Inmet Mining Corporation
TSX : IMN

Inmet Mining Corporation

July 29, 2008 08:50 ET

Inmet Announces Second Quarter 2008 Earnings of $1.40 Per Share

TORONTO, ONTARIO--(Marketwire - July 29, 2008) - Inmet Mining Corporation
(TSX:IMN) -



Highlights

- Lower net income per share

Net income per share this quarter was lower than in the second
quarter of 2007, mainly because lower zinc prices reduced second
quarter 2008 sales by $53 million. The difference was also the result
of the recognition of $15 million in foreign exchange losses
in 2008 from the repatriation of cash from our subsidiaries. A
$12 million gain on sale of investment was recorded in 2007.

- Higher production

For the second quarter 2008 copper production was similar to 2007,
while gold and zinc production was higher. Cayeli and Pyhasalmi have
continued to deliver strong throughput.

- Production outlook

For the year, we expect to produce 93,100 tonnes of copper, 78,700
tonnes of zinc and 268,400 ounces of gold. This reflects a reduction
in our original copper estimate because of the current delay in
direct ore shipping at Las Cruces and a reduction in our gold
estimate because of lower expected grades at Ok Tedi. We increased
pyrite projections to 645,000 tonnes to reflect the strong demand for
this product.

- Lower operating cash flow per share

Operating cash flow this quarter was $115 million or $2.38 per common
share compared to $138 million or $2.85 per share in the second
quarter of 2007.

- Petaquilla is moving forward

We began acting as operator, on behalf of Teck Cominco, of the
Petaquilla project on April 1, and on July 28 formally announced an
all-cash offer of $2 per share for all of the outstanding common
shares of Petaquilla Copper Ltd. (PTC). PTC has a 26 percent stake in
Minera Petaquilla SA, the Panamanian company that holds the project
concession. The purpose of the offer is to acquire control of PTC in
order to protect our interest in the Petaquilla Concession and
advance the development of the copper project.

- Las Cruces construction on target subject to regulator consent

Las Cruces is still on target to begin production in 2008 subject to
lifting of the suspension of the dewatering system permit. Good
progress has been made to address the water quality concerns of the
dewatering system as temporary water treatment facilities are now in
place. Remediation of the waste dump and residue storage areas are
underway following a slide of material in July.


Key financial data
-------------------------------------------------------------------------
three months ended June 30 six months ended June 30
2008 2007 change 2008 2007 change
-------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
(thousands, except
per share amounts)
Sales
Gross sales $281,463 $320,018 -12% $557,744 $606,632 -8%
Net income
Net income $67,705 $138,050 -51% $174,379 $239,128 -27%
Net income
per share $1.40 $2.86 -51% $3.60 $4.95 -27%
Cash flow
Cash flow
provided by
operating
activities $114,797 $137,731 -17% $195,708 $242,711 -19%
Cash flow
provided by
operating
activities
per share(1) $2.38 $2.85 -17% $4.05 $5.03 -19%
Capital
spending $121,028 $82,079 +47% $232,442 $134,014 +73%
-------------------------------------------------------------------------

OPERATING
HIGHLIGHTS
Production(2)
Copper (tonnes) 19,300 19,100 +1% 38,600 38,600 -
Zinc (tonnes) 21,000 16,600 +27% 41,300 38,700 +7%
Gold (ounces) 59,900 54,800 +9% 116,200 110,800 +5%
Cash costs
Copper (US $
per pound)(3) $0.65 $0.15 +333% $0.48 $0.12 +300%
Gold (US $ per
ounce)(3) $360 $338 +7% $374 $393 -5%
-------------------------------------------------------------------------


as at as at
June 30 December 31
FINANCIAL CONDITION 2008 2007
-------------------------
Current ratio 6.0 to 1 5.6 to 1
Gross debt to total equity(4) 25% 18%
Net working capital balance (millions) $1,034 $855
Cash balance (millions) $999 $841
Shareholders' equity (millions) $1,658 $1,392
-------------------------------------------------------------------------
(1) Calculated as cash flow provided by operating activities divided by
average shares outstanding for the respective period.
(2) Inmet's share.
(3) Cash cost per pound of copper and cash cost per ounce of gold are
non-GAAP measures - see Supplementary financial information on
pages 29, 30 and 31.
(4) Gross debt includes long-term debt and current portion of long-term
debt.


Second quarter press release

Where to find it

Our financial results .......................... 4
Key changes in 2008 ............................ 4
Understanding our performance .................. 5
Earnings from operations ..................... 7
Corporate costs .............................. 11
Results of our operations ...................... 12
Cayeli ....................................... 12
Pyhasalmi .................................... 14
Troilus ...................................... 16
Ok Tedi ...................................... 18
Status of our development projects ............. 20
Las Cruces ................................... 20
Petaquilla ................................... 22
Managing our liquidity ......................... 23
Financial condition ............................ 25
Managing risk .................................. 26
Accounting changes ............................. 28
Supplementary financial information ............ 29
Quarterly review ............................... 32
Consolidated financial statements .............. 33

In this press release, Inmet means Inmet Mining Corporation and we, us
and our mean Inmet and/or its subsidiaries and joint ventures. This quarter
refers to the three months ended June 30, 2008.

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 three months ended June 30 six months ended June 30
share amounts) 2008 2007 change 2008 2007 change
-------------------------------------------------------------------------

EARNINGS FROM
OPERATIONS(1)
Cayeli $45,262 $64,741 -30% $98,917 $124,176 -20%
Pyhasalmi 27,232 44,890 -39% 55,226 76,332 -28%
Troilus 7,510 3,718 +102% 16,145 6,530 +147%
Ok Tedi 49,656 65,391 -24% 103,574 105,406 -2%
Other (494) (355) +39% (988) (843) +17%
-------------------------------------------------------------------------
129,166 178,385 -28% 272,874 311,601 -12%
-------------------------------------------------------------------------
DEVELOPMENT AND
EXPLORATION
Corporate
development
and exploration (2,483) (1,836) +35% (5,101) (2,678) -90%
-------------------------------------------------------------------------
CORPORATE COSTS
General and
administration (2,790) (2,162) (6,438) (5,002)
Investment and
other income (11,358) 1,685 3,396 9,112
Interest expense (471) (424) (918) (862)
Income and
capital taxes (44,457) (48,783) (89,327) (84,433)
Non-controlling
interest 98 (545) (107) (340)
-------------------------------------------------------------------------
(58,978) (50,229) +17% (93,394) (81,525) +15%
-------------------------------------------------------------------------
Net income before
other items $67,705 $126,320 -46% $174,379 $227,398 -23%
Gain on sale
of Wolfden - 11,730 - 11,730
-------------------------------------------------------------------------
Net income $67,705 $138,050 -51% $174,379 $239,128 -27%
-------------------------------------------------------------------------
Basic and diluted
net income
per share $1.40 $2.86 -51% $3.61 $4.95 -27%
-------------------------------------------------------------------------
Weighted
average shares
outstanding 48,282 48,278 48,282 48,278 -27%
-------------------------------------------------------------------------
(1) Gross sales less smelter processing charges and freight, cost of
sales, depreciation and provisions for mine rehabilitation.


Key changes this year

-------------------------------------------------------------------------
three months six months
ended ended see
(millions) June 30 June 30 page
-------------------------------------------------------------------------
EARNINGS FROM OPERATIONS
Sales
Lower metal prices denominated
in Canadian dollars $(46) $(19) 7
Lower sales volumes - (22) 8
Costs
Lower smelter processing charges
and freight 7 18 9
Higher operating costs, including costs
that vary with income and cash flows (10) (16) 10
-------------------------------------------------------------------------
Decrease in earnings from operations,
compared to 2007 $(49) $(39)

CORPORATE COSTS
Change in taxes from change in income 2 (6) 11
Change in tax rates 2 1 11
Foreign exchange losses (9) (2) 11
Gain on sale of Wolfden in 2007 (12) (12) 11
Higher (lower) interest income (1) 2 11
Other (3) (9) 11
-------------------------------------------------------------------------
Decrease in net income, compared to 2007 $(70) $(65)
-------------------------------------------------------------------------


Understanding our performance

Metal prices

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

-------------------------------------------------------------------------
three months ended June 30 six months ended June 30
2008 2007 Change 2008 2007 Change
-------------------------------------------------------------------------
US dollar
metal prices
Copper (per pound) $3.83 $3.71 +3% $4.00 $3.27 +22%
Zinc (per pound) $0.94 $1.75 -46% $1.00 $1.54 -35%
Gold (per ounce) $725 $575 +26% $748 $569 +31%
-------------------------------------------------------------------------
Canadian dollar
metal prices
Copper (per pound) $3.87 $4.08 -5% $4.04 $3.73 +8%
Zinc (per pound) $0.95 $1.92 -51% $1.01 $1.76 -43%
Gold (per ounce) $732 $632 +16% $755 $649 +16%
-------------------------------------------------------------------------

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

-------------------------------------------------------------------------
three months ended June 30 six months ended June 30
2008 2007 change 2008 2007 change
-------------------------------------------------------------------------
Exchange rates
1 US$ to C$ $1.01 $1.10 -8% $1.01 $1.14 -11%
1 euro to C$ $1.58 $1.46 +8% $1.54 $1.50 +3%
-------------------------------------------------------------------------

Sales are affected by the conversion of US dollar revenue to Canadian
dollars. Because of the weaker US dollar this year, gross sales and net income
were lower compared to 2007:
- gross sales decreased by $27 million for the quarter and $67 million
year to date
- net income decreased by $36 million for the quarter and $62 million
year to date. The net income changes included the impact of foreign
exchange losses from the recognition of deferred foreign exchange
losses when cash was repatriated from Cayeli and Ok Tedi. These
losses are recorded in Investment and other income and were
$21 million for the quarter and $26 million for the year to date.

The change in the average value of the Canadian dollar relative to the
euro lowered net income slightly between periods because euro-based costs were
slightly higher when converted to Canadian dollars.
There was a larger change in the value of the euro relative to the
Canadian dollar in 2008, between December 31, 2007 to March 31, 2008 and
June 30, 2008, when we revalued euro denominated cash and short-term
intergroup receivables and from the recognition of deferred foreign exchange
gains when cash was repatriated from Pyhasalmi. This resulted in foreign
exchange gains of $3 million and $10 million for the three and six months of
this year, respectively, which we recorded in Investment and other income.

Treatment charges and freight down for copper and up for zinc

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

-------------------------------------------------------------------------
three months ended June 30 six months ended June 30
2008 2007 change 2008 2007 change
-------------------------------------------------------------------------
Treatment charges
Copper (per
dry metric
tonne of
concentrate) US $40 US $59 -32% US $46 US $69 -33%
Zinc (per
dry metric
tonne of
concentrate) US $292 US $384 -24% US $291 US $249 +17%
-------------------------------------------------------------------------
Price
participation
Copper (per
pound) US $0.05 US $0.11 -55% US $0.05 US $0.08 -38%
Zinc (per
pound)(1) US $(0.01) US $(0.12) -92% US $(0.02) US $0.09 -122%
-------------------------------------------------------------------------
Freight charges
Copper (per
dry metric
tonne of
concentrate) US $54 US $67 -19% US $50 US $55 -9%
Zinc (per
dry metric
tonne of
concentrate) US $41 US $39 +5% US $41 US $33 +24%
-------------------------------------------------------------------------
(1) Zinc price participation is based on a zinc price of US $2,000 per
tonne in 2008 and US $3,500 per tonne in 2007.


Copper treatment charges were lower this quarter and year to date than
they were in 2007 because we have better contract terms with smelters. While
zinc treatment charges were higher than 2007, zinc price participation was
down significantly.

Statutory tax rates down slightly

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

-------------------------------------------------------------------------
2008 2007 change
-------------------------------------------------------------------------
Statutory tax rates
Cayeli 24% 27% -3%
Pyhasalmi 26% 26% -
Ok Tedi 37% 37% -
-------------------------------------------------------------------------

Cayeli's tax rate is lower because the withholding tax rate was reduced
from 8 percent to 5 percent.

EARNINGS FROM OPERATIONS

Earnings from operations include the following:

-------------------------------------------------------------------------
three months ended June 30 six months ended June 30
(thousands) 2008 2007 change 2008 2007 change
-------------------------------------------------------------------------
Gross sales $281,463 $320,018 -12% $557,744 $606,632 -8%
Smelter processing
charges (53,209) (55,413) -4% (97,366) (120,019) -19%
Cost of sales:
Direct production
costs (82,076) (66,936) +23% (159,610) (140,652) +13%
Inventory changes (1,744) (6,290) -72% 1,196 (9,898) -112%
Provisions
for mine
rehabilitation
and other
non-cash charges (6,073) (4,955) +23% (10,725) (7,008) +53%
Depreciation (9,195) (8,039) +14% (18,365) (17,454) +5%
-------------------------------------------------------------------------
Earnings from
operations $129,166 $178,385 -28% $272,874 $311,601 -12%
-------------------------------------------------------------------------


Gross sales were lower this year mainly because the price of zinc was
down

-------------------------------------------------------------------------
three months ended June 30 six months ended June 30
(thousands) 2008 2007 change 2008 2007 change
-------------------------------------------------------------------------
Gross sales by
operation
Cayeli $98,313 $112,208 -12% $198,929 $229,942 -13%
Pyhasalmi 61,249 75,807 -19% 116,157 141,147 -18%
Troilus 35,171 25,849 +36% 69,422 56,091 +24%
Ok Tedi(1) 86,730 106,154 -18% 173,236 179,452 -3%
-------------------------------------------------------------------------
$281,463 $320,018 -12% $557,744 $606,632 -8%
-------------------------------------------------------------------------
Gross sales
by metal
Copper $161,530 $189,056 -15% $329,698 $332,380 -1%
Zinc 52,185 82,702 -37% 100,991 172,483 -41%
Gold 45,046 36,816 +22% 88,333 77,873 +13%
Other 22,702 11,444 +98% 38,722 23,896 +62%
-------------------------------------------------------------------------
$281,463 $320,018 -12% $557,744 $606,632 -8%
-------------------------------------------------------------------------
(1) Our 18 percent share of Ok Tedi's sales.


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

-------------------------------------------------------------------------
three months six months
ended ended
(millions) June 30 June 30
-------------------------------------------------------------------------
(Lower) higher copper prices, denominated in C$ $(11) $27
Lower zinc prices, denominated in C$ (53) (74)
Higher gold prices, denominated in C$ 7 13
Higher pyrite prices, denominated in C$ 7 11
Changes in other metal prices 4 4
Higher (lower) sales volumes 7 (30)
-------------------------------------------------------------------------
Decrease in gross sales, compared to 2007 $(39) $(49)
-------------------------------------------------------------------------

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

- 35 million pounds of copper provisionally priced at US $3.90 per
pound
- 23 million pounds of zinc provisionally priced at US $0.87 per pound.

