Timminco Limited
TSX : TIM

Timminco Limited

November 12, 2007 17:55 ET

Timminco Announces Third Quarter 2007 Results

HIGHLIGHTS - The Company raised gross proceeds of $86.3 million in a common share offering that closed September 27, 2007 - Construction of the new 3,600 metric ton solar grade silicon manufacturing facility is on schedule with commissioning of the first 1,200 metric ton line anticipated to be in December 2007 as planned. - The Company shipped 30 metric tons of solar grade silicon in the third quarter bringing cumulative year to date shipments to 56 metric tons. - The Company amended and extended its Banking Agreement

TORONTO, ONTARIO--(Marketwire - Nov. 12, 2007) - Timminco Limited ("Timminco" or the "Company")(TSX:TIM) announced its financial results for the third quarter ended September 30, 2007. The Company is divided into two segments: the Magnesium Group and the Silicon Group.

OVERVIEW

The Silicon Group reported positive net income before amortization, interest and taxes ("EBITDA") for both the third quarter and the nine months ending September 30, 2007. The Magnesium Group reported a loss at the EBITDA level for both the third quarter and year to date. Continued challenges in operations in both businesses and in Fundo Wheels resulted in a net loss for both the quarter and year to date.

"The positive developments in the solar silicon business, with strong demand and rising prices, are most welcome. We continue to be very optimistic about the opportunities in this business. For the third quarter, operating results in both the silicon metal and magnesium businesses were affected by operating issues and a strong Canadian dollar. In the Magnesium business, a weakening US housing sector is not helpful," noted Heinz Schimmelbusch, Chairman and CEO of Timminco. "However, both the progress in the construction of the solar silicon facility and our common share offering are very positive events in the quarter," continued Dr. Schimmelbusch.

"The magnesium business is showing signs of improvement due to a continued focus on margin improvement, cost reduction and management reorganization. The strategic challenge for this business is securing an economic supply of magnesium to leverage our growth opportunities," noted Dr. Schimmelbusch.

RESULTS OF FOR THE THIRD QUARTER

For the quarter ended September 30, 2007, the net loss was $4.6 million or $0.05 per share compared with a loss of $3.1 million or $0.04 per share in the third quarter of 2006. For the nine months ended September 30, 2007, the net loss was $9.2 million or $0.11 per share compared with a loss of $7.5 million or $0.10 per share in the same period in 2006.

Sales for the third quarter of 2007 were $43.0 million, a decrease of $1.1 million compared to sales of $44.1 million for the third quarter of 2006. For the nine months ended September 30, 2007, sales were $125.9 million compared with $130.2 million in the first nine months of 2006.

Silicon Group

In the Silicon Group, sales for the third quarter of 2007 were $28.6 million compared with $28.1 million in the third quarter of 2006, an increase of $0.5 million. For the nine months ended September 30, 2007, sales in the Silicon Group were $76.1 million compared with $72.0 million for the first nine months of 2006. In the third quarter and on a year to date basis, there has been an increase in the sales of silicon metal compared to the same periods in 2006. Sales of ferrosilicon and by-products decreased when compared to the third quarter of 2006. Sales of solar grade silicon from the Company's prototype facility were 30 metric tons in the third quarter of 2007 and 56 metric tons year to date.

For the quarter ended September 30, 2007, the Silicon Group had a gross margin of $0.6 million or 2.1% of sales compared with $1.7 million or 6.1% of sales in the third quarter of 2006. For the nine months ended September 30, 2007, gross margin was $2.6 million or 3.5% of sales compared with $1.7 million or 2.4% of sales in the first nine months of 2006. For the quarter, gross margin was impacted by the strength of the Canadian dollar when compared to the US dollar. Compared to the third quarter of 2006, the strength of the Canadian dollar had an unfavourable impact of approximately $1.4 million on sales. The increase in gross margin for the nine months ended September 30, 2007, is related to higher selling prices for materials, predominantly silicon metal, negotiated for the 2007 fiscal year.

Magnesium Group

Sales for the Magnesium Group for the third quarter of 2007 were $14.4 million compared to $16.0 million in the third quarter of 2006. For the nine months ended September 30, 2007, sales were $49.8 million compared to $58.2 million in the first nine months of 2006. The strength of the Canadian dollar when compared to the US dollar was responsible for approximately 40% of the sales decrease for the quarter ended September 30, 2007 when compared to the same quarter in the prior year, as the majority of the Group's sales are made in US dollars. Comparing the third quarter and the nine months ended September 30, 2007 with the respective periods in the prior year, sales of anodes and concrete tools were lower in 2007. Actual tonnes of magnesium sold increased 3.2% in the third quarter of 2007 compared to the same quarter in 2006 and were up 1.1% on a year to date basis when compared to the prior year.

Gross margin in the Magnesium Group was $2.2 million or 14.9% of sales in the third quarter of 2007 compared to $2.1 million or 12.9% of sales in the third quarter of 2006. For the nine months ended September 30, 2007, gross margin was $5.5 million or 11.0% of sales compared to $8.1 million or 13.9% of sales during the first nine months of 2006. In the third quarter of 2007, the increase in gross margin percentage was due to lower manufacturing variances and overheads and a slightly more favourable product mix. For the nine months ended September 30, 2007, the decrease in gross margin percentage when compared to the same period in 2006 is due to higher manufacturing variances, which predominantly occurred in the first quarter, offset by lower overhead costs.

Amortization of capital assets in the third quarter of 2007 was $0.1 million, down from $0.9 million in the third quarter of 2006. The decrease in amortization was caused by the lower level of property, plant and equipment in the Magnesium Group, an outcome of the asset impairment charge of $31.2 million taken in December 2006.



FINANCIAL HIGHLIGHTS

(000's except per share data)
--------------------------------------------
Three Months ended Nine Months ended
(unaudited) (unaudited)
--------------------------------------------
September September September September
30, 2007 30, 2006 30, 2007 30, 2006
--------------------------------------------
Sales 43,033 44,065 125,930 130,202

Gross profit 3,095 4,119 9,094 10,799

Gross profit percentage 7.2% 9.3% 7.2% 8.3%

Net income (loss) (4,579) (3,105) (9,200) (7,500)

Earnings (loss) per common
share, basic and diluted (0.05) (0.04) (0.11) (0.10)
Working capital (excluding
cash items) 23,681 36,547 23,681 36,547

Total assets 186,865 149,760 186,865 149,760

Bank debt 327 33,268 327 33,268

Total long term liabilities
excluding bank debt 22,673 23,282 22,673 23,282

Cash flow from operations (4,218) (6,219) (5,047) (6,008)

Weighted average number of
common shares outstanding,
basic and diluted 93,932 75,133 85,396 75,133


FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements concerning Timminco's business and operations. Timminco cautions that, by their nature, forward-looking statements involve risk and uncertainty and that Timminco's actual results could differ materially from those expressed or implied in such statements. Such statements include comments regarding the status of construction of the new 3,600 metric ton solar grade silicon manufacturing facility, and pricing and demand for the products of the Silicon Group.

