Inmet Mining Corporation
TSX : IMN

Inmet Mining Corporation

February 12, 2008 09:11 ET

Inmet Announces Fourth Quarter 2007 Earnings of $1.32 Per Share



TORONTO, ONTARIO--(Marketwire - Feb. 12, 2008) - Inmet Mining Corporation (TSX:IMN) -

All amounts in Canadian dollars unless indicated otherwise

Highlights

- Lower net income per share

Net income per share of $1.32 this quarter was lower than the same
period in 2006, mainly because of lower realized Canadian dollar
denominated base metal prices. The copper price was down 15 percent
at C$2.70 per pound compared to C$3.16 per pound in the prior year
quarter. The zinc price was down 55 percent at C$1.08 per pound
compared to C$2.42 per pound. This included negative settlement
adjustments, which reduced sales by $17 million this quarter.

- Strong production this quarter

Copper and zinc production was strong
this quarter partly because of record production levels at Cayeli.
Cayeli was producing ore this quarter at an annualized rate of more
than 1.1 million tonnes.

- Strong operating cash flow per share

Operating cash flow was $76 million or $1.58 per common share
compared to $81 million or $1.69 per share for the same period in
2006.

- 2008 production estimates

We expect copper production to increase by approximately 40 percent
in 2008 to 112,000 tonnes once Las Cruces begins production and gold
production to increase by 28 percent to 285,000 ounces because of
higher grades mined at Troilus and Ok Tedi. We expect zinc production
to be slightly lower in 2008 at 79,000 tonnes.

- Las Cruces remains on target

Las Cruces is on target to achieve first copper production from its
metallurgical plant in the fourth quarter of 2008. Capital cost
estimates to complete the project remain unchanged. Negotiations are
well underway with smelters to sell 130,000 tonnes of high grade ore
starting in May.

- Work advancing on Cerattepe

Construction work at Cerattepe is progressing well and we expect
production to start in the second quarter of 2009, subject to the
court decisions on the status of the project's operating licences and
related matters.

- Revised capital and operating costs for Petaquilla

The front-end engineering and design study for Petaquilla has revised
the capital cost estimates to $3.5 billion and cash costs to
US $0.85 per pound of copper produced. A project review team is
currently studying opportunities to reduce the capital costs.

Key financial data
-------------------------------------------------------------------------
three months ended December 31 year ended December 31
2007 2006 change 2007 2006 change
-------------------------------------------------------------------------
FINANCIAL
HIGHLIGHTS
(thousands,
except per
share amounts)
Sales
Gross sales $224,773 $258,911 -13% $1,103,698 $1,087,869 +1%

Net income
Net income $63,645 $97,420 -35% $417,609 $420,653 -1%
Net income
per share $1.32 $2.02 -35% $8.65 $8.73 -1%

Cash flow
Cash flow
provided by
operating
activities $76,325 $81,360 -6% $427,351 $438,129 -2%
Cash flow
provided by
operating
activities
per share (1) $1.58 $1.69 -6% $8.85 $9.09 -2%

Capital
spending $93,989 $45,759 +105% $345,892 $132,799 +160%
-------------------------------------------------------------------------

OPERATING
HIGHLIGHTS
Production(2)
Copper
(tonnes) 21,700 20,400 +6% 79,300 81,300 -2%
Zinc (tonnes) 26,000 21,300 +22% 85,100 74,400 +14%
Gold (ounces) 57,200 64,100 -11% 223,300 246,900 -10%

Cash costs
Copper(US $
per pound)(3) $0.29 $(0.25) +216% $0.20 $0.20 -
Gold (US $
per ounce)(3) $552 $406 +36% $421 $365 +15%
-------------------------------------------------------------------------


as at as at
December 31 December 31
FINANCIAL CONDITION 2007 2006
-----------------------------------
Current ratio 5.6 to 1 5.1 to 1
Long-term debt to total capitalization 18% 10%
Net working capital balance (millions) $855 million $666 million
Cash balance (millions) $841 million $640 million
Shareholders' equity (millions) $1,392 million $1,073 million
-------------------------------------------------------------------------
(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 31, 33 and 34.



Fourth quarter press release


Where to find it

Our financial results .......................... 4
Key changes in 2007 ............................ 5
Understanding our performance .................. 5
Earnings from operations ..................... 7
Corporate costs .............................. 11
Results of our operations ...................... 14
Cayeli ....................................... 14
Pyhasalmi .................................... 16
Troilus ...................................... 18
Ok Tedi ...................................... 20
Status of our development projects ............. 22
Las Cruces ................................... 22
Cerattepe .................................... 24
Petaquilla ................................... 25
Managing our liquidity ......................... 26
Financial condition ............................ 27
Accounting changes ............................. 28
Managing risk .................................. 30
Supplementary financial information ............ 33
Quarterly review ............................... 35
Consolidated financial statements .............. 36


In this press release, Inmet means Inmet Mining Corporation and we, us and
our mean Inmet and/or its subsidiaries and joint ventures. This year refers to
calendar year 2007 and this quarter refers to the three months ended December
31, 2007.

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

-------------------------------------------------------------------------
(thousands,
except
per share
amounts) three months ended December 31 year ended December 31
2007 2006 change 2007 2006 change
-------------------------------------------------------------------------

EARNINGS
FROM
OPERATIONS(1)
Cayeli $36,138 $42,214 -14% $223,892 $192,524 +16%
Pyhasalmi 28,149 46,172 -39% 138,582 140,260 -1%
Troilus 345 740 -53% 9,828 5,545 +77%
Ok Tedi 28,441 28,431 - 182,774 192,091 -5%
Other (491) (576) -15% (1,953) (1,944) -
-------------------------------------------------------------------------
92,582 116,981 -21% 553,123 528,476 +5%
-------------------------------------------------------------------------

DEVELOPMENT
AND
EXPLORATION
Corporate
development
and
exploration (3,510) (4,136) -15% (9,083) (9,754) -7%
-------------------------------------------------------------------------

CORPORATE
COSTS
General and
administra-
tion (12,622) (6,128) +106% (20,298) (13,740) +48%
Investment
and other
income 5,968 17,972 -67% 36,454 47,757 -24%
Interest
expense (407) (425) -4% (1,693) (1,619) +5%
Income and
capital
taxes (18,339) (26,679) -31% (140,694) (130,467) +8%
Non-
controlling
interest (27) (165) -84% (200) - +100%
-------------------------------------------------------------------------
(25,427) (15,425) +65% (126,431) (98,069) +29%
-------------------------------------------------------------------------
Net income $63,645 $97,420 -35% $417,609 $420,653 -1%
-------------------------------------------------------------------------
Basic net
income per
share $1.32 $2.02 -35% $8.65 $8.73 -1%
-------------------------------------------------------------------------
Diluted net
income per
share $1.32 $2.02 -35% $8.64 $8.71 -1%
-------------------------------------------------------------------------

Weighted
average
shares
outstanding 48,282 48,278 - 48,279 48,212 -

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



Key changes in 2007

-------------------------------------------------------------------------
three months ended year ended see
(millions) December 31 December 31 page
-------------------------------------------------------------------------
EARNINGS FROM OPERATIONS
Sales
Lower metal prices denominated in
Canadian dollars $(96) $(73) 7
Higher sales volumes 33 47 8
Costs
Lower smelter processing charges
and freight 44 69 9
Higher operating costs, including costs
that vary with income and cash flows (5) (15) 10
Other - (3)
------------------------------------------------------------------
Increase (decrease) in earnings
from operations, compared to 2006 $(24) $25

CORPORATE COSTS
Change in taxes from change in income 10 10 13
Change in tax rates (1) (20) 13
Corporate bonus (6) (6) 11
Gain on sale of Wolfden - 12 12
Gain on sale of Izok recorded in the
previous year - (25) 12
Interest income 4 18 12
Foreign exchange (10) (18) 12
Other (7) 1 12
------------------------------------------------------------------
Decrease in net income, compared to 2006 $(34) $(3)
------------------------------------------------------------------

Understanding our performance

Metal prices

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

-------------------------------------------------------------------------
three months ended December 31 year ended December 31
2007 2006 change 2007 2006 change
-------------------------------------------------------------------------
US dollar
metal prices
Copper
(per pound) US $2.75 US $2.77 -1% US $3.22 US $3.21 -
Zinc
(per pound) US $1.10 US $2.12 -48% US $1.39 US $1.54 -10%
Gold
(per ounce) US $664 US $525 +26% US $594 US $514 +16%
-------------------------------------------------------------------------
Canadian dollar
metal prices
Copper
(per pound) C $2.70 C $3.16 -15% C $3.45 C $3.64 -5%
Zinc
(per pound) C $1.08 C $2.42 -55% C $1.49 C $1.75 -15%
Gold
(per ounce) C $651 C $599 +9% C $636 C $581 +9%
-------------------------------------------------------------------------

Exchange rates

Canadian dollar revenue and earnings were lower this quarter and for the
year compared to the same periods last year because of the significant
increase in the value of the Canadian dollar relative to the US dollar. This
lowered gross sales by $37 million this quarter and by $56 million for the
year. It also lowered net income this quarter by $22 million and $37 million
for the year.

The following table shows the average exchange rates we realized.

-------------------------------------------------------------------------
three months ended December 31 year ended December 31
2007 2006 change 2007 2006 change
-------------------------------------------------------------------------
Exchange rates
1 US$ to C$ $0.98 $1.14 -14% $1.07 $1.13 -5%
1 euro to C$ $1.42 $1.47 -3% $1.46 $1.42 +3%
-------------------------------------------------------------------------

Treatment charges and freight

Treatment charges are one component of smelter processing charges. We also
pay smelters for content losses and price participation. Copper treatment
charges were lower in 2007 than they were in 2006 because of more favourable
contract terms with smelters. Zinc treatment charges, as expected, have been
significantly higher in 2007 than they were in 2006, but lower price
participation more than offset these charges.

The following table shows the average smelter processing charges we
realized.

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

three months ended December 31 year ended December 31
2007 2006 change 2007 2006 change
-------------------------------------------------------------------------
Treatment
charges
Copper (per
dry metric
tonne of
concentrate) US $58 US $90 -36% US $60 US $88 -32%
Zinc (per dry
metric tonne
of concen-
trate) US $295 US $125 +136% US $258 US $110 +135%
-------------------------------------------------------------------------
Price
participation
Copper (per
pound) US $0.05 US $0.17 -71% US $0.08 US $0.16 -50%
Zinc (per
pound)(1) US $(0.05) US $0.40 -113% US $0.01 US $0.29 -97%
-------------------------------------------------------------------------
Freight
charges
Copper (per
dry metric
tonne of
concen-
trate) US $41 US $47 -13% US $44 US $42 +5%
Zinc (per
dry metric
tonne of
concen-
trate) US $36 US $21 +71% US $29 US $16 +81%
-------------------------------------------------------------------------
(1) Zinc price participation is based on a zinc price of US $1,400 per
tonne in 2007.

Statutory tax rates

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

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

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

EARNINGS FROM OPERATIONS

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

-------------------------------------------------------------------------
three months ended December 31 year ended December 31
(thousands) 2007 2006 change 2007 2006 change
-------------------------------------------------------------------------
Gross sales $224,773 $258,911 -13% $1,103,698 $1,087,869 +1%
Smelter
processing
charges (43,902) (65,005) -32% (206,478) (240,605) -14%
Cost of sales:
Direct
production
costs (79,588) (72,255) +10% (295,896) (280,186) +6%
Inventory
changes 2,239 6,544 -66% (3,264) 3,042 -207%
Provisions
for mine
rehabilita-
tion and
other non-
cash charges (1,460) (2,157) -32% (9,264) (8,072) +15%
Depreciation (9,480) (9,057) +5% (35,673) (33,572) +6%
-------------------------------------------------------------------------
Earnings from
operations $92,582 $116,981 -21% $553,123 $528,476 +5%
-------------------------------------------------------------------------

Gross sales revenues were 13 percent lower this quarter ...

-------------------------------------------------------------------------
three months ended December 31 year ended December 31
(thousands) 2007 2006 change 2007 2006 change
-------------------------------------------------------------------------
Gross sales by
operation
Cayeli $81,088 $87,867 -8% $418,694 $370,561 +13%
Pyhasalmi 58,672 88,170 -33% 260,246 273,848 -5%
Troilus 27,317 26,365 +4% 108,378 103,880 +4%
Ok Tedi(1) 57,696 56,509 +2% 316,380 339,580 -7%
-------------------------------------------------------------------------
$224,773 $258,911 -13% $1,103,698 $1,087,869 +1%
-------------------------------------------------------------------------
Gross sales by
metal
Copper $120,705 $127,092 -5% $627,424 $638,209 -2%
Zinc 53,246 83,677 -36% 280,713 266,114 +5%
Gold 38,313 35,577 +8% 150,228 141,385 +6%
Other 12,509 12,565 - 45,333 42,161 +8%
-------------------------------------------------------------------------
$224,773 $258,911 -13% $1,103,698 $1,087,869 +1%
-------------------------------------------------------------------------
(1) Our 18 percent share of Ok Tedi's sales.

... because copper and zinc prices were lower

-------------------------------------------------------------------------
three months ended year ended
(millions) December 31 December 31
-------------------------------------------------------------------------
Lower copper prices, denominated in C$ $(24) $(40)
Lower zinc prices, denominated in C$ (75) (49)
Higher gold prices and other metal prices,
denominated in C$ 3 16
Higher sales volumes 62 89
-------------------------------------------------------------------------
Increase (decrease) in gross sales,
compared to 2006 $(34) $16
-------------------------------------------------------------------------

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

- we decreased copper sales by $14 million
- we decreased zinc sales by $3 million.

These sales were recorded at a price of US $3.64 per pound for copper and
US $1.40 per pound for zinc. The average LME price for copper this quarter was
US $3.28 per pound and for zinc was US $1.20 per pound. The copper price
fluctuated widely between US $2.85 per pound and US $3.77 per pound.
At the end of this quarter, the following sales had not been settled:

- 36 million pounds of copper provisionally priced at US $3.02 per
pound
- 16 million pounds of zinc provisionally priced at US $1.07 per pound.

The finalization adjustment we record for these sales will depend on the
actual price we receive on final settlement, which can range from one to
five months after we initially record the sale.

Higher sales volumes of copper and zinc reduced the impact


three months ended December 31 year ended December 31
2007 2006 change 2007 2006 change
-------------------------------------------------------------------------
Sales volumes
Copper
(tonnes) 21,000 18,400 +14% 82,900 79,300 +5%
Zinc (tonnes) 24,400 16,100 +52% 87,200 70,000 +25%
Gold (ounces) 57,900 59,600 -3% 234,200 241,900 -3%
-------------------------------------------------------------------------

Our sales volumes are directly affected by the amount of production from
our mines, and our ability to ship to our customers.
Sales this quarter were in line with production compared to the same
period last year when shipping at Cayeli and Ok Tedi was delayed from the
fourth quarter to the first quarter of 2007.

