shares of Bema trade at 120% or more of the conversion price for a specified period of time.Closing is expected on or about February 25, 2004. Bema issued the Convertible Notes to benefit from attractive financing opportunities available in the current convertible debt market. Proceeds from the offering will be used for the recommencement of gold mining at the Refugio Mine in Chile and the continued development of the Kupol property located in north eastern Russia and for general corporate purposes. The Notes are unsecured and constitute direct, general and unconditional obligations of Bema. The Notes bear interest from the date of issue of the Notes, currently anticipated to be February 25, 2004, at a rate of 3.25% per annum payable in arrear on February 25 in each year with the first interest payment date being February 25, 2005. Unless previously redeemed, converted, or purchased and cancelled, the Notes will be redeemed on the maturity date of February 25, 2011 at their principal amount. The holder of each Note has the right to convert such Note into fully-paid common shares of Bema (the “Shares”) at any time during the period beginning on and including June 26, 2004 (being four months and one day following closing) and ending on and including the earlier to occur of: (1) the close of business on February 15, 2011; and (2) if the Notes have been called for redemption before the maturity date, on the close of business on the day which is 10 days before the date fixed for redemption. The number of Shares to be delivered upon conversion shall be determined by dividing the principal amount of the Note by the conversion price in effect on the conversion date. Bema shall, at the option of the holder of any Note, redeem such Note on September 25, 2009 at a price equal to 100% of its principal amount together with interest accrued but unpaid to such date. The Notes may also be redeemed at the option of Bema at their principal amount together with accrued but unpaid interest to the date fixed for redemption: (1) at any time on or after February 25, 2007, provided that the closing market price of the Shares on the American Stock Exchange on each of not less than ten trading days in any period of 30 consecutive trading days ending not earlier than the seventh day prior to the date on which the relevant notice of redemption is given by Bema to the Noteholders shall have exceeded 120% of the conversion price in effect on such trading day; or (2) at any time if prior to the date on which the relevant notice of redemption is given by Bema less than 10% in principal amount of the Notes originally issued remain outstanding. The Notes will be issued pursuant to the terms of a Trust Deed to be entered into between Bema and the Bank of New York as trustee. The Notes are being offered through Barclays Bank plc and Bayerische Hypo-und Vereinsbank (collectively, the “Managers”) outside of Canada and the United States and a commission of 3.5% of the proceeds will be payable to the Managers. Application has been made to list the Notes, but not the Shares resulting from conversion, on the Luxembourg Stock Exchange. The Shares are listed for trading on the Toronto Stock Exchange, the American Stock Exchange and the Alternative Investment Market. Bema may elect, upon conversion of the Notes by a Noteholder, to deliver a cash amount to the relevant Noteholder calculated by reference to the prevailing market value of the Shares relative to the conversion price. The maximum number of Shares issuable upon conversion based on the established conversion price will be 15,008,576 Shares, representing approximately 4.2% of Bema’s current outstanding Shares, however, if certain prescribed events occur, the conversion price will be adjusted and consequently the number of Shares issuable upon conversion of the Notes may be increased. | 