Inmet Mining Corporation
TSX : IMN

Inmet Mining Corporation

April 28, 2009 08:50 ET

Inmet Announces First Quarter Earnings of $1.06 Per Share




TORONTO, ONTARIO--(Marketwire - Apr. 28, 2009) - Inmet Mining Corporation (TSX:IMN)

All amounts in Canadian dollars unless indicated otherwise

First quarter highlights

- Earnings lower because of lower metal prices

Lower copper and zinc prices reduced sales by $88 million this
quarter compared to the same quarter in 2008. Earnings from Troilus
of $58 million in the quarter were unique as it completed mining
high grade ore from the bottom of the pit while realizing a price for
gold of US $942 per ounce.

- Copper prices increased from last quarter

We realized a copper price of US $2.01 per pound this quarter, of
which US $0.27 per pound was a result of finalization adjustments in
respect of shipments in previous quarters. This quarter, copper
recorded its strongest quarterly price performance since 2006,
gaining over 30 percent, compared to a 50 percent decline in the
fourth quarter of 2008.

- Copper cash costs

Copper cash costs this quarter were US $0.56 per pound compared to US
$0.33 per pound in the first quarter of 2008. The increase in unit
costs is largely due to lower zinc metal credits. Cash costs are a
non-GAAP measure (see pages 29 and 31).

- Production

Copper production this quarter was in line with last year's
production. Zinc production was lower and gold production was higher.

- Las Cruces resumes mining operations

On April 7th, the Andalucian Regional Ministry of Innovation, Science
and Business (CICE) issued a resolution to approve lifting of the
suspension on mining at Las Cruces imposed in May 2008, and Las
Cruces believes it has satisfied the prescribed pre-conditions for
the resumption of mining set out in the resolution and is awaiting
CICE's confirmation that it can resume mining. Plant commissioning
has been completed and we expect first copper to be produced at the
beginning of June.

- Petaquilla pursuing higher copper production target

The base case for the front-end engineering and design program is a
throughput rate of 150,000 tonnes per day, which equates to an
average annual production of 275,000 tonnes of copper for the first
ten years. Work is progressing well on the drilling program designed
to expand reserves to ensure a minimum mine life of 30 years at this
throughput.


Key financial data
-------------------------------------------------------------------------
three months ended March 31
2009 2008 change
-------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(thousands, except per share amounts)

Sales
Gross sales $239,152 $276,281 -13%

Net income
Net income $51,327 $106,674 -52%
Net income per share $1.06 $2.21 -52%

Cash flow
Cash flow provided by operating
activities $17,097 $76,750 -78%
Cash flow provided by operating
activities per share(1) $0.35 $1.59 -78%

Capital spending $94,859 $111,414 -15%

OPERATING HIGHLIGHTS
Production(2)
Copper (tonnes) 20,000 19,200 +4%
Zinc (tonnes) 15,300 20,300 -25%
Gold (ounces) 78,800 56,300 +40%

Cash costs(3)
Copper (US $ per pound) $0.56 $0.33 +70%
Gold (US $ per ounce) $120 $392 -69%
-------------------------------------------------------------------------
------------------------------------
as at March 31 as at December 31
FINANCIAL CONDITION 2009 2008
------------------------------------
Current ratio 3.0 to 1 2.4 to 1
Gross debt to total equity(4) 19% 19%
Net working capital balance (millions) $513 $475
Cash balance (millions) $507 $573
Shareholders' equity (millions) $1,949 $1,868
-------------------------------------------------------------------------
(1) Calculated as cash flow provided by operating activities divided by
average shares outstanding for the respective period.
(2) Inmet's share.
(3) Cash cost per pound of copper and cash cost per ounce of gold are
non-GAAP measures - see Supplementary financial information on pages
29 and 31.
(4) Gross debt includes long-term debt and current portion of long-term
debt less the non-recourse note owing from Las Cruces to its non-
controlling shareholder.

Current market environment

Although we saw some improvement in base metal prices in the latter part
of this quarter, we continue to consider market conditions to be volatile.
Based on the strength of our financial position, together with our relatively
low operating costs:

- we do not expect market conditions to have any impact on our ability
to meet expected production levels
- we expect to maintain capital expenditures
- we expect to continue to pursue our growth objectives by advancing
the Petaquilla project and considering other opportunities as they
arise.

We will monitor the metal and financial markets, our financial performance
and resources, and our capital spending to make sure we maintain the financial
strength we need in these volatile and uncertain markets.


First quarter press release

Where to find it

Our financial results........................... 4
Key changes in 2009............................. 4
Understanding our performance................... 5
Earnings from operations...................... 7
Corporate costs............................... 11
Results of our operations....................... 13
Cayeli........................................ 14
Pyhasalmi..................................... 16
Troilus....................................... 18
Ok Tedi....................................... 20
Status of our development projects.............. 22
Las Cruces.................................... 22
Petaquilla.................................... 24
Managing our liquidity.......................... 25
Financial condition............................. 27
Accounting changes.............................. 28
Supplementary financial information............. 29
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. This quarter
refers to the three months ended March 31, 2009.

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.

Our financial results
-------------------------------------------------------------------------
three months ended March 31
(thousands, except per share amounts) 2009 2008 change
-------------------------------------------------------------------------

EARNINGS FROM OPERATIONS(1)

Cayeli $14,901 $53,655 -72%
Pyhasalmi 6,543 27,994 -77%
Troilus 54,484 8,635 +531%
Ok Tedi 17,585 53,918 -67%
Other (484) (494) -2%
-------------------------------------------------------------------------
93,029 143,708 -35%
-------------------------------------------------------------------------
DEVELOPMENT AND EXPLORATION
Corporate development and
exploration (3,232) (2,618) +23%
-------------------------------------------------------------------------

CORPORATE COSTS
General and administration (4,124) (3,648) +13%
Investment and other income (11,203) 14,754 -176%
Asset impairment (6,419) - -100%
Interest expense (492) (447) +10%
Income and capital taxes (19,015) (44,870) -58%
Non-controlling interest 2,783 (205) +1,458%
-------------------------------------------------------------------------
(38,470) (34,416) +12%
-------------------------------------------------------------------------

Net income $51,327 $106,674 -52%
-------------------------------------------------------------------------
Basic net income per share $1.06 $2.21 -52%
-------------------------------------------------------------------------
Diluted net income per share $1.06 $2.21 -52%
-------------------------------------------------------------------------

Weighted average shares outstanding 48,282 48,282 -

-------------------------------------------------------------------------
(1) Gross sales less smelter processing charges and freight, cost of
sales, depreciation and provisions for mine reclamation.



Key changes in 2009
-------------------------------------------------------------------------
three months ended see
(millions) March 31 page
-------------------------------------------------------------------------
EARNINGS FROM OPERATIONS
Sales
Lower copper and zinc prices denominated in
Canadian dollars $(88) 7
Higher gold prices and other prices 30 7
Higher sales volumes 12 8
Costs
Lower smelter processing charges and freight 4 9
Higher operating costs, net of costs that vary
with income and cash flows (2)
Higher depreciation (7) 10
-------------------------------------------------------------------------
Decrease in earnings from operations, compared to
2008 (51)

CORPORATE COSTS
Lower income tax expense from lower earnings 20 12
Asset impairment related to Cerattepe, net of tax
recovery - 12
Lower interest income on cash balances (7) 11
Foreign exchange loss on Las Cruces debt (11) 11
Other foreign exchange loss (6) 11
-------------------------------------------------------------------------
Decrease in net income, compared to 2008 $(55)
-------------------------------------------------------------------------

Understanding our performance

Metal prices

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

-------------------------------------------------------------------------
three months ended March 31
2009 2008 change
-------------------------------------------------------------------------
US dollar metal prices
Copper (per pound) US $2.01 US $4.16 -52%
Zinc (per pound) US $0.52 US $1.08 -52%
Gold (per ounce) US $922 US $776 +19%
-------------------------------------------------------------------------
Canadian dollar metal prices
Copper (per pound) C$ 2.50 C$ 4.16 -40%
Zinc (per pound) C$ 0.65 C$ 1.08 -40%
Gold (per ounce) C$1,147 C$ 776 +48%
-------------------------------------------------------------------------

There was an overall improvement in base metal prices by the end of the
first quarter, and a steady increase in the price of gold.
In the first quarter of 2009 the copper price gained over 30 percent,
compared to a 50 percent decline in the previous quarter, and reached over US
$1.80 per pound for the first time since November 2008. The average market
copper price for the quarter was US $1.56 per pound including the March
average of US $1.70 per pound.
Total copper exchange stocks fell by 40,000 tonnes in March, with much of
the material destined for China. This is the largest monthly draw down in LME
warehouses we have seen in the past four years.
Zinc prices were down for the first two months of the year, but increased
13 percent in March, bringing the price back to where it had been at the start
of the year. The average price for zinc was US $0.55 per pound in March. Like
copper, zinc prices were boosted by the Chinese stockpile purchases, which
brought down stocks in Asian warehouses, and reduced LME stocks by about four
percent in March.
The median price for gold in the first quarter of 2009 was about US $862
per ounce, about six percent below its closing price of US $918 per ounce at
the end of March. In February, gold prices approached US $1,000 per ounce for
the first time in 11 months in response to rising fears about the stability of
the global economy.
Towards the end of 2008, the financial crisis began to have a significant
effect on demand for sulphur and sulphuric acid. According to analysts, the
sulphuric acid market will continue to deteriorate and sulphur prices will
continue to be lower over the short to medium term. This will have a direct
impact on pyrite prices.

Exchange rates

Exchange rates affect revenue and earnings. The table below shows the
average exchange rates we realized.

-------------------------------------------------------------------------
three months ended March 31
2009 2008 Change
-------------------------------------------------------------------------
Exchange rates
1 US$ to C$ $1.24 $1.00 +24%
1 euro to C$ $1.62 $1.51 +7%
1 euro to US$ $1.31 $1.51 -13%
-------------------------------------------------------------------------

Sales are affected by the conversion of US dollar revenue to Canadian
dollars. Foreign exchange had a significant impact on our first quarter 2009
results compared to the same period last year. The Canadian dollar dropped 24
percent relative to the US dollar and 7 percent relative to the euro.
Net income was $19 million more for the quarter because of fluctuations
in the value of the US dollar and euro relative to the Canadian dollar, as
described in the table below.

-------------------------------------------------------------------------
three months ended
(millions) March 31
-------------------------------------------------------------------------
US dollar sales translated into Canadian dollars (reflected in
Canadian dollar sales price) $60
Cayeli and Ok Tedi US dollar costs translated into Canadian
dollars (33)
Pyhasalmi euro based costs translated into Canadian dollars (3)
Foreign exchange loss on Las Cruces debt, net of tax and non-
controlling interest (6)
Foreign exchange loss on euro denominated cash held in Canada (2)
Other 3
-------------------------------------------------------------------------
$19
-------------------------------------------------------------------------

Treatment charges up for copper and down for zinc

Treatment charges are one component of smelter processing charges. We also
pay smelters for content losses and price participation.
The table below shows the average charges we realized this quarter and
year to date.

-------------------------------------------------------------------------
three months ended March 31
2009 2008 change
-------------------------------------------------------------------------
Treatment charges
Copper (per dry metric tonne of
concentrate) US$68 US$52 +31%
Zinc (per dry metric tonne of
concentrate) US$248 US$310 -20%
-------------------------------------------------------------------------
Price participation
Copper (per pound) US$0.02 US$0.05 -60%
Zinc (per pound) US($0.03) US($0.04) -25%
-------------------------------------------------------------------------
Freight charges
Copper (per dry metric tonne of
concentrate) US$26 US$50 -48%
Zinc (per dry metric tonne of
concentrate) US$23 US$39 -41%
-------------------------------------------------------------------------

Copper treatment charges were higher this quarter than 2008 because of
less favourable contract terms with smelters. Contract terms for zinc smelters
have not been finalized yet and are based on 2008 terms.

