Inmet announces 2007 third quarter earnings of $2.38 per share



    All amounts in Canadian dollars unless indicated otherwise

    TORONTO, Oct. 30 /CNW/ -

    
    Highlights

    -   Higher net income per share

        Net income per share this quarter was $2.38 compared to $2.31 for the
        same period in 2006.

    -   Strong operating cash flow per share

        Operating cash flow before working capital was $129.5 million or
        $2.68 per common share, which is consistent with the same period in
        2006.

    -   Update to our annual production estimates

        We produced 19,000 tonnes of copper, 20,400 tonnes of zinc and
        55,400 ounces of gold in the third quarter. Our annual production
        objectives are: copper 81,200 tonnes, zinc 82,800 tonnes and gold
        227,200 ounces.

    -   Plant construction delay at Las Cruces

        Construction of the hydrometallurgical process plant has been delayed
        and is now scheduled to be completed in the fourth quarter of 2008.
        To manage the impact of this delay, Las Cruces plans to selectively
        mine and crush approximately 100,000 to 150,000 tonnes of high grade
        chalcocite ore and sell it as direct feed to copper smelters.

        We anticipate that the estimated project capital cost of
        (euro) 463 million will be increased by (euro) 4 million per month
        for owners and construction management costs from April 2008 until
        production begins.

    -   Cerattepe construction started

        Project development began this quarter with the construction of the
        ramp access, preparation work for the installation of the tramway and
        the engineering for the Cayeli mill expansion.

    -   Petaquilla work is progressing

        The drill program began, front-end engineering and design is
        advancing and work on the social and environmental assessment is
        progressing.


    Key financial data
    -------------------------------------------------------------------------
                                three months ended          nine months ended
                                      September 30               September 30
                            2007      2006  change     2007      2006  change
    -------------------------------------------------------------------------
    FINANCIAL HIGHLIGHTS
    (thousands, except
     per share amounts)

    Sales
    Gross sales         $272,293  $301,100   -10%  $878,925  $828,958    +6%

    Net income
    Net income          $114,836  $111,582    +3%  $353,964  $323,233   +10%
    Net income per share   $2.38     $2.31    +3%     $7.33     $6.71    +9%
    Adjusted net
     income(1)          $114,836  $111,582    +3%  $342,234  $299,328   +14%
    Adjusted net income
     per share(1)          $2.38     $2.31    +3%     $7.09     $6.21   +14%

    Cash flow(1)
    Cash flow provided
     by operating
     activities (before
     working capital)   $129,536  $129,486      -  $372,873  $320,463   +16%
    Cash flow provided
     by operating
     activities per
     share (before
     working capital)      $2.68     $2.68      -     $7.72    $6.65    +16%
    -------------------------------------------------------------------------

    Capital spending    $117,989   $49,936  +136%  $252,003  $87,040   +190%
    -------------------------------------------------------------------------

    OPERATING HIGHLIGHTS
    Production(2)
      Copper (tonnes)     19,000    20,700    -8%    57,600   60,900     -5%
      Zinc (tonnes)       20,400    16,500   +24%    59,100   53,100    +11%
      Gold (ounces)       55,400    57,900    -4%   166,200  182,800     -9%

    Cash costs
      Copper (US $ per
       pound)(1),(3)       $0.28     $0.38   -26%     $0.19    $0.36    -47%
      Gold (US $ per
       ounce)(1)            $367      $366     -%      $384     $350    +10%
    -------------------------------------------------------------------------


                                                         as at         as at
                                                  September 30   December 31
    FINANCIAL CONDITION                                   2007          2006
                                                -----------------------------
    Current ratio                                     6.1 to 1      5.1 to 1
    Long-term debt to total capitalization                 16%           10%
    Net working capital balance (millions)                $854          $666
    Cash balance (millions)                               $815          $640
    Shareholders' equity (millions)                     $1,319        $1,073
    -------------------------------------------------------------------------
    (1) See reconciliation of non-GAAP measures on page 31 to see how these
        items are calculated.
    (2) Inmet's share.
    (3) Cayeli and Pyhasalmi zinc production and Ok Tedi gold production are
        included as metal credits.



    Third quarter press release


    Where to find it

    Our financial results ..........................  4
    Key changes in 2007 ............................  5
    Understanding our performance ..................  5
      Earnings from operations .....................  7
      Corporate costs .............................. 11
    Results of our operations ...................... 13
      Cayeli ....................................... 13
      Pyhasalmi .................................... 15
      Troilus ...................................... 17
      Ok Tedi ...................................... 19
    Status of our development projects ............. 21
      Las Cruces ................................... 21
      Cerattepe .................................... 22
      Petaquilla ................................... 23
    Managing our liquidity ......................... 24
    Financial condition ............................ 25
    Accounting changes ............................. 27
    Managing risk .................................. 28
    Non-GAAP measures .............................. 31
    Quarterly review ............................... 32
    Consolidated financial statements .............. 33

    In this press release, Inmet means Inmet Mining Corporation and we, us
    and our mean Inmet and/or its subsidiaries and joint ventures.



    Our financial results

    -------------------------------------------------------------------------
    (thousands, except          three months ended          nine months ended
     per share amounts)               September 30               September 30
                            2007      2006  change     2007      2006  change
    -------------------------------------------------------------------------

    EARNINGS FROM
     OPERATIONS(1)
    Cayeli               $66,018   $60,347    +9%  $190,444  $149,553   +27%
    Pyhasalmi             34,101    35,854    -5%   110,433    94,088   +17%
    Troilus                2,953     2,115   +40%     9,483     4,805   +97%
    Ok Tedi               48,927    60,011   -18%   154,333   163,660    -6%
    Other                   (619)     (414)  +50%    (1,462)   (1,368)   +7%
    -------------------------------------------------------------------------
                         151,380   157,913    -4%   463,231   410,738   +13%
    -------------------------------------------------------------------------
    DEVELOPMENT AND
     EXPLORATION
    Corporate development
     and exploration      (2,475)   (2,708)   -9%    (5,573)   (5,618)   -1%
    -------------------------------------------------------------------------

    CORPORATE COSTS
    General and
     administration       (2,674)   (2,618)          (7,676)   (7,612)
    Investment and
     other income          6,784     2,257           16,066     6,637
    Interest expense        (424)     (412)          (1,286)   (1,194)
    Income and capital
     taxes               (37,922)  (42,861)        (122,355) (103,788)
    Non-controlling
     interest                167        11             (173)      165
    -------------------------------------------------------------------------
                         (34,069)  (43,623)  -22%  (115,424) (105,792)   +9%
    -------------------------------------------------------------------------
    Net income before
     other items        $114,836  $111,582    +3%  $342,234  $299,328   +14%
    Gain on sale of
     Wolfden                   -         -           11,730         -  +100%
    Gain on sale of Izok       -         -                -    23,905  -100%
    -------------------------------------------------------------------------
    Net income          $114,836  $111,582    +3%  $353,964  $323,233   +10%
    -------------------------------------------------------------------------
    Basic net income
     per share             $2.38     $2.31    +3%     $7.33     $6.71    +9%
    -------------------------------------------------------------------------
    Diluted net income
     per share             $2.37     $2.31    +3%     $7.32     $6.70    +9%
    -------------------------------------------------------------------------

    Weighted average
     shares outstanding   48,278    48,274      -    48,278    48,190      -
    -------------------------------------------------------------------------
    (1) Sales less smelter processing charges and freight, cost of sales,
        depreciation and provisions for mine rehabilitation.



    Key changes in 2007

    -------------------------------------------------------------------------
                                           three months   nine months
                                                  ended         ended    see
    (millions)                             September 30  September 30   page
    -------------------------------------------------------------------------
    EARNINGS FROM OPERATIONS
    Sales
    Higher (lower) metal prices
     denominated in Canadian dollars               $(27)          $15      7
    Higher sales volumes                              -            20      8
    Costs
    Lower smelter processing charges
     and freight                                     20            29     10
    Higher operating costs                            -           (10)    10
    Other                                             -            (2)
    ------------------------------------------------------------------
    Increase (decrease) in earnings from
     operations, compared to 2006                    (7)           52

    CORPORATE COSTS
    Change in taxes from change in income             8             -     12
    Change in tax rates                              (3)          (19)    12
    Gain on sale of Wolfden                           -            12     11
    Gain on sale of Izok recorded in
     the previous year                                -           (25)    11
    Other                                             5            11
    ------------------------------------------------------------------
    Increase in net income, compared to 2006         $3           $31
    ------------------------------------------------------------------


    Understanding our performance

    Metal prices

    The following table shows the metal prices, in US dollars and Canadian
dollars, we realized (the prices we realize include finalization adjustments -
see Gross sales on page 7).

    -------------------------------------------------------------------------
                                three months ended          nine months ended
                                      September 30               September 30
                            2007      2006  change     2007      2006  change
    -------------------------------------------------------------------------
    US dollar metal prices
      Copper (per
       pound)           US $3.62  US $3.60    +1%  US $3.37  US $3.35    +1%
      Zinc (per pound)  US $1.37  US $1.56   -12%  US $1.50  US $1.37    +9%
      Gold (per ounce)   US $580   US $534    +9%   US $571   US $511   +12%
    -------------------------------------------------------------------------
    Canadian dollar
     metal prices
      Copper (per pound) C$ 3.76   C$ 4.03    -7%   C$ 3.74   C$ 3.79    -1%
      Zinc (per pound)   C$ 1.42   C$ 1.75   -19%   C$ 1.67   C$ 1.55    +8%
      Gold (per ounce)    C$ 603    C$ 598    +1%    C$ 634    C$ 577   +10%
    -------------------------------------------------------------------------

    Exchange rates

    Canadian dollar revenue and earnings were lower this quarter and year to
date compared to the same periods last year because of the significant
strengthening of the Canadian dollar relative to the US dollar. This lowered
gross sales by $18 million this quarter, and by $19 million year to date. It
also lowered net income this quarter by $12 million and year to date by
$14 million.
    The following table shows the average exchange rates we realized.

    -------------------------------------------------------------------------
                                three months ended          nine months ended
                                      September 30               September 30
                            2007      2006  change     2007      2006  change
    -------------------------------------------------------------------------
    Exchange rates
      1 US$ to C$          $1.04     $1.12    -7%     $1.11     $1.13    -2%
      1 euro to C$         $1.44     $1.43    +1%     $1.48     $1.41    +5%
    -------------------------------------------------------------------------

    Treatment charges and freight

    Treatment charges are one component of smelter processing charges. We also
pay smelters for content losses and price participation. Copper treatment
charges have been lower in 2007 than they were in 2006 because we negotiated
more favourable contract terms with smelters. Zinc treatment charges, as
expected, are significantly higher in 2007 than they were in 2006, but lower
price participation more than offset these charges.
    The Baltic Dry Index, which monitors shipping rates, hit an all time high
in September 2007 as port congestion and increasing global demand for raw
materials have boosted freight rates.
    The following table shows the average smelter processing charges we
realized.

    -------------------------------------------------------------------------
                                three months ended          nine months ended
                                      September 30               September 30
                            2007      2006  change     2007      2006  change
    -------------------------------------------------------------------------
    Smelter processing
     charges
      Copper (per
       pound)           US $0.37  US $0.57   -35%  US $0.41  US $0.54   -24%
      Zinc (per pound)  US $0.37  US $0.55   -33%  US $0.43  US $0.46    -7%
    Freight charges
      Copper (per tonne)  US $49    US $43   +14%    US $45    US $42    +7%
      Zinc (per tonne)    US $23    US $21   +10%    US $27    US $18   +50%
    -------------------------------------------------------------------------

    Statutory tax rates

    The following table shows the statutory tax rates for each of our taxable
operating mines.

    -----------------------------------------------
                            2007      2006  change
    -----------------------------------------------
    Statutory tax rates
      Cayeli                 27%       20%    +7%
      Pyhasalmi              26%       26%      -
      Ok Tedi                37%       37%      -
    -----------------------------------------------

    The increase in tax rate at Cayeli in 2007 is because we have returned to
accruing for withholding taxes on net income in anticipation of dividend
payments.


    EARNINGS FROM OPERATIONS

    We calculate earnings from operations by taking the revenues generated
from the sale of metals, less the costs associated with those sales, and then
subtracting depreciation charges for capital investments and provisions for
mine rehabilitation.

    1.  Gross sales were 10 percent lower this quarter ...

    -------------------------------------------------------------------------
                                three months ended          nine months ended
                                      September 30               September 30
    (thousands)             2007      2006  change     2007      2006  change
    -------------------------------------------------------------------------
    Gross sales by operation
      Cayeli            $107,664  $105,916    +2%  $337,606  $282,694   +19%
      Pyhasalmi           60,427    64,436    -6%   201,574   185,678    +9%
      Troilus             24,970    29,274   -15%    81,061    77,515    +5%
      Ok Tedi(1)          79,232   101,474   -22%   258,684   283,071    -9%
    -------------------------------------------------------------------------
                        $272,293  $301,100   -10%  $878,925  $828,958    +6%
    -------------------------------------------------------------------------
    Gross sales by metal
      Copper            $174,338  $195,510   -11%  $506,718  $511,117    -1%
      Zinc                54,983    57,378    -4%   227,467   182,437   +25%
      Gold                33,826    37,544   -10%   111,700   105,808    +6%
      Other                9,146    10,668   -14%    33,040    29,596   +12%
    -------------------------------------------------------------------------
                        $272,293  $301,100   -10%  $878,925  $828,958    +6%
    -------------------------------------------------------------------------
    (1) Our 18 percent share of Ok Tedi's sales.


        ... because of lower copper and zinc prices in the quarter

    -------------------------------------------------------------------------
                                                  three months   nine months
                                                         ended         ended
    (millions)                                    September 30  September 30
    -------------------------------------------------------------------------
    Lower copper prices, denominated in C$                $(12)         $(12)
    Higher (lower) zinc prices, denominated in C$          (14)           15
    Higher (lower) gold prices and other metal
     prices, denominated in C$                              (1)           12
    Higher (lower) sales volumes                            (2)           35
    -------------------------------------------------------------------------
    Increase (decrease) in gross sales,
     compared to 2006                                     $(29)          $50
    -------------------------------------------------------------------------

    We record sales using the metal price for sales settled during the
reporting period. For sales that have not been settled, we use an estimate
based on the month we expect the sale to settle and the metal's forward price
at the end of the reporting period. We recognize the difference between our
estimate and the final price by adjusting our gross sales in the period we
settle the sale (finalization adjustment).
    We made the following finalization adjustments for sales recorded in the
second quarter of 2007 that were settled this quarter:

    -   we increased copper sales by US $3 million
    -   we decreased zinc sales by US $1 million.

    At the end of this quarter, the following sales had not been settled:

    -   31 million pounds of copper provisionally priced at US $3.64 per
        pound
    -   26 million pounds of zinc provisionally priced at US $1.40 per pound.

    The finalization adjustment we record for these sales will depend on the
actual price we receive on final settlement.


    ...and because of lower gold sales volume during the third quarter

    -------------------------------------------------------------------------
                                three months ended          nine months ended
                                      September 30               September 30
                            2007      2006  change     2007      2006  change
    -------------------------------------------------------------------------
    Sales volumes
      Copper (tonnes)     21,000    22,000    -5%    61,900    60,800    +2%
      Zinc (tonnes)       17,900    15,000   +19%    62,800    53,900   +17%
      Gold (ounces)       55,500    62,900   -12%   176,400   182,300    -3%
    -------------------------------------------------------------------------

    Our sales volumes are directly affected by the amount of production from
our mines, and our ability to ship to our customers.
    Sales volumes of gold this quarter were lower than the third quarter of
last year because gold production was down at Ok Tedi and Troilus made fewer
shipments. Sales volumes of zinc this quarter and year to date were higher
than the same periods in 2006, in line with higher production.

    Production
    -------------------------------------------------------------------------
                        three months ended        nine months ended   revised
    Inmet's                   September 30             September 30 objective
     share           2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
    Copper (tonnes)
      Ok Tedi       6,900    8,200          21,700   26,200           31,300
      Cayeli        7,900    7,800          23,500   22,700           33,000
      Pyhasalmi     3,400    3,900          10,300    9,800           14,000
      Troilus         800      800           2,100    2,200            2,900
    -------------------------------------------------------------------------
                   19,000   20,700    -8%   57,600   60,900    -5%    81,200
    -------------------------------------------------------------------------
    Zinc (tonnes)
      Cayeli       12,300    9,700          32,500   26,600           44,400
      Pyhasalmi     8,100    6,800          26,600   26,500           38,400
    -------------------------------------------------------------------------
                   20,400   16,500   +24%   59,100   53,100   +11%    82,800
    -------------------------------------------------------------------------
    Gold (ounces)
      Troilus      36,400   34,600         104,700  108,600          139,000
      Ok Tedi      19,000   23,300          61,500   74,200           88,200
    -------------------------------------------------------------------------
                   55,400   57,900    -4%  166,200  182,800    -9%   227,200
    -------------------------------------------------------------------------
    Pyrite (tonnes)
      Pyhasalmi    45,100   56,900   -21%  304,000  334,800    -9%   537,000
    -------------------------------------------------------------------------

    This quarter:

    -   copper production was lower than the same period last year because
        throughput at Ok Tedi was down.
    -   zinc production was higher mainly because of higher grades and higher
        throughput at Cayeli.
    -   gold production was lower because throughput was down at both Troilus
        and Ok Tedi.

    2007 outlook for sales

    We made some minor changes to our 2007 production estimates this quarter
to reflect the most recent forecasts at our operations.
    We expect sales of all metals for the year to be consistent with these
revised production estimates. The total amount we will receive in Canadian
dollars will be affected by US dollar denominated metal prices and the
exchange rate between the US dollar and the Canadian dollar.

