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Eldorado Gold Corporation (TSX:ELD - News)(NYSE:EGO - News)(ASX:EAU - News) - (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 - $400 per
ounce.
Table 1 below provides detail of the
individual contributions of the Kisladag, Jinfeng, Tanjianshan and White
Mountain mines.
Table 1
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2010 Q4 2010
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Gold produced (oz) 148,372 632,537
Cash cost ($/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
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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-$395/ounce range.
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Mine Gold Production Cash Cost Capital Expenditure
(oz) ($/oz) ($M)
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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
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715,000 - 770,000 375 - 395 230.0
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Vila Nova 440,000-480,000 tonnes $35-40 / tonne 2.5
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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, 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 - News); NYSE- (NYSE:EGO - News). Eldorado CDIs trade on
the Australian Stock Exchange (ASX:EAU - News).
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