Q1, 2011 Financial and Operating
Results
Operating Results and Construction
on Plan
Earnings per share $0.10; Cash Flow per share $0.17
(all figures in United
States dollars unless otherwise noted)
VANCOUVER, BC - Paul N. Wright, President and Chief Executive Officer of
Eldorado Gold Corporation, ("Eldorado" the "Company" or
"we") is pleased to report on the Company's financial and operational
results for the first quarter ended March 31, 2011. Eldorado reported net
income attributable to shareholders of the Company of $52.5 million for the
period and generated $91.7 million in cash from operating activities before
changes in non-cash working capital.
"All of our mines performed in accordance with their operating plans in
terms of production and operating costs to produce 148,577 ounces of gold at a
cash operating cost of $410 per ounce. During the quarter we also completed the
Phase III expansion at Kisladag and a major overhaul
of the primary crusher mainframe. Construction at Efemcukuru
remains on schedule with first gold to be produced this quarter. With a strong
start to the year, the Company retains its guidance of producing
715,000-770,000 ounces at cash operating cost of $375-395/oz." said Paul
Wright, President and CEO of Eldorado Gold.
Q1 2011 Highlights
- Increased proven and probable
gold reserves to 18.7 million ounces and measured and indicated resources
to 22.9 million ounces
- Produced 148,577 ounces of gold
at an average cash operating cost of $410 per ounce (total cash cost $462
per ounce)
- Sold 148,530 ounces of gold at
an average realized price of $1,397 per ounce
- Reported
earnings of $0.10 per share
- Generated $91.7 million ($0.17
per share) from operating activities before changes in non-cash working
capital
- Paid dividend of $0.05 to shareholders
on record February 11, 2011
Financial Results
Eldorado's consolidated net income attributable to the shareholders of the
Company for the first quarter of 2011 was $52.5 million or $0.10 per share
compared to $50.5 million or $0.09 per share in the first quarter of 2010. The
increase in profit for the period was the result of a higher gold price and a
contributing profit from Vila Nova.
In the first quarter of the year, 148,530 ounces of gold were sold at an
average price of $1,397 per ounce compared to 163,446 ounces of gold at an
average realized price of $1,110 per ounce in the first quarter of 2010. In
addition, 85,421 dry metric tonnes of iron ore were
sold at an average price of $124 per dry metric tonne.
Operating Performance
Kisladag
During the quarter, 2,341,635 tonnes
of ore were placed on the leach pad at an average grade of 1.04 grams of gold
per tonne. We produced 50,833 ounces of gold at a
cash operating cost of $386 per ounce, compared to record production of 82,240
ounces of gold at a cash operating cost of $304 per ounce in the first quarter
of 2010. Production was lower than the first quarter of 2010 in part due to the
planned major overhaul of the primary crusher mainframe and integrating the
Phase III expansion.
Tanjianshan ("TJS")
TJS produced 28,493 ounces of gold at a cash operating cost of $402 per ounce
in Q1 2011, as compared to 25,423 ounces at a cash operating cost of $420 per
ounce in Q1 2010. Additional roaster feed provided by Qinglongtan
concentrate has helped TJS to increase gold production while processing lower
grade ore.
Jinfeng
The operation processed 384,400 tonnes of ore at a
grade of 4.32 grams of gold per tonne and produced
48,564 ounces of gold at a cash operating cost of $430 per ounce. Strip ratio
fell at Jinfeng to 1.61:1 this quarter as a result of
the planned mining at the bottom of the open pit during the quarter.
White Mountain
At our White Mountain mine, we processed 140,211 tonnes
of ore at a grade of 5.70 grams of gold per tonne and
produced 20,687 ounces of gold at a cash operating cost of $438 per ounce.
White Mountain achieved record production during the quarter was due to higher
grade and improved recoveries.
Vila Nova
In the quarter, 138,114 tonnes of run-of-mine iron
ore were mined. Two shipments, one of lump ore and
another of sinter fines, totalling 85,421 dry metric tonnes were made during the quarter. Both of these
shipments were sold into the Chinese spot market at prices averaging $124 per dry metric tonne delivered to
the Santana Port in Brazil. Total cash cost (including royalties, production
taxes and shipping costs) were approximately $53 per tonne.
Development
Efemcukuru
Dry commissioning of the concentrator plant continued during the quarter. The
majority of the circuit was tested with the exception of the gold room which
was reaching the final stages of completion. The high voltage power supply was
tied into the plant in April. Wet commissioning of the plant is projected to
take place in the second quarter. The remaining construction activity at site
has focused on completion of the filtration and backfill plants. All mechanical
equipment has been installed. Piping and electrical installations have been
ongoing.
Underground development continued on schedule with approximately 3,000 meters
of development completed by the end of the quarter representing approximately
70% of the contract value. A portable crusher is on site to provide temporary
crushing capacity of ore production during the commissioning of the plant until
the underground crusher installation has been completed, which is projected to
be in the third quarter of 2011.
Eastern Dragon
During the quarter construction continued at the Eastern Dragon Project despite
extreme weather conditions. We successfully advanced the winter works program
schedule safely and efficiently through this difficult period. Currently we are
focused on the civil and structural installations.
