TSX: ELD NYSE: EGO

VANCOUVER, July 28, 2016 /CNW/ - Eldorado Gold Corporation, ('Eldorado' or 'the Company') is pleased to announce the Company's financial and operational results for the second quarter ended June 30, 2016. Eldorado reported gold production of 124,110 ounces (2015: 181,160 oz) at an average cash operating cost of $607 per ounce (2015: $569/oz). Adjusted net earnings for the quarter was $11.7 million ($0.01 per share) compared to adjusted net earnings of $17.0 million ($0.02 per share) in 2015.

'Quarterly production was in-line with internal plans and we are expecting to produce a total of 570,000 ounces of gold at all in sustaining cash costs of $930 per ounce and cash costs of $595 per ounce for the full year 2016,' stated Paul Wright, President and Chief Executive Officer of Eldorado.

'Development work at Skouries is ramping up following the Technical Study approval in early May. The Olympias Phase II development continues on schedule and initial production is expected in the first quarter 2017. I am also pleased to report that during the quarter we announced the sale of our Chinese assets, specifically the Jinfeng, White Mountain and Tanjianshan mines, as well as the Eastern Dragon project. The two transactions, expected to close in the third and fourth quarters, will result in an even stronger balance sheet. This balance sheet will enable us to re-invest in our high quality internal project pipeline and provide long term growth for Eldorado.'

Second Quarter 2016 Financial and Operational Highlights

• Gold production of 124,110 ounces.
• Gold revenues were $162.7 million on sales of 128,090 ounces of gold at an average realized gold price of $1,270 per ounce.
• Liquidity of $422.8 million, including $202.8 million in cash, cash equivalents and term deposits, and $220.0 million in unused lines of credit.
• All-in sustaining cash costs averaged $933 per ounce; cash operating costs averaged $607 per ounce.
• Announced agreements to sell the Chinese portfolio of assets to two parties for a total of $900 million in cash, subject to regulatory and other approvals and closing adjustments.

Review of Financial Results

Loss attributable to shareholders of the Company was $329.9 million (or $0.46 per share) for the quarter compared with a loss of $198.6 million (or $0.28 per share) in the second quarter of 2015. During the quarter the Company recorded a post-tax impairment loss of $339.0 million in discontinued operations related to the Company's Chinese assets. The loss reported during the second quarter of 2015 was mainly due to an impairment loss in the amount of $214.1 million recorded against Certej. Adjusted net earnings for the quarter were $11.7 million (or $0.01 per share) compared with $17.0 million (or $0.02 per share) in the second quarter of 2015.

Gross profit from continuing gold mining operations increased slightly year over year as the impact of lower sales volumes was offset by higher gold prices and lower unit operating costs. Gold sales volumes from continuing operations fell year over year due to an anticipated decrease in gold production from Kisladag in comparison with 2015. Kisladag's production was impacted by longer leach cycles as a result of solution being applied to higher lifts. Additionally, production during 2015 benefitted from significant leach pad inventory draw down due to an increase in the solution pumping and treatment capacity installed at the end of 2014. Cash operating costs per ounce from continuing operations decreased year over year due to lower cash operating costs at Kisladag. Mining costs at Kisladag fell 44% as a result of a 64% drop in waste stripping tonnes year over year.

Loss from discontinued operations was $339.4 million compared with a profit of $10.0 million in the second quarter of 2015. In addition to the $339.0 million impairment loss mentioned above, the loss from discontinued operations included gross profit from gold mining operations of $14.0 million (2015 - $21.6 million), general and administrative expenses of $10.5 million (2015 - $3.4 million), and income tax expense of $2.8 million (2015 - $7.4 million).

Review and 2016 Outlook

Operations Update

Kisladag
Kisladag's gold production of 49,924 ounces during the quarter was impacted by longer leach cycles as a result of solution being applied to higher lifts. Production during 2015 had also benefitted from significant leach pad inventory draw down as a result of an increase in the solution pumping rate from equipment installed at the end of 2014. Production is expected to increase throughout the remainder of the year as leach cycles benefit from lower lifts placed on new leach pad cells. Cash operating costs decreased to $479 per ounce due to lower mining costs and higher recovery rates.

Capital expenditures of $6.2 million for the quarter included costs for capitalized waste stripping and sustaining construction activities.

Efemcukuru
Efemcukuru's gold production of 23,406 ounces during the quarter was lower year over year due to an 18% decrease in average treated head grade. Cash operating costs increased to $509 per ounce and were higher year over year due to lower head grade. Capital spending of $7.2 million during the quarter included underground development and mine mobile equipment.

Tanjianshan
Tanjianshan's gold production of 13,900 ounces during the quarter was 45% lower year over year due to a decrease in head grade and lower recovery rate. Cash operating costs of $830 per ounce for the quarter were 85% higher year over year due to lower gold produced.

