PERSEUS MINING LIMITED — Management Reports 2010

Sep 28, 2010

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29 September 2010

The Manager ASX Ltd Level 4 20 Bridge Street Sydney, NSW 2000

Dear Sir

MANAGEMENT’S DISCUSSION AND ANALYSIS AND ANNUAL INFORMATION FORM

Perseus Mining Limited (ASX / TSX: PRU) advises lodgement of Management’s Discussion and Analysis (MD&A) for the year ended 30 June 2010 and the Annual Information Form for Canadian reporting purposes.

The MD&A, which must be read in conjunction with the statutory financial report for the year ended 30 June 2010, is attached.

The Annual Information Form is available on the Company’s website and at SEDAR.com.

Yours faithfully

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Susmit Shah Company Secretary

Perseus Mining Limited ABN 27 106 808 986 30 Ledgar Road, Balcatta, Western Australia 6021 PO Box 717 Balcatta WA 6914 Telephone: (618) 9240 6344 Facsimile: (618) 9240 2406 Email address: info@perseusmining.com Website: www.perseusmining.com

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September 28, 2010

MANAGEMENT’S DISCUSSION & ANALYSIS For the twelve months ended June 30, 2010.

This Management’s Discussion and Analysis (“MD&A”) of Perseus Mining Limited and its controlled entities (“Perseus” or the “Company”) is dated September 28, 2010 and provides an analysis of the Company’s performance and financial condition for the twelve months and the three months ended June 30, 2010 (the “Full year” or “June 2010 quarter” respectively).

This MD&A should be read in conjunction with the Company’s June 30, 2010 audited consolidated annual financial statements and notes thereto, and the Company’s unaudited interim consolidated financial statements for the six months to December 31, 2009. 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 information that is based on the Company’s expectations, estimates and projections regarding its business and the economic environment in which it operates. Forward-looking information speaks only as of the date it is provided, is not a guarantee of future performance and involves risks and uncertainties that are difficult to control or predict. Examples of some of the specific risks associated with the operations of the Company are set out in this MD&A under “Risk Factors”. Actual outcomes and results may differ materially from those expressed in forward-looking information and readers should not place undue reliance on such statements. Readers are also referred to the “Cautionary Note Regarding Forward Looking Information” in this MD&A.

All monetary amounts are stated in Australian dollars, except as otherwise stated.

COMPANY OVERVIEW

Perseus is listed on the Australian, Toronto and Frankfurt stock exchanges. The Company was incorporated in Australia on October 24, 2003, listed on the Australian Securities Exchange (“ASX”) on September 22, 2004 and on the Toronto Stock Exchange (“TSX”) on February 3, 2010.

Perseus is an Australian based gold exploration, evaluation and development stage corporation with a focus on underexplored gold belts in West Africa. As mining operations have not yet commenced on any of its properties, the Company does not currently have any mining revenues. Perseus currently has no long-term debt obligations, although a project finance facility has been negotiated (details of which are provided elsewhere in this MD&A) but no amounts had been drawn down up to the date of this MD&A.

Perseus’s principal assets currently consist of:

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

Perseus Mining Limited ABN 27 106 808 986 30 Ledgar Road, Balcatta, Western Australia 6021 PO Box 717 Balcatta WA 6914 Telephone: (618) 9240 6344 Facsimile: (618) 9240 2406 Email address: info@perseusmining.com Website: www.perseusmining.com

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• A 90% interest in the Tengrela gold deposit (the ‘‘Tengrela Gold Project’’ or “TGP”), an advanced stage gold exploration and evaluation project, located in the north of Côte d'Ivoire. The Company completed a pre-feasibility study for the TGP in February 2009 and, based on the results of that study and the results of subsequent exploration activities, commenced a DFS for the TGP in the first quarter of 2010. The study has since been substantially advanced and is on schedule for completion during the December 2010 quarter. The Company’s interest in the project will reduce to 80% in the event that a mining lease is granted by Ivorian authorities requiring a 10% equity interest in the project to be transferred to the Government.

In addition to the above, Perseus also owns: (i) a 100% interest (reducing to 90% on the granting of a mining licence) in the Grumesa gold deposit (the ‘‘Grumesa Gold Project’’) an exploration stage project located 30 kilometres to the east of the CAGP in Ghana. A pre-feasibility study completed in September 2007 indicated that the Grumesa Gold Project represents a potential satellite production opportunity to the larger mine under construction at the CAGP; (ii) a 20% interest in Burey Gold Limited (“Burey”) an ASX-listed company holding a portfolio of gold exploration properties in the Republic of Guinea in West Africa; and (iii) a 28% interest in Manas Resources Limited (‘‘Manas’’), an ASX-listed company holding a portfolio of gold properties in Central Asia that were sold to Manas by Perseus in mid-2008.

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

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

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

• complete the DFS for the TGP, and subject to a positive outcome and permitting of the project, to undertake the construction and commissioning of the TGP;

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

PERFORMANCE HIGHLIGHTS

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

Central Ashanti Gold Project and elsewhere in Ghana :

• Applied for and were granted two mining licences covering the CAGP in Ghana;

• Obtained all environmental approvals, including the environmental permit needed for development of the CAGP;

• Assembled an experienced project management team, capable of successfully delivering the CAGP;

• Substantially completed the design of the CAGP process plant;

• Placed orders for long lead items of plant and equipment, and awarded fixed price lump sum contracts for the design, supply, construction and provision of services related to the development of the CAGP;

• Substantially progressed the compensation of local residents for disturbance to crops and land;

• Received an approved offer of debt finance from a banking syndicate for a facility of up to US$85M.

• Commenced mine construction in June 2010 and by June 30, 2010 had spent $59.47 million on pre-development, procurement and construction activities;

• Continued exploration and resource drilling on the tenements associated with the CAGP with 79,804 metres of drilling completed, including 32,224 metres during the June 2010 quarter. .

Tengrela Gold Project and elsewhere in Côte d’Ivoire :

• A total of 83,262 metres of reverse circulation (RC) and diamond drilling and 36,098 metres of rotary air blast (RAB) drilling were completed during the year ended June 30, 2010, including 33,509 metres of RC and diamond drilling and 11,524 metres of RAB drilling respectively during the June 2010 quarter, mostly on the Sissingue prospect that forms the basis of the TGP.

• Very high grade intercepts including 6 metres at 429 g/t gold, 8 metres at 325 g/t gold, 22 metres at 72.1 g/t gold, 20 metres at 65.5 g/t gold and 8 metres at 67.7 g/t gold, were recorded resulting in an upgraded Measured and Indicated Mineral Resource for the TGP of 0.931 M ounces of gold plus a further 0.257 M ounces of Inferred Mineral Resource at a 0.5 g/t gold cut-off grade;

• Substantially advanced preparation of the DFS for the TGP and maintained the schedule for completion of the study in the December quarter of 2010;

• Established a corporate presence in Côte d’Ivoire, and started assembling a management team capable of managing the government approvals process for the development of the TGP.

