IAMGOLD Corporation
TSX : IMG
NYSE : IAG
ASX : IGD
BOTSWANA : IAMGOLD

IAMGOLD Corporation

March 09, 2006 18:11 ET

IAMGOLD 2005 Year-End Results

    

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TSX Trading Symbol: IMG
NYSE Trading Symbol: IAG
Fully Diluted Shares Outstanding: 153.9 MM
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TORONTO, ONTARIO--(March 9, 2006) -

HIGHLIGHTS:

- Net earnings for the year were $20.5 million, approximately a
75% increase over 2004. Fourth quarter earnings were $6.2 million
compared to $2.9 million for the fourth quarter of 2004.

- Operating cash flow for the year was $34.0 million, a 150% increase
over 2004. Fourth quarter operating cash flow was $18.0 million
or $0.12 per share compared to negative operating cash flow in the
fourth quarter of 2004.

- Attributable production in 2005 was 447,000 ounces, in line with
guidance provided in March 2005 of 450,000 ounces. Average Gold
Institute (GI) cash cost of production was $276 per ounce compared
to March 2005 guidance of $270 per ounce. Attributable production
for the fourth quarter of 2005 was 117,000 ounces at an average
GI cash cost of $276 per ounce.

- Excellent exploration results continued during 2005 at the
Company's Quimsacocha project in Ecuador. On October 28, a resource
estimate was released showing indicated resources of 2.8 million
ounces of gold.

- With a gold price of $513 per ounce at December 31, 2005, the
unrealized gain on the Company's holdings of gold bullion increased
to $27.3 million ($0.19 per share).

- On March 3, 2006, the shareholders of Gallery Gold Limited (GGL) voted
in favour of a transaction whereby IAMGOLD will acquire all of the
shares of GGL. Completion of the transaction is expected to occur
on March 14.



CONSOLIDATED FINANCIAL RESULTS SUMMARY (US$000's):
-------------------------------------------------------------------------
Three Months Ended Year Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2005 2004 2005 2004
-------------------------------------------------------------------------
Net earnings $ 6,178 $ 2,897 $ 20,494 $ 11,609
Operating cash flow $ 18,002 $ (4,713) $ 34,043 $ 13,683
Net earnings per share
- basic and diluted $ 0.04 $ 0.02 $ 0.14 $ 0.08
Operating cash flow
per share
- basic and diluted $ 0.12 $ (0.03) $ 0.23 $ 0.09
Gold produced (oz)
IMG share 117,000 119,000 447,000 432,000
GI cash cost (US$/oz)(i) $ 276 $ 253 $ 276 $ 248
Average realized gold
price (US$/oz) $ 485 $ 437 $ 446 $ 414
-------------------------------------------------------------------------
(i) Gold Institute cash cost per ounce is a non-GAAP measure. Please
refer to the Supplemental Information attached to the Management's
Discussion and Analysis for a reconciliation to GAAP.


CONFERENCE CALL

A conference call to review the Corporation's fourth quarter results will
take place on Friday, March 10, 2006 at 11:00 a.m. EST. Local call-in number:
416-644-3420 and N.A. toll-free: 1-800-814-4862. This conference call will
also be audiocast on our website (www.iamgold.com).

A replay of this conference call will be available from 1:00 p.m.
March 10 to March 17, 2006 by dialing local: 416-640-1917, passcode: 21179963
followed by the number sign and N.A. toll-free: 1-877-289-8525, passcode:
21179963 followed by the number sign. A replay will also be available on
IAMGOLD's website.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

The following report, dated March 9, 2006, should be read in conjunction
with the Consolidated Financial Statements for December 31, 2005 and related
notes thereto which appear elsewhere in this report. All figures in the
following sections are in US dollars, unless stated otherwise.

OVERVIEW

IAMGOLD ("IMG" or the "Company") is a growth-oriented precious metals
mining and exploration company. The Company holds interests in four operating
gold mines in West Africa, certain diamond and gold royalties and conducts
exploration activities in South America and West Africa.

Net earnings for 2005 were $20.5 million or $0.14 per share compared to
$11.6 million or $0.08 per share for 2004 and $20.0 million or $0.14 per share
for 2003. Earnings in 2005 benefited from stronger gold prices but were offset
by higher operating costs. Earnings in 2004 were depressed as a result of
$11.2 million ($8.2 million, net of tax) of corporate transaction costs
relating to potential business combinations with Wheaton River Minerals and
Gold Fields International and the defence of an unsolicited take-over bid by
Golden Star Resources. Operating cash flow for 2005 was $34.0 million compared
to $13.7 million in 2004 and $30.6 million in 2003. The increase is a result
of higher earnings and a reduction in non-cash working capital of
$11.0 million at Sadiola and Yatela in 2005. In addition, operating cash flow
in 2005 includes increased dividend distributions from Tarkwa and Damang of
$10.0 million (2004 - $8.7 million; 2003 - $4.0 million). Operating cash flow
excludes loan repayments received of $5.2 million in 2005 from Tarkwa and
$6.7 million in 2003 from Damang, which are classified as investing cash flow.

Business Combination

On March 3, 2006, the shareholders of Gallery Gold Limited ("GGL")
approved a scheme of arrangement whereby the Company will acquire all of the
issued and outstanding shares of GGL in exchange for the issuance of
26,212,850 common shares. All common share options will be settled in cash by
the Company. As a result of this transaction the combined company will be held
85% by the Company's existing shareholders and 15% by GGL's existing
shareholders. The acquisition is subject to Australian court approval, which
is expected to occur on March 14, 2006. The purchase price has been determined
to be approximately $230 million before acquisition costs.



Summarized Financial Results
(in US$000's except where noted)
-------------------------------------------------------------------------
2005 2004 2003
-------------------------------------------------------------------------
Cash, short-term deposits and gold
bullion $ 110,197 $ 85,436 $ 113,958
Net current working capital 114,527 102,562 118,539
Total assets 468,985 448,002 452,227
Non-recourse loans payable 6,924 10,437 11,342

Gold sales 119,393 112,663 96,607
Royalty revenues 10,381 9,209 4,504
Earnings from working interests 15,467 13,149 9,650

Net earnings 20,494 11,609 20,017
Basic and diluted net earnings per share 0.14 0.08 0.14

Cash dividends declared per share (Cdn$) 0.07 0.06 0.06
(US$) 0.06 0.05 0.05

Operating cash flow 34,043 13,683 30,638
Operating cash flow per share
(basic & diluted) 0.23 0.09 0.21

Gold produced (000 oz - IMG share) 447 432 421
Weighted average GI cash cost (US$/oz -
IMG share)(i) 276 248 225
Average gold spot price (US$/oz)(xx) 445 410 363
-------------------------------------------------------------------------
(i) Weighted average Gold Institute cash cost is a non-GAAP measure.
Please refer to the Supplemental Information to the Management's
Discussion and Analysis for reconciliation to GAAP.

(xx) Average gold price as per the London PM fix.


Quarterly Financial Review
(in US$000's except where noted)

Net earnings for the fourth quarter of 2005 were $6.2 million or $0.04 per share compared to $2.9 million or $0.02 per share for the fourth quarter of 2004 and $7.0 million or $0.05 per share for the fourth quarter of 2003.




2005 Q1 Q2 Q3 Q4 Total
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Revenue $ 29,493 $ 29,539 $ 31,316 $ 39,426 $129,774
Net earnings 7,743 2,375 4,198 6,178 20,494
Basic and diluted
earnings per share 0.05 0.02 0.03 0.04 0.14
Operating cash flow 8,533 5,680 1,828 18,002 34,043
Operating cash flow per
share (basic and diluted) 0.06 0.04 0.01 0.12 0.23

-------------------------------------------------------------------------
2004 Q1 Q2 Q3 Q4 Total
-------------------------------------------------------------------------
Revenue $ 27,632 $ 31,510 $ 28,076 $ 34,654 $121,872
Net earnings 7,182 622 908 2,897 11,609
Basic and diluted
earnings per share 0.05 0.00 0.01 0.02 0.08
Operating cash flow 5,773 (6,263) 18,886 (4,713) 13,683
Operating cash flow per
share (basic and diluted) 0.04 (0.04) 0.13 (0.03) 0.09

-------------------------------------------------------------------------
2003 Q1 Q2 Q3 Q4 Total
-------------------------------------------------------------------------
Revenue $ 23,842 $ 24,179 $ 23,763 $ 29,327 $101,111
Net earnings 4,426 2,440 6,174 6,977 20,017
Basic and diluted
earnings per share 0.03 0.02 0.04 0.05 0.14
Operating cash flow 12,292 7,850 6,485 4,011 30,638
Operating cash flow per
share (basic and diluted) 0.09 0.05 0.04 0.03 0.21
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IAMGOLD ATTRIBUTABLE PRODUCTION AND COSTS

The table below presents the production attributable to IAMGOLD's ownership in its four operating gold mines in West Africa along with the weighted average cost of production.



IAMGOLD Basis
-------------------------------------------------------------------------
2005
1st 2nd 3rd 4th 2004 2003
Production (000 oz) Qtr Qtr Qtr Qtr Total Total Total
-------------------------------------------------------------------------
Sadiola - 38% 38 43 44 43 168 173 172
Yatela - 40% 23 23 21 31 98 97 87
Tarkwa - 18.9% 35 37 33 32 137 105 105
Damang - 18.9% 10 11 11 11 43 56 57
Total production 106 114 109 117 447 432 421

Gold Institute cash cost(i)
-------------------------------------------------------------------------
Sadiola - 38% 288 261 244 289 270 246 213
Yatela - 40% 268 306 300 221 269 263 244
Tarkwa - 18.9% 238 254 290 295 268 250 224
Damang - 18.9% 345 343 371 330 347 221 230
Weighted average 273 275 281 276 276 248 225
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(i) Cash costs per ounce are non-GAAP measures. Please refer to the
Supplemental Information attached to the Management's Discussion and
Analysis for a reconciliation to GAAP.


The Company's attributable share of gold production in 2006 from the above four operating mines is expected to be 480,000 ounces of gold at a total direct cash cost of $280 per ounce and a total cash cost, as defined by the Gold Institute, of $295 per ounce.



RESULTS OF OPERATIONS
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MINING INTERESTS
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2005
(US$ 000'S) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
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Gold sales $ 27,230 $ 27,265 $ 27,904 $ 36,994 $119,393
Mining expense 18,536 19,015 16,593 25,144 79,288
Depreciation and depletion 4,727 4,894 4,790 6,194 20,605
-------------------------------------------------------------------------
Earnings from mining
interests $ 3,967 $ 3,356 $ 6,521 $ 5,656 $ 19,500
-------------------------------------------------------------------------


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2004 2003
(US$ 000'S) Total Total
----------------------------------------------
Gold sales $112,663 $ 96,607
Mining expense 69,333 56,620
Depreciation and depletion 20,592 18,385
----------------------------------------------
Earnings from mining
interests $ 22,738 $ 21,602
----------------------------------------------


The Company owns a 38 percent interest in a Malian registered company, La
Société d'Exploitation des Mines d'Or de Sadiola S.A. ("Sadiola"). Sadiola
holds the mining permits for the Sadiola mine in western Mali.
AngloGoldAshanti Limited ("AngloGold") owns 38 percent of Sadiola, the
Republic of Mali holds 18 percent and the International Finance Corporation
("IFC") holds the remaining 6 percent. AngloGold is the mine operator.

The Company owns an indirect 40 percent interest in a Malian registered
company, La Société d'Exploitation des Mines d'Or de Yatela S.A. ("Yatela").
Yatela holds the mining and exploration permits for the Yatela mine in western
Mali, 25 kilometres north of the Sadiola mine. AngloGold also owns an indirect
40 percent interest in Yatela and the Republic of Mali holds the remaining
20 percent. AngloGold is the mine operator.

The Company records its proportionate share of assets, liabilities and
results from operations from its joint venture interests in the Sadiola and
Yatela mines.

