PERSEUS MINING LIMITED — Capital/Financing Update 2007

Oct 17, 2007

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ASX/MEDIA RELEASE 18 October 2007

Resource Upgrade in Ghana Ayanfuri Gold Project

Highlights

• Maiden 421,000oz gold resource estimate announced for the AF-Gap portion of the Abnabna – Fobinso zone.

• Resources for the 1.8km long Abnabna – Fobinso zone now total 924,000oz.

• The Abnabna – Fobinso zone resource includes 8Mt at 2.1g/t containing 530,000oz of gold at a cut off grade of 1.5g/t.

• By the end of the October Perseus will have 4 drill rigs operating at Ayanfuri working on exploration and infill drilling. Targets include the strike and depth extensions to the Abnabna - Fobinso zone.

• In November, the company expects to have at least 5 rigs operating in Ghana and 3 in the Ivory Coast.

Perseus Mining Limited (ASX: PRU) is pleased to announce a maiden 421,000 ounce gold resource estimate for the recently discovered AF-Gap prospect at its Ayanfuri Project in Ghana, providing a 19 percent increase in resources for Ayanfuri to 2.61 million ounces up from 2.19 million ounces declared on July 24 2007.

The increase takes Perseus’s total gold resources at the Ayanfuri and Grumesa projects in Ghana to 3.4 million ounces and its global resources to 4.0 million ounces.

Recent drilling and the resource estimate have confirmed that AF-Gap is part of an almost continuous 1.8km gold mineralised zone between Abnabna and Fobinso which is likely to support a 2km long open pit development. Deeper drilling is planned in several areas along the zone to further increase resources.

There is also significant potential NE and SW along strike from the Abnabna-Fobinso zone where soil sampling, trenching and limited drilling has extended the zone of interest to a strike length of over 8km. For example, limited recent drilling completed on two sections 0.5km and 1.2km SW along strike from Abnabna returned encouraging results, including 10m at 1.6g/t, 4m @ 2.5g/t, 66m at 0.6g/t, and 35m at 0.6g/t Au. These results are comparable to those from between the main higher-grade shoots in the better drilled portion of the Abnabna-Fobinso zone.

The AF-Gap resource estimate comprises indicated resources of 4.63Mt at 1.8g/t for 261,400 ounces of contained gold, and inferred resources of 3.12Mt at 1.6g/t Au for 160,000 ounces of contained gold, in each case at a cut off grade of 0.8g/t Au.

Perseus Mining Limited ABN 27 106 808 986 30 Ledgar Road, Balcatta, Western Australia 6021 PO Box 717 Balcatta WA 6914 Telephone: (618) 9240 6344 Facsimile: (618) 9240 2406 Email address: info@perseusmining.com Website: www.perseusmining.com

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Mineralisation in the Abnabna-Fobinso zone is essentially hosted by a single granite body which is open along strike to the NE of Fobinso and SW of Abnabna. The majority of resources are contained in structurally controlled shoots, each typically 50 to 100m wide and 200m long.

Three rigs are currently on site at Ayanfuri, the fourth will arrive by the end of October, and a fifth rig will arrive in November 2007. The rigs are undertaking both exploration and infill drilling. The Company will be testing 20 soil, trench and geophysical targets and will work towards extending known deposits and converting existing inferred resources to indicated status. The Company also has another rig currently operating on the Kayeya gold deposit on the Grumesa project in Ghana.

While mining of oxide ore was previously undertaken at both Abnabna and Fobinso, the oxide resource remains intact at the AF-Gap zone. Test work undertaken to date indicates consistent and excellent metallurgical characteristics for granite samples, with 50% gravity recoverable gold and 94% total recovery, including 92.6% of gold extracted after only 8 hours leaching. PQ core drilling has commenced as the first stage of a definitive metallurgical program over the largest known deposits at Ayanfuri.