There are financial and operational risks inherent in all of Timminco's businesses, which include, but are not limited to: commodity prices, currency exchange, interest rates, capital, credit, regulatory, political, operational and environmental risks. In Timminco's solar silicon business, there are additional risks associated with the expansion of this business and production capacity, increasing product purity, the long-term commercial contracts, and protection of intellectual property. Timminco takes specific measures to manage anticipated risks, and any forward-looking statements in this news release were based on the assumption of no significant changes or trends with respect to such risk factors. However, there can be no assurance that future developments affecting Timminco or its businesses will be those anticipated by Timminco. Reference should be made to the most recent Management's Discussion and Analysis for a description of the major risk factors. Timminco disclaims any duty to update forward-looking statements other than through relevant future Management's Discussions and Analyses.

ABOUT TIMMINCO

Timminco is a leader in the production of silicon metal for the electronics, chemical and aluminum industries. Timminco has also commenced production of solar grade silicon metal. Other businesses include the production and marketing of magnesium, calcium and strontium alloys and magnesium extruded and fabricated products. Timminco's products are used in a broad range of specialized industrial applications and industries such as electronics, solar energy, chemical, engineered extruded products, pharmaceutical, automotive and metallurgical. Timminco's common shares are traded on the Toronto Stock Exchange under the symbol TIM.



Timminco Limited

Consolidated Balance Sheets
As at
September 30 December 31
2007 2006
(unaudited)
--------------------------------------------------------------------------
(in thousands of Canadian dollars)

ASSETS
Current Assets
Cash $ 60,926 $ 804
Accounts receivable 23,885 19,834
Inventories 29,516 33,830
Prepaid expenses and deposits 1,898 2,160
Future income taxes 225 225
-------------------------------
116,450 56,853
-------------------------------

Long term receivables 112 135
Convertible note receivable (Note 3) 2,051 -
Property, plant and equipment 30,620 18,280
Investment in Fundo Wheels AS (Note 3) 8,313 9,173
Employee future benefits 2,437 2,034
Deferred financing costs - 526
Future income taxes 3,549 3,431
Intangible assets (Note 10) 5,025 4,262
Goodwill 18,308 18,308
-------------------------------
$ 186,865 $ 113,002
-------------------------------
-------------------------------

LIABILITIES
Current Liabilities
Bank indebtedness (Note 5 and 13) $ 327 $ 26,243
Accounts payable and accrued liabilities 24,642 25,062
Term bank debt (Note 5 and 13) - 4,355
Due to affiliated companies (Note 4 and 6) 5,118 5,497
Future income taxes 183 -
Current portion of long term provisions
(Note 11) 1,900 2,863
-------------------------------
32,170 64,020

Loan - other 171 202
Employee future benefits 17,993 17,508
Future income taxes 1,234 1,324
Long term provisions 3,275 3,720
-------------------------------
54,843 86,774
-------------------------------

SHAREHOLDERS' EQUITY
Capital stock (Note 6) 199,089 84,191
Equity component of convertible notes
(Note 4 and 6) 2,521 1,693
Contributed surplus 3,177 3,192
Deficit (72,131) (62,490)
Accumulated other comprehensive loss
(Note 2 and 9) (634) (358)
-------------------------------
132,022 26,228
-------------------------------
$ 186,865 $ 113,002
-------------------------------
-------------------------------


The accompanying notes are an integral part of these interim consolidated
financial statements.



Timminco Limited
Consolidated Statements of Operations, Comprehensive Loss and Deficit
(unaudited)

Three months ended Nine months ended
September 30 September 30
-------------------------------------------------------------------------
2007 2006 2007 2006
-------------------------------------------------------------------------
(in thousands of
Canadian dollars,
except for
earnings per share
information)

Sales $ 43,033 $ 44,065 $ 125,930 $ 130,202

Expenses
Cost of goods sold 39,938 39,946 116,836 119,403
Selling and
administrative 4,666 3,161 11,990 10,087
Amortization of
property, plant
and equipment 828 1,502 2,160 4,678
Amortization of
intangible assets 138 138 413 413
Amortization of
deferred financing
costs - 104 - 311
Interest 546 938 2,111 2,384
Foreign exchange
(gain) loss 559 (20) (884) (2,485)
---------------------------------------------------

Loss before the
undernoted (3,642) (1,704) (6,696) (4,589)

Gain on sale of
property, plant
and equipment 10 5 41 120
Reorganization costs - (51) (34) (79)
Equity loss of Fundo
Wheels AS (1,295) (1,263) (2,422) (2,741)
---------------------------------------------------

Loss before income
taxes (4,927) (3,013) (9,111) (7,289)
Income taxes
Current (24) 6 163 220
Future (324) 86 (74) (9)
---------------------------------------------------
(348) 92 89 211
---------------------------------------------------

---------------------------------------------------
Net loss $ (4,579) $ (3,105) $ (9,200) $ (7,500)
---------------------------------------------------
---------------------------------------------------

Other Comprehensive
Loss, net of
income taxes

Loss on foreign
exchange forwards
realized in
the period - - 1,086 -

Unrealized gain
(loss) on
translating
financial 145 (280) (276) 8
statement of
self-sustaining
foreign
operation - Fundo
Wheels AS
---------------------------------------------------
Comprehensive Loss $ (4,434) $ (3,385) $ (8,390) $ (7,492)
---------------------------------------------------
---------------------------------------------------

Loss per common
share - basic and
diluted $ (0.05) $ (0.04) $ (0.11) $ (0.10)
---------------------------------------------------
---------------------------------------------------

Weighted average
number of common
shares outstanding -
basic and diluted
(Note 6 (b)) 93,932,352 75,132,614 85,396,245 75,132,614
---------------------------------------------------
---------------------------------------------------



Consolidated Statements of Deficit
(unaudited)

Three months ended Nine months ended
September 30 September 30
2007 2006 2007 2006
-------------------------------------------------------------------------
(in thousands of
Canadian dollars)

Deficit at
beginning
of period $ (67,552) $ (20,652) $ (62,490) $ (16,257)
Net loss (4,579) (3,105) (9,200) (7,500)
Adjustment for
changes in
accounting policy
(Note 2) - - (441) -
------------------------------------------------------

Deficit at end of
period $ (72,131) $ (23,757) $ (72,131) $ (23,757)
------------------------------------------------------

The accompanying notes are an integral part of these interim consolidated
financial statements.



