Eldorado Gold Corporation
AMEX : EGO
TSX : ELD

Eldorado Gold Corporation

March 23, 2007 08:15 ET

Eldorado Gold Corporation: 2006 Financial Results

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 23, 2007) - (all figures in United States dollars)

Paul N. Wright, President and Chief Executive Officer of Eldorado Gold Corporation ("Eldorado" the "Company" or "we") (TSX:ELD)(AMEX:EGO), provides the Company's financial results for the year ended December 31, 2006.

Highlights

- Recorded a net profit for the year of $3.3 million or $0.01 per share, compared to a loss of $49.1 million or ($0.17) per share in 2005

- Sold 127,552 ounces of gold at a realized price $609 per ounce

- Produced 135,653 ounces of gold at a cash operating cost of $324 per ounce

- Held $60.0 million in cash and short-term deposits at year-end

- Successful equity raising of net $155.0 million

- Began commercial production at Kisladag Mine in Turkey in July 2006; opened Tanjianshan Mine in China in November 2006 and began commercial production in February 1, 2007

- Drilled 6,720 of a 13,000 meter program at Efemcukuru for a feasibility study which is planned for completion in Q2 2007

- Expended $12.7 million in exploration in Brazil, Turkey and China

- An operating platform created to produce 310,000 to 330,000 ounces of gold at an estimated cash cost of $220 - $230 in 2007

2006 Results

The consolidated net profit for 2006 was $3.3 million or $0.01 for 2006 compared with a net loss of $49.1 million or ($0.17) per share for 2005; a net loss of $13.9 million or ($0.05) per share in 2004. Our gain in 2006 is a result from higher gold prices, increased gold production and lower average production costs.

In 2006, we sold 127,552 ounces of gold for $77.6 million at an average realized selling price of $609 per ounce. This compares with 2005 gold sales of 66,804 ounces of gold for $29.7 million at an average realized selling price of $444 per ounce and with 2004 gold sales of 81,913 ounces for $33.5 million at an average realized price of $409 per ounce. Sales from Kisladag totaled 63,352 ounces of gold at an average price of $619 per ounces while production cash costs averages $206 per ounce. Sales from Sao Bento totaled 64,200 ounces of gold at an average price of $598 compared to 66,804 ounces at an average price of $444 in 2005.

Eldorado is in a strong financial position and at December 31, 2006 we held $60.0 million in cash and short-term deposits and $79.6 million in a restricted account held against long term debt - $50.0 million, bank indebtedness - $15.4 million and environmental reclamation obligations of $8.3 million. We remain hedge free. On February 7, 2006, we closed a financing that resulted in net proceeds of $155.0 million (CDN$178.9 million). This financing gave us sufficient funds to develop and explore our properties in Turkey, China and Brazil, acquire additional development gold properties in China and make other acquisitions and carry out general corporate activities.

In 2006 we produced 135,653 ounces of gold an 111% increase over 2005 production of 64,298 ounces of gold and a 65% increase over 2004 production of 84,024 ounces of gold. The increased production was attributable to Kisladag where commercial production commenced in July 2006. In the six months ended December 2006 at Kisladag: 70,895 ounces of gold were produced at an average cash cost of $208 per ounces - 5,178,268 tonnes of ore were mined at an average grade of 1.18 grams per tonne. In 2006 Sao Bento produced 64,758 ounces of gold at cash cost of $454 per ounce - 334, 814 tonnes of ore were sent to the mill at an average grade of 6.71 grams per tonne with a recovery rate of 87.9 percent. Production ounces was up 7% from the 2005 production of 64,298 produced at an average cash cost of $407. Production yield and recovery declined from the 310,703 tonnes of ore with 7.67 grams per tonne grade and 89.3% recovery in 2005. As the ore body approached full depletion production yield declined and recovery decreased while mining and processing costs increased.

