I agree with the fungal diagnosis, but penicillin is rendered useless on fungus unless there is a secondary bacterial infection going on such as fin rot or fish tuberculosis. Before we start dosing the tank with a bunch of antibiotics we will want to rule out other conditions.
You will want to make a visit to your LFS and ask to see their anti-fungal remedies, and use as directed. There are a number of them on the market.
Keep in mind that fungal infections can sometimes be the result of poor water quality. Most fish are able to fight off many of the fungal colonies that can infect their skin, but if their immune systems are stressed because of poor living conditions they can easily succumb. This is often an overlooked factor when we are talking about fungal infections.
Pay close attention to your water maintenance. Are you performing your weekly or bi-weekly water changes ? Are you vacuuming up all detritus from the aquarium floor ? How about your filter sponges/cartridges... are they kept clean and unclogged ? Water parameters OK ?
These are some of the questions that come to mind in dealing with these kinds of conditions. Fungal infections on the skin of fish are generally a symptom of a bigger problem that can sometimes be traced back to water quality.