PERSEUS MINING LIMITED — Interim / Quarterly Report 2006

Mar 14, 2006

PERSEUS MINING LIMITED ABN 27 106 808 986

HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2005

CONTENTS

Page

Directors' Report	$\overline{2}$
Auditor's Independence Declaration	5
Condensed Income Statement	6
Condensed Balance Sheet	$\overline{\overline{f}}$
Condensed Statement of Changes in Equity	8
Condensed Cash Flow Statement	9
Notes to the Financial Statements	10
Directors' Declaration	22
Independent Review Report	23.

DIRECTORS' REPORT

DIRECTORS' REPORT

Your directors submit their report for the half-vear ended 31 December 2005.

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 Rhett Boudewyn Brans Neil Christian Fearis Alexander Becker

Resigned 12 October 2005

Results

The consolidated loss for the half year after tax was $$672,014 (2004; $625,267)$ .

Review of Operations

Activities

Tolubay (Kyrgyz Republic)

The Obdilla prospect was discovered in 2005, extensive trenching defined a zone 2km long by $50 -$ 200m wide. Drilling commenced on the main zone at Obdilla in late November, with a second rig commencing in December. Six diamond holes were completed and two holes were in progress, for a total of 1,385m to 27 January 2006.

The current 7,500m, 40 hole program has been planned to provide the basis for an initial resource estimate. To facilitate this process, samples have been sent to SGS Lakefield in Johannesburg for metallurgical testwork.

The Obdilla prospect has potential for a large tonnage, medium grade gold deposit in a setting comparable to deposits on Nevada's Carlin Trend.

Tengrela (Ivory Coast)

Perseus commenced RAB drilling on the Sissingue gold in soil anomaly on the Tengrela project in late November 2005. By 28 January 2006 a total of 207 drill holes had been completed for 8,844m of drilling. 143 of these holes were completed at Sissingue, while 64 holes were completed on the Kanakono anomaly. A number of significant intercepts have been made from the initial wide spaced drill pattern.

DIRECTORS' REPORT

Review of Operations (continued)

Savovardy (Kvrgvz Republic)

A total of 910m of adit sampling was undertaken during the period. Most (+90%) of the gold in the $+300$ m long Zone 4 is contained within high-grade sulphide rich shoots. Zone 10 has not been fully resampled due to access limitations within crosscuts where the soft carbonaceous shale contact containing high grades were previously intercepted.

A total of 1.401 soil samples were collected from areas of anomalous stream sediments over about 13.5km strike. The most impressive areas of soil anomalism occur in an open ended arc 3.500m long and 500m wide, situated immediately east of the high grade Savoyardy deposit.

A further 196 infill soil samples and six trenches totaling 314m were completed prior to the suspension of exploration in October due to the onset of winter conditions. A man portable diamond drill rig purchased for use in the Kyrgyz Republic will be used to test mineralised zones at Savoyardy next field season.

Grumesa (Ghana)

Feasibility work is continuing on both the mine-haul-custom mill and the on site heap leach options for the Kayeya gold project on the Grumesa licence.

The Draft Environmental Impact Statement for the Kayeya gold project mine-haul-custom mill operation has been completed.

Metallurgical results from the first three column tests in USA have been completed. The column testwork focused on the fresh material, as this potential ore type was considered the most important in terms of resource potential and least likely to be heap leachable. Favorable results led to the decision to commence further column test work on the more amenable oxide and transition material, with three columns currently nearing completion.

Talas (Kvrgyz Republic)

Gold in soil results have been reported for 1.922 samples collected from three grids totaling 137 line km over a 100 sq km portion of the licence area. Relatively extensive gold anomalism has been identified over about 7km strike.

The 905 sq km Talas licence is located 40km south west of the world class Jerooy gold deposit and 30km north east of the large Chaarat discovery.

Maly Naryn (Kyrgyz Republic)

Analytical results have been received for 616 soil samples collected over 21.5 sq km on the Maly Naryn project in the Kyrgyz Republic.

DIRECTORS' REPORT

Review of Operations (continued)

A significant number of the samples contain anomalous gold, copper, bismuth and arsenic. The strongest zone of soil anomalism is associated with a granodiorite-limestone contact zone, which forms a ridge extending for 3km. Gold and other metals are shedding from both the granodiorite and the altered limestone.