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Corporate

During the Full year, the Company has:

• Listed its shares for trading on the TSX on February 3, 2010 to complement its existing listings on the ASX and the Frankfurt Stock Exchange;

• Raised approximately $204.4 million in new equity through a number of equity offerings and the exercise of options;

• Strengthened its Board and corporate management team with the recruitment of two new independent, nonexecutive directors and several key executives;

• entered into an agreement in March 2010 to acquire a 19.9% stake in and establish a strategic alliance with Burey Gold Limited (“Burey”), an ASX-listed exploration company focussed on the Republic of Guinea, West Africa. Subsequently, Perseus subscribed for 34.7 million shares in Burey with 34.7 million attaching options, at a cost of $1,392,000, including 24.3m shares with 24.3m attaching options acquired at a cost of $973,300 during the June quarter.

Summary of Financial Results

All amounts shown as millions of Australian		June Quarter	Full Financial Year	Full Financial Year
dollars unless noted otherwise
	2010	2009	2010	2009
Financial performance
Gain / (Loss) for the period	3.186	(0.490)	(9.781)	(4.789)
Gain / (Loss) per share (cents)	0.83	(0.24)	(2.94)	(2.53)
Financial Position
Total assets	346.793	145.903	346.793	145.903
Total liabilities	25.862	13.105	25.862	13.105
Net assets	320.930	132.797	320.930	132.797
Cashflow
Net Increase in Cash Held	95.845	69.315	101.944	59.970
Cash and cash equivalents at the end of
the period	185.592	79.876	185.592	79.876

REVIEW OF CENTRAL ASHANTI GOLD PROJECT

The CAGP comprises a group of large gold deposits located on the Ayanfuri and Nanankaw mining leases which together with adjoining license areas of Grumesa, Kwatechi, Dunkwa, Nsuaem and Nkotumso, cover a total area of about 650 square kilometres in a highly prospective area of Ghana. Within the project tenements, current Proven and Probable Mineral Reserves of 2.150 M oz and Measured and Indicated Mineral Resources (inclusive of Mineral Reserves) totalling 3.139 M oz have been delineated. In addition, Inferred Mineral Resources totalling 2.115 M oz have also been delineated on the tenements.

Statutory Approvals

Two 15 year mining leases (renewable under the terms of the Ghanaian Minerals and Mining Act, 2006 ) covering a total area of 93.13sq km were granted to Perseus’s subsidiary Central Ashanti Gold Limited in December 2009, and in June 2010 Ghana’s Environmental Protection Agency issued the environmental permit enabling construction and mining to commence at the CAGP.

Development Activities

An exhaustive eight-week tender process for the ‘Lump Sum’ design, supply and construction of the 5.5mtpa CAGP process facility ended in September 2009. Four conforming tenders were received, three of which were competitively priced and within the DFS estimates. In November 2009, Perseus signed a memorandum of understanding (MOU) and heads of agreements with a joint venture comprising DRA Mineral Projects (Pty) Ltd and Group Five Projects (Pty) Ltd, agents for Group Five Construction (Pty) Ltd on a lump sum turn key (LSTK) basis and immediately commenced funding initial design, procurement of long lead items and site construction establishment.

The civil earthworks contract and the tailings storage facility, forming part of the ‘owner’s scope’ for work was awarded during the June 2010 quarter to PW Ghana Ltd, at a price that is well within the DFS cost estimate. The contract mining tenders for the project are in the final stages of evaluation and awarding of the contract is imminent.

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Compensation for disturbance to crops in the treatment plant site area has been paid to local farmers following the issue of the environmental permit and site works commenced on June 21, 2010. Excellent progress has been made and the project remains on schedule for processing of ore to commence in the third quarter of 2011.

To June 30, 2010 the Company has made total commitments of US$95.417 M for the development of the CAGP and has incurred expenditure (including both cash payments and accruals) of US$49.857 M:

	Capital	Commitments	Expenditure(1)
	Estimate(2)	30 /6/2010	30 /6/2010
	US$M	US$M	US$M
Design, supply and construction contracts (Process plant)	76.7	76.4	41.8
Owner’s Costs (Infrastructure and management)	69.7	19.0	8.1
Contingency	13.6	-	-
Total	160.0	95.4	49.9

Notes:

(1) Includes cash payments plus accruals

(2) A review of the capital cost estimate for the CAGP has resulted in an estimated increase in the cost over that estimated in the CAGP DFS. The increase in cost from US$148 M to US$160 M is mainly the result of a decision to significantly increase the capacity of the comminution circuit (crushing and milling); recognition of additional Ghanaian import duties, fees and charges; a 13% increase in the A$/US$ exchange rate from $0.81 in July 2009 to $0.92 at the time of the review and an increase in contingency allowances from US$11.4M to US$13.6M.

Project Financing

The CAGP is being financed though a mixture of debt and equity capital, with current funding coming from the Company’s significant cash reserves established through a series of capital raisings during the course of the , financial year.

In November 2009, the Company entered into a Mandate Letter with Macquarie Bank Limited (“MBL”) and Credit Suisse AG (“CS”) (together, the “Lenders”) for project finance facilities of up to US$85 million and on June 9, 2010 a Committed Letter of Offer was executed by all parties. Draft full form documentation is at an advanced stage of preparation and is expected to be executed early in the December 2010 quarter. The first draw down of debt is likely to take place shortly thereafter.

The Committed Letter of Offer contemplates an aggregate principal amount of the project loan facility of US$85 million that may be reduced at the discretion of the Company. The Company will consider all relevant factors prior to exercising such discretion, including the effect any such reduction would have on the terms and size of the required hedging facility. As a pre-requisite for fully drawing the US$85 million facility, the Lenders require that the price of 230,000 ounces of gold production be hedged. As at June 30, 2010 a total of 170,000 ounces of gold had been sold for delivery progressively from March 2012 to December 2014 at an average price of US$1,240.70 per ounce. Subject to completion of all other conditions precedent, this level of hedging would enable Perseus to draw up to US$65 million of the US$85 million facility. This amount of hedging relates to approximately 8% of the gold contained in current Mineral Reserves at the CAGP and about 23% of forecast gold production in the period from March 2012 to December 2014. In addition, options granting the right but not the obligation to sell 100,000 ounces of gold at US$850 per ounce in the period from January 2012 to December 2013 and a further 20,000 ounces of gold at US$1,100 per ounce from July to December 2011 were purchased as part of the Company’s financial risk management strategy.

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

Additions to project management team

The Company has recruited an experienced team of professionals to manage the development and subsequent operation of its Ghanaian mining operations. This team includes a balanced mix of professionals with international mining experience plus individuals with extensive experience in the mining industry in Ghana. The Company is also well advanced in the recruitment of junior management staff, all of whom are Ghanaian nationals.

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Mineral Reserve and Mineral Resource Estimate

The CAGP’s current Mineral Reserve and Resource estimates are documented in a report titled ‘‘Technical Report — Central Ashanti Gold Project, Ghana’’ dated November 30, 2009 prepared by Paul Payne, Principal Consultant Geologist, Runge Limited; David Price, Senior Consultant Geologist, Runge Limited; and Brad Marwood, Principal Consultant (Mining), Corporate Mining Resources Pty Ltd (the “CAGP Technical Report”).

