TORONTO, ONTARIO -- (Marketwire) -- 08/10/10 -- Timminco Limited ("Timminco" or the "Company") (TSX: TIM) today reported its financial results for the second quarter ended June 30, 2010 (all figures are in Canadian dollars unless otherwise stated).

Second Quarter Fiscal 2010 Summary (all figures are comparable against Q2 2009)

--  Consolidated sales increased to $34.3 million from $22.3 million (which
    last year included $14.0 million in sales from the Magnesium Group
    divested in July 2009);
--  Sales from the silicon metal product lines increased 389% to $34.3
    million from $7.0 million;
--  EBITDA for the Company's Silicon Group was positive $0.4 million
    compared with negative $7.8 million;
--  Net loss was $9.7 million, or $0.05 per share, compared with $24.0
    million, or $0.20 per share;
--  The Company completed a private placement equity offering through three
    tranches, which generated total gross proceeds of approximately $13.1
    million;
--  The Company established an US$11.0 million term loan facility under the
    existing credit agreement with Bank of America and extended the maturity
    date of the credit agreement by three months to September 30, 2010. The
    term loan was reduced through application of a portion of the proceeds
    of the equity offering to US$5.8 million as at June 30, 2010 and
    accordingly the total credit commitment under Bank credit facilities was
    reduced to approximately US$45.0 million.

Developments Subsequent the Second Quarter Fiscal 2010

The Company agreed to form a joint venture with Dow Corning Corporation ("Dow Corning") under which Dow Corning will acquire a 49% equity interest in a new joint venture entity that will own the existing silicon metal operations of Timminco's wholly-owned subsidiary, Becancour Silicon Inc., ("BSI") with BSI retaining a 51% interest. In exchange, BSI will receive net cash proceeds of US$39.7 million on closing, and up to potentially an additional US$10.0 million after closing subject to achieving certain performance objectives relating to production cost and capacity improvements. All of production output of the joint venture will be split between BSI and Dow Corning proportional to their ownership interests. Closing is expected to occur on or about September 30, 2010 subject to satisfying applicable conditions. All of BSI's solar grade purification operations and facilities will remain with BSI.

"Our second quarter results illustrate the Company's progress towards stabilizing its financial position and implementing our clearly defined turnaround strategy," said Dr. Heinz Schimmelbusch, Chairman of the Board and Chief Executive Officer of Timminco. "We continued to operate at full capacity throughout the quarter, which resulted in a 389% year-over-year increase in silicon metal product line sales, and increased throughput and higher selling prices during the quarter contributed to growth in sales over the first quarter of the year. In addition, reduced silicon metal production costs resulted in the Silicon Group achieving positive EBITDA for the second quarter."

Dr. Schimmelbusch added, "At an industry level, market demand for silicon metal is continuing to improve and spot prices have increased as the chemical and aluminum industries continue to strengthen. Our joint venture with Dow Corning announced today not only solidifies our relationship with one of the largest purchasers of silicon metal in the world but it also provides a significantly strengthened financial position from which to pursue growth opportunities going forward."

Financial Results

The Company's financial results for the second quarter ended June 30, 2010 consist of its silicon metal and solar grade silicon operations. The results from the second quarter ended June 30, 2009 also include the contribution of the Magnesium Group, which was divested on July 22, 2009. The breakdown of the Magnesium Group's contribution to results is provided in the Summary of Operations.

