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Re: 2008 - Friday, October 31, 2008
Q3 2008 Financial and Operating Results Revenue, Net Income, Gold
Production All Increase
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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 third quarter ended September 30, 2008. "This was a very solid
quarter for us. Our Kisladag and Tanjianshan mines produced more than
72,000 ounces of gold at a cash operating cost of $283 per ounce. We
continue to be one of the lowest cost pure gold producers with a strong
balance sheet. Considerable construction progress was made at both our
Efemcukuru gold mine in Turkey and our Vila Nova iron ore mine in
Brazil along with continued execution of our exploration programs in
Turkey, China and Brazil. The completion of the Frontier acquisition
will contribute to our growth strategy and strengthens our competitive
position in southeastern Europe."
Q3 2008 Highlights
- Gold revenue increased 70% to $65.0M on gold sales of 74,740 ounces
from $38.1M in the third quarter of 2007
- Produced 72,343 ounces of gold from our operations at a cash
operating cost of $283 per ounce and a total cash cost of $313 per
ounce;
- Reported earnings of $0.05 per share;
- Reported earnings of $0.05 per share;
- Completed our acquisition of Frontier Pacific Mining, giving us a
100% interest in the Perama Hill gold project in northeastern Greece;
- Finalized an agreement with Brazauro Resources to earn an interest in
the 43,000 hectare Tocantinzinho project in Brazil; and
- Announced the sale of our Sao Bento mine to AngloGold Ashanti for $70
million.
"We are pleased with our demonstrated ability to achieve our cost and
performance targets in the first 9 months of the year. Despite cost
pressures detrimentally affecting the metal sector, the Company's mines
have produced 226,957 ounces at cash operating costs of $242/oz. This
excellent performance is consistent with our continued guidance of 2008
production of 300,000 ounces at cash operating costs of $255/oz.,"
commented Paul N. Wright, President and Chief Executive Officer.
Financial Results
Our consolidated net income for the third quarter of 2008 was $17.0
million or $0.05 per share, compared with net income of $5.2 million or
$0.02 per share in the third quarter of 2007. In the third quarter of
2008, we sold 74,740 ounces of gold at an average price of $870 per
ounce, compared to 57,230 ounces at an average price of $667 per ounce
in the third quarter of 2007.
Operating Performance
Tanjianshan
We produced 25,480 ounces of gold at cash cost of $306 per ounce in the
third quarter, and we sold 27,431 ounces of gold for third quarter
revenue of $24.0 million. We spent $12.2 million on capital
expenditures,
primarily relating to construction of the sulphide ore processing
project, which we expect to commission in the fourth quarter of 2008.
Kisladag
During the quarter, we placed 2,562,343 tonnes of ore on the leach pad
at a grade of 1.05 grams per tonne of gold. We produced 46,863 ounces
of gold at a cash operating cost of $270 per ounce and we sold 47,309
ounces of gold for third quarter revenues of $41.0 million. Gold
production at Kisladag was higher than the 23,610 ounces produced in
the third quarter of 2007 but lower than the second quarter 2008
production of 55,490 ounces due to lower grade mined ore transported to
the leach pad and seasonally dry conditions that reduced the flow of
solution to the leach pad. By quarter-end, in heap solution had
increased, accompanied by higher daily plant throughput. We
successfully completed the transition to owner-operated mining at the
end of the quarter.
Development
Efemcukuru
We continued construction at Efemcukuru, spending $3.3 million during
the quarter. Construction activities included site clearing of all
major facility areas, widening the access road and preparing for
drilling and blasting at the plant site.
Vila Nova Iron Ore
We are anticipating start-up of our Vila Nova iron ore project in the
first quarter of 2009. In the third quarter, we spent $8.0 million on
the project, with construction activities focusing on the plant site
earthworks and concrete foundations for the crushing and screening
equipment, as well as earthworks for the tailing dam. We finalized
layouts for the train and ship-loading facilities and continued to
increase staffing on the project.
Exploration
Exploration expense for the third quarter was $7.4 million (Q3 2007 --
$2.8 million); exploration activities focused on our properties in
Turkey, Brazil and China.
Exploration -- Turkey
Our reconnaissance work during the quarter focused on Sayacik, a
volcanic center adjacent to Kisladag, and properties in the Pontides.
At Sayacik, our soil sampling and mapping programs identified three
anomalous gold zones, where we will follow up with magnetic and induced
polarization geophysical surveys and
Diamond drilling. At Efemcukuru,
we conducted mapping and rock chip sampling of anomalous zones
identified earlier in the year and initiated a 10-hole 1,900 meter
drilling program. At Kisladag, we drilled 11,000 meters in 20 holes to
define new areas of oxide mineralization and confirm lateral extensions
to existing sulphide mineralization.
Exploration -- Brazil
Exploration in Brazil consisted of support for the Vila Nova iron ore
project, as well as drilling at the Tocantinzinho project, where we are
conducting a 16,000 meter drilling program as part of our earn-in
agreement. The objective of this drilling is to bring the inferred
resource into the indicated category and to explore for extensions of
the ore body.
Exploration -- China
At Tanjianshan, we drilled 9,750 meters in 34 holes primarily in the
Xijingou area, enabling us to define three mineralized zones. This
drilling program will be completed early in the fourth quarter.
Acquisitions
On July 7, we completed our acquisition of all issued and outstanding
shares of Frontier Pacific Mining Corporation. We now own a 100%
interest in the Perama Hill gold project in northeastern Greece along
with other exploration projects in Peru and Colombia.
During the quarter, we also finalized an agreement with Brazauro
Resources Corporation to earn an interest in the 43,000 hectare
Tocantinzinho Project in Brazil.
Eldorado is a gold producing and exploration company actively growing
businesses in Turkey, China, Brazil and Greece. We are 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
Eldorado will host a conference call Friday, October 31, 2008 to
discuss the 2008 Third 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 November 7, 2008 by dialing 416-695-5800
in Toronto or 1-800-408-3053 free in North America and entering the
Pass code: 3272241.
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, Vice President Investor Relations
Phone: 604.601.6650 or 1.888.353.8166
Fax: 604.687.4026
Email: nancyw@eldoradogold.com
Request for information packages: laurelw@eldoradogold.com
Eldorado Gold Corporation
1188, 550 Burrard Street
Vancouver, BC V6C 2B5
Web site: www.eldoradogold.com
View Full News Release or Third Quarter Report in PDF Format:
File: http://www.eldoradogold.com/i/pdf/08-28.pdf
File: http://www.eldoradogold.com/i/pdf/08-28-Q3-2008.pdf
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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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