Bema Gold Corporation

Bema Gold Corporation

March 22, 2005 16:11 ET

Bema Gold Corporation: 2004 Fourth Quarter and Year End Results/Updated Kupol Mineral Resource Estimate


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: BEMA GOLD CORPORATION

TSX, AMEX SYMBOL: BGO
AIM SYMBOL: BAU

MARCH 22, 2005 - 16:11 ET

Bema Gold Corporation: 2004 Fourth Quarter and Year
End Results/Updated Kupol Mineral Resource Estimate

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 22, 2005) - Bema Gold
Corporation (TSX:BGO)(AMEX:BGO)(AIM:BAU) reports the results from its
operations for the fourth quarter and year ended December 31, 2004. Bema
remains leveraged to growth through the development of three key
projects; the Kupol deposit in Russia and in Chile the Refugio Mine and
the Cerro Casale project. In 2004, the South African rand continued to
appreciate versus the US dollar, negatively affecting the operations at
Petrex, while at Julietta a fire in the warehouse early in the year
contributed to lower than budgeted gold production. Despite these
challenges, Bema was able to significantly advance each of its
development projects during the year. Refugio commenced a major
construction program and is scheduled to recommence production in May
2005. At Kupol, Bema completed an extensive exploration and development
program while at Cerro Casale, Placer Dome Inc. continues to use
reasonable efforts to arrange financing for the project and are required
to make a financing decision in 2005. All dollar figures are in United
States dollars unless otherwise indicated.

Financial Results

Bema's loss for the year ended December 31, 2004 was $79.6 million or
$0.22 per share compared to a loss of $30.6 million or $0.09 per share
in 2003. The largest contributor to the loss during the year was a write
down of the carrying value of the goodwill at Petrex in the amount of
$27.3 million. The valuation of Petrex is highly sensitive to
assumptions regarding the South African rand / U.S. dollar exchange
rates and to the price of gold. Management has determined that the
carrying value of the Petrex Mines was not impaired based on the
projected undiscounted cash flows of the mines. However, in determining
the fair value of the Petrex reporting unit, management determined that
the overall goodwill was impaired. The loss in 2004 was also a result of
a number of other non cash charges during the year, including an $8.5
million write-down of the carrying value of the Yarnell property (refer
to Q-1 press release dated 05-14-04) a write-down of $4 million relating
to the cessation of the open pit operations at the Petrex Mines in the
fourth quarter and a $6.1 million decrease in the value of the
mark-to-market, non-hedge derivatives. Further contributing to the loss
was $6.4 million of Refugio Mine start-up costs, which were expensed
during the year ($3.2 million in the fourth quarter), lower than
forecasted production at Julietta (see: "Julietta Mine" section) and
high operating costs at the Petrex Mines. (see: "Petrex Mines" section).
Removing the non cash items from the $79.6 million loss for the year
would result in a loss of $33.7 million or $0.09 per share.

The Company reported a loss of $44.6 million ($0.12 per share) during
the fourth quarter of 2004 compared to a net loss of $20.2 million
($0.06 per share) in the same period of 2003. The loss for the quarter
was due mainly to the write downs at Petrex and the Refugio Mine start
up costs.

Gold Revenue

Gold revenue improved by 6% in 2004 to $92.1 million on sales of 232,925
ounces at an average realized price of $396 per ounce. The Julietta Mine
accounted for $32.7 million from the sale of 86,000 ounces of gold at an
average price of $380 per ounce, while $59.5 million was contributed by
the Petrex Mines from 146,925 ounces of gold sold at an average price of
$405 per ounce.

Gold revenue in 2003 totaled $86.8 million on sales of 245,523 ounces at
an average realized price of $354 per ounce. The Julietta Mine
contributed $39.5 million from 116,066 ounces of gold sold at an average
price of $340 per ounce, while the Petrex Mines accounted for $47.4
million from sale of 129,457 ounces of gold sold at an average price of
$366 per ounce.

In 2004, gold revenue for the fourth quarter was $26.4 million on sales
of 65,674 ounces at an average realized price of $403 per ounce.
Julietta contributed $7.4 million from the sale of 19,033 ounces at an
average price of $387 per ounce and Petrex accounted for $19.1 million
from the sale of 46,641 ounces at an average price of $410 per ounce.

Operations

Bema's consolidated gold production for the year was 229,545 ounces with
an operating cash cost of $315(1)(2) and total cash cost of $332 per
ounce(1)(2). In 2003, Bema produced 250,315 ounces of gold with an
operating cash cost of $242(3) and total cash cost of $259 per ounce(3).
Lower than forecasted production at Julietta, due mainly to a fire in
the warehouse in February, and higher operating cost at Petrex, due to
the strong South African Rand, were the primary reasons for the
shortfall in production ounces and the higher operating costs. For more
detail please refer to the "Julietta Mine" and "Petrex Mines" sections,
respectively.