Statutory tax rates remain consistent

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

-------------------------------------------------------------------------
2009 2008 change
-------------------------------------------------------------------------
Statutory tax rates
Cayeli 24% 24% -
Pyhasalmi 26% 26% -
Ok Tedi 37% 37% -
Las Cruces 30% 30% -
-------------------------------------------------------------------------

Earnings from operations

Earnings from operations include the following:

-------------------------------------------------------------------------
three months ended March 31
(thousands) 2009 2008 change
-------------------------------------------------------------------------
Gross sales $239,152 $276,281 -13%
Smelter processing charges and
freight (40,540) (44,157) -8%
Cost of sales:
Direct production costs (78,419) (77,534) +1%
Inventory changes (3,895) 2,940 -232%
Provisions for mine
rehabilitation and other
non-cash charges (7,590) (4,652) +63%
Depreciation (15,679) (9,170) +71%
-------------------------------------------------------------------------
Earnings from operations $93,029 $143,708 -35%
-------------------------------------------------------------------------

Gross sales were down this year

-------------------------------------------------------------------------
three months ended March 31
(thousands) 2009 2008 change
-------------------------------------------------------------------------
Gross sales by operation
Cayeli $60,021 $100,616 -40%
Pyhasalmi 33,981 54,908 -38%
Troilus 86,990 34,251 +154%
Ok Tedi(1) 58,160 86,506 -33%
-------------------------------------------------------------------------
$239,152 $276,281 -13%
-------------------------------------------------------------------------
Gross sales by metal
Copper $104,739 $168,168 -38%
Zinc 27,024 48,806 -45%
Gold 93,014 43,287 +115%
Other 14,375 16,020 -10%
-------------------------------------------------------------------------
$239,152 $276,281 -13%
-------------------------------------------------------------------------
(1) Our 18 percent share of Ok Tedi's sales.

Key components of the change in sales: copper and zinc prices down, gold
prices up

-------------------------------------------------------------------------
three months ended
(millions) March 31
-------------------------------------------------------------------------
Lower copper prices, denominated in Canadian dollars $(70)
Lower zinc prices, denominated in Canadian dollars (18)
Higher gold prices, denominated in Canadian dollars 28
Changes in other metal prices 2
Higher sales volumes 21
-------------------------------------------------------------------------
Decrease in gross sales, compared to 2008 $(37)
-------------------------------------------------------------------------

We record sales using the metal price we receive for sales that settle
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 forward price
of the metal at the end of the reporting period. We recognize the difference
between our estimate and the final price we receive by adjusting our gross
sales in the period we settle the sale (finalization adjustment).
We recorded $14 million in positive finalization adjustments from 2008
sales in the first quarter.

At the end of this quarter, the following sales had not been settled:
- 39 million pounds of copper provisionally priced at US $1.83 per
pound
- 3 million pounds of zinc provisionally priced at US $0.59 per pound.

The finalization adjustment we record for these sales will depend on the
actual price when the sale settles, which can be from one to five months after
we initially record it. We expect the sales that had not settled on March 31,
2009 to settle in the following months:

----------------------------------------------------
(millions of pounds) copper zinc
----------------------------------------------------
April 2009 26 3
May 2009 9 -
June 2009 2 -
July and August 2009 2 -
----------------------------------------------------
Unsettled sales at March 31, 2009 39 3
----------------------------------------------------

Gold sales volumes up in the quarter - Troilus completes mining in the
high grade pit bottom

Our sales volumes are directly affected by the amount of production from
our mines, and our ability to ship to our customers.

-------------------------------------------------------------------------
three months ended March 31
2009 2008 change
-------------------------------------------------------------------------
Sales volumes
Copper (tonnes) 19,000 18,300 +4%
Zinc (tonnes) 18,700 20,500 -9%
Gold (ounces) 83,900 55,300 +52%
Pyrite (tonnes) 76,000 124,100 -39%
-------------------------------------------------------------------------


Production
-------------------------------------------------------------------------
revised
three months ended March 31 objective
Inmet's share(1) 2009 2008 change 2009
-------------------------------------------------------------------------
Copper (tonnes)
Ok Tedi 6,600 6,700 -1% 31,600
Cayeli 7,000 8,100 -14% 36,800
Pyhasalmi 3,600 3,500 +3% 13,000
Las Cruces - - - 20,200
Troilus 2,800 900 +211% 6,000
-------------------------------------------------------------------------
20,000 19,200 +4% 107,600
-------------------------------------------------------------------------
Zinc (tonnes)
Cayeli 11,800 12,700 -7% 56,400
Pyhasalmi 3,500 7,600 -54% 22,600
-------------------------------------------------------------------------
15,300 20,300 -25% 79,000
-------------------------------------------------------------------------
Gold (ounces)
Troilus 58,100 35,000 +66% 132,200
Ok Tedi 20,700 21,300 -3% 109,400
-------------------------------------------------------------------------
78,800 56,300 +40% 241,600
-------------------------------------------------------------------------
Pyrite (tonnes)
Pyhasalmi 190,800 194,500 -2% 510,000
-------------------------------------------------------------------------
(1) Inmet's share represents 100 percent for Cayeli, Pyhasalmi and
Troilus, 18 percent for Ok Tedi and 70 percent for Las Cruces.

This quarter compared to the first quarter of 2008:
- zinc production was lower mainly because zinc grades at Pyhasalmi
were lower
- gold production was higher because grades were higher at Troilus.

2009 outlook for sales

Our outlook for sales ties directly to our production outlook. We expect
copper and zinc sales volumes in 2009 to be higher than 2008 because our
production expectations, which include new copper production at Las Cruces,
are higher.
We have set a higher copper production target for 2009 because of
expected production at Las Cruces and expected higher throughput at Cayeli and
Ok Tedi. Estimated production for our 70 percent share of Las Cruces includes
16,400 tonnes of copper cathode and 3,800 tonnes of ore that, depending on
market conditions and export permit renewals, we plan on shipping directly to
smelters (we also plan on shipping another 8,900 tonnes of ore directly to
smelters in 2010). Our Las Cruces objective is lower than our original
objective because of the delay in receiving approval to resume mining. It
assumes first copper is produced in June.
We expect to mine lower zinc grades at Pyhasalmi in 2009.
Our gold target for 2009 is consistent with our 2008 results. We expect
more production from Ok Tedi because of higher throughput, but lower
production from Troilus after it starts to produce gold from its lower grade
stockpiles.
Our Canadian dollar sales revenues are affected by the US dollar
denominated metal price we receive, and the exchange rate between the US
dollar and Canadian dollar. The market uncertainty makes it difficult to
forecast metal prices, but we remain focused on maximizing the efficiency of
our operations to ensure that we remain highly competitive in any economic
environment.

Lower smelter processing charges for the quarter

-------------------------------------------------------------------------
three months ended March 31
(thousands) 2009 2008 change
-------------------------------------------------------------------------
Smelter processing charges and
freight by operation
Cayeli $19,076 $22,013 -13%
Pyhasalmi 8,991 10,820 -17%
Troilus 6,260 2,187 +186%
Ok Tedi(1) 6,213 9,137 -32%
-------------------------------------------------------------------------
$40,540 $44,157 -8%
-------------------------------------------------------------------------
Smelter processing charges and
freight by metal
Copper $18,516 $20,894 -11%
Zinc 15,188 19,772 -23%
Other 6,836 3,491 +96%
-------------------------------------------------------------------------
$40,540 $44,157 -8%
-------------------------------------------------------------------------
Smelter processing charges by type
and freight

Copper treatment and refining
charges $9,693 $5,975 +62%
Zinc treatment charges 11,679 11,792 -1%
Copper price participation 1,463 1,963 -25%
Zinc price participation (1,668) (1,894) -12%
Content losses 10,743 16,257 -34%
Other 1,968 2,272 -13%
Freight 6,662 7,792 -15%
-------------------------------------------------------------------------
$40,540 $44,157 -8%
-------------------------------------------------------------------------
(1) Our 18 percent share of Ok Tedi's smelter processing charges and
freight.

Copper treatment and refining charges were higher in 2009 compared to
2008 because of less favourable contract terms with smelters. Zinc treatment
charges were lower in part because of lower sales volumes. The 2009 terms for
zinc have not yet been finalized.

2009 outlook for smelter processing charges and freight

We expect copper treatment and refining costs to increase in 2009, and
recently signed agreements with our smelters reflect this. We sell
approximately 90 percent of our copper concentrate under long-term contracts.
We are estimating annual treatment costs of US $75 per dry metric tonne in
2009. We also expect there will continue to be minimal price participation.
In the first quarter of 2009, smelters joined mines in cutting zinc
production to respond to the decline in demand for refined zinc and to falling
prices. We expect zinc mine production in 2009 to be below smelting
requirements, and believe that a balanced or deficit zinc concentrate market
could evolve. We therefore expect realized zinc processing charges to be less
than US $200 per tonne in 2009.
We are expecting production to begin at Las Cruces in June. Depending on
certain conditions, it may sell crushed ore to smelters and incur smelter
processing charges. The costs associated with smelting this material are
expected to be higher than at our other operations because of the higher level
of impurities in this ore.
Las Cruces' copper cathode production will be sold directly to copper
fabricators, bypassing the smelters and eliminating smelting and refining
charges.
We expect our ocean freight costs to be about 20 percent lower than they
were in 2008 because of the general slowdown in global economic activity.

Direct production costs and cost of sales were higher than last year

-------------------------------------------------------------------------
three months ended March 31
(thousands) 2009 2008 change
-------------------------------------------------------------------------
Direct production costs by operation
Cayeli $20,472 $23,340 -12%
Pyhasalmi 15,654 14,604 +7%
Troilus 18,606 19,947 -7%
Ok Tedi(1) 23,687 19,643 +21%
-------------------------------------------------------------------------
Total direct production costs 78,419 77,534 +1%
Inventory changes 3,895 (2,940) +232%
Reclamation, accretion and other
non-cash expenses 7,590 4,652 +63%
-------------------------------------------------------------------------
Total cost of sales $89,904 $79,246 +13%
-------------------------------------------------------------------------
(1) Our 18 percent share of Ok Tedi's direct production costs.

2009 outlook for cost of sales

We expect cost of sales to increase in 2009 reflecting the expected start
of production at Las Cruces. We expect to see cost reductions in consumables
and energy. The total amount we spend in Canadian dollars will also be
affected by the value of the US dollar and euro relative to the Canadian
dollar.

Depreciation was higher than last year

-------------------------------------------------------------------------
three months ended March 31
(thousands) 2009 2008 change
-------------------------------------------------------------------------
Depreciation by operation
Cayeli $3,473 $2,373 +46%
Pyhasalmi 2,602 2,150 +21%
Troilus 3,419 2,418 +41%
Ok Tedi 6,185 2,229 +177%
-------------------------------------------------------------------------
$15,679 $9,170 +71%
-------------------------------------------------------------------------

Depreciation to date in 2009 is higher mainly because we started
depreciating the mine waste tailings plant at Ok Tedi.

2009 outlook for depreciation

We expect depreciation to be about $70 million for 2009. Depreciation for
Las Cruces should be about $14 million, assuming we capitalize pre-production
for the four months after first copper is produced, which is expected in June.

Corporate costs

Corporate costs include general and administration costs, taxes, interest
and other income.

Investment and other income was lower in the quarter because of foreign
exchange losses

-------------------------------------------------------------------------
three months ended March 31
(thousands) 2009 2008
-------------------------------------------------------------------------
Interest income $2,042 $8,723
Foreign exchange gain (loss) (10,098) 6,858
Other (3,147) (827)
-------------------------------------------------------------------------
$(11,203) $14,754
-------------------------------------------------------------------------

Foreign exchange gain (loss)
We have a foreign exchange gain or loss when:
- we revalue certain foreign denominated assets and liabilities
- we distribute funds from our self-sustaining operations and recognize
the foreign exchange we previously deferred on our original
investment and on funds as they accumulated.

Foreign exchange gains (losses) are a result of the following:

-------------------------------------------------------------------------
three months ended March 31
(millions) 2009 2008
-------------------------------------------------------------------------
Revaluation of US dollar denominated debt at Las
Cruces $(11) -
Distribution of funds from subsidiaries - (5)
Revaluation of euro denominated cash held in
Canada (2) 1
Revaluation of short-term foreign intergroup
loans and other monetary items 3 11
-------------------------------------------------------------------------
$(10) $7
-------------------------------------------------------------------------

2009 outlook for investment and other income

Investment and other income is affected by cash balances, interest rates
and exchange rates. We plan to continue to repatriate excess cash balances
from our foreign operations. This might result in foreign exchange gains or
losses, depending on the strength or weakness of the Canadian dollar relative
to when we initially invested in the operations or the rate at which funds
were accumulated. The amount of the gain or loss, if any, will depend on the
amount distributed and foreign exchange rates at the time of distribution.
We plan to repatriate approximately US $80 million in cash from Cayeli
and (euro)10 million from Pyhasalmi in the second quarter of 2009. This excess
cash was accumulated at 2008 average exchange rates. The foreign exchange
impact will depend on the exchange rate on the day of repatriation. Because Ok
Tedi distributes its earnings more frequently, the effect of repatriation is
normally not that significant.
At March 31, 2009, we held (euro)13 million in Canada that could be
affected by foreign exchange gains or losses.

Asset impairment

We made a decision in 2008 not to proceed with the Cerattepe project. All
work has ceased on the project and we took a $34 million charge that year to
write down the assets to net realizable value. This quarter, we took an
additional impairment charge of $6 million and a tax recovery of $6 million.

