SEMAFO Inc.
TSX : SMF

SEMAFO Inc.

May 10, 2007 15:42 ET

Semafo reports first quarter 2007 financial results

MONTREAL, May 10 - SEMAFO (TSX - SMF) today reported its
operating results for the three-month period ended March 31, 2007. All amounts
referenced are in US dollars except as otherwise stated.



Highlights
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Three-month periods ended March 31 2007 2006
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Operations
Gold production (ounces) 29,000 33,300
Gold sales (ounces) 28,100 30,000
Cash operating cost ($/tonne processed) (2)(3) 23 23
Cash operating cost ($/ounce produced) (2)(3) 450 362
Average selling price ($/ounce) 661 417

Results (in thousands $)
Gold sales 18,576 13,087
Net loss (3) (3,233) (1,659)
Cash flow from operating activities (1)(2)(3) 3,871 22
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(1) Cash flow from operating activities excludes changes in non-cash
working capital items and settlement of liabilities related to asset
retirement obligations for property, plant and equipment.
(2) Non GAAP measures.
(3) The 2006 amounts are restated since the company adopted
CICA EIC-160 - 'Stripping Costs Incurred in the Production Phase of a
Mining Operation''.


- Gold production of 29,000 ounces in the first quarter of 2007
- Net loss of $3,233,000 in the first quarter of 2007, including an
unrealized loss of $3,350,000 following the changes to fair value of
financial instruments
- Production cost steady at $23 / tonne processed
- Cash flow from operating activities of $3,871,000
- Granted the exploitation permit for the Mana project
- Closing of a $45,000,000 loan for the Mana project
- Settlement of gold sales contracts, representing 45,000 ounces
- Achievement of significant energy cost savings in Niger by joining the
national power grid
- Awarded 5 uranium permits in Niger


Results for the three-month period ended March 31, 2007

For the three-month period ended March 31, 2007, Semafo presents a net
loss of $3,233,000 or $0.02 per share, compared to a net loss of $1,659,000 or
$0.01 per share for the corresponding period in 2006. This increase is mainly
due to the unrealized loss on our gold sales contract for $3,350,000 during
the first quarter 2007 following the application of the accounting policy on
financial instruments as at January 1, 2007.

During the first quarter of 2007, gold sales totalled $18,576,000
corresponding to the sale of 28,100 ounces of gold at an average price of
$661 per ounce. For the same period in 2006, gold sales totalled $13,087,000
corresponding to the sale of 30,000 ounces of gold at an average price of
$417 per ounce. The average price increase is the result of the market gold
price increase.

Kiniero - Mining Operations for the three-month period ended March 31, 2007

During the three-month period ending March 31, 2007, we produced
8,600 ounces of gold at a cash operating cost of $498 per ounce compared to
13,100 ounces at a cash operating cost of $382 per ounce over the same period
in 2006. This reduction of ounces produced and the variation of the cash
operating cost per ounce is mainly attributable to the processing of lower
grade ore in 2007 versus 2006. The cash operating cost per tonne of ore
processed is $31 in 2007, compared to $33 in 2006. The reduction in cash
operating cost per tonne is derived mainly from the savings realized following
the replacement of the mining contractor by our own mining fleet. This
approach offers greater availability and efficiency and thus a larger
extraction capacity. These savings were partially offset by the increase of
stripping ratio and by the increase in fuel and reagent prices that the mining
industry has incurred over the last year.

Samira Hill - Mining Operations for the three-month period ended March 31, 2007

We produced 20,400 ounces of gold at Samira Hill during the first quarter
of 2007 at a cash operating cost of $431 per ounce compared to 20,200 ounces
during the first quarter of 2006 at a cash operating cost of $349 per ounce.
The increase in the cash operating cost per ounce is caused essentially by the
reduction of the grade of the ore processed. The cash operating cost per tonne
of ore processed is $21 in 2007, compared to $19 for the same period in 2006.
This increase is mainly due to the additional blasting work and the increase
in fuel and reagent prices. The savings brought by the national power grid
that services the Samira Hill mine, which allows for monthly savings of
approximately $100,000, in part compensates this increase.

Consolidated interim financial statements and the Management's discussion
and analysis for the three-month period ended March 31, 2007 are available on
the Semafo website at www.semafo.com and on the SEDAR website at
www.SEDAR.com.

FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking statements", including, but
not limited to, the statements regarding the Company's expectations as to the
market price of gold, strategic plans, future commercial production,
production targets, timetables, mine operating costs, fixed assets expenses,
mineral reserve estimates and to the company's perspectives. Forward-looking
statements express, as at the date of this press release, our estimates,
forecasts, projections, expectations and beliefs as to future events or
results. Forward-looking statements are reasonable, but involve a number of
risks and uncertainties, and there can be no assurance that such statements
will prove to be accurate. Therefore, actual results and future events could
differ materially from those anticipated in such statements. Factors that
could cause results or events to differ materially from current expectations
expressed or implied by the forward-looking statements include, but are not
limited to, factors associated with fluctuations in the market price of
precious metals, mining industry risks, uncertainty as to calculation of
mineral reserves, risks related to the grade of reserves, risks related to
hedging strategies, risks of delays in construction and requirements of
additional financing.

The common shares of Semafo are traded on The Toronto Stock Exchange under
the symbol "SMF".

More extensive information on Semafo can be found on our home page at
http://www.semafo.com

NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS RELEASE

Semafo is a mining company whose mission is to explore, develop and mine major mineral deposits in West Africa. Semafo currently operates the Kiniero mine in Guinea, the Samira Hill mine in Niger and the Mana project in Burkina Faso, currently in construction.

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