The Company's 2005 consolidated gold revenue was 6% higher than 2004 and
24% higher than 2003. The increase in 2005 was due to gold revenues per ounce
being 7% higher than 2004 and 20% higher than 2003 and attributable production
from Sadiola and Yatela being 2% lower than 2004 and 3% higher than 2003.
During 2005, all sales at Sadiola and Yatela were made at spot prices. During
2004 and 2003, the Company recorded an increase to gold revenue of
$1.8 million in each year to reflect the amortization of the deferred hedge
revenue from previously crystallized financial instruments at Sadiola and also
recorded a reduction to gold revenue of $0.5 million and $0.3 million,
respectively, to reflect its share of the change in the mark-to-market loss on
Sadiola call options.

The Company's share of Sadiola and Yatela operating expenses was 14%
higher in 2005 than 2004 and 40% higher than in 2003. Total consolidated cash
costs at Sadiola and Yatela in 2005 of $269 per ounce increased from $252 per
ounce in 2004 and $224 per ounce in 2003. Costs increased as a result of
overall general increases in cost components.

In 2005, the Company expensed $0.4 million (2004 - $0.1 million; 2003 -
$0.7 million) for exploration at the mine level in accordance with Canadian
accounting policies. All other exploration expenditures at Sadiola and Yatela
were capitalized.

Sadiola Mine (IAMGOLD interest - 38%)

A summary of significant operating statistics at Sadiola is provided in
the table below:



Summarized Results
100% Basis
-------------------------------------------------------------------------
2005
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
-------------------------------------------------------------------------
Waste mined (000t) 3,000 4,560 2,500 2,890 12,950
Marginal ore mined (000t) 180 180 140 310 810
Ore mined (000t) 1,420 970 1,080 2,100 5,570
Total material mined (000t) 4,600 5,710 3,720 5,300 19,330
Strip Ratio(i) 2.2 4.9 2.4 1.5 2.5

Ore milled (000t) 1,180 1,170 1,360 1,320 5,030
Head grade (g/t) 3.3 3.7 2.9 3.0 3.2
Recovery (%) 80 82 92 88 86

Gold production - 100% (000 oz) 101 113 116 112 442
Gold sales - 100% (000 oz) 102 110 117 116 445

Gold revenue (US$/oz)(xx) 429 427 439 485 446
Direct cash costs (US$/oz)(xxx) 295 282 244 298 279
Production taxes (US$/oz)(xxx) 26 25 26 30 27
Total cash costs (US$/oz)(xxx) 321 307 270 328 306
Stockpile adjustments
(US$/oz)(xxx) (33) (46) (26) (39) (36)
GI cash cost (US$/oz)(xxx) 288 261 244 289 270
-------------------------------------------------------------------------

----------------------------------------------
2004 2003
Total Total
----------------------------------------------
Waste mined (000t) 8,910 11,440
Marginal ore mined (000t) 1,000 1,480
Ore mined (000t) 5,630 5,730
Total material mined (000t) 15,540 18,650
Strip Ratio(i) 1.8 2.3

Ore milled (000t) 5,150 5,070
Head grade (g/t) 3.8 3.0
Recovery (%) 76 88

Gold production - 100% (000 oz) 458 452
Gold sales - 100% (000 oz) 458 453

Gold revenue (US$/oz)(xx) 420 376
Direct cash costs (US$/oz)(xxx) 234 210
Production taxes (US$/oz)(xxx) 24 22
Total cash costs (US$/oz)(xxx) 258 232
Stockpile adjustments
(US$/oz)(xxx) (12) (19)
GI cash cost (US$/oz)(xxx) 246 213
----------------------------------------------
(i) Strip ratio is calculated as waste plus marginal ore divided
by full-grade ore.
(xx) Gold revenue is calculated as gold sales divided by ounces of
gold sold.
(xxx) Cash costs per ounce are non-GAAP measures. Please refer to the
Supplemental Information attached to the Management's Discussion
and Analysis for a reconciliation to GAAP.


The Company's average gold revenue at Sadiola of $446 per ounce in 2005
was higher than the $420 per ounce achieved in 2004 and the $376 per ounce
achieved in 2003. The mine had no exposure to any financial instruments during
2005. The premium above the average spot price of $410 per ounce in 2004 and
$363 per ounce in 2003 resulted from the amortization of deferred hedge
revenue from previously crystallized financial instruments, which were fully
amortized as at December 31, 2004.

Material mined in 2005 was 24% higher than 2004 and 4% higher than 2003
due primarily to increased equipment availability. The increase in mining has
led to an additional 1.0 million tonnes of ore being added to the stockpile,
which at year end stood at 6.1 million tonnes or 1.2 years of mill feed.

Gold production at Sadiola was essentially the same in 2005 in comparison
to 2004 and 2003. The head grade to the mill in 2005 was 16% lower than the
grade fed in 2004 as higher grade sulphides constituted a lower proportion of
the mill feed in 2005 (26%) than in 2004 (45%). This reduction in grade is
offset by a 13% increase in recovery over 2004. The higher proportion of oxide
ore to the mill feed contributed to the increase in recovery as oxide ore
(91%) achieves a higher recovery than sulphide ore (79%). In addition,
recovery of gold from the sulphide ore in 2004 was at lower than expected
levels and averaged only 69% for the 2004 year. A plant scale gravity
concentration circuit will be tested during 2006 with the objective of an
overall improvement in recovery.

A pre-feasibility study on mining of the hard sulphide ore below the main
pit was completed and showed marginal economics assuming the current mill
configuration and current mining and energy costs. Further metallurgical test
work will be conducted during 2006 on improving recoveries. A feasibility
study and infill drilling will continue once that has been successfully
achieved.

Direct unit cash costs increased in 2005 by 19% over 2004 and 33% over
2003. Increases in the cost of fuel, parts and supplies, reagents and mining
contractor rates all contributed to the increase in costs. In the fourth
quarter of 2005, Sadiola expensed $5.2 million relating to an agreement
reached with the Malian government whereby the government would retain a
pre-payment to settle income tax claims relating to the years 2000 through
2002. In addition, Sadiola also recorded a $2.2 million provision for income
tax claims relating to the years 2003 and 2004. In 2004, an ore stockpile was
written down from $10.3 million to $4.7 million due to contamination with
hard, sub-marginal material.

Additions to fixed assets at Sadiola in 2005 were $17.1 million (2004 -
$7.1 million; 2003 - $4.3 million). $8.5 million (2004 - $1.0 million; 2003 -
nil) of the total expenditures was spent on the 115 house extension of the
mine village, $3.9 million (2004 - $0.1 million; 2003 - nil) was spent on the
purchase of mining equipment and the remainder was expended on a variety of
smaller capital projects. Exploration expenditures in 2005 were $3.6 million
(2004 - $9.2 million; 2003 - $7.9 million), of which $2.6 million
(2004 - $8.9 million; 2003 $7.5 million) was capitalized. Of the total
expenditures, $0.4 million (2004 - $5.1 million; 2003 - $3.3 million) was
spent on the deep sulphide project, $1.8 million (2004 - $1.1; 2003 -
$1.8 million) was spent on FE3 and FE4 drilling and $0.4 million (2004 -
$2.7 million; 2003 - $2.2 million) was spent on other oxide programs.

During 2005, $31.0 million (2004 - $45.0 million; 2003 - $41.0 million)
of profit distributions were paid to shareholders. The Company's share of
these distributions was $11.8 million (2004 - $17.1 million; 2003 -
$15.6 million). Cash balances at Sadiola as at December 31, 2005 were
$12.2 million (2004 - $12.7 million; 2003 - $30.5 million). Subsequent to
year-end, $10.0 million (IAMGOLD share $3.8 million) of profit distributions
was paid by Sadiola to shareholders.

For 2006, Sadiola is expected to produce 480,000 ounces of gold at a
total direct cash cost of $290 per ounce and a total cash cost, as defined by
the Gold Institute, of $305 per ounce.

Yatela Mine (IAMGOLD interest - 40%)

A summary of significant operating statistics at Yatela is provided in
the table below:



Summarized Results
100% Basis
-------------------------------------------------------------------------
2005
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
-------------------------------------------------------------------------
Waste mined (000t) 3,300 3,520 2,310 2,420 11,550
Marginal ore mined (000t) 280 330 210 210 1,030
Ore mined (000t) 620 400 260 540 1,820
Total material mined (000t) 4,200 4,250 2,780 3,170 14,400
Strip Ratio(i) 5.8 9.6 9.7 4.9 6.9

Ore crushed (000t) 810 800 720 820 3,150
Head grade (g/t) 2.6 2.5 2.8 4.0 3.0
Gold stacked (oz) 68 64 65 105 302

Gold production - 100%
(000 oz) 58 57 54 78 247
Gold sales - 100% (000 oz) 62 55 48 80 245

Gold revenue (US$/oz)(xx) 428 428 438 487 449
Direct cash costs (US$/oz)(xxx) 248 283 328 226 266
Production taxes (US$/oz)(xxx) 29 26 24 31 28
Total cash costs (US$/oz)(xxx) 277 309 352 257 294
Cash cost adjustments
(US$/oz)(xxx) (9) (3) (52) (36) (25)
GI cash cost (US$/oz)(xxx) 268 306 300 221 269
-------------------------------------------------------------------------


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2004 2003
Total Total
----------------------------------------------
Waste mined (000t) 15,700 18,730
Marginal ore mined (000t) 1,750 1,120
Ore mined (000t) 3,670 2,270
Total material mined (000t) 21,120 22,120
Strip Ratio(i) 4.7 8.7

Ore crushed (000t) 2,870 2,590
Head grade (g/t) 3.4 2.8
Gold stacked (oz) 314 236

Gold production - 100%
(000 oz) 242 218
Gold sales - 100% (000 oz) 241 222

Gold revenue (US$/oz)(xx) 410 361
Direct cash costs (US$/oz)(xxx) 281 249
Production taxes (US$/oz)(xxx) 25 23
Total cash costs (US$/oz)(xxx) 306 272
Cash cost adjustments
(US$/oz)(xxx) (43) (28)
GI cash cost (US$/oz)(xxx) 263 244
----------------------------------------------
(i) Strip ratio is calculated as waste plus marginal ore divided by
full-grade ore.
(xx) Gold revenue is calculated as gold sales divided by ounces of
gold sold.
(xxx) Cash costs per ounce are non-GAAP measures. Please refer to the
Supplemental Information attached to the Management's Discussion
and Analysis for a reconciliation to GAAP.


Gold revenue at Yatela averaged $449 per ounce in 2005 compared to $410
per ounce in 2004 and $361 per ounce in 2003. The mine had no exposure to any
financial instruments over the reporting periods.

Production in 2005 totalled 247,000 ounces, 2% higher than in 2004 and
13% higher than in 2003, when a severe rainy season disrupted operations.

Material mined in 2005 was 32% lower than 2004 and 35% lower than 2003
due primarily to the substantial completion in 2004 of the mining of the
Alamoutala satellite deposit. Rehabilitation activities at the Alamoutala site
commenced during 2005. A pit cutback that will extend the operating life of
Yatela by up to ten months is being considered given the current gold price.

Ore crushed in 2005 was 10% higher than in 2004 and 22% higher than in
2003 as plant availabilities have improved. The head grade in 2005 was 12%
lower than 2004 and 7% higher than 2003. However, access to higher grade areas
in the lower reaches of the pit was achieved in the fourth quarter of 2005 and
will continue for the first half of 2006.

Direct unit cash costs decreased by 5% in 2005 from 2004 and increased 7%
over 2003. The reduction from 2004 was due to high cement usage in 2004 as all
crushed ore was stacked on first lifts of the leach pad, which require the
addition of more than twice the amount of cement than second lifts. In
addition, haulage costs were lower in 2005 as all ore was sourced from the
main pit. Offsetting these cost reductions were general cost increases for
fuel, mining contractor rates and supplies at Yatela.

