific component of the ore body, is the most suitable production measure. Furthermore, judgements and estimates are also used to apply the units of production method in determining the amortisation of the stripping activity asset(s).

Changes in a mine’s life and design will usually result in changes to the expected stripping ratio (waste to mineral reserves ratio). Changes in other technical or economical parameters that impact reserves will also have an impact on the life of component ratio even if they do not affect the mine’s design. Changes to the life of the component are accounted for prospectively.

Notes to the Financial Statements

For the year ended 30 June 2018

3.INCOME TAX EXPENSE

3.INCOME TAX EXPENSE
	Consolidated
	2018	2017 (restated)
	$’000	$’000
(a) Income tax expense
Current tax expense	138	233
Deferred tax expense / (beneft)	5,654	(17,498)
Income tax expense / (beneft)	5,792	(17,265)
Income tax expense is attributable to:
Proft / (loss) from continuing operations	5,792	(17,265)
Loss from discontinued operations	-	-
Aggregate income tax beneft	5,792	(17,265)
Deferred income tax expense included in tax comprises:
Decrease / (increase) in deferred tax assets	21,775	(23,147)
(Decrease) / increase in deferred tax liabilities	(16,121)	5,649
Aggregate deferred tax expense / (beneft)	5,654	(17,498)
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense	(19,114)	(100,387)
Loss from discontinuing operations before income tax expense	-	-
	(19,114)	(100,387)
Tax at the Australian tax rate of 30%	(5,734)	(30,116)
Effect of tax rates in foreign jurisdictions	849	(2,531)
Non-deductible expenses	108	664
Share based payments	520	829
Foreign exchange on investment in foreign subsidiaries	(5,976)	2,227
Deferred tax asset not brought to account	16,516	11,662
	6,283	(17,265)
(Over) / under provision in prior years	(491)	-
Income tax expense / (beneft)	5,792	(17,265)

Notes to the Financial Statements

For the year ended 30 June 2018

3.INCOME TAX EXPENSE (continued)

3.INCOME TAX EXPENSE (continued)
	Consolidated
	2018	2017	(restated)
	$’000		$’000
(c) Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting period and not
recognised in net proft or loss but directly debited or credited to equity	(1,942)		(7,614)
Net deferred tax credited directly to equity	(1,942)		(7,614)
(d) Tax losses
Estimated Australian revenue tax losses	45,205		36,484
Estimated Australian capital tax losses	4,100		4,103
	49,305		40,587
Potential tax beneft at 30%	14,792		12,176
Unused foreign tax losses for which no deferred tax has been recognised	-		-
	14,792		12,176

RECOGNITION & MEASUREMENT

The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company’s subsidiaries and associated operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

SIGNIFICANT JUDGEMENTS AND ESTIMATES

Judgement is required in determining whether deferred tax assets are recognised on the statement of financial position. Deferred tax assets, including those arising from un-utilised tax losses, require management to assess the likelihood that the group will generate taxable earnings in future periods, in order to utilise recognised deferred tax assets. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the group to realise the net deferred tax assets recorded at the reporting date could be impacted.

Additionally, future changes in tax laws in jurisdictions in which the group operates could limit the ability of the group to obtain tax deductions in future periods.

Notes to the Financial Statements

For the year ended 30 June 2018

4. LOSS PER SHARE

4. LOSS PER SHARE
	Consolidated
	2018	2017 (restated)
(a) Earnings used in calculating earnings per share	$’000	$’000
Loss attributable to ordinary shareholders of the parent	(25,853)	(79,613)
(b) Weighted average number of shares	No. of shares	No. of shares
Weighted average number of ordinary shares used in calculating
basic loss per share	1,033,696,169	1,027,960,331
Effect of dilution from performance rights	-	-
Effect of dilution from warrants	-	-
Weighted average number of ordinary shares used in calculating
diluted loss per share	1,033,696,169	1,027,960,331

Performance rights, first issued in November 2012 (see note 24) and granted to employees under the terms of the company’s Performance Rights Plan approved by shareholders in November 2012 and amended in October 2014, are considered to be potential ordinary shares. However, these performance rights are anti-dilutive for the year ended 30 June 2018 and therefore have been excluded from the calculation of diluted earnings per share. Warrants issued in April 2016 to the shareholders of Amara, are also considered to be potential ordinary shares. However, these warrants are anti-dilutive for the year ended 30 June 2018 and therefore have been excluded from the calculation of diluted earnings per share.

RECOGNITION & MEASUREMENT

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the net result attributable to owners of the parent, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for any bonus element.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of ordinary shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

Notes to the Financial Statements

For the year ended 30 June 2018

5. CASH AND CASH EQUIVALENTS

		Consolidated
		2018	2017
		$’000	$’000
Cash assets	(i)	20,791	11,228
Short term deposits	(ii)	10,375	12,799
		31,166	24,027

(i) Cash at bank earns interest at floating rates based on daily bank deposit rates.

(ii) Short-term deposits are made for varying periods, depending on the immediate cash requirements of the group, and earn interest at the respective short-term deposit rates.

RECOGNITION & MEASUREMENT

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions with an original maturity not exceeding three months, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. If greater than three months principal amounts can be redeemed in full with interest payable at the same cash rate from inception as per the agreement with each bank. Bank overdrafts, if utilised, are shown within borrowings in current liabilities on the statement of financial position.

6. RECEIVABLES

6. RECEIVABLES
		Consolidated
		2018	2017	(restated)
		$’000		$’000
Current
Trade debtors	(i)	533		481
Sundry debtors	(i)	2,013		4,365
Other receivable	(ii)	23,097		9,227
Allowance for doubtful debts	(iii)	(3,767)		(3,632)
		21,876		10,441
Non-current
Security deposits	(iv)	12,857		12,375
		12,857		12,375
Movement in the allowance for doubtful debts:
Balance at beginning of the year		3,632		3,751
Foreign exchange translation (loss) / gain		135		(119)
Balance at the end of the year	(iii)	3,767		3,632

Notes to the Financial Statements

For the year ended 30 June 2018

6. RECEIVABLES (continued)

Terms relating to the above financial instruments:

(i) Trade and sundry debtors are non-interest bearing and generally on 30 day terms.
(ii) Other receivable relates to GST and VAT receivable throughout the group. At 30 June 2018 $19.3 million (30 June 2017: $9.2 million) related to a VAT refund receivable from the Ghana Revenue Authority (“GRA”). During the year, the group received a total of GHS 83.8 million (US$19.0 million) from the GRA for the VAT receivable.
(iii) Allowance for doubtful debts are recognised against sundry and other debtors for estimated irrecoverable amounts determined by reference to an analysis of the counterparty’s current financial position.
(iv) At 30 June 2018, the group had US$9.6 million (approximately A$12.9 million) (30 June 2017: US$9.5 million (approximately A$12.4 million)) held in bank deposits which are subject to a lien and are collateral for a bank guarantee that has been issued to the Ghana Environmental Protection Agency in relation to environmental rehabilitation provisions concerning the EGM.

Past due but not impaired

With the exception of $3.8 million (30 June 2017: $3.6 million) disclosed above which is fully provided for, all of the remaining trade and other receivables are not past due.

Fair value and foreign exchange and credit risk

Due to the short-term nature of the current receivables, their carrying amount is assumed to approximate their fair value. Long term receivables are evaluated by the group based on parameters such as individual creditworthiness of the customer and specific country risk factors. The carrying amount of long term receivables is assumed to approximate fair value, as the security deposits that make up the long-term receivables have a market based interest rate. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of receivable mentioned above.

The other receivable relating to a VAT refund from the GRA is immediately repayable on demand in Ghanaian Cedis, is unsecured and bears no interest. Since the authorisation of treasury credit notes by the GRA, payments of employment taxes, withholding taxes and royalties have been offset against the VAT receivable.

Further information about the group’s exposure to these risks is provided in note 16.

RECOGNITION & MEASUREMENT

(i) Trade and other receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost less provision for impairment. Trade receivables are generally due for settlement within 30 days. They are presented as current assets unless collection is not expected for more than 12 months after the reporting date.

An allowance for doubtful debts is made when collection of the full amount is no longer probable. Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are written off by reducing the carrying amount directly. The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses.

(ii) Loan and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting period which are classified as non-current assets. Loans and receivables are included in receivables in the statement of financial position. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Notes to the Financial Statements

For the year ended 30 June 2018

7. INVENTORIES

7. INVENTORIES
Consolidated 2018 2017	(restated)
$’000	$’000
Current Ore stockpiles – at cost 691	6,865
Ore stockpiles – at net realisable value 30,481	3,580
Gold in circuit – at cost 14,283	4,840
Bullion on hand – at cost 39,895	12,544
Materials and supplies 39,412	30,534
124,762	58,563

Inventory expense

The inventory expense during the year ended 30 June 2018 was $334.2 million (30 June 2017: $287.8 million). The write back of inventories due to an increase in net realisable value recognised during the year ended 30 June 2018 amounted to $5.9 million (30 June 2017 write down: $6.3 million) and is included in ‘cost of sales’ in the statement of comprehensive income.

Non-current

Non-current
Ore stockpiles – at net realisable value	20,061	6,311
	20,061	6,311

RECOGNITION & MEASUREMENT

Gold bullion, gold in circuit and ore stockpiles are physically measured or estimated and stated at the lower of cost and net realisable value.

Cost comprises direct material, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs in getting such inventories to their existing location and condition, based on weighted average costs incurred during the period in which such inventories were produced. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and costs of selling the final product.

Inventories of consumable supplies and spare parts expected to be used in production are valued at weighted average cost. Obsolete or damaged inventories of such item are valued at net realisable value.

Significant judgements and estimates

Net realisable value tests are performed at least quarterly and represent the estimated future sales price of the product based on prevailing spot metals prices at the reporting date, less estimated costs to complete production and bring the product to sale. Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number of contained gold ounces based on assay data, and the estimated recovery percentage based on the expected processing method. Stockpile tonnages are verified by periodic surveys.

Notes to the Financial Statements

For the year ended 30 June 2018

8. AVAILABLE FOR SALE FINANCIAL ASSETS

8. AVAILABLE FOR SALE FINANCIAL ASSETS
		Consolidated 2018	2017
		$’000	$’000
Non-current
Available for sale fnancial assets	(i)	1,400	3,324
		1,400	3,324
Reconciliation of movements in available for sale fnancial assets:
Balance at beginning of the year		3,324	5,044
Additions		-	-
Disposals		(29)	(338)
Impairment	(ii)	(1,222)	-
(Loss) / gain on fair value re-measurements		(673)	(1,382)
Balance at end of the year		1,400	3,324

(i) The group’s investment in Manas Resources Limited (“Manas”) of $0.7 million and Amani Gold Limited (“Amani”) of $0.7 million are recognised as available for sale financial assets.

(ii) During the year ended 30 June 2018, impairment of the investment in Manas was considered and no evidence of impairment existed. The investment in Manas is recognised at fair value at 30 June 2018. During the year ended 30 June 2018, impairment of the investment in Amani was considered. The significant decline in the fair value of Amani’s shares was considered objective evidence of impairment and as such, an impairment of $1.2 million was made. The investment in Amani is recognised at fair value 30 June 2018.

Risk exposure and fair value measurements

Information about the group’s exposure to price risk and about the methods and assumptions used in determining fair value is provided in note 16.

RECOGNITION & MEASUREMENT

(i) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. Investments are designated as available-for-sale if they do not have fixed maturities and fixed or determinable payments and management intends to hold them for the medium to long term

Purchase and sale of investments are recognised on trade-date, the date on which the group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.

When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are reclassified to profit or loss as gains and losses on sale of available-for-sale financial assets.

Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in profit or loss in the period in which they arise. Changes in value of non-monetary securities classified as available-for-sale are recognised in other comprehensive income.

Details on how the fair value of financial instruments is determined are disclosed in note 16.

(ii) Impairment

The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of a security below its cost is considered an indicator in determining whether the security is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from other comprehensive income and recognised in the profit or loss.

Notes to the Financial Statements

For the year ended 30 June 2018

9. PROPERTY, PLANT AND EQUIPMENT

9. PROPERTY, PLANT AND EQUIPMENT
	Consolidated 2018	2017
	$’000	$’000
Plant and equipment – at cost	341,916	213,664
Accumulated depreciation	(127,126)	(91,605)
	214,790	122,059
Reconciliation of plant and equipment:
Balance at the beginning of the year	122,059	118,731
Additions	92	123
Transferred from assets under construction	117,269	28,004
Transferred from exploration	-	29
Depreciation	(30,844)	(20,946)
Disposals	-	(6)
Translation difference movement	6,214	(3,876)
Carrying amount at the end of the year	214,790	122,059
Assets under construction – at cost	202,532	177,563
Reconciliation of assets under construction:
Balance at the beginning of the year	177,563	122,072
Additions	72,424	109,409
Transferred to property, plant and equipment	(117,269)	(28,004)
Transferred to mine properties	(112,393)	(35,309)
Transferred from exploration	177,566	7,303
Asset written off	(7,189)	-
Disposals	-	(577)
Translation difference movement	11,830	2,669
Carrying amount at the end of the year	202,532	177,563
Total property, plant and equipment net book value	417,322	299,622

The $7.2 million (30 June 2017: $nil) asset write off occurred in December 2017 and relates to a SAG mill that was originally intended to be utilised in a previous design of the Sissingué plant. That plant design was superseded making the SAG mill obsolete and as a result of failure to secure a buyer for the asset, it was written off.

