Perseus Mining. Revised Sissingué plan A$0.31 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation

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1 AUSTRALIA PRU AU Price (at 5:1, 31 Mar 217 GMT) Neutral A$.31 Valuation A$ - DCF (WACC 1.%, beta.4, ERP 5.%, RFR 3.3%) month target A$ month TSR % +3.2 Volatility Index Very High GICS sector Materials Market cap A$m 32 3-day avg turnover A$m 2.3 Number shares on issue m 1,33 Investment fundamentals Year end 3 Jun 216A 217E 218E 219E Revenue m EBIT m Reported profit m Adjusted profit m Gross cashflow m CFPS CFPS growth % , PGCFPS x PGCFPS rel x EPS adj EPS adj growth % nmf nmf PER adj x nmf nmf PER rel x nmf nmf Total DPS.... Total div yield %.... ROA % ROE % EV/EBITDA x Net debt/equity % P/BV x PRU AU vs Small Ordinaries, & rec history Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, April 217 (all figures in AUD unless noted) 3 April 217 Macquarie Securities (Australia) Limited Revised Sissingué plan Event PRU has released a revised life of mine plan (LOMP) for its Sissingué development project in Cote d Ivoire. The revised plan incorporates the reduction in the Sissingué resource and reserve, and the addition of the Bélé East and Bélé West resources and maiden reserve. Impact Maiden reserve for Bélé East and West. The new LOMP incorporates new resource estimates and maiden reserves for the Bélé East and Bélé West deposits. Combined the two deposits have a total resource of 2.35Mt containing 151koz at a grade of 2g/t. Total reserves stand at 1Mt containing 74koz at a grade of 2.3g/t. Adds 12 months to mine life. The Bélé reserve replaces the ounces lost in the recent resource and reserve downgrade for Sissingué, and adds approximately 12 months to the Sissingué production profile. The mine is expected to produce total of an average 358koz over its five-year life. Unit cost reduction but higher sustained capex. PRU has also lowered its unit cost estimates for the project. Some of the reductions are material including a 14% reduction in mining costs and a 21% reduction in processing costs. However, sustaining capital of $35/oz has more than doubled from the original $14/oz estimate. Overall life of mine cash cost of production has reduced 5% to US$543/oz, and all-in sustaining costs are effectively unchanged at US$628/oz. Earnings and target price revision We have incorporated the revised mine plan for Sissingué, and we have also updated our Edikan mining assumptions to better reflect the company s recently revised five-year plan. Our production forecasts increase but we note that we model for a lower mill throughput that is PRU s target. We have made a number of changes to our earnings forecasts; FY18 increases 76% whilst FY19 falls 37%. Our target price is unchanged at $.32/sh. Price catalyst 12-month price target: A$.32 based on a 5:5 blend.8x NAV, 4x CFPS methodology. Catalyst: In our view near-term operational delivery remains the key catalyst from PRU. Significant reinvestment has been completed at Edikan and achieving both higher production and more importantly improved cash flows are central to allowing PRU to fund its longer-term growth plans. Commissioning Sissingué and banking its cash flow should also provide positive momentum. Action and recommendation Maintain Neutral. After the recent re-investment programme we expect higher throughput rates at Edikan to be achievable. However, we continue to assume more modest production rates preferring to wait for a sustained demonstration of capability before factoring in more optimistic assumptions. Please refer to page 6 for important disclosures and analyst certification, or on our website

