PERSEUS MINING LIMITED — Interim / Quarterly Report 2016

Feb 14, 2016

==> picture [309 x 87] intentionally omitted <==

ABN 27 106 808 986

Consolidated Interim Financial Statements

For the three and six months ended

31 December 2015 (unaudited)

The accompanying unaudited consolidated interim financial statements for the three and six months ended 31 December 2015 have been prepared by management and approved by the Audit Committee on behalf of the Board of Directors of the company. The company’s auditors have not reviewed these financial statements. Readers are cautioned that these financial statements contain forward-looking information as described in the associated Management’s Discussion & Analysis. All amounts are stated in Australian dollars, except as otherwise stated.

Perseus Mining Limited and its controlled entities Unaudited consolidated statement of comprehensive income For the period ended 31 December 2015

For theperiod ended 31 December 2015
Notes Revenue 2 Changes in inventories of finished goods and work in progress Contractors, consumables, utilities and reagents Royalties Employee benefits expense Depreciation and amortisation expense 2 Foreign exchange (loss) / gain 2 Finance cost 2 Impairment of available-for-sale financial asset 7 Impairment of exploration Share of net losses of associate Gain recognised on discontinuation of equity accounting Other expenses (Loss) / profit before income tax expense Income tax benefit / (expense) 3 Net (loss) / profit after income tax Other comprehensive (loss) / income Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations Net changes in fair value of cash flow hedges Net changes in fair value of financial assets Income tax benefit / (expense) relating to cash flow hedges Total comprehensive (loss) / income for the period (Loss) / profit attributable to: Owners of the parent Non-controlling interests Total comprehensive (loss) / income attributable to: Owners of the parent Non-controlling interests Basic (loss) / profit per share Diluted (loss) / profit per share	Consolidated Three months ended Six months ended 31 Dec 2015 31 Dec 2014 31 Dec 2015 31 Dec 2014 $’000 $’000 $’000 $’000
	67,559 70,466 149,111 142,168 (1,362) 2,087 (5,239) (2,495) (45,925) (43,094) (92,097) (81,484) (3,366) (3,808) (11,441) (8,690) (6,681) (7,819) (12,874) (13,478) (13,210) (11,340) (22,315) (23,557) (15,174) 18,919 17,863 39,101 (155) (141) (293) (461) (709) (1,030) (709) (1,030) (4,844) - (4,844) - - - - (108) - - - 507 (1,789) (3,793) (3,297) (5,035)
	(25,656) 20,447 13,865 45,438 1,818 (2,011) (1,893) (4,271)
	(23,838) 18,436 11,972 41,167
	(12,604) 9,320 10,567 17,989 (8,309) 863 (18,548) 12,766 1,070 142 (397) (380) 2,909 (302) 6,590 (4,468)
	(40,772) 28,460 10,184 67,074
	(22,894) 18,178 12,127 40,508 (944) 258 (155) 659
	(23,838) 18,436 11,972 41,167
	(38,738) 27,746 11,004 64,767 (2,034) 714 (820) 2,307
	(40,772) 28,460 10,184 67,074
	(4.34) cents 3.45 cents 2.29 cents 7.69 cents (4.27) cents 3.40 cents 2.25 cents 7.58 cents

2

Perseus Mining Limited and its controlled entities Unaudited consolidated statement of financial position As at 31 December 2015

Notes Current assets Cash and cash equivalents 4 Receivables 5 Inventories 6 Prepayments Derivative financial instruments 11 Total current assets Non-current assets Receivables 5 Available for sale financial assets 7 Property, plant and equipment 8 Mine properties 9 Mineral interest acquisition and exploration expenditure 10 Total non-current assets Total assets Current liabilities Trade and other payables Total current liabilities Non-current liabilities Provision Deferred tax liability Total non-current liabilities Total liabilities Net assets Equity Issued capital 13 Reserves Retained earnings Parent entity interest Non-controlling interest Total equity	Consolidated 31 Dec 2015 30 June 2015 $’000 $’000
	94,641 103,741 29,838 40,720 46,445 43,960 6,250 6,033 35,328 21,276
	212,502 215,730
	12,968 12,337 1,714 2,820 215,267 210,672 233,259 214,699 41,717 41,568
	504,925 482,096
	717,427 697,826
	47,566 38,054
	47,566 38,054
	12,396 10,477 64,333 66,073
	76,729 76,550
	124,295 114,604
	593,132 583,222
	476,427 476,427 20,542 22,007 84,666 72,539
	581,635 570,973 11,497 12,249
	593,132 583,222

The accompanying notes form part of these financial statements.

