PERSEUS MINING LIMITED - Management Reports 2012

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August 27, 2012

MANAGEMENT’S DISCUSSION & ANALYSIS For the twelve months ended June 30, 2012

This Management’s Discussion and Analysis (“MD&A”) of Perseus Mining Limited and its controlled entities (“Perseus” or the “Company”) is dated August 27, 2012 and provides an analysis of the Company’s performance and financial condition for the three months ended June 30, 2012 (the “June 2012 Quarter” or “Quarter”) and the twelve months ended June 30, 2012 (the “2012 Financial Year”).

This MD&A should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended June 30, 2012 (the “2012 Financial Report”), and the Company’s audit reviewed consolidated financial statements for the half year ended December 31, 2011. The financial statements (and the financial information contained in this MD&A) comply with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. These documents are available under the Company’s profile on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) at sedar.com and on the Company’s website, www.perseusmining.com .

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

COMPANY OVERVIEW

Perseus was incorporated in Australia on October 24, 2003. Perseus’s corporate office is in Perth, Western Australia. On September 22, 2004, the Company’s shares were listed for trading on the Australian Securities Exchange (“ASX”) and on February 3, 2010 the Company’s shares commenced trading on the Toronto Stock Exchange (“TSX”). The Company’s shares are also listed on the German Stock Exchange.

Perseus is a successful integrated gold company whose activities include exploration and evaluation, development and gold production. The Company conducts its activities on under-explored gold belts located in West Africa.

Its principal assets are:

A 90% interest in the Edikan Gold Mine (“EGM”) (previously referred to as the Ayanfuri gold deposit or the Central Ashanti Gold Project), a newly commissioned gold mine located in Ghana. In July 2009, the Company completed a definitive feasibility study (‘‘DFS’’) on developing a mine and associated treatment facility for the EGM and based on the positive outcome of that DFS, construction of a gold mine and associated processing facility commenced in June 2010. The first gold pour and the first revenue received from the EGM took place on August 21, 2011 and on September 28, 2011 respectively. Commercial Production was declared on January 1, 2012.
An 85% interest in the Sissingué gold deposit, a development stage gold project (the ‘‘Sissingué Gold Project’’ or “SGP”). The Sissingué gold deposit was discovered during an exploration programme (the “Tengrela Gold Project”) focussed on the Tengrela exploration tenements located in the north of Côte d'Ivoire. In November 2010, the Company completed a DFS on developing an open cut mining operation together with a conventional carbon in leach (“CIL”) gold processing plant and related infrastructure based on the Sissingué gold deposit. The Company’s 85% interest in the SGP reflects (as if it has been granted) a 10% free carried interest in the mine-owning company which is required to be allocated to the Government of Côte d'Ivoire upon the issue of an Exploitation Permit pursuant to the current Ivorian Mining Code.
A 90% interest in the Kayeya gold deposit which forms part of the Grumesa Gold Project (“GGP’’), an exploration stage gold project located 30 kilometres to the east of the EGM in Ghana. Previous studies indicated that the GGP represents a potential satellite production opportunity to the larger EGM. The Company’s 90% interest in the GGP reflects a 10% free carried interest in the mine-owning company which is required to be allocated to the Government of Ghana upon the issue of a mining lease.

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

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

In addition, Perseus owns (i) a 23.0% interest in Burey Gold Limited (“Burey”), an ASX-listed junior exploration company holding a portfolio of gold exploration properties in the Republic of Guinea in West Africa; and (ii) a 23.7% interest in Manas Resources Limited (‘‘Manas’’), an ASX-listed company that owns a portfolio of gold properties in Central Asia that were sold to Manas by Perseus in mid-2008.

Perseus has long-term debt obligations under the terms of a project finance facility that was fully drawn to US$85 million on June 23, 2011. During the 2012 Financial Year a total of US$22.0 million has been repaid to lenders in accordance with the agreed debt amortization schedule reducing the debt outstanding at June 30, 2012 to US$63 million. Associated with the project debt facility, the Company sold forward 230,000 ounces of gold. A total of 40,000 ounces of gold have been delivered under forward sales contracts during the 2012 Financial year at a weighted average price of US$1,219 per ounce, reducing the Company’s forward sales obligations to 190,000 ounces of gold at a weighted average sale price of $1,256 (details of which are provided elsewhere in this MD&A).

HIGHLIGHTS OF THE 2012 FINANCIAL YEAR

During the 2012 Financial Year Perseus significantly expanded and developed both its physical and human asset bases and successfully transitioned from being a successful explorer for gold into a successful, fully integrated gold company whose activities include exploration and evaluation, project development and gold production.

After starting site works for the development of EGM in Ghana in June 2010, construction was completed on schedule and within budget. First gold was produced on August 21, 2011 and on December 31, 2011, commissioning of the EGM was declared complete and commercial production formally commenced the following day. By June 30, 2012, the Company had produced 137,298 ounces of gold.

In the same period, preparations for the development of Perseus’s second gold project, the SGP in Côte d’Ivoire were materially advanced. The Environmental and Social Impact Assessment (“EISA”) and the Definitive Feasibility Study (“DFS”) for the SGP received regulatory approval and by the end of the period, an Exploitation Licence application and a draft Mining Convention documenting the fiscal terms under which the SGP would be developed and operated had been filed and were being considered by regulatory authorities. Subsequent to the end of the 2012 Financial Year but before the date of this report, the Exploitation Permit was issued to Occidental Gold SARL, a subsidiary of Perseus. Project engineering and procurement plans were well advanced in preparation for the commencement of early works on site at Sissingué.

Active exploration has continued throughout the year in both Ghana and Côte d’Ivoire. The Mineral Resources associated with the EGM were upgraded on December 22, 2011 and then again on March 29, 2012. A large amount of drill core obtained from drilling of the Tengrela exploration tenements in Côte d’Ivoire was dispatched for assaying, the results of which will be used as a basis for upgrading the Mineral Resources and Ore Reserves associated with the SGP in the latter part of 2012.

The Group’s Proved and Probable Ore Reserves as at June 30, 2012 increased to 103.5 Million tonnes of Ore containing 4.035 million ounces of gold after allowing for mining depletion. During the period, the Group’s Measured and Indicated Mineral Resources (inclusive of Ore Reserves) increased by 22.6% to 7.017 million ounces of gold and Inferred Mineral Resources increased by 1.4% to 2.217 million ounces of gold.

EGM, Ghana

The EGM is located on the Ayanfuri and Nanankaw mining leases in the Republic of Ghana, in West Africa. These mining leases together, with the adjoining exploration license areas of Grumesa, Kwatechi, Dunkwa, Nsuaem and Nkotumso that are also held by the Group, cover a total area of about 650 square kilometres.

Project Development and Commissioning

Development of the EGM processing facility and associated project infrastructure progressed on schedule and on budget during the period with the following milestones being achieved:

Practical Completion of the construction of the processing facility (as defined by the SAG mill being ready to receive ore) was achieved on July 20, 2011;
The first gold pour occurred on schedule on August 21, 2011;
Commissioning of the mine and processing facility was declared complete as at December 31, 2011 and
commercial production of gold commenced with effect from January 1, 2012.

Gold Production Operations

The total of 14,973,000 bcm of ore and waste mined during the 2012 Financial Year included 2,444,000t of oxide ore at 1.0g/t gold, 4,864,000t of transition and primary ore at 1.2g/t gold and 24,875,000t of waste. Of this amount, 3,660,000bcm of ore and waste were mined during the June 2012 Quarter including 173,000t of oxide ore at 0.9g/t gold and 1,905,000t of transition and primary ore at 1.3g/t gold. The 23% decrease in mine production relative to the March 2012 Quarter reflected a combination of expected wet weather and over budget performance in the March Quarter.

Ore stockpiles (including both high and low grade ore but not mineralised waste) increased to 3,632,000 tonnes grading 0.8 g/t and included approximately 78% oxide ore and 22% primary ore. Stockpiles at the end of the 2012 Financial Year were significantly larger and of higher grade than forecast due to overall positive reconciliation and lower mill throughput rates.

Total mill throughput for the 2012 Financial Year was 3,688,000 tonnes of ore and by year end, gold recovery rates had improved ahead of forecast to 87.4% as a result of improved process efficiency and a gradual reduction in the amount of transition material included in fresh ore feed. Recent changes to the float collector reagent also appear to have resulted in a further significant improvement in gold recovery. During the June 2012 Quarter, average operating mill throughput rates had increased to 734 dry tonnes per hour from 685 dtph in the prior quarter. Based on the long term target utilisation rate of 90% the throughput rate in the June 2012 Quarter equated to about 5.8Mtpa, or 0.3Mtpa above the 5.5Mtpa nameplate capacity of the mill.

Unscheduled mill downtime was higher than planned during the June 2012 Quarter, albeit down slightly from the March 2012 Quarter, resulting in mill run time during the June 2012 Quarter of 1,566 hours relative to plan of 1,986 hours. The lack of mill feed due to crusher downtime accounted for 43% of mill downtime and resulted in decreased throughput rates for a number of days. Water and tails management accounted for 9% of downtime, 10% was attributable to mill lube and drive issues and about 15% to wear to chutes and piping. The Company has actioned measures to reduce downtime to these areas. Grid power issues only accounted for 2.4% of downtime

The overall performance of the processing facility during the period has validated the efficacy of the Edikan process flow sheet that allows for good recovery at very low reagent unit consumption and low power usage.