Income tax expense was lower in the quarter because earnings were lower

-------------------------------------------------------------------------
three months ended March 31
(thousands) 2009 2008 change
-------------------------------------------------------------------------
Cayeli $(581) $19,124 -103%
Pyhasalmi 435 6,023 -93%
Ok Tedi 6,540 19,347 -66%
Las Cruces (4,035) 250 -1,714%
Corporate 16,656 126 +13,119%
-------------------------------------------------------------------------
$19,015 $44,870 -58%
-------------------------------------------------------------------------

Our tax expense changes as our earnings change.
- At Cayeli, we recorded a $6 million tax recovery related to the
impairment on Cerattepe.
- At Las Cruces, we recorded a tax recovery related to foreign exchange
losses from the translation of US dollar denominated debt.
- The tax expense at Corporate relates to a provision for Quebec mining
duties and a reduction in our future income tax asset to reflect
Troilus' first quarter earnings.

2009 outlook for income tax expense

We are not expecting any further changes in statutory tax rates at our
operations this year. We do, however, expect to expense approximately $10
million in Quebec mining duties, depending on Troilus' 2009 net income.

Results of our operations

2009 estimates

We have included estimates for our 2009 operating earnings and operating
cash flows in our financial review by operation. In deriving our estimates we
used our 2009 objectives for production and cost per tonne of ore milled, as
well as the following assumptions:

-------------------------------------------------------------------------
Copper price US $1.50 per pound
Zinc price US $0.50 per pound
Gold price US $900 per ounce
Copper treatment cost US $75 per tonne
Zinc treatment cost US $200 per tonne
US $ to C$ exchange rate $1.25
euro to C$ exchange rate $1.50
Working capital Assume no changes
-------------------------------------------------------------------------


Cayeli

-------------------------------------------------------------------------
three months ended March 31 objective
-------------------------------------------------------------------------
2009 2008 change 2009
-------------------------------------------------------------------------
Tonnes of ore milled
(000's) 264 278 -5% 1,200
Tonnes of ore milled
per day 2,900 3,100 -5% 3,300
-------------------------------------------------------------------------
Grades (percent) copper 3.4 3.6 -6% 3.8
zinc 6.2 6.5 -5% 6.5
-------------------------------------------------------------------------
Mill recoveries
(percent) copper 78 81 -4% 80
zinc 72 70 +3% 72
-------------------------------------------------------------------------
Production
(tonnes) copper 7,000 8,100 -14% 36,800
zinc 11,800 12,700 -7% 56,400
-------------------------------------------------------------------------
Cost per tonne of ore
milled (C$) $77 $84 -8% $81
-------------------------------------------------------------------------

Production targets remain consistent

Cayeli achieved a mill throughput rate of 143 tonnes per hour during the
quarter - which keeps it on target to achieve its objective of a 1.2 million
tonne annualized rate.
Interruptions in stope sequencing, however, meant lower mine production
and mill throughput, as well as lower ore grades than last year's first
quarter and our 2009 plan. Copper and zinc production were therefore lower
this quarter than in the first quarter of 2008. We expect grades to increase
in the second quarter.
Operating costs for the quarter were lower than last year, mainly because
of the drop in the value of the Turkish lira, which reduced labour costs, and
the cost of key commodities, such as copper sulphate and electricity. Programs
designed to achieve additional savings also made an impact, saving about $0.5
million in operating costs and 700 man shift hours in labour throughout the
quarter. Royalty charges were $2 million less than the first quarter of last
year because earnings were lower.

2009 outlook for production and costs

We expect copper grades in 2009 to increase to 3.8 percent and zinc
grades to rise to 6.5 percent. Although we have not adjusted our objective for
cost per tonne of ore milled yet, we expect savings during the year from cost
savings programs, lower commodity prices and lower labour costs.
The current three-year labour agreement will expire in May 2009 and
negotiations with the union are expected to begin in May. Pay increases
historically have exceeded inflation levels. We will make a strong effort to
manage labour cost escalations to maintain our competiveness.
Royalties also have a significant effect on costs and are variable
depending on earnings. Cost per tonne of ore milled includes $7 per tonne in
royalties in the first quarter. We have estimated that royalties will be $3
per tonne out of our total 2009 objective of $81 per tonne of ore milled,
depending on metal prices.

Financial review

Lower earnings this quarter because of a significant decline in copper
and zinc prices

-------------------------------------------------------------------------
(millions of Canadian dollars three months ended March 31 objective
unless otherwise stated) 2009 2008 2009
-------------------------------------------------------------------------
Sales analysis
Copper sales (tonnes) 6,500 6,700 36,800
Zinc sales (tonnes) 14,800 13,900 56,400
--------------------------------------
Gross copper sales $37 $64 $152
Gross zinc sales 21 34 78
Other metal sales 2 3 23
--------------------------------------
Gross sales 60 101 253
Smelter processing charges and
freight (19) (22) (99)
-------------------------------------------------------------------------
Net sales $41 $79 $154
-------------------------------------------------------------------------
Cost analysis
Tonnes of ore milled (thousands) 264 278 1,200
Direct production costs ($ per
tonne) $77 $84 $81
-------------------------------------------------------------------------
Direct production costs $20 $23 $97
Change in inventory 2 (2) -
Depreciation and other non-cash
costs 4 4 18
-------------------------------------------------------------------------
Operating costs $26 $25 $115
-------------------------------------------------------------------------
Operating earnings $15 $54 $39
-------------------------------------------------------------------------
Operating cash flow ($9) $15 $51
-------------------------------------------------------------------------

The objective for 2009 uses the assumptions laid out on page 13.

The table below shows what contributed to the change in operating earnings
and operating cash flow between 2009 and 2008.

-------------------------------------------------------------------------
(millions) three months ended
March 31
-------------------------------------------------------------------------
Lower metal prices, denominated in Canadian dollars $(39)
Lower smelter processing charges 1
Lower royalty 2
Higher depreciation (1)
Other (2)
-------------------------------------------------------------------------
Lower operating earnings, compared to 2008 (39)
Lower tax expense because earnings were lower 11
Changes in working capital 5
Other (1)
-------------------------------------------------------------------------
Lower operating cash flow, compared to 2008 $(24)
-------------------------------------------------------------------------

Spending in 2009 will be limited to sustaining capital

-------------------------------------------------------------------------
three months ended March 31 objective
2009 2008 change 2009
-------------------------------------------------------------------------
Capital spending $3,600 $5,700 -37% $22,000
-------------------------------------------------------------------------

Capital spending in the quarter was for mine equipment replacements.

2009 outlook for capital spending

Cayeli expects to spend $22 million in 2009 on mine equipment
replacements, mill upgrades and mine development.

Pyhasalmi

-------------------------------------------------------------------------
three months ended March 31 objective
2009 2008 change 2009
-------------------------------------------------------------------------
Tonnes of ore milled
(000's) 349 348 - 1,370
Tonnes of ore milled
per day 3,900 3,900 - 3,750
-------------------------------------------------------------------------
Grades (percent) copper 1.1 1.1 - 1.0
zinc 1.2 2.4 -50% 1.9
sulphur 44 42 +5% 42
-------------------------------------------------------------------------
Mill recoveries
(percent) copper 95 96 -1% 94
zinc 85 92 -8% 87
-------------------------------------------------------------------------
Production
(tonnes) copper 3,600 3,500 +3% 13,000
zinc 3,500 7,600 -54% 22,600
pyrite 190,800 194,500 -2% 510,000
-------------------------------------------------------------------------
Cost per tonne of ore
milled (C$) $45 $42 +7% $41
-------------------------------------------------------------------------

Lower zinc grades reduce zinc production by more than half

Pyhasalmi maintained its strong production record in the first quarter of
2009, processing at an annualized rate of 1.4 million tonnes.
Copper production was consistent with last year. Zinc production in the
first quarter was lower than we planned and lower than the first quarter of
2008 because changes in stope sequencing resulted in lower grades. Pyrite
production was consistent with last year, but a steep drop in pyrite demand at
the end of 2008 reduced prices significantly, and customers took only minimum
contracted deliveries. Pyhasalmi sold 76,000 tonnes of pyrite in the first
quarter of 2009 compared to 124,000 tonnes in the same period last year.
The higher cost in 2009 is a result of the exchange rate between the euro
and Canadian dollar.

2009 outlook for production and costs

Pyhasalmi expects to mine 1.4 million tonnes of 1 percent copper and 1.9
percent zinc in 2009, and produce 13,000 tonnes of copper and 22,600 tonnes of
zinc. Zinc grades are expected to increase through the rest of the year to
reach our objective of 1.9 percent.

Financial review

Lower earnings this quarter because of a significant decline in copper
and zinc prices

-------------------------------------------------------------------------
(millions of Canadian dollars three months ended March 31 objective
unless otherwise stated) 2009 2008 2009
-------------------------------------------------------------------------
Sales analysis
Copper sales (tonnes) 3,700 3,500 13,000
Zinc sales (tonnes) 4,000 6,600 22,600
Pyrite sales (tonnes) 76,000 124,000 510,000
--------------------------------------
Gross copper sales $17 $28 $54
Gross zinc sales 6 15 31
Other metal sales 11 12 46
--------------------------------------
Gross sales 34 55 131
Smelter processing charges and
freight (9) (11) (38)
-------------------------------------------------------------------------
Net sales $25 $44 $93
-------------------------------------------------------------------------
Cost analysis
Tonnes of ore milled (thousands) 349 348 1,370
Direct production costs ($ per
tonne) $45 $42 $41
-------------------------------------------------------------------------
Direct production costs $16 $15 $56
Change in inventory (1) (2) -
Depreciation and other non-cash
costs 3 3 11
-------------------------------------------------------------------------
Operating costs $18 $16 $67
-------------------------------------------------------------------------
Operating earnings $7 $28 $26
-------------------------------------------------------------------------
Operating cash flow ($2) $31 $33
-------------------------------------------------------------------------

The objective for 2009 uses the assumptions laid out on page 13.

The table below shows what contributed to the change in operating earnings
and operating cash flow between 2009 and 2008.

-------------------------------------------------------------------------
three months ended
(millions) March 31
-------------------------------------------------------------------------
Lower metal prices, denominated in Canadian dollars $(11)
Lower pyrite sales, net of costs to sell (5)
Lower sales volumes (5)
-------------------------------------------------------------------------
Lower operating earnings, compared to 2008 (21)
Lower tax expense because of lower earnings 6
Changes in working capital (mainly from higher accounts
receivable) (15)
Other (3)
-------------------------------------------------------------------------
Lower operating cash flow, compared to 2008 $(33)
-------------------------------------------------------------------------

Capital spending to sustain and improve

-------------------------------------------------------------------------
three months ended March 31 objective
(thousands) 2009 2008 change 2009
-------------------------------------------------------------------------
Capital spending $800 $1,800 -56% $11,000
-------------------------------------------------------------------------

2009 outlook for capital spending

We expect to spend $11 million in 2009, mainly for mine equipment, making
improvements in the mill and renovating process water pumps. We expect to
replace the zinc circuit cells in September, and these should provide a
reliable circuit for the remaining mine life.

Troilus

-------------------------------------------------------------------------
three months ended March 31 objective
2009 2008 change 2009
-------------------------------------------------------------------------
Tonnes of ore milled
(000's) 1,500 1,400 +7% 6,200
Tonnes of ore milled
per day 16,700 15,400 +7% 16,900
-------------------------------------------------------------------------
Strip ratio 0.1 1.2 -89% 0.3
-------------------------------------------------------------------------
Grades gold
(grams/tonne) 1.44 0.93 +55% 0.82
copper (percent) 0.20 0.07 +186% 0.11
-------------------------------------------------------------------------
Mill recoveries (percent)
gold 85 84 +1% 81
copper 95 91 +4% 92
-------------------------------------------------------------------------
Production
gold (ounces) 58,100 35,000 +66% 132,200
copper (tonnes) 2,800 900 +211% 6,000
-------------------------------------------------------------------------
Cost per tonne of ore
milled (C$) $13 $14 -7% $10
-------------------------------------------------------------------------

Record gold production in January and February

Troilus had record production in the first two months of the year because
of the high grade of the ore it mined from the main 87 pit.
As we were mining the final benches of the pit, we expected challenges
with the stability of the pit walls. By the end of February and into March
those concerns caused us to frequently suspend activities, which impacted
production. At the end of March, the pit wall had deteriorated to the point
where we decided to permanently withdraw from the pit bottom and resulted in a
net loss in reserves of about 2,600 ounces.

2009 outlook for production and costs

Stockpile recovery will begin in May, lowering production costs.
We expect mill throughput of 6.2 million tonnes for the year at average
grades of 0.8 grams per tonne gold and 0.11 percent copper, which should
produce 132,200 ounces of gold and 6,000 tonnes of copper.
Layoffs of mining and maintenance personnel began at the end of March and
will continue once the primary reclamation activities and pit clean up are
completed.