3

Perseus Mining Limited and its controlled entities Unaudited consolidated statement of changes in equity For the period ended 31 December 2015

					Consolidated
	Issued capital	Retained earnings	Share based payments reserve	Foreign currency translation	Asset revaluation reserve	Hedge reserve	Non- controlling interest’s	Non- controlling interest	Total equity
				reserve			reserve
	$’000	$’000	$’000	$’000	$’000	$’000	$’000	$’000	$’000
Six months to 31 December 2015
Balance at 1 July 2015	476,427	72,539	19,212	(8,124)	(93)	10,762	250	12,249	583,222
Profit for the period	-	12,127	-	-	-	-	-	(155)	11,972
Currency translation differences	-	-	-	10,036	-	-	-	531	10,567
Net change in the available-for-sale financial assets	-	-	-	-	(397)	-	-	-	(397)
Net change in fair value of cash flow hedges	-	-	-	-	-	(16,557)	-	(1,991)	(18,548)
Income tax relatingto components of other comprehensive income	-	-	-	-	-	5,795	-	795	6,590
Total comprehensive income for theperiod	-	12,127	-	10,036	(397)	(10,762)	-	(820)	10,184
Shares issued during the period	-	-	-	-	-	-	-	-	-
Share issue expenses	-	-	-	-	-	-	-	-	-
Share based payments	-	-	165	-	-	-	-	37	202
Non-controllinginterest arisingfrom change in ownershipinterest	-	-	-	-	-	-	(507)	31	(476)
Balance at 31 December 2015	476,427	84,666	19,377	1,912	(490)	-	(257)	11,497	593,132
Six months to 31 December 2014
Balance at 1 July 2014	476,429	(15,280)	19,071	(33,739)	54	13,286	218	6,570	466,609
Profit for the period	-	40,508	-	-	-	-	-	659	41,167
Currency translation differences	-	-	-	17,244	-	-	-	818	18,062
Share of currency translation difference of associated entity	-	-	-	(73)	-	-	-	-	(73)
Net change in the fair value of available-for-sale financial assets	-	-	-	-	(380)	-	-	-	(380)
Net change in fair value of cash flow hedges	-	-	-	-	-	11,489	-	1,277	12,766
Income tax relatingto components of other comprehensive income	-	-	-	-	-	(4,021)	-	(447)	(4,468)
Total comprehensive income for theperiod	-	40,508	-	17,171	(380)	7,468	-	2,307	67,074
Shares issued during the period	-	-	-	-	-	-	-	-	-
Share issue expenses	-	-	-	-	-	-	-	-	-
Share basedpayments	-	-	231	-	-	-	-	72	303
Balance at 31 December 2014	476,429	25,228	19,302	(16,568)	(326)	20,754	218	8,949	533,986

The accompanying notes form part of these financial statements.

4

Perseus Mining Limited and its controlled entities Unaudited consolidated statement of cash flows For the period ended 31 December 2015

Notes Operating activities Receipts in the course of operations Payments to suppliers and employees Interest received Net cash (used in) / from operating activities Investing activities Payments for exploration and evaluation expenditure Payments for acquisition of property, plant and equipment Payments for mine properties Payments for acquisition of assets under construction Investment in listed entity Net cash used in investing activities Financing activities Proceeds from share issues Share issue expenses Acquisition of minority interest Net cash provided by financing activities Net decrease in cash held Cash and cash equivalents at the beginning of the financial period Effects of exchange rate fluctuations on the balances of cash held in foreign currencies Cash and cash equivalents at the end of the period 4	Consolidated Three months ended Six months ended 31 Dec 2015 31 Dec 2014 31 Dec 2015 31 Dec 2014 $’000 $’000 $’000 $’000
	54,243 64,032 143,809137,058 (58,815) (61,666) (133,947) (126,316) 186138442261
	(4,386) 2,504 10,304 11,003
	(1,522) (1,509) (2,691) (3,214) (601) (28) (607) (31) (3,523) (1,977) (4,167) (5,211) (10,751) (4,315) (18,761) (6,943) - - - (100)
	(16,397) (7,829) (26,226) (15,499)
	- - - - - - - - (475) - (475) -
	(475) - (475) -
	(21,258) (5,325) (16,397) (4,496) 123,414 44,321 103,741 36,937 (7,515) 4,0917,297 10,646
	94,641 43,087 94,641 43,087

The accompanying notes form part of these financial statements.

