PERSEUS MINING LIMITED — Management Reports 2004

Oct 11, 2004

12 October 2004

The Manager Company Announcements Office Australian Stock Exchange Ltd 4th Floor, 20 Bridge Street SYDNEY, NSW 2000

Dear Sir

PROGRESS REPORT

Highlights

Exploration is commencing on Perseus's three lead projects, located within major gold belts:

• Infill drilling at Grumesa to upgrade existing resource with the view to completing a mining feasibility study;
• RAB drilling and pitting at Tengrela to follow up nine regionally significant soil anomalies:
• Diamond drilling at Savovardy:

Each of these projects have had substantial previous exploration and have potential for "world" class" gold deposits.

Following its debut on the Australian Stock Exchange on 22 September, Perseus is commencing active exploration programs on its highly prospective West African and Kyrgyz Republic gold projects.

Tengrela - Ivory Coast, West Africa

A six month exploration program planned to test nine prospect areas within a 60km portion of the Syama-Boundiali greenstone belt and Syama Shear will commence within two weeks with infill soil sampling and pitting of the identified anomalies. Subject to inspection of the RAB drilling rig on site by the Perseus exploration supervisor, it is anticipated that an initial 3,000 metre drilling program will commence in early November.

The exploration program, which is testing nine significant soil anomalies in a region that historically has a high conversion rate of such anomalies to gold deposits, is expected to include 13,000 metres of drilling over six months.

Grumesa - Ghana, West Africa

A two phase drilling program consisting of approximately 2,900 metres of RC and 200 metres of core drilling on the Grumesa project will commence within 7 days. The 74 RC drill hole program is designed to infill and extend the 70,000 ounce higher grade portion of the 450,000 ounce Kayeya The diamond drilling is designed to provide sample material for further gold resource. metallurgical testwork.

The drilling will enable a resource upgrade on the higher-grade portion of the deposit. It will be followed by a mining feasibility study investigating the potential of trucking ore grade material to a nearby processing plant.

Savovardy - Kyrgyz Republic

A diamond drilling rig has arrived on the Savoyardy project. A delay due to late commencement of road works meant that the target zones for a planned ten hole drilling campaign has not yet been reached. However, mineralisation encountered 700m south-west of Pogranichnoe was found to contain anomalous gold grades of up to 0.1 and $1.1g/t$ Au in four sub-zones totalling 26m in width in surface exposures. A two hole drilling program is planned to test this zone subject to continued favourable weather. The 600m long Pogranichnoe zone is located 2.7km south-west of the Savovardy zone, where high grade gold mineralisation ranging up to $12.4g/t$ over 13m has been delineated in adit sampling below low grade mineralisation at surface.

In view of the delays, joint venture partner, Lalo Ventures Ltd ("Lalo"), has been given extra time to complete its farmin commitments. Lalo now has until 30 June 2005 to spend a minimum of US$250,000 on exploration. It may then elect to spend a further US$750,000 by 31 December 2005 to maintain its farmin rights. To earn 70% equity, Lalo is required to spend a total of US$2 million by 31 December 2006, US$3 million by 31 December 2007 and US$6 million by 31 December 2008.

Yours faithfully

MARK CALDERWOOD Managing Director