PERSEUS MINING LIMITED - Interim / Quarterly Report 2015

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May 14, 2015

MANAGEMENT’S DISCUSSION & ANALYSIS For the three months ended March 31, 2015

This Management’s Discussion and Analysis (“MD&A”) of Perseus Mining Limited and its controlled entities (“Perseus” or the “Company”) is dated May 14, 2015 and provides an analysis of the Company’s performance and financial condition for the three months ended March 31, 2015 (the “March 2015 Quarter” or “Quarter”).

This MD&A should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended June 30, 2014 (the “2014 Financial Report”), and the Company’s audited reviewed consolidated financial statements for the half year ended December 31, 2014. 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. Perseus’s corporate office is in Perth, Western 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 German Stock Exchange. Perseus is an integrated gold company whose activities include exploration and evaluation, development and gold production. The Company conducts its activities on under-explored gold belts located in West Africa. Its principal assets are:

A 90% interest in the Edikan Gold Mine (“EGM” or “Edikan”), a gold mine located in Ghana. In July 2009, the Company completed a definitive feasibility study (‘‘DFS’’) on developing a mine and associated treatment facility for the EGM and based on the positive outcome of that DFS, construction of a gold mine and associated processing facility commenced in June 2010. The first gold pour and the first revenue received from the EGM took place on August 21, 2011 and on September 28, 2011 respectively. Commercial Production was declared on January 1, 2012. The remaining 10% interest in the EGM is a free-carried interest in the mine-owning company held by the Government of Ghana.
An 85% interest in the Sissingué gold deposit, a development stage gold project (the ‘‘Sissingué Gold Project’’ or “SGP”). The Sissingué gold deposit was discovered during an exploration programme focussed on the Tengréla exploration tenements located in the north of Côte d'Ivoire. In November 2010, the Company completed a DFS on developing an open cut mining operation together with a conventional carbon in leach (“CIL”) gold processing plant and related infrastructure based on the Sissingué gold deposit. In April 2015 the Company completed a revised feasibility study (“RFS”) following a period of review on the process flow sheet and underlying operating and cost assumptions. Subsequently, a decision was undertaken to proceed with the development. The Company’s 85% interest in the SGP reflects (as if it had been granted) a 10% free carried interest in the mine-owning company which is required to be allocated to the Government of Côte d'Ivoire in consideration of the issue of an Exploitation Permit pursuant to the Ivorian Mining Code, and 5% owned by local interests.
A 90% interest in the Kayeya gold deposit which forms part of the Grumesa Gold Project (“GGP’’), an exploration stage gold project located 30 kilometers to the east of the EGM in Ghana. Previous studies indicated that the GGP represents a potential satellite production opportunity to the larger EGM. The Company’s 90% interest in the GGP reflects a 10% free carried interest in the mine-owning company which is required to be allocated to the Government of Ghana upon the issue of a mining lease.

Perseus Mining Limited ABN 27 106 808 986 Level 2, 437 Roberts Road Subiaco WA 6008 Telephone: +61 8 6144 1700 Email: [email protected]

PO Box 1578 Subiaco WA 6008 Facsimile: +61 8 6144 1799 Website: www.perseusmining.com

In addition, Perseus owns (i) a 14.16% interest in Burey Gold Limited (“Burey”), an ASX-listed junior exploration company holding a portfolio of gold exploration properties in Africa; and (ii) a 13.52% interest in Manas Resources Limited (‘‘Manas’’), an ASX-listed company that owns a portfolio of gold properties in Central Asia that were sold to Manas by Perseus in mid-2008.

As at the date of this report, Perseus has no long term debt obligations. The Company has a commitment to deliver 69,500 ounces of gold at a weighted average gold price of US$1,514/oz under outstanding gold forward sale contracts. (Refer to the section below titled “ Liquidity and Capital Resources ”).

OVERVIEW OF THE MARCH 2015 QUARTER

Summary

Following a strong operating performance in the December 2014 quarter, Perseus has delivered another solid operating performance at Edikan during the Quarter notwithstanding the challenge presented by plant availability being materially reduced by government-imposed power restrictions.

Quarterly gold production totalled 47,450 ounces, a decrease of 2% relative to the December 2014 quarter and an increase of 8% relative to the March 2014 quarter. All-in site costs averaged US$903/oz for the Quarter representing a cost decrease of 11% relative to the previous quarter and 30% less than in the March 2014 quarter. Key production statistics for the Quarter are as shown below in Table 1.

Table 1: Key Production Statistics

Parameter	Unit	March	December	September
		Quarter	Quarter	Quarter
		2015	2014	2014
Total material mined	bcm	1,346,539	1,555,852	1,668,176
	tonnes	3,269,139	4,142,657	4,486,336
Waste to ore strip ratio	bcm:bcm	0.97	1.4	1.9
	tonnes:tonnes	0.97	1.4	1.9
Ore mined
 Oxide	tonnes	-	-	-
 Primary	tonnes	1,658,147	1,725,385	1,547,272
Ore grade mined
 Oxide	g/t gold	-	-	-
 Primary	g/t gold	1.26	1.07	1.15
Ore stockpiles
 Quantity	tonnes	3,880,483	3,606,910	3,462,407
 Grade	g/t gold	0.66	0.61	0.58
Mill throughput	tonnes	1,384,574	1,580,883	1,767,270
Milled head grade	g/t gold	1.21	1.09	1.05
Gold recovery	%	88	87	87
Goldproduced	ounces	47,450	48,487	51,529

Total ore and waste movement of 1,346,539 bank cubic metres (“bcm”) for the Quarter was nearly 13% less than the December 2014 quarter of 1,555,852 bcm. Mill head grade at 1.21 g/t was 11% higher than the December 2014 quarter head grade, while recovery increased by 1% during the Quarter at 88%. The average mill throughput rate of 926 dry tonnes per hour (“dtph”) was nearly 8% higher than the December 2014 quarter of 854 dtph.

Important initiatives implemented during the Quarter that should be beneficial for Edikan in future periods included:

Acquisition of four diesel generators that can produce up to 5.8MW of electricity to address the current power shortage. Edikan was able to draw full power load by April 19, 2015;
Finalisation of the Eastern Pits mining contract at mining rates, that along with the mining rates contracted in the December 2014 quarter for the Fobinso Pit, will materially reduce Edikan’s unit mining costs;
Re-optimisation of Edikan’s Life of Mine Plan (“LOMP”) to deliver annual gold production of about 240,000 ounces at a weighted average all in site cost of US$937/oz for the mine’s remaining 8 year life from July 1, 2015.

A positive Feasibility Study was completed for the development of Sissingué. The study forecasts that the SGP is technically viable and economically robust at a gold price of US$1,200/oz. Post Quarter-end, it has been decided to proceed with the development of the SGP subject to the three conditions set out on page 11. Work has begun on arranging funding including a modest amount of third party debt to supplement existing cash reserves.

As at March 31, 2015, Perseus had an available cash balance of $77.8 million (excluding $12.3 million in escrow), plus 3,845 ounces of gold on hand, in the process of being refined or in the Company’s metal account valued on that date at $5.9 million. The combined balance of cash and bullion on hand was $83.7 million.

EGM, Ghana

The EGM is located on the Ayanfuri and Nanankaw mining leases in the Republic of Ghana in West Africa. These mining leases, together with the adjoining exploration license areas of Grumesa, Kwatechi, Dunkwa, Nsuaem, Agyakusu and Nkotumso that are also held by the Company or in which the Company has an interest, cover a total area of about 480 square kilometres.

Mining

During the Quarter, mining occurred in Stages 2 and 3 of the AG pit, as well as in Stage 3 of the Fobinso pit, both of which are located on the western side of the Edikan mining leases, adjacent to the processing plant.

A total of 1,346,539bcm of ore and waste was mined during the Quarter, nearly 13% less than in the December 2014 quarter. The reduction in mining rates is consistent with the Company’s mine plan. Ore made up the majority of material movements from both Stages 2 and 3 of the AG Pit. Relatively little waste remains to be removed as mining advances towards designed pit floors of the AG pit. Waste stripping of the final cutback of the Fobinso pit has progressively increased during the Quarter as equipment operated by mining contractor, Rocksure International Ltd (“Rocksure”), has been progressively mobilised.

Ore mined during the Quarter included 1,658,147 tonnes of primary ore grading 1.26g/t gold. Ore movements were 4% down on the previous quarter while the grade of ore mined was approximately 18% higher than in the prior quarter, as a higher grade ore zone was accessed towards the bottom of the AG pit.

During the Quarter, ore stockpiles that include both high and low grade ore (but not mineralised waste) plus crushed ore, increased by 273,600 tonnes to 3,880,000 tonnes grading 0.66g/t gold. Contained in the stockpile is approximately 82,100 ounces of gold, an increase of 11,400 ounces or 16%, quarter-on-quarter. The increase in stockpiles reflects the surplus of ore mined relative to ore milled during the Quarter. At the end of the Quarter, the ore stockpiles were made up of approximately 15% oxide ore and 85% transitional/primary ore. Approximately 22% of the remaining stockpiled ore is classified as medium/high grade, containing greater than 0.6g/t gold, while 78% of the ore is classified as low grade containing 0.4 to 0.6g/t gold.

Eastern Pits Mining Contract

During the Quarter, tenders received during the December 2014 quarter for the mining of the Eastern Pits (including Fetish, Bokitsi and Chirawewa pits) were thoroughly assessed and negotiations were conducted with a short list of the three lowest bidders. By the end of the Quarter, all substantive terms of a contract to perform the specified work had been agreed with African Mining Services (Ghana) Limited (“AMS”), the mining contractor that has been employed by Edikan since mining started in 2011. Subsequent to the end of the Quarter, all outstanding contractual matters have been resolved and a binding Agreement between AMS and Perseus has been executed.

The contract involves grade control drilling, blast hole drilling, loading and firing, and loading, hauling and dumping of approximately 35Mbcm of ore and waste from the Eastern Pits over a 60 month period commencing on the date that all necessary approvals for mining of the Eastern pits are received from Ghanaian authorities. The prices for the provision of the mining services under the Eastern Pits contract are lower than the rates that apply to AMS’ current mining activities in the AG Pit and when combined with the recently agreed prices for mining of the Fobinso Stage 3 cutback, will result in a material decrease in Edikan’s unit mining costs in coming periods.

Power Restrictions

In early December 2014, the Ghanaian government announced a plan to reduce the amount of power available to Perseus (and other mining companies operating in Ghana) by up to 25% in response to the country’s power shortages. This arrangement remained in place until late January 2015, during which time the impact of the reduced power availability on Perseus’s gold production was minimal as a result of the use of an existing standby generator to supplement power drawn from the national grid. In late January 2015, the government increased the amount of compulsory load shedding required of mining companies to 33% of normal base load power draw and introduced a roster which temporarily permitted Edikan to draw power for only four days out of every six.

