PERSEUS MINING LIMITED - Interim / Quarterly Report 2015

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February 13, 2015

MANAGEMENT’S DISCUSSION & ANALYSIS For the three months ended December 31, 2014

This Management’s Discussion and Analysis (“MD&A”) of Perseus Mining Limited and its controlled entities (“Perseus” or the “Company”) is dated February 13, 2015 and provides an analysis of the Company’s performance and financial condition for the three months ended December 31, 2014 (the “December 2014 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 unaudited interim consolidated financial statements for the December 2014 Quarter. The financial statements (and the financial information contained in this MD&A) comply with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. These documents are available under the Company’s profile on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) at sedar.com and on the Company’s website, www.perseusmining.com .

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

COMPANY OVERVIEW

Perseus was incorporated in Australia on October 24, 2003. 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”) (previously referred to as the Ayanfuri gold deposit or the Central Ashanti Gold Project), 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 (the “Tengréla Gold Project”) 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. 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 West Africa; and (ii) a 13.04% 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 71,000 ounces of gold at a weighted average gold price of US$1,595/oz under outstanding gold forward sale contracts. (Refer to the section below titled “ Liquidity and Capital Resources ”).

OVERVIEW OF THE DECEMBER 2014 QUARTER

Summary

Perseus’s EGM has delivered another quarter of solid operating performance resulting in continued strengthening of the Company’s financial position. Perseus’s strategy of pursuing sustainable efficiency improvements in its operations is taking effect. Key processing plant operating parameters now either exceed or are approaching targets and further material mining cost reductions will take effect in 2015.

Quarterly gold production totalled 48,487 ounces, a decrease of 6% relative to the September 2014 quarter while equalling the December 2013 quarter. All-in site costs averaged US$1,019/oz for the Quarter representing a cost increase of 6% relative to the previous quarter and 17% less than in the December 2013 quarter. Key production statistics for the Quarter are as shown below in Table 1.

Table 1: Key Production Statistics

Parameter	Unit	December	September	June
		Quarter	Quarter	Quarter
		2014	2014	2014
Total material mined	bcm	1,555,852	1,668,176	2,284,242
	tonnes	4,142,657	4,486,336	6,183,813
Waste to ore strip ratio	bcm:bcm	1.4	1.9	3.0
	tonnes:tonnes	1.4	1.9	3.0
Ore mined
 Oxide	tonnes	-	-	-
 Primary	tonnes	1,725,385	1,547,272	1,564,548
Ore grade mined
 Oxide	g/t gold	-	-	-
 Primary	g/t gold	1.07	1.15	1.16
Ore stockpiles
 Quantity	tonnes	3,606,910	3,462,407	3,682,405
 Grade	g/t gold	0.61	0.58	0.58
Mill throughput	tonnes	1,580,883	1,767,270	1,506,968
Milled head grade	g/t gold	1.09	1.05	1.02
Gold recovery	%	87	87	86
Goldproduced	ounces	48,487	51,529	42,543

Total ore and waste movement of 1,555,852 bank cubic metres (“bcm”) for the Quarter was nearly 7% less than the September 2014 Quarter (the “September Quarter”) of 1,668,176 bcm. Mill head grade at 1.09 g/t was 4% higher than the September Quarter head grade, while recovery remained the same during the quarter at 87%. The average mill throughput rate of 854 dry tonnes per hour (“dtph”) was nearly 8% lower than the September Quarter of 926 dtph resulting from several factors including fluctuations in the availability of grid power during the Quarter.

The mining contract was awarded for the Fobinso Stage 3 pit and evaluation of tenders for mining the Fetish, Bokitsi and Chirawewa Pits (the “Eastern Pits”) is advanced. The new mining contracts will materially reduce Edikan’s unit mining costs.

High grade drill intercepts from resource in-fill drilling programmes on the Mampong and Chirawewa deposits confirmed the potential for improving the grade of ore processed by the EGM.

The updated Sissingué Feasibility Study is nearing completion and results are scheduled to be published after Board consideration in the March 2015 Quarter.

As at December 31, 2014, Perseus had an available cash balance of $43.1 million (excluding $11.6 million in escrow), plus 9,977 ounces of gold on hand, in the process of being refined or in the Company’s metal account valued on that date at $14.7 million. The combined balance of cash and bullion on hand was $57.8 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, both of which are located on the western side of the Edikan mining leases, adjacent to the processing plant.

A total of 1,555,852 bcm of ore and waste was mined during the Quarter, nearly 7% less than in the September Quarter. The reduction in mining rates was consistent with the Company’s plan of reducing investment in waste stripping until a comprehensive review of the Company’s approach to mining is concluded and recommendations implemented.

Ore mined during the Quarter included 1,725,385 tonnes of primary ore grading 1.07g/t gold. Ore movements were 12% up on the previous quarter while the grade of ore mined was approximately 8% less than in the prior quarter, generally in accordance with revised short term mine plans.

Ore stockpiles that include both high and low grade ore (but not mineralised waste) plus crushed ore increased during the Quarter by 144,500 tonnes to 3,606,900 tonnes grading 0.61g/t gold, containing approximately 70,700ozs of gold. The increase in stockpiles reflected 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 22% oxide ore and 78% transitional/primary ore. Approximately 14% of the remaining stockpiled ore is classified as medium/high grade, containing greater than 0.6g/t gold, while 86% of the ore is classified as low grade containing 0.4 to 0.6g/t gold.

Mining Contract

Towards the end of the Quarter, mining contractors were invited to tender for the provision of mining services for Stage 3 of the Fobinso Pit and the Eastern Pits.

The tender for mining Stage 3 of the Fobinso Pit was awarded to Rocksure International Limited, an experienced, wholly Ghanaian-owned mining contractor that has provided mining and drilling services at several other African gold mines including Golden Star’s Wassa and Bogoso-Prestea mines in Ghana.

The contract involves grade control drilling, blast hole drilling, loading and firing, and loading, hauling and dumping of approximately 6.6Mbcm of ore and waste over a 27 month period commencing in January 2015. The tendered price for the provision of the mining services will result in a material decrease in Edikan’s unit mining costs in coming periods.

Eight contractors tendered for the provision of services for the mining of the Eastern Pits, including Edikan’s current mining contractor African Mining Services (“AMS”) and seven other companies/consortia ranging from wholly Ghanaian-owned mining contractors to an assortment of international mining contractors.