Consolidated gold production for the fourth quarter was 61,501 ounces
with an operating cash cost of $353 per ounce(1)(2) and a total cash
cost of $371 per ounce(1)(2).

(1) In 2004, consolidated production costs are adjusted to reflect a
cash gain of $41 per ounce gold (Q4-$30 per ounce) from the exercise of
South African rand denominated gold put options. At Petrex the cash gain
from the puts was $64 per ounce gold (Q4-$43 per ounce).

(2) Julietta costs are net of silver by-product credit.

(3) Adjusted for rand denominated put option gains from 2003- please
refer to the year end news release dated 03/25/04 for more detail.

Operating cash costs are calculated in accordance with the Gold
Institute Production Cost Standard and include direct mining, smelting,
refining and transportation costs, less silver by-product credits. Total
cash costs, calculated in accordance with this standard, include
operating cash costs, royalties and production taxes.

Liquidity and Capital Resources

The Company ended the year with $87.1 million in cash and working
capital of $85.6 million compared to cash of $30.8 million and a working
capital deficiency of $9.3 at the end of 2003.

During the year, Bema made scheduled payments towards the Julietta
project loans and also prepaid an additional $5.6 million of the project
loans six months ahead of schedule. The Company has now repaid in its
entirety the Julietta project loans with the exception of the $1.5
million IFC C loan. This loan can be extended beyond the September 15,
2005 maturity date at the option of the IFC.

At Petrex, the lenders have agreed to provide all of the necessary
waivers for covenant compliance to the end of 2005 and to defer the loan
principal payments until 2006. During the third quarter of 2004, Petrex
closed out rand denominated gold put option contracts maturing between
October 2005 and December 2008 for a total cash consideration of $15.3
million. Of this amount, $3.4 million was applied against a deferred
premium owed relating to the original purchase of the put options. The
remaining $11.87 million was applied to the project loan balance of $24
million outstanding at the time to reduce the amount outstanding to
approximately $12.1 million at the end 2004. By prepaying a portion of
the project loan, annual interest expense is expected to be reduced by
over $500,000. Furthermore, the outstanding debt has been reclassified
from current to a long-term liability as at December 31, 2004. Petrex
also made the two scheduled principal payments of $1.5 million each in
March 2004 and in June 2004. As a result, the Petrex project loan
currently totals $12.1 million, while the rand denominated working
capital loan is $9 million. It is anticipated that a formal agreement
will be signed with the lenders over the next several months. The Petrex
project loans are non-recourse to Bema.

Bema made a $10 million payment during the fourth quarter to earn an
additional 10% interest in the Kupol project from the Government of
Chukotka. As a result of this payment, Bema now owns 40% of the Kupol
property. To earn the remaining 35%, Bema is required to make a payment
within 90 days of the completion of the feasibility study of $5 per
ounce on 75% of the proven and probable gold reserves as determined by
the study.

Julietta Mine, Russia (Bema 79%)

In 2004, Julietta produced 83,317 ounces of gold at an operating cash
cost of $189 per ounce and a total cash cost of $234 per ounce from
159,816 tonnes of ore milled at an average grade of 18.2 grams per
tonne. In 2003, Julietta produced a total of 118,145 ounces of gold at
an operating cash cost of $111 per ounce and a total cash cost of $148
per ounce. The lower than forecast production at Julietta is mainly a
result of a fire in the warehouse during the first quarter and delays in
accessing higher grade working faces that were scheduled to be mined
during the year. The fire destroyed the majority of spare parts
inventory, which resulted in mining and milling rates at Julietta being
temporarily reduced while the spare parts were replaced. The loss from
the warehouse fire of $2.3 million and a hedging loss of $2.5 million
resulted in an operating loss at Julietta of $532,000 in 2004.

In the fourth quarter, 38,535 tonnes of ore were milled at Julietta at
an average grade of 16.5 grams per tonne producing 17,743 ounces of
gold, at an operating cash cost of $266 per ounce and a total cash cost
of $327 per ounce. In the fourth quarter of 2003, Julietta produced a
total of 30,519 ounces of gold at an operating cash cost of $123 per
ounce and a total cash cost of $156 per ounce. The decline in production
and the increase in operating costs during the fourth quarter was a
result of not accessing high grade working faces as well as increased
fuel, shipping and maintenance charges. Furthermore, while the mill
performed well through most of the year, during November the leach and
recovery circuit was upset, which took several days to recover from and
resulted in gold recovery of 79% compared to normal recovery of 89% for
that month. In addition, late in December, the mantle shaft of the cone
crusher broke, resulting in downtime which was the main reason for the
shortfall in tonnes milled of 21% during the month. The crusher was
fully operational again by the end of the first week in January 2005.