The Mineral Reserves for the CAGP as at May 2009 are tabulated below:

	Proven	Mineral	Probable	Mineral	Total Proven	Total Proven	and
	Reserves		Reserves		Probable Reserves
	Million	Au	Million	Au	Million	Au	Contained
	Tonnes	(g/t)	Tonnes	(g/t)	Tonnes	(g/t)	Au Ounces
Abnabna/AF Gap…………………………… 18.4		1.40	6.0	1.11	24.4	1.33	1,050,000
Fobinso………………………………………-		-	5.4	1.28	5.4	1.28	200,000
Esuajah North……………………………… -		-	11.9	1.01	11.9	1.01	400,000
Fetish…………………………………………-		-	13.7	1.12	13.7	1.12	500,000
Total…………………………………………18.4		1.40	37.0	1.11	55.4	1.20	2,150,000

Notes: (1) Using a cut-off of 0.5g/t Au.

The reserve estimate set out above includes the resource estimate from the Abnabna/Fobinso, Esuajah North and Fetish deposits, currently comprising the CAGP. Phase 2 of the DFS is underway to incorporate the remaining resources, with a view to increasing reserves, mine life and project economics.

The Mineral Resources for the CAGP as at May 2009 is tabulated below:

Measured Mineral	Measured Mineral	Measured Mineral	Indicated Mineral	Indicated Mineral	Indicated Mineral		Inferred	Mineral
Resources(1)				Resources	(1)		Resources(1)
Million	Au	Contained	Million	Au	Contained	Million	Au	Contained
Tonnes	(g/t)	Au Ounces	Tonnes	(g/t)	Au Ounces	Tonnes	(g/t)	Au Ounces
Abnabna/Fobinso……20.0	1.3	867,000	20.5	1.1	719,000	16.4	1.0	514,000
Esuajah North……… -	-	-	20.2	0.9	579,000	9.3	0.7	214,000
Esuajah South……… -	-	-	6.9	1.7	377,000	5.6	1.8	315,000
Fetish……………… -	-	-	17.4	1.1	597,000	8.0	1.4	360,000
Chirawewa………… -	-	-	-	-	-	12.5	0.8	341,000
Mampong……………-	-	-	-	-	-	6.9	0.9	209,000
Dadieso………………-	-	-	-	-	-	3.2	1.6	162,000
Total (2)………………20.0	1.3	867,000	65.0	**1.1 **	2,272,000	61.9	**1.1 **	2,115,000
Notes:

(1) Using a cut-off grade of 0.4 g/t gold.

(2) Mineral Resources are inclusive of Mineral Reserves.

For a description of the key assumptions, parameters and methods used to estimate the foregoing mineral reserves and resources, and the extent to which the estimate of mineral reserves and resources may be materially affected by any known environmental permitting, legal, title, taxation, socio-political, marketing and other relevant issues, refer to the CAGP Technical Report.

Exploration

A total 79,804 metres of RC and diamond drilling was completed at the CAGP during the Full year, with 32,224 metres being completed during the June 2010 quarter. Significant results are tabulated in Table 1 below. Most of the drilling was infill and extensional drilling undertaken on the western deposits (Abnabna, AF-Gap and Fobinso), which occur in a granitic dyke with a dip varying from 50 to 80 degrees to the northwest. Drilling on these deposits is directed to the southeast, and drill hole intercepts generally have true widths of 70% to 90% of drill length, depending upon drill hole inclinations and the dip of mineralisation. Drill samples were assayed by 50g fire assays by Intertek Minerals Limited in Ghana.

Although not specifically related to the CAGP, exploration drilling also occurred on the Dadieso, Dunkwa, and Kwatechi Licenses in Ghana which adjoin the CAGP mining licenses. Further significant drilling results achieved on these tenements are tabulated in Table 2 below.

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Table 1 – CAGP Infill and Extensional Drilling

Table 1 –CAGP Infill and Extensional	**Drilling **
Hole Deposit East	North Depth Azm. Incl.	From To Width Au
(m)	(m) (m) (°) (°)	(m) (m) (m) g/t
ABDD177 AF Gap 26260	13870 304 180 -50	172 183 11 1.1
		256 278 22 1.3
		289 294 5 1.6
ABDD178 AF Gap 26160	13888 462 180 -70	331 378 47 1.4
	incl.	341 342 1 10.7
		384 425 41 3.1
	incl.	394 395 1 64.9
ABDD180 AF Gap 26160	13735 205 180 -50	77 81 4 2.6
		112 125 13 5.5
	incl.	115 116 1 33.6
		123 125 2 8.6
ABDD181 AF Gap 26600	13990 353 180 -65	151 160 9 1.5
		190 226 36 2.2
	incl.	209 210 1 10.4
ABDD182 AF Gap 26420	13998 385 179 -55	277 372 95 1.4
	incl.	337 338 1 14.4
ABDD183 AF Gap 26540	14010 441 180 -70	355 365 10 1.0
		370 385 15 2.3
	incl.	370 371 1 13.8
		391 406 15 1.0
ABRDD424 Abnabna 26120	13858 417.5 180 -68	290 375 85 1.2
	incl.	294 295 1 10.5
ABRDD425 AF Gap 26240	13855 339.3 180 -62	235 253 18 1.3
		263 284 21 1.0
		292 306 14 2.1
		316 329 13 1.7
ADD162 Chirawewa 4283	4600 238 270 -54	133 140 7 5.9
	incl.	135 138 3 11.4
ADD163 Chirawewa 3957	4600 124.3 270 -78	50.1 54 3.9 9.6
	incl.	50.1 51 0.9 33.7
		86 95 9 1.5
		113 114 1 9.9
ADD167 Chirawewa 4046	4480 222 90 -50	186 222 36 3.2
	incl.	204 205 1 79.6
AKRDD240 Esuajah S. 1800	6240 312.2 90 -60	199 281 82 3.8
	incl.	205 206 1 14.9
	and	234 242 8 16.2
	incl.	237 238 1 56.5
AKRDD241 Esuajah S. 1799	6240 395 90 -68	218 231 13 1.3
		239 358 119 2.5
	incl.	250 255 5 25.9
	and	309 310 1 14.0
	and	353 354 1 16.3
AKRDD242 Esuajah S. 1798	6240 459.5 90 -76	247 272 25 3.5
	incl.	249 251 2 12.0
	and	263 265 2 20.5
		292 320 28 2.4
	incl.	315 316 1 26.8
		326 401 75 1.7

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Table 1: CAGP Infill and Extensional Drilling (Continued)

Hole Deposit East	North Depth Azm. Incl.	From To Width Au
(m)	(m) (m) (°) (°)	(m) (m) (m) g/t
EFDD001 Fetish 3380	5100 146 270 -55	55 62 7 19.2
	incl.	60 62 2 61.7
		73 77 4 4.2
		123 124 1 12.0
EFDD002 Fetish 3420	5100 196 270 -55	117 121 4 2.5
		129 141 12 2.5
	incl.	140 141 1 14.5
		169 171 2 5.3
EFDD004 Fetish 3460	5100 247 270 -55	104 112 8 1.4
		127 136 9 1.1
		191 195 4 2.6
		236 245 9 7.7
	incl.	239 243 4 15.7
EFDD005 Fetish 3370	5180 253 270 -55	123 133 10 1.8
		178 180 2 7.4
		203 222 19 1.0
EFDD006 Fetish 3410	5140 300 270 -55	60 68 8 4.0
	incl.	65 66 1 26.7
		121 166 45 1.4
	incl.	138 139 1 28.9
		179 186 7 1.1
		251 266 15 1.4
EFDD010 Fetish 3530	5280 320 272 -55	270 281 11 1.7
		294 314 20 1.9
FBDD088 Fobinso 27360	14085 248.51 180 -52	148 241 93 3.1
	incl.	150 152 2 10.1
	and	177 178 1 11.8
	and	190 191 1 46.1
	and	202 207 5 10.5
FBDD089 Fobinso 27440	14120 311 180 -60	164 198 34 1.3
		258 259 1 9.3
		277 298 21 4.2
	incl.	293 294 1 60.5

Notes

1) All holes were core drilled through the mineralised zone.