2006 Gold Reserves and Resources

(Efemcukuru Project resources and reserves will be updated when the feasibility study is released in Q2, 2007)



--------------------------------------------------------------------------
Property Resources Reserves
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Au Au
Tonnes Au/ ozs Tonnes Au/ ozs
(X1000) g/t (X1000) (X1000) g/t (X1000)
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Kisladag Measured 55,503 1.23 2,195 Proven 51,102 1.24 2,031
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Indicated 153,351 0.97 4,782 Probable 78,418 1.12 2,811
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M + I 208,853 1.04 6,977 Total 129,520 1.16 4,842
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Inferred 45,500 0.75 1,097
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Tanjianshan Measured 3,021 3.37 327 Proven 2,504 4.09 329
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Indicated 9,599 3.47 1,071 Probable 6,094 4.26 835
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M + I 12,620 3.45 1,398 Total 8,598 4.21 1,164
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Inferred 798 3.03 78
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Efemcukuru Measured 665 15.11 323 Proven
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Indicated 1,172 13.94 525 Probable 1,856 13.14 784
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M + I 1,837 14.36 848 Total 1,856 13.14 784
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Inferred 522 12.07 203
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Total Measured 59,189 1.50 2,845 Proven 53,606 1.37 2,360
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Indicated 164,122 1.21 6,378 Probable 86,368 1.60 4,430
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M + I 223,311 1.28 9,224 Total 139,974 1.51 6,790
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Inferred 46,820 0.92 1,377
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Notes:
1) Gold prices used for Reserves were $450/oz. for Tanjianshan and
Kisladag, and $325/oz. for Efemcukuru
2) Qualified Persons - Norm Pitcher, P.Geo. and Chief Operating Officer of
the Company is responsible for the Kisladag and Tanjianshan Reserves,
Gary Giroux, P.Geo., and Independent Qualified Person, is responsible
for the resources calculations at Kisladag and Efemcukuru; Stephen
Juras, P.Geo. and Manager, Geology is responsible for the Tanjianshan
Resource.
3) Efemcukuru Reserves were calculated prior to implementation of NI43-101
and will be updated upon completion of a feasibility study in 2007.

2006 Iron Ore Resources

--------------------------------------------------------------
Vila Nova Tonnes (x1000) Fe%
--------------------------------------------------------------
Measured & Indicated Resource 10,418 61.6
--------------------------------------------------------------
Inferred Resource 2,532 61.3
--------------------------------------------------------------
Proven & Probable Reserve ROM 5,253 62.3
--------------------------------------------------------------

Note:
Stephen Juras, Ph.D., P.Geo., Manager, Geology is the Qualified Person
under whose direction the mineral resources were estimated. Roberto R.
Costa, an independent mining engineer and principal of Roberto Costa
Engenharia Ltda., directed the mine engineering and metallurgical testwork
of the Vila Nova Iron Ore Project.


Corporate

"2006 was a milestone year for Eldorado where we have successfully built a solid base of long lived low cost assets enabling a future increase in cash flow and earnings," said Paul Wright, President and Chief Executive Officer.

Eldorado Gold 2006 Annual Shareholders Meeting will be held Thursday, May 24 at 3:00 PM at the Company's corporate office at 1188-550 Burrard Street, Vancouver, BC.

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.

ON BEHALF OF ELDORADO GOLD CORPORATION

Paul N. Wright, President and Chief Executive Officer

Eldorado will host a conference call today to discuss the 2006 Financial Results at 11:00 a.m. EST (8:00 a.m. PST). You may participate in the conference call by dialing 416-695-9712 in Toronto or 1-877-667-7774 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 for one week by dialing 416-695-5275 in Toronto or 1-888-509-0081 toll free in North America and entering the Pass code: 640760.

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.

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 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 23, 2006. Forward-looking statements herein 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 Company's Annual Information Form and Form 40-F dated March 23, 2006. 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 in Canada and the U.S.