Petrex Mines, South Africa (Bema 100%)

In 2004, Petrex produced 146,228 ounces of gold at a total cash cost of
$388 per ounce(1) from 1,862,635 tonnes of ore milled at an average
grade of 2.65 grams per tonne. During the first two quarters of 2004
Bema successfully completed a program designed to improve mining
efficiencies and cut costs at Petrex. As a result, tonnes milled,
recoveries, operating costs, capital expenditures and ounces produced
were all improved during the second half of the year. However, operating
costs will remain high if the South African rand retains its strength
versus the US dollar. Petrex incurred an operating loss for the year of
$8.9 million(2), most of which occurred in the first half of the year.

Petrex produced 43,758 ounces of gold during the fourth quarter ending
December 31, 2004, at a total cash cost $388 per ounce(1) from 478,314
tonnes of ore milled at an average grade of 3 grams per tonne. Petrex
produced 38,436 ounces of gold during the fourth quarter of 2003 at
total cash cost of $395 per ounce(3).

(1) Consolidated production costs are adjusted to reflect a cash gain of
$41 per ounce gold from the exercise of South African rand denominated
gold put options in 2004. At Petrex the cash gain from the puts is $64
per ounce gold (Q4-$43 per ounce).

(2) Adjusting for a rand denominated put gain of $9.4 million during the
year.

(3) Adjusted for rand denominated put option gains from 2003 please
refer to the year end news release dated 03/25/04 for more details.

Refugio Mine, Chile (Bema 50%)

Start up of the crushing facilities at Refugio is scheduled to commence
on May 1, 2005. A two-month ramp-up period is projected prior to
reaching full plant capacity of 40,000 tonnes per day. As a result,
Bema's share of estimated production at Refugio for the remainder of the
year should be approximately 50,000 ounces of gold. Total operating
costs are projected at $298 per ounce in 2005, slightly higher than the
life of mine projections of $250 per ounce, due to the ramp up
period.(i) The mine plan at Refugio is being updated and is expected to
be completed by mid year.

(i) These projections have been estimated by Bema and are not
necessarily the view of the Refugio joint venture.

Kupol Deposit, Russia (Bema 75%)

The following is the updated mineral resource estimate for the Kupol
gold and silver property in Chukotka, north-eastern Russia. The infill
drilling in 2004 has resulted in a 230% increase in contained gold
ounces and a 273% increase in contained silver ounces in the Indicated
category over the 2003 resource estimate (published in February 2004).
The resource estimate also confirms the large, high grade nature of the
Kupol project. The deposit remains open to the north, at depth in the
north and to the south. In addition several parallel structures remain
untested. The new indicated and inferred resource estimates are
tabulated below.



Indicated Resource: Undiluted Risk-Adjusted, Vein,
Above 6 g/t Gold Cutoff
--------------------------------------------------------------------
Tonnes Gold Silver Contained Contained
(000's) Grade Grade Metal Metal
(g/t) (g/t) Gold Troy Silver Troy
Ounces (000's)(ii) Ounces (000's)
--------------------------------------------------------------------
Big Bend Zone 2,209 31.0 382.6 2,201 27,165
---------------------------------------------------------------------
All Kupol
Vein(i) 6,417 21.7 275.7 4,486 56,874
--------------------------------------------------------------------


Inferred Resource : Undiluted Risk-Adjusted, Vein,
Above 6 g/t Gold Cutoff
--------------------------------------------------------------------
Tonnes Gold Silver Contained Contained
(000's) Grade Grade Metal Metal
(g/t) (g/t) Gold Troy Silver Troy
Ounces (000's)(ii) Ounces (000's)
--------------------------------------------------------------------
Big Bend Zone 532 13.1 198.8 223 3,400
--------------------------------------------------------------------
All Kupol
Vein(i) 4,102 13.1 179.4 1,723 23,659
--------------------------------------------------------------------

(i) Including Big Bend
(ii) Subject to mine planning, metallurgical recovery studies and
infill drilling to be converted to reserves. Subject to mining
dilution and recovery losses.


The details of the resource estimation techniques and cutting can be
found at the end of the news release. The major difference between the
2004 and the 2003 resource calculation is the large increase in the
Indicated category with a corresponding decrease in the Inferred
category as a result of the infill drilling. The specific gravity with
more sampling has decreased to 2.48 from 2.55. In addition, further
drilling has removed 50 metres from the bottom of the Big Bend zone
which was included in last years Inferred resource. The resources lost
in these two situations were gained back due to several previously
unknown parallel veins in the North Zone, the increase in grade of the
Big Bend Inferred resource when converted to an Indicated resource by
infill drilling and a lower metal at risk factor. In addition, the
mineralization has been extended a further 350 metres north and 150
metres deep in the north based on 2004 drilling. The metal at risk
adjusted factors were used as a result of guidance from Bema's
consultant Dr. Harry Parker of AMEC E&C Services and the final review of
this resource will be completed by Dr. Parker for the feasibility study.
The following table shows the uncut 2004 resource that can be compared
with the uncut resource calculation derived from the 2003 drill program
(published in February 2004).