    2.  Copper cash costs this quarter were lower than 2006

    We measure cost performance at our operations by tracking costs per pound
of copper or ounce of gold in US dollars.

    Cash costs include:
    -   direct production costs, such as labour, fuel, consumables and other
        costs directly related to the production of metals
    -   plus smelter processing charges and freight
    -   less revenue from the sale of by-product metals (metal credits).

    The table below shows our cash cost by operation.

    -------------------------------------------------------------------------
                        three months ended        nine months ended   revised
                              September 30             September 30 objective
    (US $)           2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
    Cash cost per
     pound of copper
      Cayeli(1)     $0.20    $0.29   -31%    $0.25    $0.50   -50%     $0.16
      Pyhasalmi
       (1,2)        (0.87)   (0.56)  +55%    (1.42)   (1.20)  +18%     (1.61)
      Ok Tedi(3)     0.94     0.93    +1%     0.86     0.83    +4%      0.77
    -------------------------------------------------------------------------
                    $0.28    $0.38   -26%    $0.19    $0.36   -47%     $0.08
    -------------------------------------------------------------------------
    Cash cost per
     ounce of gold
      Troilus(4,5)   $367     $366      -     $384     $350   +10%      $370
    -------------------------------------------------------------------------
    To estimate the by-product credits for our 2007 objectives, we used:
    (1) a zinc price of US $1.46 per pound
    (2) a euro to US dollar exchange rate of US $1.30
    (3) a gold price of US $620 per ounce
    (4) a copper price of US $3.44 per pound
    (5) a US dollar to Canadian dollar exchange rate of $1.10.

    Our cash cost per pound of copper this quarter was 26 percent lower than
the same period last year mainly because:

    -   zinc metal credits were higher because zinc production was higher
    -   smelter processing charges and freight were lower because copper and
        zinc price participation charges and copper treatment charges were
        lower.

    The table below shows the breakdown of our cash cost per pound of copper:

    -------------------------------------------------------------------------
                        three months ended        nine months ended   revised
                              September 30             September 30 objective
    (US $)           2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
    Cash cost per
     pound of copper
      Direct
       production
       costs        $1.16    $0.90   +29%    $1.11    $0.91   +22%     $1.03
      Royalties and
       variable
       compensation  0.07     0.10   -30%     0.09     0.10   -10%      0.11
      Smelter
       processing
       charges and
       freight       1.05     1.13    -7%     1.04     1.11    -6%      1.03
      Metal credits (2.00)   (1.75)  +14%    (2.05)   (1.76)  +16%     (2.09)
    -------------------------------------------------------------------------
                    $0.28    $0.38   -26%    $0.19    $0.36   -47%     $0.08
    -------------------------------------------------------------------------

    Unit direct production costs for copper were higher this quarter and year
to date because copper production was down, the value of the US dollar was
lower and labour and consumable costs were higher, compared to 2006.

    Direct production costs and cost of sales
    -----------------------------------------
    Our cost of sales this quarter was lower than in 2006...

    -------------------------------------------------------------------------
                                three months ended          nine months ended
                                      September 30               September 30
    (thousands)             2007      2006  change     2007      2006  change
    -------------------------------------------------------------------------
    Cost of sales by
     operation
      Cayeli             $20,518   $18,034   +14%   $65,996   $55,092   +20%
      Pyhasalmi           11,579    11,135    +4%    37,886    35,999    +5%
      Troilus             17,755    20,909   -15%    57,887    56,422    +3%
      Ok Tedi(1)          19,146    23,400   -18%    63,694    69,224    -8%
      Other                  619       414   +50%     1,462     1,368    +7%
    -------------------------------------------------------------------------
                         $69,617   $73,892    -6%  $226,925  $218,105    +4%
    -------------------------------------------------------------------------
    (1) Our 18 percent share of Ok Tedi's cost of sales.

    ...mainly because lower sales volumes and foreign exchange more than
    offset higher costs

    -------------------------------------------------------------------------
                                                  three months   nine months
                                                         ended         ended
    (millions)                                    September 30  September 30
    -------------------------------------------------------------------------
    Volume                                                 $(5)          $(3)
    Labour costs                                             2             5
    Consumables                                              7            12
    Costs that vary with income and cash flow               (3)           (4)
    Foreign exchange                                        (5)           (1)
    -------------------------------------------------------------------------
    Increase (decrease) in cost of sales,
     compared to 2006                                      $(4)           $9
    -------------------------------------------------------------------------

    Smelter processing charges and freight
    --------------------------------------

    -------------------------------------------------------------------------
                                three months ended          nine months ended
                                      September 30               September 30
    (thousands)             2007      2006  change     2007      2006  change
    -------------------------------------------------------------------------
    Smelter processing
     charges and freight
     by operation
      Cayeli             $19,474   $25,713   -24%   $74,944   $72,503    +3%
      Pyhasalmi           12,983    15,111   -14%    46,697    49,307    -5%
      Troilus              1,478     3,127   -53%     6,191     8,214   -25%
      Ok Tedi(1)           8,622    16,319   -47%    34,744    45,576   -24%
    -------------------------------------------------------------------------
                         $42,557   $60,270   -29%  $162,576  $175,600    -7%
    -------------------------------------------------------------------------
    Smelter processing
     charges and
     freight by metal
      Copper             $22,479   $35,018   -36%   $77,156   $97,839   -21%
      Zinc                17,673    22,783   -22%    76,459    70,304    +9%
      Other                2,405     2,469    -3%     8,961     7,457   +20%
    -------------------------------------------------------------------------
                         $42,557   $60,270   -29%  $162,576  $175,600    -7%
    -------------------------------------------------------------------------
    (1) Our 18 percent share of Ok Tedi's smelter processing charges and
        freight.

    Copper treatment charges were lower in the third quarter and year to date
compared to 2006 because of more favourable contract terms with smelters. Zinc
smelter processing charges were lower in the third quarter despite higher
sales volumes, because the lower zinc price reduced our price participation
charges. Zinc processing charges year to date are higher than last year
because of higher zinc sales.

    2007 outlook for costs

    We have revised our 2007 copper cash cost objective to US $0.08 per pound
from US $(0.01) per pound because we expect operating costs to be higher and
copper production to be slightly lower.


    3.  Depreciation is higher for the year

    -------------------------------------------------------------------------
                                three months ended          nine months ended
                                      September 30               September 30
    (thousands)             2007      2006  change     2007      2006  change
    -------------------------------------------------------------------------
    Depreciation by
     operation
      Cayeli              $1,654    $1,822    -9%    $6,222    $5,546   +12%
      Pyhasalmi            1,764     2,336   -24%     6,558     6,284    +4%
      Troilus              2,784     3,123   -11%     7,500     8,074    -7%
      Ok Tedi              2,537     1,744   +45%     5,913     4,611   +28%
    -------------------------------------------------------------------------
                          $8,739    $9,025    -3%   $26,193   $24,515    +7%
    -------------------------------------------------------------------------

    Depreciation at Ok Tedi was higher because of the depreciation of recent
capital additions for mining operations.

    2007 outlook for depreciation

    We expect depreciation to be approximately $34 million for 2007.


    CORPORATE COSTS

    This includes general and administration costs, taxes and interest. We
also record income from investments in this category, as well as income we
receive from other transactions.

    1.  Investment income was higher in the quarter because of rising
        interest income

    -------------------------------------------------------------------------
                                    three months ended     nine months ended
                                          September 30          September 30
    (thousands)                        2007       2006       2007       2006
    -------------------------------------------------------------------------
    Gain on sale of Izok             $    -     $    -    $     -    $23,905
    Gain on sale of Wolfden               -          -     11,730          -
    Interest and dividend income     10,451      4,483     27,015      8,720
    Foreign exchange loss            (4,695)    (2,390)   (14,240)    (2,610)
    Other                             1,028        164      3,291        527
    -------------------------------------------------------------------------
                                     $6,784     $2,257    $27,796    $30,542
    -------------------------------------------------------------------------
    

    In 2006, we sold our interest in the Izok development property to Wolfden
Resources Inc., and recorded a gain of $23.9 million. In exchange, we received
13.5 million common shares of Wolfden and 9.5 million common shares of Premier
Gold Mining Ltd. This year, we disposed of our shares in Wolfden to Zinifex
Canadian Enterprises Inc. for cash proceeds of $51.4 million or $3.81 per
share, and recorded a gain of $11.7 million.
    Interest income was higher this quarter and year to date compared to the
same periods last year because we had higher cash balances.
    We recorded a foreign exchange loss of $4.7 million this quarter because
of the revaluation of some of our foreign currency denominated accounts and
cash balances, and the recognition of deferred foreign exchange losses from
dividends from Ok Tedi.

    2007 outlook for investment and other income

    Investment and other income will be affected by cash balances, interest
rates and exchange rates. Rising cash balances at our foreign operations may
lead us to continue to repatriate funds. This could result in foreign exchange
losses or gains depending on the strength or weakness of the Canadian dollar
relative to the other currencies, compared to when we initially invested in
the operation, or the foreign exchange rate at which funds were accumulated.
We are not expecting significant repatriations for the remainder of the year.

    
    2.  Income tax expense was lower in the quarter

    -------------------------------------------------------------------------
                                three months ended          nine months ended
                                      September 30               September 30
    (thousands)             2007     2006   change     2007      2006  change
    -------------------------------------------------------------------------
    Cayeli               $13,055  $12,508     +4%   $40,489   $21,810   +86%
    Pyhasalmi              7,425    8,186     -9%    24,711    21,215   +16%
    Ok Tedi               17,015   22,208    -23%    54,923    60,313    -9%
    Las Cruces              (232)       -   +100%       254         -  +100%
    Corporate                659      (41) +1707%     1,978       450  +340%
    -------------------------------------------------------------------------
                         $37,922  $42,861    -12%  $122,355  $103,788   +18%
    -------------------------------------------------------------------------

    Tax expense has fluctuated in parallel with earnings. At Cayeli, the
statutory tax rate is higher this year because we have returned to accruing
for withholding taxes on net income in anticipation of dividend payments. The
following table shows Cayeli's tax expense in more detail:

    -------------------------------------------------------------------------
                                    three months ended     nine months ended
                                          September 30          September 30
    (millions)                         2007       2006       2007       2006
    -------------------------------------------------------------------------
    Current and future income
     tax expense                        $10        $12        $31        $32
    Withholding tax expense               3          -          9          -
    Reduction in tax rate - 2006          -          -          -        (10)
    -------------------------------------------------------------------------
                                        $13        $12        $40        $22
    -------------------------------------------------------------------------

    Despite higher earnings, Cayeli's current tax expense was lower this
quarter and year to date than the same periods last year because of foreign
exchange losses in their Turkish lira tax accounts. The 2006 tax expense
includes the impact of a rate reduction: In June 2006, the Turkish government
enacted tax legislation that reduced Cayeli's corporate tax rate to 20 percent
from 30 percent effective January 1, 2006.

    2007 outlook for income tax expense

    We are not expecting any further changes in statutory tax rates at our
operations in 2007.


    Results of our operations


    CAYELI

    -------------------------------------------------------------------------
                        three months ended        nine months ended   revised
                              September 30             September 30 objective
                     2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
    Tonnes of ore
     milled (000's)   262      240    +9%      770      686   +12%     1,050
    Tonnes of ore
     milled per day 2,850    2,600    +9%    2,800    2,500   +12%     2,900
    -------------------------------------------------------------------------
    Grades (percent)
      copper          3.7      3.8    -3%      3.7      3.9    -5%       3.8
      zinc            6.4      5.5   +16%      6.0      5.4   +11%       6.0
    -------------------------------------------------------------------------
    Mill recoveries
     (percent)
      copper           81       85    -5%       82       85    -4%        82
      zinc             73       74    -1%       71       72    -1%        71
    -------------------------------------------------------------------------
    Production
     (tonnes)
      copper        7,900    7,800    +1%   23,500   22,700    +4%    33,000
      zinc         12,300    9,700   +27%   32,500   26,600   +22%    44,400
    -------------------------------------------------------------------------

    Cayeli ore production continues strong with much improved metallurgical
    performance

    Ore production at Cayeli this quarter was nine percent higher than in the
same period last year, and higher than the first two quarters of this year. By
blending different ore types, Cayeli was also able to significantly improve
metallurgical performance during the quarter in comparison to prior quarters.

    2007 outlook for production

    We expect ore production for the rest of 2007 to be in line with our
objective for the year of 1.1 million tonnes.

    Cash costs remain lower and are expected to decrease further by year end

    Cash costs this quarter and year to date are lower than last year because
of higher zinc metal credits.

    -------------------------------------------------------------------------
                        three months ended        nine months ended   revised
                              September 30             September 30 objective
    (US $)           2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
    Cash cost per
     pound of copper
    Direct production
     costs          $1.01    $0.78   +29%    $0.97    $0.77   +26%     $0.91
    Royalty payments 0.16     0.13   +23%     0.15     0.14    +7%      0.20
                    ---------------------------------------------------------
    Total direct
     production
     costs           1.17     0.91   +29%     1.12     0.91   +23%      1.11
    Smelter
     processing
     charges and
     freight         1.29     1.43   -10%     1.22     1.30    -6%      1.21
    Metal
     credits(1)     (2.26)   (2.05)  +10%    (2.09)   (1.71)  +22%     (2.16)
    -------------------------------------------------------------------------
    Cash costs      $0.20    $0.29   -31%    $0.25    $0.50   -50%     $0.16
    Depreciation
     and other
     non-cash costs  0.13     0.11   +18%     0.13     0.11   +18%      0.14
    -------------------------------------------------------------------------
    Total costs     $0.33    $0.40   -18%    $0.38    $0.61   -38%     $0.30
    -------------------------------------------------------------------------
    (1) We used a zinc price of US $1.47 per pound to estimate the metal
        credit in the 2007 objective for cash costs per pound of copper. For
        every US $0.05 per pound change in the price of zinc, cash costs
        would change by US $0.04 per pound.


    Direct production costs this quarter were US $0.23 per pound higher than
    2006

    -------------------------------------------------------------------------
                                                  three months   nine months
                                                         ended         ended
    (US $ per pound)                              September 30  September 30
    -------------------------------------------------------------------------
    Impact of higher copper production                  $(0.01)       $(0.03)
    Higher labour costs                                   0.09          0.08
    Higher consumable and energy costs                    0.11          0.08
    Higher consumable volumes                             0.01          0.04
    Other                                                 0.03          0.03
    -------------------------------------------------------------------------
    Increase in direct production costs,
     compared to 2006                                    $0.23         $0.20
    -------------------------------------------------------------------------

    2007 outlook for costs

    We have adjusted our unit cost objective for Cayeli to US $0.16 per pound,
from our initial objective of US ($0.02) per pound, to account for higher
labour and material costs, and lower zinc production.

    Capital spending higher than 2006

    -------------------------------------------------------------------------
                        three months ended        nine months ended   revised
    (thousands                September 30             September 30 objective
     of US$)         2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
    Capital
     spending      $5,900   $2,900  +103%  $14,100   $9,400   +50%   $19,000
    -------------------------------------------------------------------------

    About half of the capital spending year to date (US $7 million;
US $2 million in the third quarter) has been on the shaft extension project.

    2007 outlook for capital spending

    We have allocated capital spending in the rest of 2007 to mine
development, loaders and for sustaining and other capital.

    Operating earnings improved from 2006

    -------------------------------------------------------------------------
                                three months ended          nine months ended
                                      September 30               September 30
                            2007      2006  change     2007      2006  change
    -------------------------------------------------------------------------
    Sales (tonnes)
      copper               8,800     7,900   +11%    24,200    21,600   +12%
      zinc                10,400     8,500   +22%    36,700    28,800   +27%
    -------------------------------------------------------------------------
    Operating earnings
     (millions)            $66.0     $60.3    +9%    $190.4    $149.6   +27%
    -------------------------------------------------------------------------
    Operating cash flows
     (millions)            $41.6     $64.0   -35%    $163.9    $149.2   +10%
    -------------------------------------------------------------------------

    ...mainly because of higher metal prices, and higher zinc sales volumes
    year to date

    -------------------------------------------------------------------------
                                                  three months   nine months
                                                         ended         ended
    (millions)                                    September 30  September 30
    -------------------------------------------------------------------------
    Higher (lower) metal prices, denominated
     in Canadian dollars                                  $(14)           $7
    Higher sales volumes                                    10            27
    Lower smelter processing charges                        11            14
    Higher operating costs                                  (1)           (6)
    Other                                                    -            (1)
    -------------------------------------------------------------------------
    Increase in operating earnings, compared to 2006         6            41
    Higher tax expense from higher rates                    (3)           (9)
    Changes in working capital                             (21)          (14)
    Other                                                   (4)           (3)
    -------------------------------------------------------------------------
    Increase (decrease) in operating cash flow,
     compared to 2006                                     $(22)          $15
    -------------------------------------------------------------------------

    The change in working capital this quarter and year to date is from higher
accounts receivable because of higher sales.


    PYHASALMI

    -------------------------------------------------------------------------
                        three months ended        nine months ended   revised
                              September 30             September 30 objective
                     2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
    Tonnes of ore
     milled (000's)   348      353    -1%    1,019    1,026    -1%     1,370
    Tonnes of ore
     milled per day 3,780    3,800    -1%    3,730    3,800    -1%     3,750
    -------------------------------------------------------------------------
    Grades (percent)
      copper          1.0      1.2   -17%      1.1      1.0   +10%       1.1
      zinc            2.6      2.2   +18%      2.9      2.8    +4%       3.1
      sulphur        40.7     40.4    +1%     40.3     39.6    +2%        41
    -------------------------------------------------------------------------
    Mill recoveries
     (percent)
      copper           95       95      -       95       95      -        95
      zinc             89       88    +1%       91       93    -2%        92
    -------------------------------------------------------------------------
    Production
     (tonnes)
      copper        3,400    3,900   -13%   10,300    9,800    +5%    14,000
      zinc          8,100    6,800   +19%   26,600   26,500      -    38,400
      pyrite       45,100   56,900   -21%  304,000  334,800    -9%   537,000
    -------------------------------------------------------------------------

    Pyhasalmi increases its annual copper production objective

    Mill throughput is consistent with 2006.
    As expected, higher zinc grades in the third quarter led to increased
production compared to the same period last year. The mine decreased pyrite
production in the third quarter of 2007 and 2006 to reduce stockpile levels.

