PERSEUS MINING LIMITED — Interim / Quarterly Report 2011

Nov 14, 2010

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November 12, 2010

MANAGEMENT’S DISCUSSION & ANALYSIS For the three months ended September 30, 2010.

This Management’s Discussion and Analysis (“MD&A”) of Perseus Mining Limited and its controlled entities (“Perseus” or the “Company”) is dated November 12, 2010 and provides an analysis of the Company’s performance and financial condition for the three months ended September 30, 2010 (the “Quarter” or “September 2010 quarter” respectively).

This MD&A should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended 30 June 2010, and the Company’s unaudited interim consolidated financial statements for Quarter. The financial statements (and the financial information contained in this MD&A) comply with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. These documents are available under the Company’s profile on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) at sedar.com and on the Company’s website, www.perseusmining.com.

This MD&A may contain forward-looking statements that are subject to risk factors set out in a cautionary note contained herein. Examples of some of the specific risks associated with the operations of the Company are set out under “Risk Factors”. All monetary amounts are stated in Australian dollars, except as otherwise stated.

COMPANY OVERVIEW

Perseus was incorporated in Australia on October 24, 2003 and its corporate office was established in Perth, West Australia. On September 22, 2004, the Company’s shares were listed for trading on the Australian Securities Exchange (“ASX”) and on February 3, 2010 the Company’s shares commenced trading on the Toronto Stock Exchange (“TSX”). The Company’s shares are also listed on the Frankfurt Stock Exchange.

Perseus is a gold exploration, evaluation and development corporation with activities focussed on under-explored gold belts in West Africa.

Its principal assets are:

• A 90% interest in the Central Ashanti gold deposit - previously referred to as the Ayanfuri gold deposit, (the ‘‘Central Ashanti Gold Project’’ or “CAGP”), a development stage gold project, located in Ghana. In July 2009, the Company completed a definitive feasibility study (‘‘DFS’’) on developing a mine and associated treatment facility for the CAGP and based on the positive outcome of that DFS, construction of a gold mine and associated processing facility has commenced. The targeted date for commencement of gold production from the CAGP is the September 2011 quarter.

• A 90% interest in the Tengrela gold deposit (the ‘‘Tengrela Gold Project’’ or “TGP”), an advanced stage gold exploration and evaluation project, located in the north of Côte d'Ivoire. The Company completed a pre-feasibility study for the TGP in February 2009 and, based on the results of that study and the results of subsequent exploration activities, commenced a DFS for the TGP in the first quarter of 2010. The study has been concluded subsequent to the Quarter and the summary results of the study are referred to elsewhere in this MD&A. The Company’s interest in the project will reduce to 80% in the event that a mining lease is granted by Ivorian authorities, as under Ivorian mining laws, the host government is entitled to receive a 10% free carried interest in any project for which it issues a mining lease.

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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In addition to the above, Perseus also owns: (i) a 100% interest (reducing to 90% on the granting of a mining licence) in the Grumesa gold deposit (the ‘‘Grumesa Gold Project’’) an exploration stage project located 30 kilometres to the east of the CAGP in Ghana. A pre-feasibility study completed in September 2007 indicated that the Grumesa Gold Project represents a potential satellite production opportunity to the larger mine under construction at the CAGP; (ii) a 19.9% interest in Burey Gold Limited (“Burey”) an ASX-listed company holding a portfolio of gold exploration properties in the Republic of Guinea in West Africa; and (iii) a 28% interest in Manas Resources Limited (‘‘Manas’’), an ASX-listed company holding a portfolio of gold properties in Central Asia that were sold to Manas by Perseus in mid-2008.

As mining operations have not yet commenced on any of its properties, the Company does not currently have any mining revenues. Perseus currently has no long-term debt obligations, although a project finance facility has been negotiated (details of which are provided elsewhere in this MD&A) but no amounts had been drawn down up to the date of this MD&A.

The Company’s principal short to medium term objectives are to:

• complete the construction and commissioning of the CAGP and, by 2012, to be producing gold at an average rate of at least 200,000 ounces per year at this project;

• complete a material upgrade of the Mineral Reserves estimate at the CAGP in the December 2010 quarter;

• subject to Board approval, the Company plans to advance the development of the TGP as fast as practicable, and will start with regulatory permitting, engineering design and procurement of long lead items;

• expand the Company’s Mineral Resource base through successful and rapid exploration of the area covered by the Company’s existing tenements and the acquisition of prospective new projects.

PERFORMANCE HIGHLIGHTS

The key highlights of the Company’s performance during the Quarter were:

Central Ashanti Gold Project and elsewhere in Ghana :

CAGP in Ghana is progressing in line with expectations:

• Site works are well advanced with a significant portion of the concrete works completed.

• Procurement is also well advanced with most of the process plant equipment now on site in Ghana or enroute to site.

• Power line easement clearing is 80% complete and the switch yard earthworks are complete. The transformer and transmission line pylons have been delivered to storage in Ghana and construction works have commenced.

• All major contracts have now been awarded, and pre-production mining is scheduled to commence in March 2011.

Most of the 44,874m of drilling completed on the Ghanaian projects during the Quarter was focused on infill and stepout drilling of known deposits:

• Significant intercepts from step-out drilling at Abnabna-AF Gap, Fobinso and Fetish on the CAGP in Ghana included 93m at 3.1g/t, 67m at 1.8g/t, 35m at 3.4g/t and 21m at 4.2g/t Au from Fobinso, 7m at 19.2g/t Au, 15m at 5.2g/t, 3m at 30.9g/t Au from Fetish, and 41m at 3.1g/t, 95m at 1.4g/t and 13m at 5.5g/t Au from Abnabna-AF-Gap.

• Other infill drill results from the CAGP in Ghana included 82m at 3.8g/t, 119m at 2.5g/t, 81m at 2.8g/t and 70m at 2.4g/t Au from Esuajah South and 36m at 3.2g/t Au from Chirawewa.

• Anomalous results from drilling on the Dadieso and Kwatechi licences in Ghana included 8m at 13.5g/t, 12m at 4.0g/t and 10m at 3.8g/t Au from Dadieso and 10m at 3.0g/t and 2m at 45.8g/t Au from Kwatechi.

The Company is planning to release a significant Mineral Resource and Reserve updates for the CAGP during the December Quarter 2010.

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Tengrela Gold Project and elsewhere in Côte d’Ivoire :

A total of 18,936m of RC and diamond drilling and 16,949m of RAB and air core drilling was completed during the Quarter on a number of prospects. Several potentially significant new discoveries were made, including:

• First pass RC drilling at Podio returned several high-grade intercepts over 1.5km strike including 8m at 30.0g/t, 4m at 13.0g/t and 2m at 21.0g/t Au .

• Reconnaissance drilling at Sissingue East returned 5m at 18.5g/t Au at the bottom of a 77m deep hole, 650m east of the main zone at Sissingue.

• RAB drilling at Papara intercepted 12m at 5.0g/t Au.

The Tengrela Gold Project (“TGP”) feasibility study for the Sissingue deposit was concluded subsequent to the Quarter and the summary results of the study are referred to elsewhere in this MD&A.

Corporate

• Raised approximately $4.8m in new equity through the exercise of options to purchase ordinary shares in the Company.

• Agreed to subscribe for a further 11.9 million shares at 10 cents per share in Burey as part of a wider capital raising by that company. The first tranche of consideration of $495,833.30 was paid on 6 October 2010 with the remainder due in mid-November 2010 following Burey shareholder approval of the share placement.

• The final form documentation for the US$85 million bank debt facility for the CAGP has been submitted to the Ghanaian Government for approval prior to execution. Also in September and October, CAGL completed the final 60,000 ounces of a gold forward sales program required by the banks as a prerequisite to drawing down the full US$85 million facility. Including the previously announced contracts, the 230,000 ounces of gold forward sales were completed at a weighted average price of USD1,250 per ounce, with deliveries scheduled between March 2012 and December 2014. This hedging represents about 25% of expected production from CAGP to the end of 2014 and represents around 11% of current gold reserves at CAGP. As previously announced the Company also holds put options that provide it with the right but not the obligation to sell a further total of 120,000 ounces of gold to counterparties at fixed prices.

• At September 30, 2010, Perseus had cash and cash equivalent balances of $130 million.

REVIEW OF CENTRAL ASHANTI GOLD PROJECT

The CAGP comprises a group of large gold deposits located on the Ayanfuri and Nanankaw mining leases which together with adjoining license areas of Grumesa, Kwatechi, Dunkwa, Nsuaem and Nkotumso, cover a total area of about 650 square kilometres in a highly prospective area of Ghana. Current Mineral Reserves stand at 2.1Moz and additional Indicated Mineral Resources total 1.2Moz and Inferred Mineral Resources total 2.7Moz inclusive of Mineral Resources on the Grumesa licence (also part of the CAGP). A Mineral Resource upgrade based on drilling undertaken since mid-2009 is planned for completion in the December quarter 2010, with the view to upgrading Mineral Reserves by the end of the calendar year.

