2010 Operating Results / 2011 Operating Guidance Continued Growth at Low
Cost with Increasing Dividend
(all
figures in United States dollars, unless otherwise noted)
- Paul N. Wright President and Chief Executive Officer of Eldorado Gold
Corporation ("Eldorado" the "Company" or "We") is
pleased to announce the 2010 operating results and provide operating guidance
for 2011.
2010 Operating Results
All the Company's mines continued to perform strongly through the fourth
quarter contributing to a combined total production of 148,372 ounces of gold
and a total of 632,537 ounces of gold in the year.
The year end production of 632,537 ounces of gold at a cash cost of $382 per
ounce compares very favorably with our start of the year guidance of 550,000 -
600,000 ounces at $395 - $400 per ounce.
Table 1 below provides detail of the individual contributions of the Kisladag, Jinfeng, Tanjianshan and White Mountain mines.
|
2010 Q4
|
2010
|
Gold produced (oz)
|
148,372
|
632,537
|
Cash cost ($/oz)
|
418
|
382
|
|
|
|
Kisladag
|
|
|
Tonnes to Pad
|
2,021,057
|
10,372,719
|
Grade (g/t)
|
0.99
|
1.06
|
Gold Produced (oz)
|
59,815
|
274,592
|
Cash cost ($/oz)
|
383
|
329
|
|
|
|
Jinfeng
|
|
|
Tonnes Milled
|
387,710
|
1,557,199
|
Grade (g/t)
|
3.81
|
4.24
|
Gold Produced (oz)
|
37,560
|
181,950
|
Cash cost ($/oz)
|
486
|
425
|
|
|
|
Tanjianshan
|
|
|
Tonnes Milled
|
244,867
|
1,049,952
|
Grade (g/t)
|
4.59
|
4.20
|
Gold Produced (oz)
|
30,709
|
113,863
|
Cash cost ($/oz)
|
349
|
383
|
|
|
|
White Mountain
|
|
|
Tonnes Milled
|
169,669
|
622,418
|
Grade (g/t)
|
4.06
|
3.98
|
Gold Produced (oz)
|
20,288
|
62,132
|
Cash cost ($/oz)
|
494
|
486
|
Dividend
Recognizing the increased cash margins realized
through gold sales in 2010, the Company is declaring and will be paying an
additional dividend of C$0.05 per share for 2010, which doubles the amount of
the 2010 dividend to C$0.10 per share. The total amount of this dividend
represents approximately $100 per ounce of gold sold by Eldorado in the second
half of 2010. This dividend will be payable on February 25, 2011 to
shareholders of record at the close of business February 11, 2011.
For 2011, the Company's dividend will be declared and paid in two semi-annual
increments, shortly after the end of the second and fourth quarters. The
Company envisages that the total dividend amount shall approximate $100 per
ounce of gold, sold in the year.
Dividends in subsequent years will be based on gold production, gold sales,
gold price, margins, capital reinvestment and market conditions among other
factors.
"Eldorado enjoys some of the best margins in the gold business due to our
lowest quartile cost of production, and we expect to continue doing so,"
said Paul Wright, President and CEO of Eldorado. "We are pleased to have
adopted a policy of distributing a meaningful portion of these excellent
margins to our shareholders through what we believe to be an attractive and
sustainable dividend, while we aggressively continue to grow Eldorado as one of
the worlds best pure gold
producers".
2011 Guidance
Following a very successful year in 2010 where the
Company's gold production grew 74% to 632,537ounces compared with 363,509
ounces in 2009, production will continue to grow in 2011 by an additional 15%
to 20%.
With the planned start up of both the Efemcukuru and
Eastern Dragon mines in 2011, gold production will increase to be in the range
of 715,000 - 770,000 ounces whilst maintaining one of the lowest costs in the
industry in the $375-$395/ounce range.