    2007 outlook for production

    We expect Pyhasalmi to meet its production objectives for 2007. Because
copper grades should be higher for the year as a whole, we expect 2007 copper
production to be nine percent higher than originally anticipated. We also
expect an incremental increase in zinc production for the year because we plan
to mine zinc rich stopes in the fourth quarter.

    Cash costs were lower

    Zinc production increased considerably in the third quarter, which
increased metal credits and reduced cash costs. Improved terms for copper
treatment charges also contributed to lower cash costs overall.

    -------------------------------------------------------------------------
                        three months ended        nine months ended   revised
                              September 30             September 30 objective
    (US $)           2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
    Cash cost per
     pound of copper
    Direct production
     costs          $1.38    $1.11   +24%    $1.47    $1.43    +3%     $1.34
    Smelter
     processing
     charges and
     freight         1.46     1.46      -     1.59     1.85   -14%      1.69
    Metal
     credits(1)     (3.71)   (3.13)  +19%    (4.48)   (4.48)     -     (4.64)
    -------------------------------------------------------------------------
    Cash costs     $(0.87)  $(0.56)  +55%   $(1.42)  $(1.20)  +18%    $(1.61)
    Depreciation
     and other
     non-cash costs  0.25     0.26    -4%     0.28     0.28      -      0.28
    -------------------------------------------------------------------------
    Total costs    $(0.62)  $(0.30) +107%   $(1.14)  $(0.92)  +24%    $(1.33)
    -------------------------------------------------------------------------
    (1) We used a zinc price of US $1.47 per pound to estimate the metal
        credit in our 2007 objective for cash costs per pound of copper, and
        a euro to US dollar exchange rate of US $1.30. For every US $0.05 per
        pound change in the price of zinc, cash costs would change by
        US $0.11 per pound.


    Lower copper production this quarter increased unit direct production
    costs

    Operating costs in euros for the quarter were consistent with 2006, but US
dollar unit production costs were higher because copper production was lower
compared to last year, as was the value of the US dollar.

    -------------------------------------------------------------------------
                                                  three months   nine months
                                                         ended         ended
    (US $ per pound)                              September 30  September 30
    -------------------------------------------------------------------------
    Weakened US dollar compared to the euro              $0.11         $0.11
    Change in costs due to change in copper
     production                                           0.17         (0.07)
    Other                                                (0.01)            -
    -------------------------------------------------------------------------
    Increase in direct production costs,
     compared to 2006                                    $0.27         $0.04
    -------------------------------------------------------------------------


    2007 outlook for costs

    Our annual cash cost objective for Pyhasalmi is consistent with our
initial objective of US ($1.61) per pound. We expect the impact of the weaker
US dollar relative to the euro to be offset by higher copper production.

    Minimal capital spending in 2007, as expected

    -------------------------------------------------------------------------
                        three months ended        nine months ended   revised
                              September 30             September 30 objective
    (thousands)      2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
                    (euro)   (euro)          (euro)   (euro)           (euro)
    Capital spending  900    1,200   -25%    1,400    2,400   -42%     2,500
    -------------------------------------------------------------------------


    2007 outlook for capital spending

    We expect to spend (euro) 2.5 million to replace mine mobile equipment and
for other sustaining capital.

    Operating cash flows higher than last year

    -------------------------------------------------------------------------
                                three months ended          nine months ended
                                      September 30               September 30
                            2007      2006  change     2007      2006  change
    -------------------------------------------------------------------------
    Sales (tonnes)
      copper               3,900     3,800    +3%    10,700     9,800    +9%
      zinc                 7,500     6,300   +19%    26,100    25,000    +4%
      pyrite             118,100   113,600    +4%   376,400   363,500    +4%
    -------------------------------------------------------------------------
    Operating earnings
     (millions)            $34.1     $35.9    -5%    $110.4     $94.1   +17%
    -------------------------------------------------------------------------
    Operating cash
     flows (millions)      $52.7     $29.5   +79%    $103.7     $70.8   +46%
    -------------------------------------------------------------------------

    ...mainly because of working capital changes

    -------------------------------------------------------------------------
                                                  three months   nine months
                                                         ended         ended
    (millions)                                    September 30  September 30
    -------------------------------------------------------------------------
    Higher (lower) metal prices, denominated
     in Canadian dollars                                   $(9)           $5
    Higher sales volumes                                     3             7
    Lower smelter processing charges and freight             4             6
    Other                                                    -            (2)
    -------------------------------------------------------------------------
    Increase (decrease) in operating earnings,
     compared to 2006                                      $(2)          $16
    Change in tax expense because of change
     in earnings                                             1            (3)
    Changes in working capital                              25            21
    Other                                                   (1)           (1)
                                                  ---------------------------
    Increase in operating cash flow,
     compared to 2006                                      $23           $33
    -------------------------------------------------------------------------

    The change in working capital is mainly because accounts receivable
balances are lower this year because of lower zinc prices and volumes.


    TROILUS

    -------------------------------------------------------------------------
                        three months ended        nine months ended   revised
                              September 30             September 30 objective
                     2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
    Tonnes of ore
     milled (000's) 1,475    1,645   -10%    4,600    4,880    -6%     6,100
    Tonnes of ore
     milled per
     day           16,000   17,900   -10%   16,800   17,900    -6%    16,700
    -------------------------------------------------------------------------
    Strip ratio       1.1      1.3   -15%      1.0      1.6   -38%       1.1
    -------------------------------------------------------------------------
    Grades
      gold (grams/
       tonne)        0.93     0.79   +18%     0.87     0.84    +4%      0.87
      copper
       (percent)     0.06     0.05   +20%     0.05     0.05      -      0.05
    -------------------------------------------------------------------------
    Mill recoveries
     (percent)
      gold             83       83      -       82       82      -        81
      copper           89       88    +1%       87       87      -        87
    -------------------------------------------------------------------------
    Production
      gold
       (ounces)    36,400   34,600    +5%  104,700  108,600    -4%   139,000
      copper
       (tonnes)       800      800      -    2,100    2,200    -5%     2,900
    -------------------------------------------------------------------------

    Mill throughput affected by harder ores during the third quarter

    While mill throughput was below expectations this quarter, higher gold
grades increased gold production compared to the same period last year. Hard
ore from the 87 pit lowered throughput, and we expect this to continue until
we can access the lower levels of the pit in September 2008.
    We continue to look at alternatives in our grinding circuit to optimize
performance. We made some changes in the SAG mill at the end of the quarter
and this appears to have been successful in improving performance and
utilizing the power available.

    2007 outlook for production

    We expect gold production for 2007 to be 139,000 ounces, compared to our
original objective of 157,900 ounces. This is the result of the ball mill
capacity restrictions we experienced this year, and a three-day unplanned mill
shut down in October to replace the ball mill pinion. We have adjusted our ore
throughput target to 6.1 million tonnes for the year.

    Cash cost per ounce in the quarter consistent to last year's unit cost

    Troilus pays for its production costs in Canadian dollars, but reports its
cash costs in US dollars. The weaker US dollar has increased US dollar cash
costs this year, but higher gold production offset most of that increase this
quarter.

    -------------------------------------------------------------------------
                        three months ended        nine months ended   revised
                              September 30             September 30 objective
    (US $)           2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
    Cash cost
     per ounce
     of gold
    Direct
     production
     costs           $489     $478    +2%     $488     $465    +5%      $486
    Smelter
     processing
     charges and
     freight           43       73   -41%       53       69   -23%        48
    Metal
     credits(1)      (165)    (185)  -11%     (157)    (184)  -15%      (164)
    -------------------------------------------------------------------------
    Cash cost        $367     $366      -     $384     $350   +10%      $370
    Depreciation
     and other
     non-cash
     costs             81       75    +8%       64       70    -9%        69
    -------------------------------------------------------------------------
    Total cost       $448     $441    +2%     $448     $420    +7%      $439
    -------------------------------------------------------------------------
    (1) We used a copper price of US $3.30 per pound to estimate the metal
        credit in the 2007 objective for cash costs per ounce of gold and a
        US dollar to Canadian dollar exchange rate of $1.10.


    Direct production costs this quarter were US $11 per ounce higher than
    2006

    -------------------------------------------------------------------------
                                                  three months   nine months
                                                         ended         ended
    (US $ per ounce)                              September 30  September 30
    -------------------------------------------------------------------------
    Stronger Canadian dollar                               $34           $12
    Change in costs due to change in production            (26)           18
    Lower consumable costs                                   -            (8)
    Other                                                    3             1
    -------------------------------------------------------------------------
    Increase in direct production costs, compared
     to 2006                                               $11           $23
    -------------------------------------------------------------------------

    2007 outlook for unit costs

    We have adjusted our unit cost objective to US $370 per ounce, from our
original objective of US $348 per ounce, because we expect gold production to
be lower for the year as a whole.

    Modest capital spending

    -------------------------------------------------------------------------
                        three months ended        nine months ended   revised
                              September 30             September 30 objective
    (thousands)      2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
    Capital
     spending      $1,100   $1,300    -15%  $1,500   $1,900    -21%   $2,000
    -------------------------------------------------------------------------

    2007 outlook for capital spending

    The mine will spend approximately $2 million on copper cleaner cells in
the mill, on a tailings dam lift and embankment enforcements, and on other
sustaining capital.

    Operating earnings higher because of higher gold prices

    -------------------------------------------------------------------------
                                three months ended          nine months ended
                                      September 30               September 30
                            2007      2006  change     2007      2006  change
    -------------------------------------------------------------------------
    Sales
      gold (ounces)       33,900    38,400   -12%   106,100   105,400    +1%
      copper (tonnes)        700       900   -22%     2,100     2,200    -5%
    -------------------------------------------------------------------------
    Operating earnings
     (millions)             $3.0      $2.1   +43%      $9.5      $4.8   +98%
    -------------------------------------------------------------------------
    Operating cash flows
     (millions)             $4.8     $13.3   -64%      $9.5     $12.0   -21%
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
                                                  three months   nine months
                                                         ended         ended
    (millions)                                    September 30  September 30
    -------------------------------------------------------------------------
    Higher metal prices denominated in
     Canadian dollars                                       $-            $4
    Lower smelter processing charges                         1             1
    -------------------------------------------------------------------------
    Increase in operating earnings, compared
     to 2006                                                 1             5
    Changes in working capital                              (8)           (4)
    Other                                                   (2)           (3)
    -------------------------------------------------------------------------
    Decrease in operating cash flow, compared
     to 2006                                               $(9)          $(2)
    -------------------------------------------------------------------------

    The change in working capital results from an increase in accounts
receivable. The increase is because of new payment terms for the smelter,
which began in 2007.


    OK TEDI

    -------------------------------------------------------------------------
                        three months ended        nine months ended   revised
                              September 30             September 30 objective
    (100 percent)    2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
    Tonnes of ore
     milled (000's) 6,500    6,700    -3%   19,500   20,800    -6%    26,000
    Tonnes of ore
     milled per
     day           70,700   72,800    -3%   71,500   76,200    -6%    71,000
    -------------------------------------------------------------------------
    Strip ratio       1.1      1.8   -39%      1.2      1.7   -29%       1.1
    -------------------------------------------------------------------------
    Grades
      copper
       (percent)      0.7      0.8   -13%      0.7      0.8   -13%       0.7
      gold (grams/
       tonne)         0.8      0.8      -      0.8      0.9   -11%       0.8
    -------------------------------------------------------------------------
    Mill recoveries
     (percent)
      copper           86       86      -       86       86      -        87
      gold             64       73   -12%       71       71      -        72
    -------------------------------------------------------------------------
    Production
      copper
       (tonnes)     38,200   45,500   -16%  120,800  145,300   -17%   174,000
      gold
       (ounces)    105,400  129,500   -19%  341,400  412,100   -17%   490,000
    -------------------------------------------------------------------------

    High fluorine ore continued to impact production as expected

    Ok Tedi continued to mine skarn ores in the pit that contained high levels
of fluorine. To reduce the fluorine to levels acceptable by smelters, Ok Tedi
also mined lower grade ore from other areas of the pit. However, this had the
effect of reducing copper and gold head grades, lowering copper and gold
production to well below last year's levels.
    Ok Tedi has developed a fluorine management plan to improve concentrate
quality and increase the sale of concentrates containing elevated fluorine
levels. The mine is currently opening additional working faces in the pit,
including areas that are expected to contain lower levels of fluorine. We
expect these areas will be in production in early 2008. At that time, Ok Tedi
should be in a position to blend the ore to bring down fluorine levels in the
concentrate.

    2007 outlook for production

    We expect Ok Tedi's 2007 production to be affected by fluorine content in
the ore and have reflected this in the mine's production objectives:

    -   copper production is expected to be 174,000 tonnes compared to our
        original objective of 188,000 tonnes

    -   gold production is expected to be 490,000 ounces compared to our
        original objective of 507,000 ounces.

    Costs higher mainly due to lower production

    -------------------------------------------------------------------------
                        three months ended        nine months ended   revised
                              September 30             September 30 objective
    (US $)           2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
    Cash cost
     per pound
     of copper
    Direct
     production
     costs          $1.23    $0.92   +34%    $1.08    $0.84   +29%     $1.02
    Variable
     compensation       -     0.12  -100%     0.06     0.11   -45%      0.07
    Smelter
     processing
     charges and
     freight         0.57     0.69   -17%     0.58     0.66   -12%      0.53
    Metal
     credits(1)     (0.86)   (0.80)   +8%    (0.86)   (0.78)  +10%     (0.85)
    -------------------------------------------------------------------------
    Cash cost       $0.94    $0.93    +1%    $0.86    $0.83    +4%     $0.77
    Depreciation
     and other
     non-cash
     costs           0.14     0.08   +75%     0.13     0.07   +86%      0.11
    -------------------------------------------------------------------------
    Total costs     $1.08    $1.01    +7%    $0.99    $0.90   +10%     $0.88
    -------------------------------------------------------------------------
    (1) We used a gold price of US $650 per ounce to estimate the metal
        credit in the 2007 objective for cash costs per pound of copper.

    Direct production costs in the quarter were US $0.31 per pound higher
    than 2006

    -------------------------------------------------------------------------
                                                  three months   nine months
                                                         ended         ended
    (US $ per pound)                              September 30  September 30
    -------------------------------------------------------------------------
    Increase in costs from lower production              $0.20         $0.18
    Higher labour costs                                   0.02          0.01
    Higher consumables cost                               0.01          0.02
    Higher payments to the community                      0.05          0.03
    Other                                                 0.03             -
    -------------------------------------------------------------------------
    Increase in direct production costs,
     compared to 2006                                    $0.31         $0.24
    -------------------------------------------------------------------------

    2007 outlook for costs

    We revised our annual cash cost objective from our original objective of
US $0.61 per pound, to US $0.77 per pound of copper, mainly because we now
expect copper production to be lower.

    Capital spending was higher because of the mine waste management program

    Ok Tedi's capital spending this quarter was mainly for the mine waste
management program.

    -------------------------------------------------------------------------
    (100 percent)       three months ended        nine months ended
    (thousands                September 30             September 30 objective
     of US$)         2007     2006  change    2007     2006  change      2007
    -------------------------------------------------------------------------
    Capital
     spending     $45,000  $15,600  +188% $107,700  $32,400  +232%  $209,000
    -------------------------------------------------------------------------

    2007 outlook for capital spending

    Most of the capital spending at Ok Tedi for the rest of the year will be
related to the mine waste management program. The remaining amount will be
spent on capital required for pit drainage, mine equipment and other
sustaining capital.

    Operating earnings lower this quarter from lower sales volumes

    Sales volumes were lower mainly because production was lower. Concentrate
inventory was reduced by 13,000 tonnes this quarter, to 70,000 tonnes as at
September 30, 2007.

    -------------------------------------------------------------------------
                                three months ended          nine months ended
                                      September 30               September 30
    (18 percent)            2007      2006  change     2007      2006  change
    -------------------------------------------------------------------------
    Sales
      copper (tonnes)      7,600     9,400   -19%    24,900    27,200    -8%
      gold (ounces)       21,600    24,600   -12%    70,300    77,000    -9%
    Operating earnings
     (millions)            $48.9     $60.0   -19%    $154.3    $163.7    -6%
    Operating cash flows
     (millions)             $5.8     $46.9   -88%     $75.8    $138.7   -45%
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
                                                  three months   nine months
                                                         ended         ended
    (millions)                                    September 30  September 30
    -------------------------------------------------------------------------
    Lower metal prices, denominated in
     Canadian dollars                                      $(3)          $(1)
    Lower sales volumes                                    (13)          (14)
    Lower smelter processing charges                         4             8
    Lower variable compensation                              3             4
    Higher operating costs                                  (2)           (6)
    -------------------------------------------------------------------------
    Decrease in operating earnings, compared
     to 2006                                               (11)           (9)
    Decreased tax expense because of lower
     earnings                                                8             6
    Changes in net working capital                         (38)          (59)
    Other                                                    -            (1)
    -------------------------------------------------------------------------
    Decrease in operating cash flow, compared
     to 2006                                              $(41)         $(63)
    -------------------------------------------------------------------------
    

    The change in working capital is mainly because of higher accounts
receivable from timing of receipts and the payment of taxes.