Table 1: Key Production Statistics – EGM

Parameter	Unit	Twelve Months	June	March	December	September
		to	Quarter	Quarter	Quarter	Quarter
		30 June 2012	2012	2012	2011	2011
Total material mined	bcm1	14,973,000	3,660,000	4,760,000	3,680,000	2,873,000
Waste to Ore Strip Ratio	bcm:bcm	4.1	3.8	4.2	3.3	4.5
Ore mined
 Oxide	tonnes	2,444,000	173,000	908,000	779,000	584,000
 Primary	tonnes	4,864,000	1,905,000	1,294,000	1,016000	648,000
Ore Grade mined
 Oxide	g/t Au2	1.0	0.9	1.0	1.1	1.0
 Primary	g/t Au	1.2	1.3	1.3	1.0	1.0
Ore Stockpiles
 Quantity	tonnes	3,632,000	3,632,000	2,703,000	1,669,000	1,028,000
 Grade	g/t Au	0.8	0.8	0.8	0.8	0.8
Mill throughput	tonnes	3,688,000	1,149,000	1,028,000	1,087,000	424,000
Milled head grade	g/t Au	1.4	1.6	1.4	1.3	1.0
Gold recovery	%	83.5	87.4	83.7	81.0	77.5
Goldproduced	oz	137,298	52,670	38,796	35,801	10,031

Denotes bank cubic metres 2. Denotes grams/tonne of gold

Since commencing commercial production on January 1, 2012, 98,769 ounces of gold have been sold at an average delivered price of US$1,508 per ounce, including 58,769 ounces that were sold at spot gold prices averaging US$1,632 per ounce and the 40,000 ounces of gold that were delivered into forward sales contracts at an average of US$1,219 per ounce.

In the June 2012 Quarter, 33,279 oz were sold at spot gold prices averaging US$1,674/oz and 20,000 oz of gold into forward sales contracts at an average of US$1,221/oz. This reduced the outstanding hedge commitment to 190,000oz of gold to be delivered at an average gold price of US$1,256/oz in quarterly instalments. The last delivery under the forward sales contracts is scheduled for the December 2014 Quarter.

The cash cost for the June 2012 Quarter of US$676/oz compared favourably to guidance of US$690/oz and to the comparable cost in the March 2012 Quarter. The reduction in unit costs can be attributed to the higher grade of ore treated and the gold recovery rate that meant that fewer tonnes of ore needed to be processed in order to produce the targeted amount of gold. The adjustment to gross cash costs of US$2.1M reflected costs incurred on stockpiling ore and deferred costs of waste stripping, consistent with the level of mining activity that occurred during the Quarter as previously discussed.

A total of US$20.2M of expenditure was capitalised since declaration of commercial production (US$11.4M in the June 2012 Quarter) including US$11.0M on tailings dam modifications, US$2.9M on construction of an oxide ore feed circuit and US$2.6M on community relations including compensation for loss of crops.

During each of the June 2012 and March 2012 Quarters, scheduled debt repayments of US$11.0M per quarter were made to project debt lenders Macquarie Bank Limited and Credit Suisse AG, reducing the balance of outstanding debt to US$63.0M.

Table 2: Key Financial Operating Statistics – EGM

Parameter Units 2012 Financial Year	June 2012 Quarter March 2012 Quarter December 2011 Quarter1 September 2011 Quarter1
Total gold sales oz 98,769 Average sales price US$/oz of gold sold 1,508 Gross Cash Costs US$/oz 826 Including:  Mining cost US$/tonne of material mined 2.64  Processing cost US$/tonne of ore milled 8.98  G & A cost US$M / month 1.31 Accounting Adjustment US$M (11.9) Adjusted Cash Costs US$/oz 696 Royalties US$/oz 106 Adjusted Cash Costs including royalties US$/oz 802 Sustaining capital and plant upgrade costs US$M 20.2	53,279 45,490 n/a n/a 1,504 1,513 n/a n/a 716 975 n/a n/a 2.70 2.59 n/a n/a 9.30 8.63 n/a n/a 1.41 1.20 n/a n/a (2.1) (9.8) n/a n/a 676 723 n/a n/a 106 107 n/a n/a 782 830 n/a n/a 11.4 8.8 n/a n/a

Parameter
Units
2012
Financial
Year

June
2012
Quarter
March
2012
Quarter
December
2011
Quarter1
September
2011
Quarter1

Total gold sales
oz
98,769
Average sales price
US$/oz of gold
sold
1,508
Gross Cash Costs
US$/oz
826
Including:

Mining cost
US$/tonne of
material mined
2.64

Processing cost
US$/tonne of
ore milled
8.98

G & A cost
US$M / month
1.31
Accounting
Adjustment
US$M
(11.9)
Adjusted Cash Costs
US$/oz
696
Royalties
US$/oz
106
Adjusted Cash Costs
including royalties
US$/oz
802
Sustaining capital and
plant upgrade costs
US$M
20.2

53,279
45,490
n/a
n/a
1,504
1,513
n/a
n/a
716
975
n/a
n/a
2.70
2.59
n/a
n/a
9.30
8.63
n/a
n/a
1.41
1.20
n/a
n/a
(2.1)
(9.8)
n/a
n/a
676
723
n/a
n/a
106
107
n/a
n/a
782
830
n/a
n/a
11.4
8.8
n/a
n/a

Note that Commercial Production was declared on January 1, 2012. Prior to this date all revenue and costs were capitalised on the balance sheet. Since January 1, 2012, all revenue and costs have been recorded in the Income Statement.

Guidance for September 2012 quarter production is 55,000oz to 60,000oz at a cash cost of $700/oz before accounting adjustments or $575/oz after accounting adjustments for stockpile movements and excess waste movement. December 2012 quarter production guidance is 65,000oz to 70,000oz at a cash cost of $630/oz before accounting adjustments or $575/oz after accounting adjustments. The combined guidance for the two quarters of 120,000oz to 130,000oz is down from previous production guidance of 135,000oz to 145,000oz due to changes in the mine plan and the resulting reduction in feed grade from 1.59g/t to 1.42g/t. Revised cash cost guidance of $575/oz is similar to previous cash cost guidance of $550/oz. Combined March 2013 and June 2013 Quarter production guidance is 125,000oz to 135,000oz at a cash cost of $670/oz before accounting adjustments or $625/oz after accounting adjustments but before royalties.

Exploration

Following a large amount of resource definition drilling early in the 2012 Financial Year using up to 8 drill rigs on the Group’s Ghanaian mining and exploration tenements, updated Mineral Resource and Ore Reserve estimates for EGM and the GGP were completed on December 22, 2011 and on March 29, 2012 a revised Mineral Resource estimate was completed for the Esuajah North deposit which further increased the Mineral Resource estimate for the EGM.

The Company completed 13,447 meters of drilling at the EGM and adjoining licenses during the June 2012 Quarter. Drilling activity during the June 2012 Quarter was reduced with only two multi-purpose rigs deployed as the focus shifted from principally resource/reserve drilling to a larger component of near-mine and district exploration drilling. This will improve assay turn-around times and free up resources for a major review comprising integrated interpretation of geochemical, geological and recent geophysical data.

December 2011 EGM Mineral Resource Estimate:

Drilling on the Fetish deposit during the past two years has grown the deposit, with significant potential remaining to further expand the Mineral Resource. Measured and Indicated Mineral Resources at Fetish have increased 62% to 29.4Mt at 1.0g/t gold for 972,000 ounces, while Inferred Mineral Resources reduced by 31% to 7.5Mt at 1.0g/t Au for 248,000 ounces.

Infill drilling at Chirawewa enabled an initial Indicated Mineral Resource estimate and an increase in total Mineral Resources. A more comprehensive drill-out of Chirawewa will be undertaken after the deposit is dewatered to allow better access to the pit floor. Initial Indicated Mineral Resources at Chirawewa are 4.5Mt at 1.1g/t Au for 167,000 ounces and Inferred Mineral Resources increased 22% to 8.7Mt at 0.9g/t Au for 249,000 ounces.

Limited additional exploration drilling and grade control drilling on the Abnabna-Fobinso deposit during 2011 significantly improved the understanding of mineralisation controls of the resource model and resulted in an increase in Mineral Resources notwithstanding the 2.6Mt of ore mined to 30 November 2011. M&I Mineral Resources at Abnabna-Fobinso increased 8% to 72.6Mt at 1.1g/t Au for 2,515,000 ounces, while Inferred resources increased 109% to 11.1Mt at 1.0g/t Au for 362,000 ounces. Subsequent to the resource cut-off date, a 42-hole drill program has commenced at Abnabna-Fobinso targeting conversion of Inferred Mineral Resources within or near the base of the current pit design. The Bokitsi deposit is a new addition to the Mineral Resource inventory. Indicated Mineral Resources at Bokitsi total 2.6Mt at 2.5g/t Au containing 212,000 ounces of gold and Inferred Mineral Resources are 1.6Mt at 1.7g/t Au containing 89,000 ounces of gold.