Financial review

Higher gold prices and higher sales volumes improved earnings

-------------------------------------------------------------------------
revised
(millions of Canadian dollars three months ended March 31 objective
unless otherwise stated) 2009 2008 2009
-------------------------------------------------------------------------
Sales analysis
Gold sales (ounces) 60,100 35,100 132,200
Copper sales (tonnes) 2,800 800 6,000
--------------------------------------
Gross gold sales $70 $26 $149
Gross copper sales 16 7 25
Other metal sales 1 1 3
--------------------------------------
Gross sales 87 34 177
Smelter processing charges and
freight (6) (2) (13)
-------------------------------------------------------------------------
Net sales $81 $32 $164
-------------------------------------------------------------------------
Cost analysis
Tonnes of ore milled (thousands) 1,500 1,400 6,200
Direct production costs ($ per
tonne) $13 $14 $10
-------------------------------------------------------------------------
Direct production costs $19 $20 $62
Change in inventory 3 (1) 1
Depreciation and other non-cash
costs 4 4 12
-------------------------------------------------------------------------
Operating costs $26 $23 $75
-------------------------------------------------------------------------
Operating earnings $55 $9 $89
-------------------------------------------------------------------------
Operating cash flow $49 $6 $99
-------------------------------------------------------------------------

The objective for 2009 uses the assumptions laid out on page 13.

The table below shows what contributed to the change in operating earnings
and operating cash flow between 2009 and 2008.

-------------------------------------------------------------------------
three months ended
(millions) March 31
-------------------------------------------------------------------------
Higher gold price denominated in Canadian dollars $26
Lower copper price denominated in Canadian dollars (12)
Higher sales volumes 31
Higher smelter processing charges (1)
Lower operating costs 2
-------------------------------------------------------------------------
Higher operating earnings, compared to 2008 46
Changes in working capital (5)
Other 2
-------------------------------------------------------------------------
Higher operating cash flow, compared to 2008 $43
-------------------------------------------------------------------------


Ok Tedi

-------------------------------------------------------------------------
three months ended March 31 objective
(100 percent) 2009 2008 change 2009
-------------------------------------------------------------------------
Tonnes of ore milled
(000's) 5,200 5,000 +4% 25,300
Tonnes of ore milled
per day 57,800 54,900 +4% 69,000
-------------------------------------------------------------------------
Strip ratio 1.6 1.9 -16% 1.2
-------------------------------------------------------------------------
Grades
copper (percent) 0.8 0.9 -11% 0.8
gold (grams/tonne) 1.1 1.0 +10% 1.1
-------------------------------------------------------------------------
Mill recoveries (percent)
copper 86 85 +1% 84
gold 66 73 -10% 68
-------------------------------------------------------------------------
Production
copper (tonnes) 36,900 37,300 -1% 176,000
gold (ounces) 115,100 118,500 -3% 608,000
-------------------------------------------------------------------------
Cost per tonne of ore
milled (C$) $25 $24 +4% $26
-------------------------------------------------------------------------


Throughput to improve once the mine tailings management plant has reached
designed performance

The mine plan this quarter was modified to limit the amount of sulphur in
tailings while the tailings management plant is being fully commissioned. The
purpose of the plant is to minimize discharge of sulphur to the river, thus
greatly reducing the potential environmental impact. Until the plant reaches
its design performance, Ok Tedi will only mine ores with low sulphur content.
The change in plan reduced gold grades but increased copper grades from what
we expected.
Mill throughput in the quarter was higher than last year, but lower than
expected because of lower mine production and low grinding rates on certain
ores. Gold recoveries were low because of difficulty with complex ores.
The cost per tonne of ore milled this quarter was higher than in 2008
mainly because of the weaker value of the Canadian dollar.

2009 outlook for production and costs

Ok Tedi expects to process 25.3 million tonnes of ore containing 0.8
percent copper and 1.1 grams per tonne of gold. This should produce 176,000
tonnes of copper and 608,000 ounces of gold. Copper grades should be slightly
lower during the rest of the year, but gold grades should be slightly higher.
Modifications on the mine tailings management plant to reach full
performance are required, and engineering for this is now underway. Modifying
and operating the plant to achieve designed results are critical not only to
achieve annual production objectives but also for the continued responsible
operation of the mine.

Financial review

Lower earnings and operating cash flow

-------------------------------------------------------------------------
revised
(millions of Canadian dollars three months ended March 31 objective
unless otherwise stated) 2009 2008 2009
-------------------------------------------------------------------------
Sales analysis at 18%
Copper sales (tonnes) 6,000 7,400 31,600
Gold sales (ounces) 23,800 20,200 109,400
--------------------------------------
Gross copper sales $34 $68 $131
Gross gold sales 23 17 123
Other metal sales 1 1 4
--------------------------------------
Gross sales 58 86 258
Smelter processing charges and
freight (6) (9) (38)
-------------------------------------------------------------------------
Net sales $52 $77 $220
-------------------------------------------------------------------------
Cost analysis at 18%
Tonnes of ore milled (thousands) 932 900 4,550
Direct production costs ($ per
tonne) $25 $24 $26
-------------------------------------------------------------------------
Direct production costs $23 $20 $118
Change in inventory 1 1 -
Depreciation and other non-cash
costs 10 2 28
-------------------------------------------------------------------------
Operating costs $34 $23 $146
-------------------------------------------------------------------------
Operating earnings $18 $54 $74
-------------------------------------------------------------------------
Operating cash flow ($14) $39 $70
-------------------------------------------------------------------------

The objective for 2009 uses the assumptions laid out on page 13.

The table below shows what contributed to the change in operating earnings
and operating cash flow between 2009 and 2008.

-------------------------------------------------------------------------
three months ended
(millions) March 31
-------------------------------------------------------------------------
Lower copper prices, denominated in Canadian dollars $(19)
Higher gold prices, denominated in Canadian dollars 2
Lower sales volumes (8)
Higher operating costs (7)
Higher depreciation (4)
-------------------------------------------------------------------------
Lower operating earnings, compared to 2008 (36)
Lower tax expense because of lower earnings 12
Changes in net working capital (mainly from the repayment of
overpaid metal sales) (34)
Add back - non-cash higher depreciation 4
Other 1
-------------------------------------------------------------------------
Lower operating cash flow, compared to 2008 $(53)
-------------------------------------------------------------------------

Capital spending on pit drainage

In 2009, Ok Tedi spent US $15 million (our 18 percent share was $3
million) on capital projects. Of this, US $8 million was for the pit drainage
project.

-------------------------------------------------------------------------
(18 percent) three months ended March 31 objective
2009 2008 change 2009
-------------------------------------------------------------------------
Capital spending $3,300 $8,000 -59% $26,000
-------------------------------------------------------------------------

2009 outlook for capital spending

Ok Tedi plans to spend US $115 million (our 18 percent share is $26
million) in 2009 for continuing work on the pit drainage project, further pit
development and other capital projects.

Status of our development projects

Las Cruces

Quarterly development update

On April 7th, the Andalucian Regional Ministry of Innovation, Science and
Business (CICE) issued a resolution to approve the lifting of the suspension
of mining imposed at Las Cruces in May 2008.
Las Cruces has completed all activities required to fulfill the
pre-conditions and is awaiting receipt of final verification from CICE which
would enable Las Cruces to resume mining in the pit.

Preparation for first copper

Construction of the process plant has been completed and commissioned to
the extent possible without ore. It is ready to start up as soon as ore is
delivered, which we expect would be about four weeks after Las Cruces receives
the final verification from CICE that would enable it to resume mining. First
copper should be produced approximately eight days after the start of
production.

2009 outlook for development and production

Las Cruces construction is complete. To date, (euro)477 million has been
spent on construction capital for the project and (euro)543 million for the
total project.
The following table shows total spending for the project to the end of
March 2009 and our capital objective for the rest of the year:

-------------------------------------------------------------------------
(millions) up to January to revised total
December March 2009 objective project
31, 2008 April to estimate at
December December 31,
2009 2009
-------------------------------------------------------------------------

Construction capital (euro)448 (euro)29 (euro)27 (euro)504
Mine development 6 4 14 24
Sustaining capital - - 24 24
Capitalized interest 18 3 5 26
Pre-operating costs
capitalized, net of
sales - - 16 16
Value added tax 25 5 (30) -
Other 5 - 3 8
-------------------------------------------------------------------------
Capital expenditures (euro)502 (euro)41 (euro)59 (euro)602
-------------------------------------------------------------------------

The table below shows expected production for 100 percent of Las Cruces
for 2009 (assuming we start production in June) and for the mine life.

-------------------------------------------------------------------------
2009 life of
target mine
-------------------------------------------------------------------------
Tonnes of ore processed (thousands) 305 17,492
-------------------------------------------------------------------------
Strip ratio 40 12.5
-------------------------------------------------------------------------
Copper grades (percent) 9.8 6.2
-------------------------------------------------------------------------
Copper production (tonnes) 28,800 997,200
-------------------------------------------------------------------------
Cost per tonne of ore processed (C $) $195 $87
-------------------------------------------------------------------------

Expected copper production for 2009 includes 23,400 tonnes of copper
cathode and 5,400 tonnes of copper in ore that, depending on market conditions
and renewal of export permits, we plan to ship directly to smelters. If market
conditions change and smelters refuse to accept the ore, we will stockpile the
ore and process it in the hydrometallurgical plant, which will reduce copper
sales by 5,400 tonnes of copper. We still plan on mining 18,200 tonnes of
copper in ore to ship directly to smelters, however, 12,800 tonnes has been
shifted to 2010.
Based on the 2009 production targets and the assumptions laid out on page
13, we estimate the following operating earnings and cash flow in 2009.

100%
----------------------------------------------------- ------------------
(millions of Canadian dollars unless revised objective
otherwise stated) 2009
----------------------------------------------------- ------------------
Copper sales (tonnes) 28,800
------------------
Gross copper sales $77
Smelter processing charges and freight (14)
----------------------------------------------------- ------------------
Net sales $63
----------------------------------------------------- ------------------
Tonnes of ore milled (thousands) 305
Direct production costs ($ per tonne) $195
----------------------------------------------------- ------------------
Direct production costs $39
Change in inventory (6)
Depreciation and other non-cash costs 14
----------------------------------------------------- ------------------
Operating costs $47
----------------------------------------------------- ------------------
Operating earnings $16
----------------------------------------------------- ------------------
Operating cash flow $32
----------------------------------------------------- ------------------

Petaquilla

Quarterly development update

We have three main activities at Petaquilla: drilling, social and
environmental impact assessment and engineering.

Drilling

We drilled 18,000 metres in the first quarter of 2009, bringing total
resource drilling to approximately 39,000 metres. We expect to achieve our
project mineral reserve targets by mid-2009. Our drill programme was expanded
to nine rigs from eight in the first quarter to ensure we reach our reserve
target on schedule. Work is progressing well to expand reserves to ensure a
minimum mine life of 30 years at a throughput rate of 150,000 tonnes per day.

Social and environmental impact assessment and community development

Baseline studies are substantially completed, and we are moving to the
impact assessment stage. We expect to submit an impact assessment (EsIA) to
the Panamanian environmental authorities by the end of 2009.
We have been active in supporting sustainable businesses to support our
activities, including carpentry projects to supply core boxes, poultry
production within communities to supply our camps, a contractor maintenance
cooperative to ensure our access road is in good condition and experts to
improve agricultural practices and yields. We will continue to fund these
programs until they become fully sustainable.
Other initiatives, such as local scholarship programs and meal programs
that we inherited, are being continued with success.

Engineering

We continued with engineering work and expect to complete the final
front-end engineering and design (FEED) study by the end of 2009. The base
case for the FEED study is a throughput rate of 150,000 tonnes per day, which
equates to an average annual production of 275,000 tonnes of copper for the
first 10 years. We intend to select an independent producer that would
construct a facility to provide the power required for the operation.

2009 outlook for development

By the end of 2009, once the final FEED study is complete and the EsIA is
submitted, we expect to begin detailed engineering. At the same time, we
intend to seek approval of the EsIA and begin the permitting process for
construction. If permits are received in a timely manner, construction should
be completed in 2014.
We expect to spend approximately $94 million in 2009 to fund this work.
We have commenced the process of meeting potential partners for the
development of this project and expect to develop partnerships over the next
12 months.

Managing our liquidity

We plan our financing strategy by assessing our long-term financial
requirements, reviewing our future capital needs and determining the optimal
mix of several alternatives, including our significant cash position, future
operating cash flow, credit facilities and project financing. In planning our
capital structure, we include a liquidity cushion that allows us to address
operational disruptions or general market downturns, such as the current
weakening of the global economy.

