WASHINGTON, D.C. 20549

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(Registrant’s name)

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(Address of principal executive offices)

Form 20-F     o		Form 40-F     þ

Yes     o		No     þ

For immediate release

METHANEX ANNOUNCES SECOND QUARTER RESULTS — METHANOL PRICES REMAIN STRONG INTO THE THIRD QUARTER

July 22, 2008

For the second quarter of 2008, Methanex reported Adjusted EBITDA¹ of $78.9 million, net income of $38.9 million and earnings per share of $0.41 (on a diluted basis).

Bruce Aitken, President and CEO of Methanex commented, “The strong methanol price environment resulted in another good quarter of earnings. In the second quarter, we achieved an average realized price of $412 per tonne on sales volumes which were up about 10% over last quarter. ”

“Entering the third quarter, the pricing environment remains strong. Overall methanol demand is healthy, despite softness in some derivatives due to general weakness in the economy in some regions. In China, low operating rates coupled with strong demand, including growth into DME and gasoline blending supported by high energy prices, have resulted in China significantly increasing its imports over the quarter. Plant outages across the global industry have also continued, adding further tightness to the market.”

“With the shift to our larger plant in New Zealand in Q3, we will be in a better position to benefit from strong industry conditions. Longer term, we also expect production improvements from Chile, resulting from the gas exploration activities ongoing in southern Chile, and from our Egypt project which is on schedule to be producing methanol by early 2010. ”

Mr. Aitken concluded, “Strong cash generation in the second quarter continues to leave us in an excellent financial position. With US$345 million cash on hand at the end of the quarter, a strong balance sheet and a US$250 million undrawn credit facility, we are well positioned to meet our financial commitments related to the Egypt methanol project, pursue opportunities to accelerate natural gas development in southern Chile, pursue opportunities to sponsor methanol demand in new energy applications, pursue other strategic growth initiatives, and continue to deliver on our commitment to return excess cash to shareholders.”

A conference call is scheduled for Wednesday, July 23, 2008 at 11:00 am EST (8:00 am PST) to review these second quarter results. To access the call, dial the Telus Conferencing operator ten minutes prior to the start of the call at (416) 883-0139, or toll free at (888) 458-1598. The passcode for the call is 45654. A playback version of the conference call will be available for fourteen days at (877) 653-0545. The reservation number for the playback version is 518973. There will be a simultaneous audio-only webcast of the conference call, which can be accessed from our website at www.methanex.com. In addition, an audio recording of the conference call can be downloaded from our website for three weeks after the call.

Methanex is a Vancouver based, publicly traded company engaged in the worldwide production, distribution and marketing of methanol. Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol “MX”, on the NASDAQ Global Market in the United States under the trading symbol “MEOH”, and on the foreign securities market of the Santiago Stock Exchange in Chile under the trading symbol “Methanex”. Methanex can be visited online at www.methanex.com.

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FORWARD-LOOKING STATEMENTS

Information contained in this press release and the attached Second Quarter 2008 Management’s Discussion and Analysis contains forward-looking statements. Certain material factors or assumptions were applied in drawing the conclusions or making the forecasts or projections that are included in these forward-looking statements. Methanex believes that it has a reasonable basis for making such forward-looking statements. However, forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. The risks and uncertainties include those attendant with producing and marketing methanol and successfully carrying out major capital expenditure projects in various jurisdictions, the ability to successfully carry out corporate initiatives and strategies, conditions in the methanol and other industries including the supply and demand balance for methanol, the success of natural gas exploration and development activities in southern Chile and our ability to obtain any additional gas in that region on commercially acceptable terms, actions of competitors and suppliers, actions of governments and governmental authorities, changes in laws or regulations in foreign jurisdictions, world-wide economic conditions and other risks described in our 2007 Management’s Discussion & Analysis and the attached Second Quarter 2008 Management’s Discussion and Analysis. Undue reliance should not be placed on forward-looking statements. They are not a substitute for the exercise of one’s own due diligence and judgment. The outcomes anticipated in forward-looking statements may not occur and we do not undertake to update forward-looking statements. These materials also contain certain non-GAAP financial measures. Non-GAAP financial measures do not have any standardized meaning and therefore are unlikely to be comparable to similar measures used by other companies. For more information regarding these non-GAAP measures, please see our 2007 Management’s Discussion & Analysis and the attached Second Quarter 2008 Management’s Discussion and Analysis.

1		Adjusted EBITDA is a non-GAAP measure that does not have any standardized meaning prescribed by Canadian generally accepted accounting principles (GAAP) and therefore is unlikely to be comparable to similar measures presented by other companies. Refer to Supplemental Non-GAAP Measures in the attached Second Quarter 2008 Management’s Discussion and Analysis for a description of each Supplemental Non-GAAP Measure and a reconciliation to the most comparable GAAP measure.

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For further information, contact:

Jason Chesko
Director, Investor Relations
Tel: 604.661.2600

SECOND QUARTER MANAGEMENT’S DISCUSSION AND ANALYSIS

Except where otherwise noted, all currency amounts are stated in United States dollars.

This second quarter 2008 Management’s Discussion and Analysis should be read in conjunction with the 2007 Annual Consolidated Financial Statements and the Management’s Discussion and Analysis included in the Methanex 2007 Annual Report. The Methanex 2007 Annual Report and additional information relating to Methanex is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

		Three Months Ended												Six Months Ended
		Jun 30				Mar 31				Jun 30				Jun 30				Jun 30
($ millions, except where noted)		2008				2008				2007				2008				2007
Sales volumes (thousands of tonnes)
Produced methanol			910				678				1,360				1,588				2,500
Purchased methanol			541				669				269				1,210				644
Commission sales 1			168				143				89				311				228
Total sales volumes			1,619				1,490				1,718				3,109				3,372
Methanex average non-discounted posted price ($ per tonne) 2			489				703				330				595				433
Average realized price ($ per tonne) 3			412				545				286				476				362
Adjusted EBITDA 4			78.9				127.1				76.5				206.0				313.4
Cash flows from operating activities 4 5			68.5				102.3				67.2				170.8				246.2
Operating income 4			52.5				104.0				48.1				156.4				261.3
Net income			38.9				65.5				35.7				104.4				180.4
Basic net income per common share			0.41				0.67				0.35				1.09				1.74
Diluted net income per common share			0.41				0.67				0.35				1.08				1.73
Common share information (millions of shares):
Weighted average number of common shares			94.5				97.2				102.7				95.8				103.9
Diluted weighted average number of common shares			95.1				97.5				103.0				96.3				104.3
Number of common shares outstanding, end of period			94.0				95.6				101.1				94.0				101.1

1		Commission sales represent volumes marketed on a commission basis. Commission income is included in revenue when earned.
2		Methanex average non-discounted posted price represents the average of our non-discounted posted prices in North America, Europe and Asia Pacific weighted by sales volume. Current and historical pricing information is available at www.methanex.com.
3		Average realized price is calculated as revenue, net of commissions earned, divided by the total sales volumes of produced and purchased methanol.
4		These items are non-GAAP measures that do not have any standardized meaning prescribed by Canadian generally accepted accounting principles (GAAP) and therefore are unlikely to be comparable to similar measures presented by other companies. Refer to Supplemental Non-GAAP Measures for a description of each non-GAAP measure and a reconciliation to the most comparable GAAP measure.
5		Cash flows from operating activities in the above table represents cash flows from operating activities before changes in non-cash working capital.

