PERSEUS MINING LIMITED — Capital/Financing Update 2009

Jan 11, 2009

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ASX RELEASE

Exchanges :

Feasibility Update Ayanfuri Gold Project , Ghana

12 January 2009

ASX:

Ongoing Feasibility Study Suggests Significant Cost Savings and Improved Economics

PRU

PRUO

Improvements to processing methods proposed for the Ayanfuri Gold project in an update to the prefeasibility study have:

Börse Frankfurt:

P4Q

Issued Shares : 175.5M

Listed Options : 10.3M

Unlisted Options : 9.2M

Resources:

Ghana

4.7Moz

Next upgrade Q1 2009

Ivory Coast

• Reduced processing costs by 34% by the introduction of a flotation circuit and a coarser grind;

• Reduced capital costs;

• Significantly increased projected cash flows and investment returns; and

• Provided an option for earlier production from a lead-in heap leach operation for oxide and a small portion of transition material.

Ongoing test work alluded to in the Company’s 1 October 2008 prefeasibility study announcement confirmed the Ayanfuri sulphide material is amenable to flotation at a relatively coarse grind size, with high gold recoveries. Further reductions in budgeted operating costs are being pursued by ongoing refinement as part of the Definitive Feasibility Study (“DFS”) now scheduled for completion in the second half of 2009.

Highlights of the Revised Projections:

1.0Moz

Feasibility Next updates

Ghana January 2009

Ivory Coast January 2009

• Processing rate of 4.5Mtpa flotation-CIL and up to 1.4Mtpa heap leach.

• Average gold production of 206,000ozpa for the first 8 years of full production including 493,000ozs in the first two years.

• Estimated cash cost of US$268 per oz in year 1 and US$355 per oz average over 10 years.

• Average projected operating cash surplus of US$83Mpa for 10 years, including US$106Mpa for the first two years of full production using a US$850/oz gold price.

• Total gross operating cash surplus (before depreciation and tax but after royalties) of US$836M at a US$850 gold price.

• The capital cost estimate is down 23% to US$134M with heap leach production and income to commence after capital expenditure of about US$60M on the heap leach and flotation-CIL circuits.

• Project payback takes about one year from completion of capital works and the estimated Internal Rate of Return (“IRR”) is 71% from the commencement of heap leaching.

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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Perseus Mining Limited (ASX:PRU) is pleased to provide this update for the Ayanfuri Gold Project feasibility study, reflecting the introduction of a flotation circuit in the plant design.

The updated preliminary economic assessment (“PEA”) as detailed in the 1 October 2008 ASX announcement has been used as the basis of the ‘base case’ for the new processing route, with the following indicative changes:

• The primary crusher and single stage SAG mill are retained, but the grind size has been relaxed to 212 microns, reducing the required mill size. Flotation has been adopted as the primary recovery method. Test work to date shows this reduces the concentrate mass pull to 3% of the original feed, whereby a sulphide concentrate leach is then applied using conventional CIL technology. This revised process route provides an overall recovery of 95% into gold doré. This process route is used for the transition-sulphide and sulphide material.

• 4.9Mt of oxide and oxide-transition material will be treated through the Company’s existing uninstalled heap leach plant. The 76% recovery rate achieved from the previous heap leach mining operation at Ayanfuri has been assumed for this material.

• A new mining schedule allows for heap leaching to commence nine months before completion of the main processing plant. It is estimated that by the time heap leaching commences cumulative capital expenditure of US$60M will heave been incurred increasing to about US$134M before the flotation-CIL circuit is commissioned. A net US$13M cash flow is projected from the heap leach operation by completion of the flotation-CIL plant, with an additional US$7M of recoverable gold in the heap leach circuit.

Advances since 1 October 2008 Study

The above changes to the prefeasibility model were made in response to favourable results from test work commenced in October. This test work, which is ongoing, demonstrated that the sulphide ore at Ayanfuri is highly amenable to flotation of a gold bearing bulk sulphide concentrate. This concentrate can then be processed through a normal but much smaller CIL circuit. The various aspects are discussed below.