Production
-------------------------------------------------------------------------
three months ended year ended
Inmet's December 31 December 31 objective
share 2007 2006 change 2007 2006 change 2008
-------------------------------------------------------------------------
Copper (tonnes)
Ok Tedi 8,700 8,800 -1% 30,400 35,000 -13% 31,300
Cayeli 9,100 7,700 +18% 32,500 30,400 +7% 33,600
Pyhasalmi 3,300 3,200 +3% 13,600 13,000 +5% 13,000
Las Cruces - - - - - - 27,000
Troilus 600 700 -14% 2,800 2,900 -3% 7,000
-------------------------------------------------------------------------
21,700 20,400 +6% 79,300 81,300 -2% 111,900
-------------------------------------------------------------------------
Zinc (tonnes)
Cayeli 13,600 12,100 +12% 46,200 38,700 +19% 47,800
Pyhasalmi 12,400 9,200 +35% 38,900 35,700 +9% 30,900
-------------------------------------------------------------------------
26,000 21,300 +22% 85,100 74,400 +14% 78,700
-------------------------------------------------------------------------
Gold (ounces)
Troilus 33,700 39,300 -14% 138,400 147,900 -6% 163,200
Ok Tedi 23,500 24,800 -5% 84,900 99,000 -14% 121,300
-------------------------------------------------------------------------
57,200 64,100 -11% 223,300 246,900 -10% 284,500
-------------------------------------------------------------------------
Pyrite (tonnes)
Pyhasalmi 182,000 177,000 +3% 486,000 512,000 -5% 505,000
-------------------------------------------------------------------------

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

2008 outlook for sales

We expect sales of all metals for the year to be consistent with our 2008
production estimates, as shown in the chart above. The increase in copper
production reflects the expected start of production at Las Cruces.
The total amount we will receive in Canadian dollars will be affected by
US dollar denominated metal prices and the exchange rate between the US dollar
and the Canadian dollar.

Smelter processing charges and freight were substantially less this year

-------------------------------------------------------------------------
three months ended December 31 year ended December 31
(thousands) 2007 2006 change 2007 2006 change
-------------------------------------------------------------------------
Smelter
processing
charges and
freight by
operation
Cayeli $19,756 $26,959 -27% $94,700 $99,462 -5%
Pyhasalmi 15,384 26,035 -41% 62,081 75,342 -18%
Troilus 1,798 2,898 -38% 7,989 11,112 -28%
Ok Tedi(1) 6,964 9,113 -24% 41,708 54,689 -24%
-------------------------------------------------------------------------
$43,902 $65,005 -32% $206,478 $240,605 -14%
-------------------------------------------------------------------------
Smelter
processing
charges and
freight by
metal
Copper $19,910 $28,508 -30% $97,071 $126,347 -23%
Zinc 20,682 33,807 -39% 97,141 104,111 -7%
Other 3,310 2,690 +23% 12,266 10,147 +21%
-------------------------------------------------------------------------
$43,902 $65,005 -32% $206,478 $240,605 -14%
-------------------------------------------------------------------------
Smelter
processing
charges by type
and freight
Copper treat-
ment and
refining
charges $7,577 $12,094 -37% $33,439 $51,941 -36%
Zinc treat-
ment charges 13,444 4,319 +211% 46,058 16,610 +177%
Copper price
participation 2,461 7,019 -65% 13,763 27,650 -50%
Zinc escala-
tion clauses (2,535) 14,211 -118% 2,529 43,958 -94%
Content
losses 15,062 18,361 -18% 74,112 68,078 +9%
Other (163) 2,030 -108% 4,369 6,709 -35%
Freight 8,056 6,971 +16% 32,208 25,659 +26%
-------------------------------------------------------------------------
$43,902 $65,005 -32% $206,478 $240,605 -14%
-------------------------------------------------------------------------
(1) Our 18 percent share of Ok Tedi's smelter processing charges and
freight.

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

2008 outlook for smelter processing charges and freight

Copper treatment and refining charges have been on a downward trend since
2005 and we expect this trend to continue as all forecasts point to a third
consecutive year of concentrate deficits.
We sell approximately 90 percent of our copper concentrate under
long-term contracts. We are estimating long-term treatment costs of US $50 per
dry metric tonne and spot treatment costs as low as US $25 per dry metric
tonne. We also expect there will continue to be little to no price
participation.
The output of zinc concentrates has increased over the year, which has
created a large surplus in the zinc concentrate market. We therefore expect to
see another increase in zinc treatment charges in 2008 to about US $325 per
dry metric tonne. Price escalation/de-escalation is expected to continue for
zinc concentrates. This should be approximately US $0.10 per dry metric tonne
for zinc prices greater than US $3,000 per tonne ($1.36 per pound), and
(US $0.06) per dry metric tonne for zinc prices less than US $3,000 per tonne.
Production will begin at Las Cruces in 2008. For the first five months,
Las Cruces plans to sell crushed ore 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 impurity levels in this ore.
We expect copper cathode production to start in the fourth quarter. This
copper cathode will be sold directly to buyers, bypassing the smelters and
eliminating smelter and refining treatment charges.

Direct production costs and cost of sales

Our cost of sales was higher this year...

-------------------------------------------------------------------------
three months ended December 31 year ended December 31
(thousands) 2007 2006 change 2007 2006 change
-------------------------------------------------------------------------
Direct production
costs by
operation
Cayeli $23,913 $20,741 +15% $86,978 $72,517 +20%
Pyhasalmi 13,589 12,915 +5% 50,043 47,826 +5%
Troilus 21,173 19,793 +7% 77,643 76,973 +1%
Ok Tedi(1) 20,913 18,806 +11% 81,232 82,870 -2%
-------------------------------------------------------------------------
Total direct
production
costs 79,588 72,255 +10% 295,896 280,186 +6%
Inventory
change (2,239) (6,544) -66% 3,264 (3,042) +207%
Reclamation,
accretion and
other non-cash
expenses 1,460 2,157 -32% 9,264 8,072 +15%
-------------------------------------------------------------------------
Total cost of
sales $78,809 $67,868 +16% $308,424 $285,216 +8%
-------------------------------------------------------------------------
(1) Our 18 percent share of Ok Tedi's direct production costs.

...mainly because of higher labour and consumable costs

-------------------------------------------------------------------------
three months ended year ended
(millions) December 31 December 31
-------------------------------------------------------------------------
Volume $2 $1
Labour costs 3 9
Consumables 3 11
Costs that vary with income and cash flow (1) (5)
-------------------------------------------------------------------------
Increase in direct production costs,
compared to 2006 $7 $16
-------------------------------------------------------------------------

Depreciation is higher for the year

-------------------------------------------------------------------------
three months ended December 31 year ended December 31
(thousands) 2007 2006 change 2007 2006 change
-------------------------------------------------------------------------
Depreciation by
operation
Cayeli $2,635 $1,872 +41% $8,857 $7,418 +19%
Pyhasalmi 1,881 2,333 -19% 8,439 8,617 -2%
Troilus 2,620 2,838 -8% 10,120 10,912 -7%
Ok Tedi 2,344 2,014 +16% 8,257 6,625 +25%
-------------------------------------------------------------------------
$9,480 $9,057 +5% $35,673 $33,572 +6%
-------------------------------------------------------------------------

Depreciation this year included a full year of the shaft development at
Cayeli, compared to only four months in 2006. Ok Tedi has increased
depreciation because of the spending on mine equipment replacements and other
sustaining capital over the last few years.

2008 outlook for depreciation

We expect depreciation to be higher in 2008 because production at Las
Cruces will begin and Ok Tedi will begin depreciating the capital for its mine
waste tailings project. Depreciation is estimated at about $50 million for
2008.

CORPORATE COSTS

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

General and administration costs almost 50 percent higher

General and administration costs are largely for management remuneration,
governance and corporate development. Inmet has not granted stock options to
management since 2001. In recognition of this, the Board determined that the
2007 performance bonus should reflect not only the performance of the 2007
corporate objectives but also the creation of long-term shareholder value that
has been achieved by management, particularly over the past five years. Costs
in 2007 were $7 million higher than in 2006 mainly because of the higher
performance bonus.

2008 outlook for general and administration

Our general and administration costs have been increasing over the last
few years mainly because of performance-based bonuses. Our long-term incentive
plans should result in more consistent general and administration costs in the
future.
In December 2007, the Board approved a new management performance share
unit plan. Units awarded under the plan are redeemable for Inmet common shares
issued from treasury on a one-to-one basis upon the successful completion of
specified growth projects. 500,000 Inmet common shares have been reserved for
issuance under the plan. An initial award, comprised of three tranches
totaling 215,000 units relating to completion of the Las Cruces, Cerattepe and
Petaquilla projects, has been made. The plan is subject to shareholder
approval, which will be sought at Inmet's Annual and Special Meeting of
Shareholders (ASM) to be held on Tuesday, April 29, 2008. Details of the plan
will be set out in the management proxy circular to be mailed to shareholders
in connection with the ASM.
For 2008, we expect general and administration costs of approximately
$15 million.

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

-------------------------------------------------------------------------
three months ended December 31 year ended December 31
(thousands) 2007 2006 2007 2006
-------------------------------------------------------------------------
Gain on sale of Izok $- $- $- $23,905
Gain on sale of Wolfden - - 11,730 -
Interest income 9,703 5,479 32,647 14,199
Dividend income and royalty 1,677 5,700 5,748 5,700
Foreign exchange gain (loss) (2,969) 7,137 (14,519) 3,770
Settlement of pension
liability (2,034) - (2,034) -
Other (409) (344) 2,882 183
-------------------------------------------------------------------------
$5,968 $17,972 $36,454 $47,757
-------------------------------------------------------------------------

In 2006, we sold our interest in the Izok development property to Wolfden
Resources Inc., and recorded a gain of $23.9 million. In exchange, we received
13.5 million common shares of Wolfden and 9.5 million common shares of Premier
Gold Mining Ltd. In May 2007, we disposed of our shares in Wolfden to Zinifex
Canadian Enterprises Inc. for cash proceeds of $51.4 million or $3.81 per
share, and recorded a gain of $11.7 million.
Interest income was higher this quarter and this year compared to the
same periods last year because of higher cash balances in 2007.
We recorded a foreign exchange loss of $3.0 million this quarter and
$14.5 million this year because we revalued some of our foreign currency
denominated accounts and cash balances, and recognized deferred foreign
exchange losses from dividends from Ok Tedi. We recorded foreign exchange
gains on the revaluation of intergroup loans in 2006.

2008 outlook for investment and other income

Investment and other income is affected by cash balances, interest rates
and exchange rates.
We plan to repatriate approximately $300 million in cash from Cayeli in
the first half of the year. Assuming US dollar parity to the Canadian dollar
we would expect to record a foreign exchange loss of about $30 million in the
first half of 2008. We also plan to repatriate Pyhasalmi's 2007 distributable
earnings in the second quarter of 2008. These earnings were accumulated at an
average exchange rate of C $1.46 to the euro. If this exchange does not change
significantly, the foreign exchange impact should be minimal. Because Ok Tedi
distributes its earnings more frequently, the effect of repatriation is
normally not significant.
At December 31, 2007, we only held cash of (euro) 5 million in Canada
that could be affected by foreign exchange gains or losses.

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

-------------------------------------------------------------------------
three months ended December 31 year ended December 31
(thousands) 2007 2006 change 2007 2006 change
-------------------------------------------------------------------------
Cayeli $5,956 $4,036 +48% $46,445 $25,846 +80%
Pyhasalmi 6,200 10,863 -43% 30,911 32,078 -4%
Ok Tedi 10,822 9,580 +13% 65,745 69,893 -6%
Las Cruces 32 - +100% 286 - +100%
Corporate (4,671) 2,200 -312% (2,693) 2,650 -202%
-------------------------------------------------------------------------
$18,339 $26,679 -31% $140,694 $130,467 +8%
-------------------------------------------------------------------------

Tax expense has fluctuated with earnings. At Corporate, we increased our
Future income tax asset and recorded a recovery of $5 million in earnings in
anticipation of higher earnings at Troilus next year because of the rising
price of gold. We adjust our corporate tax asset when it is more likely than
not that we will recover our tax loss pools. At Cayeli, the statutory tax rate
was higher this year because we have returned to accruing for withholding
taxes on net income in anticipation of dividend payments. The following table
shows Cayeli's tax expense in more detail:

-------------------------------------------------------------------------
three months ended December 31 year ended December 31
(millions) 2007 2006 2007 2006
-------------------------------------------------------------------------
Current and future income
tax expense $5 $4 $36 $36
Withholding tax expense 1 - 10 -
Reduction in tax rate - 2006 - - - (10)
-------------------------------------------------------------------------
$6 $4 $46 $26
-------------------------------------------------------------------------

Cayeli's effective tax rate was 16 percent in the quarter; lower than its
statutory rate of 27 percent because of foreign exchange losses in their
Turkish lira tax accounts. The 2006 tax expense includes the impact of a rate
reduction. In June 2006, the Turkish government enacted tax legislation that
reduced Cayeli's corporate tax rate to 20 percent from 30 percent effective
January 1, 2006.

2008 outlook for income tax expense

For 2008, we are expecting our statutory tax rate at Cayeli to be
24 percent. We are not expecting any further changes in statutory tax rates at
our other operations in 2008.

Results of our operations

Cayeli

-------------------------------------------------------------------------
three months ended year ended
December 31 December 31 objective
2007 2006 change 2007 2006 change 2008
-------------------------------------------------------------------------
Tonnes of ore
milled (000's) 277 246 +13% 1,046 933 +12% 1,100
Tonnes of ore
milled per
day 3,000 2,700 +13% 2,900 2,600 +12% 3,000
-------------------------------------------------------------------------
Grades (percent)
copper 4.2 3.8 +11% 3.8 3.9 -3% 3.8
zinc 6.8 6.6 +3% 6.3 5.7 +11% 6.0
-------------------------------------------------------------------------
Mill recoveries
(percent)
copper 79 82 -4% 82 84 -2% 81
zinc 72 74 -3% 73 73 - 72
-------------------------------------------------------------------------
Production
(tonnes)
copper 9,100 7,700 +18% 32,500 30,400 +7% 33,600
zinc 13,600 12,100 +12% 46,200 38,700 +19% 47,800
-------------------------------------------------------------------------
Cost per
tonne of ore
milled (C$) $86 $84 +2% $83 $78 +6% $71
-------------------------------------------------------------------------

Cayeli achieved record performance

Cayeli was producing ore this quarter at an annualized rate of more than
1.1 million tonnes. This was not only 13 percent higher than in the same
period last year, but the highest production rate Cayeli has experienced.
Lower mill recoveries in the quarter and the year were a result of the
difficult ore mineralogy. Metallurgical performance is impacted by the ore
types and relative quantities of these ores delivered to the mill. Through the
year we improved our ability to characterize the ore and predict metallurgy,
and we will continue with improvements in this area during 2008.

2008 outlook for production and costs

Cayeli expects to complete improvements to its ore pass system in 2008,
allowing it to mine and process 1.1 million tonnes of ore in 2008. The ore
will come from all areas of the mine as the emphasis on the lower mine
continues to increase. Ore pass performance is critical for efficient material
flow. Development in 2008 will focus on access and level development of the
lower mine ore blocks. This will allow the mine to operate at its maximum
production rate of 1.2 million tonnes in 2009 and beyond.
We expect costs to be in line with 2007 results. On a unit basis we are
seeing the benefit of higher throughput and a stronger Canadian dollar
relative to Cayeli's US dollar costs. This benefit could be offset if the
Turkish lira also continues to strengthen against the US dollar increasing
Turkish lira based costs such as labour.

Financial review

Higher sales volumes increase operating earnings and cash flow

-------------------------------------------------------------------------
(millions of
Canadian dollars three months ended year ended
unless otherwise December 31 December 31
stated) 2007 2006 2007 2006
-------------------------------------------------------------------------
Sales analysis
Copper sales (tonnes) 9,400 7,700 33,600 29,300
Zinc sales (tonnes) 11,500 5,600 48,200 34,500
---------------------------------------------
Gross copper sales $55 $54 $253 $238
Gross zinc sales 23 32 155 126
Other metal sales 3 2 11 7
---------------------------------------------
Gross sales 81 88 419 371
Smelter processing charges
and freight (20) (27) (95) (100)
-------------------------------------------------------------------------
Net sales $61 $61 $324 $271
-------------------------------------------------------------------------
Cost analysis
Tonnes of ore milled
(thousands) 277 246 1,047 933
Direct production costs
(per tonne) $86 $84 $83 $78
-------------------------------------------------------------------------
Direct costs of production $24 $21 $87 $73
Change in inventory (2) (4) 1 (4)
Depreciation and other
non-cash costs 3 2 12 10
-------------------------------------------------------------------------
Operating costs $25 $19 $100 $79
-------------------------------------------------------------------------
Operating earnings $36 $42 $224 $192
-------------------------------------------------------------------------
Operating cash flow $51 $23 $215 $173
-------------------------------------------------------------------------


The table below shows what contributed to the change in operating earnings
and operating cash flow between this year and 2006.

