Eldorado Gold Corporation

Eldorado Gold Corporation

March 21, 2005 08:35 ET

Eldorado Gold Corporation: 2004 Financial Results




MARCH 21, 2005 - 08:35 ET

Eldorado Gold Corporation: 2004 Financial Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 21, 2005) - Eldorado
Gold Corporation (TSX:ELD)(AMEX:EGO) (all figures in United States

Paul N. Wright, President and Chief Executive Officer of Eldorado Gold
Corporation ("Eldorado" the "Company" or "we") provides its report on
the financial results of the Company for the year ended December 31,

2004 Highlights

- Proven and probable reserves 6.15 million ounces

- Net loss of $13.9 million or $0.05 cents per common share

- Year end cash balance $135 million

- Working capital of $144 million

- 82,024 ounces of gold produced at cash cost of $294 per ounce

- Company remains debt and hedge free

- Kisladag Construction on budget, on schedule

- Memorandum of Understanding signed with Shandong Gold Corp. January

2004 Results

The consolidated net loss for 2004 was $13.94 million or ($0.05) per
share compared with a net loss of $45.03 million or ($0.20) per share in
2003 and a profit of $1.78 million or $0.01 per share in 2002. The loss
in 2004 is due to lower gold sales and higher operating costs at the Sao
Bento mine. Our 2004 exploration drilling program at the Sao Bento mine
did not establish the continuity of the mineralization. Based upon
drilling results and the impact on reserves we have charged certain
development costs of $8.07 million to operating costs in 2004.

In 2004, we sold 81,913 ounces of gold for $33.15 million, including
$0.33 million in net hedging loss amortization. The average realized
selling price was $405 per ounce, or $409 per ounce excluding the
hedging loss amortization. This compares to 2003 gold sales of 95,544
ounces, which sold at a realized average price of $385 per ounce, or
$361 per ounce excluding $2.29 million in hedging gain amortization. The
average spot price in 2004 was $409 (2003: $363) per ounce.

Eldorado is in a strong financial position and at December 31, 2004, we
held $135.39 million in cash and short-term deposits. We remain debt
free and hedge free. We have sufficient funds to construct the $63.10
million Kisladag mine, carry out our planned exploration programs in
Turkey and Brazil and pursue new opportunities in China and elsewhere.

2004 Reserves and Resource Statement - As of December 31, 2004

erty Resources Reserves
--------- --------
Tonnes Au, Au ozs Tonnes Au, Au ozs
(X1000) g/t (X1000) (X1000) g/t (X1000)
------- ------ ------ ------- ----- ------
Bento Measured 332 12.78 136 Proven 315 9.40 95
Indicated 672 11.21 242 Probable 839 7.85 212
M+I 1,004 11.73 379 Total 1,154 8.27 307
Inferred 257 11.20 93

dag Measured 59,081 1.23 2,336 Proven 54,008 1.25 2,170
Indicated 155,723 0.97 4,856 Probable 81,012 1.11 2,891
M+I 214,804 1.04 7,193 Total 135,020 1.16 5,062
Inferred 45,500 0.75 1,097

kuru Measured 665 15.11 323 Proven
Indicated 1,172 13.94 525 Probable 1,856 13.14 784
M+I 1,837 14.36 848 Total 1,856 13.14 784
Inferred 552 12.07 214

Kaymaz Measured
Indicated 1,086 6.25 218
M+I 1,086 6.25 218

dere Measured
Indicated 1,276 6.43 264

Piaba Measured
Indicated 6,273 1.27 256
M+I 6,273 1.27 256
Inferred 4,322 1.28 178

Total Measured 60,078 1.45 2,796 Proven 54,323 1.30 2,266
Indicated 166,202 1.19 6,362 Probable 83,707 1.44 3,887
M+I 226,280 1.26 9,158 Total 138,030 1.39 6,153
Inferred 50,631 0.97 1,582


1) Gold prices used for reserves were $375/oz. for Sao Bento, $350
for Kisladag, and $325 for Efemcukuru.
2) Qualified Persons - Norm Pitcher, P. Geo. for Sao Bento, Gary
Giroux, P. Geo and Callum Grant, P. Eng. for Kisladag and
3) Sao Bento, Kisladag and Efemcukuru resources have been prepared in
accordance with NI43-101. All other resources are historical
estimates prior to implementation of 43-101.
4) Sao Bento and Kisladag reserves were prepared in accordance with
NI43-101, Efemcukuru was prepared prior NI43-101 and is currently
being updated.
5) Piaba resources represent Eldorado's 50% interest.