Discussions are progressing with a short list of Tenderers and a contract will be awarded shortly to enable the successful Tenderer to be in a position to start mining the Eastern Pits during the March 2015 Quarter. While the final contract price has not been settled, it is highly likely that there will be a material decrease in Edikan’s overall unit mining costs in coming periods relative to current mining costs.

Irrespective of the outcome of the Eastern Pits Tender, it is expected that AMS will continue to mine Stages 2 and 3 of the AG Pit under the terms of their existing contract.

Processing

Key operating parameters associated with Edikan’s processing plant were relatively stable during the Quarter as indicated by the following:

Table 2: Plant Performance Statistics

	December 2014	September 2014	June 2014
	Quarter	Quarter	Quarter
Crusher
Run time (%)	56	54	51
Hourly throughput rate (wmt)	1,130	1,275	1,294
Oxide Circuit
Run time (%)	66	76	63
Hourly throughput rate (t)	142	133	120
SAG Mill
Run time (%)	84	86	791
Hourly throughput rate (dmt)	854	926	869
Gold recoveryrate(%)	87	87	85

1. Impacted by fire and substation failure.

The slight decrease in the throughput rates in the SAG mill during the Quarter resulted from several factors including fluctuations in the availability of grid power during the Quarter.

Site management’s efforts to reduce grid power consumption by managing the composition of SAG mill feed and the use of stand-by generators to supplement grid power meant that the impact on gold production of the Ghanaian government directive that mining companies reduce their consumption of grid power by 25% in the month of December 2014, was materially less than might have been the case. The impact of the slight decrease in both run time and hourly throughput rates was partially offset by an increase in the head grade of ore processed, leaving total gold production approximately 6% lower on a quarter-on-quarter basis. Under the circumstances, this was considered a creditable result.

The trend of incrementally improving gold recoveries continued during the Quarter, helped in particular by improved recoveries in the gravity circuit, relative to prior periods.

Site Operating 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$1,019/oz, approximately 6% more than in the prior quarter but approximately 17% less than in the December 2013 quarter. Please refer to Table 4-Key Quarterly Financial Statistics and Table 5-Quarter-on-Quarter Changes in Site Costs below for detailed statistics.

For the Half Year, all-in site unit cash costs averaged US$988/oz which was materially (15%) below the guided range for all-in site costs of US$1,160-1,280/oz and well below reported industry average costs.

Approximately 44% of the EGM’s total production costs during the Quarter were incurred by the mining department while a further 43% were incurred by processing and maintenance with the balance in general and administration. The relative proportion of mining costs as a percentage of total operating costs decreased this Quarter as a result of fewer tonnes of ore and waste being moved during the period. Unit costs in each of these areas were as follows:

Table 3: Unit Costs

Table 3: Unit Costs
Unit Cost	December 2014	September 2014	June 2014
	Quarter	Quarter	Quarter
Mining1US$/t mined	4.65	4.61	4.49
Processing US$/t milled	11.89	9.83	11.80
G & A US$/month	2.04	1.46	1.45

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 tonnes of ore and waste moved decreased 8%, however unit mining costs increased only 1% as a result of cost savings in other areas, including the cost of diesel fuel, shorter hauls to waste dumps and lower blasting costs.

Unit processing and maintenance costs increased quarter-on-quarter by $2.06/tonne or 21%. The major factor contributing to this increase in unit costs was the decrease in the quantity of ore processed. The fall in tonnes processed resulted in US$1.25/tonne (61%) of the increase while the remaining US$0.80/tonne (39%) of the increase was mainly the result of an increase in the consumption of maintenance spares and consumables during the Quarter. Two scheduled partial mill relines occurred during this period, the first at the beginning of the Quarter when a shutdown originally

scheduled for the September Quarter took place. The second scheduled maintenance shutdown occurred later in the Quarter. In addition unscheduled expenditure was incurred in maintaining the crusher and conveyors during the Quarter.

Positively, a number of cost savings were achieved by the processing department during the Quarter to partially offset the increased maintenance charges. 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. It should also be noted that the cost of increased diesel fuel consumption needed to power standby generators to comply with the government directive to reduce grid power consumption in the month of December, was offset by lower electricity costs arising from reduced consumption of grid power.

It is expected that in the March 2015 quarter, maintenance costs will be reduced significantly due to less scheduled maintenance activity and further cost savings will be achieved through tighter procurement practices.

Expenditure on sustaining capital remained relatively low during the Quarter (US$58/oz). This is expected to increase as work begins to accelerate on the relocation housing project, required to provide mining access to certain of the Eastern Pits.

Table 4: Key Quarterly Financial Statistics - EGM

Parameter	Units	December	September	June	March
		Quarter 2014	Quarter 2014	Quarter 2014	Quarter 2014
Gold produced	ounces	48,487	51,529	42,543	43,787
Total gold sales1	ounces	46,666	49,703	45,767	43,873
Average sales price	US$/oz of gold sold	1,283	1,330	1,333	1,294
Mining cost	US$/t material mined	4.65	4.61	4.49	4.08
Processing cost	US$/t ore milled	11.89	9.83	11.80	9.94
G & A cost	US$M/month	2.04	1.46	1.45	1.67
All-In Site Cash Cost
Gold Production Cost:
Cash Cost	US$/oz	861	863	1,150	1,071
Royalties	US$/oz	66	88	82	87
Total production cost	US$/oz	927	951	1,232	1,158
Capital Costs:
Inventory and Stripping	US$/oz	34	(40)	23	44
Other Capital	US$/oz	58	48	69	84
Total capital cost	US$/oz	92	8	92	128
Total All-InSite Cost	US$/oz	1,019	959	1,324	1,286

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, EGM’s gold production for the Half Year totalled 100,016 ounces which is in line with the midpoint of guided production of 95-105,000 ounces while all-in site costs for the Half Year averaged US$988/oz approximately 15% below the bottom end of the cost guidance range of US$1,160-1,280/oz.

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

Cost		Quarter-on-Quarter	Change in:
	Volume	Unit costs	Total Costs
Mining	-8.0%	1.0%	-7.0%
Processing	-11.0%	21.0%	8.0%
Cash Production costs	-6.0%	0.0%	-7.0%
Sustaining & Other Capital	-6.0%	1050.0%	982.0%
All-in Site Costs	-6.0%	6.0%	0.0%

Gold Sales and Price Hedging

Of the 46,666 ounces of gold sold during the Quarter at a weighted average delivered price of US$1,283/oz (September 2014 quarter: US$1,330/oz), a total of 19,000 ounces were delivered into forward sales contracts at an average price of US$1,296/oz with the remaining gold sales occurring at prevailing spot or spot deferred prices.

