PERSEUS MINING LIMITED — Capital/Financing Update 2008

Sep 30, 2008

ASX RELEASE 1 October 2008

==> picture [252 x 77] intentionally omitted <==

Ayanfuri Feasibility Update Ghana - West Africa

The Ayanfuri Gold Project Definitive Feasibility Study (“DFS”) is on track for completion by April 2009 following a positive Preliminary Economic Assessment (“PEA”) and subsequent ongoing value engineering, resulting in the following current ‘base case’ for the feasibility:

Highlights

• 1.9Moz of in-pit gold resources from four of the eight deposits at Ayanfuri, using a US$750 gold price for whittle shell selection.

• Processing rate of 4.5mtpa through a conventional CIL mill.

• Average gold production 196,000ozpa for years 1 to 5 and 162,000ozpa for years 6 to 10.

• Average cash cost of US$430 per oz and operating cash surplus of US$74Mpa for years 1 to 5 using a US$850 gold price for cash flow modeling.

• Total gross operating cash surplus (before depreciation and tax but after royalties) of US$625M.

• The capital cost estimate is US$175M including US$30M for pre-strip, contingencies and cost escalation during construction, giving a two year one month payback .

Potential exists to significantly extend the mine life by:

• redesigning the pits using US$850 gold price pit shells, which extends in-pit resources to 2.6Moz ;

• the inclusion of extensional drilling completed since the April 2008 resource estimates;

• the inclusion of another three small deposits at Ayanfuri which are yet to be optimized;

• continued exploration on prime drill targets; and

• ongoing engineering work focusing on grind size optimisation with the aim of reducing operating costs.

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

1

F:\PUBLIC\Perseus Mining Limited\Corporate\ASX\2009\ASX 011008 (Ayanfuri Feasibility Update).doc

Perseus Mining Limited (ASX:PRU) is pleased to provide the following feasibility update for the Ayanfuri Gold Project in Ghana.

The preliminary economic assessment (“PEA”) completed in September 2008 has determined the current ‘base case’ throughput of 4.5mtpa is preferable to the 3mtpa starting point for the study. The updated ‘base case’ results are as follows:

• Optimisations and pit designs completed in September 2008 using gold prices of US$750/oz (with one pit modeled at US$700/oz) and US$850/oz identified between 1.9Moz and 2.6Moz of ‘in pit resources’, prompting an increase in this ‘base case’ processing rate to 4.5Mtpa. The more conservative US$750 pit shells were adopted for scheduling for the cash flow model.

• Processing plant crushing and grinding remains as primary crusher and single stage SAG mill. Test-work indicated that an increase in residence time to 48 hours would lead to a 2% increase in gold recoveries and enhance project profitability. Definitive metallurgical testwork currently under way will review the residence time and it is expected to see the optimal residence time reduced.

• The key economic indicators resulting from the value engineering work to date using US$850 gold price:

• Payback period of 2 years 1 month and cash costs US$393/oz over the payback period.

• The capital cost estimate is US$175M including owner costs, contingencies and escalation allowance.

• The 4.5Mtpa option takes into account an initial 10years of production.

• Average cash cost of US$430 per oz for years 1 to 5 and US$495 per oz for years 6 to 10.

The Company has identified a number of areas likely to improve the forecast project economics considerably, including:

• Inclusion of the smaller, less advanced Chirawewa, Dadieso and Mampon deposits, and extensions to Abnabna, AF-Gap, Fobinso and Fetish resources to take into account work since the April 2008 resource estimates.

• Further grind size optimisation, taking into account the favorable metallurgical characteristics of the ore, power costs and feed grade. Indications are that the grind size may be relaxed with limited effect on recovery, but significantly increasing throughput with minimal additional operating cost. Recovery test-work at varied grind sizes will evaluate this opportunity.

• Assessment of secondary and tertiary crushing options, including the use of a High Pressure Grinding Rolls crusher (“HPGR”), has the potential to reduce power consumption and mill feed size, thereby increasing economic mineralisation at reduced cutoff grades and reducing operating costs.