    Status of our development projects

    Las Cruces

    Quarterly development update - delay in plant construction

    Construction of the hydrometallurgical process plant has been delayed and
is now scheduled to be completed in the fourth quarter of 2008. It is
approximately 50 percent complete and is behind schedule mainly because of
delays in finalizing engineering drawings and the disappointing performance of
a major contractor. Detailed engineering is now fully completed and all
construction drawings have been issued. Las Cruces has also replaced one of
its prime contractors and re-tendered several parts of the project. It
anticipates meeting the milestones for completing the remaining 50 percent of
construction. Although the delay is disappointing, it also provides Las Cruces
with the opportunity to prepare for a smooth commissioning and allows it to
use the ore stockpile to prepare an optimal blend for start-up.
    We anticipate that the estimated project capital cost of
(euro)463 million will be increased by (euro)4 million per month from April
2008 until production begins to cover owners and construction management
costs.
    Overburden removal in the pit is proceeding as planned and we expect that
the first ore will be mined by May 2008. Aomsa, Las Cruces' mining contractor,
has been performing very well over the past year and a half, ensuring that ore
production should be available. During the first four months of mining, Las
Cruces anticipates it will selectively mine and crush between 100,000 and
150,000 tonnes of high grade chalcocite ore at an estimated average grade of
14 percent copper, which is equivalent to between 13,000 and 20,000 tonnes of
contained copper and is part of Las Cruces' mineral reserves. To manage the
impact of the delay in plant construction, Las Cruces plans to sell some or
all of this material as direct feed to copper smelters.
    Under its mining plan Las Cruces will mine approximately 300,000 tonnes
of gossan in 2008. The gossan is the weathered zone overlying the main
chalcocite orebody and contains lead, gold and silver. It is currently not
part of Las Cruces' mineral reserve. The original plan was to stockpile the
gossan during the initial mining phase and consider processing it at a later
time. Metallurgical test work has indicated that the gossan can be processed
into a lead concentrate with about 50 percent of the gold and 65 percent of
the silver reporting to the concentrate. Lead recoveries would be around
50 percent. Because of the current high price of lead, Las Cruces is
evaluating options to enter into a toll milling arrangement to produce a
saleable concentrate from the gossan.

    CERATTEPE

    Quarterly development update - making encouraging progress

    Construction work has begun

    All the necessary permits are in place and to begin construction on the
site, three critical components of the project are now underway:

    Underground rehabilitation and development
    Work on the decline has begun and is proceeding as expected. We expect to
reach the orebody in the first quarter of 2009.

    Aerial tramway
    We have selected the contractor to design, supply and install the
ropeway. Engineering has begun and the tramway should be installed by the end
of 2008.

    Cayeli mill expansion
    This is the single largest cost related to the project. The mill needs to
increase its capacity from 1.2 million tonnes per year to 1.5 million tonnes
per year. This requires a new grinding and flotation section as well as a
small SAG mill and a ball mill.
    We completed geotechnical investigations at the mine site and we continue
to maintain an active campaign of community dialogue and engagement to
reinforce support for the project.
    Subject to the outcome of current legal proceedings (see Managing Risk -
Cerattepe legal proceedings), we will continue to move the project forward and
hope to start production by the end of the first quarter of 2009.

    PETAQUILLA

    Quarterly development update

    Front-end engineering and design (FEED) program is advancing

    The FEED program continued this quarter, focusing on process engineering
and infrastructure. A number of technical changes to the original 1998
feasibility study have been suggested related to alternatives for
transportation and power supply. We will continue to do work in this area, get
up to date capital costs, identify and draft specifications for long lead time
equipment and build an effective project execution plan.

    Work on the social environmental impact assessment is progressing

    Work in this area accelerated during the quarter. This work includes
interacting with local communities to ensure that their needs are addressed in
the social and environmental impact assessment required by regulatory
authorities.

    2007 drill program has begun

    The program includes more than 30,000 metres of condemnation, infill,
metallurgical, geotechnical and hydrogeological drilling. The emphasis is on
condemnation and geotechnical drilling because the results of these can
directly affect the project design. Some drilling has begun, but we need
approval for two additional permits from the Panamanian mining and
environmental authorities to begin full-scale drilling. We expect these
approvals in November 2007.

    
    Managing our liquidity

    -------------------------------------------------------------------------
                                    three months ended     nine months ended
                                          September 30          September 30
    (millions)                         2007       2006       2007       2006
    -------------------------------------------------------------------------
    CASH FROM OPERATING ACTIVITIES
    Cayeli                              $42        $64       $164       $149
    Pyhasalmi                            53         30        104         71
    Troilus                               5         13         10         12
    Ok Tedi                               6         47         76        139
    Corporate development and
     exploration not included in
     operation's cash flow               (1)        (1)        (3)        (2)
    General and administration           (3)        (3)        (8)        (8)
    Other                                 6          1          8         (4)
    -------------------------------------------------------------------------
                                        108        151        351        357
    -------------------------------------------------------------------------
    CASH FROM INVESTING AND FINANCING
    Capital spending                   (118)       (50)      (252)       (87)
    Long-term borrowings, less
     repayments                          27         10         65         37
    Funding from non-controlling
     shareholder                         13          -         40          9
    Acquisition (disposition) of
     investments                         (1)         2         50          4
    Foreign exchange on cash held in
     foreign currency                   (23)         -        (57)        (2)
    Other                                 6         (7)       (22)       (14)
    -------------------------------------------------------------------------
                                        (96)       (45)      (176)       (53)
    -------------------------------------------------------------------------
    Increase in cash                     12        106        175        304
    Cash and short-term investments
      Beginning of period               803        450        640        252
    -------------------------------------------------------------------------
      End of period                    $815       $556       $815       $556
    -------------------------------------------------------------------------



    CASH FROM OPERATING ACTIVITIES

    -------------------------------------------------------------------------
                                                  three months   nine months
                                                         ended         ended
    (millions)                                    September 30  September 30
    -------------------------------------------------------------------------
    Increased (decreased) earnings from
     operations (see page 5)                               $(7)          $52
    Non-cash changes in operating earnings:
      Decreased (increased) tax expense                      5            (1)
      Changes in working capital                           (43)          (58)
      Other                                                  2             1
    -------------------------------------------------------------------------
    Decrease in operating cash flow, compared
     to 2006                                              $(43)          $(6)
    -------------------------------------------------------------------------

    Operating cash flows are lower compared to 2006 because of an increase in
working capital, mostly at Ok Tedi.

    2007 outlook for operating activities

    We expect high metal prices and increased production to continue to
increase earnings and operating cash flows. The level of operating cash flows
will depend on earnings and the accumulation or reduction of working capital.

    CASH FROM INVESTING AND FINANCING

    Capital spending
    -------------------------------------------------------------------------
                            three months ended   nine months ended   revised
                                  September 30        September 30 objective
    (millions)                  2007      2006      2007      2006      2007
    -------------------------------------------------------------------------
    Cayeli                        $6        $4       $16       $11       $21
    Pyhasalmi                      1         1         2         3         3
    Troilus                        1         1         1         2         2
    Ok Tedi                        9         4        21         7        41
    Las Cruces                   100        39       207        61       435
    Cerattepe                      1         -         4         1         8
    Accruals and other             -         1         1         2         -
    -------------------------------------------------------------------------
                                $118       $50      $252       $87      $510
    -------------------------------------------------------------------------
    

    Refer to Results of our operations and Status of our development projects
for a discussion of actual results and our 2007 objective.
    Las Cruces borrowed an additional (euro)19 million this quarter, bringing
the total amount borrowed under its credit facility to (euro)94 million.

    2007 outlook for investing and financing

    We expect capital spending to be $510 million in 2007. Of that amount, we
expect to spend $435 million for the continuing development of the Las Cruces
mine, and $28 million for the mine waste management program at Ok Tedi. The
remaining spending will be mostly on sustaining capital.

    Financial condition

    CASH

    Our cash and equivalents balance of $815 million is mostly held in crown
corporation investments and bank term deposits. At September 30, 2007 we held
$26 million of our investments (3 percent of our portfolio) in asset-backed
commercial paper funds sponsored by a Canadian chartered bank, with maturity
dates of less than 90 days. These funds meet the global liquidity standards of
a recognized international rating agency and are backed by global liquidity
line agreements with the bank.

    Our restricted cash balance of $46 million at September 30, 2007
    includes:

    
    -   $12 million in trust for future rehabilitation at Ok Tedi
    -   $14 million of cash collateralized letters of credit for Inmet
    -   $20 million related to issuing letters of credit to suppliers at
        Las Cruces.

    COMMON SHARES

    -------------------------------------------------------------------------
    Common shares outstanding as of September 30, 2007
     and October 30, 2007                                         48,281,759
    -------------------------------------------------------------------------
    Deferred share units outstanding as of September 30, 2007
     (redeemable on a one-for-one basis for common shares)            74,274
    -------------------------------------------------------------------------

    OFF BALANCE SHEET TRANSACTIONS

    As at September 30, 2007, we had no off balance sheet transactions.

    The following table shows gold hedging transactions at Troilus, gold and
copper hedging transactions at Ok Tedi, the currency and interest rate hedges
related to Las Cruces, and their respective marked-to-market valuations
recorded on our consolidated balance sheet as at September 30, 2007.

    -------------------------------------------------------------------------
                                                                C$ marked-to-
    Type of                                                market gain (loss)
    contract    Expiry     Quantity          Price      at September 30 2007
    -------------------------------------------------------------------------
    Copper
     forward
     sales
      Ok Tedi    2007  1.0 million lbs  US $3.03 per lb
                 2008  3.2 million lbs  US $2.78 per lb
                 2009  3.2 million lbs  US $2.41 per lb
                -------------------------------------------------------------
                       7.4 million lbs  US $2.66 per lb     $(5.2 million)(1)
    Gold forward
     sales
      Troilus    2007    14,600 ounces  US $352 per oz.
                 2008    58,200 ounces  US $352 per oz.
                -------------------------------------------------------------
                         72,800 ounces  US $352 per oz.    $(27.7 million)(2)

      Ok Tedi    2007     6,700 ounces  US $372 per oz.
                 2008     6,800 ounces  US $372 per oz.
                -------------------------------------------------------------
                         13,500 ounces  US $372 per oz.     $(4.9 million)(2)

      Ok Tedi    2010     3,600 ounces  US $748 per oz.
                 2011     3,600 ounces  US $775 per oz.
                 2012     3,600 ounces  US $803 per oz.
                 2013     1,800 ounces  US $825 per oz.
                -------------------------------------------------------------
                         12,600 ounces  US $783 per oz.     $(1.5 million)(2)

    Currency
     forward
     sales
      Las Cruces 2008  US $215 million  (euro)171.80 million   $28.5 million
                -------------------------------------------------------------

    Interest
     rate swaps
      Las Cruces 2008  US $179 million     5.2 percent        $(3.2  million)
                   to  (reducing in con-
                 2014   junction with debt
                        repayment schedule)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) At a copper price of US $3.64 per pound.
    (2) At a gold price of US $743 per ounce.
    

    Accounting changes

    We adopted several new CICA - Handbook sections.

    Section 3855 - Financial instruments - recognition and measurement

    This section establishes standards for recognizing and measuring
financial assets, financial liabilities and non-financial derivatives. It
requires that financial assets and liabilities including derivatives be
recognized on the balance sheet when we become a party to the contractual
provisions of the financial instrument or a non-financial derivative contract.
All financial instruments should be measured at fair value on initial
recognition except for certain related party transactions. Measurement in
subsequent periods depends on whether the financial instruments have been
classified as held-for-trading, available-for-sale, held-to-maturity, loans
and receivables, or other liabilities.
    Effective January 1, 2007, we classify cash and short-term investments,
accounts receivable, investments, restricted cash, accounts payable and
accrued liabilities as held-for-trading and record them on the balance sheet
at fair value. We record long-term debt at amortized cost.

    3865 - Hedges

    This section specifies when and how we can use hedge accounting for
hedging strategies: fair value hedges, cash flow hedges and hedges of a
foreign currency exposure of a net investment in a self-sustaining foreign
operation.
    All of our hedges at January 1, 2007 qualified for cash flow hedge
accounting. The contracts are reflected at fair value on the balance sheet.

    1530 - Comprehensive income

    This section calls for a statement of comprehensive income and its
components. Other comprehensive income includes unrealized gains and losses on
financial assets classified as available-for-sale, unrealized foreign currency
translation amounts arising from self-sustaining foreign operations, and
changes in the fair value of the effective portion of cash flow hedging
instruments.
    Effective January 1, 2007, we include unrealized fair value of our cash
flow hedges, investments and foreign currency translation adjustment in
accumulated other comprehensive income, net of tax. The change in fair value
this quarter of the effective portion of our cash flow hedges, investments and
foreign currency translation adjustments is included in other comprehensive
income for the period, net of tax.
    Turn to note 2 on page 42 in the Interim consolidated financial
statements for more details about the transitional adjustments.

    The CICA has also recently issued new accounting pronouncements:

    In December 2006, the CICA issued Handbook Section 3862, Financial
Instruments - Disclosure and Section 3863, Financial Instruments -
Presentation. Section 3862 replaces the disclosure portion of Section 3861. It
places increased emphasis on disclosing the nature and extent of risks arising
from both recognized and unrecognized financial instruments, and how these
risks are managed. Section 3863 carries forward the presentation requirements
from Section 3861.
    Additionally in December 2006, the CICA issued Handbook Section 1535,
Capital Disclosures. This Section establishes standards for disclosing
qualitative and quantitative information about an entity's capital and how it
is managed in order to enable users of its financial statements to evaluate
the entity's objectives, policies and processes for managing capital.
    In June 2007, the CICA issued Handbook Section 3031, Inventories. This
Section requires inventory to be recorded at the lower of cost or net
realizable value, which is our current accounting policy. The section also
clarifies the allocation of fixed production overhead, requires consistent use
of either first-in, first-out or weighted average to measure inventories, and
requires that any previous write-downs be reversed when the value of
inventories increases. The amount of the reversal is limited to the amount of
the original write-down.
    The above standards will become effective for us beginning on January 1,
2008. We are reviewing these standards, and have not yet determined the
impact, if any, on our consolidated financial statements.

    Managing risk

    The following is an update to the discussion, only where required, of the
key risks associated with our business and the strategies we use to manage
them. You can find the full discussion in the annual Management's discussion
and analysis in Inmet's 2006 annual report.

    Development at Las Cruces

    Las Cruces is a development project, and while we are confident that the
project will add value as planned, there is still significant uncertainty,
particularly in Las Cruces' contractors ability to meet critical construction
milestones. While there are rigorous controls on the contractors' performance,
progress depends highly on the abilities of Las Cruces' owner's team and
construction manager to hire the necessary resources and effectively manage
them.
    A local non-governmental group has initiated several legal proceedings
claiming that various governmental approvals for the project were not granted
according to regulatory requirements. We believe these claims are without
merit and are vigourously defending against them. Two of these proceedings
were dismissed in 2006. The other two proceedings are outstanding.

    Development at Cerattepe

    While recent court decisions have confirmed the validity of the project's
operating licences, the local non-governmental group plaintiff has re-filed
its applications to cancel the operating licenses and filed new applications
with a view to stopping the project. Since the recent court decisions, we have
resumed permitting and on-site work, but an adverse ruling in the future could
have an impact on or stop our progress.

    Cerattepe legal proceedings

    Prior to April of this year, Cerattepe was affected by a local
administrative court decision that governmental authorities had incorrectly
exempted the project operating licences from environmental assessment
regulations. In April, the Danistay (Turkish Administrative Supreme Court)
directed the lower court to review its decision and re-instated the validity
of the licences on procedural grounds. In June, the local court confirmed its
agreement with the Danistay's decision. The plaintiff in the prior proceedings
has since re-filed its applications to have the licences cancelled, and has
also made applications to stop work on the property and to cancel a lease of
the land on which the bottom ropeway terminus will be located. While the
recent court decisions do not finally resolve the status of the operating
licences, they remain valid pending new decisions from the local
administrative court. At this time, neither we nor the relevant government
authorities, who are defendants in the proceedings, have received the
particulars of the applications filed by the plaintiff after the Danistay
ruling. We intend to join in the proceedings and respond to these applications
as we believe they are without merit.

    Sensitivity analysis

    The table below shows you the effect of key variables on our net income,
based on our revised objectives for 2007.

    
    -------------------------------------------------------------------------
                                                                Would change
                                          Would change              our 2007
                                          our 2007 net        net income per
                       A change of:          income by:             share by:
    -------------------------------------------------------------------------
    Metal prices
    Copper (per pound)    US $0.10         $13 million                 $0.28
    Zinc (per pound)      US $0.05          $5 million                 $0.11
    Gold (per ounce)(1)     US $10          $2 million                 $0.03
    -------------------------------------------------------------------------
    Exchange rates
    Canadian dollar
     per US dollar          C$0.05         $21 million                 $0.43
    Canadian dollar
     per euro               C$0.05          $5 million                 $0.09
    -------------------------------------------------------------------------
    Treatment and
     refining charges
    Copper treatment
     charge per tonne       US $10
     and copper
     refining charge
     per pound            US $0.10          $4 million                 $0.08
    Zinc treatment
     charge per tonne       US $10          $1 million                 $0.03
    -------------------------------------------------------------------------
    Freight and energy
     costs
    Concentrate freight
     per tonne                 10%          $3 million                 $0.06
    Fuel price per
     litre                   $0.10          $3 million                 $0.07
    Electricity per
     kilowatt hour           $0.01          $2 million                 $0.05
    -------------------------------------------------------------------------
    (1) Calculations include hedging in place at December 31, 2006.
    

