COMMENTS

The figures for the year reflect the successful progression of the company's growth strategy. Profit from before tax was up from US$48 million to US$74 million for the year. This was the first full year of corporate tax at Morila and the group incurred an income tax charge of US$23.1 million for the year (2005: US$0.2 million). The tax charge was however offset by the increased profit from mining activity. Net profit for the year of US$50.9 million was up by 6% when compared to the prior year (restated). The main factors in the improved profit were the first full year of production at Loulo and higher gold prices. These elements were partially offset by lower grades resulting in lower production at Morila and increased costs, as has been experienced by most of the industry this year. Gold prices averaged US$604/oz compared to US$445/oz in 2005. Attributable production (taking 80% of Loulo) was up for the third successive year at 399 927 ounces in 2006, (448 242 million ounces assuming 100% of Loulo production) compared to 314 831 ounces in 2005 and 204 194 ounces in 2004. Earnings per share of 70 cents is in line with the 74 cents of 2005 (restated) and up on 32 cents in 2004.

Cash operating costs for the group were US$258/oz up from US$169/oz in 2005 (restated). After royalties, total cash costs for the group were US$296/oz for the year compared to US$201/oz in 2005 (restated). This compares to an average for the industry which is now over US$350/oz. Industry wide cost pressures have continued this year resulting from the weak dollar, high diesel and steel prices and contract mining costs. The company's mines are in particularly remote locations and the mines produce power from diesel fired generators. This, with the diesel required for the mining fleet, meant that diesel comprised 25% of the production costs in the year. Contract mining costs make up over 30% of production costs and have also experienced inflationary pressures as demand for mining equipment has led to a supply deficit which has pushed up costs. Despite these cost pressures, costs have been well controlled at both locations and the lower grade processed is the main factor in the increased cost per ounce. Grades have decreased from 5.9g/t in 2005 at Morila to 4.2g/t this year, and at Loulo from 4.5g/t to 3.2g/t as per the respective Life of Mine plans.

Expenditure on exploration and corporate costs continues to be an important investment with US$29 million being spent in the year compared to last year's US$24 million. Extensive drilling programmes were undertaken in all countries in which we operate except for Ghana. 

The company's cash position remains very healthy with U$143 million cash on the balance sheet and debt of US$53 million. Net funds has improved from last year despite the significant expenditure on exploration and corporate costs, US$31.7 being spent on completion of the Loulo capital project, US$28.8 million on exploration and corporate costs and US$17.6 million being spent on underground equipment and the commencement of the decline shaft sinking at Loulo. US$19.2 million of the US$60 million project financing was paid back during the year.

The board has declared a dividend for the 2006 year of US$6.9 million or 10 cents per share. A separate announcement is being issued simultaneously with these results. 

The results for the fourth quarter of 2006 were impacted by a number of items:

Loulo finished the year with an excellent quarter increasing production by 20% compared to the previous quarter, mainly due to operational improvements. This was partially offset by lower production due to lower grades from Morila.

Total cash costs were impacted by a provision of US$1.3 million against slow moving Loulo and Morila debtors relating to reimbursable indirect taxes which have been discounted to reflect the expected settlement dates. These provisions increased total cash costs for the group by US$11/oz for the quarter.

Cash costs were reduced at Loulo from US$350/oz during the previous quarter to US$326/oz during the final quarter due to the productivity improvements and the higher grade which was 3.7g/t up from 3.2g/t.

At Morila, cash costs were up from US$251/oz to US$327/oz due to lower grades and the year end provisions for slow-moving debts which have been discounted that amounted to US$23/oz.