PERSEUS MINING LIMITED — Interim / Quarterly Report 2005

Mar 13, 2005

PERSEUS MINING LIMITED ABN 27 106 808 986

HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2004

CONTENTS

Page

Directors' Report	$\overline{2}$
Lead auditor's independence declaration	6
Statement of Financial Performance	7
Statement of Financial Position	8
Statement of Cash Flows	9
Notes to the Consolidated Financial Statements	10
Directors' Declaration	15
Independent Review Report	16

DIRECTORS' REPORT

Your directors submit their report for the half-year ended 31 December 2004.

Directors

The directors of the Company during or since the end of the half-year are listed below. All directors were in office for this entire period unless otherwise stated.

Reginald Norman Gillard Mark Andrew Calderwood Colin John Carson Alexander Becker Rhett Boudewyn Brans Neil Christian Fearis

Results

The consolidated loss for the half year after tax and extraordinary items was $349,327.

Review of Operations

The Company listed on the Australian Stock Exchange on 22 September 2004 after raising $3,717,000 in its initial public offering. The exploration properties acquired by the Company prior to listing included the Grumesa low grade gold project in the Ashanti gold belt in Ghana with inferred resources of 450,000 oz, the Tengrela project incorporating Ivory Coast's 50 km portion of the Syama Shear, which hosts the Syama gold deposit across the border in Mali with a reported resource of 6.5 million oz, and five prospective gold projects in the renowned Tien Shan gold belt in the Kyrgyz Republic, Central Asia.

The first phase of drilling of the higher grade portion of the Grumesa gold resource, mainly testing extensions to higher grade zone, was successfully completed during the period. When the second phase of the drilling program is completed in first half of 2005 a resource upgrade will be completed as a precursor to completing a feasibility study on the mining and toll treating option under investigation by the Company. Exploration in the Kyrgyz Republic during the period was limited by seasonal factors and a short interruption to the UN enforced ceasefire in Ivory Coast prevented work on Tengrela during the period. However, pitting and soil sampling commenced at Tengrela in late January and is progressing well. It is planned that the Company will move its recently acquired rig to Tengrela to bolster the exploration effort after short drilling campaigns on the Kwatechi and Grumesa projects in Ghana.

Tengrela (Ivory Coast)

A program consisting of pitting the identified soil anomalies and infill soil sampling commenced in late January 2005 and drilling a number of regionally significant soil anomalies already identified at Tengrela is planned to be well advanced by the June quarter, by which time it is expected that in excess of 10,000m of drilling will have been completed at Tengrela.

Review of Operations (continued)

Grumesa (Ghana)

Drilling to extend a higher-grade portion of the Kayeva deposit at Grumesa was undertaken in October and November. This drilling is a precursor to infill drilling and a feasibility study that will review the viability of mining and toll treating higher-grade mineralisation through a mill located 35km away at Obuasi, possibly commencing in early 2006.

The program comprised 21 reverse circulation drill holes and three diamond drill hole tails totalling 1.028m. Nearly all holes in the initial phase were drilled either at the outer limits of the original highergrade target area or at depth. Two diamond drill holes totalling 120m were also completed to obtain bulk metallurgical samples. Significant mineralisation was encountered in most holes, with best intercepts including 30m @ 1.8g/t, 20m @ 2.0g/t and 68m @ 1.1g/t Au. KRC145 was successful in tracing the southern shallow dipping zone of mineralisation a further 100m north. It ended in mineralisation having intercepted 19m @ 1.5g/t and a further 21m @ 1.2g/t Au. This zone remains open down dip to north and along strike. Additional bottom of hole intercepts from other holes ending in mineralisation included 2m $(a)$ 4.4g/t and 56m $(a)$ 1.1g/t Au.

The feasibility study has commenced and will be conducted concurrently with infill drilling. The Base Line Environmental Study required for the Environmental Impact Statement and metallurgical test work for both the toll treating and heap leach processing options are in progress.