• 2) Core holes sampled at 1m intervals.

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

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

• 5) Only holes with combined intercepts of greater than 40 gram metres included. 6) The type of analytical or testing procedures utilized and sample size and the quality assurance program and quality control measures are consistent with those described in the CAGP Technical Report.

• 7) The true width of intercepts from recent drilling at Esuajah South ranges from 55-80% of the intercept width. 8) The true width of intercepts from recent drilling at Abnabna-AF Gap-Fobinso ranges from 58-82% of the intercept width, averaging about 70%.

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

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

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

Hole Deposit East North Depth Azm.	Incl.	From To Width	Au
(m) (m) (m) (°)	(°)	(m) (m) (m)	g/t
DKRC062 Dadieso -190 -9430 90 270	-50	34 44 10	2.1
		74 90* 16	2.2
	incl.	84 86 2	10.2
DKRC063 Dadieso -220 -9400 70 270	-50	48 58 10	1.9
DKRC064 Dadieso -180 -9400 100 270	-50	92 100* 8	3.6
DKRC065 Dadieso -60 -9460 105 270	-50	66 74 8	13.5
	incl.	70 72 2	48.2
		104 105* 1	5.8
DKRC066 Dadieso -160 -9360 100 270	-50	38 40 2	5.8
DKRC067 Dadieso -210 -9330 90 270	-50	4 12 8	1.2
DKRC068 Dadieso -170 -9330 90 270	-50	4 16 12	1.2
DKRC069 Dadieso -130 -9330 90 270	-50	60 64 4	7.0
	incl.	60 62 2	12.9
DKRC070 Dadieso -290 -9330 90 270	-50	58 70 12	1.1
DKRC071 Dadieso -260 -9300 90 270	-50	80 90* 10	1.5
DKRC072 Dadieso -180 -9300 75 270	-50	2 20 18	1.1
DKRC073 Dadieso -139 -9300 90 270	-50	24 34 10	1.2
		46 58 12	2.0
DKRC074 Dadieso -160 -9260 90 270	-50	72 82 10	3.8
	incl.	80 82 2	11.6
DKRC076 Dadieso -240 -9260 90 270	-50	66 68 2	6.5
DKRC077 Dadieso -220 -9220 100 270	-50	8 26 18	2.1
		44 56 12	1.7
		96 100* 4	2.5
DKRC078 Dadieso -260 -9220 60 270	-50	10 16 6	3.2
DKRC080 Dadieso -300 -9180 90 270	-50	24 36 12	4.0
	incl.	32 34 2	10.6
		82 90 8	3.4
	incl.	86 88 2	10.3
DKRC093 Dadieso -80 -9500 90 270	-50	40 58 18	0.7
		70 84 14	0.8
DKRC094 Dadieso -100 -9560 70 270	-50	18 20 2	8.6
		50 54 4	1.5
		62 70* 8	2.1
DKRC095 Dadieso -100 -9600 70 270	-50	26 28 2	3.7
DKRC096 Dadieso -140 -9760 80 270	-50	74 76 2	2.3
BBRC009 Dunkwa 46450 90400 31 90	-55	24 28 4	5.7
KTRC031 Kwatechi 68000 78300 74 92	-60	22 30 8	1.7
92	-60	44 54 10	3.0
	incl.	50 52 2	10.6
KTRC032 Kwatechi 68040 78300 80 92	-60	60 72 12	0.7
KTRC037 Kwatechi 67920 78200 51 92	-60	0 10 10	1.9
KTRC038 Kwatechi 67960 78200 80 92	-60	0 8 8	2.2
	incl.	0 2 2	6.9
KTRC042 Kwatechi 68120 78200 80 92	-60	62 74 12	1.1
KTRC045 Kwatechi 67920 78100 55 92	-60	24 30 6	1.4

Notes

• 1) All holes are RC holes.

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

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

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

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

6) * denotes open ended intercept.

• 8) The true width of intercepts from recent drilling at the Dadieso deposit, Kwatechi and Dunkwa liecnses is currently unknown.

• 9) The type of analytical or testing procedures utilized and sample size and the quality assurance program and quality control measures are consistent with those described in the CAGP Technical Report.

8

REVIEW OF THE TENGRELA GOLD PROJECT

The TGP contains a number of regionally significant gold anomalies, only seven of which have been drill-tested by RC or Core drilling, including the Sissingue prospect. The Company believes that the Sissingue prospect has a strike length of at least five kilometres and is up to 800 metres wide, and multiple zones of gold mineralization have been delineated. The Company believes that gold mineralization remains open to the north and south of the area in which Mineral Resources have been delineated and that the total strike of gold mineralization is approximately three kilometres.

Exploration

A total of 83,262 metres of RC and DD and 36,098 metres of RAB drilling was completed on the TGP tenements in the year ended June 30, 2010, including 33,509 metres of RC and diamond drilling and 11,524 metres of RAB drilling during the June 2010 quarter. Exploration highlights included a significant increase in grade of the Sissingue deposit due to successful infill drilling plus the recording of several further significant drill intercepts at the Sissingue deposit following the cut-off date for drilling results incorporated into the July 2010 Mineral Resource upgrade.

RC drilling of prospects outside of Sissingue has also commenced and a recent new gold discovery has been recorded at the Kanakono deposit.

Significant intercepts, mostly from infill drilling at the Sissingue prospect, are tabulated below in Table 3.

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

Table 3 – Significant Intercepts from TGP

**Table 3 –Significant Intercepts from TGP **
Hole Deposit East North Depth Azm.	Incl.	From To Width Au
(m) (m) (m) (°)	(°)	(m) (m) (m) g/t
SD106 Sissingue 806720 1154596 224.7 271	-56	67 73 6 8.0
	incl.	68 68.6 0.6 55.1
	and	72 73 1 13.0
		127 131 4 2.0
		147 170 23 2.7
	incl.	168.3 169 0.7 67.9
		185 200.6 15.6 1.2
SD109 Sissingue 806461 1154440 257.7 91	-51	107.6 116 8.4 3.6
	incl.	113 114 1 23.8
		164 168 4 2.4
SD111 Sissingue 806500 1154220 204.7 90	-51	138 144 6 1.7
		165 204.7* 39.7 2.2
	incl.	200 204.7* 4.7 7.7
	incl.	204 _204.7 _0.7 28.4*
KATCR025 Katara 806240 1131000 90 90	-55	34 36 2 13.7
KATRC029 Katara 806080 1131000 90 90	-55	56 62 6 1.7
KATRC032 Katara 806201 1131079 90 90	-55	48 52 4 2.6

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

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

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

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

• 5) The true width of intercepts from the current program at the Katara prospect is currently unknown.

• 6) * denotes open ended intercept.