As at 31 December 2014, the Company’s gold price hedging position included 71,000 ounces of gold deliverable up to and including 31 December 2015 at a weighted average price of US$1,595/oz.

The total hedge position was “in the money” to the extent of $35.5M (US$29.0M) as at December, 31 2014. In the March 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 $35.0 million at December, 31 2014, a reduction of $1.7 million during the Quarter.

Human Resources

In December 2015, Mr Paul Thompson was appointed to the corporate office role of Group Technical Services Manager where he will manage a small but highly professional technical team that will provide geological, mine engineering and metallurgical services to site teams charged with the exploration, development and operation of the company’s assets.

Paul is a professional engineer holding a Bachelor of Science and a Master of Science, Engineering Geology degree and is a Fellow of the AusIMM. He has had extensive relevant experience having previously worked in similar roles with well-known international mining companies Newcrest Mining Limited, Alacer Gold Corporation, De Beers Consolidated Mines, and Anglo American Corporation as well as mining consulting companies AECOM Australia Pty Ltd and Coffey Mining Pty Ltd.

During the Quarter Perseus significantly enhanced the quality and depth of its senior management team on the Edikan site by making the following key appointments:

Mr Brent Horochuk was appointed to the role of Executive General Manager in early December 2014, replacing Mr John Seaward who occupied the role on a short-term contract while the international search that identified Brent was completed. Brent is a Canadian citizen who will reside full time in Ghana for the duration of his role at Edikan. He is a highly experienced professional manager and mining engineer who has been responsible for managing both open pit and underground mining operations for a number of major corporations around the world and in particular, in Africa. Most relevant to Edikan is Brent’s 12 years of experience with Ashanti Goldfields Company and Anglogold Ashanti Limited, where he held senior and general management positions at the Obuasi, Iduapriem and Bibiani Mines in Ghana, Siguiri Mine in Guinea, Geita Mine in Tanzania and Freda Rebecca Mine in Zimbabwe.

Mr Mark Somlyay is an Australian citizen who was appointed to the role of Commercial Manager in November 2014. He is a professional accountant who holds a Bachelor of Commerce degree and is a Certified Practising Accountant (CPA). Mark has had a wealth of international financial management experience and has a highly developed strategic and commercially orientated approach to work. Prior to joining the team at Edikan, Mark gained highly relevant experience working for London Mining in Sierra Leone, Inmet in Panama, Newcrest in PNG, Barrick Gold in Tanzania, and Moto Gold Mines in the DRC.

Edikan is also at a very advanced stage in the recruitment of a highly qualified and experienced Ghanaian Mine Operations Manager who will oversee all contract mining activities at the current Fobinso and AG Pits and the future Eastern Pits.

On December, 31 2014, the total number of direct employees at Edikan was reduced to 334 full time employees and fixed-term contractors, including 319 Ghanaian citizens, following a retrenchment programme involving 48 employees. Indirectly, approximately 1,000 additional people, the vast majority of whom are Ghanaian citizens, are employed by an assortment of contractors that provide a range of services to Edikan.

EGM Mineral Resource Estimate

The Company’s Measured and Indicated Mineral Resource base at EGM is 5.3M ounces of gold and the Inferred Mineral Resource base is 2.4M ounces and is tabulated below in Tables 6 and 7. The Company’s Proven and Probable Mineral Reserves at EGM are as shown in Table 8.

Table 6: EGM Measured and Indicated Mineral Resources

Deposit	Measured Resources	Measured Resources	Indicated Resources	Indicated Resources	Measured + Indicated Resources	Measured + Indicated Resources
	Quantity Grade Mt g/t gold	Gold Ounces	Quantity Grade Mt g/t gold	Gold Ounces	Quantity Grade Mt g/t gold	Gold Ounces
AF Gap - Fobinso Esuajah South Esuajah North Fetish Chirawewa Bokitsi Mampong Dadieso	34.5 1.1 9.5 1.8 16.9 0.9 12.6 0.9 - - 0.7 3.7 - - - -	1,228,000 546,000 494,000 380,000 - 86,000 - -	24.5 0.9 7.3 1.6 18.4 0.8 18.1 1.1 5.8 1.0 1.6 2.6 - - - -	698,000 370,000 493,000 663,000 195,000 133,000 - -	59.0 1.0 16.8 1.7 35.3 0.9 30.8 1.1 5.8 1.0 2.3 3.0 - - - -	1,926,000 916,000 986,000 1,043,000 195,000 219,000 - -
Total	74.2 1.1	2,734,000	75.7 1.0	2,552,000	150.0 1.1	5,285,000

Based on May 2014 Resource estimation.
0.4g/t gold cut-off applied.
Last updated in May 2014 and allows for mining depletion to June 30, 2014.

Table 7: EGM Inferred Mineral Resources

Deposit	Inferred Resources	Inferred Resources
	Quantity Grade Mt g/t gold	Gold Ounces
AF Gap - Fobinso Esuajah South Esuajah North Fetish Chirawewa Bokitsi Mampong Dadieso	28.5 0.8 5.7 1.1 3.6 0.9 9.8 1.1 10.4 0.9 2.9 1.8 8.6 0.9 5.3 1.5	731,000 211,000 105,000 346,000 284,000 170,000 257,000 253,000
Total	74.8 1.0	2,356,000

Based on May 2014 Resource estimation.
0.4g/t gold cut-off applied.
Last updated in May 2014 and allows for mining depletion to June 30, 2014.

Mine Planning

Work is progressing on revising the existing designs of each of the pits taking into account assumptions based on updated Mineral Resources as well as recent operating experience and recently tendered costs for mining the Fobinso and the Eastern Pits. Detailed consideration will also be given to rescheduling the order in which new pits are developed to optimise the overall value of the mine. This work will result in a revision to the current Edikan Life of Mine Plan (“LOMP”) which, based on the current schedule, is intended to be published later in the March 2015 quarter. It is not expected that the updated LOMP will result in any change to the guidance for the six month period ending June 30, 2015.