METHANEX CORPORATION 2008 SECOND QUARTER REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS

PRODUCTION SUMMARY

		Q2 2008									Q1 2008				Q2 2007					YTD Q2 2008				YTD Q2 2007
(thousands of tonnes)		Capacity				Production					Production				Production					Production				Production
Chile I, II, III and IV			960				261					309				569					570				1,320
Titan			213				229					217				225					446				450
Atlas (63.1% interest)			268				288					293				234					581				414
New Zealand			132				124					120				120					244				238
			1,573				902					939				1,148					1,841				2,422

Chile

Our methanol facilities in Chile produced 261,000 tonnes during the second quarter of 2008 compared with 309,000 tonnes during the first quarter of 2008. We have natural gas supply contracts for approximately 60% of our natural gas requirements for our production facilities in Chile with natural gas suppliers in Argentina with the remaining natural gas supply coming from natural gas suppliers in Chile. Since June 2007, the government of Argentina has curtailed all natural gas exports to our plants and we do not expect to receive natural gas supply from Argentina. We currently source natural gas for our methanol facilities in Chile primarily from Empresa Nacional del Petroleo (ENAP), the Chilean state-owned energy company, and from GeoPark Chile Limited (GeoPark). Methanol production at our facilities in Chile was lower during the second quarter of 2008 compared with the first quarter of 2008 primarily as a result of lower natural gas supply from ENAP due to higher demand for natural gas general use in southern Chile during the winter months as well as some deliverability issues.

To secure natural gas to supply our plants in Chile we continue to invest to accelerate natural gas development and to purchase more natural gas from suppliers in Chile. On May 5, 2008, we announced that we signed an agreement with ENAP to accelerate natural gas exploration and development in the Dorado Riquelme exploration block and supply natural gas to our production facilities in Chile. Under the arrangement, we expect to contribute approximately $100 million in capital over the next three years and will have a 50 percent participation in the block. The arrangement is subject to approval by the Government of Chile. We began receiving some small quantities of natural gas deliveries from the Dorado Riquelme block in May 2008. Also, in late 2007, we signed a natural gas prepayment agreement with GeoPark under which we will provide US$40 million in financing to support and accelerate GeoPark’s natural gas exploration and development activities in the Fell block in southern Chile. Under the arrangement, GeoPark will also provide us with natural gas supply sourced from the Fell block under a 10-year exclusive supply agreement. GeoPark continues increasing its deliveries of natural gas to our plants from the Fell block to a level that currently represents approximately 5 percent of our total natural gas requirements to operate at capacity in Chile.

We continue to pursue other opportunities to invest to help accelerate natural gas exploration and development in areas of southern Chile. In late 2007, the government of Chile completed an international bidding round to assign natural gas exploration areas that lie close to our production facilities and announced the participation of five international oil and gas companies. Exploration and development activities in these areas in southern Chile have commenced. On July 16, 2008, we announced that under the international bidding round, the government of Chile awarded the Otway hydrocarbon exploration block to a consortium that includes Wintershall Holding AG, GeoPark, and ourselves. Wintershall and GeoPark each own a 42% interest in the consortium and we own a 16% interest. Exploration work is expected to commence by the end of this year. The minimum exploration investment committed in the block by the consortium is US$30 million.

We cannot provide assurance that ENAP, GeoPark or others would be successful in the exploration and development of natural gas or that we would obtain any additional natural gas from suppliers in Chile on commercially acceptable terms.

Trinidad

Our methanol facilities in Trinidad operated well during the second quarter of 2008 and produced a total of 517,000 tonnes compared with 510,000 tonnes during the first quarter of 2008.

METHANEX CORPORATION 2008 SECOND QUARTER REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS

New Zealand

Our Waitara Valley facility in New Zealand produced 124,000 tonnes during the second quarter of 2008 compared with 120,000 tonnes during first quarter of 2008.

In addition to our 530,000 tonne Waitara Valley facility which we have operated over the past few years, we have up to 1.9 million tonnes of additional flexible annual operating capacity from our idled Motunui facilities in New Zealand. In May 2008, we agreed to terms on a natural gas supply arrangement which will allow us to restart one idled 900,000 tonne per year Motunui methanol plant. We plan to restart this facility during the third quarter of 2008 and operate this plant until at least the end of 2009. We will continue to operate the Waitara Valley facility until the Motunui plant restarts. We have become more optimistic about the longer term future of our New Zealand operations and we believe there is potential to operate our Motunui plant longer and potentially restart our Waitara Valley plant again. The continued operations of the flexible New Zealand facilities are dependant upon industry supply and demand and the availability of natural gas on commercially acceptable terms.

EARNINGS ANALYSIS

We analyze the results of produced methanol sales separately from purchased methanol sales as the margin characteristics of each are very different. We discuss changes in average realized price, sales volumes and total cash costs related to our produced methanol sales whereas we discuss purchased methanol on a net margin basis.

For a further discussion of the definitions and calculations used in our Adjusted EBITDA analysis, refer to How We Analyze Our Business.

For the second quarter of 2008 we recorded Adjusted EBITDA of $78.9 million and net income of $38.9 million ($0.41 per share on a diluted basis). This compares with Adjusted EBITDA of $127.1 million and net income of $65.5 million ($0.67 per share on a diluted basis) for the first quarter of 2008 and Adjusted EBITDA of $76.5 million and net income of $35.7 million ($0.35 per share on a diluted basis) for the second quarter of 2007.

For the six months ended June 30, 2008, we recorded Adjusted EBITDA of $206.0 million and net income of $104.4 million ($1.08 per share on a diluted basis). This compares with Adjusted EBITDA of $313.4 million and net income of $180.4 million ($1.73 per share on a diluted basis) during the same period in 2007.

Adjusted EBITDA

The increase (decrease) in Adjusted EBITDA resulted from changes in the following:

		Q2 2008				Q2 2008				YTD Q2 2008
		compared with				compared with				compared with
($ millions)		Q1 2008				Q2 2007				YTD Q2 2007
Average realized price		$	(103	)		$	96			$	147
Sales volumes			51				(34	)			(140	)
Total cash costs1			16				(39	)			(59	)
Purchased methanol			(12	)			(20	)			(55	)
		$	(48	)		$	3			$	(107	)

1		Includes cash costs related to methanol produced at our Chile, Trinidad and New Zealand facilities as well as consolidated selling, general and administrative expenses and fixed storage and handling costs.