In response to the new government initiative, Perseus purchased four new Caterpillar diesel driven generators that can produce up to 5.8MW of power to substantially increase the on-site power generating capacity at Edikan. The equipment, that was purchased from Mantrac Ghana Limited, and associated infrastructure cost approximately US$3.3

million (including taxes) and was operational by late April 2015.

The additional on-site power generating capacity has ensured that the Edikan processing plant can operate unimpeded by power disruptions from April 19, 2015, based on the current power restrictions. The net incremental cost of generating power using the diesel-fired generators is estimated to be in the order of US$35/oz more than using grid power (assuming it is available) which represents approximately 3.5% of the year to date all in site cost per ounce.

Processing

As a result of the power rationing referred to above, sufficient quantities of grid electricity was available to Edikan to power the processing facility for only 66% of the time for the last two months of the Quarter. Notwithstanding this restriction, Edikan’s processing performance has been very strong on the days when full power draw was available and as a result overall quarterly processing performance is considered to be quite reasonable by the following key operating parameters:

Table 2: Plant Performance Statistics

	March 2015	December 2014	September 2014
	Quarter	Quarter	Quarter
Crusher
Run time (%)	49	56	54
Hourly throughput rate (wmt)	1,112	1,130	1,275
Oxide Circuit
Run time (%)	53	66	76
Hourly throughput rate (t)	118	142	133
SAG Mill
Run time (%)	69	84	86
Hourly throughput rate (dmt)	926	854	926
Gold recoveryrate(%)	88	87	87

Due to power restrictions, the SAG Mill could only be operated on 69 days out of a possible 90 days during the Quarter, giving an availability of 76.7%. During this available run time, the plant was operated for 90% (or 93% after taking into account a period of scheduled downtime for a planned mill reline) giving a total actual utilisation of 69%. Hourly throughput rates increased quarter-on-quarter by 8% to 926dtph. This equates to an annualised throughput rate of 7.4Mt at the targeted runtime of 92%.

The recent trend of incrementally improving gold recoveries continued during the Quarter, helped in particular by improved recoveries in the gravity circuit as illustrated by the month of March 2015, when recoveries averaging 89% were achieved. This was a very satisfactory performance given the frequent interruptions to power supply and the subsequent instability that this creates in the processing circuit.

During the Quarter, the weighted average head grade of ore processed also increased relative to the prior quarter by 11% from 1.09g/t gold to 1.21g/t gold. The average blend of processed ore was 90% fresh ore grading 1.28g/t and 10% oxide ore at 0.4g/t gold.

Under the circumstances, the resulting gold production for the Quarter of 47,450 ounces compares very favourably with the December 2014 quarter when 2% more gold or 48,487 ounces was produced.

Production Costs

The all-in site unit cash costs for the Quarter (including production, royalties, investment in pre-stripping and inventory, development and sustaining capital) totalled US$903/oz, approximately 11% less than in the prior quarter. The 11% quarter-on-quarter decrease in unit costs occurred notwithstanding the 2% decrease in gold production discussed above, reflecting a material decrease in the cost base.

Year to date, all-in site unit cash costs have averaged US$960/oz which is materially (13%) below the midpoint of guided range for all-in site costs for FY2015 of US$1,075-1,125/oz. Achievement of cost guidance for the six and twelve months to June 30, 2015 appears likely in the absence of any major issues emerging in the June 2015 quarter.

As in the December 2014 quarter, approximately 44% of the EGM’s total production costs during the Quarter were incurred by the mining department while a further 43% was incurred by processing and maintenance with the balance by general and administration functions. Unit costs in each of these areas were as follows:

Table 3: Unit Costs

Table 3: Unit Costs
Unit Cost	March 2015	December 2014	September 2014
	Quarter	Quarter	Quarter
Mining1US$/t mined	4.59	4.65	4.61
Processing US$/t milled	10.77	11.89	9.83
G & A US$/month	1.49	2.04	1.46

Notes:

Unit mining cost includes the cost of mining as charged by the mining contractor plus overheads (including but not limited to staff costs) incurred by Perseus’s mining department.

During the period, the total tonnage of ore and waste moved decreased by 21%, however unit mining costs also decreased by 1% as a result of cost savings in mining rates for the Fobinso pit, the decrease in the cost of diesel fuel, shorter hauls to waste dumps and lower blasting costs.

Unit processing and maintenance costs decreased quarter-on-quarter by US$1.12/t milled or 9%, notwithstanding a 12% decrease in the number of tonnes of ore processed. To some extent this reflects a reversal of the abnormally high processing costs (particularly in the maintenance area) that occurred in the prior quarter but more importantly, it also reflects a number of cost savings that have been achieved by the processing department during the Quarter. These savings were achieved through more efficient use of contractors and consultants as well as renegotiating supply deals for a number of key consumable items.

Expenditure on sustaining capital remained relatively low during the Quarter at US$79/oz. This is expected to increase when construction work begins to accelerate on the relocation housing project, required to provide mining access to some of the Eastern Pits. This construction work will not commence until all approvals required to mine the Eastern Pits are granted to Edikan by the regulatory authorities.

Table 4: Key Quarterly Financial Statistics - EGM

Parameter	Units	March Quarter	December	September	June
		2015	Quarter 2014	Quarter 2014	Quarter 2014
Gold produced	ounces	47,450	48,487	51,529	42,543
Total gold sales1	ounces	48,936	46,666	49,703	45,767
Average sales price	US$/oz of gold sold	1,375	1,283	1,330	1,333
Mining cost	US$/t material mined	4.59	4.65	4.61	4.49
Processing cost	US$/t ore milled	10.77	11.89	9.83	11.80
G & A cost	US$M/month	1.49	2.04	1.46	1.45
All-In Site Cash Cost
Gold Production Cost:
Cash Cost	US$/oz	744	861	863	1,150
Royalties	US$/oz	100	66	88	82
Total production cost	US$/oz	844	927	951	1,232
Capital Costs:
Inventory and Stripping	US$/oz	(20)	34	(40)	23
Other Capital	US$/oz	79	58	48	69
Total capital cost	US$/oz	59	92	8	92
Total All-InSite Cost	US$/oz	903	1,019	959	1,324

Notes:

A gold sale is recognised in Perseus’s accounts when the Company’s contracted gold refiner, Rand Refineries Limited, takes delivery of gold in the EGM gold room. For accounting purposes, the sales price is the spot price of gold on the day of transfer and subsequently adjusted to reflect the realised gold price.

Based on the above, Edikan is on track to achieve or exceed revised gold production and cost guidance for the June 2015 Half Year of 100-110,000 ounces at an all-in site cost of US$1,150-1,250/oz.

Table 5: Quarter-on-Quarter Changes in Site Costs

Cost	Quarter-on-Quarter	Quarter-on-Quarter	Change in:
	Volume	Unit costs	Total Costs
Mining	-21.0%	-1.0%	-22.0%
Processing	-12.0%	-9.0%	-21.0%
Cash Production costs	-2.0%	-14.0%	-15.0%
Sustaining & Other Capital	-2.0%	-36.0%	-37.0%
All-in Site Costs	-2.0%	-11.0%	-13.0%

Gold Sales and Price Hedging

Of the 48,936 ounces of gold sold during the Quarter at a weighted average delivered price of US$1,375/oz (December 2014 quarter: US$1,283/oz), a total of 18,500 ounces were delivered into forward sales contracts at an average price of US$1,600/oz with the remaining gold sales occurring at prevailing spot or spot deferred prices.

As at March 31, 2015, the Company’s gold price hedging position included 69,500 ounces of gold deliverable up to and including December 31, 2015 at a weighted average price of US$1,514/oz.

The total hedge position was “in the money” to the extent of $29.7 million (US$22.8 million) as at March 31, 2015. In the June 2015 quarter, 18,500 ounces of gold are scheduled to be delivered at an average price of US$1,600/oz under the Company’s hedge programme.

Third Party Debt

Perseus remained debt free during the Quarter. Trade creditors and accruals that will be paid in the ordinary course of business totalled $40.4 million at March 31, 2015, an increase of $5.4 million during the Quarter.

Updated Mineral Resources

An updated Mineral Resource estimate for Edikan has been prepared by independent consultant, RungePincockMinarco (“RPM”) in accordance with the JORC Code – 2012 Edition. This estimate is based on the May 1, 2014 Mineral Resource estimate prepared by RPM amended for mining depletion to January 31, 2015 in the case of the AF Gap and Fobinso pits. It was also updated to include in-fill drilling results returned from a recent drilling campaign on the Mampong mineral deposit.

Refer to Perseus’s News Release dated April 20, 2015 for full details of the updated Mineral Resource.

In summary, the updated global Measured and Indicated Mineral Resource estimate for Edikan is now estimated as 149.5Mt grading 1.1g/t gold, containing 5,246k ounces of gold. A further 68.1Mt of material grading 1.0g/t gold and containing a further 2,165k ounces of gold are classified as an Inferred Mineral Resource. Details of the estimates are shown in Table 6.

Table 6: Mineral Resources[1,2,3] , Edikan Gold Mine

Deposit	Measured Resources Quantity Grade Gold Mtg/t gold Kozs	Indicated Resources Quantity Grade Gold Mtg/t gold Kozs	Measured + Indicated Resources Quantity Grade Gold Mt g/t gold Kozs	Inferred Resources Quantity Grade Gold Mtg/t gold Kozs
AAF Bokitsi Fetish Chirawewa Dadieso Esuajah North Esuajah South Mampong	30.8 1.1 1,080 0.7 3.7 86 12.7 0.9 380 - - - - - - 16.9 0.9 494 9.5 1.8 546 0.2 0.9 6	23.8 0.9 680 1.6 2.6 133 18.1 1.2 663 5.8 1.1 195 - - - 18.4 0.8 493 7.3 1.6 370 3.7 1.0 122	54.6 1.0 1,760 2.3 2.9 219 30.8 1.1 1,043 5.8 1.1 195 - - - 35.3 0.9 986 16.8 1.7 916 3.9 1.0 128	28.5 0.8 731 2.9 1.8 170 10.0 1.1 346 10.4 0.9 284 5.3 1.5 253 3.6 0.9 105 5.7 1.1 211 2.0 1.0 67
Total	70.8 1.1 2,591	78.7 1.0 2,654	149.5 1.1 5,246	68.1 1.0 2,165

Notes:

Based on May 1, 2014 Mineral Resource estimate as amended for mining depletion and results of in-fill drilling.
Last updated on March 15, 2015 allowing for mining depletion to January 31, 2015.
0.4g/t gold cut-off applied.