March 2012 EGM Mineral Resource Estimate Upgrade (to include Esuajah North Resource Estimate)

A revised Mineral Resource estimate for Esuajah North was completed by consultants, Runge Limited, in March 2012. Measured and Indicated Mineral Resources at a 0.8g/t Au cut-off increased by 51% to 15.1Mt at 1.2g/t Au and at a 0.4g/t Au cut-off increased 59% to 32.7Mt at 0.9g/t Au containing 920,000oz of gold. Inferred resources decreased from 9.3Mt at 0.7g/t to 6.3Mt at 0.8 g/t Au containing 168,000oz of gold. The 400m-long Esuajah North deposit averages more than 100m in width and contains Measured and Indicated Mineral Resources of 3,400oz per vertical metre for the first 150m below the existing shallow pit.

The Company’s Measured and Indicated Mineral Resource base at EGM is now 5.6Moz of gold and the Inferred Mineral Resource base is 1.7Moz before adjustment for mining depletion and is tabulated below in Tables 3 and 4 respectively.

Table 3: Measured and Indicated Mineral Resources – EGM

	Measured Resources1	Measured Resources1	Measured Resources1	Measured Resources1	Indicated Resources1	Indicated Resources1	Indicated Resources1	Indicated Resources1	Measured + Indicated Resources	Measured + Indicated Resources	Measured + Indicated Resources	Measured + Indicated Resources
Deposit	Quantity		Grade	Gold	Quantity		Grade	Gold	Quantity		Grade	Gold
	Mt		g/t gold	Ounces	Mt		g/t gold	Ounces	Mt		g/t gold	Ounces
Abnabna/AFGap/Fobinso	49.4		1.2	1,850,000	23.2		0.9	666,000	72.6		1.1	2,515,000
Esuajah South	8.3		1.8	482,000	6.2		1.7	336,000	14.5		1.8	818,000
Esuajah North	17.2		0.9	498,000	15.4		0.8	422,000	32.7		0.9	920,000
Fetish	8.8		0.9	255,000	20.6		1.1	717,000	29.4		1.0	972,000
Chirawewa		-	-	-	4.5		1.1	167,000	4.5		1.1	167,000
Bokitsi		-	-	-	2.6		2.5	212,000	2.6		2.5	212,000
Mampong		-	-	-		-	-	-		-	-	-
Dadieso		-	-	-		-	-	-		-	-	-
Total	83.7		1.1	3,085,000	72.5		1.1	2,520,000	156.3		1.1	5,604,000

1 Last updated in March 2012 and does not allow for mining depletion.

Table 4: Inferred Mineral Resources – EGM

	Inferred Resources1	Inferred Resources1	Inferred Resources1
Deposit	Quantity	Grade	Gold
	Mt	g/t gold	Ounces
Abnabna/AF Gap/Fobinso	11.1	1.0	362,000
Esuajah South	5.3	1.3	224,000
Esuajah North	6.3	0.8	168,000
Fetish	7.5	1.0	248,000
Chirawewa	8.7	0.9	249,000
Bokitsi	1.6	1.7	89,000
Mampong	6.9	0.9	210,000
Dadieso	3.2	1.6	161,000
Total	50.6	1.1	1,711,000

1 Last updated in March 2012

EGM Ore Reserve Estimate:

New pit designs have been completed for the Abnabna-Fobinso, Esuajah North, Esuajah South and Fetish deposits. Mining is currently taking place at Abnabna-Fobinso and all four deposits are likely to be subject to mining during the next four years. The limits of the pit designs were nominally based on US$1,200/oz gold price optimisation shells using revised, more conservative engineering parameters and updated unit costs. An increased waste to ore strip ratio from 2.8 to 3.4 is a function of inter-ramp slope angles being reduced to 37 degrees for oxide and 53.5 degrees for fresh material. Provision for blasting in oxides has however reduced significantly based on current practice.

Ore Reserves are reported at a 0.4g/t Au cut-off for Abnabna-Fobinso and 0.5g/t Au for Esuajah South, Esuajah North and Fetish. Due to the relatively low marginal processing cost at Edikan, material between 0.2g/t and 0.4g/t Au is currently stockpiled for future treatment but is not recorded as Ore Reserves.

Subsequent to the end of the 2012 Financial Year, further Mineral Resource and Ore Reserve estimation work was being undertaken on the Bokitsi, Chirawewa, Chirawewa South, Mampong, Dadieso deposits amongst others. The underground potential of the Esuajah South and the Fetish deposits is also being assessed. The Company is continuing to work on long-term initiatives to improve open pit mining methods and equipment selection with the aim of reducing mining unit costs.

Table 5: Ore Reserves – EGM

Deposit	Proven Quantity Mt	Ore Reserves1 Grade g/t gold Gold ‘000 oz	Ore Reserves1 Grade g/t gold Gold ‘000 oz	Probable Quantity Mt	Ore Reserves1 Grade g/t gold Gold ‘000 oz	Ore Reserves1 Grade g/t gold Gold ‘000 oz	Proven & Probable Reserves Quantity Mt Grade g/t gold	Proven & Probable Reserves Quantity Mt Grade g/t gold	Ore Gold ‘000 oz	W:O2 Ratio
Abnabna-Fobinso	37.3	1.2	1,397	11.7	0.8	320	49.0	1.1	1,717	2.9
Esuajah South	7.2	1.8	422	1.0	2.1	71	8.2	1.9	493	9.0
Esuajah North	12.7	0.9	376	4.4	0.9	125	17.1	0.9	502	1.9
Fetish	7.4	0.9	222	8.4	1.3	354	15.9	1.1	576	3.4
ROM Stockpiles				3.6	0.8	90	3.6	0.8	90	-
Total	64.6	1.2	2,417	29.2	1.0	961	93.8	1.1	3,378	3.4

Notes:

1 0.4g/t gold cut-off applied to Abnabna-Fobinso and 0.5g/t gold cut-off applied to other deposits.

2 Inferred Mineral Resources totalling 1.41Mt at 1.2g/t gold is considered as waste.

3 Last updated in August 2012 and allows for material mined to June 30, 2012.

SGP, Côte d’Ivoire

The SGP is situated within an 885sq km exploration tenement area located in the north of Côte d’Ivoire that is being explored as part of the Tengrela Gold Exploration Project. The exploration tenements are located along the same structural/stratigraphic corridor within the Syama-Boundiali greenstone belt. The SGP lies approximately 150km south-southeast of the Morila gold mine (7Moz) in Mali and 65km west northwest of Randgold’s Tongon deposit (4.3Moz) in Côte d’Ivoire.

Definitive Feasibility Study

A DFS on the development of the Sissingué gold deposit (this potential development has subsequently become known as the SGP) was completed and the results were published in November 2010. These results included the following:

Initial Probable Ore Reserve of 657,000oz of gold (Refer to Table 6 below for details).
Estimated production of 340,000oz (3.5Mt at 3.3g/t) of gold in first two years of a six year mine life.
C1 Cash costs in the first two years of US$421/oz, with mine life average cash costs of US$505/ oz.
EBITDA of US$221M for first two years of production at US$1,100/oz gold price.
Start-up capital cost of US$115 million paid back in 14 months at US$1,100/oz gold price.

With the passage of time, and as a result of industry cost inflation and material changes in commodity prices, some of the assumptions used in the DFS have become outdated and subsequent to the end of the 2012 Financial Year the Company has commenced recalculating the Ore Reserve and reviewing the DFS taking into account drilling results obtained since the DFS was completed in 2010 as well as the current gold price and cost data.

Table 6: Ore Reserves – SGP

	Proved	Reserves		Probable Reserves	Probable Reserves		Proved & Probable Reserves	Proved & Probable Reserves	Proved & Probable Reserves
Ore type	Quantity Mt	Grade g/t gold	Gold ‘000 oz	Quantity Mt	Grade g/t gold	Gold ‘000 oz	Quantity Mt	Grade g/t gold	Gold ‘000 oz
Oxide/Transition	-	-	-	3.4	2.1	224	3.4	2.1	224
Primary	-	-	-	6.3	2.1	433	6.3	2.1	433
Total	-	-	-	9.7	2.1	657	9.7	2.1	657

Notes:

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

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

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

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

Project Permitting

During the 2012 Financial Year, material progress has been made on the permitting of the SGP. Following a public hearing in September 2011, a technical validation process was completed with the Ivorian National Environmental Agency (ANDE) in December 2011, and in early 2012, the Company was advised that the EISA and the DFS for the SGP had been approved.

An application for an Exploitation Permit was filed with the Ministry of Mines and Energy together with a draft Mining Convention containing suggested fiscal terms to apply during the course of the SGP and subsequent gold mining operation. Subsequent to the end of the 2012 Financial Year, the Exploitation Permit for the Sissingue development was granted by the Ivorian government to Occidental Gold SARL, a subsidiary of Perseus. The draft Mining Convention remains under consideration by the relevant regulatory authorities as at the date of this report.