Adoption of Australian Equivalents to International Financial Reporting Standards ("AIFRS")

This interim report has been prepared under Australian Equivalents to IFRS. A reconciliation of differences between previous GAAP and Australian Equivalents to IFRS has been included in Note 2 of this report.

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 5 and forms part of this directors' report for the half-year ended 31 December 2005.

Signed in accordance with a resolution of the directors.

* Csht

M A Calderwood Director Perth Dated this 15^th day of March 2006

Auditor's Independence Declaration

As lead auditor for the review of the financial report of Perseus Mining Limited for the half year ended 31 December 2005, 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 a) relation to the review; and
• $\mathbf{b}$ 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 15 March 2006

Normage

N G NEILL Partner, HLB Mann Judd

HLB Mann Judd (WA Partnership)

HLB Mann Judd (WA Parmership)
15 Rhecia 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@hibwa.com.au. Website: http:/

HLB Mann Judd (WA Partnership) is a member of [11.5] International and the HLB Mann Judd National Association of independent accounting firms

CONDENSED INCOME STATEMENT For the half year ended 31 December 2005

	Note	Consolidated 6 Months Ended 31 December 2005 S	Consolidated 6 Months Ended 31 December 2004 S
Revenue from ordinary activities		51,318	53,717
Directors fees Employee, and consultants costs Director and employee benefits expense Depreciation expense West African administration costs Kyrgyz Republic administration costs Travel and accommodation expenses Stock Exchange listing, compliance and registry Fees Write-down of exploration expenditure Other expenses from ordinary activities		(61, 827) (243, 439) (16, 622) (24, 499) (85, 844) (11, 195) (40, 578) (34,219) (120, 511) (84, 598)	(68, 675) (131, 404) (275,940) (7,171) (91, 868) (5,846) (19, 633) (42, 743) (35,704)
Loss before related income tax expense		(672, 014)	(625, 267)
Income tax expense
Net loss after income tax attributable to members of the parent entity		(672, 014)	(625, 267)
Basic loss per share	3	$(1.0)$ cents	$(1.2)$ cents

CONDENSED BALANCE SHEET As at 31 December 2005

	Notes	Consolidated 31 December 2005 $\mathbb{S}$	Consolidated 30 June 2005 \$
Current Assets
Cash assets		2,494,679	1,917,368
Receivables Other		144,754 66,601	62,008 6,839
Total Current Assets		2,706,034	1,986,215
Non-Current Assets Property, plant and equipment Mineral interest acquisition, exploration and		387,404	340,879
development expenditure		4,009,198	3,177,343
Other - VAT withheld		141,376	41,385
Total Non-Current Assets		4,537,978	3,559,607
Total Assets		7,244,012	5,545,822
Current Liabilities
Payables		227,674	432,075
Provisions		15,968	7,837
Total Current Liabilities		243,642	439,912
Total Liabilities		243,642	439,912
Net Assets		7,000,370	5,105,910
Equity
Contributed equity	5	8,289,067	5,886,067
Option reserve Foreign currency translation reserve	6	496,562 55,291	479,940
Accumulated losses		(1,840,550)	(91, 561) (1,168,536)
Total Equity		7,000,370	5,105,910

CONDENSED STATEMENT OF CHANGES IN EQUITY For the half year ended 31 December 2005

		Consolidated
	Issued Capital	Retained Earnings	Option Premium Reserve	Foreign Currency Reserve	Total Equity
	\$	$\mathbf S$	$\mathbb{S}$	\$	\$
Balance at 1 July 2004	2,698,511	(204, 251)			2,494,260
Shares issued during the year	3,717,000				3,717,000
Currency translation differences				(78,365)	(78, 365)
Loss attributable to members of the parent entity		(625, 267)			(625, 267)
Share issue expenses	(529, 444)		204,000		(325, 444)
Cost of share based payments			275,940		275,940
Balance at 31 December 2004	5,886,067	(829, 518)	479,940	(78, 365)	5,458,124
Balance at 1 July 2005	5,886,067	$(1,168,536)$ 479,940		(91, 561)	5,105,910
Shares issued during the year	2,500,000				2,500,000
Currency translation differences				146,852	146,852
Loss attributable to members of the parent entity		(672, 014)			(672, 014)
Share issue costs	(97,000)				(97,000)
Cost of share based payments			16,622		16,622
Balance at 31 December 2005	8,289,067	(1,840,550)	496,562	55,291	7,000,370