METHANEX CORPORATION 2008 SECOND QUARTER REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS

Average realized price

		Three Months Ended												Six Months Ended
		Jun 30				Mar 31				Jun 30				Jun 30				Jun 30
($ per tonne, except where noted)		2008				2008				2007				2008				2007
Methanex average non-discounted posted price 1			489				703				330				595				433
Methanex average realized price 2			412				545				286				476				362
Average discount			16	%			22	%			13	%			20	%			16	%

1		Methanex average non-discounted posted price represents the average of our non-discounted posted prices in North America, Europe and Asia Pacific weighted by sales volume. Current and historical pricing information is available at www.methanex.com.
2		Methanex average realized price disclosed above is calculated as revenue, net of commissions earned, divided by the total sales volumes of produced and purchased methanol.

We commenced 2008 in a tight methanol market environment as a result of planned and unplanned supplier outages, including outages at our Chile facilities, which began in the second half of 2007. Our average non-discounted posted price for the second quarter of 2008 was $489 per tonne compared with $703 per tonne for the first quarter of 2008 and $330 per tonne for the second quarter of 2007. Our average realized price for the second quarter of 2008 was $412 per tonne compared with $545 per tonne for the first quarter of 2008 and $286 per tonne for the second quarter of 2007. The change in our average realized price for produced methanol for the second quarter of 2008 decreased our Adjusted EBITDA by $103 million compared with the first quarter of 2008 and increased our Adjusted EBITDA by $96 million compared with the second quarter of 2007.

For the second quarter of 2008 our average realized price was approximately 16% lower than our average non-discounted posted price. This compares with approximately 22% lower for the first quarter of 2008 and 13% lower for the second quarter of 2007. We have entered into long-term contracts for a portion of our production volume with certain global customers where prices are either fixed or linked to our costs plus a margin and accordingly, we expect the discount from our average non-discounted posted prices to widen during periods of higher methanol pricing. The discount from our average non-discounted posted price narrowed during the second quarter of 2008 compared with the first quarter of 2008 primarily as a result of lower methanol pricing.

Sales volumes of produced methanol

Sales volumes of produced methanol for the second quarter of 2008 were higher by 232,000 tonnes compared with the first quarter of 2008. Sales volumes of produced methanol for the first quarter of 2008 were lower than production volumes primarily as a result of a rebuilding of produced inventories during the first quarter.

Sales volumes of produced methanol for the second quarter of 2008 and six months ended June 30, 2008 were lower by 450,000 tonnes and 912,000 tonnes, respectively, compared with the same periods in 2007 primarily as a result of lower production at our Chile facilities during 2008. Lower sales volumes for these periods decreased Adjusted EBITDA by $34 million and $140 million, respectively.

Total cash costs

Our production facilities are underpinned by natural gas purchase agreements with pricing terms that include base and variable price components. The variable component is adjusted in relation to increases in methanol prices above pre-determined prices.

Total cash costs for the second quarter of 2008 were lower than in the first quarter of 2008 by $16 million. Natural gas costs for produced methanol were lower by $19 million during the second quarter of 2008 compared with the first quarter of 2008 primarily due to the impact of lower methanol pricing during the second quarter of 2008. Ocean freight costs were higher by $3 million during the second quarter of 2008 compared with the first quarter of 2008 primarily as a result of changes in our shipping routes and higher fuel costs.

Total cash costs for the second quarter of 2008 and the six months ended June 30, 2008 were higher than the same periods in 2007 by $39 million and $59 million, respectively. Natural gas costs for produced methanol for the second quarter of 2008 and the six months ended June 30, 2008 were higher compared to the same periods in 2007 by $24 million and $29

METHANEX CORPORATION 2008 SECOND QUARTER REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS

million, respectively, primarily as a result of higher methanol pricing in 2008. Ocean freights costs for the second quarter of 2008 and the six months ended June 30, 2008 were higher compared to the same periods in 2007 by $9 million and $13 million, respectively, primarily as a result of higher fuel costs and lower backhaul profits. The remaining increase in cash costs for the second quarter of 2008 and six months ended June 30, 2008 relates to higher unabsorbed fixed production costs in Chile and higher selling, general and administrative expenses primarily as a result of changes in foreign exchange rates and timing of expenditures.

Margin on sale of purchased methanol

We purchase additional methanol produced by others through long-term and short-term offtake contracts or on the spot market to meet customer needs and support our marketing efforts. Consequently, we realize holding gains or losses on the resale of this product depending on the methanol price at the time of resale. During the fourth quarter of 2007, as a result of reduced production rates at our Chile facilities, we increased our purchasing levels to continue to meet commitments to our customers. As these purchases were made in a period of significantly increasing methanol pricing, we recorded cash margin on sale of purchased methanol of $35 million during the fourth quarter of 2007. In 2008, methanol pricing moderated from these high levels and we recorded negative cash margin of $19 million for the first quarter of 2008 and negative cash margin of $31 million on the resale of purchased methanol for the second quarter of 2008.

Depreciation and Amortization

Depreciation and amortization was $26 million for the second quarter of 2008 compared with $23 million for the first quarter of 2008. The increase in depreciation and amortization for the second quarter of 2008 compared with the first quarter of 2008 was primarily due to higher sales volume of produced methanol in the second quarter.

Depreciation and amortization for the second quarter of 2008 and six months ended June 30, 2008 was $26 million and $50 million, respectively, compared with $28 million and $52 million, respectively, for the same periods in 2007.

Interest Expense

		Three Months Ended												Six Months Ended
		Jun 30				Mar 31				Jun 30				Jun 30				Jun 30
($ millions)		2008				2008				2007				2008				2007
Interest expense before capitalized interest		$	13			$	14			$	11			$	26			$	22
Less capitalized interest			(3	)			(3	)			—				(6	)			—
Interest expense		$	10			$	11			$	11			$	20			$	22

Interest expense before capitalized interest for the second quarter of 2008 was $13 million compared with $14 million for the first quarter of 2008 and $11 million for the second quarter of 2007. In May 2007, we reached financial close and secured limited recourse debt of $530 million for our joint venture project to construct a 1.3 million tonne per year methanol facility in Egypt. Interest costs related to this project have been capitalized since that date.

Interest and Other Income

		Three Months Ended												Six Months Ended
		Jun 30				Mar 31				Jun 30				Jun 30				Jun 30
($ millions)		2008				2007				2007				2008				2007
Interest and other income (expense)		$	13			$	(1	)		$	13			$	12			$	18

Interest and other income (expense) for the second quarter of 2008 was $13 million compared with an expense of $1 million for the first quarter of 2008. The increase in income and other income during the second quarter of 2008 compared with the first quarter of 2008 was primarily due to the impact of changes in foreign exchange rates as well as a $5 million gain on sale of ammonia production assets during the second quarter of 2008. The assets sold are located at our Kitimat site which was permanently closed in 2005.