Updated Mineral Reserves

Based on the re-estimated Mineral Resources, pit optimisation and scheduling, RPM also independently calculated the Mineral Reserves for Edikan as at January 31, 2015 in accordance with the requirements of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2012 Edition).

Refer to Perseus’s News Release dated April 20, 2015 for full details of the updated Mineral Reserves.

In summary, the updated Proved and Probable Mineral Reserves for Edikan are now estimated as 61.6Mt grading 1.2g/t gold, containing 2,349k ounces of gold including 44.2Mt of ore grading 1.2g/t gold and containing 1,659k ounces of gold in the Proved category and a further 17.3Mt of ore grading 1.2g/t gold containing 0.690k ounces of gold classified as Probable Mineral Reserves. Details of these estimates are shown in Table 7.

Table 7: EGM Proved and Probable Mineral Reserves as at February 1, 2015

Deposit	Proved Reserves Quantity Grade Gold Mt g/t gold Kozs	Probable Reserve Quantity Grade Gold Mt g/t gold Kozs	Proved + Probable Reserves Quantity Grade Gold Mt g/t gold Kozs
AAF Fobinso Fetish Esuajah North Esuajah South Chirawewa Bokitsi Stockpile	11.5 1.2 449 3.5 1.3 146 8.6 1.0 268 10.5 1.0 326 5.7 1.8 319 - - - 0.8 3.3 80 3.6 0.6 72	1.6 0.8 42 0.2 1.1 8 8.6 1.4 381 3.5 0.9 105 0.9 1.8 53 2.4 1.2 95 0.1 2.8 7 - - -	13.1 1.2 491 3.7 1.3 153 17.3 1.2 649 14.0 1.0 431 6.6 1.8 372 2.4 1.2 95 0.9 3.2 87 3.6 0.6 72
Total	44.2 1.2 1,659	17.3 1.2 690	61.6 1.2 2,349

Notes:

Estimate has been rounded to reflect accuracy
All the estimates are on a dry tonne basis
Based on January 2015 Mineral Resource estimation
Variable gold cut-off grade based on material type
Inferred Mineral Resource is treated as mineralised waste
Calculated in March 2015 and allows for mining depletion up to and including January 31, 2015
The boundary between Mineral Reserves included in the Fetish and Bokitsi pits has been modified since calculation of the July 2014 Mineral Reserve.

Updated Life of Mine Plan

Based on the Mineral Reserves stated above, the updated life of mine production profile for Edikan is forecast as shown in Table 8 below. In summary, in the eight years of production between FY2016 and FY2023 inclusive, annual gold production will average approximately 240,000 ounces at weighted average approximate all-in site cost of US$937/oz. Compared to the October 2013 LOMP (adjusted for mining depletion to January 31, 2015), the updated LOMP results in the following changes to physical parameters:

Tonnes of ore and waste moved - Up by 4%
• Tonnes of ore - Down by 18% • Life of mine strip ratio - Up by 1.3 to 4.0 • Head grade - Up by 8% • Contained gold in Mineral Reserve - Down by 10% • Life of mine - Reduced by 14 months to July 2023

The forecast unit all-in site cash costs for the EGM’s LOMP are also as shown in Table 8 below. It should be noted that these costs differ marginally from the input costs used in the calculation of the Mineral Reserve and reflect actual cost reductions achieved plus cost reductions expected to be realised from recently implemented initiatives at the EGM in the period between the commencement of calculation of Mineral Reserves and finalisation of pit optimisations.

These estimated unit costs are based on the following assumptions:

The weighted average life of mine mining cost assumed in the LOMP is US$3.33/t of material moved. Mining costs include the cash cost of mining both ore and waste (including all waste stripping costs) during the period. The weighted average mining cost is based on the following:
a. AG Pit – For Stages 2 and 3 of the pit, costs are contracted rates negotiated in November 2009 with mining contractor AMS, adjusted for historical rise and fall factors. The costs for mining the Final Stage of the AG Pit are based on recently negotiated rates for mining the Final Stage of the Fobinso Pit.
b. Fobinso Pit – un-escalated contracted rates negotiated in September 2014 with mining contractor, Rocksure.
c. Fetish, Bokitsi, and Chirawewa (the “Eastern Pits”) - un-escalated contracted rates for mining the negotiated in March 2015 with mining contractor, AMS.
d. Esuajah North and Esuajah South - mining rates are based on recently negotiated rates for mining the Eastern Pits.
Un-escalated unit processing costs are assumed to be US$9.03/t of ore processed plus a further US$0.04/t of ore processed for billion transport and refining costs.
An un-escalated General and Administration unit cost of US$2.48/t of ore processed has been assumed for the remaining years of the mine.

Royalty is based on a US$1,200/oz gold price and assumes a 5% royalty paid to the Ghanaian government, a 1.5% royalty payable to Franco Nevada and a 0.25% royalty payable to Waratah Investments Ltd.
Sustaining capital expenditure is estimated at US$108.0 million (un-escalated) over the remaining life of mine.

The largest items of forecast capital expenditure relate to the total costs of gaining access to areas for mining within the existing Mining Lease boundary. Under Ghanaian laws, Perseus is required to compensate landowners for loss of crops, structures and livelihood as well as provide alternative housing built to the rigorous building standards specified in relevant legislation. In addition, where infrastructure such as roads is located within a blast radius of 500 metres from a planned open pit, the infrastructure needs to be relocated. In the case of the Esuajah South pit, this involves the relocation of several roads as well as a number of dwellings. In total, access costs accounts for approximately 64% of the total estimated sustaining capital required to be spent during the remaining 8 years of mine life.

The use of underground mining techniques to mine the Esuajah South Mineral Resource (and therefore minimise disruption to existing land use and the need for housing and infrastructure relocation) has been investigated, however, this is not an economic proposition at the current gold price. Notwithstanding the relatively high estimated cost of gaining access to the Esuajah South mine area, the economics of developing an open pit mining operation and processing the ore are incrementally positive, and therefore development of this pit has been included in the LOMP schedule. Investigation of further underground mining options is being considered.

The sustaining capital cost estimate includes the cost of site rehabilitation net of equipment salvage value in the final year of the mine.

Table 8: LOMP Production and Costs

Parameter		FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 Total
PRODUCTION Ore mined Waste mined Total material mined Strip ratio Unit mining costs Ore processed Head grade Recovery Gold production COSTS Unit mining costs Unit processing costs1 Unit G&A costs Production cash costs2 Royalties Sustaining capital costs3 Total all-in site cash cost Sustaining Capital3 Access to all mining areas Mining infrastructure Processing infrastructure G&A sustaining Reclamation & Closure Total sustaining capital	Mt Mt Mt t:t US$/t mined Mt g/t gold % kozs US$/t milled US$/t milled US$/t milled US$/oz US$/oz US$/oz US$/oz US$ million US$ million US$ million US$ million US$ million US$ million	5.4 6.8 10.7 10.4 7.1 6.8 6.2 0.4 - 53.8 27.2 39.1 41.4 48.4 37.2 21.6 5.5 0.1 - 220.5 32.6 45.9 52.1 58.8 44.3 28.4 11.7 0.5 - 274.3 5.0 5.8 3.9 4.7 5.2 3.2 0.9 0.3 - 4.1 3.26 3 3.31 3.14 3.37 3.57 4.37 6.26 - 3.3 7.3 7.2 7.3 7.1 6.9 6.8 6.8 6.8 0.5 56.7 1.1 1.1 1.2 1.3 1.6 1.3 1.4 0.7 0.7 1.2 85.0 89.2 90.5 91 89.7 90.2 91.1 90.3 80.2 89.7 208 222 245 275 312 258 286 129 9 1,944 3.26 3.00 3.31 3.14 3.37 3.57 4.37 6.26 - 3.33 8.99 8.95 8.99 9.02 9.37 9.35 9.41 8.33 7.63 9.04 2.66 2.66 2.64 2.70 2.79 2.84 2.12 1.36 0.65 2.48 916 998 1,048 973 745 711 453 531 485 800 88 82 81 81 81 81 81 81 81 82 158 74 192 7 7 2 11 1 404 56 1,162 1,155 1,321 1,062 833 795 545 613 970 937 10.616 14.057 45.204 - - - - - - 69.877 3.925 - - - 0.500 - - - - 4.425 17.850 1.956 1.374 1.535 0.750 0.100 0.100 0.100 0.100 23.865 0.500 0.500 0.500 0.500 0.500 0.500 - - - 3.00 - - - - 0.466 0.031 3.156 0.000 3.498 7.151 32.891 16.513 47.078 2.035 2.216 0.631 3.256 0.100 3.598 108.32

Notes:

Excludes cost of transporting and refining bullion at $0.04/oz.
Includes mining (incl. all waste stripping), processing, general and administration cash costs
Sustaining capital includes access costs comprising the cost of all forms of compensation to be paid to landholders, acquisition of land for relocation housing, and development costs for relocation housing including civil works, house construction and project management, plus other processing, mining and G&A infrastructure.

Investment Metrics

Based on the life of mine production and cost parameters, the investment metrics as expressed by the Net Present Value of cash flows forecast to be generated by the Edikan Mine at a range of gold prices and applying a range of real discount rates are as follows:

Table 9: Net present value (US$ million) of Edikan’s forecast cashflows

US$1,100/oz	Gold Price US$1,200/oz	US$1,300/oz
226 206 189	324 300 278	419 389 363

Revised Production and Cost Guidance

During the Quarter, Perseus revised its production guidance for the six months and twelve months ending June 30, 2015. The updated LOMP has confirmed that the production and cost guidance shown below in Table 10 remains unchanged.

Table 10: FY 2015 Revised Production and Cost Guidance

Parameter	Units	December 2014 Half Year1	June 2015 Half Year	FY2015
Gold Production All-InSite Cash Costs	Ounces US$/oz	100,016 988	100,000-110,000 1,150-1,250	200,000-210,000 1,075-1,125

Notes: 1. Actual production and costs

SGP – Côte d’Ivoire

The SGP is located in the north of Côte d’Ivoire and is situated within an 885sq km land package consisting of the SGP exploitation permit area and the adjoining Tengréla South exploration permit area. The permits are located along a structural/stratigraphic corridor within the Syama-Boundiali greenstone belt approximately 150km south-southeast of the Morila gold mine (7.0 million ounces) in Mali and 65km west northwest of Randgold’s Tongon deposit (4.3 million ounces) in Côte d’Ivoire.