5

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

Notes to the consolidated financial statements

About this report			Page 7
Performance	Operating assets and liabilities	Capital and financial risk	Unrecognised items
		management
1. Segment information	4. Cash and cash equivalents	11. Derivative financial	14. Contingencies
		instruments
2. Other income / expenses	5. Receivables	12. Financial risk	15. Commitments
and adjustments		management
3. Income tax expense	6. Inventories	13. Issued capital and	16. Events occurring after the end of
		reserves	the reporting period
	7. Available for sale financial
	assets
	8. Property, plant and equipment
	9. Mine properties
	10. Mineral interest acquisition and
	exploration expenditure

6

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

ABOUT THIS REPORT

The interim financial statements are for the consolidated entity consisting of Perseus Mining Limited and its subsidiaries (the “group” or the “consolidated entity”). Perseus Mining Limited is a listed for-profit public company, incorporated and domiciled in Australia. During the half-year ended 31 December 2015, the consolidated entity conducted operations in Australia, Ghana and Côte d’Ivoire.

These consolidated interim financial statements of the consolidated entity for the period ended 31 December 2015 are general purpose condensed financial statements prepared in accordance with the requirements of the Australian Corporations Act 2001 (Cth) and AASB 134 ‘Interim Financial Reporting’.

These condensed interim financial statements do not include full disclosures of the type normally included in an annual financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the group as in the full financial report. It is recommended that these interim financial statements be read in conjunction with the annual financial report for the year ended 30 June 2015, and any public announcements made by the group during the period in accordance with continuous disclosure requirements arising under the Corporations Act 2001.

The consolidated interim financial statements are presented in Australian dollars, which is Perseus Mining Limited’s functional and presentation currency. These consolidated interim financial statements are rounded off to the nearest thousand dollars ($’000), unless otherwise indicated.

New and amended standards and interpretations adopted by the group

In the period ended 31 December 2015, the group has reviewed and adopted 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 before 1 July 2015. The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the group’s annual consolidated financial statements for the year ended 30 June 2015. As a result of this review the directors have determined that there is no change necessary to group accounting policies.

Historical cost convention

These consolidated interim financial statements have been prepared under the historical cost convention, as modified by the revaluation of derivative instruments and available for sale financial assets.

Critical accounting estimates

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed throughout the notes.

SIGNIFICANT JUDGEMENTS AND 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 consolidated entity and that are believed to be reasonable under the circumstances.

The group makes estimates and assumptions concerning the future. The resulting accounting will, by definition, seldom equal the actual results. The estimates and assumptions that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Note Depreciation and amortisation Unit-of-production method of depreciation/amortisation Deferred stripping expenditure Impairment Income tax

7

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

SIGNIFICANT JUDGEMENTS AND ESTIMATES – continued

Inventory	6
Reserves and resources	9
Exploration and evaluation expenditure	10
Derivative financial instruments	11
Measurement of fair value	12
Share based payments	13

1. SEGMENT INFORMATION

(a) Description of segments

Management has determined the operating segments based on the reports reviewed by the executive management team and board of directors that are used to make strategic decisions.

The group primarily reports on a geographical basis as its risks and rates of return are affected predominantly by differences in geographical areas in which it operates and this is the format of the information provided to the executive management team and board of directors.

The group operated principally in three geographical segments during the period ended 31 December 2015 being Australia and the West African countries of Ghana and Côte d’Ivoire. The segment information is prepared in conformity with the group’s accounting policies.

The group comprises the following main segments:

Australia	Investing activities and corporate management.
Ghana	Mining, mineral exploration, evaluation and development activities.
Côte d’Ivoire	Mineral exploration, evaluation and development activities.

Revenue is derived from two external customers arising from the sale of gold bullion reported under the Ghana reporting segment.

8

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

1. SEGMENT INFORMATION – continued

(b) Segment information provided to the executive management team and board of directors