Kwatechi (Ghana)

In January 2005, Perseus entered into an agreement giving it the right to increase its interest to up to 76% equity in the Kwatechi Joint Venture by funding the development of the project to profitable production. The 43.3sq km Kwatechi prospecting licence and 69.5sq km Kwatechi prospecting licence application, owned by Tropical Exploration and Mining Company Ltd ("Tropical"), are the subject of the Kwatechi Joint Venture. The project adjoins Perseus's Grumesa-Awisam licence area and lies 8km south of its Kayeya gold resource and 40km north-east of the Damang mine. All three projects are hosted by Tarkwaian rocks. Previous exploration has defined significant gold in soil and trench anomalies that have never been tested by drilling.

Drilling to test the soil and trench anomalies commenced on 2 March.

Savoyardy (Kyrgyz Republic)

Progress on the Savoyardy project was disappointing due to a late start to the field season and delays during road construction to proposed drill sites along strike from the high grade mineralisation identified by Soviet explorers. A planned ten hole drilling campaign by joint venture partner Lalo Ventures Ltd ("Lalo") was not undertaken as the road to the drill sites was not completed in time. The only hole drilled, into mineralisation in road cuttings containing anomalous gold grades of up to $1.1g/t$ Au in four sub-zones totalling 26m in width 700m south-west of Pogranichnoe, was abandoned before reaching the target depth without intercepting significant mineralisation due to extreme weather conditions. The 2,000m long Pogranichnoe - Jushnoe zone is located 1 km south-west of the Savoyardy zone, where high grade gold mineralisation ranging up to 12.4g/t over 13m has been delineated in adit sampling below low grade mineralisation at surface.

Review of Operations (continued)

Tolubay (Kyrgyz Republic)

The Tolubay project has potential to host large tonnage, low grade gold mineralisation in a favourable setting. Gold is located within altered carbonaceous shale associated with arsenic mineralisation stratigraphically above cinnabar bearing jasperoid and limestone. Most of the limited number (<400) of samples taken intermittently within a 9.5km portion of the limestone shale contact zone in a recent geochemical program returned significant grades ranging from 0.2 to 19.8g/t Au. Higher grade gold mineralisation appears to be associated with local faulting and increases in grade with depth. This style of gold mineralisation has similarities to some deposits on the Carlin Trend in Nevada.

Diamond hole ZDDH001 intercepted a zone of mineralisation averaging 1.0g/t Au from 99m to 170m down hole, which included a sub intercept of $22m \omega$ 1.8g/t Au. Perseus drilled this hole below PDC 1-98, one of three wide spaced holes drilled by Phelps Dodge in 1998 that intercepted stratabound mineralisation, including $20m \omega$ 1.9g/t Au from 60m.

The second hole, ZDDH002 was drilled approximately 120m along strike to the east of ZDDH001. While detailed logging is still to be completed, it appears hole ZDDH002 passed through a fault offset zone containing no significant gold mineralisation. Hole ZDDH003, located 1,300m west along strike from ZDDH001, experienced severe core recovery problems. Only 48% of the core was recovered from the target zone, a 12.4m interval commencing at 70.9m which averaged 0.4g/t Au. All holes were terminated in competent meta-limestone averaging about 40ppb Au.

Perseus completed the first geochemical sampling for gold in the area when it undertook an orientation sampling program for gold and multi elements over 10km strike of the 15km target zone.

Drilling is expected to recommence in April at Obdilla, where a strong geochemical anomaly has been located by Perseus. Reverse circulation drilling will be preferred to core drilling to avoid sample loss from potentially high grade clay rich zones.

Kyldoo (Kyrgyz Republic)

At Kyldoo, joint venture partner Lalo completed four diamond drill holes totalling 591m into the folded Vendian carbonaceous shale setting. The holes were spaced over 1.85km and were designed to test for Kumtor style mineralisation. Drill holes KDD01 to KDD03 were successful in confirming the overall geologically and metasomatic alteration, however alteration, sulphide and gold mineralisation in the core was weak. The last hole, KDD04, drilled 1,060m south-east of KDD03, encountered an altered porphyritic intrusive and pervasively altered limestone and shale host rocks containing abundant sulphides and anomalous gold mineralisation. The most significant intercept was 8m $\omega$ 0.5g/t Au. Alteration and mineralisation encountered in KDD04 are indicative of intrusive contact related The large Makmal gold mine, located 3.7km north-east from KDD04, comprises mineralisation. intrusive contact style gold mineralisation. Surface trench results including 4m $\omega$ 6.3g/t, 4m $\omega$ 6.4g/t and 8m $(a)$ 3.0g/t Au, soil anomalies located between KDD04 and Makmal and soil anomalies further south over larger intrusives are prospective untested targets.

