Eldorado Gold Corporation: Q4, 2010 Financial and Operating Results-Earnings Increased 31%; Cash Flow Increased 40%
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/18/11 -- (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') (TSX: ELD)(NYSE: EGO)(ASX: EAU), is pleased to report on the Company's financial and operational results for the fourth quarter ended December 31, 2010. The Company reported net income of $43.6 million, or $0.08 per share, and cash flow from operations of $83.0 million or $0.15 per share for the fourth quarter ended December 31, 2010.
'We have operated to plan and are extremely pleased with our strong performance. Our earnings increased 31% and our cash flow increased 40% compared to Q4, 2009,' stated Paul N. Wright, President and Chief Executive Officer of Eldorado. 'Construction at both Efemcukuru and Eastern Dragon are progressing and we look forward to production from both mines during 2011.'
Q4 2010 Highlights
-- Produced 148,374 ounces of gold, an increase of 15% over Q4, 2009 at an
average cash operating cost of $418 per ounce (Total cash cost $460 per
ounce)
-- Sold 149,022 ounces of gold at an average realized price of $1,373 per
ounce; which generated revenue 42% higher than Q4, 2009
-- Reported earnings of $43.6 million ($0.08 per share) an increase of 31%
over Q4, 2009
-- Generated $83.0 million of cash ($0.15 per share) from operating
activities before changes in non-cash working capital an increase of 40%
over Q4, 2009
-- Trial mining operations at Vila Nova continued with two shipments of
iron ore completed in the quarter
-- Underground pre-production development at Efemcukuru reached the Middle
Ore Shoot ore zone with production anticipated to begin in Q2, 2011
-- Construction activities at Eastern Dragon resumed during the quarter
Financial Results
Eldorado's consolidated net income for the fourth quarter of 2010 was $43.6 million or $0.08 per share compared to $33.3 million or $0.08 in the fourth quarter of 2009. Net income for the twelve month period ended December 31, 2010 was $205.7 million or $0.38 per share, compared to $102.4 million or $0.26 per share in the comparable period from 2009.
During the fourth quarter, we sold 149,022 ounces of gold at an average price of $1,373 per ounce compared to 131,068 ounces of gold at an average price of $1,103 per ounce in the fourth quarter of 2009.
Operating Performance
Kisladag
During the quarter we produced 59,815 ounces of gold at a cash operating cost of $382 per ounce. We placed 2,021,057 tonnes of ore on the leach pad at an average grade of 1.00 gram per tonne of gold. We sold 59,741 ounces of gold.
We continued our work on expansion of the circuit this quarter and began the installation of two tertiary crushers. The new circuit will be tied into the existing process in late February.
Jinfeng
During the quarter we produced 37,560 ounces of gold at cash operating cost of $486 per ounce and we milled 387,710 tonnes of ore at a grade of 3.81 grams per tonne. Ore mined from the open pit was 387,701 tonnes and ore from the underground totalled 110,818 tonnes. We sold 38,282 ounces of gold.
We mined from the bottom of the open pit this quarter, which reduced waste removal and increased production. We have now completed the current phase of open pit mining, and will begin waste stripping in 2011.
Tanjianshan
At Tanjianshan we produced 30,710 ounces of gold at cash operating cost of $349 per ounce. We milled a total of 244,867 tonnes of ore at an average grade of 4.59 grams per tonnes. We sold 30,710 ounces of gold.
White Mountain
During the quarter we produced 20,289 ounces of gold at a cash operating cost of $498 per ounce and we processed 169,669 tonnes of ore at a grade of 4.06 grams per tonnes. We sold 20,289 ounces of gold.
Vila Nova Iron Ore
During the quarter as part of trial mining Vila Nova mined 163,920 tonnes of ore. One shipment of lump ore totalling 45,442 wet metric tonnes and the other shipment of sinter fines totalling 47,702 wet metric tonnes were sold into the Chinese spot market for an average of $93.0 per tonne.