Subsequent to the quarter, Tanjianshan reported a crack in the mill shell. It is expected that this will take 3-4 weeks to repair by welding. During this period, any other shutdown works requiring downtime will also be completed.

Jinfeng
Jinfeng's gold production of 22,353 ounces during the quarter was 42% lower year over year mainly as a result of less ore milled and lower head grade, largely due to the end of open pit mining in the second quarter of 2015. Cash costs of $821 per ounce were higher year over year due to lower gold produced.

Capital expenditures of $1.1 million for the quarter included underground development, mining equipment and tailings dam improvements.

White Mountain
White Mountain's gold production of 14,527 ounces during the quarter was 22% lower year over year due to slightly reduced milled tonnage and lower feed grade. Cash operating costs of $824 per ounce were 9% higher, as a result of lower gold produced.

Capital expenditures of $2.0 million for the quarter included underground development, exploration drilling, tailings dam construction, and sustaining capital projects within the processing plant.

Stratoni
Concentrate production during the quarter at Stratoni was higher year over year due to higher ore tonnes processed and zinc head grades. Higher mine production and plant throughput reflected commencement of a trial of continuous underground operations in April, and reduced days lost to stoppages.

Gold Projects Update

Olympias
At Olympias, progress was made in the Phase II civil works and steelwork fabrication during the quarter. Concrete demolition work was completed across the site, providing access into additional areas for the civil contractor. Progress was also made on the design and procurement of steel work with arrival of the first deliveries for the crushing area in late June.

By the end of the quarter the majority of the long lead items had arrived at site including a number of batches of flotation cells. Plate work fabrication also commenced for the crushing and main production buildings and the refurbishment of existing equipment is proceeding to schedule. The key highlight of the quarter was the awarding of the structural and mechanical installation contracts, which were placed in late June and mobilisation is due to begin early August.

Total capital expenditure for the quarter was $30.0 million.

Skouries
Skouries began the quarter on care and maintenance, however activities recommenced late in the quarter after receipt of the approval of the Updated Technical Study on May 9, 2016. Construction teams began to remobilize in early June, with the ramp up planned over the next few months. Early activities will be limited to those that take advantage of the summer weather window, including earthworks, completion of building foundations and remaining tree cutting, as well as enabling works for the tailings management facility access road.

Total capital expenditures during the quarter were $5.9 million.

Perama Hill
No project development activities took place during the quarter and the project remains on care and maintenance.

Certej
During the quarter project development focused on continued optimization work in the areas of the metallurgical process, water and waste management and site infrastructure. Development continued at the onsite quarry to produce aggregates for onsite road construction and water management facilities. Offsite infrastructure work was focused on upgrading the main waterline. Higher level capital and operating costs updates are underway in order to support ongoing permitting activities.

A total of $3.6 million was spent on Certej during the quarter.

Tocantinzinho
Site activity increased during the quarter as a result of the beginning of the dry season. Work included further geotechnical drilling at the plant and infrastructure areas, maintenance work on the access road and an increase in security facilities, primarily around the camp. Work on the power line and access road focused on engineering design to bring both project areas to a high level of basic design for permitting and costing purposes. A similar approach has been taken with the tailings management and mine rock storage facilities to support ongoing permitting activities.

Capital costs incurred at Tocantinzinho during the quarter totalled $0.9 million.

Eastern Dragon
During the quarter, Eastern Dragon remained on care and maintenance as the Company continues to advance the permitting process. The Mining License application has been submitted. Work continued on amendments to the Feasibility Report for forest usage.

Exploration Review

During the quarter 7,100 metres of exploration drilling were completed at the Company's operations and exploration projects. The 2016 drilling programs have been affected by delays in obtaining drilling permits. A total of $9.1 million was spent on exploration and evaluation programs.

Greece
In Greece, exploration activities focused on the Stratoni corridor, and included geological mapping, updating the three dimensional model for the Mavres Petres orebody and relogging of historical drillcore. Development of the hangingwall exploration drift, designed to provide access for exploration drilling of extensions to the Mavres Petres orebody, will commence in early July.

Romania
Fieldwork in Romania during the quarter focused on defining epithermal targets for drilling peripheral to the Certej deposit. Drilling permit applications are pending for several of these, and we expect the work to commence in the third quarter.

Turkey
Exploration in Turkey concentrated on project generation work, primarily to identify Tertiary volcanic centers in the western part of the country similar to that which hosts the Kisladag deposit. Detailed mapping and modelling work was also completed at the Efemcukuru mine, targeting extensions to the Kokarpinar and Kestane Beleni veins that are scheduled for drilling later this year.