Financial Summary

($000's except per share amounts, unaudited)

                                  Three Months Ended    Six Months Ended

                                  Jun. 30,  Jun. 30,   Jun. 30,   Jun. 30,
                                      2010      2009       2010       2009

Sales                               34,309    22,293     65,106     60,037

Gross profit (loss)                  1,410    (9,048)      (970)   (18,347)

Gross profit (loss) percentage         4.1%    (40.6%)     (1.5%)    (30.6%)

EBITDA                              (3,115)   (9,860)    (6,971)   (25,807)

Net loss                            (9,704)  (23,980)   (20,609)   (46,297)

Loss per common share, basic and
 diluted                             (0.05)    (0.20)     (0.12)     (0.41)

Working capital (excluding
 available cash items and
 interest bearing debt)             20,262    27,527     20,262     27,527

Total assets                       195,668   293,016    195,668    293,016

Cash, cash equivalents and short-
 term investments                    1,481     1,601      1,481      1,601

Bank debt                           31,213    41,663     31,213     41,663

Total long-term liabilities         29,064    47,106     29,064     47,106

Weighted average number of Common
 shares outstanding, basic and
 diluted                           184,215   117,868    172,408    113,395

Sales for the second quarter of 2010 ("Q2-10") increased to $34.3 million from $22.3 million for the second quarter of 2009 ("Q2-09"), with sales for Q2-09 including $14.0 million in sales from the Magnesium Group divested in July 2009. The increase is the result of higher sales from the Company's core silicon metal product lines.

EBITDA for Q2-10 was negative $3.1 million, which reflects the stronger Canadian dollar versus the Euro and U.S. dollar, compared with negative $9.9 million for Q2-09, which reflected costs for reprocessing solar grade silicon by-products into saleable material.

Net loss for Q2-10 was $9.7 million, or $0.05 per share, compared with a net loss of $24.0 million, or $0.20 per share, for Q2-09. The decrease in net loss for Q2-10 is attributable to an increase in sales of silicon metal, a reduction in operating costs, and the closure of a Magnesium Group facility in Q1-09.

Cash, cash equivalents and short-term investments at June 30, 2010 were $1.5 million compared with $1.6 million at June 30, 2009. The Company had funds available to it through its revolving credit facility at June 30, 2010 of US$0.7 million.

Silicon Group

Silicon Group sales for Q2-10 increased by 314% to $34.3 million from $8.3 million in Q2-09. Q2-10 sales were composed entirely of silicon metal product lines and reflected shipments of 22,786 mt compared with 5,792 mt in Q2-09. Silicon metal product line sales increased 389% from $7.0 million in Q2-09. The increase in silicon metal sales is due to improved demand for silicon metal from the Company's traditional chemical and aluminium industry customers.

For Q2-10, the strength of the Canadian dollar against the U.S. dollar and the Euro had an unfavourable impact on sales of $3.6 and $3.3 million, respectively, compared with Q2-09, as the majority of Silicon Group sales are denominated in these currencies.

There were no sales of solar grade silicon during the second quarter. During Q2-09, solar grade silicon sales were $1.3 million. The Company continues to pursue its market development and research and development efforts in anticipation of changes in market demand for solar grade silicon, which during Q2-10, resulted in costs of approximately $0.7 million.

Gross profit for Q2-10 was positive $1.4 million (4.1% of sales) compared with negative gross profit of $8.1 million (negative 97.7% of sales) for Q2-09. The improvement in gross margin was the result of progress the company has made in its initiative to reduce silicon metal production costs, namely furnace efficiency and lower labour costs. Higher selling prices in the second quarter also helped improve gross profit margins.

EBITDA for Q2-10 was $0.4 million compared with negative $7.8 million for Q2-09.

Net loss for Q2-10 was $2.3 million compared with a net loss of $18.5 million for Q2-09. The decrease in net loss is due to a return to full capacity production of silicon metal to fulfil higher sales demand of silicon metal and lower unit production costs when compared with Q2-09.