CONSOLIDATED STATEMENT OF CASH FLOWS For the half year ended 31 December 2005

	Consolidated 6 Months Ended 31 December 2005 \$	Consolidated 6 Months Ended 31 December 2004 \$
Cash flows from operating Activities
Cash payments in the course of operations Interest received	(717, 646) 47,657	(436,740) 52,762
Net cash used in operating activities	(669,989)	(383,978)
Cash flows from investing Activities
Payments for exploration and development expenditure Payments for plant and equipment Loans repaid to other entities	(1,054,601) (74, 565) (26, 534)	(241, 324) (293, 505) (43, 812)
Net cash used in investing activities	(1,155,700)	(578, 641)
Cash flows from financing Activities
Proceeds from share issues Share issue expenses	2,500,000 (97,000)	3,717,000 (325, 443)
Net cash provided by financing activities	2,403,000	3,391,557
Net increase in cash held	577,311	2,428,938
Cash at the beginning of the reporting period	1,917,368	402,823
Cash at the end of the reporting period	2,494,679	2,831,761

NOTES TO THE FINANCIAL STATEMENTS For the half year ended 31 December 2005

$\mathbf{I}$ . STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The half-year consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001, applicable accounting standards including AASB 134: Interim Financial Reporting, Urgent Issues Group Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.

The half-year financial report has been prepared in accordance with the historical cost convention.

This half-year financial report should be read in conjunction with the annual financial report for the year ended 30 June 2005 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

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 cash flows of the consolidated entity as the annual financial report.

For the purpose of preparing the half-year report, the half-year has been treated as a discrete reporting period.

As this is the first interim financial report prepared under Australian equivalents to IFRS, the accounting policies applied are inconsistent with those applied in the 30 June 2005 annual report as this report was presented under previous Australian GAAP. Accordingly, a summary of the significant accounting policies under Australian equivalents to IFRS has been included below. A reconciliation of equity and profit and loss between previous GAAP and Australian equivalents to IFRS has been prepared and is presented in Note 2.

Principles of consolidation

The consolidated financial report comprises the financial statements of Perseus Mining Limited and its controlled entities

A controlled entity is any entity controlled by Perseus Mining Limited whereby Perseus Mining Limited has the power to control the financial and operating policies of an entity so as to obtain benefits from its activities.

The financial statements of controlled entities are prepared for the same reporting period as the parent company, using consistent accounting policies. Accounting policies of controlled entities have been changed where necessary to ensure consistencies with those policies applied by the parent entity.

NOTES TO THE FINANCIAL STATEMENTS For the half year ended 31 December 2005

$\mathbf{I}$ . STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

All inter-company balances and transactions between entities in the consolidated entity, including any unrealised profits or losses, have been eliminated on consolidation

Where controlled entities have entered or left the consolidated entity during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased.

Income tax

Deferred income tax is provided for on all temporary differences at balance date between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes.

No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or $loss$

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the consolidated entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. The carrying amount of deferred tax assets is reviewed at each balance date and only recognised to the extent that sufficient future assessable income is expected to be obtained.

At the reporting date, the Directors have not made a decision to elect to be taxed as a single entity. In accordance with Urgent Issues Group ('UIG') Interpretation 1039, "Substantive Enactment of Major Tax Bills in Australia", the financial effect of the legislation has therefore not been brought to account in the financial statements for the year ended 30 June 2005, except to the extent that the adoption of the tax consolidation would impair the carrying value of any deferred tax assets.

Property, plant and equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

NOTES TO THE FINANCIAL STATEMENTS For the half year ended 31 December 2005

$\mathbf{I}$ . STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Plant and equipment

Plant and equipment are measured on the cost basis less depreciation and impairment losses. The cost of fixed assets constructed within the economic entity includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Revaluations

Where the fair value model is used, valuations are performed with sufficient regularity to ensure that carrying value does not differ materially from fair value at balance date.

Revaluation increments are credited to the asset revaluation reserve as a component of equity unless it constitutes a reversal of a previous revaluation decrement previously recognised through the income statement. The associated depreciation expense relating to the revaluation is transferred annually to retained earnings from the asset revaluation reserve

Any accumulated depreciation at revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued asset amount.