METHANEX CORPORATION 2008 SECOND QUARTER REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS

Interest and other income for the second quarter of 2008 and six months ended June 30, 2008 compared to the same periods in 2007 remained the same and decreased by $6 million, respectively. Interest and other income during 2008 was lower than 2007 due to the impact of lower interest rates and lower cash balances during 2008 compared with the same periods in 2007. This decrease in interest and other income during 2008 was offset by the gain of $5 million on sale of ammonia production assets during the second quarter of 2008.

Income Taxes

The effective tax rate for the second quarter of 2008 was 30% compared with 29% for the first quarter of 2008 and 28% for the second quarter of 2007. The statutory tax rate in Chile and Trinidad, where we earn a substantial portion of our pre-tax earnings, is 35%. Our Atlas facility in Trinidad has partial relief from corporation income tax until 2014.

In Chile the tax rate consists of a first tier tax that is payable when income is earned and a second tier tax that is due when earnings are distributed from Chile. The second tier tax is initially recorded as future income tax expense and is subsequently reclassified to current income tax expense when earnings are distributed. Accordingly, the ratio of current income tax expense to total income tax expense is highly dependent on the level of cash distributed from Chile.

SUPPLY/DEMAND FUNDAMENTALS

We commenced 2008 in a tight methanol market environment as a result of planned and unplanned supplier outages in the second half of 2007. This resulted in high methanol prices during the first quarter which are unsustainable in a normal supply and demand environment. As we entered the second quarter of 2008, methanol prices had moderated and pricing has remained relatively stable during the quarter. There have been significant planned and unplanned outages across the global industry recently, including in Trinidad and Tobago, Saudi Arabia, Western Europe and most recently Equatorial Guinea. Consequently, we have recently seen tightening market conditions and this has resulted in increasing spot prices. Methanex non-discounted posted prices for July average approximately $500 per tonne across the major regions.

Methanex Non-Discounted Regional Posted Prices ¹

		July				Jun				May				Apr
(US $ per tonne)		2008				2008				2008				2008
United States			526				526				499				532
Europe 2			465				465				465				465
Asia			500				500				450				450

Excluding the 1.7 million tonne per year plant in Saudi Arabia, which commenced operations last quarter, the next increments of world scale capacity additions outside of China are two 1.7 million tonne per year plants under construction in Malaysia and Iran, and we expect product from both of these plants to be available to the market later this year or in the first half of 2009. We also believe that global methanol demand growth combined with the potential shutdown of high cost capacity as a result of high feedstock prices could offset this new industry supply.

Overall, while demand growth for some derivatives, such as formaldehyde and biodiesel, has weakened in some regions, we believe that global demand remains healthy in both traditional chemical derivatives and in energy applications as high energy prices continue to drive strong demand for fuel blending and di-methyl ether (DME) in China. In addition, high energy prices are continuing to support strong demand for MTBE outside of North America.

We believe methanol demand in China will continue to grow at high rates as a result of strong traditional demand driven by high industrial production growth rates and strong demand related to alternative fuel uses such as gasoline blending and DME. We also believe that there is increasing pressure on the cost structure of the Chinese methanol industry and the cost to export as a result of escalating feedstock costs for both coal and natural gas based producers in China, the continued appreciation of the Chinese currency and reduced fiscal incentives for exports of methanol introduced during 2007. During the first quarter of 2008, China was a net exporter of methanol as a result of the very high methanol price environment, which gave producers in China the incentive to export methanol. As we entered the second quarter of 2008, methanol prices had moderated and China reverted back to a net importer of methanol and we believe this has supported strong methanol prices in China and other global markets. Due to the high cost position of many of the Chinese producers, we

 
METHANEX CORPORATION 2008 SECOND QUARTER REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS

believe that substantially all domestic methanol production in China will be consumed within the local market and that imports of methanol into China will grow over time.

LIQUIDITY AND CAPITAL RESOURCES

Cash flows from operating activities before changes in non-cash working capital in the second quarter of 2008 were $69 million compared with $67 million for the same period in 2007. The cash flows from operating activities before non-cash working capital are consistent with the level of earnings in each period. During the second quarter of 2008, the change in non-cash working capital decreased our cash flows from operating activities by $34 million. This was primarily due to a decrease in our trade payables which was partially offset by lower inventory levels. These changes were primarily as a result of the impact of lower purchased methanol and timing of natural gas payments during the second quarter of 2008 compared with the first quarter of 2008.

During the second quarter of 2008, we repurchased for cancellation a total of 1.6 million common shares at an average price of US$26.55 per share, totaling $43 million. During the second quarter of 2008, we completed the normal course issuer bid that expired at May 16, 2008. Upon completion of this bid, we had repurchased a total of 8.7 million common shares at an average price of US$26.01 per share, totaling $226 million. On May 6, 2008, a new normal course issuer bid was approved. This bid commenced May 20, 2008 and expires May 19, 2009 and allows us to repurchase for cancellation up to 7.9 million common shares.

Also during the second quarter of 2008, our Board of Directors approved an 11% increase in our regular quarterly dividend to shareholders, from US$0.14 per share to US$0.155 per share. During the second quarter of 2008 we paid quarterly dividends of approximately $15 million.

We are constructing a 1.3 million tonne per year methanol facility at Damietta on the Mediterranean Sea in Egypt. We expect commercial operations of the methanol facility to begin in early 2010 and we will purchase and sell 100% of the methanol from the facility. We own 60% of Egyptian Methanex Methanol Company S.A.E. (“EMethanex”) which is the company that is developing the project. We account for our investment in EMethanex using consolidation accounting. This results in 100% of the assets and liabilities of EMethanex being included in our financial statements. The other investors’ interest in the project is presented as “non-controlling interest”. During the second quarter of 2008, total plant and equipment construction costs related to our project in Egypt were $84 million. EMethanex has limited recourse debt of $530 million. During the second quarter of 2008, a total of $49 million of this limited recourse debt was drawn. The total estimated future costs to complete the project over the next two years, excluding financing costs and working capital, are expected to be approximately $505 million. Our 60% share of future equity contributions, excluding financing costs and working capital, over the next two years is estimated to be approximately $145 million and we expect to fund these expenditures from cash generated from operations and cash on hand.

We have excellent financial capacity and flexibility. Our cash balance at June 30, 2008 was $345 million and we have a strong balance sheet with an undrawn $250 million credit facility. We invest our cash only in highly rated instruments that have maturities of three months or less to ensure preservation of capital and appropriate liquidity. Our planned capital maintenance expenditure program directed towards major maintenance, turnarounds and catalyst changes, including costs to complete the restart of the Motunui facility, is currently estimated to total approximately $100 million for the period to the end of 2010.

We believe we are well positioned to meet financial requirements related to the methanol project in Egypt, complete our capital maintenance spending program, complete the restart of the Motunui facility, pursue new opportunities to enhance our leadership position in the methanol industry, pursue investment opportunities to accelerate the development of natural gas in southern Chile, investigate opportunities related to new methanol demand for energy applications, pursue other strategic initiatives and continue to deliver on our commitment to return excess cash to shareholders.