Summary of Operations

----------------------------------------------------------------------------
($000's, except per share amounts, unaudited)
----------------------------------------------------------------------------
                                  Three Months Ended    Six Months Ended
                                 -------------------------------------------
                                  Jun. 30,  Jun. 30,   Jun. 30,   Jun. 30,
                                      2010      2009       2010       2009
                                 -------------------------------------------
Sales
----------------------------------------------------------------------------
  Silicon                           34,309     8,286     65,106     31,924
----------------------------------------------------------------------------
  Magnesium / Other                      -    14,007          -     28,113
----------------------------------------------------------------------------
  Total                             34,309    22,293     65,106     60,037
----------------------------------------------------------------------------

Gross Profit (Loss)(1)
----------------------------------------------------------------------------
  Silicon                            1,410    (8,097)      (970)   (18,354)
----------------------------------------------------------------------------
  Magnesium / Other                      -      (951)         -          7
----------------------------------------------------------------------------
  Total                              1,410    (9,048)      (970)   (18,347)
----------------------------------------------------------------------------

Gross Profit (Loss) Percentage(1)
----------------------------------------------------------------------------
  Silicon                              4.1%    (97.7%)     (1.5%)    (57.5%)
----------------------------------------------------------------------------
  Magnesium/Other                        -      (6.8%)        -          -
----------------------------------------------------------------------------
  Total                                4.1%    (40.6%)     (1.5%)    (30.6%)
----------------------------------------------------------------------------

Net Income (Loss)
----------------------------------------------------------------------------
  Silicon                           (2,288)  (18,459)    (7,459)   (29,000)
----------------------------------------------------------------------------
  Magnesium                              -    (1,278)         -     (6,373)
----------------------------------------------------------------------------
  Corporate / Other                 (7,416)   (4,243)   (13,150)   (10,924)
----------------------------------------------------------------------------
  Total                             (9,704)  (23,980)   (20,609)   (46,297)
----------------------------------------------------------------------------

EBITDA(1)
----------------------------------------------------------------------------
Silicon                                408    (7,841)    (1,992)   (19,561)
----------------------------------------------------------------------------
Magnesium                                -    (1,097)         -     (2,236)
----------------------------------------------------------------------------
Corporate / Other                   (3,523)     (922)    (4,979)    (4,010)
----------------------------------------------------------------------------
Total                               (3,115)   (9,860)    (6,971)   (25,807)
----------------------------------------------------------------------------

Adjusted Income (Loss) (1)
----------------------------------------------------------------------------
Silicon                             (2,229)  (11,825)    (7,356)   (27,276)
----------------------------------------------------------------------------
Magnesium                                -    (1,138)         -     (2,315)
----------------------------------------------------------------------------
Corporate / Other                   (7,300)   (4,243)   (12,917)   (10,226)
----------------------------------------------------------------------------
Total                               (9,529)  (17,206)   (20,273)   (39,817)
----------------------------------------------------------------------------

Loss per common share, basic and
 diluted                             (0.05)    (0.20)     (0.12)     (0.41)
----------------------------------------------------------------------------

Weighted average number of common
 shares outstanding, basic and
 diluted                           184,215   117,868    172,408    113,395
----------------------------------------------------------------------------
  (1) See "Non-GAAP Accounting Definitions".
----------------------------------------------------------------------------

Timminco will file its unaudited consolidated financial statements for the period ended June 30, 2010 and related management's discussion and analysis (MD&A) with securities regulatory authorities within the applicable timelines. Such financial statements, MD&A and related documents will be available through SEDAR at www.sedar.com as well as through Timminco's website, www.timminco.com.

Conference Call

Timminco will host a conference call today, August 10, 2010 at 5:00 pm ET to discuss its financial results for the second quarter ended June 30, 2010.

To access the conference call by telephone, dial 647-427-7450 or 1-888- 231-8191. Please connect approximately 15 minutes prior to the beginning of the call to ensure participation. The conference call will be archived for replay until Tuesday August 17, 2010 at midnight. To access the archived conference call, dial 416-849-0833 or 1-800-642-1687 and enter the reservation number 90386532.

A live audio webcast of the conference call will also be available at www.timminco.com . Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be available for replay at www.timminco.com following the live presentation.

About Timminco

Timminco produces silicon metal for the chemical (silicones), aluminum and electronic/solar industries. Timminco also produces solar grade silicon, using its proprietary technology for purifying silicon metal, for the solar photovoltaic energy industry.

