VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 1, 2008) - (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)(AMEX:EGO) 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 Kisladag 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 Efemcukuru gold mine in Turkey and continued construction at the Vila Nova iron ore mine in Brazil."
Q2 2008 Highlights
- Produced 87,380 ounces of gold from our operations at an average cash cost of $229 per ounce
- Sold 88,610 ounces of gold from our Tanjianshan and Kisladag mines at a realized average price of $904 per ounce
- Reported earnings of $0.07 per share
- Commenced construction of our Efemcukuru gold mine in Turkey
- Continued construction of our Vila Nova iron ore mine in Brazil
- Released $10.8 million in restricted cash as a result of loan repayments from our Tanjianshan gold mine in China.
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 Sao 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 Sao Bento as well as a one-time production increase of 12,575 ounces at Kisladag related to cleaning the electro-winning cathodes.
Operating Performance
Kisladag
Our Kisladag 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 Kisladag 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
Efemcukuru
We began construction work at Efemcukuru, 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 Kisladag. At Efemcukuru we are finishing a large soil sampling program and preparing for a drill program targeting the North Ore Shoot.
At Kisladag we completed 3,775 meters of diamond drilling and 2,598 meters of reverse circulation drilling. Resource drilling at Kisladag 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, 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.