The finalization adjustment we record for these sales will depend on the
actual price when the sale settles, which can be from one to five months after
we initially record it.

Sales volume higher for zinc

-------------------------------------------------------------------------
three months ended June 30 six months ended June 30
2008 2007 change 2008 2007 change
-------------------------------------------------------------------------
Sales volumes
Copper (tonnes) 18,900 20,900 -10% 37,200 40,900 -9%
Zinc (tonnes) 25,000 19,700 +27% 45,500 44,900 +1%
Gold (ounces) 61,600 59,000 +4% 117,000 120,800 -3%
-------------------------------------------------------------------------

Our sales volumes are directly affected by the amount of production from
our mines, and our ability to ship to our customers.
Higher production increased sales volumes this quarter compared to the
same period last year. While production was also higher for the first six
months of 2008, sales volumes were mostly lower than the same period in 2007
because of shipment timing.

Production
-------------------------------------------------------------------------
revised
Inmet's three months ended June 30 six months ended June 30 objective
share(1) 2008 2007 change 2008 2007 change 2008
-------------------------------------------------------------------------
Copper
(tonnes)
Ok Tedi 7,400 6,700 +10% 14,100 14,900 -5% 32,100
Cayeli 7,600 8,100 -6% 15,800 15,600 +1% 33,600
Pyhasalmi 3,100 3,600 -14% 6,600 6,900 -4% 13,000
Las Cruces - - - - - - 7,400
Troilus 1,200 700 +71% 2,100 1,400 +50% 7,000
-------------------------------------------------------------------------
19,300 19,100 +1% 38,600 38,600 - 93,100
-------------------------------------------------------------------------
Zinc (tonnes)
Cayeli 13,200 8,300 +59% 25,900 20,200 +28% 47,800
Pyhasalmi 7,700 8,300 -7% 15,300 18,500 -17% 30,900
-------------------------------------------------------------------------
20,900 16,600 +26% 41,200 38,700 +6% 78,700
-------------------------------------------------------------------------
Gold (ounces)
Troilus 37,800 35,100 +8% 72,800 68,300 +7% 163,200
Ok Tedi 22,100 19,700 +12% 43,400 42,500 +2% 105,200
-------------------------------------------------------------------------
59,900 54,800 +9% 116,200 110,800 +5% 268,400
-------------------------------------------------------------------------
Pyrite
(tonnes)
Pyhasalmi 111,200 98,400 +13% 305,700 258,900 +18% 645,000
-------------------------------------------------------------------------
(1) Inmet's share represents 100 percent for Cayeli, Pyhasalmi and
Troilus, 18 percent for Ok Tedi and 70 percent for Las Cruces.


This quarter:
- copper production was consistent with the second quarter of 2007.
This was the net result of higher grades at Ok Tedi and Troilus, and
lower grades at Cayeli and Pyhasalmi.
- zinc production was higher mainly because of higher grades,
recoveries and throughput at Cayeli.
- gold production was higher due to higher grades.

2008 outlook for sales

We expect sales of all metals for the year to be consistent with our 2008
production estimates in the chart above. We have estimated an October
production start up 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 consistent with last year

-------------------------------------------------------------------------
three months ended June 30 six months ended June 30
(thousands) 2008 2007 change 2008 2007 change
-------------------------------------------------------------------------
Smelter processing
charges and freight
by operation
Cayeli $25,565 $24,302 +5% $47,578 $55,470 -14%
Pyhasalmi 14,561 15,100 -4% 25,381 33,714 -25%
Troilus 2,421 2,020 +20% 4,608 4,713 -2%
Ok Tedi(1) 10,662 13,991 -24% 19,799 26,122 -24%
-------------------------------------------------------------------------
$53,209 $55,413 -4% $97,366 $120,019 -19%
-------------------------------------------------------------------------
Smelter processing
charges and
freight by metal
Copper $21,516 $27,160 -21% $42,409 $54,640 -22%
Zinc 24,679 25,071 -2% 44,451 58,786 -24%
Other 7,014 3,182 +120% 10,506 6,593 +59%
-------------------------------------------------------------------------
$53,209 $55,413 -4% $97,366 $120,019 -19%
-------------------------------------------------------------------------
Smelter processing
charges by type
and freight
Copper treatment
and refining
charges $5,099 $7,398 -31% $11,074 $18,423 -40%
Zinc treatment
charges 14,348 14,562 -1% 26,140 21,646 +21%
Copper price
participation 2,281 5,222 -56% 4,244 9,082 -53%
Zinc price
participation (366) (5,082) -93% (2,261) 8,533 -126%
Content losses 16,104 20,829 -23% 32,361 42,792 -24%
Other 2,239 3,252 -31% 4,512 2,179 +107%
Freight 13,504 9,232 +46% 21,296 17,364 +23%
-------------------------------------------------------------------------
$53,209 $55,413 -4% $97,366 $120,019 -19%
-------------------------------------------------------------------------
(1) Our 18 percent share of Ok Tedi's smelter processing charges and
freight.

Copper treatment and refining charges were lower in 2008 compared to 2007
because of more favourable contract terms with smelters. Zinc treatment
charges were higher, but lower prices significantly reduced zinc price
participation charges. For the quarter, zinc treatment charges expensed were
similar with last year's second quarter because of adjustments made to first
quarter sales after contracts were finalized with the smelters in the second
quarter. Freight charges were higher because Pyhasalmi increased their
shipments of pyrite and freight rates increased as a result of rising demand
and fuel prices.

2008 outlook for smelter processing charges and freight

Contract terms for long-term copper sales at our operating mines, and
treatment charges are averaging about US $50 per dry metric tonne with little
to no price participation.
Contract terms for long-term zinc treatment charges have been finalized
averaging about US $300 per dry metric tonne. Price participation of zinc
concentrate is averaging US $0.10 per dry metric tonne for zinc priced at
higher than US $2,000 per tonne ($1.36 per pound), and (US $0.10) per dry
metric tonne for zinc priced at less than US $2,000 per tonne.
Copper cathode production at Las Cruces should begin in the fourth
quarter. Copper cathode will be sold directly to buyers, bypassing the
smelters and eliminating smelter and refining treatment charges. In the fourth
quarter, the mine also intends to sell crushed ore and pay smelter processing
charges. These charges are expected to be higher than what our other
operations pay because of the impurity levels in this ore.

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

-------------------------------------------------------------------------
three months ended June 30 six months ended June 30
(thousands) 2008 2007 change 2008 2007 change
-------------------------------------------------------------------------
Direct production
costs by operation
Cayeli $22,638 $20,865 +8% $45,978 $41,766 +10%
Pyhasalmi 15,351 11,833 +30% 29,955 25,450 +18%
Troilus 22,345 18,569 +20% 42,292 37,906 +12%
Ok Tedi(1) 21,742 15,669 +39% 41,385 35,530 +16%
-------------------------------------------------------------------------
Total direct
production costs 82,076 66,936 +23% 159,610 140,652 +13%
Inventory changes 1,744 6,290 -72% (1,196) 9,898 -112%
Reclamation,
accretion and
other non-cash
expenses 6,073 4,955 +23% 10,725 7,008 +53%
-------------------------------------------------------------------------
Total cost
of sales $89,893 $78,181 +15% $169,139 $157,558 +7%
-------------------------------------------------------------------------
(1) Our 18 percent share of Ok Tedi's direct production costs.


Key reasons for the increase in direct production costs

-------------------------------------------------------------------------
three months six months
ended ended
(millions) June 30 June 30
-------------------------------------------------------------------------
Volume $(2) $(3)
Labour costs 6 8
Consumables 7 9
Energy 1 4
Costs that vary with income and cash flow (2) 1
Other 5 -
-------------------------------------------------------------------------
Increase in direct production costs,
compared to 2007 $15 $19
-------------------------------------------------------------------------


Depreciation was higher than last year

-------------------------------------------------------------------------
three months ended June 30 six months ended June 30
(thousands) 2008 2007 change 2008 2007 change
-------------------------------------------------------------------------
Depreciation by
operation
Cayeli $2,556 $1,871 +37% $4,929 $4,568 +8%
Pyhasalmi 2,232 2,433 -8% 4,382 4,794 -9%
Troilus 1,718 2,007 -14% 4,136 4,716 -12%
Ok Tedi 2,689 1,728 +56% 4,918 3,376 +46%
-------------------------------------------------------------------------
$9,195 $8,039 +14% $18,365 $17,454 +5%
-------------------------------------------------------------------------

At Cayeli, depreciation is higher because of the shaft extension that was
finished in the last quarter of 2007. Ok Tedi has higher depreciation because
it has been spending on new mine equipment and other sustaining capital over
the last few years.

2008 outlook for depreciation

We estimate depreciation will be about $40 million for 2008 assuming
production at Las Cruces commences in October.

CORPORATE COSTS

Corporate costs include 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.

Investment and other income was lower because of foreign exchange losses

-------------------------------------------------------------------------
three months six months
ended June 30 ended June 30
(thousands) 2008 2007 2008 2007
-------------------------------------------------------------------------
Interest income $6,963 $7,378 $15,686 $14,394
Dividend income and royalty 1,504 1,000 1,504 2,000
Foreign exchange gain (loss) (18,573) (9,400) (11,715) (9,545)
Sale of Wolfden - 11,730 - 11,730
Other (1,252) 2,707 (2,079) 2,263
-------------------------------------------------------------------------
$(11,358) $13,415 $3,396 $20,842
-------------------------------------------------------------------------

We recorded a net foreign exchange loss of $18.6 million this quarter.
This included a foreign exchange loss of $15 million when we received
dividends from Cayeli, Pyhasalmi and Ok Tedi, and a $4 million loss when we
revalued some of our foreign currency denominated accounts and cash balances.
For the year, we recognized $20 million in foreign exchange losses from
dividends received. In 2007, we sold our shares in Wolfden for cash proceeds
of $51 million and recorded a gain of $11.7 million.

2008 outlook for investment and other income

Investment and other income is affected by cash balances, interest rates
and exchange rates. For the rest of the year, we expect to repatriate funds
only from Ok Tedi. This operation distributes its earnings more frequently, so
the foreign exchange effect of repatriation is normally not significant.
On June 30, 2008, the Las Cruces credit facility converted from a euro
denominated loan to a US $215 million dollar loan. Starting on July 1, we will
revalue the loan to euros (the functional currency of Las Cruces). Foreign
exchange gains or losses on revaluations will be reflected in Investment and
other income.

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

-------------------------------------------------------------------------
three months ended June 30 six months ended June 30
(thousands) 2008 2007 change 2008 2007 change
-------------------------------------------------------------------------
Cayeli $8,655 $13,763 -37% $27,779 $27,434 +1%
Pyhasalmi 6,425 10,379 -38% 12,448 17,286 -28%
Ok Tedi 23,803 23,291 +2% 43,150 37,908 +14%
Las Cruces (84) 691 -112% 166 486 -66%
Corporate 5,658 659 +759% 5,784 1,319 +339%
-------------------------------------------------------------------------
$44,457 $48,783 -9% $89,327 $84,433 +6%
-------------------------------------------------------------------------

Our tax expense changes as our earnings change. Cayeli's effective tax
rate was 20 percent this quarter. This is lower than its statutory rate of 24
percent because taxable foreign exchange losses in its Turkish lira tax
accounts generated a lower tax expense of $2 million. For the year to date,
Cayeli's effective tax rate was 27 percent, the result of foreign exchanges
gains in its tax accounts. The effective tax rate at Ok Tedi is also higher
than its statutory 37 percent for the quarter and year to date because of
foreign exchange gains recorded in its tax accounts. The tax expense at
Corporate reflects a provision for Quebec mining duties. We expect 2008 to be
the first year we have to pay this tax because we have fully drawn down our
tax deductible assets in regard to this mining tax return.

2008 outlook for income tax expense

We are not expecting any further changes in statutory tax rates at our
operations in 2008. We estimate approximately $15 million for Quebec mining
duties will be expensed for the year, but this will depend on Troilus' 2008
net income.

Results of our operations

Cayeli

-------------------------------------------------------------------------
revised
three months ended June 30 six months ended June 30 objective
2008 2007 change 2008 2007 change 2008
-------------------------------------------------------------------------
Tonnes of
ore milled
(000's) 279 249 +12% 557 508 +10% 1,100
Tonnes of
ore milled
per day 3,100 2,700 +12% 3,100 2,800 +10% 3,000
-------------------------------------------------------------------------
Grades
(percent)
copper 3.5 3.9 -10% 3.6 3.7 -3% 3.8
zinc 6.3 5.3 +19% 6.4 5.7 +12% 6.0
-------------------------------------------------------------------------
Mill recoveries
(percent)
copper 78 83 -6% 79 83 -5% 81
zinc 75 63 +19% 73 70 +4% 72
-------------------------------------------------------------------------
Production
(tonnes)
copper 7,600 8,100 -6% 15,800 15,600 +1% 33,600
zinc 13,200 8,300 +59% 25,900 20,200 +28% 47,800
-------------------------------------------------------------------------
Cost per
tonne of ore
milled (C$) $81 $84 -4% $83 $82 +1% $80
-------------------------------------------------------------------------

On target to achieve production goal of 1.1 million tonnes

Cayeli produced ore this quarter at an annualized rate of more than 1.1
million tonnes, which is consistent with our annual objective and higher than
last year. Higher zinc grades along with the higher throughput increased zinc
production compared to last year. Copper production was slightly lower in the
second quarter compared to last year because of lower copper grades mined.
Operating costs are higher than in previous years. This is mainly because
of inflation in Turkey (which has increased labour costs), rising electricity
rates in Turkey, and increasing commodity prices worldwide.

2008 outlook for production and costs

Improvements to Cayeli's ore pass system were completed in the first half
of the year and we expect to continue to reliably mine and process 1.1 million
tonnes of ore this year. Development in 2008 is focusing on access and level
development of the lower mine ore blocks. Mine development rates are higher
than 2007 and development of the lower mine is proceeding as planned. We
expect to operate at an annual production rate of 1.2 million tonnes by 2009.
Costs could change, depending on the value of the Turkish lira relative
to the US dollar. If the Turkish lira decreases in value, Turkish lira based
costs such as labour will go down, reducing our costs.
Royalties also have a significant effect on costs and are variable
depending on earnings. Cost per tonne of ore milled includes $8 per tonne in
royalties in the second quarter, and $12 per tonne in royalties year to date.
Our objective is $12 per tonne, which is based on metal price assumptions for
the rest of the year.