Indicated Resource: Undiluted Not Capped, Vein,
Above 6 g/t Gold Cutoff
--------------------------------------------------------------------
Tonnes Gold Silver Contained Contained
(000's) Grade Grade Metal Metal
(g/t) (g/t) Gold Troy Silver Troy
Ounces (000's)(ii) Ounces (000's)
--------------------------------------------------------------------
Big Bend Zone 2,208 29.1 358.6 2,064 25,454
--------------------------------------------------------------------
All Kupol
Vein(i) 6,403 20.3 257.0 4,184 52,911
--------------------------------------------------------------------


Inferred Resource: Undiluted Uncapped, Vein,
Above 6 g/t Gold Cutoff
Tonnes Gold Silver Contained Contained
(000's) Grade Grade Metal Metal
(g/t) (g/t) Gold Troy Silver Troy
Ounces (000's)(ii) Ounces (000's)
--------------------------------------------------------------------
Big Bend Zone 532 12.4 188.6 212 3,226
--------------------------------------------------------------------
All Kupol
Vein(i) 4,090 12.4 171.4 1,637 22,539
--------------------------------------------------------------------

(i) Including Big Bend
(ii) Subject to mine planning, metallurgical recovery studies and
infill drilling to be converted to reserves. Subject to mining
dilution and recovery losses.


The feasibility study work is underway and is scheduled to be completed
in May 2005. Drilling at Kupol is expected to recommence this May and
will consist of approximately 45,000 metres to test the deposit to the
north and to depth in the north, to test the offset of the structure
southwards and to test parallel veins. Approximately 1/3 to 1/2 of the
drilling will also be used for further infill, condemnation and mine
planning.

Cerro Casale, Chile (Bema 24%)

In September 2004, Placer Dome issued a certificate (Certificate B)
under the shareholders' agreement indicating that it has commenced or is
continuing to use reasonable commercial efforts to arrange financing for
the Cerro Casale project on commercially reasonable and customary terms
in accordance with the financing requirements of the shareholders'
agreement. Subject to the terms of the shareholders' agreement, Placer
Dome has until the end of 2005 to arrange such financing. Placer Dome is
also advancing discussions on key commercial contracts and long-term
marketing off-take arrangements. If Placer Dome elects not to proceed
with the project and it is still deemed financeable under the terms of
the shareholders agreement, they will relinquish their interest in Cerro
Casale. The Cerro Casale project is located in Chile and is a joint
venture between Placer Dome (51%), Bema (24%) and Arizona Star Resource
Corp. (25%).

Bid for Arizona Star

On December 20, 2004, Bema announced that it intends to make an offer to
all Arizona Star Resource Corp. ("Arizona Star") shareholders to
exchange each Arizona Star share for 1.85 shares of Bema. The offer
valued Arizona Star at CDN$7.01 per common share based on that day's
closing price and represented a premium of 33% based on the 20 day
moving average trading share prices for both companies at the time of
the offer. Bema currently owns approximately 5% of the common shares of
Arizona Star.

Gold forward and Option Contracts

The Company reduced the number of outstanding gold forward and
contingent forward contracts by 92,325 ounces in 2004. The Company
intends to deliver into all of the outstanding Julietta forward
contracts on the designated maturity dates out to 2006.



2005 2006 2007 2008-2012
-----------------------------------------
-----------------------------------------
Gold
Forward contracts (ounces) 38,550 43,350 - -

Average price per ounce $ 341 $ 319 $ - $ -

Dollar denominated -
Put options purchased
$290 strike price (ounces) 26,364 23,790 21,342 38,646
$390 to $422 strike price
(ounces) 49,000 68,000 68,000 38,500

Rand ("ZAR") denominated -
Put options purchased
(ounces) 103,914 - - -
Average price per ounce
(ZAR) 3,100 - - -
Average price per ounce
(U.S.)(1) $ 552 $ - $ - $ -

Call options sold (ounces) 57,000 59,000 59,000 33,000

Average price per ounce $ 467 $ 464 $ 464 $ 466

Contingent forwards (maximum)
$320 strike price
(ounces) 10,000 - - -
$350 strike price
(ounces) 34,500 36,000 36,000 132,000

Silver
Forward contracts (ounces) 200,000 - - -
Average price per ounce $ 6.23 $ - $ - $ -

Put options purchased
(ounces) 600,000 600,000 - -

Average price per ounce $ 6.34 $ 6.34 $ - $ -

Call options sold (ounces) 600,000 600,000 - -

Average price per ounce $ 7.65 $ 7.65 $ - $ -

(1) Based on 5.6153 rand to one U.S. dollar, being the closing rate
at December 31, 2004.