Perama Hill
The Ministry of Environment continues to review our Preliminary Environmental
Impact Assessment. As part of our ongoing efforts to work with various levels
of government and other stakeholders in regards to educating and providing a
better understanding of best practises in modern gold
mining, specifically in the European Union, arrangements were made to take
stakeholders to visit mining operations in Finland. We continue our efforts
with government officials to advance the permitting process and answer any
questions they may have regarding the benefits the Perama
Hill project can bring to Greece.
Tocantinzinho ("TZ")
Subsequent to the end of the quarter, the Company released a Positive Technical
Study ("Study") on the 100% owned Tocantinzinho
Gold Project located in Para state in Central Brazil. The Study highlighted an
11-year open pit mine that will operate with a production rate of 4.4 million tonnes per year producing an average of 159,000 ounces of
gold annually at a cash operating cost of $559 per ounce. Initial capital
investment will be $383.5 million.
Exploration
Turkey
During the first quarter, exploration in Turkey focused on drilling at Sayacik and AS and on fieldwork related to target
definition at several other early-stage prospects. Exploration drilling at the Kisladag and Efemcukuru mine
areas will commence during the second quarter.
At Sayacik, the final drill holes of the 2010 program
that targeted the remaining untested geophysical anomalies on the property were
completed. Both drill holes intersected altered volcaniclastic
and intrusive rock sequences, but had no significant mineralization. All assay
results have been received from the 2010 drilling program and no further work
is planned at this time.
At the AS deposit, two drill holes tested surface geochemical anomalies,
completing the planned 2010 program. The low-grade Cu, Mo, and Au values
obtained from the program do not support further exploration on the property at
this time. We also completed reconnaissance fieldwork, including mapping and
soil geochemistry surveys on the early-stage Dogancilar
and Atalan projects this winter.
Brazil
During the first quarter at TZ we drilled 11 diamond drill holes (3,691 meters)
to test exploration targets peripheral to the main deposit area. These targets
were defined by a combination of surface soil geochemical anomalies, chargeability
or resistivity anomalies and areas of known mineralization based on garimpero workings or surface gold occurrences. Several of
the drill holes encountered granitoid units with
similar lithologic, alteration, and mineralisation character to that found in the TZ deposit,
although gold assay results received from the first few drill holes have been
limited to narrow, low grade intercepts.
Soil sampling programs during the quarter were initiated to extend the area of
coverage both along and peripheral to the TZ trend. In addition, grid-based
augur drilling commenced within areas containing broad gold geochemical
anomalies in soil to more closely define targets for diamond drilling.
At Agua Branca where we hold an option, fieldwork
this quarter focused on soil geochemical sampling aimed at defining targets for
diamond drilling in the second and third quarter of 2011.
China
During the quarter we focused our exploration on projects in the Guizhou region. Three drill holes totalling
331 meters were completed at the Banna and Weiruo prospects in Jinluo
Exploration License.
At the Jinfeng mine, we completed 3,607 meters of
underground drilling from the 310 level mainly devoted to infill of the
mineralized zones along the F2, F3, and F7 faults. We also completed reverse
circulation drilling in the Rongban portion of the
deposit to better define the continuity and extent of mineralized zones. We
made progress on a revised structural/lithologic
model for the deposit, directed towards refining our knowledge of controls on
gold distribution, defining new drill targets, and helping constrain future
resource estimates.
In the White Mountain, Eastern Dragon and TJS areas, field activities were
limited by winter conditions but plans for the 2011 program were completed
during the quarter.
Eldorado is a gold producing, exploration and development company actively
growing businesses in Turkey, China, Greece, Brazil.
With our international expertise in mining, finance and project development,
together with highly skilled and dedicated staff, we believe that our company
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
Eldorado will host a
conference call on Friday, May 6, 2011 to discuss the 2011 First Quarter
Financial and Operating Results at 11:30 a.m. EDT (8:30 a.m. PDT). You may
participate in the conference call by dialling
416-340-8527 in Toronto or 1-877-440-9795 toll free in North America and asking
for the Eldorado Conference Call with Chairperson: Paul Wright, President and
CEO of Eldorado Gold. The call will be available on Eldorado's website. www.eldoradogold.com. A replay of the call will be
available until May 13, 2011 by dialling 905-694-9447
in Toronto or 1-800-408-3053 toll free in North America and entering the Pass
code: 7200381.
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 the Company's Q1, 2011 Financial and Operating Results.
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
and 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: gold price volatility;
discrepancies between actual and estimated production, mineral reserves and
resources and metallurgical recoveries; mining operational and development
risk; 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, 2011
There can be no assurance
that forward-looking statements or information will prove to be accurate, as
actual results and future events could differ materially from those anticipated
in such statements. Accordingly, you should not place undue reliance on the
forward-looking statements or information contained herein. Except as required
by law, we do not expect to update forward-looking statements and information
continually as conditions change and you are referred to the full discussion of
the Company's business contained in the Company's reports filed with the
securities regulatory authorities in Canada and the U.S.
Eldorado Gold Corporation's common shares trade on the Toronto Stock Exchange
(TSX: ELD) and the New York Stock Exchange (NYSE: EGO). Our Chess Depositary
Interests trade on the Australian Securities Exchange (ASX: EAU).
Contact:
Nancy Woo, VP 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 StreetVancouver,
BC V6C 2B5
Web site: www.eldoradogold.com
Request for information packages:reception@eldoradogold.com
Click here for
the Unaudited Consolidated Financial Statements for the quarter ended March 31,
2011 in PDF.