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Classified in: Mining industry, Business
Subject: MINING EXPLORATION UPDATE

Perseus Mining Limited Updates Mineral Resource and Ore Reserve Estimates for Edikan Gold Mine


PERTH, WESTERN AUSTRALIA--(Marketwired - Feb. 20, 2017) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Perseus Mining Limited (ASX:PRU)(TSX:PRU) recently completed a re-estimation of Mineral Resources and Ore Reserves at its Edikan Gold Mine in Ghana ("Edikan"). Details are as follows:

EXECUTIVE SUMMARY

Mineral Resources

Ore Reserves

To view Graph 1: Change in Edikan's Ore Reserves - June 2016 to December 2016, please visit the following link: http://media3.marketwire.com/docs/Graph1_Change-in-Edikan.pdf

Perseus's Managing Director and CEO, Jeff Quartermaine, commented:
 
"The updated Mineral Resource and Ore Reserve estimates at Edikan have numerically changed very little from the previously published estimates notwithstanding the fact that a different estimating technique that is considered to be more suited to the style of mineralisation that we have been mining recently in the open pit has been adopted. Tonnes are slightly higher, grade is slightly lower and contained metal is slightly higher.
 
Since applying multiple indicator kriging techniques to estimate Mineral Resources in favour of ordinary kriging techniques that have been traditionally used at Edikan, we have witnessed a material improvement in the reconciliation between our Resource block model estimates and grade control data.
 
It is therefore expected that our production forecasts, and in particular our revised Life-of-Mine Plan for Edikan that is due to be published by the end of this month, will more closely reflect actual operating experience than has been the case during the last twelve months."

MINERAL RESOURCE ESTIMATE

The global Mineral Resource estimate is prepared in accordance with the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Refer to Appendices 1, 2 and 3 to the full press release available on www.perseusmining.com and www.sedar.com for the JORC Table 1 criteria for open pit, underground and heap leach resources, respectively. The Mineral Resource estimate is summarised in the following table that reports the Mineral Resources by category, deposit and deposit type. The classification categories of Measured, Indicated and Inferred under the JORC Code are equivalent to the CIM categories of the same name (CIM, 2010).

In summary, the updated global Measured and Indicated Mineral Resource for Edikan is now estimated as 155.8 Mt grading at 1.0g/t gold, containing 5,011 kozs of gold as shown in Table 1. A further 30.0 Mt of material grading at 0.9 g/t gold and containing a further 899 kozs of gold are classified as Inferred Resources. Details of these estimates are shown below in Table 2.

Table 1: Edikan's Measured and Indicated Mineral Resources - December 20166,7

Deposit Deposit Type Measured Resources Indicated Resources Measured + Indicated
Resources
Quantity Grade Gold Quantity Grade Gold Quantity Grade Gold
Mt g/t gold '000 oz Mt g/t
gold		 '000 oz Mt g/t
gold		 '000 oz
AF Gap 1, 2 Open Pit 11.0 0.97 342 35.6 0.84 963 46.6 0.87 1,305
Fobinso 1, 2 Open Pit 2.7 1.08 93 11.8 0.94 357 14.5 0.97 450
Esuajah North 1, 2 Open Pit 11.4 0.96 352 19.5 0.89 557 30.9 0.92 909
Fetish 1, 2, 5 Open Pit 9.6 1.00 309 23.9 0.90 692 33.5 0.93 1,001
Chirawewa North 1, 2 Open Pit 1.4 0.85 38 5.7 0.82 150 7.1 0.83 188
Chirawewa South 1, 2 Open Pit 0.2 1.16 6 0.6 1.02 19 0.8 1.05 25
Bokitsi South 1, 2 Open Pit 0.9 2.57 71 1.1 1.90 66 1.9 2.20 137
Sub-Total Open Pit 37.2 1.01 1,211 98.2 0.89 2,804 135.3 0.92 4,015
Esuajah South 3 U/ground 8.5 1.9 533 6.3 1.7 353 14.8 1.8 879
Heap Leach 4 Stockpile       4.3 0.6 89 4.3 0.6 89
ROM Stockpiles Stockpile 1.4 0.61 28 - - - 1.4 0.61 28
Total   47.1 1.17 1,772 108.8 0.93 3,246 155.8 1.00 5,011
Notes: 
1 Allows for mining depletion to 31 December 2016.
2 0.4g/t gold cut-off applied
3 0.7g/t gold cut-off grade applied
4 At zero cut-off grade
5 Includes Bokitsi North lode
6 Mineral Resources are inclusive of any Ore Reserves
7 Numbers are rounded and may not add up correctly in the table
8 Note that the Dadieso and Mampong deposits have been removed from the Mineral Resource on economic grounds