2 Revised LOMP for Sissingué PRU has released a revised life of mine plan (LOMP) for its Sissingué development project in Cote d Ivoire. The revised plan incorporates the reduction in the Sissingué resource and reserve and the addition of the Bélé East and Bélé West resources and maiden reserve. Maiden reserve for Bélé East and West The new LOMP incorporates new resource estimates and maiden reserves for the Bélé East and Bélé West deposits. Bélé East and West will be operated as small open pits with ore trucked to the Sissingué mill. Combined the two deposits have a total resource of 2.35Mt containing 151koz at a grade of 2g/t. Fig 1 Bélé East and Bélé West reserves Deposit Category Mt Grade (g/t) Koz Bele East Probable Bele West Probable Total Source: Company data, Macquarie Research, April 217 Only Probable reserves have been estimated for the Bélé deposits. Total reserves stand at 1Mt containing 74koz at a grade of 2.3g/t. Adds 12 months to mine life The Bélé reserve replaces the ounces lost in the recent resource and reserve downgrade for Sissingué and adds approximately 12 months to the Sissingué production profile. The mine is expected to produce total of an average 358koz over its five-year life. PRU has also lowered its unit cost estimates for the project. Some of the reductions are material including a 14% reduction in mining costs and a 21% reduction in processing costs. However, sustaining capital of $35/oz has more than doubled from the original $14/oz estimate. Overall life of mine cash cost of production has reduced 5% to US$543/oz, and all-in sustaining costs are effectively unchanged at US$628/oz. Revising our Edikan assumptions We have also updated our Edikan mining assumptions to better reflect the details of the company s recently revised five-year plan. PRU is targeting run rates of up to 7.5Mtpa, 15% higher than the average annualised run rate achieved to date. Fig 2 PRU actual annualised mill run rates and LOMP target 8 Annualised quartelry mill run rates Recovery % 88% 86% 84% 82% 8% 78% 76% 74% Source: Company data, Macquarie Research, April 217 After the recent re-investment programme we expect higher throughput rates to be achievable but prefer to wait for a sustained demonstration of capability before factoring in more optimistic assumptions. Our production forecasts increase but we note that we model for a lower mill throughput that is PRU s target. 3 April 217 2

3 Jun 16 Oct 16 Feb 17 Jun 17 Oct 17 Feb 18 Jun 18 Oct 18 Feb 19 Jun 19 Oct 19 Feb 2 Jun 2 Oct 2 Feb 21 Jun 21 Oct 21 Feb 22 Jun 22 Oct 22 Feb 23 Jun 23 Oct 23 Feb 24 Macquarie Wealth Management Fig 3 Edikan production and costs Fig 4 Sissingué production and costs 25. Edikan (koz) AISC (US$/oz) 8, 9. Sissingué (koz) AISC (US$/oz) 1, 7, , 5, 4, 3, 2, 1, FY17e FY18e FY19e FY2e FY21e FY22e FY23e FY24e Source: PRU, Macquarie Research, April 217 Source: PRU, Macquarie Research, April 217 Fig 5 Yaouré production and costs Fig 6 Operating and free cash flow 25. Yaouré (koz) AISC (US$/oz) 1,2 3. Operating cash flow (A$m) Free cash flow (A$m) 2. 1, (1.) 5. 2 (2.). (3.) Source: PRU, Macquarie Research, April 217 Source: PRU, Macquarie Research, April 217 Fig 7 PRU cash flow build vs market cap Fig 8 PRU asset valuation breakdown Net cash (debt) (A$m) Market Cap (A$m) (1) (2) (3) (4) Undeveloped Resources 8% Yaouré 43% Cash/Corp/oth 2% Edikan 3% Sissingué 17% Source: PRU, Macquarie Research, April 217 Source: PRU, Macquarie Research, April April 217 3