Development
Efemcukuru
Construction of the tailings filtration and backfill plants continue on schedule during the quarter. We are continuing with dry commissioning in the main concentrator building and expect it to be complete in early 2011. We will start wet commissioning when construction is complete and the power line is energized (scheduled for early April). We finished the structures for the administration building, the mine dry, the warehouse/maintenance shop and mine canteen.
Preproduction development moved ahead on all three declines. The contractor's advance rates have continued to improve as we gain experience with the operation and ground conditions. The conveyor decline has now reached the level of the crushing chamber and lateral development has begun. We have gained access to the Middle Ore Shoot from the north ramp which allows us to evaluate the ground conditions in the ore zone.
Eastern Dragon
We have made excellent progress at Eastern Dragon this quarter as part of the winter work program. Despite severe weather civil foundation and structural steel work continued on schedule.
Tocantinzinho
We will complete the prefeasibility study for Tocantinzinho in the first quarter of 2011. We are evaluating capital and operating costs to further identify opportunities to optimize the project. A significant portion of the investment capital is for infrastructure, particularly for road access and to install a dedicated power line. We have substantially increased the level of detail for both engineering and estimating in these areas.
Perama Hill
There was no significant change in the status of the pre-environmental assessment report which is currently being reviewed by the Ministry of Environment. We continue to work with all levels of government to advance the understanding of the project and its importance to the regional economy.
Exploration
Turkey
At Kisladag, 17 diamond drill holes were completed during the quarter, focused on the western and southwestern margin of the deposit. Significant gold values were intersected adjacent to a late-mineral intrusion extending westward from the core of the deposit. The discovery of ore-grade gold values in the basement schist here highlights the prospectively of the relatively unexplored area west of the deposit. Adjacent to Kisladag at the Sayacik prospect, we completed five reverse circulation drill holes and two diamond drill holes, targeting geophysical and geochemical anomalies.
Drilling programs were completed during the quarter at the Malatya-Hasancelebi (MH), Sizma, and AS exploration projects. At the MH iron oxide copper gold prospect, six diamond drill holes tested targets defined by soil and rock chip geochemistry, alteration mapping, and geophysical survey data. At the Sizma project (phyllite-hosted gold) we completed the 22 drillhole phase 1 exploration program this quarter. Several drill holes intersected significant Au values over several tens of metres at shallow depths, which will be targeted at deeper levels in 2011. At the AS porphyry prospect, we completed six drill holes on new target areas defined by mapping, geochemical sampling and magnetic survey programs. All intersected variable altered and mineralized rocks, including zones of porphyry-style Cu, Mo, Au mineralization.
China
At Tanjianshan, we completed the final two drillholes of the 2010 resource drilling program on the 323 zone during the quarter. Geological modeling of the mineralized zones has formed the basis for a preliminary resource estimate of approximately 160,000 ounces of inferred gold at an average grade of 2.75 g/t. The mineralized zone remains open to the south, where one of the final drill holes of the season intersected 11.6 g/t Au over 5.5 meters.
At Jinfeng, we continued our drilling programs at the mine proper this quarter, at the Bannian prospect located approximately 20 km southwest of the Jinfeng mine, and at the Lintan prospect located immediately north of the mine. Drilling programs at Bannian and Lintan targeted mineralized fault zones where previous surface work identified structurally-controlled zones of high-grade gold. At the Jinfeng mine, drilling focused on upgrading zones of inferred resources.
Drilling this quarter at White Mountain we focused on the open down-dip and along-strike extensions of the deposit, as well as early-stage targets at the newly acquired Xiashiren Central exploration license located 20km to the southeast. At White Mountain, high-grade mineralization was intersected approximately 200 meters down-dip of the known deposit (24.7 meters @ 8.7 g/t Au) possibly representing a second mineralized zone that is open along strike and down dip. Seven diamond drill holes were completed at the Xiaoshiren prospect, testing for the source of the abundant boulders of high-grade silicified breccia at the prospect. Several drill holes intersected mineralized breccias zones, with the most significant interval grading 7.8 g/t Au over 6.5 metres.