Timminco Limited Consolidated Statements of Cash Flows
(unaudited)

Three months ended Nine months ended
September 30 September 30
2007 2006 2007 2006
--------------------------------------------------------------------------
(in thousands of Canadian
dollars)

Cash flows from operating
activities
Net loss $ (4,579) $ (3,105) $ (9,200) $ (7,500)
Adjustments for items
not requiring cash
Amortization of property,
plant and equipment 828 1,502 2,160 4,678
Amortization of intangible
assets 138 138 413 413
Amortization of deferred
financing costs - 104 - 311
Stock based compensation 126 117 360 352
Reorganization costs - 51 34 79
Benefits plan expense 819 803 2,214 2,297
Gain on disposal of
property, plant
and equipment (10) (5) (41) (120)
Future income taxes (272) 86 60 61
Equity loss of Fundo
Wheels AS 1,295 1,263 2,422 2,741
Defined benefit pension
plan contributions (1,010) (495) (2,132) (1,862)
Expenditures charged against
provision for reorganization (297) (361) (1,358) (1,530)
Expenditures charged against
other long term provisions (47) (3) (84) (56)

Change in non-cash working
capital items
(Increase) decrease in
accounts receivable (4,662) (3,597) (4,051) (2,693)
(Increase) decrease in
inventories 1,756 483 4,314 (122)
(Increase) decrease in
prepaid expenses
and deposits (207) 307 262 237
Increase (decrease) in
accounts payable and
accrued liabilities 1,904 (3,507) (420) (3,294)
----------------------------------------------
(4,218) (6,219) (5,047) (6,008)
----------------------------------------------

Cash flows from investing
activities
Capital expenditures (8,021) (1,214) (15,211) (3,376)
Development costs
capitalized (Note 10) - - (1,176) -
Investment in Fundo Wheels
AS (Note 3 and 4 (15) - (1,838) -
Investment in convertible
note (Note 3) (2,051) - (2,051) -
Decrease in long term
receivables 8 20 23 65
Proceeds on disposal of
property, plant
and equipment 10 5 774 120
Other 20 (6) (22) (257)
----------------------------------------------
(10,049) (1,195) (19,501) (3,448)
----------------------------------------------

Cash flows from financing
activities
(Decrease) increase in bank
indebtedness (6,055) 4,337 (25,916) 2,407
Decrease in term bank debt (3,375) (337) (4,386) (990)
(Decrease) increase in loans
from affiliated companies (78) 3,422 3,054 5,714
Expenditures charged against
deferred financing costs - (56) - (115)
Issuance of capital stock 83,943 - 111,918 -
----------------------------------------------
74,435 7,366 84,670 7,016
----------------------------------------------

Increase (decrease) in cash 60,168 (48) 60,122 (2,440)

Cash at beginning of period 758 88 804 2,480

----------------------------------------------
Cash at end of period $ 60,926 $ 40 $ 60,926 $ 40
----------------------------------------------
----------------------------------------------


Supplemental information
Cash paid during
the period:
Interest $ 387 $ 808 $ 1,656 $ 2,231
----------------------------------------------
----------------------------------------------
Income taxes $ 100 $ 78 $ 234 $ 729
----------------------------------------------
----------------------------------------------

The accompanying notes are an integral part of these interim consolidated
financial statements.


Timminco Limited

Notes to the Interim Consolidated Financial Statements

For the quarter ended September 30, 2007 and 2006

Unaudited

The notes presented in these interim consolidated financial statements refer to only significant events and transactions since December 31, 2006 and are not fully inclusive of all matters normally disclosed in the Company's annual audited financial statements including the disclosures required by Canadian Generally Accepted Accounting Principles ("GAAP"). Accordingly, these interim consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2006.

1. NATURE OF OPERATIONS

Timminco Limited (the "Company" or "Timminco") is a global supplier of silicon metal for the electronics, chemical and aluminum industries and solar grade silicon for the solar industry. Other businesses include the production and marketing of magnesium, calcium and strontium alloys and magnesium extruded and fabricated products. Timminco's products are used in a broad range of specialized industrial applications and industries. The Company manages its business along two principal business segments, the production and sale of silicon based metals, the Silicon Group and the production and sale of specialty non-ferrous metals, the Magnesium Group. AMG Advanced Metallurgical Group N.V. ("AMG") is the controlling shareholder of the Company.

2. CHANGE IN ACCOUNTING POLICIES AND ACCOUNTING CHANGES

These interim consolidated financial statements have been prepared using the same accounting policies and methods as were used for the consolidated financial statements for the year ended December 31, 2006, except for the following new accounting pronouncements which have been adopted effective January 1, 2007:

On January 1, 2007, the Company adopted the recommendations of the Canadian Institute of Chartered Accountants ("CICA") Handbook: Section 1530, Comprehensive Income, Section 3251, Equity, Section 3855, Financial Instruments - Recognition and Measurement, Section 3861, Financial Instruments - Disclosure and Presentation and Section 3865, Hedges. These new Handbook Sections, which apply to fiscal years beginning on or after October 1, 2006, provide comprehensive requirements for the recognition and measurement of financial instruments, as well as standards on when and how hedge accounting may be applied. Section 1530 also establishes standards for reporting and displaying comprehensive income. Comprehensive income is defined as the change in equity from transactions and other events from non-owner sources. Other comprehensive income refers to items recognized in comprehensive income, but that are excluded from net income calculated in accordance with generally accepted accounting principles.