4 Fig 9 PRU Summary model ASX: PRU Price: (A$ps).31 Year end: Jun Rating: Neutral Up/dn TSR Mkt cap: (A$m) 32 Diluted shares (m) Target:.32 3% 3% CAD Target:.33 ASSUMPTIONS FY13 FY14 FY15 FY16 FY17e FY18e FY19e ATTRIBUTABLE MINE OUTPUT FY13 FY14 FY15 FY16 FY17e FY18e FY19e Exchange Rate A$/US$ Gold production (1%) Spot Gold (US$/oz) 1,64 1,295 1,223 1,167 1,236 1,331 1,375 Edikan (koz) Sissingué (koz) RATIO ANALYSIS FY13 FY14 FY15 FY16 FY17e FY18e FY19e Yaouré (koz) Diluted share capital m , , ,46.5 1,46.5 Baomahun (koz) EPS (diluted and pre sig. items) A Total (koz) P/E x 5.7x -16.x 4.6x -14.2x -11.x 5.3x 8.5x Cash costs - C1 CFPS A (.4) Edikan (US$/oz) 781 1, ,54 1, P/CF x 2.3x 14.1x 2.1x 12.x -69.9x 3.3x 3.5x Sissingué (US$/oz) DPS A Yaouré (US$/oz) Dividend yield %.%.%.%.%.%.%.% Baomahun (US$/oz) Franking Level % % % % % % % % Cash costs - C1 (US$/oz) 781 1, ,54 1, Book value per share x Cash costs - AISC P/Book value x.3x.3x.3x.5x.5x.5x.5x Edikan (US$/oz) 1,1 1, ,349 1, ,64 R.O.E. (pre sig items) % 8% -7% 15% -5% -4% 9% 6% Sissingué (US$/oz) R.O.A. (pre sig items) % 9% -2% 9% -4% -5% 8% 5% Yaouré (US$/oz) Interest Cover x 17.7x -1.2x 686.2x 76.3x 43.7x -45.3x nmf Baomahun (US$/oz) EBITDA per share A$ps Corporate (US$/oz) EV/EBITDA x 3.6x 1.4x 1.8x 12.5x -38.3x 1.5x 3.1x Cash costs - AISC (US$/oz) 1,66 1, ,433 1, FCF Yield (%) (4%) (9%) 15% (13%) (39%) (29%) (68%) EV/Production (US$/oz) 1,281 1,479 1,259 1,735 1,588 1,6 976 OPERATIONAL OUTLOOK (1% basis) EARNINGS FY13 FY14 FY15 FY16 FY17e FY18e FY19e Edikan (koz) Sissingué (koz) Yaouré (koz) Baomahun (koz) AISC (US$/oz) Sales Revenue A$m Other Revenue A$m Total Revenue A$m Operating Costs A$m (27) (227) (26) (227) (247) (293) (339) 4 Operational EBITDA A$m Exploration Expense/Write-offs A$m Corporate & Other Costs A$m (7) (1) (8) (12) (21) (8) (8) 3 1 EBITDA A$m (7) D&A A$m (28) (41) (54) (48) (44) (58) (82) EBIT A$m 52 (14) 65 (34.58) (52) Net Interest A$m (3) (1) () Profit Before Tax A$m 49 (15) 65 (34) (51) Significant Items A$m 14 (22) 52 (1) Tax Expense A$m (21) 5 (25) 7 14 (36) (24) 5 2 NPAT A$m 42 (32) 92 (38) (37) Minorities A$m (3) 1 (4) 2 4 (7) (4) FY13 FY14 FY15 FY16 FY17e FY18e FY19e FY2e FY21e FY22e Reported NPAT A$m 39 (31) 88 (36) (33) RESERVES AND RESOURCES (ATTRIBUTABLE) Underlying NPAT A$m 25 (9) 36 (25) (33) Reserves Project Mt g/t koz PRU CASHFLOW FY13 FY14 FY15 FY16 FY17e FY18e FY19e Edikan ,78 1,644 Net Profit A$m 39 (31) 88 (36) (33) Sissingué Interest/Tax/D&A A$m Yaouré ,246 2,921 Working Capital/other A$m (12) 12 (82) 32 8 (7) 2 Total ,724 4,965 Net Operating Cashflow A$m (5) Capex A$m (74) (39) (33) (74) (121) (225) (343) Resources Investments A$m () 2 () Project Mt g/t koz PRU Sale of PPE and Other A$m () () Edikan ,917 5,325 Free cash flow A$m (12) (29) 47 (42) (126) (92) (217) Sissingué Dividends Paid A$m Bele Debt A$m (61) Grumesa Equity Issuance A$m () 31 () Yaouré ,312 6,581 Other A$m Total ,2 13,457 Net Financing Cashflow A$m (61) 31 () EV/Reserve (A$/oz) 54 EV/Resource (A$/oz) 2 Net change in cash A$m (73) (74) 166 (197) EQUITY DCF VALUATION Macquarie forecasts Spot prices Projects A$m A$ps A$m A$ps BALANCE SHEET FY13 FY14 FY15 FY16 FY17e FY18e FY19e Edikan Cash A$m Sissingué PP&E & Mine Development A$m Yaouré Exploration A$m Undeveloped Resources Total Assets A$m ,53 1,57 1,589 Unpaid capital & Investments.. Debt A$m Forwards () (.) (48) (.4) Total Liabilities A$m Corporate (46) (.4) (45) (.4) Total Net Assets / Equity A$m Net cash (debt) Net Debt / (Cash) A$m (35) (37) (14) (151) (39) (47) 17 Net Equity Value (@ 1% WACC) Gearing (net debt/(nd + equity)) % (8%) (9%) (22%) (24%) (5%) (6%) 16% Price Target (5%.8x NAV, 5% 4x CFPS).32 Gearing (net debt/equity) % (7%) (8%) (18%) (2%) (5%) (6%) 19% P/NAV.89x Source: PRU, Macquarie Research, April April 217 4