Brazil
At Tocantinzinho, drilling during the quarter was divided between infill resource holes and condemnation holes. None of the condemnation drill holes intersected significant mineralization. The infill drilling constrained positions of lithologic and mineralization boundaries in areas with low drillhole density, and will allow us to convert inferred resources to indicated resources. At the nearby Aqua Branca and Piranhas projects, both held under option, fieldwork this quarter focused on geochemical sampling programs aimed at defining auger and diamond drilling targets for 2011.
Eldorado is a gold producing, exploration and development 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, President and Chief Executive Officer
Eldorado will host a conference call Friday, February 18, 2011 to discuss the 2010 Fourth Quarter Financial and Operating Results at 11:30 a.m. ET (8:30 a.m. PT). You may participate in the conference call by dialling 416-340-2216 in Toronto or 1-866-226-1792 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 February 25, 2011 by dialling 416-695-5800 in Toronto or 1-800-408-3053 toll free in North America and entering the Pass code 2583817.
Cautionary Note Concerning Forward-Looking Statements
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 statements with respect to the Company's Fourth Quarter Financial and Operating results and its development and exploration projects.
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, 2010.
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 NYSE (NYSE: EGO). Eldorado's CDI trade on the Australian Securities Exchange (ASX: EAU).
Request for information packages: jenniferm@eldoradogold.com
PRODUCTION HIGHLIGHTS
First Second Third Fourth Fourth
Quarter Quarter Quarter Quarter Quarter
2010 2010 2010 2010 2009 2010 2009
----------------------------------------------------------------------------
Gold Production
---------------
Oun-
ces
Sold 163,446 172,826 154,655 149,022 131,068 639,949 360,226
Oun-
ces
Prod-
uced 164,928 167,940 151,297 148,374 128,593 632,539 363,509
Cash
Oper-
at-
ing
Cost
($/oz)
1,3,4 370 357 386 418 330 382 309
Total
Cash
Cost
($/oz)
2,3,4 397 410 431 460 365 423 337
Real-
ized
Price
($/oz
- sold 1,110 1,195 1,231 1,373 1,103 1,223 995
----------------------------------------------------------------------------
Kisladag Mine, Turkey
---------------------
Oun-
ces
Sold 83,974 69,197 66,113 59,741 70,765 279,025 237,363
Oun-
ces
Prod-
uced 82,240 70,451 62,086 59,815 70,131 274,592 237,210
Tonnes
to
Pad 2,898,199 2,686,284 2,767,179 2,021,057 3,679,685 10,372,719 10,716,556
Grade
(grams
/
tonne) 1.12 1.12 0.98 1.00 0.86 1.06 1.11
Cash
Oper-
ating
Cost
($/oz)
3,4 304 304 337 382 294 329 279
Total
Cash
Cost
($/oz)
2,3,4 307 345 359 354 296 339 281
----------------------------------------------------------------------------
Tanjianshan Mine, China
-----------------------
Oun-
ces
Sold 18,947 38,261 28,847 30,710 40,150 116,765 102,710
Oun-
ces
Prod-
uced 25,423 28,884 28,847 30,710 37,773 113,864 105,610
Tonnes
Mill-
ed 249,738 271,749 283,598 244,867 256,828 1,049,952 974,498
Grade
(grams
/
tonne) 4.01 4.38 3.84 4.59 5.81 4.19 5.31
Cash
Oper-
ating
Cost
($/oz)
3,4 420 387 391 349 332 383 350
Total
Cash
Cost
($/oz)
2,3,4 517 483 493 459 421 485 435
----------------------------------------------------------------------------
Jinfeng Mine, China
-------------------
Oun-
ces
Sold 49,674 48,623 45,447 38,282 14,554 182,026 14,554
Oun-
ces
Prod-
uced 45,615 52,659 46,116 37,560 14,541 181,950 14,541
Tonnes
Mill-
ed 389,851 392,211 387,427 387,710 136,054 1,557,199 136,054
Grade
(grams
/
tonne) 4.23 4.51 4.42 3.81 3.97 4.24 3.97
Cash
Oper-
ating
Cost
($/oz)
3,4 422 381 425 486 471 425 471
Total
Cash
Cost
($/oz)
2,3,4 462 423 473 585 515 480 515
----------------------------------------------------------------------------
White Mountain Mine, China
--------------------------
Oun-
ces
Sold 10,851 16,745 14,248 20,289 5,599 62,133 5,599
Oun-
ces
Prod-
uced 11,650 15,946 14,248 20,289 6,148 62,133 6,148
Tonnes
Mill-
ed 130,643 167,981 154,125 169,669 58,074 622,418 58,074
Grade
(grams
/
tonne) 4.09 3.78 4.01 4.06 4.26 3.98 4.26
Cash
Oper-
ating
Cost
($/oz)
3,4 550 442 477 498 400 487 400
Total
Cash
Cost
($/oz)