The credit ratings for our unsecured notes at June 30, 2008 were as follows:

Standard & Poor’s Rating Services		BBB- (stable)
Moody’s Investor Services		Ba1 (stable)
Fitch Ratings		BBB (negative)

Credit ratings are not recommendations to purchase, hold or sell securities and do not comment on market price or suitability for a particular investor. There is no assurance that any rating will remain in effect for any given period of time or that any rating will not be revised or withdrawn entirely by a rating agency in the future.

 
METHANEX CORPORATION 2008 SECOND QUARTER REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS

SHORT-TERM OUTLOOK

Over the next year, we believe that traditional and non-traditional demand growth, along with closures of high cost capacity, will substantially offset the new supply that is scheduled to start up over the coming year and that supply/demand fundamentals will be in reasonable balance. We also believe that methanol prices will be underpinned by strong demand in China and global energy prices.

The methanol price will ultimately depend on industry operating rates, global energy prices, the rate of industry restructuring and the strength of global demand. We believe that our excellent financial position and financial flexibility, outstanding global supply network and low cost position will provide a sound basis for Methanex continuing to be the leader in the methanol industry.

CONTROLS AND PROCEDURES

For the three months ended June 30, 2008, no changes were made in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ADDITIONAL INFORMATION — SUPPLEMENTAL NON-GAAP MEASURES

In addition to providing measures prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP), we present certain supplemental non-GAAP measures. These are Adjusted EBITDA, operating income and cash flows from operating activities before changes in non-cash working capital. These measures do not have any standardized meaning prescribed by Canadian GAAP and therefore are unlikely to be comparable to similar measures presented by other companies. We believe these measures are useful in evaluating the operating performance and liquidity of the Company’s ongoing business. These measures should be considered in addition to, and not as a substitute for, net income, cash flows and other measures of financial performance and liquidity reported in accordance with Canadian GAAP.

Adjusted EBITDA

This supplemental non-GAAP measure is provided to assist readers in determining our ability to generate cash from operations. We believe this measure is useful in assessing performance and highlighting trends on an overall basis. We also believe Adjusted EBITDA is frequently used by securities analysts and investors when comparing our results with those of other companies. Adjusted EBITDA differs from the most comparable GAAP measure, cash flows from operating activities, primarily because it does not include changes in non-cash working capital, other cash payments related to operating activities, stock-based compensation expense, other non-cash items, interest expense, interest and other income (expense), and current income taxes.

 
METHANEX CORPORATION 2008 SECOND QUARTER REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS

The following table shows a reconciliation of cash flows from operating activities to Adjusted EBITDA:

		Three Months Ended												Six Months Ended
		Jun 30				Mar 31				Jun 30				Jun 30				Jun 30
($ thousands)		2008				2008				2007				2008				2007
Cash flows from operating activities		$	34,220			$	110,586			$	123,825			$	144,807			$	314,927
Add (deduct):
Changes in non-cash working capital			34,294				(8,267	)			(56,601	)			26,027				(68,710	)
Other cash payments			1,801				320				3,547				2,121				4,287
Stock-based compensation expense			(5,207	)			(4,628	)			(6,747	)			(9,835	)			(10,269	)
Other non-cash items			1,378				(6,427	)			(3,540	)			(5,049	)			(6,187	)
Interest expense			9,630				10,690				11,159				20,320				22,226
Interest and other income (expense)			(12,671	)			837				(12,606	)			(11,834	)			(17,678	)
Current income taxes			15,441				23,960				17,478				39,401				74,804
Adjusted EBITDA		$	78,886			$	127,071			$	76,515			$	205,958			$	313,400

Operating Income and Cash Flows from Operating Activities before Non-Cash Working Capital

Operating income and cash flows from operating activities before changes in non-cash working capital are reconciled to Canadian GAAP measures in our consolidated statements of income and consolidated statements of cash flows, respectively.

QUARTERLY FINANCIAL DATA (UNAUDITED)

A summary of selected financial information for the prior eight quarters is as follows:

		Three Months Ended
		Jun 30				Mar 31				Dec 31				Sep 30
($ thousands, except per share amounts)		2008				2008				2007				2007
Revenue		$	600,025			$	735,934			$	731,057			$	395,118
Net income			38,945				65,484				171,697				23,610
Basic net income per common share			0.41				0.67				1.74				0.24
Diluted net income per common share			0.41				0.67				1.72				0.24

		Three Months Ended
		Jun 30				Mar 31				Dec 31				Sep 30
($ thousands, except per share amounts)		2007				2007				2006				2006
Revenue		$	466,414			$	673,932			$	668,159			$	519,586
Net income			35,654				144,706				172,445				113,230
Basic net income per common share			0.35				1.38				1.62				1.05
Diluted net income per common share			0.35				1.37				1.61				1.05

 
METHANEX CORPORATION 2008 SECOND QUARTER REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS

NORMAL COURSE ISSUER BID

On May 6, 2008 the Company filed a Notice of Intention to Make a Normal Course Issuer Bid with Toronto Stock Exchange (“TSX”) pursuant to which the Company may repurchase up to 7,909,393 common shares of the Company, representing 10 percent of the public float of the issued and outstanding common shares of the Company as at May 2, 2008. This normal course issuer bid repurchase program, which is carried out through the facilities of the TSX, commenced on May 20, 2008 and will expire on the earlier of May 19, 2009 and the date upon which the Company has acquired the maximum number of common shares permitted under the purchase program or otherwise decided not to make further purchases. The Company has entered into an automatic securities purchase plan with its broker in connection with purchases to be made under this program. Shareholders may obtain a copy of the Notice of Intention without charge by contacting the Corporate Secretary at 604-661-2600.

FORWARD-LOOKING STATEMENTS

Information contained in this Second Quarter 2008 Management’s Discussion and Analysis contains forward-looking statements. Certain material factors or assumptions were applied in drawing the conclusions or making the forecasts or projections that are included in these forward-looking statements. Methanex believes that it has a reasonable basis for making such forward-looking statements. However, forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. The risks and uncertainties include those attendant with producing and marketing methanol and successfully carrying out major capital expenditure projects in various jurisdictions, the ability to successfully carry out corporate initiatives and strategies, conditions in the methanol and other industries including the supply and demand balance for methanol, the success of natural gas exploration and development activities in southern Chile and our ability to obtain any additional gas in that region on commercially acceptable terms, actions of competitors and suppliers, actions of governments and governmental authorities, changes in laws or regulations in foreign jurisdictions, world-wide economic conditions and other risks described in our 2007 Management’s Discussion & Analysis and this Second Quarter 2008 Management’s Discussion and Analysis. Undue reliance should not be placed on forward-looking statements. They are not a substitute for the exercise of one’s own due diligence and judgment. The outcomes anticipated in forward-looking statements may not occur and we do not undertake to update forward-looking statements.