Metallurgy

Metallurgical test work has focused on flotation at a coarse grind size to produce a high grade free milling concentrate and a disposable “clean sandy tails” product. Results to date have been highly encouraging, with recoveries exceeding the conventional CIL recoveries, at double the grind size.

To date 10 flotation tests have been completed at grind sizes of 106, 212, 300, 500 and 1000 microns (“µm”). Very high gold recoveries have been achieved from 212µm tests, with results to date as high as 98% of gold into a bulk sulphide concentrate assaying 60g/t Au and a concentrate mass of 3% by weight. Further test work is continuing at the coarser grind sizes to attempt to further increase optimum grind size, providing potential for further capital and operating cost savings.

The coarse grind flotation process reduces capital and operating costs substantially by reducing the size of the grinding circuit, CIL tankage and detoxification components of the proposed mill. Power and consumable costs savings are also significant.

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Table 1: Flotation Results Summary at P80 212µm

	Test Units WH1202 WH1203 WH1204 WH1152 WH1200 WH1201 WH1351 Grind Size P80 µm 212 212 212 212 212 212 212 CalculatedHead Grade g/t Au 2.31 2.57 2.03 1.01 1.87 1.82 1.42 MassRecoveryto Concentrate % 3.33 3.23 3.20 2.29 2.94 2.69 1.77 ConcentrateGrade /t Au 676 780 619 421 608 646 745	Test Units WH1202 WH1203 WH1204 WH1152 WH1200 WH1201 WH1351 Grind Size P80 µm 212 212 212 212 212 212 212 CalculatedHead Grade g/t Au 2.31 2.57 2.03 1.01 1.87 1.82 1.42 MassRecoveryto Concentrate % 3.33 3.23 3.20 2.29 2.94 2.69 1.77 ConcentrateGrade /t Au 676 780 619 421 608 646 745	Test Units WH1202 WH1203 WH1204 WH1152 WH1200 WH1201 WH1351 Grind Size P80 µm 212 212 212 212 212 212 212 CalculatedHead Grade g/t Au 2.31 2.57 2.03 1.01 1.87 1.82 1.42 MassRecoveryto Concentrate % 3.33 3.23 3.20 2.29 2.94 2.69 1.77 ConcentrateGrade /t Au 676 780 619 421 608 646 745	Test Units WH1202 WH1203 WH1204 WH1152 WH1200 WH1201 WH1351 Grind Size P80 µm 212 212 212 212 212 212 212 CalculatedHead Grade g/t Au 2.31 2.57 2.03 1.01 1.87 1.82 1.42 MassRecoveryto Concentrate % 3.33 3.23 3.20 2.29 2.94 2.69 1.77 ConcentrateGrade /t Au 676 780 619 421 608 646 745	Test Units WH1202 WH1203 WH1204 WH1152 WH1200 WH1201 WH1351 Grind Size P80 µm 212 212 212 212 212 212 212 CalculatedHead Grade g/t Au 2.31 2.57 2.03 1.01 1.87 1.82 1.42 MassRecoveryto Concentrate % 3.33 3.23 3.20 2.29 2.94 2.69 1.77 ConcentrateGrade /t Au 676 780 619 421 608 646 745	Test Units WH1202 WH1203 WH1204 WH1152 WH1200 WH1201 WH1351 Grind Size P80 µm 212 212 212 212 212 212 212 CalculatedHead Grade g/t Au 2.31 2.57 2.03 1.01 1.87 1.82 1.42 MassRecoveryto Concentrate % 3.33 3.23 3.20 2.29 2.94 2.69 1.77 ConcentrateGrade /t Au 676 780 619 421 608 646 745	Test Units WH1202 WH1203 WH1204 WH1152 WH1200 WH1201 WH1351 Grind Size P80 µm 212 212 212 212 212 212 212 CalculatedHead Grade g/t Au 2.31 2.57 2.03 1.01 1.87 1.82 1.42 MassRecoveryto Concentrate % 3.33 3.23 3.20 2.29 2.94 2.69 1.77 ConcentrateGrade /t Au 676 780 619 421 608 646 745	Test Units WH1202 WH1203 WH1204 WH1152 WH1200 WH1201 WH1351 Grind Size P80 µm 212 212 212 212 212 212 212 CalculatedHead Grade g/t Au 2.31 2.57 2.03 1.01 1.87 1.82 1.42 MassRecoveryto Concentrate % 3.33 3.23 3.20 2.29 2.94 2.69 1.77 ConcentrateGrade /t Au 676 780 619 421 608 646 745	Test Units WH1202 WH1203 WH1204 WH1152 WH1200 WH1201 WH1351 Grind Size P80 µm 212 212 212 212 212 212 212 CalculatedHead Grade g/t Au 2.31 2.57 2.03 1.01 1.87 1.82 1.42 MassRecoveryto Concentrate % 3.33 3.23 3.20 2.29 2.94 2.69 1.77 ConcentrateGrade /t Au 676 780 619 421 608 646 745	Test Units WH1202 WH1203 WH1204 WH1152 WH1200 WH1201 WH1351 Grind Size P80 µm 212 212 212 212 212 212 212 CalculatedHead Grade g/t Au 2.31 2.57 2.03 1.01 1.87 1.82 1.42 MassRecoveryto Concentrate % 3.33 3.23 3.20 2.29 2.94 2.69 1.77 ConcentrateGrade /t Au 676 780 619 421 608 646 745
	Test	Units	WH1202	WH1203	WH1204	WH1152	WH1200	WH1201	WH1351
	Grind Size	P80 µm	212	212	212	212	212	212	212
	CalculatedHead Grade	g/t Au	2.31	2.57	2.03	1.01	1.87	1.82	1.42
	MassRecoveryto Concentrate	%	3.33	3.23	3.20	2.29	2.94	2.69	1.77
	ConcentrateGrade	/t Au	676	780	619	421	608	646	745
		g	.	.	.	.	.	.	.
	GoldRecoveryto Concentrate	%	97.28	98.12	97.62	95.16	95.84	95.71	93.07
	Flotation Tails Grade	**g/t **	0.065	0.05	0.05	0.05	0.08	0.08	0.10