EGM Mineral Reserve Estimate

The Mineral Reserves, which comprise material from seven open pits including Abnabna, Fobinso, Fetish, Chirawewa, Bokitsi, Esuajah North and Esuajah South plus stockpiles and taking into account mining depletion, are as follows:

Table 8: Ore Reserves – EGM[1,2,3,4]

Deposit	Proved Reserves	Proved Reserves	Probable Reserves	Probable Reserves	Proved & Probable Reserves	Proved & Probable Reserves	W: O Ratio3
	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
AF Gap - Fobinso Esuajah South Esuajah North Fetish Chirewawa Bokitsi ROM Stockpiles	24.2 1.2 5.9 1.7 11.8 0.9 7.8 0.9 - - - - - -	908 327 354 224 - - -	6.0 0.8 1.0 1.8 3.9 0.9 6.1 1.1 2.9 1.1 2.1 2.3 3.7 0.6	154 55 111 219 106 158 69	30.2 1.1 6.9 1.7 15.7 0.9 13.9 1.0 2.9 1.1 2.1 2.3 3.7 0.6	1,062 382 465 443 106 158 69	2.4 8.1 1.4 2.1 3.9 6.3 -
Total	49.7 1.1	1,813	25.7 1.1	872	75.4 1.1	2,685	2.7

Based on June 2013 Resource estimation.
Variable gold grade cut-off based on material type, Oxide = 0.6g/t, Transition = 0.5g/t and Fresh = 0.4g/t
Inferred mineral resource is considered as waste.
Last updated in August 2013 and allows for material mined to June 30, 2014.

Sissingué Development Project, 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 Sissingué exploration permit area and the adjoining Tengréla South exploration permit area, together referred to as the Tengréla Gold Project. 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

During the Quarter, Lycopodium Minerals Pty Ltd (“Lycopodium”), an internationally recognised engineering and project management consultancy, was appointed by Perseus to revise the project Feasibility Study for the SGP.

The revised study will reflect not only the processing flow sheet adopted following a preliminary economic assessment of a “scaled down” version of the SGP that was completed in the September 2014 quarter but also updated assumptions on mining, processing and various service functions associated with the project. This work has included a review of various energy sources for powering the project with consideration being given to a range of alternatives including electricity drawn from the national electricity grid as well as stand-alone power plants fuelled by diesel or gas products. As energy is a key consumable for the project, the outcome of this aspect of the study is expected to have a material impact on forecast project economics.

Lycopodium has made solid progress on preparing the revised study and it is estimated that revised operating and capital cost estimates will be completed by the end of March 2015 quarter and that a formal Feasibility Study will be tabled for consideration by Perseus’s Board during the course of the March 2015 quarter.

Apart from project economics, a key input into any positive project development decision to be taken by the Company will be the viability of the project financing plan which is currently being formulated by the Company’s corporate office. In formulating the plan, the full range of financing alternatives currently available to the Company is being assessed taking particular note of the incremental risk and the potential impact on existing shareholders of each of the financing alternatives. Formulation of this plan is also expected to be materially advanced during the March 2015 quarter.

During the Quarter, the Company has continued to engage constructively with the Ivorian Government on the drafting of a Mining Convention for the project. This process has been greatly assisted by the introduction in 2014 of a new Mining Code in Côte d’Ivoire which clearly specifies many of the fiscal terms under which projects can be operated in country. The Company is very confident, that in the event of a positive development decision on the project, an appropriate Mining Convention could be promptly finalised.

SGP Mineral Resource Estimate

The Company’s Measured and Indicated Mineral Resource base at SGP is 0.9 million ounces of gold and the Inferred Mineral Resource base is 0.3 million ounces and is tabulated below in Tables 9 and 10. The Company’s Proven and Probable Mineral Reserves at SGP are as shown in Table 11.

Table 9: M&I Mineral Resources – SGP[1 ]

Ore type	Measured Resources Quantity Mt Grade g/t gold Gold Ounces	Measured Resources Quantity Mt Grade g/t gold Gold Ounces	Indicated Resources	Indicated Resources	Measured + Indicated Resources	Measured + Indicated Resources
		Gold Ounces	Quantity Mt Grade g/t gold	Gold Ounces	Quantity Mt Grade g/t gold	Gold Ounces
Oxide Transition Primary	0.9 1.6 0.6 2.0 2.7 2.5	48,000 39,000 217,000	4.6 1.2 1.3 1.3 8.9 1.4	171,000 56,000 394,000	5.5 1.2 1.9 1.6 11.6 1.6	219,000 95,000 611,000
Total	4.2 2.2	304,000	14.8 1.3	621,000	19.0 1.5	925,000

0.6g/t gold cut-off applied.

Table 10: Inferred Mineral Resources – SGP[1]

Ore type	Inferred Resources	Inferred Resources
	Quantity Grade Mt g/t gold	Gold Ounces
Oxide Transition Primary	0.9 1.0 0.7 1.0 5.4 1.4	31 21 239
Total	7.0 1.3	291

0.6g/t gold cut-off applied.

SGP Mineral Reserve Estimate

Work on the re-design of the SGP open pit based on the current Mineral Resource estimate is underway in conjunction with the review of feasibility discussed above. The current Mineral Reserves for the SGP are as follows:

Table 11: Ore 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	- - - -	- -	3.4 2.1 6.3 2.1	224 433	3.4 2.1 6.3 2.1	224 433
Total	- -	-	9.7 2.1	657	9.7 2.1	657

1 Reserve estimated by Coffey Mining using a pit design based on a US$950/oz gold price optimisation.

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

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

4 The Probable Ore Reserve as estimated in the DFS was estimated at a 0.55g/t gold cut-off.

Exploration

Ghana

During the Quarter, US$0.415 million was spent on exploration activities in Ghana at the EGM including completion of a resource in-fill drilling programme on the Mampong deposit involving 2,196m of reverse circulation (“RC”) drilling and 25m of diamond drilling (“DD”) as well as commencement of a resource in-fill drilling programme on the Chirawewa deposit involving 1,370m of RC drilling. Results are as follows:

Mampong Deposit, EGM, Ghana

Highlights

MPRC171 - 7m at 2.9g/t Au from 69m including 1m at 10.5g/t Au from 69m
MPRC173 - 15m at 3.6g/t Au from 69m including 3m at 13.5g/t Au from 69m MPRC178 - 11m at 2.0g/t Au from 66m
MPRC180 - 12m at 3.2g/t Au from 60m including 1m at 10.7g/t Au from 60m MPRC184 - 13m at 2.5g/t Au from 66m including 1m at 15.0g/t from 77m

The Mampong deposit is located between 700m and 2,100m southwest of the operating Abnabna pit at the EGM. The deposit consists of two mineralised zones including a wider, lower grade zone to the north which represents the southwestern strike extension of the Abnabna-Fobinso gold-bearing granite, and further south, a narrower, higher grade zone which is hosted in a separate 10m to 15m wide granitic dyke situated approximately 200m south-east of and parallel to the Abnabna-Fobinso granite. The two mineralised zones at Mampong presently contain an Inferred Mineral Resource of 8.6Mt at 0.9g/t for 257,000 ounces gold. Mineralisation at Mampong is essentially the same as that in the AbnabnaFobinso deposits and consists of stock work quartz veining in altered granite with trace to several percent disseminated pyrite plus arsenopyrite.

