Eldorado Gold Corporation: Q1, 2011 Financial and Operating Results; Operating Results and Construction on Plan; Earnings Per Share $0.10; Cash Flow Per Share $0.17
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 05/05/11 -- (all figures in United States dollars unless otherwise noted)
Paul N. Wright, President and Chief Executive Officer of Eldorado Gold Corporation (TSX: ELD)(NYSE: EGO)(ASX: EAU) ('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, 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).
PRODUCTION HIGHLIGHTS
---------------------------------------------------------------------------
First First Second Third Fourth
Quarter Quarter Quarter Quarter Quarter
2011 2010 2010 2010 2010
---------------------------------------------------------------------------
Gold Production
Ounces Sold 148,530 163,446 172,826 154,655 149,022
Ounces Produced 148,577 164,928 167,940 151,297 148,374
Cash Operating Cost
($/oz) (1,3) 410 370 357 386 418
Total Cash Cost ($/oz)
(2,3) 462 397 410 431 460
Realized Price ($/oz -
sold) 1,397 1,110 1,195 1,231 1,373
---------------------------------------------------------------------------
Kisladag Mine, Turkey
Ounces Sold 50,832 83,974 69,197 66,113 59,741
Ounces Produced 50,833 82,240 70,451 62,086 59,815
Tonnes to Pad 2,341,635 2,898,199 2,686,284 2,767,179 2,021,057
Grade (grams / tonne) 1.04 1.12 1.12 0.98 1.00
Cash Operating Cost
($/oz) (3) 386 304 304 337 382
Total Cash Cost ($/oz)
(2,3) 408 307 345 359 354
---------------------------------------------------------------------------
Tanjianshan Mine, China
Ounces Sold 28,493 18,947 38,261 28,847 30,710
Ounces Produced 28,493 25,423 28,884 28,847 30,710
Tonnes Milled 238,070 249,738 271,749 283,598 244,867
Grade (grams / tonne) 3.90 4.01 4.38 3.84 4.59
Cash Operating Cost
($/oz) (3) 402 420 387 391 349
Total Cash Cost ($/oz)
(2,3) 515 517 483 493 459
---------------------------------------------------------------------------
Jinfeng Mine, China
Ounces Sold 48,518 49,674 48,623 45,447 38,282
Ounces Produced 48,564 45,615 52,659 46,116 37,560
Tonnes Milled 384,400 389,851 392,211 387,427 387,710
Grade (grams / tonne) 4.32 4.23 4.51 4.42 3.81
Cash Operating Cost
($/oz) (3) 430 422 381 425 486
Total Cash Cost ($/oz)
(2,3,4) 482 462 423 473 585
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White Mountain Mine, China
Ounces Sold 20,687 10,851 16,745 14,248 20,289
Ounces Produced 20,687 11,650 15,946 14,248 20,289
Tonnes Milled 140,211 130,643 167,981 154,125 169,669
Grade (grams / tonne) 5.71 4.09 3.78 4.01 4.06
Cash Operating Cost
($/oz) (3) 438 550 442 477 498
Total Cash Cost ($/oz)
(2,3) 475 589 474 507 536
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(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.
Eldorado Gold Corporation
Unaudited Condensed Consolidated Balance Sheets
---------------------------------------------------------------------------
(Expressed in thousands of U.S. dollars)
March 31, December January 1,
Note 2011 31, 2010 2010
ASSETS
Current assets
Cash and cash equivalents 294,116 314,344 265,369
Restricted cash 6 55,399 52,425 50,000
Marketable securities 6,864 8,027 13,951
Accounts receivable and other 34,123 42,437 26,434
Inventories 147,982 147,263 129,197
---------------------------------
538,484 564,496 484,951
Inventories 28,940 29,627 31,534
Investment in significantly
influenced company 5 6,324 6,202 -
Deferred income tax assets 6,562 - -
Restricted assets and other 19,741 19,328 13,759
Property, plant and equipment 2,742,579 2,699,787 2,527,567
Goodwill 365,928 365,928 324,935
---------------------------------
3,708,558 3,685,368 3,382,746
---------------------------------
LIABILITIES & EQUITY
Current liabilities
Accounts payable and accrued
liabilities 148,490 145,695 153,036
Current debt 7 93,648 98,523 56,499
---------------------------------
242,138 244,218 209,535
Debt 7 63,596 68,140 134,533
Asset retirement obligations 33,632 33,228 26,995
Pension fund obligation 12,595 12,019 7,811
Deferred tax liabilities 329,537 330,512 355,425
---------------------------------
681,498 688,117 734,299
---------------------------------
Equity
Share capital 11 2,818,238 2,814,679 2,671,634
Treasury stock 12(b) (5,870) - -
Contributed surplus 28,326 22,967 17,865
Accumulated other comprehensive
income (2,213) (1,637) 2,227
Retained earnings (deficit) 149,953 125,221 (69,423)
---------------------------------
Total equity attributable to
shareholders of the Company 2,988,434 2,961,230 2,622,303
Attributable to non-controlling
interests 38,626 36,021 26,144
---------------------------------
3,027,060 2,997,251 2,648,447
---------------------------------
3,708,558 3,685,368 3,382,746
---------------------------------
Subsequent events 7(a)(d)
Approved on behalf of the Board of Directors
(Signed) Robert Gilmore, Director
(Signed) Paul N. Wright, Director
See accompanying notes to consolidated financial statements.