Project Development

In the December 2014 quarter, Lycopodium Minerals Pty Ltd, an internationally recognised engineering and project management consultancy, was appointed to prepare a RFS for the development of the SGP. The RFS was intended to not only reflect the preferred processing flow sheet, but also update where necessary, all assumptions on mining, processing and various service functions associated with the project.

The RFS was completed during the course of the Quarter and the results were published on April 21, 2015. (Refer to Perseus’s News Release of this date for details.) In summary, the key technical, commercial and investment parameters associated with the proposed mine development, are summarised in Table 12 and 13 below. The LOMP for the SGP is presented in more detail in Table 14.

Based on the life of mine production and cost parameters, the Net Present Values of cash flows forecast to be generated by the SGP at a range of gold prices and applying a range of real discount rates are as follows:

Table 11: Net present value (US$ million) of the SGP’s forecast cashflows

Real Discount Rate (%)	US$1,100/oz	Gold Price US$1,200/oz	US$1,300/oz
6.50 8.25 10.00	40.7 33.2 26.8	70.0 60.8 52.5	97.2 86.5 76.8

Other critical investment metrics include:

Table 12: Key Investment Parameters

able 12: Key Investment Parameters
Investment Parameters1	Units	Amount
Gross Cash flow	[US$ million]	208.4
Net cash flow2	[US$ million]	112.4
Average annual cash flow (years 1-5)	[US$ million]	41.7
Payback period	[months]	32
Net Cash flow tail	[months]	31
Ungeared Internal Rate of Return (IRR)3	[%]	27.0
Gross Cash Flow : Development Capital	[$:$]	2.0
Net Cash Flow: Development Capital	[$:$]	1.0
Net Present Value: Development Capital	[$:$]	0.5

Notes:

Assumes flat gold price of US$1,200/oz over the 5.25 year mine life;
Net of development capital and all taxes including corporate tax;
Stated in real terms (i.e. not notional)

Table 13: Key Technical and Commercial Parameters

Key Parameters Units Amount	Key Parameters	Amount
Measured and Inferred Mineral Resources Quantity [Mt] 16 Grade [g/t] 1.7 Contained gold [kozs] 880 Proved and Probable Mineral Reserves Quantity [Mt] 5.5 Grade [g/t] 2.4 Contained gold [kozs] 429 Mining Ore Mined [Mt] 5.5 Waste mined [Mt] 17.7 Total material mined [Mt] 23.2 Waste: Ore strip ratio [t:t] 3.2 Processing Ore Processing Rates Oxide ore [Mt/y] 1.2 Primary ore - granite [Mt/y] 1.0 Primary ore - porphyry [Mt/y] 1.0 Primary ore - sediment [Mt/y] 0.9 Processing Period [months] 63 Tonnes milled [Mt] 5.5 Average head grade [g/t] 2.4 Contained gold [koz] 429 Average recovery [%] 90 Recovered gold - total [koz] 385 Recoveredgold – Averageyears 1-5 [koz] 75	Capital Costs3 Development capital [US$ million] 106 Sustaining capital [US$ million] 5.2 Sustaining capital [US$/oz] 14 Unit Costs3 Operating Costs Mining [US$/t] 3.7 Processing [US$/t] 16.75 G & A [US$/t] 7.7 Mining [US$/oz] 223 Processing [US$/oz] 233 Bullion transport and refining [US$/oz] 3 G & A [US$/oz] 110 Royalties [US$/oz] 49 Sustaining Capex [US$/oz] 14 AISC [US$/oz] 632 Revenue Gold Sales [koz] 385 Average Price2 [US$/oz] 1,200
Notes: 1. All metrics represent 100% of Project. 2. Assumes flat gold price of US$1,200/oz over the 5.25 year mine life. 3. All costs shown exclude allowances for inflation. Table 14: SGP LOMP Production and Costs
Parameter Year-1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6		Total
PRODUCTION Ore mined Mt 1.7 1.0 1.8 0.7 0.6 1.2 - Waste mined Mt 2.3 5.0 4.2 3.9 1.8 0.5 - Total Material Mined Mt 4.0 6.0 6.0 4.6 2.4 1.7 - Strip ratio t:t 1.4 4.8 2.3 5.3 2.9 0.5 - Ore processed Mt - 1.1 1.1 1.1 1.1 1.0 0.2 Head grade g/t gold - 2.0 2.6 2.0 2.4 3.2 1.6 Recovery % - 91.7 90.3 89.2 90.7 88.6 77.7 Gold production kozs - 66.8 81.6 60.7 74.5 93.2 8.1 COSTS Unit mining costs US$/t mined - 3.18 3.31 4.07 6.35 7.61 - Unit processing costs US$/t milled - 13.85 17.06 16.85 16.94 18.46 20.78 Annual G&A costs US$M - 8.2 8.3 8.2 8.2 7.8 1.8 Production cash costs1 US$/oz - 635 565 731 550 422 775 Royalties2 US$/oz - 49 49 49 49 49 49 Sustainingcapital costs US$/oz - 3 7 6 15 6 302		5.5 17.7 23.2 3.2 5.5 2.4 89.7 385.2 3.70 16.75 42.6 569 49 14
Total all-in site cash cost US$/oz - 687 621 786 614 477 1,126 Development Capital - Construction Indirects US$ million 9.0 - - - - - - - Treatment Plant Costs US$ million 24.5 - - - - - - - Reagents & Plant Services US$ million 9.6 - - - - - - - Infrastructure US$ million 25.6 - - - - - - - Mining US$ million 11.9 - - - - - - - Management Costs US$ million 9.7 - - - - - - - Owners project Costs US$ million 12.9 - - - - - - - Owners Operations Costs US$million 2.8 - - - - - -		632 9.0 24.5 9.6 25.6 11.9 9.7 12.9 2.8
Total Development Capital US$ million 106.0 - - - - - -		106.0

Notes:

Includes mining (incl. all waste stripping), processing, general and administration cash costs
Assumes US$1,200/oz gold price

Project Implementation

Subsequent to the end of the Quarter, the Board of Directors approved the Company’s plans to advance the implementation of the development of the SGP. Prior to full scale commitment to the development, the following tasks will be completed:

Finalisation of a funding package of US$106.0 million to satisfy the capital development requirements of the mine development. It is anticipated that a proportion of the funding will be provided by debt financiers with the balance of funds required being drawn from Perseus’s existing cash reserves. Management is currently working with advisers on designing the optimum debt/equity funding mix and funding structure taking into account competing uses of capital from within the Company. The Company has conducted a range of discussions with potential financiers and expects to formally approach the debt market during the course of the June 2015 quarter with a view to finalising finance by the September 2015 quarter;
Finalising a Mining Convention with the Ivorian Government. Material changes were made to the Ivorian Mining Code in May 2014 including the right of companies to enter into a Mining Convention with the Republic of Côte d’Ivoire in which the conditions governing the development and operation of the mine are prescribed and guaranteed for the life of the mine. Perseus has been in discussion with the Ivorian government on the terms of a Mining Convention for several months and outstanding matters will need to be agreed to the satisfaction of both parties; and
Formulation of detailed engineering design work and a Project Implementation Plan including the recruitment of key development and operating staff that will be responsible for implementing both project development and then operations. Systems, policies and procedures developed for Edikan in Ghana will be adapted for use in Côte d’Ivoire.

SGP Mineral Resource Estimate

In October 2014, independent mining industry consultant, Snowden Mining Industry Consultants (“Snowden”) was commissioned by Perseus to estimate Mineral Resources at the SGP deposit. The Resource estimate was prepared in accordance with the 2012 Australian Code for Reporting of Mineral Resources and Ore Reserves (“JORC Code 2012”). The Mineral Resource estimate is summarised in the following table that reports the Resources by category and area, above a 0.6 g/t gold cut-off grade. The classification categories of Inferred, Indicated and Measured under the JORC Code 2012 are equivalent to the CIM categories of the same name (CIM, 2014).

In summary, the updated global Measured and Indicated Mineral Resource for the SGP is now estimated as 16.0Mt grading 1.7g/t gold, containing 880k ounces of gold. A further 1.1Mt of material grading 1.7g/t gold and containing a further 63k ounces of gold are classified as Inferred Mineral Resources. Details of these estimates are shown below in Table 15.

Table 15: M&I Mineral Resources – SGP[1]

Ore type	Measured Resources	Measured Resources	Indicated Resources	Indicated Resources	Measured + Indicated Resources	Measured + Indicated Resources
	Quantity Mt Grade g/t gold	Gold Ounces	Quantity Mt Grade g/t gold	Gold Ounces	Quantity Mt Grade g/t gold	Gold Ounces
Oxide Transition Primary	1.0 1.8 0.6 2.3 3.2 2.5	59,000 49,000 260,000	3.1 1.3 0.8 1.5 7.1 1.5	130,000 38,000 350,000	4.1 1.4 1.4 1.9 10.0 1.8	190,000 87,000 600,000
Total	4.8 2.4	370,000	11.0 1.4	510,000	16.0 1.7	880,000

Notes:

Mineral Resources are inclusive of Mineral Reserves.
Mineral Resources are reported to two significant figures.
Rounding may cause minor discrepancies in the table.
Oxide includes small portions of laterite.

Table 16: Inferred Mineral Resources – SGP[1]

Ore type	Inferred Resources	Inferred Resources
	Quantity Mt Grade g/t gold	Gold Ounces
Oxide Transition Primary	0.3 1.2 0.1 1.2 0.8 2.0	12,000 2,100 49,000
Total	1.1 1.7	63,000

Notes:

Rounding may cause minor discrepancies in the table.
Oxide includes small portions of laterite.

SGP Mineral Reserve Estimate

RPM was commissioned by Perseus to complete a mining study and a subsequent independent estimate of the open cut Mineral Reserves for the SGP. The Mineral Reserve Statement estimates the Mineral Reserves as at February 1, 2015 and has been undertaken in compliance with the requirements of the reporting guidelines of the JORC Code 2012.

A total of 5.5 Mt of open cut Mineral Reserves grading 2.4g/t gold were estimated for the SGP as at February 1, 2015 classified as follows in Table 17:

Table 17: Mineral Reserves - SGP

Ore type	Proved Reserves	Proved Reserves	Probable Reserves	Probable Reserves	Proved & Probable	Reserves
	Quantity Mt Grade g/t gold	Gold ‘000 oz	Quantity Mt Grade g/t gold	Gold ‘000 oz	Quantity Mt Grade g/t gold	Gold ‘000 oz
Oxide/Transition Primary	1.4 2.2 2.0 3.3	97 215	1.4 1.4 0.7 2.3	61 54	2.8 1.8 2.7 3.1	159 270
Total	3.4 2.8	312	2.1 1.7	115	5.5 2.4	429

Note: Rounding may cause minor mathematical discrepancies in the table.