The southern, higher grade portion of the Mampong deposit was the principal subject of the recent infill drilling program. The two Mampong zones were previously drilled in several campaigns during 2008 through 2010 to a nominal drill spacing of 40m by 40m, resulting in the present Inferred Mineral Resource. The current 5,500m program was planned to infill previous drilling to a drill spacing of approximately 20m by 20 to 40m on the southern higher grade portion of Mampong to better define that portion of the Mineral Resource and upgrade it to an Indicated Mineral Resource for inclusion into the EGM Ore Reserves and life-of-mine plan.

The planned drilling at Mampong South is now complete and all assays have been received. The last phase of this activity involved 1,360m of drilling including 1,314m of RC drilling and 46m of DD. The infill drilling results were generally consistent with previous drilling, although the greater detail in drilling will permit much of the Mampong South Inferred Mineral Resource to be upgraded to the Indicated category.

A drill hole at the southern limit of the Mampong South drilling, MPRC184, returned a relatively significant intercept of 13m at 2.5g/t Au. With no drilling located further to the south of this drill hole, there is potential to add to the Mineral Resource with additional drilling to the south.

In addition to completing the Mineral Resource infill drilling at Mampong South, 12 RC holes totalling 957m were drilled at Mampong North in an area where previous drilling generated slightly higher than average drill results for the generally lower grade Mampong North deposit. These holes returned anomalous weak intercepts typical of Mampong North.

Chirawewa Deposit, EGM, Ghana

Highlights

CHRC324 - 38m at 1.5g/t Au from 12m and 2m at 28.4g/t Au from 64m CHRC327 - 28m at 2.3g/t Au from 8m including 1m at 21.2g/t Au from 26m CHRC329 - 16m at 1.8g/t Au from 4m and 8m at 2.6g/t Au from 64m CHRC330 - 2m at 23.0g/t Au from 8m and 18m at 3.6g/t Au from 32m including 2m at 12.6g/t Au from 33m
CHRC331 - 16m at 2.1g/t Au from 26m including 1m at 16.2g/t from 41m plus 2m at 39.0g/t Au from 70m

The Chirawewa deposit, the eastern-most deposit at the EGM, was partially mined by Ashanti Gold Corporation (“AGC”), the previous owners of the tenements on which the EGM is located. As a result of the flooding of the old oxide pit following cessation of AGC’s operations, limited drilling has been possible to test mineralisation directly below the old pit floor but to allow the drill rig to access this zone, the old pit was recently dewatered and a resource infill drilling program on the Chirawewa deposit was commenced from within the old pit during the Quarter.

The Chirawewa deposit is similar to the other granite hosted deposits at Edikan, 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. This shear zone has been drilled only to shallow depths and there appears to be potential to lift the overall grade of the Chirawewa Mineral Resource if further drilling can extend the mineralization to depth. The Chirawewa deposit currently hosts an Indicated Mineral Resource of 195,000 ounces at 1.0g/t Au plus an Inferred Mineral Resource of 284,000 ounces at 0.9g/t Au. The current drilling program should upgrade a portion of the Inferred Mineral Resource to the Indicated category.

In December 2014, 17 RC holes totalling 1,370m were drilled from the floor of the old Chirawewa pit. While many of the intercepts were in line with past drilling, a number of drill holes returned significantly better than the deposit’s average deposit grade of 1.0g/t and suggest the potential for improving the overall grade of the Chirawewa deposit through infill drilling. Another 30 holes for 2,100m remain to be drilled in this program, which is expected to resume by mid to late January 2015. Depending on results, several deeper holes may be added to probe at depth the high grade shear flanking the main deposit. Upon completion of the drilling, the Chirawewa deposit will be remodelled with the resource updated for inclusion into the Edikan mining plan.

Côte d’Ivoire

During the Quarter a total of US$0.812 million was spent by Perseus on exploration activities in Côte d’Ivoire, including 12,503m of drilling comprised of 2,213m of RC drilling and 280m of DD at Mahalé plus 7,157m of auger drilling and 2,853m of rotary air blast (“RAB”) drilling on the Sissingué Exploitation Permit. Results are as follows:

Bélé Prospects, Mahalé Exploration Permit

Highlights MHRD120 - 20m at 6.7g/t Au from 58m including 10m at 10.5g/t Au from 74m MHRC122 - 10m at 2.1g/t Au from 69m and 8m at 3.4g/t Au from 82m MHRD123 - 9.7m at 2.1g/t Au from 119.15m

An exploration drilling program was completed during the quarter at the Bélé Prospects on the Mahalé Permit in Côte d’Ivoire to follow-up previous favourable drilling results, test the principal Bélé zones at greater depths and evaluate a number of previously untested geophysical plus geochemical targets. A total of 2,493m was drilled on Mahalé including 2,213m of RC and 280m of diamond core drilling. Most of the drill holes tested new targets and returned weak anomalous results at best. The final 6 holes of the program tested the Bélé East and West targets at depth with details as follows.

Drilling at Bélé East was designed to test for the depth and strike continuity of higher grade mineralisation which sits at 40 to 80m vertical depth and appears to be nearly sub-horizontal with a shallow plunge to the north. Drill hole MHRD121 which undercut previous high grade intercepts, e.g. MHRC077 (28m at 12.4g/t Au reported in the September 2014 Quarterly Report) returned weak results cutting off the high grade mineralisation to depth on section 1,136,960N. Hole MHRD120 drilled 40m to the north returned a very strong intercept of 20m at 6.7g/t Au extending the high grade mineralisation encountered in MHRC077 40 meters to the north. The high grade mineralisation remains open below MHRD120 on section 1,137,000N. A third hole, MHRD119, was drilled 80 meters further to the north below previous drilling, and unfortunately returned weak results, effectively cutting off the continuation of the high grade mineralisation to the north. Based on the latest drilling, the Bélé East high grade mineralisation remains partially open to depth, however it appears to be of limited strike extent and is therefore likely relatively small in volume.