Eldorado Gold Corporation
Unaudited Condensed Consolidated Income Statements
---------------------------------------------------------------------------
(Expressed in thousands of U.S. dollars)
For the quarter ended March 31 Note 2011 2010
Revenue
Metal sales 218,073 181,479
Cost of sales
Production costs 74,311 64,590
Depreciation and amortization 31,217 23,333
----------------------
Total cost of sales 105,528 87,923
Gross profit 112,545 93,556
Exploration expenses 3,841 3,333
Mine standby costs - 706
General and administrative expenses 21,034 10,418
Employee benefit expenses 8 423 211
Share based payments 7,352 6,947
Asset retirement obligation costs 366 513
Foreign exchange loss (gain) 647 (1,560)
Gain on disposal of assets - (1,506)
----------------------
Operating profit 78,882 74,494
Gain on marketable securities (635) (1,112)
Other (income) expenses (1,397) (671)
Interest and financing costs 1,589 2,613
----------------------
Profit before taxation 79,325 73,664
Income tax expense 20,625 20,356
----------------------
Profit for the period 58,700 53,308
----------------------
Attributable to:
Shareholders of the Company 52,473 50,502
Non-controlling interests 6,227 2,806
----------------------
Profit for the period 58,700 53,308
----------------------
Weighted average number of shares outstanding
Basic 548,320 538,009
Diluted 551,500 540,911
Earnings per share attributable to shareholders of
the Company:
Basic earnings per share 0.10 0.09
Diluted earnings per share 0.10 0.09
See accompanying notes to the consolidated financial statements.
Eldorado Gold Corporation
Unaudited Condensed Consolidated Statements of Comprehensive Income
---------------------------------------------------------------------------
(Expressed in thousands of U.S. dollars)
For the quarter ended March 31 2011 2010
Profit for the period 58,700 53,308
Other comprehensive income (loss):
Change in fair value of available-for-sale financial
assets (net of taxes of $nil and $106) (414) 1,459
Realized losses on disposal of available-for-sale
financial assets transferred to net income (162) -
Actuarial losses on defined benefit pension plans - -
----------------------
Total other comprehensive (loss) income for the
period (576) 1,459
----------------------
Total comprehensive income for the period 58,124 54,767
----------------------
Attributable to:
Shareholders of the Company 51,897 51,961
Non-controlling interests 6,227 2,806
----------------------
Total comprehensive income for the period 58,124 54,767
----------------------
Eldorado Gold Corporation
Unaudited Condensed Consolidated Statements of Cash Flows
---------------------------------------------------------------------------
(Expressed in thousands of U.S. dollars)
Attributable to shareholders of the Company
Accumu-
lated
other
Compri-
hen-
Contri- sive
Trea- buted inc-
Share sury sur- ome Retained
Note capital stock plus (loss) earnings Total
Balance at January
1, 2011 11 2,814,679 - 22,967 (1,637) 125,221 2,961,230
Total
comprehensive
(loss) income for
the quarter - - - (576) 52,473 51,897
Dividends declared
to Non-
controlling
interests - - - - - -
Purchase of
treasury stock - (5,870) - - - (5,870)
Shares issued upon
exercise of share
options, for cash 2,080 - - - - 2,080
Estimated initial
fair value of
employee options
exercised 813 - - - - 813
Shares issued upon
exercise of
warrants, for
cash 666 - - - - 666
Options exercised,
credited to share
capital - - (813) - - (813)
Share based
payments - - 6,172 - - 6,172
Dividend paid to
shareholders of
the Company - - - - (27,741) (27,741)
----------------------------------------------------
Balance at March
31, 2011 2,818,238 (5,870) 28,326 (2,213) 149,953 2,988,434
----------------------------------------------------
Eldorado Gold Corporation
Unaudited Condensed Consolidated Statements of Cash Flows
---------------------------------------------------------
(Expressed in thousands of U.S. dollars)