-------------------------------------------------------------------------
three months ended year ended
(millions) December 31 December 31
-------------------------------------------------------------------------
Lower metal prices, denominated in
Canadian dollars $(52) $(37)
Higher sales volumes from higher
production 22 43
Lower smelter processing charges 25 34
Higher operating costs from higher
labour and consumable costs (1) (7)
Other - (1)
-------------------------------------------------------------------------
Increase (decrease) in operating earnings,
compared to 2006 (6) 32
(Higher) lower tax expense 3 (8)
Changes in working capital 28 14
Other 3 4
-------------------------------------------------------------------------
Increase in operating cash flow, compared
to 2006 $28 $42
-------------------------------------------------------------------------

The change in working capital this quarter and for the year is from lower
accounts receivable mainly because of the lower sales price used to value year
end receivables.

Capital spending higher than 2006

-------------------------------------------------------------------------
three months ended year ended
December 31 December 31 objective
2007 2006 change 2007 2006 change 2008
-------------------------------------------------------------------------
Capital
spending $2,100 $4,300 -51% $17,700 $15,000 +18% $23,000
-------------------------------------------------------------------------

The shaft extension was completed in the third quarter and almost half of
the capital spending in the year ($7 million) has been for that project.

2008 outlook for capital spending

Cayeli expects to spend $23 million in 2008 on a water filtration plant,
ventilation raise, mine equipment and other equipment replacements.

Pyhasalmi

-------------------------------------------------------------------------
three months ended year ended
December 31 December 31 objective
2007 2006 change 2007 2006 change 2008
-------------------------------------------------------------------------
Tonnes of ore
milled (000's) 358 346 +3% 1,377 1,372 +1% 1,370
Tonnes of ore
milled per
day 3,900 3,800 +3% 3,770 3,750 +1% 3,750
-------------------------------------------------------------------------
Grades (percent)
copper 1.0 1.0 - 1.0 1.0 - 1.0
zinc 3.8 2.9 +31% 3.1 2.8 +11% 2.5
sulphur 40 38 +5% 40 39 +3% 41
-------------------------------------------------------------------------
Mill recoveries
(percent)
copper 96 95 +1% 96 95 +1% 94
zinc 92 92 - 92 93 -1% 90
-------------------------------------------------------------------------
Production
(tonnes)
copper 3,300 3,200 +3% 13,600 13,000 +5% 13,000
zinc 12,400 9,200 +35% 38,900 35,700 +9% 30,900
pyrite 182,000 177,000 +3% 486,000 512,000 -5% 505,000
-------------------------------------------------------------------------
Cost per
tonne of ore
milled (C$) $38 $37 +3% $36 $35 +3% $36
-------------------------------------------------------------------------

Pyhasalmi delivers strong results

Pyhasalmi delivered a solid performance during the year mining higher
grade zinc than in 2006.

2008 outlook for production and costs

Pyhasalmi expects to mine 1.4 million tonnes of 1 percent copper and
2.5 percent zinc in 2008, and produce 13,000 tonnes of copper and 30,900
tonnes of zinc. These estimates are lower than 2007 results because of the
grade of the remaining ore.
To maintain throughput and increase efficiency in both the mine and mill,
Pyhasalmi plans to make improvements to the ore-pass system and replace key
drilling equipment, as well as the primary mill motor and mill flotation
cells. A new mill motor will allow speed to be adjusted more easily, which
will increase throughput capacity in the grinding circuit and reduce energy
costs. This could increase mill throughput by about five percent.
We expect costs to be maintained at similar levels in 2008.

Financial review

Higher sales volumes increase operating earnings

-------------------------------------------------------------------------
(millions of
Canadian dollars three months ended year ended
unless otherwise December 31 December 31
stated) 2007 2006 2007 2006
-------------------------------------------------------------------------
Sales analysis
Copper sales (tonnes) 3,300 3,700 14,000 13,500
Zinc sales (tonnes) 12,800 10,500 38,900 35,500
Pyrite sales (tonnes) 133,000 131,000 509,000 495,000
---------------------------------------------
Gross copper sales $21 $27 $105 $103
Gross zinc sales 30 52 125 140
Other metal sales 8 9 30 31
---------------------------------------------
Gross sales 59 88 260 274
Smelter processing charges
and freight (16) (26) (62) (76)
-------------------------------------------------------------------------
Net sales $43 $62 $198 $198
-------------------------------------------------------------------------
Cost analysis
Tonnes of ore milled
(thousands) 358 346 1,377 1,372
Direct production costs
(per tonne) $38 $37 $36 $35
-------------------------------------------------------------------------
Direct costs of production $13 $13 $50 $48
Change in inventory - 1 (1) 1
Depreciation and other
non-cash costs 2 2 10 9
-------------------------------------------------------------------------
Operating costs $15 $16 $59 $58
-------------------------------------------------------------------------
Operating earnings $28 $46 $139 $140
-------------------------------------------------------------------------
Operating cash flow $5 $38 $109 $109
-------------------------------------------------------------------------

The table below shows what contributed to the change in operating earnings
and operating cash flow between this year and 2006.

-------------------------------------------------------------------------
three months ended year ended
(millions) December 31 December 31
-------------------------------------------------------------------------
Lower metal prices, denominated in
Canadian dollars $(38) $(31)
Higher sales volumes 6 12
Lower smelter processing charges and
freight 14 20
Higher operating costs from foreign exchange - (2)
-------------------------------------------------------------------------
Decrease in operating earnings,
compared to 2006 (18) (1)
Lower tax expense because of lower
earnings 4 1
Changes in working capital (21) -
Other 1 -
--------------------------------
Decrease in operating cash flow,
compared to 2006 $(34) -
-------------------------------------------------------------------------

The change in working capital in the quarter is mainly because of the
timing in paying tax instalments.

Minimal capital spending in 2007 and some deferred until 2008

-------------------------------------------------------------------------
three months ended year ended
December 31 December 31 objective
(thousands) 2007 2006 change 2007 2006 Change 2008
-------------------------------------------------------------------------
Capital
spending $1,400 $2,100 -33% $3,500 $5,500 -36% $12,000
-------------------------------------------------------------------------

2008 outlook for capital spending

We expect to spend $12 million in 2008, mainly for mine and mill
equipment. In addition the replacement of certain mill equipment expected to
have been spent in 2007 should be spent in 2008.

TROILUS

-------------------------------------------------------------------------
three months ended year ended
December 31 December 31 objective
2007 2006 change 2007 2006 change 2008
-------------------------------------------------------------------------
Tonnes of ore
milled (000's) 1,440 1,645 -12% 6,000 6,500 -8% 6,600
Tonnes of ore
milled per
day 15,700 17,900 -12% 16,500 17,900 -8% 18,100
-------------------------------------------------------------------------
Strip ratio 1.5 1.1 +36% 1.1 1.5 -27% 1.1
-------------------------------------------------------------------------
Grades
gold
(grams/tonne) 0.89 0.90 -1% 0.87 0.86 +1% 0.93
copper
(percent) 0.06 0.05 +20% 0.05 0.05 - 0.11
-------------------------------------------------------------------------
Mill
recoveries
(percent)
gold 82 82 - 82 82 - 83
copper 89 87 +2% 88 87 +1% 92
-------------------------------------------------------------------------
Production
gold
(ounces) 33,700 39,300 -14% 138,400 147,900 -6% 163,200
copper
(tonnes) 600 700 -14% 2,800 2,900 -3% 7,000
-------------------------------------------------------------------------
Cost per
tonne of ore
milled (C$) $15 $12 +25% $13 $12 +8% $12
-------------------------------------------------------------------------

Mill throughput did not meet expectation

Throughput was below 2006 levels and below our target because of several
factors, including harder than expected ore from the 87 pit, mechanical
failures and a lack of overall pump capacity in the mill. As a result, gold
production was lower than the prior year. Copper production was consistent
between periods because of improved recoveries.
In January 2008, Troilus completed its program to upgrade the primary
ball mill pumps to 1,500 horse power and secondary ball mill pumps to
1,000 horsepower. These investments should improve our productivity in 2008.

2008 outlook for production and costs

Gold and copper grades will increase significantly in 2008 as we return
to mining in the bottom of the 87 pit after completion of the J-4 pit.
The mine will continue with its present plan of open pit mining and
stockpile recovery. The J4 pit is expected to be completed in the first
quarter of 2008 while the 87 pit will continue to be mined into the second
quarter of 2009. Stockpile recovery will begin in 2009.
We have increased our obligation for mine rehabilitation, which is
scheduled to start in 2009, and will accrue the additional accretion and
depreciation over the next two years. We will also start accruing termination
costs in 2008 for employees we expect to remain with the mine until the end of
its life. These two items together will add approximately $4 million to costs
in 2008.

Financial review

Higher gold prices helped earnings

-------------------------------------------------------------------------
(millions of
Canadian dollars three months ended year ended
unless otherwise December 31 December 31
stated) 2007 2006 2007 2006
-------------------------------------------------------------------------
Sales analysis
Gold sales (ounces) 36,100 38,800 142,200 144,100
Copper sales (tonnes) 800 700 2,900 2,900
---------------------------------------------
Gross gold sales $22 $22 $85 $78
Gross copper sales 4 4 21 24
Other metal sales 1 1 2 2
---------------------------------------------
Gross sales 27 27 108 104
Smelter processing charges
and freight (2) (3) (8) (11)
-------------------------------------------------------------------------
Net sales $25 $24 $100 $93
-------------------------------------------------------------------------
Cost analysis
Tonnes of ore milled
(thousands) 1,440 1,645 6,000 6,500
Direct production costs
(per tonne) $15 $12 $13 $12
-------------------------------------------------------------------------
Direct costs of production $21 $20 $78 $77
Change in inventory 1 - 1 (2)
Depreciation and other
non-cash costs 3 3 11 12
-------------------------------------------------------------------------
Operating costs $25 $23 $90 $87
-------------------------------------------------------------------------
Operating earnings $- $1 $10 $6
-------------------------------------------------------------------------
Operating cash flow $5 $5 $15 $17
-------------------------------------------------------------------------

The table below shows what contributed to the change in operating earnings
and operating cash flow between this year and 2006.

-------------------------------------------------------------------------
three months ended year ended
(millions) December 31 December 31
-------------------------------------------------------------------------
Higher metal prices denominated in
Canadian dollars $1 $5
Lower smelter processing charges 1 3
Higher operating costs (2) (4)
-------------------------------------------------------------------------
Increase in operating earnings,
compared to 2006 - 4
Changes in working capital (1) (5)
Other 1 (1)
-------------------------------------------------------------------------
Decrease in operating cash flow,
compared to 2006 $- $(2)
-------------------------------------------------------------------------

The change in working capital is mainly a result of higher accounts
receivable. The increase is because of new payment terms for the smelter,
which began in 2007 and higher gold prices.

Modest capital spending

-------------------------------------------------------------------------
three months ended year ended
December 31 December 31 objective
(thousands) 2007 2006 change 2007 2006 change 2008
-------------------------------------------------------------------------
$300 $300 - $1,700 $2,200 -23% $1,000
-------------------------------------------------------------------------

Troilus spent $1.7 million this year on some mill improvements designed to
improve throughput volumes and metal recoveries, and a tailings dam lift.

OK TEDI

-------------------------------------------------------------------------
three months ended year ended
December 31 December 31 objective
(100 percent) 2007 2006 change 2007 2006 change 2008
-------------------------------------------------------------------------
Tonnes of ore
milled (000's) 6,300 6,700 -6% 25,800 27,600 -7% 25,300
Tonnes of ore
milled per
day 68,000 72,800 -6% 71,000 75,600 -7% 69,000
-------------------------------------------------------------------------
Strip ratio 1.5 1.4 +7% 1.3 1.6 -19% 1.3
-------------------------------------------------------------------------
Grades
copper
(percent) 0.9 0.9 - 0.8 0.8 - 0.8
gold
(grams/tonne) 1.0 0.9 +11% 0.9 0.9 - 1.2
-------------------------------------------------------------------------
Mill recoveries
(percent)
copper 87 86 +1% 86 86 - 85
gold 63 69 -9% 71 71 - 67
-------------------------------------------------------------------------
Production
copper
(tonnes) 48,400 49,100 -1% 169,200 194,400 -13% 174,000
gold
(ounces) 130,400 138,000 -6% 471,800 550,100 -14% 674,000
-------------------------------------------------------------------------
Cost per
tonne of ore
milled (C$) $19 $16 +19% $18 $17 +6% $18
-------------------------------------------------------------------------

High fluorine ore lowered throughput this year

Ok Tedi continued to mine skarn ores in the pit that contained high
levels of fluorine. To reduce the impact, for most of the year Ok Tedi has
been blending lower grade ore with lower levels of fluorine. Lowering
throughput while blending the low grade ore brought the fluorine content in
the concentrate back to acceptable levels. This had the effect, however, of
reducing copper and gold head grades, lowering copper and gold production to
below 2006 levels.
Ok Tedi has developed a fluorine management plan, which includes
solutions for the pit and the process plant, as well as a sales strategy for
concentrate. The plan includes evaluating the possibility of separating the
fluorine minerals from the concentrate using chemical reagents in the
flotation circuit.
The mine is also opening additional working faces in the pit, including
areas that are expected to contain lower levels of fluorine. We expect these
areas will be in production in early 2008. At that time, Ok Tedi should be in
a position to blend the ore to bring down fluorine levels in the concentrate.
Operating costs for Ok Tedi were higher in 2007 compared to 2006 because
of lower tonnes of ore produced and higher labour, contractor and community
payments.

2008 outlook for production and costs

Ok Tedi expects a 43 percent increase in its gold production compared to
2007 because of the higher content of skarn ores in the mill feed.
The fluorine situation is expected to improve in 2008 as Ok Tedi opens
additional working faces in the pit. Recoveries for both copper and gold are
still expected to be somewhat lower in 2008 compared to this year.
Ok Tedi will mine a significantly higher portion of skarn ore in 2008
than it has in the past. Skarn ores are metallurgically more challenging and
contain more sulphur than the porphyry ores that were predominantly mined in
previous years. Skarn ores will significantly increase sulphur content in the
mill feed (from three percent in 2007 to an average of eight percent in 2008).
It is therefore crucial that the Mine Waste and Tailings Management Plant is
commissioned by the middle of 2008, since it will remove most of the sulphur
in the tailings stream and greatly reduce the environmental risk of acid rock
drainage.

Financial review

Sales were higher than production, making earnings comparable between
periods

-------------------------------------------------------------------------
(millions of
Canadian dollars three months ended year ended
unless otherwise December 31 December 31
stated) 2007 2006 2007 2006
-------------------------------------------------------------------------
Sales analysis at 18%
Copper sales (tonnes) 7,600 6,400 32,500 33,600
Gold sales (ounces) 21,800 20,800 92,000 97,700
---------------------------------------------
Gross copper sales $40 $42 $248 $273
Gross gold sales 16 13 65 64
Other metal sales 1 1 3 3
---------------------------------------------
Gross sales 57 56 316 340
Smelter processing charges
and freight (7) (9) (41) (55)
-------------------------------------------------------------------------
Net sales $50 $47 $275 $285
-------------------------------------------------------------------------
Cost analysis at 18%
Tonnes of ore milled
(thousands) 1,125 1,200 4,640 4,960
Direct production costs
(per tonne) $19 $16 $18 $17
-------------------------------------------------------------------------
Direct costs of production $21 $19 $81 $83
Change in inventory (1) (3) 2 2
Depreciation and other
non-cash costs 2 3 9 8
-------------------------------------------------------------------------
Operating costs $22 $19 $92 $93
-------------------------------------------------------------------------
Operating earnings $28 $28 $183 $192
-------------------------------------------------------------------------
Operating cash flow $23 $12 $98 $151
-------------------------------------------------------------------------

The table below shows what contributed to the change in operating earnings
and operating cash flow between this year and 2006.