Under Section 3855, all financial instruments are classified into one of the following five categories: held-for trading, held-to-maturity investments, loans and receivables, available-for-sale financial assets or other financial liabilities. All financial instruments, including derivatives, are included in the consolidated balance sheet and are measured at fair value with the exception of loans and receivables, investments held-to-maturity and other financial liabilities, which are measured at amortized cost. Subsequent measurement and recognition of changes in fair value of financial instruments depend on their initial classification. Held-for-trading investments are measured at fair value and all gains and losses are included in net income in the period in which they arise. Available-for-sale financial assets are measured at fair value with revaluation gains and losses included in other comprehensive income until the asset is derecognized or impaired. As a result of the adoption of these new standards, the Company has classified its cash as held-for-trading. Receivables are classified as loans and receivables. Foreign forward exchange contracts, included in prepaid expenses and deposits, are classified as held-for-trading. The Company's investment in Fundo Wheels AS is accounted for under the equity method. Unrealized gains and losses from the translation into Canadian dollars of this equity investment are now presented as a separate component of other comprehensive income (loss). In accordance with Section 3251, accumulated other comprehensive income (loss) is presented as a separate component of shareholders' equity in the Consolidated Balance Sheets. Previously, these gains and losses were deferred and included in the foreign currency translation adjustment as part of shareholders' equity. Accounts payable and accruals and short-term debt, including interest payable, are classified as other financial liabilities. The principal changes in the accounting for financial instruments and hedging relationships due to the adoption of these accounting standards are described below.

Comprehensive Income

The Company's comprehensive loss is composed of net loss and other comprehensive loss ("OCL"). OCL includes the deferred loss on the foreign exchange forward contracts (see discussion under "Hedges" below) and their reclassification in the statements of operations during the period, as well as the foreign currency loss on the Company's investment in Fundo Wheels AS.

Equity

Accumulated other comprehensive income ("AOCI") is included on the consolidated balance sheet as a separate component of shareholders' equity.

Derivatives

Derivatives are carried at fair value and are reported as assets where they have a positive fair value and as liabilities where they have a negative fair value. Non-financial derivatives are carried at fair value unless exempted from derivative treatment as a normal purchase and sale. The Company has reviewed all significant contractual arrangements and determined there are no material non-financial derivatives that need to be carried at fair value.

Embedded derivatives

Derivatives embedded in other financial instruments or contracts are separated from their host contracts and accounted for as derivatives when their economic characteristics and risks are not closely related to those of the host contract; the terms of the embedded derivative are the same as those of a free standing derivative; and the combined instrument or contract is not measured at fair value, with changes in fair value recognized in interest and other expenses, net. These embedded derivatives are measured at fair value with changes therein recognized in interest and other expenses, net. The Company selected January 1, 2003 as the transition date for embedded derivatives, as such only contracts or financial instruments entered into or modified after the transition date were examined for embedded derivatives. As at September 30, 2007, the Company does not have any outstanding contracts or financial instruments with embedded derivatives that require bifurcation. The Company has chosen, as a matter of accounting policy, not to account for embedded foreign currency derivatives in host contracts that are not financial instruments separately from the host contracts when the currency that is commonly used in contracts to purchase or sell non-financial items in the economic environment is that currency in which the transaction takes place.

Transaction costs

Transaction costs directly attributable to the issuance of long-term debt are now expensed. Previously, these amounts were deferred and amortized using the straight line method over the term of the debt. During the first quarter, $0.4 million of transaction costs were recognized as an adjustment of the balance of retained earnings at the beginning of the period due to the adoption of this accounting policy.

Determination of fair value

The fair value of a financial instrument is the amount of consideration that would be agreed upon in an arm's length transaction between knowledgeable, willing parties who are under no compulsion to act. The fair value of a financial instrument on initial recognition is the transaction price, which is the fair value of the consideration given or received. Subsequent to initial recognition, the fair values of financial instruments that are quoted in active markets are based on bid prices for financial assets held and offer prices for financial liabilities. When independent prices are not available, fair values are determined by using valuation techniques which refer to observable market data. These include comparisons with similar instruments where market observable prices exist, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants.

Hedges

Section 3865 of the CICA Handbook specifies the criteria that must be satisfied in order for hedge accounting to be applied and the accounting for each of the permitted hedging strategies: fair value hedges and cash flow hedges. Hedge accounting is discontinued prospectively when the hedging relationship ceases to be effective, when the hedging item or hedged item ceases to exist and when the entity terminates its designation of the hedging relationship. The Company does not have any forward contracts accounted for as hedges as at September 30, 2007. As at December 31, 2006, the Company accounted for its forward currency contacts using hedge accounting under Accounting Guideline 13 ("AcG 13"). As at January 1, 2007, the Company discontinued accounting for forward contracts under AcG 13, The deferred loss on the hedging item as at January 1, 2007 was transferred to accumulated other comprehensive loss and reclassified to the statement of operations when the hedged item affected the statement of operations in the period. Future changes in fair value (subsequent to January 1, 2007) of the Company's forward contracts will be recorded in foreign exchange gain/loss on the statement of operations and the forward contracts will be recorded at fair value as a prepaid item. As at September 30, 2007, the fair value loss on currency forward contracts was nil.

Transitional adjustment

Adoption of these standards was on a prospective basis without retroactive restatement of prior periods, except for the restatement of equity balances to reflect the reclassification of "Foreign currency translation adjustments" to "Accumulated other comprehensive income".

ACCOUNTING CHANGES

Effective January 1, 2007, the Company has adopted the new recommendations of the CICA Handbook Section 1506, Accounting Changes. Under these new recommendations, voluntary changes in accounting policy are permitted only when they result in the financial statements providing reliable and or relevant information, requires changes in accounting policy to be applied retrospectively unless doing so is impracticable, requires prior period errors to be corrected retrospectively and requires enhanced disclosures about the effects of changes in accounting policies, estimates and errors on the financial statements. These recommendations also require the disclosure of new primary sources of generally accepted accounting principles that have been issued but are not yet effective. The impact that the adoption of this section will have on the Company's financial statements will depend on the nature of future accounting changes and the required additional disclosure on Recent Accounting Pronouncements as noted below.

Recent Accounting Pronouncements

Recent accounting pronouncements issued and not yet effective:

Capital Disclosures

CICA Handbook Section 1535, Capital Disclosures, requires disclosure of an entity's objectives, policies and processes for managing capital, quantitative data about what the entity regards as capital and whether the entity has complied with any capital requirements and, if it has not complied, the consequences of such non-compliance. This standard is effective for the Company for interim and annual financial statements beginning on January 1, 2008. The Company has not yet determined the impact of the adoption of this change on the disclosure in its financial statements.