Cautionary Notes

This news release contains "forward-looking information," including "financial outlooks" as such terms are defined in applicable Canadian securities legislation, concerning Timminco's future financial or operating performance and other statements that express management's expectations or estimates of future developments, circumstances or results. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "expects", "believes", "anticipates", "budget", "scheduled", "estimates", "forecasts", "intends", "plans" and variations of such words and phrases, or by statements that certain actions, events or results "may", "will", "could", "would" or "might" "be taken", "occur" or "be achieved". In this news release, such information includes statements regarding: the terms and execution of the proposed joint venture and related transactions with Dow Corning; Timminco's liquidity; and market demand for silicon metal and solar grade silicon.

Forward-looking information is based on a number of assumptions and estimates that, while considered reasonable by management based on the business and markets, in which Timminco operates, are inherently subject to significant operational, economic and competitive uncertainties and contingencies. Timminco cautions that forward-looking information involves known and unknown risks, uncertainties and other factors that may cause Timminco's actual results, performance or achievements to be materially different from those expressed or implied by such information, including, but not limited to: liquidity risks; foreign currency exchange rates; equipment failures, downtime or inefficiencies; dependence upon power supply for silicon metal production; pricing and availability of raw materials; global economic conditions; credit risk exposure; selling price of silicon metal; customer concentration; transportation delays and disruptions; class action lawsuits; contract termination claims; interest rates; future growth plans and strategic objectives; environmental, health and safety laws and liabilities; conflicts of interest; limited history with the solar grade silicon business; selling price of solar grade silicon; customer commitments; production cost targets; achieving and maintaining quality of solar grade silicon; customer capabilities in producing ingots; protection of intellectual property rights; production capacity expansion at the Becancour facilities; closure of the magnesium facilities; investment in Applied Magnesium; insurance costs; government and economic incentives; dependence upon key executives and employees; completion and integration of potential acquisitions, partnerships or joint ventures; intellectual property infringement claims; and climate change. These factors are discussed in greater detail in Timminco's Annual Information Form for the year ended December 31, 2009, and in Timminco's most recent Management's Discussion and Analysis, each of which is available via the SEDAR website at www.sedar.com. Although Timminco has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in forward-looking information, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information in this news release is made as of the date of this news release and Timminco disclaims any intention or obligation to update or revise such information, except as required by applicable law.

Non-GAAP Accounting Definitions

 (1) EBITDA is not a recognized measure under Canadian generally accepted
     accounting principles ("GAAP"). Management believes that, in addition
     to net income (loss), EBITDA is a useful supplemental measure as it
     provides investors with an indication of cash available for
     distribution prior to debt service, past pension service obligations,
     capital expenditures, income taxes and restructuring cash payments.
     Investors should be cautioned, however, that EBITDA should not be
     construed as an alternative to net income determined in accordance with
     GAAP as an indicator of the Company's performance or to cash flows from
     operating, investing and financing activities as a measure of liquidity
     and cash flows. The Company's method of calculating EBITDA may differ
     from other companies and, accordingly, EBITDA may not be comparable to
     measures used by other companies. EBITDA is calculated as follows:

($000's, unaudited)            Three Months Ended       Six Months Ended

                                Jun.30,    Jun. 30,    Jun. 30,    Jun. 30,
                                   2010        2009        2010        2009

Net loss                         (9,704)    (23,980)    (20,609)    (46,297)
Add back(subtract):
Income taxes                          -       6,653           -       1,777
Impairment of Fundo                   -           -           -         698
Loss (gain) on the sale of
 property, plant and
 equipment                           14         (11)         14         (11)
Interest                          1,678       1,830       3,791       2,764
Amortization of intangible
 assets                             707         435       1,414         670
Amortization of property,
 plant and equipment              1,935       3,090       3,961       6,624
Reorganization costs                  -          (1)          -       3,751
Environmental remediation
 costs                              161         133         322         265
Stock-based compensation          2,094       1,991       4,136       3,952