Central Ashanti Gold Project Development

Engineering and procurement activities for the CAGP are now well advanced and construction under the lump sum turn-key arrangement is progressing smoothly.

During the Quarter, plant site terracing bulk earthworks were progressed in the process facilities and administrative building areas. Foundation blinding in the processing facilities has been placed and the crusher pedestals, stockpile base slab, mill block foundation, workshop floor slab and wet plant base slabs cast. Stockpile tunnel, CIL tank rings and flotation tank support column construction is in progress. Plant site building erection is well advanced. Accumulative overall earned value progress by CAJV/G5 at the end of the Quarter is assessed at 68% complete.

Perseus subsidiary Central Ashanti Gold Ltd (“CAGL”) controlled scopes of work have gained momentum during the Quarter with the completion of the switch yard terracing and access road and the commencement of the tailing storage facilities (“TSFs”) contract during September.

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Following the issue and acceptance of a Letter of Intent to the preferred TSFs construction contractor on 9 September, mobilisation activities have been completed with offices and fuel storage facilities in place and site clearing has commenced.

The 161Kv switchyard terrace earthworks were completed during the Quarter. Power line easement clearing was advanced during period and is now 80% complete. The procurement of all major electrical equipment and materials is now complete. The manufacture and testing of the main substation transformer has been completed and has arrived in Ghana. Transmission line pylons are presently in storage in Ghana. Overall procurement is 80% completed.

The project remains on schedule to commence processing ore in the 3[rd] quarter of 2011. Photos of the construction process at CAGP are available on the Company’s website www.perseusmining.com.

Project Financing

The CAGP is being financed though a mixture of debt and equity capital, with current funding coming from the Company’s significant cash reserves established through a series of prior year capital raisings. A Committed Letter of Offer from Macquarie Bank Limited (“MBL”) and Credit Suisse AG (“CS”) (together, the “Lenders”) was executed on June 9, 2010 for a debt facility of up to USD85 million. Full form documentation was at an advanced stage of preparation at the end of the Quarter and has subsequently been completed and submitted to the Ghanaian government for review, prior to execution by the Company and the Lenders. The first draw down of debt is likely to take place shortly thereafter.

Mining Contract

CAGL has issued a letter of intent to African Mining Services Ghana (AMS), a subsidiary of Ausdrill Limited, in relation to an Open Pit Mining Contract for the CAGP. The contract, which anticipates pre-production mining commencing in March 2011, is for a complete service including grade control, drilling and blasting, loading and hauling ore and waste and crusher feed. The mining schedule currently allows for the movement of on average about 7.0 Mtpa of ore. The final price for the mining contract is in line with that estimated in the 2009 DFS. Mining represents the largest portion of the operating costs.

AMS has been operating in Ghana for 15 years and will have all the key personnel and plant in place to ensure a smooth start up for both AMS and the CAGP. AMS will employ approximately 300 people, nearly all of whom are Ghanaians, in executing the mining contract.

Fuel Supply Contract

CAGL has awarded the fuel supply contract to Total Petroleum Ghana Limited (‘TPGL’). TPGL is part of Group Total, which is the fifth-largest publicly-traded integrated oil and gas company in the world. TPGL will install a 360,000 litre fuel storage facility at the CAGP.

Ghana Exploration

A total 44,874m of RC and diamond drilling was completed on the Company’s Ghanaian projects during the September Quarter. Encouraging grades from deeper drilling on the Esuajah South, Fobinso, Fetish and Abnabna deposits highlight the potential for significantly deeper pits and potentially underground bulk mining.

A reserve upgrade for the Abnabna-Fobinso group and a maiden reserve estimate for Esuajah South are scheduled to be completed in Q4 2010. Esuajah South is expected to provide relatively high-grade feed for the CAGP.

Exploration drilling on the Dadieso and Kwatechi has returned encouraging results.

Drilling on these deposits is directed to the southeast, and drill hole intercepts generally have true widths of 70% to 90% of drill length, depending upon drill hole inclinations and the dip of mineralisation. Drill samples were assayed by 50g fire assays by Intertek Minerals Limited, an independent laboratory in Ghana.

Significant infill and extensional drill results are summarized in Table 1 below and significant exploration results are summarised in Table 2.

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REVIEW OF THE TENGRELA GOLD PROJECT

The TGP is an underexplored project with a current open-ended gold resource, containing 0.9Moz of Measured and Indicated Mineral Resources and 0.3Moz of Inferred Mineral Resources at Sissingue, one of a number of prospects that comprise the project. The feasibility study for the Sissingue project was completed after the end of the Quarter and there is significant exploration upside potential on the licence area. Drilling is being stepped up for the remainder of this year to test a number of other prospects, including the new discoveries at Podio, Papara and Kanakono.

Exploration

Including sterilisation drilling for the Sissingue project, a total of 18,936m of RC and diamond drilling and 16,949m of RAB and air core drilling was completed on the Tengrela gold project in the Quarter. Significant intercepts are summarised in Table 3.

With the addition of another drill rig, drilling is expected to be accelerated at the Sissingue deposit to facilitate further conversion of the Inferred Mineral Resource and to test below and along strike of the US$950 pit optimization shell, which essentially bottomed out on Indicated Mineral Resource.

Drill samples were assayed by 50g fire assays by Intertek Minerals Limited in Ghana. Recent significant drill intercepts on the Sissingue deposit typically have true widths of 60 to 90% of drill length. Locally, drill intercept length may equate to actual true width, depending upon the variable dip of the mineralisation. Mineralisation is structurally complex, such that true thickness may occasionally be better measured as a range. Most recent drilling results at Sissingue have been drilled to the west and mineralisation generally dips to the east, so true thickness is usually significantly greater than 60% of drill length.

Significant bottom of hole gold mineralisation was intercepted in wide spaced exploratory air core drilling 650m east of the main zone at Sissingue. The geology is sandstones with ~5% quartz veining with limonite and is proximal to the margin of a circular IP anomaly interpreted as an intrusive body. Significantly, the mineralisation was discovered in an area of low gold in soil anomalism, highlighting the potential along the entire 60km long belt between Papara and Podio. Results for SAC005 are summarised in Table 4 below.

The Podio prospect covers about 2km strike of the highly prospective 8km long Podio-Zing corridor. Initial RC drilling results have returned a number of narrow though high grade intercepts over an open strike of 1.5km. Mineralisation is associated with quartz veining and pyrite within a zone of discrete EM anomaly (‘low’). Table 4 below contains a summary of the anomalous to significant intercepts and Figure 2 provides locations of the significant intercepts.

Drilling over the large Papara prospect is starting to provide some continuity of drill results. Over recent months there have been several modest intercepts of 5g/t to 10g/t within an area of interest which is about 2.5km by 1km. The recent intercept is summarized in Table 4 below.

Feasibility Study – Sissingue Deposit

The feasibility study assessment for Sissingue was completed following the end of the Quarter. A detailed announcement of the results was made on November 8, 2010 and that is available on the Company’s website www.perseusmining.com as well as at SEDAR.com. A summary of the results is noted below:

Highlights of the Tengrela FS

• Initial Probable Ore Reserve of 657,000oz of gold (using US$950 gold price pit design).

• Production of 340,000oz (3.5Mt at 3.3g/t) of gold in first two years of a six year mine life.

• Cash costs (C1) in the first two years of US$421/oz, with mine life average cash costs of US$505 per oz.

• EBITDA of US$221M for first two years of production at US$1,100 gold price.

• Start-up capital cost of US$115 million paid back in 14 months at US$1,100 gold price.

• Plan to advance as fast as practicable, targeting first gold pour Q4 2012.

• Ongoing aggressive drilling will provide resource growth and extend mine life – next upgrade scheduled for Q1 2011.

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Key Parameters of the Sissingue Feasibility Study

Gold Production Year One 178,400 oz Years 1-3 (average) 147,000 oz pa Life of mine (average) 106,400 oz pa Ore Reserves 657,000oz (Probable) Capital Costs and Operating Costs Initial Capital Cost US$115M (incl. US$14M contingency) Plant Capacity 1.6-2.0 million tpa Cash Costs C1 US$421/oz (Years 1&2) US$505/oz (5.6 years) Cash Costs + Royalty US$454/oz (Years 1&2) US$538/oz (5.6 years) based on 3% Government royalty

Earnings Capability EBITDA (assuming US$1,100/oz) US$221M (first 2 years) US$337.4M (5.6 years) Planned Timing of Development and Production* Design & ordering Q2 2011 Construction start Q4 2011 Gold production Q4 2012 Payback 14 months (at US$1,100 gold price) IRR 65% (at US$1,100 gold price)

• Subject to receipt of all Government approvals by Q4 2011

OTHER CÔTE D’IVOIRE PROJECTS

Mbengue Gold Project

The large Kanadi gold in soil anomaly on the 913 sq km Mbengue permit in Côte d’Ivoire is now awaiting final approval for drilling to commence. The 5.6km by 2.2km anomaly is situated approximately 7.5 km north of Randgold’s 4.3Moz Tongon gold project, which is in the final stages of construction and is due to commence production later this year.