At Bélé West, two holes were drilled to moderate depths below the previous shallow drilling. Past drilling was oriented west to east, at a low angle to the strike of the zone, while the recent drill holes were directed to the southwest, at right angles to the mineralised zone. One of the holes, MHRC124 drilled near the centre of the strike of the zone returned a weak result, cutting off the mineralisation to depth in this area. A second hole, MHRD123 drilled under the stronger mineralisation towards the north-eastern end of Bélé West, returned 9.7m at 2.1g/t Au, in line with previous drilling. The third hole, MHRC122, drilled just beyond the known north-eastern limit of the Bélé West zone, returned broader mineralisation with multiple intercepts of 2m at 14.8g/t, 10m at 2.1g/t plus 8m at 3.4g/t Au. The recent drilling has demonstrated that the Bélé West mineralisation, although apparently weaker at depth in the central portion, persists to moderate depths at comparable grade to the northeast and may be improving further northeast and remains open on strike. However, the potential strike continuation is only open for 150 meters to the northeast where a fence of north to south drilled holes returned very weak results and cut off the north-eastern strike continuation of the zone, at least to shallow levels.

As was the case at Bélé East, the Bélé West zone appears to be limited in extent and unlikely to produce a significant Mineral Resource at economic grades. The exploration potential of the Mahalé Permit will be revisited in the March 2015 quarter, however further drilling is not planned in the near term.

Sissingué Exploitation Permit

A program of auger drilling with RAB drilling to follow up auger anomalies was conducted on the Sissingué Exploitation Permit to evaluate areas of potential geochemical masking by transported regolith along the PaparaSissingué-Kanakono mineralized corridor. During the Quarter, a total of 7,157m of auger and 2,853m of RAB drilling was completed. A number of modest auger anomalies were identified by the program, some of which were followed up with RAB drill testing with weak results. As yet untested auger anomalies will be considered for further RAB drill testing in the March 2015 quarter.

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. Results are awaited from a short soil sampling programme conducted on the Burkina Faso licenses during the Quarter. A small air-core drilling program is planned for the March 2015 quarter to evaluate the large Koutakou gold in soil anomaly plus several areas of active artisanal mining.

COMPANY OUTLOOK FOR THE QUARTER ENDING MARCH 31, 2015

Based on current work schedules for the Quarter ending March 31, 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;
Award a contract for the mining of the Eastern Pits and oversee the commencement of this contract as well as the contract to mine Fobinso Stage 3;
Continue training of operating and maintenance staff;
Complete current drilling programmes to delineate potential higher grade mill feed; and
Continue to implement business improvement initiatives across all departments of the EGM.

Sissingué Gold Mine Development Project

Update Feasibility Study for the SGP based on preferred development configuration and flow sheet;
Continue discussions with the Ivorian government about a Mining Convention covering the revised SGP; and
Continue exploration on the Mahalé exploration licence and the Sissingué exploitation permit.

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	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31
months ended	2014	2014	2014	2014	2013	2013	2013	2013
Total revenue	70.466	71.702	64.595	64.262	63.373	71.988	69.301	77.254
Net profit / (loss) after tax	18.436	22.731	(12.034)	(16.002)	(6.878)	2.854	10.277	(0.892)
Basicprofit /(loss) per share(cents)	3.45	4.24	(2.25)	(3.34)	(1.25)	0.41	2.53	(0.23)

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

The operating results for the December 2014 Quarter included revenue earned from the sale of precious metals (December 2014 Quarter: $70.322 million; December 2013 Quarter: $63.301 million) less the cost of the goods sold (December 2014 Quarter: $51.161 million; December 2013 Quarter: $67.603 million). The decrease in total revenue, from $71.702 million in the September 2014 Quarter to $70.466 million in the December 2014 Quarter, is a result of lower gold sales (December 2014 Quarter: 46,666 oz; September 2014 Quarter: 49,703 oz) and a decrease in average sales prices (December 2014 Quarter: US$1,283/oz; September 2014 Quarter: US$1,330/oz of gold sold).

Other movements during the December 2014 Quarter includes a write-down of the VAT receivable of $2.294 million (December 2013 Quarter: nil) and an impairment of available for sale asset of $1.030 million (December 2013 Quarter: $2.225 million).

During the December 2014 Quarter a foreign exchange gain ($18.919 million) was recognised (December 2013 Quarter: $4.938 million) arising from a depreciation of the AUD relative to the USD during the period (December 31, 2014: 0.8158, September 30, 2014: 0.8727).

In addition, the result includes interest revenue (December 2014 Quarter: $0.144 million; December 2013 Quarter: $0.012 million), depreciation and amortisation (December 2014 Quarter: $11.340 million; December 2013 Quarter: $10.376 million), administration and corporate overheads (December 2014 Quarter: $1.499 million; December 2013 Quarter: $2.680 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:	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31
	2014	2014	2014	2014	2013	2013	2013	2013
Cash and cash equivalents	43.087	44.321	36.937	42.510	16.016	23.091	35.480	38.409
Total Assets	627.497	595.114	562.022	594.445	603.192	572.552	590.380	520.820
Total Liabilities	93.511	89.743	95.413	108.485	117.113	105.558	108.536	117.685
Net Assets	533.986	505.371	466.609	485.960	486.059	466.994	481.844	403.135

1All amounts shown are in millions of dollars

Total Assets

Total assets have increased during the December 2014 Quarter by $32.383 million (September 2014 Quarter increase of $33.092 million). The December 2014 Quarter increase is due to an increase in current assets of $30.800 million and an increase in non-current assets of $1.583 million. Details of movements in specific accounts follow.

Cash and cash equivalents

At December 31, 2014, the Company had available cash or cash equivalent resources of $43.087 million plus a further $11.572 million of restricted funds on deposit securing environmental obligations. This cash balance represents a decrease relative to the position as at September 30, 2014 ($44.321 million plus restricted cash of $10.814 million). The decrease in cash reserves of $1.234 million during the December 2014 Quarter is due to a decrease in inflows from the sale of gold and silver during the period, payments associated with capital work in progress and operation of the EGM, purchase of other fixed assets and payments for the exploration and administration activities.

