Bema forecasts higher production costs in 2006

Vancouver – Mid-tier gold producer Bema Gold (BGO-T, BGO-X, BGO-L) expects to produce about 381,000 oz. gold from its global roster of mines this year, at a cash operating cost of US$336 per oz. and a total cash cost of US$356 per oz. While this represents a 48% increase in production over 2005, operating costs are up significantly too, largely because of the under-performing Petrex mines in South Africa.

In 2005, the company produced 256,668 oz. gold at a cash cost of US$327 per oz. and a total cost of US$347 per oz. This was below projections of 300,000 oz., mostly because of delays in the start-up of the Refugio mine in the Maricunga district of Chile.

Bema’s share of production from Refugio late last year was 19,409 oz. gold at cash costs of US$286 per oz. and a total cost of US$313 per oz. The 50%-owned mine is expected to produce about 248,000 oz. this year, with Bema’s share being half that amount, at an operating cash cost of US$267 per oz., and a total cash cost of US$291 per oz.

The Petrex mines are projected to produce about 169,000 oz. gold at a cash cost of US$440 per oz. this year. Bema notes that it is “continuing to pursue opportunities to improve the economics of the mines through joint-ventures or consolidations with other mining companies in the East Rand area.”

The Julietta mine in Far East Russia was the company’s star performer in 2005. The 79%-owned operation produced 90,133 oz. gold at an operating cost of US$208 per oz. and a total cash cost of US$257 per oz. Production this year is projected at 88,000 oz. at an operating cash cost of US$235 per oz., and a total cash cost of US$287 per oz.

Bema is presently constructing its 75%-owned Kupol mine, also in Far East Russia. The mine is projected to produce more than 550,000 oz. gold annually over the initial 6.5-year mine life, with operating cash costs of US$47 per oz., and a total cash cost of US$88 per oz. (net of silver credits). Production is slated to start in mid-2008.