-------------------------------------------------------------------------
three months ended year ended
(millions) December 31 December 31
-------------------------------------------------------------------------
Lower metal prices, denominated in
Canadian dollars $(7) $(10)
Higher (lower) sales volumes 5 (8)
Lower smelter processing charges 4 12
Lower variable compensation - 4
Higher operating costs (2) (7)
-------------------------------------------------------------------------
Decrease in operating earnings,
compared to 2006 - (9)
Decreased tax expense because of
lower earnings - 3
Changes in net working capital 11 (47)
-------------------------------------------------------------------------
Increase (decrease) in operating
cash flow, compared to 2006 $11 $(53)
-------------------------------------------------------------------------

The change in working capital this quarter is mainly because of lower tax
payments. For the year, accounts receivable is higher because of timing of
payments and higher taxes were paid in 2007 compared to 2006.

Capital spending was higher because of the mine waste management program

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

-------------------------------------------------------------------------
(18 percent) three months ended year ended
December 31 December 31 objective
2007 2006 change 2007 2006 change 2008
-------------------------------------------------------------------------
Capital
spending $10,100 $4,500 +124% $31,500 $11,100 +184% $23,000
-------------------------------------------------------------------------

2008 outlook for capital spending

Ok Tedi plans to spend $130 million (our 18 percent share is $23 million)
in 2008. Of the $130 million, it will spend an estimated $43 million on the
mine waste management program, $27 million for the pit drainage tunnel, and
the rest for mine equipment and other sustaining capital.

Status of our development projects

Las Cruces

Quarterly development update

Construction

By December 31, 2007 Las Cruces had completed the following:
- essentially all detailed engineering and procurement
- 51 percent of construction
- 71 percent of total physical progress.

At the start of 2008, civil works are nearly complete, and the focus is
shifting to mechanical work and piping installation. Electrical and
instrumentation work is also well underway. Infrastructure projects to supply
and store process water, provide power from the Spanish grid and divert a
number of streams for environmental and safety reasons are essentially
complete.

Mining progress and direct ore shipping

A total of 19.9 million bench cubic metres (bcms) of waste were removed
from the mine this year, reaching a total of 27.8 million bcms for the project
to date. A further 2.4 million bcms is to be removed before reaching ore in
late April 2008. Mining costs to date have been 9 percent below budget because
of more efficient blasting and haulage.
Since the plant is not expected to be ready to process ore until the
fourth quarter of 2008, Las Cruces plans to selectively mine and crush a
subset of approximately 130,000 tonnes of the available ore that averages
14 percent copper, and then ship this ore directly to selected smelters. This
should result in the production of approximately 18,000 tonnes of copper and
should significantly mitigate the financial impact of the delay in
construction. At the same time, ore will be stockpiled in preparation for the
plant start-up in the fourth quarter. The build-up of the stockpile will
permit blending of the ore to ensure optimal feed for start-up.

Operating costs

Most cost estimates for consumables are now supported by firm price
quotations and contract values. We expect the life-of-mine operating costs for
Las Cruces to be approximately (euro) 0.49 per pound of copper produced. On an
annual basis they should range from (euro) 0.53 per pound in the early years,
to (euro) 0.44 per pound in later years when the mine's strip ratio decreases.

Environment

Las Cruces continued its strict environmental management program this
year and is pleased to report that there were no significant environmental
incidents. Progressive reclamation also continues. Las Cruces' environmental
management system became certified under ISO14001 this year.

Community relations

Las Cruces continues to have a very good relationship with the local
communities. At the end of the year, almost 200 local residents were directly
employed by Las Cruces or its contractors, and local groups are visiting the
mine on a regular basis.

2008 outlook for development and operations

Las Cruces construction should be complete by the end of the third
quarter and copper production should begin in the fourth quarter. To date,
(euro) 370 million has been spent or committed on the project, and we expect
to spend the balance in 2008. Las Cruces will start generating revenue in 2008
as 130,000 tonnes of high grade copper ore are expected to be shipped to
smelters beginning in May. Copper cathode production is expected to begin in
the fourth quarter.

The following table shows the spending made and required:

-------------------------------------------------------------------------
(millions) Spending Lending Subsidies Funding
under received from
Tranche A project
of credit sponsors
facility
-------------------------------------------------------------------------
Up to December 31 2007 (euro)263 (euro)87 (euro)6 (euro)197
2008 200 84 47 42
-------------------------------------------------------------------------
(euro)463 (euro)171 (euro)53 (euro)239
-------------------------------------------------------------------------

The following table shows expected production for 100 percent of
Las Cruces

-------------------------------------------------------------------------
2008 2009
target target
-------------------------------------------------------------------------
Tonnes of ore processed (thousands) 240 800
-------------------------------------------------------------------------
Strip ratio 28 32
-------------------------------------------------------------------------
Copper grades (percent) 12 9
-------------------------------------------------------------------------
Copper production (tonnes) 27,000 64,000
-------------------------------------------------------------------------
Smelter processing charges and
freight for crushed ore sales (C $ per tonne) $277 -
-------------------------------------------------------------------------
Direct production cost of ore
processed (C $ per tonne) $172 $150
-------------------------------------------------------------------------

CERATTEPE

Quarterly development update

All the necessary permits are in place for site construction, which began
in the third quarter. We continue to maintain an active campaign of community
dialogue and engagement to reinforce support for the project.
The following work was underway this quarter:

Underground rehabilitation and development

Work on the decline was completed and the ramp was extended toward the
ore zone. Development will continue in 2008 with anticipation of reaching the
ore body in the first quarter of 2009.

Aerial tramway

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

Cayeli mill expansion

This is the single largest cost related to the project. The mill needs to
increase its capacity from 1.2 million tonnes per year to 1.5 million tonnes
per year. This requires a new grinding and flotation section as well as a
small SAG mill and a ball mill. Basic engineering has been completed.

2008 outlook for development

Subject to the outcome of current legal proceedings (see Managing Risk -
Cerattepe legal proceedings), we will continue to move the project forward and
hope to start production by the end of the first quarter of 2009. In all,
engineering and construction are on track.

The following table shows the spending to date and planned:

-------------------------------------------------------------------------
(millions) Spending
-------------------------------------------------------------------------
Up to December 31 2007 $15
Option payments 9
2008 development (includes mill expansion at Cayeli) 44
2009 development 20
-------------------------------------------------------------------------
$88
-------------------------------------------------------------------------
Spending will continue to be funded with cash from Cayeli.

PETAQUILLA

Quarterly development update

In May 2007, Teck Cominco, Petaquilla Copper and Inmet agreed to a work
plan to accelerate the development of the Petaquilla copper deposit in Panama
by completing the front-end engineering and design (FEED), progressing the
social and environmental impact assessment, commencing marketing discussions
with our potential customers and advancing financing discussions.
The interim FEED study was completed and estimates that the capital cost
required to develop the Petaquilla project would be US $3.5 billion (including
a contingency of $515 million but not working capital or escalation). The
capital cost estimate includes approximately $500 million for the construction
of an oil-fired power plant and approximately $280 million for port
facilities. Cash costs, including operating and realization costs net of by-
product credits, in years 1 to 10 of the project are estimated to average
US $0.85 per pound of copper produced. The study is based on the mine plan
developed in 1998, which contemplates a 23-year mine life. The project
includes a concentrator capable of processing 120,000 tonnes per day of ore.
Construction is expected to take approximately 44 months from issuance of
construction permits. Permitting would follow the submission of a social and
environmental impact assessment, expected to be completed in the fourth
quarter of 2008.
Capital costs for the project have increased substantially over
previously published estimates because of scope changes, including
enhancements in erosion control, water management and other environmental
protection measures, and increases in equipment and construction costs that
have been affecting projects worldwide. Despite the increase in capital costs
required to develop Petaquilla, the shareholders believe that the project
still has the potential to be a world-class mining operation.
Work is continuing on the FEED study. A project review team is currently
studying opportunities to reduce the capital costs from the interim FEED study
estimate. Several possible opportunities have already been identified in the
area of the grinding circuit, power supply and port infrastructure. The
project review team will evaluate these opportunities over the next six weeks
and, where appropriate incorporate these changes into the capital cost
estimate.

Managing our liquidity

-------------------------------------------------------------------------
three months ended year ended
December 31 December 31
(millions) 2007 2006 2007 2006
-------------------------------------------------------------------------
CASH FROM OPERATING ACTIVITIES
Cayeli $51 $23 $215 $173
Pyhasalmi 5 38 109 109
Troilus 5 5 15 17
Ok Tedi 23 12 98 151
Corporate development and
exploration not included in
operation's cash flow (2) (1) (6) (3)
General and administration (13) (6) (20) (14)
Other 7 10 16 5
-------------------------------------------------------------------------
76 81 427 438
-------------------------------------------------------------------------
CASH FROM INVESTING AND FINANCING
Capital spending (94) (46) (346) (133)
Long-term borrowings, less
repayments 24 36 89 73
Funding from non-controlling
shareholder 16 4 56 13
Disposition of investments - - 50 2
Foreign exchange on cash held in
foreign currency 6 17 (51) 15
Other (2) (8) (24) (20)
-------------------------------------------------------------------------
(50) 3 (226) (50)
-------------------------------------------------------------------------
Increase in cash 26 84 201 388
Cash and short-term investments
Beginning of period 815 556 640 252
-------------------------------------------------------------------------
End of period $841 $640 $841 $640
-------------------------------------------------------------------------



CASH FROM OPERATING ACTIVITIES

-------------------------------------------------------------------------
three months ended year ended
(millions) December 31 December 31
-------------------------------------------------------------------------
Increased (decreased) earnings from
operations (see page 5) $(24) $25
Non-cash changes in operating earnings:
Decreased (increased) tax expense 6 (4)
Changes in working capital 21 (37)
Other (8) 5
-------------------------------------------------------------------------
Decrease in operating cash flow,
compared to 2006 $(5) $(11)
-------------------------------------------------------------------------

Operating cash flows are lower this quarter compared to 2006 because of
lower earnings offset by an increase in working capital from lower accounts
receivable at Cayeli. The change in working capital this year is largely due
to higher taxes paid in 2007 and lower payables at Cayeli.

2008 outlook for operating activities

Based on our outlook for metal prices and production, we expect our
operating cash flows to be in a similar range for 2008 for our operating mines
and we expect operating cash flows from the start of production at Las Cruces.

CASH FROM INVESTING AND FINANCING

Capital spending
-------------------------------------------------------------------------
three months ended year ended
December 31 December 31 objective
(millions) 2007 2006 2007 2006 2008
-------------------------------------------------------------------------

Cayeli $2 $4 $18 $15 $23
Pyhasalmi 2 2 3 6 12
Troilus - - 2 2 1
Ok Tedi 10 5 32 11 23
Las Cruces 76 32 283 93 342
Cerattepe 4 1 8 3 53
Accruals and other - 2 - 3 -
-------------------------------------------------------------------------
$94 $46 $346 $133 $454
-------------------------------------------------------------------------

Refer to Results of our operations and Status of our development projects
for a discussion of actual results and our 2008 objective.

Las Cruces borrowed an additional (euro)13 million this quarter, bringing
the total amount borrowed under Tranche A of its credit facility to
(euro)87 million.

2008 outlook for investing and financing

We expect capital spending to be $454 million in 2008:
- $325 million for the continuing development of the Las Cruces mine
and $17 million for its sustaining capital
- $8 million for the mine waste management program and $5 million for
drainage tunnel underground works at Ok Tedi.

The Las Cruces spending will be financed by a combination of debt,
government subsidies and sponsor contributions (see page 23).
A decision on whether we proceed with development of Petaquilla will be
made by the end of March 2008. At that time we will better be able to assess
our cash and financing requirements over the near term.

Financial condition

CASH

Our cash and equivalents balance of $841 million at December 31, 2007
includes cash and money market instruments that mature in 90 days or less from
the date of acquisition. Short-term investments mature in 91 days to a year.
At December 31, our cash and short-term investments are generally held in:
- short term debt instruments issued by Canadian Crown Corporations
- AAA rated 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 and term and overnight deposits with leading Canadian and
international financial institutions.
Our restricted cash balance of $39 million at December 31, 2007 includes:
- $12 million in trust for future rehabilitation at Ok Tedi
- $14 million of cash collateralized letters of credit for Inmet
- $13 million related to issuing letters of credit to suppliers at Las
Cruces.

COMMON SHARES
-------------------------------------------------------------------------
Common shares outstanding as of
December 31, 2007 and February 12, 2008 48,281,909
-------------------------------------------------------------------------
Deferred share units outstanding as of
December 31, 2007 75,215
(redeemable on a one-for-one basis for common shares)
-------------------------------------------------------------------------

FINANCIAL INSTRUMENTS

The following table shows gold forward sales at Troilus, gold and copper
forward sales at Ok Tedi, the currency and interest rate hedges related to Las
Cruces, and their respective marked-to-market valuations recorded on our
consolidated balance sheet as at December 31, 2007.

-------------------------------------------------------------------------
Type of Expiry Quantity Price C$ marked-to-
contract market gain (loss)
at December 31,
2007
-------------------------------------------------------------------------
Copper forward
sales
Ok Tedi 2008 3.2 million lbs US $2.78 per lb
2009 3.2 million lbs US $2.41 per lb
----------------------------------------
6.4 million lbs US $2.60 per lb $(2.4 million)(1)

Gold forward
sales
Troilus 2008 58,200 ounces US $352 per oz. $(26.9 million)(2)


Ok Tedi 2008 6,800 ounces US $372 per oz.
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.
-----------------------------------------------------------
19,400 ounces US $639 per oz. $(6.6 million)(3)

Currency forward
sales
Las Cruces 2008 US $215 million (euro)171.80 million $33.6 million
-----------------------------------------------------------

Interest rate
swaps
Las Cruces 2008 US $179 million 5.2 percent $(8.0 million)
to 2014 (reducing in
conjunction with
debt repayment
schedule)
-------------------------------------------------------------------------
(1) At a copper price of US $3.04 per pound.
(2) At a gold price of US $859 per ounce.
(3) At a gold price of US $826 per ounce.

Accounting changes

We adopted several new CICA Handbook sections.

Section 3855 - Financial instruments - recognition and measurement

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

3865 - Hedges

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

1530 - Comprehensive income

This section calls for a statement of comprehensive income and its
components. Other comprehensive income includes unrealized gains and losses on
financial assets classified as available-for-sale, unrealized foreign currency
translation amounts arising from self-sustaining foreign operations, and
changes in the fair value of the effective portion of cash flow hedging
instruments.
Effective January 1, 2007, we include unrealized fair value of our cash
flow hedges, investments and foreign currency translation adjustment in
accumulated other comprehensive income, net of tax. The change in fair value
this quarter of the effective portion of our cash flow hedges, investments and
foreign currency translation adjustments is included in other comprehensive
income for the period, net of tax.
Turn to note 2 on page 45 in the Interim consolidated financial
statements for more details about the transitional adjustments.