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

• 8) Only holes from Katara with combined intercepts of greater than 10 gram metres included.

9

Upgraded Mineral Resource Estimate

The October 2009 Mineral Resource estimate for the Sissingue deposit, as calculated by Runge Limited in its report titled “Technical Report — Tengrela Gold Project, Ivory Coast” (available on sedar.com), was upgraded in July 2010 and is summarised in Tables 4 to 6 which follow [‘‘Technical Report — Tengrela Gold Project, Ivory Coast’’ by Paul Payne, Executive Consultant WA Consulting, and Graham de la Mare, Consulting Geologist, Runge Limited (the ‘‘Tengrela Technical Report’’) in relation to the upgraded Mineral Resource estimate was subsequently issued on September 02, 2010].

– - Table 4: July 2010 Mineral Resource Estimate[1] Sissingue Deposit at 1.0g/t gold cut off grade

Type	Measured	Indicated	Measured & Indicated	Inferred
	Tonnes Grade g/t	Tonnes Grade g/t	Tonnes Grade Gold g/t Ounces	Tonnes Grade Gold g/t Ounces
Oxide Transitional Primary	10,000 1.9 83,000 3.0 794,000 3.2	2,028,000 2.2 1,134,000 2.8 5,929,000 2.4	2,038,000 2.2 144,000 1,218,000 2.8 111,000 6,723,000 2.5 542,000	599,000 2.1 40,000 232,000 1.6 12,000 2,473,000 1.5 119,000
Total	888,000 **3.2 **	9,091,000 **2.4 **	9,979,000 2.5 796,000	3,304,000 1.6 171,000

– - Table 5: July 2010 Mineral Resource Estimate[1] Sissingue Deposit above 0.5g/t and below 1.0g/t gold cut off grade

Type	Measured	Indicated	Measured & Indicated	Inferred
	Tonnes Grade g/t	Tonnes Grade g/t	Tonnes Grade Gold g/t Ounces	Tonnes Grade Gold g/t Ounces
Oxide Transitional Primary	0 0.0 1,000 0.8 43,000 0.8	1,702,000 0.8 706,000 0.8 3,101,000 0.8	1,702,000 0.8 41,000 707,000 0.8 18,000 3,144,000 0.8 76,000	612,000 0.7 15,000 495,000 0.7 12,000 2,530,000 0.7 60,000
Total	44,000 0.8	5,509,000 0.8	5,553,000 0.8 135,000	3,637,000 0.7 86,000

Table 6: Mineral Resource Estimate[1] – Sissingue Deposit at 0.5 g/t gold cut-off grade

Type	Measured	Indicated	Measured & Indicated	Inferred
	Tonnes Grade g/t	Tonnes Grade g/t	Tonnes Grade Gold g/t Ounces	Tonnes Grade Gold g/t Ounces
**Total **	931,000 **3.1 **	14,600,000 1.8	15,532,000 1.9 931,000	6,941,000 1.2 257,000
(1)Rounding Applied to Totals

For a description of the key assumptions, parameters and methods used to estimate the foregoing mineral resources, and the extent to which the estimate of mineral resources may be materially affected by any known environmental permitting, legal, title, taxation, socio-political, marketing and other relevant issues, refer to the Tengrela Technical Report.

Feasibility Study – Sissingue Deposit

The Company is working towards completion of the DFS during the December 2010 quarter.

Metallurgy - Metallurgical test work has been largely completed and Process Design Criteria have been developed. The final metallurgy report is currently being prepared and, based on test work, the gold recovery and physical parameters are:

Parameters	Units	Oxide Ore	Fresh Ore
Recovery Parameters
Total Gold recovery	%	92.0	90.0
Gravity Recovery Component (Average)	%	20.0	23.0
Gravity Recovery Component (Range)	%	10 - 54	7 - 49
Physical Parameters
Unconfined Compressive Strength	Mpa	-	132.5
Crushing Work Index	kWh/t	-	7.7
Bond Rod Mill Work Index	kWh/t	3.7	19.1
BondBall MillWork Index	kWh/t	5.4	16.3

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Geotechnical Engineering - Pit and tailings dam geotechnical drilling and logging has been completed and reports are being prepared. The requisite mine design parameters have been incorporated into the mining engineering models and schedules. The geotechnical and mine design studies are being undertaken by Coffey Mining Services.

Process Plant Design - The manager of the DFS, Mintrex, has completed the initial plant design and layout and is well advanced in the capital costing development. Process flow diagrams have been developed and signed off. The electrical power supply to the project, under design by BEC Engineering, is in the final stages of evaluation, with two options under discussion.

Environmental Studies - A local Ivorian environmental consultant, CECAF, has completed both phases of fieldwork needed for the baseline environmental survey. The second phase of reporting remains to be completed and is the only outstanding baseline item required for the DFS. The Company is working closely with the Ivorian Environmental Protection Agency and Ministry of Mines and Energy to map the approval and permitting process.

Management Additions

In anticipation of completion of the DFS in the fourth quarter of 2010, Perseus has commenced the process of building a locally based management team that is capable of working with government agencies including the Ministry of Mining and Energy and the Environmental Protection Agency, to agree terms for permits and licences required to develop and operate the TGP.

OUTLOOK FOR FULL YEAR ENDING 30 JUNE 2011

Plans and targets for the full year ending 30 June 2011 are:

At CAGP:

• Complete the construction and commence commissioning of the CAGP process plant and infrastructure;

• Commence pre-strip plus mining and stockpiling of ore;

• Announce updates of Mineral Resources and Reserves;

• Apply for a mining licence for the Grumesa deposit; and

• Continue aggressive exploration of the Company’s Ghanaian land holdings.

At TGP:

• Complete the DFS;

• Undertake Board review of the DFS and if approved, start pre-construction activities at Sissingue;

• Commence process of gaining environmental and mining licences;

• Continue extension and infill drilling at Sissingue; and

• Continue to aggressively explore the Tengrela tenements and the other Ivorian tenements held by the Company.

FINANCIAL PERFORMANCE

No discussion of quarterly results for the eight most recently completed quarters has been included herein due to the fact that quarterly financial statements have not historically been prepared by Perseus as it is not required to do so under either the listing rules of the ASX or the Corporations Act. However, the discussion that follows does assess the yearon-year financial performance of the Company and also considers the Company’s quarterly results for the seven quarters during which quarterly financial statements have been prepared.

The financial performance of the Company is expected to be affected by ongoing exploration activities being conducted on its properties and the proposed development of the CAGP and TGP. Until such time as commercial production is achieved, the Company will continue to incur administrative costs and exploration and development expenditures, resulting in continuing operating losses. The financial performance of the Company will also be closely linked to the gold price following the development of the CAGP and, potentially, the TGP. The gold price also affects the economic viability of the Company’s other projects and prospects.

The Company reports its financial results in Australian dollars. The Company’s costs, however, are mainly incurred in United States (“US”) dollars, Australian dollars, Ghanaian New Cedis and CFA francs and the Company receives the proceeds of financings in Australian dollars and Canadian dollars (although the recently negotiated project debt finance will be denominated in US dollars). If, as expected by management, the CAGP or any of the Company’s other projects commences production, future metals sales revenue will be in US dollars. Fluctuations in these exchange rates may therefore significantly affect the results of operations of the Company.