OUTLOOK FOR THE DECEMBER 2010 QUARTER

Plans and targets for the December 2010 quarter are:

At CAGP

• Continue construction of process plant and related infrastructure.

• Complete and publish a Mineral Reserve upgrade for Abnabna-Fobinso zone.

• Complete and publish a maiden Mineral Reserve estimate for Esuajah South.

• At TGP

• Release feasibility study results for the Tengrela Gold Project.

• Continue resource drilling at Sissingue.

• Undertake further drilling on regional targets, with the aim to continue the run of new discoveries.

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Table 1: CAGP Infill and Extensional Drilling

Hole Deposit East North Depth Azm. Incl.	From To Width Au
(m) (m) (m) (°) (°)	(m) (m) (m) g/t
ABDD177 AF Gap 26260 13870 304 180 -50	172 183 11 1.1
	256 278 22 1.3
	289 294 5 1.6
ABDD178 AF Gap 26160 13888 462 180 -70	331 378 47 1.4
incl.	341 342 1 10.7
	384 425 41 3.1
incl.	394 395 1 64.9
ABDD180 AF Gap 26160 13735 205 180 -50	77 81 4 2.6
	112 125 13 5.5
incl.	115 116 1 33.6
	123 125 2 8.6
ABDD181 AF Gap 26600 13990 353 180 -65	151 160 9 1.5
	190 226 36 2.2
incl.	209 210 1 10.4
ABDD182 AF Gap 26420 13998 385 179 -55	277 372 95 1.4
incl.	337 338 1 14.4
ABDD183 AF Gap 26540 14010 441 180 -70	355 365 10 1.0
	370 385 15 2.3
incl.	370 371 1 13.8
	391 406 15 1.0
ABDD185 Abnabna 26160 13880 406 180 -63	282 298 16 1.0
	321 331 10 3.9
incl.	326 329 3 10.3
	349 368 19 1.1
	375 391 16 1.5
	401 404 3 5.3
ABDD187 AF Gap 26220 13865 356.5 180 -61	304 305 1 12.4
	312 352 40 1.0
ABRDD426 AF Gap 26249 13820 288.3 180 -60	227 240 13 1.0
	271 281 10 2.6
ABRDD424 Abnabna 26120 13858 417.5 180 -68	290 375 85 1.2
incl.	294 295 1 10.5
ABRDD425 AF Gap 26240 13855 339.3 180 -62	235 253 18 1.3
	263 284 21 1.0
	292 306 14 2.1
	316 329 13 1.7
ADD162 Chirawewa 4283 4600 238 270 -54	133 140 7 5.9
incl.	135 138 3 11.4
CHDD003 Chirawewa 4335 4540 323 270 -50	128 136 8 1.4
	156 167 11 1.2
	242 243 1 10.0
	278 281 3 3.6
ADD163 Chirawewa 3957 4600 124.3 270 -78	50.1 54 3.9 9.6
incl.	50.1 51 0.9 33.7
	86 95 9 1.5
	113 114 1 9.9
ADD167 Chirawewa 4046 4480 222 90 -50	186 222 36 3.2
incl.	204 205 1 79.6
AKRDD240 Esuajah S. 1800 6240 312.2 90 -60	199 281 82 3.8
incl.	205 206 1 14.9
and	234 242 8 16.2
incl.	237 238 1 56.5

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Table 1: CAGP Infill and Extensional Drilling (continued)

Hole Deposit East North Depth Azm. Incl.	From To Width Au
(m) (m) (m) (°) (°)	(m) (m) (m) g/t
AKRDD241 Esuajah S. 1799 6240 395 90 -68	218 231 13 1.3
	239 358 119 2.5
incl.	250 255 5 25.9
and	309 310 1 14.0
and	353 354 1 16.3
AKRDD242 Esuajah S. 1798 6240 459.5 90 -76	247 272 25 3.5
incl.	249 251 2 12.0
and	263 265 2 20.5
	292 320 28 2.4
incl.	315 316 1 26.8
	326 401 75 1.7
AKRDD243 Esuajah S 1800 6280 325 90 -58	219 300 81 2.8
incl.	281 289 8 10.2
and	293 295 2 11.2
AKRDD244 Esuajah S 1799 6280 370 90 -65	224 294 70 2.4
incl.	249 250 1 15.5
and	282 285 3 12.9
	317 342 25 1.8
incl.	338 339 1 12.0
AKRDD245 Esuajah S 1759 6280 420.3 90 -65	277 288 11 3.7
incl.	285 286 1 12.1
	306 327 21 3.0
incl.	323 325 2 16.1
	338 393 55 2.6
incl.	368 369 1 17.8
AKRDD246 Esuajah S 1680 6292 579.2 90 -65	397 464 67 1.7
incl.	420 421 1 13.2
and	463 464 1 23.5
	508 518 10 1.0
	525 528 3 4.8
incl.	525 526 1 15.0
	534 545 11 1.2
	549 570 21 2.6
ESDD001 Esuajah S 1829 6180 256 90 -63	165 181 16 2.7
incl.	179 180 1 10.6
	190 245 55 2.1
incl.	218 219 1 17.3
EFDD001 Fetish 3380 5100 146 270 -55	55 62 7 19.2
incl.	60 62 2 61.7
	73 77 4 4.2
	123 124 1 12.0
EFDD004 Fetish 3460 5100 247 270 -55	104 112 8 1.4
	127 136 9 1.1
	191 195 4 2.6
	236 245 9 7.7
incl.	239 243 4 15.7
EFDD005 Fetish 3370 5180 253 270 -55	123 133 10 1.8
	178 180 2 7.4
	203 222 19 1.0
EFDD006 Fetish 3410 5140 300 270 -55	60 68 8 4.0
incl.	65 66 1 26.7
	121 166 45 1.4
incl.	138 139 1 28.9
	179 186 7 1.1
	251 266 15 1.4

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Table 1: CAGP Infill and Extensional Drilling (continued)

Hole Deposit East North Depth Azm. Incl.	From To Width Au
(m) (m) (m) (°) (°)	(m) (m) (m) g/t
EFDD007 Fetish 3410 5180 184.33 270 -55	31 43 12 1.2
	48 55 7 1.7
	74.5 99 24.5 1.1
	128 135 7 2.3
EFDD009 Fetish 3543 5160 380 270 -56	167 173 6 5.5
incl.	169 170 1 14.5
	213 223 10 1.6
	234 236 2 11.3
EFDD010 Fetish 3530 5280 320 272 -55	270 281 11 1.7
	294 314 20 1.9
EFDD011 Fetish 3530 5320 395 270 -55	278 313 35 1.2
	320 333 13 1.2
EFDD015 Fetish 3332 5462 175 270 -50	136 160 24 2.2
incl.	136 137 1 18.7
EFDD016 Fetish 3459 5220 270 270 -50	81 82 1 11.3
	251 254 3 30.9
incl.	251 252 1 60.8
EFDD017 Fetish 3500 5220 310 270 -50	136 161 25 1.2
	179 199 20 1.1
	208 219 11 1.0
EFDD018 Fetish 3540 5220 347 270 -55	210 224 14 2.2
	252 259 7 1.6
	310 319 9 1.2
EFDD019 Fetish 3499 5100 300 270 -55	179 191 12 1.3
	226 245 19 1.6
incl.	229 230 1 13.0
EFDD022 Fetish 3449 5140 260 270 -55	90 103 13 1.6
	154 174 20 1.5
incl.	155 156 1 17.5
	179 186 7 1.5
EFDD025 Fetish 3117 5320 130 270 -56	86.5 89.5 3 23.0
EFDD029 Fetish 3370 5460 210 270 -50	176 191 15 5.2
incl.	176 178 2 13.9
and	182 183 1 10.5
and	190 191 1 21.9
EFDD024 Fetish 3489 5243 300.5 270 -55	115 125 10 3.0
incl.	117 118 1 10.4
	130 145 15 1.0
	156 157 1 29.5
	201 202 1 14.5
	229 230 1 13.7
	268 290 22 1.9
EFDD027 Fetish 3530 5240 325 270 -55	164 188 24 2.0
incl.	186 187 1 11.2
	281 282 1 13.1
	295 309 14 1.0
EFDD030 Fetish 3425 5220 305.6 270 -50	241 261 20 1.6
	264 278 14 1.0
EFDD031 Fetish 3491 5180 311 270 -55	121 136 15 1.8
	143 153 10 1.0
	238 259 21 1.0
	276 287 11 1.3
EFDD035 Fetish 3366 5140 235 270 -50	41.5 96 54.5 1.6
	180 181 1 24.9
	196 212 16 3.0
incl.	196 197 1 10.7
and	198 199 1 12.2

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Table 1: CAGP Infill and Extensional Drilling (continued)