The CICA also recently issued new accounting pronouncements:

In December 2006, the CICA issued Handbook Section 3862, Financial
Instruments - Disclosure and Section 3863, Financial Instruments -
Presentation. This section replaces the disclosure portion of Section 3861. It
increases the emphasis on disclosing the nature and extent of risks arising
from both recognized and unrecognized financial instruments, and how these
risks are managed. Section 3863 carries forward the presentation requirements
from Section 3861.
In December 2006, the CICA issued Handbook Section 1535, Capital
Disclosures. This section establishes standards for disclosing qualitative and
quantitative information about capital and how it is managed. Its goal is to
make it easier for readers to use the financial statements to evaluate a
company's objectives, policies and processes for managing capital.
In June 2007, the CICA issued Handbook Section 3031, Inventories. This
section requires companies to record their inventory at the lower of cost or
net realizable value. This is our current accounting policy. The section also
clarifies the allocation of fixed production overhead, requires consistent use
of either first-in, first-out or weighted average to measure inventories, and
requires that any previous write-downs be reversed when the value of
inventories increases. The amount of the reversal is limited to the amount of
the original write-down.
The above standards will become effective for us beginning on January 1,
2008. We are assessing the impact these changes in accounting policy will have
on our consolidated financial statements.

Managing risk

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

Development at Las Cruces

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

Cerattepe legal proceedings

Prior to April 2007, Cerattepe was affected by a local administrative
court decision that governmental authorities had incorrectly exempted the
project operating licences from environmental assessment regulations. In April
2007, the Danistay (Turkish Administrative Supreme Court) directed the lower
court to review its decision and re-instated the validity of the licences on
procedural grounds. In June, the local court confirmed its agreement with the
Danistay's decision. The plaintiff in the prior proceedings has since re-filed
its applications to have the licences cancelled, and has also made
applications to stop work on the property and to cancel a lease of the land on
which the bottom ropeway terminus will be located. We have applied to join the
proceedings as an intervenor and together with the Turkish Ministry of Energy
and Natural Resources have filed defences to the applications which we
continue to believe are without merit.
The decision of the Danistay did not finally resolve the status of the
operating licences but they remain valid pending receipt of any new decision
from the local administrative court. As a result, we resumed permitting and
on- site work in April 2007 and have continued with such efforts. Any adverse
ruling in the future could have a negative impact on, or stop our ability to
progress, the project.

Sensitivity analysis

The table below shows you the effect of key variables on our net income,
based on our 2008 objectives.

-------------------------------------------------------------------------
Would change
Would change our 2007 net
our 2007 net income per
A change of: income by: share by:
-------------------------------------------------------------------------
Metal prices
Copper (per pound) US $0.10 $16 million $0.32
Zinc (per pound) US $0.05 $4 million $0.08
Gold (per ounce)(1) US $10 $2 million $0.03
-------------------------------------------------------------------------
Exchange rates
Canadian dollar per US dollar C$0.05 $30 million $0.61
Canadian dollar per euro C$0.05 $2 million $0.05
-------------------------------------------------------------------------
Treatment and refining charges
Copper treatment charge per tonne US $10
and copper refining charge per
pound US $0.10 $4 million $0.08
Zinc treatment charge per tonne US $10 $1 million $0.02
-------------------------------------------------------------------------
Freight and energy costs
Concentrate freight per tonne 10% $3 million $0.07
Fuel price per litre $0.10 $4 million $0.08
Electricity per kilowatt hour $0.01 $5 million $0.09
-------------------------------------------------------------------------
(1) Calculations include hedging in place at December 31, 2007.

Supplementary financial information

Pages 33 and 34 include supplementary financial information on cash costs.
These are non-generally accepted accounting principle measures.
We use unit cash cost information as a key performance indicator, both on
a segment basis and consolidated basis. We have included cash costs as
supplementary information because we believe our key stakeholders use this
measure 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 is not a recognized measure under Canadian generally
accepted accounting principles it should not be considered in isolation of
earnings or cash flows. There is also no standard way to calculate them, 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 Cerattepe, and one pre- development
property, Petaquilla.

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

Fourth quarter conference call

Will be held on
- Wednesday, February 13, 2008
- 11:00 a.m. (ET)
webcast available at
www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2143900 or
www.inmetmining.com.

You can also dial in by calling
- Local or international: +1.416.644.3415
- Toll-free within North America: +1.800.733.7560

Starting 1 p.m. (ET) Wednesday February 13, 2008, conference call replay
will be available
- Local or international: +1.416.640.1917 passcode 21260197 followed by
the number sign.
- Toll-free within North America: +1.877.289.8525 passcode 21260197
followed by the number sign.



INMET MINING CORPORATION
Supplementary financial information

Cash costs
2007 For the year ended December 31

per ounce
per pound of copper of gold
--------------------------------------- ---------
TOTAL
CAYELI PYHASALMI OK TEDI COPPER TROILUS
----------------------------------------------------- --------- ---------
(US dollars)

Direct production costs $1.01 $1.58 $1.09 $1.14 $522
Royalties and variable
compensation 0.13 - 0.05 0.08 -
Smelter processing
charges and freight 1.18 1.64 0.53 1.00 52
Metal credits (1.97) (4.63) (0.90) (2.02) (153)
----------------------------- --------- ---------

Cash cost $0.35 ($1.41) $0.77 $0.20 $421
----------------------------- --------- ---------
----------------------------- --------- ---------

2006 For the year ended December 31

per ounce
per pound of copper of gold
--------------------------------------- ---------
TOTAL
CAYELI PYHASALMI OK TEDI COPPER TROILUS
----------------------------------------------------- --------- ---------
(US dollars per pound)


Direct production costs $0.80 $1.48 $0.86 $0.94 $459
Royalties and variable
compensation 0.14 - 0.09 0.09 -
Smelter processing
charges and freight 1.48 2.07 0.64 1.20 68
Metal credits (2.15) (5.11) (0.79) (2.03) (162)
----------------------------- --------- ---------

Cash cost $0.27 ($1.56) $0.80 $0.20 $365
----------------------------- --------- ---------
----------------------------- --------- ---------

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



Reconciliation of cash costs to statements of earnings
2007 For the year ended December 31

per ounce
per pound of copper of gold
--------------------------------------- ---------
(millions of Canadian
dollars, except where TOTAL
otherwise note) CAYELI PYHASALMI OK TEDI COPPER TROILUS
----------------------------------------------------- --------- ---------
GAAP reference page 15 page 17 page 21 page 19

Direct production costs $87 $50 $81 $218 $78
Smelter processing
charges and freight 95 62 41 198 8
By product sales (165) (155) (68) (388) (23)
Adjust smelter processing
and freight, and sales
to production basis 9 (2) 1 8 -
--------- --------- --------- --------- ---------
Operating costs net
of metal credits $26 ($45) $55 $36 $63
US $ to C$ exchange rate $1.07 $1.07 $1.07 $1.07 $1.07
Inmet's share of
production (000's) 72,000 30,000 67,000 169,000 138,400
--------------------------------------- ---------
Cash cost $0.35 ($1.41) $0.77 $0.20 $421
--------------------------------------- ---------
--------------------------------------- ---------

2006 For the year ended December 31

per ounce
per pound of copper of gold
--------------------------------------- ---------
(millions of Canadian
dollars, except where TOTAL
otherwise note) CAYELI PYHASALMI OK TEDI COPPER TROILUS
----------------------------------------------------- --------- ---------
GAAP reference page 15 page 17 page 21 page 19

Direct production costs $73 $48 $83 $204 $77
Smelter processing
charges and freight 100 76 55 231 11
By product sales (133) (171) (67) (371) (26)
Adjust smelter processing
and freight, and sales
to production basis (20) (3) (1) (24) (1)
--------- --------- --------- --------- ---------
Operating costs net
of metal credits $20 ($50) $70 $40 $61
US $ to C$ exchange rate $1.13 $1.13 $1.13 $1.13 $1.13
Inmet's share of
production (000's) 67,000 28,700 77,000 172,700 147,900
--------------------------------------- ---------
Cash cost $0.27 ($1.56) $0.80 $0.20 $365
--------------------------------------- ---------
--------------------------------------- ---------



INMET MINING CORPORATION
Supplementary financial information

Cash costs
2007 For the three months ended December 31

per ounce
per pound of copper of gold
--------------------------------------- ---------
TOTAL
CAYELI PYHASALMI OK TEDI COPPER TROILUS
----------------------------------------------------- --------- ---------
(US dollars)

Direct production costs $1.10 $1.95 $1.10 $1.23 $640
Royalties and variable
compensation 0.07 - 0.03 0.04 -
Smelter processing
charges and freight 1.09 1.77 0.43 0.92 51
Metal credits (1.64) (5.05) (0.99) (1.90) (139)
----------------------------- --------- ---------

Cash cost $0.62 ($1.33) $0.57 $0.29 $552
----------------------------- --------- ---------
----------------------------- --------- ---------

2006 For the three months ended December 31

per ounce
per pound of copper of gold
--------------------------------------- ---------
TOTAL
CAYELI PYHASALMI OK TEDI COPPER TROILUS
----------------------------------------------------- --------- ---------
(US dollars per pound)

Direct production costs $0.89 $1.62 $0.92 $1.02 $442
Royalties and variable
compensation 0.14 - 0.02 0.06 -
Smelter processing
charges and freight 1.96 2.72 0.60 1.48 66
Metal credits (3.38) (7.08) (0.79) (2.83) (102)
----------------------------- --------- ---------

Cash cost ($0.39) ($2.74) $0.75 ($0.27) $406
----------------------------- --------- ---------
----------------------------- --------- ---------

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



Reconciliation of cash costs to statements of earnings
2007 For the three months ended December 31

per ounce
per pound of copper of gold
--------------------------------------- ---------
(millions of Canadian
dollars, except where TOTAL
otherwise note) CAYELI PYHASALMI OK TEDI COPPER TROILUS
----------------------------------------------------- --------- ---------
GAAP reference page 15 page 17 page 21 page 19

Direct production costs $24 $13 $21 $58 $21
Smelter processing
charges and freight 20 16 7 43 2
By product sales (26) (38) (17) (81) (5)
Adjust smelter processing
and freight, and sales
to production basis (6) - - (6) -
--------- --------- --------- --------- ---------
Operating costs net
of metal credits $12 ($9) $11 $14 $18
US $ to C$ exchange rate $0.98 $0.98 $0.98 $0.98 $0.98
Inmet's share of
production (000's) 20,000 7,200 19,200 46,400 33,700
--------------------------------------- ---------
Cash cost $0.62 ($1.33) $0.57 $0.29 $552
--------------------------------------- ---------
--------------------------------------- ---------

2006 For the three months ended December 31

per pound of copper of gold
--------------------------------------- ---------
(millions of Canadian
dollars, except where TOTAL
otherwise note) CAYELI PYHASALMI OK TEDI COPPER TROILUS
----------------------------------------------------- --------- ---------
GAAP reference page 15 page 17 page 21 page 19

Direct production costs $21 $13 $19 $53 $20
Smelter processing
charges and freight 27 26 9 62 3
By product sales (34) (61) (14) (109) (5)
Adjust smelter processing
and freight, and sales
to production basis (22) - 3 (19) -
Operating costs net --------- --------- --------- --------- ---------
of metal credits ($8) ($22) $17 ($13) $18
US $ to C$ exchange rate $1.14 $1.14 $1.14 $1.14 $1.14
Inmet's share of
production (000's) 17,100 7,100 19,500 43,700 39,300
--------------------------------------- ---------
Cash cost ($0.39) ($2.74) $0.75 ($0.27) $406
--------------------------------------- ---------
--------------------------------------- ---------



INMET MINING CORPORATION
Quarterly review
(unaudited)

Latest Four Quarters
-------------------------------------------------------------------------
2007 2007 2007 2007
(thousands of Canadian dollars, Fourth Third Second First
except per share amounts) quarter quarter quarter quarter
-------------------------------------------------------------------------
STATEMENTS OF EARNINGS

Gross sales $ 224,773 $ 272,293 $ 320,018 $ 286,614
Smelter processing
charges and freight (43,902) (42,557) (55,413) (64,606)
Cost of sales (78,809) (72,057) (78,181) (79,377)
Depreciation (9,480) (8,739) (8,039) (9,415)
-------------------------------------------
92,582 148,940 178,385 133,216
Corporate development
and exploration (3,510) (2,895) (1,836) (842)
General and administration (12,622) (2,674) (2,162) (2,840)
Investment and other income 5,968 9,644 13,415 7,427
Interest expense (407) (424) (424) (438)
Capital tax (expense) recovery 212 (273) (274) (274)
Income tax expense (18,551) (37,649) (48,509) (35,376)
Non-controlling interest (27) 167 (545) 205
-------------------------------------------
Net income $ 63,645 $ 114,836 $ 138,050 $ 101,078
-------------------------------------------
Net income per common share $ 1.32 $ 2.38 $ 2.86 $ 2.09
-------------------------------------------
Diluted net income
per common share $ 1.32 $ 2.37 $ 2.86 $ 2.09
-------------------------------------------


Previous Four Quarters
-------------------------------------------------------------------------
2006 2006 2006 2006
(thousands of Canadian dollars, Fourth Third Second First
except per share amounts) quarter quarter quarter quarter
-------------------------------------------------------------------------
STATEMENTS OF EARNINGS

Gross sales $ 258,911 $ 301,100 $ 317,624 $ 210,234
Smelter processing
charges and freight (65,005) (60,270) (63,668) (51,662)
Cost of sales (67,868) (73,394) (78,778) (65,176)
Depreciation (9,057) (9,025) (8,225) (7,265)
-------------------------------------------
116,981 158,411 166,953 86,131
Corporate development
and exploration (4,136) (2,708) (1,456) (1,454)
General and administration (6,128) (2,618) (2,624) (2,370)
Investment and other income 17,972 1,759 2,940 25,086
Interest expense (425) (412) (391) (391)
Capital tax (expense) recovery - 41 (246) (245)
Income tax expense (26,679) (42,902) (33,240) (27,196)
Non-controlling interest (165) 11 154 -
-------------------------------------------
Net income $ 97,420 $ 111,582 $ 132,090 $ 79,561
-------------------------------------------
Net income per common share $ 2.02 $ 2.31 $ 2.74 $ 1.65
-------------------------------------------
Diluted net income
per common share $ 2.02 $ 2.31 $ 2.74 $ 1.64
-------------------------------------------



INMET MINING CORPORATION
Consolidated balance sheets

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

Assets

Current assets:
Cash and short-term investments $840,823 $640,186
Restricted cash (note 6) 1,569 -
Accounts receivable 131,197 122,645
Inventories 52,725 58,323
Future income tax asset 14,515 7,567
-------------------------
1,040,829 828,721

Restricted cash (note 6) 37,205 35,759
Property, plant and equipment 870,965 548,637
Investments (note 7) 32,266 53,002
Future income tax asset 7,884 21,750
Deferred charges - 2,408
Derivatives (note 8) 33,565 -
Other assets 25,751 42,663
-------------------------

$2,048,465 $1,532,940
-------------------------------------------------------------------------

Liabilities

Current liabilities:
Accounts payable and accrued liabilities $172,800 $163,106
Current portion of long-term debt 12,971 -
-------------------------
185,771 163,106

Long-term debt (note 9) 234,317 109,080
Reclamation liabilities (note 10) 84,017 65,812
Derivatives (note 8) 43,960 -
Other liabilities 19,249 30,617
Future income tax liabilities 37,084 42,366
Non-controlling interest 51,574 49,125
-------------------------
655,972 460,106
-------------------------
Commitments (note 11)

Shareholders' equity

Share capital 337,464 337,338
Contributed surplus 60,722 66,999
Stock based compensation 1,085 915
Retained earnings 1,076,958 669,385
Accumulated other comprehensive loss (note 12) (83,736) (1,803)
-------------------------