The calculation of the Mineral Reserves for the SGP was based on the following economic assumptions:

Gold metal price US$1,200/oz. 2. A discount rate of 10% (real) has been assumed to calculate net present values of forecast cash flows unless specified otherwise.
Un-escalated average costs used in optimising pit designs included:

Exploration

Chirawewa Deposit – EGM, Ghana

During the Quarter, US$0.842 million was spent on exploration activities in Ghana at the EGM including completion of a resource in-fill drilling programme on the Chirawewa deposit.

Drilling Highlights

CHRC333	-	2m at 78.8g/tAu from 26m
CHRC335	-	29m at 6.5g/tAu from 15m including 7m at 18.7g/t Au from 28m
CHRC338	-	20m at 4.4g/tAu from 80m including 6m at 8.0g/t from 80m
CHRC339	-	24m at 3.6g/tAu from 50m
CHRC344	-	10m at 5.9g/tAu from surface including 3m at 13.4g/t Au from 3m
CHRC351	-	30m at 3.1g/tAu from 2m
CHRC356	-	22m at 2.9g/tAu from 8m including 5m at 5.7g/t Au from 15m
CHRC366	-	6m at 23.5 g/tAu from surface including 2m at 63.9 g/t Au from 2m
CHRC367	-	17m at 4.7 g/tAu from 10m including 6m at 9.3g/t Au from 10m
CHRDD010	-	35m at 2.6g/tAu from 24m including 2m at 13.7g/t Au from 30m

The Chirawewa deposit, the eastern-most deposit at Edikan, is similar to the other granite hosted deposits on the mining leases, although several sub-parallel mineralized granitic intrusives are present and ore grade mineralization also occurs within intervening meta-sediments. Additionally, narrow high grade mineralization is present within a carbonaceous

sediment-hosted shear zone along the western flank of the granitic intrusives.

The Chirawewa deposit was partially mined by Ashanti Gold Corporation (“AGC”), the previous owners of the mining leases on which Edikan is located. As a result of the flooding of the old oxide pit following cessation of AGC’s operations, limited drilling was possible to test mineralisation directly below the old pit floor. The old pit was recently dewatered and a Resource infill drilling program undertaken from within the old pit. Drilling was conducted at 40m hole spacing along 20m spaced lines across the strike extent of the deposit.

The Chirawewa deposit currently hosts an Indicated Mineral Resource of 195,000 ounces at 1.1g/t gold plus an Inferred Mineral Resource of 284,000 ounces at 0.9g/t gold. The recently completed drilling program consisting of forty-two holes for a total of 2,656m is expected to upgrade a portion of the Inferred Mineral Resource to the Indicated category and potentially incrementally improve the grade of the mineralisation.

Ayanfuri Heap-leach Pads – EGM, Ghana

A program of drilling and metallurgical testing commenced on the old heap-leach pads from Cluff Resources-AGC’s Ayanfuri oxide heap-leach operation which ran from 1994 to 2001. The program is intended to evaluate if the leach pads contain significant zones of ore-grade material which may process with acceptable recovery in the Edikan plant. The leach pads are located 3 kilometres to the east of the Edikan plant site.

One hundred and seventy-one air core (“AC”) holes and one reverse circulation (“RC”) hole for a total of 4,085 meters were drilled during the period covering approximately 30% of the area of the leach pads. Holes were drilled vertically to average depths of 25 meters, to just below the bottom of the leach pads, and were spaced 20 metres apart. Assays results are pending. If the results indicate a mineable resource above ore grade cut-off might be present in the leach pads, the drilling program will expanded.

Sissingué Exploitation Permit – SGP, Côte d’Ivoire

During the Quarter, a total of US$0.115 million was spent by Perseus on exploration activities on the Sissingué Exploitation Permit in Côte d’Ivoire.

A program of rotary air blast (“RAB”) drilling in follow-up to an auger drilling campaign which was partially completed along the Papara-Sissingué-Kanakono mineralised corridor late last year was recommenced in March with 87 holes for 3,258m drilled. The auger drilling was intended to investigate areas of weak gold in soil response and areas not covered by soil sampling due to weak lag gold geochemistry along the principal mineralised structural corridor on the Sissingué permit, and accordingly never drill tested. The lack of gold in soils may be related to masking by transported barren regolith, rather than the absence of in-situ mineralisation. The aim of the auger and RAB drilling program is to identify near mine satellite mineralisation which may contribute to the SGP’s Mineral Reserve and mine life.

A number of significant auger anomalies were returned last year. Many are single point anomalies however several clusters of gold anomalous auger holes may be delineating mineralisation. The current RAB drilling program is systematically testing the more significant auger anomalies for the presence of in-situ mineralisation in the area of the SGP.

A handful of assays from the RAB drilling have been received thus far and are weak. A continuation of the program will depend on the remaining assays pending.

Koutakou, Tangayé, Touya and Barga licences – Burkina Faso

The Koutakou, Tangayé, Touya and Barga licences in north-western Burkina Faso are being explored under an earn-in agreement with unlisted Australian company West African Gold Limited. There was no work conducted on the Burkina Faso licenses during the Quarter.

COMPANY OUTLOOK FOR THE QUARTER ENDING JUNE 30, 2015

Based on current work schedules for the Quarter ending June 30, 2015 the Company provides the following outlook:

Edikan Gold Mine

Produce gold at a total all-in site cash cost that is in line with Half Year guidance;
Continue to fine-tune plant metallurgical performance and maximise SAG mill throughput;
Finalise access arrangements for gaining access to mine the Eastern Pits;
Continue training of operating and maintenance staff;
Complete current drilling programmes to delineate potential higher grade mill feed;
Study the economic viability of purchasing and installing a heavy fuel oil fired power station at Edikan that is capable of generating 100% of Edikan’s power requirements; and
Continue to implement business improvement initiatives across all departments at Edikan.

Sissingué Gold Project

Finalise negotiation of a Mining Convention for the SGP;
Advance the structuring of a financing facility to supplement existing cash resources to fund development of the SGP;
Appoint an EPCM contractor and commence early works on site at the SGP;
Appoint key members of staff needed for the development and operation of the SGP; and
Continue exploration on the Mahalé exploration licence and at the SGP.

OVERALL FINANCIAL PERFORMANCE OF THE COMPANY

The financial performance of the Company will be affected by the operation of the EGM and potential development and future operation of the SGP and GGP as well as ongoing exploration and evaluation activities being conducted on its properties. The financial performance of the Company is closely linked to the gold price following the commencement of commercial production at the EGM and, potentially, the SGP and GGP. 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 entered a number of hedging contracts, including put options and forward sales contracts which are discussed in further detail below under “Financial Instruments and Related Risks”.

The Company reports its financial results in Australian dollars (AUD or $). However, the Company’s costs are currently incurred in several currencies including AUD, United States dollars (USD), Canadian dollars (CAD), Ghanaian Cedis, and CFA francs. Furthermore, for the EGM or any of the Company’s other projects that commence commercial production, metals sales revenue will be denominated in USD. Fluctuations in the rates of exchange between the AUD and the currencies in which the Company transacts business may therefore significantly affect the results of operations of the Company and are discussed further below under “Financial Instruments and Related Risks”.

The exploration, evaluation, development and operation of the Company’s properties may require substantial additional financing. Failure to obtain sufficient financing in the future may result in delay or indefinite postponement of the exploration, evaluation, development or operation 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.

DISCUSSION OF OPERATING RESULTS

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

Operating Results1 for the three	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30
months ended	2015	2014	2014	2014	2014	2013	2013	2013
Total revenue	85.890	70.466	71.702	64.595	64.262	63.373	71.988	69.301
Net profit / (loss) after tax	30.141	18.436	22.731	(12.034)	(16.002)	(6.878)	2.854	10.277
Basicprofit /(loss) per share(cents)	5.44	3.45	4.24	(2.25)	(3.34)	(1.25)	0.41	2.53

1All amounts shown above are in millions of Australian dollars except as otherwise indicated

The operating results for the March 2015 Quarter included revenue earned from the sale of precious metals (March 2015 Quarter: $85.749 million; March 2014 Quarter: $63.398 million) less the cost of the goods sold (March 2015 Quarter: $46.281 million; March 2014 Quarter: $59.345 million). The increase in total revenue, from $70.466 million in the December 2014 Quarter to $85.890 million in the March 2015 Quarter, is a result of higher gold sales (March 2015 Quarter: 48,936 ounces; December 2014 Quarter: 46,666 ounces), an increase in average USD sales prices (March 2015 Quarter: US$1,375/oz; December 2014 Quarter: US$1,283/oz of gold sold) and the depreciation of the AUD relative to the USD during the period.

During the March 2015 Quarter a foreign exchange gain ($14.205 million) was recognised (March 2014 Quarter: loss of $14.243 million) arising from a depreciation of the AUD relative to the USD during the period (March 31, 2015: 0.7691, December 31, 2014: 0.8158).

In addition, the result includes interest revenue (March 2015 Quarter: $0.141 million; March 2014 Quarter: $0.091 million), depreciation and amortisation (March 2015 Quarter: $12.321 million; March 2014 Quarter: $9.374 million), administration and corporate overheads (March 2015 Quarter: $1.288 million; March 2014 Quarter: $1.423 million).

DISCUSSION OF FINANCIAL CONDITION

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

below.
Financial Position1 as at:	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30
	2015	2014	2014	2014	2014	2013	2013	2013
Cash and cash equivalents	77.807	43.087	44.321	36.937	42.510	16.016	23.091	35.480
Total Assets	673.350	627.497	595.114	562.022	594.445	603.192	572.552	590.380
Total Liabilities	107.786	93.511	89.743	95.413	108.485	117.113	105.558	108.536
Net Assets	565.564	533.986	505.371	466.609	485.960	486.059	466.994	481.844

1All amounts shown are in millions of dollars

Total Assets

Total assets have increased during the March 2015 Quarter by $45.853 million (December 2014 Quarter increase of $32.383 million). The March 2015 Quarter increase is due to an increase in current assets of $28.851 million and an increase in non-current assets of $17.002 million. Details of movements in specific accounts follow.

Cash and cash equivalents

At March 31, 2015, the Company had available cash or cash equivalent resources of $77.807 million plus a further $12.279 million of restricted funds on deposit securing environmental obligations. This cash balance represents an increase relative to the position as at December 31, 2014 ($43.087 million plus restricted cash of $11.572 million). The increase in cash reserves of $34.720 million during the March 2015 Quarter is due to an increase in inflows from the sale of gold and silver during the period slightly offset by payments associated with capital work in progress and operation of the EGM, purchase of other fixed assets and payments for exploration and administration activities.