Whereas all previous estimates of Mineral Resources at Edikan have been prepared using the OK estimation method, the updated Mineral Resource estimate is based on MIK estimating techniques for all deposits other than the Esuajah South deposit and Heap Leach where the OK estimation method has continued to be used.

Table 2: Edikan's Inferred Mineral Resources - December 2016

Deposit Deposit Type Inferred Resources
Quantity Grade Gold
Mt g/t gold '000 oz
AF Gap 1, 2 Open Pit 9.4 0.8 250
Fobinso 1, 2 Open Pit 3.5 0.9 95
Esuajah North 1, 2 Open Pit 2.9 0.9 88
Fetish 1, 2, 4 Open Pit 6.3 1.0 191
Chirawewa North 1, 2 Open Pit 1.5 0.8 39
Chirawewa South 1, 2 Open Pit 0.04 1.1 1
Bokitsi South 1, 2 Open Pit 1.3 1.1 43
Esuajah South 3 Underground 4.7 1.3 192
Total   30.0 0.9 899
Notes: 
1 Allows for mining depletion to 31 December 2016.
2 0.4g/t gold cut-off applied.
3 0.7g/t gold cut-off grade applied
4 Includes Bokitsi North lode
5 Numbers are rounded and may not add up correctly in the table

Comparisons of the updated Edikan Mineral Resource models against ore delineated by grade control during the last three months of calendar 2016 and in January 2017 indicate that the updated Resource estimates are likely to be more reliable predictors of ore tonnes and grades than were the previous Resource models and this should result in a closer correlation between forecasts and actual gold production going forward.

When compared to an Open Pit Mineral Resource estimate calculated at the same date, using the OK method (which has been traditionally used at Edikan), the revised MIK based Mineral Resource estimate includes:

A direct comparison of Mineral Resource estimates using the two alternative techniques is shown in Table 3 below.

Table 3: Edikan's Open Pit Mineral Resource Estimates using MIK and OK estimation techniques

  Estimated using MIK Techniques Estimated Using OK Techniques
Mineral Resource Category Quantity
(Mt)		 Grade
(g/t gold)		 Gold
(koz)		 Quantity
(Mt)		 Grade
(g/t gold)		 Gold
(koz)
Measured 37.2 1.01 1,211 56.8 1.01 1,860
Indicated 98.2 0.89 2,804 61.2 0.99 1,956
Measured + Indicated 135.3 0.92 4,015 118.0 1.00 3,816
Inferred 24.8 0.89 707 48.6 0.94 1,473

Edikan's Mineral Resources comprise four components:

Geology

The Edikan gold deposits occur near the western flank of the Ashanti Greenstone Belt in south-western Ghana. Mineralisation is hosted by Palaeoproterozoic aged rocks of the Birimian Supergroup. Structurally controlled gold mineralisation occurs in two principal modes: disseminated pyrite-arsenopyrite mineralisation associated with quartz veining and sericite alteration hosted by granitoids and shear-zone hosted mineralisation associated with pyrite-arsenpoyrite mineralisation in and adjacent to quartz veins in deformed, fine-grained metasedimentary rocks. The strike lengths of the individual deposits range from approximately 300 metres (Esuajah South) to more than 2 kilometres (Abnabna-AF Gap-Fobinso). Granite-hosted mineralisation is developed over widths of up to 150 metres; shear hosted mineralisation in metasedimentary rocks is typically 10-30 metres wide. Resource definition drilling has defined mineralisation to depths ranging from approximately 130 metres (Chirawewa South) to more than 550 metres (AF Gap, Esuajah South).

