AWARD OF MINING & FUEL SUPPLY CONTRACTS

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Central Ashanti Gold Project, Ghana

PERTH, Western Australia, Oct. 14 /CNW/ - Perseus Mining Limited (ASX/TSX: PRU) announces the award of the Open Pit Mining Contract and the Fuel Supply Contract for the Central Ashanti Gold Project ('CAGP') in Ghana, West Africa.

Open Pit Mining Contract

Perseus Mining's subsidiary, Central Ashanti Gold Limited ("CAGL") has provided a letter of intent to African Mining Services (AMS), a subsidiary of Ausdrill Limited, with respect to the awarding of an Open Pit Mining Contract for the CAGP.   The contract, which anticipates pre-production commencing in March 2011, is for a complete service including grade control, drilling and blasting, loading and hauling ore and waste and crusher feed.  The mining schedule currently allows for the movement on average of about 7.0 Mtpa of ore.

AMS has been active in Ghana for 15 years and will have all the key personnel and plant in place ensuring a smooth start up for both AMS and CAGP.   AMS will employ approximately 300 people of whom the vast majority will be Ghanaian. 

Fuel Supply Contract

CAGL has awarded the fuel supply contract to Total Petroleum Ghana Limited ('TPGL').   TPGL is part of Group Total, which is the fifth-largest publicly-traded integrated oil and gas company in the world. TPGL will install a 360,000 litre fuel storage facility at the CAGP.

Perseus Managing Director, Mark Calderwood's Comments

"Awarding contracts to two companies with a strong presence in Ghana after a competitive tender process is an excellent outcome. The final price for the mining contract is in line with that estimated in the 2009 DFS." 

"The CAGP project is likely to grow significantly over the next two years and I believe both AMS and TPGL are fully capable of ramping up services as required."

"CAGP construction is progressing as planned and the Company is well positioned for the commencement of mining in March 2011."

Mark Calderwood
Managing Director

About Perseus Mining Limited

Perseus Mining Limited (ASX/TSX: PRU) has forged a reputation as one of the West Africa's most successful gold explorers. Focused on under-explored gold belts in West Africa, Perseus is on track to become a producer by the third quarter of 2011 at its Central Ashanti Gold Project in Ghana.  The Company plans to produce at the initial rate of 220,000 ounces of gold in year 1 in Ghana and plans to increase this to 300,000 ounces per annum by 2013.

Perseus is also working on a definitive feasibility study at its Tengrela Gold Project in Côte d'Ivoire, subject to which production is targeted for late 2012. Tengrela has the potential to become a 150,000 ounce per year contributor in the Company's goal to develop into a 400,000 ounce per year gold producer by 2013.

With 25,000m of drilling planned each month across its projects, Perseus will continue its strategy of rapidly increasing its resource and reserve base during the development period for CAGP and Tengrela. 

On top of its projects in Ghana and Côte d'Ivoire, Perseus retains a 28 per cent stake in Manas Resources Limited which it spun off in 2008 as a focused Kyrgyz Republic gold explorer and developer. Perseus also has a 19.9% stake, as well as a strategic alliance, with Burey Gold Limited, an ASX-listed exploration company with a focus in Guinea, West Africa.

Caution Regarding Forward Looking Information: This report contains forward-looking information which is based on assumptions and judgments of management regarding future events and results. Such forward-looking information, includes but is not limited to information with respect to future exploration and drilling,  procurement of financing, procurement of necessary regulatory approvals, the development of a mine at the Central Ashanti Gold Project, completion of a definitive feasibility study at Tengrela and development of a mine at Tengrela subject to the results of  that study . 

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.

For further information:

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