-------------------------------------------------------------------------
three months ended March 31
(millions) 2009 2008
-------------------------------------------------------------------------
CASH FROM OPERATING ACTIVITIES
Cayeli $(9) $15
Pyhasalmi (2) 31
Troilus 49 6
Ok Tedi (14) 39
Corporate development and exploration not
included in operations' cash flow (2) (2)
General and administration (4) (4)
Other (1) (8)
-------------------------------------------------------------------------
17 77
-------------------------------------------------------------------------
CASH FROM INVESTING AND FINANCING
Capital spending (95) (111)
Long-term debt - borrowings - 50
- repayments (8) -
Funding bynon-controlling shareholder 16 15
Foreign exchange on cash held in foreign
currency 6 37
Other (2) (3)
-------------------------------------------------------------------------
(83) (12)
-------------------------------------------------------------------------
Increase (decrease) in cash (66) 65
Cash and short-term investments
Beginning of period 573 841
-------------------------------------------------------------------------
End of period $507 $906
-------------------------------------------------------------------------

OPERATING ACTIVITIES

Key components of the change in operating cash flows
-------------------------------------------------------------------------
three months ended
(millions) March 31
-------------------------------------------------------------------------
Lower earnings from operations (see page 4) $(51)
Non-cash changes in operating earnings:
Add back higher non-cash charges included in earnings from
operations 8
Lower tax expense 21
Lower interest income (7)
Changes in working capital (29)
Other (2)
-------------------------------------------------------------------------
Lower operating cash flow, compared to 2008 $(60)
-------------------------------------------------------------------------

Operating cash flows are lower than they were in 2008 because of lower
operating earnings and a large outflow of cash related to working capital.
First quarter cash flow was reduced by approximately $48 million to repay
smelters for the excess provisional payments they made in 2008, before copper
prices dropped.

2009 outlook for cash from operating activities

Volatile markets make it more difficult than usual to develop reliable
estimates for commodity prices and foreign exchange rates. The table below
shows our expected operating cash at our operations, based on the market
assumptions described on page 13, and the assumptions in Results of our
operations, which starts on page 13.

2009 estimated operating cash flow by operation
-------------------------------------------------------------------------

(millions)
-------------------------------------------------------------------------
Cayeli $ 51
Pyhasalmi 33
Troilus 99
Ok Tedi 70
Las Cruces 32
-------------------------------------------------------------------------
$285
-------------------------------------------------------------------------

INVESTING AND FINANCING

Capital spending
-------------------------------------------------------------------------
revised
three months ended March 31 objective
(millions) 2009 2008 2009
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cayeli $ 3 $ 6 $ 22
Pyhasalmi 1 2 11
Troilus - - -
Ok Tedi 3 8 26
Las Cruces 65 92 156
Cerattepe - 3 -
Petaquilla 23 - 94
-------------------------------------------------------------------------
$95 $111 $309
-------------------------------------------------------------------------

Please see Results of our operations and Status of our development
projects for a discussion of actual results and our 2009 objective.

Long-term debt repayments

In 2009, Las Cruces repaid (euro) 5 million under Tranche B of its credit
facility which is equal to the amount of subsidies received. We expect to
receive the remaining subsidies in the second quarter, and will fully repay
Tranche B at that time.

2009 outlook for investing and financing

We expect capital spending to be $309 million in 2009. The more
significant items include:
- $84 million on completion of the construction of the processing plant
at Las Cruces
- $94 million for work on the development plan at Petaquilla
- $10 million for pit development and $7 million for an underground
drainage tunnel at Ok Tedi.

Until we start receiving proceeds from sales at Las Cruces, we expect to
use sponsor contributions, value added tax refunds and government subsidies to
fund its costs. We are expecting (euro) 40 million in subsidies, but we must
meet certain conditions before we can receive the funds (mainly specific
levels of employment and completing construction of the plant, which we
believe have been met).

Financial condition

CASH

Our cash and cash equivalents balance at March 31, 2009 was $507 million.
This included cash and money market instruments that mature in 90 days or
less, and short-term investments that mature in 91 days to a year.
Our policy is to invest excess cash in highly liquid investments of the
highest credit quality and to limit our exposure to individual counterparties
to minimize the risk associated with these investments. We base our decisions
about the length of maturities on our cash flow requirements, rates of return
and other factors.
General worldwide economic conditions have weakened dramatically since
the end of the third quarter of 2008. In response, we have adjusted our
investment positions and are now mainly invested in treasury funds to minimize
liquidity risk until normal market conditions return. At March 31, 2009, we
held cash and short-term investments in the following:

- Canada and provincial T-Bills
- Short-term debt instruments issued by Canadian Crown Corporations
- Highest rated asset backed commercial paper programs sponsored by
leading Canadian financial institutions backed by global style
liquidity lines
- AAA rated treasury funds and money market funds managed by leading
international fund managers investing in money market and short-term
debt securities and fixed income securities issued by leading
international financial institutions and their sponsored
securitization vehicles
- Cash, term and overnight deposits with leading Canadian and
international financial institutions benefiting directly and
indirectly from support programs by various governments and central
banks.

See note 4 on page 41 in the consolidated financial statements for more
details about where our cash is invested.
Our restricted cash balance of $71 million included:
- $18 million in trust for future reclamation at Ok Tedi
- $16 million of cash collateralized letters of credit for Inmet
- $35 million related to issuing letters of credit to suppliers at
Las Cruces and for its labour bond to the government
- $2 million for future reclamation at Pyhasalmi


COMMON SHARES

-------------------------------------------------------------------------
Common shares outstanding as of
March 31, 2009 and April 28, 2009 48,281,909
-------------------------------------------------------------------------
Deferred share units outstanding as of
March 31, 2009
(redeemable on a one-for-one basis for common shares) 85,563
-------------------------------------------------------------------------

Dividend Declaration

The board of directors has declared an eligible dividend of $0.10 per
common share payable on June 15, 2009 to common shareholders of record as at
May 31, 2009.

FINANCIAL INSTRUMENTS

The table below shows the gold and copper forward sales and interest rate
hedges (and their marked-to-market valuations) recorded on our balance sheet
at the end of this quarter.

-------------------------------------------------------------------------
C$ marked-to-
market gain
Type of (loss) at
contract Expiry Quantity Price March 31, 2009
-------------------------------------------------------------------------
Ok Tedi copper
forward sales 2009 2.4 million lbs US $2.41 per lb $2.0 million(1)

Ok Tedi gold
forward sales 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. ($2.5 million)(2)

Las Cruces 2009 US $179 million 5.2 percent ($20.6 million)
interest to 2014 (reducing in
rate conjunction
swaps with debt
repayment
schedule)
-------------------------------------------------------------------------
(1) At a copper price of US $1.84 per pound.
(2) At a gold price of US $937 per ounce.

Accounting changes

We adopted a new section of the CICA Handbook:

Emerging Issues Committee (EIC) 173 - Credit Risk and the fair value of
financial assets and financial liabilities

Section 3855, (Financial instruments-recognition and measurement)
requires certain financial assets and financial liabilities to be measured at
fair value, taking into account the credit quality of the financial
instrument.
The EIC reached a consensus that an entity's own credit risk and the
credit risk of the counterparty should both be taken into account in
determining the fair value of financial assets and financial liabilities,
including derivative instruments, for presentation and disclosure purposes.
We have adopted this standard retrospectively, without restatement. The
adoption of EIC 173 did not have an impact on our consolidated financial
statements.

Section 3064 - Goodwill and Intangible Assets

Effective January 1, 2009, we adopted CICA Handbook Section 3064,
Goodwill and Intangible Assets, which replaces Section 3062 - Goodwill and
Other Intangible Assets and Section 3450 - Research and Development Costs.
This new standard establishes standards for the recognition, measurement,
presentation and disclosure of goodwill subsequent to its initial recognition
and of intangible assets. It provides guidance for recognizing internally
developed intangible assets, and ensuring consistent treatment of all
intangible assets, whether separately acquired or internally developed.
Standards concerning goodwill are unchanged from the standards included in the
previous section. The adoption of this standard did not impact on our
consolidated financial statements.

Plans on transition to International Financial Reporting Standards
(IFRS):

The Accounting Standards Board confirmed in February 2008 that
International Financial Reporting Standards (IFRS) will replace current
Canadian GAAP for financial periods beginning on and after January 1, 2011.
IFRS is based on a conceptual framework similar to Canadian GAAP, but there
are significant differences in recognition, measurement and disclosure.
While the adoption of IFRS will not change the actual cash flows we
generate, it will result in changes to our reported financial position and
results of operations - which could have material effects.
We have prepared a comprehensive IFRS convergence plan that addresses the
changes in accounting policy, restatement of comparative periods, internal
control over financial reporting, modification of existing systems, the
training and awareness of staff, as well as other related business matters.
Senior financial management who report to and are overseen by Inmet's Audit
Committee are responsible for planning and implementing the conversion.
To date, we have completed an initial draft for the majority of our
significant accounting policies. Over the next several months we will quantify
and prepare the calculations to adjust our financial statements using these
initial new policies. This exercise will either validate our accounting policy
choices or require reconsideration of our choices. The work prepared to date
has indicated that we are not expecting significant changes to the carrying
values of property, plant and equipment, but based on current IFRS we would
expect significant effects on our accounting for business combinations on a
going forward basis. Current exposure drafts on accounting for joint venture
interests, which currently includes our investment in Ok Tedi, and future
income taxes could also have significant effects on our financial statements.
We will continue to monitor these exposure drafts.
For the remainder of 2009, we will complete and finalize our accounting
policies under IFRS, calculate all differences and document new internal
controls. Our goal is to restate our December 31, 2009 Canadian GAAP balance
sheet to IFRS in the first quarter of 2010.

Supplementary financial information

Page 31 includes supplementary financial information about cash costs.
These measures do not fall into the category of generally accepted accounting
principles.
We use unit cash cost information as a key performance indicator, both on
a segmented and consolidated basis. We have included cash costs as
supplementary information because we believe our key stakeholders use these
measures as a financial indicator of our profitability and cash flows before
the effects of capital investment and financing costs, such as interest.
Since cash costs are not recognized measures under Canadian generally
accepted accounting principles they should not be considered in isolation of
earnings or cash flows. There is also no standard way to calculate cash costs,
so they are not a reliable way to compare us to other companies.

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 Petaquilla.

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

Annual general meeting
Will be held on
- Tuesday, April 28, 2009
- 2:30 p.m. Eastern Time
- webcast available at
http://w.on24.com/r.htm?e=141502&s=1&k=F7A8F940C6062080C2DF292F43696FF2
or www.inmetmining.com.

You can also dial in by calling
- Local or international: +1.416.644.3417
- Toll-free within North America: +1.800.732.6179

Starting 5:00 p.m. (ET) Tuesday April 28, 2009, conference call replay
will be available
- Local or international: +1.416.640.1917 passcode 21302880 followed by
the number sign
- Toll-free within North America: +1.877.289.8525 passcode 21302880
followed by the number sign


First quarter conference call
Will be held on
- Wednesday, April 29, 2009
- 8:30 a.m. Eastern Time
- webcast available at
www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2610080 or
www.inmetmining.com.