Notes to the Financial Statements

For the year ended 30 June 2018

9. PROPERTY, PLANT AND EQUIPMENT (continued)

RECOGNITION & MEASUREMENT

(i) Assets under construction

Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified as ‘assets under construction’, and disclosed as a component of property, plant and equipment.

All subsequent expenditure incurred in the construction of a mine by, or on behalf of the group, is accumulated separately for each area of interest in which economically recoverable reserves have been identified. This expenditure includes net direct costs of construction and borrowing costs capitalised during construction. On completion of development, all assets included in ‘assets under construction’ are reclassified as either ‘plant and equipment’ or ‘mine properties’.

(ii) Property, plant and equipment

Land and buildings and all other property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the consolidated entity and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

Land is not depreciated.

Property, plant and equipment directly engaged in the crushing and milling operations are depreciated over the shorter of expected economic life or over the remaining life of the mine on a units-of-production basis. Assets which are depreciated on a basis other than units-of-production method are typically depreciated on a straight-line basis over their estimated useful lives as follows:

Item	Estimated useful life (years)
Plant and equipment	3-10
Buildings	20

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in profit or loss.

(iii) Impairment of assets

Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they may be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount exceeds its recoverable amount. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. Value in use is the present value of the future cash flows expected to be derived from the asset or cash generating unit. In estimating value in use, a pre-tax discount rate is used which reflects current market assessments of the time value of money and the risks specific to the asset. Fair value less costs of disposal is the amount the cash generating unit can be sold to a knowledgeable and willing market participant in an arm’s length transaction, less the disposal costs. In estimating fair value less costs of disposal, discounted cash flow methodology is utilised, and a post-tax discount rate is used.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generated units). The group has three cash generating units, Edikan Gold Mine, Sissingué Gold Mine and the Yaouré Gold Project. Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

Notes to the Financial Statements

For the year ended 30 June 2018

10. MINE PROPERTIES

10. MINE PROPERTIES
	Consolidated 2018	2017
	$’000	$’000
Mine properties – at cost	580,538	431,456
Accumulated depreciation	(276,406)	(177,216)
	304,132	254,240
Reconciliation of mine properties:
Balance at the beginning of the year	254,240	227,245
Additions	28,101	34,731
Transferred from assets under construction	112,393	35,309
Amortisation	(88,740)	(35,486)
Impairment	(10,151)	-
Translation difference movement	8,289	(7,559)
Carrying amount at the end of the year	304,132	254,240

Commercial production at Sissingué was declared with effect from 31 March 2018. All pre-commercial production operational expenditure during the ramp up of the mine until commercial production commenced was capitalised to mine properties. There were no pre-commercial production gold bullion sales at Sissingué.

The $10.2 million (30 June 2017: $nil) impairment expense relates to the impairment of the Sissingué CGU. This impairment resulted from an update to the life of mine plan, a decrease in gold price assumptions and an increase in the discount rate applied.

The significant estimates and judgements underpinning impairment are detailed at note 2.

RECOGNITION AND MEASUREMENT

(i) Mine Properties

Accumulated mine development costs (classified as either ‘plant and equipment’ or ‘mine properties’) are depreciated/amortised on a unit of production basis over the economically recoverable reserves of the mine concerned, except in the case of assets whose useful life is shorter than the life of mine, in which case the straight line method is applied. The units of measure for amortisation of mine properties is tonnes of ore mined and the amortisation of mine properties takes into account expenditures incurred to date. The EGM and SGM mine properties work in progress is assessed at the end of every month and when the work is completed it is transferred to mine properties and then amortised.

The units of measure for depreciating mine related plant and equipment is tonnes of ore processed.

(ii) Deferred stripping costs

The group incurs waste removal costs (stripping costs) during the development and production phases of its surface mining operations. During the production phase, stripping costs (production stripping costs) can be incurred both in relation to the production of inventory in that period and the creation of improved access and mining flexibility in relation to ore to be mined in the future. The former are included as part of the costs of inventory, while the latter are capitalised as a stripping activity asset, where certain criteria are met. Once the group has identified its production stripping for each surface mining operation, it identifies the separate components of the ore bodies for each of its mining operations. An identifiable component is a specific volume of the ore body that is made more accessible by the stripping activity.

The stripping activity asset is initially measured at cost, which is the accumulation of costs directly incurred to perform the stripping activity that improves access to the identified component of ore, plus an allocation of directly attributable overhead costs. If incidental operations are occurring at the same time as the production stripping activity, but are not necessary for the production stripping activity to continue as planned, these costs are not included in the cost of the stripping activity asset. The stripping activity asset is accounted for as an addition to, or an enhancement of, an existing asset, being the mine asset, and is presented as part of ’Mine properties’ in the statement of financial position. This forms part of the total investment in the relevant cash generating unit, which is reviewed for impairment if events or changes of circumstances indicate that the carrying value may not be recoverable.

Notes to the Financial Statements

For the year ended 30 June 2018

10. MINE PROPERTIES (continued)

SIGNIFICANT JUDGEMENTS AND ESTIMATES

Ore reserves are estimates of the amount of ore that can be economically and legally extracted from the group’s mining properties. The group estimates its Ore Reserves and Mineral Resources based on information compiled by appropriately qualified persons relating to the geological data on the size, depth and shape of the ore body and this requires complex geological judgements to interpret data. The estimation of recoverable reserves is based upon factors such as estimates of foreign exchange rates, commodity prices, future capital requirements, and production costs along with geological assumptions and judgements made in estimating the size and grade of the ore body. Changes in the reserve or resource estimates may impact upon the carrying value of exploration and evaluation assets, mine properties, property, plant and equipment, goodwill, provision for rehabilitation, recognition of deferred assets, and depreciation and amortisation charges.

11. MINERAL INTEREST ACQUISITION AND EXPLORATION EXPENDITURE

Consolidated
2018	2017
$’000	$’000
Mineral interest acquisition and exploration – at cost 9,607	183,956
Reconciliation: Balance at the beginning of the year 183,956	184,443
Additions 6,265	26,127
Transferred to plant and equipment -	(29)
Transferred to assets under construction (177,566)	(7,303)
Exploration costs written off (5,772)	(16,111)
Translation difference movement 2,724	(3,171)
Carrying amount at the end of the year 9,607	183,956

The expenditure above relates principally to exploration and evaluation activities. The ultimate recoupment of this expenditure is dependent upon successful development and commercial exploitation, or alternatively, sale of the respective areas of interest. The write-off of $5.8 million as at 30 June 2018 was mainly attributable to the non-discovery of commercially viable deposits at the Mbengué and Napie prospects in Cote d’Ivoire, whilst the write-off of $16.1 million as at 30 June 2017 was a result of writing off both the Nsuaem and Nkotumso areas of interest as no commercially viable deposits had been discovered.

RECOGNITION AND MEASUREMENT

Exploration and evaluation expenditures in relation to each separate area of interest with current tenure are carried forward to the extent that:

(i) such expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or

(ii) exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest is continuing.

Notes to the Financial Statements

For the year ended 30 June 2018

11. MINERAL INTEREST ACQUISITION AND EXPLORATION EXPENDITURE (continued)

Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest.

In the event that an area of interest if abandoned or, if facts and circumstances suggest that the carrying amount of an exploration and evaluation asset is impaired then the accumulated costs carried forward are written off in the year in which the assessment is made.

Significant judgements and estimates

Management determines when an area of interest should be abandoned. When a decision is made that an area of interest is not commercially viable, all costs that have been capitalised in respect of that area of interest are written off. In determining this, assumptions, including the maintenance of title, ongoing expenditure and prospectivity are made.

12. PAYABLES AND PROVISIONS

		Consolidated
		2018	2017
		$’000	$’000
Current
Trade creditors and accruals	(i)	98,047	72,204
Employee benefts		2,017	1,836
		100,064	74,040

Terms and conditions relating to the above financial instruments:

(i) Trade and other creditors are non-interest bearing and are normally settled on 30 day terms.

Risk exposure

Information about the group’s exposure to risk is provided in note 16.

Non - current

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Provision for rehabilitation work 18,060 18,574
Balance at the beginning of the year 18,574 15,648
(Decreased) / increased obligations during the year (1,172) 3,407
Rehabilitation expenditure during the year (194) (169)
Unwinding of discount 58 29
Translation difference movement 794 (341)
Balance at the end of the year 18,060 18,574
Employee benefits 619 627
Total non - current provisions 18,679 19,201
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Notes to the Financial Statements

For the year ended 30 June 2018

12. PAYABLES AND PROVISIONS (continued)

The provision for rehabilitation work relates to the EGM in Ghana, SGM in Côte d’Ivoire and the historical heap leach operations at Yaouré in Côte d’Ivoire. The timing of settlement of these obligations cannot be established with any certainty. The group has commenced mining the EGM project area and many of the old pits identified for rehabilitation work will be subject to new mining. The group has also commenced mining the SGM project area. The provision related to the EGM, SGM and YGP has been reviewed and updated in line with the additional development that has occurred since June 2017.

RECOGNITION AND MEASUREMENT

(i) Trade and other payables

These amounts represent liabilities for goods and services provided to the group prior to the end of the financial year that are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

(ii) Provisions

Provisions are recognised when the group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.

Provisions are measured as the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as an interest expense.

(iii) Employee benefits

(a) Short term obligations

Liabilities for short-term employee benefits expected to be wholly settled within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.

(b) Other long-term employee benefit obligations

The liability for long service leave which is not expected to be wholly settled within 12 months of the reporting date is recognised in the provision for employee benefits and measured as the present value of expected future payments. Consideration is given to expected future wage and salary level, experience of employees’ departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(c) Retirement benefit obligations

Contributions are made by the group to superannuation funds as stipulated by statutory requirements and are charged as expenses when incurred.

(iv) Rehabilitation provision

A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of development activities undertaken, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the provision can be measured reliably. The estimated future obligations include the costs of abandoning sites, removing facilities and restoring the affected areas.

The provision for future restoration costs is the best estimate of the present value of the expenditure required to settle the restoration obligation at the balance date. Future restoration costs are reviewed annually and any changes in the estimate are reflected in the present value of the restoration provision at each balance date.

The initial estimate of the restoration and rehabilitation provision is capitalised into the cost of the related asset and amortised on the same basis as the related asset, unless the present obligation arises from the production of inventory in the period, in which case the amount is included in the cost of production for the period. Changes in the estimate of the provision for restoration and rehabilitation are treated in the same manner, except that the unwinding of the effect of discounting on the provision is recognised as a finance cost rather than being capitalised into the cost of the related asset.

Significant judgements and estimates

Restoration and Rehabilitation provision

The value of the current restoration and rehabilitation provision is based on a number of assumptions including the nature of restoration activities required and the valuation at the present value of a future obligation that necessitates estimates of the cost of performing the work required, the timing of future cash flows and the appropriate risk free discount rate. Additionally current provisions are based on the assumption that no significant changes will occur in relevant legislation covering restoration of mineral properties. A change in any, or a combination, of these assumptions used to determine current provisions could have a material impact to the carrying value of the provision.

Notes to the Financial Statements

For the year ended 30 June 2018

13. DEFERRED TAX

13. DEFERRED TAX
	Consolidated 2018	2017
	$’000	$’000
Deferred tax asset	27,493	47,498
Set off of deferred tax liabilities of entity pursuant to set off provisions	(27,493)	(47,498)
Net deferred tax asset	-	-
Deferred tax liability	72,609	83,428
Set off of deferred tax assets of entity pursuant to set off provisions	(27,493)	(47,498)
Net deferred tax liability	45,116	35,930
(a) The deferred tax asset balance comprising of temporary differences attributable to:
Employee benefts	66	93
Derivatives held for trading	-	55
Other	1,319	2,230
Tax losses	26,108	45,120
Net deferred tax asset	27,493	47,498
(b) Movement in the deferred tax asset:
Opening balance at 1 July	47,498	29,794
Credited to the income statement	(21,775)	23,146
Credited to the equity – hedging reserve	-	(4,494)
Foreign exchange	1,770	(948)
Closing balance at 30 June	27,493	47,498
(c) The deferred tax liability comprises temporary differences attributable to:
Property, plant and equipment	27,961	31,299
Mine properties in use	42,509	52,012
Cash fow hedges	2,139	117
Net deferred tax liability	72,609	83,428
(d) Movement in the deferred tax liability:
Opening balance at 1 July	83,428	77,010
(Credited) / charged to the income statement	(16,121)	5,647
Charged to the equity – hedging reserve	1,942	3,120
Foreign exchange	3,360	(2,349)
Closing balance at 30 June	72,609	83,428

Notes to the Financial Statements

For the year ended 30 June 2018

13. DEFERRED TAX (continued)

RECOGNITION AND MEASUREMENT

Deferred income tax is provided in full, using the balance sheet full liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affect neither accounting nor taxable profit nor loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

14. INTEREST BEARING LIABILITIES

14. INTEREST BEARING LIABILITIES
		Consolidated
		2018	2017
		$’000	$’000
Current
Interest-bearing loan facility	(i)	32,632	19,514
		32,632	19,514
Non-current
Interest-bearing loan facility	(i)	52,383	-
		52,383	-
Reconciliation of liabilities arising from fnancing activities:
Balance at the beginning of the year		19,514	-
Cashfows		61,392	19,530
Translation difference movement		4,109	(16)
Carrying amount at the end of the year		85,015	19,514

(i) The Company’s US$20 million working capital debt facility provided to Perseus’s Ghanaian subsidiary by Macquarie Bank Limited was converted into a US$30 million revolving line of credit to improve flexibility in terms of managing working capital and fund high potential exploration activities. The amount drawn as at 30 June 2018 was US$25 million.