2,3,4 589 474 507 536 439 522 439
----------------------------------------------------------------------------
1. Cost figures calculated in accordance with the Gold Institute Standard.
2. Cash Operating Costs, plus royalties and the cost of off-site
administration.
3. Cash operating costs and total cash costs are non-GAAP measures. See the
section 'Non-GAAP Measures' of this Review.
4. Cash operating costs and total cash costs have been recalculated for
prior quarters based on ounces sold.
Eldorado Gold Corporation
Unaudited Consolidated Balance Sheets
(Expressed in thousands of US dollars)
December 31, December 31,
2010 2009
$ $
Assets
Current assets
Cash and cash equivalents 314,344 265,369
Restricted cash 52,425 50,000
Marketable securities 8,027 13,951
Accounts receivable and other 40,534 26,434
Inventories 147,263 129,197
Future income taxes 606 -
-----------------------------
563,199 484,951
Inventories 29,627 31,534
Investment in significantly influenced
company 6,202 -
Restricted assets and other 19,328 13,872
Mining interests 2,793,722 2,580,816
Goodwill 364,093 324,935
-----------------------------
3,776,171 3,436,108
-----------------------------
-----------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 146,487 157,250
Debt - current 98,523 56,499
Future income taxes 2,915 4,264
-----------------------------
247,925 218,013
Debt - long-term 68,140 134,533
Asset retirement obligations 24,275 26,566
Future income taxes 430,020 390,242
-----------------------------
770,360 769,354
-----------------------------
Non-controlling interests 38,940 26,144
Shareholders' Equity
Share capital 2,814,679 2,671,634
Contributed surplus 22,967 17,865
Accumulated other comprehensive income 998 2,227
Retained earnings (deficit) 128,227 (51,116)
-----------------------------
2,966,871 2,640,610
-----------------------------
3,776,171 3,436,108
-----------------------------
Eldorado Gold Corporation
Unaudited Consolidated Statements of Operations
For the period ended December 31,
(Expressed in thousands of U.S. dollars)
Three months ended Twelve months ended
------------------------------------------------
2010 2009 2010 2009
$ $ $ $
Revenue
Gold sales 204,623 144,506 782,850 358,467
Iron ore sales 8,325 - 8,325 -
------------------------------------------------
212,948 144,506 791,175 358,467
Expenses
Operating costs 74,194 57,411 282,465 132,464
Depletion, depreciation and
amortization 26,813 18,643 106,791 38,658
General and administrative 22,414 8,429 62,217 32,530
Exploration 11,608 3,352 23,181 11,970
Mine standby costs - 763 1,335 2,580
Accretion of asset
retirement obligations 29 95 1,564 291
Foreign exchange loss
(gain) 6,465 (1,397) 14,792 (2,966)
------------------------------------------------
141,523 87,296 492,345 215,527
(Gain) loss on disposal of
assets 1,143 490 (592) (854)
Gain on marketable
securities (1,225) (402) (6,572) (1,689)
Interest expense and
financing costs 1,828 589 8,089 824
Interest and other income (382) (679) (11,036) (2,262)
------------------------------------------------
142,887 87,294 482,234 211,546
------------------------------------------------
Income before income taxes
and non-controlling
interest 70,061 57,212 308,941 146,921
------------------------------------------------
Income tax (expense)
recovery
Current (25,431) (17,397) (95,022) (44,862)
Future 1,076 (5,143) 5,864 2,972
------------------------------------------------