    About Inmet

    Inmet is a Canadian-based global mining company that produces copper,
zinc and gold. We have interests in four mining operations in locations around
the world: Cayeli, Pyhasalmi, Troilus and Ok Tedi. We also have interests in
two development properties, Las Cruces and Cerattepe, and one pre-development
property, Petaquilla.

    This press release is also available at www.inmetmining.com

    
    Third quarter conference call

    Will be held on
    -   Wednesday, October 31, 2007
    -   11:30 a.m. (ET)
    webcast available at
www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2029280 or
www.inmetmining.com.

    You can also dial in by calling
    -   Local or international: +1.416.644.3421
    -   Toll-free within North America: +1.800.732.6179
    

    Forward looking information

    Securities regulators encourage companies to disclose forward-looking
information to help investors understand a company's future prospects. This
press release contains statements about our future financial condition,
results of operations and business.
    These are "forward-looking" because we have used what we know and expect
today to make a statement about the future. Forward-looking statements usually
include words such as may, expect, anticipate, believe or other similar words.
We believe the expectations reflected in these forward-looking statements are
reasonable. However, actual events and results could be substantially
different because of the risks and uncertainties associated with our business
or events that happen after the date of this press release. You should not
place undue reliance on forward-looking statements. As a general policy, we do
not update forward-looking statements except as required by securities laws
and regulations.

    
    INMET MINING CORPORATION
    Non-GAAP measures

    Reconciliation of copper cash costs to statements of earnings

    -------------------------------------------------------------------------
    (millions of Canadian             three months               nine months
     dollars, except where      ended September 30        ended September 30
     otherwise noted)            2007         2006         2007         2006
    -------------------------------------------------------------------------
    Cost of sales per
     financial statements         $51          $52         $168         $160
    Smelter processing charges
     and freight per financial
     statements                    41           57          156          167
    Zinc, gold and other sales    (78)         (84)        (308)        (261)
    Inventory and receivable
     changes                       (3)          (5)          15          (10)
    Less - non-cash items           1           (1)          (5)          (3)
    -------------------------------------------------------------------------
    Operating costs net of
     metal credits                $12          $19          $26          $53
    -------------------------------------------------------------------------
    US $ to C$ exchange rate    $1.04        $1.12        $1.11        $1.13
    Inmet's share of copper
     production
     (000's pounds)            40,200       44,000      122,300      129,500
    -------------------------------------------------------------------------
    Copper cash cost
     (per pound)             US $0.28     US $0.38     US $0.19     US $0.36
    -------------------------------------------------------------------------

    Reconciliation of gold cash costs to statements of earnings

    -------------------------------------------------------------------------
    (millions of Canadian             three months               nine months
     dollars, except where      ended September 30        ended September 30
     otherwise noted)            2007         2006         2007         2006
    -------------------------------------------------------------------------
    Cost of sales per
     financial statements         $18          $20          $58          $56
    Smelter processing
     charges and freight
     per financial statements       1            3            6            8
    Copper and other sales         (6)          (8)         (18)         (22)
    Inventory and receivable
     changes                        1           (1)          (1)           1
    -------------------------------------------------------------------------
    Operating costs net of
     metal credits                $14          $14          $45          $43
    -------------------------------------------------------------------------
    US $ to C$ exchange rate    $1.04        $1.12        $1.11        $1.13
    Inmet's share of gold
     production (ounces)       36,400       34,600      104,700      108,600
    -------------------------------------------------------------------------
    Gold cash cost
     (per ounce)              US $367      US $366      US $384      US $350
    -------------------------------------------------------------------------

    Reconciliation of net income to adjusted net income

    -------------------------------------------------------------------------
    (thousands of Canadian            three months               nine months
     dollars, except where      ended September 30        ended September 30
     otherwise noted)            2007         2006         2007         2006
    -------------------------------------------------------------------------
    Net income per
     financial statements    $114,836     $111,582     $353,964     $323,233
    Deduct gain on sale
     of Wolfden in 2007
     and Izok in 2006               -            -       11,730       23,905
    -------------------------------------------------------------------------
    Adjusted net income      $114,836     $111,582     $342,234     $299,328
    -------------------------------------------------------------------------
    Weighted average
     shares outstanding        48,278       48,274       48,278       48,190
    -------------------------------------------------------------------------
    Adjusted net income
     per share                  $2.38        $2.31        $7.09        $6.21
    -------------------------------------------------------------------------

    Reconciliation of operating cash flow to operating cash flow before
    working capital

    -------------------------------------------------------------------------
    (thousands of Canadian            three months               nine months
     dollars, except where      ended September 30        ended September 30
     otherwise noted)            2007         2006         2007         2006
    -------------------------------------------------------------------------
    Operating cash flow per
     financial statements    $108,315     $150,885     $351,026     $356,769
    Deduct: Net change in
     non-cash working
     capital per financial
     statements               (21,221)      21,399      (21,847)      36,306
    -------------------------------------------------------------------------
    Operating cash flow
     before working capital  $129,536     $129,486     $372,873     $320,463
    -------------------------------------------------------------------------
    Weighted average shares
     outstanding               48,278       48,274       48,278       48,190
    -------------------------------------------------------------------------
    Operating cash flow
     before working
     capital per share          $2.68        $2.68        $7.72        $6.65
    -------------------------------------------------------------------------



    INMET MINING CORPORATION
    Quarterly review
    (unaudited)

    Latest Four Quarters
    -------------------------------------------------------------------------
    (thousands of Canadian       2007         2007         2007         2006
     dollars, except per        Third       Second        First       Fourth
     share amounts)           quarter      quarter      quarter      quarter
    -------------------------------------------------------------------------
    STATEMENTS OF EARNINGS
    Gross sales             $ 272,293    $ 320,018    $ 286,614    $ 258,911
    Smelter processing
     charges and freight      (42,557)     (55,413)     (64,606)     (65,005)
    Cost of sales             (69,617)     (78,068)     (79,240)     (66,593)
    Depreciation               (8,739)      (8,039)      (9,415)      (9,057)
                            -------------------------------------------------
                              151,380      178,498      133,353      118,256
    Corporate development
     and exploration           (2,475)      (1,836)        (842)      (4,136)
    General and
     administration            (2,674)      (2,162)      (2,840)      (6,128)
    Investment and other
     income                     6,784       13,302        7,290       16,697
    Interest expense             (424)        (424)        (438)        (425)
    Capital tax expense          (273)        (274)        (274)           -
    Income tax expense        (37,649)     (48,509)     (35,376)     (26,679)
    Non-controlling interest      167         (545)         205         (165)
                            -------------------------------------------------
    Net income              $ 114,836    $ 138,050    $ 101,078    $  97,420
                            -------------------------------------------------
    Net income per common
     share                  $    2.38    $    2.86    $    2.09    $    2.02
                            -------------------------------------------------
    Diluted net income
     per common share       $    2.37    $    2.86    $    2.09    $    2.02
                            -------------------------------------------------

    Previous Four Quarters
    -------------------------------------------------------------------------
    (thousands of Canadian       2006         2006         2006         2005
     dollars, except per        Third       Second        First       Fourth
     share amounts)           quarter      quarter      quarter      quarter
    -------------------------------------------------------------------------
    STATEMENTS OF EARNINGS
    Gross sales             $ 301,100    $ 317,624    $ 210,234    $ 190,901
    Smelter processing
     charges and freight      (60,270)     (63,668)     (51,662)     (46,131)
    Cost of sales             (73,892)     (78,425)     (65,788)     (67,305)
    Depreciation               (9,025)      (8,225)      (7,265)      (7,879)
                            -------------------------------------------------
                              157,913      167,306       85,519       69,586
    Corporate development
     and exploration           (2,708)      (1,456)      (1,454)      (2,893)
    General and
     administration            (2,618)      (2,624)      (2,370)      (2,119)
    Investment and other
     income                     2,257        2,587       25,698          985
    Interest expense             (412)        (391)        (391)        (392)
    Capital tax (expense)
     recovery                      41         (246)        (245)        (499)
    Income tax expense        (42,902)     (33,240)     (27,196)     (19,022)
    Non-controlling interest       11          154            -            -
                            -------------------------------------------------
    Net income              $ 111,582    $ 132,090    $  79,561    $  45,646
                            -------------------------------------------------
    Net income per common
     share                  $    2.31    $    2.74    $    1.65    $    0.95
                            -------------------------------------------------
    Diluted net income
     per common share       $    2.31    $    2.74    $    1.64    $    0.95
                            -------------------------------------------------



    INMET MINING CORPORATION
    Consolidated balance sheets

                                                   September 30  December 31
    (thousands of Canadian dollars)                        2007         2006
    -------------------------------------------------------------------------
                                                     (unaudited)
    Assets

    Current assets:
      Cash and short-term investments                  $814,584     $640,186
      Restricted cash (note 5)                            9,668            -
      Accounts receivable                               136,530      122,645
      Inventories                                        53,123       58,323
      Future income tax asset                             6,150        7,567
                                                     ------------------------
                                                      1,020,055      828,721

    Restricted cash (note 5)                             36,699       35,759

    Property, plant and equipment                       758,041      548,637

    Investments (note 6)                                 28,628       53,002

    Future income tax asset                              13,952       21,750

    Deferred charges                                          -        2,408

    Derivatives (note 7)                                 28,485            -

    Other assets                                         25,658       42,663
                                                     ------------------------
                                                     $1,911,518   $1,532,940
    -------------------------------------------------------------------------


    Liabilities

    Current liabilities:
      Accounts payable and accrued liabilities         $165,868     $163,106


    Long-term debt (note 8)                             204,703      109,080

    Reclamation liabilities                              72,142       65,812

    Derivatives (note 7)                                 42,549            -

    Other liabilities                                    19,869       30,617

    Future income tax liabilities                        36,303       42,366

    Non-controlling interest                             50,675       49,125
                                                     ------------------------
                                                        592,109      460,106
                                                     ------------------------

    Commitments (note 9)

    Shareholders' equity

    Share capital                                       337,464      337,338

    Contributed surplus                                  64,592       66,999

    Stock based compensation                              1,009          915

    Retained earnings                                 1,018,141      669,385

    Accumulated other comprehensive loss (note 10)     (101,797)      (1,803)
                                                     ------------------------

                                                      1,319,409    1,072,834
                                                     ------------------------

                                                     $1,911,518   $1,532,940
    -------------------------------------------------------------------------
    (see accompanying notes)



    INMET MINING CORPORATION
    Segmented balance sheets

    2007 As at September 30

    (unaudited)                CORPORATE      CAYELI   PYHASALMI     TROILUS
    -------------------------------------------------------------------------
    (thousands of Canadian
     dollars)                                (Turkey)   (Finland)    (Canada)

    Assets
    Cash and short-term
     investments                $372,026    $285,733    $108,951    $      -
    Other current assets          12,445      44,791      46,837      24,788
    Restricted cash               14,661           -           -      27,426
    Property, plant and
     equipment                       661     112,235      64,707           -
    Investments                   28,628           -           -           -
    Derivatives                        -           -           -           -
    Other assets                  26,834         431           -       6,288
                              -----------------------------------------------
                                $455,255    $443,190    $220,495     $58,502
                              -----------------------------------------------
                              -----------------------------------------------

    Liabilities
    Current liabilities           $6,581     $37,856     $27,761     $12,112
    Long-term debt                15,839           -           -           -
    Reclamation liabilities       25,354       3,095      12,701       4,426
    Derivatives                        -           -           -      27,740
    Other liabilities              6,311       4,398           -           -
    Future income tax
     liabilities                       -      17,918       6,642           -
    Non-controlling interest           -           -           -           -
                              -----------------------------------------------
                                 $54,085     $63,267     $47,104     $44,278
                              -----------------------------------------------
                              -----------------------------------------------


    (unaudited)                  OK TEDI  LAS CRUCES       TOTAL
    ------------------------------------------------- -----------
    (thousands of Canadian    (Papua New
     dollars)                     Guinea)     (Spain)

    Assets
    Cash and short-term          $36,183     $11,691    $814,584
     investments                  43,342      33,268     205,471
    Other current assets          11,569      10,469      64,125
    Restricted cash
    Property, plant and           50,549     502,463     730,615
     equipment                         -           -      28,628
    Investments                        -      28,485      28,485
    Derivatives                    3,703       2,354      39,610
                              ----------------------- -----------
    Other assets                $145,346    $588,730  $1,911,518
                              ----------------------- -----------
                              ----------------------- -----------


    Liabilities                  $27,339     $54,219    $165,868
    Current liabilities                -     188,864     204,703
    Long-term debt                15,334      11,232      72,142
    Reclamation liabilities       11,576       3,233      42,549
    Derivatives                    1,348       7,812      19,869
    Other liabilities
    Future income tax                  -      11,743      36,303
     liabilities                       -      50,675      50,675
                              ----------------------- -----------
    Non-controlling interest     $55,597    $327,778    $592,109
                              ----------------------- -----------
                              ----------------------- -----------

    2006 As at December 31

                               CORPORATE      CAYELI   PYHASALMI     TROILUS
    -------------------------------------------------------------------------
    (thousands of Canadian
     dollars)                                (Turkey)   (Finland)    (Canada)

    Assets
    Cash and short-term
     investments                $267,277    $176,676    $119,260    $      -
    Other current assets           9,690      55,776      68,897      18,104
    Restricted cash               14,300           -           -           -
    Property, plant and
     equipment                       570     117,464      74,873      33,277
    Investments                   53,002           -           -           -
    Deferred charges                   -           -           -       2,408
    Other assets                  32,052         486           -       6,245
                              -----------------------------------------------
                                $376,891    $350,402    $263,030     $60,034
                              -----------------------------------------------
                              -----------------------------------------------

    Liabilities
    Current liabilities          $11,698     $37,879     $35,130     $19,780
    Long-term debt                16,786           -           -           -
    Reclamation liabilities       25,507       3,467      13,175       4,268
    Other liabilities              8,035       3,891           -       8,657
    Future income tax
     liabilities                       -      20,433       7,025           -
    Non-controlling interest           -           -           -           -
                              -----------------------------------------------
                                 $62,026      $65,670    $55,330     $32,705
                              -----------------------------------------------
                              -----------------------------------------------


                                 OK TEDI  LAS CRUCES       TOTAL
    ------------------------------------------------- -----------
    (thousands of Canadian    (Papua New
     dollars)                     Guinea)     (Spain)

    Assets
    Cash and short-term          $44,689     $32,284    $640,186
     investments                  26,157       9,911     188,535
    Other current assets          10,982      10,477      35,759
    Restricted cash
    Property, plant and           42,489     279,964     548,637
     equipment                         -           -      53,002
    Investments                        -           -       2,408
    Deferred charges                 805      24,825      64,413
                              ----------------------- -----------
    Other assets                $125,122    $357,461  $1,532,940
                              ----------------------- -----------
                              ----------------------- -----------


    Liabilities                  $37,391     $21,228    $163,106
    Current liabilities                -      92,294     109,080
    Long-term debt                17,568       1,827      65,812
    Reclamation liabilities        1,572       8,462      30,617
    Other liabilities
    Future income tax              2,186      12,722      42,366
     liabilities                       -      49,125      49,125
                              ----------------------- -----------
    Non-controlling interest     $58,717    $185,658    $460,106
                              ----------------------- -----------
                              ----------------------- -----------


    INMET MINING CORPORATION
    Consolidated statements of earnings
    (unaudited)

    (thousands of Canadian          Three Months Ended     Nine Months Ended
     dollars except per                   September 30          September 30
     share amounts)                    2007       2006       2007       2006
    --------------------------------------------------- ---------------------

    Gross sales                    $272,293   $301,100   $878,925   $828,958

    Smelter processing
     charges and freight            (42,557)   (60,270)  (162,576)  (175,600)

    Cost of sales                   (69,617)   (73,892)  (226,925)  (218,105)

    Depreciation                     (8,739)    (9,025)   (26,193)   (24,515)

    --------------------------------------------------- ---------------------
                                    151,380    157,913    463,231    410,738


    Corporate development
     and exploration                 (2,475)    (2,708)    (5,573)    (5,618)

    General and
     administration                  (2,674)    (2,618)    (7,676)    (7,612)

    Investment and other
     income (note 11)                 6,784      2,257     27,796     30,542

    Interest expense                   (424)      (412)    (1,286)    (1,194)

    Capital tax expense                (273)        41       (821)      (450)

    Income tax expense
     (note 12)                      (37,649)   (42,902)  (121,534)  (103,338)

    Non-controlling
     interest                           167         11       (173)       165

    --------------------------------------------------- ---------------------

    Net income                     $114,836   $111,582   $353,964   $323,233
    --------------------------------------------------- ---------------------

    Basic net income per
     common share (note 13)           $2.38      $2.31      $7.33      $6.71
    --------------------------------------------------- ---------------------

    Diluted net income
     per common share
      (note 13)                       $2.37      $2.31      $7.32      $6.70
    --------------------------------------------------- ---------------------

    Weighted average shares
      outstanding (000's)            48,278     48,274     48,278     48,190
    --------------------------------------------------- ---------------------
    (see accompanying notes)



    INMET MINING CORPORATION
    Segmented statements of earnings
    (Unaudited)

    2007 For the nine months ended September 30

                               CORPORATE      CAYELI   PYHASALMI     TROILUS
    -------------------------------------------------------------------------
    (thousands of Canadian
     dollars)                                (Turkey)   (Finland)    (Canada)

    Gross sales                 $      -    $337,606    $201,574     $81,061
    Smelter processing
     charges and freight               -     (74,944)    (46,697)     (6,191)
    Cost of sales                 (1,462)    (65,996)    (37,886)    (57,887)
    Depreciation                       -      (6,222)     (6,558)     (7,500)
                              -----------------------------------------------
                                  (1,462)    190,444     110,433       9,483