Revenue Total revenue Results Operating profit before income tax Income tax expense Net profit Included within segment results: Share of net loss of associate accounted for using the equity method Impairment of available-for-sale financial asset Depreciation and amortisation Share based payments to employees, directors and consultants Foreign exchange gain Assets Segment assets Total assets includes: Additions to non-current assets (other than financial assets) Liabilities Segment liabilities	Six months ending Australia Australia Ghana Ghana Côte d’Ivoire Côte d’Ivoire 31 Dec 2015 31 Dec 2014 31 Dec 2015 31 Dec 2014 31 Dec 2015 31 Dec 2014 $’000 $’000 $’000 $’000 $’000 $’000	Consolidated Consolidated 31 Dec 2015 31 Dec 2014 $’000 $’000
	238 300 148,873 141,868 - -	149,111 142,168
	10,387 34,195 5,344 12,120 (1,866) (877)	13,865 45,438
	- (108) ---- (709) (1,030) ---- (352) (519) (21,883) (22,970) (80) (68) (98) (263) (89) 7 (11) (20) 15,752 39,257 3,094 (158) (983) 2 As at As at As at As at As at As at 31 Dec 2015 30 June 2015 31 Dec 2015 30 June 2015 31 Dec 2015 30 June 2015 $’000 $’000 $’000 $’000 $’000 $’000	(1,893) (4,271)
		11,972 41,167
		- (108) (709) (1,030) (22,315) (23,557) (198) (276) 17,863 39,101 As at As at 31 Dec 2015 30 June 2015 $’000 $’000
	77,565 45,104 559,559 587,263 80,303 65,459	717,427 697,826
	150 131 18,866 36,023 10,577 3,782 1,055 1,543 122,615 112,512 625 549	29,593 39,936 124,295 114,604

9

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

2. OTHER INCOME / EXPENSES AND ADJUSTMENTS

2. OTHER INCOME / EXPENSES AND ADJUSTMENTS
		Consolidated
	Three months ended		Six months ended
	31 Dec 2015	31 Dec 2014	31 Dec 2015	31 Dec 2014
	$’000	$’000	$’000	$’000
(Loss) / profit before income tax has been determined after:
Other revenue:
Interest revenue	186	143	460	313
Interest revenue is included in ‘revenue’ in the statement of comprehensive income.
Foreign exchange (loss) / gain:
Foreign exchange (loss) / gain on translation of inter-company loans	(11,975)	18,055	15,798	37,791
Foreign exchange (loss) / gain on translation of VAT receivable	(174)	(56)	2,020	(1,526)
Foreign exchange (loss) / gain on other translations	(3,025)	920	45	2,836
	(15,174)	18,919	17,863	39,101
Changes in inventories of finished goods and work in progress:
Write back / (write down) of inventories due to a (decrease) /
increase in net realisable value	(822)	(2,081)	1,850	(6,704)

(Write down) / write back of inventories due to a (decrease) / increase in net realisable value is included in ‘changes in inventories of finished goods and work in progress’ in the statement of comprehensive income.

Finance costs: Interest and finance charges Other costs: Loss on disposal of property, plant and equipment Write-down of receivable Depreciation and amortisation: Amortisation of stripping asset Other depreciation and amortisation	(155) (141) (293) (461)
	- - - (4) - (2,294) - (2,294)
	(3,192) (3,996) (5,111) (9,504) (10,018) (7,344) (17,204) (14,053)
	(13,210) (11,340) (22,315) (23,557)

SIGNIFICANT JUDGEMENTS

(i) Impairment of assets

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 group undertakes future cash flow calculations which are based on a number of critical estimates and assumptions, and reflect the life of mine (“LOM”) operating and capital cost assumptions used in the group’s latest budget and LOM plans:

• (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 are based on brokers consensus forecast;

• (iv) Future costs of production;

• (v) Future capital expenditure;

• (vi) Future exchange rates; and/or

• (vii) Discount rates based on the group’s estimated before tax weighted average cost of capital, adjusted when appropriate to take into account relevant risks such as development risk etc.

10

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

2. OTHER INCOME / EXPENSES AND ADJUSTMENTS – continued

SIGNIFICANT JUDGEMENTS – continued

(i) Impairment of assets - continued

Variations to expected future cash flows, and timing thereof, could result in significant changes to the impairment test results, which in turn could impact future financial results. The expected future cash flows of the cash generating units are most sensitive to fluctuations in gold the price.

(ii) Unit-of-production method of depreciation / amortisation

The group 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 group amortises mine property assets utilising tonnes of ore mined and mine related plant and equipment over tonnes of ore processed.

(iii) 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 and a suitable production measure to be used to allocate production stripping costs between inventory and any stripping activity asset(s) for each component. The group considers that the ratio of the expected waste to be stripped for an expected amount of ore to be mined, for a specific component of the ore body, is the most suitable production measure. Furthermore, judgements and estimates are also used to apply the units of production method in determining the amortisation of the stripping activity asset(s).

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 component ratio even if they do not affect the mine’s design. Changes to the life of the component are accounted for prospectively.

3. INCOME TAX EXPENSE

The income tax expense that has been recognised in the statement of comprehensive income comprises $1,892,524 (31 December 2014 income tax expense: $4,270,949), fully relating to the EGM profit for the period.