The mark-to-market value of the Company's off balance sheet gold hedge
contracts as at December 31, 2004 was negative $2.2 million.

Outlook

Bema's projected gold production in 2005 is approximately 309,000 ounces
at an estimated operating cash cost of $295 per ounce (1)(2) and a total
cash cost of $312 per ounce(1)(2). This would represent a 35% increase
over the number of ounces produced in 2004 and a 6% decrease in total
operating cost per ounce. The main reason for the increase in production
is the recommencement of operations at the 50% owned Refugio Mine and an
estimated 18% increase in production at the Petrex Mines. In 2006,
Bema's consolidated production is projected to increase further and
operating costs to decline, as the Refugio Mine records a full year of
gold production.

At Kupol the majority of supplies for the 2005 exploration and
development work have been shipped to the seaports of Pevek and Magadan,
and mobilization of that material to site along winter roads is
underway. The 2005 Kupol development program has commenced and Bema has
received permits for preliminary construction, which includes, roads and
site earth works. In addition, a 45,000 metre drill program is planned
to further infill drill the resource and continue exploration drilling
to further test the ultimate potential of the Kupol deposit. Bema is
earning a 75% interest in the Kupol Project from the Government of
Chukotka.

Through the development of the Kupol deposit and the continued
advancement of the Cerro Casale project by Placer Dome Inc. Bema is one
of the world's fastest growing gold mining companies with a goal of
producing over 1 million ounces by 2008.

(1) Net of silver credits at Julietta assuming a $6.50 per ounce spot
price

(2) Based on a 6.5 rand to 1 USD conversion rate, a $400 per ounce spot
gold price and accounting for any potential gains from the 2005 rand
gold put option program.

A Quality Control Program ("QC") has been designed in concert with an
independent consultant to meet or exceed the requirements of N1 43-101.
This QC program includes the use of certified standard reference
samples, coarse field blank material and duplicate sampling. Tom
Garagan, Vice President of Exploration, is the Qualified Person for Bema
Gold Corporation. For more detailed information on the Kupol Mineral
Resource estimate please refer to the "Kupol Mineral Resource" section.

On Behalf of BEMA GOLD CORPORATION

Clive T. Johnson, Chairman, C.E.O., & President

Kupol Mineral Resource

QA/QC on Assay and Logged Database

The Kupol QA/QC program used to monitor the accuracy of the assay
database was managed by Bema's Qualified Person Tom Garagan and was
audited by Smee and Associates, who found it to be compliant with 43-101
regulations. The lithology database was verified by redundant checks
against original and quick log information

Methodology Used to Estimate the Kupol Resource

The construction of the Resource Model was performed using Datamine
software by Bema personnel and several contractors. The process of
building the resource model was overseen by Susan Meister (Resource
Modeling consultant) and Ken Brisebois (AMEC, Principle Geostatistician).

The resource was estimated from a three-dimensional block model, which
was created by interpreting the vein, stockwork zone, dyke and faults on
east-west trending vertical cross sections and reconciling the
interpretations on levels. Three-dimensional solids (wireframe) models
were built from the interpretations and were the basis for coding the
block model. Within the vein and stockwork interpretation, 1.5-metre
composites were created from the assay intervals. To best represent the
high and lower grade portions of the vein, an indicator variable was
created using the intensity of sulfosalts and Au grade. Variograms were
run on composites for the indicator variable in addition to Au and Ag
within the high-grade portion and Au and Ag within the lower grade
portion of the vein.

The indicator (high-sulfosalt) variable, high-grade Au, low-grade Au,
high-grade Ag and low-grade Ag were estimated with four passes of
ordinary kriging, using 15 search orientations from south-to-north that
match the local strike and dip of the vein. Each of the passes was used
to control the amount of data mixing with consideration given to the
drill hole spacing.

The whole block grade for vein was calculated using the kriged indicator
to weight the high and low grade kriged estimates. The formula used in
this calculation was determined by visual inspection of the block grades
relative to the drill hole and trench data, comparison of the average
grade at a zero cutoff to the average of the declustered composites and
comparison of profiles of kriged versus nearest neighbor results by
northing and elevation.

An in-situ dry density of 2.48 tonnes per cubic metre was used for
tonnage calculations. This is based on 543 vein samples collected from
throughout the deposit. These were tested at site using the wax-coated
density technique as specified in ASTM standard C914-95 (reapproved
1999).

Checks made on the model include a comparison of the kriged estimate to
the nearest neighbor (block polygon) models and to the declustered
composites. The effect of edge (contact) dilution and ore loss will be
assessed in a mining study that is in progress. Visual checks of the
block grades relative to the drill hole and trench data were completed
in detail on cross sections and levels on the computer screen.