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To hedge against future changes in the gold price, the Company purchased a strip of gold put options in the September 2009 quarter for US$9.1 million for the right but not the obligation to sell gold at US$850 per ounce should the prevailing price be less. The options covered 100,000 ounces of gold scheduled for delivery in 2012 and 2013, which represents approximately 22% of planned production from the CAGP during that period. A subsidiary of the Company purchased additional gold put options in the June 2010 quarter at a cost of US$1.6 million in relation to 20,000 ounces of gold scheduled for delivery between July and December 2011, again representing just over 20% of planned production from the CAGP during that period.

These options give the Company the right but not the obligation to sell gold at US$1,100 per ounce should the prevailing price be less. As previously noted, the Company has accepted an offer of a project debt facility of US$85 million from the Lenders. As a pre-requisite for fully drawing the US$85 million facility, the Lenders require that the price of 230,000 ounces of gold production be hedged. As at June 30, 2010 a total of 170,000 ounces of gold had been sold forward under physical gold delivery contracts at an average price of US$1,241 per ounce. This gold is to be delivered progressively from March 2012 to December 2014. Subject to completion of all other conditions precedent, this level of hedging would enable Perseus to draw up to US$65 million of the US$85 million facility.

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

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

FINANCIAL CONDITION

As at June 30, 2010 Perseus had cash or cash equivalent resources of $185.592 million plus a further $7.804 million of funds on deposit securing environmental obligations and an international trade facility which represented a significant increase over the position at June 30, 2009 when cash or cash equivalent resources were $79.876 million plus a further $2.696 million of funds on deposit securing environmental obligations. This increase in cash reserves was the result of several equity capital raisings completed during the year. During the Full year, the Company capitalised $57.904 million of expenditure on construction of the CAGP and a further $25.018 million of exploration and evaluation expenditure, before writing off capitalised exploration expenditure of $0.844 million. A total of $53.355 million of exploration and evaluation expenditure related to the CAGP was also transferred to property, plant and equipment (as “Assets under Construction”) following a decision to proceed with development of the project. As a result, the Company recognised on its balance sheet a total of $114.602 million for property, plant and equipment and $25.869 million for exploration and evaluation expenditure as at June 30, 2010. Combined, these totals were significantly higher than at the corresponding date in 2009 when balances for property, plant and equipment and exploration and evaluation expenditure were $1.903 million and $58.1698 million respectively. As at June 30, 2010, the Company also recorded the carrying value of gold put options purchased during the Full year at $7.658 million (after marking-to-market the carrying value by recognising a devaluation of the put options of $5.042 million). As no put options were held during the prior period, no value was recorded at the balance date of the prior corresponding period.

Total liabilities as at June 30, 2010 of $25.862 million reflect an increase of $12.756 million compared to the corresponding date in 2009 largely as a result of the increased expenditure being undertaken in relation to construction of the CAGP.

Financial Position1 as at June 30	2010	2009
Cash and cash equivalents	185.591	79.876
Investments accounted for using the equity method	4.342	2.500
Other financial assets	7.658	-
Property, plant and equipment	114.603	1.904
Exploration and evaluation expenditure	25.869	58.168
Total Assets	346.792	145.903
Total Liabilities	25.862	13.106
Total Equity	320.930	132.797
Total Number of shares outstanding	418.032	298.458

12

Weighted Average number of shares outstanding

332.558

189.543

1 All amounts shown are in millions of dollars

The quarter-on-quarter movements in the financial position of the Company are shown below.

Financial	Position1	Position1	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
as at:			2010	2010	2009	2009	2009	2009	2008	2008
Cash and		cash
equivalents			185.591	82.705	67.166	60.626	79.876	10.685	3.622	11.288
Total Assets			346.792	194.031	155.813	136.238	145.903	72.206	69.236	65.667
Total Liabilities			25.862	18.296	4.895	6.350	13.106	3.828	6.115	8.743
Net Assets			320.930	175.735	150.918	129.888	132.797	68.378	63.121	56.924

1 All amounts shown are in millions of dollars

Higher cash balances as at June 30 2010, March 31, 2010, December 31, 2009, and September 30, 2009 reflect the increased share placement activity since June 2009 as the Company prepared to develop the CAGP and increase the pace of exploration at the TGP.

Total Assets increased in the three months ended June 30, 2010 by $152.761 m, reflecting higher cash balances as noted above, higher closing balances of property, plant and equipment, and exploration and evaluation expenditure, (combined the increase was $42.754 m). The increase in property, plant and equipment relates primarily to expenditure incurred with respect to gold plant and infrastructure for the CAGP, including engineering design, equipment specifications and deposits for certain long lead plant items, but also reflects a reclassification of exploration and evaluation expenditure related to the CAGP from Exploration and Evaluation to Property, Plant and Equipment. Other assets to increase in value during the quarter were the value of the gold put options (the increase reflecting the purchase of additional put options, which was offset slightly by a diminution in the value of all options held by the Company, reflecting an increase in the gold price and the passage of time) ($1.689 m); receivables in the form of additional cash placed on deposit to secure an international trade facility plus interest ($5.313 m); and the additional investment in Burey shares ($0.973m).

The marked increase in total liabilities at quarter-end compared to preceding quarters reflects the increased scale of activity with respect to the pre-development work at the CAGP, particularly expenditure incurred with the DRA/Group 5 Joint Venture, as well as the substantially increased drilling activity during the quarter.

CASHFLOW

The Company’s cashflows in the twelve months ended June 30, 2010 and 2009 respectively were as follows:

Cashflows1 for the twelve months ended June 30	2010	2009
Cash flows from operating activities	(3.056)	(1.562)
Cash flows from investing activities	(85.119)	(23.019)
Cash flows from financing activities	190.119	84.551
Net Increase in Cash Held	101.944	59.970
Cash and cash equivalents at the end of the Financial Year	185.591	79.876

1 All amounts shown are in millions of dollars

The cash outflows attributable to operating activities increased from $1.562 million in 2009 to $3.056 million during the twelve month period to June 30, 2010, reflecting the increase in administration activities across the Group, including payroll and also the increased use of consultants and advisors, as the Company accelerated its transition from a junior explorer to a development and operating company.

This level of activity was also reflected in the significant increase in cash outflows for investing activities in Full year 2010 compared to Full year 2009,which related to payments for assets under construction ($37.489 million), payments for the purchase of gold put options ($12.699 million), payments for investments in associates, Burey and Manas

13

($2.225 million), which did not occur in 2009, plus increases in the escrowing of funds as security deposits for the international trade facility ($4.504 million) and exploration and evaluation expenditure ($4.162 million).

The increase in cash inflows from financing activities in the full year ended June 30, 2010, which amounted to $190.112 million (2009: $ 84.551 million), is the result of an active programme of equity capital raisings undertaken during the year to fund the development of the CAGP and an accelerated programme of exploration on the Company’s West African tenements.

As a consequence of the above year-on-year movements, cash held by Perseus increased from 2009 to 2010 by $101.944 million to a total net available cash balance at June 30, 2010 of $185.591 million.