• The current ‘base case’ assumes contract mining of ore and waste. Given the large volume of marginal grade material which is sensitive to operating costs, owner mining has the potential to further reduce operating costs and increase the mineable resources.

2

F:\PUBLIC\Perseus Mining Limited\Corporate\ASX\2009\ASX 011008 (Ayanfuri Feasibility Update).doc

Table 1: Optimisation Summary

	‘Base Case’ Waste (Mt) Resource (Mt)	‘Base Case’ Waste (Mt) Resource (Mt)	Cont. Au (ounces)	$850 Optimisations Waste (Mt) Resource (Mt) Cont. Au (ounces)	$950 Optimisations Waste (Mt) Resource (Mt) Cont. Au (ounces)
Abna-Af-Gap- Fobinso Esuajah Sth Esuajah Nth Fetish	54.86 2.05 17.18 8.31	24.07(1) 1.19(2) 14.21(3) 6.16(4)	1,123,631 71,173 509,494 231,777	78.91 32.83 1,378,776 48.16 7.00 416,232 21.66 15.73 561,476 10.89 6.26 225,235	90.61 36.21 1,469,405 50.11 7.23 427,848 22.94 17.23 598,277 12.15 6.86 240,611
	82.39	45.64	1,936,075	159.62 61.82 2,581,719	175.80 67.54 2,736,141

Notes

(1) Actual pit design on nominal US$750 pit shell, 66% Indicated and 34% Inferred resources

(2) US$700 optimisation shell, 100% Indicated resources

(3) US$750 optimisation shell, 54% Indicated and 46% Inferred resources

(4) US$750 optimisation shell, 100% Inferred resources

Details of current ‘base case’

Mining

The mine design used multiple open pits developed in sequence, with ore delivered to the processing plant at 4,5mtpa. Mining is expected to commence about 4 months prior to commissioning, resulting in total movement of 370,000 tonnes of ore and 2.4Mt of pre-strip waste. Life of mine waste to ore ratio using a 0.55g/t Au cut-off for ore is estimated to be 1.8:1.

The total mining cost was estimated to be US$370M, representing an average cost of US$8.11 per tonne of ore mined, including capitalised pre-strip, the relatively low mining cost is a result of the low waste to ore strip ratio.

Metallurgy

Metallurgical test-work has been conducted for the base case grind size for the main known deposits at Ayanfuri using the moderately course base case grind size of 80% passing 106µm.

Test-work has demonstrated the simple free milling ore which is not complex in nature, has no specific metallurgical processing issues and has demonstrated high gravity gold recoveries of towards 30% and total gold recoveries of above 91% for fresh granite deposits and 98% for the transitional and oxide material using the base case 106µm grind and 30 hours residence time.

Crushing and milling work indices indicate moderate competency and abrasion characteristics typical of fresh ore types. Ayanfuri mineralised rock types are not expected to cause significant comminution issues, with modelling confirming amenability to a single stage crush and SAG mill comminution circuit. The potential savings in power costs and increased mill throughput by introducing the HPGR crushing system are being investigated and could lead to changes in the proposed processing method.

Further potential leaching improvements will be investigated to enhance overall gold recoveries for fresh rock ore types.

3

F:\PUBLIC\Perseus Mining Limited\Corporate\ASX\2009\ASX 011008 (Ayanfuri Feasibility Update).doc

Reagent consumption test-work has demonstrated low levels of lime of approximately 0.25kg/t and moderate levels of cyanide of approximately 0.53kg/t are required for effective leaching kinetics and gold extraction.

Other test-work has demonstrated low viscosity, high settling rates and densities, and fast carbon loading kinetics. The detoxification test-work has confirmed a very clean ore with simple detoxification and low reagent requirements reflecting the low cyanide consumption.

Variability test-work has replicated composite tests in respect to comminution characteristics and high gold recoveries for the granite hosted deposits. Some limited further variability test-work will be required to enable the DFS level study to incorporate samples from the expanded project resources.