 
METHANEX CORPORATION 2008 SECOND QUARTER REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS

HOW WE ANALYZE OUR BUSINESS

We review our results of operations by analyzing changes in the components of our Adjusted EBITDA (refer to Supplemental Non-GAAP Measures for a reconciliation to the most comparable GAAP measure), depreciation and amortization, interest expense, interest and other income, unusual items and income taxes. In addition to the methanol that we produce at our facilities, we also purchase and re-sell methanol produced by others. We analyze the results of produced methanol sales separately from purchased methanol sales as the margin characteristics of each are very different.

Methanex-Produced Methanol

Our production facilities generate the substantial portion of our Adjusted EBITDA, and accordingly, the key drivers of changes in our Adjusted EBITDA for produced methanol are analyzed separately. The key drivers of changes in our Adjusted EBITDA for produced methanol are average realized price, sales volume and cash costs. Changes in Adjusted EBITDA related to our produced methanol include sales of methanol from our facilities in Chile, Trinidad and New Zealand.

The price, cash cost and volume variances included in our Adjusted EBITDA analysis for produced methanol are defined and calculated as follows:

PRICE		The change in Adjusted EBITDA as a result of changes in average realized price is calculated as the difference from period to period in the selling price of produced methanol multiplied by the current period sales volume of produced methanol. Sales under long-term contracts where the prices are either fixed or linked to our costs plus a margin are included as sales of produced methanol. Accordingly, the selling price of produced methanol will differ from the selling price of purchased methanol.
COST		The change in our Adjusted EBITDA as a result of changes in cash costs is calculated as the difference from period to period in cash costs per tonne multiplied by the sales volume of produced methanol in the current period plus the change in unabsorbed fixed cash costs. The change in consolidated selling, general and administrative expenses and fixed storage and handling costs are included in the analysis of produced methanol.
VOLUME		The change in Adjusted EBITDA as a result of changes in sales volumes is calculated as the difference from period to period in the sales volumes of produced methanol multiplied by the margin per tonne for the prior period. The margin per tonne is calculated as the selling price per tonne of produced methanol less absorbed fixed cash costs per tonne and variable cash costs per tonne (excluding Argentina natural gas export duties per tonne).

Purchased Methanol

The cost of sales of purchased methanol consists principally of the cost of the methanol itself, which is directly related to the price of methanol at the time of purchase. Accordingly, the analysis of purchased methanol and its impact on our Adjusted EBITDA is discussed on a net margin basis.

 
METHANEX CORPORATION 2008 SECOND QUARTER REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS

Methanex Corporation
Consolidated Statements of Income (unaudited)
(thousands of U.S. dollars, except number of common shares and per share amounts)

		Three Months Ended								Six Months Ended
		Jun 30				Jun 30				Jun 30				Jun 30
		2008				2007				2008				2007
Revenue		$	600,025			$	466,414			$	1,335,960			$	1,140,346
Cost of sales and operating expenses			521,139				389,899				1,130,002				826,946
Depreciation and amortization			26,396				28,373				49,509				52,112
Operating income before undernoted items			52,490				48,142				156,449				261,288
Interest expense (note 7)			(9,630	)			(11,159	)			(20,320	)			(22,226	)
Interest and other income			12,671				12,606				11,834				17,678
Income before income taxes			55,531				49,589				147,963				256,740
Income taxes:
Current			(15,441	)			(17,478	)			(39,401	)			(74,804	)
Future			(1,145	)			3,543				(4,133	)			(1,576	)
			(16,586	)			(13,935	)			(43,534	)			(76,380	)
Net income		$	38,945			$	35,654			$	104,429			$	180,360
Net income per common share:
Basic		$	0.41			$	0.35			$	1.09			$	1.74
Diluted		$	0.41			$	0.35			$	1.08			$	1.73
Weighted average number of common shares outstanding:
Basic			94,520,011				102,697,808				95,837,568				103,894,611
Diluted			95,149,888				102,973,271				96,341,992				104,278,109
Number of common shares outstanding at period end			94,037,242				101,120,704				94,037,242				101,120,704

     See accompanying notes to consolidated financial statements.

METHANEX CORPORATION 2008 SECOND QUARTER REPORT
CONSOLIDATED FINANCIAL STATEMENTS

Methanex Corporation
Consolidated Balance Sheets (unaudited)
(thousands of U.S. dollars)

		Jun 30				Dec 31
		2008				2007
ASSETS
Current assets:
Cash and cash equivalents		$	344,525			$	488,224
Receivables			302,545				401,843
Inventories			246,767				312,143
Prepaid expenses			35,358				20,889
			929,195				1,223,099
Property, plant and equipment (note 4)			1,710,287				1,542,100
Other assets			145,615				104,700
		$	2,785,097			$	2,869,899
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	295,072			$	466,020
Current maturities on long-term debt (note 6)			15,282				15,282
Current maturities on other long-term liabilities			19,436				16,965
			329,790				498,267
Long-term debt (note 6)			663,015				581,987
Other long-term liabilities			75,997				74,431
Future income tax liabilities			342,735				338,602
Non-controlling interest			70,755				41,258
Shareholders’ equity:
Capital stock			436,289				451,640
Contributed surplus			19,221				16,021
Retained earnings			855,814				876,348
Accumulated other comprehensive loss			(8,519	)			(8,655	)
			1,302,805				1,335,354
		$	2,785,097			$	2,869,899

     See accompanying notes to consolidated financial statements.

METHANEX CORPORATION 2008 SECOND QUARTER REPORT
CONSOLIDATED FINANCIAL STATEMENTS

Methanex Corporation
Consolidated Statements of Shareholders’ Equity (unaudited)
(thousands of U.S. dollars, except number of common shares)