Lalo withdrew from the joint venture, leaving Perseus with 50% equity in and management of the project. Perseus and joint venture partner JSC Kentor will fund ongoing exploration equally or dilute.

Review of Operations (continued)

Talas (Kyrgyz Republic)

Outcrop channel sampling was undertaken on the Talas Project, with 630 samples collected from two prospect areas covering 30sq km. Early results from the wide spaced sampling are consistent with previous exploration, and included intercepts of 4m $\omega$ 4.6g/t, 4m $\omega$ 1.5g/t, 2m $\omega$ 1.6g/t, 26m $\omega$ 0.7g/t and 8m $\omega$ 0.4g/t Au. Gold is associated with pyrite, chalcopyrite and alteration minerals within sheared metasediments, metabasalt and quartz veining. Secondary copper, pyrite minerals and barites are widespread, as are alteration minerals. Anomalous gold reportedly occurs over at least 40km strike. Extensive previous geochemical and geological data is currently being digitised in preparation for the next exploration season, which is expected to commence in May 2005.

Maly Naryn (Kyrgyz Republic)

A total of 825 outcrop channel samples have been collected over an area of 15sq km at Maly Naryn. The sampling programme was undertaken to extend the area of defined insitu gold occurrences and to test a stream sediment gold anomaly. Anomalous results were widespread, though grades were typically below 0.5g/t Au. Exploration will recommence in May 2005 after the winter break and will focus intrusive contact style gold mineralisation associated with the granodiorite intrusive. Previous scout sampling included grades up to $42g/t$ Au in sulphide bearing sandstone, up to $71g/t$ Au in quartz veins and up to $10g/t$ Au in skarn samples.

Impact of International Financial Reporting Standards ("IFRS")

The Company will be required to prepare financial statements using Australian equivalents to IFRS for the first time for the half-year ended 31 December 2005 and the year ended 30 June 2006. Refer also to Note 1 in the financial statements.

Auditors' Independence Declaration

Section 307C of the Corporations Act 2001 requires the Company's auditors, HLB Mann Judd, to provide the directors of the Company with an Independence Declaration in relation to the review of the half-year financial report. This Independence Declaration is set out on page 6 and forms part of this directors' report for the half-year ended 31 December 2004.

Signed in accordance with a resolution of the directors.

$R N$ Gillard Chairman Perth Dated this 14th day of March 2005

Auditors' Independence Declaration

As lead auditor for the review of the financial report of Perseus Mining Limited for the half year ended 31 December 2004, I declare that to the best of my knowledge and belief, there have been:

• no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to $a)$ the review; and
• $b)$ no contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of Perseus Mining Limited.

Perth, Western Australia 14 March 2005

Normalgheill

N G NEILL Partner, HLB Mann Judd

HLB Mann Judd (WA Partnership)15 Rheola Street West Perth 6005. PO Box 263 West Perth 6872 Western Australia. DX 238 (Perth) Telephone +61 (08) 9481 0977. Fax +61 (08) 9481 3686.Email: hib@mjwa.com.au. Website: http://

HLB Mann Judd (WA Partnership) is a momber of HLB International and the HLB Mann Judd National Association of Independent accounting firms

CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE For the half year ended 31 December 2004

Notes	Consolidated6 Months Ended31 December2004S
Revenue from ordinary activities	53,717
Directors fees	(68, 675)
Employee, and consultants costs	(131, 404)
Depreciation expense	(7,171)
West African administration costs	(91, 868)
Kyrgyz Republic administration costs	(5, 846)
Travel and accommodation expenses	(19, 633)
Stock Exchange listing, Compliance and
Registry Fees	(42,743)
Other expenses from ordinary activities	(35,704)
Loss from ordinary activities before related
income tax expense	(349,327)
Income tax expense relating to ordinary
activities
Net loss after income tax attributable to
members of the parent entity	(349,327)
Total changes in equity other than thoseresulting from transactions with owners as
owners	(349,327)
$\overline{2}$Basic loss per share	$(0.7)$ cents

CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2004

	Consolidated31 December2004S	Consolidated30 June2004$
Current AssetsCash assetsReceivablesOther	2,831,76128,71710,916	402,82317,849421
Total Current Assets	2,871,394	421,093
Non-Current AssetsProperty, plant and equipmentMineral interest acquisition, exploration and	323,945	13,304
development expenditure	2,547,620	2,100,166
Total Non-Current Assets	2,871,565	2,113,470
Total Assets	5,742,959	2,534,563
Current LiabilitiesPayables	284,771	118,605
Total Current Liabilities	284,771	118,605
Total Liabilities	284,771	118,605
Net Assets	5,458,188	2,415,958
EquityContributed equityAccumulated losses	6,090,068(631, 880)	2,698,511(282, 553)
Total Equity	5,458,188	2,415,958

CONSOLIDATED STATEMENT OF CASH FLOWS For the half year ended 31 December 2004

	Consolidated6 Months Ended31 December2004S
Cash Flows From Operating Activities
Cash payments in the course of operationsInterest received	(436,740)52,762
Net cash used in operating activities	(383,978)
Cash Flows From Investing Activities
Payments for exploration and development expenditurePayments for plant and equipmentLoans repaid to other entities	(241, 324)(293, 505)(43, 812)
Net cash used in investing activities	(578, 641)
Cash Flows From Financing Activities
Proceeds from share issuesShare issue expenses	3,717,000(325, 443)
Net cash provided by financing activities	3,391,557
Net increase in Cash Held	2,428,938
Cash at the beginning of the reporting period	402,823
Cash at the end of the reporting Period	2,831,761

NOTES TO THE FINANCIAL STATEMENTS 31 December 2004

$\mathbf{L}$ BASIS OF PREPARATION OF HALF-YEAR FINANCIAL REPORT

This half-year financial report does not include all the notes of the type normally included in an annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the annual financial report.

This half-year financial report should be read in conjunction with the annual financial report for the year ended 30 June 2004 and any public announcements made by Perseus Mining Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

Basis of Accounting

This half-year financial report is a general purpose financial report which has been prepared in accordance with Accounting Standard AASB 1029 "Interim Financial Reporting", other mandatory professional reporting requirements (Urgent Issues Group Consensus Views) and the Corporations Act 2001.

The half-year financial report has been prepared in accordance with the historical cost convention. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

Australian Equivalents to International Financial Reporting Standards

In accordance with the Financial Reporting Council's strategic directive, the Company will be required to prepare financial statements that comply with Australian equivalents to International Financial Reporting Standards ("A-IFRS") for annual financial reporting periods beginning on or after 1 January 2005. Accordingly, the Company's first half-year report prepared under A-IFRS will be for the half-year reporting period ending 31 December 2005 and its first annual financial report prepared under A-IFRS will be for the year ending 30 June 2006.

At the date of this report, the directors of the Company have not yet finalised a high-level assessment of the impact of A-IFRS on the consolidated entity, and consequently have not yet determined how they are going to manage the transition to A-IFRS. However, the directors are monitoring the developments in A-IFRS and the potential impact it will have on the consolidated entity and expect to complete an impact study and commence a plan to to prepare the consolidated entity to be A-IFRS compliant shortly.

NOTES TO THE FINANCIAL STATEMENTS 31 December 2004

$\mathbf{1}$ . BASIS OF PREPARATION OF HALF-YEAR FINANCIAL REPORT - continued

International Financial Reporting Standards - continued

Set out below are the key areas where accounting policy will change and may have an impact on financial reporting by Perseus Mining Limited. At this stage, the Company has not been able to reliably quantify the impact on the financial report, as the convergence work has yet to be completed.