Project Engineering

An Australian engineering firm, GR Engineering Services, in conjunction with Perseus’s SGP team, has completed the design of the SGP processing plant and about 90% of the total detailed design. Tender enquiry packages were issued for the supply of all mechanical equipment and preferred tenderers were selected and issued with letters of intent.

A US$5.5 million order was placed with Outotec Pty Ltd in December 2011 for the supply of a 4,500kW, 5.5m diameter, 9.2m long, semi-autogenous grinding (SAG) mill. Fabrication of the SAG mill is scheduled to be completed within 45 weeks ex-works, and the complete mill package is expected to be delivered to site in late 2012.

During the 2012 Financial Year, tender enquiries for early civil works have been issued and responses have been received. Tender packages for fabrication and construction works have also been prepared in anticipation of a project commencement date in the second half of 2012.

Exploration

During the 2012 Financial Year, 143,553 metres were drilled on various drill targets as part of the Tengrela Gold Exploration Project. A large amount of the drilling has been focussed around the Sissingué deposit on the Tengrela East tenement. A portion of this drilling was sterilization drilling for the proposed process plant site for the SGP. Intercepts including 16m at 2.1g/t and 4m at 5.5g/t Au were recorded in the proposed waste dump and ROM pad area. Strong infill and extension drill results were also obtained from the limited number of holes at Sissingué for which assay results have been received. These included anomalous intercepts such as 4m at 33.5g/t Au and 5m at 16.5g/t Au at Sissingué East. In other drilling, several anomalous exploration intercepts were also recorded, including 2m at 60.0g/t and 8m at 4.0g/t Au at Kanakono, 14m at 5.9g/t, 13m at 2.4g/t Au and 6m at 3.6g/t at Podio, 4m at 10g/t Au at Sissingué North and 4m at 10.0g/t Au from Zing.

The Company has added another Permis de Recherche application (“permit application”) to its portfolio in Northern Côte d’Ivoire. The 250sq km Napi é Permit application is located 80km southeast of the Company’s Mbengué Permit. Previous work about 10 years ago by Leo Shield Exploration Ltd identified a significant gold in soil anomaly extending for 15km. Significantly, anomalous pitting results were never followed up by Leo Shield.

After a review process, the government of Côte d’Ivoire has commenced renewing existing exploration licences. This will progress to the conversion of reconnaissance licences to exploration permits and then consideration of new licence applications. The Company has lodged a number of reconnaissance licence conversion applications including those covering several significant targets that have been awaiting drilling for up to two years.

The next Ore Reserve and Mineral Resource estimate update for the SGP is expected to be completed during the December 2012 Quarter.

COMPANY OUTLOOK FOR THE QUARTER ENDING SEPTEMBER 30, 2012

Based on current work schedules for the Quarter ending September 30, 2012 the Company plans to:

Edikan Gold Mine

Target gold production of 55-60,000oz at cash cost of US$575/oz after accounting adjustments;
Implement measures to improve mining efficiency;
Progressively de-bottleneck the processing plant to increase throughput rates;
Improve crusher and mill availability rates to 90%;
Continue active exploration drilling.

Sissingué Gold Project

Confirm capital and operating cost structures and mine plan for the SGP;
Finalise project permitting and commit to development of the SGP;
Commence early works associated with the SGP;
Advance detailed engineering design and contract packaging for the development of the SGP;
Continue exploration drilling at Sissingué and other TGP targets;

Business Development

Continue to manage the preparation of an environmental impact statement relating to the development of a satellite gold mining and heap leach operation based on the Kayeya deposit which forms part of the GGP;
Continue to investigate opportunities for expanding the Company’s inventory of Mineral Resources and Ore Reserves by identifying, investigating and, where appropriate, acquiring tenement holdings in West Africa through direct application to government authorities, joint venture activities or acquisition from existing holders.

OVERALL FINANCIAL PERFORMANCE OF THE COMPANY

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

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

The exploration, evaluation, development and operation of the Company’s properties may require substantial additional financing. Failure to obtain sufficient financing in the future may result in delay or indefinite postponement of the exploration, evaluation, development or operation of any or all of the Company’s properties. There can be no assurance that bank financing, equity capital or other types of financing will be available when needed or that, if available, the terms of such financing will be acceptable to the Company. See ‘‘ Risk Factors ’’ for a further discussion of these and other risk factors associated with the Company and an investment in the Company’s shares.

DISCUSSION ON OPERATING RESULTS

The operating results for the three most recent financial years are as shown below:

Operating Results1 for the Full Year ended	June 30, 2012	June 30 2011	June 30 2010
Total income	156.128	2.533	1.928
Total operating expenses	(95.907)	(53.709)	(11.709)
Tax	(7.760)	-	-
Net profit / (loss) after tax	52.461	(51.176)	(9.781)
Basicprofit /(loss) per share(cents)	10.56	(12.11)	(2.94)

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

The net profit after tax earned of $52.461 million in FY 2012, represents a significant improvement in operating performance relative to prior years reflecting the successful transition of the Company from being an exploration and development company to a company that is also successfully operating its first gold mine.

On January 1, 2012, the Company commenced commercial gold production from the EGM resulting in a significant change in the nature of the operating results recorded by the Company in comparison to operating results recorded in prior periods.

Prior to declaring commercial production at the Company’s EGM on January 1, 2012 all costs, net of any cash receipts from the sale of precious metals, were capitalised and recorded as an asset on the Company’s Balance Sheet. From January 1, 2012 the Company has expensed operating costs and recognised revenue associated with gold production and sales from the EGM. Also in accordance with the Company’s accounting policy of capitalising development, exploration and evaluation expenditure, costs associated with exploration at both EGM and SGP as well as predevelopment works at SGP has been capitalised and recorded as an asset on the Company’s Balance Sheet. Administration and corporate overheads have been expensed throughout the 2012 Financial Year. Note that in prior years, as a company in the pre-production stage of development, Perseus’s revenues mainly comprised interest income and its expenses have mainly comprised administration and corporate overheads (given the Company’s accounting policy to capitalise development, exploration and evaluation expenditure).

As referenced above, due to the commencement of commercial production at EGM the Company’s results for the twelve months ended June 30, 2012 (Net profit after tax: $52.461 million and basic profit per share of 10.56 cents) differ to those of the corresponding period ending June 30, 2011 (Net loss: $51.176 million and basic loss per share of 12.11 cents) to the extent that during the prior period revenues mainly comprised interest income and its expenses mainly comprised administration and corporate overheads (given the Company’s accounting policy to capitalise preoperations, development, exploration and evaluation expenditure prior to the commencement of commercial production.) During the twelve months ended June 30, 2012 a foreign exchange gain of $10.393 million has been earned (Twelve months ended June 30, 2011: loss of $10.380 million) reflecting a depreciation of the AUD relative to the USD during the period (June 30, 2012: 1.0161; June 30, 2011: 1.0597). A hedge loss of $0.255 million incurred during the twelve months ended June 30, 2012 contrasts with a hedge loss of $22.763 million incurred during the corresponding period ended June 30, 2011 following the inception of hedge accounting during that period. Tax expense of $7.760 million incurred during the twelve months ended June 30, 2012 contrasts with nil tax expense in the corresponding period ended June 30, 2011 and 2010 respectively.

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

Operating Results1 for the three	Jun 30	Mar 31	Dec 31	Sept 30	Jun 30	Mar 31	Dec 31	Sept 30
months ended	2012	2012	2011	2011	2011	2011	2010	2010
Total income	84.553	60.960	7.549	3.067	0.315	0.581	0.739	0.897
Net profit / (loss) after tax	19.053	19.722	12.907	0.779	(5.097)	(3.653)	(30.083)	(12.343)
Basicprofit /(loss) per share(cents)	3.01	4.41	2.96	0.18	(1.38)	(0.73)	(7.07)	(2.93)

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

The operating results for the June 2012 Quarter included revenue earned from the sale of precious metals ($78.313 million) less the cost of the goods sold ($40.228 million). In addition the result includes interest income (June 2012 Quarter: $0.165 million; June 2011 Quarter: $0.315 million), depreciation and amortisation (June 2012 Quarter: $4.540 million; June 2011 Quarter: $0.070 million), administration and corporate overheads (June 2012 Quarter: $2.488 million; June 2011 Quarter: $2.292 million). In the June 2012 Quarter a foreign exchange gain ($6.080 million) was incurred (June 2011 Quarter: loss of $1.167) that arose from a devaluation of the AUD relative to the USD during the period (June 30, 2012: 1.0161; March 31, 2012: 1.0387).

DISCUSSION OF FINANCIAL CONDITION

The year -on-year movements in the financial position of the Company over the last three financial years are shown below.