Capital expenditures at Yatela totaled $6.1 million (2004 - $7.2 million;
2003 - $13.6 million). The largest expenditure was $5.1 million (2004 -
$4.5 million; 2003 - $3.4 million) for the expansion of leach pads.
Exploration expenditures were $0.2 million (2004 - $1.1 million; 2003 -
$1.1 million) and nil (2004 - $0.1 million; 2003 - $5.7 million) was spent on
the development of Alamoutala. The remaining $0.8 million (2004 -
$1.5 million; 2003 - $1.2 million) was spent on various small capital
projects.

During 2005, principal repayments on loans provided to construct the
project totaled $28.4 million (2004 - $2.4 million; 2003 - $11.3 million). The
Company portion of these repayments were $9.9 million (2004 - $nil; 2003 -
$3.5 million). The remaining repayments were to third party debt providers and
the Company's joint venture partners. Total project loans that remain
outstanding at year-end 2005 total $52.4 million (2004 - $77.1 million; 2003 -
$76.9 million) and are expected to be fully repaid during 2006.

Cash balances at Yatela as at December 31, 2005 were $12.5 million
(2004 - $15.7 million; 2003 - $4.5 million).

For 2006, Yatela is expected to produce 290,000 ounces of gold at a total
direct cash cost of $225 per ounce and a total cash cost, as defined by the
Gold Institute, of $250 per ounce.



WORKING INTERESTS
-------------------------------------------------------------------------
(US$ 2005 2004 2003
000's) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total Total Total
-------------------------------------------------------------------------
Tarkwa $ 5,278 $ 3,372 $ 2,259 $ 2,827 $13,736 $ 7,741 $ 6,739
Damang 444 163 292 832 1,731 5,408 2,911
-------------------------------------------------------------------------
Earnings from
working
interests $ 5,722 $ 3,535 $ 2,551 $ 3,659 $15,467 $13,149 $ 9,650
-------------------------------------------------------------------------
-------------------------------------------------------------------------


The Company owns an 18.9 percent interest in each of two Ghanaian
registered companies, Gold Fields Ghana Limited ("GFGL") and Abosso Goldfields
Limited ("Abosso"). GFGL holds the mining and exploration permits for the
Tarkwa mine in Ghana while Abosso holds the permits for the Damang mine, also
in Ghana. Gold Fields Limited ("Gold Fields") owns a 71.1 percent interest in
each of GFGL and Abosso and the Government of Ghana holds the remaining
10 percent interests in each mine. Gold Fields is the operator at both mines.
In addition, the Company owns a 20.79 percent interest in the GFGL shareholder
loans.

The Company records its investments in its working interests on its
consolidated balance sheet by including its share of the profits from the
Tarkwa and Damang mines, which are also recorded on its consolidated statement
of earnings, net of any profit distributions received.

Earnings improved in 2005 by 78% over 2004 and 104% over 2003 for Tarkwa.
The improvement was primarily attributable to the additional production from
the mill, which began operating in November 2004. Earnings at Damang declined
by 69% from 2004 and 42% from 2003. The decline in Damang is a result of the
depletion of the main pit, resulting in lower grades and higher costs of ore
sourced from satellite pits. Higher realized prices for gold and reduced tax
rates in Ghana have had a positive impact on both mines. The Company's share
of the amortization and depreciation expense recorded in the determination of
the above earnings was $9.1 million (2004 - $7.2 million; 2003 -
$5.7 million).

Subsequent to year-end, the Government of Ghana again reduced its income
tax rate from 28% to 25% and its national reconstruction levy from 1.5% to
0.75%. These tax reductions will result in a reduction to future tax
liabilities at Tarkwa and Damang, resulting in an increase to earnings from
working interests on the order of $1.7 million in 2006.

Tarkwa Mine (IAMGOLD interest - 18.9%)

A summary of significant operating statistics at Tarkwa is provided in
the table below:



Summarized Results
100% Basis
-------------------------------------------------------------------------
2005
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
-------------------------------------------------------------------------
Waste mined (000t) 15,780 16,460 18,550 17,030 67,820
Marginal ore mined (000t) 430 160 120 240 950
Ore mined (000t) 4,920 5,250 5,400 5,140 20,710
Total material mined (000t) 21,130 21,870 24,070 22,410 89,480
Strip Ratio(i) 3.3 3.2 3.5 3.4 3.3

Heap Leach:
-----------
Ore crushed (000t) 4,060 4,220 4,140 4,030 16,450
Head grade (g/t) 1.2 1.3 1.2 1.2 1.2
Gold stacked (000 oz) 150 175 158 157 640
Recovery (%) 80 77 77 77 78
Gold production (000 oz) 126 136 120 111 493

CIL:
----
Ore milled (000t) 1,160 1,180 1,140 1,130 4,610
Head grade (g/t) 1.8 1.7 1.5 1.6 1.7
Recovery (%) 97 98 97 98 98
Gold production (000 oz) 59 63 54 56 232

Total Gold production &
sales - 100% (000 oz) 185 199 174 167 725

Gold revenue (US$/oz)(xx) 428 429 437 482 443
Direct cash costs (US$/oz)(xxx) 223 237 280 297 258
Production taxes (US$/oz)(xxx) 13 13 13 14 13
Total cash costs (US$/oz)(xxx) 236 250 293 311 271
Gold-in-process adjustments
(US$/oz)(xxx) 2 4 (3) (16) (3)
GI cash cost (US$/oz)(xxx) 238 254 290 295 268
-------------------------------------------------------------------------


----------------------------------------------
2004 2003
Total Total
----------------------------------------------
Waste mined (000t) 55,590 31,640
Marginal ore mined (000t) 930 240
Ore mined (000t) 17,740 16,600
Total material mined (000t) 74,260 48,480
Strip Ratio(i) 3.2 1.9

Heap Leach:
-----------
Ore crushed (000t) 16,160 15,570
Head grade (g/t) 1.3 1.4
Gold stacked (000 oz) 705 698
Recovery (%) 78 74
Gold production (000 oz) 525 555

CIL:
----
Ore milled (000t) 850 -
Head grade (g/t) 1.7 -
Recovery (%) 96 -
Gold production (000 oz) 28 -

Total Gold production &
sales - 100% (000 oz) 553 555

Gold revenue (US$/oz)(xx) 411 358
Direct cash costs (US$/oz)(xxx) 249 201
Production taxes (US$/oz)(xxx) 12 11
Total cash costs (US$/oz)(xxx) 261 212
Gold-in-process adjustments
(US$/oz)(xxx) (11) 12
GI cash cost (US$/oz)(xxx) 250 224
----------------------------------------------
(i) Strip ratio is calculated as waste plus marginal ore divided by
full-grade ore.
(xx) Gold revenue is calculated as gold sales, adjusted for hedge
accounting, divided by ounces of gold sold.
(xxx) Cash costs per ounce are non-GAAP measures. Please refer to the
Supplemental Information attached to the Management's Discussion
and Analysis for a reconciliation to GAAP.


The Company's average gold revenue at Tarkwa of $443 per ounce in 2005
was higher than the $411 per ounce achieved in 2004 and the $358 per ounce
achieved in 2003. The mine had no exposure to any financial instruments
(including gold price hedges) during the year, and has no financial
instruments in place for the future.

Material mined in 2005 was 20% higher than 2004 and 85% higher than 2003.
The higher levels of material moved were required to source additional ore as
feed for the new mill and to increase the overall stripping ratio to a level
more in line with the life-of-mine requirement.

Additional gold production at Tarkwa increased 31% over 2004 and 2003 due
to the commencement of mill operations in late 2004. Production from the heap
leach operation declined 6% and 13% from 2004 and 2003 respectively as higher
grade ore is now being processed through the mill, which achieved a recovery
rate of 98% during the year. This high recovery is an indication of the
simplicity in milling the gold from the conglomerate. Studies considering an
increase to the capacity of the mill are currently under way.

Direct cash costs increased 4% from 2004 and 28% from 2003 due to higher
mining costs resulting from continued record levels of waste being mined and
higher costs for fuel and mining supplies. These increases have been mitigated
by the lower mining cost resulting from the conversion to owner mining from
contractor mining in 2004.

Total capital expenditures at Tarkwa in 2005 were $43.7 million (2004 -
$160.4 million; 2003 - $57.2 million), $2.6 million (2004 - $72.1 million;
2003 - $28.9 million) of which was spent on the construction of the new mill,
$0.6 million (2004 - $67.2 million; 2003 - $3.7 million) was spent on the new
mining fleet, $21.2 million (2004 - $2.2 million; 2003 - $9.3 million) was
spent on leach pad expansions, $4.1 million on the purchase of replacement or
additional mining fleet and $15.8 million (2004 - $18.9 million; 2003 -
$15.4 million) was spent on various smaller capital projects.

During 2005, $75.0 million (2004 - $20 million; 2003 - $20 million) of
profit distributions were paid to the mine shareholders. The Company's share
of these distributions was $15.2 million (2004 - $4.0 million; 2003 - $4.0
million), $10.0 million (2004 - $4.0 million; 2003 - $4.0 million) of which is
classified as a dividend and the remaining $5.2 million is classified as a
loan repayment, which is considered an investing activity. In 2004, the
Company remitted $28.2 million to the mine as its share of a cash call for
the construction of the mill and the purchase of the new mining fleet. Cash
balances at Tarkwa as at December 31, 2005 were $45.7 million (2004 - $61.1
million; 2003 - $30.1 million). Subsequent to year-end, Tarkwa paid an
additional $15.0 million of profit distributions (IAMGOLD share $2.9 million).

For 2006, Tarkwa is expected to produce 750,000 ounces of gold at a total
direct cash cost of $285 per ounce and a total cash cost, as defined by the
Gold Institute, of $305 per ounce.

Damang Mine (IAMGOLD interest - 18.9%)

A summary of significant operating statistics at Damang is provided in
the table below:



Summarized Results
100% Basis
-------------------------------------------------------------------------
2005
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
-------------------------------------------------------------------------
Waste mined (000t) 2,650 2,950 2,990 3,250 11,840
Marginal ore mined (000t) 10 - - - 10
Ore mined (000t) 460 860 740 640 2,700
Total material mined (000t) 3,120 3,810 3,730 3,890 14,550
Strip Ratio(i) 5.8 3.4 4.0 5.1 4.4
Waste mined (000t) -
Pit cut back - - 1,550 1,990 3,540

Ore milled (000t) 1,260 1,260 1,330 1,320 5,170
Head grade (g/t) 1.4 1.5 1.5 1.5 1.5
Recovery (%) 91 92 93 93 92

Gold production & sales -
100% (000 oz) 54 58 57 60 229

Gold revenue (US$/oz)(xx) 429 428 438 481 445
Direct cash costs (US$/oz)(xxx) 302 330 322 305 315
Production taxes (US$/oz)(xxx) 13 13 13 14 13
Total cash costs (US$/oz)(xxx) 315 343 335 319 328
Gold-in-process adjustments
(US$/oz)(xxx) 31 - 36 11 19
GI cash cost (US$/oz)(xxx) 345 343 371 330 347
-------------------------------------------------------------------------


----------------------------------------------
2004 2003
Total Total
----------------------------------------------
Waste mined (000t) 7,450 12,250
Marginal ore mined (000t) - -
Ore mined (000t) 4,820 5,250
Total material mined (000t) 12,270 17,500
Strip Ratio(i) 1.5 2.3
Waste mined (000t) -
Pit cut back - -

Ore milled (000t) 5,390 5,080
Head grade (g/t) 1.9 2.1
Recovery (%) 90 91

Gold production & sales -
100% (000 oz) 296 303

Gold revenue (US$/oz)(xx) 407 362
Direct cash costs (US$/oz)(xxx) 210 215
Production taxes (US$/oz)(xxx) 12 11
Total cash costs (US$/oz)(xxx) 222 226
Gold-in-process adjustments
(US$/oz)(xxx) (1) 4
GI cash cost (US$/oz)(xxx) 221 230
-----------------------------------------------
(i) Strip ratio is calculated as waste plus marginal ore divided by
full-grade ore.
(xx) Gold revenue is calculated as gold sales divided by ounces
of gold sold.
(xxx) Cash costs per ounce are non-GAAP measures. Please refer to the
Supplemental Information attached to the Management's Discussion
and Analysis for a reconciliation to GAAP.