On disposal of a revalued asset, the portion of the asset revaluation reserve which relates to the asset disposed of is transferred to retained earnings.

Impairment

Carrying values of assets are reviewed at each balance date to determine whether there are any objective indicators of impairment that may indicate the carrying values may not be recoverable in whole or in part.

Where an asset does not generate cash flows that are largely independent it is assigned to a cash generating unit and the recoverable amount test applied to the cash generating unit as a whole.

Recoverable amount is determined as the greater of fair value less costs to sell and value in use. The assessment of value in use considers the present value of future cash flows discounted using an appropriate pre-tax discount rate reflecting the current market assessments of the time value of money and risks specific to the asset.

If the carrying value of the asset is determined to be in excess of its recoverable amount, the asset or cash generating unit is written down to its recoverable amount.

NOTES TO THE FINANCIAL STATEMENTS For the half year ended 31 December 2005

$\mathbf{I}$ . STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Depreciation

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is depreciated on a straight line basis over their useful lives to the consolidated entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. Estimated useful lives of between three and ten years have been used in the calculation of depreciation for plant and equipment. The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

Exploration and Development Expenditure

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that the consolidated entity's rights of tenure to that area of interest are current and that the costs are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.

When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

Recoverable amount of assets and impairment testing

The consolidated entity assesses at each reporting date whether any objective indications of impairment are present. Where such an indicator exists, a formal assessment of recoverable amount is then made and where this is in excess of carrying amount, the asset is written down to its recoverable amount.

NOTES TO THE FINANCIAL STATEMENTS For the half year ended 31 December 2005

$\mathbf{I}$ . STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recoverable amount is the greater of fair value less costs to sell and value in use. Value in use is the present value of the future cash flows expected to be derived from the asset or cash generating unit. In estimating value in use, a pre-tax discount rate is used which reflects current market assessments of the time value of money and the risks specific to the asset.

Any resulting impairment loss is recognised immediately in the income statement unless it reverses a previous impairment loss that was recognised in prior periods in the income statement.

Foreign currency transactions and balances

The functional and presentation currency of Perseus Mining Limited is Australian dollars.

Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date.

All differences in the consolidated financial report are taken to the income statement with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of a net investment, at which time they are recognised in the income statement.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the date the fair value was determined.

The functional currency of the overseas subsidiaries are as follows:

Sun Gold Resources Limited	Ghanaian cedis (GHC);
Occidental Gold (Ivory Coast)	SarlCFA francs (BCEAO – XOF)
JSC Z-Explorer	SOMS (KGS)
JSC Savoyardy	SOMS (KGS)

As at the reporting date, the assets and liabilities of these overseas subsidiaries are translated into the reporting currency of Perseus Mining Limited at the rate of exchange ruling at the balance sheet date and the income statements are translated at the weighted average exchange rates for the period.

The exchange differences on the retranslation are taken directly to a separate component of equity.

On disposal of a foreign entity, the deferred cumulative amount recognised in equity is recognised in the income statement.

NOTES TO THE FINANCIAL STATEMENTS For the half year ended 31 December 2005

$\mathbf{I}$ . STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Employee benefits

Provision is made for the consolidated entity's liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

Provisions

Provisions are recognised when the consolidated entity has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other shortterm highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the consolidated entity and the revenue is capable of being reliably measured.

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.

All revenue is stated net of the amount of goods and services tax (GST).

Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

NOTES TO THE FINANCIAL STATEMENTS For the half year ended 31 December 2005

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued) $\mathbf{I}$ .

AASB 1 Transitional exemptions

The consolidated entity has made its election in relation to the transitional exemptions allowed by AASB 1 'First-time Adoption of Australian Equivalents to International Financial Reporting Standards' as follows:

Share based payment transactions

AASB 2 'Share-Based Payment' is applied only to equity instruments granted after 7 November 2002 that had not vested on or before 1 January 2005.

Comparative figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

NOTES TO THE FINANCIAL STATEMENTS For the half year ended 31 December 2005

$\overline{2}$ . FIRST TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS ('AIFRS')

Impact of adoption of AIFRS

The impacts of adopting AIFRS on the total equity and profit after tax as reported under Australian Accounting Standards applicable before 1 January 2005 (previous Australian GAAP) are illustrated below.

