Samira Hill

The Samira Hill Mine was inaugurated in 2004. It is located approximately 90 kilometers west of Niamey, the capital of Niger, on the 50-kilometer gold belt commonly referred to as the "Samira Horizon".

Exploration

Exploration at the Samira Hill Mine, with a budget of $4.8 million, is focusing primarily on the identification of new oxide deposits. More than 30,000 meters of Air Core (“AC”) and 40,000 meters of RC drilling are planned including:

25,000 meters of RC drilling over the most prospective area around Boulon Jounga open pit, and 8,000 meters of AC over more distal potentials
3,000 meters of RC delineation drilling over Sikia
Various projects around Libiri
Early stage exploration program at Tondé Babangou, Gare Garé and Bouli.

Production

Third Quarter 2011 v. Third Quarter 2010

During the second quarter 2011, gold production at the Samira Hill Mine totaled 11,200 ounces of gold at a cash operating cost of $880 per ounce produced.

During the three-month period ended September 30, 2011, 332,700 tonnes of ore and 426,900 tonnes of waste material were extracted from the Libiri NW and Samira Main pits, resulting in a strip ratio of 1.3:1. In addition, 2,614,000 tonnes of waste material were extracted from the Samira Main and Libiri NW pits during the pre-stripping phase. For the corresponding period in 2010, 89,500 tonnes of ore and 125,900 tonnes of waste material were extracted primarily from the Libiri A West pit, resulting in a strip ratio of 1.4:1. The increase in ore mined in the third quarter of 2011, compared to the third quarter of 2010, is mainly due to the focus on pre-stripping of the Samira Main pit in 2010, and to increased productivity following the addition of our mining fleet in 2011.

The recovery rate decreased mainly due to the processing of higher quantities of sulphide ore sourced primarily from the Samira Main pit.

Third quarter 2011 throughput increased by 32% compared to the same period in 2010. This is mainly due to the processing of saprolite ore sourced from the Libiri NW pits as opposed to the processing of harder ore extracted from the Boundary and Boulon Jounga pits in 2010.

In light of our current reserves, we are focusing exploration activities on oxide zones.

Gold ounces produced increased by 4% year over year as a result of higher throughput.

The 16% improvement in cash operating cost per tonne processed during the third quarter of 2011, compared to the third quarter of 2010, related to a 32% increase in ore processed and lower transportation costs. The cash operating cost per ounce produced increased slightly as a result of lower recovered head grade.

The depreciation per once sold increased in the third quarter of 2011, compared to the third quarter of 2010, as a result of the depreciation of Samira Main and Libiri NW pit’s stripping costs as we began extracting ore in this area.