Financial Position1 as at:	June 30, 2012	June 30, 2011	June 30, 2010
Cash and cash equivalents	105.497	96.462	185.591
Total Assets	528.971	382.598	346.792
Total Liabilities	169.103	170.213	25.862
Net Assets	359.868	212.385	320.930

1All amounts shown are in millions of dollars

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

Financial Position1 as at:	Jun 30	Mar 31	Dec 31	Sept 30	Jun 30	Mar 31	Dec 31	Sept 30
	2012	2012	2011	2011	2011	2011	2010	2010
Cash and cash equivalents	105.497	117.120	131.455	53.561	96.462	68.038	88.796	130.213
Total Assets	528.971	531.544	507.721	407.739	382.598	312.433	300.718	309.447
Total Liabilities	169.103	201.204	196.120	207.815	170.213	82.481	64,755	14.340
Net Assets	359.868	330.340	311.601	199.924	212.385	229.951	235.963	295.107

1All amounts shown are in millions of dollars

Total Assets

Total assets have decreased in the June 2012 Quarter by $2.573 million and increased in the twelve month period since June 30, 2011 by $146.373 million. The June Quarter decrease is due to a decrease in current assets of $15.850 million offset by an increase in non-current assets of $13.277 million. The increase in Total assets relative to June 30, 2011 reflects an increase of $50.442 million in current assets as well as an increase of non-current assets of $95.930 million. Details of movements in specific accounts follow.

Cash and cash equivalents

At June 30, 2012, the Company had available cash or cash equivalent resources of $105.497 million plus a further $2.212 million of restricted funds on deposit securing environmental obligations. This cash balance represents an increase relative to the position as at June 30, 2011 ($96.462 million plus restricted cash of $2.881 million) but a decrease relative to March 31, 2012 ($117.120 million plus restricted cash of $2.164 million). The increase in cash reserves of $9.035 million during the twelve month period ended June 30, 2012 is due to the receipt of proceeds from a capital raising that occurred during the December 2011 Quarter (refer to the discussion on “Liquidity and Capital Resources” below) and from the sale of gold and silver during the period, offset by payments associated with the development, commissioning and operation of the EGM, development at SGP, purchase of other fixed assets and equity investments and payments for exploration and administration activities plus repayment of US$22.000 million in debt to project lenders.

The decrease in cash reserves of $11.623 million during the June 2012 Quarter is discussed in some detail in the ” “Discussion on Cash flows .

Receivables

At June 30, 2012 the Company’s current receivables were $10.507 million (June 30, 2011: 8.547 million; March 31, 2012: $15.651 million) while non-current receivables amounted to $29.563 million (June 30, 2011: 3.631 million; March 31, 2012: $22.366 million).

The increase in current receivables during the twelve months to June 30, 2012 relative to prior periods is as a result of increased gold sales while the increase in non-current receivables in this period is due to an increase in a VAT refund from the Ghana Revenue Authority. During the twelve month period since June 30, 2011 the VAT refund from the Ghana Revenue Authority has been reclassified from current to non-current receivable. The overall increase in receivables during this period is the result of an increase in gold sales and an increase in the VAT refund due from the Ghana Internal Revenue Service.

At the end of the June 2012 Quarter the level of current receivables has decreased relative to the end of the March 2012 Quarter as a result of the timing of gold sales and the receipt of debtor payments.

Inventory

At June 30, 2012 the Company held inventories of $37.335 million (June 30, 2011: $0.428 million; March 31, 2012: $36.912 million). The net increase in inventory during the 2012 Financial Year ($36.907 million) relative to the position at June 30, 2011, is the result of the steady increase each quarter of mining and processing activities being undertaken at EGM giving rise to ore stockpiles, gold in circuit, bullion on hand and materials and supplies.

Property, plant and equipment

At June 30, 2012, the Company recognised on its balance sheet a total of $162.044 million for property, plant and equipment (“PP&E”) (June 30, 2011: $228.480 million; March 31, 2012: $265.744 million).

The Company capitalised $25.235 million of expenditure on PP&E during the June 2012 Quarter before expensing depreciation of $0.980 million. During the June 2012 Quarter, an amount of $128.643 million which relates to the EGM has been reclassified from PP&E to mine properties expenditure. Due to the appreciation of the USD against AUD referred to above, a $0.688 million foreign exchange gain was recorded against PP&E during the June 2012 Quarter as the majority of these assets are recorded in USD in the subsidiary companies’ accounts and are translated into AUD on consolidation.

During the twelve month period since June 30, 2011, $27.680 million of expenditure on PP&E has been capitalised and $3.622 million of depreciation has been expensed. In addition, $32.960 million relating to the SGP was reclassified from exploration and evaluation to PP&E, as mentioned above, $128.643 million was reclassified to mine properties and the net appreciation of the USD against AUD during the period referred to above gave rise to $5.691 million foreign exchange gain being recorded against PP&E.

Mine Properties

At June 30, 2012 the Company recognised mine properties of $125.732 million on its Balance Sheet (June 30, 2011: $nil; March 31, 2012: nil). During the June 2012 Quarter, $1.1740 million of expenditure on Mine Properties as a result of a deferred waste accounting entry has been capitalised and $6.545 million of amortisation has been expensed. In addition, $28.643 million was reclassified from PP&E and the net appreciation of the USD against AUD during the period referred to above gave rise to $1.894 million foreign exchange gain being recorded against mine properties.

The movement for the twelve month period since June 30, 2011 is the same as for the June 2012 Quarter above.

Exploration and evaluation expenditure

At June 30, 2012 the Company recognised mineral interest acquisition and exploration expenditure of $29.125 million on its Balance Sheet (June 30, 2011: $32.246 million; March 31, 2012: $24.778 million). The year on year movement in capitalised exploration and evaluation expenditure reflects the aggressive exploration programmes conducted by the Company in recent years and also the reclassification of expenditure from exploration and evaluation to mine properties as the properties progress to development.

The Company capitalised $2.907 million of exploration and evaluation expenditure incurred on its Ghanaian and Ivorian exploration tenements during the June 2012 Quarter ($30.643 million in the twelve month period from June 30, 2011) before recording a foreign exchange gain of $1.44 million in the June 2012 Quarter and a $0.804 million loss in the twelve month period from June 30, 2011.

Other assets

At June 30, 2012 the Company recognised prepayments of $5.618 million on its balance sheet (June 30, 2011: $3.081 million; March 31, 2012: $5.128 million). The increase in prepayments during the three months and twelve months ended June 30, 2012 reflects the increased commercial activity associated with the EGM.

Total Liabilities

As at June 30, 2012, the Company had liabilities totalling $169.103 million compared to $170.213 million at June 30, 2011 and $201.204 million at March 31, 2012. In the twelve month period since June 30, 2011 the changes in total liabilities are attributable to increases in current liabilities of $42.869 million offset by a decrease in non-current liabilities of $43.979 million. Details of movements in specific accounts follow. The change in total liabilities during the June 2012 Quarter is principally the result of a decrease in current liabilities ($8.864 million) as well as a decrease ($23.237 million) in non-current liabilities.

Payables

During, the twelve months ending June 30, 2012 amounts owed to creditors, relating mainly to the operation of the EGM, increased to $31.732 million from a total outstanding at June 30, 2011 of $28.637 million and at March 31, 2012 of $38.300 million.

On a quarter on quarter basis, creditors at June 30, 2012 are $6.568 million less than at the end of the March 2012 Quarter. The decrease relative to the March 2012 Quarter reflected a slight decrease in the volume of creditors and also an administrative delay in the timing of processing of outstanding invoices in the March 2012 Quarter.

Provision

A provision of $6.865 million as at June 30, 2012 for future rehabilitation work relating mainly to both old and new mining activity at EGM, was $2.403 million higher than the amount provided for at June 30, 2011 of $4.462 million. The change during the twelve month period ended June 30, 2012 reflects an increase in the area requiring rehabilitation as a result of increased mining activity during the period. In the three month period since March 31, 2012 there has been a $0.198 million increase in the provision from the March 2012 provision of $6.667 million.

Derivative financial instruments

As at June 30, 2012 the Company held forward sales contracts for 190,000 ounces of gold and recorded a liability of $67.123 million (March 31 2012: 210,000 ounces of gold with a recorded liability of $86.883 million; June 30, 2011: 230,000 ounces of gold with a recorded liability of $59.310 million) on its balance sheet. These contracts were designated as effective hedge contracts beginning October 1, 2010. The movement in mark-to-market value has been recorded as equity while $32.836 million (March 31, 2012: $37.079; June 30, 2011: $10.838 million;) of the liability has been classified as a current liability as these forward contracts settle within twelve months of balance date; the balance of $34.287 million (March 31, 2012: $49.803; June 30, 2011: $48.472) has been classified as a non-current liability. The liability in each case reflects the difference in value of the hedge contracts on the respective balance dates relative to the value of the contracts on the date of inception of hedge accounting.

Borrowings

The decrease in total borrowings at June 30, 2012 ($60.264 million) relative to March 31, 2012 ($69.354 million) and June 30, 2011 ($77.805 million) is largely the result of the scheduled debt repayments of US$11.0 million on call at June 30, 2012 and March 30, 2012 and an increase in the AUD equivalent value of the outstanding USD denominated borrowings due to the depreciation of the AUD against the USD during the June 2012 Quarter as described above.