Resource Classification

Mineral Resources have been categorized using the classification of the
Canadian Institute of Mining, Metallurgy and Petroleum (2000), relevant
definitions being quoted below. This classification is the basis for
Technical Reports by Qualified Persons in Canada, and the classification
is virtually the same as that of the JORC code (Australia), SME
guidelines (USA), SAMREC (South Africa) and that of the European Union.

The CIM Mineral Resource Definitions state that an Indicated Mineral
Resource is that part of a Mineral Resource for which quantity, grade or
quality, densities, shapes and physical characteristics can be estimated
with a level of confidence sufficient to allow appropriate application
of technical and economic parameters, to support mine planning and
evaluation of the economic viability of the deposit. The estimate is
based on detailed and reliable exploration information gathered through
appropriate techniques from locations such as outcrops, trenches, pits,
workings and drill holes that are spaced close-enough for geological and
grade continuity to be assumed. Mineral resources under NI 43-101 must
show a reasonable chance of economic viability however are not mineral
reserves and do not have demonstrated economic viability.

An Inferred Mineral Resource can be estimated on the basis of geological
evidence and limited sampling and reasonably assumed, but not verified
geological and grade continuity. The estimate is based on limited
information from locations such as outcrops, trenches, pits, workings
and drill holes.

Due to the uncertainty which may attach to Inferred Mineral Resources,
it cannot be assumed that all or part of an Inferred Mineral Resource
will be upgraded to an Indicated or Measured Mineral Resource as a
result of continued exploration.

At Kupol, Indicated and Inferred Resources were defined by reviewing
grade and mineralized vein width on east/west trending cross sections
and on a vertical longitudinal projection. Indicated Mineral Resources
are estimated where drill holes or trenches intersect the vein(s) at an
approximate 50-metre spacing. Eighty-three percent of the Indicated
Resource is supported by approximately 25x50-metre drill hole spacing.
Projection of Indicated Resources is limited to 25 metres down-dip in
the vein and 12.5 to 25 metres along strike. Within Indicated Resources,
the vein structure is continuous, although the vein thickness may be
affected locally by faulting and dikes. The grade appears continuous
from hole to hole; this continuity has been confirmed by 141 trenches
spaced at 4- to 5-metre intervals and 27 trenches at 10-metre intervals
across the outcrop of the vein. Additionally, 63 close spaced drill
holes were completed in Big Bend and South Zones, which confirm the
grade and vein continuity. The average spacing of the detailed drilling
is 10-metres along strike and 5 to 10-metres down dip.

Inferred Mineral Resources are estimated down dip and along strike from
Indicated Resources in areas that have been drilled on an approximate
100-metre spacing. Projection distances have been limited to within 100
m of a drill hole.

Metal-at-Risk (Capping Levels)

The Mineral Resource is risk-adjusted with an average 5.8% metal
reduction in the 25x50-metre spaced drill area (within Indicated
Resource), 11.3% metal reduction in the 50x50-metre spaced drill area
(within Indicated Resource) and 3.7% metal reduction in Inferred
Resource. These approximately correspond to reductions of 5.8, 12.2 and
5 % targets developed by Dr. Parker and Mr. Brisebois. The
risk-adjustment accounts for a large portion of the gold being
represented by a relatively small proportion of samples having very high
grades. Blocks in the three-dimensional block model with gold grades
greater than 8 g/t were adjusted downward by factoring the indicator to
attain the metal reduction suggested by the metal-at-risk analysis.

Risk Adjustment (Description of Methodology)

Precious metals deposits have skewed grade distributions. Skewed grade
distributions have the property that a small proportion of samples can
represent a disproportionately large amount of metal. The limited number
of these samples can introduce significant uncertainty into a resource
estimate. It is a common practice to cut the grades of very high-grade
samples, restrict their projection distance or to adjust resource models
to mitigate risk.

In many precious metals deposits, Kupol included, the highest grade
samples are scattered and discontinuous at the exploration drill-hole
spacing. The number of high-grade samples intersected can vary according
to the positioning of the drill holes, and it is impossible to know in
advance which positions would give the most accurate estimate of the
amount of high-grade metal actually present. The uncertainty related to
the amount of high-grade metal can be evaluated using a Monte Carlo
simulation technique developed by Mineral Resources Development/AMEC
that has been applied over a 14-year period. This method simulates
re-drilling the deposit 1000 times and notes the variation in the amount
of high-grade metal present in annual or global production increments.
The 20th percentile of the simulated metal contents is added to the
metal content represented by the remaining samples to give a
risk-adjusted metal content. The difference between total metal content
and risk-adjusted metal content is termed metal at risk. Theoretically,
in four periods out of five, the mine should do better than the
estimate; however there is additional and largely unquantifiable
uncertainty related to how representative the assay distribution input
is to the simulation.