SIGNIFICANT JUDGEMENTS

Judgement is required in determining whether deferred tax assets are recognised on the statement of financial position. Deferred tax assets, including those arising from unutilised tax losses, require management to assess the likelihood that the group 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 group 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 group operates could limit the ability of the group to obtain tax deductions in future periods.

11

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

4. CASH AND CASH EQUIVALENTS

4. CASH AND CASH EQUIVALENTS Cash assets (i) Short term deposits (ii)	Consolidated 31 Dec 2015 30 June 2015 $’000 $’000 40,467 10,795 54,174 92,946
	94,641 103,741

(i) Cash at bank earns interest at floating rates based on daily bank deposit rates.

(ii) Short-term deposits are made for varying periods, depending on the immediate cash requirements of the group, and earn interest at the respective short-term deposit rates.

Risk exposure

The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned above.

5. RECEIVABLES

Current Trade debtors (i) Sundry debtors (i) Other receivable (ii) Allowance for doubtful debts (iii) Non-current Security deposits (iv) Movement in the allowance for doubtful debts: Balance at beginning of the period Foreign exchange translation gains Balance at the end of the period	4,992 24,508 5,436 7,403 23,234 12,454 (3,824) (3,645)
	29,838 40,720
	12,968 12,337
	12,968 12,337
	3,645 2,958 179 687
	3,824 3,645

Terms relating to the above financial instruments:

(i) Trade and sundry debtors are non-interest bearing and generally on 30 day terms.

• (ii) Other receivable relates to a VAT refund from the Ghana Revenue Authority (“GRA”). During the period, $23.2 million (30 June 2015: $12.4 million) related to a VAT refund receivable from the Ghana Revenue Authority (“GRA”). There are no non-current VAT receivables as at 31 December 2015.

• (iii) Allowance for doubtful debts are recognised against sundry debtors for estimated irrecoverable amounts determined by reference to an analysis of the counterparty’s current financial position.

• (iv) At 31 December 2015, the group has US$9.5 million (approximately A$13.0 million) held in bank deposits which are subject to a lien and are collateral for a bank guarantee that has been issued to the Ghana Environmental Protection Agency in relation to environmental rehabilitation provisions concerning the EGM.

Past due but not impaired

With the exception of $3.8 million disclosed above which is fully provided for, all of the remaining trade and other receivables are not past due.

12

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

5. RECEIVABLES – continued

Fair value and foreign exchange and credit risk

Due to the short term nature of the current receivables, their carrying amount is assumed to approximate their fair value. Long term receivables are evaluated by the group based on parameters such as individual creditworthiness of the customer and specific country risk factors. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of receivables mentioned above.

The other receivable relating to a VAT refund from the GRA is immediately repayable on demand in Ghanaian Cedis (“GHS”), is unsecured and bears no interest. Since the authorisation of treasury credit notes by the GRA, payments of employment taxes, withholding taxes and royalties have been offset against the VAT receivable. No payments were received for the half-year ended 31 December 2015.

6. INVENTORIES

Current Ore stockpiles – at cost Ore stockpiles – at net realisable value Gold in circuit Materials and supplies	Consolidated 31 Dec 2015 30 June 2015 $’000 $’000 - 9,176 4,357 - 4,576 4,288 37,512 30,496
	46,445 43,960

Inventory expense

The inventory expense during the six month period ended 31 December 2015 was $130.7 million (30 June 2015: $235.3 million). The write up of inventories due to an increase in net realisable value recognised during the period ended 31 December 2015 amounted to $1.9 million (30 June 2015: write down of $6.4 million) and is included in ‘changes in inventories of finished goods and work in progress’ in the statement of comprehensive income.

SIGNIFICANT JUDGEMENTS

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.

7. AVAILABLE FOR SALE FINANCIAL ASSETS

Non-current Available for sale financial assets (i) Reconciliation of movements in available for sale financial assets: Balance at beginning of the period Reclassification from investments accounted for using the equity method Additions Impairment of available for sale financial asset (ii) Loss on fair value remeasurements Balance at end of the period	1,714 2,820
	1,714 2,820
	2,820 1,841 - 1,875 - 281 (709) (1,030) (397) (147)
	1,714 2,820

13

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

7. AVAILABLE FOR SALE FINANCIAL ASSETS – continued

Terms and conditions relating to the above financial instruments:

• (i) The group’s investment in Manas Resources Limited ($0.3 million) and Burey Gold Limited ($1.4 million) is recognised as an available for sale financial asset.