5 Macquarie Quant View The quant model currently holds a strong negative view on Perseus Mining. The strongest style exposure is Earnings Momentum, indicating this stock has received earnings upgrades and is well liked by sell side analysts. The weakest style exposure is Valuations, indicating this stock is over-priced in the market relative to its peers. 157/1544 Global rank in Materials % of BUY recommendations 22% (2/9) Number of Price Target downgrades 2 Number of Price Target upgrades Fundamentals Attractive Quant Local market rank Global sector rank Displays where the company s ranked based on the fundamental consensus Price Target and Macquarie s Quantitative Alpha model. Two rankings: Local market (Australia & NZ) and Global sector (Materials) Macquarie Alpha Model ranking A list of comparable companies and their Macquarie Alpha model score (higher is better). Factors driving the Alpha Model For the comparable firms this chart shows the key underlying styles and their contribution to the current overall Alpha score % -8% -6% -4% -2% % 2% 4% 6% 8% 1% Valuations Growth Profitability Earnings Momentum Price Momentum Quality Macquarie Earnings Sentiment Indicator The Macquarie Sentiment Indicator is an enhanced earnings revisions signal that favours analysts who have more timely and higher conviction revisions. Current score shown below. Drivers of Stock Return Breakdown of 1 year total return (local currency) into returns from dividends, changes in forward earnings estimates and the resulting change in earnings multiple % -5% % 5% 1% Dividend Return Multiple Return Earnings Outlook 1Yr Total Return What drove this Company in the last 5 years Which factor score has had the greatest correlation with the company s returns over the last 5 years. Price to Sales NTM Price to Cash FY Price to Book FY Sales to EV NTM Operating Accruals Non-current Assets Inc. Capex to Sales FY Earnings Stability -34% Negatives Positives -24% -25% -28% -4% -2% % 2% 4% 31% 3% 3% 29% How it looks on the Alpha model A more granular view of the underlying style scores that drive the alpha (higher is better) and the percentile rank relative to the sector and market. Alpha Model Score Valuation Growth Profitability Earnings Momentum Price Momentum Quality Capital & Funding Liquidity Risk Technicals & Trading Normalized Score Percentile relative to sector(/1544) Percentile relative to market(/422) Source (all charts): FactSet, Thomson Reuters, and Macquarie Research. For more details on the Macquarie Alpha model or for more customised analysis and screens, please contact the Macquarie Global Quantitative/Custom Products Group (cpg@macquarie.com) 3 April 217 5

6 Important disclosures: Recommendation definitions Macquarie - Australia/New Zealand Outperform return >3% in excess of benchmark return Neutral return within 3% of benchmark return Underperform return >3% below benchmark return Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield Macquarie Asia/Europe Outperform expected return >+1% Neutral expected return from -1% to +1% Underperform expected return <-1% Macquarie South Africa Outperform expected return >+1% Neutral expected return from -1% to +1% Underperform expected return <-1% Macquarie - Canada Outperform return >5% in excess of benchmark return Neutral return within 5% of benchmark return Underperform return >5% below benchmark return Macquarie - USA Outperform (Buy) return >5% in excess of Russell 3 index return Neutral (Hold) return within 5% of Russell 3 index return Underperform (Sell) return >5% below Russell 3 index return Volatility index definition* This is calculated from the volatility of historical price movements. Very high highest risk Stock should be expected to move up or down 6 1% in a year investors should be aware this stock is highly speculative. High stock should be expected to move up or down at least 4 6% in a year investors should be aware this stock could be speculative. Medium stock should be expected to move up or down at least 3 4% in a year. Low medium stock should be expected to move up or down at least 25 3% in a year. Low stock should be expected to move up or down at least 15 25% in a year. * Applicable to Asia/Australian/NZ/Canada stocks only Recommendations 