Financial Instruments Disclosures

CICA Handbook Section 3862, Financial Instruments - Disclosures, increases the disclosures currently required that will enable users to evaluate the significance of financial instruments for an entity's financial position and performance, including disclosures about fair value. In addition, disclosure is required of qualitative and quantitative information about exposure to risks arising from financial instruments, including specified minimum disclosures about liquidity risk and market risk. The quantitative disclosures must also include a sensitivity analysis for each type of market risk to which an entity is exposed, showing how net income and other comprehensive income would have been affected by reasonably possible changes in the relevant risk variable. This standard is effective for the Company for interim and annual financial statements beginning on January 1, 2008. The Company has not yet determined the impact of the adoption of this change on the disclosure in its financial statements.

Financial Instruments Presentation

CICA Handbook Section 3863, Financial Instruments - Presentation, replaces the existing requirements on presentation of financial instruments which have been carried forward unchanged to this new section. This standard is effective for the Company for interim and annual financial statements beginning on January 1, 2008. The Company does not expect the adoption of this standard to have a material impact on presentation in its financial statements.

General Standards on Financial Statement Presentation

CICA Handbook Section 1400, General Standards on Financial Statement Presentation, has been amended to include requirements to assess and disclose an entity's ability to continue as a going concern. The changes are effective for the Company for interim and annual financial statements beginning January 1, 2008. The Company does not expect the adoption of these changes to have an impact on its financial statements.

International Financial Reporting Standards

The CICA plans to converge Canadian GAAP with International Financial Reporting Standards (IFRS) over a transition period expected to end in 2011. The impact of the transition to IFRS on the Company's financial statements is not yet determinable.

Inventories

The new Section 3031 "Inventories", was issued in June 2007 and replaces existing Section 3030 of the same title. It provides guidance with respect to the determination of cost and requires inventories to be measured at the lower of cost and net realizable value. Reversal of previous write-downs to net realizable value when there is a subsequent increase in the value of inventories is now required. The cost of the inventories should be based on a first-in, first-out or a weighted average cost formula. Techniques used for the measurement of cost of inventories, such as the retail method or standard cost method, may be used for convenience if the results approximate cost. The new standard also requires additional disclosures including the accounting policies used in measuring inventories, the carrying amount of the inventories, amounts recognized as an expense during the period, write- downs and the amount of any reversal of any write-downs recognized as a reduction in expenses. This standard is effective for fiscal years beginning on or after January 1, 2008. The difference in the measurement of opening inventory may be applied to the opening inventory for the period, with an adjustment to opening retained earnings with no prior periods restated, or retrospectively with a restatement to prior periods in accordance with Section 1506 "Accounting Changes". The standard is applicable to the Company for the first quarter of 2008. The Company is currently assessing the implications of this standard to identify differences between the current accounting and the new guidance in the standard.

3. INVESTMENT IN FUNDO WHEELS AS AND CONVERTIBLE NOTE

Fundo Wheels AS ("Fundo"), a Norwegian company with operations located in Hoyanger, Norway, is an original equipment manufacturer of cast aluminium wheels for high end European car manufacturers. On March 22, 2004, the Company acquired 100% of the shares of Nor-Wheels AS ("Nor-Wheels"), a Norwegian Company that holds a 24.4% interest in Fundo for $6,276,000.

Nor-Wheels became a subsidiary of Timminco and assumed the Company's rights and obligations under the Call Option and Fees Agreement and other existing agreements with the controlling shareholder of Fundo, which is the Community of Hoyanger (the "Community"). As at September 30, 2007, the Community owns approximately 53% of Fundo. The Company accounts for the Fundo investment under the equity method. The acquisition of the equity interest did not create any purchase discrepancy.

On May 25, 2005, the Company acquired an additional 726 shares of Fundo from an unrelated third party. The purchase price was satisfied by the issuance of 5,750,000 common shares of the Company from treasury, valued at $4,393,000. The value was determined using the weighted average share price for the two days before and after the transaction announcement. The acquisition of the equity interest did not create any purchase discrepancy. As a result of the transaction, the Company's ownership interest increased from 24.4% to 47% of Fundo.

In December 2006, the Company acquired an additional 264 shares of Fundo from treasury for $1,058,000. The Community also invested in Fundo such that the Company's ownership interest remained at 47%. The acquisition of the interest did not create any purchase discrepancy.

In March 2007, the Company acquired an additional 453 shares of Fundo from treasury for $1,823,000. The Community also invested in Fundo such that the Company's ownership interest remained at 47%. The acquisition of the interest did not create any purchase discrepancy.

On September 10, 2007, the Company loaned Fundo $2.0 million to assist Fundo with its working capital requirements. The loan is due December 31, 2010, bears interest at three month NIBOR plus 4% and is to be repaid in instalments commencing September 30, 2009. The loan is secured by a charge against Fundo's land, buildings and equipment and is subordinate to Fundo's bank debt. The loan is convertible into shares of Fundo at the Company's option at Fundo's book value on the date the loan was granted or on the date of conversion at the Company's option. The conversion of the loan is restricted such that the Company cannot exceed ownership of 49.9% of Fundo through the conversion of this loan.

Also on September 10, 2007, Fundo's shareholders agreed to terminate the call option that Nor-Wheels had in respect of the Community's shares in Fundo and the put option that the Community had in respect of its shares in Fundo.

4. RELATED PARTY TRANSACTIONS

During the quarter ended March 31, 2007, Safeguard International Fund, L.P. ("Safeguard") transferred all of its common shares of the Company to AMG. On July 11, 2007, AMG completed its initial public offering, with a secondary offering by Safeguard of a portion of its shares of AMG. The shares of AMG are listed on the Euronext Amsterdam stock exchange.

On March 1, 2007, ALD International L.L.C. ("ALD International"), an affiliate of Safeguard, loaned $4.5 million to the Company to expedite product development and to fund its further investment in Fundo. The loan, which is in the form of a convertible promissory note and is secured against certain assets of the Company, is repayable on demand, and bears interest at the U.S. prime rate plus 1%. The loan and related security are subordinate to the indebtedness and the security provided by the Company's senior lender, Bank of America, N.A. Under the terms of the loan, ALD International has the option to convert the whole or any part of the outstanding principal amount at any time into common shares of the Company at a conversion rate of $0.42 per common share.