The average gold revenue in 2005 at Damang was $445 per ounce versus the
$407 per ounce in 2004 and the $362 per ounce in 2003. The mine had no
exposure to any financial instruments (including gold price hedges) and has no
financial instruments in place for the future.

Gold production for 2005 declined 23% from 2004 and 24% from 2003. The
decline is a result of lower head grades as most of the mill feed was sourced
from satellite pits and stockpiled ore.

Direct cash costs have risen significantly in 2005 to approximately 50%
over 2004 and 2003, which is a result of higher stripping ratios, lower
grades, increased haulage costs from the satellite pits and increased fuel and
mining supplies costs.

During the year, the decision was made to deepen the main Damang pit,
extending the mine life to 2011, and stripping of the pit began in July 2005.
The pit cut back is expected to take two years and will access an additional
700,000 ounces of gold. Production is expected to remain low at approximately
200,000 ounces per year in the pre-strip years but increasing to almost
300,000 ounces per year on completion. The expected cost of the pit cut back
is $44 million, which will be capitalized until production recommences from
the main pit in mid-2007.

Total capital expenditures at Damang in 2005 were $15.0 million (2004 -
$6.4 million; 2003 - $2.8 million). $7.2 million of the 2005 amount was spent
on the pit cut back the remaining $7.8 million and the 2004 and 2003 amounts
were for a variety of small capital projects. Exploration expenditures were
$1.9 million (2004 - $2.0 million; 2003 - $3.0 million) for the year.

Damang paid no dividends to its shareholders in 2005 and 2003 and paid
$25 million in 2004. The Company's share of the 2004 dividend was $4.7
million. During 2005, cash balances were retained in order to finance the pit
cut back project. During 2003, final shareholder loan repayments of $34.3
million were paid, with the Company's share being $6.6 million. Cash balances
at Damang as at December 31, 2005 were $41.0 million (2004 - $34.3 million;
2003 - $14.3 million).

For 2006, Damang is expected to produce 205,000 ounces of gold at a total
direct cash cost of $360 per ounce and a total cash cost, as defined by the
Gold Institute, of $365 per ounce.



ROYALTY INTERESTS
-------------------------------------------------------------------------
2005 2004 2003
(US$ 000'S) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total Total Total
-------------------------------------------------------------------------
Gold royalties
Revenue $ 706 $ 817 $ 742 $ 834 $ 3,099 $ 2,842 $ 2,370
Amortization 344 544 488 505 1,881 1,857 1,586

Diamond royalties
Revenue 1,557 1,457 2,670 1,598 7,282 6,367 2,134
Amortization 818 782 1,411 845 3,856 3,365 1,129
-------------------------------------------------------------------------
Earnings from
royalty
interests $ 1,101 $ 948 $ 1,513 $ 1,082 $ 4,644 $ 3,987 $ 1,789
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Royalty revenues from gold operations were recorded from the following
royalty interests: the Williams mine in northern Ontario; the Joe Mann mine in
Quebec; the Limon mine in Nicaragua; the Vueltas del Rio mine in Honduras,
which ceased operations during 2004; the Magistral mine in Mexico, which began
operations during 2003 and suspended operations during 2005; and the Don Mario
mine in Bolivia, which began operations in 2003.

On November 28, 2005, the Company announced that an agreement had been
reached to sell all of the Company's gold producing and non-producing
royalties, excluding the Magistral and Addwest royalties for $21.8 million.
The closing date was scheduled to occur in January but has been extended to
March 21, 2006.

Royalty income in 2005 from the Diavik project, which recorded its
initial sales during 2003, continued to increase from 2004 and 2003. The
recorded amount for royalty income is based upon sales during the year.

EXPLORATION PROPERTIES

During 2005, the Company spent $10.0 million (2004 - $7.8 million; 2003 -
$5.5 million) to advance various exploration properties in South America, West
Africa and Canada, of which $1.0 million of expenditures in Ecuador was
capitalized. All remaining exploration expenditures, outside of operating
mines, were expensed.

Ecuador

Total exploration spending in 2005 was $5.2 million (2004 - $2.7 million;
2003 - $2.1 million).

At IAMGOLD's 100% owned Quimsacocha property, 27,000m of diamond drilling
were completed in the D1 and Loma Larga zones. Gold, silver and copper
mineralization has been intersected in thick, sub-horizontal layers and in
narrow, sub-vertical zones. This mineralization has been shown to exist
beneath an area of at least 1,500m by 500m.

During 2005, initial metallurgical testing was completed which
demonstrated the high levels of metallurgical recoveries can be achieved
utilizing pressure oxidation or autoclaves to process the ore. In October, an
independent resource assessment for Quimsacocha was completed by Roscoe Postle
and Associates which outlined a resource containing 2.8 million ounces in the
indicated category. Additional drilling during the remainder of 2005 has
extended the dimensions of the deposit. Initial review of the hydro geological
and socio environmental aspects for Quimsacocha's potential development have
also been completed by independent specialists. Metallurgical testing will
continue and drilling in the first half of 2006 is expected to total 23,000
meters in over 80 drill holes. As a result of the independent resource
estimate, the Company began to capitalize all direct exploration expenditures
at Quimsacocha.

The exploration budget for the first half of 2006 is $4.5 million.

Argentina

Total exploration spending in 2005 was $1.3 million (2004 - $1.7 million;
2003 - $1.2 million).

A combination of poor results from three drill programs on targets in Rio
Negro province in 2005 and the passing of a law banning the use of cyanide in
gold mining operations in the province has led to a change in exploration
strategy in Argentina. The drill program planned for the Jacobacci area of Rio
Negro province in the latter part of 2005 was cancelled and no further work
will be carried out in Rio Negro until the cyanide law is rescinded. A
document has been presented to the Rio Negro mining authority requesting the
suspension of all land payments and work obligations in the province until the
law is removed.

In the last quarter of 2005, efforts were concentrated on identifying
advanced projects held by third parties or on new, high-potential exploration
areas. A shift in focus will be made away from Rio Negro and Santa Cruz
provinces to the Central Belt of San Juan and Cajamarca provinces.

IAMGOLD plans to spend $0.5 million in exploration in Argentina in the
first half of 2006.

Brazil

Total exploration expenditures in 2005 amounted to $1.0 million (2004 -
$1.2 million; 2003 - $0.8 million).

At the Tocantins project, INCO signed an agreement with IAMGOLD and
AngloAshanti which allows it to earn up to a 71% interest in selected
properties at Tocantins (excluding gold interests) by spending US$4.5M over
five years.

Field work focused on two of five land packages identified in the region.
Drill results to date on one of two land packages have been encouraging and
follow-up exploration is planned. The Company has also signed an agreement to
earn a 100% interest in the exploration concession adjacent to the
non-operating Canaqua copper gold mine. Exploration effort in 2006 will be
focused on a complete data review to improve the understanding of the mine
site and regional geology.

IAMGOLD plans to spend $1.0 million in exploration in Brazil in the first
half of 2006.

Senegal

Total exploration spending in 2005 was $1.9 million (2004 - $1.3 million;
2003 - $1.1 million).

The Company completed a 3,000m diamond drill and a 10,000m RAD drilling
program in 2005 on the Bambadji project. The objective was to test deeper
targets identified within the Bambadji structural trend. Mineralization was
not considered to be continuous. For 2006, the focus for the first half of the
year will be related to increasing the Company's knowledge of the geologic
controls associated with the broad zones of mineralization established to
date. This will include detailed geologic and geophysical surveys. In order to
reduce land holding costs, a number of concessions were dropped in 2005.

The exploration budget for Senegal in the first half of 2006 is
$1.0 million.

Project Generation

Approximately $0.6 million has been spent in 2005 to identify new regions
of Africa and South America for exploration potential. A similar level of
expenditures will occur in 2006.

ADMINISTRATION AND OTHER COSTS

Corporate administration expenses in 2005 were $9.6 million (2004 -
$8.1 million; 2003 - $7.6 million). A large component of the increase over
2004 and 2003 is attributable to the appreciation of the Canadian dollar as
the majority of administration expense is incurred in Canadian dollars.
Expenses in 2005 and 2004 also include $1.1 million and $1.6 million
respectively of non-cash charges relating to accounting rules adopted
effective January 1, 2004 that require expensing of share options granted to
employees. The 2003 expense includes $1.0 million of restructuring charges
related to the acquisition of Repadre in January 2003.

Corporate transaction costs of $0.7 million were incurred relating to the
acquisition of GGL and have been capitalized in other assets. In addition,
$0.2 million in 2005 and $11.2 million in 2004 were incurred and expensed
relating to the unsuccessful business combinations with Wheaton River Minerals
and Gold Fields International and the defense of the unsolicited take-over bid
by Golden Star Resources.

Foreign exchange losses were $0.2 million in 2005 (2004 - $2.6 million;
2003 - $0.6 million). The Cdn$/US$ exchange rate has strengthened from a year
end closing rate of 1.29 for 2003 to 1.20 for 2004 to 1.16 for 2005. Foreign
exchange losses are primarily attributable to non-cash losses on the
translation of the Company's Canadian-based future tax liability into U.S.
dollars. In 2005 and 2003, the Company held larger Canadian dollar cash
balances and the appreciation of these balances helped to offset the future
tax liability translation losses.

Corporate investment income in 2005 was $1.1 million (2004 -
$2.0 million; 2003 - $2.4 million) and is primarily made up of interest on
cash balances and on the Government of Mali receivable related to the free and
carried interest for the funding of Yatela. 2004 investment income also
includes a gain of $1.1 million on the sale of a loan receivable from Combined
Metals Reduction Company.

INCOME TAXES

An overall income tax expense of $1.7 million was recorded for 2005
(2004 - $0.2 million recovery; 2003 - $1.8 million expense). Current income
tax, in the amount of $5.9 million for 2005 (2004 - $3.7 million; 2003 -
$4.6 million), is primarily composed of $5.1 million (2004 - $3.1 million;
2003 - $4.3 million) of income taxes relating to profits on the Sadiola
operations and paid to the government of Mali. Yatela's five-year tax free
period ends July 3, 2006 and current income tax will start to be recorded at
that time for that operation. The future tax recovery of $4.2 million for 2005
(2004 - $3.9 million; 2003 - $2.9 million expense) is made up of $2.6 million
relating to Canadian corporate administration being in excess of Canadian
taxable revenues and $1.7 million relating to future tax calculations at
Sadiola. In 2003, a future tax recovery of $3.2 million was recorded relating
to reduced estimates of Sadiola profits attributable to Canada.

LIQUIDITY AND CAPITAL RESOURCES

The Company maintains a strong balance sheet and has sufficient liquidity
and capital resources to fund its known commitments.

WORKING CAPITAL

The Company's consolidated working capital position at December 31 is set
out below (in $ millions):



-------------------------------------------------------------------------
2005 2004
-------------------------------------------------------------------------
Current Working Capital 114.5 104.1
Current Ratio 5.0 5.8
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Cash and Short Term Deposits

Consolidated cash and short term deposit balances totaled $61.4 million
at year-end 2005 compared to $37.4 million at year-end 2004, and can be
segmented as follows (in $ millions):



-------------------------------------------------------------------------
2005 2004
-------------------------------------------------------------------------
Joint venture cash $ 8.0 $ 11.1
Corporate cash and short term deposits 53.4 26.3
-------------------------------------------------------------------------
Total $ 61.4 $ 37.4
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Joint venture cash represents the Company's proportionate share of cash
at the Sadiola and Yatela mines and forms part of the working capital at those
operations.