You can also dial in by calling
- Local or international: +1.416.644.3421
- Toll-free within North America: +1.800.732.0232

Starting 10:30 a.m. (ET) Wednesday April 29, 2009, conference call replay
will be available
- Local or international: +1.416.640.1917 passcode 21302881 followed by
the number sign
- Toll-free within North America: +1.877.289.8525 passcode 21302881
followed by the number sign



INMET MINING CORPORATION
Supplementary financial information

Cash costs
2009 For the three months ended March 31
per ounce
per pound of copper of gold
--------------------------------------- ---------
TOTAL
CAYELI PYHASALMI OK TEDI COPPER TROILUS
----------------------------------------------------- --------- ---------
(US dollars)

Direct production costs $0.97 $1.60 $1.32 $1.24 $258
Royalties and variable
compensation 0.09 - (0.05) 0.02 -
Smelter processing
charges and freight 1.02 0.68 0.39 0.71 84
Metal credits (1.10) (2.04) (1.40) (1.41) (222)
----------------------------- --------- ---------

Cash cost $0.98 $0.24 $0.26 $0.56 $120
----------------------------- --------- ---------
----------------------------- --------- ---------

2008 For the three months ended March 31
per ounce
per pound of copper of gold
--------------------------------------- ---------
TOTAL
CAYELI PYHASALMI OK TEDI COPPER TROILUS
----------------------------------------------------- --------- ---------
(US dollars)

Direct production costs $1.06 $1.90 $1.27 $1.30 $567
Royalties and variable
compensation 0.24 - 0.11 0.15 -
Smelter processing
charges and freight 1.19 1.16 0.55 0.95 62
Metal credits (1.86) (3.90) (1.37) (2.07) (237)
----------------------------- --------- ---------

Cash cost $0.63 ($0.84) $0.56 $0.33 $392
----------------------------- --------- ---------
----------------------------- --------- ---------

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

Reconciliation of cash costs to statements of earnings
2009 For the three months ended March 31
per ounce
per pound of copper of gold
-------------------------------------- ---------
(millions of Canadian
dollars, except where TOTAL
otherwise noted) CAYELI PYHASALMI OK TEDI COPPER TROILUS
----------------------------------------------------- --------- ---------
GAAP reference page 15 page 17 page 21 page 19

Direct production costs $20 $16 $23 $59 $19
Smelter processing
charges and freight 19 9 6 34 6
By product sales (23) (17) (24) (64) (17)
Adjust smelter processing
and freight, and sales
to production basis 3 (6) - (3) -
--------- ---------- -------- -------- ---------
Operating costs net of
metal credits $19 $2 $5 $26 $8
US $ to C$ exchange rate $1.24 $1.24 $1.24 $1.24 $1.24
Inmet's share of
production (000's) 15,500 7,900 14,600 38,000 58,100
-------------------------------------- ---------
Cash cost $0.98 $0.24 $0.26 $0.56 $120
-------------------------------------- ---------
-------------------------------------- ---------


2008 For the three months ended March 31
per ounce
per pound of copper of gold
-------------------------------------- ---------
(millions of Canadian
dollars, except where TOTAL
otherwise noted) CAYELI PYHASALMI OK TEDI COPPER TROILUS
----------------------------------------------------- --------- ---------
GAAP reference page 15 page 17 page 21 page 19
Direct production costs $23 $15 $20 $58 $20
Smelter processing
charges and freight 22 11 9 42 2
By product sales (37) (27) (18) (82) (8)
Adjust smelter processing
and freight, and sales
to production basis 3 (5) (2) (4) -
--------- ---------- -------- -------- ---------
Operating costs net of
metal credits $11 ($6) $9 $14 $14
US $ to C$ exchange rate $1.00 $1.00 $1.00 $1.00 $1.00
Inmet's share of
production (000's) 18,000 7,800 14,800 40,600 35,000
-------------------------------------- ---------
Cash cost $0.63 ($0.84) $0.56 $0.33 $392
-------------------------------------- ---------
-------------------------------------- ---------



Quarterly review

INMET MINING CORPORATION
Quarterly review
(unaudited)

Latest Four Quarters
-------------------------------------------------------------------------
(thousands of Canadian 2009 2008 2008 2008
dollars, except per First Fourth Third Second
share amounts) quarter quarter quarter quarter
-------------------------------------------------------------------------

STATEMENTS OF EARNINGS
Gross sales $ 239,152 $ 139,626 $ 247,495 $ 281,463
Smelter processing
charges and freight (40,540) (32,870) (49,502) (53,209)
Cost of sales (89,904) (91,715) (84,948) (89,893)
Depreciation (15,679) (14,844) (11,395) (9,195)
-----------------------------------------------
93,029 197 101,650 129,166
Corporate development
and exploration (3,232) (1,971) (3,548) (2,483)
General and administration (4,124) (3,289) (3,411) (2,790)
Investment and other
income (expense) (11,203) 8,057 (5,467) (11,358)
Asset impairment (6,419) (36,275) - -
Interest expense (492) (490) (476) (471)
Capital tax expense (125) (1,304) (125) (124)
Income tax expense (18,890) 767 (17,379) (44,333)
Non-controlling interest 2,783 1,794 3,813 98
-----------------------------------------------
Net income (loss) $ 51,327 ($32,514) $ 75,057 $ 67,705
-----------------------------------------------
Net income (loss) per
common share $ 1.06 ($0.67) $ 1.55 $ 1.40
-----------------------------------------------
Diluted net income (loss)
per common share $ 1.06 ($0.67) $ 1.55 $ 1.40
-----------------------------------------------


Previous Four Quarters
-------------------------------------------------------------------------
(thousands of Canadian 2008 2007 2007 2007
dollars, except per First Fourth Third Second
share amounts) quarter quarter quarter quarter
-------------------------------------------------------------------------

STATEMENTS OF EARNINGS
Gross sales $ 276,281 $ 224,773 $ 272,293 $ 320,018
Smelter processing
charges and freight (44,157) (43,902) (42,557) (55,413)
Cost of sales (79,246) (78,809) (72,057) (78,181)
Depreciation (9,170) (9,480) (8,739) (8,039)
-----------------------------------------------
143,708 92,582 148,940 178,385
Corporate development
and exploration (2,618) (3,510) (2,475) (2,086)
General and
administration (3,648) (12,622) (2,674) (2,162)
Investment and other
income 14,754 5,968 9,224 13,665
Interest expense (447) (407) (424) (424)
Capital tax (expense)
recovery (126) 212 (273) (274)
Income tax expense (44,744) (18,551) (37,649) (48,509)
Non-controlling interest (205) (27) 167 (545)
-----------------------------------------------
Net income $ 106,674 $ 63,645 $ 114,836 $ 138,050
-----------------------------------------------
Net income per
common share $ 2.21 $ 1.32 $ 2.38 $ 2.86
-----------------------------------------------
Diluted net income
per common share $ 2.21 $ 1.32 $ 2.37 $ 2.86
-----------------------------------------------



Consolidated financial statements
INMET MINING CORPORATION
Consolidated balance sheets

March 31 December 31
(thousands of Canadian dollars) 2009 2008
-------------------------------------------------------------------------
(unaudited)

Assets
Current assets:
Cash and short-term investments (note 4) $ 506,939 $ 572,733
Restricted cash (note 5) 8,056 8,311
Accounts receivable 171,145 135,742
Inventories 72,731 74,362
Future income tax asset 14,110 14,311
------------------------
772,981 805,459

Restricted cash (note 5) 62,715 52,893
Property, plant and equipment 2,043,727 1,950,535
Investments (note 6) 21,134 17,514
Future income tax asset 11,134 5,499
Derivatives (note 7) 1,959 4,327
Other assets 4,942 5,031
------------------------
$2,918,592 $2,841,258
-------------------------------------------------------------------------

Liabilities

Current liabilities:
Accounts payable and accrued liabilities $ 136,950 $ 212,527
Derivatives (note 7) 8,575 8,693
Future income tax liabilities 2,915 -
Current portion of long-term debt 111,954 109,666
------------------------
260,394 330,886

Long-term debt (note 8) 419,187 384,848
Asset retirement obligations 130,522 126,782
Derivatives (note 7) 14,508 16,417
Other liabilities (note 10) 59,879 27,122
Future income tax liabilities 17,599 15,971
Non-controlling interest 67,434 71,449
------------------------
969,523 973,475
------------------------

Commitments (note 9)

Shareholders' equity

Share capital 337,464 337,464
Contributed surplus 62,421 61,925
Stock based com pensation 2,775 2,688
Retained earnings 1,334,401 1,283,074
Accumulated other comprehensive loss (note 11) 212,008 182,632
------------------------
1,949,069 1,867,783
------------------------
$2,918,592 $2,841,258
-------------------------------------------------------------------------
(see accompanying notes)



INMET MINING CORPORATION
Segmented balance sheets

2009 As at March 31

(unaudited) CORPORATE CAYELI PYHASALMI TROILUS
-------------------------------------------------------------------------

(thousands of Canadian (Turkey) (Finland) (Canada)
dollars)

Assets

Cash and short-term
investments $227,130 $187,444 $58,123 $ -
Other current assets 11,645 52,393 46,376 33,486
Restricted cash 16,410 - 2,011 -
Property, plant
and equipment 990 146,265 71,919 24,193
Investments 21,134 - - -
Other non-current assets 1,752 417 - 1,825
-----------------------------------------------
$279,061 $386,519 $178,429 $59,504
-----------------------------------------------

Liabilities

Current liabilities $23,359 $34,294 $11,160 $11,605
Long-term debt 19,628 - - -
Asset retirement
obligations 23,841 10,132 16,321 12,731
Derivatives - - - -
Other liabilities 4,865 4,903 - 1,856
Future income tax
liabilities 3,952 4,335 9,094 -
Non-controlling interest - - - -
-----------------------------------------------
$75,645 $53,664 $36,575 $26,192
-----------------------------------------------


2009 As at March 31

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

Assets

Cash and short-term
investments $20,389 $9,707 $4,146 $506,939
Other current assets 46,947 74,344 851 266,042
Restricted cash 17,746 26,548 - 62,715
Property, plant
and equipment 105,686 1,125,175 569,499 2,043,727
Investments - - - 21,134
Other non-current assets 7,392 6,649 - 18,035
----------------------- ----------- -----------
$198,160 $1,242,423 $574,496 $2,918,592
----------------------- ----------- -----------

Liabilities

Current liabilities $19,035 $152,830 $8,111 $260,394
Long-term debt - 399,559 - 419,187
Asset retirement
obligations 26,119 41,378 - 130,522
Derivatives 2,453 12,055 - 14,508
Other liabilities 2,011 46,244 - 59,879
Future income tax
liabilities - 218 - 17,599
Non-controlling interest - 67,434 - 67,434
----------------------- ----------- -----------
$49,618 $719,718 $8,111 $969,523
-----------------------------------------------



2008 As at December 31

CORPORATE CAYELI PYHASALMI TROILUS
-------------------------------------------------------------------------

(thousands of Canadian (Turkey) (Finland) (Canada)
dollars)

Assets

Cash and short-term
investments $241,238 $192,881 $65,976 $ -
Other current assets 15,992 43,946 39,428 22,595
Restricted cash 16,343 - 2,104 -
Property, plant and
equipment 916 144,124 74,790 27,659
Investments 17,514 - - -
Other non-current assets 3,183 454 - 1,825
-----------------------------------------------
$295,186 $381,405 $182,298 $52,079
-----------------------------------------------

Liabilities

Current liabilities $15,983 $52,112 $11,537 $11,029
Long-term debt 19,741 - - -
Asset retirement
obligations 23,501 9,654 16,307 12,626
Derivatives - - - -
Other liabilities 4,911 5,374 - 1,484
Future income tax
liabilities 1,026 5,509 9,215 -
Non-controlling interest - - - -
-----------------------------------------------
$65,162 $72,649 $37,059 $25,139
-----------------------------------------------


2008 As at December 31

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

Assets

Cash and short-term
investments $37,547 $33,981 $1,110 $572,733
Other current assets 43,148 66,774 843 232,726
Restricted cash 16,667 17,779 - 52,893
Property, plant and
equipment 105,145 1,065,435 532,466 1,950,535
Investments - - - 17,514
Other non-current assets 7,039 2,356 - 14,857
-----------------------------------------------
$209,546 $1,186,325 $534,419 $2,841,258
-----------------------------------------------

Liabilities

Current liabilities $45,711 $182,535 $11,979 $330,886
Long-term debt - 365,107 - 384,848
Asset retirement
obligations 25,016 39,678 - 126,782
Derivatives 1,670 14,747 - 16,417
Other liabilities 2,232 13,121 - 27,122
Future income tax
liabilities - 221 - 15,971
Non-controlling interest - 71,449 - 71,449
-----------------------------------------------
$74,629 $686,858 $11,979 $973,475
-----------------------------------------------



INMET MINING CORPORATION
Consolidated statements of earnings
(unaudited)

(thousands of Canadian dollars Three Months Ended March 31
except per share amounts) 2009 2008
-------------------------------------------------------------------------

Gross sales $239,152 $276,281

Smelter processing charges and freight (40,540) (44,157)

Cost of sales (89,904) (79,246)

Depreciation (15,679) (9,170)

-------------------------------------------------------------------------
93,029 143,708

Corporate development and exploration (3,232) (2,618)

General and administration (4,124) (3,648)

Investment and other income (expense) (note 12) (11,203) 14,754

Asset impairment (note 15) (6,419) -

Interest expense (492) (447)

Capital tax expense (125) (126)

Income tax expense (note 13) (18,890) (44,744)

Non-controlling interest 2,783 (205)

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

Net income $51,327 $106,674
-------------------------------------------------------------------------

Basic and diluted net income per
common share (note 14) $1.06 $2.21
-------------------------------------------------------------------------

Weighted average shares outstanding (000's) 48,282 48,282
-------------------------------------------------------------------------
(see accompanying notes)



INMET MINING CORPORATION
Segmented statements of earnings
(unaudited)

2009 For the three months ended March 31

CORPORATE CAYELI PYHASALMI TROILUS
-------------------------------------------------------------------------

(thousands of Canadian (Turkey) (Finland) (Canada)
dollars)

Gross sales $ - $60,021 $33,981 $86,990
Smelter processing
charges and freight - (19,076) (8,991) (6,260)
Cost of sales (484) (22,571) (15,845) (22,827)
Depreciation - (3,473) (2,602) (3,419)
-----------------------------------------------
(484) 14,901 6,543 54,484

