COMMENTS

Profit from mining activity for the quarter ended September 2005 compared to the corresponding period ended September 2004 improved by 413% mainly as a result of higher throughput, improved grades and improved recoveries, plus the effect of a higher gold price resulting in revenues increasing by US$18.8 million, partially offset by the effect of deferred stripping charges in the current quarter and higher royalties payable on the increase in revenues.

Net profit for the quarter ended September 2005 of US$9.2 million was up 30% from US$7.1 million for the previous quarter.

Exploration and corporate expenditure for the quarter ended September 2005 of US$5.0 million was in line with the previous quarter but up on the comparative quarter ended September 2004 by US$1.4 million which reflects the increased exploration activity in 2005.

Main balance sheet movements for the 9 months ended September 2005 include the following :

• Increases in property, plant and equipment principally relate to the costs incurred on the development of the Loulo Mine.  The original budget for the Loulo capital project was US$87 million including working capital and financing costs, but excluding power plant, pre-production and exploration. There have been changes in scope following the initial budget which resulted in a revision to US$101 million.  The initial plant design was for 180 000 tonnes per month and this has been increased to 200 000 tonnes per month. This includes four additional CIL tanks. The other main element of the revised budget has been an acceleration in pre-production mining to allow for a more conservative stockpile build-up amounting to some US9.9 million additional capital. Actual costs incurred are some 12% in excess of this revised budget and total approximately US$113 million. The project was commissioned later than the accelerated start date resulting in additional owners' costs of US$3.9 million which have been included in the capital costs. Working capital costs of US$0.8 million above budget have been incurred. The balance of the extra cost is mainly shipping and exchange losses. The bulk of the capital expenditure has now been completed.
  
  
• An increase in ore stockpiles in line with the Morila life of mine plan.
  
  
• An increase in receivables comprising advances to the main Loulo contractor, as well as an increase in reimbursable fuel duties and TVA at Morila and Loulo.  Reimbursable fuel duties and TVA amounted to US$17 million at 30 SeptemberSeptember 2005. The Company is working with the Mali Government to expedite re-payment of these amounts. Advances to contractors totals US$17 million. A large part of this is secured and the remainder relates to project variations which are still to be agreed.
  
  
• The decrease in cash and cash equivalents relates to the continued funding of the Loulo project and the working capital tied up as referred to above.
  
  
• Increases in long-term borrowings results from the drawdown of the Loulo project finance loan amounting to US$25 million in 2005, offset by the short term portion of the loan of US$8.4 million included in accounts payable. The first repayment is due in June 2006.
  
  
• The increase in deferred financial liabilities reflects an increase in the negative marked-to-market valuation  of the derivative financial instruments held as at 30 September 2005, due to the significant increase in the gold spot price, which was US$473.25 at 30 September 2005.
  
  
• The increase in the provision for environmental rehabilitation reflects the provision for the Loulo closure cost obligation of US$4.9 million which has been recognised.