The net increase in cash reserves of $34.720 million during the March 2015 Quarter is discussed in some detail in the ” “Discussion on Cash flows .

Receivables

At March 31, 2015, the Company’s current receivables were $28.229 million (December 31, 2014: $32.982 million) while non-current receivables amounted to $12.279 million (December 31, 2014: $11.572 million). The decrease in current receivables during the March 2015 Quarter relative to the prior Quarter is a result of the timing of gold sales and the receipt of debtor payments. The increase in non-current receivables is due to the effect of the depreciation of the AUD relative to the USD during the period on the restricted funds on deposit.

Inventory

At March 31, 2015, the Company held inventories of $47.895 million (December 31, 2014: $42.735 million). The net increase in inventory during the March 2015 Quarter ($5.160 million) relative to the position at December 31, 2014, is the result of an increase in the high grade ore stockpiles and materials and supplies on hand, slightly offset by a decrease in gold in circuit.

Property, plant and equipment

At March 31, 2015, the Company recognised on its balance sheet a total of $206.460 million for property, plant and equipment (“PP&E”) (December 31, 2014: $199.759 million).

The Company capitalised $4.802 million of expenditure on PP&E during the March 2015 Quarter before expensing depreciation of $3.433 million. In addition, $0.194 million was reclassified from PP&E to mine properties. Due to the appreciation of the USD against AUD, a $5.526 million foreign exchange gain was recorded against PP&E during the March 2015 Quarter as the majority of these assets are recorded in USD in the subsidiary companies’ accounts and are translated into AUD on consolidation.

Mine Properties

At March 31, 2015, the Company recognised mine properties of $216.650 million on its balance sheet (December 31, 2014: $210.913 million). During the March 2015 Quarter, $2.441 million of expenditure of Mine Properties (most of which relates to deferred waste accounting entry) has been capitalised and $8.889 million of amortisation has been expensed. In addition, $0.194 million was reclassified from PP&E to mine properties and the net appreciation of the USD against AUD during the period referred to above gave rise to $11.991 million foreign exchange gain being recorded against mine properties.

Exploration and evaluation expenditure

At March 31, 2015, the Company recognised mineral interest acquisition and exploration expenditure of $43.746 million on its balance sheet (December 31, 2014: $40.931 million).

The Company capitalised $1.458 million of exploration and evaluation expenditure incurred on its Ghanaian and Ivorian exploration tenements during the March 2015 Quarter ($1.341 million in the December 2014 Quarter) before recording a foreign exchange gain of $1.357 million.

Other assets

At March 31, 2015, the Company recognised other assets of $10.586 million on its balance sheet (December 31, 2014: $9.988 million), of which $7.139 million is classified as current and $3.447 million is classified as non-current. The increase in other assets during the March 2015 Quarter is due to a gain on the mark-to-market revaluation of the available for sale financial asset (investment in Manas and Burey) along with the acquisition of shares in Manas during the period, slightly offset by a decrease in prepayments. The decrease in prepayments during the March 2015 Quarter reflects the normal commercial activity associated with the EGM, along with the unwinding of capitalised borrowing costs classified as prepayments.

Derivative financial instruments

As at March 31, 2015, the Company held forward sales contracts for 51,500 ounces of gold and recorded an asset of $27.782 million (December 31, 2014: 70,000 ounces of gold and recorded an asset of $35.477 million) on its balance sheet. The movement in mark-to-market value has been recorded as equity. $27.782 million has been classified as a current asset as these forward contracts settle within twelve months of balance date (December 31, 2014: current asset of $35.477 million; non-current asset of nil). The asset reflects the difference in value of the hedge contracts on the respective balance dates relative to the value of the contracts on the date of inception of hedge accounting.

In addition, the Company held financial assets at fair value through profit and loss in the form of forward sales contracts for 18,000 ounces of gold and recorded an asset of $1.916 million (December 31, 2014: 1,000 ounces of gold and recorded an asset of $0.053 million) on its balance sheet. The movement in mark-to-market value has been recorded in the income statement. $1.916 million has been classified as a current asset as these forward contracts settle within twelve months of balance date (December 31, 2014: current asset of $0.053 million).

Total Liabilities

As at March 31, 2015, the Company had liabilities totalling $107.786 million compared to $93.511 million at December 31, 2014. The changes in total liabilities during the March 2015 Quarter are attributable to increases in current liabilities of $5.404 million and increases in non-current liabilities of $8.871 million. Details of movements in specific accounts follow below.

Payables

During, the March 2015 Quarter amounts owed to creditors, relating mainly to the operation of the EGM, increased to $41.977 million from a total outstanding at December 31, 2014 of $36.573 million.

On a quarter-on-quarter basis, creditors at March 31, 2015 were $5.404 million higher than at the end of the December 2014 Quarter. The increase relative to the December 2014 Quarter reflects changes in timing of payment of outstanding invoices in the March 2015 Quarter.

Provision

A provision of $9.732 million as at March 31, 2015 for future rehabilitation work relating mainly to both old and new mining activity at EGM as well as for the long-service entitlement was $0.519 million higher than the amount provided for at December 31, 2014 of $9.213 million. The change during the March 31, 2015 Quarter is a result of an appreciation of the USD against the AUD during the period, as highlighted above.

DISCUSSION ON CASHFLOWS

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

Cash flows1 for three	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30
months ended	2015	2014	2014	20142	20142	20132	20132	20132
Operating activities	36.326	2.504	8.499	4.033	7.527	5.688	1.466	2.778
Investing activities	(8.738)	(7.829)	(7.671)	(10.220)	(10.674)	(14.664)	(12.083)	(12.083)
Financingactivities	(0.002)	-	-	(0.002)	31.027	-	-	-

1All amounts shown are in millions of dollars 2Payments relating to capitalised deferred waste have been reclassified from operating activities to investing activities

After considering the effects of foreign exchange movements, the Company’s cash balance increased by $34.720 million during the March 2015 Quarter while in the corresponding period in 2014 cash increased by $26.494 million.

Operating activities during the March 2015 Quarter resulted in total cash receipts of $90.928 million (December Quarter: $64.032 million) from the sale of precious metals produced at the EGM and $0.177 million (December Quarter: $0.138 million) from bank interest that were offset by administration expenses and production expenses at EGM of $54.779 million (December Quarter: $61.666 million), giving a net cash inflow for Operating Activities during the period of $36.326 million (December Quarter: inflow of $2.504 million). This net cash inflow was $28.799 million more than the corresponding amount in the March 2014 Quarter when net inflows associated with Operating Activities totalled $7.527 million. In the March 2014 Quarter, there were cash receipts of $63.411 million from the sale of precious metals produced at the EGM. Interest received in the March 2014 Quarter was $0.002 million, administration expenses and production expenses were $55.870 million and payments for borrowing costs were $0.016 million.

Investing activities during the March 2015 Quarter included payments for mine properties of $2.424 million (December 2014 Quarter: $1.977 million), development expenses at EGM and SGP of $4.449 million (December Quarter: $4.315 million), payments relating to exploration in Ghana and Côte d’Ivoire of $1.670 million (December Quarter: $1.509 million), investment in fixed assets of $0.014 million (December Quarter: $0.028 million), investments in listed entities of $0.181 million (December Quarter: nil), that generated a net cash outflow of $8.738 million (December Quarter: $7.829 million). In the corresponding March 2014 Quarter, investing activities included payments for mine properties ($6.879 million), payments for development of EGM and SGP ($2.106 million), payments relating to exploration in Ghana and Côte d’Ivoire ($1.638 million), investment in fixed assets ($0.002 million), investment in unlisted entity (West African Gold Limited) of $0.050 million, offset by the proceeds on disposal of property plant and equipment of $0.001 million, resulting in a net cash outflow associated with investing activities of $10.674 million.

Financing activities cash flows in the March 2015 Quarter included payments for share issue expenses of $0.002 million (December 2014 Quarter: nil). In the corresponding March 2014 Quarter, financing activities included a placement of about 68.694 million shares, raising approximately $32.286 million offset by share issue expenses of $1.259 million, resulting in a net cash inflow of $31.027 million.

LIQUIDITY AND CAPITAL RESOURCES

As at March 31, 2015, the Company’s cash and cash equivalents amounted to $77.807 million (December 31, 2014: $43.087).

The Company does not currently have a working capital deficiency. At March 31, 2015, the Company has sufficient funds or assets available to convert into cash, to enable payment of debts as and when they fall due and to meet its planned growth. As previously stated, the Company’s short to medium term plans include maximising the cash margin at the EGM through continuing to fine-tune plant metallurgical performance and maximise SAG mill throughput, coupled with the continuing cost reduction program, finalise access arrangement for gaining access to mine the Eastern Pits, study the economic viability of purchasing and installing a heavy fuel oil fired power station at Edikan that is capable of generating 100% of Edikan’s power requirements, finalise negotiation of a Mining Convention for the SGP, advance the structuring of a financing facility to supplement existing cash resources to fund development of the SGP, appoint an EPCM contractor and commence early works on site at the SGP, continue exploration on a limited basis for gold on exploration tenements associated with these projects as well as on other exploration tenements held by the Company in West Africa, all of which require significant levels of funding. The Company’s ability to generate sufficient amounts of cash and cash equivalents in the long term (if required) to maintain capacity, meet planned growth and fund development of activities depends on its ability to generate sufficient cash from the EGM and failing that, to raise additional funds from the debt or capital markets.

On February 17, 2014, Perseus completed a placement to institutional and sophisticated investors of about 68.7 million ordinary shares, representing 15% of the Company’s existing capital to raise approximately $32 million (the “Placement”). Settlement of the Placement occurred on February 21, 2014, and the new shares that rank equally with existing shares, were allotted and commenced trading on the ASX on February 24, 2014. The price under the Placement was set at $0.47 (“Placement Price”) per new share issued. The Placement Price represented a 6.9% discount to the last

ASX closing price of Perseus shares of $0.505 on February 14, 2014 and a 2.3% discount to the ASX five-day volume weighted average price of $0.48 (up to and including February 14, 2014). The proceeds of the Placement were intended for capital expenditure to accelerate productivity improvements and access to the eastern pits at the EGM and to provide for further balance sheet flexibility.

In June 2014, the Company received two partial payments of the outstanding VAT debt from the GRA, totalling GHS30.0 million (US$10.0 million). During the September Quarter, Perseus received a cash payment of GHS17.6 million (US$5.8 million) and a further GHS30.0 million (US$9.4 million) of Treasury Credit Notes. The next tranche of outstanding VAT debt, totalling GHS38.4 million (US$10.2 million), has been audited and approved by the GRA. The Treasury Credit Note for this audited and approved amount is pending.