• (ii) During the half-year, impairment of the investment in Manas was considered. The prolonged decline in the fair value of Manas’s shares was considered objective evidence of impairment and as such, an impairment of $0.7 million was made and is shown at ‘impairment of available for sale financial assets’ in the statement of comprehensive income. The investment in Manas is recognised at fair value at 31 December 2015.

8. PROPERTY, PLANT AND EQUIPMENT

Plant and equipment - at cost Accumulated depreciation Reconciliation of plant and equipment: Balance at the beginning of the period Additions Transferred from assets under construction Depreciation Disposals Translation difference movement Carrying amount at the end of the period Assets under construction – at cost Reconciliation of assets under construction: Balance at the beginning of the period Additions Transferred to property, plant and equipment Transferred to mine properties Translation difference movement Carrying amount at the end of the period Total property, plant and equipment net book value	Consolidated 31 Dec 2015 30 June 2015 $’000 $’000 187,791 177,088 (63,620) (51,358)
	124,171 125,730
	125,730 110,467 607 69 1,513 5,935 (9,877) (15,271) - (29) 6,198 24,559
	124,171 125,730
	91,096 84,942
	84,942 74,054 19,010 19,362 (1,513) (5,935) (14,058) (5,818) 2,715 3,279
	91,096 84,942
	215,267 210,572

14

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

9. MINE PROPERTIES

Mine properties - at cost Accumulated depreciation Reconciliation of mine properties: Balance at the beginning of the period Additions Transferred from assets under construction Transferred from mineral interest acquisition and exploration expenditure Amortisation Translation difference movement Carrying amount at the end of the period	Consolidated 31 Dec 2015 30 June 2015 $’000 $’000 366,426 330,017 (133,167) (115,318)
	233,259 214,699
	214,699 189,005 6,781 14,992 14,058 5,818 - 3,267 (12,438) (39,152) 10,159 40,769
	233,259 214,699

SIGNIFICANT JUDGEMENTS

Ore reserves are estimates of the amount of ore that can be economically and legally extracted from the group’s mining properties. The group 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.

10. MINERAL INTEREST ACQUISITION AND EXPLORATION EXPENDITURE

Mineral interest acquisition and exploration – at cost Reconciliation: Balance at the beginning of the period Additions Transferred to mine properties Impairment of exploration Translation difference movement Carrying amount at the end of the period	41,717 41,568
	41,568 33,565 3,195 5,389 - (3,267) (4,844) - 1,798 5,881
	41,717 41,568

15

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

10. MINERAL INTEREST ACQUISITION AND EXPLORATION EXPENDITURE – continued

The expenditure above relates principally to exploration and evaluation activities. The ultimate recoupment of this expenditure is dependent upon successful development and commercial exploitation, or alternatively, sale of the respective areas of interest. The impairment recognised of $4.8 million (30 June 2015: nil) is a result of writing off the Dadieso licence in Ghana due to the assessed complexity of developing that area of interest.

SIGNIFICANT JUDGEMENTS

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.

11. DERIVATIVE FINANCIAL INSTRUMENTS

11. DERIVATIVE FINANCIAL INSTRUMENTS
Current assets Cash flow hedge asset Financial assets at fair value – gold forward contracts	Consolidated 31 Dec 2015 30 June 2015 $’000 $’000 - 18,397 35,328 2,879
	35,328 21,276

The group is party to derivative financial instruments in the normal course of business in order to hedge exposure to future price and currency fluctuations in the primary commodity markets in which it operates. This is done in accordance with the group's financial risk management policies.

Forward metal contracts – cash flow hedges:

The group uses cash flow designated USD forward metal contracts to manage movements in USD precious metal prices on its anticipated sales of gold. At 31 December 2015 there were no remaining cash flow designated hedge contracts in place. The portion of the gain or loss on the hedging instruments used during the period that are determined to be an effective hedge are recognised and retained directly in equity. The ineffective portion will be recognised in the statement of comprehensive income.

The amount reclassified during the year to the income statement was a gain of $22.0 million (30 June 2015 gain: $23.6 million).

Financial assets at fair value – gold forward contracts:

Financial assets at fair value through profit or loss include the change in value of gold forward contracts put in place during the half-year ending 31 December 2015. The group uses USD forward metal contracts to hedge movements in USD precious metal prices on its anticipated sales of gold. The risk management policies related to these contracts are provided in note 12. Movements in fair value between inception and close-out of the contract are taken to the statement of comprehensive income.

At 31 December 2015 the group held forward metal contracts for 120,267 ounces of gold on a spot deferred basis with a weighted average price of US$1,276/oz. When necessary, these contracts may be rolled over into new contracts at maturity, subject to counterparty credit approval.