Corporate cash and short term deposits in 2005 increased by $27.1 million
(2004 decreased by $26.9 million; 2003 increased by $47.4 million). Cash flows
that determined this increase (decrease) can be shown as below (in
$ millions):



-------------------------------------------------------------------------
2005 2004 2003
-------------------------------------------------------------------------
Inflows
Tarkwa cash receipts $ 15.2 $ 4.0 $ 4.0
Sadiola cash receipts 11.8 17.1 15.6
Yatela cash receipts, net of repayments to
AngloGold 9.9 - 3.5
Royalties received, net of withholding taxes
and gold bullion 9.1 8.2 4.3
Share issuances, net of share issue costs 6.4 1.1 8.3
Interest income 1.1 0.9 0.9
Foreign exchange gain on cash balances 0.4 - 2.4
Damang cash receipts - 4.7 6.6
Proceeds from sale of marketable securities
and loans receivable - 1.8 3.0
Net cash acquired from Repadre - - 34.2
Other 0.8 - -
-------------------------------------------------------------------------
$ 54.7 $ 37.9 $ 82.8
-------------------------------------------------------------------------


-------------------------------------------------------------------------
2005 2004 2003
-------------------------------------------------------------------------
Outflows
Exploration and exploration administration $ 10.0 $ 7.8 $ 5.5
Corporate administration 8.8 6.8 7.3
Dividends paid 7.3 6.7 2.5
Corporate transaction costs 0.9 11.2 -
Kinbauri settlement 0.4 3.4 -
Tarkwa cash calls - 8.2 2.7
Foreign exchange loss on cash balances - 0.2 -
Gold bullion purchase - - 16.2
Other 0.2 0.5 1.2
-------------------------------------------------------------------------
$ 27.6 $ 64.8 $ 35.4
-------------------------------------------------------------------------
Net inflow (outflow) $ 27.1 $(26.9) $ 47.4
-------------------------------------------------------------------------


Gold Bullion

At the end of 2005, the Company held 148,420 ounces (2004 -
146,648 ounces) of gold bullion with an average cost of $329 per ounce
(2004 - $328 per ounce) resulting in a total cost base of $48.8 million
(2004 - $48.1 million) and a total market value of $76.1 million at $513 per
ounce (2004 - $63.9 million at $436 per ounce).

Other Working Capital Items

Current accounts receivable decreased by $7.1 million in 2005 (2004 -
$5.9 million increase). For 2005, the majority of the decrease relates to the
expensing of the Company's $2.0 million share of the tax pre-payment to the
Government of Mali. Short-term inventories increased in 2005 by $1.2 million
as a result of reclassifying Yatela's oxide ore stockpiles from long-term to
short-term. Current accounts payable increased by $5.4 million during 2005
(2004 - $6.0 million decrease) and include a provision of $1.1 million for
settlement of current tax and duty disputes with the government of Mali.
Dividends payable increased $1.6 million (2004 - $0.6 million) as a result of
an increase in the dividend declared from Cdn. $0.06 per share in 2004 and
2003 to Cdn. $0.07 per share.

FINANCIAL INSTRUMENTS

The Company's functional currency is United States dollars. The Company
does not currently use any derivative products to manage or mitigate any
foreign exchange exposure. There are no financial instruments in place for the
Sadiola, Yatela, Tarkwa or Damang mines and there are no plans to put any
financial instruments in place at this time.

CONTRACTUAL OBLIGATIONS

A summary of the Company's contractual obligations is presented in
tabular form below (in $ millions).



-------------------------------------------------------------------------
Payments due by period
Less After
Total than 1 yr 1-3 yrs 4-5 yrs 5 yrs
-------------------------------------------------------------------------
Long-term debt 6.9 6.9 - - -
Operating lease obligations 0.4 0.3 0.1 - -
Purchase obligations 5.4 5.4 - - -
Rehabilitation 8.0 - 4.5 1.8 1.7
-------------------------------------------------------------------------
Total contractual
obligations 20.7 12.6 4.6 1.8 1.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Long-Term Debt

The Company's long-term loans payable, including interest, at
December 31, 2005 of $6.9 million (2004 - $10.4 million) relate to loans from
AngloGold to the Company for construction of the Yatela mine. These loans are
non-recourse to the Company and are only secured against cash flows of the
Yatela mine. These loans have no fixed repayment schedule. The timing of the
repayments shown in the table above are based on the cash flow generation
ability of the Yatela operations. During 2005, the Company made principal
repayments to AngloGold of $2.7 million (2004 - nil).

Lease Obligations

The majority of the Company's lease obligations relate to leases for
office space, including the head office and exploration offices. These leases
carry standard rights of sublet should the office space not be required.

Purchase Obligations

The Company does not have any material direct purchase obligations. The
major indirect obligations relate to board approved capital expenditures at
the Sadiola and Yatela mines at the joint venture level. Any purchase
contracts associated with these expenditures normally contain standard
termination clauses which may reduce overall commitment level.

Asset Retirement Obligations

The amounts indicated in the table above are the Company's share of the
estimated decommissioning and rehabilitation costs that will be incurred at
the Sadiola and Yatela mines. The timing of the expenditures is dependant upon
the actual life of mine achieved.

RELATED PARTY TRANSACTIONS

During 2005, the Company obtained management and other services from
companies controlled by a director and significant shareholder of the Company
in the amount of $185,000. During 2004 and 2003, the Company obtained
management, office and other services from companies controlled by directors
and significant shareholders of the Company in the amount of $189,000 and
$417,000 respectively. These amounts are included in corporate administration
expense.

CRITICAL ACCOUNTING ESTIMATES

The Company's consolidated financial statements are prepared in
conformity with Canadian generally accepted accounting principles ("Canadian
GAAP"). The accounting policies for the purposes of Canadian GAAP are
described in note 1 to the consolidated financial statements. These policies
are consistent with accounting principles generally accepted in the United
States in all material respects except as outlined in note 19, to the
consolidated financial statements.

Preparation of the consolidated financial statements requires management
to make estimates and assumptions. Management considers the following
estimates to be the most critical in understanding the uncertainties that
could impact its results of operations, financial condition and cash flows.

MINERAL RESERVES AND MINERAL RESOURCES

A mineral reserve is a technical estimate of the amount of metal or
mineral that can be economically extracted from a mineral deposit. Mineral
reserve and mineral resource estimates are imprecise and depend heavily on
geological interpretations and statistical inferences drawn from drilling and
other data, which may prove to be unreliable. To determine the economics of
extraction of the metal, reserve statements also require an estimate of the
future price for the commodity in question and an estimate of the future cost
of operations. A number of accounting estimates, as described below, are
formulated from the reserve estimate.

MINING, WORKING AND ROYALTY INTERESTS

The carrying amounts shown on the balance sheet for mining, working and
royalty interests are regularly tested for impairment of value. The critical
variables in performing these tests are the reserve estimates, the estimate of
future commodity prices and the estimate of the future costs of operation. An
interest is considered impaired if its estimated future cash flow generation
ability is less than its carrying value. If an impairment is identified, the
interest is written down to its fair value. Impairment tests have been
performed on mining, working and royalty interests using an estimated
long-term price for gold of $375 per ounce. No interests were identified as
impaired.

IMPAIRMENT OF GOODWILL

The carrying value for the goodwill on the balance sheet is tested at
least annually for impairment. Goodwill arising from the acquisition of
Repadre in 2003 has been allocated to the Tarkwa/Damang reporting unit and the
gold royalty reporting unit. The fair values of these reporting units are
compared to the total carrying amount (including goodwill) of the respective
reporting unit. If the fair value exceeds the carrying value, goodwill is not
considered to be impaired. If the fair value is less than the carrying value,
the fair values of the assets and liabilities within the reporting unit are
estimated. The difference between the fair value of the assets and liabilities
within the reporting unit and the fair value of the entire reporting unit
represents the fair value of the goodwill of the reporting unit and this value
is reduced if impaired. Any reduction is charged to earnings in the period in
which the impairment is determined. No portion of goodwill was identified as
impaired in 2005.

DEPRECIATION, AMORTIZATION AND DEPLETION

Depreciation, amortization and depletion of mining, working and royalty
interests (other than equipment) is provided over the economic life of the
mine or royalty interest on a units-of-production basis. Equipment at the
mining operations is usually depreciated over its estimated useful life on a
straight-line basis. The reserve and resource estimates for the operation in
question are the prime determinants of the life of the mine and the
units-of-production for that mine. In estimating the units-of-production, the
nature of the orebody and the method of mining the orebody are taken into
account. In general, an open-pit orebody where the mineralization is
reasonably well defined is amortized over its proven and probable mineral
reserves. An underground mine or open pit mine, where additional proven and
probable mineral reserves are likely to be reported over the near to medium
term, may be amortized over proven and probable mineral reserves and a portion
of the mineralized material beyond proven and probable reserves. Changes in
the estimate of mineral reserves will result in changes to the depreciation
and amortization charges over the life of the operation.

ASSET RETIREMENT OBLIGATIONS

The operating entities producing gold at Sadiola, Yatela, Tarkwa and
Damang are obligated to decommission and rehabilitate those mine sites to an
acceptable environmental standard as each operation reaches the point of final
closure. Estimates of these costs have been made by personnel at the
operations and these estimates are regularly reviewed and updated.

At Sadiola, decommissioning and rehabilitation expenses are estimated to
total $9.8 million (2004 - $9.6 million). The Company's share is 38% or
$3.7 million (2004 - $3.6 million). At Yatela, decommissioning and
rehabilitation expenses are estimated to total $13.5 million (2004 -
$7.4 million). The Company's share is 40% or $5.4 million (2004 -
$3.0 million). At December 31, 2005, the Company has recorded a liability of
$7.5 million (2004 - $5.5 million), representing the discounted value of these
obligations.

The amounts estimated for Tarkwa and Damang are $26.6 million (2004 -
$28.0 million) and $4.4 million (2004 - $8.2 million) respectively. The
Company's share of amounts recorded at Tarkwa and Damang are not shown on the
Company's balance sheet as these interests are equity accounted.

INCOME TAXES

At the close of each accounting period, the Company estimates a liability
for future income taxes. These taxes are primarily Canadian-based and arise
from the difference between the book and the tax base of its assets and
liabilities. As mining is capital intensive with long-lived assets, these
future tax provisions can be significant. Future income taxes are provided at
expected future rates for such tax. In addition, Canadian GAAP requires the
calculated liability for future income tax to be translated to the Company's
reporting currency of US dollars at current rates of exchange for each
reporting period. There is no certainty that future income tax rates and
exchange rates will be consistent with current estimates. Changes in tax and
exchange rates increase the volatility of the Company's earnings.

CHANGES IN CANADIAN ACCOUNTING POLICIES

On March 2, 2006, the CICA issued EIC-160 - "Stripping Costs Incurred in
the Production Phase of a Mining Operation" which requires that stripping
costs be expensed unless the stripping activity can be shown to represent a
betterment to the mineral property which requires such costs be capitalized.
Retroactive treatment may be applied. However, if not applied on a retroactive
basis, any existing balance sheet amount relating to stripping costs
represents the opening balance for the year of initial year of application.
Any capitalized stripping costs or any opening existing balance should be
amortized over the reserves that directly benefit from the stripping activity
on a units of production basis. The application of this accounting treatment
is required for fiscal years beginning on or after July 1, 2006. The Company
does not intend to apply this accounting recommendation on a retroactive basis
and does not expect the impact on its financial position to be significant.

FORWARD LOOKING STATEMENTS

Certain statements in this document constitute "forward looking
statements" within the meaning of Section 27A of the US Securities Act of 1933
and Section 21E of the US Securities Exchange Act of 1943.

Such forward looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual results,
performance or achievements of the company to be materially different from the
future results, performance or achievements expressed or implied by such
forward looking statements. Such risks, uncertainties and other important
factors include among others; economic, business and political conditions,
decreases in the market, the price of gold, hazards associated with mining,
labour disruptions, changes in government, exchange rates, currency
devaluations; inflation and other macro-economic factors. These forward
looking statements speak only as of the date of this document.

The company undertakes no obligation to update publicly or release any
revisions to these forward looking statements to reflect events or
circumstances after the date of this document or to reflect the occurrence of
unanticipated events.