(a) Reconciliation of total equity as presented under previous Australian GAAP to that under AIFRS

	Consolidated
Note	1 July 2004	31 December 2004	30 June 2005
	\$	$\mathbf S$	\$
Total equity under previous Australian GAAP	2,415,959	5,458,188	5,119,170
Adjustments to equity:
foreign Recognize exchange movements on overseas exploration expenditure and fixed assets against opening accumulated losses	78,301	78,301	78,301
Recognise an option premium reserve for options issued during the period		479,940
Options issued in relation to services rendered for the prospectus		(204,000)
Options issued for services rendered directors, employees and to consultants		(275,940)
Recognize foreign exchange movements on overseas exploration expenditure and fixed assets against foreign currency translation reserve		(78,365)	(91, 561)
Total equity under AIFRS	2,494,260	5,458,124	5,105,910

NOTES TO THE FINANCIAL STATEMENTS For the half year ended 31 December 2005

FIRST TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL $\overline{2}$ . FINANCIAL REPORTING STANDARDS ('AIFRS') - continued

(b) Reconciliation of profit after tax under previous Australian GAAP to that under AIFRS

			Consolidated
		Year ended	Half year ended
	Note	30 June 2005	31 December 2004
		\$	\$
Loss after tax as previously reported		(688, 344)	(349,327)
Recognition of share-based payment expense	(i)	(275,940)	(275,940)
Loss after tax under AIFRS		(964, 284)	(625, 267)

(i)Share-based payment costs are charged to the income statement under AASB 2 'Share-based Payment', this was not the case under previous Australian GAAP.

(c) Explanation of material adjustments to the cash flow statements

There are no material differences between the cash flow statement presented under AIFRS and those presented under previous Australian GAAP.

$\overline{3}$ . EARNINGS PER SHARE

	Consolidated 31 December 2005 cents	Consolidated 31 December 2004 cents
Basic earnings $/$ (loss) per share	(1.0)	(1.2)
Weighted average number of ordinary shares outstanding during the period used in the calculation of basic earnings	Number	Number
per share	64,964,102	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 For the half year ended 31 December 2005

$\overline{4}$ . SEGMENT REPORTING

Australia $\mathbb{S}$	West Africa \$	Central Asia \$	2005 \$
			51,318 51,318
(306, 445)	(175, 187)	(190, 382)	(672, 014)
			(672, 014)
Australia S	West Africa \$	Central Asia \$	2004 \$
53,716			53,716
53,716	$\overline{\phantom{a}}$	$\overline{\phantom{0}}$	53,716
			(625, 267)
			(625, 267)
	51,274 51,274 (521, 407)	44 44 (70, 863)	÷ (32,997)

NOTES TO THE FINANCIAL STATEMENTS For the half year ended 31 December 2005

CONTRIBUTED EQUITY 5.

	Consolidated 31 December 2005 \$	Consolidated 30 June 2005 \$
(a) Issued and paid-up share capital
72,018,450 (30 June 2005: 59,518,450) ordinary shares, fully paid	8,289,067	5,886,067
Movements in Ordinary Shares:
	Number	S
Balance at 1 July 2005	59,518,450	5,886,067
Share placements at issue price of 20 cents each on 8 September and 25 October 2005	12,500,000	2,500,000
Transaction costs arising from issue for cash		(97,000)
Balance at 31 December 2005	72,018,450	8,289,067

(b) Share Options

Options to take up ordinary shares in the capital of the Company have been granted as follows:

Exercise Period	Note	Exercise Price	Opening Balance	Options Issued	Options Exercised/ Cancelled/	Closing Balance 31
			1 July 2005	2005/06	Expired 2005/06	December 2005
			Number	Number	Number	Number
On or before 31 March 2009-	(i)	\$0.20	22,782,500	6,250,000		29,032,500
2 December 2006 to 1 December 2008	(ii)	\$0.26		1,185,000		1,185,000

$(i)$ 6,250,000 options were issued as part of the Company successfully completing a placement of 12,500,000 fully paid ordinary shares and 6,250,000 free attaching options (exercisable at 20 cents each on or before 31 March 2009) to raise a total of \$2,500,000.