1,392,493 1,072,834
-------------------------

$2,048,465 $1,532,940
-------------------------------------------------------------------------
(see accompanying notes)



INMET MINING CORPORATION
Segmented balance sheets

2007 As at December 31

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

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

Assets
Cash and short-term
investments $359,359 $333,671 $111,492 $-
Other current assets 23,455 29,384 55,069 23,644
Restricted cash 14,444 - - -
Property, plant and
equipment 629 115,064 63,147 28,413
Investments 32,266 - - -
Derivatives - - - -
Other assets 22,343 441 - 6,289
----------------------------------------------
$452,496 $478,560 $229,708 $58,346
----------------------------------------------
----------------------------------------------

Liabilities
Current liabilities $16,948 $39,161 $14,560 $11,972
Long-term debt 16,267 - - -
Reclamation liabilities 24,393 3,169 13,104 7,662
Derivatives - - - 26,889
Other liabilities 5,057 4,787 - -
Future income tax
liabilities - 17,723 7,393 -
Non-controlling interest - - - -
----------------------------------------------
$62,665 $64,840 $35,057 $46,523
----------------------------------------------
----------------------------------------------


2007 As at December 31

(unaudited) OK TEDI LAS CRUCES TOTAL
------------------------------------------------- -----------

(thousands of (Papua New
Canadian dollars) Guinea) (Spain)

Assets
Cash and short-term
investments $13,473 $22,828 $840,823
Other current assets 38,162 30,292 200,006
Restricted cash 11,836 10,925 37,205
Property, plant and
equipment 63,655 600,057 870,965
Investments - - 32,266
Derivatives - 33,565 33,565
Other assets 2,101 2,461 33,635
---------------------- -----------
$129,227 $700,128 $2,048,465
---------------------- -----------
---------------------- -----------

Liabilities
Current liabilities $21,487 $81,643 $185,771
Long-term debt - 218,050 234,317
Reclamation liabilities 19,708 15,981 84,017
Derivatives 9,034 8,037 43,960
Other liabilities 1,412 7,993 19,249
Future income tax
liabilities - 11,968 37,084
Non-controlling interest - 51,574 51,574
---------------------- -----------
$51,641 $395,246 $655,972
---------------------- -----------
---------------------- -----------



2006 As at December 31

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

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

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

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


2006 As at December 31

OK TEDI LAS CRUCES TOTAL
------------------------------------------------- -----------

(thousands of (Papua New
Canadian dollars) Guinea) (Spain)

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

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



INMET MINING CORPORATION
Consolidated statements of earnings
(unaudited)

(thousands of Canadian Three Months Ended Year Ended
dollars except per December 31 December 31
share amounts) 2007 2006 2007 2006
------------------------------------------------- -----------------------

Gross sales $224,773 $258,911 $1,103,698 $1,087,869

Smelter processing
charges and freight (43,902) (65,005) (206,478) (240,605)

Cost of sales (78,809) (67,868) (308,424) (285,216)

Depreciation (9,480) (9,057) (35,673) (33,572)
------------------------------------------------- -----------------------

92,582 116,981 553,123 528,476


Corporate development
and exploration (3,510) (4,136) (9,083) (9,754)

General and administration (12,622) (6,128) (20,298) (13,740)

Investment and other
income (note 13) 5,968 17,972 36,454 47,757

Interest expense (407) (425) (1,693) (1,619)

Capital tax (expense) recovery 212 - (609) (450)

Income tax expense
(note 14) (18,551) (26,679) (140,085) (130,017)

Non-controlling interest (27) (165) (200) -

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

Net income $63,645 $97,420 $417,609 $420,653
------------------------------------------------- -----------------------

Basic net income per
common share (note 15) $1.32 $2.02 $8.65 $8.73
------------------------------------------------- -----------------------

Diluted net income per
common share (note 15) $1.32 $2.02 $8.64 $8.71
------------------------------------------------- -----------------------

Weighted average shares
outstanding (000's) 48,282 48,278 48,279 48,212
------------------------------------------------- -----------------------
(see accompanying notes)



INMET MINING CORPORATION
Segmented statements of earnings
(unaudited)

2007 For the year ended December 31

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

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

Gross sales $- $418,694 $260,246 $108,378
Smelter processing
charges and freight - (94,700) (62,081) (7,989)
Cost of sales (1,953) (91,245) (51,144) (80,441)
Depreciation - (8,857) (8,439) (10,120)
----------------------------------------------
(1,953) 223,892 138,582 9,828

Corporate development
and exploration (5,590) (1,686) (2,077) 270
General and administration (20,298) - - -
Investment and other
income (expense) 34,807 (2,004) - 5,549
Interest expense (1,693) - - -
Capital tax expense (609) - - -
Income tax expense 3,302 (46,445) (30,911)
Non-controlling interest - - - -
----------------------------------------------

Net income $7,966 $173,757 $105,594 $15,647
----------------------------------------------
----------------------------------------------


2007 For the year ended December 31

OK TEDI LAS CRUCES TOTAL
------------------------------------------------- -----------

(thousands of (Papua New
Canadian dollars) Guinea) (Spain)

Gross sales $316,380 $- $1,103,698
Smelter processing
charges and freight (41,708) - (206,478)
Cost of sales (83,641) - (308,424)
Depreciation (8,257) - (35,673)
---------------------- -----------
182,774 - 553,123

Corporate development
and exploration - - (9,083)
General and administration - - (20,298)
Investment and other
income (expense) (2,850) 952 36,454
Interest expense - - (1,693)
Capital tax expense - - (609)
Income tax expense (65,745) (286) (140,085)
Non-controlling interest - (200) (200)
---------------------- -----------

Net income $114,179 $466 $417,609
---------------------- -----------
---------------------- -----------



2006 For the year ended December 31

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

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

Gross sales $- $370,561 $273,848 $103,880
Smelter processing
charges and freight - (99,462) (75,342) (11,112)
Cost of sales (1,944) (71,157) (49,629) (76,311)
Depreciation - (7,418) (8,617) (10,912)
----------------------------------------------
(1,944) 192,524 140,260 5,545

Corporate development
and exploration (2,955) (1,454) (1,993) (3,352)
General and administration (13,740) - - -
Investment and other income 46,340 1,417 - -
Interest expense (1,619) - - -
Capital tax expense (450) - - -
Income tax expense (2,200) (25,846) (32,078) -
----------------------------------------------

Net income $23,432 $166,641 $106,189 $2,193
----------------------------------------------
----------------------------------------------


2006 For the year ended December 31

OK TEDI LAS CRUCES TOTAL
------------------------------------------------- -----------

(thousands of (Papua New
Canadian dollars) Guinea) (Spain)

Gross sales $339,580 $- $1,087,869
Smelter processing
charges and freight (54,689) - (240,605)
Cost of sales (86,175) - (285,216)
Depreciation (6,625) - (33,572)
---------------------- -----------
192,091 - 528,476

Corporate development
and exploration - - (9,754)
General and administration - - (13,740)
Investment and other income - - 47,757
Interest expense - - (1,619)
Capital tax expense - - (450)
Income tax expense (69,893) - (130,017)
---------------------- -----------

Net income $122,198 $- $420,653
---------------------- -----------
---------------------- -----------



INMET MINING CORPORATION
Segmented statements of earnings
(unaudited)

2007 For the three months ended December 31

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

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

Gross sales $- $81,088 $58,672 $27,317
Smelter processing
charges and freight - (19,756) (15,384) (1,798)
Cost of sales (491) (22,559) (13,258) (22,554)
Depreciation - (2,635) (1,881) (2,620)
----------------------------------------------
(491) 36,138 28,149 345
----------------------------------------------
----------------------------------------------

Corporate development
and exploration (2,438) (526) (506) (40)
General and administration (12,622) - - -
Investment and other
income (expense) 6,447 (587) - 1,361
Interest expense (407) - - -
Capital tax recovery 212 - - -
Income tax expense 4,459 (5,956) (6,200) -
Non-controlling interest - - - -
----------------------------------------------

Net income (loss) ($4,840) $29,069 $21,443 $1,666
----------------------------------------------
----------------------------------------------


2007 For the three months ended December 31

OK TEDI LAS CRUCES TOTAL
------------------------------------------------- -----------

(thousands of (Papua New
Canadian dollars) Guinea) (Spain)

Gross sales $57,696 $- $224,773
Smelter processing
charges and freight (6,964) - (43,902)
Cost of sales (19,947) - (78,809)
Depreciation (2,344) - (9,480)
---------------------- -----------
28,441 - 92,582
---------------------- -----------
---------------------- -----------

Corporate development
and exploration - - (3,510)
General and administration - - (12,622)
Investment and other
income (expense) (1,358) 105 5,968
Interest expense - - (407)
Capital tax recovery - - 212
Income tax expense (10,822) (32) (18,551)
Non-controlling interest - (27) (27)
---------------------- -----------

Net income (loss) $16,261 $46 $63,645
---------------------- -----------
---------------------- -----------


2006 For the three months ended December 31

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

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

Gross sales $- $87,867 $88,170 $26,365
Smelter processing
charges and freight - (26,959) (26,035) (2,898)
Cost of sales (576) (16,822) (13,630) (19,889)
Depreciation - (1,872) (2,333) (2,838)
----------------------------------------------
(576) 42,214 46,172 740
----------------------------------------------
----------------------------------------------

Corporate development
and exploration (1,268) (610) (400) (2,408)
General and administration (6,128) - - -
Investment and other
income (expense) 17,960 12 - -
Interest expense (425) - - -
Capital tax expense - - - -
Income tax expense (2,200) (4,036) (10,863) -
Non-controlling interest - - - -
----------------------------------------------

Net income (loss) $7,363 $37,580 $34,909 ($1,668)
----------------------------------------------
----------------------------------------------


2006 For the three months ended December 31

OK TEDI LAS CRUCES TOTAL
------------------------------------------------- -----------

(thousands of (Papua New
Canadian dollars) Guinea) (Spain)

Gross sales $56,509 $- $258,911
Smelter processing
charges and freight (9,113) - (65,005)
Cost of sales (16,951) - (67,868)
Depreciation (2,014) - (9,057)
---------------------- -----------
28,431 - 116,981
---------------------- -----------
---------------------- -----------

Corporate development
and exploration - 550 (4,136)
General and administration - - (6,128)
Investment and other
income (expense) - - 17,972
Interest expense - - (425)
Capital tax expense - - -
Income tax expense (9,580) - (26,679)
Non-controlling interest - (165) (165)
---------------------- -----------

Net income (loss) $18,851 $385 $97,420
---------------------- -----------
---------------------- -----------



INMET MINING CORPORATION
Consolidated statements of cash flows
(unaudited)

Three Months Ended Year Ended
(thousands of Canadian December 31 December 31
dollars) 2007 2006 2007 2006
------------------------------------------------- -----------------------

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

Net income $63,645 $97,420 $417,609 $420,653
Add (deduct) items not
affecting cash:
Gain on disposition of
investments (note 13) - - (11,730) (24,291)
Depreciation 9,480 9,057 35,673 33,572
Future income tax (4,217) (2,380) (5,724) (11,823)
Loss on settlement
of pension liability
(note 13) 2,034 - 2,034 -
Accretion expense on
reclamation liabilities 899 925 3,609 3,500
Deferred revenue - 1,053 - 3,126
Non-controlling interest 27 165 200 -
Other 5,419 (3,562) 10,439 (126)
Reclamation costs (1,460) (1,049) (3,410) (2,519)
Net change in non-cash
working capital (note 4) 498 (20,269) (21,349) 16,037
------------------------------------------------- -----------------------
76,325 81,360 427,351 438,129
------------------------------------------------- -----------------------

Cash provided by (used in)
investing activities

Capital spending (93,889) (45,759) (345,892) (132,799)
Acquisition and disposition
of investments, net - - 50,170 2,105
Purchase of short-term
investments (29,363) (21,199) (64,949) (254,826)
Other - (118) (43) 1,249
------------------------------------------------- -----------------------
(123,252) (67,076) (360,714) (384,271)
------------------------------------------------- -----------------------

Cash provided by (used in)
financing activities

Long-term debt:
Borrowings (note 9) 23,599 35,870 97,537 72,921
Repayment (note 9) - - (8,604) -
Funding by non-controlling
shareholder 16,277 4,071 55,805 13,317
Financial assurance deposits 8,487 (4,814) (4,164) (11,718)
Dividends paid on
common shares (4,828) (4,827) (9,656) (9,654)
Settlement of pension
liability (note 13) (3,266) - (3,266) -
Other (1,322) (495) (5,406) (835)
------------------------------------------------- -----------------------
38,947 29,805 122,246 64,031
------------------------------------------------- -----------------------


Foreign exchange change
on cash held
in foreign currency 5,602 16,884 (50,988) 14,826
------------------------------------------------- -----------------------

Increase (decrease) in cash (2,378) 60,973 137,895 132,715

Cash:
Beginning of period 524,883 323,637 384,610 251,895
------------------------------------------------- -----------------------
End of period 522,505 384,610 522,505 384,610

Short-term investments 318,318 255,576 318,318 255,576
------------------------------------------------- -----------------------

Cash and short-term
investments $840,823 $640,186 $840,823 $640,186
------------------------------------------------- -----------------------
(see accompanying notes)


(1) Supplementary cash
flow information:

Cash interest paid $1,557 $- $7,119 $1,196
Cash taxes paid $58,076 $41,261 $173,645 $119,600
------------------------------------------------- -----------------------



INMET MINING CORPORATION
Segmented statements of cash flows
(unaudited)

2007 For the year ended December 31

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

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

Cash provided by (used in)
operating activities
Before net change
in non-cash working
capital ($1,583) $191,754 $114,982 $19,584
Net change in non-cash
working capital (7,210) 22,773 (6,470) (4,935)
----------------------------------------------
(8,793) 214,527 108,512 14,649
----------------------------------------------
Cash provided by (used in)
investing activities
Capital spending (191) (26,073) (3,451) (1,742)
Acquisition and
disposition of
investments, net 50,170 - - -
Sale (purchase) of
short-term investments (90,940) 16,113 - -
Other - - - (43)
----------------------------------------------
(40,961) (9,960) (3,451) (1,785)
----------------------------------------------
Cash provided by
(used in) financing
activities (14,472) - - (4,000)
----------------------------------------------

Foreign exchange change
on cash held in
foreign currency - (40,362) (4,405) -

Intergroup funding
(distributions) 65,368 10,271 (108,424) (8,864)
----------------------------------------------

Increase (decrease)
in cash 1,142 174,476 (7,768) -
Cash:
Beginning of period 39,899 159,195 119,260 -
----------------------------------------------
End of period 41,041 333,671 111,492 -
Short-term investments 318,318 - - -
----------------------------------------------

Cash and short-term
investments $359,359 $333,671 $111,492 $-
----------------------------------------------
----------------------------------------------


2007 For the year ended December 31

OK TEDI LAS CRUCES TOTAL
------------------------------------------------- -----------

(thousands of (Papua New
Canadian dollars) Guinea) (Spain)

Cash provided by (used in)
operating activities
Before net change
in non-cash working
capital $123,963 $- $448,700
Net change in non-cash
working capital (25,507) - (21,349)
---------------------- -----------
98,456 - 427,351
---------------------- -----------
Cash provided by (used in)
investing activities
Capital spending (31,527) (282,908) (345,892)
Acquisition and
disposition of
investments, net - - 50,170
Sale (purchase) of
short-term investments 9,878 - (64,949)
Other - - (43)
---------------------- -----------
(21,649) (282,908) (360,714)
---------------------- -----------
Cash provided by
(used in) financing
activities (1,609) 142,327 122,246
---------------------- -----------

Foreign exchange change
on cash held in
foreign currency (7,375) 1,154 (50,988)
---------------------- -----------