																		Accumulated
		Number of																Other				Total
		Common				Capital				Contributed				Retained				Comprehensive				Shareholders'
		Shares				Stock				Surplus				Earnings				Loss				Equity
Balance, December 31, 2006			105,800,942			$	474,739			$	10,346			$	724,166			$	—			$	1,209,251
Net income			—				—				—				375,667				—				375,667
Compensation expense recorded for stock options			—				—				9,343				—				—				9,343
Issue of shares on exercise of stock options			552,175				9,520				—				—				—				9,520
Reclassification of grant date fair value on exercise of stock options			—				3,668				(3,668	)			—				—				—
Payments for shares repurchased			(8,042,863	)			(36,287	)			—				(168,440	)			—				(204,727	)
Dividend payments			—				—				—				(55,045	)			—				(55,045	)
Other comprehensive loss			—				—				—				—				(8,655	)			(8,655	)
Balance, December 31, 2007			98,310,254				451,640				16,021				876,348				(8,655	)			1,335,354
Net income			—				—				—				65,484				—				65,484
Compensation expense recorded for stock options			—				—				2,893				—				—				2,893
Issue of shares on exercise of stock options			128,513				2,392				—				—				—				2,392
Reclassification of grant date fair value on exercise of stock options			—				776				(776	)			—				—				—
Payments for shares repurchased			(2,850,000	)			(13,081	)			—				(60,995	)			—				(74,076	)
Dividend payments			—				—				—				(13,464	)			—				(13,464	)
Other comprehensive loss			—				—				—				—				(12,161	)			(12,161	)
Balance, March 31, 2008			95,588,767				441,727				18,138				867,373				(20,816	)			1,306,422
Net income			—				—				—				38,945				—				38,945
Compensation expense recorded for stock options			—				—				1,705				—				—				1,705
Issue of shares on exercise of stock options			86,353				1,508				—				—				—				1,508
Reclassification of grant date fair value on exercise of stock options			—				622				(622	)			—				—				—
Payments for shares repurchased			(1,637,878	)			(7,568	)			—				(35,921	)			—				(43,489	)
Dividend payments			—				—				—				(14,583	)			—				(14,583	)
Other comprehensive income			—				—				—				—				12,297				12,297
Balance, June 30, 2008			94,037,242			$	436,289			$	19,221			$	855,814			$	(8,519	)		$	1,302,805

     See accompanying notes to consolidated financial statements.

Consolidated Statements of Comprehensive Income (unaudited)
(thousands of U.S. dollars)

		Three months ended								Six months ended
		Jun 30				Jun 30				Jun 30				Jun 30
		2008				2007				2008				2007
Net income		$	38,945			$	35,654			$	104,429			$	180,360
Other comprehensive income (loss), net of tax:
Change in fair value of forward exchange contracts (note 13)			325				227				60				(153	)
Change in fair value of interest rate swap contracts (note 13)			11,972				—				76				—
			12,297				227				136				(153	)
Comprehensive income		$	51,242			$	35,881			$	104,565			$	180,207

     See accompanying notes to consolidated financial statements.

METHANEX CORPORATION 2008 SECOND QUARTER REPORT
CONSOLIDATED FINANCIAL STATEMENTS

Methanex Corporation
Consolidated Statements of Cash Flows (unaudited)
(thousands of U.S. dollars)

		Three Months Ended								Six Months Ended
		Jun 30				Jun 30				Jun 30				Jun 30
		2008				2007				2008				2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	38,945			$	35,654			$	104,429			$	180,360
Add (deduct) non-cash items:
Depreciation and amortization			26,396				28,373				49,509				52,112
Future income taxes			1,145				(3,543	)			4,133				1,576
Stock-based compensation expense			5,207				6,747				9,835				10,269
Other			(1,378	)			3,540				5,049				6,187
Other cash payments			(1,801	)			(3,547	)			(2,121	)			(4,287	)
Cash flows from operating activities before undernoted			68,514				67,224				170,834				246,217
Changes in non-cash working capital (note 11)			(34,294	)			56,601				(26,027	)			68,710
			34,220				123,825				144,807				314,927
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for shares repurchased			(43,489	)			(78,614	)			(117,565	)			(123,886	)
Dividend payments			(14,583	)			(14,230	)			(28,047	)			(27,302	)
Proceeds from limited recourse debt (note 6)			49,000				35,574				88,000				35,574
Financing costs			—				(8,725	)			—				(8,725	)
Equity contribution by non-controlling interest			15,897				7,445				29,497				18,295
Repayment of limited recourse debt			(7,328	)			(7,016	)			(7,640	)			(7,016	)
Proceeds on issue of shares on exercise of stock options			1,508				1,674				3,900				3,813
Changes in debt service reserve accounts			(1,995	)			(1,560	)			(1,995	)			916
Repayment of other long-term liabilities			(1,089	)			(1,539	)			(6,087	)			(2,549	)
			(2,079	)			(66,991	)			(39,937	)			(110,880	)
CASH FLOWS FROM INVESTING ACTIVITIES
Property, plant and equipment			(30,103	)			(12,091	)			(38,254	)			(25,767	)
Egypt plant construction costs			(84,140	)			(37,550	)			(180,351	)			(46,136	)
Dorado Riquelme investment (note 15)			(32,850	)			—				(32,850	)			—
GeoPark financing			—				—				(11,390	)			—
Other assets			(163	)			48				142				93
Changes in non-cash working capital (note 11)			(5,524	)			(3,471	)			14,134				(3,124	)
			(152,780	)			(53,064	)			(248,569	)			(74,934	)
Increase (decrease) in cash and cash equivalents			(120,639	)			3,770				(143,699	)			129,113
Cash and cash equivalents, beginning of period			465,164				480,397				488,224				355,054
Cash and cash equivalents, end of period		$	344,525			$	484,167			$	344,525			$	484,167
SUPPLEMENTARY CASH FLOW INFORMATION
Interest paid		$	6,913			$	5,638			$	23,902			$	19,061
Income taxes paid, net of amounts refunded		$	31,969			$	52,985			$	63,083			$	82,105

     See accompanying notes to consolidated financial statements.

METHANEX CORPORATION 2008 SECOND QUARTER REPORT
CONSOLIDATED FINANCIAL STATEMENTS

Methanex Corporation
Notes to Consolidated Financial Statements (unaudited)
Except where otherwise noted, tabular dollar amounts are stated in thousands of U.S. dollars.

1.		Basis of presentation:
		These interim consolidated financial statements are prepared in accordance with generally accepted accounting principles in Canada on a basis consistent with those followed in the most recent annual consolidated financial statements, except as described in Note 2 below. These accounting principles are different in some respects from those generally accepted in the United States and the significant differences are described and reconciled in Note 16. These interim consolidated financial statements do not include all note disclosures required by Canadian generally accepted accounting principles for annual financial statements, and therefore should be read in conjunction with the annual consolidated financial statements included in the Methanex Corporation 2007 Annual Report.
2.		Changes in accounting policies:
		On January 1, 2008, the Company adopted the Canadian Institute of Chartered Accountants (“CICA”) Handbook Section 3031 Inventories, Section 1535 Capital Disclosures, Section 3862 Financial Instruments — Disclosure and Section 3863 Financial Instruments — Presentation. Section 3031 provides more extensive guidance on the measurement and disclosure of inventory. The adoption of this standard has had no impact on the Company’s measurement of inventory. Section 1535 establishes standards for disclosing information about an entity’s capital and how it is managed. Sections 3862 and 3863 revise and enhance disclosure and presentation of financial instruments and place increased emphasis on disclosures about the nature and extent of risks arising from financial instruments and how those risks are managed.
3.		Inventories:
		Inventories are valued at the lower of cost, determined on a first-in first-out basis, and estimated net realizable value. The amount of inventories included in cost of sales and operating expense and depreciation and amortization during the three and six month periods ended June 30, 2008 was $491 million (2007 — $372 million) and $1,067 million (2007 — $780 million), respectively.
4.		Property, plant and equipment:

