Toronto, Ontario

The most significant event in the second quarter was the series of rock bursts at the Macassa Mine in Kirkland Lake, Ontario. While production is resuming in the upper levels of the mine and recent exploration results have been quite encouraging, the rock burst incidents have resulted in a degree of uncertainty about the viability of mining at depth. To properly reflect this uncertainty the Company has decided to take a $24,000,000 after-tax write-down. As a result the net loss for the three months ended June 30, 1997 was $23,546,000 indicating a small profit from operations of approximately $454,000. After accounting for the convertible debenture equity component increase, the Company reports a second quarter loss of $0.20 per share on revenues of $47,315,000. This compares with a net income for the three months ended June 30, 1996 of $3,739,000 or three cents per share on revenues of $53,660,000. However, operating cash flow before changes in non-cash working capital increased by 82% during the second quarter to $9,462,000 as compared to $5,204,000 in the first quarter of 1997.

Net loss for the six months ended June 30, 1997 was $25,621,000. After accounting for the convertible debenture equity component increase, the Company reports a loss of $0.22 per share on revenues of $90,647,000 for the first half of the year. This compares with a net income for the six months ended June 30, 1996 of $4,871,000, or four cents per share on revenues of $98,813,000.

Earnings and operating cash flow in the second quarter and first half of 1997 were negatively effected by lower realized gold prices and lower production at the Macassa Mine.

Revenue from the sale of 103,158 ounces of gold and 1,460,000 ounces of silver in the second quarter was $44,825,000, 15% lower than the $52,755,000 revenue reported in the second quarter of 1996 from the sale of 117,780 ounces of gold and 1,247,000 ounces of silver. Average realized prices for the second quarter were $356 (1996 - $391) per ounce for gold and $5.56 (1996 - $5.39) per ounce for silver which compares to average spot prices of $344 for gold and $4.76 for silver. Average realized prices for the first six months of 1997 were $362 (1996 - $395) per ounce for gold and $5.54 (1996 - $5.55) per ounce for silver which compares to average spot prices of $347 for gold and $4.89 for silver.

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