Intergroup funding
(distributions) (88,322) 129,971 -
---------------------- -----------

Increase (decrease)
in cash (20,499) (9,456) 137,895
Cash:
Beginning of period 33,972 32,284 384,610
---------------------- -----------
End of period 13,473 22,828 522,505
Short-term investments - - 318,318
---------------------- -----------

Cash and short-term
investments $13,473 $22,828 $840,823
---------------------- -----------
---------------------- -----------



2006 For the year ended December 31

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

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

Cash provided by (used in)
operating activities
Before net change
in non-cash working
capital ($3,530) $163,616 $115,832 $17,394
Net change in non-cash
working capital (8,244) 8,952 (6,600) 96
----------------------------------------------
(11,774) 172,568 109,232 17,490
----------------------------------------------
Cash provided by (used in)
investing activities
Capital spending (94) (19,987) (5,760) (2,665)
Acquisition and
disposition of
investments, net - - 2,105 -
Purchase of short-term
investments (227,378) (17,016) - -
Other 1,629 - - (380)
----------------------------------------------
(225,843) (37,003) (3,655) (3,045)
----------------------------------------------
Cash provided by
(used in) financing
activities (12,881) - - -
----------------------------------------------

Foreign exchange change
on cash held in
foreign currency - 3,149 11,545 -
----------------------------------------------

Intergroup funding
(distributions) 166,554 (16,097) (56,000) (14,445)
----------------------------------------------

Increase (decrease)
in cash (83,944) 122,617 61,122 -
Cash:
Beginning of period 123,843 36,578 58,138 -
----------------------------------------------
End of period 39,899 159,195 119,260 -
Short-term investments 227,378 17,481 - -
----------------------------------------------

Cash and short-term
investments $267,277 $176,676 $119,260 $-
----------------------------------------------
----------------------------------------------


2006 For the year ended December 31

OK TEDI LAS CRUCES TOTAL
------------------------------------------------- -----------

(thousands of (Papua New
Canadian dollars) Guinea) (Spain)

Cash provided by (used in)
operating activities
Before net change
in non-cash working
capital $128,780 $- $422,092
Net change in non-cash
working capital 21,833 - 16,037
---------------------- -----------
150,613 - 438,129
---------------------- -----------
Cash provided by (used in)
investing activities
Capital spending (11,110) (93,183) (132,799)
Acquisition and
disposition of
investments, net - - 2,105
Purchase of short-term
investments (10,432) - (254,826)
Other - - 1,249
---------------------- -----------
(21,542) (93,183) (384,271)
---------------------- -----------
Cash provided by
(used in) financing
activities (1,712) 78,624 64,031
---------------------- -----------

Foreign exchange change
on cash held in
foreign currency (1,045) 1,177 14,826
---------------------- -----------

Intergroup funding
(distributions) (108,373) 28,361 -
---------------------- -----------

Increase (decrease)
in cash 17,941 14,979 132,715
Cash:
Beginning of period 16,031 17,305 251,895
---------------------- -----------
End of period 33,972 32,284 384,610
Short-term investments 10,717 - 255,576
---------------------- -----------

Cash and short-term
investments $44,689 $32,284 $640,186
---------------------- -----------
---------------------- -----------



INMET MINING CORPORATION
Segmented statements of cash flows
(unaudited)

2007 For the three months ended December 31

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

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

Cash provided by (used in)
operating activities
Before net change in
non-cash working
capital ($7,167) $33,684 $23,976 $3,260
Net change in non-cash
working capital 234 16,910 (19,143) 1,866
----------------------------------------------
(6,933) 50,594 4,833 5,126
----------------------------------------------
Cash provided by
(used in) investing
activities
Capital spending (46) (5,814) (1,380) (285)
Purchase of short-term
investments (28,617) (462) - -
Other - - - - -
----------------------------------------------
(28,663) (6,276) (1,380) (285)
----------------------------------------------
Cash provided by
(used in) financing
activities (8,000) - - (1,000)
----------------------------------------------

Foreign exchange change
on cash held in
foreign currency - (448) 2,863 -
----------------------------------------------

Intergroup funding
(distributions) 2,312 4,068 (3,775) (3,841)
----------------------------------------------

Increase (decrease)
in cash (41,284) 47,938 2,541 -
Cash:
Beginning of period 82,325 285,733 108,951 -
----------------------------------------------
End of period 41,041 333,671 111,492 -
Short-term investments 318,318 - - -
----------------------------------------------

Cash and short-term
investments $359,359 $333,671 $111,492 $-
----------------------------------------------
----------------------------------------------


2007 For the three months ended December 31

OK TEDI LAS CRUCES TOTAL
------------------------------------------------- -----------

(thousands of (Papua New
Canadian dollars) Guinea) (Spain)

Cash provided by (used in)
operating activities
Before net change in
non-cash working
capital $22,074 $- $75,827
Net change in non-cash
working capital 631 - 498
---------------------- -----------
22,705 - 76,325
---------------------- -----------
Cash provided by
(used in) investing
activities
Capital spending (10,113) (76,251) (93,889)
Purchase of short-term
investments (284) - (29,363)
Other - - -
---------------------- -----------
(10,397) (76,251) (123,252)
---------------------- -----------
Cash provided by
(used in) financing
activities 50 47,897 38,947
---------------------- -----------

Foreign exchange change
on cash held in
foreign currency 973 2,214 5,602
---------------------- -----------

Intergroup funding
(distributions) (36,041) 37,277 -
---------------------- -----------

Increase (decrease)
in cash (22,710) 11,137 (2,378)
Cash:
Beginning of period 36,183 11,691 524,883
---------------------- -----------
End of period 13,473 22,828 522,505
Short-term investments - - 318,318
---------------------- -----------

Cash and short-term
investments $13,473 $22,828 $840,823
---------------------- -----------
---------------------- -----------



2006 For the three months ended December 31

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

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

Cash provided by (used in)
operating activities
Before net change in
non-cash working
capital $4,822 $34,113 $36,796 $2,638
Net change in non-cash
working capital (2,633) (10,732) 1,619 2,859
----------------------------------------------
2,189 23,381 38,415 5,497
----------------------------------------------
Cash provided by
(used in) investing
activities
Capital spending (9) (5,882) (3,191) (240)
Sale (purchase) of
short-term investments (101,924) 91,157 - -
Other - - - (118)
----------------------------------------------
(101,933) 85,275 (3,191) (358)
----------------------------------------------
Cash provided by
(used in) financing
activities (8,387) - - -
----------------------------------------------

Foreign exchange change
on cash held in
foreign currency - 5,040 9,429 -
----------------------------------------------

Intergroup funding
(distributions) 54,838 (1,516) (42,857) (5,139)
----------------------------------------------

Increase (decrease)
in cash (53,293) 112,180 1,796 -
Cash:
Beginning of period 93,192 47,015 117,464 -
----------------------------------------------
End of period 39,899 159,195 119,260 -
Short-term investments 227,378 17,481 - -
----------------------------------------------

Cash and short-term
investments $267,277 $176,676 $119,260 $-
----------------------------------------------
----------------------------------------------


2006 For the three months ended December 31

OK TEDI LAS CRUCES TOTAL
------------------------------------------------- -----------

(thousands of (Papua New
Canadian dollars) Guinea) (Spain)

Cash provided by (used in)
operating activities
Before net change in
non-cash working
capital $22,710 $550 $101,629
Net change in non-cash
working capital (10,832) (550) (20,269)
---------------------- -----------
11,878 - 81,360
---------------------- -----------
Cash provided by
(used in) investing
activities
Capital spending (4,505) (31,932) (45,759)
Sale (purchase) of
short-term investments (10,432) - (21,199)
Other - - (118)
---------------------- -----------
(14,937) (31,932) (67,076)
---------------------- -----------
Cash provided by
(used in) financing
activities - 38,192 29,805
---------------------- -----------

Foreign exchange change
on cash held in
foreign currency 1,478 937 16,884
---------------------- -----------

Intergroup funding
(distributions) (8,813) 3,487 -
---------------------- -----------

Increase (decrease)
in cash (10,394) 10,684 60,973
Cash:
Beginning of period 44,366 21,600 323,637
---------------------- -----------
End of period 33,972 32,284 384,610
Short-term investments 10,717 - 255,576
---------------------- -----------

Cash and short-term
investments $44,689 $32,284 $640,186
---------------------- -----------
---------------------- -----------



INMET MINING CORPORATION
Consolidated statements of retained earnings
(unaudited)

Three Months Ended Year Ended
(thousands of Canadian December 31 December 31
dollars) 2007 2006 2007 2006
------------------------------------------------- -----------------------

Retained earnings,
beginning of period,
as previously reported $1,018,141 $576,792 $669,385 $258,386

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

Retained earnings,
restated 1,018,141 576,792 669,004 258,386

Net income 63,645 97,420 417,609 420,653

Dividends on common shares (4,828) (4,827) (9,655) (9,654)
------------------------------------------------- -----------------------

Retained earnings,
end of period $1,076,958 $669,385 $1,076,958 $669,385
------------------------------------------------- -----------------------
(see accompanying notes)



Consolidated statements of comprehensive income
(unaudited)

Three Months Ended Year Ended
(thousands of Canadian December 31 December 31
dollars) 2007 2006 2007 2006
------------------------------------------------- -----------------------

Net income $63,645 $97,420 $417,609 $420,653
----------------------- -----------------------

Other comprehensive income
(loss) for the period(1):
Changes in fair value
of gold forward
sales contracts (6,017) - (8,576) -

Changes in fair value
of interest rate
swap contracts (2,392) - (3,929) -

Changes in fair value
of foreign exchange
forward contracts 2,193 - 8,264 -

Changes in fair value
of investments 2,820 - 23,202 -

Currency translation
adjustments 10,907 34,973 (88,296) 40,640

Reclassification to net
income of gains/losses
realized:
Gain on sale of
investment (note 13) - - (11,730) -

Troilus gold hedge loss 4,872 - 15,689 -

Ok Tedi gold hedge loss 3,595 - 3,595 -

Foreign exchange loss on
reduction of net
investment in
self-sustaining foreign
operations (note 13) 2,083 - 5,394 3,286
----------------------- -----------------------
18,061 34,973 (56,387) 43,926
----------------------- -----------------------

Comprehensive income $81,706 $132,393 $361,222 $464,579
-------------------------------------------------------------------------
(see accompanying notes)

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



INMET MINING CORPORATION
Notes to the consolidated financial statements

1. Significant accounting policies

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

2. Changes in accounting policies

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

Section 1506 - Accounting changes

This section specifies that a voluntary change in accounting
principles:

(a) can only be made if the change results in more reliable and
relevant information

(b) must be accompanied by restated amounts for prior periods and
the reasons for the change

(c) must describe the nature and amount of the change, if it is a
change to an estimate.

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

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

Section 3855 - Financial instruments - recognition and measurement

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

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

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

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

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

At December 31, 2007, we had recorded $125 million in revenues that
was waiting final settlement. This included:

- 36 million pounds of copper valued using a forward rate of
US $3.02 per pound

- 16 million pounds of zinc valued using a forward rate of US $1.07
per pound.

At December 31, 2006, we had recorded $110 million in revenues that
was waiting final settlement. This included:

- 28 million pounds of copper valued using a forward rate of
US $2.87 per pound

- 15 million pounds of zinc valued using a forward rate of US $1.95
per pound.

Investments

Our investments are classified as available-for-sale and recorded at
fair value. We record changes in their fair value net of tax in other
comprehensive income. The change in fair value of an investment
appears in net income only when it is sold or impaired. We calculate
fair value using the bid price of the investment as quoted in an
active market. We capitalize transaction costs related to purchasing
investments and include these costs in the initial carrying value. We
have made adjustments to the opening values of our investments
(note 7).

Long-term debt

All of our long-term debt is classified as other than held-for-
trading and is accounted for at amortized cost. At December 31, 2006
our long-term debt approximated amortized cost, and we did not make
any adjustments to the opening values (note 9).

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

Derivative and other contracts

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

3865 - Hedges

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

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

On January 1, 2007, we designated our existing derivative contracts
related to gold forward sales contracts at Troilus and Ok Tedi, the
foreign exchange forward and the interest rate swap contracts at Las
Cruces, as part of a cash flow hedge relationship. The fair values of
these contracts are recorded on the balance sheet (note 8).

1530 - Comprehensive income

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

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


(thousands of December 31 January 1 January 1
Canadian dollars) 2006 2007 2007
---------------------------------------------------------------------
Adjustments
on adoption Restated
of new opening
As reported standards Ref balances

Assets
Current assets:
Cash and short-term
investments $640,186 $ - a $640,186
Accounts receivable 122,645 - a 122,645
Inventories 58,323 - 58,323
Future income tax asset 7,567 - 7,567
--------------------------------------------
828,721 - 828,721
Restricted cash 35,759 - 35,759
Property, plant and
equipment 548,637 13,795 b 562,432
Investments (note 7) 53,002 3,677 c 56,679
Future income tax asset 21,750 (5,696) e 16,054
Deferred charges 2,408 (2,408) d -
Derivatives (note 8) - 17,965 d 17,965
Other assets 42,663 (13,795) b 28,868
--------------------------------------------
$1,532,940 $13,538 $1,546,478
---------------------------------------------------------------------
Liabilities
Accounts payable and
accrued liabilities $163,106 (5,444) a,d $157,662
Long-term debt 109,080 - a 109,080
Reclamation liabilities 65,812 - 65,812
Derivatives (note 8) - 51,494 d 51,494
Other liabilities 30,617 (7,958) d 22,659
Future income tax
liabilities 42,366 (2,166) e 40,200
Non-controlling interest 49,125 3,539 e 52,664
--------------------------------------------
460,106 39,465 499,571
--------------------------------------------

Shareholders' equity
Share capital 337,338 - 337,338
Contributed surplus 66,999 - 66,999
Stock based compensation 915 - 915
Retained earnings 669,385 (381) e 669,004
Accumulated other
comprehensive
loss (note 12) - (27,349) e (27,349)
Foreign currency translation
account (1,803) 1,803 f -
--------------------------------------------
1,072,834 (25,927) 1,046,907
--------------------------------------------
$1,532,940 $13,538 $1,546,478
---------------------------------------------------------------------

(a) The carrying values for cash, accounts receivable and accounts
payable approximated fair value because of their short terms to
maturity, and we did not make any adjustments to the opening
values. The carrying value of our long-term debt approximated
amortized cost, and we did not make any adjustments to the
opening values.

(b) We reclassified the cost of issuing debt for the Las Cruces
credit facility to Property, plant and equipment. These costs
were previously capitalized as Other assets.

(c) We have designated investments we previously accounted for at
cost as available for sale, and recorded them at fair value.

(d) We have reflected derivatives that were previously off balance
sheet at fair value. We have recorded the accumulated
ineffective portion of the hedges in opening retained earnings.
Deferred amounts related to hedging of Troilus gold productions
have been included in Accumulated other comprehensive loss.

(e) All adjustments are net of tax and non-controlling interest.

(f) We have reclassified the foreign currency translation account
to Accumulated other comprehensive loss.

3. Recently issued accounting pronouncements

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

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

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

The above standards will become effective for us beginning on
January 1, 2008. We are assessing the impact, if any; these changes
will have on our consolidated financial statements.


4. 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 and year ending
December 31.