AF-Gap Mineral Resource Estimate (Gold)

resource remains intact at the AF-Gap zone. Test work undertaken to date indicates consistent and excellent metallurgical characteristics for granite samples, with 50% gravity recoverable gold and 94% total recovery, including 92.6% of gold extracted after only 8 hours leaching. PQ core drilling has commenced as the first stage of a definitive metallurgical program over the largest known deposits at Ayanfuri.	resource remains intact at the AF-Gap zone. Test work undertaken to date indicates consistent and excellent metallurgical characteristics for granite samples, with 50% gravity recoverable gold and 94% total recovery, including 92.6% of gold extracted after only 8 hours leaching. PQ core drilling has commenced as the first stage of a definitive metallurgical program over the largest known deposits at Ayanfuri.	resource remains intact at the AF-Gap zone. Test work undertaken to date indicates consistent and excellent metallurgical characteristics for granite samples, with 50% gravity recoverable gold and 94% total recovery, including 92.6% of gold extracted after only 8 hours leaching. PQ core drilling has commenced as the first stage of a definitive metallurgical program over the largest known deposits at Ayanfuri.	resource remains intact at the AF-Gap zone. Test work undertaken to date indicates consistent and excellent metallurgical characteristics for granite samples, with 50% gravity recoverable gold and 94% total recovery, including 92.6% of gold extracted after only 8 hours leaching. PQ core drilling has commenced as the first stage of a definitive metallurgical program over the largest known deposits at Ayanfuri.	resource remains intact at the AF-Gap zone. Test work undertaken to date indicates consistent and excellent metallurgical characteristics for granite samples, with 50% gravity recoverable gold and 94% total recovery, including 92.6% of gold extracted after only 8 hours leaching. PQ core drilling has commenced as the first stage of a definitive metallurgical program over the largest known deposits at Ayanfuri.	resource remains intact at the AF-Gap zone. Test work undertaken to date indicates consistent and excellent metallurgical characteristics for granite samples, with 50% gravity recoverable gold and 94% total recovery, including 92.6% of gold extracted after only 8 hours leaching. PQ core drilling has commenced as the first stage of a definitive metallurgical program over the largest known deposits at Ayanfuri.	resource remains intact at the AF-Gap zone. Test work undertaken to date indicates consistent and excellent metallurgical characteristics for granite samples, with 50% gravity recoverable gold and 94% total recovery, including 92.6% of gold extracted after only 8 hours leaching. PQ core drilling has commenced as the first stage of a definitive metallurgical program over the largest known deposits at Ayanfuri.	resource remains intact at the AF-Gap zone. Test work undertaken to date indicates consistent and excellent metallurgical characteristics for granite samples, with 50% gravity recoverable gold and 94% total recovery, including 92.6% of gold extracted after only 8 hours leaching. PQ core drilling has commenced as the first stage of a definitive metallurgical program over the largest known deposits at Ayanfuri.	resource remains intact at the AF-Gap zone. Test work undertaken to date indicates consistent and excellent metallurgical characteristics for granite samples, with 50% gravity recoverable gold and 94% total recovery, including 92.6% of gold extracted after only 8 hours leaching. PQ core drilling has commenced as the first stage of a definitive metallurgical program over the largest known deposits at Ayanfuri.	resource remains intact at the AF-Gap zone. Test work undertaken to date indicates consistent and excellent metallurgical characteristics for granite samples, with 50% gravity recoverable gold and 94% total recovery, including 92.6% of gold extracted after only 8 hours leaching. PQ core drilling has commenced as the first stage of a definitive metallurgical program over the largest known deposits at Ayanfuri.
AF-Gap Mineral Resource Estimate (Gold)
>0.8g/t Au	Oxide and Transition			Sulphide			**Total ***
	Tonnes	Grade Au g/t	Ounces cont.	Tonnes	Grade Au g/t	Ounces cont.	Tonnes	Grade Au g/t	Ounces cont.
Indicated	1,092,000	1.7	57,500	3,541,000	1.8	202,500	4,633,000	1.8	261,400
Inferred	361,000	1.3	15,200	2,762,000	1.6	144,800	3,123,000	1.6	160,000
Total	1,452,600	1.6	73,200	6,303,000	1.7	348,100	7,756,000	1.7	421,400

• Rounding applied Notes to the estimate are contained in the attached Appendix 1

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Background on Ayanfuri Gold Project

In March 2007 Perseus exercised an option to purchase a company which has rights to two mining leases and a prospecting licence at Ayanfuri (the “Ayanfuri Mine Licences”), and two reconnaissance licences covering a project area of 510.6sq km. The project is located 25-65kms south-west of Obuasi on the Ashanti Gold Belt in Ghana.

Perseus’s second Ghanaian project, the 800,000oz Grumesa project, adjoins the Ayanfuri project area to the east. The Obuasi (Ashanti) gold mine, situated to the north-east, is one of Africa’s premier producing gold mines, having to date produced in excess of 60 million ounces.