Financial review

Lower earnings this quarter because shipments in 2007 were considerably
higher than production

-------------------------------------------------------------------------
three months six months
(millions of Canadian dollars ended June 30 ended June 30
otherwise stated) 2008 2007 2008 2007
-------------------------------------------------------------------------
Sales analysis
Copper sales (tonnes) 6,800 7,200 13,500 15,400
Zinc sales (tonnes) 17,300 10,600 31,200 26,300
---------------------------------------
Gross copper sales $57 $66 $121 $124
Gross zinc sales 37 44 70 101
Other metal sales 4 2 8 5
---------------------------------------
Gross sales 98 112 199 230
Smelter processing
charges and freight (25) (24) (48) (56)
-------------------------------------------------------------------------
Net sales $73 $88 $151 $174
-------------------------------------------------------------------------
Cost analysis
Tonnes of ore milled (thousands) 279 249 557 508
Direct production costs
($ per tonne) $81 $84 $83 $82
-------------------------------------------------------------------------
Direct production costs 23 21 46 42
Change in inventory 1 (1) - 2
Depreciation and
other non-cash costs 4 3 6 6
-------------------------------------------------------------------------
Operating costs $28 $23 $52 $50
-------------------------------------------------------------------------
Operating earnings $45 $65 $99 $124
-------------------------------------------------------------------------
Operating cash flow $31 $63 $50 $122
-------------------------------------------------------------------------

The table below shows what contributed to the change in operating
earnings and operating cash flow between 2008 and 2007.

-------------------------------------------------------------------------
three months six months
ended ended
(millions) June 30 June 30
-------------------------------------------------------------------------
Change in metal prices,
denominated in Canadian dollars $(38) $(34)
Higher (lower) sales volumes 11 (2)
Lower smelter processing charges 9 14
Higher operating costs (2) (3)
-------------------------------------------------------------------------
Decrease in operating earnings, compared to 2007 $(20) $(25)
(Higher) lower tax expense 3 (4)
Lower tax rate 2 2
Changes in working capital (12) (46)
Other (5) 1
-------------------------------------------------------------------------
Decrease in operating cash flow, compared to 2007 $(32) $(72)
-------------------------------------------------------------------------

The change in working capital this quarter is from higher tax payments,
reduced in part by the collection of accounts receivable. Year to date, higher
accounts receivable balances and higher taxes paid resulted in a $46 million
reduction in working capital.

Capital spending ahead of schedule, but on track for the year

-------------------------------------------------------------------------
three months ended June 30 six months ended June 30 objective
2008 2007 change 2008 2007 change 2008
-------------------------------------------------------------------------
Capital
spending $6,300 $3,900 +62% $12,000 $8,300 +45% $23,000
-------------------------------------------------------------------------

Capital spending in the quarter and the year to June was mainly for
replacing mine equipment.

2008 outlook for capital spending

Cayeli expects to spend $23 million in 2008 on repairing a ventilation
raise, buying mine equipment and replacing other equipment.

PYHASALMI

-------------------------------------------------------------------------
revised
three months ended June 30 six months ended June 30 objective
2008 2007 change 2008 2007 change 2008
-------------------------------------------------------------------------
Tonnes of
ore milled
(000's) 344 346 -1% 691 671 +3% 1,370
Tonnes of
ore milled
per day 3,800 3,800 -1% 3,800 3,700 +3% 3,750
-------------------------------------------------------------------------
Grades
(percent)
copper 1.0 1.1 -9% 1.0 1.1 -9% 1.0
zinc 2.5 2.6 -4% 2.4 3.0 -20% 2.5
sulphur 40 41 -2% 41 40 +3% 41
-------------------------------------------------------------------------
Mill recoveries
(percent)
copper 95 96 -1% 96 96 - 94
zinc 92 90 +2% 92 92 - 90
-------------------------------------------------------------------------
Production
(tonnes)
copper 3,100 3,600 -14% 6,600 6,900 -4% 13,000
zinc 7,700 8,300 -7% 15,300 18,500 -17% 30,900
pyrite 111,200 98,400 +13% 305,700 258,900 +18% 645,000
-------------------------------------------------------------------------
Cost per
tonne of ore
milled (C$) $45 $34 +32% $43 $38 +13% $41
-------------------------------------------------------------------------

Consistent strong performance

Mill throughput has been consistent between years. Copper and zinc
production is lower, however, because the areas being mined contain lower
grades.
Strengthening of the pyrite market has resulted in significantly improved
prices and sales.

2008 outlook for production and costs

We expect throughput and copper production for the year to be consistent
with our earlier estimates.
Pyhasalmi has commissioned new copper flotation cells and installed a
primary mill motor for the mill in May. The mill motor should allow speed to
be adjusted more easily, which should increase throughput capacity in the
grinding circuit and reduce energy costs.
We have revised our costs upwards to reflect the strength of the euro
relative to the Canadian dollar.

Financial review

Lower sales volumes reduce operating earnings

-------------------------------------------------------------------------
three months six months
(millions of Canadian dollars ended June 30 ended June 30
otherwise stated) 2008 2007 2008 2007
-------------------------------------------------------------------------
Sales analysis
Copper sales (tonnes) 3,300 3,400 6,800 6,800
Zinc sales (tonnes) 7,700 9,100 14,300 18,600
Pyrite sales (tonnes) 142,700 124,400 266,800 258,300
---------------------------------------
Gross copper sales $29 $30 $57 $54
Gross zinc sales 16 38 31 72
Other metal sales 16 8 28 15
---------------------------------------
Gross sales 61 76 116 141
Smelter processing
charges and freight (15) (15) (25) (34)
-------------------------------------------------------------------------
Net sales 46 61 91 107
-------------------------------------------------------------------------
Cost analysis
Tonnes of ore milled (thousands) 344 346 691 671
Direct production costs
($ per tonne) $45 $34 $43 $38
-------------------------------------------------------------------------
Direct production costs 15 12 30 25
Change in inventory 1 1 (1) -
Depreciation and
other non-cash costs 3 3 7 6
-------------------------------------------------------------------------
Operating costs $19 $16 $36 $31
-------------------------------------------------------------------------
Operating earnings $27 $45 $55 $76
-------------------------------------------------------------------------
Operating cash flow $19 $10 $50 $51
-------------------------------------------------------------------------

The table below shows what contributed to the change in operating
earnings and operating cash flow between 2008 and 2007.

-------------------------------------------------------------------------
three months six months
ended ended
(millions) June 30 June 30
-------------------------------------------------------------------------
Lower metal prices, denominated in Canadian dollars $(8) $(9)
Lower sales volumes (8) (14)
Lower smelter processing charges and freight 3 7
Higher freight on pyrite sales (3) (3)
Higher operating costs (2) (2)
-------------------------------------------------------------------------
Decrease in operating earnings, compared to 2007 $(18) $(21)
Lower tax expense because of lower earnings 4 4
Changes in working capital 23 16
-----------------------
Increase (decrease) in operating
cash flow, compared to 2007 $9 $(1)
-------------------------------------------------------------------------

The change in working capital this quarter and year to date is mainly
because the accounts receivable was lower and fewer income taxes were paid.

Capital spending in 2008 will mainly be used to improve mill efficiencies

-------------------------------------------------------------------------
three months ended June 30 six months ended June 30 objective
(thousands) 2008 2007 change 2008 2007 change 2008
-------------------------------------------------------------------------
Capital
spending $1,600 $400 +300% $3,400 $700 +386% $12,000
-------------------------------------------------------------------------

Spending this quarter was mainly for the mill motor and other asset
replacements and upgrades.


2008 outlook for capital spending

We expect to spend $12 million in 2008, mainly for mine and mill
equipment.

TROILUS

-------------------------------------------------------------------------
revised
three months ended June 30 six months ended June 30 objective
2008 2007 change 2008 2007 change 2008
-------------------------------------------------------------------------
Tonnes of
ore milled
(000's) 1,454 1,487 -2% 2,851 3,122 -9% 6,100
Tonnes of
ore milled
per day 16,000 16,300 -2% 15,700 17,200 -9% 16,700
-------------------------------------------------------------------------
Strip ratio 1.6 1.0 +60% 1.4 1.0 +40% 1.1
-------------------------------------------------------------------------
Grades
gold
(grams/
tonne) 0.96 0.90 +7% 0.94 0.84 +12% 1.00
copper
(percent) 0.09 0.05 +80% 0.08 0.05 +60% 0.12
-------------------------------------------------------------------------
Mill recoveries
(percent)
gold 84 81 +4% 84 81 +4% 83
copper 92 88 +5% 92 86 +7% 92
-------------------------------------------------------------------------
Production
gold
(ounces) 37,800 35,100 +8% 72,800 68,300 +7% 163,200
copper
(tonnes) 1,200 700 +71% 2,000 1,400 +43% 7,000
-------------------------------------------------------------------------
Cost per
tonne of ore
milled (C$) $15 $12 +25% $15 $12 +25% $12
-------------------------------------------------------------------------

Higher gold production

Throughput this quarter continued to be lower than expectations.
Modifications to maximize mill throughput were complete during the first
quarter, but because harder ore was mined from the upper areas of the 87 pit,
we have yet to benefit from the modifications.
Gold production this quarter and year to date was higher than the same
periods last year, mainly because grades from the 87 pit were higher. Gold
recoveries also continue to be higher than expected.
A higher cost per tonne compared to previous years is mainly because the
cost of fuel and steel grinding media are higher.

2008 outlook for production and costs

Troilus is mining through the hard, lower grade ore of the upper benches
of the 87 pit and expects to access the higher grade, softer ore of the main
87 pit in August of this year. Both grades and mill throughput will improve as
it progresses deeper and towards the north. The pit will remain on track for
completion in early 2009 and then will begin stockpile recovery. Despite lower
throughput than expected, Troilus should meet targeted gold and copper
production this year because of the higher expected grades.

Financial review

Higher gold prices helped earnings

-------------------------------------------------------------------------
three months six months
(millions of Canadian dollars ended June 30 ended June 30
otherwise stated) 2008 2007 2008 2007
-------------------------------------------------------------------------
Sales analysis
Gold sales (ounces) 36,300 32,400 71,500 72,100
Copper sales (tonnes) 1,200 700 2,100 1,400
---------------------------------------
Gross gold sales $24 $18 $50 $44
Gross copper sales 10 7 18 11
Other metal sales 1 1 1 1
---------------------------------------
Gross sales 35 26 69 56
Smelter processing
charges and freight (2) (2) (4) (5)
-------------------------------------------------------------------------
Net sales $33 $24 $65 $51
-------------------------------------------------------------------------
Cost analysis
Tonnes of ore milled (thousands) 1,454 1,487 2,851 3,122
Direct production costs
($ per tonne) $15 $12 $15 $12
-------------------------------------------------------------------------
Direct production costs $22 $19 $42 $38
Change in inventory - (1) - 1
Depreciation and other non-cash costs 3 2 7 6
-------------------------------------------------------------------------
Operating costs $25 $20 $49 $45
-------------------------------------------------------------------------
Operating earnings $8 $4 $16 $7
-------------------------------------------------------------------------
Operating cash flow $8 $4 $15 $5
-------------------------------------------------------------------------

The table below shows what contributed to the change in operating
earnings and operating cash flow between 2008 and 2007.

-------------------------------------------------------------------------
three months six months
ended ended
(millions) June 30 June 30
-------------------------------------------------------------------------
Higher metal prices
denominated in Canadian dollars $1 $8
Higher sales volumes 5 5
Higher operating costs (2) (4)
-------------------------------------------------------------------------
Increase in operating earnings, compared to 2007 $4 $9
Changes in working capital - (2)
Other - 3
-------------------------------------------------------------------------
Increase in operating cash flow, compared to 2007 $4 $10
-------------------------------------------------------------------------


OK TEDI

-------------------------------------------------------------------------
revised
(100 three months ended June 30 six months ended June 30 objective
percent) 2008 2007 change 2008 2007 change 2008
-------------------------------------------------------------------------
Tonnes of
ore milled
(000's) 5,400 6,400 -16% 10,400 13,000 -20% 23,200
Tonnes of
ore milled
per day 59,300 70,500 -16% 57,100 71,900 -20% 64,000
-------------------------------------------------------------------------
Strip ratio 1.5 1.1 +36% 1.7 1.2 +42% 1.3
-------------------------------------------------------------------------
Grades
copper
(percent) 0.9 0.7 +29% 0.9 0.7 +29% 0.9
gold
(grams/
tonne) 1.0 0.7 +43% 1.0 0.8 +25% 1.1
-------------------------------------------------------------------------
Mill recoveries
(percent)
copper 87 87 - 86 86 - 84
gold 74 72 +3% 74 72 +3% 72
-------------------------------------------------------------------------
Production
copper
(tonnes) 41,100 37,200 +10% 78,400 82,500 -5% 178,600
gold
(ounces) 122,700 109,300 +12% 241,200 236,500 +2% 584,700
-------------------------------------------------------------------------
Cost per
tonne of ore
milled (C$) $22 $14 +57% $22 $15 +47% $22
-------------------------------------------------------------------------

Lower throughput at Ok Tedi

Mill throughput this quarter and year to date was lower than the same
periods last year because of harder skarn ore, and because problems with the
in-pit crusher conveyor system reduced the supply of ore to the mill. A
detailed plan has been developed to improve the conveyor.
Copper and gold grades exceeded grades in 2007, increasing copper
production this quarter and gold production this quarter and year to date.
The cost per tonne of ore milled is higher in 2008 because mill
throughput is lower and labour and fuel costs have increased.

2008 outlook for production and costs

We have adjusted our objective for 2008 to compensate for the shortfall
in production in the first half of the year. We anticipate copper production
to be consistent to our original objective because we expect copper grades to
be higher. We expect gold production to be lower than originally anticipated
because of lower gold grades.
The increased cost per tonne reflects the higher fuel and labour costs.

Financial review

Ok Tedi benefited from higher copper and gold prices

-------------------------------------------------------------------------
three months six months
(millions of Canadian dollars ended June 30 ended June 30
otherwise stated) 2008 2007 2008 2007
-------------------------------------------------------------------------
Sales analysis at 18%
Copper sales (tonnes) 7,600 9,600 15,000 17,300
Gold sales (ounces) 25,300 26,500 45,500 48,700
---------------------------------------
Gross copper sales $65 $87 $134 $143
Gross gold sales 21 18 38 34
Other metal sales 1 1 1 2
---------------------------------------
Gross sales 87 106 173 179
Smelter processing
charges and freight (11) (14) (20) (26)
-------------------------------------------------------------------------
Net sales 76 92 153 153
-------------------------------------------------------------------------
Cost analysis at 18%
Tonnes of ore milled (thousands) 5,400 6,400 10,400 13,000
Direct production costs
($ per tonne) $22 $14 $22 $15
-------------------------------------------------------------------------
Direct production costs $22 $16 $41 $36
Change in inventory (1) 7 - 6
Depreciation and other non-cash costs 5 4 8 6
-------------------------------------------------------------------------
Operating costs $26 $27 $49 $48
-------------------------------------------------------------------------
Operating earnings $50 $65 $104 $105
-------------------------------------------------------------------------
Operating cash flow $42 $62 $81 $70
-------------------------------------------------------------------------

The table below shows what contributed to the change in operating
earnings and operating cash flow between 2008 and 2007.