US Investors Should Note

The U.S. Securities and Exchange Commission ("SEC") permits mining
companies, in their filings with the SEC to disclose only those mineral
deposits that a company can economically and legally extract or produce. The
Company may use certain terms in its publications such as "resources" that are
prescribed by Canadian regulatory policy and guidelines but are not provided
for in the SEC guidelines on publications and filings.

As at March 9, 2006, there were 149.4 million common shares of the
Company issued and outstanding.


SUPPLEMENTAL INFORMATION TO THE MANAGEMENT'S DISCUSSION AND ANALYSIS

NON-GAAP PERFORMANCE MEASURES

The Company has included cash cost per ounce data, which are non-GAAP
performance measures, in order to provide investors with information about the
cash generating capabilities and profitability of the Company's mining
operations and comparability to other gold producers. The Company reports
total cash cost per ounce wherein the cash cost equals the sum of operating
costs inclusive of production-based taxes and management fees. The Company
also reports Gold Institute cash cost per ounce data in accordance with the
Gold Institute Standard, which the Company believes most gold producers
follow. GI cash cost equals total cash cost, as described previously, adjusted
for the inclusion of certain cash costs incurred in prior periods or the
exclusion of certain cash costs incurred in the current period related to
future production such as stockpiling, gold in process and stripping costs.
These measures differ from measures determined in accordance with GAAP and
should not be considered in isolation or as a substitute for measures of
performance or liquidity prepared in accordance with GAAP. These measures are
not necessarily indicative of operating profit or cash flow from operations as
determined under GAAP.



-------------------------------------------------------------------------
(in $000's except where noted)
2005
Q1 Q2 Q3 Q4 Total
-------------------------------------------------------------------------
Net earnings from joint ventures and working interests:
-------------------------------------------------------
Joint ventures:
Sadiola $ 1,428 $ 1,633 $ 3,328 $ 1,844 $ 8,233
Yatela 1,789 869 1,427 3,797 7,882
Working interests:
Tarkwa 5,278 3,372 2,259 2,827 13,736
Damang 444 163 292 832 1,731
-------------------------------------------------------------------------
As per segmented
information note to
financial statements $ 8,939 $ 6,037 $ 7,306 $ 9,300 $ 31,582
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Sadiola (38% proportionate share):
----------------------------------
Gold revenue $ 16,597 $ 17,855 $ 19,464 $ 21,377 $ 75,293

Mining costs:
Total cash costs (12,260) (13,201) (11,918) (13,963) (51,342)
Stockpile movement 1,273 1,987 1,135 1,687 6,082
-------------------------------------------------------------------------
Gold Institute cash
costs (10,987) (11,214) (10,783) (12,276) (45,260)
Change in bullion
inventory (38) 147 (20) (242) (153)
Exploration expensed (62) (182) (76) (50) (370)
Foreign exchange and
interest (774) (1,157) (311) (3,797) (6,039)
Other non-cash
adjustments 342 132 132 130 736
-------------------------------------------------------------------------
(532) (1,060) (275) (3,959) (5,826)
-------------------------------------------------------------------------
Mining costs (11,519) (12,274) (11,058) (16,235) (51,086)
-------------------------------------------------------------------------
5,078 5,581 8,406 5,142 24,207
Depreciation (2,900) (3,094) (3,312) (3,283) (12,589)
Income taxes (750) (854) (1,766) (15) (3,385)
-------------------------------------------------------------------------
Net earnings from
Sadiola $ 1,428 $ 1,633 $ 3,328 $ 1,844 $ 8,233
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Gold production
- 100% (000 oz) 101 113 116 112 442
Gold production
- 38% (000 oz) 38 43 44 43 168
Total cash costs per
ounce ($/oz) $ 321 $ 307 $ 270 $ 328 $ 306
Gold Institute cash
costs per ounce ($/oz) $ 288 $ 261 $ 244 $ 289 $ 270
-------------------------------------------------------------------------


-------------------------------------------
(in $000's except where noted)
2004 2003
Total Total
-------------------------------------------
Net earnings from joint ventures and working interests:
-------------------------------------------------------
Joint ventures:
Sadiola $ 12,471 $ 12,157
Yatela 5,119 3,316
Working interests:
Tarkwa 7,741 6,739
Damang 5,408 2,911
-------------------------------------------
As per segmented
information note to
financial statements $ 30,739 $ 25,123
-------------------------------------------
-------------------------------------------
Sadiola (38% proportionate share):
----------------------------------
Gold revenue $ 73,178 $ 64,621

Mining costs:
Total cash costs (44,998) (39,851)
Stockpile movement 2,191 3,208
-------------------------------------------
Gold Institute cash
costs (42,807) (36,643)
Change in bullion
inventory 183 (35)
Exploration expensed (85) (159)
Foreign exchange and
interest (330) 993
Other non-cash
adjustments (1,738) 320
-------------------------------------------
(1,970) 1,119
-------------------------------------------
Mining costs (44,777) (35,524)
-------------------------------------------
28,401 29,097
Depreciation (10,782) (10,811)
Income taxes (5,148) (6,129)
-------------------------------------------
Net earnings from
Sadiola $ 12,471 $ 12,157
-------------------------------------------
-------------------------------------------
Gold production
- 100% (000 oz) 458 452
Gold production
- 38% (000 oz) 173 172
Total cash costs per
ounce ($/oz) $ 258 $ 232
Gold Institute cash
costs per ounce ($/oz) $ 246 $ 213
-------------------------------------------



-------------------------------------------------------------------------
(in $000's except where noted)
2005
Q1 Q2 Q3 Q4 Total
-------------------------------------------------------------------------
Yatela (40% proportionate share):
---------------------------------
Gold revenue $ 10,633 $ 9,410 $ 8,440 $ 15,617 $ 44,100

Mining costs:
Total cash costs (6,374) (6,998) (7,541) (8,033) (28,946)
Cash cost adjustments:
Stockpile movement (429) (1,741) (1,879) (144) (4,193)
Deferred stripping 249 1,766 3,198 1,538 6,751
Gold in process 382 49 (194) (273) (36)
-------------------------------------------------------------------------
202 75 1,125 1,121 2,522
-------------------------------------------------------------------------
Gold Institute cash
costs (6,172) (6,924) (6,416) (6,912) (26,424)
Change in bullion
inventory (611) 255 748 (471) (79)
Exploration expensed - - - - -
Foreign exchange and
interest (214) (222) 58 (1,626) (2,004)
Other non-cash adjustments (20) 150 75 100 305
-------------------------------------------------------------------------
(845) 183 881 (1,997) (1,778)
-------------------------------------------------------------------------
Mining costs (7,017) (6,741) (5,535) (8,909) (28,202)
-------------------------------------------------------------------------
3,616 2,669 2,905 6,708 15,898
Depreciation (1,827) (1,800) (1,478) (2,911) (8,016)
-------------------------------------------------------------------------
Net earnings (loss)
from Yatela $ 1,789 $ 869 $ 1,427 $ 3,797 $ 7,882
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Gold production
- 100% (000 oz) 58 57 54 78 247
Gold production
- 40% (000 oz) 23 23 21 31 98
Total cash costs per
ounce ($/oz) $ 277 $ 309 $ 352 $ 257 $ 294
Gold Institute cash
costs per ounce ($/oz) $ 268 $ 306 $ 300 $ 221 $ 269
-------------------------------------------------------------------------

Tarkwa (18.9% proportionate share):
-----------------------------------
Gold revenue $ 14,954 $ 16,154 $ 14,387 $ 15,188 $ 60,683

Mining costs:
Total cash costs (8,253) (9,384) (9,654) (9,800) (37,091)
Gold in process (76) (182) 102 524 368
-------------------------------------------------------------------------
Gold Institute cash
costs (8,329) (9,566) (9,552) (9,276) (36,723)
Interest income (expense) 129 136 248 (120) 393
-------------------------------------------------------------------------
Mining costs (8,200) (9,430) (9,304) (9,396) (36,330)
-------------------------------------------------------------------------
6,754 6,724 5,083 5,792 24,353
Depreciation (2,201) (1,898) (1,837) (1,756) (7,692)
Income taxes 725 (1,454) (987) (1,209) (2,925)
-------------------------------------------------------------------------
Net earnings from
Tarkwa $ 5,278 $ 3,372 $ 2,259 $ 2,827 $ 13,736
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Gold production
- 100% (000 oz) 185 199 174 167 725
Gold production
- 18.9% (000 oz) 35 37 33 32 137
Total cash costs per
ounce ($/oz) $ 236 $ 250 $ 293 $ 311 $ 271
Gold Institute cash
costs per ounce ($/oz) $ 238 $ 254 $ 290 $ 295 $ 268
-------------------------------------------------------------------------


-------------------------------------------
(in $000's except where noted)
2004 2003
Total Total
-------------------------------------------
Yatela (40% proportionate share):
---------------------------------
Gold revenue $ 39,485 $ 31,986

Mining costs:
Total cash costs (29,605) (23,732)
Cash cost adjustments:
Stockpile movement 4,053 (479)
Deferred stripping (1,291) 3,256
Gold in process 1,369 (345)
-------------------------------------------
4,131 2,432
-------------------------------------------
Gold Institute cash
costs (25,474) (21,300)
Change in bullion
inventory (44) (118)
Exploration expensed (47) -
Foreign exchange and
interest (299) (318)
Other non-cash
adjustments 1,308 640
-------------------------------------------
918 204
-------------------------------------------
Mining costs (24,556) (21,096)
-------------------------------------------
14,929 10,890
Depreciation (9,810) (7,574)
-------------------------------------------
Net earnings (loss)
from Yatela $ 5,119 $ 3,316
-------------------------------------------
-------------------------------------------
Gold production
- 100% (000 oz) 242 218
Gold production
- 40% (000 oz) 97 87
Total cash costs per
ounce ($/oz) $ 306 $ 272
Gold Institute cash
costs per ounce ($/oz) $ 263 $ 244
-------------------------------------------

Tarkwa (18.9% proportionate share):
-----------------------------------
Gold revenue $ 42,971 $ 37,548

Mining costs:
Total cash costs (27,331) (22,268)
Gold in process 1,158 (1,227)
-------------------------------------------
Gold Institute cash
costs (26,173) (23,495)
Interest income (expense) 214 80
-------------------------------------------
Mining costs (25,959) (23,415)
-------------------------------------------
17,012 14,133
Depreciation (4,974) (3,222)
Income taxes (4,297) (4,172)
-------------------------------------------
Net earnings from
Tarkwa $ 7,741 $ 6,739
-------------------------------------------
-------------------------------------------
Gold production
- 100% (000 oz) 553 555
Gold production
- 18.9% (000 oz) 105 105
Total cash costs per
ounce ($/oz) $ 261 $ 212
Gold Institute cash
costs per ounce ($/oz) $ 250 $ 224
-------------------------------------------



-------------------------------------------------------------------------
(in $000's except where noted)
2005
Q1 Q2 Q3 Q4 Total
-------------------------------------------------------------------------
Damang (18.9% proportionate share):
-----------------------------------
Gold revenue $ 4,367 $ 4,713 $ 4,733 $ 5,474 $ 19,287

Mining costs:
Total cash costs (3,209) (3,779) (3,620) (3,631) (14,239)
Gold in process (311) (4) (388) (122) (825)
-------------------------------------------------------------------------
Gold Institute cash
costs (3,520) (3,783) (4,008) (3,753) (15,064)
Exploration expensed (74) (63) (119) (106) (362)
Interest income (expense) 48 110 138 (129) 167
-------------------------------------------------------------------------
Mining costs (3,546) (3,736) (3,989) (3,988) (15,259)
-------------------------------------------------------------------------
821 977 744 1,486 4,028
Depreciation (381) (481) (295) (250) (1,407)
Income taxes 4 (333) (157) (404) (890)
-------------------------------------------------------------------------
Net earnings from
Damang $ 444 $ 163 $ 292 $ 832 $ 1,731
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Gold production
- 100% (000 oz) 54 58 57 60 229
Gold production
- 18.9% (000 oz) 10 11 11 11 43
Total cash costs per
ounce ($/oz) $ 315 $ 343 $ 335 $ 319 $ 328
Gold Institute cash
costs per ounce ($/oz) $ 345 $ 343 $ 371 $ 330 $ 347
-------------------------------------------------------------------------