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



PRODUCTION HIGHLIGHTS(1)

---------------------------------------------------------------------------
First Second Third Fourth Fourth
Quarter Quarter Quarter Quarter Quarter
2006 2006 2006 2006 2005 2006 2005
---------------------------------------------------------------------------

Gold Production
Ounces
produced 19,111 25,035 41,082 50,454 16,212 135,653 64,298
Cash
Operating
Cost
($/oz)(4) 421 378 309 274 433 324 407
Total
Cash Cost
($/oz)(2,4) 429 386 315 278 442 330 416
Total
Production
Cost ($/oz)
(3,4,5) 438 463 364 259 610 343 564
Realized
Price
($/oz -
sold) 549 615 620 615 486 609 444
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Sao Bento Mine,
Brazil
Ounces
produced 19,111 18,163 13,605 13,879 16,212 64,758 64,298
Tonnes
to Mill 93,626 90,024 81,869 69,295 73,057 334,814 310,703
Grade
(grams /
tonne) 6.99 7.23 6.38 6.06 7.85 6.71 7.67
Cash
Operating
Cost
($/oz)(4) 421 429 493 492 433 454 407
Total
Cash Cost
($/oz)(2,4) 429 441 506 502 442 464 416
Total
Production
Cost ($/oz)
(3,4) 438 463 525 455 610 467 564
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Kisladag Mine,
Turkey
Ounces
produced n/a 6,872 27,477 36,546 n/a 70,895 n/a
Tonnes
Mined n/a 1,493,156 1,802,368 1,882,744 n/a 5,178,268 n/a

Grade
(grams /
tonne) n/a 0.97 1.29 1.23 n/a 1.18 n/a
Cash
Operating
Cost
($/oz)(4) n/a 242 218 191 n/a 206 n/a
Total
Cash Cost
($/oz)(2,4) n/a 242 220 193 n/a 208 n/a
Total
Production
Cost ($/oz)
(3,4,5) n/a n/a 285 185 n/a 229 n/a
---------------------------------------------------------------------------

1) Cost figures calculated in accordance with Gold Institute Standard.
2) Cash Operating Costs, plus royalties and the cost of off-site
administration.
3) Total Cash Cost, plus foreign exchange gain or loss, depreciation,
amortization and reclamation expenses.
4) Cash operating, total cash and total production costs are non-GAAP
measures. See the section "Non-GAAP Measures" of the MD&A.
5) The Kisladag gold mine commenced commercial production on July 1,
2006. Total production cost for the Kisladag mine during the quarter
ended June 30, 2006 is not presented.


Eldorado Gold Corporation
Consolidated Balance Sheets
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(Expressed in thousands of U.S. Dollars)

December 31, December 31,
2006 2005
$ $
Assets
Current assets
Cash and cash equivalents 59,967 33,826
Restricted cash (note 3) 21,250 -
Accounts receivable and prepaids (note 4) 28,306 17,138
Inventories (note 5) 35,697 7,597
Future income taxes (note 11) 10,182 -
-------------------------
155,402 58,561
Restricted cash (note 3) 58,300 50,000
Mining interests (note 6) 311,080 209,936
Goodwill (note 7) 2,238 2,238
-------------------------
527,020 320,735
-------------------------
-------------------------
Liabilities
Current liabilities
Bank indebtedness (note 8) 15,367 -
Accounts payable and accrued liabilities 29,267 21,036
Current portion of long term debt (note 9) 333 309
Current portion of asset retirement
obligations (note 10) 8,271 -
-------------------------
53,238 21,345
Long term debt (note 9) 50,499 50,832
Contractual severance obligations 3,216 2,437
Asset retirement obligations (note 10) 5,420 11,143
Future income taxes (note 11) 18,742 10,051
-------------------------
131,115 95,808
-------------------------
Shareholders' Equity
Share capital (note 12(a)) 740,061 573,721
Contributed surplus (note 12(d)) 9,314 7,976
Deficit (353,470) (356,770)
-------------------------
395,905 224,927
-------------------------
527,020 320,735
-------------------------
-------------------------
Commitments (note 14)

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
Consolidated Statements of Operations
For the Years Ended December 31
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(Expressed in thousands of U.S. dollars except per share amounts)

2006 2005 2004
$ $ $
Revenue
Gold sales 77,641 29,680 33,153
Interest and other income 7,048 4,117 2,762
----------------------------