-------------------------------------------------------------------------
three months six months
ended ended
(millions) June 30 June 30
-------------------------------------------------------------------------
(Lower) higher metal prices,
denominated in Canadian dollars $(1) $15
Lower sales volumes (9) (8)
Higher smelter processing charges (3) -
Higher operating costs (2) (8)
-------------------------------------------------------------------------
Decrease in operating earnings, compared to 2007 $(15) $(1)
Lower tax expense (4) (2)
Changes in net working capital (8) 8
Other 7 6
-------------------------------------------------------------------------
Increase (decrease) in operating cash flow,
compared to 2007 $(20) $11
-------------------------------------------------------------------------

The mine waste management program is expected to be commissioned in
August

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

-------------------------------------------------------------------------
(18 three months ended June 30 six months ended June 30 objective
percent) 2008 2007 change 2008 2007 change 2008
-------------------------------------------------------------------------
Capital
spending $10,900 $6,400 +70% $18,900 $13,000 +45% $32,000
-------------------------------------------------------------------------

2008 outlook for capital spending

Ok Tedi plans to spend $180 million in 2008 (Inmet's 18 percent share is
$32 million). Of the $180 million, about $90 million will be for the mine
waste management program, $27 million for the pit drainage tunnel, and the
rest for mine equipment and other sustaining capital. The estimate for the
mine waste management program has increased about $50 million to include the
effect of a weaker US dollar on the Australian dollar based costs of
construction.


Status of our development projects

Las Cruces

Quarterly development update

Dewatering and re-injection system (DRS)

In May Las Cruces was notified of a suspension of the authorization for
its DRS by the Confederacisn Hidrografica del Guadalquivir (CHG). Las Cruces
continued to operate the DRS to ensure that water from the aquifer did not
impact the pit walls. Although Las Cruces stopped mining in the bottom of the
pit, Las Cruces began to strip material for the second push back of the pit.
On June 13, in response to the concerns that led to the suspension of the
DRS authorization, Las Cruces submitted a "Global Plan" to CHG. The proposal
included two primary actions.
The first proposed action item under the Global Plan involves
purification of water extracted from the aquifer through a highly efficient
reverse osmosis treatment process prior to reinjection into the aquifer. In
July, Las Cruces took delivery of three reverse osmosis treatment units and
partial water treatment began shortly thereafter. We have also begun the
design of a long-term water treatment facility.
The second proposed action item under the Global Plan involves the
relocation of certain DRS extraction wells currently located above the
mineralized zone to locations outside of the mineralized zones and to add
additional wells to increase dewatering capacity. We have identified the
locations for the new DRS wells.
We anticipate that once we can demonstrate to the relevant regulatory
authorities through use of the temporary water treatment units that water
reinjected into the aquifer meets drinking water quality standards the
suspension of our DRS authorization will be lifted. At that time, mining of
ore can recommence prior to the completion of construction of the
metallurgical plant in the fourth quarter of 2008.

Ground movement

At the beginning of July over 5 million cubic metres of material from the
North dump failed, affecting a newly constructed storage facility. The
facility will be used for dried residues from the process plant once the plant
has started up. Las Cruces immediately commenced rehabilitation of the
affected areas and is examining measures to ensure long term stability of the
dumps. Based on preliminary findings we do not expect that the failure and the
rehabilitation measures will impact our planned fourth quarter start-up.

Plant construction

Plant construction continued at full pace and by the end of the second
quarter Las Cruces had completed the following:

- 88 percent of construction
- 89 percent of total physical progress.

Work is progressing on schedule. We are preparing for the commissioning
of the plant and anticipate production of the first copper cathode in the
fourth quarter.

Direct ore shipping

Direct ore shipping has been suspended until the DRS authorization
suspension has been resolved and mining activity can restart in the bottom of
the pit.

2008 outlook for development and operations

Las Cruces plant construction is on schedule and copper cathode
production could begin in the fourth quarter subject to the lifting of the
suspension of the DRS permit and completion on the remediation of the storage
facilities.
By June 30, 2008 (euro)393 million had been spent on the project with a
further (euro)24 million committed. We expect to spend the balance of the
estimated project costs ((euro)495 million, which includes the project
estimate of (euro)463 million plus the additional owners costs and
construction costs we expected because of the delay in the plant construction)
by the fourth quarter of 2008. Capital expenditures for 2008 are estimated to
be $344 million. This includes the cost to complete the project, $17 million
for sustaining capital and $10 million on further pushback of the mine in
preparation of phase two mining. The costs to remediate the dumps have not
been included in the capital expenditure forecast for the year. Las Cruces has
been in contact with its insurance adjustor. Once the technical issues have
been fully resolved, Las Cruces will identify and pursue appropriate remedies
to attempt to mitigate these incremental costs.

PETAQUILLA

Quarterly development update

All-cash offer for Petaquilla Copper

On July 28, 2008, we filed a formal offer for all the outstanding common
shares of Petaquilla Copper Ltd. (PTC). Under the offer, PTC shareholders will
receive $2 per share in cash.
PTC holds 26 percent of Minera Petaquilla SA. Petaquilla is an important
source of long term growth for Inmet. By obtaining control over the project we
can protect our interests in the Petaquilla Concession and advance the
development of the copper project.

Summary of work during the quarter

Management
-----------
Under our agreement with Teck Cominco Limited, Inmet began acting as
operator of the project on behalf of Teck Cominco as of April 1. Inmet also
has funded $8 million for development costs in the quarter.

Drilling
--------
Drilling to expand the resource, to confirm prospective locations for
plant and other facilities and to provide geotechnical information for
engineering work is continuing. It is not progressing as quickly as planned
because of the speed of the permitting process, drill availability and a lack
of roads to supplement helicopter support. Additional drills are being sourced
and the field facilities to support them are being prepared.

Plant and equipment
-------------------
Because of the long lead times required to receive equipment, we have
placed an order for two SAG mills, four ball mills and the associated gearless
drives, subject to cancellation terms.

Baseline work for the social and environmental impact assessment
----------------------------------------------------------------
Work is progressing in this area and we expect to submit our impact
assessment to the Panamanian environmental authorities in the second quarter
of 2009.

Petaquilla team
---------------
We continue to build a strong and dedicated team to lead all development,
engineering, technical, environmental and permitting activities in Panama.

2008 outlook for development

Petaquilla budgeted approximately $75 million for the project in 2008 to
continue the current field program and the engineering study and order long
lead time capital equipment. The capital items must be ordered at this stage
of development to maintain the project schedule. This spending plan could be
affected by the outcome of the all-cash offer for PTC and if the arbitration
between PTC and Teck Cominco continues without resolution in the near term.

Managing our liquidity
-------------------------------------------------------------------------
three months six months
ended June 30 ended June 30
(millions) 2008 2007 2008 2007
-------------------------------------------------------------------------
CASH FROM OPERATING ACTIVITIES
Cayeli $37 $63 $50 $122
Pyhasalmi 19 10 50 51
Troilus 8 4 15 5
Ok Tedi 42 62 81 70
Corporate development and
exploration not included
in operations' cash flow (2) (2) (4) (3)
General and administration (3) (2) (6) (5)
Other 14 3 10 3
-------------------------------------------------------------------------
115 138 196 243
-------------------------------------------------------------------------
CASH FROM INVESTING AND FINANCING
Capital spending (121) (82) (232) (134)
Long-term borrowings 56 24 106 38
Funding from
non-controlling shareholder 20 21 35 26
Funding for Petaquilla (4) - (5) -
Settlement of foreign
exchange forward contract 52 - 52 -
Financial assurance deposits (6) (7) (14) (17)
Dividends paid on common shares (5) (5) (5) (5)
Disposition of portfolio investments - 51 2 51
Foreign exchange on cash
held in foreign currency (9) (32) 24 (34)
Other (5) (3) (1) (5)
-------------------------------------------------------------------------
(22) (33) (38) (80)
-------------------------------------------------------------------------
Increase in cash 93 105 158 163
Cash and short-term investments
Beginning of period 906 698 841 640
-------------------------------------------------------------------------
End of period $999 $803 $999 $803
-------------------------------------------------------------------------

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


OPERATING ACTIVITIES

Key components of the change in operating cash flows
-------------------------------------------------------------------------
three months six months
ended ended
(millions) June 30 June 30
-------------------------------------------------------------------------
Lower earnings from operations (see page 4) $(49) $(39)
Non-cash changes in operating earnings:
Higher tax expense - (5)
Changes in working capital 16 (16)
Other 10 13
-------------------------------------------------------------------------
Decrease in operating cash flow, compared to 2007 $(23) $(47)
-------------------------------------------------------------------------

Operating cash flows are lower than they were in 2007 mainly because
earnings from operations are lower. Working capital in the second quarter of
2008 increased because outstanding dividends were paid, accounts receivable
was down and higher taxes were paid at Pyhasalmi. For the year to June,
working capital was affected by higher accounts receivable at Cayeli.

2008 outlook for operating activities

Based on our outlook for metal prices and production, we expect operating
cash flows in 2008 for our operating mines to be similar to 2007.

INVESTING AND FINANCING

Capital spending and investing
-------------------------------------------------------------------------
three months six months revised
ended June 30 ended June 30 objective
(millions) 2008 2007 2008 2007 2008
-------------------------------------------------------------------------
Cayeli $6 $4 $12 $9 $23
Pyhasalmi 2 1 3 1 12
Troilus - - - - 1
Ok Tedi 11 7 19 13 32
Las Cruces 97 69 190 107 344
Cerattepe 5 1 8 3 20
-------------------------------------------------------------------------
$121 $82 $232 $133 $432
-------------------------------------------------------------------------

-------------------------------------------------------------------------
Funding for Petaquilla $4 - $5 $- $75
-------------------------------------------------------------------------

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

As of April 29, development work stopped at Cerattepe after an appeal by
the Turkish Ministry of Energy and Natural Resources of an injunction granted
by the Rize Administrative Court prohibiting further work on the property was
rejected. The property will remain on care and maintenance until a final
decision is made by the Rize Court concerning two applications by a local
non-governmental organization to cancel the operating licences for the
property (see page 27 for further details on the legal proceedings). Spending
year to date was on ramp development and receipt of part of the aerial
tramway.

Long term borrowings and settlement of hedge

Las Cruces borrowed the remaining (euro)26 million this quarter under its
credit facility, bringing the total amount borrowed under Tranche A of its
credit facility to (euro)139 million. On June 30, this euro denominated debt
was converted to a US dollar facility and the foreign exchange forward
contract in relation to this conversion was settled. Las Cruces received
(euro)36 million in cash from settlement of this contract. At June 30, Las
Cruces holds a US $215 million debt at interest rates of US Libor plus
2 percent. The funds received from the settlement of the forward contract will
be amortized as a reduction to interest expense over the term of the loan.

2008 outlook for investing and financing

We expect capital spending to be $432 million in 2008:
- $317 million for the continuing development of the Las Cruces mine and
$27 million for its sustaining capital and phase two mining
- $20 million for development at Cerattepe for capital already incurred
and committed items
- $17 million for the mine waste management program and $5 million for
drainage tunnel underground work at Ok Tedi.

To fund the costs at Las Cruces for the rest of the year, we expect to
use current cash on hand of $105 million, along with government subsidies and
sponsor contributions. We are expecting (euro)45 million in subsidies, but we
must meet certain conditions before we receive the funds (mainly reaching
specific levels of employment and completing construction of the plant).
We also expect to invest $36 million (our 48 percent share) for
engineering studies and the deposits required for long lead time equipment at
Petaquilla. We will fund this from our current cash balances.

Financial condition

CASH

Our cash and equivalents balance of $999 million at June 30, 2008
included cash and money market instruments that mature in 90 days or less from
the date of acquisition, and short-term investments that mature in 91 days to
a year.

Cash and short-term investments were generally held in:
- short-term debt instruments issued by Canadian Crown Corporations
- highest rated asset backed commercial paper programs sponsored by
leading Canadian financial institutions backed by global style
liquidity lines
- AAA rated 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 $55 million included:
- $13 million in trust for future reclamation at Ok Tedi
- $16 million of cash collateralized letters of credit for Inmet
- $24 million related to issuing letters of credit to suppliers at Las
Cruces
- $2 million for future reclamation at Pyhasalmi.

COMMON SHARES
-------------------------------------------------------------------
Common shares outstanding as of
June 30, 2008 and July 29, 2008 48,281,759
-------------------------------------------------------------------
Deferred share units outstanding as of
June 30, 2008
(redeemable on a one-for-one basis for common shares) 77,290
-------------------------------------------------------------------


FINANCIAL INSTRUMENTS

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

-------------------------------------------------------------------------
Type of Expiry Quantity Price C$ marked-to-
contract market loss at
June 30, 2008
-------------------------------------------------------------------------
Copper
forward
sales
Ok Tedi 2008 1.6 million lbs US $2.78 per lb
2009 3.2 million lbs US $2.41 per lb
-------------------------------------------
4.8 million lbs US $2.54 per lb $6.2 million(1)
Gold
forward
sales
Troilus 2008 29,100 ounces US $352 per oz. $17.4 million(2)
-------------------------------------------

Ok Tedi 2010 3,600 ounces US $748 per oz.
2011 3,600 ounces US $775 per oz.
2012 3,600 ounces US $803 per oz.
2013 1,800 ounces US $825 per oz.
-------------------------------------------
12,600 ounces US $783 per oz. $4.8 million(2)
Interest
rate
swaps
Las 2009 to
Cruces 2014 US $179 million 5.2 percent $8.1 million
(reducing in con-
junction with debt
repayment schedule)
-------------------------------------------------------------------------
(1) At a copper price of US $3.86 per pound.
(2) At a gold price of US $933 per ounce.

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 our 2007 annual review.

Development at Las Cruces

Las Cruces is a development project, and while we are confident that the
project will add value as planned, there are still significant risks to
completing the project as planned, particularly in the ability to meet
critical construction milestones and to demonstrate to the regulators the
effectiveness of the Global Plan with respect to the DRS.
Not meeting construction milestones or requirements for operating permits
could delay the date Las Cruces starts production, and affect whether it
receives government subsidies.
A local non-governmental group has initiated several legal proceedings
claiming that various government 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. Two other proceedings are still outstanding.