Mine
|
Gold
Production
(oz)
|
Cash Cost
($/oz)
|
Capital Expenditure
($M)
|
Kisladag
|
270,000 - 285,000
|
350 - 365
|
50.0
|
Jinfeng
|
175,000 - 185,000
|
445 - 465
|
30.0
|
Tanjianshan
|
110,000 - 120,000
|
410 - 430
|
7.5
|
White Mountain
|
70,000 - 75,000
|
485 - 500
|
10.0
|
Efemcukuru
|
70,000 - 80,000
|
285 - 300
|
70.0
|
Eastern Dragon
|
20,000 - 25,000
|
40 - 45
|
62.5
|
|
715,000 -
770,000
|
375 - 395
|
230.0
|
|
|
|
|
Vila Nova
|
440,000-480,000
tonnes
|
$35-40 / tonne
|
2.5
|
Principal assumptions used in the preparation of guidance for 2011 include:
Gold
Price
|
$1,250
|
|
Oil Price
|
$80
/ barrel
|
|
Exchange
Rate
|
CAD
vs USD
|
1.05
|
|
RMB
vs USD
|
6.50
|
|
YTL
vs USD
|
1.50
|
|
EURO
vs USD
|
0.70
|
|
REAL
vs USD
|
1.75
|
Exploration
The worldwide exploration budget for 2011 is estimated at $54 million.
Approximately $30 million of the total budget will be spent on "near
mine" exploration where we plan to take advantage of both existing
infrastructure and highly prospective targets.
Of the $54 million budget, approximately $24 million will be spent in China
with the remaining balance in Turkey, Brazil, and Nevada.
Kisladag
In 2011 the Kisladag Mine will place 12 million tonnes of ore on the leach pad at a grade of 1.07 g/t Au,
with a strip ratio of 1.4:1. The increased ore production (from 10 million tonnes in 2010) is the result of the expansion project
undertaken in 2010 which added capacity to the crushing and conveying circuits.
Capital spending in 2011 is estimated at $50 million. Major capital items are:
- $7.5 million for four new haul
trucks and one Production Drill;
- $7.5 million in capitalized
waste stripping;
- $10.5 million to complete the
plant expansion; and
- $6 million in major mining
equipment overhauls.
Exploration at Kisladag in 2011 will focus on
resource drilling in the western deposit area and geophysics for deep target
generation.
Jinfeng
Jinfeng will process 1.55 million tonnes
of ore at a grade of 4.06 g/t Au. 760,000 tonnes of
ore will come from the open pit; 500,000 tonnes from
underground, and the remainder from existing stockpiles. Capital spending in
2011 will be approximately $30 million. Major capital items are:
- $8.2
million in underground development;
- $5.8 million in capitalized
waste stripping; and
- $4.9 million in underground
mining equipment.
Exploration at Jinfeng will consist of surface and
underground drilling in the immediate mine area (24,000 meters) as well as
regional exploration on 11 exploration licenses with sediment-hosted
Carlin-type potential.
Tanjianshan
Tanjianshan will process 1.0 million tonnes of ore at 4.04 g/t Au. Mining will continue from the
JLG open pit at a strip ratio of 2.56:1. Capital spending for 2011 will be
$13.9 million, with the major item being:
- $3.6
million for tailings expansion.
Exploration at Tanjianshan will consist of infill
drilling at the 323 deposit, underground development and drilling at the QLT
Deep area, and general target generation.
White Mountain
White Mountain will process 707,000 tonnes of ore at
4.02 g/t Au. This represents a 15% increase over the tonnes
processed in 2010. This is being accomplished mainly by taking advantage of the
excess throughput capacity in the grinding circuit. Capital expenditures for
2011 estimated to be $10.0 million, and the major items are:
- $4.8
million for underground development; and
- $1.0 million for tailings dam
expansion.
Efemcukuru
In its first year of production, Efemcukuru will mine
and process 254,000 tonnes of ore at 11.06 g/t Au.
Mining will take place in the South Ore Shoot and the Middle Ore Shoot. Capital
expenditures for 2011 are estimated at $70.0 million, of which $53 million is
to complete the project construction.