The appropriate time-period for Indicated Resources is annual, as
Indicated Resources will be used to prepare annual production schedules
as part of scoping and feasibility studies. For Inferred Resources,
there is inadequate information to support annual planning; therefore a
global time-period is used.

The method has advantages over other top-cutting methods in that it
takes into account 1) the data density, and 2) the volumes used for
production scheduling. As the data density is increased, the amount of
metal at risk declines; longer production increments will have less risk
than shorter ones.

Some of the statements contained in this release are "forward-looking
statements" within the meaning of Section 21E of the Securities Exchange
Act of 1934. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause our actual
results, performance or achievements to differ materially from the
anticipated results, performance or achievements expressed or implied by
such forward-looking statements. Forward-looking statements in this
release include statements regarding: the Company's projections
regarding gold production, costs of production, drilling and development
programs, financings and the proposed bid for Arizona Star. Factors that
could cause actual results to differ materially from anticipated results
include risks and uncertainties such as: risks relating to estimates of
reserves, mineral deposits and production costs; mining and development
risks; the risk of commodity price fluctuations; political and
regulatory risks; and other risks and uncertainties detailed in the
Company's Form 40-F Annual Report for the year ended December 31, 2003,
which has been filed with the Securities and Exchange Commission, and
the Company's Renewal Annual Information Form for the year ended
December 31, 2003, which is an exhibit to the Company's Form 40-F and is
available at the Canadian Depository for Securities Web site. The
Company disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.



BEMA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the periods ended December 31
(Unaudited)
(in thousands of United States dollars,
except shares and per share amounts)

Fourth Quarter Twelve Months
2004 2003 2004 2003
-------- --------- -------- ---------
(Restated) (Restated)

GOLD REVENUE $ 26,445 $ 26,716 $ 92,133 $ 86,817
-------- --------- -------- ---------

EXPENSES
Operating costs 25,567 22,292 85,365 69,110
Depreciation and depletion 6,910 5,614 20,231 17,909
Refugio re-start of
operations 3,158 (57) 6,354 682
Julietta warehouse
fire loss 521 - 2,321 -
Other 1,441 736 4,528 2,041
-------- --------- -------- ---------
37,597 28,585 118,799 89,742
-------- --------- -------- ---------

MINE OPERATING LOSS 11,152 1,869 26,666 2,925
-------- --------- -------- ---------

OTHER EXPENSES (INCOME)
General and
administrative 2,003 1,437 8,901 7,125
Interest and
financing costs (255) 2,109 7,251 6,662
General exploration 915 137 1,593 340
Stock-based compensation 1,185 1,188 4,980 3,147
Foreign exchange
loss (gains) 2,090 (2,163) 3,311 (1,747)
Other (375) (181) (690) (133)
-------- --------- -------- ---------
5,563 2,527 25,346 15,394
-------- --------- -------- ---------

LOSS BEFORE THE
UNDERNOTED ITEMS 16,715 4,396 52,012 18,319

Write-down of
mineral properties 3,957 720 12,484 720
Write-off of goodwill 27,344 - 27,344 -
Realized derivative
(gains) (930) (172) (16,895) (2,362)
Unrealized derivative
losses (gains) (660) 13,494 6,087 7,481
Equity in losses of
associated companies 40 41 272 94
Investment losses (gains) (1,308) (54) (1,706) 45
-------- --------- -------- ---------

LOSS BEFORE INCOME TAXES 45,158 18,425 79,598 24,297

Current income
taxes (recovery) (1,170) 4,215 (678) 5,024
Future income
taxes (recovery) 661 (2,488) 695 1,255
-------- --------- -------- ---------

LOSS FOR THE PERIOD $ 44,649 $ 20,152 $ 79,615 $ 30,576
-------- --------- -------- ---------
-------- --------- -------- ---------

LOSS PER COMMON SHARE
- basic and diluted $ 0.12 $ 0.06 $ 0.22 $ 0.09
-------- --------- -------- ---------
-------- --------- -------- ---------

Weighted average number
of common shares
outstanding
(in thousands) 382,888 352,851 364,788 323,475
-------- --------- -------- ---------
-------- --------- -------- ---------


BEMA GOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the periods ended December 31
(Unaudited)
(in thousands of United States dollars)