SIGNIFICANT JUDGEMENTS

The group makes judgements on the effectiveness of all derivative financial instruments entered into, including forward metal contracts, metal options and foreign currency option contracts. 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.

16

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

12. FINANCIAL RISK MANAGEMENT

Set out below is an overview of financial instruments, other than cash and short-term deposits, held by the group as at 31 December 2015:

Financial assets: Receivables Gold forward contracts Total current Receivables Available for sale investments Total non-current Total Financial liabilities: Payables Total current Total	Loans and receivables / amortised cost Available-for- sale Fair value through profit and loss Fair value through other comprehensive income (cash flow hedge) $’000 $’000 $’000 $’000 29,838 - - - - - 35,328 -
	29,838 - 35,328 - 12,968 - - - - 1,714 - -
	12,968 1,714 - -
	42,806 1,714 35,328 -
	46,105 - - -
	46,105 - - -
	46,105 - - -

Set out below is an overview of financial instruments, other than cash and short-term deposits, held by the group as at 30 June 2015:

Financial assets: Receivables Gold forward contracts Derivative financial instruments Total current Receivables Available for sale investments Total non-current Total Financial liabilities: Payables Total current Total	Loans and receivables / amortised cost Available-for- sale Fair value through profit and loss Fair value through other comprehensive income (cash flow hedge) $’000 $’000 $’000 $’000 40,720 - - - - - 2,879 - - - - 18,397
	40,720 - 2,879 18,397 12,337 - - - - 2,820 - -
	12,337 2,820 - -
	53,057 2,820 2,879 18,397
	36,437 - - -
	36,437 - - -
	36,437 - - -

17

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

12. FINANCIAL RISK MANAGEMENT – continued

Fair values

Set out below is a comparison of the carrying amounts and fair values of financial instruments:

Financial assets: Receivables Gold forward contracts Derivative financial instruments Total current Receivables Available for sale investments Total non-current Total Financial liabilities: Payables Total non-current Total Fair value hierarchy	Consolidated 31 Dec 2015 30 June 2015 Carrying amount Fair value Carrying amount Fair value $’000 $’000 $’000 $’000 29,838 29,838 40,720 40,720 35,328 35,328 2,879 2,879 - - 18,397 18,397
	65,166 65,166 61,996 61,996 12,968 12,968 12,337 12,337 1,714 1,714 2,820 2,820
	14,682 14,682 15,157 15,157
	79,848 79,848 77,153 77,153
	46,105 46,105 36,437 36,437
	46,105 46,105 36,437 36,437
	46,105 46,105 36,437 36,437

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 Quoted market prices in an active market (that are unadjusted) for identical assets or liabilities Level 2 Valuation techniques (for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable)

• Level 3 Valuation techniques (for which the lowest level input that is significant to the fair value measurement is unobservable)

For financial instruments that are recognised at fair value on a recurring basis, the group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

There were no transfers between categories during the period.

18

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

12. FINANCIAL RISK MANAGEMENT – continued

The following table presents the group’s financial instruments measured and recognised at fair value:

31 December 2015 Financial assets: Available for sale instruments Gold forward contracts Total 30 June 2015 Financial assets: Available for sale instruments Gold forward contracts Derivative financial instruments Total	Level 1 Level 2 Level 3 Total $’000 $’000 $’000 $’000 1,714 - - 1,714 - 35,328 - 35,328
	1,714 35,328 - 37,042
	2,820 - - 2,820 - 2,879 - 2,879 - 18,397 - 18,397
	2,820 21,276 - 24,096

Valuation techniques

The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in level 1.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. The valuation techniques include forward pricing using present value calculations. The models incorporate various inputs including the credit quality of counterparties and forward rate curves of the underlying commodity. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

Specific valuation techniques used to value financial instruments include:

• Quoted market prices or dealer quotes for similar instruments.

• The fair value of forward exchange contracts is determined using forward exchange market rates at the end of the reporting period.

• Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments.

The net fair value of cash and cash equivalents and non-interest bearing financial assets and liabilities of the group approximate their carrying values. The carrying values (less impairment provision if provided) of trade receivables and payable are assumed to approximate their fair values due to their short-term nature.

SIGNIFICANT JUDGEMENTS

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.