First time adoption of A-IFRS -On first-time adoption of A-IFRS, the consolidated entity will be required to restate its comparative balance sheet such that the comparative balances presented comply with the requirements specified in the A-IFRS. That is, the balances that will be presented in the financial report for the year ended 30 June 2005 may not be the balances that will be presented as comparative numbers in the financial report for the following year, as a result of the requirement to retrospectively apply the A-IFRS. In addition, certain assets and liabilities may not qualify for recognition under A-IFRS, and will need to be derecognised. As any adjustments on first-time adoption are to be made against opening retained earnings, the amount of retained earnings at 30 June 2004 presented in the 2005 financial report and the 2006 financial report available to be paid out as dividends may differ significantly.

Various voluntary and mandatory exemptions are available to the consolidated entity on firsttime adoption, which will not be available on an ongoing basis. The exemptions provide relief from retrospectively accounting for certain balances, instruments and transactions in accordance with A-IFRS, and includes relief from having to restate past business combinations, and the identification of a 'deemed cost' for property, plant and equipment.

The impact on Perseus Mining Limited of the changes in accounting policies on first-time adoption of A-IFRS will be affected by the choices made. The consolidated entity is evaluating the effect of the options available on first-time adoption in order to determine the best possible outcome for the consolidated entity.

Impairment of Assets – Under Accounting Standard AASB 136 'Impairment of Assets', the recoverable amount of an asset is determined as the higher of net selling price and value in use. This will result in a change in the Company's current accounting policy, which determines the recoverable amount of an asset on the basis of undiscounted cash flows. Under the new policy, it is likely that impairment of assets will be recognised sooner and that the amount of write-downs charged to the Statement of Financial Performance could be greater.

Share based payments - Under Accounting Standard AASB 2, the Company will be required to determine the fair value of future options or other equity based compensation issued to employees and recognise this as an expense in the statement of financial performance.

NOTES TO THE FINANCIAL STATEMENTS 31 December 2004

$\mathbf{1}$ . BASIS OF PREPARATION OF HALF-YEAR FINANCIAL REPORT - continued

International Financial Reporting Standards - continued

Income taxes – Currently, the consolidated entity adopts the liability method of tax effect accounting whereby the income tax expense is based on the accounting profit adjusted for any permanent differences. Timing differences are currently brought to account as either a provision for deferred income tax or future income tax benefit. Under the Australian equivalent to IAS 12, the consolidated entity will be required to adopt a balance sheet approach under which temporary differences are identified for each asset and liability rather than the effects of the timing and permanent differences between taxable income and accounting profit.

Exploration expenditure - AASB 6 "Exploration for and Evaluation of Mineral Resources" which sets out the framework to deal with accounting for exploration and evaluation costs permits 'area of interest' accounting to continue for exploration and evaluation costs. These costs will be subject to impairment testing. This standard no longer deals with accounting for development costs. These costs will be classified as tangible and intangible assets under the AIFRS framework and will be subject to impairment testing requirements.

EARNINGS PER SHARE $2.$

	Consolidated31 December2004cents
Basic earnings / (loss) per share	(0.7)
Weighted average number of ordinary shares outstandingduring the period used in the calculation of basic earnings	Number
per share	51,741,032

The Company's potential ordinary shares, being its options granted, are not considered dilutive as the conversion of these options would result in a decreased net loss per share.

NOTES TO THE FINANCIAL STATEMENTS 31 December 2004

$3.$ SEGMENT REPORTING

	Australia$	West Africa$	Central Asia$	2004S
Geographicalsegments (PrimarySegment)2004
Revenue
Other external revenueTotal segment revenue	53,71653,716	۰	$\blacksquare$	53,71653,716
Results
Operating loss before
income taxIncome tax expense	(262, 807)	(70, 863)	(15, 657)	(349, 327)
Net loss				(349, 327)
CONTRIBUTED EQUITY4.
				Company
				S
(a) Issued and paid-up share capital
59,518,450 ordinary shares, fully paid				6,090,068
Movements in Ordinary Shares:
			Number	$
Subscriber Shares issued at 20 cents each on 24/10/2003			5	1
Promoter Shares issued at 0.1 cents each on 23 /01/2004			13,233,445	13,233
Shares at 10 cents each to Caspian Oil and Gas Limited forassignment of debt on 05/03/2004			16,000,000	1,600,000
Shares at 10 cents each to Caspian Oil and Gas Limited for
acquisition of Grumesa Joint Venture on 05/03/2004			3,200,000	320,000
Shares at 10 cents each to Caspian Oil and Gas Limited foracquisition of interest in Kyldoo Joint Venture on 31/03/2004			1,000,000	100,000
Shares at 10 cents each issued as seed capital between
05/03/2004 and 12/04/2004			7,500,000	750,000
Transaction costs arising from issue for cash				(84, 723)
Balance at 30/06/2004			40,933,450	2,698,511
Share issue at 20 cents each pursuant to the prospectus to list
on the Australian Stock Exchange			18,585,000	3,717,000
Transaction costs arising from issue for cash				(325, 443)
Balance at 31/12/200459,518,450				6,090,068