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations Financial definitions All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards). Recommendation proportions For quarter ending 31 December 216 AU/NZ Asia RSA USA CA EUR Outperform 57.53% 5.72% 45.57% 42.28% 6.58% 52.79% (for global coverage by Macquarie, 8.71% of stocks followed are investment banking clients) Neutral 33.9% 33.97% 43.4% 5.11% 37.23% 35.62% (for global coverage by Macquarie, 8.5% of stocks followed are investment banking clients) Underperform 8.56% 15.3% 11.39% 7.61% 2.19% 11.59% (for global coverage by Macquarie, 4.63% of stocks followed are investment banking clients) PRU AU vs Small Ordinaries, & rec history (all figures in AUD currency unless noted) Note: Recommendation timeline if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, April month target price methodology PRU AU: A$.32 based on a 5:5 blend.8x NAV, 4x CFPS methodology Company-specific disclosures: PRU AU: Macquarie and its affiliates collectively and beneficially own or control 1% or more of any class of Ltd's equity securities. MACQUARIE CAPITAL (AUSTRALIA) LIMITED or one of its affiliates managed or co-managed a public offering of securities of Ltd in the past 12 months, for which it received compensation. Macquarie or one of its affiliates has provided Ltd with non-investment advisory securities related services during the past 12 months, for which it received compensation. Important disclosure information regarding the subject companies covered in this report is available at Date Stock Code (BBG code) Recommendation Target Price 14-Mar-217 PRU AU Neutral A$ Feb-217 PRU AU Neutral A$.33 3-Jan-217 PRU AU Neutral A$.37 2-Dec-216 PRU AU Neutral A$.4 26-Jul-216 PRU AU Outperform A$.9 19-Apr-216 PRU AU Outperform A$ Mar-216 PRU AU Underperform A$ Feb-216 PRU AU Underperform A$ Jan-216 PRU AU Underperform A$ Dec-215 PRU AU Neutral A$ Oct-215 PRU AU Neutral A$.4 31-Aug-215 PRU AU Outperform A$ Jul-215 PRU AU Outperform A$.46 8-May-215 PRU AU Outperform A$ Mar-215 PRU AU Outperform A$.4 2-Jan-215 PRU AU Neutral A$.4 15-Jan-215 PRU AU Neutral A$ Aug-214 PRU AU Neutral A$.43 3 April 217 6

7 This publication was disseminated on 3 April 217 at 4:36 UTC. Macquarie Wealth Management 3-Apr-214 PRU AU Neutral A$.49 Target price risk disclosures: PRU AU: Any inability to compete successfully in their markets may harm the business. This could be a result of many factors which may include geographic mix and introduction of improved products or service offerings by competitors. The results of operations may be materially affected by global economic conditions generally, including conditions in financial markets. The company is exposed to market risks, such as changes in interest rates, foreign exchange rates and input prices. From time to time, the company will enter into transactions, including transactions in derivative instruments, to manage certain of these exposures. Analyst certification: We hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. The Analysts responsible for preparing this report receive compensation from Macquarie that is based upon various factors including Macquarie Group Limited (MGL) total revenues, a portion of which are generated by Macquarie Group s Investment Banking activities. General disclosure: This research has been issued by Macquarie Securities (Australia) Limited ABN , AFSL , a Participant of the ASX and Chi-X Australia Pty Limited. This research is distributed in Australia by Macquarie Wealth Management, a division of Macquarie Equities Limited ABN AFSL ("MEL"), a Participant of the ASX, and in New Zealand by Macquarie Equities New Zealand Limited ( MENZ ) an NZX Firm. Macquarie Private Wealth s services in New Zealand are provided by MENZ. 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