Hole Deposit East North Depth Azm. Incl.	From To Width Au
(m) (m) (m) (°) (°)	(m) (m) (m) g/t
FBDD087 Fobinso 27400 14083 271.6 179 -59	139 173 34 1.2
	179 220 41 1.4
incl.	207 208 1 18.2
	249 251 2 6.8
FBDD088 Fobinso 27360 14085 248.51 180 -52	148 241 93 3.1
incl.	150 152 2 10.1
and	177 178 1 11.8
and	190 191 1 46.1
and	202 207 5 10.5
FBDD089 Fobinso 27440 14120 311 180 -60	164 198 34 1.3
	258 259 1 9.3
	277 298 21 4.2
incl.	293 294 1 60.5
FBDD090 Fobinso 27320 14097 265.35 180 -50	178 245 67 1.8
incl.	195 196 1 17.7
and	198 199 1 11.1
FBDD093 Fobinso 27460 14095 271.9 180 -60	138 150 12 1.9
	179 191 12 1.1
	213 233 20 1.0
FBDD094 Fobinso 27140 14000 185 180 -50	117 139 22 1.1
FBDD095 Fobinso 27140 14040 218 180 -50	145 171 26 1.2
	179 185 6 2.3
FBDD097 Fobinso 27460 14135 328 180 -60	168 190 22 2.1
incl.	189 190 1 21.7
FBDD098 Fobinso 27180 14084 280 179 -58	196 231 35 3.4
incl.	198 201 3 16.9
and	212 217 5 6.5

Notes

• 1) All holes were core drilled through the mineralised zone. 2) Core holes sampled at 1m intervals.

• 3) Oxide samples or low sulphur fresh rock samples analysed using 50grm fire assays by independent laboratory, Intertek Minerals Limited in Ghana.

• 4) High sulphide content samples analysed using 25gram fire assays by Intertek Minerals Limited in Ghana.

• 5) Only holes with combined intercepts of greater than 40 gram metres included.

• 6) The type of analytical or testing procedures utilized and sample size and the quality assurance program and quality control measures are consistent with those described in the technical report entitled “Technical Report – Central Ashanti Gold Project, Ghana” dated November 30, 2009.

• 7) The true width of intercepts from recent drilling at Esuajah South ranges from 55-80% of the intercept width.

• 8) The true width of intercepts from recent drilling at Abnabna-AF Gap-Fobinso ranges from 58-82% of the intercept width, averaging about 70%.

• 9) The true width of intercepts from recent drilling at Fetish ranges from 75-85% of the intercept width.

• 10) The true width of intercepts from recent drilling at Chirawewa ranges from 47-77% of the intercept width.

5

Table 2: Recent Anomalous Exploration Intercepts on Dadieso, Dunkwa, and Kwatechi Licences in Ghana

Hole Deposit East North Depth Azm. Incl.	From To Width Au
(m) (m) (m) (°) (°)	(m) (m) (m) g/t
NBRC025 Bokitsi S 2750 4080 90 270 -55	36 48 12 2.4
NBRC026 Bokitsi S 2799 4040 90 270 -55	72 82 10 3.3
NBRC027 Bokitsi S 2779 4000 90 270 -55	54 68 14 2.4
DKRC062 Dadieso -190 -9430 90 270 -50	34 44 10 2.1
	74 90* 16 2.2
incl.	84 86 2 10.2
DKRC063 Dadieso -220 -9400 70 270 -50	48 58 10 1.9
DKRC064 Dadieso -180 -9400 100 270 -50	92 100* 8 3.6
DKRC065 Dadieso -60 -9460 105 270 -50	66 74 8 13.5
incl.	70 72 2 48.2
	104 105* 1 5.8
DKRC066 Dadieso -160 -9360 100 270 -50	38 40 2 5.8
DKRC067 Dadieso -210 -9330 90 270 -50	4 12 8 1.2
DKRC068 Dadieso -170 -9330 90 270 -50	4 16 12 1.2
DKRC069 Dadieso -130 -9330 90 270 -50	60 64 4 7.0
incl.	60 62 2 12.9
DKRC070 Dadieso -290 -9330 90 270 -50	58 70 12 1.1
DKRC071 Dadieso -260 -9300 90 270 -50	80 90* 10 1.5
DKRC072 Dadieso -180 -9300 75 270 -50	2 20 18 1.1
DKRC073 Dadieso -139 -9300 90 270 -50	24 34 10 1.2
	46 58 12 2.0
DKRC074 Dadieso -160 -9260 90 270 -50	72 82 10 3.8
incl.	80 82 2 11.6
DKRC076 Dadieso -240 -9260 90 270 -50	66 68 2 6.5
DKRC077 Dadieso -220 -9220 100 270 -50	8 26 18 2.1
	44 56 12 1.7
	96 100* 4 2.5
DKRC078 Dadieso -260 -9220 60 270 -50	10 16 6 3.2
DKRC080 Dadieso -300 -9180 90 270 -50	24 36 12 4.0
incl.	32 34 2 10.6
	82 90 8 3.4
incl.	86 88 2 10.3
DKRC093 Dadieso -80 -9500 90 270 -50	40 58 18 0.7
	70 84 14 0.8
DKRC094 Dadieso -100 -9560 70 270 -50	18 20 2 8.6
	50 54 4 1.5
	62 70* 8 2.1
DKRC095 Dadieso -100 -9600 70 270 -50	26 28 2 3.7
DKRC096 Dadieso -140 -9760 80 270 -50	74 76 2 2.3
DKRC097 Dadieso -380 -9720 70 92 -50	30 44 14 2.0
DKRC100 Dadieso -320 -9660 80 270 -50	32 56 24 2.6
incl.	48 50 2 10.7
BBRC009 Dunkwa 46450 90400 31 90 -55	24 28 4 5.7
KTRC031 Kwatechi 68000 78300 74 92 -60	22 30 8 1.7
92 -60	44 54 10 3.0
incl.	50 52 2 10.6
KTRC032 Kwatechi 68040 78300 80 92 -60	60 72 12 0.7
KTRC037 Kwatechi 67920 78200 51 92 -60	0 10 10 1.9
KTRC038 Kwatechi 67960 78200 80 92 -60	0 8 8 2.2
incl.	0 2 2 6.9

6

Table 2: Recent Anomalous Exploration Intercepts on Dadieso, Dunkwa, and Kwatechi Licences in Ghana (continued)

Hole Deposit East North Depth Azm. Incl.	From To Width Au
(m) (m) (m) (°) (°)	(m) (m) (m) g/t
KTRC042 Kwatechi 68120 78200 80 92 -60	62 74 12 1.1
KTRC045 Kwatechi 67920 78100 55 92 -60	24 30 6 1.4
KTRC052 Kwatechi 64170 82700 80 92 -60	12 14 2 4.6
	18 20 2 6.0
KTRC056 Kwatechi 64140 82800 80 92 -60	38 56 18 1.6
KTRC063 Kwatechi 64280 82600 80 90 -60	32 42 10 3.2
KTRC065 Kwatechi 64010 83000 80 90 -60	0 2 2 5.1
KTRC070 Kwatechi 64000 83100 71 90 -60	12 22 10 1.2
KTRC071 Kwatechi 63960 83100 80 90 -60	6 8 2 8.3
	18 20 2 45.8

Notes

• 1) All holes are RC holes.

• 2) RC holes samples sampled at 1m intervals and composited to 2m intervals.

• 3) Oxide samples or low sulphur fresh rock samples analysed using 50grm fire assays by Intertek Minerals Limited in Ghana.

• 4) High sulphide content samples analysed using 25gram fire assays by Intertek Minerals Limited in Ghana.

• 5) Only holes with combined intercepts of greater than 10 gram metres included.

• 6) The true width of intercepts from recent drilling at the Dadieso deposit, Kwatechi and Dunkwa licences is currently unknown. The true width of intercepts along the Bokitsi zone is about 70% of the intercept width.

• 7) The type of analytical or testing procedures utilized and sample size and the quality assurance program and quality control measures are consistent with those described in the technical report entitled “Technical Report – Central Ashanti Gold Project, Ghana” dated November 30, 2009.

