Corporation (“Mitsubishi”). Both tranches of the Project Loan will be drawn down on a pro rata basis and will be administered by HVB, as documentation and facility agent, and SG CIB, as technical and insurance agent. The US$250 million tranche of the Project Loan will have a six and a half year term from drawdown, and the US$150 million tranche will have a seven and a half year term. Interest accrues annually on both tranches of the Project Loan at: (a) LIBOR plus 2% prior to economic completion of the Kupol Mine; (b) LIBOR plus 2.5% payable between the economic completion date and the date that is two years after economic completion of the Kupol Mine; and (c) LIBOR plus 3% payable at any time after the date that is two years from the economic completion date. The Project Loan is secured against the Kupol Mine and will be guaranteed by Bema until economic completion of the Kupol Mine is achieved, as defined by the loan agreements. The loan agreements include customary covenants for debt financings of this type, As part of the project equity contribution, CMGC has signed a subordinated Corporate Loan for Kupol with IFC for US$25 million. This facility, which will be guaranteed by Bema until economic completion of the Kupol Mine, will have an eight and a half year term from drawdown. Interest accrues annually on this loan at the rate of LIBOR plus 2%. As part of the loan agreement, and in consideration of the reduced rate of interest payable under this loan, Bema will issue 8.5 million share purchase warrants to IFC, each warrant entitling IFC to purchase one common share of Bema at a price of US$2.94 per share. Proceeds from the exercise of the warrants will be used to repay the loan. The cost for the construction of the Kupol Mine (not including certain prior equity expenditures) is currently estimated at US$470 million and includes pre-production capital costs, working capital, financing fees and costs (estimated at US$25 million), interest and taxes. The breakdown of funding is as follows: of the US$400 million Project Loan, US$380 million is available to fund construction and US$20 million is set aside for contingencies; of the IFC Corporate Loan, US$19.5 million will be contributed towards construction costs and US$5.5 million will be set aside for interest payments. Bema’s remaining required equity contribution to the project will be approximately US$53 million and the Government of Chukotka will be responsible for contributing approximately US$18 million of equity. Bema’s equity will be funded from a portion of the US$120 million equity financing completed on October 5, 2005. Drawdown of the Project Loan and IFC Corporate Loan is expected in the first quarter of 2006. The material conditions precedent for drawdown are final construction permits for Kupol (expected in early 2006) and the required equity contributions from Bema and the Government of Chukotka. HVB has also agreed to provide, at Bema’s option, a US$17.5 million cost overrun facility in addition to the Project Loan and IFC Corporate Loan. In the event that Bema wishes to draw down under this facility, the Company will issue to HVB convertible unsecured notes with a seven year term from drawdown. The holder of the notes has the right prior to maturity or repayment of the note to convert the note into common shares of the Company at a conversion price equal to a 35% premium to Bema’s average share price in the 20 consecutive trading days following the initial drawdown of the Project Loan. The notes will bear interest at the rate of LIBOR plus 2.5% during the period of four years from the date of issuance and thereafter at the rate of LIBOR plus 3%. Bema has completed a feasibility study for the Kupol project, demonstrating that it is technically feasible and can be developed as a high grade, low cost gold and silver mine with robust project economics. The main construction years at Kupol are expected to be 2006 and 2007. Bema is currently on budget and on schedule to commence production at the Kupol Mine in mid 2008. Endeavour Financial International Corporation acted as the financial advisor to Bema, and will receive a fee of approximately US$5.5 million, payable in Bema shares, for providing assistance in structuring, sourcing, negotiation and closing of the Project Financing. R. Stuart Angus, a director of Bema, is also a senior executive of Endeavour Financial Corporation, an affiliate of Endeavour Financial International Corporation. This fee is included in the estimated US$25 million of financing fees and costs for the Kupol debt financing. | 