Cerattepe legal proceedings

After the Turkish Administrative Supreme Court reinstated the project
operating licences on procedural grounds in April 2007, the plaintiffs in
prior proceedings re-filed applications to have the licences cancelled with
the newly created Rize Administrative Court to stop work on the property and
to cancel a lease of the land where the ropeway terminus will be located.
We joined the various application proceedings as an intervener and,
together with the Turkish Ministry of Energy and Natural Resources, filed
defences in the various proceedings.
On March 26, 2008 we received notice from the Rize Administrative Court
of its decision to grant an injunction against the Cerattepe project. The main
defendant in the legal proceedings is the Turkish Ministry of Energy and
Natural Resources (ABMI is a co-defendant). The Ministry appealed the
injunction decision to the Trabzon District Administrative Court, and on April
29, 2008 that appeal was rejected.
As a result, our subsidiary Artvin Bakir Maden Isletmeleri, A.S. (ABMI)
is prevented from carrying out further development work on the Cerattepe
property until the Rize Administrative Court makes its final decision on the
status of the operating licences which is expected later this year. This
decision can be appealed to the Turkish Administrative Supreme Court.
We continue to believe the applications to cancel the operating licences
are without merit and together with the Ministry are vigourously defending
against them. Nonetheless, in light of the Trabzon Regional Administrative
Court's decision, our ability to move the Cerattepe project ahead remains
subject to legal uncertainty at this time.

Sensitivity analysis

The table below shows you the effect of key variables on our net income
for the last six months of 2008, based on our 2008 revised objectives.

-------------------------------------------------------------------------
Would
change our
Would change 2008 net
our 2008 net income per
A change of: income by: share by:
-------------------------------------------------------------------------
Metal prices
Copper (per pound) US $0.30 $25 million $0.51
Zinc (per pound) US $0.10 $3 million $0.06
Gold (per ounce)(1) US $100 $13 million $0.27
-------------------------------------------------------------------------
Exchange rates
Canadian dollar per US dollar C$0.10 $30 million $0.63
Canadian dollar per euro C$0.10 $4 million $0.07
-------------------------------------------------------------------------
Treatment and refining charges
Copper treatment charge per tonne and US $10
copper refining charge per pound US $0.01 $2 million $0.03
Zinc treatment charge per tonne US $10 $1 million $0.01
-------------------------------------------------------------------------
Freight and energy costs
Concentrate freight per tonne 10% $2 million $0.04
Fuel price per litre $0.10 $2 million $0.04
Electricity per kilowatt hour $0.01 $2 million $0.04
-------------------------------------------------------------------------
(1) Calculations include hedging in place at December 31, 2007.

Accounting changes

We adopted a new section of the CICA Handbook:

Section 3031 - Inventories

Effective January 1, 2008, we adopted CICA Handbook section 3031 -
Inventory on a prospective basis. This Section requires inventory to be
measured at cost or net realizable value - whichever is lower.
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.
As a result, certain administrative and other costs that were previously
included in the cost of inventory are now expensed as incurred. Metal
inventory and materials and supplies are measured at weighted average cost or
net realizable value - whichever is lower.
This change in policy had the following impact on our interim 2008
financial statements:

- decreased opening 2008 inventory by $5.2 million
- increased opening 2008 property, plant and equipment by $2.4 million
- decreased opening 2008 future income tax liability by $0.6 million
- decreased opening 2008 retained earnings by $2.2 million.

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

As of January 1, 2011 Inmet will report under IFRS, which are the
accounting standards used in most of the European Union, Australia, South
Africa and many other countries around the world. Changing from Canadian GAAP
to IFRS could materially affect our reported financial position and results of
operations. We have analyzed the major accounting differences between current
Canadian GAAP and IFRS.
Over the next year we will refine our transitional plan, consult with our
operating units and assess the impact on our internal controls over financial
reporting, disclosure controls and information systems. Our goal is to make
policy changes (including transition elections) that are compliant but also
provide the most meaningful and transparent information to our stakeholders.

Recently issued accounting pronouncement:

Section 3064 - Goodwill and intangible assets

This section establishes standards for the recognition, measurement,
presentation and disclosure of goodwill subsequent to its initial recognition
and of intangible assets. This section replaces Section 3062, Goodwill and
Other Intangible Assets and Section 3450, Research and Development Costs.
Various changes have been made to other sections of the CICA Handbook for
consistency purposes. It provides guidance for the recognition of internally
developed intangible assets and ensuring consistent treatment of all
intangible assets, whether separately acquired or internally developed.
Standards concerning goodwill are unchanged from the standards included in the
previous section. This section will become effective for us beginning on
January 1, 2009. We are currently assessing the impact this change in
accounting policy will have on our consolidated financial statements.

Supplementary financial information

Page 30 includes supplementary financial information on cash costs. These
measures do not fall into the category of generally accepted accounting
principles.
We use unit cash cost information as a key performance indicator, both on
a segmented and consolidated basis. We have included cash costs as
supplementary information because we believe our key stakeholders use these
measures as a financial indicator of our profitability and cash flows before
the effects of capital investment and financing costs, such as interest.
Since cash costs are not recognized measures under Canadian generally
accepted accounting principles they should not be considered in isolation of
earnings or cash flows. There is also no standard way to calculate cash costs,
so they are not a reliable way to compare us to other companies.

About Inmet

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

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

Second quarter conference call

Will be held on
- Wednesday, July 30, 2008
- 8:30 a.m. Eastern Time
- webcast available at
www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2326280
or www.inmetmining.com.

You can also dial in by calling
- Local or international: +1.416.644.3419
- Toll-free within North America: +1.800.732.6179

Starting 10:30 a.m. (ET) Wednesday July 30, 2008, conference call replay
will be available
- Local or international: +1.416.640.1917 passcode 21276716 followed by
the number sign.
- Toll-free within North America: +1.877.289.8525 passcode 21276716
followed by the number sign.


INMET MINING CORPORATION
Supplementary financial information

Cash costs
2008
For the six months per ounce
ended June 30 per pound of copper of gold
------------------------------------ ----------
TOTAL
CAYELI PYHASALMI OK TEDI COPPER TROILUS
------------------------------------------------------ ------- ----------
(US dollars)

Direct production costs $1.15 $2.06 $1.25 $1.35 $576
Royalties and
variable compensation 0.19 - 0.11 0.12 -
Smelter processing
charges and freight 1.40 1.17 0.58 1.04 63
Metal credits (2.04) (3.73) (1.22) (2.03) (265)
------------------------------------ ----------
Cash cost $0.70 ($0.50) $0.72 $0.48 $374
------------------------------------ ----------
------------------------------------ ----------

2007 For the six months per
ended June 30 ounce
per pound of copper of gold
------------------------------------ ----------
TOTAL
CAYELI PYHASALMI OK TEDI COPPER TROILUS
------------------------------------------------------ ------- ----------
(US dollars)

Direct production costs $0.95 $1.52 $1.02 $1.08 $488
Royalties and
variable compensation 0.14 - 0.08 0.09 -
Smelter processing
charges and freight 1.07 1.66 0.58 0.98 58
Metal credits (1.89) (4.87) (0.86) (2.03) (153)
------------------------------------ ----------
Cash cost $0.27 ($1.69) $0.82 $0.12 $393
------------------------------------ ----------
------------------------------------ ----------
-------------------------------------------------------------------------


Reconciliation of cash costs to statements of earnings

2008 For the six months per
ended June 30 ounce
per pound of copper of gold
------------------------------------ ----------
(millions of Canadian
dollars, except where TOTAL
otherwise noted) CAYELI PYHASALMI OK TEDI COPPER TROILUS
------------------------------------------------------ ------- ----------
GAAP reference page 15 page 17 page 21 page 19

Direct production costs $46 $30 $42 $118 $42
Smelter processing
charges and freight 48 26 20 94 5
By product sales (77) (59) (39) (175) (19)
Adjust smelter
processing and
freight, and sales
to production basis 8 (4) - 4 -
------------------------------------ ----------
Operating costs net
of metal credits $25 ($7) $23 $41 $28
US $ to C$ exchange rate $1.01 $1.01 $1.01 $1.01 $1.01
Inmet's share
of production (000's) 34,400 14,600 31,100 80,100 72,800
------------------------------------ ----------
Cash cost $0.70 ($0.50) $0.72 $0.48 $374
------------------------------------ ----------
------------------------------------ ----------


2007 For the six months per
ended June 30 ounce
per pound of copper of gold
------------------------------------ ----------
(millions of Canadian
dollars, except where TOTAL
otherwise noted) CAYELI PYHASALMI OK TEDI COPPER TROILUS
------------------------------------------------------ ------- ----------
GAAP reference page 15 page 17 page 21 page 19

Direct production costs $42 $25 $36 $103 $38
Smelter processing
charges and freight 55 34 26 115 5
By product sales (105) (88) (37) (230) (13)
Adjust smelter processing
and freight, and sales
to production basis 19 (2) 5 22 -
------------------------------------- ----------
Operating costs
net of metal credits $11 ($31) $30 $10 $30
US $ to C$ exchange rate $1.14 $1.14 $1.14 $1.14 $1.14
Inmet's share
of production (000's) 34,300 15,100 32,800 82,200 68,300
------------------------------------- ----------
Cash cost $0.27 ($1.69) $0.82 $0.12 $393
------------------------------------- ----------




INMET MINING CORPORATION
Supplementary financial information

Cash costs
2008 For the three months per
ended June 30 ounce
per pound of copper of gold
------------------------------------ ----------
TOTAL
CAYELI PYHASALMI OK TEDI COPPER TROILUS
------------------------------------------------------ ------- ----------
(US dollars)

Direct production costs $1.24 $2.23 $1.21 $1.40 $584
Royalties and
variable compensation 0.14 - 0.12 0.11 -
Smelter processing
charges and freight 1.39 1.19 0.60 1.03 67
Metal credits (2.02) (3.51) (1.09) (1.89) (291)
------------------------------------ ----------
Cash cost $0.75 ($0.09) $0.84 $0.65 $360
------------------------------------ ----------
------------------------------------ ----------

2007 For the three months per
ended June 30 ounce
per pound of copper of gold
------------------------------------ ----------
TOTAL
CAYELI PYHASALMI OK TEDI COPPER TROILUS
------------------------------------------------------ ------- ----------
(US dollars per pound)

Direct production costs $0.93 $1.43 $1.14 $1.11 $480
Royalties and
variable compensation 0.16 - 0.18 0.14 -
Smelter processing
charges and freight 1.23 1.34 0.58 1.02 57
Metal credits (1.99) (4.64) (0.90) (2.12) (199)
------------------------------------ ----------
Cash cost $0.33 ($1.87) $1.00 $0.15 $338
------------------------------------ ----------
------------------------------------ ----------
-------------------------------------------------------------------------


Reconciliation of cash costs to statements of earnings

2008 For the three months per
ended June 30 ounce
per pound of copper of gold
------------------------------------ ----------
(millions of Canadian
dollars, except where TOTAL
otherwise noted) CAYELI PYHASALMI OK TEDI COPPER TROILUS
------------------------------------------------------ ------- ----------
GAAP reference page 15 page 17 page 21 page 19

Direct production costs $23 $15 $22 $60 $22
Smelter processing
charges and freight 26 15 11 52 3
By product sales (41) (32) (21) (94) (11)
Adjust smelter processing
and freight, and sales
to production basis 5 1 2 8 -
------------------------------------ ----------
Operating costs
net of metal credits $13 ($1) $14 $26 $14
US $ to C$ exchange rate $1.01 $1.01 $1.01 $1.01 $1.01
Inmet's share
of production (000's) 16,400 6,800 16,300 39,500 37,800
------------------------------------ ----------
Cash cost $0.75 ($0.09) $0.84 $0.59 $360
------------------------------------ ----------
------------------------------------ ----------

2007 For the three months per
ended June 30 ounce
per pound of copper of gold
------------------------------------ ----------
(millions of Canadian
dollars, except where TOTAL
otherwise noted) CAYELI PYHASALMI OK TEDI COPPER TROILUS
------------------------------------------------------ ------- ----------
GAAP reference page 15 page 17 page 21 page 19

Direct production costs $21 $12 $16 $49 $19
Smelter processing
charges and freight 24 15 14 53 2
By product sales (46) (46) (20) (112) (8)
Adjust smelter processing
and freight, and sales
to production basis 8 2 6 16 -
------------------------------------ ----------
Operating costs
net of metal credits $7 ($17) $16 $6 $13
US $ to C$ exchange rate $1.10 $1.10 $1.10 $1.10 $1.10
Inmet's share
of production (000's) 17,900 8,100 14,800 40,800 35,100
------------------------------------ ----------
Cash cost $0.33 ($1.87) $1.00 $0.15 $338
------------------------------------ ----------


INMET MINING CORPORATION
Quarterly review
(unaudited)

Latest Four Quarters
-------------------------------------------------------------------------
2008 2008 2007 2007
(thousands of Canadian dollars, Second First Fourth Third
except per share amounts) quarter quarter quarter quarter
-------------------------------------------------------------------------
STATEMENTS OF EARNINGS
Gross sales $281,463 $276,281 $224,773 $272,293
Smelter processing
charges and freight (53,209) (44,157) (43,902) (42,557)
Cost of sales (89,893) (79,246) (78,809) (72,057)
Depreciation (9,195) (9,170) (9,480) (8,739)
---------------------------------------
129,166 143,708 92,582 148,940
Corporate development
and exploration (2,483) (2,618) (3,510) (2,895)
General and administration (2,790) (3,648) (12,622) (2,674)
Investment and
other income (expense) (11,358) 14,754 5,968 9,644
Interest expense (471) (447) (407) (424)
Capital tax expense (124) (126) 212 (273)
Income tax expense (44,333) (44,744) (18,551) (37,649)
Non-controlling interest 98 (205) (27) 167
---------------------------------------
Net income $67,705 $106,674 $63,645 $114,836
---------------------------------------
Net income per common share $1.40 $2.21 $1.32 $2.38
---------------------------------------
Diluted net income
per common share $1.40 $2.21 $1.32 $2.37
---------------------------------------