Table 3: Significant Intercepts Sissingue Gold Deposit, Côte d’Ivoire

Hole Deposit East North Depth Azm. Incl.	From To Width Au
(m) (m) (m) (°) (°)	(m) (m) (m) g/t
SD106 Sissingue 806720 1154596 224.7 271 -56	67 73 6 8.0
incl.	68 68.6 0.6 55.1
and	72 73 1 13.0
	127 131 4 2.0
	147 170 23 2.7
incl.	168.3 169 0.7 67.9
	185 200.6 15.6 1.2
SD109 Sissingue 806461 1154440 257.7 91 -51	107.6 116 8.4 3.6
incl.	113 114 1 23.8
	164 168 4 2.4
SD111 Sissingue 806500 1154220 204.7 90 -51	138 144 6 1.7
	165 204.7* 39.7 2.2
incl.	200 204.7* 4.7 7.7
incl.	204 _204.7 _0.7 28.4*
SD112 Sissingue 806678 1154137 173.7 271 -56	6.7 79.5 72.8 3.2
incl.	13.7 25.2 11.5 8.7
	95.1 96.1 1 9.5
	109 132.72 23.72 3.2
incl.	116 117 1 27.0
and	132 132.72 0.72 15.4
	136.5 156 19.5 1.5

7

Table 3: Significant Intercepts Sissingue Gold Deposit, Côte d’Ivoire (continued)

Hole Deposit East North Depth Azm. Incl.	From To Width Au
(m) (m) (m) (°) (°)	(m) (m) (m) g/t
SD113 Sissingue 806521 1154100 206.7 89 -50	104 155 51 4.1
incl.	105.5 108 2.5 12.9
and	119 120 1 78.4
	178 191 13 2.4
incl.	189 190 1 18.9
SGC003 Sissingue 806650 1154470 50 270 -55	21 25 4 2.6
	31 32 1 29.3
	41 44 3 13.2
SGC004 Sissingue 806663 1154470 60 270 -55	26 33 7 20.5
incl.	26 27 1 132.1
SGC005 Sissingue 806675 1154470 70 270 -55	10 11 1 13.3
	19 25 6 1.6
	35 36 1 24.1
SGC006 Sissingue 806688 1154470 80 270 -55	28 30 2 50.5
incl.	28 29 1 82.6
	35 47 12 1.9
	65 80* 15 3.3
SGC011 Sissingue 806663 1154490 60 270 -55	6 7 1 57.5
	9 24 15 1.6
	28 37 9 1.1
SGC012 Sissingue 806675 1154490 70 270 -55	12 30 18 3.5
incl.	26 30 4 9.0
	55 69 14 3.3

Notes

• 1) SGC holes are reverse circulation drill holes, SD holes are core drill holes.

• 2) The type of analytical or testing procedures utilized and sample size and the quality assurance program and quality control measures are consistent with those described in the technical report entitled “Technical Report – Tengrela Gold Project, Côte d’Ivoire” dated September 02, 2010.

• 3) Drill samples were assayed by 50g fire assays by Intertek Minerals Limited, an independent laboratory in Ghana.

• 4) True width of intercepts from the current program at the Sissingue deposits is about 55-77% of the intercept width.

• 5) * denotes open ended intercept.

• 6) Only holes from Sissingue with combined intercepts of greater than 40 gram metres included.

8

Table 4: Significant Exploration Intercepts Tengrela Gold Project, Côte D’Ivoire

Hole Deposit East North Depth Azm. Incl.	From To Width Au
(m) (m) (m) (°) (°)	(m) (m) (m) **g/t **
SAC005 SissEast 807385 1154400 77 270 -60	72 77 5 18.5*
LLC055 LogBog 781120 1113600 90 90 -55	6 12 6 4.0
incl.	8 10 2 10.3
LLC067 LogBog 781080 1114240 94 90 -55	12 16 4 3.4
LLC071 LogBog 781205 1114240 90 90 -55	30 34 4 4.0
KATCR025 Katara 806240 1131000 90 90 -55	34 36 2 13.7
KATRC029 Katara 806080 1131000 90 90 -55	56 62 6 1.7
KATRC032 Katara 806201 1131079 90 90 -55	48 52 4 2.6
PRB225 Papara 799235 1174638 53 270 -60	36 48 12 5.0
PLC027 Podio 793720 1108800 99 90 -55	0 2 2 21.0
	64 68 4 2.1
PLC039 Podio 793640 1108400 90 90 -55	20 22 2 2.5
	34 36 2 2.5
PLC045 Podio 793480 1108160 90 90 -55	42 44 2 10.4
PLC048 Podio 793600 1108160 90 90 -55	24 26 2 4.0
	50 54 4 13.0
incl.	52 54 2 22.2
	86 90* 4 1.3
PLC057 Podio 793480 1107600 96 90 -55	52 60 8 30.0
incl.	56 58 2 114.1
PLC058 Podio 793520 1107600 90 90 -55	4 44 40 1.0
	84 90* 6 1.1
WLC001 Zing 793440 1112880 90 90 -55	0 2 2 8.0

Notes

• 1) All holes except PRB225 are reverse circulation drill holes, PRB225 is a RAB drill hole.

• 2) The type of analytical or testing procedures utilized and sample size and the quality assurance program and quality control measures are consistent with those described in the technical report entitled “Technical Report – Tengrela Gold Project, Côte d’Ivoire” dated September 02, 2010.

• 3) Drill samples were assayed by 50g fire assays by Intertek Minerals Limited, an independent laboratory in Ghana.

• 4) The true width of intercepts from all new prospects is currently unknown.

• 5) * denotes open ended intercept.

• 6) Only holes with combined intercepts of greater than 10 gram metres included.

Table 5: Mineral Reserves (Gold) - Perseus Mining Limited Projects

Deposit		Proven	Proven		Probable	Probable		Total	Total
	Tonnes (million)	g/t Au	Ounces Au	Tonnes (million)	g/t Au	Ounces Au	Tonnes (million)	g/t Au	Ounces Au
Central Ashanti Gold Project (CAGP) >0.5g/t (1)	18.4	1.4	828,000	37.0	1.1	1,313,000	55.4	1.2	2,141,000

Notes 1) Last updated on 30 July 2009

9

Table 6: Mineral Resources (Gold) - Perseus Mining Limited Projects (excluding reserves)

Deposit	Measured & Indicated	Measured & Indicated	Measured & Indicated		Inferred	Inferred
	Tonnes (million)	g/t Au	Ounces Au	Tonnes (million)	g/t Au	Ounces Au
CAGP >0.8g/t(1)	15.8	1.5	764,000	29.9	1.5	1,423,000
CAGP 0.4g/t-0.8g/t(1)	14.1	0.6	267,000	31.9	0.7	691,000
Tengrela(2) >1.0g/t	9.9	2.5	796,000	3.3	1.6	171,000
Tengrela(2) 0.5g/t-1.0g/t	5.6	0.8	135,000	3.6	0.7	86,000
Grumesa Sth>0.4 / 0.6g/t(3)	7.1	0.9	195,000	1.9	0.8	46,000
Grumesa Nth>0.4g/t(4)				21.4	0.8	573,000
Totals >0.8g/t (>1.0g/t Tengrela)	25.7	1.9	1,560,000	33.2	1.5	1,594,000
Totals >0.4g/t (>0.5g/t Tengrela)	52.5	1.3	2,157,000	92.0	1.0	2,990,000

Notes

• 1) Last updated on 30 July 2009

• 2) June 2010 estimate

• 3) Last updated on 30 April 2007

• 4) Last updated on 29 September 2006

• 5) The Company holds 90% of CAGP, 90% of Grumesa and 80% of Tengrela after allowing for Government equity at the mining stage

[The above table is prior to the post- Quarter end completion of a feasibility study at the Sissingue Deposit within the Tengrela Gold Project, which classified 9.7Mt as Probable Ore Reserves for 657,000 ounces at a grade of 2.1g/t. Details are in Table 7 below.]

Table 7: October 2010 Mineral Reserve Estimate – Sissingue Deposit

Type	Probable Ore Reserve
	Tonnes Au Au Mt g/t Koz
Oxide/Transition Primary	3.4 2.1 224 6.3 2.1 433
Total	9.7 2.1 657

Notes:

• 1) Reserve estimated by Coffee Mining using a pit design based on a US$950 gold price optimisation.

• 2) All Measured and Indicated Mineral Resources in pit designs designated as Probable Ore Reserves, Inferred Mineral Resources considered as waste.

• 3) A mining dilution of 5% was applied at a 0.0g/t diluting grade. In addition, a mining ore loss of 3% was assumed.

• 4) The Probable Ore Reserve as declared for the FS was estimated at a 0.55g/t Au cut-off.

2

FINANCIAL PERFORMANCE

The financial performance of the Company is expected to be affected by ongoing exploration and evaluation activities being conducted on its properties and the proposed development of the CAGP and TGP. Until such time as commercial production is achieved, the Company will continue to incur administrative costs and exploration and development expenditures, resulting in continuing operating losses. The financial performance of the Company will be closely linked to the gold price following the development of the CAGP and, potentially, the TGP. The gold price also affects the economic viability of the Company’s other projects and prospects. To protect against changes in gold price the company has put in place a quantity of hedging using Put Options and Forward contracts which are discussed in further detail under “Financial Instruments and Related Risks”.

The Company reports its financial results in Australian dollars (AUD). The Company’s costs and funding however are currently incurred in several currencies including AUD, United States dollars (USD), Ghanaian New Cedis, and CFA francs and if, as expected by management, the CAGP or any of the Company’s other projects commence production future metals sales revenue will be in US dollars. Fluctuations in the rates of exchange between the Australian dollar and the currencies in which the Company transacts may therefore significantly affect the results of operations of the Company and are discussed further under “Financial Instruments and Related Risks”.

The exploration and development of the Company’s properties will require substantial additional financing. Failure to obtain sufficient financing in the future may result in delay or indefinite postponement of the exploration or development of any or all of the Company’s properties. There can be no assurance that bank financing, equity capital or other types of financing will be available when needed or that, if available, the terms of such financing will be acceptable to the Company.