Drilling Techniques

Edikan Mineral Resources are delineated by Reverse Circulation ("RC") and diamond core drill holes undertaken by previous operators Cluff Mining Plc and Ashanti Goldfields Corporation, and by Perseus. Estimates of those portions of the in situ resources remaining at 31 December 2016 are informed almost entirely by Perseus drilling and the majority of data informing the estimates derive from samples of half NQ diameter diamond core.

Drill hole collar locations have been surveyed by qualified surveyors. Perseus diamond core holes were down-hole surveyed at nominal 30 metre intervals.

Orientation of drill holes at each of the deposits is approximately perpendicular to the strike of mineralisation. With the exception of Esuajah South, the interpreted geometries and continuities of mineralisation underpinning the resource estimates have been confirmed by grade control drilling and mine exposures. 

Sampling

RC drill samples were collected at drill sites at 1 metre intervals and split using multi-stage riffle splitters. For the majority of Perseus's drilling, each two consecutive samples were composited into one sample for assaying. Sample weights were nominally 2.5 kilograms and 5 kilograms for 1 metre and 2 metre samples respectively.

Diamond core was sawn in half using a diamond blade saw, with the right-hand half sent for assaying and the left-hand half stored in core trays for reference. Samples were normally taken at 1 metre intervals.

Core recoveries from Perseus diamond drilling were measured and averaged in excess of 90% with no significant issues noted. RC samples were logged visually for recovery, moisture and contamination. RC sample recoveries were not quantitatively measured. Considering that the bulk of estimated remaining resources at Edikan are informed by diamond core samples, sample recovery is not considered to be a significant risk to the reliability of the estimates.

Sample Analytical Methods

All sample preparation and assaying was carried out by commercial laboratories; no sample preparation was undertaken by Perseus.

Samples collected by Perseus were variously assayed by Transworld Laboratories, Tarkwa, Intertek Laboratories (Gh) Ltd (formerly TWL), Tarkwa, and ALS, Kumasi. Approximately 5% of samples were assayed by 24 hour cyanide bottle roll with atomic absorption spectroscopy ("AAS") finish. All other RC samples and diamond half core samples were analysed by 50 gram Fire Assay and AAS finish. Sample preparation typically comprised drying, crushing to -2millimetres and pulverising of a 200 gram subsample. Internal laboratory checks required at least 90% of the pulp passing -75 microns.

Perseus's quality assurance and quality control "QAQC" procedures included submission of field duplicates (RC only) inserted at 1 in 25, certified blanks inserted at 1 in 20, certified standards at 1 in 20, internal laboratory standards, duplicates and repeats.

Open Pit Mineral Resources

Estimation Methodology

Geological logging of lithology and weathering were considered in conjunction with gold grades of 2 metre composited sample intervals to delineate mineralised domains at each of the deposits within which the tenor and spatial trends of mineralisation are similar. Grade control sampling and exposures of and host rocks within the open pits currently being mined confirm the geometry of the mineralisation.

MIK with block support adjustment was used to estimate gold resources into blocks with dimensions of 20 metres (east) by 20 metres (north) by 5 metres (elevation), is considered appropriate given the spacing of data available to inform the estimates and the mining bench height presently used at Edikan. MIK of gold grades used indicator variography based on the 2 metre resource composite sample grades. Gold grade continuity was characterised by indicator variograms at 14 indicator thresholds spanning the global range of grades in each of the mineralised domains.