Total joint ventures and working interests:
-------------------------------------------
Gold revenue $ 46,551 $ 48,132 $ 47,024 $ 57,656 $199,363
Mining costs:
Total cash costs (30,096) (33,362) (32,733) (35,427) (131,618)
Total cash adjustments 1,088 1,875 1,974 3,210 8,147
-------------------------------------------------------------------------
Gold Institute cash
costs (29,008) (31,487) (30,759) (32,217) (123,471)
Other adjustments (1,274) (694) 873 (6,311) (7,406)
-------------------------------------------------------------------------
Mining costs (30,282) (32,181) (29,886) (38,528) (130,877)
-------------------------------------------------------------------------
16,269 15,951 17,138 19,128 68,486
Depreciation (7,309) (7,273) (6,922) (8,200) (29,704)
Income taxes (21) (2,641) (2,910) (1,628) (7,200)
-------------------------------------------------------------------------
Net earnings from
all mines $ 8,939 $ 6,037 $ 7,306 $ 9,300 $ 31,582
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Attributable production
(000 oz) 106 114 109 117 446
Weighted average Total
cash costs per ounce
($/oz) $ 283 $ 292 $ 299 $ 304 $ 295
Weighted average Gold
Institute cash costs
per ounce ($/oz) $ 273 $ 275 $ 281 $ 276 $ 276
-------------------------------------------------------------------------


-------------------------------------------
(in $000's except where noted)
2004 2003
Total Total
-------------------------------------------
Damang (18.9% proportionate share):
-----------------------------------
Gold revenue $ 22,800 $ 20,698

Mining costs:
Total cash costs (12,430) (12,950)
Gold in process 35 (243)
-------------------------------------------
Gold Institute cash
costs (12,395) (13,193)
Exploration expensed (375) (569)
Interest income (expense) 27 68
-------------------------------------------
Mining costs (12,743) (13,694)
-------------------------------------------
10,057 7,004
Depreciation (2,199) (2,510)
Income taxes (2,450) (1,583)
-------------------------------------------
Net earnings from
Damang $ 5,408 $ 2,911
-------------------------------------------
-------------------------------------------
Gold production
- 100% (000 oz) 296 303
Gold production
- 18.9% (000 oz) 56 57
Total cash costs per
ounce ($/oz) $ 222 $ 226
Gold Institute cash
costs per ounce ($/oz) $ 221 $ 230
-------------------------------------------

Total joint ventures and working interests:
-------------------------------------------
Gold revenue $178,434 $154,853
Mining costs:
Total cash costs (114,364) (98,801)
Total cash adjustments 7,515 4,170
-------------------------------------------
Gold Institute cash
costs (106,849) (94,631)
Other adjustments (1,186) 902
-------------------------------------------
Mining costs (108,035) (93,729)
-------------------------------------------
70,399 61,124
Depreciation (27,765) (24,117)
Income taxes (11,895) (11,884)
-------------------------------------------
Net earnings from
all mines $ 30,739 $ 25,123
-------------------------------------------
-------------------------------------------
Attributable production
(000 oz) 431 421
Weighted average Total
cash costs per ounce
($/oz) $ 265 $ 235
Weighted average Gold
Institute cash costs
per ounce ($/oz) $ 248 $ 225
-------------------------------------------



CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. dollars)
(Unaudited)
December 31, 2005 and 2004
-------------------------------------------------------------------------

2005 2004
-------------------------------------------------------------------------
ASSETS

Current assets:
Cash and cash equivalents (note 1) $ 45,534 $ 37,152
Short-term deposits 15,823 228
Gold bullion (148,420 oz - market value
$76,139,000) (note 2) 48,840 48,056
Accounts receivable and other 20,267 27,330
Inventories 12,825 11,605
-------------------------------------------------------------------------
143,289 124,371
Ore stockpiles 17,941 16,883
Long-term receivables (note 3) 13,600 6,861
Working interests 92,762 92,476
Royalty interests 51,482 57,219
Mining interests 70,716 72,825
Deferred exploration 962 -
Other assets 3,347 2,481
Goodwill 74,886 74,886
-------------------------------------------------------------------------
$ 468,985 $ 448,002
-------------------------------------------------------------------------
-------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable & accrued liabilities $ 19,892 $ 14,533
Dividends payable 8,870 7,276
-------------------------------------------------------------------------
28,762 21,809

Non-recourse loans payable (note 3) 6,924 10,437
Future tax liability 14,791 18,464
Asset retirement obligation 7,506 5,549
-------------------------------------------------------------------------
29,221 34,450
Shareholders' equity:
Common shares (Issued: 147,648,127 shares)
(note 4) 352,606 343,957
Stock-based compensation (note 4(a)) 4,671 5,675
Share purchase loans (296) (286)
Retained earnings 54,021 42,397
-------------------------------------------------------------------------
411,002 391,743
-------------------------------------------------------------------------
$ 468,985 $ 448,002
-------------------------------------------------------------------------
-------------------------------------------------------------------------

See accompanying notes to the consolidated financial statements.


CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
(Expressed in thousands of U.S. dollars, except per share amounts)
(Unaudited)
December 31, 2005 and 2004
-------------------------------------------------------------------------
Three months ended Year ended
Dec.31 Dec.31, Dec.31, Dec.31,
2005 2004 2005 2004
-------------------------------------------------------------------------

Revenue:
Gold sales $ 36,994 $ 31,593 $ 119,393 $ 112,663
Royalties 2,432 3,061 10,381 9,209
-------------------------------------------------------------------------
39,426 34,654 129,774 121,872
Expenses:
Mining costs, excluding
depreciation and
depletion 25,144 19,427 79,288 69,333
Depreciation and
depletion 6,194 5,967 20,605 20,592
Amortization of royalty
interests 1,350 1,753 5,737 5,222
-------------------------------------------------------------------------
32,688 27,147 105,630 95,147
-------------------------------------------------------------------------
6,738 7,507 24,144 26,725
Earnings from working
interests 3,659 3,854 15,467 13,149
-------------------------------------------------------------------------
10,397 11,361 39,611 39,874
-------------------------------------------------------------------------
Other expenses (income) :
Corporate administration 3,660 2,207 9,560 8,135
Corporate transaction
costs - 1,715 172 11,224
Provision for litigation
(note 6(a)) - 371 (381) 371
Exploration 2,029 2,449 9,001 7,813
Writedowns - 405 - 405
Foreign exchange (236) 1,805 187 2,595
Investment income (397) (195) (1,080) (2,044)
-------------------------------------------------------------------------
5,056 8,757 17,459 28,499
-------------------------------------------------------------------------
Earnings before income taxes 5,341 2,604 22,152 11,375
Income taxes (recovery ):
Current 1,671 716 5,907 3,689
Future (2,508) (1,009) (4,249) (3,923)
-------------------------------------------------------------------------
(837) (293) 1,658 (234)
-------------------------------------------------------------------------
Net earnings (loss) 6,178 2,897 20,494 11,609
Retained earnings: 56,713 46,776 42,397 38,064
Dividends (8,870) (7,276) (8,870) (7,276)
-------------------------------------------------------------------------
Retained earnings, end
of period $ 54,021 $ 42,397 $ 54,021 $ 42,397
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Number of common shares
Average outstanding
during period 147,634,000 145,746,000 146,650,000 145,592,000
Outstanding at end
of period 147,648,000 145,762,000 147,648,000 145,762,000
Net earnings per share
- basic and diluted $ 0.04 $ 0.02 $ 0.14 $ 0.08
-------------------------------------------------------------------------

See accompanying notes to the consolidated financial statements.


CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of U.S. dollars,
except per share amounts)
(Unaudited)
Years ended December 31, 2005 and 2004

-------------------------------------------------------------------------
Three months ended Year ended
Dec.31 Dec.31, Dec.31, Dec.31,
2005 2004 2005 2004
-------------------------------------------------------------------------

Operating activities:
Net income (loss) $ 6,178 $ 2,897 $ 20,494 $ 11,609
Items not affecting cash:
Earnings from working
interests, net of
dividends 1,569 (3,854) (5,514) (4,432)
Depreciation, depletion
and amortization 7,578 7,670 26,445 25,814
Writedown - 318 - 318
Deferred revenue - (414) - (1,655)
Future income taxes (2,508) (1,009) (4,249) (3,923)
Stock-based compensation 545 237 1,237 1,577
Gain on sale of marketable
securities and long-term
receivables - - - (1,120)
Unrealized foreign exchange
losses (5) 967 585 1,492
Change in non-cash current
working capital 7,016 (10,709) 4,402 (11,778)
Change in non-cash long-term
working capital (2,371) (816) (9,357) (4,219)
-------------------------------------------------------------------------
18,002 (4,713) 34,043 13,683
-------------------------------------------------------------------------
Financing activities:
Issue of common shares,
net of issue costs (note 4) 28 162 6,440 1,108
Dividends paid - - (7,276) (6,725)
Share purchase loan repayments - - - -
Repayments of non-recourse
loans (2,247) (601) (3,960) (1,207)
-------------------------------------------------------------------------
(2,219) (439) (4,796) (6,824)
-------------------------------------------------------------------------
Investing activities:
Mining interests (1,323) (2,519) (9,919) (9,000)
Note receivable 1,482 56 2,136 24
Distributions received
(paid) from (to) working
interests 5,228 - 5,228 (28,238)
Deferred exploration (962) - (962) -
Short-term deposits (10,030) (1) (15,595) 23,265
Gold bullion (200) (221) (784) (773)
Other assets (810) 34 (969) -
Proceeds from disposition
of marketable securities
and long-term receivables - - - 1,833
-------------------------------------------------------------------------
(6,615) (2,651) (20,865) (12,889)
-------------------------------------------------------------------------
Increase (decrease) in
cash and cash equivalents 9,168 (7,803) 8,382 (6,030)
Cash and cash equivalents,
beginning of period 36,366 44,955 37,152 43,182
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period $ 45,534 $ 37,152 $ 45,534 $ 37,152
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Supplemental cash flow
information:
Interest paid 32 64 78 $ 142
Income taxes 1,671 920 5,907 3,893
-------------------------------------------------------------------------

See accompanying notes to the consolidated financial statements.

NOTES TO CONSOLIDATED STATEMENTS
(unaudited)
(Tabular amounts in thousands of United States Dollars except per share data)


For the period ended December 31, 2005

The interim consolidated financial statements of IAMGOLD Corporation
("the Company") have been prepared by management in accordance with accounting
principles generally accepted in Canada. The interim consolidated financial
statements have been prepared following the same accounting policies and
methods of computation as the consolidated financial statements for the fiscal
year ended December 31, 2005. The interim consolidated financial statements
should be read in conjunction with the consolidated financial statements and
the notes thereto in the Company's annual report for the year ended
December 31, 2005.



1. CASH AND CASH EQUIVALENTS:
-------------------------------------------------------------------------
Dec 31, Dec. 31,
2005 2004
---------------------------------------------------------------------
Corporate $ 37,576 $ 26,260
Joint ventures 7,958 11,120
---------------------------------------------------------------------
$ 45,534 $ 37,380
---------------------------------------------------------------------
---------------------------------------------------------------------

2. GOLD BULLION:
-------------------------------------------------------------------------
As at December 31, 2005, the Company held 148,420 ounces of gold
bullion at an average cost of US$329 per ounce. The market value of
this gold bullion, based on the market close price of $513 per ounce
was $76,139,000.