For the year ended December 31, 2007
---------------------------------------------------------------------

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

Accounts receivable $(4,814) $17,032 $14,383 $(7,685)
Inventories - 557 (853) 1,814
Accounts payable and
accrued liabilities 5,927 (2,707) 94 936
Taxes payable (3,905) 7,920 (20,094) -
Other (4,418) (29) - -
---------------------------------------------------------------------
$(7,210) $22,773 $(6,470) $(4,935)
---------------------------------------------------------------------

For the year ended December 31, 2007
----------------------------------------------------------
Las
(thousands) Ok Tedi Cruces Total
----------------------------------------------------------

Accounts receivable $(14,877) $ - $4,039
Inventories (1,362) - 156
Accounts payable and
accrued liabilities 2,528 - 6,778
Taxes payable (8,450) - (24,529)
Other (3,346) - (7,793)
----------------------------------------------------------
$(25,507) $ - $(21,349)
----------------------------------------------------------


For the year ended December 31, 2006
---------------------------------------------------------------------

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

Accounts receivable $(6,017) $(9,038) $(20,271) $2,667
Inventories - (4,497) 591 (1,389)
Accounts payable and
accrued liabilities 276 16,980 440 (1,182)
Taxes payable 446 5,504 12,640 -
Other (2,949) 3 - -
---------------------------------------------------------------------
$(8,244) $8,952 $(6,600) $96
---------------------------------------------------------------------

For the year ended December 31, 2006
----------------------------------------------------------
Las
(thousands) Ok Tedi Cruces Total
----------------------------------------------------------
Accounts receivable $15,199 $ - $(17,460)
Inventories (60) - (5,355)
Accounts payable and
accrued liabilities 5,085 - 21,599
Taxes payable 1,758 - 20,348
Other (149) - (3,095)
----------------------------------------------------------
$21,833 $ - $16,037
----------------------------------------------------------


For the three months ended December 31, 2007
---------------------------------------------------------------------

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

Accounts receivable $(2,061) $ 16,777 $(3,436) $(2,613)
Inventories - (690) (149) 3,619
Accounts payable and
accrued liabilities 7,052 3,617 280 860
Taxes payable (357) (2,783) (15,838) -
Other (4,400) (11) - -
---------------------------------------------------------------------
$234 $16,910 $(19,143) $1,866
---------------------------------------------------------------------

For the three months ended December 31, 2007
----------------------------------------------------------
Las
(thousands) Ok Tedi Cruces Total
----------------------------------------------------------

Accounts receivable $7,923 $ - $16,590
Inventories (1,845) - 935
Accounts payable and
accrued liabilities 5,317 - 17,126
Taxes payable (8,871) - (27,849)
Other (1,893) - (6,304)
----------------------------------------------------------
$631 $ - $498
----------------------------------------------------------


For the three months ended December 31, 2006
---------------------------------------------------------------------

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

Accounts receivable $(6,120) $(15,832) $(2,952) $1,755
Inventories - (4,574) 684 1,050
Accounts payable and
accrued liabilities 2,979 9,118 (1,881) 54
Taxes payable 2,694 560 5,768 -
Other (2,186) (4) - -
---------------------------------------------------------------------
$(2,633) $(10,732) $1,619 $2,859
---------------------------------------------------------------------

For the three months ended December 31, 2006
----------------------------------------------------------
Las
(thousands) Ok Tedi Cruces Total
----------------------------------------------------------
Accounts receivable $10,804 $ - $(12,345)
Inventories (3,666) - (6,506)
Accounts payable and
accrued liabilities 2,945 (550) 12,665
Taxes payable (21,220) - (12,198)
Other 305 - (1,885)
----------------------------------------------------------
$(10,832) $(550) $(20,269)
----------------------------------------------------------

5. Cash and short-term investments

At December 31, our cash and short-term investments are held in:

---------------------------------------------------------------------
December December
(thousands) 31 2007 31 2006
---------------------------------------------------------------------
Cash:
Liquidity funds $424,390 -
Term deposits 22,186 313,054
Corporate - 15,203
Overnight deposits 50,822 35,386
Other 25,549 20,967
522,947 384,610
Short-term investments:
Federal and crown corporation investments 317,876 188,411
Corporate - 38,967
Term deposits - 28,198
---------------------------------------------------------------------
317,876 255,576
---------------------------------------------------------------------
Total cash and short-term investments $840,823 $640,186
---------------------------------------------------------------------

6. Restricted cash

The table below shows our restricted cash balances.

---------------------------------------------------------------------
December December
(thousands) 31 2007 31 2006
---------------------------------------------------------------------
Collateralized cash for letter of
credit facility $14,444 $14,300
In trust for Ok Tedi rehabilitation (note 11) 11,836 10,982
Collateralized cash for letters
of credit - Las Cruces 12,494 10,477
---------------------------------------------------------------------
38,774 35,759
Less current portion:
Collateralized cash for letters
of credit - Las Cruces (1,569) -
---------------------------------------------------------------------
$37,205 $35,759
---------------------------------------------------------------------


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

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

7. Investments

The table below shows our investments.

---------------------------------------------------------------------
December 31 January 1 December 31
2007 2007 2006
(fair value) (fair value (historical
- adjusted) cost - as
(thousands) reported)
---------------------------------------------------------------------
Wolfden Resources Inc.
(note 13) - $39,690 $39,705
Premier Gold Mines Ltd. 22,680 13,041 10,920
Other 9,586 3,948 2,377
---------------------------------------------------------------------
$32,266 $56,679 $53,002
---------------------------------------------------------------------


8. Derivatives

The table below shows the fair value of our derivatives.

---------------------------------------------------------------------
December 31 January 1 December 31
2007 2007 2006
(fair value) (fair value (historical
- adjusted) cost - as
(thousands) reported)
---------------------------------------------------------------------
Derivative asset:
Las Cruces currency
forward sale $33,565 $17,965 -
---------------------------------------------------------------------
Derivative liabilities:
Troilus gold forward
sales $26,889 $43,156 -
Ok Tedi gold and copper
forward sales 9,034 7,220 -
Las Cruces interest
rate swaps 8,037 1,118 -
---------------------------------------------------------------------
$43,960 $51,494 -
---------------------------------------------------------------------

9. Long-term debt

---------------------------------------------------------------------
December December
(thousands) 31 2007 31 2006
---------------------------------------------------------------------
Credit facility - Tranche A $125,776 $53,792
- Tranche B 34,656 23,054
Promissory note 16,267 16,786
Loans from non-controlling shareholder 70,589 15,448
---------------------------------------------------------------------
247,288 109,080
Less current portion:
Credit facility - Tranche B (12,971) -
---------------------------------------------------------------------
$234,317 $109,080
---------------------------------------------------------------------

Credit facility

This quarter, Las Cruces borrowed an additional (euro)13 million
((euro)52 million for the year) under Tranche A, the US $240 million
senior secured facility, and an additional (euro)4 million
((euro)15 million for the year) under Tranche B, the (euro)69 million
senior secured bridge financing facility. During the third quarter,
Las Cruces repaid (euro)6 million under Tranche B equal to value-
added tax refunds received. The credit facility loans approximate
fair value because the loans accrue interest at prevailing market
rates.

Loans from non-controlling shareholder

This quarter, Las Cruces received (euro)39 million ((euro)129 million
for the year) of intercompany loan advances. These loans bear
interest at EURIBOR plus 8.55 percent and are due to be repaid on
February 25, 2020. The non-controlling portion of these loans,
(euro)38.7 million, is reflected in long-term debt at December 31,
2007. Loans from non-controlling shareholders approximate fair value
because the loans accrue interest at prevailing market rates.

10. Reclamation liabilities

During the year, we recorded additional liabilities of $14.4 million
at Las Cruces ($1.8 million in 2006) as a result of development
activities that took place. On December 31, 2007, we recognized
additional liabilities of $4.3 million at Ok Tedi and $3.2 million at
Troilus mainly because of cost escalation.


11. Commitments

Capital commitments

Our operations have the following capital commitments as at
December 31, 2007:

- Ok Tedi has committed approximately $55.4 million (our
proportionate share is $10.0 million) to capital expenditures for
the mine waste tailings project.

- Las Cruces has committed $142.7 million to engineering,
procurement and construction management and additional
construction work related to the development of the mine and
process plant.

- Cayeli has committed $1.7 million for the purchase of mining
equipment.

- Cerattepe has committed approximately $6.8 million for
construction of a ropeway.

Community mine continuation agreements

In 2007, Ok Tedi signed a new memorandum of agreement with most of
the affected communities. In this agreement, Ok Tedi has increased
direct compensation funds to US $18 million per year or four times
the previous level. Inmet's share of the payments under the new
agreement is US $3 million per year for the next six years, compared
to approximately US $1 million per year under the previous agreement.
Total payments to be made to these communities over the remaining six
years of the mine life, at December 31, 2007, are approximately
US $107 million (our proportionate share is US $19 million).

Las Cruces - royalty payment

Las Cruces is responsible for payment of a royalty associated with
the sale of its copper production if the average price for copper is
higher than US $0.80 per pound in the month the sale is completed. It
is calculated as 1.5 percent of copper sold at US $0.80 or more,
multiplied by the number of pounds sold.

Freight, insurance and other costs associated with the sale are
deducted in calculating the royalty to be paid. When partially
processed copper is sold, smelting and refining charges and other
similar charges are also deducted in calculating the royalty.

12. Accumulated other comprehensive loss (AOCL)

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

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

(thousands)
---------------------------------------------------------------------
Unrealized losses on gold forward sales contracts
(net of tax of $2,166) $(48,208)
Deferred Troilus gold hedges 10,993
Unrealized gains on foreign exchange forward contract(1) 8,803
Unrealized losses on interest rate swap contracts(2) (168)
Unrealized gains on investments (net of tax of $643) 3,034
Currency translation adjustment (1,803)
---------------------------------------------------------------------
AOCL, January 1, 2007 $(27,349)
Other comprehensive loss for the year ending
December 31, 2007 (56,387)
---------------------------------------------------------------------
AOCL, December 31, 2007 $(83,736)
---------------------------------------------------------------------

AOCL December 31, 2007 comprises:
Unrealized losses on gold forward sales
contracts (net of tax of $2,169) $(31,951)
Deferred Troilus gold hedges 5,444
Unrealized gains on foreign exchange forward contract(3) 17,067
Unrealized losses on interest rate swap contract(4) (4,097)
Unrealized gains on investments (net of tax of $2,951) 14,506
Currency translation adjustment (84,705)
---------------------------------------------------------------------
AOCL, December 31, 2007 $(83,736)
---------------------------------------------------------------------

1. Net of tax of $5,389 and non-controlling interest of $3,773.
2. Net of tax of $103 and non-controlling interest of $72.
3. Net of tax of $10,448 and non-controlling interest of $7,315.
4. Net of tax of $2,510 and non-controlling interest of $1,756.

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

---------------------------------------------------------------------
December December
(thousands) 31 2007 31 2006
---------------------------------------------------------------------
Pyhasalmi (euro functional currency) $(1,466) $5,637
Las Cruces (euro functional currency) (1,919) 8,095
Cayeli (US dollar functional currency) (65,822) (9,278)
Ok Tedi (US dollar functional currency) (15,498) (6,257)
---------------------------------------------------------------------
$(84,705) $(1,803)
---------------------------------------------------------------------

The US dollar to Canadian dollar exchange rate was $0.99 at
December 31, 2007 and $1.17 at December 31, 2006. The euro to
Canadian dollar exchange rate was $1.45 at December 31, 2007 and
$1.54 at December 31, 2006.

13. Investment and other income

Investment and other income are summarized as follows:

---------------------------------------------------------------------
three months ended year ended
December 31 December 31
(thousands) 2007 2006 2007 2006
---------------------------------------------------------------------
Gain on sale of Izok $ - $ - $ - $23,905
Gain on sale of Wolfden - - 11,730 -
Interest income 9,703 5,479 32,647 14,199
Dividend and royalty income 1,677 5,700 5,748 5,700
Foreign exchange gain (loss) (2,969) 7,137 (14,519) 3,770
Loss on settlement of pension
liability (2,034) (2,034) -
Other (409) (344) 2,882 183
---------------------------------------------------------------------
$5,968 $17,972 $36,454 $47,757
---------------------------------------------------------------------

Gain on sale of investments

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

Interest income

Interest and dividend income was higher in the fourth quarter and for
the year compared to the same periods in 2006 because of higher cash
balances.

Foreign exchange

We recorded a foreign exchange loss of $3.0 million during the
quarter because of the revaluation of some of our foreign currency
denominated accounts and cash balances, and the recognition of
deferred foreign exchange losses from dividends from Ok Tedi.

Settlement of US pension liability

During the quarter, we settled our US defined benefit pension
liability by buying annuities for retirees in the plan. We purchased
the annuities using the assets of the plan with a fair value at the
time of settlement of US $16.3 million and a cash payment of
US $3.3 million. We recorded a $2.0 million loss on settlement of the
US pension plan, representing the difference between the
US $3.3 million payment made and the liability we had recorded of
$1.2 million.

14. Income tax expense

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

For the year ended December 31, 2007
-------------------------------------------------------------------------
Las
(thousands) Corporate Cayeli Pyhasalmi Ok Tedi Cruces Total
-------------------------------------------------------------------------

Current
income taxes $1,698 $45,866 $30,117 $68,128 $ - $145,809
Future
income taxes (5,000) 579 794 (2,383) 286 (5,724)
-------------------------------------------------------------------------
$(3,302) $46,445 $30,911 $65,745 $286 $140,085
-------------------------------------------------------------------------

For the year ended December 31, 2006
-------------------------------------------------------------------------
Las
(thousands) Corporate Cayeli Pyhasalmi Ok Tedi Cruces Total
-------------------------------------------------------------------------

Current
income taxes $2,200 $37,858 $31,063 $70,719 $ - $141,840
Future
income taxes - (12,012) 1,015 (826) - (11,823)
-------------------------------------------------------------------------
$2,200 $25,846 $32,078 $69,893 $ - $130,017
-------------------------------------------------------------------------

For the three months ended December 31, 2007
-------------------------------------------------------------------------
Las
(thousands) Corporate Cayeli Pyhasalmi Ok Tedi Cruces Total
-------------------------------------------------------------------------

Current
income taxes $541 $5,735 $5,569 $10,923 $ - $22,768
Future
income taxes (5,000) 221 631 (101) 32 (4,217)
-------------------------------------------------------------------------
$(4,459) $5,956 $6,200 $10,822 $32 $18,551
-------------------------------------------------------------------------

For the three months ended December 31, 2006
-------------------------------------------------------------------------
Las
(thousands) Corporate Cayeli Pyhasalmi Ok Tedi Cruces Total
-------------------------------------------------------------------------

Current
income taxes $2,200 $9,000 $9,920 $7,939 $ - $29,059
Future
income taxes - (4,964) 943 1,641 - (2,380)
-------------------------------------------------------------------------
$2,200 $4,036 $10,863 $9,580 $ - $26,679
-------------------------------------------------------------------------

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

15. Net income per share

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

---------------------------------------------------------------------
three months ended year ended
December 31 December 31
(thousands) 2007 2006 2007 2006
---------------------------------------------------------------------
Net income available to
common shareholders $63,645 $97,420 $417,609 $420,653
---------------------------------------------------------------------


---------------------------------------------------------------------
three months ended year ended
December 31 December 31
(thousands) 2007 2006 2007 2006
---------------------------------------------------------------------
Weighted average common
shares outstanding 48,282 48,278 48,279 48,212
Plus incremental shares
from assumed conversions:
Deferred share units 75 75 75 75
---------------------------------------------------------------------
Diluted weighted average
common shares outstanding 48,357 48,353 48,354 48,287
---------------------------------------------------------------------


---------------------------------------------------------------------
three months ended year ended
December 31 December 31
(Canadian dollars per share) 2007 2006 2007 2006
---------------------------------------------------------------------
Basic net income per common
share $1.32 $2.02 $8.65 $8.73
Dilutive effect from assumed
conversions of deferred
share units per common share - - (0.01) (0.02)
---------------------------------------------------------------------
Diluted net income per common
share $1.32 $2.02 $8.64 $8.71
---------------------------------------------------------------------

Contact Information

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