The loan agreement for the US$40 million Sissingué project debt facility provided by Macquarie Bank Limited was executed during the year and the facility was fully drawn during the year. The first principle repayment of US$2 million was made in June 2018 and the amount outstanding on the facility was US$38 million as at 30 June 2018.

Notes to the Financial Statements

For the year ended 30 June 2018

14. INTEREST BEARING LIABILITIES (continued)

Secured liabilities and assets pledged as security

The debt and hedge facilities provided by Macquarie Bank Limited to Perseus Mining Ghana Limited (“PMGL”) are secured by a guarantee and indemnity from the company covering all money due under the facilities as well as mortgages over certain of the company’s assets including its shares in Kojina Resources Ltd (“Kojina”) and receivables under intercompany loan arrangements with subsidiaries. In addition, the security package includes fixed and floating charges over all of the assets and undertakings of both Kojina and PMGL including a first ranking mortgage over the EGM tenements.

The debt and hedge facilities provided by Macquarie Bank Limited to Perseus Mining Côte d’Ivoire SA (“PMCI”) are secured by a guarantee and indemnity from the company covering all money due under the facilities as well as mortgages over certain of the company’s assets including its shares in Occidental Gold Pty Ltd (“Occidental”) and receivables under intercompany loan arrangements with subsidiaries. In addition, the security package includes fixed and floating charges over all of the assets and undertakings of both Occidental and PMCI including a first ranking mortgage over the Sissingué Gold Mine tenement.

Risk exposures and fair value measurements

Information about the group’s exposure to interest rate and foreign currency changes is provided in note 16.

RECOGNITION AND MEASUREMENT

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

Notes to the Financial Statements

For the year ended 30 June 2018

15. DERIVATIVE FINANCIAL INSTRUMENTS

15. DERIVATIVE FINANCIAL INSTRUMENTS
	Consolidated 2018	2017
	$’000	$’000
Current assets
Cash fow hedge asset	5,076	490
	5,076	490
Non-current assets
Cash fow hedge asset	24	1,265
	24	1,265
Current liabilities
Financial liabilities at fair value – gold forward contracts	-	157
	-	157

The group is party to derivative financial instruments in the normal course of business in order to hedge exposure to future price and currency fluctuations in the primary commodity markets in which it operates. This is done in accordance with the group’s financial risk management policies.

Forward metal contracts – cash flow hedges:

The group uses cash flow designated USD forward metal contracts to hedge movements in USD precious metal prices on its anticipated sales of gold. At 30 June 2018 there were cash flow designated hedge contracts in place for 129,350 ounces of gold with settlements scheduled between September 2018 and September 2020 with a weighted average price of US$1,312/oz. These include 62,350 ounces of cash flow designated hedge contracts at an average price of US$1,301/ oz specifically to support the proposed Sissingué project finance debt facility. The portion of the gain or loss on these hedging instruments that are determined to be an effective hedge are recognised and retained directly in equity. The ineffective portion will be recognised in the statement of comprehensive income.

The amount reclassified during the year to revenue in the income statement was a loss of $0.8 million (30 June 2017 loss: $10.5 million)

Financial liabilities at fair value – gold forward contracts:

Financial liabilities at fair value through profit or loss include the change in value of gold forward contracts put in place during the year ending 30 June 2018. The group uses USD forward metal contracts to hedge movements in USD precious metal prices on its anticipated sales of gold. The risk management policies related to these contracts are provided in note 16.

Movements in fair value between inception and close-out of the contract are taken to the statement of comprehensive income. When necessary, these contracts may be rolled over into new contracts at maturity, subject to counterparty credit approval.

At 30 June 2018, the group did not hold any spot deferred contracts.

Risk exposures and fair value measurements

Information about the group’s exposure to credit risk, price risk and liquidity risk related to the undiscounted cash flow exposure from derivative contracts is provided at note 16.

Notes to the Financial Statements

For the year ended 30 June 2018

RECOGNITION AND MEASUREMENT

(i) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss are financial instruments held for trading. A financial liability is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading unless they are designated as hedges. Liabilities in this category are classified as current liabilities if they are expected to be settled within 12 months; otherwise they are classified as non-current.

(ii) Fair value measurement

The group measures derivatives at fair value at each balance-sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

In the principal market for the asset or liability
In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

(iii) Derivatives and hedging activities

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The group designates certain derivatives as either:

hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges); or
hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable forecast transactions (cash flow hedges).

At the inception of a hedge transaction, the group formally designates and documents the hedge relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking the hedge. The group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedge items.

The fair values of various derivative financial instruments used for hedging purposes are disclosed as above. Movements in the hedging reserve in shareholders’ equity are shown in the statement of changes in equity. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.

Where forward contracts are entered into and continue to be held for the purpose of receipt or delivery of a physical commodity in accordance with expected purchase, sale or usage requirements, the contracts are outside of the scope of AASB 139 Financial Instruments: Recognition and Measurement and are therefore off balance sheet.

(i) Fair value hedges
Changes in fair value of derivatives that are designated and qualify as fair value hedges are recorded in the comprehensive income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The gain or loss relating to the effective portion of derivative contracts are recognised in the statement of comprehensive income within “Revenue” with a corresponding offsetting amount to the carrying amount of the asset or liability being the fair value movement of the hedged asset or liability. The gain or loss relating to the ineffective portion is recognised immediately in the statement of comprehensive income as other income or expense.
(ii) Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in reserves in equity. The gain or loss related to the ineffective portion is recognised immediately in profit or loss within other income or expense.

Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for instance when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of derivative contracts is recognised in the statement of comprehensive income within “revenue”. However when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory) or a non-financial liability, the gains and losses previously deferred in equity are included in the measurement of the initial cost or carrying amount of the asset or liability.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to profit or loss.

(iii) Derivatives that do not qualify for hedge accounting

Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in the statement of comprehensive income.

Notes to the Financial Statements

100

For the year ended 30 June 2018

15. DERIVATIVE FINANCIAL INSTRUMENTS (continued)

Significant judgements and estimates

The group makes judgements on the effectiveness of all derivative financial instrument entered into, including forward metal contracts, metal options and foreign currency option contracts in accordance with the above accounting policy. Management’s assessment is that, unless otherwise disclosed, the derivatives have been highly effective in offsetting changes in the fair value of the future cash flows against which they have been designated and as such are compliant with the hedge effectiveness requirements of AASB 139.

16. FINANCIAL RISK MANAGEMENT

Set out below is an overview of financial instruments, other than cash and short-term deposits, held by the group as at 30 June 2018:

30 June 2018:
	Loans and	Fair value Fair value through other comprehensive
	receivables /	Available- through proft income (cash
	amortised cost	for- sale and loss fow hedge)
	$’000	$’000 $’000 $’000
Financial assets:
Receivables	21,876	- - -
Derivative fnancial instruments	-	- - 5,076
Total current	21,876	- - 5,076
Receivables	12,857	- - -
Available for sale investments	-	1,400 - -
Derivative fnancial instruments	-	- - 24
Total non-current	12,857	1,400 - 24
Total fnancial assets	34,733	1,400 - 5,100
Financial liabilities:
Payables	98,047	- - -
Interest-bearing liabilities	32,632	- - -
Total current	130,679	- - -
Interest-bearing liabilities	52,383	- - -
Total non-current	52,383	- - -
Total fnancial liabilities	183,062	- - -

Notes to the Financial Statements

101

For the year ended 30 June 2018

16. FINANCIAL RISK MANAGEMENT (continued)

Set out below is an overview of financial instruments, other than cash and short-term deposits, held by the group as at 30 June 2017:

at 30 June 2017:
	Loans and	Fair value Fair value through other comprehensive
	receivables /	Available- through proft income (cash
	amortised cost	for- sale and loss fow hedge)
	$’000	$’000 $’000 $’000
Financial assets:
Receivables	10,441	- - -
Derivative fnancial instruments	-	- - 490
Total current	10,441	- - 490
Receivables	12,375	- - -
Available for sale investments	-	3,324 - -
Derivative fnancial instruments	-	- - 1,265
Total non-current	12,375	3,324 - 1,265
Total	22,816	3,324 - 1,755
Financial liabilities:
Payables	72,204	- - -
Interest-bearing liabilities	19,514	- - -
Derivative fnancial instruments	-	- 157 -
Total current	91,718	- 157 -
Total	91,718	- 157 -

The group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk); credit risk; liquidity risk and equity price risk. The group therefore has an overall risk management program that focuses on the unpredictability of financial and precious metal commodity markets and seeks to minimise potential adverse effects on the financial performance of the group.

The group uses different methods to measure different types of risk to which it is exposed including sensitivity analysis in the case of interest rate, foreign exchange and other price risks and aging analysis for credit risk. The group then uses derivative financial instruments such as forward metal and forward metal option contracts to hedge certain risk exposures.

Financial risk management is carried out by the finance area of the group under policies approved by the board of directors with identification, evaluation and hedging of financial and commodity risks being undertaken in close co-operation with the group’s operating units. The board provides written principles for overall risk management as well as written policies covering specific areas such as use of derivative financial instruments and investment of excess liquidity.

102

Notes to the Financial Statements

For the year ended 30 June 2018

16. FINANCIAL RISK MANAGEMENT (continued)

Market Risk

(i) Foreign exchange risk

The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar, West African CFA franc and Ghanaian cedi. Foreign exchange risk arises from commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash flow forecasting. The group is also exposed to foreign exchange risk arising from the translation of its foreign operations, the group’s investments in its subsidiaries are not hedged as those currency positions are considered to be long term in nature. In addition, the parent entity has intercompany receivables from its subsidiaries denominated in US Dollars which are eliminated on consolidation. The gains or losses on re-measurement of these intercompany receivables from US Dollars to Australian Dollars are not eliminated on consolidation as those loans are not considered to be part of the net investment in the subsidiaries.

The group’s exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollars, was as follows:

Market Risk Table:

	2018
	USD ZAR CFA EUR GHS	GBP
	$’000 $’000 $’000 $’000 $’000	$’000
Financial Assets
Cash and cash equivalents	10,242 - - 2 1,472	206
Receivables	11,102 - - - 19,320	-
Derivative fnancial instruments	5,100 - - - -	-
Total Assets	26,444 - - 2 20,792	206
Financial Liabilities
Payables	78 287 - 475 2,829	25
Financial liabilities at fair value	- - - - -	-
Interest-bearing liabilities	85,015 - - - -	-
Total Liabilities	85,093 287 - 475 2,829	25

Notes to the Financial Statements

103

For the year ended 30 June 2018

16. FINANCIAL RISK MANAGEMENT (continued)

	2017 USD ZAR CFA EUR GHS	GBP
	$’000 $’000 $’000 $’000 $’000	$’000
Financial Assets
Cash and cash equivalents	13,643 - 622 614 7,830	450
Receivables	10,638 - - - 9,217	-
Derivative fnancial instruments	1,755 - - - -	-
Total assets	26,036 - 622 614 17,047	450
Financial Liabilities
Payables	45 - - 124 5,489	10
Financial liabilities at fair value	157 - - - -	-
Interest-bearing liabilities	19,514 - - - -	-
Total liabilities	19,716 - - 124 5,489	10

Sensitivity

The following table summarises the sensitivity of financial instruments held at balance date to movement in the exchange rate of the AUD to the USD with all other variables held constant and the AUD to the GHS with all other variables held constant, including the impact of the foreign exchange movement on the inter-company loan of $261.2 million (2017: $248.1 million). The sensitivity is based on management’s estimate of reasonably possible changes over a financial year.

	Change in USD rate	Impact on proft or loss before tax and equity $’000

2018	+10%	(20,941)
	-10%	25,595

2017	+10%	(24,645)
	-10%	30,322

	Change in GHS rate	Impact on proft or loss before tax and equity $’000

2018	+10%	(1,633)
	-10%	1,996

2017	+10%	(1,051)
	-10%	1,284

The group’s exposure to other foreign exchange movements is not material.

104

Notes to the Financial Statements

For the year ended 30 June 2018

16. FINANCIAL RISK MANAGEMENT (continued)

(ii) Price risk

The group is exposed to commodity price risk for its future gold production. These risks are measured using sensitivity analysis and cash flow forecasting and to manage exposures the group enters into forward commodity price derivatives. The group’s policy is to hedge no more than 40% of anticipated gold sales in the subsequent 12 months and no more than 30% of anticipated gold sales in the 12 months subsequent to that first 12 months.

At the end of the reporting period the group had a total of 93,350 ounces of forward metal contracts in place over approximately 26% of anticipated monthly gold production from 1 July 2018 through to 30 June 2019, 27,500 ounces of forward metal contracts in place over approximately 10% of anticipated monthly gold production from 1 July 2019 through to 30 June 2020 and 8,500 ounces of forward metal contracts in place over approximately 9% of anticipated monthly gold production from 1 July 2020 through to 30 September 2020.

When necessary these contracts may be rolled over into new contracts at maturity, subject to counterparty credit approval. Of this total, the group held forward metal contracts for 67,000 ounces of forward metal contracts designated as hedging contracted specifically to support the proposed Sissingué project finance debt facility. Balance date exposures and further details of current commodity price derivatives are provided at note 15.

Sensitivity

The following table summarises the sensitivity of the fair value of instruments held at balance date to movements in the forward gold price, with all other variables held constant.