						Accumulated				Net Book
		Cost				Depreciation				Value
June 30, 2008
Plant and equipment		$	2,487,228			$	1,251,836			$	1,235,392
Egypt plant under construction			408,134				—				408,134
Other			125,918				59,157				66,761
		$	3,021,280			$	1,310,993			$	1,710,287
December 31, 2007
Plant and equipment		$	2,450,175			$	1,206,730			$	1,243,445
Egypt plant under construction			227,783				—				227,783
Other			124,779				53,907				70,872
		$	2,802,737			$	1,260,637			$	1,542,100

METHANEX CORPORATION 2008 SECOND QUARTER REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.		Interest in Atlas joint venture:
		The Company has a 63.1% joint venture interest in Atlas Methanol Company (Atlas). Atlas owns a 1.7 million tonne per year methanol production facility in Trinidad. Included in the consolidated financial statements are the following amounts representing the Company’s proportionate interest in Atlas:

		Jun 30				Dec 31
Consolidated Balance Sheets		2008				2007
Cash and cash equivalents		$	14,158			$	20,128
Other current assets			99,770				107,993
Property, plant and equipment			256,319				263,942
Other assets			18,323				16,329
Accounts payable and accrued liabilities			43,912				56,495
Long-term debt, including current maturities (note 6)			113,258				119,891
Future income tax liabilities			17,086				16,099

		Three Months Ended								Six Months Ended
		Jun 30				Jun 30				Jun 30				Jun 30
Consolidated Statements of Income		2008				2007				2008				2007
Revenue		$	76,455			$	22,436			$	158,532			$	88,770
Expenses			(72,101	)			(31,607	)			(146,735	)			(89,896	)
Income before income taxes			4,354				(9,171	)			11,797				(1,126	)
Income tax (expense) recovery			(1,049	)			1,419				(2,951	)			(254	)
Net income		$	3,305			$	(7,752	)		$	8,846			$	(1,380	)

		Three Months Ended								Six Months Ended
		Jun 30				Jun 30				Jun 30				Jun 30
Consolidated Statements of Cash Flows		2008				2007				2008				2007
Cash inflows (outflows) from operating activities		$	(10,466	)		$	10,306			$	14,088			$	37,344
Cash outflows from financing activities			(9,010	)			(8,576	)			(9,010	)			(6,100	)
Cash outflows from investing activities			(444	)			(3,730	)			(610	)			(13,688	)

6.

Long-term debt:

		Jun 30				Dec 31
		2008				2007
Unsecured notes
8.75% due August 15, 2012		$	197,974			$	197,776
6.00% due August 15, 2015			148,428				148,340
			346,402				346,116
Atlas limited recourse debt facilities			113,258				119,891
Egypt limited recourse debt facilities			204,574				116,574
Other limited recourse debt facilities			14,063				14,688
			678,297				597,269
Less current maturities			(15,282	)			(15,282	)
		$	663,015			$	581,987

METHANEX CORPORATION 2008 SECOND QUARTER REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.

Interest expense:

		Three Months Ended								Six Months Ended
		Jun 30				Jun 30				Jun 30				Jun 30
		2008				2007				2008				2007
Interest expense before capitalized interest		$	12,447			$	11,159			$	26,302			$	22,226
Less: capitalized interest related to Egypt project			(2,817	)			—				(5,982	)			—
Interest expense		$	9,630			$	11,159			$	20,320			$	22,226

		In 2007, the Company reached financial close and secured limited recourse debt of $530 million for its joint venture project to construct a 1.3 million tonne per year methanol facility in Egypt. For the three and six month periods ended June 30, 2008, interest costs related to this project of $2.8 million and $6.0 million were capitalized, respectively.
8.		Net income per common share:
		A reconciliation of the weighted average number of common shares outstanding is as follows:

		Three Months Ended								Six Months Ended
		Jun 30				Jun 30				Jun 30				Jun 30
		2008				2007				2008				2007
Denominator for basic net income per common share			94,520,011				102,697,808				95,837,568				103,894,611
Effect of dilutive stock options			629,877				275,463				504,424				383,498
Denominator for diluted net income per common share			95,149,888				102,973,271				96,341,992				104,278,109

9.

Stock-based compensation:

a)

Stock options:

	(i)		Incentive stock options:
			Common shares reserved for outstanding incentive stock options at June 30, 2008:

		Options Denominated in CAD								Options Denominated in USD
		Number of Stock				Weighted Average				Number of Stock				Weighted Average
		Options				Exercise Price				Options				Exercise Price
Outstanding at December 31, 2007			104,450			$	7.79				2,920,981			$	21.17
Granted			—				—				1,078,068				28.43
Exercised			(19,750	)			9.99				(103,763	)			19.95
Cancelled			(7,000	)			11.60				(3,666	)			23.36
Outstanding at March 31, 2008			77,700			$	6.89				3,891,620			$	23.21
Granted			—				—				—				—
Exercised			(1,250	)			3.29				(75,103	)			19.43
Cancelled			—				—				(33,450	)			24.24
Outstanding at June 30, 2008			76,450			$	6.95				3,783,067			$	23.28

METHANEX CORPORATION 2008 SECOND QUARTER REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.

Stock-based compensation (continued):

Information regarding the incentive stock options outstanding at June 30, 2008 is as follows:

		Options Outstanding at												Options Exercisable at
		June 30, 2008												June 30, 2008
		Weighted
		Average
		Remaining				Number of Stock				Weighted				Number of				Weighted
		Contractual Life				Options				Average Exercise				Stock Options				Average
Range of Exercise Prices		(Years)				Outstanding				Price				Exercisable				Exercise Price
Options denominated in CAD
$3.29 to 9.56			2.1				76,450			$	6.95				76,450			$	6.95
Options denominated in USD
$6.45 to 11.56			4.5				188,550			$	8.58				188,550			$	8.58
$17.85 to 22.52			4.5				1,484,900				20.26				997,433				20.01
$23.92 to 28.43			6.2				2,109,617				26.72				329,460				24.95
			5.4				3,783,067			$	23.28				1,515,443			$	19.66

	(ii)		Performance stock options:
			As at June 30, 2008, there were 35,000 shares (December 31, 2007 — 50,000 shares) reserved for performance stock options with an exercise price of CAD $4.47. All outstanding performance stock options have vested and are exercisable.
	(iii)		Compensation expense related to stock options:
			For the three and six month periods ended June 30, 2008, compensation expense related to stock options included in cost of sales and operating expenses was $1.7 million (2007 — $2.3 million) and $4.6 million (2007 — $4.9 million), respectively. The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:

		2008				2007
Risk-free interest rate			2.5	%			4.5	%
Expected dividend yield			2	%			2	%
Expected life		5 years				5 years
Expected volatility			32	%			31	%
Expected forfeitures			5	%			5	%
Weighted average fair value of options granted (USD per share)		$	7.52			$	7.06