On April 26, 2007, ALD International exercised its right to convert the entire principal amount outstanding under the US$2.0 million convertible promissory note issued March 7, 2006 into 5,601,000 common shares of the Company at a conversion rate of Cdn$0.40 per common share. The Canadian dollar equivalent of the United States dollars comprised in the principal amount of the note was $2.24 million. ALD International subsequently transferred all such shares to AMG.

On July 23, 2007, Safeguard exercised its right to convert US$350,000 of the principal amount outstanding under the US$3.0 million convertible promissory note issued August 31, 2006 into 913,500 common shares of the Company at a conversion rate of Cdn$0.40 per common share. The Canadian dollar equivalent of the United States dollars converted was $0.37 million. Pursuant to an agreement among AMG, Safeguard and ALD International, all of the issued shares were issued directly to AMG (See Note 6).



5. BANK DEBT

(a) Bank debt at September 30, 2007 and December 31, 2006 was comprised as
follows:

(000's) September 30, 2007 December 31, 2006
---------------------------------------------------------------------------
Bank indebtedness $ 327 $ 26,243
Current portion of long term bank debt - 4,355
---------------------------------------------------------------------------
$ 327 $ 30,598
---------------------------------------------------------------------------
---------------------------------------------------------------------------

At September 30, 2007, total bank debt denominated in US dollars amounted
to US$0.1 million (December 31, 2006 - US$27.3 million).


(b) As at March 31, 2006, the Company was in compliance with its covenants under its credit facility and banking agreement dated April 15, 2005 (the "Credit Agreement") with Bank of America, N.A. (the "Bank"). As at June 30, 2006, the covenants in the Credit Agreement were amended by requiring the Company to maintain minimum levels of earnings before interest, taxes, depreciation and amortization ("EBITDA"), as defined by the Credit Agreement and limiting the amount of capital expenditures. Both the EBITDA and capital expenditure requirements were to be measured at June 30, September 30 and December 31, 2006. As at December 31, 2006, such covenants were further amended such that the Company was in compliance. The Bank also amended the covenants for fiscal 2007; for the first three quarters of 2007, the Company was required to meet certain EBITDA levels and submit to certain limits on capital spending. The revised covenants for 2007 were based on the Company's 2007 budget. As at March 31, June 30 and September 30, 2007, such covenants were further amended such that the Company was in compliance with its covenants under the Credit Agreement as at those dates.

Furthermore, the Credit Agreement was amended in 2006 to expand the Company's borrowing base by a maximum of US$1.3 million through the inclusion of receivables from Australia, Japan and Mexico into the borrowing base formula. These receivables were previously considered ineligible by the Bank. This increase in borrowing base is a temporary relief expiring on November 30, 2007.

6. CAPITAL STOCK

(a) Authorized: unlimited number of Class A and Class B preference shares, issuable in series and having such rights, privileges, restrictions and conditions as may be approved by the Board of Directors of the Company.

Issued: none

(b) Authorized: unlimited number of common shares. Holders of common shares are entitled to one vote for each share.



Issued capital is:
Common Shares
No. of Shares Amount
(000's)
----------------------------------------------------------------------
Balance as at January 1 75,132,614 $ 84,191
Common share offering April 30 (Note 6(b)) 11,500,000 27,811
Common share offering September 27 (Note 6(b)) 10,150,474 83,562
Conversion of notes (Note 4 and 6(b)) 6,514,500 2,606
Stock options exercised 622,250 919
----------------------------------------------------------------------
Balance as at September 30, 2007 103,919,838 $ 199,089
----------------------------------------------------------------------
----------------------------------------------------------------------


During March 2006, the warrants related to the Company's private placement, which occurred during March 2004, expired. The balance of $1.4 million was added to contributed surplus.

On March 7, 2006, the Company borrowed US$2 million from an affiliate of Safeguard, the Company's controlling shareholder. On April 26, 2007, Safeguard gave written notice to the Company that it was exercising its right to convert the entire principal amount outstanding under this note into 5,601,000 common shares of the Company at a conversion rate of Cdn$0.40 per common share. The Canadian dollar equivalent of the United States dollars comprised in the principal amount of the note was $2.24 million.

On September 5, 2006, (the "August 2006 Note") the Company borrowed US$3 million from Safeguard (See Note 4). The loan may be settled, at the lender's option, in cash or shares at $0.40 per share, or a combination of cash and shares. The lender's option to settle the debt in shares has been fair valued separately from the debt using the Black-Scholes option pricing model. Accordingly, the transaction was recorded as $2.4 million as Due to an affiliate in current liabilities and $0.9 million as Equity component of convertible note in shareholders' equity. The following assumptions were used to calculate the fair value of the equity component: expected dividend yield of 0%, expected stock volatility of 63%, risk free rate of 4.0% and expected life of 3.6 years. The expected life of the debt coincides with the maturity of the Bank of America agreement including the optional renewal period, to which the debt is subordinate.

On March 1, 2007, (the "March 2007 Note") the Company borrowed $4.5 million from ALD International (See Note 4). Under the terms of the loan, Safeguard, through its affiliate, has the option to convert the whole or any part of the outstanding principal amount at any time into common shares of the Company at a conversion rate of $0.42 per common share. The lender's option to settle the debt in shares has been fair valued separately from the debt using the Black-Scholes option pricing model. Accordingly, the transaction was recorded as $2.8 million as Due to an affiliate in current liabilities and $1.7 million as Equity component of convertible note in shareholders' equity. The following assumptions were used to calculate the fair value of the equity component: expected dividend yield of 0%, expected stock volatility of 65%, risk free rate of 3.96% and expected life of 3.2 years. The expected life of the debt coincides with the maturity of the Bank of America agreement including the optional renewal period, to which the debt is subordinate.

On April 30, 2007, the Company completed a public offering of 10,000,000 common shares at a price of $2.60 per common share for gross proceeds of $26.0 million. The offering was sold on a bought deal basis. The Underwriters also exercised their over-allotment option in full and purchased an additional 1,500,000 common shares at a price of $2.60 per common share for gross proceeds of $3.9 million. The total gross proceeds of the Offering was $29.9 million.

On June 21, 2007, AMG entered into an option agreement with Safeguard and ALD International relating to common shares of the Company (the "AMG Call Option Agreement"). Pursuant to this agreement, each time Safeguard or ALD International exercises in whole or in part its conversion right respectively under the August 2006 Note or the March 2007 Note, AMG has the right, and must use its reasonable endeavours, to exercise an option requiring Safeguard or ALD International, as applicable, to instruct the Company to issue the common shares issuable on the conversion directly to AMG. On any exercise of this option AMG must pay to Safeguard or ALD International, as applicable, a sum of cash equal to the closing market price for the common shares of the Company over which it is exercising the option.