	Increase / decrease in gold prices	Impact on proft or loss before tax $’000	Impact on equity before tax $’000

2018	+10%	-	(16,778)
	-10%	-	26,899

2017	+10%	(5,462)	(22,266)
	-10%	5,462	24,792

(iii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The group’s exposure to the risk of changes in market interest rates relates primarily to the group’s debt obligations which have floating interest rates.

Notes to the Financial Statements

105

For the year ended 30 June 2018

16. FINANCIAL RISK MANAGEMENT (continued)

At the end of the reporting period the group’s interest rate risk exposure and the weighted average interest rate for each class of financial assets and liabilities was:

	Weighted average effective interest rate	Fixed interest rate $’000	Floating interest rate $’000	Non-interest bearing $’000	Total $’000

30 June 2018
Financial assets: Cash and cash equivalents 0.7% - 10,956 20,210					31,166
Security deposit	1.6%	8,322	2,733	1,802	12,857
Net exposure to cash fow interest rate risk		8,322	13,689	22,012	44,023
Financial liabilities: Interest-bearing liabilities 6.6% - 85,015 -					85,015
Net exposure to cash fow interest rate risk		-	85,015	-	85,015

30 June 2017
Financial assets: Cash and cash equivalents 3.9% - 21,601 2,426					24,027
Security deposit	0.6%	2,620	8,017	1,738	12,375
Net exposure to cash fow interest rate risk		2,620	29,618	4,164	36,402
Financial liabilities: Interest-bearing liabilities 4.3% - 19,514 -					19,514
Net exposure to cash fow interest rate risk		-	19,514	-	19,514

Sensitivity

If interest rates were to move up by 1% with all other variables held constant, then the pre-tax impact on the group’s profit as well as total equity would be a movement of $0.6million (30 June 2017: $0.1 million), a 1% decrease would be a movement of $0.6 million (30 June 2017: $0.01 million).

106

Notes to the Financial Statements

For the year ended 30 June 2018

16. FINANCIAL RISK MANAGEMENT (continued)

Credit risk

Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted under a financial instrument resulting in a financial loss to the group and arises from deposits with banks and financial institutions, favourable derivative financial instruments as well as credit exposures to customers including outstanding receivables and committed transactions. For banks and financial institutions, only independent parties with a minimum credit rating of ‘A’ are accepted.

The carrying amount the group’s financial assets, represents the maximum credit exposure.

The group restricts the exposure to credit losses on derivative instruments it holds by entering into master netting arrangements with major counterparties with whom a significant volume of transactions are undertaken.

Such an arrangement provides for a single net settlement of all financial instruments covered by the agreement in the event of default on any one contract. Master-netting arrangements do not result in an offset of balance-sheet assets and liabilities unless certain conditions for offsetting under AASB 132 apply.

Although master-netting arrangements may significantly reduce credit risk, it should be noted that:

(i) Credit risk is eliminated only to the extent that amounts due to the same counterparty will be settled after the assets are realised; and
(ii) The extent to which overall credit risk is reduced may change substantially within a short period because the exposure is affected by each transaction subject to the arrangement.

At 30 June 2018, master netting arrangements reduced the credit risk on favourable contracts that have a fair value of $6.5million (2017: $1.8 million).

Liquidity Risk

Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group’s approach to managing liquidity is to ensure, that as far as possible, it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the group’s reputation.

The group manages liquidity risk by maintaining adequate cash reserves by continuously monitoring forecast and actual cash flows, matching maturity profiles of financial assets and financial liabilities, and by ensuring that surplus funds are generally only invested in instruments that are tradable in highly liquid markets or that can be relinquished with minimal risk of loss.

107

Notes to the Financial Statements

For the year ended 30 June 2018

16. FINANCIAL RISK MANAGEMENT (continued)

Maturities of financial liabilities

The tables below analyse the group’s financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Consolidated	Less than 6 months $’000	6 months – 1 year $’000	1 – 2 years $’000	2 – 5 years $’000	Greater than 5 years $’000	Total contractual cash fows $’000

30 June 2018
Non-derivatives Payables 98,047 - - - - 98,047
Interest-bearing liabilities	2,193	35,087	55,820	-	-	93,100
	100,240	35,087	55,820	-	-	191,147
Derivatives Derivative fnancial instruments - - - - - -
	-	-	-	-	-	-

30 June 2017
Non-derivatives Payables 72,204 - - - - 72,204
Interest-bearing liabilities	-	19,514	-	-	-	19,514
	72,204	19,514	-	-	-	91,718
Derivatives Derivative fnancial instruments (1,674) 1,831 - - - 157
	(1,674)	1,831	-	-	-	157

108

Notes to the Financial Statements

For the year ended 30 June 2018

16. FINANCIAL RISK MANAGEMENT (continued)

Fair values

Set out below is a comparison of the carrying amounts and fair values of financial instruments as at 30 June 2018:

	Consolidated	Consolidated	Consolidated
	2018 2017
	Carrying amount $’000	Fair value $’000 Carrying amount $’000	Fair value $’000
Financial assets:
Cash	31,166	31,166 24,027	24,027
Receivables	21,876	21,876 10,441	10,441
Derivative fnancial instruments	5,076	5,076 490	490
Total current	58,118	58,118 34,958	34,958

Receivables	12,857	12,857 12,375	12,375
Available for sale instruments	1,400	1,400 3,324	3,324
Derivative fnancial instruments	24	24 -	-
Total non-current	14,281	14,281 15,699	15,699
Total	72,399	72,399 50,657	50,657
Financial liabilities:
Payables	98,047	98,047 72,204	72,204
Gold forward contracts	-	- 157	157
Total current	98,047	98,047 72,361	72,361
Total	98,047	98,047 72,361	72,361

Fair value hierarchy

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 Quoted market prices in an active market (that are unadjusted) for identical assets or liabilities

Level 2 Valuation techniques (for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable)
Level 3 Valuation techniques (for which the lowest level input that is significant to the fair value measurement is unobservable)

For financial instruments that are recognised at fair value on a recurring basis, the group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

There were no transfers between categories during the period.

Notes to the Financial Statements

109

For the year ended 30 June 2018

16. FINANCIAL RISK MANAGEMENT (continued)

The following table presents the group’s financial instruments measured and recognised at fair value at 30 June 2018 and 30 June 2017.

30 June 2017.
	Level 1 $’000	Level 2 $’000	Level 3 $’000	Total $’000

30 June 2018
Financial assets:
Available for sale instruments	1,400	-	-	1,400
Derivative fnancial instruments	-	5,100	-	5,100
Total	1,400	5,100	-	6,500
Financial liabilities: Derivative fnancial instruments	-	-	-	-
Total	-	-	-	-

30 June 2017
Financial assets: Available for sale instruments	3,324	-	-	3,324
Derivative fnancial instruments	-	1,755	-	1,755
Total	3,324	1,755	-	5,079
Financial liabilities: Derivative fnancial instruments	-	157	-	157
Total	-	157	-	157

Valuation techniques

The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. The valuation techniques include forward pricing using present value calculations. The models incorporate various inputs including the credit quality of counterparties and forward rate curves of the underlying commodity. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

Specific valuation techniques used to value financial instruments include;

Quoted market prices or dealer quotes for similar instruments.
The fair value of forward exchange contracts is determined using forward exchange market rates at the end of the reporting period.
Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments.

110

Notes to the Financial Statements

For the year ended 30 June 2018

16. FINANCIAL RISK MANAGEMENT (continued)

The net fair value of cash and cash equivalents and non-interest bearing financial assets and liabilities of the group approximate their carrying values. The carrying values (less impairment provision if provided) of trade receivables and payable are assumed to approximate their fair values due to their short-term nature.

RECOGNITION AND MEASUREMENT

Measurement

At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Fair value measurement

The group presents assets and liabilities in statement of financial position based on current/non-current classification. An asset is current when it is either:

Expected to be realised within 12 months after the reporting period
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period All other assets are classified as non-current.

A liability is current when either:

It is due to be settled within 12 months after the reporting period
There is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period The group classifies all other liabilities as non-current.

SIGNIFICANT JUDGEMENTS AND ESTIMATES

Measurement of fair values

When the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

Equity price risk

The group’s investments in Manas and Amani, which are classified as available for sale financial assets, is susceptible to market price risk arising from uncertainties about future values of the investment securities. At the reporting date, the exposure to listed equity securities at fair value was $1.4 million (30 June 2017: $3.3 million). A decrease of 10% on the share price of Manas could have an impact of approximately ($0.05 million) on the income or equity attributable to the group and a decrease of 10% on the share price of Amani could have an impact of approximately ($0.31 million), depending on whether the decline is prolonged. An increase of 10% in the value of the listed securities would only impact equity by $0.05 million for Manas and $0.31 million for Amani and would not have an effect on the profit or loss.

Capital management

Management controls the capital of the group in order to ensure that the group can fund its operations in an efficient and timely basis and continue as a going concern. Due to the funding provided by Macquarie the group is required to hold a minimum liquid assets balance of US$15.0 million. Management effectively manages the group’s capital by assessing the group’s cash projections up to twenty-four months in the future and any associated financial risks. Management will adjust the group’s capital structure in response to changes in these risks and in the market. There have been no changes in the strategy adopted by management to control the capital of the group since the prior year.

During the prior year, the group formally accepted Committed Letters of Offer from Macquarie to provide members of the group with a total of US$60 million of debt finance to be used to finance its growth strategy. The financing included a US$40 million project debt facility that will be used to finance the completion of the development of Sissingué. Execution of the loan agreement for the US$40 million Sissingué project debt facility provided by Macquarie Bank Limited was completed and the facility was fully drawn during the year. The first principal repayment of US$2 million was made during June 2018 and the amount outstanding on the facility was US$38 million as at 30 June 2018.

Notes to the Financial Statements

111

For the year ended 30 June 2018

16. FINANCIAL RISK MANAGEMENT (continued)

The Company’s US$20 million working capital debt facility provided to Perseus’s Ghanaian subsidiary by Macquarie Bank Limited was converted into a US$30 million revolving line of credit to improve flexibility in terms of managing working capital and fund high potential exploration activities. The amount drawn as at 30 June 2018 was US$25 million. This facility is for the purpose of providing general working capital while production at Edikan is ramping up and Perseus’s corporate cash resources are being applied to fund Sissingué as well as exploration and corporate expenses.

17. ISSUED CAPITAL AND RESERVES

17. ISSUED CAPITAL AND RESERVES	17. ISSUED CAPITAL AND RESERVES	17. ISSUED CAPITAL AND RESERVES	17. ISSUED CAPITAL AND RESERVES
Consolidated 2018 $’000 2017 $’000
(a) Issued and paid-up share capital
1,034,826,432 (2017: 1,033,217,813) ordinary shares, fully paid 720,943 720,739

	Consolidated
	2018 2017
	$’000	Number $’000	Number
Balance at the beginning of the year	720,739	1,033,217,813 708,692	1,004,653,217
Transaction costs arising from issue of securities	-	- (797)	-
Vesting of performance rights on 28 July 2016	-	- -	375,000
Vesting of performance rights on 21 February 2017	-	- -	1,062,500
Vesting of performance rights on 2 March 2018	-	750,000 -	-
Vesting of performance rights on 13 April 2018	-	400,000 -	-
Share placement at issue price of $0.44 pursuant to the exercise of warrants	204	458,619 5,193	11,824,727
Share placement at issue price of $0.50 on 22 July 2016	-	- 7,651	15,302,369
Issued and paid-up share capital	720,943	1,034,826,432 720,739	1,033,217,813
Balance at the end of the year	720,943	1,034,826,432 720,739	1,033,217,813

RECOGNITION AND MEASUREMENT

Ordinary shares are classified as equity and incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. If the company reacquires its own equity instruments for the purpose of reducing its issued capital, for example as the result of a share buy-back, those instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including any directly attributable incremental costs (net of tax) is recognised directly in equity.

112

Notes to the Financial Statements

For the year ended 30 June 2018

17. ISSUED CAPITAL AND RESERVES (continued)

(a) Performance rights

The consolidated entity measures the cost of equity-settled transactions with employees and consultants by reference to the fair value of the equity instruments at the date at which they were granted. The fair value of options granted is determined using a Black-Scholes model and the fair value of performance rights granted is determined using a Monte Carlo simulation model. Refer to Note 24 for further details.

(b) Ordinary shares

Ordinary shares entitle the holder to participate in dividends as declared and, in the event of winding up of the company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.

(c) Nature and purpose of reserves

A summary of the transactions impacting each reserve has been disclosed in the statement of changes in equity.

Share based payments reserve

The share based payments reserve is used to record the fair value of options and performance rights issued but not exercised.

Foreign currency translation reserve

The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations where their functional currency is different to the presentation currency of the reporting entity along with Perseus’s share of the movement in its associate’s foreign currency translation reserve.

Non-controlling interest’s reserve

The non-controlling interest’s reserve records the difference between the fair value of the amount by which the non-controlling interests were adjusted to record their initial relative interest and the consideration paid.

Hedge reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedges related to hedged transactions that have not yet occurred.

Asset revaluation reserve

The asset revaluation reserve is used to record the revaluation of the investment in Manas and Amani to market value as the investment is designated as an available for sale financial asset.