The effect of extreme gold grades on the conditional statistics of data informing each of the estimation domains was considered. The effect of extreme grades on estimates was modified by composites being ignored domain during the generation of the indicator statistics, and by selection of the median instead of the mean for the highest indicator threshold.

Block support adjustments were derived from the variogram of gold grades in each of the mineralised domains. The selective mining unit was assumed to be in the general range 6mE by 10mN by 2.5mRL, reflecting the scale of mining presently employed at Edikan. Additional adjustments for the "Information Effect" have been applied, based on high quality grade control sampling at 8mE x 8mN x 1m consistent with current practices at Edikan, to arrive at the final Mineral Resource estimates.

The Mineral Resource estimates can be reasonably expected to provide appropriately reliable estimates of potential mining outcomes at the assumed selectivity without application of additional mining dilution or mining recovery factors.

Compositing and wire-framing were performed using Micromine software. Exploratory data analysis, variogram calculation and modelling, and resource estimation were performed using FSSI Consultants (Australia) Pty Ltd (FSSI) GS3M software.

The Mineral Resource estimates for Abnabna - AFGap - Fobinso, Fetish, Chirawewa and Esuajah North were compared to recent mine site grade control outcomes. The grade control modelling undertaken for validation was performed using the MP3 grade control software. The mined tonnes and grade of ore for the four months to January 2017 compared favourably.

Criteria for Resource Classification

Confidence categories have been applied to the estimates of Mineral Resource on a block-by-block basis based on the number and location of data used to estimate proportions and gold grade of each block. This is based on the principle that larger numbers of samples, which are more evenly distributed within the search neighbourhood, will provide a more reliable estimate. Generally, Measured resources are informed by drilling at approximately 20 metre x 20 metre spacing or closer, Indicated resources are informed by drilling spaced at up to 40 metre x 40 metre and Inferred resources are on the peripheries of drilling to a maximum distance of approximately 40 metres.

The Mineral Resource classification also considered the quality of the data collected (geology, survey and assaying data), the density of data, the confidence in the geological models and mineralisation model, and the grade estimation quality.

Cut-Off Grade

The cut-off grade of 0.4g/t gold for the stated open pit Mineral Resource estimates reflects economic parameters deriving from current and anticipated mining practices at Edikan.

Esuajah South Mineral Resource

Estimation Methodology

Wireframes were constructed using cross sectional interpretations based on geological contacts and a nominal 0.2g/t gold cut-off grade. Samples within the wireframes were composited to even 1 metre intervals. A 40g/t gold top cut was applied to composite values in the granite mineralisation. Top cuts of between 15g/t gold to 30g/t gold were applied to selected sediment lodes. Top cuts were based on statistical analysis of composite data.

A Surpac block model was used for the estimate with a parent block size of 10 metre (North) by 10 metre (East) by 10 metre vertical with sub-cells of 2.5 metre by 2.5 metre by 2.5 metre. OK grade interpolation was used for the granite mineralisation with an oriented search ellipse based on interpreted controls on mineralisation. A first pass radius of 30 metres was used with a second pass radius of 60 metres and a third pass radius of 240 metres. Greater than 86% of the blocks were filled in the first two passes. An 'ellipsoid' search method was used.

Inverse distance squared grade interpolation was used for the sediment-hosted mineralisation with an oriented search ellipse based on individual lode geometry. A first pass radius of 30 metres was used with a second pass radius of 60 metres and a third pass radius of 180 metres. Greater than 92% of the blocks were filled in the first pass. An 'ellipsoid' search method was used.

Criteria for Resource Classification

The deposit was classified as Measured, Indicated and Inferred Mineral Resource based on data quality, drill hole spacing, and continuity of mineralisation. The portion of the granite where the drill spacing was 20 metres by 20 metres or less and demonstrating good lode and grade continuity supported by high kriging efficiencies was classified as Measured Mineral Resource. The portion of the deposit where the drill spacing was generally greater than 20 metres by 20 metres but still demonstrated good lode and grade continuity was classified as Indicated Mineral Resource. The portion of the deposit classified as Inferred Mineral Resource includes areas where the drill spacing was greater than 40 metres by 40 metres and the zones of mineralisation within the adjacent sediments that are defined by limited drilling.