The net decrease in cash reserves of $1.234 million during the December 2014 Quarter is discussed in some detail in ” the “Discussion on Cash flows .

Receivables

At December 31, 2014, the Company’s current receivables were $32.982 million (September 30, 2014: $14.298 million) while non-current receivables amounted to $11.572 million (September 30, 2014: $25.053 million). The increase in current receivables during the December 2014 Quarter relative to the prior Quarter is a result of the timing of gold sales and reclassification of the VAT receivable from non-current to current as it is expected to be recovered within the next 12 months. The decrease in non-current receivables is due to the non-current component of the VAT receivable now classified as current as mentioned above.

Inventory

At December 31, 2014, the Company held inventories of $42.735 million (September 30, 2014: $36.691 million). The net increase in inventory during the December 2014 Quarter ($6.044 million) relative to the position at September 30, 2014, is the result of an increase in the high grade ore stockpiles, gold in circuit and materials and supplies on hand, offset by a write-down of low grade ore stockpiles.

Property, plant and equipment

At December 31, 2014, the Company recognised on its balance sheet a total of $199.759 million for property, plant and equipment (“PP&E”) (September 30, 2014: $189.175 million).

The Company capitalised $3.941 million of expenditure on PP&E during the December 2014 Quarter before expensing depreciation of $3.421 million. In addition, $0.186 million was reclassified from PP&E to mine properties. Due to the appreciation of the USD against AUD, a $10.250 million foreign exchange gain was recorded against PP&E during the December 2014 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 December 31, 2014, the Company recognised mine properties of $210.913 million on its balance sheet (September 30, 2014: $202.995 million). During the December 2014 Quarter, $2.389 million of expenditure of Mine Properties (most of which relates to deferred waste accounting entry) has been capitalised and $7.920 million of amortisation has been expensed. In addition, $0.186 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 $13.263 million foreign exchange gain being recorded against mine properties.

Exploration and evaluation expenditure

At December 31, 2014, the Company recognised mineral interest acquisition and exploration expenditure of $40.931 million on its balance sheet (September 30, 2014: $37.469 million).

The Company capitalised $1.341 million of exploration and evaluation expenditure incurred on its Ghanaian and Ivorian exploration tenements during the December 2014 Quarter ($1.810 million in the September 2014 Quarter) before recording a foreign exchange gain of $2.121 million.

Other assets

At December 31, 2014, the Company recognised other assets of $9.988 million on its balance sheet (September 30, 2014: $12.404 million), of which $7.583 million is classified as current and $2.405 million is classified as non-current. The decrease in other assets during the December 2014 Quarter is due to a decrease in prepayments and impairment of the Company’s investment in Manas. The decrease in prepayments during the December 2014 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 December 31, 2014, the Company held forward sales contracts for 70,000 ounces of gold and recorded an asset of $35.477 million (September 30, 2014: 89,000 ounces of gold and recorded an asset of $32.708 million) on its balance sheet. The movement in mark-to-market value has been recorded as equity. $35.477 million has been classified as a current asset as these forward contracts settle within twelve months of balance date (September 30, 2014: current asset of $27.479 million; non-current asset of $5.229 million). 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 1,000 ounces of gold and recorded an asset of $0.053 million (September 30, 2014: nil ounces of gold and recorded an asset of nil) on its balance sheet. The movement in mark-to-market value has been recorded in the income statement. $0.053 million has been classified as a current asset as these forward contracts settle within twelve months of balance date (September 30, 2014: current asset of nil).

Total Liabilities

As at December 31, 2014, the Company had liabilities totalling $93.511 million compared to $89.743 million at September 30, 2014. The changes in total liabilities during the December 2014 Quarter are attributable to increases in non-current liabilities of $7.814 million offset by decreases in current liabilities of $4.046 million. Details of movements in specific accounts follow below.

Payables

During, the December 2014 Quarter amounts owed to creditors, relating mainly to the operation of the EGM, decreased to $36.573 million from a total outstanding at September 30, 2014 of $38.328 million.

On a quarter-on-quarter basis, creditors at December 31, 2014 were $1.755 million lower than at the end of the September 2014 Quarter. The decrease relative to the September 2014 Quarter reflects changes in timing of payment of outstanding invoices in the December 2014 Quarter.

Provision

A provision of $9.213 million as at December 31, 2014 for future rehabilitation work relating mainly to both old and new mining activity at EGM as well as for the long-service entitlement was $0.978 million higher than the amount provided for at September 30, 2014 of $8.235 million. The change during the December 31, 2014 Quarter reflects a slight increase in the area requiring rehabilitation as a result of increased mining activity and 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	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31
months ended	2014	2014	20142	20142	20132	20132	20132	2013
Operating activities	2.504	8.499	4.033	7.527	5.688	1.466	2.778	15.054
Investing activities	(7.829)	(7.671)	(10.220)	(10.674)	(14.664)	(12.083)	(12.083)	(15.576)
Financing activities	-	-	(0.002)	31.027	-	-	-	(0.128)

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 decreased by $1.234 million during the December 2014 Quarter while in the corresponding period in 2013 cash decreased by $7.075 million.

Operating activities during the December 2014 Quarter resulted in total cash receipts of $64.032 million (September Quarter: $73.026 million) from the sale of precious metals produced at the EGM and $0.138 million (September Quarter: $0.123 million) from bank interest that were offset by administration expenses and production expenses at EGM of $61.666 million (September Quarter: $64.650 million), giving a net cash inflow for Operating Activities during the period of $2.504 million (September Quarter: inflow of $8.499 million). This net cash inflow was $3.184 million less than the corresponding amount in the December 2013 Quarter when net inflows associated with Operating Activities totalled $5.688 million. In the December 2013 Quarter, there were cash receipts of $57.440 million from the sale of precious metals produced at the EGM. Interest received in the December 2013 Quarter was $0.004 million, administration expenses and production expenses were $51.506 million and payments for borrowing costs were $0.250 million.