18. ACCUMULATED LOSSES

Movements in accumulated losses were as follows:

Movements in accumulated losses were as follows:
	Consolidated
	2018	2017
	$’000	$’000
Balance at beginning of fnancial year	(42,714)	36,899
Loss attributable to the owners of the parent	(25,853)	(79,613)
Balance at end of fnancial year	(68,567)	(42,714)

Notes to the Financial Statements

113

For the year ended 30 June 2018

19. SUBSIDIARIES

19. SUBSIDIARIES
Name of subsidiary Notes	Place of incorporation Consolidated entity interest 2018 (%) Consolidated entity interest 2017 (%)
Parent entity
Perseus Mining Limited (a)	Australia
Subsidiaries
Occidental Gold Pty Ltd (i) (a)	Australia 100 100
Centash Holdings Pty Limited (ii) (a)	Australia 100 100
Sun Gold Resources Ltd (b)	Ghana 100 100
Kojina Resources Ltd (iii) (b)	Ghana 100 100
Perseus Burkina Holdings Pty Ltd (a)	Australia 100 100
Amara Mining Limited (iv) (g)	UK 100 100
Perseus Canada Ltd (a)	Australia 100 100
(i) Subsidiaries of Occidental Gold Pty Ltd
Occidental Gold SARL (c)	Côte d’Ivoire 100 100
Perseus Mining Côte d’Ivoire SA (c) (e)	Côte d’Ivoire 86 86
(ii) Subsidiaries of Centash Holdings Pty Ltd
Perex SARL (c)	Côte d’Ivoire 100 100
Perseus Services SARL (c)	Côte d’Ivoire 100 100
(iii) Subsidiary of Kojina Resources Ltd
Perseus Mining (Ghana) Limited (b) (d)	Ghana 90 90
(iv) Subsidiaries of Amara Mining Limited
Amara Mining (Burkina) Limited (f)	UK 100 100
Amara Mining (Sierra Leone) Limited (f)	UK 100 100
Amara Mining (Côte d’Ivoire) Limited (f)	UK 100 100
Winston Mining Limited (g)	BVI - 100
(v) Subsidiaries of Amara Mining (Côte d’Ivoire) Limited
Perseus Yaouré sarl (c)	Côte d’Ivoire 100 100
Yaouré Mining SA (c)	Côte d’Ivoire 90 90

Notes:

(a) Audited by PriceWaterhouseCoopers Australia.
(b) Audited by PriceWaterhouseCoopers Ghana.
(c) Audited by PriceWaterhouseCoopers Côte d’Ivoire.

(d) For key financial information of Perseus Mining (Ghana) Limited which has a non-controlling interest. The entity accounts for the majority of the Ghana reporting segment.

(e) The 86% interest in the Perseus Mining Côte d’Ivoire SA reflects a 10% free carried interest which is required to be allocated to the Government of Côte d’Ivoire in consideration of the issue of an Exploitation Permit pursuant to the Ivorian Mining Code, and 4% owned by local interests. For key financial information of PMCI which has a non-controlling interest, refer to note 1. Perseus Mining Côte d’Ivoire SA accounts for the majority of the Côte d’Ivoire reporting segment.

(f) Audited by BDO United Kingdom.
(g) Liquidated on 4 July 2017.

Notes to the Financial Statements

114

For the year ended 30 June 2018

20. PARENT ENTITY DISCLOSURES

20. PARENT ENTITY DISCLOSURES
Statement of fnancial position	Parent
	2018 $’000 2017 $’000
Assets Current assets	12,710 3,805
Non-current assets	692,886 709,903
Total assets	705,596 713,708
Liabilities Current liabilities	1,378 1,238
Non-current liabilities	447 354
Total liabilities	1,825 1,592
Equity Issued capital	720,943 720,739
Accumulated losses	(38,158) (35,017)
Asset revaluation reserve	(4,265) 1,412
Share-based payments reserve	25,251 23,418
Hedge reserve	- 1,564
Total equity	703,771 712,116
Loss for the year	(3,141) (54,447)
Other comprehensive (loss) / income	- -
Total comprehensive loss	(3,141) (54,447)

Contingent liabilities of the parent entity:

There were no contingent liabilities of the parent entity at 30 June 2018.

Commitments for the acquisition of property, plant and equipment by the parent entity:

Plant and equipment

Plant and equipment
Within one year	- -
One year or later and not later than fve years	- -
Later than fve years	- -

Commitments for operating lease by the parent entity:

Operating lease

Operating lease
Within one year	269 262
One year or later and not later than fve years	1,070 1,339
Later than fve years	- -

Notes to the Financial Statements

115

For the year ended 30 June 2018

20. PARENT ENTITY DISCLOSURES (continued)

RECOGNITION AND MEASUREMENT

The financial information for the parent entity, Perseus Mining Limited has been prepared on the same basis as the consolidated financial statements, except as set out below.

(i) Investments in subsidiaries, associates and joint venture entities

Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements of Perseus Mining Limited. Dividends received from associates are recognised in the parent entity’s profit or loss, rather than being deducted from the carrying amount of these investments.

(ii) Share-based payments

The grant by the company of options over its equity instruments to the employees of subsidiary undertakings in the group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.

21. RELATED PARTY DISCLOSURES

(a) Identity of related parties

The consolidated entity has a related party relationship with its subsidiaries (see note 19) and with its key management personnel (refer below).

(b) Transactions with other related parties

The consolidated entity had no transactions with any other related party during the year ended 30 June 2018.

(c) Key management personnel compensation

The key management personnel compensation included in ‘Employee benefits expenses’ and ‘Share based payments’ is as follows:

	Consolidated
	2018	2017
	$’000	$’000
Short-term employee benefts	3,987	3,910
Long-term employee benefts	60	42
Post-employment benefts	204	255
Termination / resignation payments	-	27
Share-based payments	798	1,243
	5,049	5,477

Details of remuneration disclosures are provided in the remuneration report on pages 44 to 64.

116

Notes to the Financial Statements

For the year ended 30 June 2018

22. REMUNERATION OF AUDITORS

22. REMUNERATION OF AUDITORS
Consolidated 2018	2017
$	$
Amounts received or due and receivable by Ernst & Young Australia for: Audit or review of the fnancial report of the entity and any other entity in the group -	134,000
Non-statutory audit services in relation to the entity and any other entity in the group 5,839	28,000
Amounts received or due and receivable by overseas Ernst & Young frm for: Audit or review of the fnancial report of the entity and any other entity in the group -	107,000
Non-statutory audit services in relation to the entity and any other entity in the group -	-
Amounts received or due and receivable by PricewaterhouseCoopers Australia for: Audit or review of the fnancial report of the entity and any other entity in the group 100,000	-
Non-statutory audit services in relation to the entity and any other entity in the group -	-
Amounts received or due and receivable by overseas PricewaterhouseCoopers frm for: Audit or review of the fnancial report of the entity and any other entity in the group 85,000	-
Non-statutory audit services in relation to the entity and any other entity in the group 5,223	-
Amounts received or due and receivable by overseas BDO for:
Audit or review of the fnancial report of the entity and any other entity in the group 42,819	-
Non-statutory audit services in relation to the entity and any other entity in the group 28,263	-
267,144	269,000

Notes to the Financial Statements

117

For the year ended 30 June 2018

23. CASH FLOWS FROM OPERATING ACTIVITIES RECONCILIATON

23. CASH FLOWS FROM OPERATING ACTIVITIES RECONCILIATON
Consolidated 2018	2017
$’000	$’000
Reconciliation of the loss from ordinary activities to net cash provided in operating activities Loss from ordinary activities after income tax (24,906)	(83,122)
Add back non-cash items: Depreciation and amortisation 119,584	56,171
Foreign currency (gain) / loss (5,707)	11,653
Gain on derivative fnancial instruments (157)	(2,363)
(Gain) / loss on disposal of property, plant and equipment (311)	13
Share based payments 1,716	2,786
Impairment and write-offs 24,334	16,111
Dissolution of entities -	1,703
Write down of receivable 335	532
Borrowing costs 2,797	1,664
Unrealised derivative gains 1,412	7,885
Change in operating assets and liabilities: Decrease / (increase) in net tax balances 10,346	(12,987)
(Increase) / decrease in inventories (80,148)	9,235
(Increase) / decrease in receivables (3,187)	4,775
(Increase) / decrease in other assets (8,473)	437
Increase / (decrease) in payables 30,422	(14,250)
Increase in provision 234	617
Net cash from operating activities 68,291	860

118

Notes to the Financial Statements

For the year ended 30 June 2018

24. SHARE BASED PAYMENTS

Performance Rights Plan

Performance rights were issued to directors and employees of the company under the terms of the company’s Performance Rights Plan approved by shareholders in November 2014 as disclosed in the remuneration report under the heading “LTI”. These performance rights were issued at nil consideration and each performance right will convert to an ordinary share upon satisfaction of vesting criteria.

The following table illustrates the number and movements in performance rights during the year under the Plan:

Grant date	End of measure- ment period	Expiry date	Exer- cise price	Balance at start of the year Number	Granted during the year Number	Exercised during the year Number	Forfeited during the year Number	Balance at the end of the year Number	Vested and exercisable at end of the year Number
2018
1-Jan-15	31-Dec-17	30-Jun-18	nil	250,000	-	(125,000)	(125,000)	-	-
1-Jul-15	30-Jun-17	31-Dec-17	nil	3,725,000	-	-	(3,725,000)	-	-
20-Nov-15	30-Jun-17	31-Dec-17	nil	800,000	-	-	(800,000)	-	-
20-Nov-15	30-Jun-18	31-Dec-18	nil	500,000	-	-	-	500,000	-
12-Oct-16	30-Jun-17	31-Dec-17	nil	1,116,668	-	-	(1,116,668)	-	-
12-Oct-16	30-Jun-18	31-Dec-18	nil	333,333	-	-	-	333,333	-
12-Oct-16	30-Jun-19	31-Dec-19	nil	333,333	-	-	-	333,333	-
25-Nov-16	30-Jun-18	30-Jun-25	nil	533,333			-	533,333	-
25-Nov-16	30-Jun-19	30-Jun-26	nil	533,333			-	533,333	-
25-Nov-16	31-Dec-17	30-Jun-18	nil	1,525,000	-	(1,025,000)	(500,000)	-	-
25-Nov-16	31-Dec-18	30-Jun-19	nil	5,300,000	-	-	(300,000)	5,000,000	-
3-Aug-17	30-Jun-20	31-Dec-20	nil	-	8,958,334	-	(450,000)	8,508,334	-
24-Nov-17	30-Jun-20	31-Dec-20	nil	-	2,233,334	-	-	2,233,334	-
Total				14,950,000	11,191,668	(1,150,000)	(7,016,668)	17,975,000	-

2017 1-Jan-14	31-Dec-16	30-Jun-17	nil	1,925,000	-	(781,250)	(1,143,750)	-	-
4-Jun-14	31-Dec-16	30-Jun-17	nil	562,500	-	(281,250)	(281,250)	-	-
1-Jan-15	30-Jun-16	31-Dec-16	nil	750,000	-	(375,000)	(375,000)	-	-
1-Jan-15	31-Dec-17	30-Jun-18	nil	750,000	-	-	(500,000)	250,000	-
1-Jul-15	30-Jun-17	31-Dec-17	nil	4,725,000	-	-	(1,000,000)	3,725,000	-
20-Nov-15	30-Jun-17	31-Dec-17	nil	800,000	-	-	-	800,000	-
20-Nov-15	30-Jun-18	31-Dec-18	nil	500,000	-	-	-	500,000	-
13-Jan-16	31-Dec-16	30-Jun-17	nil	1,325,000	-	-	(1,325,000)	-	-
12-Oct-16	30-Jun-17	31-Dec-17	nil	-	1,241,668	-	(125,000)	1,116,668	-
12-Oct-16	30-Jun-18	31-Dec-18	nil	-	991,666	-	(125,000)	866,666	-
12-Oct-16	30-Jun-19	31-Dec-19	nil	-	866,666	-	-	866,666	-
25-Nov-16	31-Dec-17	30-Jun-18	nil	-	1,925,000	-	(400,000)	1,525,000	-
25-Nov-16	31-Dec-18	30-Jun-19	nil	-	5,700,000	-	(400,000)	5,300,000	-
Total				11,337,500	10,725,000	(1,437,500)	(5,675,000)	14,950,000	-

Notes to the Financial Statements

119

For the year ended 30 June 2018

24. SHARE BASED PAYMENTS (continued)

The weighted average exercise price of all performance rights granted was nil.

The fair value of the equity-settled performance rights granted under the Performance Rights Plan is estimated as at the date of grant using a Monte Carlo model taking into account the terms and conditions upon which the performance rights were granted.

The following table lists the inputs to the model used for the performance rights in existence during the year ended 30 June 2017 and 30 June 2018.