Operating Performance

In 2004, production at the Sao Bento mine was 82,024 ounces of gold at a
cash cost of $294 per ounce. Production in 2004 was negatively impacted
by the high level of waste handling, poor ground conditions and the
presence of the metabasite intrusive that intersects the orebody in the
area mined in 2004. In 2005 we are forecasting production of 72,000
ounces at a cash cost of $320 per ounce.


In 2004 at Kisladag we acquired all the public and private land, updated
the Feasibility Study to reflect increased costs, completed the
permitting process and obtained all approvals from the Turkish
authorities to commence construction of the Kisladag mine.

In October we began installing site services and completing two process
water wells. In December, we began earthwork excavation for construction
of the first phase of the leach pad. Kisladag mine construction is on
budget and on schedule to begin production in December 2005. The
Kisladag mine will produce 164,000 ounces of gold in its first year of
operations increasing in year two to 240,000 ounces of gold. Cash
operating costs are expected to be $165 per ounce for a planned mine
life of 14 years.

A public meeting was held on our Efemcukuru project in February 2005 by
the Turkish Ministry of the Environment to obtain input from local
residents about our proposed Efemcukuru mine. We are addressing the
questions of local residents in our Environmental Impact Assessment
Study which we are completing for submission to the Ministry in May 2005.

Exploration Activity

In 2004, we focused our exploration activities on Turkey, Brazil and
China, spending a total of $4.14 million.


Our exploration activities in Turkey centered on three areas: the
Western Pontides, the Demir Joint Venture and the Biga Peninsula.

In the Western Pontides, we control 145,200 hectares in 42 exploration
licenses that are 100% owned by our subsidiary, Tuprag Metal Madencilik
San. Ve. Tic. Ltd. Sti. The targets in this area are large, bulk
tonnage, high sulfidation-type precious metal systems and low
sulfidation-type precious metal vein systems. In 2004, we undertook a
range of activities - including mapping and sampling - to provide drill
targets for the year ahead.

Our 50/50 Demir Joint Venture consists of 27 licenses covering a total
of 58,642 hectares. Included in the JV is the AS Project, discovered
during a reconnaissance program in 2001 and 2002, which includes a
porphyry-style gold-molybdenum-copper deposit that has alteration styles
similar to those at Kisladag. In 2004, we completed the layout of six
kilometers of roads through the center of the anomaly for mapping,
sampling and drill access. Results from the sampling will guide our
drill program for 2005.

In the Biga Peninsula area of western Turkey, we control 25 exploration
licenses covering 38,244 hectares. Reconnaissance work will continue in
2005 and we may carry out additional drilling.


In 2004, we pursued several exploration opportunities and obtained
mineral licenses on two properties in northern Brazil's Amapa State and
another in Rio Grande do Norte State.

Our land position in Amapa State totals 12,000 hectares and our work
program in 2004 focused on geologic mapping, stream and soil sampling
and geophysics to define drill targets. These properties host large
geochemical gold anomalies as well as artisanal gold mining, in the same
rock formations that host major deposits in Venezuela, Surinam and

In Rio Grande do Norte State results from a 4 hole exploration program
in the Bonfim area were negative, and the property was subsequently

Exploration Outlook

Our exploration program for 2005 is focused on Brazil, China and Turkey.


Total exploration expenditures in Brazil for 2005 are budgeted at $4.10
million, which will be allocated to the Tartarugalzinho and Cassipore
projects, as well as a development project currently being negotiated.