DISCUSSION ON CASHFLOWS

The movements in the cash flow of the Company for the three most recent financial years are as shown below:

Cash flows1 for twelve months ended	June 30, 2012	June 30 2011	June 30 2010
Operating Activities	43.067	(5.826)	(3.056)
Investing Activities	(103.087)	(160.967)	(85.119)
FinancingActivities	68.450	89.278	190.119

1All amounts shown above are in millions of dollars

The significant year on year increases in cash outflows in prior years was attributable to investing activities largely reflecting payments for assets under construction at the EGM and SGP and an increase in exploration activities by the Company. In the current year, pre-commercial production cash receipts capitalised to development offset the cash flow from investing activities. The significant cash inflows from financing activities in 2011 ($89.278 million) and 2010 ($190.119 million), were the result of an active programme of debt and equity capital raisings undertaken to fund the development of the EGM and the SGP as well as fund the accelerated programme of exploration on the Company’s West African tenements.

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

Cash flows1 for	Jun 30	Mar 31	Dec 31	Sept 30	Jun 30	Mar 31	Dec 31	Sept 30
three months ended	2012	2012	2011	2011	2011	2011	2010	2010
Operating activities	21.641	25.163	(1.829)	(1.908)	(1.622)	(1.977)	(1.131)	(1.096)
Investing activities	(23.446)	(26.206)	(6.857)	(46.579)	(52.249)	(19.108)	(40.328)	(49.282)
Financing activities	(10.664)	(8.240)	85.010	2.343	81.689	0.789	1.997	4.803

1All amounts shown are in millions of dollars

After considering the effects of foreign exchange movements, the Company’s cash balance decreased by $11.623 million during the June 2012 Quarter while in the corresponding period in 2011 cash increased by $28.424 million.

Operating activities , during the June 2012 Quarter, resulted in total cash receipts of $82.899 million (March 2012 Quarter: $51.330 million) from the sale of precious metals produced at the EGM and $0.189 million (March 2012 Quarter:$0.222 million) from bank interest that were offset by administration expenses and production expenses at EGM of $59.758 million (March 2012 Quarter: $26.389 million), giving a net cash inflow for Operating Activities during the period of $21.641 million (March 2012 Quarter: $25.163 million). This net cash inflow was $23.263 million

more than the corresponding amount in June Quarter in 2011 when net outflows associated with Operating Activities totalled $1.622 million. In the June 2011 Quarter, the EGM had not commenced production as construction was still in progress and therefore no precious metals were available for sale and similarly no operating costs were incurred. Interest received in the June 2011 Quarter was $0.390 million and the costs of administration activities were $2.012 million.

Investing activities during the June 2012 Quarter included development expenses at EGM and SGP of $15.765 million (March 2012 Quarter: $26.006 million, which was slightly offset by pre-commercial production cash receipts capitalised to development of $9.261 from the sales of precious metal produced at EGM), payments for exploration activities in Ghana and Cote d’Ivoire of $7.126 million (March 2012 Quarter: $7.319 million), investment in fixed assets of $0.995 million (March 2012 Quarter: $0.997 million), advances to third parties of $0.536 million (March 2012 Quarter: $0.169 million) and financing costs of $nil million (March 2012 Quarter: $0.976 million), that generated a net cash outflow of $23.446 million (March 2012 Quarter: $26.206 million). In the corresponding quarter in 2011, investing activities included development of EGM ($17.726 million), exploration associated with the EGM and TGP ($1.000 million), investment in fixed assets ($0.729 million), investment in associates ($1.800 million), financing costs ($0.471 million) offset by funds received for security deposits and bank guarantees, and resulted in a net cash outflow associated with investing activities of $2.618 million

Financing activities in the June 2012 Quarter gave rise to a net cash outflow of $10.664 million (March 2012 Quarter: $8.240 million). During the June 2012 Quarter, the second scheduled debt repayment of US$11.0 million to lenders of the project debt facility occurred giving rise to a payment of $10.664 million. By contrast during the June 2011 Quarter, $3.734 million of cash was generated by the exercising of options to acquire ordinary shares in the Company. No other financing activities occurred during this period.

LIQUIDITY AND CAPITAL RESOURCES

As at June 30, 2012, the Company’s cash and cash equivalents amounted to $105.497 million (March 31, 2012 $117.120 million; June 30, 2011: $96.462).

The Company does not currently have a working capital deficiency. The Company has sufficient amounts of cash and cash equivalents in the short term to maintain capacity, meet its planned growth and fund development activities. As previously stated, the Company’s short to medium term plans include the progressive expansion of the processing capacity of the EGM processing facility, permitting and development of the SGP, expansion of the Company’s mineral resources through rapid exploration of existing ground, and the acquisition of prospective new projects, all of which require significant levels of funding. The Company’s ability to generate sufficient amounts of cash and cash equivalents in the long term (if required) to maintain capacity, meet planned growth and fund development of activities depends on its ability to generate sufficient cash from the EGM and failing that, to raise additional funds from the debt or capital markets.

On November 2, 2011, the Company completed an offering of 25 million ordinary shares at a price of CAD 3.25 per ordinary share for aggregate gross proceeds of CAD 81,250,000 pursuant to a short form prospectus dated October 26, 2011. Further gross proceeds of CAD 12,187,500 were received by the Company on November 14, 2011 upon the issue of an additional 3.75 million ordinary shares at a price of CAD 3.25 per share pursuant to the closing of an overallotment option which was exercised on November 9, 2011. The Company intends to use the net proceeds of this offering together with surplus cash flow generated by operating activities at the EGM, for development of the Sissingué Gold Project that as previously stated, is estimated to have an initial capital cost of USD 115 million.

The Company’s liquidity is expected to fluctuate with production from the EGM and the price of gold. The Company’s ability to raise funds from the debt or capital markets will be affected by, among other things, global economic conditions (including the price of gold). As described in detail below, the Company’s liquidity will also be negatively affected in the event there is a breach of the Facility Agreement (as defined below) which is not waived and upon which the lenders demand repayment of the outstanding balance of the project loan facility which at June 30, 2012 amounted to US$63 million (31 March 2012: US$74 million; June 30, 2011: US$85 million). In such event, the Company would seek replacement financing and to the extent it was unsuccessful, it would use existing cash and cash equivalents to satisfy the demand. Such a sequence of events could potentially cause development of the SGP to be delayed as existing cash and cash equivalents are planned to be used to partially fund the SGP development. To the extent sufficient funds could not be accessed to repay the project loan facility, the lenders would be entitled to realize on their security interest in the EGM.

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

During the last three financial years, both the debt and equity capital markets have been used as sources of funding by the Company. As discussed above, the Company completed a 28.75 million share fundraising during the December

2011 Quarter. The Company also received $nil million during the June 2012 Quarter (2.401 million in the March 2012 Quarter; $0.752 million in the December 2011 Quarter; $2.343 million in the September 2011 Quarter; $1.478 million in the June 2011 Quarter; $9.230 million during the June 2011 Full Year) from the exercise of options to purchase ordinary shares in the Company pursuant to its Share Option Plan. During the June 2011 quarter, the Company drew $80.211 million under its project debt facility. There can be no assurance however that the Company will be successful in raising additional funds, as and when required, from the debt or capital markets in the future. See “ Risk Factors ”.

The project debt facility agreement (the “Facility Agreement”) contains covenants and imposes restrictions on the Company’s ability to complete certain transactions. For example, the Facility Agreement requires that the Company maintain certain financial ratios and prohibits the Company from incurring additional indebtedness or entering into hedging arrangements beyond that specifically permitted. The Facility Agreement also contains (i) certain conditions precedent to the drawing down of funds, which were either satisfied or waived, and (ii) certain conditions subsequent, some of which remain outstanding. The Company has previously received waivers of breaches of, and extensions for satisfaction of, non-financial conditions to the Facility Agreement. In particular, the Company has received waivers in respect of breaches of, and extensions to the time required for satisfaction of, the conditions subsequent that: (i) the Company enter into a term sheet in respect of a power supply agreement for the Edikan Gold Mine on or before December 31, 2011 (as extended); (ii) the Company use its best endeavours to complete a reorganization of its subsidiaries by December 31, 2011 (as extended); (iii) the Company grants additional security in favour of the lenders by December 31, 2011 (as extended) in the event the reorganization has not been completed by then; (iv) there is parliamentary ratification of the Edikan mining leases and stability agreement by December 31, 2011 (as extended); (v) the Company execute a foreign exchange retention account agreement with the Republic of Ghana, the Bank of Ghana, the lenders and a financial institution in Ghana by December 31 2011 (as extended). While the Company is currently in compliance with the terms of the Facility Agreement and believes it will be able to satisfy the foregoing conditions subsequent in the prescribed time, it may require one or more waivers or extensions from the lenders in the future. A breach by the Company of certain provisions of the Facility Agreement, unless waived, will constitute an event of default, entitling the lenders to accelerate the payment of amounts due there under. The project loan is effectively secured by all (or substantially all) of the Company’s interest in the Edikan Gold Mine. An obligation to repay the amount owing under the project loan before its stated maturity could have an adverse effect on the Company and its financial position.