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Volatility
Expected life Price of (%) – Risk-free
Exer- of perfor- underlying Perseus Volatility Dividends interest
cise mance rights shares at share (%) – per expected rate (%) – Performance
Grant date price (years) grant date price group range on shares range period
55.0% - 01/01/2015 –
1-Jan-15 nil 1.5 $0.26 94.0% nil 2.15%
110.7% 30/06/2016
52.0% - 01/01/2015 –
1-Jan-15 nil 3.0 $0.26 217.2% nil 2.11%
113.3% 31/12/2017
42.2% - 01/07/2015 –
1-Jul-15 nil 2.0 $0.42 86.8% nil 1.92%
98.2% 30/06/2017
42.5% - 01/07/2015 –
20-Nov-15 nil 2.0 $0.42 71.9% nil 1.92%
83.4% 30/06/2017
50.6% - 01/07/2015 –
20-Nov-15 nil 3.0 $0.42 74.0% nil 1.95%
82.7% 30/06/2018
48.1% - 01/01/2016 –
13-Jan-16 nil 1.0 $0.33 75.7% nil 1.95%
82.9% 31/12/2016
0.7%- 01/07/2016 –
17-Aug-16 nil 0.9 $0.53 77.9% nil 1.57%
86.5% 30/06/2017
48.7%- 01/07/2016 –
17-Aug-16 nil 1.9 $0.53 78.8% nil 1.57%
170.0% 30/06/2018
3.9%- 01/07/2016 –
12-Oct-16 nil 0.7 $0.48 78.8% nil 1.57%
85.1% 30/06/2017
48.9%- 01/07/2016 –
12-Oct-16 nil 1.7 $0.48 78.2% nil 1.57%
169.4% 30/06/2018
49.5%- 01/07/2016 –
12-Oct-16 nil 2.7 $0.48 79.8% nil 1.52%
143.2% 30/06/2019
3.6%- 01/07/2016 –
25-Nov-16 nil 0.6 $0.54 80.8% nil 1.57%
89.9% 30/06/2017
3.7%- 01/07/2016 –
25-Nov-16 nil 1.1 $0.54 75.1% nil 1.57%
79.4% 31/12/2017
49.9%- 01/07/2016 –
25-Nov-16 nil 1.6 $0.54 78.6% nil 1.57%
168.4% 30/06/2018
47.4%- 01/07/2016 –
25-Nov-16 nil 2.1 $0.54 78.9% nil 1.52%
167.0% 31/12/2018
49.0%- 01/07/2016 –
25-Nov-16 nil 2.6 $0.54 78.3% nil 1.52%
132.7% 30/06/2019
5.0%- 01/07/2017 –
03-Aug-17 nil 2.9 $0.29 48.6% nil 1.90%
78.1% 30/06/2020
1.2%- 01/07/2017 –
24-Nov-17 nil 2.6 $0.33 78.0% nil 1.90%
82.8% 30/06/2020
----- End of picture text -----

120

Notes to the Financial Statements

For the year ended 30 June 2018

24. SHARE BASED PAYMENTS (continued)

The expected life of the performance rights is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumptions that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. Refer to table 5 of the remuneration report for the fair value of the performance rights at the grant date.

RECOGNITION AND MEASUREMENT

Share based compensation benefits are provided to employees, consultants and contractors via the Perseus Mining Limited Employee Option Plan and the Performance Rights Plan.

The fair value of options or performance rights granted under the Perseus Mining Limited’s Employee Option Plan or the Performance Rights Plan is recognised as an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options or performance rights granted, which includes any market performance conditions but excludes the impact of any service and non-market performance vesting conditions.

The total expense is recognised over the vesting period, which is the period over which all of the specific vesting conditions are to be satisfied. At the end of each reporting period, the group revises its estimate of the number of options or performance rights that are expected to become vested. The employee benefit expense recognised each period takes into account the most recent estimate. The impact of the revision to original estimates, if any, is recognised in the statement of comprehensive income with a corresponding adjustment to equity.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition. If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

25. SUMMARY OF OTHER SIGNIFICANT ACCOUNTING POLICIES

Other significant accounting policies adopted in the preparation of these consolidated financial statements are set out in relevant sections of the notes and below. These policies have been consistently applied to all the years presented, unless otherwise stated. Where necessary, comparative information has been restated to conform with changes in presentation in the current year.

(a) Basis of preparation

Changes in accounting policies

(i) AASB 15 Revenue from contracts with customers replaces the existing revenue recognition standards AASB 111 Construction Contracts , AASB 118 Revenue and related interpretations (Interpretation 13 Customer Loyalty Programmes , Interpretation 15 Agreements for the Construction of Real Estate , Interpretation 18 Transfers of Assets from Customers , Interpretation 131 Revenue—Barter Transactions Involving Advertising Services and Interpretation 1042 Subscriber Acquisition Costs in the Telecommunications Industry ). AASB 15 incorporates the requirements of IFRS 15 Revenue from contracts with customers issued by the IASB and developed jointly with the US Financial Accounting Standards Board (“FASB”)

The core principle of AASB 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with that core principle by applying the following steps:

Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Notes to the Financial Statements

121

For the year ended 30 June 2018

25. SUMMARY OF OTHER SIGNIFICANT ACCOUNTING POLICIES (continued)

The group has early adopted AASB 15 with effect from 1 July 2017. This change in accounting policy was accounted for using the full retrospective transition provisions and as a result the prior year comparatives have been restated. The impact of the early adoption of this standard was a change in the revenue recognition point from the mine gate to once the gold has been credited to the metal account of the customer.

The following tables show the effects of the restatements for each individual line item excluding those that were not affected by the changes. Consequently, the sub-totals and totals disclosed cannot be recalculated from the numbers disclosed below.

Statement of comprehensive income	2017 (as originally presented) $’000	AASB 15 $’000	2017 (restated) $’000
Continuing operations
Revenue	282,648	(5,724)	276,924
Cost of sales	(252,978)	(143)	(253,121)
Gross proft before depreciation and amortisation	29,670	(5,867)	23,803
Gross proft / (loss) from operations	(26,255)	(5,867)	(32,122)
Loss before income tax expense	(94,520)	(5,867)	(100,387)
Income tax (expense) / beneft	15,212	2,053	17,265
Net loss after tax expense	(79,308)	(3,814)	(83,122)
Other comprehensive income Items that may be reclassifed subsequently to proft or loss
Exchange differences on translation of foreign operations	(4,143)	(1,623)	(5,766)
Total comprehensive loss for the period	(69,129)	(5,437)	(74,566)
Loss attributable to:
Owners of the parent	(76,180)	(3,433)	(79,613)
Non-controlling interest	(3,128)	(381)	(3,509)
	(79,308)	(3,814)	(83,122)
Comprehensive loss attributable to:
Owners of the parent	(67,218)	(4,893)	(72,111)
Non-controlling interest	(1,911)	(544)	(2,455)
	(69,129)	(5,437)	(74,566)

Basic loss per share	(7.41) cents	(0.33) cents	(7.74) cents
Diluted loss per share	(7.41) cents	(0.33) cents	(7.74) cents

122

Notes to the Financial Statements

For the year ended 30 June 2018

25. SUMMARY OF OTHER SIGNIFICANT ACCOUNTING POLICIES (continued)

	2017 (as originally presented) $’000 AASB 15 $’000 2017 (restated) $’000
Current assets
Receivables	30,436 (19,995) 10,441
Inventories	45,819 12,544 58,363
Total current assets	105,062 (7,451) 97,611
Non-current liabilities
Deferred tax liability	37,944 (2,014) 35,930
Total non-current liabilities	57,145 (2,014) 55,131
Equity
Reserves	27,467 (1,460) 26,007
Accumulated losses	(39,281) (3,433) (42,714)
Parent entity interest	708,925 (4,893) 704,032
Non-controlling interest	6,374 (544) 5,830
Total equity	715,299 (5,437) 709,862

New and amended Standards and Interpretations adopted by the group

In the year ended 30 June 2018, the group reviewed and has adopted all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective from 1 July 2017, including:

(i) AASB 2013-9 Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments

Part A makes consequential amendments arising from the issuance of AASB CF 2013-1 Amendments to the Australian Conceptual Framework .

Part B makes amendments to particular Australian Accounting Standards to delete references to AASB 1031 Materiality and also makes minor editorial amendments to various other standards.

AASB 2013-9 is applicable to annual reporting periods beginning on or after 1 January 2016 and has been adopted in this financial report. The group has applied the new standard and its application has had no impact on the composition of the group as they are largely of the nature of clarification of existing requirements and additional disclosures introduced.

(ii) AASB 2015-3 Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality

The Standard completes the withdrawal of references to AASB 1031 in all Australian Accounting Standards and Interpretations, allowing that Standard to effectively be withdrawn.

AASB 2013-9 is applicable to annual reporting periods beginning on or after 1 July 2016 and has no material impact on the composition of the group.

Notes to the Financial Statements

123

For the year ended 30 June 2018

25. SUMMARY OF OTHER SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounting standards and interpretations issued but not yet effective

At the date of the authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the group. Management anticipates that all of the relevant pronouncements will be adopted in the group’s accounting policies for the first period beginning after the effective date of the pronouncement.

(i) AASB 9 Financial Instruments (December 2014) is a new standard which replaces AASB 139. This new version supersedes AASB 9 issued in December 2009 (as amended) and AASB 9 (issued in December 2010) and includes a model for classification and measurement, a single, forward-looking ‘expected loss’ impairment model and a substantially-reformed approach to hedge accounting.

AASB 9 is effective for annual periods beginning on or after 1 July 2018. However, the Standard is available for early adoption. The own credit changes can be early adopted in isolation without otherwise changing the accounting for financial instruments.

Classification and measurement

AASB 9 includes requirements for a simpler approach for classification and measurement of financial assets compared with the requirements of AASB 139. There are also some changes made in relation to financial liabilities. The main changes are described below.

Financial assets

Financial assets that are debt instruments will be classified based on (1) the objective of the entity’s business model for managing the financial assets; (2) the characteristics of the contractual cash flows.
Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument.
Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases.

Financial liabilities

Changes introduced by AASB 9 in respect of financial liabilities are limited to the measurement of liabilities designated at fair value through profit or loss (FVPL) using the fair value option. Where the fair value option is used for financial liabilities, the change in fair value is to be accounted for as follows:

The change attributable to changes in credit risk are presented in other comprehensive income (OCI)
The remaining change is presented in profit or loss

AASB 9 also removes the volatility in profit or loss that was caused by changes in the credit risk of liabilities elected to be measured at fair value. This change in accounting means that gains or losses attributable to changes in the entity’s own credit risk would be recognised in OCI. These amounts recognised in OCI are not recycled to profit or loss if the liability is ever repurchased at a discount.

Impairment

The final version of AASB 9 introduces a new expected-loss impairment model that will require more timely recognition of expected credit losses. Specifically, the new Standard requires entities to account for expected credit losses from when financial instruments are first recognised and to recognise full lifetime expected losses on a more timely basis.

124

Notes to the Financial Statements

For the year ended 30 June 2018

25. SUMMARY OF OTHER SIGNIFICANT ACCOUNTING POLICIES (continued)

Hedge accounting

Amendments to AASB 9 (December 2009 & 2010 editions and AASB 2013-9) issued in December 2013 included the new hedge accounting requirements, including changes to hedge effectiveness testing, treatment of hedging costs, risk components that can be hedged and disclosures.

Consequential amendments were also made to other standards as a result of AASB 9, introduced by AASB 2009-11 and superseded by AASB 2010-7, AASB 2010-10 and AASB 2014-1 – Part E. AASB 2014-7 incorporates the consequential amendments arising from the issuance of AASB 9 in Dec 2014. AASB 2014-8 limits the application of the existing versions of AASB 9 (AASB 9 (December 2009) and AASB 9 (December 2010)) from 1 February 2015 and applies to annual reporting periods beginning on after 1 January 2015.

The application date of this standard is 1 July 2018 and management has assessed its impact on the group. The following highlights the anticipated impact of the adoption of this standard to the group:

The classification of financial assets and financial liabilities are anticipated not to change under AASB 9 as current accounting treatment is consistent with this new standard;
The changes to hedge accounting under this new standard are anticipated to not have an impact on the group as current accounting treatment is consistent with this new standard; and
The new model for determining impairment based on expected credit losses is also not anticipated to have an impact on the group as sales are to a large international institution with a strong credit rating, there has been no history of default and receivables are short-term in nature. However, this expected credit loss model for impairment determination has been identified as potentially affecting the inter-company loans between group companies, but this has been identified as not having an effect on a consolidated basis although it may have an impact on parent entity disclosures.
(ii) AASB 16 Leases replaces AASB 117 Leases , Interpretation 4 Determining whether an Arrangement contains a Lease , Interpretation 115 Operating Leases – Incentives and Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease . The Standard will provide a comprehensive model for the identification of lease arrangements and their treatment in the financial statements of both lessees and lessors.

The new Standard introduces three main changes:

Enhanced guidance on identifying whether a contract contains a lease;
A completely new leases accounting model for lessees that require lessees to recognise all leases on balance sheet, except for short-term leases and leases of low value assets; and
Enhanced disclosures.

Lessor accounting will not significantly change.

The application date of this standard is 1 July 2019 and management has commenced assessment of its impact on the group. Management has focused on the identification of which areas of the standard which will impact the group the most. The focus of current analysis is a review of contracts currently in place with an aim to ascertain if there will be any change to how these are accounted under this new standard and how this will impact the financial reporting of the group.

It is anticipated that there potentially will be a recognition of lease assets and lease liabilities that have a term greater than 12 months that are currently classified as operating leases. As a result of the recognition of these lease assets and liabilities, it is anticipated that there will be additional depreciation expense and interest charges on lease liabilities compared to what is recognised under the current standard. Furthermore, a decrease in the general and administrative costs and / or production costs is also anticipated to correspond to this. The group has not quantified these impacts at this time.

125

Notes to the Financial Statements

For the year ended 30 June 2018

25. SUMMARY OF OTHER SIGNIFICANT ACCOUNTING POLICIES (continued)

(b) Principles of consolidation

(i) Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Perseus Mining Limited (the ‘company’ or ‘parent entity’) as at 30 June 2018 and the results of all subsidiaries for the year then ended.

Subsidiaries are all entities (including special purpose entities) controlled by the group. The group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through power over the entity.