On July 23, 2007, Safeguard exercised its option to acquire 913,500 Timminco common shares through the conversion of US$350,000 principal amount of its US$3.0 million Promissory Note dated August 31, 2006. Such shares were issued directly to AMG pursuant to the AMG Call Option Agreement (See Note 4).

On September 27, 2007, the Company completed a public offering of 4,360,291 common shares at a price of $8.50 per common share for gross proceeds of $37.1 million. The public offering was sold on a bought deal basis. The Underwriters also exercised their over-allotment option in full and purchased an additional 654,043 common shares at a price of $8.50 per common share for gross proceeds of $5.6 million. The total gross proceeds of the offering was $42.6 million. Concurrently with the public offering, the Company completed a private placement to AMG of 5,136,140 common shares at a price of $8.50 per common share for gross proceeds of $43.7 million. Net proceeds from the public offering and private placement will be used primarily for significant production capacity expansion for solar grade silicon at the Company's manufacturing facility located in B?cancour, Qu?bec, and to further the Company's objective to increase the purity of its solar grade silicon production. The balance of the net proceeds was used for repayment of bank debt and general corporate purposes.

(c) The Company's shares rank in the priority of Class A and Class B preference shares and then common shares with respect to the payment of dividends and the return of capital.

(d) Stock options have been granted to certain key employees and directors to purchase common shares of the Company subject to various vesting requirements. During 2004, the Company established a Share Option Plan (the "Plan") which supersedes the Stock Option Plan for Directors and Key Employees. Under the Plan, options are granted at the discretion of the Board at an exercise price equal to the closing price of the common shares on the Toronto Stock Exchange on the last trading day preceding the day of grant. The options vest equally over a four year period, with the initial 25% vesting after one year. The options have a life of seven years. On May 31, 2007, the shareholders of Timminco agreed to an increase in the number of common shares available for issuance of stock options by 1,669,625 common shares. The maximum number of shares available for issuance under the Plan pursuant to stock options is, as at September 30, 2007, 7,825,925 common shares.

On January 31, 2007, 1,200,000 stock options were granted under the Plan. The fair value of the grant, determined using the Black-Scholes option-pricing model, was $0.19 per option. The following assumptions were used to calculate the fair value: expected dividend yield of 0%, expected stock volatility of 76.6%, risk free interest rate of 4.1% and expected option life of 7 years. The share option expense is being amortized, according to the vesting schedule, over a four year period.

On September 11, 2007, 50,000 stock options were granted under the Plan. The fair value of the grant, determined using the Black-Scholes option-pricing model, was $10.27 per option. The following assumptions were used to calculate the fair value: expected dividend yield of 0%, expected stock volatility of 328.9%, risk free interest rate of 4.3% and expected option life of 7 years. The share option expense is being amortized, according to the vesting schedule, over a four year period.

A summary of the status of the Company's stock option plan as of September 30, 2007 and 2006, and changes during the periods ending on those dates is presented below:



2007 2006
-------------------------------------------
Weighted Weighted
Shares Average Shares Average
Exercise Exercise
(000's) Price (000's) Price
-----------------------------------------------------------------------
Outstanding at January 1 3,844 $0.71 3,650 $0.78
Granted 1,250 $0.79 200 $0.29
Exercised (623) $0.87 - -
Forfeited (137) $0.66 (200) $0.59
-----------------------------------------------------------------------
Outstanding at September 30 4,334 $0.71 3,650 $0.77
-----------------------------------------------------------------------
-----------------------------------------------------------------------


At September 30, 2007, 1,157,750 options were exercisable at a weighted average price of $0.85, with a weighted average remaining life of 3.9 years.

The exercise of outstanding stock options has not been included in the determination of earnings per share as to do so would have been anti-dilutive.

7. FINANCIAL INSTRUMENTS

The Company enters into foreign currency contracts to hedge foreign currency risk relating to certain cash flow exposures. The Company's forward exchange contracts reduce the Company's risk from exchange movements because gains and losses on such contracts offset losses and gains on transactions being hedged. The counterparties to the contracts are a multinational commercial bank and therefore credit risk of counterparty non- performance is remote. As at September 30, 2007, the Company had no outstanding exchange contracts. As at December 31, 2006, the Company had outstanding exchange contracts to sell approximately US$26.4 million and EUR3.4 million over a period of 6 months at a weighted average exchange rate of $1.1213 and $1.4920, respectively. The Company recorded an unrealized loss of $1.1 million on these contracts.

The carrying value of current monetary assets and liabilities approximates their fair value due to their relatively short periods to maturity. The fair value of long term debt approximates its carrying amount as the terms and conditions are similar to current market conditions.

8. COMMITMENTS

The Company has committed to purchase $7.2 million of capital goods over the next three months related to its construction of a solar grade silicon production facility in Becancour, Quebec.



9. ACCUMULATED OTHER COMPREHENSIVE LOSS

The accumulated other comprehensive loss balances are as follows:

For the three months For the nine months
ended ended
-----------------------------------------------------------------------
(000's) September September September September
30, 30, 30, 30,
2007 2006 2007 2006
-----------------------------------------------------------------------

Balance at beginning
of period (779) (664) (358) (952)

Adjustment for changes in
accounting policies
Deferred unrealized
losses on foreign - - (1,086) -
exchange forward
contracts
Other Comprehensive
(loss) income $ 145 $ (280) $ 810 $ 8
-----------------------------------------------------------------------
Balance at end of period $ (634) $ (944) $ (634) $ (944)
-----------------------------------------------------------------------
-----------------------------------------------------------------------


10. INTANGIBLE ASSETS

The Company deferred development costs related to the production of solar grade silicon of $1.2 million during the quarter ended June 30, 2007. The deferred development costs will be amortized over a period of three years on a straight line basis once production commences.

11. REORGANIZATION RESERVE

During the three months and nine months ended September 30, 2007, cash payments of $0.3 million and $1.4 million were charged against the Reorganization reserve, respectively (2006 - $0.4 million and $1.5 million).