Eastern Dragon
The Eastern Dragon project will complete construction in Q4 2011 and then
process 40,000 tonnes of ore at 17.38 g/t Au and 132
g/t Ag. Capital spending for 2011 to complete project construction is estimated
to be $62.5 million.
Perama Hill
During 2011 we expect to receive approval of the Pre-Environmental Impact
Assessment and submit the full Environmental Impact Assessment. Construction is
scheduled to begin in mid-2012.
Outlook
The Company continues to advance on the path set a number of years ago to build
in a disciplined manner a successful high quality gold Company. In addition to
meeting our operating objectives, completing construction and commissioning of
two new mines and executing our exploration programs, we will be developing
plans designed to optimize our existing asset base with the objective to raise
annual production to 1, 500,000 ounces by 2015. Expansion plans for the
individual assets shall be disclosed in the course of 2011, with the first
study scheduled release pertaining to the plan associated with increasing
annual gold production at our Kisladag Mine to
approximately 450,000 ounces. The Company is of the opinion that, in addition
to the expansion opportunities at Kisladag, Efemcukuru, White Mountain and Eastern Dragon also are
expandable to levels beyond present guidance.
Eldorado is a gold producing, exploration and development company actively
growing businesses in Brazil, China, Greece, Turkey and surrounding regions. We
remain one of the lowest cost pure gold producers. With our international
expertise in mining, finance and project development, together with highly
skilled and dedicated staff, we believe that Eldorado is well positioned to
grow in value as we create and pursue new opportunities.
ON BEHALF OF
ELDORADO GOLD CORPORATION
"Paul N.
Wright"
Paul N. Wright
President and Chief Executive Officer
Certain of
the statements made herein may contain forward-looking statements or
information within the meaning of the United States Private Securities
Litigation Reform Act of 1995 and applicable Canadian securities laws. Often,
but not always, forward-looking statements and forward-looking information can
be identified by the use of words such as "plans",
"expects", "is expected", "budget",
"scheduled", "estimates", "forecasts",
"intends", "anticipates", or "believes" or the
negatives thereof or variations of such words and phrases or statements that
certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be
achieved. Forward-looking statements or information herein
include, but are not limited to, reporting of the Company's 2010 operating
results, the Company's guidance for 2011 and the payment of dividends.
Forward-looking statements
and forward-looking information by their nature are based on assumptions and
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements or information. We have
made certain assumptions about the forward-looking statements and information,
including, assumptions about the price of gold, the estimated reserve,
resources and production of the combined entity and the impact on the
integration of the business on our operations and financial position. Even
though our management believes that the assumptions made and the expectations
represented by such statements or information are reasonable, there can be no
assurance that the forward-looking statement or information will prove to be
accurate. Furthermore, should one or more of the risks, uncertainties or other
factors materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those described in forward-looking statements
or information. These risks, uncertainties and other factors include, among
others, the following: the ability to conclude a transaction, gold price
volatility; discrepancies between actual and estimated production, mineral
reserves and resources and metallurgical recoveries; mining operational and
development risk; business integration risks; litigation risks; regulatory
restrictions, including environmental regulatory restrictions and liability;
risks of sovereign investment; currency fluctuations; speculative nature of
gold exploration; global economic climate; dilution; share price volatility;
competition; loss of key employees; additional funding requirements; and
defective title to mineral claims or property, as well as those factors
discussed in the sections entitled "Forward-Looking Statements" and
"Risk Factors" in the Company's Annual Information Form & Form
40-F dated March 31, 2010.
Eldorado Gold Corporation's common shares trade on the Toronto Stock Exchange
(TSX: ELD); NYSE- (NYSE: EGO). Eldorado CDIs trade on the Australian Stock
Exchange (ASX: EAU).
Contact:
Nancy Woo, Vice President Investor Relations
Phone: 604.601-6650 or 1.888.353.8166
Fax: 604.687.4026
Email: nancyw@eldoradogold.com
Eldorado Gold Corporation
1188, 550 Burrard Street
Vancouver, BC V6C 2B5
Website: www.eldoradogold.com