See ‘‘ Risk Factors ’’ for a further discussion of these and other risk factors associated with the Company and an investment in the Company’s shares.

FINANCIAL CONDITION

Cash and cash equivalents

As at September 30, 2010 the Company had cash or cash equivalent resources of $130.213 million plus a further $8.410 million of funds on deposit securing environmental obligations and an international trade facility. This represents a significant decrease relative to the position as at June 30, 2010 when cash or cash equivalent resources included $185.592 million plus a further $7.805 million of funds on deposit securing environmental obligations and an international trade facility. This decrease in cash reserves resulted from planned expenditure on the CAGP & TGP projects and a $9.804 million foreign exchange loss on the USD cash held due to a significant devaluation of the USD against AUD.

Property, plant and equipment

During the Quarter, the Company capitalised $31.785 million of expenditure on construction of the CAGP, and $0.235 million of expenditure on other plant and equipment. Due to the significant devaluation of the USD against AUD a $15.402 million foreign exchange loss was recorded against property, plant and equipment (“PP&E”) as the majority of these assets are recorded in USD in the subsidiary accounts and are translated into AUD on consolidation. As a result, the Company recognised on its balance sheet a total of $131.903 million for PP&E as at September 30, 2010, (June 30, 2010: $114.603 million).

Exploration and evaluation expenditure

During the Quarter, the Company capitalised $4.566 million of exploration and evaluation expenditure, before recording a foreign exchange loss of $0.743 million for the same reasons as those discussed above in property, plant and equipment. As a result, the Company recognised on its balance sheet a total of $29.693 million for exploration and evaluation expenditure as at September 30, 2010, (June 30, 2010: $25.869 million).

Other financial assets

As at September 30, 2010, the Company recorded a carrying value of gold put options held at $3.884 million (June 30, 2010: $7.658 million), after marking-to-market the carrying value and recognising a devaluation of the put options of

3

$8.278 million (June 30, 2010: $5.042 million). The continuing devaluation of the put options is a consequence of the rising gold price during the Quarter and the passage of time reducing the time to maturity of the options.

Total Liabilities

As at September 30, 2010 the Company had total liabilities of $14.340 million (June 30, 2010: $25.862 million). The decrease in liabilities is as a result of payment during the Quarter of creditors relating mainly to the construction of the CAGP that were outstanding at June 30, 2010.

The quarter-on-quarter movements in the financial position of the Company over the last eight quarters are shown below.

Financial Position1	Sept 30	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31
as at:	2010	2010	2010	2009	2009	2009	2009	2008
Cash and cash
equivalents	130.213	185.591	82.705	67.166	60.626	79.876	10.685	3.622
Total Assets	309.447	346.792	194.031	155.813	136.238	145.903	72.206	69.236
Total Liabilities	14.340	25.862	18.296	4.895	6.350	13.106	3.828	6.115
Net Assets	295.107	320.930	175.735	150.918	129.888	132.797	68.378	63.121

1 All amounts shown are in millions of dollars

The decrease in cash between September 30, 2010 and June 30, 2010 is due to the increased expenditure on the CAGP and TGP projects as well as a devaluation of the USD cash held due to a devaluation of the USD against the AUD. Higher cash balances as at June 30, 2010, March 31, 2010, December 31, 2009, and September 30, 2009 reflect the increased share placement activity since June 2009 as the Company sourced finance to fund development of the CAGP and increase the level of exploration activity at the TGP.

Total Assets have decreased this Quarter by $37.345 million. This is due to the decrease in cash balances of $55.378 million as noted above, which has been offset by higher closing balances of PP&E and exploration and evaluation expenditure (a combined increase of $21.124 million). The increase in capitalised PP&E is lower than the previous quarter due to the significant devaluation of the USD against AUD. The majority of PP&E transactions are recorded in USD and are translated to AUD when consolidated. In the September 2010 quarter this translated to a $15.402 million loss capitalised against PP&E. The balance sheet at June 30, 2010 reflected higher cash balances as noted above, higher closing balances of PP&E, and exploration and evaluation expenditure, (combined the increase was $42.754 million). The increase in PP&E from March 31, 2010 relates primarily to expenditure incurred with respect to gold plant and infrastructure for the CAGP, including engineering design, equipment specifications and deposits for certain long lead plant items, but also reflects a reclassification of exploration and evaluation expenditure related to the CAGP from Exploration and Evaluation to PP&E. Other assets diminished during the Quarter due to devaluation of gold put options as a result of the rising gold price and the passage of time reducing the time to maturity of the options ($3.773 million). This compared unfavourably to the June 2010 quarter during which Other assets increased as a result of the purchase of additional put options, being partially offset by a diminution in the value of all options held by the Company, (reflecting an increase in the gold price and the passage of time ($1.689 million)). Receivables in the form of additional cash placed on deposit to secure an international trade facility plus interest again increased in the Quarter ($0.605 million, June 30, 2010: $5.313 million).

The decrease in total liabilities at Quarter-end relative to the position at the end of the preceding quarter is due to the payment of creditors outstanding at June 30, 2010 in relation to the construction of the CAGP. The marked increase in total liabilities at June 30, 2010 quarter-end compared to preceding quarters, reflected the increased scale of activity associated with pre-development work at the CAGP, particularly expenditure incurred with the DRA/Group 5 Joint Venture, as well as the substantially increased resource definition drilling activity during the quarter.

4

CASHFLOW

The eight most recent quarter-on-quarter movements in the cash flow of the Company are as shown below.

Cash flows1 for three	Sept 30	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31
months ended	2010	2010	2010	2009	2009	2009	2009	2008
Operating Activities	(1.096)	(1.345)	(0.236)	(0.687)	(0.788)	(0.268)	(0.322)	(0.437)
Investing Activities	(49.282)	(37.080)	(16.773)	(16.446)	(14.810)	(4.266)	(2.959)	(8.276)
Financing Activities	4.803	134.280	34.463	23.786	(2.410)	73.849	10.423	0.199
1All amounts shown are in	millions of dollars

The cash outflows attributable to operating activities have been increasing over time reflecting the increase in administration activities across the Group, including payroll and also the increased use of consultants and advisors, as the Company accelerated its transition from a junior explorer to a development and operating company.

This level of activity was also reflected in the significant increase in cash outflows for investing activities which related to payments for assets under construction (September 2010 quarter $43.131 million, 2010: $37.489 million), payments for the purchase of gold put options (2010: $12.699 million), payments for investments in associates, Burey and Manas (2010: $2.225 million), which did not occur in 2009, plus increases in the escrowing of funds as security deposits for the international trade facility ($4.504 million) and exploration and evaluation expenditure (September 2010 quarter $5.546 million, 2010:$4.162 million).

Unlike prior quarters, no further share placements occurred in the current Quarter, however, the cash inflows from financing activities did occur as a result of options to acquire ordinary shares being exercised. The increase in cash inflows from financing activities in 2010 ($190.112 million, 2009: $ 84.551 million), is the result of an active programme of equity capital raisings undertaken during the prior year to fund the development of the CAGP and an accelerated programme of exploration on the Company’s West African tenements.

As a consequence of the above quarter-on-quarter movements, cash held by Perseus increased from 2009 to 2010 and has decreased in the current Quarter to a total net available cash balance at September 30, 2010 of $130.213 million.

OPERATING RESULTS

The operating results for the eight most recent quarters are as follows:

Operating Results1 for the	Sept 30	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31
three months ended	2010	2010	2010	2009	2009	2009	2009	2008
Interest Income	0.897	0.533	0.294	0.501	0.548	0.286	0.026	0.258
Other revenue	-	3.874	-	0.054	-	(1.640)	0.254	1.443
Total Operating expenses	(13.240)	(1.166)	(6.742)	(3.145)	(4.478)	0.031	(0.684)	(2.165)
Net Loss	(12.343)	3.186	(6.448)	(2.590)	(3.929)	(0.490)	(0.404)	(0.463)
Basicloss pershare (cents)	(2.93)	0.83	(2.04)	(0.82)	(1.31)	(0.24)	(0.23)	(0.26)

1 All amounts shown above are in millions of dollars

As a pre-production stage company, Perseus’s revenues to date have mainly comprised interest income and its expenses have mainly been comprised of administration and corporate overheads (given the Company’s accounting policy to capitalise exploration and evaluation expenditure).

The considerably greater net interest income for the past five quarters compared to the prior quarters is a result of both higher average cash balances held in interest bearing deposits during the period and slightly increasing interest rates during the current twelve month period. “Other revenue” received in the June 2010 quarter consists mainly of foreign exchange gains realised on cash deposits as a result of a decline in the AUD:USD exchange rate, coupled with an increase in the amount of foreign currency, particularly USD, held by the Company following completion of a number of share placements during the prior periods. In the December 2009 quarter, a gain was recognized on disposal of gold projects in the Central Asian Kyrgyz Republic to ASX listed, Manas Resources Limited ($0.833 million). Foreign exchange gains were also recognised.