As at June 30, 2012 a total of 190,000 ounces of gold (March 31, 2012: 210,000 ounces of gold) had been hedged under gold forward sale contracts for settlement from September 2012 to December 2014 at an average sale price of US$1,256 per ounce. The inception of this hedging was a pre-requisite for Perseus to be able to draw the full US$85 million debt facility in the June 2011 quarter. This hedging represents about approximately 25% of expected production from EGM to the end of 2014 and approximately 6% of current Ore Reserves estimate at EGM. In addition, options granting Perseus the right but not the obligation to sell 75,000 ounces of gold at US$850 per ounce in the period from July 2012 to December 2013 were purchased as part of the Company’s financial risk management strategy.

As at the date of this MD&A the Company had no material commitments for future capital expenditure over and above those that arise in the normal course of business. In future quarters, subject to achieving satisfactory progress on the permitting of the SGP, commitments for capital expenditure associated with the development of the SGP, whose cost is currently estimated as US$145 million, (including US$30 million associated with the construction of an HV power line which will not be completed at the time of commencement of commercial production) may be incurred. As noted above, the Company intends to use its existing cash reserves to partly fund the development of the SGP. The balance of the capital required to meet future commitments associated with the development of the SGP will be drawn from cash expected to be generated from the EGM operation. There are no known trends or expected fluctuations that are expected to change the mix of funds used for this purpose.

COMMITMENTS

The following table sets forth information regarding the Company’s contractual obligations as at June 30, 2012. The Company has no long term debt, finance lease obligations, operating leases or purchase obligations except as indicated below.

	Less than 1	1 - 3 Years	4 - 5 Years	After 5 years
	Year
Exploration expenditure1 (US$M)	0.750	0.700	0.700	0.950
Debt Repayment obligations (US$M)(2)	36.000	27.000	-	-
Rent of corporatepremises	0.360	0.720	0.720	-
Total (US$M)	37.110	28.420	1.420	0.950

Notes:

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

(2) Represents repayments of the project loan facility which are scheduled to occur on or about the end of each ensuing quarter, with the final payment due on 30 September 2014. As a pre-requisite for drawing down the loan, PMGL, entered into gold hedge contracts with the lenders for 230,000 ounces of gold during the period from March 2012 to December 2014. The contracts are settled on a quarterly basis. A total of 190,000 ounces remain to be delivered under forward sales contracts at contracted weighted average delivery price of US$1,256 per ounce.

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

The principal financial instruments used by the Company as at June 30, 2012 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 represents the loss that would be recognised if counterparties failed to perform as contracted under a financial instrument resulting in a financial loss to the Company and arises from deposits with banks and financial institutions, favourable derivative financial instruments as well as credit exposures to customers including outstanding receivables and committed transactions. There has been no significant change in the Company’s exposure to credit risk or its objectives and policies for managing these risks during the June 2012 Quarter.

Liquidity Risk

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

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

Market Risk

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

The Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash flow forecasting. The Company is also exposed to foreign exchange risk arising from the translation of its foreign operations, the Company’s investments in its subsidiaries are not hedged as those currency positions are considered to be long term in nature. There has been no significant change in the Company’s exposure to currency risk or its objectives and policies for managing these risks during June 2012 Quarter. The Company’s main interest rate risk arises from long-term borrowing through its project loan facility which is based on three month LIBOR. Borrowings issued at variable rates expose the group to cash flow interest rate risk. During the June 2012 Quarter the Company’s borrowings at variable rate were denominated in US dollars. The Company has not entered into any hedge/interest rate swap instruments to manage interest rate risk exposure. There has not been a change in the Company’s exposure to interest rate risk during the June 2012 Quarter compared to the March 2102. The Company’s objectives and policies for managing these risks have not changed during the June 2012 Quarter.

OFF BALANCE SHEET ARRANGEMENTS

There are no off-balance sheet arrangements as at June 30, 2012.

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 directors consulting fees for extra services, if any, performed outside of normally expected non-executive duties. These transactions are made on commercial terms and conditions and at market rates.

Rent, accounting, secretarial and corporate service fees paid or payable to Corporate Consultants Pty Ltd (“CCPL”), a company in which a Director, Mr Gillard, and the company secretary, Mr Susmit Shah, have beneficial interests, totalled $341,753 million during the 2012 Financial Year ($66,204 during the June 2012 Quarter) compared to $298,710 in the corresponding twelve months ending June 30, 2011 ($56,715 million in the corresponding quarter ending June 30, 2011).

During the March 2012 Quarter the Company also leased office space in a building that is owned by a syndicate of investors which includes Mr Gillard. During the June 2012 Quarter, the Company’s lease with the syndicate was terminated and the Company has already moved to new premises that are leased from a party that is not related to the Company.

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

CRITICAL ACCOUNTING ESTIMATES

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

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

(i) Exploration and evaluation expenditure

In accordance with accounting policy note 1(n) in the June 2012 Financial Report, management determines when an area of interest should be abandoned. When a decision is made that an area of interest is not commercially viable, all costs that have been capitalised in respect of that area of interest are written off. In determining this, assumptions, including the maintenance of title, ongoing expenditure and prospectivity are made.

(ii) Impairment of assets

In accordance with accounting policy note 1(g) in the June 2012 Financial Report, in determining whether the recoverable amount of each cash generating unit is the higher of fair value less costs to sell or value-in-use against which asset impairment is to be considered, the Company undertakes future cash flow calculations which are based on a number of critical estimates and assumptions including, for its assets under construction, forward estimates of:

a) Mine life including quantities of ore reserves and mineral resources for which there is a high degree of confidence of economic extraction with given technology;
b) Estimated production and sales levels;
c) Estimated future commodity prices;
d) Future costs of production;
e) Future capital expenditure;
f) Future exchange rates; and/or
g) Discount rates applicable to the cash generating unit.

Variations to expected future cash flows, and timing thereof, could result in significant changes to the impairment test results, which in turn could impact future financial results.

(iii) Share-based payment transactions

The Company measures the cost of equity-settled transactions with employees and directors 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 share-based compensation expense and derivative values. As such, the values derived may change significantly from period to period and are subject to significant uncertainty. The Company recorded a total share-based compensation expense of $(0.429) million for the Quarter ended June 30, 2012 as a result of options lapsing due to vesting conditions not being met and $1.528 million for the twelve months ended June 30, 2012.

The expense for the Quarter ended June 30, 2012 of $(0.429) million compared to $0.622 million for the March 2012 Quarter, $0.675 million for the December 2011 Quarter, $0.661 million for the September 2011 Quarter, $2.439 million for the June 2011 Quarter, $1.102 million for the March 2011 Quarter, $2.693 million for the December 2010 Quarter, $1.152 million for the September 2010 Quarter and $1.181 million for the June 2010 Quarter.

(iv) Restoration and rehabilitation provisions

As set out in accounting policy note 1(t) in the June 2012 Financial Report, the value of the current restoration and rehabilitation provision is based on a number of assumptions including the nature of restoration activities required and the valuation at the present value of a future obligation that necessitates estimates of the cost of performing the work required, the timing of future cash flows and the appropriate discount rate. Additionally current provisions are based on the assumption that no significant changes will occur in either relevant Federal or State/Prefect legislation covering restoration of mineral properties. A change in any, or a combination, of these assumptions used to determine current provisions could have a material impact to the carrying value of the provision.

(v) Derivative financial instruments

The Company makes judgements on the effectiveness of all derivative financial instrument entered into, including forward metal contracts, metal options and foreign currency option contracts in accordance with accounting policy note 1(l) in the June 2012 Financial Report. Management’s assessment is that, unless otherwise disclosed the derivatives have been highly effective in offsetting changes in the fair value of the future cash flows against which they have been designated and as such are compliant with the hedge effectiveness requirements of AASB 139.

(vi) Taxes

Judgement is required in determining whether deferred tax assets are recognised on the statement of financial position. Deferred tax assets, including those arising from un-utilised tax losses, require management to assess the likelihood that the 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.

(vii) Commercial production

The group assesses the stage of each mine under construction to determine when a mine moves into the production stage being when the mine is substantially complete and ready for its intended use. The criteria used to assess the start date are determined based on the unique nature of each mine construction project, such as the complexity of a plant and its location. The group considers various relevant criteria to assess when the production phase is considered to commence and all related amounts are reclassified from ‘Mines under construction’ to ‘Mine properties’ and ‘Property, plant and equipment’. Some of the criteria used will include but are not limited to, the following:

a) Level of capital expenditure incurred compared to the original construction cost estimates;
b) Completion of a reasonable period of testing of the mine plant and equipment;
c) Ability to produce metal in saleable form (within specifications); and
d) Ability to sustain ongoing production of metal.

When a mine development / construction project moves into the production stage, the capitalisation of certain mine development / construction costs ceases and costs are either regarded as forming part of the cost of inventory or expensed, except for costs that qualify for capitalisation relating to mining asset additions or improvements, underground mine development or mineable reserve development. It is also at this point that depreciation / amortisation commences.

(viii) 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.

(ix) Deferred stripping expenditure

The group defers advanced stripping costs incurred during the production stage of its operations. This calculation requires the use of judgements and estimates such as estimates of tonnes of waste to be removed over the life of the mining area and economically recoverable reserves extracted as a result. Changes in a mine’s life and design will usually result in changes to the expected stripping ratio (waste to ore reserves ratio). Changes in other technical or economical parameters that impact reserves will also have an impact on the life of mine ratio even if they do not affect the mine’s design. Changes to the life of mine are accounted for prospectively.