Fourth Quarter Twelve Months
2004 2003 2004 2003
-------- -------- -------- ---------
(Restated) (Restated)
OPERATING ACTIVITIES
Loss for the period $(44,649) $(20,152) $(79,615) $ (30,576)
Non-cash charges (credits)
Depreciation and depletion 6,910 5,614 20,231 17,909
Amortization of deferred
financing costs (242) 427 1,809 1,707
Accretion of Convertible
Notes (1,245) - 1,345 -
Accretion of asset
retirement obligations 370 376 1,477 1,340
Equity in losses of
associated companies 40 41 272 94
Derivative instruments (1,971) 14,169 5,195 10,565
Investment losses (gains) (1,308) (54) (1,706) 45
Future income tax expense
(recovery) 661 (2,488) 695 1,255
Stock-based compensation 1,185 1,188 4,980 3,147
Write-off of goodwill 27,344 - 27,344 -
Write-down of mineral
properties 3,957 720 12,484 720
Other 3,953 (696) 2,548 293
Change in non-cash
working capital (1,208) (1,145) (4,935) 1,629
-------- -------- -------- ---------
(6,203) (2,000) (7,876) 8,128
-------- -------- -------- ---------

FINANCING ACTIVITIES
Common shares issued,
net of issue costs 104,863 3,037 115,130 58,714
Subsidiary shares issued,
net of issue costs 3,046 - 3,046 -
Convertible loan,
net of issue costs (69) - 66,534 -
Kupol bridge financing 8,000 - 46,000 -
Julietta project
loan repayment - - (16,750) (11,167)
Petrex loan repayments (11,870) (1,500) (14,870) (8,000)
Capital lease repayments (540) - (770) -
Other (273) (218) (1,950) (450)
-------- -------- -------- ---------
103,157 1,319 196,370 39,097
-------- -------- -------- ---------

INVESTING ACTIVITIES
Julietta Mine (1,738) (615) (3,222) (1,441)
Julietta Mine exploration (1,397) (1,040) (6,456) (2,372)
Petrex Mines (1,385) (1,480) (7,454) (6,947)
Petrex exploration 61 (443) (1,415) (646)
Refugio exploration
and construction (6,291) (447) (20,019) (2,981)
Kupol exploration and
development (32,114) (27,996) (82,331) (35,920)
Acquisition, exploration
and development (1,444) (1,034) (7,010) (6,275)
Investment purchases - - (3,059) (869)
Acquisition of EAGC
Ventures Corp.,
net cash acquired - - - 6,742
Sale of EAGC special
warrants - - - 16,935
Other 477 (609) (699) (108)
-------- -------- -------- ---------
(43,831) (33,664) (131,665) (33,882)
-------- -------- -------- ---------

Effect of exchange
rate changes on cash
and cash equivalents (465) 78 (491) 772
-------- -------- -------- ---------

Increase (decrease) in
cash and cash equivalents 52,658 (34,267) 56,338 14,115

Cash and cash equivalents,
beginning of period 34,453 65,040 30,773 16,658
-------- -------- -------- ---------

Cash and cash equivalents,
end of period $ 87,111 $ 30,773 $ 87,111 $ 30,773
-------- -------- -------- ---------
-------- -------- -------- ---------


BEMA GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands of United States dollars)

As at As at
December 31 December 31
2004 2003
ASSETS
Current
Cash and cash equivalents $ 87,111 $ 30,773
Accounts receivable 8,019 5,754
Marketable securities
(Market value - $13.8 million;
December 31, 2003 - $12.1 million) 3,554 3,567
Inventories 16,113 14,932
Other 6,827 4,845
----------- -----------
121,624 59,871

Investments 5,593 2,706
Property, plant and equipment 418,883 304,044
Goodwill - 27,344
Unrealized fair value of derivatives 13,761 20,792
Deferred derivative losses 6,718 3,965
Future income tax assets 5,100 -
Other assets 21,374 14,206
----------- -----------
$ 593,053 $ 432,928
----------- -----------
----------- -----------

LIABILITIES
Current
Accounts payable $ 32,250 $ 23,292
Current portion of long-term debt 3,730 45,864
----------- -----------
35,980 69,156

Unrealized fair value of derivatives 49,299 48,382
Long-term debt 129,937 7,084
Future income tax liabilities 24,321 15,320
Asset retirement obligations 17,418 15,380
Other liabilities 664 3,465
Non-controlling interest 2,587 830
----------- -----------
260,206 159,617
----------- -----------

SHAREHOLDERS' EQUITY
Capital stock
Issued - 400,498,902 common shares
(December 31, 2003 - 355,688,190) 557,365 441,309
Value assigned to share purchase warrants
and stock options 19,060 14,814
Convertible debt 18,849 -
Deficit (262,427) (182,812)
----------- -----------
332,847 273,311
----------- -----------
$ 593,053 $ 432,928
----------- -----------
----------- -----------

Approved by the Directors

"Clive T. Johnson" "Robert J. Gayton"
Clive T. Johnson Robert J. Gayton



-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Bema Gold Corporation
    Ian MacLean
    Manager, Investor Relations
    (604) 681-8371
    or
    Bema Gold Corporation
    Derek Iwanaka
    Investor Relations
    (604) 681-8371
    investor@bemagold.com
    www.bema.com
    The Toronto Stock Exchange neither approves nor disapproves the
    information contained in this News Release.