Corporate development
and exploration (1,848) (494) (890) -
General and administration (4,124) - - -
Investment and other
income (expense) 451 2,867 - 284
Asset impairment charges - (6,419)
Interest expense (492) - - -
Capital tax expense (125) - - -
Income tax (expense)
recovery (16,531) 581 (435) -
Non-controlling interest - - - -
-----------------------------------------------

Net income (loss) ($23,153) $11,436 $5,218 $54,768
-----------------------------------------------


2009 For the three months ended March 31

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

Gross sales $58,160 $ - $ - $239,152
Smelter processing
charges and freight (6,213) - - (40,540)
Cost of sales (28,177) - - (89,904)
Depreciation (6,185) - - (15,679)
-----------------------------------------------
17,585 - - 93,029

Corporate development
and exploration - - - (3,232)
General and administration - - - (4,124)
Investment and other
income (expense) (1,372) (13,433) - (11,203)
Asset impairment charges - (6,419)
Interest expense - - - (492)
Capital tax expense - - - (125)
Income tax (expense)
recovery (6,540) 4,035 - (18,890)
Non-controlling interest - 2,783 - 2,783
-----------------------------------------------

Net income (loss) $9,673 ($6,615) $ - $51,327
-----------------------------------------------



2008 For the three months ended March 31

CORPORATE CAYELI PYHASALMI TROILUS
-------------------------------------------------------------------------

(thousands of Canadian (Turkey) (Finland) (Canada)
dollars)

Gross sales $ - $100,616 $54,908 $34,251
Smelter processing
charges and freight - (22,013) (10,820) (2,187)
Cost of sales (494) (22,575) (13,944) (21,011)
Depreciation - (2,373) (2,150) (2,418)
-----------------------------------------------
(494) 53,655 27,994 8,635

Corporate development
and exploration (1,977) (70) (566) (5)
General and administration (3,648) - - -
Investment and other
income (expense) 10,561 4,861 - 1,361
Interest expense (447) - - -
Capital tax expense (126) - - -
Income tax expense - (19,124) (6,023) -
Non-controlling interest - - - -
-----------------------------------------------

Net income $3,869 $39,322 $21,405 $9,991
-----------------------------------------------


2008 For the three months ended March 31

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

Gross sales $86,506 $ - $ - $276,281
Smelter processing
charges and freight (9,137) - - (44,157)
Cost of sales (21,222) - - (79,246)
Depreciation (2,229) - - (9,170)
-----------------------------------------------
53,918 - - 143,708

Corporate development
and exploration - - - (2,618)
General and administration - - - (3,648)
Investment and other
income (expense) (2,862) 833 - 14,754
Interest expense - - - (447)
Capital tax expense - - - (126)
Income tax expense (19,347) (250) - (44,744)
Non-controlling interest - (205) - (205)
-----------------------------------------------

Net income $31,709 $378 $ - $106,674
-----------------------------------------------



INMET MINING CORPORATION
Consolidated statements of cash flows
(unaudited)

Three Months Ended March 31
(thousands of Canadian dollars) 2009 2008
-------------------------------------------------------------------------

Cash provided by (used in)
operating activities(1)
Net income $51,327 $106,674
Add (deduct) items not affecting cash:
Depreciation 15,679 9,170
Future income tax (2,233) 2,917
Accretion expense on asset
retirement obligations 1,267 1,021
Non-controlling interest (2,783) 205
Asset impairment (note 15) 6,419 -
Foreign exchange loss (gain) 10,940 (7,436)
Other 2,496 1,742
Settlement of asset retirement obligations (447) (521)
Net change in non-cash working capital (note 3) (65,568) (37,022)
--------------------------
17,097 76,750
--------------------------

Cash provided by (used in) investing activities

Capital spending (94,859) (111,414)
Disposition of investments - 1,521
Sale of short-term investments 2,431 300,424
--------------------------
(92,428) 190,531
--------------------------

Cash provided by (used in) financing activities

Long-term debt:
Borrowings (note 8) - 50,346
Repayments (note 8) (8,328) -
Funding by non-controlling shareholder 15,672 15,129
Financial assurance deposits (9,440) (7,494)
Subsidies received 8,609 3,233
Other (45) (46)
--------------------------
6,468 61,168
--------------------------

Foreign exchange change on cash held 5,500 37,196
--------------------------
in foreign currency (63,363) 365,645

Increase (decrease) in cash
Cash:
Beginning of period 537,059 522,505
--------------------------
End of period 473,696 888,150
--------------------------
33,243 17,894
--------------------------

Short-term investments $506,939 $906,044
-----------------------------------------------------------------------

Cash and short-term investments
(see accompanying notes)
(1) Supplementary cash flow information:
Cash interest paid $4,725 $3,398
Cash taxes paid $5,848 $15,212
-----------------------------------------------------------------------



INMET MINING CORPORATION
Segmented statements of cash flows
(unaudited)

2009 For the three months ended March 31

CORPORATE CAYELI PYHASALMI TROILUS
-------------------------------------------------------------------------

(thousands of Canadian (Turkey) (Finland) (Canada)
dollars)

Cash provided by (used in)
operating activities
Before net change in
non-cash working capital ($13,532) $11,597 $5,660 $59,716
Net change in non-cash
working capital 6,979 (20,543) (7,446) (10,990)
-----------------------------------------------
(6,553) (8,946) (1,786) 48,726
-----------------------------------------------
Cash provided by (used in)
investing activities
Capital spending 184 (3,567) (772) -
Sale of short-term
investments 2,431 - - -
-----------------------------------------------
2,615 (3,567) (772) -
-----------------------------------------------
Cash provided by (used in)
financing activities (110) - - -
-----------------------------------------------
Foreign exchange
change on cash
held in foreign currency - 6,681 (1,143) -
-----------------------------------------------
Intergroup funding
(distributions) (7,629) 395 (4,152) (48,726)
-----------------------------------------------

Increase (decrease) in cash (11,677) (5,437) (7,853) -
Cash:
Beginning of period 205,564 192,881 65,976 -
-----------------------------------------------
End of period 193,887 187,444 58,123 -
Short-term investments 33,243 - - -
-----------------------------------------------

Cash and short-term
investments $227,130 $187,444 $58,123 $ -
-----------------------------------------------


2009 For the three months ended March 31

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

Cash provided by (used in)
operating activities
Before net change in
non-cash working capital $19,224 $ - $ - $82,665
Net change in non-cash
working capital (33,568) - - (65,568)
-----------------------------------------------
(14,344) - - 17,097
-----------------------------------------------
Cash provided by (used in)
investing activities
Capital spending (3,321) (64,551) (22,832) (94,859)
Sale of short-term
investments - - - 2,431
-----------------------------------------------
(3,321) (64,551) (22,832) (92,428)
-----------------------------------------------
Cash provided by (used in)
financing activities (773) 7,351 - 6,468
-----------------------------------------------
Foreign exchange
change on cash
held in foreign currency 1,086 (1,668) 544 5,500
-----------------------------------------------
Intergroup funding
(distributions) 194 34,594 25,324 -
-----------------------------------------------

Increase (decrease) in cash (17,158) (24,274) 3,036 (63,363)
Cash:
Beginning of period 37,547 33,981 1,110 537,059
-----------------------------------------------
End of period 20,389 9,707 4,146 473,696
Short-term investments - - - 33,243
-----------------------------------------------

Cash and short-term
investments $20,389 $9,707 $4,146 $506,939
-----------------------------------------------



2008 For the three months ended March 31

CORPORATE CAYELI PYHASALMI TROILUS
-------------------------------------------------------------------------

(thousands of Canadian (Turkey) (Finland) (Canada)
dollars)

Cash provided by (used in)
operating activities
Before net change in
non-cash working capital ($2,672) $40,914 $24,114 $12,675
Net change in non-cash
working capital (12,077) (25,914) 7,124 (6,197)
-----------------------------------------------
(14,749) 15,000 31,238 6,478
-----------------------------------------------
Cash provided by (used in)
investing activities
Capital spending (32) (8,883) (1,759) (247)
Sale of short-term
investments 1,521 - - -
Other 300,424 - - -
-----------------------------------------------
301,913 (8,883) (1,759) (247)
-----------------------------------------------
Cash provided by (used in)
financing activities (45) - - -
-----------------------------------------------

Foreign exchange
change on cash
held in foreign currency - 15,933 15,375 -
-----------------------------------------------

Intergroup funding
(distributions) 18,038 (42,773) (4,625) (6,231)
-----------------------------------------------

Increase (decrease) in cash 305,157 (20,723) 40,229 -
Cash:
Beginning of period 41,041 333,671 111,492 -
-----------------------------------------------
End of period 346,198 312,948 151,721 -
Short-term investments 17,894 - - -
-----------------------------------------------

Cash and short-term
investments $364,092 $312,948 $151,721 $ -
-----------------------------------------------


2008 For the three months ended March 31

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

Cash provided by (used in)
operating activities
Before net change in
non-cash working capital $38,741 $ - $ - $113,772
Net change in non-cash
working capital 42 - - (37,022)
-----------------------------------------------
38,783 - - 76,750
-----------------------------------------------
Cash provided by (used in)
investing activities
Capital spending (7,959) (92,534) - (111,414)
Sale of short-term
investments - - - 1,521
Other - - - 300,424
-----------------------------------------------
(7,959) (92,534) - 190,531
-----------------------------------------------
Cash provided by (used in)
financing activities (615) 61,828 - 61,168
-----------------------------------------------

Foreign exchange
change on cash
held in foreign currency 1,143 4,745 - 37,196
-----------------------------------------------

Intergroup funding
(distributions) 118 35,473 - -
-----------------------------------------------

Increase (decrease) in cash 31,470 9,512 - 365,645
Cash:
Beginning of period 13,473 22,828 - 522,505
-----------------------------------------------
End of period 44,943 32,340 - 888,150
Short-term investments - - - 17,894
-----------------------------------------------

Cash and short-term
investments $44,943 $32,340 $ - $906,044
-----------------------------------------------



INMET MINING CORPORATION
Consolidated statements of retained earnings
(unaudited)

Three Months Ended March 31
(thousands of Canadian dollars) 2009 2008
-------------------------------------------------------------------------

Retained earnings, beginning of period $1,283,074 $1,074,762

Net income 51,327 106,674
-------------------------------------------------------------------------
Retained earnings, end of period $1,334,401 $1,181,436
-------------------------------------------------------------------------
(see accompanying notes)


Consolidated statements of comprehensive income
(unaudited)

Three Months Ended March 31
(thousands of Canadian dollars) 2009 2008
-------------------------------------------------------------------------

Net income $51,327 $106,674
-----------------------

Other comprehensive income (loss) for the period :
Changes in fair value of gold forward
sales contracts (761) (9,925)
Changes in fair value of interest
rate swap contracts 1,740 (4,722)
Changes in fair value of foreign exchange
forward contracts - 12,272
Changes in fair value of investments 3,620 (7,419)
Currency translation adjustments 27,045 75,369
Reclassification to net income of
gains/losses realized:
Gain on sale of investment - (256)
Troilus gold hedge loss - 6,997
Ok Tedi gold hedge loss - 1,013
Amortization of gain on foreign exchange
forward contracts (1,508) -
Foreign exchange loss on reduction of net
investment in self-sustaining foreign
operations (note 12) - 5,514
Income tax expense related to other
comprehensive income (note 16) (1,039) (1,263)
----------------------
29,097 77,580
----------------------

Comprehensive income $80,424 $184,254
-------------------------------------------------------------------------
(see accompanying notes)



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 2008 Annual Review.

2. Changes in accounting policies

Section 3064 - Goodwill and Intangible Assets

Effective January 1, 2009, we adopted CICA Handbook Section 3064,
Goodwill and Intangible Assets, which replaces Section 3062 -
Goodwill and Other Intangible Assets and Section 3450 - Research and
Development Costs. This new standard establishes standards for the
recognition, measurement, presentation and disclosure of goodwill
subsequent to its initial recognition and of intangible assets. It
provides guidance for recognizing internally developed intangible
assets, and ensuring consistent treatment of all intangible assets,
whether separately acquired or internally developed. Standards
concerning goodwill are unchanged from the standards included in the
previous section. The adoption of this standard did not have an
impact on our consolidated financial statements.

Emerging Issues Committee 173 - Credit Risk and the fair value of
financial assets and financial liabilities

Effective January 1, 2009, we adopted EIC-173, Credit Risk and the
Fair Value of Financial Assets and Financial Liabilities
retroactively, without restatement. This EIC provides guidance on how
to take into account credit risk of an entity and counterparty when
determining the fair value of financial assets and financial
liabilities, including derivative instruments. The adoption of EIC
173 did not have a significant impact on our consolidated financial
statements.