Investing activities during the December 2014 Quarter included payments for mine properties of $1.977 million (September 2014 Quarter: $3.234 million), development expenses at EGM and SGP of $4.315 million (September Quarter: $2.628 million), payments relating to exploration in Ghana and Côte d’Ivoire of $1.509 million (September Quarter: $1.705 million), investment in fixed assets of $0.028 million (September Quarter: $0.004 million), investments in listed entities of nil (September Quarter: $0.100 million), that generated a net cash outflow of $7.829 million (September Quarter: $7.671 million). In the corresponding December 2013 Quarter, investing activities included payments for mine properties ($7.138 million), payments for development of EGM and SGP ($5.249 million), exploration associated with the EGM and SGP ($1.975 million), investment in fixed assets ($0.204 million) and payments relating to investments in put options of $0.179 million offset by the proceeds on disposal of property plant and equipment of $0.081 million resulting in a net cash outflow associated with investing activities of $14.664 million.

Financing activities cash flows in the December 2014 Quarter were nil, as there were no financing activities during the Quarter (September 2014 Quarter: nil). There were no financing activities during the December 2013 Quarter.

LIQUIDITY AND CAPITAL RESOURCES

As at December 31, 2014, the Company’s cash and cash equivalents amounted to $43.087 million (September 30, 2014: $44.321).

The Company does not currently have a working capital deficiency. At December 31, 2014, 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 improving recoveries, coupled with less waste stripping and implementing a cost reduction program, reviewing the decision on the development of the SGP and associated infrastructure after taking into account the results of optimised life of mine plans for both the EGM and the SGP and gold market conditions, and continued 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 are 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 Company is continuing to work with the Government to agree repayment terms for the balance of the outstanding debt and also to avoid the current situation where a large VAT receivable has accumulated and remained unpaid for an extended period.

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. A commitment limit may be renegotiated with the lenders if a decision to go ahead with the development of the SGP is taken.

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 31 December 2014 and no new options were issued during the December 2014 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 December 31, 2014 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. The Available Commitment limit may be renegotiated with the lenders if a decision to go ahead with the development of the SGP is taken.

As at December 31, 2014, a total of 71,000 ounces of gold (September 30, 2014: 89,000 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$1,595/oz. This includes a total of 70,000 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 30% of the Company’s total forecast gold production to December 31, 2015 and approximately 3% 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 December 31, 2014. 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	1.050	2.150	1.200
Rent of corporatepremises	0.419	0.546	-
Total	1.469	2.696	1.200
Notes:

(1) 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 December 31, 2014 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 December 2014 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 December 2014 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 December 2014 Quarter. The Company’s objectives and policies for managing these risks have not changed during the December 2014 Quarter.

OFF BALANCE SHEET ARRANGEMENTS

There are no off-balance sheet arrangements as at December 31, 2014.

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 ore 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 $0.141 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 ore 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 December 2014 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 December 31, 2014, the Company had issued 526,656,401 shares (September 30, 2014: 526,656,401; June 30, 2014: 526,656,401; March 31, 2014: 526,656,401; December 31, 2013: 457,962,088), nil options (September 30, 2014: nil; June 30, 2014: nil; March 31, 2014: 1,440,000; December 31, 2013: 1,540,000) and 6,944,561 performance rights (September 30, 2014: 7,263,775; June 30, 2014: 7,983,911; March 31, 2014: 7,263,813; December 31, 2013: 2,091,575).

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 December 31, 2014 and up to the date of this MD&A, the Company has not issued any shares, or options. In January 2015, 1,500,000 performance rights with an effective issue date of January 1, 2015 were issued subsequent to December 31, 2014 under the terms of the Company’s Performance Rights Plan, approved by shareholders in November 2014.

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 December 31, 2014, 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 December 2014 Quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. As at December 31, 2014, 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 ore reserves and mineral resources, realization of ore 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) 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 EGM Mineral Resources was first reported by the Company in compliance with the JORC Code 2012 in market announcements released on 27 August 2014 and 4 September 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 EGM Ore Reserves, SGP Ore Reserves and SGP Mineral Resources is based on, and fairly represents, information and supporting documentation compiled by Mr Kevin Thomson, a Competent Person who is a Professional Geoscientist with the Association of Professional Geoscientists of Ontario. This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. Mr Thomson is self-employed and a consultant of the Company. Mr Thomson has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken, to qualify as a Competent Person as defined in the JORC Code amd consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

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 20 January 2015. The Company confirms that it is not aware of any new information or data that materially affects the information in those market announcements.

For a description of Perseus’ data verification process, quality assurance and quality control measures, the effective date of the mineral resource and mineral reserve estimates contained herein, details of the key assumptions, parameters and methods used to estimate the mineral resources and reserves set out in this report and the extent to which the estimate of mineral resources or mineral reserves set out herein may be materially affected by any known

environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues, readers are directed to the technical report entitled “Technical Report - Central Ashanti Gold Project, Ghana” dated May 30, 2011 and the technical report entitled ‘‘Technical Report - Tengréla Gold Project, Côte d’Ivoire’’ dated December 22, 2010 in relation to the Edikan Gold Mine (formerly the Central Ashanti Gold Project) and the Tengréla Gold Project respectively.

AI assistant

PERSEUS MINING LIMITED — Interim / Quarterly Report 2015

46513_rns_2015-02-15_2a36d1b1-7993-49ae-9c31-abb2e3b74db4.pdf

February 13, 2015

MANAGEMENT’S DISCUSSION & ANALYSIS For the three months ended December 31, 2014

COMPANY OVERVIEW

OVERVIEW OF THE DECEMBER 2014 QUARTER

Summary

EGM, Ghana

Mining

Mining Contract

Processing

Site Operating Costs

Gold Sales and Price Hedging

Third Party Debt

Human Resources

EGM Mineral Resource Estimate

Table 6: EGM Measured and Indicated Mineral Resources

Table 7: EGM Inferred Mineral Resources

Mine Planning

EGM Mineral Reserve Estimate

Table 8: Ore Reserves – EGM[1,2,3,4]

Sissingué Development Project, Côte d’Ivoire

Project Development

SGP Mineral Resource Estimate

SGP Mineral Reserve Estimate

Exploration

Ghana

Mampong Deposit, EGM, Ghana

Highlights

Chirawewa Deposit, EGM, Ghana

Highlights

Côte d’Ivoire

Bélé Prospects, Mahalé Exploration Permit

Sissingué Exploitation Permit

Burkina Faso

COMPANY OUTLOOK FOR THE QUARTER ENDING MARCH 31, 2015

Edikan Gold Mine

Sissingué Gold Mine Development 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

PERSEUS MINING LIMITED Interim / Quarterly Report 2015