(ii) 1,185,000 options were issued following approval of the Perseus Mining Limited Employee Option Plan by shareholders at the annual general meeting on 29 November 2005.

NOTES TO THE FINANCIAL STATEMENTS For the half year ended 31 December 2005

6. OPTION RESERVE

	Consolidated 31 December 2005 \$	Consolidated 30 June 2005 \$
Option Reserve	496,562	479,940
Movements during the period
Balance at beginning of period	479,940
Fair value of 2,940,000 incentive options issued to a director, employees and consultants (at 5.1 cents each)		149,940
Fair value of 2,800,000 incentive options issued to directors and a consultant (at 4.5 cents each)		126,000
Fair value of 4,000,000 options issued in relation to services rendered for the prospectus (at 5.1 cents each)		204,000
Fair value of 1,185,000 options issued as part of the Perseus Mining Limited Employee Option Plan (at 16 cents each)	16,622
Balance at end of period	496,562	479,940

$7.$ CONTINGENT LIABILITIES

Since the last annual reporting date, there has been no material change in any contingent liabilities reported in the June 2005 Annual Report.

8. EVENTS OCCURRING SUBSEQUENT TO 31 DECEMBER 2005

Other than the matter referred to below, there are no matters or circumstances that have arisen since 31 December 2005 that have or may significantly affect the operations, results, or state of affairs of the consolidated entity in future financial periods.

In January 2006, the parent entity sold its investment in Carbeck Pty Ltd (comprising 20% of Carbeck's share capital) to ASX listed Monaro Mining NL. Carbeck is the parent company of a wholly owned subsidiary in the Kyrgyz Republic, which holds a number of uranium prospective licences. The sale consideration comprised 700,000 Monaro shares, 600,000 options (to acquire Monaro shares) exercisable at 40 cents each and a further 600,000 options (to acquire Monaro shares) exercisable at 60 cents each. Perseus will also receive 400,000 shares in Monaro if a mining licence is issued with respect to any of the licence areas in the Kyrgyz Republic and a 0.2% royalty on gross production revenue. This sale transaction has not been accounted for in this Half Year Financial Report.

DIRECTORS' DECLARATION 31 December 2004

In the opinion of the directors:

• (a) the financial statements and notes of the consolidated entity:
• comply with Accounting Standard AASB 134: Interim Financial Reporting and the $(i)$ Corporations Regulations; and
• give a true and fair view of the consolidated entity's financial position as at 31 December $(ii)$ 2005 and of its performance for the half-year then ended.
• (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.

Calif i
V

M A Calderwood Director

Dated at Perth this 15th day of March 2006

Chartered Accountants

INDEPENDENT REVIEW REPORT

To the members of PERSEUS MINING LIMITED

Scope

The financial report and directors' responsibility

The financial report comprises the balance sheet, income statement, cash flow statement, statement of changes in equity and accompanying notes to the financial statements and the directors' declaration of Perseus Mining Limited for the half year ended 31 December 2005. 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-vear 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 consolidated entity and that complies with Accounting Standard AASB 134 "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 AASB 134 "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 consolidated entity'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 an audit opinion.

Independence

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

In accordance with ASIC Class Order 05/83, we declare to the best of our knowledge and belief that the auditor's independence declaration as set out on page 5 of the half year financial report has not changed as at the date of provision our review report.

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. Finally, International Company of the Company of Company of Company of Company of Company of Company of Company
Partners: Ian H Barsden, Terry M Blenkinsop, Litsa Christodelou, Wayne M Clark, Lucio Di Gialfonardo, Colia O

Statement

Based on our review, which is not an audit, we have not become aware of any matter that causes us to believe that the half year financial report of Perseus Mining Limited and the entities which it controlled during the half year, is not in accordance with:

• (a) the Corporations Act 2001, including:
• (i) giving a true and fair view of the consolidated entity's financial position at 31 December 2005 and of its performance for the half year ended on that date; and
• (ii) complying with Accounting Standard AASB 134 "Interim Financial Reporting" and the Corporations Regulations 2001; and
• (b) other mandatory financial reporting requirements in Australia.

HLB Manyfeld

HLB MANN JUDD Chartered Accountants

Manner GLAD

N G NEILL Partner

Perth, Western Australia 15 March 2006