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Re: 2008 - Friday, August 01, 2008
Q2 2008 Financial and Operating Results
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(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 second quarter
ended June 30, 2008. "This was the first full quarter of production
from our restarted Kişladağ mine, and our operating and
financial results reflect our strong performance. We benefitted from
low cash costs, increased production levels and high selling prices as
compared to the first quarter of the year. We also commenced
construction at our Efem�ukuru gold mine in Turkey and continued
construction at the Vila Nova iron ore mine in Brazil."
Q2 2008 Highlights
On July 3, we announced that we were successful in our bid to acquire
all outstanding shares of Frontier Pacific Mining Corporation. On July
9 we announced an agreement with Brazauro Resources to earn an interest
in the Tocantinzinho project in Brazil and on July 30 we announced we
entered into a letter agreement with AngloGold Ashanti to sell the S�o
Bento mine.
Financial Results
Our consolidated net income for the second quarter of 2008 was $25.2
million or $0.07 per share, compared with net income of $26.7 million
or $0.08 per share in the second quarter of 2007. In the second quarter
of 2008, we sold 88,610 ounces of gold at an average price of $904 per
ounce, compared to 112,702 ounces at an average price of $664 per ounce
in the second quarter of 2007.
Revenues increased 7% over the same period in 2007 due to increases in
selling prices, partially offset by lower ounces sold. Production was
higher in the second quarter of 2007 due to ounces produced during the
plant decommissioning at S�o Bento as well as a one-time production
increase of 12,575 ounces at Kişladağ related to cleaning the
electro-winning cathodes.
Operating Performance
Kişladağ
Our Kişladağ mine benefitted from its first full quarter of
production since re-opening on March 6, 2008. During the quarter, we
placed 2,092,957 tonnes of ore on the leach pad at a grade of 1.47
grams per tonne of gold. We produced 55,490 ounces of gold at a cash
cost of $230 per ounce during the quarter.
In our transition to making Kişladağ an owner-operated mine,
we completed the assembly of two Hitachi hydraulic shovels as well as
ten Caterpillar haul trucks and ancillary equipment, and commenced
waste mining activities with the fleet
Tanjianshan
We produced 31,890 ounces of gold at a cash cost of $229 per ounce in
the second quarter. We spent $10.3 million on capital expenditures,
primarily relating to construction of the sulphide ore processing
project, which we expect to complete by the fourth quarter of 2008.
Mining has now shifted to the Jinlonggou pit.
Development
Efem�ukuru
We began construction work at Efem�ukuru, spending $2.8 million during
the quarter. Activities during the quarter focused on site clearing
and preparation along with engineering work designed to finalize
process flow sheets and allow orders to be placed for long lead-time
items.
Vila Nova Iron Ore
We are anticipating start-up of our Vila Nova iron ore project late in
the fourth quarter of 2008. Engineering work on the design and
detailing of the ore processing plant is nearing completion, and we
have placed orders for the major plant and mobile mining equipment and
have begun staffing the project. We are continuing with stripping and
earthwork preparation in the areas of the pit, process plant and
tailings dam and we have begun the civil foundation installation for
the crushers and screen plant.
Exploration
Exploration expense for the second quarter was $2.7 million (Q2 2007 --
$2.9 million); exploration activities focused on our properties in
Turkey, Brazil and China.
Exploration -- Turkey
Our reconnaissance work during the quarter focused on Zonguldak in the
western Pontides and Sayacik, a volcanic center adjacent to
Kişladağ. At Efem�ukuru we are finishing a large soil
sampling program and preparing for a drill program targeting the North
Ore Shoot.
At Kişladağ we completed 3,775 meters of
Diamond drilling and
2,598 meters of reverse circulation drilling. Resource drilling at
Kişladağ is targeting inferred mineralization discovered
during last years exploration program and the continuation of known
mineralization on the western edge of the deposit.
Exploration -- Brazil
Exploration in Brazil consisted of support for the Vila Nova iron ore
project and project evaluations in various prospective areas.
Exploration -- China
We drilled 6,879 meters in 39 holes, primarily at Xijingou (south of
the Jinlongou pit limit) and Qinlongtan South, where the target horizon
is similar to the mineralization found at the main Qinlongtan deposit.
In the third quarter, we will begin drilling in the Qinlongtan deep
zone, targeting high grade ore mined at QLT and extending beneath the
final pit floor.
Acquisitions
On July 3, we announced that we were successful in our bid to acquire
all outstanding shares of Frontier Pacific Mining Corporation. Frontier
Pacific owns the Perama Hill gold project in northeastern Greece, and
the acquisition will accelerate Eldorado's growth strategy and
strengthen its competitive position in southeastern Europe.
Eldorado is a gold producing and exploration company actively growing
businesses in Brazil, Turkey, China, Greece and surrounding regions.
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
Eldorado will host a conference call Friday, August 1, 2008 to discuss
the 2008 Second Quarter Financial and Operating Results at 11:30 a.m.
EDT (8:30 a.m. PDT). You may participate in the conference call by
dialing 416-641-6127 in Toronto or 1-866-226-1799 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 August 8, 2008 by dialing 416-695-5800 in
Toronto or 1-800-408-3053 free in North America and entering the Pass
code: 3266194.
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 forward looking
statements or information within the meaning of the Securities Act
(Ontario). Such forward looking statements or information include, but
are not limited to statements or information with respect to unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company, or industry
results, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Forward-looking statements or information
are subject to a variety of risks and uncertainties, which could cause
actual events, or results to differ from those reflected in the
forward-looking statements or information. Should one or more of these
risks and uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those
described in forward looking statements. Specific reference is made to
"Forward Looking Statements and Risk Factors" in the Company's Annual
Information Form and Form 40-F dated March 31, 2008. Forward-looking
statements herein include statements regarding the expectations and
beliefs of management. Such factors included, amongst others the
following: gold price volatility; impact of any hedging activities,
including margin limits and margin calls; discrepancies between actual
and estimated production, between actual and estimated reserves, and
between actual and estimated metallurgical recoveries; mining
operational risk; risks from litigation; regulatory restrictions,
including environmental regulatory restrictions and liability; risks of
sovereign investment; speculative nature of gold exploration; dilution;
competition; loss of key employees; additional funding requirements;
and defective title to mineral claims or property, as well as those
factors discussed in the section entitled "Risk Factors" in the
Company's Annual Information Form and Form 40-F dated March 31, 2008.
We do not expect to update forward-looking statements 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 shares trade on the Toronto Stock Exchange
(TSX: ELD) and the American Stock Exchange (AMEX: EGO). The TSX has
neither approved nor disapproved the form or content of this release.
Contact:
Nancy E. Woo, Manager 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
Web site: www.eldoradogold.com
Request for information packages: laurelw@eldoradogold.com
View News Release or Second Quarter Report in PDF Format:
Associated File:
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Copyright (c) 2008 ELDORADO GOLD CORP. (ELD) All rights reserved. For
more information visit our website at http://www.eldoradogold.com/ or
send mailto:info@eldoradogold.com
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