Attributable to shareholders of the Company
Non-
controlling Total
interests equity
Balance at January 1, 2011 36,021 2,997,251
Total comprehensive (loss) income for the quarter 6,227 58,124
Dividends declared to Non-controlling interests (3,622) (3,622)
Purchase of treasury stock - (5,870)
Shares issued upon exercise of share options, for
cash - 2,080
Estimated initial fair value of employee options
exercised - 813
Shares issued upon exercise of warrants, for cash - 666
Options exercised, credited to share capital - (813)
Share based payments - 6,172
Dividend paid to shareholders of the Company - (27,741)
-----------------------
Balance at March 31, 2011 38,626 3,027,060
-----------------------
Attributable to shareholders of the Company
Accumu-
lated
other
com-
pre- Non-
hen- control-
Contri- sive ling
Share buted in- int- Total
Note capital surplus come Deficit Total erests equity
Balance
at
January
1, 2010 2,671,634 17,865 2,227 (69,423) 2,622,303 26,144 2,648,447
Total
comprehe-
nsive
income
for the
quarter - - 1,459 50,502 51,961 2,806 54,767
Dividends
declared
to Non-
controll-
ing
interests - - - - - (1,286) (1,286)
Shares
issued
upon
exercise
of share
options,
for cash 5,594 - - - 5,594 - 5,594
Estimated
initial
fair
value of
employee
options
exercised 1,981 - - - 1,981 - 1,981
Share
based
payments - 6,947 - - 6,947 - 6,947
Stock-
based
compensa-
tion on
Brazauro
warrants
&
options
converted - - - - - - -
Options
exercised,
credited
to share
capital - (1,981) - - (1,981) - (1,981)
-------------------------------------------------------------
Balance
at March
31, 2010 2,679,209 22,831 3,686 (18,921) 2,686,805 27,664 2,714,469
-------------------------------------------------------------
Eldorado Gold Corporation
Unaudited Condensed Consolidated Statements of Cash Flows
---------------------------------------------------------------------------
(Expressed in thousands of U.S. dollars)
For the quarter ended March 31 Note 2011 2010
Cash flows generated from (used in):
Operating activities
Profit for the period 58,700 53,308
Items not affecting cash
Provisions for asset retirement obligations 366 513
Depreciation and amortization 31,217 23,333
Unrealized foreign exchange loss 1,733 -
Deferred tax recovery (7,494) (776)
Gain on disposal of assets - (1,506)
Gain on marketable securities (635) (1,112)
Share based payments 7,352 6,947
Employee benefit expense 423 211
--------------------
91,662 80,918
Changes in non-cash working capital 13 18,719 (18,479)
--------------------
110,381 62,439
Investing activities
Purchase of mining interests and property, plant
and equipment (78,338) (47,300)
Proceeds from the sale of mining interests and
property, plant and equipment 17 2,266
Proceeds from the sale of marketable securities 938 692
Investment purchases (1,318) -
Increase in restricted cash (3,000) (2,121)
Increase in restricted asset and other - (2,512)
--------------------
(81,701) (48,975)
Financing activities
Issuance of common shares for cash 2,746 5,594
Dividend paid to non-controlling interests (6,873) (1,286)
Dividend paid to shareholders (27,741) -
Purchase of treasury stock (5,870) -
Long-term and bank debt proceeds 1,757 -
Long-term and bank debt repayments (12,927) -
--------------------
(48,908) 4,308
--------------------
Net (decrease) increase in cash and cash
equivalents (20,228) 17,772
Cash and cash equivalents - beginning of period 314,344 265,369
--------------------
Cash and cash equivalents - end of period 294,116 283,141
--------------------
283,141
-
See accompanying notes to the unaudited consolidated financial statements.
Click here for the Unaudited Consolidated Financial Statements for the quarter ended March 31, 2011 in PDF: http://media3.marketwire.com/docs/e55.pdf
Contacts:
Eldorado Gold Corporation
Nancy Woo
VP Investor Relations
604.601-6650 or 1.888.353.8166
604.687.4026 (FAX)
nancyw@eldoradogold.com
www.eldoradogold.com
Request for information packages:
reception@eldoradogold.com