The quarter-on-quarter movements in the cash flow of the Company are as shown below. The previously noted increase in activity by the Company is clearly illustrated by the increases in cash inflows and outflows in the June 2010 quarter relative to prior periods, particularly the increased investment in exploration and construction of the CAGP. Also, the in flow of cash from financing activities of $134.280 m is significantly larger than the prior quarter, reflecting the share placements, exercising of options and completion of the share purchase plan that took place during that last quarter

Cash flows1 for three	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
months ended	2010	2010	2009	2009	2009	2009	2008	2008
Operating Activities	(1.345)	(0.236)	(0.687)	(0.788)	(0.268)	(0.322)	(0.437)	(0.535)
Investing Activities	(37.080)	(16.773)	(16.446)	(14.810)	(4.266)	(2.959)	(8.276)	(7,518)
Financing Activities	134.280	34.463	23.786	(2.410)	73.849	10.423	0.199	0.080

1 All amounts shown are in millions of dollars

OPERATING RESULTS

The operating results for the twelve months ended June 30, 2010 and June 30, 2009 respectively are as follows:

Operating results1 for the twelve months ended	2010	2009
Interest Income	1.876	0.701
Other revenue including foreign exchange gains	3.874	0.703
Total Operating expenses	(15.531)	(7.026)
Loss after tax expense	(9.781)	(4.789)
Loss per share (cents)	(2.94)	(2.53)

1 All amounts shown are in millions of dollars

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

The considerably greater net interest income for the twelve months ended June 30, 2010 compared to the comparative twelve month period is a result of both higher average cash balances held in interest bearing deposits during the period and slightly increasing interest rates during the current twelve month period. “Other revenue” received in the twelve months ended June 30, 2010 consists mainly of foreign exchange gains realised on cash deposits as a result of a decline in the A$:US$ exchange rate toward the end of the period, coupled with an increase in the amount of foreign currency, particularly US dollars, held by the Company following completion of a number of share placements during the period. In the comparative period of the twelve months ended June 30, 2009, a gain was recognized on disposal of gold projects in the Central Asian Kyrgyz Republic to ASX listed, Manas Resources Limited ($832,925). Foreign exchange gains were also recognised.

The sharp increase in Operating expenses for the twelve months ended June 30, 2010 compared to the comparative twelve month period is largely the result of a recognition of devaluation of gold put options ($5,041,788), a write-off of capitalised exploration ($844,972), and increased share based payments ($3,594,491). Other expenses, including employee benefits and fees paid to professional advisors and consultants, have also increased compared to the corresponding period in 2009 and reflect the growth of the Company’s activities as a result of the transition from junior explorer to an integrated exploration, evaluation and development company.

14

Operating Results1 for the	Jun 30	Mar 31	Dec 31	Sep 30	Jun 30	Mar 31	Dec 31	Sep 30
three months ended	2010	2010	2009	2009	2009	2009	2008	2008
Interest Income	0.533	0.294	0.501	0.548	0.286	0.026	0.258	0.131
Other revenue	3.874	-	0.054	-	(1.640)	0.254	1.443	0.646
Total Operating expenses	(1.166)	(6.742)	(3.145)	(4.478)	0.031	(0.684)	(2.165)	(4.208)
Net Loss	3.186	(6.448)	(2.590)	(3.929)	(0.490)	(0.404)	(0.463)	(3.432)
Basicloss pershare (cents)	0.83	(2.04)	(0.82)	(1.31)	(0.24)	(0.23)	(0.26)	(1.97)
1All amounts shown above are in	millions of	dollars

As noted above, a short term decline in the A$:US$ exchange rate towards the end of the June 2010 quarter coupled with an increase in the proportion of cash reserves held in US dollars following the completion of equity capital raisings, resulted in a foreign exchange gain being recorded in the June 2010 quarter hence higher Other revenue than in prior quarters during the Full year.

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

LIQUIDITY AND CAPITAL RESOURCES

During the last two years, the Company has accessed equity capital markets as its primary source of funding to finance its activities. As at June 30, 2010, the Company had $185.592 million in cash and cash equivalents ($82.7 million as at March 31, 2010 and $79.9 million as at June 30, 2009). During the June 2010 quarter, the Company issued a total of 72.6 million shares by way of three share placements and a share issue to existing shareholders pursuant to a Share Purchase Plan. These activities combined raised a total of $140.7 million before deducting share issue expenses. During the Full year, a total of 117.6 million shares were issued to raise gross cash proceeds, before deducting expenses, of $204.5 million. In the corresponding prior period, 122.6 million shares were issued for gross cash consideration of $86.6 million.

As previously stated, the Company’s plans are to develop the CAGP, complete a DFS on the TGP, and, subject to a positive outcome from that DFS, develop that project and expand its resource base through rapid exploration of existing ground and the acquisition of prospective new projects.

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

	Less than 1 Year	1 - 3 Years	4 - 5 Years	After 5 years
Exploration expenditure1	1.05	2.68	2.68	1.51
Capitalconstructioncommitments2	45.56	-	-	-
Notes:

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

• (2) Under the agreement between the Company and the Central Ashanti Joint Venture (“CAJV”) comprising DRA Mineral Projects (Pty) Ltd and Group Five Projects (Pty) Ltd, Perseus authorized CAJV to enter into binding contracts and arrangements with suppliers, subcontractors and manufacturers and perform work. The Company has also made binding commitments for the performance of certain other works outside of the scope of the CAJV. As at June 30, 2010, total commitments amounted to US$95.417 million (of which US$49.857 million had been either settled or recorded as an actual liability). This commitment forms part of the estimated US$160 million capital cost for the CAGP.

• (3) As previously noted, a subsidiary of the Company, Central Ashanti Gold Limited, has entered physical gold delivery contracts with the Lenders under which it is obliged to progressively deliver a total of 170,000 ounces

15

of gold during the period from March 2012 to December 2014. The contracts are settled on a quarterly basis by physical delivery of gold as instructed by the Lenders. Based on a contracted delivery price of US$1,241.70 per ounce, the total value of metal to be delivered in the contract period is US$210.920 million.

The capital costs requirement for the CAGP is estimated to be approximately US$160 million. The Company intends to finance the capital cost of the CAGP with a mix of equity finance from existing cash reserves and debt drawn under a project debt facility to be provided by the Lenders, details of which were provided earlier in this MD&A. The exact mix of debt and equity to be deployed for the CAGP will be determined as the project progresses. As previously noted, the hedging of 170,000 ounces of gold enables the Company to draw up to $65 million of debt under the US$85 million debt facility. Whether the Company decides to draw down the remaining balance of the facility will require balancing the wish to minimise gold hedging with the desire to have funds available to commence pre-development activities at the TGP, should the TGP DFS yield positive results.

OUTSTANDING SECURITIES DATA

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

Ordinary shares	421,282,088
Options over unissued shares	9,125,000

At June 30, 2010, there were 418,032,088 (March 31, 2010: 344,632,088) shares and 12,000,000 (March 31, 2010: 11,470,000) options on issue. Since that date and up to the date of this MD&A, the Company has issued 3,250,000 shares for net proceeds of $4,832,500 upon exercise of the same number of options.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements as at June 30, 2010 other than the contractual commitment to physically deliver 170,000 ounces of gold during the period from March 2012 and December 2014. The physical gold delivery contracts are considered contracts to sell a non-financial item and are therefore outside of the scope of AASB 139. As a result, the forward sales contracts have not been recognised on the Company’s balance sheet.