19

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

13. ISSUED CAPITAL AND RESERVES

• (a) Issued and paid-up share capital

(a) Issued and paid-up share capital			Consolidated	Consolidated
			31 Dec 2015	31	Dec 2014
			$’000		$’000
529,343,901 (31 December 2014: 526,656,401) ordinary shares, fully paid			476,427		476,429
		Consolidated
	31 Dec 2015		31	Dec 2014
	$’000	Number	$’000		Number
Balance at the beginning of the period	476,427	526,656,401	476,429	526,656,401
Transaction costs arising from issue of securities for cash	-	-	-		-
Vestingofperformance rights on 29 July2015	-	2,687,500	-		-
Balance at the end of theperiod	476,427	529,343,901	476,429	526,656,401

(b) Performance rights

Performance rights have been granted as follows:

Grant date End of measurement period Expiry date Exercise price	Opening balance Performance rights issued Performance rights exercised Performance rights forfeited Closing balance 1 July 2015 31 Dec 2015 Number Number Number Number
25-Nov-12 30-Jun-15 31-Dec-15 nil 1-Jan-13 30-Jun-15 31-Dec-15 nil 1-Jan-14 30-Jun-15 31-Dec-15 nil 1-Jan-14 31-Dec-16 30-Jun-17 nil 4-Jun-14 30-Jun-15 31-Dec-15 nil 4-Jun-14 31-Dec-16 30-Jun-17 nil 1-Jan-15 30-Jun-16 31-Dec-16 nil 1-Jan-15 31-Dec-17 30-Jun-18 nil 1-Jul-15 30-Jun-17 31-Dec-17 nil 20-Nov-15 30-Jun-17 31-Dec-17 nil 20-Nov-15 30-Jun-18 31-Dec-18 nil	300,000 - - (300,000) - 1,202,418 - - (1,202,418) - 2,125,000 - (2,125,000) - - 2,125,000 - - - 2,125,000 562,500 - (562,500) - - 562,500 - - - 562,500 750,000 - - - 750,000 750,000 - - - 750,000 - 4,975,000 - - 4,975,000 - 800,000 - - 800,000 - 500,000 - - 500,000
	8,377,418 6,275,000 (2,687,500) (1,502,418) 10,462,500

SIGNIFICANT JUDGEMENTS

The consolidated entity measures the cost of equity-settled transactions with employees and consultants by reference to the fair value of the equity instruments at the date at which they were granted. The fair value of options granted is determined using a Black-Scholes model and the fair value of performance rights granted is determined using a Monte Carlo simulation model.

(c) Ordinary shares

Ordinary shares entitle the holder to participate in dividends as declared and, in the event of winding up of the company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company.

20

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

14. CONTINGENCIES

There were no changes in contingent liabilities since the annual report for the year ended 30 June 2015.

15. COMMITMENTS

(a) Exploration expenditure commitments

With respect to the group’s mineral property interests in Ghana and Côte d’Ivoire, statutory expenditure commitments specified by the mining legislation are nominal in monetary terms. However, as part of mineral licence application and renewal requirements, the group submits budgeted exploration expenditure. In assessing subsequent renewal applications, the mining authorities review actual expenditure against budgets previously submitted. The group’s budget expenditures for future periods are shown below. These amounts do not become legal obligations of the group and actual expenditure may and does vary depending on the outcome of actual exploration programs, and the costs and results from those programs.

Within one year One year or later and not later than five years Later than five years	Consolidated 31 Dec 2015 30 June 2015 $’000 $’000 750 750 1,700 1,700 1,500 1,500
	3,950 3,950

(b) Capital commitments

The group is responsible for all rehabilitation of the EGM mining leases, which are currently estimated to cost approximately US$8.9 million and a provision has been recorded for this at balance date.

(c) Operating lease commitments

The company leases office premises under normal commercial arrangements. The lease is for a period of 5 years beginning 1 April 2012. The company is under no legal obligation to accept a renewal of the lease once the lease term has expired.

Future minimum lease payments payable under non-cancellable operating leases at 31 December 2015 are as follows:

Within one year One year or later and not later than five years Later than five years	Consolidated 31 Dec 2015 30 June 2015 $’000 $’000 416 411 105 318 - -
	521 729

21

Perseus Mining Limited and its controlled entities Notes to the unaudited consolidated financial statements For the period ended 31 December 2015

16. EVENTS OCCURING AFTER THE END OF THE REPORTING PERIOD

Since the end of the period and to the date of this report no matter or circumstance has arisen that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in subsequent financial periods, other than:

• a) 1,325,000 performance rights were issued to employees of the company under the terms of the company’s Performance Rights Plan approved by shareholders in November 2014. These performance rights were issued at nil consideration with an effective issue date of 14 January 2016. Each performance right will convert to an ordinary share upon satisfaction of vesting criteria.

22