The Company’s liquidity is expected to fluctuate with production from the EGM and the price of gold. The Company’s ability to raise funds from the debt or capital markets will be affected by, among other things, global economic conditions (including the price of gold). As mentioned below, as part of the Company’s cost reduction program, Perseus reduced the Available Commitment limit on its revolving line of credit to nil, following the decision to postpone development on the SGP.

For a description of the balance sheet conditions or income or cash flow that may affect liquidity, please see the section below under “ Commitments ”.

During the last three financial years, both the debt and equity capital markets have been used as sources of funding by the Company. As discussed above, the Company completed a 68.7 million share placement during the March 2014 Quarter. The Company has nil options outstanding as at March 31, 2015 and no new options were issued during the March 2015 quarter. During the June 2011 Quarter, the Company drew $80.211 million under its project debt facility. This was subsequently fully repaid in November 2012. There can be no assurance however that the Company will be successful in raising additional funds, as and when required, from the debt or capital markets in the future. See “ Risk Factors ”.

The project debt facility agreement (the “Facility Agreement”), which is still on foot and governs the Company’s hedge arrangements, contains covenants and imposes restrictions on the Company’s ability to complete certain transactions. For example, the Facility Agreement requires that the Company maintain certain financial ratios and prohibits the Company from incurring additional indebtedness or entering into hedging arrangements beyond that specifically permitted. The Facility Agreement also contains (i) certain conditions precedent to the drawing down of funds, which were either satisfied or waived, and (ii) certain conditions subsequent, some of which remain outstanding. The Company has previously received waivers of breaches of, and extensions for satisfaction of, non-financial conditions to the Facility Agreement. In particular, the Company has received waivers in respect of breaches of, and extensions to the time required for satisfaction of, the conditions subsequent that: (i) the Company grants additional security in favour of the lenders by December 31, 2011 (as extended); (ii) there is parliamentary ratification of the Edikan mining leases and stability agreement by December 31, 2011 (as extended); (iii) the Company execute a foreign exchange retention account agreement with the Republic of Ghana, the Bank of Ghana, the lenders and a financial institution in Ghana as soon as possible. While the Company is currently in compliance with the terms of the Facility Agreement and believes it will be able to satisfy the foregoing conditions subsequent in the prescribed time, it may require one or more waivers or extensions from the lenders in the future. A breach by the Company of certain provisions of the Facility Agreement, unless waived, will constitute an event of default, entitling the lenders to accelerate the payment of amounts due there under. The project loan is effectively secured by all (or substantially all) of the Company’s interest in the Edikan Gold Mine. An obligation to repay the amount owing under the project loan before its stated maturity could have an adverse effect on the Company and its financial position. As at March 31, 2015 no amounts were drawn under the Facility Agreement.

During the December 2012 Quarter, the Company executed a Deed of Amendment and Restatement (the “Amending Deed”) which documented amendments to the Facility Agreement that had the effect of converting the project debt facility into a revolving line of credit. In addition, the Amending Deed provided for an increase in the facility limit to US$100 million, with the availability limit decreasing over time to zero as at December 28, 2015. The facility margin was revised to 4.0 percent per annum and the Commitment fee was reduced to 1.75 percent per annum. Permitted uses of funds drawn under the facility were amended to allow for repayment of intercompany loans owed by Perseus Mining (Ghana) Limited to Perseus.

During the September 2013 Quarter and as part of the Company’s cost reduction program, Perseus reduced the Available Commitment limit on its US$100 million line of credit to nil. This eliminated the 1.75% per annum undrawn line fee, and political risk insurance on the debt, that was payable in future periods.

As at March 31, 2015, a total of 69,500 ounces of gold (December 31, 2015: 71,000 ounces of gold) had been hedged under gold forward sale contracts for settlement up to and including December 2015 at an average sale price of US$1,514/oz. This includes a total of 51,500 ounces of gold at an average price of US$1,600/oz that was sold forward in the September 2012 Quarter, following the successful restructure, extension and up-sizing of the debt facility. This

hedging represents 32% of the Company’s total forecast gold production to December 31, 2015 and approximately 2% of the gold contained in the Company’s currently defined Mineral Reserves.

As at the date of this MD&A the Company had no material commitments for future capital expenditure over and above those that arise in the normal course of business.

COMMITMENTS

The following table sets forth information regarding the Company’s contractual obligations as at March 31, 2015. The Company has no long term debt, finance lease obligations, operating leases or purchase obligations except as indicated below.

	Less than 1	1-5 years	After 5 years
	Year
Exploration expenditure1	0.750	1.800	1.300
Rent of corporatepremises	0.424	0.440	-
Total	1.174	2.240	1.300

Notes:

The Company’s mineral rights in Ghana and Côte d’Ivoire are subject to nominal statutory expenditure commitments on exploration activities and its mineral lease fees are paid annually, in advance.

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

The principal financial instruments used by the Company as at March 31, 2015 are cash, receivables, financial assets at fair value, derivative financial instruments, 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 (including currency risk, interest rate risk, commodity price risk and equity price risk).

Credit Risk

Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted under a financial instrument resulting in a financial loss to the Company and arises from deposits with banks and financial institutions, favourable derivative financial instruments as well as credit exposures to customers including outstanding receivables and committed transactions. There has been no significant change in the Company’s exposure to credit risk or its objectives and policies for managing these risks during the March 2015 Quarter.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure that, as far as possible, it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company manages liquidity risk by maintaining adequate cash reserves by continuously monitoring forecast and actual cash flows, matching maturity profiles of financial assets and financial liabilities, and by ensuring that surplus funds are generally only invested in instruments that are tradable in highly liquid markets or that can be relinquished with minimal risk of loss.

Market Risk

The Company is exposed to commodity price risk for its future gold production. These risks are measured using sensitivity analysis and cash flow forecasting and to manage exposures the Company enters into forward commodity price derivatives, details of which are discussed in “Liquidity and Capital Resources” above.

The Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar and the Ghanaian Cedi. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash flow forecasting. The Company is also exposed to foreign exchange risk arising from the translation of its foreign operations, the Company’s investments in its subsidiaries are not hedged as those currency positions are considered to be long term in nature. In addition, the parent entity has an intercompany receivable from its subsidiary denominated in US dollars which is eliminated on consolidation. The gains or losses on re-measurement of this intercompany receivable from US dollars to Australian dollars are not eliminated on consolidation. There has been no significant change in the Company’s exposure to currency risk or its objectives and policies for managing these risks during the March 2015 Quarter.

In November 2012 the Company fully repaid its project finance facility. Consequently, it presently has no borrowings at variable rates. During the September 2013 Quarter and as part of the Company’s cost reduction program, Perseus reduced the Available Commitment limit on its US$100 million line of credit to nil, eliminating the 1.75% per annum undrawn line fee, as mentioned above. There were no changes in the Company’s exposure to interest rate risk during

the March 2015 Quarter. The Company’s objectives and policies for managing these risks have not changed during the March 2015 Quarter.

OFF BALANCE SHEET ARRANGEMENTS

There are no off-balance sheet arrangements as at March 31, 2015.

TRANSACTIONS WITH RELATED PARTIES

Remuneration (including salaries, Directors’ fees and the issue of share options and performance rights) 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.

The Company has no on-going contractual or other commitments arising from transactions with any of the related parties referred to above.

CRITICAL ACCOUNTING ESTIMATES

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including the expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

The Company makes estimates and assumptions concerning the future. The resulting accounting will, by definition, seldom equal the actual results. Each critical accounting estimate is discussed below.

(i) Exploration and evaluation expenditure

In accordance with accounting policy note 1(n) in the June 2014 Financial Report, management 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 been capitalised in respect of that area of interest are written off. In determining this, assumptions, including the maintenance of title, ongoing expenditure and prospectivity are made.

(ii) Impairment of assets

In accordance with accounting policy note 1(g) in the June 2014 Financial Report, in determining whether the recoverable amount of each cash generating unit is the higher of fair value less costs to sell or value-in-use against which asset impairment is to be considered, the Company undertakes future cash flow calculations which are based on a number of critical estimates and assumptions including forward estimates of:

(i) Mine life including quantities of mineral reserves and mineral resources for which there is a high degree of confidence of economic extraction with given technology;
(ii) Estimated production and sales levels;
(iii) Estimate future commodity prices;
(iv) Future costs of production;
(v) Future capital expenditure;
(vi) Future exchange rates; and/or
(vii) Discount rates applicable to the cash generating unit.

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.

(iii) Share-based payment transactions

The Company measures the cost of equity-settled transactions with employees and consultants 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 the Monte Carlo Simulation model for performance rights 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 $0.161 million for the quarter ended March 31, 2015 ($0.141 million for the quarter ended December 31, 2014; $0.135 million for the quarter ended September 30, 2014; $0.152 million for the quarter ended June 30, 2014).

(iv) Restoration and rehabilitation provisions

As set out in accounting policy note 1(t) in the June 2014 Financial Report, the value of the current restoration and rehabilitation provision is based on a number of assumptions including the nature of restoration activities required and the valuation at the present value of a future obligation that necessitates estimates of the cost of performing the work required, the timing of future cash flows and the appropriate discount rate. Additionally current provisions are based on the assumption that no significant changes will occur in either relevant legislation covering restoration of mineral properties. A change in any, or a combination, of these assumptions used to determine current provisions could have a material impact to the carrying value of the provision.

(v) Derivative financial instruments

The Company makes judgements on the effectiveness of all derivative financial instrument entered into, including forward metal contracts, metal options and foreign currency option contracts in accordance with accounting policy note 1(l) in the June 2014 Financial Report. Management’s assessment is that, unless otherwise disclosed the derivatives have been highly effective in offsetting changes in the fair value of the future cash flows against which they have been designated and as such are compliant with the hedge effectiveness requirements of AASB 139.

(vi) Taxes

Judgement is required in determining whether deferred tax assets are recognised on the statement of financial position. Deferred tax assets, including those arising from un-utilised tax losses, require management to assess the likelihood that the Company will generate taxable earnings in future periods, in order to utilise recognised deferred tax assets. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company to realise the net deferred tax assets recorded at the reporting date could be impacted.

Additionally, future changes in tax laws in jurisdictions in which the Company operates could limit the ability of the Company to obtain tax deductions in future periods.