3. Statement of cash flows

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

For the three months ended March 31, 2009
---------------------------------------------------------------------

(thousands) Corporate Cayeli Pyhasalmi Troilus
---------------------------------------------------------------------
Accounts receivable(1) ($148) ($24,517) $1,120 ($13,785)
Inventories - 1,218 (407) 2,940
Accounts payable and
accrued liabilities (734) (1,851) (221) 1,546
Taxes 7,872 4,553 (7,938) -
Other (11) 54 - (1,691)
---------------------------------------------------------------------
$6,979 ($20,543) ($7,446) ($10,990)
---------------------------------------------------------------------


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

(thousands) Ok Tedi Total
-----------------------------------------------
Accounts receivable(1) ($39,433) ($76,763)
Inventories 1,388 5,139
Accounts payable and
accrued liabilities (1,419) (2,679)
Taxes 5,204 9,691
Other 692 (956)
-----------------------------------------------
($33,568) ($65,568)
-----------------------------------------------
(1) Includes changes in accounts payable related to metal sales.


For the three months ended March 31, 2008
---------------------------------------------------------------------

(thousands) Corporate Cayeli Pyhasalmi Troilus
---------------------------------------------------------------------
Accounts receivable $15 ($33,374) $12,299 ($3,091)
Inventories - (2,747) (1,464) (2,687)
Accounts payable and
accrued liabilities (11,804) (1,589) (1,475) (419)
Taxes (284) 11,676 (2,236) -
Other (4) 120 - -
---------------------------------------------------------------------
($12,077) ($25,914) $7,124 ($6,197)
---------------------------------------------------------------------


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

(thousands) Ok Tedi Total
-----------------------------------------------
Accounts receivable ($9,061) ($33,212)
Inventories 100 (6,798)
Accounts payable and
accrued liabilities (5,537) (20,824)
Taxes 15,681 24,837
Other (1,141) (1,025)
-----------------------------------------------
$42 ($37,022)
-----------------------------------------------

4. Cash and short-term investments

At period end, our cash and short-term investments are held in:

---------------------------------------------------------------------
March 31 December 31
(thousands) 2009 2008
---------------------------------------------------------------------
Cash:
Liquidity funds $239,176 $276,301
Bankers' acceptances 44,103 64,293
Money market funds 38,408 38,683
Corporate 36,855 -
Term deposits 29,528 78,041
Overnight deposits 15,334 14,684
Bank deposits 58,876 52,429
Other 11,416 12,628
---------------------------------
473,696 537,059
Short-term investments:
Asset backed securities 12,669 -
Provincial short-term notes - 35,674
Other 20,574 -
---------------------------------------------------------------------
33,243 35,674
---------------------------------------------------------------------
Total cash and short-term investments $506,939 $572,733
---------------------------------------------------------------------

5. Restricted cash

The table below shows our restricted cash balances.
---------------------------------------------------------------------
March 31 December 31
(thousands) 2009 2008
---------------------------------------------------------------------
Collateralized cash for letter of
credit facility $16,410 $16,343
In trust for Ok Tedi rehabilitation 17,746 16,667
Collateralized cash for letters of
credit - Las Cruces 34,604 26,090
Collateralized cash for Pyhasalmi reclamation 2,011 2,104
---------------------------------------------------------------------
70,771 61,204
Less current portion:
Collateralized cash for letters of
credit - Las Cruces (8,056) (8,311)
---------------------------------------------------------------------
$62,715 $52,893
---------------------------------------------------------------------

During the quarter, Las Cruces' restricted cash which secures a
restoration bond increased by (euro) 5.4 million (note 9).

6. Investments

The table below shows our investments.

---------------------------------------------------------------------
March 31 December 31
(thousands) 2009 2008
---------------------------------------------------------------------
Available-for-sale equity securities:
Premier Gold Mines Ltd. $18,900 $15,309
Other 2,234 2,205
---------------------------------------------------------------------
$21,134 $17,514
---------------------------------------------------------------------

7. Derivatives

The table below shows our derivatives.

---------------------------------------------------------------------
March 31 December 31
(thousands) 2009 2008
---------------------------------------------------------------------
Derivative asset:
Ok Tedi copper forward sales contracts $1,959 $4,327
---------------------------------------------------------------------
Derivative liabilities:
Ok Tedi gold forward sales contracts $2,453 $1,670
Las Cruces interest rate swap contracts 20,630 23,440
---------------------------------------------------------------------
$23,083 $25,110
---------------------------------------------------------------------

8. Long-term debt

---------------------------------------------------------------------
March 31 December 31
(thousands) 2009 2008
---------------------------------------------------------------------
Credit facility - Tranche A $270,735 $262,504
- Tranche B 70,358 80,364
Promissory note 19,628 19,741
Loans from non-controlling shareholder 170,420 131,905
---------------------------------------------------------------------
531,141 494,514
Less current portion:
Credit facility - Tranche A (41,596) (29,302)
- Tranche B (70,358) (80,364)
---------------------------------------------------------------------
$419,187 $384,848
---------------------------------------------------------------------

Credit facility

This quarter, Las Cruces repaid (euro) 5.3 million under Tranche B
equal to subsidies 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) 32 million of intercompany loan advances. These loans
bear interest at EURIBOR plus 6.1 percent and are due to be repaid on
February 25, 2020. The non-controlling portion of these loans, (euro)
102 million, is reflected in long-term debt at March 31, 2009. Loans
from non-controlling shareholders approximate fair value because the
loans accrue interest at prevailing market rates.

9. Commitments

Our operations have the following capital commitments as at March 31,
2009:

- Ok Tedi has committed approximately $110.9 million (our
proportionate share is $20.0 million) to capital expenditures
related to the mine waste management project.

- Las Cruces has committed $26.8 million for engineering,
procurement and construction management related to the process
plant.

- Petaquilla has committed $174.9 million for the design and supply
of certain mill equipment.

During the quarter, Las Cruces' restoration bond was increased by
(euro) 5.4 million to (euro) 20.2 million as a result of development
activities, which took place during 2008.

10. Leases

Effective during the first quarter, Las Cruces committed to a
contract for the supply of oxygen from a plant owned and operated by
a third party and located at the mine site. This arrangement contains
a capital lease with minimum lease payments of:

2009 $2,001
2010 2,668
2011 2,668
2012 2,668
2013 2,668
Thereafter 27,348
-------------------------------------
Total $40,021
-------------------------------------

The oxygen plant has been recognized in property, plant and equipment
at $23 million based on the total minimum future lease payments
discounted at Las Cruces' incremental rate of borrowing of 8.2
percent. Capital lease obligations of $23 million have been
recognized in other liabilities. The oxygen plant will be depreciated
over its estimated useful life of 15 years once Las Cruces is
substantially complete.

11. Accumulated other comprehensive loss (AOCI)

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

---------------------------------------------------------------------
(thousands)
---------------------------------------------------------------------
Unrealized losses on gold forward sales contracts
(net of tax of $1,030) ($2,402)
Unrealized gains on foreign exchange forward contract(1) 21,023
Unrealized losses on interest rate swap contracts(2) (9,962)
Unrealized gains on investments (net of tax of $667) 3,314
Currency translation adjustment 170,659
---------------------------------------------------------------------
AOCI, December 31, 2008 $182,632
Impact on adoption of EIC 173 - January 1, 2009 (note 2) 279
Other comprehensive income for the three months ending
March 31, 2009 29,097
---------------------------------------------------------------------
AOCI, March 31, 2009 $212,008
---------------------------------------------------------------------

AOCI March 31, 2009 comprises:
Unrealized losses on gold forward sales contracts
(net of tax of $2,460) ($2,936)
Unrealized gains on foreign exchange forward contract(3) 19,515
Unrealized losses on interest rate swap contract(4) (8,603)
Unrealized gains on investments (net of tax of $1,273) 6,328
Currency translation adjustment 197,704
---------------------------------------------------------------------
AOCI, March 31, 2009 $212,008
---------------------------------------------------------------------

1. Net of tax of $12,792 and non-controlling interest of $8,956.
2. Net of tax of $6,102 and non-controlling interest of $4,270.
3. Net of tax of $11,874 and non-controlling interest of $8,315.
4. Net of tax of $5,271 and non-controlling interest of $3,688.


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

---------------------------------------------------------------------
March 31 December 31
(thousands) 2009 2008
---------------------------------------------------------------------
Pyhasalmi (euro functional currency) $14,123 $17,480
Las Cruces (euro functional currency) 53,402 57,947
Cayeli (US dollar functional currency) 35,883 24,751
Ok Tedi (US dollar functional currency) 11,148 6,224
Petaquilla (US dollar functional currency) 83,148 64,257
---------------------------------------------------------------------
$197,704 $170,659
---------------------------------------------------------------------

The US dollar to Canadian dollar exchange rate was $1.26 at March 31,
2009 and $1.22 at December 31, 2008. The euro to Canadian dollar
exchange rate was $1.68 at March 31, 2009 and $1.70 at December 31,
2008.

12. Investment and other income

Investment and other income are summarized as follows:

---------------------------------------------------------------------
three months ended
March 31
(thousands) 2009 2008
---------------------------------------------------------------------

Interest income $2,042 $8,723
Dividend and royalty income - -
Foreign exchange gain (loss) (10,098) 6,858
Mark to market on Ok Tedi copper forward
contracts (1,419) (2,849)
Other (1,728) 2,022
---------------------------------------------------------------------
($11,203) $14,754
---------------------------------------------------------------------

Foreign exchange
For transactions with foreign currencies we use:
- the exchange rates in effect at period-end for monetary assets
and liabilities
- the exchange rates in effect on the date of the transaction for
non-monetary assets and liabilities
- the exchange rates in effect on the date of the transaction for
income and expenses

Foreign exchange gain (loss) is a result of:

---------------------------------------------------------------------
three months ended
March 31
(thousands) 2009 2008
---------------------------------------------------------------------
Translation of foreign-denominated cash ($1,595) $1,256
Translation of Las Cruces' US dollar -
denominated debt (note 8) (11,465) -
Translation of other-monetary assets and
liabilities 2,962 11,116
Reduction in our net investments - (5,514)
---------------------------------------------------------------------
($10,098) $6,858
---------------------------------------------------------------------

13. Income tax expense

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

For the three months ended March 31, 2009
-------------------------------------------------------------------------
Las
(thousands) Corporate Cayeli Pyhasalmi Ok Tedi Cruces Total
-------------------------------------------------------------------------

Current income
taxes $7,655 $7,806 $428 $5,234 $ - $21,123
Future income
taxes 8,876 (8,387) 7 1,306 (4,035) (2,233)
-------------------------------------------------------------------------
$16,531 ($581) $435 $6,540 ($4,035) $18,890
-------------------------------------------------------------------------

For the three months ended March 31, 2008
-------------------------------------------------------------------------
Las
(thousands) Corporate Cayeli Pyhasalmi Ok Tedi Cruces Total
-------------------------------------------------------------------------
Current income
taxes $ - $18,550 $5,972 $17,305 $ - $41,827
Future income
taxes - 574 51 2,042 250 2,917
-------------------------------------------------------------------------
$ - $19,124 $6,023 $19,347 $250 $44,744
-------------------------------------------------------------------------

14. Net income per share

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

---------------------------------------------------------------------
three months ended
March 31
(thousands) 2009 2008
---------------------------------------------------------------------

Net income available to common shareholders $51,327 $106,674
---------------------------------------------------------------------


---------------------------------------------------------------------
three months ended
March 31
(thousands) 2009 2008
---------------------------------------------------------------------

Weighted average common shares outstanding 48,282 48,282
Plus incremental shares from assumed
conversions:
Deferred share units 86 76
Long term incentive plan units 43 -
---------------------------------------------------------------------
Diluted weighted average common shares
outstanding 48,411 48,358
---------------------------------------------------------------------


---------------------------------------------------------------------
three months ended
March 31
(Canadian dollars per share) 2009 2008
---------------------------------------------------------------------
Basic and diluted net income per common share $1.06 $2.21
---------------------------------------------------------------------

15. Asset impairment

We made a decision in 2008 not to proceed with the Cerattepe project.
All work has ceased on the project. This quarter, we recognized an
asset impairment charge of $6 million and an associated tax recovery
of $6 million.

16. Income taxes included in other comprehensive income The table below
shows the breakdown by component of the income tax recovery (expense)
included in other comprehensive income:

---------------------------------------------------------------------
three months ended
March 31
2008 2007
---------------------------------------------------------------------
Changes in fair value of gold forward sales
contracts $227 $291
Changes in fair value of interest rate swap
contracts (660) 1,793
Changes in fair value of foreign exchange forward
contracts - (4,660)
Changes in fair value of investments (606) 1,313
---------------------------------------------------------------------
($1,039) $(1,263)
---------------------------------------------------------------------





Contact Information

  • Inmet Mining Corporation
    Richard Ross
    Chairman and Chief Executive
    (416) 860-3974
    or
    Inmet Mining Corporation
    Jochen Tilk
    President and Chief Operating Officer
    (416) 860-3972