Previous Four Quarters
-------------------------------------------------------------------------
2007 2007 2006 2006
(thousands of Canadian dollars, Second First Fourth Third
except per share amounts) quarter quarter quarter quarter
-------------------------------------------------------------------------
STATEMENTS OF EARNINGS
Gross sales $320,018 $286,614 $258,911 $301,100
Smelter processing
charges and freight (55,413) (64,606) (65,005) (60,270)
Cost of sales (78,181) (79,377) (67,868) (73,394)
Depreciation (8,039) (9,415) (9,057) (9,025)
---------------------------------------
178,385 133,216 116,981 158,411
Corporate development
and exploration (1,836) (842) (4,136) (2,708)
General and administration (2,162) (2,840) (6,128) (2,618)
Investment and other income 13,415 7,427 17,972 1,759
Interest expense (424) (438) (425) (412)
Capital tax (expense) recovery (274) (274) - 41
Income tax expense (48,509) (35,376) (26,679) (42,902)
Non-controlling interest (545) 205 (165) 11
---------------------------------------
Net income $138,050 $101,078 $97,420 $111,582
---------------------------------------
Net income per common share $2.86 $2.09 $2.02 $2.31
---------------------------------------
Diluted net income
per common share $2.86 $2.09 $2.02 $2.31
---------------------------------------


INMET MINING CORPORATION
Consolidated balance sheets
June 30 December 31
(thousands of Canadian dollars) 2008 2007
-------------------------------------------------------------------------
(unaudited)
Assets

Current assets:
Cash and short-term investments (note 5) $998,925 $840,823
Restricted cash (note 6) 1,265 1,569
Accounts receivable 167,371 131,197
Inventories (note 2) 59,412 52,725
Future income tax asset 12,272 14,515
---------------------------
1,239,245 1,040,829

Restricted cash (note 6) 54,136 37,205

Property, plant and equipment 1,152,163 870,965

Investments (note 7) 49,032 32,266

Future income tax asset 10,035 7,884

Derivatives (note 8) - 33,565

Other assets 13,138 25,751
---------------------------
$2,517,749 $2,048,465
-------------------------------------------------------------------------

Liabilities

Current liabilities:

Accounts payable and accrued liabilities $191,310 $172,800
Current portion of long-term debt 14,403 12,971
---------------------------
205,713 185,771

Long-term debt (note 9) 405,798 234,317

Reclamation liabilities (note 10) 98,096 84,017

Derivatives (note 8) 36,458 43,960

Other liabilities 24,554 19,249

Future income tax liabilities 25,880 37,084

Non-controlling interest 62,862 51,574
---------------------------
859,361 655,972
---------------------------

Commitments (note 11)

Shareholders' equity

Share capital 337,464 337,464

Contributed surplus 61,630 60,722

Stock based compensation 1,229 1,085

Retained earnings 1,244,313 1,076,958

Accumulated other comprehensive
income (loss) (note 12) 13,752 (83,736)
---------------------------
1,658,388 1,392,493
---------------------------
$2,517,749 $2,048,465
-------------------------------------------------------------------------
(see accompanying notes)



INMET MINING CORPORATION
Segmented balance sheets

2008 As at June 30

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

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

Assets

Cash and short-term
investments $649,702 $147,853 $62,054 $ -
Other current assets 14,577 45,579 54,383 30,693
Restricted cash 15,994 - 1,926 -
Property, plant and
equipment 497 138,100 69,922 24,624
Investments 49,032 - - -
Derivatives - - - -
Other assets 10,234 343 - 6,289
----------------------------------------------

$740,036 $331,875 $188,285 $61,606
----------------------------------------------

Liabilities

Current liabilities $9,309 $39,797 $16,076 $11,669
Long-term debt 18,347 - - -
Reclamation liabilities 24,769 7,864 14,978 7,872
Derivatives - - - 17,381
Other liabilities 4,992 5,149 - 581
Future income tax
liabilities - 3,716 7,771 -
Non-controlling interest - - - -
----------------------------------------------

$57,417 $56,526 $38,825 $37,503
----------------------------------------------


2008 As at June 30

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

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

Assets

Cash and short-term
investments $34,805 $104,511 $998,925
Other current assets 38,266 56,822 240,320
Restricted cash 13,292 22,924 54,136
Property, plant and
equipment 78,683 840,337 1,152,163
Investments - - 49,032
Derivatives - - -
Other assets 3,878 2,429 23,173
---------------------- -----------

$168,924 $1,027,023 $2,517,749
---------------------- -----------

Liabilities

Current liabilities $37,887 $90,975 $205,713
Long-term debt - 387,451 405,798
Reclamation liabilities 20,608 22,005 98,096
Derivatives 10,981 8,096 36,458
Other liabilities 1,620 12,212 24,554
Future income tax
liabilities 1,104 13,289 25,880
Non-controlling interest - 62,862 62,862
---------------------- -----------

$72,200 $596,890 $859,361
---------------------- -----------


2007 As at December 31

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

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



INMET MINING CORPORATION
Consolidated statements of earnings
(unaudited)

Three Months Ended Six Months Ended
(thousands of Canadian June 30 June 30
dollars except per
share amounts) 2008 2007 2008 2007
------------------------------------------------- -----------------------

Gross sales $281,463 $320,018 $557,744 $606,632

Smelter processing
charges and freight (53,209) (55,413) (97,366) (120,019)

Cost of sales (89,893) (78,181) (169,139) (157,558)

Depreciation (9,195) (8,039) (18,365) (17,454)

------------------------------------------------- -----------------------
129,166 178,385 272,874 311,601

Corporate development
and exploration (2,483) (1,836) (5,101) (2,678)

General and administration (2,790) (2,162) (6,438) (5,002)

Investment and other income
(loss) (note 13) (11,358) 13,415 3,396 20,842

Interest expense (471) (424) (918) (862)

Capital tax expense (124) (274) (250) (548)

Income tax expense
(note 14) (44,333) (48,509) (89,077) (83,885)

Non-controlling interest 98 (545) (107) (340)

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

Net income $67,705 $138,050 $174,379 $239,128
------------------------------------------------- -----------------------

Basic and diluted net
income per common share
(note 15) $1.40 $2.86 $3.61 $4.95
------------------------------------------------- -----------------------

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



INMET MINING CORPORATION
Segmented statements of earnings
(unaudited)

2008 For the six months ended June 30

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

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

Gross sales $ - $198,929 $116,157 $69,422
Smelter processing
charges and freight - (47,578) (25,381) (4,608)
Cost of sales (988) (47,505) (31,168) (44,533)
Depreciation - (4,929) (4,382) (4,136)
----------------------------------------------
(988) 98,917 55,226 16,145

Corporate development
and exploration (3,812) (96) (1,181) (12)
General and administration (6,438) - - -
Investment and other
income (expense) 199 3,938 - 2,722
Interest expense (918) - - -
Capital tax expense (250) - - -
Income tax expense (5,534) (27,779) (12,448) -
Non-controlling interest - - - -
----------------------------------------------

Net income (loss) ($17,741) $74,980 $41,597 $18,855
----------------------------------------------


2008 For the six months ended June 30

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

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

Gross sales $173,236 $ - $557,744
Smelter processing
charges and freight (19,799) - (97,366)
Cost of sales (44,945) - (169,139)
Depreciation (4,918) - (18,365)
---------------------- -----------
103,574 - 272,874

Corporate development
and exploration - - (5,101)
General and administration - - (6,438)
Investment and other
income (expense) (3,786) 323 3,396
Interest expense - - (918)
Capital tax expense - - (250)
Income tax expense (43,150) (166) (89,077)
Non-controlling interest - (107) (107)
---------------------- -----------

Net income (loss) $56,638 $50 $174,379
---------------------- -----------


2007 For the six months ended June 30

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

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

Gross sales $ - $229,942 $141,147 $56,091
Smelter processing
charges and freight - (55,470) (33,714) (4,713)
Cost of sales (843) (45,728) (26,307) (40,132)
Depreciation - (4,568) (4,794) (4,716)
----------------------------------------------
(843) 124,176 76,332 6,530

Corporate development
and exploration (1,268) (860) (1,019) 469
General and administration (5,002) - - -
Investment and other
income (expense) 20,013 (1,581) - 791
Interest expense (862) - - -
Capital tax expense (548) - - -
Income tax expense (771) (27,434) (17,286) -
Non-controlling interest - - - -
----------------------------------------------

Net income $10,719 $94,301 $58,027 $7,790
----------------------------------------------


2007 For the six months ended June 30

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

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

Gross sales $179,452 $ - $606,632
Smelter processing
charges and freight (26,122) - (120,019)
Cost of sales (44,548) - (157,558)
Depreciation (3,376) - (17,454)
--------------------- -----------
105,406 - 311,601

Corporate development
and exploration - - (2,678)
General and administration - - (5,002)
Investment and other
income (expense) - 1,619 20,842
Interest expense - - (862)
Capital tax expense - - (548)
Income tax expense (37,908) (486) (83,885)
Non-controlling interest - (340) (340)
---------------------- -----------

Net income $67,498 $793 $239,128
---------------------- -----------



INMET MINING CORPORATION
Segmented statements of earnings
(unaudited)

2008 For the three months ended June 30

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

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

Gross sales $ - $98,313 $61,249 $35,171
Smelter processing
charges and freight - (25,565) (14,561) (2,421)
Cost of sales (494) (24,930) (17,224) (23,522)
Depreciation - (2,556) (2,232) (1,718)
----------------------------------------------
(494) 45,262 27,232 7,510

Corporate development
and exploration (1,835) (26) (615) (7)
General and administration (2,790) - - -
Investment and other
income (expense) (10,362) (923) - 1,361
Interest expense (471) - - -
Capital tax expense (124) - - -
Income tax (expense)
recovery (5,534) (8,655) (6,425) -
Non-controlling interest - - - -
----------------------------------------------

Net income (loss) ($21,610) $35,658 $20,192 $8,864
----------------------------------------------


2008 For the three months ended June 30

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

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

Gross sales $86,730 $ - $281,463
Smelter processing
charges and freight (10,662) - (53,209)
Cost of sales (23,723) - (89,893)
Depreciation (2,689) - (9,195)
--------------------- -----------
49,656 - 129,166

Corporate development
and exploration - - (2,483)
General and administration - - (2,790)
Investment and other
income (expense) (924) (510) (11,358)
Interest expense - - (471)
Capital tax expense - - (124)
Income tax (expense)
recovery (23,803) 84 (44,333)
Non-controlling interest - 98 98
---------------------- -----------

Net income (loss) $24,929 ($328) $67,705
---------------------- -----------


2007 For the three months ended June 30

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

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

Gross sales $ - $112,208 $75,807 $25,849
Smelter processing
charges and freight - (24,302) (15,100) (2,020)
Cost of sales (355) (21,294) (13,384) (18,104)
Depreciation - (1,871) (2,433) (2,007)
----------------------------------------------
(355) 64,741 44,890 3,718

Corporate development
and exploration (521) (651) (558) (106)
General and administration (2,162) - - -
Investment and other
income (expense) 11,878 (1,266) - 499
Interest expense (424) - - -
Capital tax expense (274) - - -
Income tax expense (385) (13,763) (10,379) -
Non-controlling interest - - - -
----------------------------------------------

Net income $7,757 $49,061 $33,953 $4,111
----------------------------------------------


2007 For the three months ended June 30

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

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

Gross sales $106,154 $ - $320,018
Smelter processing
charges and freight (13,991) - (55,413)
Cost of sales (25,044) - (78,181)
Depreciation (1,728) - (8,039)
--------------------- -----------
65,391 - 178,385

Corporate development
and exploration - - (1,836)
General and administration - - (2,162)
Investment and other
income (expense) - 2,304 13,415
Interest expense - - (424)
Capital tax expense - - (274)
Income tax expense (23,291) (691) (48,509)
Non-controlling interest - (545) (545)
--------------------- -----------

Net income $42,100 $1,068 $138,050
--------------------- -----------



INMET MINING CORPORATION
Consolidated statements of cash flows
(unaudited)

Three Months Ended Six Months Ended
(thousands of Canadian June 30 June 30
dollars) 2008 2007 2008 2007
------------------------------------------------- -----------------------

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

Net income $67,705 $138,050 $174,379 $239,128
Add (deduct) items not
affecting cash:
Gain on disposition of
investments - (11,730) (256) (11,730)
Depreciation 9,195 8,039 18,365 17,454
Future income tax (6,973) (2,645) (4,056) (4,380)
Accretion expense on
reclamation liabilities 1,123 879 2,144 1,803
Non-controlling interest (98) 545 107 340
Foreign exchange loss 22,476 3,253 18,890 3,437
Other 1,156 (2,424) 3,465 (1,711)
Reclamation costs (303) (524) (824) (1,004)
Net change in non-cash
working capital (note 4) 20,516 4,288 (16,506) (626)
----------------------- -----------------------
114,797 137,731 195,708 242,711
----------------------- -----------------------

Cash provided by (used in)
investing activities

Capital spending (121,028) (82,079) (232,442) (134,014)
Investment in Petaquilla (3,755) - (3,755) -
Loans to other Petaquilla
shareholders (4,091) - (4,091) -
Disposition of investments - 50,726 1,521 50,726
Sale (purchase) of
short-term investments (125,439) 17,355 174,985 137,531
Other - - - (46)
----------------------- -----------------------
(254,313) (13,998) (63,782) 54,197
----------------------- -----------------------

Cash provided by (used in)
financing activities

Long-term debt
borrowings (note 9) 55,894 24,169 106,240 38,009
Funding by non-controlling
shareholder 19,627 21,462 34,756 26,110
Settlement of foreign
currency forward contract 52,256 - 52,256 -
Financial assurance deposits (6,478) (7,485) (13,972) (17,415)
Dividends paid on common
shares (4,828) (4,827) (4,828) (4,827)
Subsidies received - 62 3,233 199
Other (46) (1,435) (92) (2,770)
----------------------- -----------------------
116,425 31,946 177,593 39,306
----------------------- -----------------------

Foreign exchange change
on cash held in foreign
currency (9,467) (31,540) 23,568 (34,049)
----------------------- -----------------------

Increase (decrease) in
cash (32,558) 124,139 333,087 302,165
----------------------- -----------------------

Cash:
Beginning of period 888,150 562,636 522,505 384,610
----------------------- -----------------------
End of period 855,592 686,775 855,592 686,775

Short-term investments 143,333 116,229 143,333 116,229
----------------------- -----------------------

Cash and short-term
investments $998,925 $803,004 $998,925 $803,004
------------------------------------------------- -----------------------
(see accompanying notes)

(1) Supplementary cash flow
information:
Cash interest paid $4,724 $1,100 $8,122 $2,381
Cash taxes paid $65,036 $52,368 $80,249 $64,739
------------------------------------------------- -----------------------



INMET MINING CORPORATION
Segmented statements of cash flows
(unaudited)