Transactions with Related Parties

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

Rent, accounting, secretarial and corporate service fees paid or payable to Corporate Consultants Pty Ltd, a company in which a Director, Mr Gillard, and the company secretary, Mr Susmit Shah, have beneficial interests, totalled $427,266 for the year ended June 30, 2010 and $273,552 for the corresponding period ended June 30, 2009. In the June 2010 quarter, the amount paid was $205,304 compared to $96,772 and $95,519 for the three months ended March 31, 2010 and December 31, 2009 respectively. The increase in fees reflects the additional corporate activity in relation to share placements and listing on the TSX.

Taxation services paid or payable to Icon Financial Management Pty Ltd, an entity in which Mr Gillard has a beneficial interest, totalled $8,969 for the year ended June 30, 2010 and $5,346 for the corresponding period ended June 30, 2009. In the June 2010 quarter, the amount paid was $4,179 compared to $1,510 and $2,200 for the three months to March 31, 2010 and December 31, 2009 respectively.

Critical Accounting Estimates

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

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

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Exploration and evaluation expenditure

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

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

• (ii) Estimated production and sales levels;

• (iii) Estimated future commodity prices;

• (iv) Future costs of production;

• (v) Future capital expenditure; and/or

• (vi) Future exchange rates.

Variations to expected future cash flows, and timing thereof, could result in significant changes to the impairment test results, which in turn could impact future financial results. The Board of Directors determines when an area of interest should be abandoned. When a decision is made that an area of interest is not commercially viable, all costs that have been capitalised in respect of that area of interest are written off. The Directors’ decision is made after considering the likelihood of finding economically recoverable reserves.

Share-Based Payments

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

Changes in Accounting Policies Including Initial Adoption

During the year, certain accounting policies have changed as a result of new or revised accounting standards which became operative for the annual reporting period commencing on 1 July 2009. The affected policies and standards are:

• (i) Principles of consolidation – revised AASB 127 Consolidated and Separate Financial Statements and changes made by AASB 2008-7 Amendments to Australian Accounting Standards – Cost of an Investment in a Subsidiary, Jointly Controlled Entity and Associate

• (ii) Business combinations – revised AASB 3 Business Combinations

• (iii) Segment reporting – new AASB 8 Operating Segments

• (iv) Financial Instruments – revised AASB 7 Financial Instruments: Disclosures

• (v) Borrowing Costs – revised AASB 123 Borrowing Costs

The changed policies have had no impact on the Company’s financial statements for the year ended June 30, 2010 other than by way of requiring amended disclosure in the notes to the financial statements.

The Company has also reviewed all Standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2010. As a result of this review, the Directors have determined that there is no impact, material or otherwise, from the new and revised standards and interpretations on its business and, therefore, no change is necessary to the Company’s accounting policies.

Financial Instruments and Other Instruments

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

Credit Risk

Credit risk is the risk of financial loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s receivables from customers and investment securities. The Company limits its exposure to credit risk by investing in liquid securities and only with counterparties that have an

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acceptable credit rating. Further, the Company has established an allowance for impairment that represents an estimate of the losses incurred or to be incurred in respect of other receivables and investments. Management does not expect any counterparty to fail to meet its obligations.

Liquidity Risk

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

Market Risk

Market risk is the risk that changes in market prices will offset the Company’s income. The Company is exposed to fluctuations in metal prices (principally gold), and fluctuations in foreign currency and interest rates in the normal course of its business operations. The Company uses metal hedges to mitigate its exposure to fluctuations in gold prices.

In August 2009, the Company purchased 100,000 ounces of gold put options maturing over 2012 and 2013, representing approximately 22% of the planned production for those years. The put options enable the Company to sell 100,000 ounces of gold at US$850/oz should the prevailing price be less, or at the prevailing spot price if that is higher. The consideration for the put options was US$9.1 million. In the June 2010 quarter, Perseus purchased additional gold put options at a cost of US$1.6 million for the delivery of 20,000 ounces of gold between July and December 2011, again representing just over 20% of planned production from the CAGP during that period. These options enable the Company to sell gold at US$1,100 per ounce should the prevailing price be less, or at prevailing spot prices if those are higher. Further, as a pre-requisite for fully drawing the US$85 million facility discussed elsewhere in this MD&A, the Lenders require that the price of 230,000 ounces of gold production be hedged. As at June 30, 2010 a total of 170,000 ounces of gold had been sold for delivery progressively from March 2012 to December 2014 at an average price of US$1,240.70 per ounce. Subject to completion of all other conditions precedent, this level of hedging would enable Perseus to draw up to US$65 million of the US$85 million debt facility. This amount of hedging relates to approximately 8% of the gold contained in current Mineral Reserves at the CAGP and about 23% of forecast gold production in the period from March 2012 to December 2014.

The Company has not entered into any derivative financial instruments to hedge fluctuation in foreign currency. Accordingly, the Company is exposed to fluctuations in the US dollar, the Ghanaian Cedi and the CFA franc. A strengthening or weakening of the Australian dollar against these currencies will affect the Company’s profit and loss.

The Company’s exposure to changes in interest rates relates primarily to the Company’s cash and cash equivalents. The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. The Company will, however, be exposed to the effect of interest rate fluctuations on any variable rate financial instruments entered into, including debt facilities.

Disclosure Controls and Procedures and Internal Controls over Financial Reporting

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 appropriate disclosure controls and procedures and internal controls over financial reporting for the nature and size of the Company’s business, particularly in the present phase as the Company gears up to develop and bring the CAGP into production.

Disclosure Controls and Procedures

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

Internal Controls over Financial Reporting

Internal controls over financial reporting (“ ICFR ”) are designed to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of financial statements in compliance with IFRS.

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The Board is responsible for ensuring that management fulfils its responsibilities in this regard. The Audit Committee fulfils its role of ensuring the integrity of the reported information through its review of the interim and annual financial statements. As at June 30, 2010, the Chief Executive Officer and Chief Financial Officer, with participation of the Company’s management, concluded that there were no material weaknesses in the design of ICFR at the end of the June 30, 2010 financial year or changes to the Company’s ICFR during the financial year which have materially affected, or are considered to be reasonably likely to materially affect, the Company’s financial reporting or its 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 of two or more people, or by unauthorized override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

Cautionary Note Regarding Forward Looking Statements

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

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

By its nature, forward-looking information involves known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to differ materially from those expressed or implied by such forward-looking information.

Risk factors

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

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

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

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

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

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

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

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

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

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

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

• risks related to environmental regulation and liability;

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

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

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

Technical Disclosures

The exploration results in this MD&A have been prepared by or under the supervision of Mark Calderwood, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Calderwood is the Managing Director and fulltime employee of the Company. He is a Competent Person within the meaning of the JORC Code and a Qualified Person within the meaning of National Instrument 43-101 — Standards of Disclosure for Mineral Projects (‘‘NI 43101’’). Mr. Calderwood has reviewed the data set out herein, including sampling, analytical and test data underlying the exploration results set out herein. For a description of the quality assurance program and quality control measures applied, please refer to the CAP Technical Report and the Tengrela Technical Report. Mr Calderwood has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ and as a Qualified Person for the purposes of National Instrument 43-101 of the Canadian Securities Administrators. Mr Calderwood consents to the inclusion in this MD&A of the matters based on his information in the form and context in which it appears.

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