On January 11, 2005 we signed a Memorandum of Understanding with the
Shandong Gold Corporation ("Shandong") outlining possible joint ventures
on one advanced exploration property and two development projects.
Shandong is a publicly traded company listed on the Shanghai Exchange
with assets in excess of $362 million. Located in eastern China's
Shandong province, which is China's largest gold producing region, the
company's revenue is derived from the production and sale of gold,
silver, sulfur concentrate ore and gold and silver jewelry. Shandong
produced approximately 150,000 ounces of gold in 2004 from two
underground mines and in November 2004 the company acquired its third
underground mine.


Our 2005 exploration budget for Turkey is $1.70 million which will be
divided among the Pontide Belt, Biga Peninsula and Demir Joint Venture.
We have our own drilling rigs, processing lab and technicians thereby
allowing us to do substantial exploration work economically on several
projects. Additional funds will be allocated as needed.


In September 2003 Berne Jansson became General Manager, Kisladag located
in Turkey. Berne has provided leadership and management for the Kisladag
Gold Project and effective March 31, 2005 is appointed to the position
of Vice President, Operations for Eldorado. As Vice President,
Operations Berne will be responsible for our existing operations and the
construction of our new mines. Berne will remain based in Turkey through
the majority of 2005 providing in country oversight of the Kisladag
construction. Berne Jansson is a mining engineer with over 30 years of
experience in engineering construction and operation of mines throughout
the Americas, Africa and the Middle East.

John Timmons will join the Company on May 1, 2005 as the General
Manager, Kisladag Gold Project. John will assume Berne's role providing
leadership and management for Kisladag. John has extensive experience in
the resource industry and from 1996 to 2005 held several management
positions with Cayeli Bakir Esletmeleri, Cayeli, Turkey, most recently
since 1997 as General Manager.

In November 2003, Norm Pitcher rejoined Eldorado in the position of
Manager, Evaluations. Norm was Manager Resource Development for the
Company in 1997 prior to becoming the Chief Geologist for Pan American
Silver Corporation. In May 2004, Norm was appointed to the position of
Vice President, Exploration and Corporate Development and will lead our
exploration activities including the assessment of our existing projects
and the identification of new business opportunities.

Charlie Parker also rejoined the Company on February 1, 2005 as
Operations Controller of the Kisladag Gold Project where he will be the
senior financial resource for the project. Charlie was employed by
Eldorado as Controller for its Mexico Operations from 1996 to 1999.
Since that time Charlie has maintained his involvement within the
resource industry and has extensive experience in the development and
auditing of internal control procedures pursuant to Sarbanes Oxley

In 2004 we established our Representative Office in Beijing, China. Mr.
Xuexin Zhu joined Eldorado in June 2004 as its Senior Engineer located
in Beijing. Xuexin is responsible for the coordination of our
examination of prospective projects in China. Xuexin is a professional
engineer with 12 years experience in planning, design and construction
management of underground mines and was responsible for the supervision
of the Feasibility Study of the Jianchaling Gold/Nickel Mine for Sino
Gold, the first foreign owned gold mine in China.

"2004 was a year of achievement and challenge for Eldorado," commented
Paul Wright, President and Chief Executive Officer. "We've strengthened
our balance sheet, financed our next mines, advanced our Kisladag
project to construction and made progress with the Efemcukuru EIA Study.
Although our shaft deepening project will be completed on budget and on
schedule at Sao Bento we will not be able to utilize it to greater
advantage since we were unable to extend our proven and probable
reserves at the mine. We have added prospective land positions in Brazil
and Turkey and have planned 2005 drilling programs in both countries. We
look forward to advancing our new initiative with Shandong Gold Corp. in

Eldorado is a gold producing and exploration company actively growing
businesses in Brazil, Turkey and China. 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.


Paul N. Wright, President and Chief Executive Officer

The terms "Mineral Reserve", "Proven Mineral Reserve" and "Probable
Mineral Reserve" used in this release are Canadian mining terms as
defined in accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects under the guidelines set out in the
Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM")
Standards on Mineral Resources and Mineral Reserves, adopted by the CIM
Council on August 20, 2000 as may be amended from time to time by the
CIM. These definitions differ from the definitions in the United States
Securities & Exchange Commission ("SEC") Guide 7. In the United States,
a mineral reserve is defined as a part of a mineral deposit which could
be economically and legally extracted or produced at the time the
mineral reserve determination is made.