The increase in Operating expenses for the past five quarters compared to prior periods is largely the result of recognition of devaluation of gold put options (September 2010 quarter: $3.236 million, 2010: $5.042 million), a

5

foreign exchange loss in the current Quarter of $6.363 million on cash deposits due to the weakening of the USD against the AUD, a write-off of capitalised exploration (2010: $0.845 million), and increased share based payments (September 2010 quarter: $1.152 million, 2010: $3.594 million). The increase in share based payments in the current Quarter is due to the issue of options to employees which vested immediately and as such the total cost related to these options was expensed when issued. Other expenses, including employee benefits and fees paid to professional advisors and consultants, have also increased compared to the corresponding period in 2009 and reflect the growth of the Company’s activities as a result of the transition from junior explorer to an integrated exploration, evaluation and development company.

The apparent decrease in operating expenses in the June 2010 quarter compared to the preceding two quarters is a result of several factors, including reduced costs associated with the issue of options to Directors and employees as share based payments in the June 2010 quarter ($0.928 million) (compared to a charge of around $1.595 million in the March quarter and $0.800 million in the prior two quarters combined), and a reduced decrement in the market value of gold put options (approximately $0.74 million in the June 2010 quarter compared to $4.3m in the previous three quarters combined).

LIQUIDITY AND CAPITAL RESOURCES

During the last two years, the equity capital markets have been the Company’s primary source of funding. As at September 30, 2010, the Company had $130.213 million in cash and cash equivalents ($185.592 million as at June 30, 2010).

In the current Quarter no major fund raising activities were undertaken by Perseus however, the Company did receive $4.849 million during the period from the exercise of options to acquire ordinary shares. During the June 2010 Full Year, the Company issued a total of 117.6 million shares as part of a number of share placements and a share issue to existing shareholders pursuant to a Share Purchase Plan. These activities combined raised a total of $204.5 million before deducting share issue expenses. In the corresponding prior period, 122.6 million shares were issued for gross cash consideration of $86.6 million.

As previously stated, the Company’s short to medium term plans include development of the CAGP, permitting and development of the TGP now that the Feasibility Study (FS) at this project has been completed with a positive outcome, expansion of the Company’s Mineral Resources through rapid exploration of existing ground and the acquisition of prospective new projects.

The capital required to develop the CAGP is estimated to be approximately USD160 million. This cost will be financed with a mix of equity finance from existing cash reserves and debt drawn under a project debt facility to be provided by the Lenders. The exact mix of debt and equity to be deployed for the CAGP will be determined as the project progresses. As previously noted the drafting of full form documentation for the project debt facility was at an advanced stage at the end of the Quarter and subsequent to the end of the Quarter but prior to the date of this MD&A, loan documentation has been completed and submitted to the Ghanaian Government for review, prior to execution by the Company and the Lenders. There have been no changes to the fundamental terms of the facility as described in the 2010 year end MD&A. Subject to the satisfaction of a number of conditions precedent, the project loan facility permits the drawing of up to USD85 million, the amount to be drawn is at the sole discretion of the Company. A pre-requisite for fully drawing the USD85 million facility, is that the price of 230,000 ounces of gold production must be hedged.

As at September 30, 2010 a total of 210,000 ounces of gold had been sold for delivery progressively from March 2012 to December 2014 at an average price of USD1,244.50 per ounce. Subsequent to 30 September 2010, but prior to the date of this report, CAGL entered into contracts to forward sell a further 20,000 ounces of gold, bringing the total quantity of gold sold forward under hedging contracts to 230,000 ounces at a weighted average price of USD1,250.00 per ounce. Subject to completion of all other conditions precedent, this level of hedging would enable Perseus to draw the full USD85 million facility. This hedging represents about 25% of expected production from CAGP to the end of 2014 and represents around 11% of current gold reserves at CAGP. In addition, options granting the right but not the obligation to sell 100,000 ounces of gold at USD850 per ounce in the period from January 2012 to December 2013 and a further 20,000 ounces of gold at USD1,100 per ounce from July to December 2011 were purchased as part of the Company’s financial risk management strategy.

Perseus’s objective is to limit the amount of hedging required under the hedging facility to approximately 10% of Proven and Probable Gold Reserves estimated for the CAGP (currently 2.1 million oz of gold”). In addition, the Company is continuing infill drilling with the objective of increasing the Proven and Probable Reserves at the CAGP. Any such increase in Proven and Probable Reserves will decrease the relative proportion of the Proven and Probable Reserves that are hedged.

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The following table sets forth information regarding the Company’s contractual obligations as at September 30, 2010.

			Less than 1	1 - 3 Years	4 - 5 Years	After 5 years
			Year
Exploration expenditure1		(US$M)	1.050	2.700	2.700	1.550
Capital	construction	commitments2	33.48	-	-	-
(US$M)
Notes:

• (1) The Company’s mineral rights in Ghana and Ivory Coast are not subject to minimum expenditures on exploration activities and its operating leases are paid annually, in advance. The Company has no long term debt, capital lease obligations or other long term obligations. The Company is however obliged to meet exploration budgets as described in mineral lease applications and the data reported above reflects this obligation.

• (2) Under the agreement between the Company and the Central Ashanti Joint Venture (“CAJV”) comprising DRA Mineral Projects (Pty) Ltd and Group Five Projects (Pty) Ltd, Perseus authorized CAJV to enter into binding contracts and arrangements with suppliers, subcontractors and manufacturers and perform work. The Company has also made binding commitments for the performance of certain other works outside of the scope of the CAJV. As at September 30, 2010, total commitments amounted to USD105 million (of which USD71.52 million had been either settled or recorded as an actual liability). This commitment forms part of the estimated USD160 million capital cost for the CAGP.

• (3) A subsidiary of the Company, Central Ashanti Gold Limited, has entered physical gold delivery contracts with the Lenders under which it is obliged to progressively deliver a total of 210,000 ounces of gold during the period from March 2012 to December 2014. The contracts are settled on a quarterly basis by physical delivery of gold as instructed by the Lenders. Based on a contracted delivery price of USD1,244.50 per ounce, the total value of metal to be delivered in the contract period is USD261.271 million.

FINANCIAL INSTRUMENTS AND RELATED RISKS

The principal financial instruments used by the Company as at September 30, 2010 are cash, receivables, payables and prepayments. As a result of the use of these financial instruments, the Company is exposed to credit risk, liquidity risk and market risk.

Credit Risk

Credit risk is the risk of financial loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s receivables from customers and investment securities. There has been no significant change in the Company’s exposure to credit risk and its objectives and policies for managing these risks during the three months ended September 30, 2010.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages liquidity risk by maintaining adequate cash reserves and by continuously monitoring forecast and actual cash flows. In the absence of operating revenue, the Company must raise additional capital from time to time in order to fund its exploration activities. The decision to raise capital in the future depends on market conditions existing at that time and the level of forecast activities and expenditures.

Market Risk

• (i) Price risk is the risk that changes in market prices will offset the Company’s income. The Company is exposed to fluctuations in metal prices (principally gold), and fluctuations in foreign currency and interest rates in the normal course of its business operations. The Company uses metal hedges to mitigate its exposure to fluctuations in gold prices, details of which are discussed in “Liquidity and Capital Resources” above.

• (ii) Currency risk is the risk that changes in foreign currency exchange rates will affect the Company’s income. The Company reports its financial results in Australian dollars. The Company’s costs and funding, however, are mainly incurred and provided in USD, AUD, Ghanaian New Cedis, CFA francs and Canadian dollars. If, as expected by management, the CAGP or any of the Company’s other projects commences production, future metals sales revenue will be in US dollars. Fluctuations in these exchange rates may therefore significantly

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affect the results of operations of the Company. There has been no significant change in the Company’s exposure to currency risk and its objectives and policies for managing these risks during the three months ended September 30, 2010.

• (iii) Interest rate risk is the risk that changes in market interest rates will affect the Company’s income. There has been no significant change in the Company’s exposure to currency risk and its objectives and policies for managing these risks during the three months ended September 30, 2010.

OFF BALANCE SHEET ARRANGEMENTS

There are no off-balance sheet arrangements as at September 30, 2010 other than the contractual commitment to physically deliver 210,000 ounces of gold during the period from March 2012 and December 2014. The physical gold delivery contracts are considered contracts to sell a non-financial item and are therefore outside of the scope of AASB 139. As a result, the forward sales contracts have not been recognised on the Company’s balance sheet.

TRANSACTIONS WITH RELATED PARTIES

Remuneration (including salaries, directors’ fees and the issue of share options) was paid or is payable to the directors of the Company in the normal course of business. The Company pays its non-executive directors consulting fees for extra services, if any, performed outside of normally expected non-executive duties. These transactions are made on commercial terms and conditions and at market rates.