Cut-Off Grade

The Mineral Resource estimate has been constrained by the wire-framed mineralisation envelopes, is undiluted by external waste and reported above a 0.7g/t gold cut-off grade. The cut-off grade reflects economic parameters deriving from anticipated underground mining practices, costs and recoveries from the Feasibility Study.

Heap Leach Mineral Resource

Geology

The heap leach mineral resource quoted herein comprises only material contained in the "Africa Heap". The Africa Heap comprises approximately 55% of the total volume of heap leach material remaining after processing of oxide ores by previous operators Cluff Mining Plc and Ashanti Goldfields Corporation between 1994 and 2001 and is defined by geographic limits.

Drilling Techniques

The Africa Heap has been sampled by 338 vertical RC and air core ("AC") drill holes at a nominal spacing of 20 metres x 20 metres. Hole depths varied from 18 metres to 45 metres. Drill hole collar locations were accurately surveyed by Perseus qualified mine surveyors.

Sampling

RC and AC samples were subsampled at the drill sites using a multi-tier riffle splitter. The Mineral Resource estimate is informed by 7,584 samples collected over 1 metre intervals and 1,632 samples assayed as 5 metre composite samples.

Sample Analytical Methods

Samples from the first 27 RC and first 27 AC holes were analysed for gold only by 24 hour bottle roll cyanide leach with AAS finish at Intertek Minerals Ltd in Tarkwa, Ghana. For all subsequent RC and AC holes, gold was assayed by Fire Assay with AAS finish at either Intertek Minerals Ltd or at ALS Minerals in Kumasi, Ghana.

Certified reference materials and blanks were submitted at a rate of one standard or blank for every 15 samples. Field duplicate splits were taken at a nominal rate of one duplicate per drill hole.

Estimation Methodology

Average gold grade of the Africa Heap was estimated by a number of methods including Inverse Distance Squared weighting, OK, Simple Kriging and Sequential Gaussian Simulation. All methods resulted in essentially identical estimates of average grade.

The volume of the Africa Heap has been estimated by generating two triangulated surfaces: a topographic surface based on approximately 2,300 surveyed spot heights and drill hole collar locations and a bottom surface based on depths at which drill holes penetrated the plastic liner at the base of the heap. The volume was adjusted for depletion by illegal mining carried out between the date of the topographic survey and November 2015, the affected volume being estimated from aerial photography.

A dry in-situ density estimate of 1.32 t/m3 was assigned to the heap leach pad material. Density values and moisture content were determined by independent consultants in August 2015 from 30 test pits, and a mean value was applied to the Mineral Resource.

Criteria for Resource Classification

The Mineral Resource is classified as Indicated, based on drill and sample density, accurate and detailed surface survey of the heaps and the close match of average grades derived from the various estimation methods.

Cut-Off Grade

There has been no cut-off grade applied to derive the Heap Leach Mineral Resource. It is assumed that it is not feasible to selectively mine higher grade portions of the material.

Stockpiles

Mineral Resources contained in stockpiles are based on volume estimates based on ground survey data, loose bulk densities derived over time by reconciliation of volumes mined (at in situ densities) to stockpile movements and volumes, and estimates of stockpile grades based on predicted grades of mined material transferred onto stockpiles and material depleted by processing.

Closing stockpiles at 31 December 2016 were estimated to be:

Material Quantity
(Tonnes)		 Grade
(g/t gold)		 Gold
(Ounces)
High grade oxide 12,939 1.04 433
Low grade oxide 540,128 0.55 9,567
Low grade fresh 789,044 0.59 14,865
High grade fresh 13,544 1.15 501
High grade transition 90,631 1.04 3,042
TOTAL 1,446,286 0.61 28,408

Stockpile tonnes and grade estimates are considered sufficiently accurate to support classification as Measured Mineral Resources.