Processing

The Ayanfuri ‘base case’ gold plant design criteria assume a primary crushing circuit, single stage SAG mill followed by gravity separation, CIL leaching, electrowinning and gold smelting. The tails will be detoxified prior to release to storage.

Due to the ore being hosted in granite rocks, the reagent consumptions are typically low with clean tails being generated.

Operating Cost

The operating cost estimate has been compiled by Perseus based on test work data and costs obtained from similar projects in the region.

Table 2: Operating Cost Summary Yrs 1 to 10

Cost Department	Annual Average $US(000)/yr	$US/t	% Total
Process & Admin	45,981	10.22	55.9
MiningContractor	25,062	5.57	30.4
Owner Mining*	11,253	2.50	13.7
Total	82,296	18.29	100

*Owner Mining costs cover grade control, owner’s mining and management, administration costs, pit dewatering, rehandling, overhaul, rehabilitation and miscellaneous mining contractor works.

Capital Cost

The capital cost estimate was prepared by consultants Mintrex and is presented in United States dollars to an accuracy level of +/-25%.

The estimate has been developed from a combination of quantity take-offs, factoring costs from similar recent projects in the region and obtaining budget prices for major equipment.

4

F:\PUBLIC\Perseus Mining Limited\Corporate\ASX\2009\ASX 011008 (Ayanfuri Feasibility Update).doc

Table 3: Capital Cost Summary, US$,000

Main Area	Costs
Treatment Plant Costs Infrastructure Management Costs	96,764 16,643 12,154
Total	125,561
Owner’s Project Costs Contingency Escalation During Construction	24,443 15,000 7,500
**Total **	**172,504 **

Economic Assessment

The Preliminary Economic Assessment was prepared with capital costs and operating costs in sufficient detail to be considered a Pre-feasibility Study, allowing for the Ghanaian fiscal environment. Following is a summary of the economic assessment of the project.

Table 4: Economic Assessment in US Dollars

Gold price	$750/oz	$850/oz(2) ‘base case’	$950/oz(2)
Ore processed tonnes@ g/t Au	36.1Mt @1.49g/t & LG 9.5Mt@0.69g/t	36.1Mt @1.49g/t & LG 9.5Mt@0.69g/t	36.1Mt @1.49g/t & LG 9.5Mt@0.69g/t
Strip Ratio	1.8:1	1.8:1	1.8:1
Capital Cost	$ 172.5M	$ 172.5M	$ 172.5M
Mining Costs	$7.98/t ore $201/oz	$7.98/t ore $201/oz	$7.98/t ore $201/oz
Process Recovery (average)	93.2%	93.2%	93.2%
Processing Costs	$9.61/t ore $243/oz	$9.61/t ore $243/oz	$9.61/t ore $243/oz
Administration Costs	$0.61/t ore $15.44/oz	$0.61/t ore $15.44/oz	$0.61/t ore $15.44/oz
Cash Operating **Cost/oz Average **	$460/oz	$460/oz	$460/oz
Paybackperiod	3yrs 2 months	2yrs 1 month	1yrs 8 months
Taxpaid	$70.5M	$113.4M	$156.4M
Royaltiespaid	$64.3M	$72.8M	$81.4M
Free cash (before capital and tax)	$454.4M	$626.2	$798.0M
Free cash (after capital and tax)	$211.4M	$340.3M	$496.1M
IRR	24.2%	36.1%	47.2%

• 1) The above economic assessment summary does not take into account resources from the Chirawewa, Dadieso and Mampon deposits and extensional drilling on the other deposits since April 2008.

• 2) The US$950/oz and US$850/oz scenarios do not reflect a pit expansion which would result in longer mine life and higher production if the higher gold price was used to redesign the pits. They reflect only the effect of the rising price on mining the currently designed pits.