NOTES TO THE FINANCIAL STATEMENTS 31 December 2004

5. CONTINGENT LIABILITIES

Since the last annual reporting date, there has been no material change in any contingent liabilities reported in the June 2004 Annual Report.

EVENTS OCCURRING SUBSEQUENT TO 31 DECEMBER 2004 6.

There are no matters or circumstances that have arisen since 31 December 2004 that have or may significantly affect the operations, results, or state of affairs of the consolidated entity in future financial periods.

DIRECTORS' DECLARATION 31 December 2004

In the opinion of the directors:

• (a) the financial statements and notes of the consolidated entity:
  • give a true and fair view of the financial position as at 31 December 2004 and the $(i)$ performance for the half-year ended on that date of the consolidated entity; and
  • $(ii)$ comply with Accounting Standard AASB 1029 "Interim Financial Reporting", Accounting Standards, Corporations Regulations 2001 and other mandatory professional reporting requirements; 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.

This declaration is made in accordance with a resolution of the board of directors.

R N Gillard CHAIRMAN

Dated at Perth this 14th day of March 2005

Chartered Accountants

INDEPENDENT REVIEW REPORT

To the members of PERSEIIS MINING LIMITED

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements and the directors' declaration of Perseus Mining Limited for the half-year ended 31 December 2004. The financial report includes the consolidated financial statements of the consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year.

The directors of the company are responsible for preparing a financial report that gives a true and fair view of the financial position and performance of the company and that complies with Accounting Standard AASB 1029 "Interim Financial Reporting", in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

Review approach

We conducted an independent review of the financial report in order to make a statement about it to the members of the company, and in order for the company to lodge the financial report with the Australian Stock Exchange and the Australian Securities and Investments Commission.

Our review was conducted in accordance with Australian Auditing Standards applicable to review engagements in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the financial report is not presented fairly in accordance with the Corporations Act 2001, Accounting Standard 1029 "Interim Financial Reporting" and other mandatory professional reporting requirements in Australia and statutory requirements, so as to present a view which is consistent with our understanding of the company's financial position and of its performance as represented by the results of its operations and cash flows.

A review is limited primarily to inquiries of company personnel and analytical procedures applied to the financial data. These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance is less than given in an audit. We have not performed an audit and, accordingly, we do not express and audit opinion.

HLB Mann Judd (WA Partnership)15 Rheola Street West Perth 6005, PO Box 263 West Perth 6872 Western Australia, DX 238 (Perth) Telephone +61 (08) 9481 0977, Fax +61 (08) 9481 3686. To state of the Control of the Control of the Control of the Control of the Control of the Control of the Control of the Control of the Control of the Control of the Control of the Control of the Control of the Control of

Independent Review Report

$(cont2d)$

Independence

In conducting our review, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Statement

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the financial report of Perseus Mining Limited, is not in accordance with:

• (a) the Corporations Act, including:
  • (i) giving a true and fair view of the consolidated entity's financial position at 31 December 2004 and of its performance for the half-year ended on that date; and
  • (ii) complying with Accounting Standard AASB 1029 "Interim Financial Reporting" and the Corporations Regulations 2001: and
• (b) other mandatory financial reporting requirements in Australia.

HLB Manyfrold

HLB MANN JUDD Chartered Accountants

Normalghaill

N G NEILL Partner

Perth, Western Australia 14 March 2005