ORE RESERVE ESTIMATE

The updated Ore Reserve is summarised below in Table 4 and is based on the Edikan Mineral Resources as at 31 December 2016 and updated pit optimisation, design and scheduling of the Open Pit resources and a new Esuajah South Ore Reserve based on underground mining methods. All Ore Reserves are reported in accordance with the JORC Code. Refer to Appendices 1 and 2 to the full press release available on www.perseusmining.com and www.sedar.com for the JORC Table 1 assessment criteria. The Ore Reserve estimate is summarised in the following table that reports the Ore Reserves by category, deposit and type, above variable cut-off grades. The classification categories of Proved and Probable under the JORC Code are equivalent to the CIM categories of the same name (CIM, 2010).

Table 4: Edikan's Proved and Probable Ore Reserves as at 31 December 2016

Deposit Deposit Type Proved Probable Proved + Probable
Quantity Grade Gold Quantity Grade Gold Quantity Grade Gold
Mt g/t gold koz Mt g/t gold koz Mt g/t gold koz
AF Gap Open Pit 5.5 1.09 191 6.0 1.07 208 11.5 1.08 399
Fobinso Open Pit 1.1 1.19 44 3.3 1.11 119 4.5 1.13 163
Esuajah North Open Pit 6.5 1.10 229 7.8 1.04 262 14.3 1.07 491
Fetish Open Pit 4.6 1.21 179 7.9 1.11 281 12.5 1.15 459
Chirawewa North Open Pit 0.5 1.05 17 2.0 0.99 63 2.5 1.01 80
Bokitsi Open Pit 0.5 2.94 44 0.1 2.75 10 0.6 2.91 55
Sub-total Open Pit 18.7 1.17 704 27.1 1.08 943 45.8 1.12 1,647
Esuajah South U/ground       4.9 2.0 314 4.9 2.0 314
Heap Leach Stockpile       4.3 0.6 89 4.3 0.6 89
ROM Stockpiles Stockpile 1.4 0.61 28       1.4 0.61 28
Total   20.1 1.13 733 36.3 1.13 1,346 56.5 1.14 2,078
Notes: 
1 Numbers are rounded and may not add up correctly in the table
2 All the estimates are on a dry tonne basis
3 Based on December 2016 Mineral Resource estimation
4 Variable gold cut-off grade based on material type and mining method
5 Inferred Mineral Resource is treated as mineralised waste
6 Allows for mining depletion up to and including 31 December 2016
7 ROM denotes Run of Mine
8 Heap Leach refers to decommissioned heap leach pads established by prior owners of Edikan

Proven and Probable Ore Reserves are found within the economic limits of six discrete open pits, an underground project and stockpiles that have been designed based on Measured and Indicated Mineral Resources that incorporated all available Resource in-fill drilling results, a gold price of US$1,200/oz and mining, processing and general and administration costs derived from recent operating experience.

When compared to Edikan's most recently published Ore Reserve estimate as at 30 June 2016, and after taking into account ore depletion plus the addition of Ore Reserves contained in the decommissioned heap leach stockpiles created by prior owners of the mine and not previously accounted for by Perseus, the gold contained in the updated Ore Reserve estimate has changed by less than 5% or 99kozs of gold. As shown below in Table 5 and in the waterfall graph below, the following changes have occurred:

Table 5: Comparison of Proved and Probable Ore Reserves as at 31 December & 30 June 2016