12. SEGMENTED INFORMATION

The Company manages its business along two principal business segments: the production and sale of specialty non-ferrous metals, the Magnesium Group ("Magnesium"), and silicon based metals, the Silicon Group ("Silicon"). Segmented information on sales and identifiable assets by geographic region is as follows:



(a) Sales:

Three months ended September 30
(000's) Magnesium Silicon Total 2007 Magnesium Silicon Total 2006
---------------------------------------------------------------------------
Canada $ 789 $ 5,193 $ 5,982 $ 1,380 $ 6,974 $ 8,354
United States 9,099 13,718 22,817 10,471 11,886 22,357
Mexico 870 - 870 1,394 - 1,394
Europe 1,126 8,855 9,981 789 8,978 9,767
Australia 1,054 - 1,054 1,030 - 1,030
Pacific Rim 1,198 768 1,966 705 69 774
Other 276 87 363 182 207 389
---------------------------------------------------------------------------
$ 14,412 $ 28,621 $ 43,033 $ 15,951 $ 28,114 $ 44,065
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Nine months ended September 30
(000's) Magnesium Silicon Total 2007 Magnesium Silicon Total 2006
---------------------------------------------------------------------------
Canada $ 4,104 $ 12,832 $ 16,936 $ 7,102 $ 12,286 $ 19,388
United States 33,973 36,463 70,436 38,112 31,470 69,582
Mexico 3,054 17 3,071 3,770 - 3,770
Europe 2,724 25,033 27,757 3,913 27,247 31,160
Australia 3,018 - 3,018 2,896 - 2,896
Pacific Rim 1,770 1,582 3,352 1,713 675 2,388
Other 1,146 214 1,360 713 305 1,018
---------------------------------------------------------------------------
$ 49,789 $ 76,141 $ 125,930 $ 58,219 $ 71,983 $ 130,202
---------------------------------------------------------------------------
---------------------------------------------------------------------------


(b) Net profit (loss):

Three months ended September 30, 2007
(000's) Magnesium Silicon Other Total
---------------------------------------------------------------------------

Net income (loss)
before the
following $ (686) $ 513 $ (1,957) $ (2,130)

Amortization 146 815 5 966
Interest (81) 627 - 546
Gain on disposal of
capital assets (10) - - (10)
Equity earnings in
Fundo Wheels AS - - 1,295 1,295
Income tax expense
(recovery) 67 (415) - (348)
---------------------------------------------------------------------------
Net profit (loss) $ (808) $ (514) $ (3,257) $ (4,579)
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Three months ended September 30, 2006
(000's) Magnesium Silicon Other Total
---------------------------------------------------------------------------

Net income (loss)
before the
following $ 570 $ 1,280 $ (872) $ 978

Amortization 859 777 4 1,640
Interest 462 476 - 938
Amortization of
deferred
financing cost 47 57 - 104
Gain on disposal of
capital assets (5) - - (5)
Reorganization - 51 - 51
Equity earnings of
Fundo Wheels AS - - 1,263 1,263
Income tax expense (30) 122 - 92
---------------------------------------------------------------------------
Net profit (loss) $ (763) $ (203) $ (2,139) $ (3,105)
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Nine months ended September 30, 2007
(000's) Magnesium Silicon Other Total
---------------------------------------------------------------------------

Net income (loss)
before the
following $ (939) $ 3,198 $ (4,271) $ (2,012)

Amortization 301 2,258 14 2,573
Interest 541 1,570 - 2,111
Gain on disposal
of capital assets (41) - - (41)
Reorganization expense - 34 - 34
Equity earnings of
Fundo Wheels AS - - 2,422 2,422
Income tax expense
(recovery) 231 (142) - 89
---------------------------------------------------------------------------
Net profit (loss) $ (1,971) $ (522) $ (6,707) $ (9,200)
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Nine months ended September 30, 2006
(000's) Magnesium Silicon Other Total
---------------------------------------------------------------------------

Net income (loss)
before the
following $ 4,125 $ 2,176 $ (3,104) $ 3,197

Amortization 2,890 2,188 13 5,091
Interest 1,193 1,191 - 2,384
Amortization of
deferred
financing cost 149 162 - 311
Gain on disposal
of capital assets (120) - - (120)
Reorganization expense 28 51 - 79
Equity earnings of
Fundo Wheels AS - - 2,741 2,741
Income tax expense
(recovery) 632 (421) - 211
---------------------------------------------------------------------------
Net profit (loss) $ (647) $ (995) $ (5,858) $ (7,500)
---------------------------------------------------------------------------
---------------------------------------------------------------------------



(c) Identifiable assets:

(000's) Magnesium Silicon September 30, 2007
---------------------------------------------------------------------------

Canada $ 69,593 $ 94,629 $ 164,222
United States and Other 22,643 - 22,643
---------------------------------------------------------------------------
$ 92,236 $ 94,629 $ 186,865
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(000's) Magnesium Silicon December 31, 2006
---------------------------------------------------------------------------

Canada $ 12,092 $ 76,602 $ 88,694
United States and Other 24,308 - 24,308
---------------------------------------------------------------------------
$ 36,400 $ 76,602 $ 113,002
---------------------------------------------------------------------------
---------------------------------------------------------------------------


(d) Property, Plant & Equipment:

(000's) September 30, 2007 December 31, 2006
---------------------------------------------------------------------------

Magnesium $ 3,297 $ 4,033
Silicon 27,323 14,247
---------------------------------------------------------------------------
$ 30,620 $ 18,280
---------------------------------------------------------------------------
---------------------------------------------------------------------------


(e) Additions to Property, Plant & Equipment:

(000's) Three months Three months Nine months Nine months
ended ended ended ended
September September September September
30, 2007 30, 2006 30, 2007 30, 2006
---------------------------------------------------------------------------

Magnesium $ - $ 102 $ 289 $ 234
Silicon 8,021 1,112 14,922 3,142
---------------------------------------------------------------------------
$ 8,021 $ 1,214 $ 15,211 $ 3,376
---------------------------------------------------------------------------
---------------------------------------------------------------------------


(f) Major customers:

In the first three quarters of 2007, two customers accounted for approximately 28% and 10% (26% and 10% in 2006) of total sales in the Magnesium Group.

In the Silicon Group, three customers accounted for 22%, 22% and 8% (26%, 21% and 15% in 2006) in the first three quarters of 2007.

13. SUBSEQUENT EVENT

On October 24, 2007, the Company extended its Credit Agreement with its Bank to March 31, 2010.

Contact Information

  • Timminco Limited
    Robert Dietrich, Executive Vice President -
    Finance and Chief Financial Officer
    (416) 364-5171
    (416) 364-3451 (FAX)