EBITDA                           (3,115)     (9,860)     (6,971)    (25,807)

(2)  Adjusted income (loss) is not a recognized measure under GAAP. However,
     management believes that, in addition to net income (loss), adjusted
     income (loss) is a useful supplemental measure as it provides investors
     with an indication of the ongoing profits generated on products sold to
     customers after corporate overhead expenses. Management defines
     adjusted net income as net income before income taxes, impairment of
     Fundo, environmental remediation costs and, reorganization costs.
     Adjusted income (loss) is calculated as follows:


($000's, unaudited)            Three Months Ended       Six Months Ended

                               Jun, 30,    Jun. 30,    Jun. 30,    Jun. 30,
                                   2010        2009        2010        2009

Net loss                         (9,704)    (23,980)    (20,609)    (46,297)
Add back(subtract):
Income taxes                          -       6,653           -       1,777
Impairment of Fundo                   -           -           -         698
Loss (gain) on the sale of
 property, plant and
 equipment                           14         (11)         14         (11)
Reorganization costs                  -          (1)          -       3,751
Environmental remediation
 costs                              161         133         322         265

Adjusted Loss                    (9,529)    (17,206)    (20,273)    (39,817)

(3)  Gross profit is not a recognized measure under GAAP. Management
     believes that in addition to net income (loss), gross profit is a
     useful supplemental measure as it provides investors with an indication
     of the profits generated on products sold to customers before corporate
     overhead expenses. Investors should be cautioned, however, that gross
     profit should not be construed as an alternative to net income
     determined in accordance with GAAP as an indicator of the Company's
     profitability. The Company's method of calculating gross profit may
     differ from other companies and accordingly, gross profit may not be
     comparable to measures used by other companies. Gross profit is
     calculated as follows:

($000's, unaudited)            Three Months Ended       Six Months Ended

                                Jun. 30,   Jun. 30,    Jun. 30,    Jun. 30,
                                    2010       2009        2010        2009

Sales                             34,309     22,293      65,106      60,037
Cost of goods sold                32,899     31,341      66,076      78,384
Gross profit (loss)                1,410     (9,048)       (970)    (18,347)


Timminco Limited

Consolidated Balance Sheets
                                                            As at
                                                     June 30,      December
(unaudited)                                              2010      31, 2009
----------------------------------------------------------------------------
(in thousands of Canadian dollars)

ASSETS
Current Assets
Cash                                                $   1,481     $   1,170
Restricted cash                                           471             -
Accounts receivable                                    12,939        11,007
Due from related companies                                 18           209
Inventories                                            33,893        39,797
Finished goods consigned to related company             4,413         8,090
Prepaid expenses and deposits                           1,392         1,494
                                                  ------------  ------------
                                                       54,607        61,767
                                                  ------------  ------------

Long term receivables                                   1,280         1,282
Long term inventories                                  24,730        26,769
Property, plant and equipment                          88,051        91,396
Investment in Applied Magnesium                           222           222
Employee future benefits                                  939           939
Future income taxes                                     2,550         2,831
Intangible assets                                       6,462         7,875
Goodwill                                               16,827        16,827
                                                  ------------  ------------
                                                    $ 195,668     $ 209,908
                                                  ------------  ------------
                                                  ------------  ------------

LIABILITIES
Current Liabilities
Bank indebtedness                                   $  31,213     $  40,315
Accounts payable and accrued liabilities               17,537        22,078
Deferred revenue                                       11,846         9,605
Due to related companies                                5,964         5,991
Future income taxes                                       268           455
Current portion of long term liabilities               27,806        39,158
Current portion of long term provisions                 2,134         2,681
                                                  ------------  ------------
                                                       96,768       120,283