2008 For the six months ended June 30

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

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

Cash provided by (used in)
operating activities
Before net change in non-
cash working capital ($1,973) $78,116 $46,306 $22,893
Net change in non-cash
working capital 1,752 (28,164) 4,298 (8,321)
----------------------------------------------
(221) 49,952 50,604 14,572
----------------------------------------------
Cash provided by (used in)
investing activities
Capital spending (50) (20,255) (3,358) (279)
Disposition of investments 1,521 - - -
Sale of short-term
investments 174,985 - - -
Spending for Petaquilla (7,846) - - -
----------------------------------------------
168,610 (20,255) (3,358) (279)
----------------------------------------------

----------------------------------------------
Cash provided by (used in)
financing activities 45,739 - (1,850) -
----------------------------------------------
Foreign exchange change on
cash held in foreign
currency - 9,517 8,531 -
----------------------------------------------
Intergroup funding
(distributions) 251,200 (225,032) (103,365) (14,293)
----------------------------------------------
Increase (decrease) in
cash 465,328 (185,818) (49,438) -
Cash:
Beginning of period 41,041 333,671 111,492 -
----------------------------------------------
End of period 506,369 147,853 62,054 -
Short-term investments 143,333 - - -
----------------------------------------------
Cash and short-term
investments $649,702 $147,853 $62,054 $ -
----------------------------------------------


2008 For the six months ended June 30

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 $66,872 $ - $212,214
Net change in non-cash
working capital 13,929 - (16,506)
--------------------- -----------
80,801 - 195,708
--------------------- -----------
Cash provided by (used in)
investing activities
Capital spending (18,851) (189,649) (232,442)
Disposition of investments - - 1,521
Sale of short-term
investments - - 174,985
Spending for Petaquilla - - (7,846)
--------------------- -----------
(18,851) (189,649) (63,782)
--------------------- -----------

--------------------- -----------
Cash provided by (used in)
financing activities (616) 134,320 177,593
--------------------- -----------
Foreign exchange change on
cash held in foreign
currency 978 4,542 23,568
--------------------- -----------
Intergroup funding
(distributions) (40,979) 132,469 -
--------------------- -----------
Increase (decrease) in
cash 21,333 81,682 333,087
Cash:
Beginning of period 13,473 22,828 522,505
--------------------- -----------
End of period 34,806 104,510 855,592
Short-term investments - - 143,333
--------------------- -----------
Cash and short-term
investments $34,806 $104,510 $998,925
--------------------- -----------


2007 For the six months ended June 30

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

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

Cash provided by (used in)
operating activities
Before net change in non-
cash working capital $1,392 $104,357 $62,953 $10,549
Net change in non-cash
working capital (6,696) 17,974 (11,960) (5,834)
----------------------------------------------
(5,304) 122,331 50,993 4,715
----------------------------------------------
Cash provided by (used in)
investing activities
Capital spending (131) (13,150) (724) (407)
Disposition of investments 50,726 - - -
Sale of short-term
investments 127,701 17,027 - -
Other - - - (46)
----------------------------------------------
178,296 3,877 (724) (453)
----------------------------------------------

----------------------------------------------
Cash provided by (used in)
financing activities (5,799) - - (2,000)
----------------------------------------------
Foreign exchange change on
cash held in foreign
currency - (21,515) (4,930) -
----------------------------------------------
Intergroup funding
(distributions) 64,999 1,643 (99,572) (2,262)
----------------------------------------------
Increase (decrease) in
cash 232,192 106,336 (54,233) -
Cash:
Beginning of period 39,899 159,195 119,260 -
----------------------------------------------
End of period 272,091 265,531 65,027 -
Short-term investments 99,677 - - -
----------------------------------------------
Cash and short-term
investments $371,768 $265,531 $65,027 $ -
----------------------------------------------


2007 For the six months ended June 30

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 $64,086 $ - $243,337
Net change in non-cash
working capital 5,890 - (626)
--------------------- -----------
69,976 - 242,711
--------------------- -----------
Cash provided by (used in)
investing activities
Capital spending (12,811) (106,791) (134,014)
Disposition of investments - - 50,726
Sale of short-term
investments (7,197) - 137,531
Other - - (46)
--------------------- -----------
(20,008) (106,791) 54,197
--------------------- -----------

--------------------- -----------
Cash provided by (used in)
financing activities (850) 47,955 39,306
--------------------- -----------
Foreign exchange change on
cash held in foreign
currency (6,136) (1,468) (34,049)
--------------------- -----------
Intergroup funding
(distributions) (26,174) 61,366 -
--------------------- -----------
Increase (decrease) in
cash 16,808 1,062 302,165
Cash:
Beginning of period 33,972 32,284 384,610
--------------------- -----------
End of period 50,780 33,346 686,775
Short-term investments 16,552 - 116,229
--------------------- -----------
Cash and short-term
investments $67,332 $33,346 $803,004
--------------------- -----------



INMET MINING CORPORATION
Segmented statements of cash flows
(unaudited)

2008 For the three months ended June 30

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

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

Cash provided by (used in)
operating activities
Before net change in non-
cash working capital $699 $33,041 $22,192 $10,218
Net change in non-cash
working capital 13,829 (2,250) (2,826) (2,124)
----------------------------------------------
14,528 30,791 19,366 8,094
----------------------------------------------
Cash provided by (used in)
investing activities
Capital spending (18) (11,372) (1,599) (32)
Purchase of short-term
investments (125,439) - - -
Spending on Petaquilla (7,846) - - -
----------------------------------------------
(133,303) (11,372) (1,599) (32)
----------------------------------------------

----------------------------------------------
Cash provided by (used in)
financing activities 45,784 - (1,850) -
----------------------------------------------
Foreign exchange change on
cash held in foreign
currency - (2,255) (6,844) -
----------------------------------------------
Intergroup funding
(distributions) 225,967 (182,259) (91,545) (8,062)
----------------------------------------------
Increase (decrease) in
cash 152,976 (165,095) (82,472) -
Cash:
Beginning of period 346,198 312,948 151,721 -
----------------------------------------------
End of period 499,174 147,853 69,249 -
Short-term investments 143,333 - - -
----------------------------------------------

Cash and short-term
investments $642,507 $147,853 $69,249 $ -
----------------------------------------------


2008 For the three months ended June 30

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 $28,131 $ - $94,281
Net change in non-cash
working capital 13,887 - 20,516
--------------------- -----------
42,018 - 114,797
--------------------- -----------
Cash provided by (used in)
investing activities
Capital spending (10,892) (97,115) (121,028)
Purchase of short-term
investments - - (125,439)
Spending on Petaquilla - - (7,846)
--------------------- -----------
(10,892) (97,115) (254,313)
--------------------- -----------

--------------------- -----------
Cash provided by (used in)
financing activities (1) 72,492 116,425
--------------------- -----------
Foreign exchange change on
cash held in foreign
currency (165) (203) (9,467)
--------------------- -----------
Intergroup funding
(distributions) (41,097) 96,996 -
--------------------- -----------
Increase (decrease) in
cash (10,137) 72,170 (32,558)
Cash:
Beginning of period 44,943 32,340 888,150
--------------------- -----------
End of period 34,806 104,510 855,592
Short-term investments - - 143,333
--------------------- -----------
Cash and short-term
investments $34,806 $104,510 $998,925
--------------------- -----------


2007 For the three months ended June 30

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

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

Cash provided by (used in)
operating activities
Before net change in non-
cash working capital ($2,577) $53,115 $36,430 $5,924
Net change in non-cash
working capital 872 9,626 (25,933) (1,694)
----------------------------------------------
($1,705) 62,741 10,497 4,230
----------------------------------------------
Cash provided by (used in)
investing activities
Capital spending (107) (5,818) (440) (241)
Disposition of investments 50,726 - - -
Sale (purchase) of short-
term investments 35,876 (549) - -
----------------------------------------------
86,495 (6,367) (440) (241)
----------------------------------------------

----------------------------------------------
Cash provided by (used in)
financing activities (5,464) - - (1,000)
----------------------------------------------
Foreign exchange change on
cash held in foreign
currency - (19,024) (5,519) -
----------------------------------------------
Intergroup funding
(distributions) 71,419 2,312 (94,874) (2,989)
----------------------------------------------
Increase (decrease) in
cash 150,745 39,662 (90,336) -
Cash:
Beginning of period 121,346 225,869 155,363 -
----------------------------------------------
End of period 272,091 265,531 65,027 -
Short-term investments 99,677 - - -
----------------------------------------------
Cash and short-term
investments $371,768 $265,531 $65,027 $ -
----------------------------------------------


2007 For the three months ended June 30

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 $40,551 $ - $133,443
Net change in non-cash
working capital 21,417 - 4,288
--------------------- -----------
61,968 - 137,731
--------------------- -----------
Cash provided by (used in)
investing activities
Capital spending (6,348) (69,125) (82,079)
Disposition of investments - - 50,726
Sale (purchase) of short-
term investments (17,972) - 17,355
--------------------- -----------
(24,320) (69,125) (13,998)
--------------------- -----------

--------------------- -----------
Cash provided by (used in)
financing activities 27 38,383 31,946
--------------------- -----------
Foreign exchange change on
cash held in foreign
currency (5,653) (1,344) (31,540)
--------------------- -----------
Intergroup funding
(distributions) (26,174) 50,306 -
--------------------- -----------
Increase (decrease) in
cash 5,848 18,220 124,139
Cash:
Beginning of period 44,932 15,126 562,636
--------------------- -----------
End of period 50,780 33,346 686,775
Short-term investments 16,552 - 116,229
--------------------- -----------
Cash and short-term
investments $67,332 $33,346 $803,004
--------------------- -----------



INMET MINING CORPORATION
Consolidated statements of retained earnings
(unaudited)

Three Months Ended Six Months Ended
(thousands of Canadian June 30 June 30
dollars) 2008 2007 2008 2007
------------------------------------------------- -----------------------

Retained earnings,
beginning of period,
as previously reported $1,181,436 $770,082 $1,076,958 $669,004

Adjustment for inventory
(note 2) - - (2,196) -
----------------------- -----------------------
Retained earnings,
restated 1,181,436 770,082 1,074,762 669,004

Net income 67,705 138,050 174,379 239,128

Dividends on common
shares (4,828) (4,827) (4,828) (4,827)
------------------------------------------------- -----------------------
Retained earnings, end
of period $1,244,313 $903,305 $1,244,313 $903,305
------------------------------------------------- -----------------------
(see accompanying notes)



Consolidated statements of comprehensive income
(unaudited)

Three Months Ended Six Months Ended
(thousands of Canadian June 30 June 30
dollars) 2008 2007 2008 2007
------------------------------------------------- -----------------------

Net income $67,705 $138,050 $174,379 $239,128
----------------------- -----------------------

Other comprehensive income
(loss) for the period(1):

Changes in fair value of
gold forward sales
contracts 2,351 7,745 (7,283) 10,894

Changes in fair value of
interest rate swap
contracts 3,047 14 118 (120)

Changes in fair value of
foreign exchange forward
contracts (558) (530) 7,054 291

Changes in fair value of
investments 4,360 2,408 (1,746) 19,308

Currency translation
adjustments (10,883) (54,960) 64,486 (58,203)

Reclassification to net
income of gains/losses
realized:

Gain on sale of investment - (11,730) (256) (11,730)

Troilus gold hedge loss 6,721 - 13,718 -

Ok Tedi gold hedge loss - - 1,013 -

Foreign exchange loss on
reduction of net investment
in self-sustaining foreign
operations (note 13) 14,870 - 20,384 -
----------------------- -----------------------
19,908 (57,053) 97,488 (39,560)
----------------------- -----------------------

Comprehensive income $87,613 $80,997 $271,867 $199,568
------------------------------------------------- -----------------------
(see accompanying notes)

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



INMET MINING CORPORATION
Notes to the consolidated financial statements

1. Significant accounting policies

Our interim consolidated financial statements do not include all of
the disclosure required for annual financial statements under
generally accepted accounting principles (GAAP), and they have not
been reviewed by our external auditors. These statements do, however,
follow the same accounting policies and methods of application used
in our most recent annual consolidated financial statements, except
for the differences explained in note 2. You should read our interim
statements in conjunction with our annual statements, which you can
find in our 2007 Annual Review.

2. Changes in accounting policies

Effective January 1, 2008, we adopted CICA Handbook section 3031 -
Inventories on a prospective basis. This Section requires inventory
to be recorded at the lower of cost or net realizable value. 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.

As a result, certain administrative and other costs that were
previously included in the cost of inventory are now expensed as
incurred. Metal inventory and materials and supplies are measured at
the lower of weighted average cost and net realizable value.

This change in policy had the following impact on our 2008 interim
financial statements:

- decreased opening 2008 inventory by $5.2 million
- increased opening 2008 property, plant and equipment by
$2.4 million
- decreased opening 2008 future income tax liability by $0.6 million
- decreased opening 2008 retained earnings by $2.2 million.

