2004 total cash costs of US$306.7/ounce (2003 – US$302.2/ounce) and total production costs of US$327.3/ounce (2003 – US$319.1/ounce). The Omchak Joint Venture was formed in July 2003 and as such reported profit for the period August to December 2003 – taking into account the highly profitable summer months and excluding the higher cost winter months. Reports for 2004 cover a full year of revenue and costs – the relative attributable profit line was consequently reduced.

In 2005 costs at Omchak rose due to a significant rise in material and input costs which have affected the mining industry as a whole.  With c.40% of its costs connected to fuel and energy due to its alluvial operations, and significant foreign exchange translation losses, in 2005 there was a 17% rise in total cash costs to US$360/oz (2004 - US$307/oz) and a 19% rise in total production costs to US$388/oz (2004 - US$327/oz).

Unit costs in 2006 at Omchak rose.  Part of this rise was a result of the 50% decrease in gold output from Nelkobazoloto (due to the move to mining deeper levels) - increasing unit costs as fixed costs remain constant.  Berelekh also suffered a reduction in gold production though not to the same extent as Nelkobazoloto.   

Total cash costs for Omchak in 2006 were US$483/oz (2005 - $360/oz) a 34% rise.  Although somewhat disappointing, the effect on the Group's profit for the year is not material.  The Omchak management team expect that the time invested at Nelkobazoloto could increase gold production by 50% in 2007.