  P&P Reserves (December 2016) P&P Reserves (June 2016)
Deposit Quantity
(Mt)		 Grade
(g/t gold)		 Gold
(koz)		 Quantity
(Mt)		 Grade
(g/t gold)		 Gold
(koz)
AF Gap - Fobinso 16.0 1.1 562 14.9 1.2 558
Fetish 12.5 1.1 459 12.7 1.2 497
Esuajah North 14.3 1.1 491 15.3 1.0 475
Esuajah South 4.9 2.0 314 6.7 1.8 391
Chirawewa 2.5 1.0 80 3.8 1.2 146
Bokitsi 0.6 2.9 55 0.8 3.2 79
ROM7 Stockpile 1.4 0.6 28 1.6 0.6 32
HL8 Stockpile 4.3 0.6 89 - - -
  56.5 1.1 2,078 55.8 1.2 2,177

Economic Assumptions

Table 6: Assumed Open Pit operating costs

Mining Processing G&A Selling Royalties
US$3.24t/mined US$9.25t/milled US$2.20t/milled US$1.02t/oz sold 6.75%

Open Pit Mining Parameters

Table 7: Cut-off Grades

Cut-Off Grade by Ore Type (g/t gold)
Deposit Oxide Transition Fresh
AF Gap 0.35 0.5 0.45
Fobinso 0.35 0.5 0.45
Esuajah North 0.4 0.6 0.5
Fetish 0.5 0.65 0.55
Chirawewa North 0.4 0.5 0.45
Bokitsi 0.35 0.5 0.45

Underground Mining Parameters

Processing Parameters

Table 8: Metallurgical Recoveries By Material Type and Pit

Recovery by Ore Type (%)
Deposit Oxide Transition Fresh
AF Gap 61.0 73.4 88.0
Fobinso 61.0 73.4 88.0
Chirawewa 59.5 72.0 86.0
Bokitsi 69.0 78.0 87.01
Fetish 61.0 73.4 90.0
Esuajah North 61.0 73.4 93.0
Esuajah South - - 94.0
Heap Leach 67.0 - -
1 Average value, the recovery for Bokitsi is variable based on the input grade

Stockpile and Heap Leach Parameters

It is assumed all the Heap Leach material is mined and fed to the processing plant during the mine life and all the material is rehandle on the ROM stockpile. The ROM stockpiles that existed at 31 December 2016 are all fed to the processing plant over the mine life and associated rehandle costs for all material is allowed for.

Criteria for Ore Reserve Classification

Ore Reserves have been classified based on the underlying Mineral Resources classifications and the level of detail in the mine planning. The Mineral Resources were classified as Measured, Indicated and Inferred. The Ore Reserves, based only on the Measured and Indicated Resources, have been classified as Proven and Probable Ore Reserves, respectively. 

The Ore Reserve is classified as Proved and Probable in accordance with the JORC Code, corresponding to the Mineral Resource classifications of Measured and Indicated and taking into account other factors where relevant. The deposit's geological model is well constrained. The Ore Reserve classification is considered appropriate given the nature of the deposit, the moderate grade variability, drilling density, structural complexity and mining history. Therefore it was deemed appropriate to use Measured Mineral Resources as a basis for Proven Reserves and Indicated Mineral Resources as a basis for Probable Reserves.

No Inferred Mineral Resources were included in the Ore Reserve estimate.

Jeffrey Quartermaine

Chief Executive Officer and Managing Director

21 February 2017

Competent Person Statement:

Mr Gary Brabham, FAusIMM, MAIG, has compiled and reviewed the consolidated information on the Mineral Resources in this report and compiled the information in the attachment in Appendix 1, Sections 1 and 2 of JORC Table 1 relating to the results of exploration and resource definition drilling for the Open Pit Mineral Resources of the Edikan Gold Mine. The Open Pit Mineral Resources have previously been reported by Perseus in NI43-101 technical reports filed with Canadian authorities and available on SEDAR. Mr Gary Brabham is the Group Geologist for Perseus Mining Limited and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity undertaken to qualify as a Competent Person as defined in the JORC Code 2012 and a Qualified Person as defined in NI43-101. Mr Brabham consents to the inclusion in this report of the matters based on this information in the form and context in which it appears and has approved the inclusion of technical and scientific information in this report.