5

F:\PUBLIC\Perseus Mining Limited\Corporate\ASX\2009\ASX 011008 (Ayanfuri Feasibility Update).doc

==> picture [452 x 100] intentionally omitted <==

==> picture [452 x 99] intentionally omitted <==

==> picture [452 x 99] intentionally omitted <==

==> picture [452 x 99] intentionally omitted <==

==> picture [452 x 99] intentionally omitted <==

6

F:\PUBLIC\Perseus Mining Limited\Corporate\ASX\2009\ASX 011008 (Ayanfuri Feasibility Update).doc

==> picture [360 x 129] intentionally omitted <==

==> picture [360 x 129] intentionally omitted <==

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

==> picture [136 x 58] intentionally omitted <==

Mark Calderwood Managing Director

The information in this report that relates to exploration results, mineral resources or ore reserves 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.

7

F:\PUBLIC\Perseus Mining Limited\Corporate\ASX\2009\ASX 011008 (Ayanfuri Feasibility Update).doc

Mineral Resources (Gold) - Ayanfuri Gold Project 30 April 2008 (>0.8g/t Au)

Deposit	Indicated	Indicated	Indicated	Inferred	Inferred	Inferred	Total	Total	Total
	Tonnes	g/t Au	Ounces Au	Tonnes	g/t Au	Ounces Au	Tonnes	g/t Au	Ounces Au
Esuajah North(1)	6,429,000	1.2	249,200	5,796,000	1.1	199,1 00	12,225,000	1.1	448,200
Esuajah South(1)	4,591,000	1.8	263,500	3,370,000	2.2	238,000	7,961,000	2.0	501,500
Abnabna- Fobinso(1)	15,230,000	1.6	760,900	13,306,000	1.4	608,100	28,536,000	1.5	1,369,000
Fetish(1)	4,809,000	1.1	176,200	10,930,000	1.5	543,500	15,739,000	1.4	719,700
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)				2,720,000	1.8	153,400	2,720,000	1.8	153,400
Totals	31,399,000	1.5	1,478,300	37,522,000	1.5	1,825,000	68,921,000	1.5	3,303,300

Notes

• 1 Runge Ltd April 2008 Estimate based on Perseus, Cluff and AGC drill data. Reported at 0.8g/t cutoff and 0.8 -1.2g/t cutoff for Esuajah South

• 2 Perseus Mining May 2006 Estimate based on Cluff and AGC drill data. Reported at 0.8g/t cutoff

• 3 Perseus Mining June 2007 Estimate based on Perseus and AGC drill data. Reported at 1.2g/t cutoff

• 4 Rounding applied to totals

Mineral Resources (Gold) - Ayanfuri Gold Project 30 April 2008 (Low Grade)

Deposit	Indicated	Indicated	Indicated	Inferred	Inferred	Inferred	Total	Total	Total
	Tonnes	g/t Au	Ounces Au	Tonnes	g/t Au	Ounces Au	Tonnes	g/t Au	Ounces Au
Esuajah North(1)	4,295,000	0.6	88,000	8,035,000	0.6	161,900	12,329,000	0.6	249,900
Esuajah South(1)	934,000	0.7	19,500	820,000	1.0	25,300	1,755,000	0.8	44,900
Abnabna- Fobinso(1)	3,877,000	0.6	76,400	5,889,000	0.6	113,500	9,766,000	0.6	189,800
Fetish(1)	2,693,000	0.7	56,300	2,410,000	0.7	52,000	5,103,000	0.7	108,300
Dadieso(2)				1,142,000	0.9	34,100	1,142,000	0.9	34,100
Totals	11,799,000	0.6	240,200	18,296,000	0.7	386,800	30,095,000	0.7	627,000

Notes

• 1 Runge Ltd April 2008 Estimate based on Perseus, Cluff and AGC drill data. Reported at 0.4g/t cutoff and 0.4 -0.8g/t cutoff for Esuajah South

• 2 Perseus Mining June 2007 Estimate based on Perseus and AGC drill data. Reported at 0.8g/t cutoff

• 3 Rounding applied to totals

8

F:\PUBLIC\Perseus Mining Limited\Corporate\ASX\2009\ASX 011008 (Ayanfuri Feasibility Update).doc