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 Quarterly Financial Information - Unaudited

Expressed in thousands of
United States dollars (except	Dec-31		Sept-30		Jun-30		Mar-31
for per share information)
	2007	2006	2007	2006	2007	2006	2007	2006
Mineral sales	$ 11,578	$ 13,560	$ 14,364	$ 25,901	$ 13,492	$ 5,443	$ 128	$ 16,753

Net profit (loss)	4,027	5,644	(51,317)	1,632	35,141	(25,805)	(19,112)	(11,005)

(Loss) profit per share – basic	(0.09)	0.02	(0.12)	0.00	0.08	(0.08)	(0.05)	(0.03)
(Loss) profit per share – diluted	(0.09)	0.02	(0.12)	0.00	0.06	(0.08)	(0.05)	(0.03)
Operating cash flows	(5,440)	(33,317)	(25,764)	(3,345)	(9,282)	(36,519)	(13,866)	6,001
Cash and cash equivalents	20,061	131,937	44,502	19,991	40,092	82,482	81,752	152,364
Total assets	1,007,476	918,062	990,683	801,226	944,616	804,668	919,925	792,282
Long term debt	365,559	319,520	366,101	313,222	334,282	320,560	327,674	285,440

Shareholders’ equity	464,593	419,359	454,715	307,023	440,041	301,950	402,960	310,680

FINANCIAL RESULTS FOR THE QUARTER ENDED DECEMBER 31, 2007

For the three months ended December 31, 2007, we reported mineral sales of $11.6 million (quarter ended December 31, 2006 - $13.6 million). Gold sales from LEFA and Maco during the period were offset against capital costs, in accordance with our accounting policies, as the plants have not reached commercial production. The comparative amounts for 2006 included revenue reported from the former heap leach operation at LEFA.

Direct costs for the quarter ended December 31, 2007 were $10.1 million (quarter ended December 31, 2006 - $16.0 million) and mine site administration costs were $3.9 million (quarter ended December 31, 2006 - $3.6 million). Direct costs and mine site administration costs in 2006 included costs relating to the LEFA heap leach operation. Costs for LEFA and Maco in the current period were capitalized as the plants have not yet reached commercial production.

Gross margin for the quarter ended December 31, 2007 was negative $2.4 million (quarter ended December 31, 2006 - negative $6.0 million). Depletion and depreciation expense, which is a non-cash measure, was $1.4 million (quarter ended December 31, 2006 - $0.2 million). Depletion and depreciation expense for the quarter ended December 31, 2006 was lower due to acquisition adjustments finalized in the quarter on the purchase of LEFA's assets. Depletion and depreciation expense at LEFA and Maco in the current quarter were capitalized.

General corporate administration and related costs for the quarter ended December 31, 2007 were $4.0 million (quarter ended December 31, 2006 - $8.8 million). Interest and finance charges were $5.8 million (quarter ended December 31, 2006 - $5.0 million) and the unrealized gain on foreign currency translation was $2.7 million as compared to a loss of $8.8 million for the same period last year due to the translation of NOK denominated debt into US dollars. The Company also recorded a fair value loss on forward obligations of $2.5 million.