The terms "Mineral Resource", "Measured Mineral Resource", "Indicated
Mineral Resource", "Inferred Mineral Resource" used in this release are
Canadian mining terms as defined in accordance with National Instruction
43-101 - Standards of Disclosure for Mineral Projects under the
guidelines set out in the CIM Standards. Mineral Resources which are not
Mineral Reserves do not have demonstrated economic viability.

For a detailed discussion of resource and reserve estimates and related
matters see the Company's technical reports, including the Annual
Information Form and other reports filed under the Company's name at
www.sedar.com. A qualified person has verified the data contained in
this release.

Note to U.S. Investors. While the terms "mineral resource", "measured
mineral resource", "indicated mineral resource", and "inferred mineral
resource" are recognized and required by Canadian regulations, they are
not defined terms under standards in the United States and normally are
not permitted to be used in reports and registration statements filed
with the SEC. As such, information contained in this report concerning
descriptions of mineralization and resources under Canadian standards
may not be comparable to similar information made public by U.S
companies in SEC filings. With respect to "indicated mineral resource"
and "inferred mineral resource" there is a great amount of uncertainty
as to their existence and a great uncertainty as to their economic and
legal feasibility. It can not be assumed that all or any part of an
"indicated mineral resource" or "inferred mineral resource" will ever be
upgraded to a higher category. Investors are cautioned not to assume
that any part or all of mineral deposits in these categories will ever
be converted into reserves.

Certain of the statements made may contain forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of
1934, which involve known and unknown risk, 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 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. 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 "Narrative Description of the
Business - Risk Factors" in the Company's Annual Information Form and
the factors discussed in the Prospectus dated November 5, 2004.
Forward-looking statements in this release 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; 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 Prospectus dated
November 5, 2004. 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.

Eldorado Gold Corporation's shares trade on the Toronto Stock Exchange
(TSX:ELD) and the American Stock Exchange (AMEX:EGO).

Request for information packages: info@eldoradogold.com

Eldorado Gold Corporation
Consolidated Balance Sheets
As At December 31
(Expressed in thousands of U.S. dollars)
2004 2003

Current Assets
Cash and cash equivalents $ 135,390 $ 105,465
Accounts and other receivables 8,705 3,213
Inventories (Note 3) 5,927 5,623
150,022 114,301

Property, plant and equipment (Note 4) 52,337 23,784
Mineral properties and deferred
development (Note 4) 22,676 32,287
Investments and advances (Note 8) 1,224 1,258
Deferred loss (Note 6) - 329
$ 226,259 $ 171,959

Current Liabilities
Accounts payable and accrued
liabilities $ 6,005 $ 7,164
6,005 7,164

Asset retirement obligation (Note 5) 8,059 7,172
Contractual severance obligation 636 318
Future income taxes (Note 9) 4,598 3,830
19,298 18,484

Share capital (Note 7) 508,373 444,665
Contributed surplus 1,094 1,094
Stock based compensation (Note 7) 5,138 1,418
Deficit (307,644) (293,702)
206,961 153,475
$ 226,259 $ 171,959

Commitments and Contingencies (Note 10)

Approved by the Board

Robert Gilmore Paul Wright
Director Director

Eldorado Gold Corporation
Consolidated Statements of Operations and Deficit
For The Years Ended December 31
(Expressed in thousands of U.S. dollars except per share amounts)