Ongoing test work to optimize the flotation process includes:

• Further flotation tests at 300, 500 and 1000 µm grind sizes to determine the ultimate optimum grind size;

• Improving recoveries through optimization of flotation reagents; and

• Introduction of gravity separation of gold from the concentrate to reduce extraction costs.

Operating Costs

The coarse grind flotation process route has resulted in material reductions to power, grinding media, cyanide and other consumable costs, reducing the overall processing cost by an estimated 34% excluding heap leach, as set out in Table 2.

Table 2: Estimated Process Plant Operating Cost Summary

				Heap Leach $US/t 0.66 0.56 2.51 0.27 001	Heap Leach $US/t 0.66 0.56 2.51 0.27 001
	Cost Department	Previous (CIL) $US/t	Flotation-CIL $US/t	Heap Leach $US/t
	Process Labour	1.01	0.97	0.66
	Power	4.18	2.67	0.56
	Consumables	3.51	1.52	2.51
	Maintenance	0.79	1.12	0.27
	Lbt	012	006	001
	aoraory	.	.	.
	Total	9.61	6.34	4.02

Note - excludes ore rehandle on ROM pad which is included in mining cost

The substantial reduction in processing costs will likely increase the potential mine life at Ayanfuri by expanding pit sizes when the next optimization is run. This will be complemented by a review of mining costs in light of the significant reduction in fuel costs, the increasingly competitive contract mining industry and more favorable terms from new equipment suppliers. At this stage, pit designs are still based on a US$750/oz gold price and the operating costs outlined in the 1 October 2008 prefeasibility update. In this study several pit shells were shown to be highly sensitive to operating costs and gold price, with minor cost reductions resulting in appreciable deepening of the pit shells, increasing the potential reserve tonnes.

There is room for expansion of pit sizes given the current resource base of about 3.9Moz of gold (detailed below).