    Corporate development
     and exploration              (3,152)     (1,160)     (1,571)        310
    General and
     administration               (7,676)          -           -           -
    Investment and other
     income                       28,360      (4,107)          -       4,188
    Interest expense              (1,286)          -           -           -
    Capital tax expense             (821)          -           -           -
    Income tax expense            (1,157)    (40,489)    (24,711)          -
    Non-controlling interest           -           -           -           -
                              -----------------------------------------------

    Net income                   $12,806    $144,688     $84,151     $13,981
                              -----------------------------------------------
                              -----------------------------------------------


                                 OK TEDI  LAS CRUCES       TOTAL
    ------------------------------------------------- -----------
    (thousands of Canadian    (Papua New
     dollars)                     Guinea)     (Spain)


    Gross sales                 $258,684    $      -    $878,925
    Smelter processing
     charges and freight         (34,744)          -    (162,576)
    Cost of sales                (63,694)          -    (226,925)
    Depreciation                  (5,913)          -     (26,193)
                              ----------------------- -----------
                                 154,333           -     463,231

    Corporate development
     and exploration                   -           -      (5,573)
    General and
     administration                    -           -      (7,676)
    Investment and other
     income                       (1,492)        847      27,796
    Interest expense                   -           -      (1,286)
    Capital tax expense                -           -        (821)
    Income tax expense           (54,923)       (254)   (121,534)
    Non-controlling interest           -        (173)       (173)
                              ----------------------- -----------

    Net income                   $97,918        $420    $353,964
                              ----------------------- -----------
                              ----------------------- -----------


    2006 For the nine months ended September 30

                               CORPORATE      CAYELI   PYHASALMI     TROILUS
    -------------------------------------------------------------------------
    (thousands of Canadian
     dollars)                                (Turkey)   (Finland)    (Canada)

    Gross sales                 $      -    $282,694    $185,678     $77,515
    Smelter processing
     charges and freight               -     (72,503)    (49,307)     (8,214)
    Cost of sales                 (1,368)    (55,092)    (35,999)    (56,422)
    Depreciation                       -      (5,546)     (6,284)     (8,074)
                              -----------------------------------------------
                                  (1,368)    149,553      94,088       4,805

    Corporate development
     and exploration              (1,687)       (844)     (1,593)       (944)
    General and
     administration               (7,612)          -           -           -
    Investment and other
     income                       28,380       2,162           -           -
    Interest expense              (1,194)          -           -           -
    Capital tax expense             (450)          -           -           -
    Income tax expense                 -     (21,810)    (21,215)          -
    Non-controlling interest           -           -           -           -
                              -----------------------------------------------

    Net income (loss)            $16,069    $129,061     $71,280      $3,861
                              -----------------------------------------------
                              -----------------------------------------------


                                 OK TEDI  LAS CRUCES       TOTAL
    ------------------------------------------------- -----------
    (thousands of Canadian    (Papua New
     dollars)                     Guinea)     (Spain)


    Gross sales                 $283,071    $      -    $828,958
    Smelter processing
     charges and freight         (45,576)          -    (175,600)
    Cost of sales                (69,224)          -    (218,105)
    Depreciation                  (4,611)          -     (24,515)
                              ----------------------- -----------
                                 163,660           -     410,738

    Corporate development
     and exploration                   -        (550)     (5,618)
    General and
     administration                    -           -      (7,612)
    Investment and other
     income                            -           -      30,542
    Interest expense                   -           -      (1,194)
    Capital tax expense                -           -        (450)
    Income tax expense           (60,313)          -    (103,338)
    Non-controlling interest           -         165         165
                              ----------------------- -----------

    Net income (loss)            $103,347      ($385)   $323,233
                              ----------------------- -----------
                              ----------------------- -----------

    2007 For the three months ended September 30

                               CORPORATE      CAYELI   PYHASALMI     TROILUS
    -------------------------------------------------------------------------
    (thousands of Canadian
     dollars)                                (Turkey)   (Finland)    (Canada)

    Gross sales                 $      -    $107,664     $60,427     $24,970
    Smelter processing
     charges and freight               -     (19,474)    (12,983)     (1,478)
    Cost of sales                   (619)    (20,518)    (11,579)    (17,755)
    Depreciation                       -      (1,654)     (1,764)     (2,784)
                              -----------------------------------------------
                                    (619)     66,018      34,101       2,953

    Corporate development
     and exploration              (1,464)       (300)       (552)       (159)
    General and
     administration               (2,674)          -           -           -
    Investment and other
     income (expense)              7,927      (2,276)          -       3,397
    Interest expense                (424)          -           -           -
    Capital tax expense             (273)          -           -           -
    Income tax expense              (386)    (13,055)     (7,425)          -
    Non-controlling interest           -           -           -           -
                              -----------------------------------------------

    Net income (loss)             $2,087     $50,387     $26,124      $6,191
                              -----------------------------------------------
                              -----------------------------------------------


                                 OK TEDI  LAS CRUCES       TOTAL
    ------------------------------------------------- -----------
    (thousands of Canadian    (Papua New
     dollars)                     Guinea)     (Spain)

    Gross sales                  $79,232     $     -    $272,293
    Smelter processing
     charges and freight          (8,622)          -     (42,557)
    Cost of sales                (19,146)          -     (69,617)
    Depreciation                  (2,537)          -      (8,739)
                              ----------------------- -----------
                                  48,927           -     151,380

    Corporate development
     and exploration                   -           -      (2,475)
    General and
     administration                    -           -      (2,674)
    Investment and other
     income (expense)             (1,492)       (772)      6,784
    Interest expense                   -           -        (424)
    Capital tax expense                -           -        (273)
    Income tax expense           (17,015)        232     (37,649)
    Non-controlling interest           -         167         167
                              ----------------------- -----------

    Net income (loss)            $30,420       ($373)   $114,836
                              ----------------------- -----------
                              ----------------------- -----------


    2006 For the three months ended September 30

                               CORPORATE      CAYELI   PYHASALMI     TROILUS
    -------------------------------------------------------------------------
    (thousands of Canadian
     dollars)                                (Turkey)   (Finland)    (Canada)

    Gross sales                 $      -    $105,916     $64,436     $29,274
    Smelter processing
     charges and freight               -     (25,713)    (15,111)     (3,127)
    Cost of sales                   (414)    (18,034)    (11,135)    (20,909)
    Depreciation                       -      (1,822)     (2,336)     (3,123)
                              -----------------------------------------------
                                    (414)     60,347      35,854       2,115

    Corporate development
     and exploration                (830)       (472)       (593)       (775)
    General and
     administration               (2,618)          -           -           -
    Investment and other
     income (expense)              3,201        (944)          -           -
    Interest expense                (412)          -           -           -
    Capital tax expense               41           -           -           -
    Income tax expense                 -     (12,508)     (8,186)          -
    Non-controlling interest           -           -           -           -
                              -----------------------------------------------

    Net income (loss)            ($1,032)    $46,423     $27,075      $1,340
                              -----------------------------------------------
                              -----------------------------------------------


                                 OK TEDI  LAS CRUCES       TOTAL
    ------------------------------------------------- -----------
    (thousands of Canadian    (Papua New
     dollars)                     Guinea)     (Spain)

    Gross sales                 $101,474    $      -    $301,100
    Smelter processing
     charges and freight         (16,319)          -     (60,270)
    Cost of sales                (23,400)          -     (73,892)
    Depreciation                  (1,744)          -      (9,025)
                              ----------------------- -----------
                                  60,011           -     157,913

    Corporate development
     and exploration                   -         (38)     (2,708)
    General and
     administration                    -           -      (2,618)
    Investment and other
     income (expense)                  -           -       2,257
    Interest expense                   -           -        (412)
    Capital tax expense                -           -          41
    Income tax expense           (22,208)          -     (42,902)
    Non-controlling interest           -          11          11
                              ----------------------- -----------

    Net income (loss)            $37,803        ($27)   $111,582
                              ----------------------- -----------
                              ----------------------- -----------



    INMET MINING CORPORATION
    Consolidated statements of cash flows
    (unaudited)

                                    Three Months Ended     Nine Months Ended
    (thousands of Canadian                September 30          September 30
     dollars)                          2007       2006       2007       2006
    --------------------------------------------------- ---------------------

    Cash provided by (used in)
     operating activities (1)

    Net income                     $114,836   $111,582   $353,964   $323,233
    Add (deduct) items not
     affecting cash:
      Gain on disposition of
       investments (note 11)              -          -    (11,730)   (24,291)
      Depreciation                    8,739      9,025     26,193     24,515
      Future income tax               2,873      4,828     (1,507)    (9,443)
      Accretion expense on
       reclamation liabilities          907        824      2,710      2,575
      Non-controlling interest         (167)       (11)       173       (165)
      Other                           3,294      3,666      5,020      5,509
    Reclamation costs                  (946)      (428)    (1,950)    (1,470)
    Net change in non-cash
     working capital (note 4)       (21,221)    21,399    (21,847)    36,306
                                 ---------------------- ---------------------
                                    108,315    150,885    351,026    356,769
                                 ---------------------- ---------------------

    Cash provided by (used in)
     investing activities

    Capital spending               (117,989)   (49,936)  (252,003)   (87,040)
    Acquisition and disposition
     of investments, net               (553)     2,105     50,170      3,734
    Purchase of short-term
     investments                   (173,117)  (152,432)   (35,586)  (233,627)
    Other                                 -        (67)       (43)      (262)
                                 ---------------------- ---------------------
                                   (291,659)  (200,330)  (237,462)  (317,195)
                                 ---------------------- ---------------------

    Cash provided by (used in)
     financing activities

    Long-term debt:
       Borrowings (note 8)           35,929      9,927     73,938     37,051
       Repayment (note 8)            (8,604)         -     (8,604)         -
    Funding by non-controlling
     shareholder                     13,418          -     39,528      9,246
    Financial assurance deposits      4,764     (4,737)   (12,651)    (6,904)
    Dividends paid on common
     shares                               -          -     (4,827)    (4,827)
    Other                            (1,514)      (307)    (4,085)      (340)
                                 ---------------------- ---------------------
                                     43,993      4,883     83,299     34,226
                                 ---------------------- ---------------------


    Foreign exchange loss on
     cash held in foreign
     currency                       (22,541)      (207)   (56,590)    (2,058)
                                 ---------------------- ---------------------

    Increase (decrease) in cash    (161,892)   (44,769)   140,273     71,742

    Cash:
      Beginning of period           686,775    368,406    384,610    251,895
                                 ---------------------- ---------------------
      End of period                 524,883    323,637    524,883    323,637

    Short-term investments          289,701    232,194    289,701    232,194
                                 ---------------------- ---------------------

    Cash and short-term
     investments                   $814,584   $555,831   $814,584   $555,831
    --------------------------------------------------- ---------------------
    (see accompanying notes)

    (1) Cash used in operations
         includes the following
         payments:
          Interest                   $3,187       $605     $5,568     $1,184
          Taxes                     $50,830    $41,822   $115,569    $78,339
    --------------------------------------------------- ---------------------



    INMET MINING CORPORATION
    Segmented statements of cash flows
    (unaudited)

    2007 For the nine months ended September 30

                               CORPORATE      CAYELI   PYHASALMI     TROILUS
    -------------------------------------------------------------------------
    (thousands of Canadian
     dollars)                                (Turkey)   (Finland)    (Canada)

    Cash provided by (used in)
     operating activities
      Before net change in
       non-cash working
       capital                    $5,584    $158,070     $91,006     $16,324
      Net change in non-cash
       working capital            (7,444)      5,863      12,673      (6,801)
                              -----------------------------------------------
                                  (1,860)    163,933     103,679       9,523
                              -----------------------------------------------
    Cash provided by (used in)
     investing activities
      Capital spending              (145)    (20,259)     (2,071)     (1,457)
      Acquisition and
       disposition of
       investment, net            50,170           -           -           -
      Sale (purchase) of
       short-term investments    (62,323)     16,575           -           -
      Other                            -           -           -         (43)
                              -----------------------------------------------
                                 (12,298)     (3,684)     (2,071)     (1,500)
                              -----------------------------------------------
    Cash provided by (used in)
     financing activities         (6,472)          -           -      (3,000)
                              -----------------------------------------------

      Foreign exchange change
       on cash held in foreign
       currency                        -     (39,914)     (7,268)          -

    Intergroup funding
     (distributions)              63,056       6,203    (104,649)     (5,023)
                              -----------------------------------------------

    Increase (decrease)
     in cash                      42,426     126,538     (10,309)          -
    Cash:
      Beginning of period         39,899     159,195     119,260           -
                              -----------------------------------------------
      End of period               82,325     285,733     108,951           -
    Short-term investments       289,701           -           -           -
                              -----------------------------------------------

    Cash and short-term
     investments                $372,026    $285,733    $108,951    $      -
                              -----------------------------------------------
                              -----------------------------------------------



                                 OK TEDI  LAS CRUCES       TOTAL
    ------------------------------------------------- -----------
    (thousands of Canadian    (Papua New
     dollars)                     Guinea)     (Spain)


    Cash provided by (used in)
     operating activities
      Before net change in
       non-cash working
       capital                  $101,889    $      -    $372,873
      Net change in non-cash
       working capital           (26,138)   $      -     (21,847)
                              ----------------------- -----------
                                  75,751           -     351,026
                              ----------------------- -----------
    Cash provided by (used in)
     investing activities
      Capital spending           (21,414)   (206,657)   (252,003)
      Acquisition and
       disposition of
       investment, net                 -           -      50,170
      Sale (purchase) of
       short-term investments     10,162           -     (35,586)
      Other                            -           -         (43)
                              ----------------------- -----------
                                 (11,252)   (206,657)   (237,462)
                              ----------------------- -----------
    Cash provided by (used in)
     financing activities         (1,659)     94,430      83,299
                              ----------------------- -----------

      Foreign exchange change
       on cash held in foreign
       currency                   (8,348)     (1,060)    (56,590)
                              ----------------------- -----------

    Intergroup funding
     (distributions)             (52,281)     92,694           -
                              ----------------------- -----------

    Increase (decrease)
     in cash                       2,211     (20,593)    140,273
    Cash:
      Beginning of period         33,972      32,284     384,610
                              ----------------------- -----------
      End of period               36,183      11,691     524,883
    Short-term investments             -           -     289,701
                              ----------------------- -----------

    Cash and short-term
     investments                 $36,183     $11,691    $814,584
                              ----------------------- -----------
                              ----------------------- -----------


    2006 For the nine months ended September 30

                               CORPORATE      CAYELI   PYHASALMI     TROILUS
    -------------------------------------------------------------------------
    (thousands of Canadian
     dollars)                                (Turkey)   (Finland)    (Canada)


    Cash provided by (used in)
     operating activities
      Before net change in
       non-cash working
       capital                   ($8,352)   $129,503     $79,036     $14,756
      Net change in non-cash
       working capital            (5,611)     19,684      (8,219)     (2,763)
                              -----------------------------------------------
                                 (13,963)    149,187      70,817      11,993
                              -----------------------------------------------
    Cash provided by (used in)
     investing activities
      Capital spending               (85)    (14,105)     (2,569)     (2,425)
      Acquisition and
       disposition of
       investments, net            1,629           -       2,105           -
      Purchase of short-term
       investments              (125,454)   (108,173)          -           -
      Other                            -           -           -        (262)
                              -----------------------------------------------
                                (123,910)   (122,278)       (464)     (2,687)
                              -----------------------------------------------
    Cash used in financing
     activities                   (4,494)          -           -           -
                              -----------------------------------------------

      Foreign exchange change
       on cash held in foreign
       currency                        -      (1,891)      2,116           -
                              -----------------------------------------------

    Intergroup funding
     (distributions)             111,716     (14,581)    (13,143)     (9,306)
                              -----------------------------------------------

    Increase (decrease)
     in cash                     (30,651)     10,437      59,326           -
    Cash:
      Beginning of period        123,843      36,578      58,138           -
                              -----------------------------------------------
      End of period               93,192      47,015     117,464           -
    Short-term investments       125,454     106,740           -           -
                              -----------------------------------------------

    Cash and short-term
     investments                $218,646    $153,755    $117,464    $      -
                              -----------------------------------------------
                              -----------------------------------------------


                                 OK TEDI  LAS CRUCES       TOTAL
    ------------------------------------------------- -----------
    (thousands of Canadian    (Papua New
     dollars)                     Guinea)     (Spain)

    Cash provided by (used in)
     operating activities
      Before net change in
       non-cash working
       capital                  $106,070       ($550)   $320,463
      Net change in non-cash
       working capital            32,665         550      36,306
                              ----------------------- -----------
                                 138,735           -     356,769
                              ----------------------- -----------
    Cash provided by (used in)
     investing activities
      Capital spending            (6,605)    (61,251)    (87,040)
      Acquisition and
       disposition of
       investments, net                -           -       3,734
      Purchase of short-term
       investments                     -           -    (233,627)
      Other                            -           -        (262)
                              ----------------------- -----------
                                  (6,605)    (61,251)   (317,195)
                              ----------------------- -----------
    Cash used in financing
     activities                   (1,712)     40,432      34,226
                              ----------------------- -----------

      Foreign exchange change
       on cash held in foreign
       currency                   (2,523)        240      (2,058)
                              ----------------------- -----------

    Intergroup funding
     (distributions)             (99,560)     24,874           -
                              ----------------------- -----------

    Increase (decrease)
     in cash                      28,335       4,295      71,742
    Cash:
      Beginning of period         16,031      17,305     251,895
                              ----------------------- -----------
      End of period               44,366      21,600     323,637
    Short-term investments             -           -     232,194
                              ----------------------- -----------