Subsidiaries are fully consolidated from the date in which control is transferred to the group. They are de-consolidated from the date that control ceases.

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the group.

Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of the subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of comprehensive income, statement of changes in equity and statement of financial position respectively.

(ii) Changes in ownership interests

The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interest and any consideration paid or received is recognised within equity attributable to owners of the parent entity.

When the group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

If the ownership interest in a jointly-controlled entity or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.

(c) Foreign currency transactions and balances

(i) Functional and presentation currency

Items included in the financial statements of each entity within the group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Australian dollars, which is the company’s functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when they are deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.

126

Notes to the Financial Statements

For the year ended 30 June 2018

25. SUMMARY OF OTHER SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign exchange gains and losses that relate to borrowings are presented in the statement of comprehensive income, within finance costs. All other foreign exchange gains and losses are presented in the statement of comprehensive income on a net basis.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the date the fair value was determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also recognised in other comprehensive income or profit or loss, respectively).

(iii) Group companies

The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

assets and liabilities for each statement of financial position are translated at the closing rate at the balance date;
income and expenses for each statement of comprehensive income are translated at average exchange rates; and
all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in the income statement.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented in the translation reserve in equity.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

Notes to the Financial Statements

127

For the year ended 30 June 2018

25. SUMMARY OF OTHER SIGNIFICANT ACCOUNTING POLICIES (continued)

The functional currencies of the Perseus Mining Limited’s overseas subsidiaries are as follows:

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Jurisdiction Entity Functional currency
Ghana Kojina Resources Limited United States dollars (USD)
Sun Gold Resources Limited United States dollars (USD)
Perseus Mining (Ghana) Limited United States dollars (USD)
Côte d’Ivoire Occidental Gold Sarl CFA [1] francs (XOF)
Perex Sarl CFA [1] francs (XOF)
Perseus Mining Côte d’Ivoire SA CFA [1] francs (XOF)
Perseus Services Sarl CFA [1] francs (XOF)
Perseus Yaouré Sarl CFA [1] francs (XOF)
Yaouré Mining SA CFA [1] francs (XOF)
United Kingdom Amara Mining Limited United States dollars (USD)
Amara Mining (Burkina) Limited United States dollars (USD)
Amara Mining (Sierra Leone) Limited United States dollars (USD)
Amara Mining (Côte d’Ivoire) Limited United States dollars (USD)
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1 Communauté Financière d’Afrique (Financial Community of Africa)

(d) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or other payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

26. CONTINGENCIES

Tax

Consistent with industry practice in Ghana, PMGL is currently undergoing a direct tax audit in connection with the periods from 30 June 2010 to 30 June 2017. Various matters are currently being discussed as part of the audit process and to date the GRA has not issued PMGL with a formal report on its findings. Based on management’s understanding of the matters currently under discussion they do not believe that the group will ultimately have any material exposure as a result of the current tax audit.

There were no other known contingent liabilities identified at 30 June 2018.

128

Notes to the Financial Statements

For the year ended 30 June 2018

27. COMMITMENTS

(a) Exploration expenditure commitments

With respect to the group’s mineral property interests in Ghana and Côte d’Ivoire, statutory expenditure commitments specified by the mining legislation are nominal in monetary terms. However, as part of mineral licence application and renewal requirements, the group submits budgeted exploration expenditure. In assessing subsequent renewal applications, the mining authorities review actual expenditure against budgets previously submitted. The group’s budget expenditures for future periods are shown below. These amounts do not become legal obligations of the group and actual expenditure may and does vary depending on the outcome of actual exploration programs, and the costs and results from those programs.

	Consolidated
	2018	2017
	$’000	$’000
Within one year	6,400	400
One year or later and not later than fve years	800	3,000
Later than fve years	-	-
	7,200	3,400

(b) Capital commitments

The group is responsible for all rehabilitation of the EGM mining leases, which are currently estimated to cost approximately US$9.6 million and a provision has been recorded for this at balance date. The group is also responsible for the rehabilitation of the SGM mining lease, which is currently estimated to cost approximately US$2.5 million and a provision has been recorded for this at balance date. The group is also responsible for the rehabilitation of the historical heap leach operations at Yaouré in Cote d’Ivoire, which are currently estimated to cost approximately US$1.3 million and a provision has been recorded for this at balance date.

(c) Operating lease commitments

The company leases office premises under normal commercial arrangements. The lease is for a period of 6.5 years beginning 1 October 2016. The company is under no legal obligation to renew the lease once the lease term has expired.

Future minimum lease payments payable under non-cancellable operating leases at 30 June 2018 are as follows:

	Consolidated
	2018	2017
	$’000	$’000
Within one year	296	262
One year or later and not later than fve years	1070	1,339
	1,366	1,601

Total operating lease expenditure was $0.3 million for the year ended 30 June 2018 (30 June 2017: $0.3 million).

28. EVENTS OCCURING AFTER THE END OF THE REPORTING PERIOD

Since the end of the financial year and to the date of this report no matter or circumstance has arisen that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in subsequent financial years other than:

1) On 8 August 2018, 1,366,666 performance rights that had previously been issued to employees were determined not to have vested under the terms of the company’s Performance Rights Plan and as a result were cancelled.

Directors’ Declaration

129

In the opinion of the directors of Perseus Mining Limited (the ‘company’):
(a) The financial statement and notes for the financial year ended 30 June 2018 are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2018 and of its performance for the year then ended on that date; and
(i) complying with Australian Accounting Standards, the Corporations Regulations 2001 ; and
(b) There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
(c) The financial statements and notes also comply with International Financial Reporting Standards as disclosed in note 25.
This declaration has been made after receiving the declarations required to be made to the directors by the chief executive officer and chief financial officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.

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J A Quartermaine

Managing director

Dated at Perth, 29 August 2018

130

Auditor’s Independence Report

to the Directors of Perseus Mining Limited Statements

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Independent auditor’s report To the members of Perseus Mining Limited Report on the audit of the financial report

Our opinion In our opinion:

The accompanying financial report of Perseus Mining Limited (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001 , including:

(a) giving a true and fair view of the Group's financial position as at 30 June 2018 and of its financial performance for the year then ended

(b) complying with Australian Accounting Standards and the Corporations Regulations 2001 .

What we have audited The Group financial report comprises:

the consolidated statement of financial position as at 30 June 2018
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
• the notes to the consolidated financial statements, which include a summary of significant accounting policies
the directors’ declaration.

Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

PricewaterhouseCoopers, ABN 52 780 433 757 Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840 T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation.

Auditor’s Independence Report

131

to the Directors of Perseus Mining Limited Statements

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Our audit approach

An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates.

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Materiality

For the purpose of our audit we used overall Group materiality of $9,631,800, which represents approximately 1% of the Group’s total assets.
We applied this threshold, together with qualitative considerations, to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial report as a whole.
As the Group was only operating and earning revenue for most of the year from one of its three key assets, we chose total assets as the materiality benchmark rather than profit before tax. Total assets are more reflective of the Group’s size and scale given that a significant portion of its assets were in development phase for the majority of the year at Sissingue and Yaoure. The use of total assets as a benchmark provides a level of materiality, which, in our view, is appropriate for the audit having regard to the expected requirements of users of the Group’s financial report.
We utilised a 1% threshold based on our professional judgement, noting it is within the range of commonly acceptable thresholds for entities of this nature.

Audit Scope

Our audit focused on where the Group made subjective judgements; for example, significant accounting estimates involving assumptions and inherently uncertain future events.
The Group produces gold from its Edikan Gold Mine and Sissingue Gold Mine operations, located in Ghana and Cote d'Ivoire respectively. It is also currently undertaking mine development activities at its Yaoure mine site in Cote d'Ivoire. The accounting processes are structured around a Group Finance function at its head office in Perth. Our audit procedures were predominantly performed in Perth where many of the corporate and group operations functions are centralised, with support from local audit teams in Ghana and Cote d’Ivoire.

132

Auditor’s Independence Report

to the Directors of Perseus Mining Limited Statements

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Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. The key audit matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Further, any commentary on the outcomes of a particular audit procedure is made in that context. We communicated the key audit matters to the Audit Committee.

*Key audit matter*	*How our audit addressed the key audit*	*How our audit addressed the key audit*
	*matter*
*Assessment of impairment of non-*	We	performed the following procedures, amongst
*current assets*	others:
Refer to Other Income/Expenses in note 2	●	Considered the Group’s assessment of
($10,151,ooo)		impairment indicators identified.
At 30 June 2018, the Group’s non-current assets	●	Developed an understanding of the preparation
consisted of $417.3m of Property, Plant and		of the discounted cash flow models used to
Equipment and $314.3m of Mine Properties		assess the recoverable amount of the Group’s
assets (pre impairment). These assets are		CGUs (the impairment models), being FVLCoD.
required to be assessed for indicators of impairment in accordance with the Group accounting policy at each reporting date. Where impairment indicators are identified, the applicable Cash Generating Unit (CGU) is	●	Considered if the impairment model methodology used for each CGU was consistent with the basis of preparation required by Australian Accounting Standards.
required to be assessed for impairment.	●	Assessed whether the division of the Group’s
Due to identification of impairment indicators at 30 June 2018, being the Group carrying amount of the net assets (approximately A$742 million before impairment) being more than the market capitalisation as at 30 June 2018 (A$450 million), the Group performed an impairment assessment over the Edikan,		property, plant and equipment, mine properties and exploration and evaluation assets into CGUs, which are the smallest identifiable groups of assets that can generate largely independent cash inflows, was consistent with our knowledge of the Group’s operations and internal Group reporting.
Sissingue and Yaoure CGUs.	●	Assessed whether the CGUs included assets,
The Group used a Fair value less costs of disposal (FVLCoD) methodology for each CGU		liabilities and cash flows directly attributable to each CGU.
to assess the recoverable amount.	●	Considered if estimating ‘fair value less costs of
The Group concluded that assets of the Sissingue CGU were impaired and an		disposal’ was an appropriate basis upon which to infer fair value of each CGU.
impairment charge of $10,151,000 was recorded	●	Tested if the impairment models used for each
for the year ended 30 June 2018 against the		CGU appropriately included the likely
carrying amount of the Sissingue assets.		transaction costs associated with selling the
The Edikan and Yaoure CGUs were not		CGU.
considered impaired by the Group at 30 June	●	Compared the key assumptions used in the
2018 due to therecoverable amount calculated		impairmentmodels tohistorical results,

Auditor’s Independence Report

133

to the Directors of Perseus Mining Limited Statements

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Key audit matter How our audit addressed the key audit matter under FVLCoD exceeding the carrying amount economic or industry forecasts. of the respective CGUs assets. ● Evaluated selected inputs and assumptions in We focused on this matter because: the impairment models, such as forecast

Evaluated selected inputs and assumptions in the impairment models, such as forecast production, operating and cash outflows used against the most up-to-date budgets and business plans formally approved by the Board.
the financial significance of the impairment charge to the statement of comprehensive income in the current year
- Evaluated the Group’s historical ability to forecast future cash flows by comparing budgets with reported actual results for the past year.
the valuation techniques used by the Group to assess impairment are complex, and require a large number of estimates into the valuation models
valuation models ● Involved our valuation experts to assess the reasonableness of the discount rate and forecast
● calculating the recoverable amount of each gold price used with reference to market prices
CGU involves significant judgement by the and external objective evidence where available.
Group in estimating:
- Compared total forecast production quantities over the remaining life of the Sissingue and Edikan mine sites to the Group’s latest published mineral reserves statements.
Forecast gold prices, production quantities and production costs, and
the discount rate used.
Performed tests of mathematical accuracy of the impairment models calculations.
Performed sensitivity analysis around the key assumptions used within the impairment models and the discount rate used.
Evaluated the adequacy of the disclosures made in Note 2, including those regarding the key estimates/assumptions, in light of the requirements of the Australian Accounting Standards.

Revenue recognition

Refer to note 2 ($378,076,000)

Revenue solely relates to the sale of gold bullion during the year from the two operating mines Edikan and Sissingue located in Ghana and Cote d’Ivoire respectively and amounted to $378m for the twelve months to 30 June 2018.

Revenue from sale of goods was a key audit matter due to:

the higher level of accounting complexity related to the recognition of revenue for

We performed the following procedures, amongst others:

Considered the Group’s assessment of application of AASB 15 to their revenue contracts in place.
Evaluated terms and conditions of relevant customer contracts to assess if the timing for recognition of revenue was consistent with AASB 15 criteria.
Tested selected revenue sales transactions which took place during the year from both the Edikan and Sissingue gold mines to the

134

Auditor’s Independence Report

to the Directors of Perseus Mining Limited Statements

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Key audit matter

shipments in transit at balance date and

the early adoption of AASB 15 Revenue from Contracts with Customers by the Group from 1 July 2017, given the different criteria for recognition and measurement of revenue under the new standard.

Determination of commercial production at Sissingue mine

During the year, the Group determined that Sissingue achieved commercial production on 31 March 2018.

The determination of the date of commencing commercial production at Sissingue was a key audit matter due to the significant accounting and disclosure implications which arise from this determination and the subjective consideration involved.

The date of commercial production establishes the point at which revenue from the sales of gold and associated production costs are recognised in profit or loss and non-current assets are depreciated or amortised over their useful lives. Whether commercial production is achieved depends on the outcome of a number of subjective considerations by the Group, including production and processing at an acceptable level of design capacity, gold ounce recoveries at or near expected levels and the achievement of continuous production or other output criteria.