(x) Inventory

Net realisable value tests are performed at least annually 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 expected processing method. Stockpile tonnages are verified by periodic surveys.

(xi) Reserves and resources

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.

CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION

In the June 2012 Quarter, the Company reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2011. All of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning 1 July 2011 were adopted and they did not have any impact on the current period or any prior period, and is not likely to affect future periods.

OUTSTANDING SECURITIES DATA

At June 30, 2012 the Company had issued 457,962,088 shares (March 31, 2012: 457,962,088 shares; June 30 2011: 425,617,088) and 4,470,000 options (March 31, 2012: 4,590,000; June 30, 2011: 8,435,000).

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

Ordinary shares	457,962,088
Options over unissued shares	4,470,000

Since June 30, 2012 and up to the date of this MD&A, the Company has not issued any shares as there have not been any conversions of options. No new options have been issued since June 30, 2012 and up to the date of this MD&A.

CONTROLS AND PROCEDURES

The Company maintains appropriate information systems, procedures and controls to ensure that information used internally and disclosed externally is complete and reliable. The Company continues to review and develop internal controls, including disclosure controls and procedures for financial reporting that are appropriate for the nature and size of the Company’s business.

Disclosure Controls and Procedures

The Company’s disclosure controls and procedures (“DCP”) are designed to provide reasonable assurance that all relevant information relating to the Company is communicated to the Company’s senior management and information required to be disclosed in its annual filings, interim filings and other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the specified time period. Access to material information regarding the Company is facilitated by the small size of the Company’s senior management team and workforce. The Company is continuing to develop appropriate DCP for the nature and size of the Company’s business.

As at June 30, 2012, the Chief Executive Officer and Chief Financial Officer, with participation of the Company’s management, concluded that there were no material weaknesses in the design of DCP at that date or changes to the Company’s DCP during the June 2012 Quarter which have materially affected, or are considered to be reasonably likely to materially affect, the Company’s disclosure or its DCP.

Internal Controls over Financial Reporting

Internal controls over financial reporting (“ICFR”) are designed to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. The Board is responsible for ensuring that management fulfils its responsibilities in this regard. The Audit Committee is in turn responsible for ensuring the integrity of the reported information through its review of the Company’s interim and annual financial statements. There has been no change in the Company’s ICFR during the June 2012 Quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. As at June 30, 2012, the Chief Executive Officer and Chief Financial Officer, have concluded that there is no material weakness relating to the design of the Company’s ICFR.

Limitations of Controls and Procedures

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, believe that any DCP or ICFR, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion between two or more people, or by unauthorized override of the control. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

The Company’s Chief Executive Officer and Chief Financial Officer have not limited the scope of their design of DCP and ICFR to exclude controls, policies and procedures of any proportionately consolidated entity, variable interest entity or business acquired within the preceding 365 days.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This MD&A contains “forward-looking information” within the meaning of applicable Canadian securities laws. This forward-looking information may include but is not limited to information with respect to the Company’s plans respect the EGM and the TGP, the estimation of ore reserves and mineral resources, realization of ore reserve and resource estimates, the timing and amount of future production, costs of production, capital expenditures, costs and timing of development of the TGP, mine life projections, the ability to secure required permits, the results of future exploration and drilling, the adequacy of financial resources and business and acquisition strategies. Often, this information includes words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.

Forward-looking information is based on assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management of the Company believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. Assumptions have been made by the Company regarding, among other things: the price of gold, continuing commercial production at the Edikan Gold Mine without any material disruption, the receipt of required governmental approvals, the accuracy of capital and operating cost estimates, the ability of the Company to operate in a safe, efficient and effective manner and the ability of the Company to obtain

financing as and when required and on reasonable terms. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used by the Company. Although management believes that the assumptions made by the Company and the expectations represented by such information are reasonable, there can be no assurance that the forward-looking information will prove to be accurate.

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

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

RISK FACTORS

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

risks related to the Company’s compliance with restrictions and covenants in the Facility Agreement;
risks associated with the price of gold;
risks related to potential development of the TGP;
risks related to capital cost increases at the TGP;
risks related to operating and capital cost increases at the EGM;
risks related to the availability of additional financings as and when required;
the risk of unrest and political instability in West Africa;
risks related to the periodic renewal of the Company’s various exploration and exploitation permits;
risks related to global economic conditions;
risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of mineral deposits and conclusions of economic evaluations;
risks related to negative operating costs flow;
results of initial feasibility, pre-feasibility and feasibility studies, and the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations;
risks relating to possible variations in reserves, grade, planned mining dilution and ore loss, or recovery rates and changes in project parameters as plans continue to be refined;
mining and operating risks, including risks related to accidents, equipment breakdowns, labour disputes (including work stoppages and strikes) or other unanticipated difficulties with or interruptions in exploration and development;
the potential for delays in exploration or development activities or the completion of feasibility studies;
risks related to the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses;
risks related to interest rate and foreign exchange rate fluctuations;
the uncertainty of profitability based upon the cyclical nature of the industry in which the Company operates;
the risk of changes to fiscal terms or operating approval conditions;
risks related to environmental regulation and liability; and
other risks and uncertainties related to the Company’s prospects, properties and business strategy.

A detailed discussion of these and other factors that may affect the Company’s prospects, actual results, performance, achievements or financial position is contained in the Company’s Annual Information Form dated September 30, 2011.

TECHNICAL DISCLOSURES

The information in this report that relates to exploration results, mineral resources or ore reserves is based on information compiled by Mr Mark Calderwood, who is a Chartered Professional Member of The Australasian Institute of Mining and Metallurgy. Mr Calderwood is a Director and full-time employee of the Company. 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 to qualify as a “Qualified

Person” under National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). Mr Calderwood consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Mr Calderwood verified the data disclosed, including sampling, analytical and test data underlying the information contained herein. For a description of Perseus’ data verification process, quality assurance program and quality control measure applied, the type of analytical or testing procedures utilized, sample size, name and location of testing laboratories, the effective date of the mineral resource and ore reserve estimates contained herein, details of the key assumptions, parameters and methods used to estimate the mineral resources and ore reserves set out in this report any known environmental, political, legal, title, or other risks that could materially affect the potential development of the mineral resources or ore reserves, readers are directed to the technical report entitled “Technical Report - Central Ashanti Gold Project, Ghana” dated May 30, 2011 and the technical report entitled ‘‘Technical Report - Tengrela Gold Project, Côte d’Ivoire’’ dated December 22, 2010 in relation to the Edikan Gold Mine (formerly Central Ashanti Gold Project) and the Tengrela Gold Project respectively.

AI assistant

PERSEUS MINING LIMITED — Management Reports 2012

46513_rns_2012-08-27_acec577a-4783-4a42-9f97-74af83a2bb80.pdf

August 27, 2012

MANAGEMENT’S DISCUSSION & ANALYSIS For the twelve months ended June 30, 2012

COMPANY OVERVIEW

HIGHLIGHTS OF THE 2012 FINANCIAL YEAR

EGM, Ghana

Project Development and Commissioning

Gold Production Operations

Exploration

December 2011 EGM Mineral Resource Estimate:

March 2012 EGM Mineral Resource Estimate Upgrade (to include Esuajah North Resource Estimate)

EGM Ore Reserve Estimate:

Table 5: Ore Reserves – EGM

SGP, Côte d’Ivoire

Definitive Feasibility Study

Project Permitting

Project Engineering

Exploration

COMPANY OUTLOOK FOR THE QUARTER ENDING SEPTEMBER 30, 2012

Edikan Gold Mine

Sissingué Gold Project

Business Development

OVERALL FINANCIAL PERFORMANCE OF THE COMPANY

DISCUSSION ON OPERATING RESULTS

DISCUSSION OF FINANCIAL CONDITION

Total Assets

Cash and cash equivalents

Receivables

Inventory

Property, plant and equipment

Mine Properties

Exploration and evaluation expenditure

Other assets

Total Liabilities

Payables

Provision

Derivative financial instruments

Borrowings

DISCUSSION ON CASHFLOWS

LIQUIDITY AND CAPITAL RESOURCES

COMMITMENTS

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

Credit Risk

Liquidity Risk

Market Risk

OFF BALANCE SHEET ARRANGEMENTS

TRANSACTIONS WITH RELATED PARTIES

CRITICAL ACCOUNTING ESTIMATES

(i) Exploration and evaluation expenditure

(ii) Impairment of assets

(iii) Share-based payment transactions

(iv) Restoration and rehabilitation provisions

(v) Derivative financial instruments

(vi) Taxes

(vii) Commercial production

(ix) Deferred stripping expenditure

(x) Inventory

(xi) Reserves and resources

CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION

OUTSTANDING SECURITIES DATA

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Internal Controls over Financial Reporting

Limitations of Controls and Procedures

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

RISK FACTORS

TECHNICAL DISCLOSURES

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PERSEUS MINING LIMITED Management Reports 2012