MUSSELWHITE MINE

In the quarter ended Jun30/09, gold production at the Musselwhite mine for the second quarter of 2009 was 44%, or 21,800 ounces, more than in the second quarter of 2008 due to 39% higher grades and 5% increased mill throughput, partially offset by an increase in mill circuit inventory. The higher grades were due to a higher proportion of mining in the higher grade areas of the T-Antiform and PG zones as planned, offset slightly by lower grades from the PQ Deeps zone, as compared to the second quarter of 2008, when mining was focused on the lower grade southern part of the T-Antiform. As mining continues in these lower-grade areas, grades are expected to return to historic levels for the remainder of the year. The increase in mill throughput resulted from improved stope flexibility and increased hauling capacity. Exploration during the second quarter of 2009 focused on the northern extension of the PQ Deeps deposit, extending the resources on the C- and D-blocks. Development of the PQ Deeps zone continued with accesses obtained on the higher grade stoping fronts for production scheduled in 2010. Drilling of the southern extensions of the D-block and Moose zone has also been positive and drilling continues to confirm mineralization of the S1/S2 limbs of the northern part of the T-Antiform.

Musselwhite’s gold production for the current quarter was 11%, or 6,200 ounces, lower than the corresponding quarter of 2007. Of the production shortfall, half was due to 6% lower ore tonnage resulting from a planned power line maintenance shutdown and the other half was due to an increase in in-circuit inventory. The PQ Deeps, which contains higher grade ore, some of which is being mined, will be a key future mining area for Musselwhite. Cash costs were 22%, or $107 per ounce, higher than in the same period last year due to reduced ounces ($63 per ounce impact, or 59%), higher operating costs ($43 per ounce impact, or 40%), and a stronger Canadian dollar ($1 per ounce impact, or 1%).

Musselwhite’s gold production for the current quarter was 11% (6,500 ounces) less than the corresponding quarter of 2007. Of the production shortfall, 72% was due to lower grade and 38% was due to reduced ore tonnage resulting from short-term ground control issues. Cash costs were 35%, or $166 per ounce, higher than in the same period last year due to reduced ounces ($73 per ounce impact, or 44%), higher operating costs ($42 per ounce impact, or 25%), and a stronger Canadian dollar ($51 per ounce impact, or 31%). Higher operating costs were the result of increased consumable, energy and labour costs, partially offset by reduced maintenance costs of the new mobile fleet. Comparing the current quarter to the previous quarter, gold production was 29% (11,300 ounces) higher, with 73% resulting from higher ore tonnage due to improved crushing and conveying availability, following the 18 days of maintenance downtime in the first quarter. Of the remaining increase in production, 12% was attributable to higher grade, 11% to a decrease in circuit inventory, and 3% to higher gold recovery.