Gold Exploration in West Africa

[FL]

Semafo (SMF.TO) 2004 Financial results

Montreal, Quebec, March 21, 2005. - SEMAFO (TSX – SMF) is pleased to report its operating results for the year ended December 31, 2004. All amounts referenced are in US dollars except as otherwise stated.

Highlights


* Successful start-up of the Samira Hill mine.

* Record gold production of 62,570 ounces.

* 59,740 ounces sold at an average price of $347 per ounce and at a total cash cost of $278 per ounce.

* More than 25% increase in m illing capacity at the Kiniero mine.

* Achievement of successful exploration programs and discovery of new mineral zones leading to the increase of
Kiniero’s mineral reserves to a total of 260,900 ounces as at December 31, 2004.

* Finalization and filing of the internal feasibility study of the Mana project.

* Successful delineation program on the resources and reserves of the Mana project.

* Proven and probable mineral reserves of 1,395,300 ounces of gold.

* Mineral resources of 2,606,400 ounces of gold.


Results for the year-ended December 31, 2004

For the year-ended December 31, 2004, Semafo presents a net loss of $4,940,141 or $0.05 per share compared to a net loss of $8,193,486 or $0.11 per share for the year-ended December 31, 2003. This variation is mainly due to a gain on disposal of investment in subsidiaries of $7,323,267 offset by a write-down of short-term investments of $2,819,423 and by a $1,648,119 increase of the unrealized loss on deferred forward contracts.

Gold sales for the year 2004 totalled $20,766,264 compared to $15,040,301 in 2003. In 2004, we sold 59,740 ounces of gold at an average price of $347 per ounce compared to the sale of 46,588 ounces of gold at an average price of $323 per ounce in 2003. This increase in sales is due to the start-up of the Samira Hill mine in October 2004 and to the increase of the gold price.

Operating expenses for the year-ended December 31, 2004, totalled $17,148,331 compared to $12,039,303 for the year 2003. These operating expenses represent the production cos ts of 59,740 ounces of gold at a total cash cost of $278 per ounce in 2004, compared to the production of 46,588 ounces of gold at a total cash cost of $255 per ounce for 2003.

Operations

Kiniero

In 2004, we sold 40,602 ounces of gold at an average price of $337 per ounce compared to 46,588 ounces at an average price of $323 in 2003. We sold 15,697 ounces of gold at the average market price of $403 per ounce and 24,905 ounces of gold in 2004, according to our forward sales contracts, at an average price of $295 per ounce. In 2003, we had sold 19,164 ounces of gold at an average market price of $345 per ounce and 27,424 ounces of gold, according to our forward sales contracts, at an average price of $308 per ounce.

During the year 2004, we processed 411,948 tonnes of ore at our Kiniero mine, at an average grade of 3.36 g/t compared to 437,627 tonnes of ore at an average grade of 3.71 g/t last year. This 7% decrease in processed tonnage is explained by the shut-down of the mill for more than a month following mechanical problems with the shaft of the ball mill. During the fourth quarter of 2004, only 41,478 tonnes of ore were processed at Kiniero compared to 113,467 tonnes during the same period last year. The downtime period in the fourth quarter of 2004 was used to maximize the maintenance of the plant, to proceed with the
necessary repairs and to assure the commissioning of the second ball mill which is now in full operation. The plant
improvement will now allow us to process more than 50,000 tonnes of oxide ore per month, hence an increase in total
capacity of more than 25%.

At Kiniero, in 2004, we produced 41,049 ounces of gold at a cash operating cost of $283 per ounce compared to a production of 46,728 ounces at a cash operating cost of $232 per ounce in 2003. The 18% increase in cash operating cost is explained by a lower level of production, the processing of lower-grade ore and the increased price of fuel.

At Kiniero, operating expenses totalled $12,842,099 in 2004 compared to $12,039,303 in 2003. It represents the production costs of 40,602 ounces in 2004, at a total cash cost of $305 per ounce compared to the production of 46,588 ounces in 2003 at a total cash cost of $255 per ounce. This increase in the production cost is mainly explained by the low production level during the fourth quarter of 2004 and by the increased price of fuel.

For the year 2004, operating activities, before net changes in non-cash working capital items, generated a positive cash flow of $56,844.

For 2005, our gold production target for Kiniero is 60,000 ounces of gold. We foresee the processing of 600,000 tonnes of ore at an average grade of 3.4 g/t, for 2005.

Samira Hill

Commercial production at Samira Hill started October 1, 2004. In 2004, we sold 19,138 ounces of gold at an average price of $370 per ounce. Those sales were all delivered according to our forward sales contracts.

We processed at Samira Hill, a total of 398,411 tonnes of ore at an average grade of 2.03 g/t during the year-ended December 31, 2004. The recovery rate for 2004 is 89%.

During the three-month period of operation in 2004, we produced 21,521 ounces of gold at a cash operating cost of $192 per ounce. We must add to that production, the 4,234 ounces of gold in the circuit at the year-end and the 485 ounces produced in September during the pre-production phase.

At Samira Hill, in 2004, operating expenses totalled $4,306,232 representing the production cost of 19,138 ounces of gold at a total cash cost of $225 per ounce.

For 2005, our gold production target for Samira Hill is 120,000 ounces of gold. We foresee the processing of a total of 1,875,000 tonnes of ore at an average grade of 2.2 g/t.

Audited consolidated financial statements and the Management’s discussion and analysis for the year-ended December 31, 2004 are available on the Semafo website at www.semafo.com. and on the SEDAR website at www.SEDAR.com.

<FORWARD-LOOKING STATEMENTS

This press release contains « forward-looking statements », including, but not limited to, the statements regarding the Company’s expectations as to the market price of gold, strategic plans, future commercial production, production targets, timetables, mine operating costs, fixed assets expenses, mineral reserve estimates and to the company’s perspectives. Forward-looking statements express, as at the date of this press release, our estimates, forecasts, projections, expectations and beliefs as to future events or results. Forward-looking statements are reasonable, but involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. Factors that could cause results or events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to, factors associated with fluctuations in the market price of precious metals, mining industry risks, uncertainty as to calculation of mineral reserves, risks related to the grade of reserves, risks related to hedging strategies, risks of delays in construction and requirements of additional financing.

The common shares of Semafo are traded on The Toronto Stock Exchange under the symbol “SMF”.
Semafo Inc. is a mining company whose mission is to explore
and develop gold and base metal deposits in West Africa.
For more information contact:
MONTREAL:
Benoit La Salle,
Chief Executive Officer and Chairman of the Board
Tel: [phone]
Fax: [phone]
E-mail: [e-mail]