2004 2003 2002
Gold sales $ 33,153 $ 36,814 $ 34,051
Interest and other income 2,762 1,415 5,245
35,915 38,229 39,296
Operating costs 32,459 22,604 19,027
Depletion, depreciation
and amortization 4,431 10,321 10,699
General and administrative 5,531 4,961 3,238
Exploration expense 4,136 1,956 1,078
Interest and financing costs 25 569 1,156
Loss (gain) on settlement of
convertible debenture - 227 (463)
Stock based compensation
expense 3,720 1,418 -
Accretion of asset
retirement obligation 430 406 383
Foreign exchange (gain) loss (196) (6,494) 1,046
50,536 35,968 36,164
(Loss) profit before the
undernoted items (14,621) 2,261 3,132

Writedown of assets - (44,645) (415)
Gain (loss) on disposals of
property, plant and equipment 30 (186) (205)
(Loss) profit before income
taxes (14,591) (42,570) 2,512

Tax recovery (expense) (Note 9)
Current 1,406 1,107 (1,121)
Future (757) (3,570) 387
Net (loss) income for the year $ (13,942) $ (45,033) $ 1,778

Deficit at the beginning
of the year:
As previously reported (293,702) (247,649) (249,785)
Change in accounting policy - (1,020) (662)
As restated $ (293,702) $ (248,669) $ (250,447)

Deficit at the end of the year $ (307,644) $ (293,702) $ (248,669)

Weighted average number
of shares outstanding 257,643,212 221,770,349 147,597,481
Basic (loss) income per
share - U.S.$ $ (0.05) $ (0.20) $ 0.01
Basic (loss) income per share -
CDN.$ - (yearly avg. rate) $ (0.07) $ (0.28) $ 0.02
Diluted (loss) income per
share - U.S.$ $ (0.05) $ (0.20) $ 0.01

Eldorado Gold Corporation
Consolidated Statements of Cash Flows
For The Years Ended December 31
(Expressed in thousands of U.S. dollars)

2004 2003 2002
Cash flows from
operating activities
Net (loss) income for the year $ (13,942) $ (45,033) $ 1,778
Items not affecting cash
Depletion, depreciation
and amortization 4,431 10,321 10,699
Future income taxes 757 3,570 (387)
Writedown of assets 28 44,929 415
Loss on disposals of property,
plant and equipment 8 - 205
Loss (gain) on settlement
of convertible debenture - 227 (463)
Interest and financing costs - 127 249
Amortization of hedging gain 329 (2,286) (3,550)
Stock based compensation expense 3,720 1,418 -
Contractual severance expense 318 318 -
Accretion of asset
retirement obligation 430 406 383
Foreign exchange loss (gain) 450 (6,850) 1,784
(3,471) 7,147 11,113
(Increase) decrease in
accounts and other receivable (5,492) (1,833) 1,585
(Increase) decrease
in inventories (304) (607) (425)
(Decrease) increase in
accounts payable and
accrued liabilities (1,159) (1,061) (2,985)
(10,426) 3,646 9,288
Cash flow from investing
Property, plant and equipment (22,772) (9,391) (5,334)
Proceeds from disposals of
property, plant and equipment 357 - 64
Mineral properties and
deferred development (573) (3,604) (2,285)
Investments and advances - (1,196) 37
Proceeds from disposals
of investments and advances 70 - -
Restricted cash - - 475
(22,918) (14,191) (7,043)
Cash flow from financing
Repayment of long-term debt - - (15,476)
Repayment of convertible
debentures - (7,150) -
Issue of common shares:
Voting - for cash 63,708 78,619 47,966
Other assets and deferred
charges - - (95)
63,708 71,469 32,395
Foreign exchange gain (loss)
on cash held in foreign
currency (439) 6,914 (1,765)
Net increase (decrease) in
cash and cash equivalents 29,925 67,838 32,875
Cash and cash equivalents at
beginning of the year 105,465 37,627 4,752
Cash and cash equivalents
at end of the year $ 135,390 $ 105,465 $ 37,627

Supplemental cash flow
Interest paid $ - $ 541 $ 937
Income tax paid $ 166 $ 242 $ 382


Contact Information

    Eldorado Gold Corporation
    Nancy E. Woo
    Manager Investor Relations
    (604) 601-6650 or 1-888-353-8166
    (604) 687-4026 (FAX)
    The TSX has neither approved nor disapproved the form or content of this