Long term liabilities                                      50           128
Employee future benefits                               20,481        20,118
Future income taxes                                     2,282         2,376
Long term provisions                                    6,251         6,266
                                                  ------------  ------------
                                                      125,832       149,171
                                                  ------------  ------------

SHAREHOLDERS' EQUITY
Capital stock                                         311,523       285,951
Equity component of convertible notes                     217           217
Contributed surplus                                    17,132        12,996
Deficit                                              (259,036)     (238,427)
                                                  ------------  ------------
                                                       69,836        60,737
                                                  ------------  ------------
                                                    $ 195,668     $ 209,908
                                                  ------------  ------------
                                                  ------------  ------------


Timminco Limited

Consolidated Statements of Operations and Comprehensive Loss
(unaudited)
                     Three months ended June 30   Six months ended June 30
----------------------------------------------------------------------------
                             2010          2009          2010          2009
----------------------------------------------------------------------------
(in thousands of
 Canadian dollars,
 except for loss per
 share information)

Sales                $     34,309  $     22,293  $     65,106  $     60,037

Expenses
 Cost of goods sold        32,899        31,341        66,076        78,384
 Selling and
  administrative            4,969         6,789        10,155        13,721
 Amortization of
  property, plant
  and equipment             1,935         3,090         3,961         6,624
 Amortization of
  intangible assets           707           435         1,414           670
 Interest                   1,678         1,830         3,791         2,764
 Foreign exchange
  (gain) loss               1,664        (3,997)           (4)       (2,320)
                     ------------- ------------- ------------- -------------

Loss before the
 undernoted                (9,543)      (17,195)      (20,287)      (39,806)

 Environmental
  remediation costs          (161)         (133)         (322)         (265)
 Reorganization
  costs                         -             1             -        (3,751)
 Realized foreign
  exchange loss on
  Fundo investment
  bankruptcy                    -             -             -          (698)
                     ------------- ------------- ------------- -------------

Loss before income
 taxes                     (9,704)      (17,327)      (20,609)      (44,520)

Income tax expense
 Current                        -            19             -            53
 Future                         -         6,634             -         1,724
                     ------------- ------------- ------------- -------------
                                -         6,653             -         1,777

Net loss             $     (9,704) $    (23,980) $    (20,609) $    (46,297)
                     ------------- ------------- ------------- -------------

Other comprehensive
 loss, net of income
 taxes

 Realized foreign
  exchange loss on
  Fundo bankruptcy              -             -             -           698

                     ------------- ------------- ------------- -------------
Comprehensive loss   $     (9,704) $    (23,980) $    (20,609) $    (45,599)
                     ------------- ------------- ------------- -------------
                     ------------- ------------- ------------- -------------


Loss per common
 share - basic and
 diluted             $      (0.05) $      (0.20) $      (0.12) $      (0.41)
                     ------------- ------------- ------------- -------------
                     ------------- ------------- ------------- -------------


Weighted average
 number of common
 shares outstanding
 - basic and diluted  184,215,471   117,867,509   172,408,346   113,395,361
                     ------------- ------------- ------------- -------------
                     ------------- ------------- ------------- -------------





Consolidated Statements of Deficit

                     Three months ended June 30   Six months ended June 30
----------------------------------------------------------------------------
                             2010          2009          2010          2009
----------------------------------------------------------------------------
(in thousands of
Canadian dollars)

Deficit, beginning
 of period           $   (249,332) $   (126,522) $   (238,427) $   (104,205)
Net loss                   (9,704)      (23,980)      (20,609)      (46,297)
                     ------------- ------------- ------------- -------------

Deficit, end of
 period              $   (259,036) $   (150,502) $   (259,036) $   (150,502)
                     ------------- ------------- ------------- -------------
                     ------------- ------------- ------------- -------------


Timminco Limited

Consolidated Statements of Cash Flows
(unaudited)
                                  Three months ended     Six months ended
                                        June 30               June 30
----------------------------------------------------------------------------
                                      2010       2009       2010       2009
----------------------------------------------------------------------------
(in thousands of Canadian
 dollars)