Mr Nicolas Johnson, MAIG, who is an employee of MPR Geological Consultants Pty Ltd, has compiled the information in the attachment in Appendix 1, Section 3 of JORC Table 1 which relate to the Open Pit Mineral Resources of the Edikan Gold Mine. Mr Johnson has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person, as defined in the JORC Code. Mr Johnson has no economic, financial or pecuniary interest in the company and consents to the inclusion in this report of the matters based on this information in the form and context in which it appears and has approved the inclusion of technical and scientific information in this report.

Mr Joe McDiarmid, who is a Chartered Professional Member of the Australasian Institute of Mining and Metallurgy, and is an employee of RungePincockMinarco Limited has compiled the information in the attachment in Appendix 1, Section 4 of JORC Table 1 which relate to the Open Pit Ore Reserves of the Edikan Gold Mine. Mr Joe McDiarmid has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person, as defined in the JORC Code 2012. Mr McDiarmid has no economic, financial or pecuniary interest in the company and consents to the inclusion in this report of the matters based on this information in the form and context in which it appears and has approved the inclusion of technical and scientific information in this report.

Mr Shaun Searle, who is a Member of the Australasian Institute of Geoscientists and is an employee of RungePincockMinarco Limited has compiled the information in the attachment in Appendix 2, Section 1, 2 and 3 of JORC Table 1 which relate to the Esuajah South Mineral Resource of the Edikan Gold Mine. Mr Searle has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the JORC Code. Mr Searle has no economic, financial or pecuniary interest in the company and consents to the inclusion in this report of the matters based on this information in the form and context in which it appears and has approved the inclusion of technical and scientific information in this report.

Mr Allan Earl, who is a Member of the Australasian Institute of Mining and Metallurgy and is an employee of Snowden Mining Industry Consultants Pty Ltd., has compiled the information in the attachment in Appendix 3, Section 4 of JORC Table 1 which relate to the Esuajah South Ore Reserve of the Edikan Gold Mine. Mr Earl has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the JORC Code 2012. Mr Earle has no economic, financial or pecuniary interest in the company and consents to the inclusion in this report of the matters based on this information in the form and context in which it appears and has approved the inclusion of technical and scientific information in this report.

Mr Steffen Brammer, who is a Member of the Australasian Institute of Mining and Metallurgy and is an employee of Perseus Mining Limited has compiled the information in the attachment in Appendix 2, Sections 1 and 2 and Appendix 3, Section 1, 2 and 3 of JORC Table 1 which relate to the Esuajah South and Heap Leach Mineral Resource of the Edikan Gold Mine, respectively. Mr Brammer has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the JORC Code 2012 and consents to the inclusion in this report of the matters based on this information in the form and context in which it appears and has approved the inclusion of technical and scientific information in this report. 

Mr Paul Thompson, who is a Fellow of the Australasian Institute of Mining and Metallurgy and is an employee of Perseus Mining Limited has compiled and reviewed the consolidated information on the Ore Reserves in this report. Mr Thompson has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the JORC Code 2012 and a Qualified Person as defined in NI43-101 and consents to the inclusion in this report of the matters based on this information in the form and context in which it appears and has approved the inclusion of technical and scientific information in this report.

Caution Regarding Forward Looking Information:

This report contains forward-looking information which is based on the 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 major disruption, development of a mine at Sissingué and/or Yaouré, 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. Forward-looking information involves known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any anticipated future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others, the actual market price of gold, the actual results of current exploration, the actual results of future exploration, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the Company's publicly filed documents. The Company believes that the assumptions and expectations reflected in the forward-looking information are reasonable. Assumptions have been made regarding, among other things, the Company's ability to carry on its exploration and development activities, the timely receipt of required approvals, the price of gold, 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 should not place undue reliance on forward-looking information. Perseus does not undertake to update any forward-looking information, except in accordance with applicable securities laws.


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