The Ayanfuri Mine Licences incorporate the Ayanfuri mine, which produced 306,400 ounces of gold from multiple open pits and an oxide ore heap leaching circuit between 1994 and 2001.

Feasibility studies are being conducted for a 2-5Mtpa CIL plant operation at Ayanfuri and a heap leach operation at Perseus’s nearby Grumesa project. Current gold resources for the Ayanfuri project are 636,000 ounces Indicated and 1,972,800 ounces Inferred from 7 of the 19 deposits previously mined.

Gold mineralisation at Ayanfuri occurs within a series of granitoid stocks, which have intruded into a major deformation zone, and to a lesser extent within the enclosing sheared metasediments. Several shallow open cut mines were developed on the outcropping granitoid stocks towards the end of mining operations in 2001, but their depth potential was not tested at the time due to the low prevailing gold price.

Perseus is currently undertaking extensive drilling on the Ayanfuri project and expects to release resource upgrades on a regular basis.

The updated gold resources for Ayanfuri are set out in the table below.

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Mineral Resources (Gold) - Ayanfuri Gold Project

Deposit	Indicated	Indicated		Inferred			Total
	Tonnes	g/t Au	Ounces Au	Tonnes	g/t Au	Ounces Au	Tonnes	g/t Au	Ounces Au
Esuajah North(1, 5)	5,381,000	1.2	205,900	8,160,000	1.3	327,800	13,541,000	1.2	533,700
Esuajah South(1, 4)	2,932,000	1.5	141,700	4,990,000	2.4	385,800	7,922,000	2.1	527,500
Abnabna- Fobinso(1,6,7)	4,633,000	1.8	261,400	14,063,000	1.4	662,800	18,696,000	1.5	924,200
Ataasi(2)	340,000	2.6	28,500	200,000	2.8	18,000	540,000	2.7	46,500
Chirawewa(2)				1,200,000	1.6	65,000	1,200,000	1.7	65,000
Dadieso(3,8)				2,720,000	1.8	153,400	2,720,000	1.8	153,400
Fetish(1,9)				7,594,000	1.5	360,000	7,594,000	1.5	360,000
Totals	13,286,000	1.5	**637,500 **	38,927,000	1.6	1,972,800	52,213,000	1.6	2,610,300

Notes

• 1 Resource Evaluations May 2007 Estimate based on Perseus, Cluff and AGC drill data

• 2 Perseus Mining May 2006 Estimate based on Cluff and AGC drill data

• 3 Perseus Mining June 2007 Estimate based on Perseus and AGC drill data

• 4 Excludes low grade mineralisation of 4.4Mt at 1.0g/t Au

• 5 Excludes low grade mineralisation of 7.3Mt at 0.6g/t Au

• 6 Excludes low grade mineralisation of 4.6Mt at 0.6g/t Au

• 7 Includes AF-Gap resource estimate

• 8 Excludes low grade mineralisation of 1.1Mt at 0.9g/t Au

• 9 Excludes low grade mineralisation of 4.1Mt at 0.7g/t Au

• 10 Rounding applied to totals;

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Perseus Mining Limited was listed on the ASX in September 2004 to explore and develop several advanced gold projects located in West Africa and Central Asia.

Perseus has experienced staff working in regions which host numerous "World Class" gold deposits, but which remain amongst the least explored by modern techniques.

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Perseus is demonstrating the potential of its key projects in Ghana, the Ivory Coast and the Kyrgyz Republic and now has a resource base of over 4.0 million ounces of gold. Results from ongoing drilling campaigns on these projects should result in further significant resource upgrades during the remainder of 2007 and early 2008.

To discuss any aspect of this announcement, please contact Richard Taylor at telephone +61 8 9240 6344 or mobile 0422 811 350 or email taylorr@perseusmining.com

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Mark Calderwood Managing Director

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.

The information in this report that relates to mineral resources at the AF-Gap, Fetish, Abnabna, Fobinso, Esuajah North and Esujah South deposits is based on resource estimates that have been compiled by Mr Paul Payne, who is a Principal of and a full time employee of Resource Evaluations Pty Ltd. Mr Payne is a Member of The Australasian Institute of Mining and Metallurgy and 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 Payne and Resource Evaluations Pty Ltd consent to the inclusion in this report of the matters based on their information in the form and context in which it appears. Mr Payne and Resource Evaluations Pty Ltd have not been involved in the preparation of any other part of this report.