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Capital Costs

Apart from the reduction in the size of the grinding circuit by relaxing the grind size, 97% of the output from the flotation process is “clean tails” not requiring further processing, thus significantly reducing CIL tankage and detoxification equipment required in a conventional CIL plant, and therefore capital costs.

The indicative capital cost estimate was prepared by consultants Mintrex and is presented in United States dollars to an accuracy level of +/-35%. The costs for the heap leach establishment were prepared internally to a similar accuracy level. The capital cost estimates do not make any allowance for escalation costs.

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

Table 3: Capital Cost Summary, US$M

Main Area	Costs
Treatment Plant Costs Infrastructure Management Costs	72.8 16.7 12.2
Total	101.7
Owner’s Project Costs Contingency HeapLeach Plant(excluding existing equipment)	12.8 11.4 8.4
Total	134.4

Economic Assessment

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

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Table 4: Economic Assessment in US Dollars

	Gold price	$750/oz	$850/oz(1) ‘base case’	$950/oz(1)
	Ore processed tonnes @ g/t Au	42Mt @1.32g/t & HL 4.9Mt@1.29g/t	42Mt @1.32g/t & HL 4.9Mt@1.29g/t	42Mt @1.32g/t & HL 4.9Mt@1.29g/t
	Strip Ratio	1.9:1	1.9:1	1.9:1
	Capital Cost	$ 134.4M	$ 134.4M	$ 134.4M
	Mining Costs	$7.76/t ore $197/oz	$7.76/t ore $197/oz	$7.76/t ore $197/oz
	Process Recovery	95% float-CIL 76% heapleach	95% float-CIL 76% heap leach	95% float-CIL 76% heapleach
	Processing Costs	$4.40-$6.34/t, $144/oz	$4.40-$6.34/t, $144/oz	$4.40-$6.34/t, $144/oz
	Administration Costs	$0.55/t ore, $13.9/oz	$0.55/t ore, $13.9/oz	$0.55/t ore, $13.9/oz
	Cash Oeratin Cost/oz	$355/oz	$355/oz	$355/oz
	pg
	Payback period From start of heap leach From start of float-CIL	2 yrs 1 months (1year 2 months)	1 year 9 months (1 year)	1 year 6 months (9 months)
	Taxpaid	$121.6M	$165.6M	$209.6M
	Royaltiespaid	$65.8M	$74.6M	$83.4M
	Free cash (before capital, itt d t	$6601M	$8360M	$10120M
	neres an ax)	.	.	,.
	Free cash after capital and tax (interest costs not included)	$404.2M	$536.2M	$668.13M
	IRR	55%	71%	86%

• 1) 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, based on a US$750/oz gold price.

Resource Upgrade

Resource upgrades are currently being estimated for drilling completed in 2008. The resource upgrade is scheduled to be completed prior to the end of January 2009. Significant increases in Indicated resources are expected, along with overall increases in the total 3.9Moz resource base.

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To discuss any aspect of this announcement, please contact Mark Calderwood at telephone +61 8 9240 6344, or email calderwoodm@perseusmining.com

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.

Metallurgical test work was completed under the supervision of Mr Gary Patrick, an external consultant to the Company. Mr Patrick 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 Patrick consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Statements regarding the Company’s plans with respect to its mineral properties are forward-looking statements. There can be no assurance that the plans for development of its mineral properties will proceed as currently expected. There can also be no assurance that the Company will be able to convert Inferred resources to Indicated resources, that any mineralisation will prove to be economic or that a mine will successfully be developed on any of the Company’s mineral properties.

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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	199,100	12,225,000	1.1	448,200
	Esuajah	4,591,000	1.8	263,500	3,370,000	2.2	238,000	7,961,000	2.0	501,500
	South(1)
	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 cut-off and 0.8 -1.2g/t cut-off for Esuajah South.

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

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

• 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)	2693000	07	56300	2410000	07	52000	5103000	07	108300
		,,	.	,	,,	.	,	,,	.	,
	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 cut-off and 0.4 -0.8g/t cut-off for Esuajah South.

2 Perseus Mining June 2007 Estimate based on Perseus and AGC drill data. Reported at 0.8g/t cut-off. 3 Rounding applied to totals.

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