PERSEUS MINING LIMITED — Capital/Financing Update 2006

Aug 16, 2006

ASX/MEDIA RELEASE 17 August 2006

DRILL RESULTS INCREASE OBDILLA'S RESOURCE POTENTIAL

(Tolubay Project - Kyrgyz Republic - Perseus 100%)

Perseus Mining Limited (ASX: PRU) is pleased to announce that drilling continues to enhance the potential size of its Obdilla Gold Prospect in the Kyrgyz Republic as the Company prepares to release an initial resource estimate for the prospect later this year.

Assay results from two diamond drill holes located on section 8 at Obdilla have produced broad intercepts of gold mineralisation and both ended in mineralisation.

Significant intercepts included 213m at 1.8g/t Au from surface in ZDDH034 (partially reported on 1 August) and 59m at 1.5g/t from surface, 20m at 2.2g/t from 97m, 7m at 2.5g/t from 230m and 31m at 2.6g/t Au from 270m to end of hole in ZDDH035. The results are summarized in the attached Table 1.

Based on current drill and trench data the zone of gold mineralisation on section 8 is now on average at least 70m wide and 300m deep, giving it an area of 20,000sq m. The full extent of the mineralised zone will be tested by deepening holes ZDDH034 and ZDDH035 and drilling a hole south of ZDDH035.

Perseus Managing Director Mark Calderwood said that the new results add significantly to the resource potential of this Carlin-style gold deposit.

"This is an important development as we prepare an initial resource estimate for the prospect. Gold mineralisation at Obdilla is getting wider and deeper as drilling progresses along the two kilometre mineralised strike zone at Obdilla," Mr Calderwood said.

"As on previously drilled sections, mineralisation on section 8 appears to be controlled by the fault contact between the Tolubay Suite and the massive limestone Pyrkaff Suite.

"However, while mineralisation on some sections was confined to a zone approximately 70m wide and 80m deep, mineralisation at section 8 has been confirmed to extend to a width of 70m and a depth of 300m, and remains open in both directions, as well as along strike."

It is planned to release a resource estimate based on drilling to date in October. This will include results from section 9, to be drilled 115m west of section 8, if they are to hand at that stage.

Two drilling rigs are now operating to extend the 340m gold mineralised zone delineated to date eastward by 100m and westward by 115m to section 9. The rigs will then continue to trace the gold mineralisation further west on 200m intervals over the coming months.

Obdilla is the first of a number of gold anomalies to be tested on Perseus' Tolubay Licence, located in the south west of the Kyrgyz Republic.

To discuss any aspect of this announcement, please contact Mark Calderwood at calderwoodm@perseusmining.com

For media enquiries please contact Jim Hawtin at Porter Novelli on +61 8 9386 1233 or jhawtin@wa.porternovelli.com.au

CA

Mark Calderwood Managing Director 17 August 2006

Perseus Mining is a gold exploration company exploring for large gold deposits within regions that: have numerous "World Class" gold deposits; have significant existing gold production and growing reserve inventories; remain amongst the least explored by modern techniques; and include countries in which the Directors and Perseus staff have substantial experience.

Current Activities: Resource drilling underway at Obdilla (Tolubay Project) in the Kyrgyz Republic; large exploration drill program underway on the Tengrela Project in Ivory Coast to test regionally significant soil anomalies; feasibility study in progress at the Ayanfuri and Grumesa Projects in Ghana.

Hole	East	North	Depth	Azm	Incl.	From	To	Width	Au
	(m)	(m)	(m)	$^{\circ}$	$^{\circ}$	(m)	(m)	(m)	g/t
ZDDH034	251690	4447557	241.0^	360	$-70$	$\theta$	213	213	1.8
					incl.	60	85	25	2.5
					and	92.85	100	7.15	2.5
					and	111	116	5	4.3
					and	145	167	22	2.7
						213	241	$28*$	0.5
					incl.	237	241	4*	1.2
ZDDH035	251690	4447557	$301^{\circ}$		$-90$	$\theta$	59	59	1.5
					incl.	27	32	5	3.6
					and	37	43	6	2.6
						67	71	4	0.5
						75	$78,$	3	$0.8,$
						97	117	20	2.2
					incl.	104	112	8	4.0
						120	132	12	0.5
						154	230	76	0.7
						230	237	7	2.5
						237	270	33	0.5
						270	301	$31*$	2.6
ZDDH036	251706	4447624	44	360	$-30$	Results	pending
ZDDH037	251706	4447624	125		-90	Results	pending

Table 1: Drill Intercepts - Obdilla Prospect - Tolubay Project

^ hole did not reach footwall lithology, hole will be deepened at later date

* Ended in mineralisation

Figure 1. Section 8 Interpretative Illustration

The information in this report that relates to exploration results is based on information compiled by Mr Mark Calderwood, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Calderwood is a Director and full-time employee of the Company. Mr Calderwood has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Calderwood consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.