Cash flows from (used in)
 operating activities
Net loss                          $ (9,704)  $(23,980)  $(20,609)  $(46,297)
Adjustments for items not
 requiring cash
  Amortization of property,
   plant and equipment               1,935      3,090      3,961      6,624
  Amortization of intangible
   assets                              707        435      1,414        670
  Interest expense                     844          -      1,636          -
  Accretion of convertible debt         49        209         98        413
  Stock-based compensation           2,094      1,991      4,136      3,952
  Reorganization costs                   -         (1)         -      3,751
  Accretion of environmental
   remediation costs                   161        133        322        265
  Benefits plan expense                970      1,126      1,938      2,252
  Unrealized foreign exchange
   (gain) loss                         198     (1,913)      (945)      (781)
  Future income taxes                    -      6,634          -      1,724
  Realized foreign exchange loss
   on Fundo investment
   bankruptcy                            -          -          -        698
  Loss (gain) on disposal of
   property, plant and equipment        14        (11)        14        (11)
Accrued employee future benefits
 paid                                 (786)      (768)    (1,575)    (1,517)
Expenditures charged against
 provision for reorganization         (218)      (114)      (603)      (600)
Expenditures charged against
 long term provisions                 (179)      (255)      (281)      (408)

Change in non-cash working
 capital items
  Decrease (increase) in
   restricted cash                     168          -       (471)         -
  Decrease (increase) in
   accounts receivable              (3,721)     7,166     (1,932)    13,732
  Decrease (increase) in
   inventories                       4,851     (1,131)    11,620      3,094
  Decrease (increase) in prepaid
   expenses and deposits               251        192        102         (6)
  Increase (decrease) in
   accounts payable and accrued
   liabilities                      (4,125)       837     (3,852)     1,527
  Increase in deferred revenue          78     10,430      2,240     10,430
  Decrease in deposits                   -       (118)         -       (206)
                                 ---------- ---------- ---------- ----------
                                    (6,413)     3,952     (2,787)      (694)
                                 ---------- ---------- ---------- ----------

Cash flows from (used in)
 investing activities
Capital expenditures                  (255)   (10,977)      (906)   (32,048)
Development costs capitalized            -     (2,655)         -     (5,656)
Proceeds on disposal of
 property, plant and equipment           -         11          -      4,821
                                 ---------- ---------- ---------- ----------
                                      (255)   (13,621)      (906)   (32,883)
                                 ---------- ---------- ---------- ----------

Cash flows from (used in)
 financing activities
Issuance of common shares           12,434     14,688     12,434     38,856
Issuance of convertible bond             -          -      1,043          -
Decrease in bank indebtedness       (5,013)   (11,437)    (9,102)    (9,776)
Decrease in long term
 liabilities                          (337)       (24)      (368)       (48)
Increase (decrease) in loans
 from related company                   48      1,295         (3)     1,517
                                 ---------- ---------- ---------- ----------
                                     7,132      4,522      4,004     30,549
                                 ---------- ---------- ---------- ----------

Increase (decrease) in cash
 during the period                     464     (5,147)       311     (3,028)

Cash, beginning of period            1,017      6,631      1,170      4,512

                                 ---------- ---------- ---------- ----------
Cash, end of period               $  1,481   $  1,484   $  1,481   $  1,484
                                 ---------- ---------- ---------- ----------
                                 ---------- ---------- ---------- ----------


Supplemental cash flow
 information
  Cash paid (received) during
   the period:
    Interest                      $    691   $    540   $  1,572   $  1,130
                                 ---------- ---------- ---------- ----------
                                 ---------- ---------- ---------- ----------
    Income taxes                  $      -   $     11   $    (10)  $     58
                                 ---------- ---------- ---------- ----------
                                 ---------- ---------- ---------- ----------

Sedar File Profile #00000838