3. Recently issued accounting pronouncement

Section 3064 - Goodwill and intangible assets

This section establishes standards for the recognition, measurement,
presentation and disclosure of goodwill subsequent to its initial
recognition and of intangible assets. This section replaces
Section 3062, Goodwill and Other Intangible Assets and Section 3450,
Research and Development Costs. Various changes have been made to
other sections of the CICA Handbook for consistency purposes. It
provides guidance for the recognition of internally developed
intangible assets and ensuring consistent treatment of all intangible
assets, whether separately acquired or internally developed.
Standards concerning goodwill are unchanged from the standards
included in the previous section. This section will become effective
for us beginning on January 1, 2009. We are currently assessing the
impact this change in accounting policy 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 six months ended June 30, 2008
---------------------------------------------------------------------

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

Accounts receivable $8,832 $(13,805) $9,362 $(5,113)
Inventories - (3,180) (714) (2,320)
Accounts payable and
accrued liabilities (10,271) 1,966 (80) (467)
Taxes 3,138 (13,255) (4,270) -
Other 48 110 - (421)
---------------------------------------------------------------------
$1,747 $(28,164) $4,298 $(8,321)
---------------------------------------------------------------------

For the six months ended June 30, 2008
-----------------------------------------------------------
Las
(thousands) Ok Tedi Cruces Total
-----------------------------------------------------------

Accounts receivable $1,476 $ - $752
Inventories (1,502) - (7,716)
Accounts payable and
accrued liabilities (4,232) - (13,084)
Taxes 18,386 - 3,999
Other (194) - (457)
-----------------------------------------------------------
$13,934 $ - $(16,506)
-----------------------------------------------------------


For the six months ended June 30, 2007
---------------------------------------------------------------------

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

Accounts receivable $(1,713) $18,960 $(5,602) $(5,373)
Inventories - 885 (259) 240
Accounts payable and
accrued liabilities (1,896) (10,205) 2,345 (701)
Taxes (3,090) 8,357 (8,444) -
Other 3 (23) - -
---------------------------------------------------------------------
$(6,696) $17,974 $(11,960) $(5,834)
---------------------------------------------------------------------

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

Accounts receivable $(14,916) $ - $(8,644)
Inventories 1,611 - 2,477
Accounts payable and
accrued liabilities (5,685) - (16,142)
Taxes 25,404 - 22,227
Other (524) - (544)
-----------------------------------------------------------
$5,890 $ - $(626)
-----------------------------------------------------------


For the three months ended June 30, 2008
---------------------------------------------------------------------

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

Accounts receivable $8,817 $19,569 $(2,937) $(2,022)
Inventories - (433) 750 367
Accounts payable and
accrued liabilities 1,533 3,555 1,395 (48)
Taxes 3,422 (24,931) (2,034) -
Other 52 (10) - (421)
---------------------------------------------------------------------
$13,824 $(2,250) $(2,826) $(2,124)
---------------------------------------------------------------------

For the three months ended June 30, 2008
-----------------------------------------------------------
Las
(thousands) Ok Tedi Cruces Total
-----------------------------------------------------------

Accounts receivable $10,537 $ - $33,964
Inventories (1,602) - (918)
Accounts payable and
accrued liabilities 1,305 - 7,740
Taxes 2,705 - (20,838)
Other 947 - 568
-----------------------------------------------------------
$13,892 $ - $20,516
-----------------------------------------------------------


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

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

Accounts receivable $(807) $4,365 $(18,453) $1,236
Inventories - (1,682) 573 (1,949)
Accounts payable and
accrued liabilities 1,362 3,718 3,706 (981)
Taxes 316 3,254 (11,759) -
Other 1 (29) - -
---------------------------------------------------------------------
$872 $9,626 $(25,933) $(1,694)
---------------------------------------------------------------------

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

Accounts receivable $5,786 $ - $(7,873)
Inventories 2,285 - (773)
Accounts payable and
accrued liabilities 6,064 - 13,869
Taxes 7,795 - (394)
Other (513) - (541)
-----------------------------------------------------------
$21,417 $ - $4,288
-----------------------------------------------------------

5. Cash and short-term investments

At June 30, our cash and short-term investments are held in:

---------------------------------------------------------------------
June 30 December 31
(thousands) 2008 2007
---------------------------------------------------------------------
Cash:
Liquidity funds $187,134 $424,390
Term deposits 38,887 22,186
Corporate 254,537 -
Overnight deposits 15,888 50,822
Bankers' acceptances 170,376 -
Money market funds 97,209 18,531
Other 91,561 7,018
--------------------------
855,592 522,947
Short-term investments:
Federal and crown corporation investments 29,842 317,876
Provincial short-term notes 28,971 -
Corporate 84,520 -
---------------------------------------------------------------------
143,333 317,876
---------------------------------------------------------------------
Total cash and short-term investments $998,925 $840,823
---------------------------------------------------------------------

6. Restricted cash

The table below shows our restricted cash balances.

---------------------------------------------------------------------
June 30 December 31
(thousands) 2008 2007
---------------------------------------------------------------------
Collateralized cash for letter of credit
facility - Corporate $15,994 $14,444
In trust for Ok Tedi reclamation 13,292 11,836
Collateralized cash for letters of
credit - Las Cruces 24,189 12,494
Collateralized cash for Pyhasalmi reclamation 1,926 -
---------------------------------------------------------------------
55,401 38,774
Less current portion:
Collateralized cash for letters of
credit - Las Cruces (1,265) (1,569)
---------------------------------------------------------------------
$54,136 $37,205
---------------------------------------------------------------------

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) 5 million for a labour bond previously issued under
Tranche A of its credit facility. During the second quarter,
Las Cruces closed this portion of the credit facility and has
secured the labour bond with cash. The labour bond is fixed at
(euro) 5 million for the life of the mine.
- (euro) 4.5 million for dewatering and other purposes.

7. Investments

The table below shows our investments.

---------------------------------------------------------------------
June 30 December 31
(thousands) 2008 2007
---------------------------------------------------------------------
Available-for-sale equity securities:
Premier Gold Mines Ltd. $24,381 $22,680
Other 4,171 9,586
---------------------------------------------------------------------
28,552 32,266
Equity accounted investment:
Minera Petaquilla S.A. 20,480 -
---------------------------------------------------------------------
$49,032 $32,266
---------------------------------------------------------------------

Our investment in Minera Petaquilla S.A. of $16.7 million was
included in Other assets at December 31, 2007. During the second
quarter, Inmet invested $3.8 million in Minera Petaquilla S.A.

8. Derivatives

The table below shows the fair value of our derivatives.

---------------------------------------------------------------------
June 30 December 31
2008 2007
(thousands) (fair value) (fair value)
---------------------------------------------------------------------
Derivative asset:
Las Cruces currency forward sale $ - $33,565
---------------------------------------------------------------------
Derivative liabilities:
Troilus gold forward sales $17,381 $26,889
Ok Tedi gold and copper forward sales 10,981 9,034
Las Cruces interest rate swaps 8,096 8,037
---------------------------------------------------------------------
$36,458 $43,960
---------------------------------------------------------------------

On June 30, 2008, Las Cruces' currency forward sale settled and
Las Cruces received (euro) 32.6 million. As this hedge was highly
effective from inception to the date of settlement, we continue to
apply hedge accounting for this contract. The gain on settlement
continues to be deferred in Accumulated other comprehensive income
(note 12) and will be recognized in income as a reduction of interest
expense over the life of Las Cruces' credit facility - Tranche A.

9. Long-term debt

---------------------------------------------------------------------
June 30 December 31
(thousands) 2008 2007
---------------------------------------------------------------------
Credit facility - Tranche A $222,384 $125,776
- Tranche B 67,378 34,656
Promissory note 18,347 16,267
Loans from non-controlling shareholder 112,092 70,589
---------------------------------------------------------------------
420,201 247,288
Less current portion:
Credit facility - Tranche B (14,403) (12,971)
---------------------------------------------------------------------
$405,798 $234,317
---------------------------------------------------------------------

Credit facility

This quarter, Las Cruces borrowed an additional (euro) 26 million
(2008 year to date - (euro) 52 million) under Tranche A, the
US $240 million senior secured facility, and an additional
(euro) 10 million (2008 year to date - (euro) 18 million) under
Tranche B, the (euro) 69 million senior secured bridge financing
facility. The credit facility loans approximate fair value because
the loans accrue interest at prevailing market rates.

On June 30, 2008, the Las Cruces credit facility - Tranche A was
converted from a euro-denominated loan to a US $215 million loan.
From July 1 forward, we will revalue the loan to euros (the
functional currency of Las Cruces). Foreign exchange gains and losses
on revaluations will be reflected in Investment and other income.

Loans from non-controlling shareholder

This quarter, Las Cruces received (euro) 36 million (2008 year to
date - (euro) 70 million) of intercompany loan advances. These loans
bear interest at EURIBOR plus 6.1 percent and are due to be repaid on
February 25, 2020. The non-controlling portion of these loans,
(euro) 70 million, is reflected in long-term debt at June 30, 2008.
Loans from non-controlling shareholders approximate fair value
because the loans accrue interest at prevailing market rates.

10. Reclamation liabilities

This quarter, we recognized additional liabilities of $4.3 million at
Cayeli primarily as a result of cost escalation and $1.0 million at
Las Cruces as a result of development activities that took place
during the quarter.

11. Commitments

Our operations have the following capital commitments as at June 30,
2008:

- Ok Tedi has committed approximately $28.9 million (our
proportionate share is $5.2 million) to capital expenditures for
the mine waste management project.

- Las Cruces has committed $38.5 million to engineering, procurement
and construction management and additional construction work
related to the development of the mine and process plant.

- Cayeli has committed $3.2 million for mine and mill equipment.

- Cerattepe has committed approximately $5.2 million for mine and
mill equipment.

12. Accumulated other comprehensive income (loss) (AOCI)

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

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

(thousands)
---------------------------------------------------------------------
Unrealized losses on gold forward sales contracts
(net of tax of $2,169) $(31,951)
Deferred Troilus gold hedges 5,444
Unrealized gains on foreign exchange forward contract(1) 17,067
Unrealized losses on interest rate swap contracts(2) (4,097)
Unrealized gains on investments (net of tax of $2,951) 14,506
Currency translation adjustment (84,705)
---------------------------------------------------------------------
AOCI, December 31, 2007 $(83,736)
Other comprehensive income for the six months ending
June 30, 2008 97,488
---------------------------------------------------------------------
AOCI, June 30, 2008 $13,752
---------------------------------------------------------------------

AOCI June 30, 2008 comprises:
Unrealized losses on gold forward sales contracts
(net of tax of $1,885) $(21,781)
Deferred Troilus gold hedges 2,722
Unrealized gains on foreign exchange forward contract(3) 24,121
Unrealized losses on interest rate swap contract(4) (3,979)
Unrealized gains on investments (net of tax of $2,516) 12,504
Currency translation adjustment 165
---------------------------------------------------------------------
AOCI, June 30, 2008 $13,752
---------------------------------------------------------------------

1. Net of tax of $10,448 and non-controlling interest of $7,315.
2. Net of tax of $2,510 and non-controlling interest of $1,756.
3. Net of tax of $14,767 and non-controlling interest of $10,337.
4. Net of tax of $2,438 and non-controlling interest of $1,705.

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

---------------------------------------------------------------------
June 30 December 31
(thousands) 2008 2007
---------------------------------------------------------------------
Pyhasalmi (euro functional currency) $6,607 $(1,466)
Las Cruces (euro functional currency) 34,027 (1,919)
Cayeli (US dollar functional currency) (27,557) (65,822)
Ok Tedi (US dollar functional currency) (12,912) (15,498)
---------------------------------------------------------------------
$165 $(84,705)
---------------------------------------------------------------------

The US dollar to Canadian dollar exchange rate was $1.02 at June 30,
2008 and $0.99 at December 31, 2007. The euro to Canadian dollar
exchange rate was $1.61 at June 30, 2008 and $1.45 at December 31,
2007.

13. Investment and other income

Investment and other income are summarized as follows:

---------------------------------------------------------------------
Three months ended Six months ended
June 30 June 30
(thousands) 2008 2007 2008 2007
---------------------------------------------------------------------
Interest income $6,963 $7,378 $15,686 $14,394
Foreign exchange gain (loss) (18,573) (9,400) (11,715) (9,545)
Dividend and royalty income 1,504 1,000 1,504 2,000
Gain on sale of Wolfden - 11,730 - 11,730
Other (1,252) 2,707 (2,079) 2,263
---------------------------------------------------------------------
$(11,358) $13,415 $3,396 $20,842
---------------------------------------------------------------------

Foreign exchange

We recorded a net foreign exchange loss of $18.6 million this
quarter. We recognized a deferred foreign exchange loss of
$14.7 million when dividends were received from Cayeli, Pyhasalmi and
Ok Tedi, and recognized a loss of $3.7 million because we revalued
some of our foreign currency denominated accounts and cash balances.

For the year, we recognized $20.4 million in foreign exchange losses
from dividends received.

Gain on sale of Wolfden

In 2007, we sold our shares in Wolfden for cash proceeds of
$51.4 million and recorded a gain of $11.7 million.

14. Income tax expense (recovery)

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

For the six months ended June 30, 2008
-------------------------------------------------------------------------
Las
(thousands) Corporate Cayeli Pyhasalmi Ok Tedi Cruces Total
-------------------------------------------------------------------------

Current
income taxes $5,534 $28,472 $12,536 $46,591 $ - $93,133
Future
income taxes - (693) (88) (3,441) 166 (4,056)
-------------------------------------------------------------------------
$5,534 $27,779 $12,448 $43,150 $166 $89,077
-------------------------------------------------------------------------

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

Current
income taxes $771 $26,072 $17,246 $44,176 $ - $88,265
Future
income taxes - 1,362 40 (6,268) 486 (4,380)
-------------------------------------------------------------------------
$771 $27,434 $17,286 $37,908 $486 $83,885
-------------------------------------------------------------------------

For the three months ended June 30, 2008
-------------------------------------------------------------------------
Las
(thousands) Corporate Cayeli Pyhasalmi Ok Tedi Cruces Total
-------------------------------------------------------------------------

Current
income taxes $5,534 $9,922 $6,564 $29,286 $ - $51,306
Future
income taxes - (1,267) (139) (5,483) (84) (6,973)
-------------------------------------------------------------------------
$5,534 $8,655 $6,425 $23,803 $(84) $44,333
-------------------------------------------------------------------------

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

Current
income taxes $385 $14,716 $10,381 $25,672 $ - $51,154
Future
income taxes - (953) (2) (2,381) 691 (2,645)
-------------------------------------------------------------------------
$385 $13,763 $10,379 $23,291 $691 $48,509
-------------------------------------------------------------------------

15. Net income per share

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

---------------------------------------------------------------------
Three months ended Six months ended
June 30 June 30
(thousands) 2008 2007 2008 2007
---------------------------------------------------------------------
Net income available to
common shareholders $67,705 $138,050 $174,379 $239,128

(thousands)
---------------------------------------------------------------------
Weighted average common
shares outstanding 48,282 48,278 48,282 48,278
Plus incremental shares from
assumed conversions deferred
share units 78 78 78 78
---------------------------------------------------------------------
Diluted weighted average
common shares outstanding 48,360 48,356 48,360 48,356
---------------------------------------------------------------------

(Canadian dollars per share)
---------------------------------------------------------------------
Basic net income per
common share $1.40 $2.86 $3.61 $4.95
Dilutive effect from assumed
conversions of deferred
share units per common share - - - -
---------------------------------------------------------------------
Diluted net income per
common share $1.40 $2.86 $3.61 $4.95
---------------------------------------------------------------------

16. Subsequent event

On July 6, 2008, Inmet announced its intention to make an all cash
offer for all of the outstanding shares of Petaquilla Copper Ltd.
("PTC") at a price of $2.00 per share. On July 28, 2008, Inmet mailed
its offer-to-purchase to PTC shareholders. The offer is subject to
certain conditions, including receipt of all necessary regulatory
clearance and acceptance of the offer by PTC shareholders owning not
less than 50.1 percent of PTC common shares on a fully diluted basis.
Following the completion of the offer, Inmet intends but is not
required to take steps to acquire any PTC common shares that remain
outstanding.


Contact Information

  • Inmet Mining Corporation
    Richard Ross
    Chairman and Chief Executive Officer
    (416) 860-3974

    Inmet Mining Corporation
    Jochen Tilk
    President and Chief Operating Officer
    (416) 860-3972