IN THIS SECTION

›	Introduction
›	Highlights
›	Overview
›	Operations
›	Operational Review
›	Results from Operations
›	Selected Quarterly Financial Information
›	Selected Annual Information
›	Financial Results
›	Liquidity and Capital Resources
›	Commitments and Contractual Obligations
›	Related Party Transactions
›	Outlook
›	Share Capital
›	Critical Accounting Estimates
›	Risks and Uncertainties
›	Comprehensive Income
›	Adoption of New Accounting Policies
›	New Accounting Pronouncements
›	Safe Harbour Statement
›	Non-GAAP Measures

Management’s Discussion and Analysis of Financial Condition and Results of Operations

For the year ended December 31, 2007 (Expressed in United States dollars)

Selected Annual Information

Expressed in thousands of United States dollars	12 Months ended		Six Months ended		12 Months ended
(except for per share information)	December 31, 2007		December 31, 2006		June 30, 2006
Mineral sales		$ 39,562		$ 39,461		$ 37,953
Direct cost of mineral sales		(35,186)		(38,681)		(28,050)
Mine site administration costs		(7,613)		(6,855)		(8,342)
Depletion and depreciation		(8,704)		(6,657)		(9,762)
		(11,941)		(12,732)		(8,201)


Administration, office and general		(16,461)		(8,786)		(5,982)
Exploration		(137)		(1,379)		(353)
Professional fees		(1,122)		(1,419)		(1,437)
Stock compensation expense		(7,249)		(1,972)		( 1,805)
Other income (expenses)		5,052		32,588		(19,592)
Income taxes and minority interest		597		976		1,774

Net (loss) profit		(31,261)		7,276		(35,596)

EBITDA ⁽¹⁾(see below)
		52,925		25,638		(280)

Profit (loss) per share – basic (US dollars)		$ (0.07)		$ 0.02		$ (0.13)
Profit (loss) per share – diluted (US dollars)		$ (0.07)		$ 0.02		$ (0.13)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING – BASIC		434,147,546		394,561,832		281,543,480
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING – DILUTED		434,147,546		397,896,557		281,543,480
Operating cash flows		(54,352)		(29,293)		(27,817)
Cash and cash equivalents		20,061		131,937		82,482
Total assets		1,007,476		926,873		804,668
Long-term debt		365,559		328,554		320,560

Shareholders’ equity		464,593		419,136		301,950


EBITDA ⁽¹⁾is calculated as follows:
Net profit (loss)		(31,261)		7,276		(35,596)
Depletion and depreciation		8,704		6,657		9,762
Interest and finance charges		21,562		10,097		11,938
Stock compensation expense		7,249		1,972		1,805
Fair value loss (gains) on forward obligations		7,932		(63)		(214)
Foreign exchange loss		38,874		644		12,859
Income taxes		(135)		(945)		(834)

EBITDA ⁽¹⁾		$ 52,925		$ 25,638		$ (280)

⁽¹⁾

The Company defines EBITDA as “Earnings before interest, taxes, depreciation and depletion, non-cash foreign exchange loss or gain, stock compensation expense, fair value losses or gains on forward obligations and interest and finance expense”. It is a non-GAAP measure and is more specifically described in the section entitled “Non-GAAP measures” on the final page of this MDA.