3. NON-RECOURSE LOANS PAYABLE:
-------------------------------------------------------------------------
Dec. 31, Dec. 31,
2005 2004
---------------------------------------------------------------------
Yatela loans $ 6,924 $ 10,437
Note receivable from the Government of
Mali, included in long-term receivables 4,475 6,611
---------------------------------------------------------------------
Net Yatela obligation $ 2,449 $ 3,826
---------------------------------------------------------------------
---------------------------------------------------------------------

4. SHARE CAPITAL:
-------------------------------------------------------------------------
Authorized:
Unlimited first preference of shares, issuable in series
Unlimited second preference shares, issuable in series
Unlimited common shares
Issued and outstanding common shares are as follows:
---------------------------------------------------------------------
Number of
shares Amount
---------------------------------------------------------------------
Issued and outstanding, December 31, 2004 145,761,646 $ 343,957
Exercise of options 1,834,658 8,296
Share purchase plan 31,600 211
Share bonus plan 20,223 142
---------------------------------------------------------------------
Issued and outstanding, December 31, 2005 147,648,127 $ 352,606
---------------------------------------------------------------------
---------------------------------------------------------------------



(a) Stock-based compensation:

The Company has a comprehensive share option plan for its full-
time employees, directors and officers and self-employed
consultants. The options vest over three years and expire no
longer than 10 years from the date of grant.

A summary of the status of the Company's share option plan as of
December 31, 2005 and changes during the year then ended is
presented below. All exercise prices are denominated in Canadian
dollars.

----------------------------------------------------------------
Weighted
Average
Exercise
Options Price
----------------------------------------------------------------

Outstanding, beginning of period 5,691,899 $ 5.78
Granted 415,000 8.25
Exercised (1,834,658) 4.21
Forfeited (195,999) 8.19
----------------------------------------------------------------
Outstanding, December 31, 2005 4,076,242 $ 6.62
----------------------------------------------------------------
Options exercisable, December 31, 2005 2,981,242 $ 5.95
----------------------------------------------------------------

The Company accounts for all stock- based compensation granted
on or after January 1, 2002, using the fair value based method.

The fair value of the options granted subsequent to January 1,
2002 has been estimated at the date of grant using a
Black-Scholes option pricing model with the following
assumptions: risk-free interest rate of 3% to 5%, dividend yield
of 1%, volatility factor of the expected market price of the
Company's common stock of 37%; and a weighted average expected
life of these options of 4 years or 8 years depending on the
life of the option. The estimated fair value of the options is
expensed over the options' vesting period of 3 years. For the
year ended December 31, 2005, $960,000 was recorded as
compensation expense.

The Company has a share purchase plan for employees whereby the
Company will match the participants' contribution to purchase a
maximum of 750,000 common shares. The plan was activated in 2005
and $136,000 was recorded as compensation expense and
31,600 restricted common shares were issued to employees during
the year. Common shares issued under the share purchase plan are
restricted for one year.

The Company has a share bonus plan for employees whereby a
maximum of 600,000 common shares may be awarded. In 2005, the
Company awarded share bonuses totaling 12,833 shares to
non-executive board members and recorded $89,000 as compensation
expense. In 2004, the Company awarded 22,172 restricted common
shares with a value of Cdn$200,000 to be issued over a
three-year vesting period, of which 7,390 shares were issued and
$51,000 was recorded as compensation expense in 2005.

5. SEGMENTED INFORMATION:
-------------------------------------------------------------------------

(a) The Company's assets, liabilities, revenue and expenses, and
cash flows allocated to the appropriate reporting segments
identified by the Company are as follows:



Joint
Venture
and Working
December 31, 2005 Interests Royalties Corporate Total
----------------------------------------------------------------
Cash and gold bullion $ 7,958 $ - $102,239 $110,197
Other current assets 30,547 - 2,545 33,092
Long-term assets 102,007 67,208 4,559 173,774
Long-term assets
related to working
interests 151,922 - - 151,922
----------------------------------------------------------------
$292,434 $ 67,208 $109,343 $468,985
----------------------------------------------------------------
Current liabilities $ 15,867 $ - $ 12,895 $ 28,762
Long-term liabilities 14,461 21,140 (6,380) 29,221
----------------------------------------------------------------
$ 30,328 $ 21,140 $ 6,515 $ 57,983
----------------------------------------------------------------
----------------------------------------------------------------


----------------------------------------------------------------
Joint
Venture
and Working
December 31, 2004 Interests Royalties Corporate Total
----------------------------------------------------------------
Cash and gold bullion $ 11,120 $ - $ 74,316 $ 85,436
Other current assets 36,095 - 2,840 38,935
Long-term assets 96,319 72,945 2,730 171,994
Long-term assets
related to working
interests 151,636 - - 151,636
----------------------------------------------------------------
$295,170 $ 72,945 $ 79,886 $448,001
----------------------------------------------------------------
Current liabilities $ 10,443 $ - $ 11,366 $ 21,809
Long-term liabilities 17,710 22,966 (6,226) 34,450
----------------------------------------------------------------
$ 28,153 $ 22,966 $ 5,140 $ 56,259
----------------------------------------------------------------


----------------------------------------------------------------
Joint
Three months Venture
ended December and Working
31, 2005 Interests Royalties Corporate Total
----------------------------------------------------------------
Revenues $ 36,994 $ 2,432 $ - $ 39,426
Earnings from working
Interest 3,660 - - 3,660
----------------------------------------------------------------
40,654 2,432 - 43,086
Operating costs of
mine 19,672 - - 19,672
Depreciation and
amortization 6,194 1,350 34 7,578
Exploration expense 50 - 2,029 2,079
Administration and
other expenses 5,398 (6) 3,375 8,767
Interest and investment
expense(income), net 25 - (376) (351)
Income taxes 15 (276) (576) (837)
----------------------------------------------------------------
31,354 1,068 4,486 36,908
----------------------------------------------------------------
Net earnings (loss) $ 9,300 $ 1,364 $ (4,486) $ (6,178)
----------------------------------------------------------------
----------------------------------------------------------------



----------------------------------------------------------------
Joint
Three months Venture
ended December and Working
31, 2004 Interests Royalties Corporate Total
----------------------------------------------------------------
Revenues $ 31,593 $ 3,061 $ - $ 34,654
Earnings from working
Interest 3,854 - - 3,854
----------------------------------------------------------------
35,447 3,061 - 38,508
Operating costs of
mine 20,197 - - 20,197
Depreciation and
amortization 5,967 1,753 28 7,748
Exploration expense - - 2,449 2,449
Administration and
other expenses (480) 1,192 5,232 5,944
Interest and investment
expense(income), net (291) - (143) (434)
Income taxes 1,066 (544) (815) (293)
----------------------------------------------------------------
26,459 2,401 6,751 35,611
----------------------------------------------------------------
Net earnings (loss) $ 8,988 $ 660 $ (6,751) $ 2,897
----------------------------------------------------------------


----------------------------------------------------------------
Joint
Twelve months Venture
ended December and Working
31, 2005 Interests Royalties Corporate Total
----------------------------------------------------------------
Revenues $119,393 $ 10,381 $ - $129,774
Earnings from working
Interest 15,467 - - 15,467
----------------------------------------------------------------
134,860 10,381 - 145,241
Operating costs of
mine 70,875 - - 70,875
Depreciation and
amortization 20,605 5,737 103 26,445
Exploration expense 370 - 9,001 9,371
Administration and
other expenses 7,880 770 8,569 17,219
Interest and investment
expense(income), net 163 - (984) (821)
Income taxes 3,385 (2,093) 366 1,658
----------------------------------------------------------------
103,278 4,414 17,055 124,747
----------------------------------------------------------------
Net earnings (loss) $ 31,582 $ 5,967 $(17,055) $ 20,494
----------------------------------------------------------------
----------------------------------------------------------------



----------------------------------------------------------------
Joint
Twelve months Venture
ended December and Working
31, 2004 Interests Royalties Corporate Total
-----------------------------------------------------------------
Revenues $112,663 $ 9,209 $ - $121,872
Earnings from working
Interest 13,149 - - 13,149
----------------------------------------------------------------
125,812 9,209 - 135,021
Operating costs of
mine 68,572 - - 68,572
Depreciation and
amortization 20,592 5,222 78 25,892
Exploration expense 132 - 7,813 7,945
Administration and
other expenses 1,571 1,840 20,613 24,024
Interest and investment
expense(income), net (942) - (1,845) (2,787)
Income taxes 5,148 (2,056) (3,326) (234)
----------------------------------------------------------------
95,073 5,006 23,333 123,412
----------------------------------------------------------------
Net earnings (loss) $ 30,739 $ 4,203 $(23,333) $(11,609)
----------------------------------------------------------------
----------------------------------------------------------------

(b) The Company's share of mining asset additions at its joint
ventures for the three months ended December 31, 2005 is
$1,323,000 (2004 - $2,519,000) and for the twelve months ended
December 31, 2005 is $9,919000 (2004 - $9,000,000).


(c) The Company's share of joint venture cash flows for the period
ended December 31, 2005 is as follows:

---------------------------------------------------------------------
Three months ended Year ended
---------------------------------------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2005 2004 2005 2004
---------------------------------------------------------------------
Cash flows from (used in)
operations $ 12,596 $ 3,023 $ 30,226 $ 24,899
Cash flows from (used in)
financing (2,247) (601) (3,960) (1,207)
Cash flows from (used in)
investments 159 (2,463) (7,783) (8,976)
---------------------------------------------------------------------
---------------------------------------------------------------------

6. CONTINGENCIES
-------------------------------------------------------------------------

In 2005 the Company paid Cdn.$506,000 in respect of the final legal
costs relating to an action commenced by Kinbauri Gold Corporation.
The action was resolved in 2004. In December 2003, the Department of
Taxation in Mali performed an audit of the mining operations at the
Yatela and Sadiola mines in Mali for the years 2000, 2001 and 2002.
The audit report claimed taxes and penalties payable of approximately
$15.6 million of which the Company's share is $5.9 million. In 2004,
Sadiola paid approximately $5.2 million, of which the Company's share
is $2.0 million, as a deposit towards the assessment. Sadiola and
Yatela management reviewed the claims with legal and tax advisors and
were of the opinion that all taxes were properly paid and that the
audit report was without merit. As of December 2004, the Department
of Taxation had withdrawn or abandoned significant portions of the
audit claims. The Company continued to work with the other partners
in the Yatela and Sadiola mines to negotiate a resolution of the
remaining audit claims. Rather than commence arbitration to enforce
their rights under their original Convention Agreements with the
Government of Mali, the Company in conjunction with its partners
agreed to a settlement with the Malian Department of Taxation based
on the prior payment of $5,200,000. In return for this amount, all
items were resolved and the Yatela and Sadiola mines received
clarification of future tax treatment which should benefit the mines
throughout the remaining mine life.

In December 2005 an additional audit claim for the years 2003 and
2004 was received for the Yatela and Sadiola mine. The mines have
made a provision of $2,200,000 for the resolution of the audit claims
although the mine management is formally contesting the full amount
of the audit claims.

7. SUBSEQUENT EVENTS:
-------------------------------------------------------------------------

On March 3, 2006, the shareholders of Gallery Gold Limited ("GGL")
approved a scheme of arrangement whereby the Company will acquire all
of the issued and outstanding shares of GGL in exchange for the
issuance of 26,212,850 common shares. All common share options will
be settled in cash by the Company. As a result of this transaction
the combined company will be held 85% by the Company's existing
shareholders and 15% by GGL's existing shareholders. GGL, through its
subsidiaries, owns a 100% interest in the Mupane gold mine in
Botswana and a controlling interest in an advanced exploration
project in Tanzania. The purchase price has been determined to be
$229,100,000 before acquisition costs.

The acquisition is subject to Australian court approval, which
is expected to occur on March 21, 2006.

The acquisition will be accounted for under the purchase method
with the fair value of the consideration being allocated to the
fair value of the identifiable assets and liabilities on the
closing date.

Contact Information

  • Joseph F. Conway
    President and Chief Executive Officer

    Grant A. Edey
    Chief Financial Officer
    Tel (416) 360-4710
    North America Toll Free 1-888-IMG-9999