(24,355) (22,540) (89,158) (41,890)
------------------------------------------------
Non-controlling interest in
income (2,132) (1,383) (14,083) (2,627)
------------------------------------------------
Net income for the period 43,574 33,289 205,700 102,404
------------------------------------------------
Weighted average number of
shares outstanding
Basic 547,896 424,348 542,861 389,384
Diluted 550,547 427,356 545,850 391,707
Earnings per share
Basic income per share 0.08 0.08 0.38 0.26
Diluted income per share 0.08 0.08 0.38 0.26
Eldorado Gold Corporation
Unaudited Consolidated Statements of Cash Flows
For the period ended December 31,
(Expressed in thousands of US dollars)
Three months ended Twelve months ended
------------------------------------------------
2010 2009 2010 2009
$ $ $ $
Cash flows generated from
(used in):
Operating activities
Net income for the period 43,574 33,289 205,700 102,404
Items not affecting cash
Accreation on asset
retirement obligations 29 95 1,564 291
Depletion, depreciation and
amortization 26,813 18,643 106,791 38,658
Unrealized foreign exchange
loss 8,312 (1,343) 17,973 281
Future income taxes
(recovery) expense (1,076) 5,143 (5,864) (2,972)
(Gain) loss on disposal of
assets 1,143 490 (592) (854)
Gain on marketable
securities (1,225) (402) (6,572) (1,689)
Stock-based compensation 2,683 1,423 16,557 9,091
Fair value of bonus cash
award units - - - (2,543)
Pension expense 650 444 2,517 1,689
Non-controlling interest 2,132 1,383 14,083 2,627
------------------------------------------------
83,035 59,165 352,157 146,983
Changes in non-cash working
capital (13,383) 42,718 (60,082) 45,059
------------------------------------------------
69,652 101,883 292,075 192,042
Investing activities
Acquisition of
subsidiaries, net of cash
received (518) 54,179 (6,083) 54,179
Mining interests
Capital expenditures (73,820) (43,611) (226,296) (106,614)
Proceeds on sales and
disposals 565 - 23,756 35
Marketable securities
disposals
Purchases (6,285) (3,321) (11,983) (3,967)
Proceeds on sales and
disposals 1,775 616 15,611 42,770
Equity investment purchase (1,352) - (6,727) -
Pension plan contributions - - - (1,856)
Restricted cash (242) - (2,463) -
Restricted assets and other 5,356 (11) (7,007) 1,877
------------------------------------------------
(74,521) 7,852 (221,192) (13,576)
Financing activities
Capital stock
Issuance of common shares
for cash 3,537 6,232 35,907 25,201
Dividend paid to non-
controlling interest - (149) (1,287) (149)
Dividend paid to
shareholders - - (26,357) -
Long-term and current debt
Proceeds 795 - 59,839 4,983
Repayments (24,522) - (90,010) (4,983)
------------------------------------------------
(20,190) 6,083 (21,908) 25,052
------------------------------------------------
Net increase (decrease) in
cash and cash
equivalents (25,059) 115,818 48,975 203,518
Cash and cash equivalents -
beginning of period 339,403 149,551 265,369 61,851
------------------------------------------------
Cash and cash equivalents -
end of period 314,344 265,369 314,344 265,369
------------------------------------------------
Click here for the Unaudited Consolidated Financial Statements, Financial and Operating Review for the quarter ended December 31, 2010 PDF: http://media3.marketwire.com/docs/e217.pdf
Contacts:
Eldorado Gold Corporation
Nancy Woo
604.601.6650 or 1.888.353.8166
604.687.4026 (FAX)
nancyw@eldoradogold.com
www.eldoradogold.com