(vii) Unit-of-production method of depreciation / amortisation The Company uses the unit-of-production basis when depreciating/amortising life of mine specific assets, which results in a depreciation/amortisation charge proportional to the depletion of the anticipated remaining life of mine production. Each item’s economic life, which is assessed annually, has due regard to both its physical life limitations and to present assessments of economically recoverable reserves of the mine property at which it is located. These calculations require the use of estimates and assumptions, including the amount of recoverable reserves and estimates of future capital expenditure. The Company amortises mine property assets utilising tonnes of ore mined and mine related plant and equipment over tonnes of ore processed.

(viii) Deferred stripping expenditure

The group defers stripping costs incurred during the production stage of its operations. Significant judgement is required to distinguish between production stripping that relates to the extraction of inventory and what relates to the creation of a deferred waste asset.

The group also identifies the separate components of the ore body. An identifiable component is a specific volume of the ore body that is made more accessible by the stripping activity. Significant judgement is required to identify these components, and to determine the expected volumes of waste to be stripped and ore to be mined in each component. Changes in a mine’s life and design will usually result in changes to the expected stripping ratio (waste to mineral reserves ratio).

Changes in other technical or economical parameters that impact reserves will also have an impact on the life of mine ratio even if they do not affect the mine’s design. Changes to the life of mine are accounted for prospectively.

(ix) Inventory

Net realisable value tests are performed at least quarterly and represent the estimated future sales price of the product based in prevailing spot metals prices at the reporting date, less estimated costs to complete production and bring the product to sale. Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number of contained gold ounces based on assay data, and the estimated recovery percentage based on the expected processing method. Stockpile tonnages are verified by periodic surveys.

(x) Reserves and resources

Mineral reserves are estimates of the amount of ore that can be economically and legally extracted from the Company’s mining properties. The Company estimates its mineral reserves and mineral resources based on information compiled by appropriately qualified persons relating to the geological data on the size, depth and shape of the ore body and this requires complex geological judgements to interpret data. The estimation of recoverable reserves is based upon factors such as estimates of foreign exchange rates, commodity prices, future capital requirements, and production costs along with geological assumptions and judgements made in estimating the size and grade of the ore body. Changes in the reserve or resource estimates may impact upon the carrying value of exploration and evaluation assets, mine properties, property, plant and equipment, goodwill, provision for rehabilitation, recognition of deferred assets, and depreciation and amortisation charges.

(xi) Measurement of fair values

When the fair values of financial assets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION

In the March 2015 Quarter, the Company 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 July 1, 2014. All of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning July 1, 2014 were adopted and they did not have a material impact on the current period or any prior period, and is not likely to affect future periods.

OUTSTANDING SECURITIES DATA

At March 31, 2015, the Company had issued 526,656,401 shares (December 31, 2014: 526,656,401; September 30, 2014: 526,656,401; June 30, 2014: 526,656,401; March 31, 2014: 526,656,401), nil options (December 31, 2014: nil; September 30, 2014: nil; June 30, 2014: nil; March 31, 2014: 1,440,000) and 8,377,418 performance rights (December 31, 2014: 6,944,561; September 30, 2014: 7,263,775; June 30, 2014: 7,983,911; March 31, 2014: 7,263,813).

The following is a summary of the Company’s capital structure as at the date of this MD&A:

Ordinary shares 526,656,401 Performance rights over unissued shares 8,377,418

Since March 31, 2015 and up to the date of this MD&A, the Company has not issued any shares, or options.

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 relating to the Company is communicated to the Company’s senior management and information required to be disclosed in its annual filings, interim filings and other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the specified time period. 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 March 31, 2015, 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 that date or changes to the Company’s DCP during the December 2014 Quarter 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 for external purposes in accordance with IFRS. The Board is responsible for ensuring that management fulfils its responsibilities in this regard. The Audit Committee is in turn responsible for ensuring the integrity of the reported information through its review of the Company’s interim and annual financial statements. There has been no change in the Company’s ICFR during the March 2015 Quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. As at March 31, 2015, the Chief Executive Officer and Chief Financial Officer have concluded that there is no material weakness relating to the design of the Company’s ICFR.

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 between 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.

The Company’s Chief Executive Officer and Chief Financial Officer have not limited the scope of their design of DCP and ICFR to exclude controls, policies and procedures of any proportionately consolidated entity, variable interest entity or business acquired within the preceding 12 months.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This MD&A contains “forward-looking information” within the meaning of applicable Canadian securities laws. This forward-looking information may include but is not limited to information with respect to the Company’s plans respect the EGM and the SGP, the estimation of mineral reserves and mineral resources, realization of mineral reserve and resource estimates, the timing and amount of future production, costs of production, capital expenditures, costs and timing of development of the SGP, mine life projections, the ability to secure required permits, the results of future exploration and drilling, the adequacy of financial resources and business and acquisition strategies. 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 is based on assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management of the Company believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. Assumptions have been made by the Company regarding, among other things: the price of gold, continuing commercial production at the Edikan Gold Mine without any material disruption, the receipt of required governmental approvals, the accuracy of capital and operating cost estimates, the ability of the Company to operate in a safe, efficient and effective manner and the ability of the Company to obtain financing as and when required and on reasonable terms. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used by the Company. Although management believes that the assumptions made by the Company and the expectations represented by such information are reasonable, there can be no assurance that the forward-looking information will prove to be accurate.

By its nature, forward-looking information is based on assumptions and involves known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements, or results, to be materially different from future results, performance or achievements expressed or implied by such forward-looking information. Such risks, uncertainties and other factors include among other things the risks set out below under the heading “ Risk Factors ”.

Although Perseus has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Also, many of the factors are beyond the Company’s control. Accordingly, readers should not place undue reliance on forward-looking information. Perseus undertakes no obligation to reissue or update forwardlooking information as a result of new information or events after the date of this MD&A, except in accordance with applicable securities laws. All forward-looking information disclosed in this document is qualified by this cautionary statement.

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 related to the Company’s compliance with restrictions and covenants in the Facility Agreement;
risks associated with the price of gold;
risks related to potential development of the SGP;
risks related to capital cost increases at the SGP;
risks related to operating and capital cost increases at the EGM;
risks related to the availability of additional financings as and when required;
the risk of unrest, political instability and the spread of infectious diseases in West Africa;
risks related to the periodic renewal of the Company’s various exploration and exploitation permits;
risks related to global economic conditions;
risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of mineral deposits and conclusions of economic evaluations;
risks related to negative operating costs flow;
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 operating 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;
• risks associated with the spread of infectious diseases, such as Ebola;
risks related to the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses;
risks related to interest rate and foreign exchange rate fluctuations;
the uncertainty of profitability based upon the cyclical nature of the industry in which the Company operates;
the risk of changes to fiscal terms or operating approval conditions;
risks related to environmental regulation and liability; 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 26, 2014.

TECHNICAL DISCLOSURES

Competent Person and ASX Listing Rules Statement :

All production targets for the Edikan Gold Mine (EGM) and for Sissingué referred to in this report are underpinned by estimated Ore Reserves which have been prepared by competent persons in accordance with the requirements of the JORC Code.

The information in this report that relates to Mineral Resources for the Fetish, Bokitsi, Chirawewa, Esuajah North, Esuajah South and Dadieso deposits at the EGM was first reported by the Company in compliance with the JORC Code 2012 in market announcements released on August 27, 2014 and September 4, 2014. The Company confirms that it is not aware of any new information or data that materially affects the information in those market announcements.

The information in this report that relates to Mineral Resources for the AFGap-Fobinso and Mampong deposits at the EGM and the EGM Ore Reserves was first reported by the Company in compliance with the JORC Code 2012 in a market announcement released on April 20, 2015. The Company confirms that it is not aware of any new information or data that materially affects the information in that market announcement.

The information in this report that relates to Mineral Resources and Ore Reserves for Sissingué was first reported by the Company in compliance with the JORC Code 2012 in a market announcement released on April 21, 2015. The Company confirms that it is not aware of any new information or data that materially affects the information in that market announcement.

The information in this report that relates to exploration results was first reported by the Company in compliance with the JORC Code 2012 in its Quarterly Activities Report released on April 22, 2015. The Company confirms that it it is not aware of any new information or data that materially affects the information in that market announcement .

AI assistant

PERSEUS MINING LIMITED — Interim / Quarterly Report 2015

46513_rns_2015-05-14_1191aaaf-67fb-443a-9b59-cc5e501ab0d1.pdf

May 14, 2015

MANAGEMENT’S DISCUSSION & ANALYSIS For the three months ended March 31, 2015

COMPANY OVERVIEW

OVERVIEW OF THE MARCH 2015 QUARTER

Summary

EGM, Ghana

Mining

Eastern Pits Mining Contract

Power Restrictions

Processing

Production Costs

Gold Sales and Price Hedging

Third Party Debt

Updated Mineral Resources

Updated Mineral Reserves

Updated Life of Mine Plan

Investment Metrics

Revised Production and Cost Guidance

SGP – Côte d’Ivoire

Project Development

Project Implementation

SGP Mineral Resource Estimate

SGP Mineral Reserve Estimate

Exploration

Chirawewa Deposit – EGM, Ghana

Drilling Highlights

Ayanfuri Heap-leach Pads – EGM, Ghana

Sissingué Exploitation Permit – SGP, Côte d’Ivoire

Koutakou, Tangayé, Touya and Barga licences – Burkina Faso

COMPANY OUTLOOK FOR THE QUARTER ENDING JUNE 30, 2015

Edikan Gold Mine

Sissingué Gold Project

OVERALL FINANCIAL PERFORMANCE OF THE COMPANY

DISCUSSION OF OPERATING RESULTS

DISCUSSION OF FINANCIAL CONDITION

Total Assets

Cash and cash equivalents

Receivables

Inventory

Property, plant and equipment

Mine Properties

Exploration and evaluation expenditure

Other assets

Derivative financial instruments

Total Liabilities

Payables

Provision

DISCUSSION ON CASHFLOWS

LIQUIDITY AND CAPITAL RESOURCES

COMMITMENTS

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

Credit Risk

Liquidity Risk

Market Risk

OFF BALANCE SHEET ARRANGEMENTS

TRANSACTIONS WITH RELATED PARTIES

CRITICAL ACCOUNTING ESTIMATES

(i) Exploration and evaluation expenditure

(ii) Impairment of assets

(iii) Share-based payment transactions

(iv) Restoration and rehabilitation provisions

(v) Derivative financial instruments

(vi) Taxes

(viii) Deferred stripping expenditure

(ix) Inventory

(x) Reserves and resources

(xi) Measurement of fair values

CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION

OUTSTANDING SECURITIES DATA

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Internal Controls over Financial Reporting

Limitations of Controls and Procedures

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

RISK FACTORS

TECHNICAL DISCLOSURES

Competent Person and ASX Listing Rules Statement :

PERSEUS MINING LIMITED Interim / Quarterly Report 2015