How our audit addressed the key audit matter

underlying contract and settlement statement.

Tested a sample of revenue transactions recorded both before and after 30 June 2018 to supporting third party evidence to assess whether it was recorded in the correct period.
Evaluated the adequacy of the disclosures made in Note 2, as well as those regarding the application of full retrospective early adoption of AASB 15 in Note 25 (a)(i), in light of the requirements of the Australian Accounting Standards.

To assess the date of commercial production and the related accounting implications, we performed the following audit procedures, amongst others:

We inspected the Sissingue production data for the year in order to assess ore grade, ore processing and plant recovery rates by month and made enquiries with Management on the metrics used to measure commercial production.
We considered whether the revenue and costs incurred prior to the date of commercial production were booked against property, plant and equipment and mine properties costs.
We considered if depreciation expense charged against property, plant and equipment and mine properties assets commenced on 31 March 2018.
We also evaluated the adequacy of the disclosures made in Note 10 in light of the requirements of Australian Accounting Standards.

Auditor’s Independence Report

135

to the Directors of Perseus Mining Limited Statements

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Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2018, but does not include the financial report and our auditor’s report thereon. Prior to the date of this auditor's report, the other information we obtained included the Corporate directory and the Directors' report (including Review of Operations). We expect the remaining other information to be made available to us after the date of this auditor's report, including Company Highlights, Our Strategy, Chairman’s Address, Managing Directors address and the Sustainability Report.

Our opinion on the financial report does not cover the other information and we do not and will not express an opinion or any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the other information not yet received as identified above, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors and use our professional judgement to determine the appropriate action to take.

Responsibilities of the directors for the financial report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

136

Auditor’s Independence Report

to the Directors of Perseus Mining Limited Statements

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A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our auditor's report.

Report on the remuneration report

Our opinion on the remuneration report

We have audited the remuneration report included in pages 44 to 64 of the directors’ report for the year ended 30 June 2018.

In our opinion, the remuneration report of Perseus Mining Limited for the year ended 30 June 2018 complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

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PricewaterhouseCoopers

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Craig Heatley Perth Partner 29 August 2018

Mineral Concession Interests

137

At 11 September 2018

Concession name and type	Registered Holder	File / Permit Number	Perseus’s current equity interest	Maximum equity interest capable of being earned	Notes 1
Location - Ghana
Edikan Gold Mine (EGM) Leases - Ayanfuri mining lease - Nanankaw mining lease	Perseus Mining (Ghana) Ltd (‘PMGL”)	ML6/15 ML3/2	90%	90%	2,3
Dadieso Prospecting Licence	Perseus Mining (Ghana) Ltd	PL6/15	90%	90%	2,3
Nsuaem Prospecting Licence	Perseus Mining (Ghana) Ltd	PL3/26	90%	90%	2
Dunkwa Prospecting Licence	Perseus Mining (Ghana) Ltd	PL3/27	90%	90%	2, 11
Grumesa-Awisam Prospecting Licence	Sun Gold Resources Limited	PL2/30	90%	90%	4
Kwatechi Prospecting Licence	Tropical Exploration and Mining Company Limited	PL3/64	16%	76%	5, 6
Location – Côte d’Ivoire
Sissingué Exploitation Permit	Perseus Mining Côte d’Ivoire S.A.	PE39	86%	86%	4,8, 9,10
Yaouré Exploration Permit	Perseus Yaouré s.a.r.l.	PR168	90%	90%	7
Yaouré Exploration Permit	Perseus Yaouré s.a.r.l.	PR397	90%	90%	7
Yaouré West Exploration Permit	Perseus Yaouré s.a.r.l.	PR 615	90%	90%
Yaouré East Exploration Permit	Perseus Yaouré s.a.r..l.	PR 577	90%	90%
Mahalé Exploration Permit	Occidental Gold s.a.r.l. (Occidental)	PR 259	90%	90%	14
M’Bengué East Exploration Permit	Occidental Gold s.a.r.l. (Occidental)	PR 272	90%	90%	15
Napié Exploration Permit	Occidental Gold s.a.r.l. (Occidental)	PR 281	80%	80%	13
Minignan Exploration Permit	Perex s.a.r.l.	PR 787	90%	90%
Kounahiri Exploration Permit	Générale des Mines et Carrières (GEMICA) s.a.r.l.	PR455	83%	86.5%	12

138

Mineral Concession Interests

At 11 September 2018

Notes –

The Governments of Ghana and Côte d’Ivoire are entitled to a 10% equity interest in mining companies owning projects. Perseus’s quoted equity is after allowance for that national interest, which occurs when a new project company is established prior to commencement of mining. Production royalties are payable to the Governments of Ghana (5%) and Côte d’Ivoire (3-6% depending on the gold price).
A royalty of 0.25% of gold produced from the Edikan Gold Mine (“EGM”) Licences and the Dadieso, Nsuaem and Dunkwa Licences is payable pursuant to the contract to purchase PMGL.
Under the terms of the contract to purchase the EGM Licences and the Dadieso Licence, PMGL is required to pay a 1.5% royalty on gold production.
A royalty of 0.5% of the value of minerals recovered from the licence is payable to the vendors of the exploration licence.
The Company has the right to earn a 76% interest in the property by funding the development of the project to profitable production. Joint venture partners, Tropical and Leo Shield, each retain a 7% interest which is convertible to a 1.25% net smelter royalty at the option of those parties within 30 days of completion of a feasibility study. The Company can withdraw from the joint venture at any time and is required to pay US$3,600 to Tropical annually whilst it remains in the joint venture.
The Company has been advised by Ghana Minerals Commission that this property has been forfeited on the grounds that a renewal offer had not been accepted; however the Company believes that the offer letter sent to the joint venture partner was not received and the decision is under appeal.
Perseus Yaouré sarl has applied for an exploitation permit for the Yaouré project. This application is pending.
The joint venture partner was free carried to production with costs subsequently recoverable by Perseus from production revenue.
A royalty of US$0.80 per ounce of gold produced from the licence is payable.
The exploitation permit is valid until 6 August 2022 and may be extended.
The Dunkwa licence is in the process of being split into three separate licences, to be named Dunkwa, Ahinforoso and Betenase. Perseus intends to surrender Dunkwa and Ahinforoso. An option agreement has been entered into with a Ghanaian subsidiary of Canadian explorer Asante Gold Limited in respect of the Betenase licence. Under the option agreement, Asante has the option to purchase the Betenase licence for a consideration of US$1 million and a 0.75% net smelter royalty. In addition, Asante will assume the obligation to pay the royalty referred to in note 2 above in respect of the area of the former Dunkwa licence now covered by the Betenase licence.
The Company has a before-government 93% interest in Kounahiri and has the option to acquire half (i.e. 3.5%) of GEMICA’s interest at any time for US$ 1,000,000. The 10% statutory Government interest will be assigned from Perseus’s interest, thereby reducing Perseus’s interest to a maximum of 86.5%.
Local joint venture partner AAIF has a 10% participating interest in Napié, free-carried to feasibility study completion, at which time AAIF can elect to dilute, sell its interest or revert to a 5% Net Profits Interest. Perseus subsidiary Occidental has also entered into a farm-in agreement with Australian explorer Mako Gold Limited pursuant to which Mako has the right to earn up to a pre-government 75% interest in the permit by sole funding until completion of a feasibility study. The Government equity in a mining company will come proportionally from the interests of Occidental and Mako.
Occidental has applied to convert the Mahalé Exploration Permit into an Exploitation Permit so that the Fimbiasso East and West deposits can be processed through the Sissingué gold plant. This application remains pending.
Occidental has entered into a farm-in agreement with Australian explorer Manas Resources Limited pursuant to which Manas has the right to earn up to a pre-government 70% interest in the permit by sole funding US$2 million in exploration expenditure, after which both parties may contribute in proportion to their respective equities or dilute. The parties will contribute the 10% Government equity in a production company in proportion to their joint venture interests.

Mineral permits and licences in which Perseus has an interest are subject to renewal from time to time in accordance with the relevant legislation of the governing jurisdiction and Perseus’s compliance therewith.

Additional Shareholder Information

139

The shareholder information set out below was applicable as at 11 September 2018.

SUBSTANTIAL SHAREHOLDERS

Holdings of substantial shareholders as advised to the Company are set out below.

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Name of Holder Number of Ordinary Shares
Franklin Resources, Inc and associates 79,661,412
Van Eck Associates Corporation and associates 62,222,149
AustralianSuper Pty Ltd 52,389,977
Dimensional Holdings Inc. 51,748,779
Ruffer LLP 51,617,934
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DISTRIBUTION OF HOLDERS OF EQUITY SECURITIES

Size of Holding	Number of Holders
1 to 1,000	1,061
1,001 to 5,000	1,535
5,001 to 10,000	823
10,001 to 100,000 100,001 and over	1,863 425
	5,707

The number of shareholdings comprising less than a marketable parcel was 1,277.

Additional Shareholder Information

140

VOTING RIGHTS

The voting rights attaching to ordinary shares are governed by the Constitution. On a show of hands every person present who is a member or representative of a member shall have one vote and on a poll, every member present in person or by proxy or by attorney or duly authorised representative shall have one vote for each share held.

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Twenty Largest Shareholders Number of Shares % Held
HSBC Custody Nominees (Australia) Limited 330,007,753 31.89
JP Morgan Nominees Australia Limited 222,645,857 21.51
Citicorp Nominees Pty Limited 82,940,202 8.01
CDS & Co 56,837,788 5.49
Nortrust Nominees Limited 43,389,355 4.19
BNP Paribas Noms Pty Ltd – DRP 13,646,225 1.32
BNP Paribas Nominees Pty Ltd – Peel Hunt Clts Asset DRP 13,076,854 1.26
Vidacos Nominees Limited 10,967,820 1.06
National Nominees Limited 10,637,802 1.03
Mr Meng Luo & Mrs Lan Su 8,898,000 0.86
BNP Paribas Nominees Ltd – IB AU Noms Retails Client DRP 7,496,308 0.72
Tsou Enterprise Pty Ltd 5,095,417 0.49
John Berenberg Gossler & Co KG 3,591,868 0.35
BNP Paribas Nominees Pty Ltd – Agency Lending DRP 3,469,503 0.34
Geared Investments Pty Ltd 3,000,000 0.29
Interactive Investors Services Nominees Ltd 2,951,437 0.29
State Street Nominees Limited 2,567,315 0.25
Mrs Kristin Phillips & Mr Justin Gare 2,390,361 0.23
Mr Richard Arthur Lockwood 2,385,000 0.23
Allabah Pty Ltd 2,375,000 0.23
828,369,865 80.04
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[email protected] perseusmining.com

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perseusmining.com ABN: 27 106 808 986

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PERSEUS MINING LIMITED — Annual Report 2018

46513_rns_2018-10-15_fb387ab0-4dc5-48aa-b84d-12a8fb63ee0b.pdf

DIRECTORS

COMPANY SECRETARY

REGISTERED AND CORPORATE OFFICE

GHANA OFFICE

CÔTE D’IVOIRE OFFICE

SHARE REGISTRY

AUDITORS

STOCK EXCHANGE LISTINGS

Contents

Company Highlights

Our Strategy

Chairman’s Address

Dear Fellow Shareholder,

Managing Director’s Address

Review of Operations

EGM

GHANA

Operations

Exploration

EGM Mineral Resource estimate:

Table 3: Edikan Gold Mine Measured and Indicated Mineral Resources[7,8,9]

EGM Ore Reserve estimate

Exploration

Combined SGM and Fimbiasso Mineral Resource estimate

SGM Ore Reserve estimate

Table 10: Sissingué Gold Mine Ore Reserves[ 6,7,9]

YAOURÉ CÔTE D’IVOIRE

Definitive Feasibility Study

Engineering

Development Funding

Permitting

YGP Mineral Resource estimate

YGP Ore Reserve estimate

Exploration

Other exploration permits, Côte d’Ivoire

Company Highlights

GROUP ORE RESERVES AND MINERAL RESOURCES

GOVERNANCE AND INTERNAL CONTROLS FOR RESERVE AND RESOURCE ESTIMATES

Company Highlights

Debt finance

Cash, bullion and investments

OHS PERFORMANCE

ENVIRONMENTAL PERFORMANCE

Energy Efficiency

Energy Intensity per Tonnes Milled (kWh/t)

Fresh Water Abstraction

Fresh Water Abstraction (kL)

PEOPLE

Employees by Location in June 2018

Sustainability Report 2017-2018

Sissingué Local Recruitment Committee (LRC) Statistics

Training

SOCIAL DEVELOPMENT

Community Support

Community Engagement

THE VOLUNTARY PRINCIPLES ON SECURITY AND HUMAN RIGHTS (VPSHR)

OPERATIONS SUSTAINABILITY SNAPSHOT

Sustainability Report 2017-2018

CONSOLIDATED FINANCIAL REPORT 2018

Contents

DIRECTORS

PRINCIPAL ACTIVITIES

REVIEW OF OPERATIONS

FINANCIAL POSITION

SUMMARY OF FINANCIAL INFORMATION

CORPORATE

Dividends

Equity capital raising

Revenue protection

Metal Markets

Outlook for financial year 2019

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

MATTERS SUBSEQUENT TO BALANCE DATE

LIKELY DEVELOPMENTS

ENVIRONMENTAL REGULATIONS

Directors’ Report (continued)

INFORMATION ON DIRECTORS

PERSEUS MINING LIMITED Annual Report 2018