84,689 33,797 35,915
----------------------------
Expenses
Operating costs 45,850 35,378 33,109
Depletion, depreciation and amortization 1,763 9,798 4,431
General and administrative 19,030 14,937 8,425
Exploration 12,719 7,386 4,312
Accretion of asset retirement obligation 661 484 430
Foreign exchange (gain) loss (2,050) 547 (196)
(Gain) on disposal of assets (945) (5,727) (30)
Interest and financing costs 1,586 88 25
Write down of assets 2,186 19,537 -
----------------------------

80,800 82,428 50,506
----------------------------

Income (loss) before income taxes 3,889 (48,631) (14,591)
----------------------------
Income tax (expense) recovery
Current (2,080) (152) 1,406
Future 1,491 (343) (757)
----------------------------

(589) (495) 649
----------------------------

Net income (loss) for the year 3,300 (49,126) (13,942)

Deficit, beginning of year (356,770) (307,644) (293,702)
----------------------------

Deficit, end of year (353,470) (356,770) (307,644)
----------------------------
----------------------------

Weighted average number of shares outstanding
Basic weighted average number of common
shares outstanding 337,376 284,004 257,643
----------------------------
----------------------------

Diluted weighted average number of common
shares outstanding 339,177 284,004 257,643
----------------------------
----------------------------

Earnings per share
Basic income (loss) per share - US$ 0.01 (0.17) (0.05)
Diluted income (loss) per share - US$ 0.01 (0.17) (0.05)

Basic income (loss) per share - Cdn$ 0.01 (0.19) (0.07)
Diluted income (loss) per share - Cdn$ 0.01 (0.19) (0.07)

See accompanying notes to consolidated financial statements.


Eldorado Gold Corporation
Consolidated Statements of Cash Flows
For The Years Ended December 31
--------------------------------------------------------------------------

(Expressed in thousands of U.S. dollars)

2006 2005 2004
$ $ $
Cash flows generated from (used in):
Operating activities
Net earnings (loss) for the year 3,300 (49,126) (13,942)
Items not affecting cash
Accretion of asset retirement obligation 661 484 430
Amortization of hedging gain - - 329
Contractual severance expense 1,377 1,801 318
Depletion, depreciation and amortization 1,763 9,798 4,431
Foreign exchange loss - - 11
Future income taxes (1,491) 343 757
Loss (gain) on disposal of assets 515 (227) 8
Imputed interest and financing costs 91 - -
Contractual severance obligation (598) - -
Stock-based compensation 3,542 2,426 3,720
Write down of assets - 19,537 28
----------------------------

9,160 (14,964) (3,910)
Changes in non-cash working capital (note 13) (31,668) 4,478 (6,955)
----------------------------

(22,508) (10,486) (10,865)
----------------------------
Investing activities
Acquisition of property, plant and
equipment for cash (88,299) (88,758) (22,772)
Proceeds on disposal of mining interest 1,845 227 357
Deferred development expenditures on
non-producing properties (6,871) (650) (573)
Value added taxes recoverable on
mining interest investments (7,579) (8,759) -
Restricted cash (29,550) (50,000) -
Acquisition of Afcan, net of cash received - 664 -
Proceeds from disposal of investments - - 70
----------------------------

(130,454) (147,276) (22,918)
----------------------------
Financing activities
Long term debt proceeds received - 50,000 -
Repayment of long term debt (400) (986) -
Proceeds from bank indebtedness 15,367 - -
Share issuance costs (7,089) - -
Issuance of common shares for cash 171,225 7,184 63,708
----------------------------

179,103 56,198 63,708
----------------------------

Net increase (decrease) in cash and
cash equivalents 26,141 (101,564) 29,925

Cash and cash equivalents - beginning of year 33,826 135,390 105,465
----------------------------

Cash and cash equivalents - end of year 59,967 33,826 135,390
----------------------------
----------------------------

Supplementary cash flow information (note 13)


Click here for Complete Financial Statements, Management's Discussion and Analysis (PDF): http://www.ccnmatthews.com/docs/07-06ConsolidatedFS.pdf

The TSX has neither approved nor disapproved the form or content of this release.

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