Appendix 1 Notes on the AF-Gap resource estimate

• 1) The Mineral Resource estimate for the AF-Gap gold deposit of the Ayanfuri Gold Project was completed in October 2007 by Resource Evaluations Pty Ltd for Perseus Mining Ltd.

• 2) The AF-Gap deposit is located within altered Lower Proterozoic Biriman (2.17-2.18 billion years) granitoid. The AF-Gap granitoid is continuous for 850m along strike and is up to 100m in width. It appears to be pervasively mineralised (0.1g/t to 2g/t) with higher grades associated with sheeted quartz veining.

• 3) The drill database contains 91 Reverse Circulation (“RC”) drill holes totaling 7,360m and 52 diamond drill holes totaling 6,984.4m. Sample recovery is considered to have been to industry standard for both RC and diamond cored drilling.

• 4) Pre 2006 RC drilling was routinely analysed for gold using a 0.5 kg 24hr bulk cyanide leach method. 2006 to 2007 RC drill samples were analysed by 1kg 24hr bulk cyanide leach method with the tails of all samples with assays greater than 0.5g/t being assayed by fire assay. Only the recovered grades of the bulk cyanide leach method were used in the resource estimate. 2006 and 2007 diamond drill samples were analysed by 50g fire assay method. Standards, spikes, blanks and repeat samples have been randomly submitted during all drilling programs. No issue with the assay data was indicated.

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• 5) The relative position of all drill-hole collars is related back to the original mine grid using a total station theodolite. Holes are considered to be accurate to within 1m horizontally and 0.5m vertically. The surface topography of the AF-Gap deposit used for resource modelling was generated using lattice gridding of survey data points and is considered to be sufficiently accurate for the generation of an indicated and inferred mineral resource estimate. At AF-Gap single shot surveys were routinely used in the deeper percussion drilling and diamond core holes. The downhole sample location data for the AF-Gap prospect is considered adequate to allow for the estimation of an indicated and inferred mineral resource.

• 6) The deposit has not been exploited by mining.

• 7) The AF-Gap resource area extends over a strike length of 950m from 26,050mE to 27,000mE and includes the 210m vertical interval from surface at 150mRL to -60mRL.

• 8) The database for AF-Gap drilling includes assay and lithological data from the 65 RC and 32 diamond holes within the 850m of strike of the AF-Gap deposit . Drilling was carried out along north-south fences which were nominally spaced at 20 to 40m metre grid east intervals and at 40 metre centres. All drill-holes were inclined at between 25° and 60° at grid north and south azimuths. The gold value used for plotting and grade estimation was the first bulk cyanide leach determination or, in its absence, the first fire assay determination presented by the laboratory.

• 9) Bulk densities were adopted from the historic Ayanfuri database comprising 115 bulk oxide samples and 61kg of sulphide diamond drill core. These are supported by the five bulk density determinations within the mineralised envelope recently conducted by Perseus on the nearby Abnabna Deposit.

• 10) Wireframes were constructed using cross sectional interpretations based on geology or a 0.2g/t Au cut-off grade.

• 11) Samples within the wireframes were composited to even 2.0m intervals. A 25g/t high grade cut for gold values within the higher grade lodes, while a 5g/t high grade cut was applied to gold values within the lower grade and depleted lodes, based on statistical analysis.

• 12) A Surpac block model was used for the estimate with a block size of 10m NS x 10m EW x 10m vertical with sub-cells of 5m x 5m x 2.5m.

• 13) The deposit was interpolated using Ordinary Kriging (OK) grade estimation with kriging parameters defined from directional variography. The estimate was run in three passes using an orientated search ellipse with a first pass radius varying from 20m for the depleted zone to up to 120m in the main high grade zone. A second pass radius of varying from 50m to 150m and a third and final pass of 200m was used on blocks not filled in the first pass. The majority of blocks were estimated in the first two passes.

• 14) The mineralised waste dump that lies over the top of the deposit at surface was estimated by averaging the drill-hole samples within it and a bulk density of 1.3 was applied.

• 15) The Mineral Resource was classified as indicated and inferred as a consequence of geological and grade continuity defined by recent drill programs.

No assumptions have been made about the mining and processing methods likely to be employed at the deposit.

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