Rent, accounting, secretarial and corporate service fees paid or payable to Corporate Consultants Pty Ltd, a company in which a Director, Mr Gillard, and the company secretary, Mr Susmit Shah, have beneficial interests, totalled $85,983 for the quarter ended September 30, 2010 compared to $205,304 and $96,772 for the quarters ended June 30, 2010 and March 31, 2010 respectively. The increase in fees reflects the additional corporate activity in relation to share placements and listing on the TSX.

Taxation services paid or payable to Icon Financial Management Pty Ltd, an entity in which Mr Gillard has a beneficial interest, totalled $3,014 for the quarter ended September 30, 2010 compared to $4,179 and $ 1,510 for the quarters ended June 30, 2010 and March 31, 2010 respectively.

CRITICAL ACCOUNTING ESTIMATES

Management is required to make various estimates in determining the reported amounts of assets and liabilities, revenues and expenses for each period presented, and in the disclosure of commitments and contingencies. Accounting estimates and judgments are continually re-evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable in the circumstances.

Management considers the following to be the Company’s most critical accounting estimates.

Exploration and evaluation expenditure

The recoverability of the carrying amount of exploration and evaluation costs carried forward is reviewed by the Directors. In conducting the review, except where the area of interest has not reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, the recoverable amount is assessed by reference to the higher of “fair value less costs to sell” and “value in use”. In determining value in use, future cash flows are based on:

(i) Estimates of ore reserves and mineral resources for which there is a high degree of confidence of economic extraction;

(ii) Estimated production and sales levels;

(iii) Estimated future commodity prices;

(iv) Future costs of production;

(v) Future capital expenditure; and/or

• (vi) Future exchange rates.

Variations to expected future cash flows, and timing thereof, could result in significant changes to the impairment test results, which in turn could impact future financial results. The Board of Directors determines when an area of interest should be abandoned. When a decision is made that an area of interest is not commercially viable, all costs that have

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been capitalised in respect of that area of interest are written off. The Directors’ decision is made after considering the likelihood of finding economically recoverable reserves.

Share-Based Payments

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments as at the date at which they are granted. The Company measures the cost of cash-settled share-based payments at fair value at the grant date using the Black-Scholes option pricing model and taking into account the terms and conditions upon which the instruments were granted. Differences in estimated future stock price volatility, interest rates and other factors can have a material effect on the calculation of share-based compensation expense and derivative values. As such, the values derived may change significantly from period to period and are subject to significant uncertainty. The Company recorded a total share-based compensation expense of $3.594 million for the year ended June 30, 2010 compared to $0.817 million for the corresponding period to June 30, 2009. The expense for the September 2010 quarter was $1.152 million compared with $0.928 million for the June 2010 quarter and $1.595 million for the March 2010 quarter.

CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION

In the quarter ended 30 September 2010, the Group has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2010. As a result of this review the Directors have determined that there is no change necessary to Group accounting policies.

OUTSTANDING SECURITIES DATA

The Company has ordinary shares and stock options on issue. The following is a summary of the Company’s capital structure as at the date of this MD&A:

Ordinary shares	421,517,088
Options over unissued shares	10,145,000

At September 30, 2010 there were 421,307,088 (June 30, 2010: 418,032,088, March 31, 2010: 344,632,088) shares and 9,125,000 (June 30, 2010: 12,000,000, March 31, 2010: 11,470,000) options on issue. Since that date and up to the date of this MD&A, the Company has issued 210,000 shares through the exercise of the same number of options. 1,230,000 new options have been issued since September 30, 2010 and up to the date of this report.

CONTROLS AND PROCEDURES

The Company maintains appropriate information systems, procedures and controls to ensure that information used internally and disclosed externally is complete and reliable. The Company continues to review and develop internal controls including disclosure controls and procedures for financial reporting that are appropriate for the nature and size of the Company’s business.

Disclosure Controls and Procedures

The Company’s disclosure controls and procedures (“ DCP ”) are designed to provide reasonable assurance that all relevant information is communicated to the Company’s senior management to allow timely decisions regarding external disclosure. Access to material information regarding the Company is facilitated by the small size of the Company’s senior management team and workforce. The Company is continuing to develop appropriate DCP for the nature and size of the Company’s business. As at June 30, 2010, the Chief Executive Officer and Chief Financial Officer, with participation of the Company’s management, concluded that there were no material weaknesses in the design of DCP at the end of the June 30, 2010 financial year or changes to the Company’s DCP during the financial year which have materially affected, or are considered to be reasonably likely to materially affect, the Company’s disclosure or its DCP.

Internal Controls over Financial Reporting

Internal controls over financial reporting (“ ICFR ”) are designed to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of financial statements in compliance with IFRS. The Board is responsible for ensuring that management fulfils its responsibilities in this regard. The Audit Committee fulfils its role of ensuring the integrity of the reported information through its review of the interim and annual financial

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statements. There has been no change in the Company’s internal control over financial reporting during the three months ended September 30, 2010 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Limitations of Controls and Procedures

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, believe that any DCP or ICFR, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

Certain information contained in this MD&A, including all statements that are not historical facts, constitutes forwardlooking information within the meaning of applicable Canadian securities laws. This forward-looking information is based on the Company’s expectations, estimates and projections regarding its business and the economic environment in which it operates. Such forward-looking information includes, but is not limited to, information with respect to the future financial and operating performance of Perseus, its affiliates and subsidiaries, the estimation of mineral reserves and mineral resources, realization of mineral reserve and resource estimates, costs and timing of development of the Central Ashanti Gold Project (as defined herein, and formerly known as the Ayanfuri Gold Project and sometimes still referred to by that name), timing and receipt of required approvals, consents and permits under applicable legislation, availability of the Facilities (as defined herein), costs and timing of future exploration, results of future exploration and drilling and the adequacy of financial resources. Often, this information includes words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.

Forward-looking information in this MD&A includes, but is not limited to, statements about drill results, commodity prices and core intersection lengths, in that they constitute estimates, based on certain assumptions of mineralization that may be encountered if a deposit were to be mined.

By its nature, forward-looking information speaks only as of the date it is provided, is not a guarantee of future performance and involves known and unknown risks, uncertainties and other factors that are difficult to control or predict, which may cause our actual results, performance or achievements, or industry results, to differ materially from those expressed or implied by such forward-looking information and readers should not place undue reliance on such statements.

RISK FACTORS

Some of the risks and other factors that could cause actual results to differ materially from those expressed in the forward-looking information contained in this MD&A, as well as risk factors generally facing the Company, include, but are not limited to:

• risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of mineral deposits and conclusions of economic evaluations;

• results of initial feasibility, pre-feasibility and feasibility studies, and the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations;

• risks relating to possible variations in reserves, grade, planned mining dilution and ore loss, or recovery rates and changes in project parameters as plans continue to be refined;

• mining and development risks, including risks related to accidents, equipment breakdowns, labour disputes (including work stoppages and strikes) or other unanticipated difficulties with or interruptions in exploration and development;

• the potential for delays in exploration or development activities or the completion of feasibility studies;

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• risks related to the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses;

• risks related to commodity price, interest rate and foreign exchange rate fluctuations;

• the uncertainty of profitability based upon the cyclical nature of the industry in which the Company operates;

• risks related to failure to obtain adequate financing on a timely basis and on acceptable terms or delays in obtaining governmental approvals or in the completion of development or construction activities;

• the risk of changes to fiscal terms or operating approval conditions;

• risks related to environmental regulation and liability;

• political and regulatory risks associated with mining and exploration; and

• other risks and uncertainties related to the Company’s prospects, properties and business strategy.

A detailed discussion of these and other factors that may affect the Company’s prospects, actual results, performance, achievements or financial position is contained in the Company’s Annual Information Form dated September 28, 2010. Although the Company has attempted to identify important factors that could cause actual results or events to differ materially from those described in the forward-looking information, readers are cautioned that this list is not exhaustive and there may be other factors that we have not identified. Readers are cautioned not to place undue reliance on forward-looking information contained in this MD&A. Forward-looking information is based upon management’s beliefs, estimates and opinions as at the date of this MD&A, and no assurance can be given that these will prove to be correct. Furthermore, the Company undertakes no obligation to update or revise forward-looking information if these beliefs, estimates and opinions or other circumstances should change, except as otherwise required by applicable law.

.

TECHNICAL DISCLOSURES

The exploration results in this MD&A have been prepared by or under the supervision of Mark Calderwood, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Calderwood is the Managing Director and fulltime employee of the Company. He is a Competent Person within the meaning of the JORC Code and a Qualified Person within the meaning of National Instrument 43-101 — Standards of Disclosure for Mineral Projects (‘‘NI 43101’’). Mr. Calderwood has reviewed the data set out herein, including sampling, analytical and test data underlying the exploration results set out herein. For a description of the quality assurance program and quality control measures applied, please refer to the CAP Technical Report and the Tengrela Technical Report. 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’ and as a Qualified Person for the purposes of National Instrument 43-101 of the Canadian Securities Administrators. Mr Calderwood consents to the inclusion in this MD&A of the matters based on his information in the form and context in which it appears.

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