    Cash and short-term
     investments                 $44,366     $21,600    $555,831
                              ----------------------- -----------
                              ----------------------- -----------


    2007 For the three months ended September 30

                               CORPORATE      CAYELI   PYHASALMI     TROILUS
    -------------------------------------------------------------------------
    (thousands of Canadian
     dollars)                                (Turkey)   (Finland)    (Canada)

    Cash provided by (used in)
     operating activities
      Before net change in
       non-cash working
       capital                    $4,192     $53,713     $28,053      $5,775
      Net change in non-cash
       working capital              (748)    (12,111)     24,633        (967)
                              -----------------------------------------------
                                   3,444      41,602      52,686       4,808
                              -----------------------------------------------
    Cash provided by (used in)
     investing activities
      Capital spending               (14)     (7,109)     (1,347)     (1,050)
      Acquisition of
       investments                  (553)          -           -           -
      Sale (purchase) of
       short-term investments   (190,024)       (452)          -           -
                              -----------------------------------------------
                                (190,591)     (7,561)     (1,347)     (1,050)
                              -----------------------------------------------
    Cash provided by (used in)
     financing activities           (673)          -           -      (1,000)
                              -----------------------------------------------

      Foreign exchange change
       on cash held in foreign
       currency                        -     (18,399)     (2,338)          -
                              -----------------------------------------------

    Intergroup funding
     (distributions)              (1,946)      4,560      (5,077)     (2,758)
                              -----------------------------------------------

    Increase (decrease)
     in cash                    (189,766)     20,202      43,924           -
    Cash:
      Beginning of period        272,091     265,531      65,027           -
                              -----------------------------------------------
      End of period               82,325     285,733     108,951           -
    Short-term investments       289,701           -           -           -
                              -----------------------------------------------

    Cash and short-term
     investments                $372,026    $285,733    $108,951    $      -
                              -----------------------------------------------
                              -----------------------------------------------


                                 OK TEDI  LAS CRUCES       TOTAL
    ------------------------------------------------- -----------
    (thousands of Canadian    (Papua New
     dollars)                     Guinea)     (Spain)

    Cash provided by (used in)
     operating activities
      Before net change in
       non-cash working
       capital                   $37,803    $      -    $129,536
      Net change in non-cash
       working capital           (32,028)          -     (21,221)
                              ----------------------- -----------
                                   5,775           -     108,315
                              ----------------------- -----------
    Cash provided by (used in)
     investing activities
      Capital spending            (8,603)    (99,866)   (117,989)
      Acquisition of investments       -           -        (553)
      Sale (purchase) of
       short-term investments     17,359           -    (173,117)
                              ----------------------- -----------
                                   8,756     (99,866)   (291,659)
                              ----------------------- -----------
    Cash provided by (used in)
     financing activities           (809)     46,475      43,993
                              ----------------------- -----------

      Foreign exchange change
       on cash held in foreign
       currency                   (2,212)        408     (22,541)
                              ----------------------- -----------

    Intergroup funding
     (distributions)             (26,107)     31,328           -
                              ----------------------- -----------

    Increase (decrease)
     in cash                     (14,597)    (21,655)   (161,892)
    Cash:
      Beginning of period         50,780      33,346     686,775
                              ----------------------- -----------
      End of period               36,183      11,691     524,883
    Short-term investments             -           -     289,701
                              ----------------------- -----------

    Cash and short-term
     investments                 $36,183     $11,691    $814,584
                              ----------------------- -----------
                              ----------------------- -----------


    2006 For the three months ended September 30

                               CORPORATE      CAYELI   PYHASALMI     TROILUS
    -------------------------------------------------------------------------
    (thousands of Canadian
     dollars)                                (Turkey)   (Finland)    (Canada)


    Cash provided by (used in)
     operating activities
      Before net change in
       non-cash working
       capital                   ($2,658)    $55,449     $29,490      $6,194
      Net change in non-cash
       working capital              (236)      8,575          24       7,144
                              -----------------------------------------------
                                  (2,894)     64,024      29,514      13,338
                              -----------------------------------------------
    Cash provided by (used in)
     investing activities
      Capital spending               (12)     (5,081)       (700)     (1,299)
      Acquisition and
       disposition of
       investments, net                -           -       2,105           -
      Purchase of short-term
       investments               (44,259)   (108,173)          -           -
      Other                            -           -           -         (67)
                              -----------------------------------------------
                                 (44,271)   (113,254)      1,405      (1,366)
                              -----------------------------------------------
    Cash used in financing
     activities                        -           -           -           -
                              -----------------------------------------------

      Foreign exchange change
       on cash held in foreign
       currency                        -       1,099        (763)          -
                              -----------------------------------------------

    Intergroup funding
     (distributions)              81,406     (15,298)     (9,560)    (11,972)
                              -----------------------------------------------

    Increase (decrease)
     in cash                      34,241     (63,429)     20,596           -
    Cash:
      Beginning of period         58,951     110,444      96,868           -
                              -----------------------------------------------
      End of period               93,192      47,015     117,464           -
    Short-term investments       125,454     106,740           -           -
                              -----------------------------------------------

    Cash and short-term
     investments                $218,646    $153,755    $117,464    $      -
                              -----------------------------------------------
                              -----------------------------------------------


                                 OK TEDI  LAS CRUCES       TOTAL
    ------------------------------------------------- -----------
    (thousands of Canadian    (Papua New
     dollars)                     Guinea)     (Spain)

    Cash provided by (used in)
     operating activities
      Before net change in
       non-cash working
       capital                   $41,049        ($38)   $129,486
      Net change in non-cash
       working capital             5,854          38      21,399
                              ----------------------- -----------
                                  46,903           -     150,885
                              ----------------------- -----------
    Cash provided by (used in)
     investing activities
      Capital spending            (3,167)    (39,677)    (49,936)
      Acquisition and
       disposition of
       investments, net                -           -       2,105
      Purchase of short-term
       investments                     -           -    (152,432)
      Other                            -           -         (67)
                              ----------------------- -----------
                                  (3,167)    (39,677)   (200,330)
                              ----------------------- -----------
    Cash used in financing
     activities                     (851)      5,734       4,883
                              ----------------------- -----------

      Foreign exchange change
       on cash held in foreign
       currency                       32        (575)       (207)
                              ----------------------- -----------

    Intergroup funding
     (distributions)             (45,503)        927           -
                              ----------------------- -----------

    Increase (decrease)
     in cash                      (2,586)    (33,591)    (44,769)
    Cash:
      Beginning of period         46,952      55,191      368,406
                              ----------------------- -----------
      End of period               44,366      21,600      323,637
    Short-term investments             -           -      232,194
                              ----------------------- -----------

    Cash and short-term
     investments                 $44,366     $21,600     $555,831
                              ----------------------- -----------
                              ----------------------- -----------



    INMET MINING CORPORATION
    Consolidated statements of retained earnings
    (unaudited)

                                    Three Months Ended     Nine Months Ended
    (thousands of Canadian                September 30          September 30
     dollars)                          2007       2006       2007       2006
    --------------------------------------------------- ---------------------


    Retained earnings, beginning
     of period, as previously
     reported                      $903,305   $465,210   $669,385   $258,386

    Adjustment for financial
     instruments (note 2)                 -          -       (381)         -
                                 ---------------------- ---------------------

    Retained earnings, restated     903,305    465,210    669,004    258,386

    Net income                      114,836    111,582    353,964    323,233

    Dividends on common shares            -          -     (4,827)    (4,827)
    --------------------------------------------------- ---------------------

    Retained earnings, end
     of period                   $1,018,141   $576,792  $1,018,141  $576,792
    --------------------------------------------------- ---------------------
    (see accompanying notes)


    Consolidated statements of comprehensive income
    (unaudited)

                                    Three Months Ended     Nine Months Ended
    (thousands of Canadian                September 30          September 30
     dollars)                          2007       2006       2007       2006
    --------------------------------------------------- ---------------------


    Net income                     $114,836   $111,582   $353,964   $323,233

    Other comprehensive income
     (loss) for the period(1):
      Changes in fair value of
       gold and copper forward
       sales contracts               (3,411)         -     (2,559)         -

      Changes in fair value of
       interest rate swap
       contracts                     (1,417)         -     (1,537)         -

      Changes in fair value of
       foreign exchange forward
       contracts                      5,780          -      6,071          -

      Changes in fair value of
       investments                    1,074          -     20,382          -

      Currency translation
       adjustments                  (39,269)      (968)   (99,203)     2,381

    Less; reclassification to
     net income of gains/losses
     realized on:
      Gain on sale of investment
       (note 11)                          -          -    (11,730)         -

      Troilus gold hedges loss        4,963          -     15,005          -

      Amortization of deferred
       Troilus gold hedges           (4,188)         -     (4,188)         -

      Foreign exchange loss on
       reduction of investment
       in Ok Tedi                     1,580          -      3,311          -
                                 ---------------------- ---------------------
                                    (34,888)      (968)   (74,448)     2,381
                                 ---------------------- ---------------------

    Comprehensive income            $79,948   $110,614   $279,516   $325,614
    --------------------------------------------------- ---------------------
    (see accompanying notes)

    (1) Net of applicable income tax and non-controlling interest.



    INMET MINING CORPORATION
    Notes to the consolidated financial statements

    1.  Significant accounting policies

        Our interim consolidated financial statements do not include all of
        the disclosure required for annual financial statements under
        generally accepted accounting principles (GAAP), and they have not
        been reviewed by our external auditors. These statements do, however,
        follow the same accounting policies and methods of application used
        in our most recent annual consolidated financial statements, except
        for the differences explained in note 2. You should read our interim
        statements in conjunction with our annual statements, which you can
        find in our 2006 annual report.

    2.  Changes in accounting policies

        Effective January 1, 2007, we adopted the following new CICA Handbook
        sections:

        Section 1506 - Accounting changes

        This section specifies that a voluntary change in accounting
        principles:

        (a) can only be made if the change results in more reliable and
            relevant information
        (b) must be accompanied by restated amounts for prior periods and the
            reasons for the change
        (c) must describe the nature and amount of the change, if it is a
            change to an estimate.

        We have not made any voluntary change in accounting principles since
        we adopted these standards.

        The following three sections do not permit us to restate prior
        periods.

        Section 3855 - Financial instruments - recognition and measurement

        This section establishes standards for recognizing and measuring
        financial assets, financial liabilities and non-financial
        derivatives. It requires companies to recognize financial assets and
        liabilities, including derivatives, on the balance sheet when we
        become a party to the contractual provisions of a financial
        instrument or a non-financial derivative contract. All financial
        instruments should be measured at fair value on initial recognition
        except for certain related party transactions. Fair value is the
        amount at which an item could be exchanged between willing parties.

        Measurement in subsequent periods depends on whether the financial
        instruments have been classified as held-for-trading, available-for-
        sale, held-to-maturity, loans and receivables, or other liabilities.
        We have classified our financial instruments as follows, and applied
        the following accounting principles:

        Cash and short-term investments, accounts receivable, restricted cash
        and accounts payable and accrued liabilities

        These are classified as held-for-trading and recorded at fair value.
        We record any changes in their fair value in net income. We calculate
        fair value using published price quotations in an active market,
        where there is one. Our December 31, 2006 carrying values for these
        assets and liabilities already approximated fair value, because of
        their short terms to maturity, and we did not make any adjustments to
        the opening values.

        Most of our sales contracts set prices on a specified future date
        based upon market commodity prices. Variations between the prices
        recorded on the date of revenue recognition and the actual final
        price due to changes in market prices result in the existence of an
        embedded derivative in accounts receivable. We adjust accounts
        receivable every period to reflect the change in the value of the
        contract based on the market price in the period, and then record the
        change in fair value in revenue once the contract has settled.

        Investments

        These are classified as available-for-sale and recorded at fair
        value. We record changes in their fair value net of tax in other
        comprehensive income. The change in fair value of an investment
        appears in net income only when it is sold or impaired. We calculate
        fair value using the bid price of the investment as quoted in an
        active market. We capitalize transaction costs related to purchasing
        investments and include these costs in the initial carrying value. We
        have made adjustments to the opening values of our investments
        (note 6).

        Long-term debt

        All of our long-term debt is classified as other than held-for-
        trading and is accounted for at amortized cost. At December 31, 2006
        our long-term debt approximated amortized cost, and we did not make
        any adjustments to the opening values (note 8).

        We previously capitalized any costs spent to issue debt to Other
        assets. Effective January 1, 2007, we will record transaction costs
        related to issuing debt in net income or, for development properties,
        capitalize them to Property, plant and equipment.

        Derivative and other contracts

        Non-financial derivative contracts are recorded at fair value on the
        balance sheet. We include marked-to-market adjustments on these
        instruments in net income, unless the instruments are designated as
        part of a cash flow hedge relationship. We identify and separately
        account for embedded derivatives in contracts that were entered into
        or substantively modified on or after January 1, 2003. We use
        settlement date accounting for all contracts to buy or sell financial
        assets.

        3865 - Hedges

        This section specifies when and how we can use hedge accounting for
        the following hedging strategies: fair value hedges, cash flow hedges
        and hedges of a foreign currency exposure of a net investment in a
        self-sustaining foreign operation.

        We only have cash flow hedging relationships. We recognize the
        effective portion of a change in fair value in Other comprehensive
        income, and then classify the accumulated amount to net income as the
        gains or losses are realized. We recognize the ineffective portion of
        a change in fair value in net income.

        On January 1, 2007, we designated our existing derivative contracts
        related to gold forward sales contracts at Troilus and Ok Tedi, the
        foreign exchange forward contract and the interest rate swap contract
        at Las Cruces, as part of a cash flow hedge relationship. The fair
        values of these contracts are recorded on the balance sheet (note 7).

        1530 - Comprehensive income

        This section calls for a statement of comprehensive income and its
        components. Other comprehensive income (OCI) includes unrealized
        gains and losses on our investments, unrealized foreign currency
        translation arising from self-sustaining foreign operations, and
        changes in the fair value of the effective portion of cash flow
        hedging instruments.

        The table below shows you the effect of adopting these standards on
        our balance sheet as at January 1. We have not restated prior
        periods.


        (thousands of            December 31       January 1       January 1
         Canadian dollars)              2006            2007            2007
        ---------------------------------------------------------------------
                                                 Adjustments
                                                 on adoption        Restated
                                                      of new         opening
                                 As reported       standards  Ref   balances
        Assets
        Current assets:
          Cash and short-term
           investments           $   640,186     $         -     $   640,186
          Accounts receivable        122,645               -         122,645
          Inventories                 58,323               -          58,323
          Future income tax asset      7,567               -           7,567
                                 --------------------------------------------
                                     828,721               -         828,721
        Restricted cash               35,759               -          35,759
        Property, plant and
         equipment                   548,637          13,795   a     562,432
        Investments (note 6)          53,002           3,677   b      56,679
        Future income tax asset       21,750          (5,696)  d      16,054
        Deferred charges               2,408          (2,408)  c           -
        Derivatives (note 7)               -          17,965   c      17,965
        Other assets                  42,663         (13,795)  a      28,868
                                 --------------------------------------------
                                 $ 1,532,940     $    13,538     $ 1,546,478
        ---------------------------------------------------------------------
        Liabilities
        Accounts payable and
         accrued liabilities     $   163,106          (5,444)  c $   157,662
        Long-term debt               109,080               -         109,080
        Reclamation liabilities       65,812               -          65,812
        Derivatives (note 7)               -          51,494   c      51,494
        Other liabilities             30,617          (7,958)  c      22,659
        Future income tax
         liabilities                  42,366          (2,166)  d      40,200
        Non-controlling interest      49,125           3,539   d      52,664
                                 --------------------------------------------
                                     460,106          39,465         499,571
                                 --------------------------------------------
        Shareholders' equity
        Share capital                337,338               -         337,338
        Contributed surplus           66,999               -          66,999
        Stock based compensation         915               -             915
        Retained earnings            669,385            (381)  d     669,004
        Accumulated other
         comprehensive loss
         (note 10)                         -         (27,349)  d     (27,349)
        Foreign currency
         translation account          (1,803)          1,803   e           -
                                 --------------------------------------------
                                   1,072,834         (25,927)      1,046,907
                                 --------------------------------------------
                                 $ 1,532,940     $    13,538     $ 1,546,478
        ---------------------------------------------------------------------

        (a) We have reclassified the cost of issuing debt for the Las Cruces
            credit facility to Property, plant and equipment. These costs
            were previously capitalized.
        (b) We have designated investments we previously accounted for at
            cost as available for sale, and recorded them at fair value.
        (c) We have reflected derivatives that were previously off balance
            sheet at fair value. We have recorded the accumulated ineffective
            portion of the hedges in opening retained earnings.
        (d) All adjustments are net of tax and non-controlling interest.
        (e) We have reclassified the foreign currency translation account to
            AOCL.

    3.  Recently issued accounting pronouncements

    (a) In December 2006, the CICA issued Handbook Section 3862, Financial
        Instruments - Disclosure and Section 3863, Financial Instruments -
        Presentation. Section 3862 replaces the disclosure portion of
        Section 3861. It places increased emphasis on disclosing the nature
        and extent of risks arising from both recognized and unrecognized
        financial instruments, and how these risks are managed. Section 3863
        carries forward the presentation requirements from Section 3861.

    (b) Additionally in December 2006, the CICA issued Handbook Section 1535,
        Capital Disclosures. This Section establishes standards for
        disclosing qualitative and quantitative information about an entity's
        capital and how it is managed in order to enable users of its
        financial statements to evaluate the entity's objectives, policies
        and processes for managing capital.