China
In China, drilling was completed at both the White Mountain and Tanjianshan operations. High-grade extensions to the North and Far North ore zones continue to be intersected at White Mountain, with notable intercepts including 11.8 metres grading 12.82 grams per tonne gold and 11.2 metres grading 7.06 grams per tonne gold. Drilling at Tanjianshan tested four areas, including the Xinjingou deposit which resulted in intercepts of 3.7 metres grading 3.71 grams per tonne gold and 7.0 metres grading 3.73 grams per tonne gold.

Brazil
There was no exploration activity during the quarter at Tocantinzinho in Brazil. Reconnaissance-level mapping and sampling programs were conducted over our licenses in the Mara Rosa belt in Goias State, and new project areas in Minas Gerais and northeastern Brazil.

Corporate Development

On April 26, 2016, the Company announced that it had reached an agreement to sell its 82 percent interest in the Company's Jinfeng mine to a wholly-owned subsidiary of China National Gold Group for $300 million in cash, subject to certain conditions and closing adjustments. On May 16, 2016, the Company announced that it had reached an agreement to sell its respective interests in the White Mountain and Tanjianshan mines, and the Eastern Dragon development project to an affiliate of Yintai Resources Co. Ltd. for $600 million in cash, subject to certain conditions and closing adjustments. With the completion of these two transactions the Company will have effectively divested of its Chinese business segment. The transactions are expected to close in the third to fourth quarter 2016 and are subject to obtaining various regulatory and other approvals.

Outlook

Gold production for 2016, including discontinued operations is forecast to be 570,000 ounces of gold with average cash costs for commercial production of $595 per ounce and all-in sustaining cash costs of $930 per ounce. Previous guidance was production of 565,000 - 630,000 ounces at average cash costs of $585 to $620 per ounce and all-in sustaining cash costs of $960 to $995 per ounce. Capital spending is forecast to be $95.0 million in sustaining capital and $250.0 million in new project development capital compared with previous guidance of $105.0 million and $235.0 million respectively. The forecast for new project development capital is higher than original guidance mainly due to projected higher capital spending at Skouries following the approval of the updated technical study during the quarter and the restart of construction activities at site.

In Turkey, the Company's two operating mines continue with no disruptions and all employees are accounted for and safe. The Company is confident the country will continue to provide conditions suitable for ongoing operations and further investment.

Dividend

The Company suspended the cash payment of its semi-annual dividend payment effective the first quarter of 2016. The decision of the Board of Directors was made in view of the low gold price and the terms and conditions of the Dividend Policy. The Company continues to believe that a portion of funds from operations should be shared with investors and looks forward to resuming dividend payments in a stronger gold price environment.

Conference Call

A conference call to discuss the details of the Company's Second Quarter 2016 Results will be held by senior management on July 29, 2016 at 8:30 AM PT (11:30 AM ET). The call will be webcast and can be accessed at Eldorado Gold's website: www.eldoradogold.com

About Eldorado Gold

Eldorado is a leading low cost gold producer with mining, development and exploration operations in Turkey, China, Greece, Romania and Brazil. The Company's success to date is based on a low cost strategy, a highly skilled and dedicated workforce, safe and responsible operations, and long-term partnerships with the communities where it operates. Eldorado's common shares trade on the Toronto Stock Exchange (TSX: ELD) and the New York Stock Exchange (NYSE: EGO).

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 2016 Second Quarter 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, including assumptions about the political and economic environment that we operate in, the future price of commodities and anticipated costs and expenses. 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: political and economic environment, gold price volatility; discrepancies between actual and estimated production, mineral reserves and resources and metallurgical recoveries; mining operational and development risk; litigation risks; regulatory environment and restrictions, including environmental regulatory restrictions and liability; risks of sovereign investment; risks related to completing the Chinese monetization process and impact of the Jinfeng, White Mountain, Tanjianshan and Eastern Dragon sales on the Company; 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 30, 2016.

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.

Qualified Person

Dr. Peter Lewis, P. Geo., Vice President, Exploration at Eldorado, is the Qualified Person for the technical disclosure of exploration results in this press release. Drillhole results quoted represent mineralized widths in drillholes, which are greater than the true widths of mineralized zones. Assay results reported in this release for White Mountain in China were determined from diamond drill core samples that were crushed, split, and pulverized at Eldorado's sample preparation facilities at the White Mountain mine. Gold analyses were completed by fire assay at the ALS Chemex facility in Guangzhou. Field duplicate, and blank samples were inserted prior to shipment to the preparation facility, certified standard reference materials were inserted prior to shipment to the assay laboratory, and results were regularly monitored to ensure the quality of the data.

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.
Click here for the Consolidated Financial Statements for the quarter ended March 31, 2016.

SOURCE Eldorado Gold Corporation

Krista Muhr, Vice President Investor Relations & Corporate Communications, Eldorado Gold Corporation, 604.601.6701 or 1.888.353.8166, 604.601.6702