    (c) In June 2007, the CICA issued Handbook Section 3031, Inventories.
        This Section requires inventory to be recorded at the lower of cost
        or net realizable value, which is our current accounting policy. The
        section also clarifies the allocation of fixed production overhead,
        requires consistent use of either first-in, first-out or weighted
        average to measure inventories, and requires that any previous write-
        downs be reversed when the value of inventories increases. The amount
        of the reversal is limited to the amount of the original write-down.

    The above standards will become effective for us beginning on January 1,
    2008. We are reviewing these standards, and have not yet determined the
    impact, if any, on our consolidated financial statements.

    4.  Statement of cash flows

        The tables below show the components of our net change in non-cash
        working capital by segment.

        For the nine months ended September 30, 2007
        ---------------------------------------------------------------------

        (thousands)               Corporate     Cayeli  Pyhasalmi    Troilus
        ---------------------------------------------------------------------

        Accounts receivable         $(2,753)      $255    $17,819    $(5,072)
        Inventories                       -      1,247       (704)    (1,805)
        Accounts payable and
         accrued liabilities         (1,125)    (6,324)      (186)        76
        Taxes payable                (3,548)    10,703     (4,256)         -
        Other                           (18)       (18)         -          -
        ---------------------------------------------------------------------
                                    $(7,444)    $5,863    $12,673    $(6,801)
        ---------------------------------------------------------------------


        For the nine months ended September 30, 2007
        ----------------------------------------------------------
                                                   Las
        (thousands)                 Ok Tedi     Cruces      Total
        ----------------------------------------------------------
        Accounts receivable        $(22,800)         -   $(12,551)
        Inventories                     483          -       (779)
        Accounts payable and
         accrued liabilities         (2,789)         -    (10,288)
        Taxes payable                   421          -      3,320
        Other                        (1,453)         -     (1,549)
        ----------------------------------------------------------
                                   $(26,138)         -   $(21,847)
        ----------------------------------------------------------



        For the nine months ended September 30, 2006
        ---------------------------------------------------------------------

        (thousands)               Corporate     Cayeli  Pyhasalmi    Troilus
        ---------------------------------------------------------------------

        Accounts receivable            $103     $6,794   $(17,319)      $912
        Inventories                       -         77        (93)    (2,439)
        Accounts payable and
         accrued liabilities         (2,703)     7,862      2,321     (1,236)
        Taxes payable                (2,248)     4,944      6,872          -
        Other                          (763)         7          -          -
        ---------------------------------------------------------------------
                                    $(5,611)   $19,684    $(8,219)   $(2,763)
        ---------------------------------------------------------------------


        For the nine months ended September 30, 2006
        ----------------------------------------------------------
                                                   Las
        (thousands)                 Ok Tedi     Cruces      Total
        ----------------------------------------------------------

        Accounts receivable          $4,395          -    $(5,115)
        Inventories                   3,606          -      1,151
        Accounts payable and
         accrued liabilities          2,140        550      8,934
        Taxes payable                22,978          -     32,546
        Other                          (454)         -     (1,210)
        ----------------------------------------------------------
                                    $32,665       $550    $36,306
        ----------------------------------------------------------



        For the three months ended September 30, 2007
        ---------------------------------------------------------------------

        (thousands)               Corporate     Cayeli  Pyhasalmi    Troilus
        ---------------------------------------------------------------------

        Accounts receivable         $(1,040)  $(18,705)   $23,421       $301
        Inventories                       -        362       (445)    (2,045)
        Accounts payable and
         accrued liabilities            771      3,881     (2,531)       777
        Taxes payable                  (458)     2,346      4,188          -
        Other                           (21)         5          -          -
        ---------------------------------------------------------------------
                                      $(748)  $(12,111)   $24,633      $(967)
        ---------------------------------------------------------------------


        For the three months ended September 30, 2007
        ----------------------------------------------------------
                                                   Las
        (thousands)                 Ok Tedi     Cruces      Total

        Accounts receivable         $(7,884)       $ -    $(3,907)
        Inventories                  (1,128)         -     (3,256)
        Accounts payable and
         accrued liabilities          2,896          -      5,854
        Taxes payable               (24,983)         -    (18,907)
        Other                          (929)         -     (1,005)
        ----------------------------------------------------------
                                   $(32,028)       $ -   $(21,221)
        ----------------------------------------------------------



        For the three months ended September 30, 2006
        ---------------------------------------------------------------------

        (thousands)               Corporate     Cayeli  Pyhasalmi    Troilus

        Accounts receivable             $89     $8,847    $(5,261)    $5,025
        Inventories                       -       (793)      (719)     2,242
        Accounts payable and
         accrued liabilities           (441)     4,494      2,273       (123)
        Taxes payable                  (181)    (3,968)     3,731          -
        Other                           297         (5)         -          -
        ---------------------------------------------------------------------
                                      $(236)    $8,575        $24     $7,144
        ---------------------------------------------------------------------


        For the three months ended September 30, 2006
        ----------------------------------------------------------
                                                   Las
        (thousands)                 Ok Tedi     Cruces      Total

        Accounts receivable          $6,001        $ -    $14,701
        Inventories                   1,150          -      1,880
        Accounts payable and
         accrued liabilities          2,399         38      8,640
        Taxes payable                (3,070)         -     (3,488)
        Other                          (626)         -       (334)
        ----------------------------------------------------------
                                     $5,854        $38    $21,399
        ----------------------------------------------------------

    5.  Restricted cash

        The table below shows our restricted cash balances.

        ---------------------------------------------------------------------
                                                   September 30  December 31
        (thousands)                                        2007         2006
        ---------------------------------------------------------------------
        Cash collateralized for letters of credit
         - Las Cruces - current                          $9,668            -
        Collateralized cash for letter of credit
         facility                                        14,661       14,300
        In trust for Ok Tedi rehabilitation              11,569       10,982
        Cash collateralized for letters of credit
         - Las Cruces - long-term                        10,469       10,477
        ---------------------------------------------------------------------
                                                        $46,367      $35,759
        ---------------------------------------------------------------------

        Cash collateralized letters of credit for Las Cruces are for the
        following:

           - (euro)6.5 million to secure payments that will ultimately be
             used for the construction of the plant
           - (euro)3.1 million to secure payments that will ultimately be for
             the use of an electrical substation
           - (euro)2.5 million to secure payments to local townships that it
             will owe once certain licences are granted
           - (euro)2.2 million for dewatering and other purposes.

    6.  Investments

        The table below shows our investments.

        ---------------------------------------------------------------------
        (thousands)             September 30       January 1     December 31
                                        2007            2007            2006
                                 (fair value)    (fair value     (historical
                                                  - adjusted)      cost - as
                                                                    reported)
        ---------------------------------------------------------------------
        Wolfden Resources Inc.
         (note 11)                         -         $39,690         $39,705
        Premier Gold Mines Ltd.       22,019          13,041          10,920
        Other                          6,609           3,948           2,377
        ---------------------------------------------------------------------
                                     $28,628         $56,679         $53,002
        ---------------------------------------------------------------------

    7.  Derivatives

        The table below shows the fair value of our derivatives.

        ---------------------------------------------------------------------
        (thousands)             September 30       January 1     December 31
                                        2007            2007            2006
                                 (fair value)    (fair value     (historical
                                                  - adjusted)      cost - as
                                                                    reported)
        ---------------------------------------------------------------------
        Derivative asset:
          Las Cruces currency
           forward sale              $28,485         $17,965               -
                                 --------------------------------------------
        Derivative liabilities:
          Troilus gold forward
           sales                      27,740          43,156               -
          Ok Tedi gold and copper
           forward sales              11,576           7,220               -
          Las Cruces interest
           rate swaps                  3,233           1,118               -
        ---------------------------------------------------------------------
                                     $42,549         $51,494               -
        ---------------------------------------------------------------------

    8.  Long-term debt

        ---------------------------------------------------------------------
                                                   September 30  December 31
        (thousands)                                        2007         2006
        ---------------------------------------------------------------------
        Credit facility - Tranche A                    $104,976      $53,792
                        - Tranche B                      28,332       23,054
        Promissory note                                  15,839       16,786
        Loans from non-controlling shareholder           55,556       15,448
        ---------------------------------------------------------------------
                                                       $204,703     $109,080
        ---------------------------------------------------------------------

        Credit facility

        This quarter, Las Cruces borrowed an additional (euro)19 million
        (2007 year to date - (euro)39 million) under Tranche A, the
        US $240 million senior secured facility, and an additional
        (euro)6 million (2007 year to date - (euro)11 million) under
        Tranche B, the (euro)69 million senior secured bridge financing
        facility. During this quarter, Las Cruces repaid (euro)6 million
        under Tranche B equal to value-added tax refunds received. The credit
        facility loans approximate fair value because the loans accrue
        interest at prevailing market rates.

        Loans from non-controlling shareholder

        This quarter, Las Cruces received (euro)31 million (2007 year to date
        - (euro)90 million) in intercompany loan advances. These loans bear
        interest at EURIBOR plus 8.55 percent and are due to be repaid on
        February 25, 2020. The non-controlling portion of these loans,
        (euro)39.2 million, is reflected in long-term debt at September 30,
        2007. Loans from non-controlling shareholders approximate fair value
        because the loans accrue interest at prevailing market rates.

    9.  Commitments

        Capital commitments

        Our operations had the following capital commitments as at
        September 30, 2007:

        -  Las Cruces has committed (euro)122.5 million to engineering,
           procurement and construction management and additional
           construction work related to the pit and plant.
        -  Ok Tedi has committed approximately US $75.5 million (our
           proportionate share is US $13.6 million) to capital expenditures
           related to the mine waste management program.

        Community mine continuation agreements

        On June 29, Ok Tedi concluded the scheduled mid-term review of the
        Community Mine Continuation Agreements (CMCAs) and signed a
        memorandum of agreement with most of the affected communities.
        Ok Tedi has increased direct compensation funds to four times the
        previous level, a commitment of US $110 million over the next six and
        a half years. Inmet's share of the CMCA payments will be
        US $3 million per year (18 percent of Ok Tedi's contribution)
        compared to the approximately US $1 million per year under the prior
        agreement.

    10. Accumulated other comprehensive loss (AOCL)

        The table below shows the components of the beginning and ending
        balances of AOCL.

        ---------------------------------------------------------------------
        (thousands)
        Unrealized losses on gold forward sales contracts
         (net of tax of $2,166)                                     $(37,215)
        Unrealized gains on foreign exchange forward contract(1)       8,803
        Unrealized losses on interest rate swap contracts(2)            (168)
        Unrealized gains on investments (net of tax of $643)           3,034
        Currency translation adjustment                               (1,803)
                                                                   ----------
        AOCL, January 1, 2007                                       $(27,349)
        Other comprehensive loss for the nine months ending
         September 30, 2007                                          (74,448)
        ---------------------------------------------------------------------
        AOCL, September 30, 2007                                   $(101,797)
        ---------------------------------------------------------------------

        AOCL September 30, 2007 comprises:
        Unrealized losses on gold and copper forward sales
         contracts (net of tax of $3,438)                           $(28,957)
        Unrealized gains on foreign exchange forward contract(3)      14,874
        Unrealized losses on interest rate swap contracts(4)          (1,705)
        Unrealized gains on investments (net of tax of $2,384)        11,686
        Currency translation adjustment                              (97,695)
        ---------------------------------------------------------------------
        AOCL, September 30, 2007                                   $(101,797)
        ---------------------------------------------------------------------

        1. Net of tax of $5,389 and non-controlling interest of $3,773.
        2. Net of tax of $103 and non-controlling interest of $72.
        3. Net of tax of $9,105 and non-controlling interest of $6,374.
        4. Net of tax of $1,045 and non-controlling interest of $730.

        The table below shows the breakdown of the currency translation
        adjustment included in AOCL.

        ---------------------------------------------------------------------
                                                   September 30  December 31
        (thousands)                                        2007         2006
        ---------------------------------------------------------------------
        Pyhasalmi (euro functional currency)            $(5,161)      $5,637
        Las Cruces (euro functional currency)            (8,110)       8,095
        Cayeli (US dollar functional currency)          (66,008)      (9,278)
        Ok Tedi (US dollar functional currency)         (18,416)      (6,257)
        ---------------------------------------------------------------------
                                                       $(97,695)     $(1,803)
        ---------------------------------------------------------------------

        The Canadian dollar to US dollar exchange rate was $0.99 at
        September 30, 2007, and $1.17 at December 31, 2006. The Canadian
        dollar to euro exchange rate was $1.42 at September 30, 2007, and
        $1.54 at December 31, 2006.


    11. Investment and other income

        ---------------------------------------------------------------------
                                    three months ended     nine months ended
                                          September 30          September 30
        (thousands)                    2007       2006       2007       2006
        ---------------------------------------------------------------------
        Gain on sale of Izok             $-         $-         $-    $23,905
        Gain on sale of Wolfden           -          -     11,730          -
        Interest and dividend
         income                      10,451      4,483     27,015      8,720
        Foreign exchange loss        (4,695)    (2,390)   (14,240)    (2,610)
        Other                         1,028        164      3,291        527
        ---------------------------------------------------------------------
                                     $6,784     $2,257    $27,796    $30,542
        ---------------------------------------------------------------------

        Gain on sale of investments

        In 2006, we sold our interest in the Izok development property to
        Wolfden Resources Inc., and recorded a gain of $23.9 million. In
        exchange, we received 13.5 million common shares of Wolfden and
        9.5 million common shares of Premier Gold Mines Ltd. In the second
        quarter, we sold our shares in Wolfden to Zinifex Canadian
        Enterprises Inc. for cash proceeds of $51.4 million or $3.81
        per share, and recorded a gain of $11.7 million.

        Interest and dividend income

        Interest income was higher this quarter and for the nine months ended
        September 30, 2007, compared to the same periods in 2006, because of
        higher cash balances.

        Foreign exchange

        We recorded a foreign exchange loss of $4.7 million during the
        quarter because of the revaluation of some of our foreign currency
        denominated accounts and cash balances, and the recognition of
        deferred foreign exchange losses from dividends from Ok Tedi.

    12. Income tax expense

        The tables below show our current and future income tax expense.

    For the nine months ended September 30, 2007
    -------------------------------------------------------------------------
                                                               Las
    (thousands)  Corporate    Cayeli Pyhasalmi   Ok Tedi    Cruces     Total
    -------------------------------------------------------------------------

    Current
     income taxes   $1,157   $40,131   $24,548   $57,205        $-  $123,041
    Future
     income taxes        -       358       163    (2,282)      254    (1,507)
    -------------------------------------------------------------------------
                    $1,157   $40,489   $24,711   $54,923      $254  $121,534
    -------------------------------------------------------------------------



    For the nine months ended September 30, 2006
    -------------------------------------------------------------------------
                                                               Las
    (thousands)  Corporate    Cayeli Pyhasalmi   Ok Tedi    Cruces     Total
    -------------------------------------------------------------------------

    Current
     income taxes       $-   $28,858   $21,143   $62,780        $-  $112,781
    Future
     income taxes        -    (7,048)       72    (2,467)        -    (9,443)
    -------------------------------------------------------------------------
                        $-   $21,810   $21,215   $60,313        $-  $103,338
    -------------------------------------------------------------------------



    For the three months ended September 30, 2007
    -------------------------------------------------------------------------
                                                               Las
    (thousands)  Corporate    Cayeli Pyhasalmi   Ok Tedi    Cruces     Total
    -------------------------------------------------------------------------

    Current
     income taxes     $386   $14,059    $7,302   $13,029        $-   $34,776
    Future
     income taxes        -    (1,004)      123     3,986      (232)    2,873
    -------------------------------------------------------------------------
                      $386   $13,055    $7,425   $17,015     $(232)  $37,649
    -------------------------------------------------------------------------



    For the three months ended September 30, 2006
    -------------------------------------------------------------------------
                                                               Las
    (thousands)  Corporate    Cayeli Pyhasalmi   Ok Tedi    Cruces     Total
    -------------------------------------------------------------------------

    Current
     income taxes       $-    $9,065    $8,222   $20,787        $-   $38,074
    Future
     income taxes        -     3,443       (36)    1,421         -     4,828
    -------------------------------------------------------------------------
                        $-   $12,508    $8,186   $22,208        $-   $42,902
    -------------------------------------------------------------------------

        In June 2006, the Turkish government enacted tax legislation that
        reduced Cayeli's corporate tax rate to 20 percent, effective
        January 1, 2006. Cayeli recorded an income tax recovery of
        $10 million for the nine months ended September 30, 2006 from a
        reduction in its future income tax liability.

    13. Net income per share

        The following tables show our calculation of basic and diluted net
        income per share.

        ---------------------------------------------------------------------
                                    three months ended     nine months ended
                                          September 30          September 30
        (thousands)                    2007       2006       2007       2006
        ---------------------------------------------------------------------
        Net income available to
         common shareholders       $114,836   $111,582   $353,964   $323,233
        ---------------------------------------------------------------------

        (thousands)
        Weighted average common
         shares outstanding          48,278     48,274     48,278     48,190
        Plus incremental shares
         from assumed conversions
         deferred share units            74         74         74         74
        ---------------------------------------------------------------------
        Diluted weighted average
         common shares outstanding   48,352     48,348     48,352     48,264
        ---------------------------------------------------------------------

        (Canadian dollars per share)
        ---------------------------------------------------------------------
        Basic net income per common
         share                        $2.38      $2.31      $7.33      $6.71
        Dilutive effect from
         assumed conversions of
         deferred share units per
         common share                 (0.01)         -      (0.01)     (0.01)
        ---------------------------------------------------------------------
        Diluted net income per
         common share                 $2.37      $2.31      $7.32      $6.70
        ---------------------------------------------------------------------
    





For further information:

For further information: Richard Ross, Chairman and Chief Executive
Officer, (416) 860-3974; Jochen Tilk, President and Chief Operating Officer,
(416) 860-3972

Organization Profile

INMET MINING CORPORATION

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