Eldorado Gold Corporation
AMEX : EGO
TSX : ELD

Eldorado Gold Corporation

March 27, 2008 07:55 ET

Eldorado Gold Corporation: 2007 Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 27, 2008) - (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), is pleased to provide the Company's financial results for the year ended December 31, 2007.

"2007 will be remembered as a year characterized by our great satisfaction with the performance of our two new mines where we increased our production by 107% and reduced our costs by 27% and a year of successfully navigating the challenges of having a mine temporarily closed under an injunction. With the March 6, 2008 re-opening of Kisladag and a successful year of operations at Tanjianshan we look forward to continuing our growth strategy," said Paul N. Wright, President and Chief Executive Officer.

Highlights

- Recorded record earnings of $0.10 per share compared to $0.01 per share in 2006

- Sold 266,012 ounces of gold at a realized average price $674/oz (2006 - 127,552 oz at $609/oz)

- Produced 281,135 ounces of gold at a cash operating cost of $236/oz (2006 - 135,653 oz at $324/oz)

- Held $46.0 million in unrestricted cash and short-term deposits at year-end

- Began commercial production at Tanjianshan mine in China on February 1, 2007 becoming the first North American gold producer in China

- Completed Kisladag gold mine expansion affectively doubling production capacity to 10 million tonnes of ore per year before operations were halted by an injunction on August 18, 2007. Kisladag resumed production March 6, 2008

- Completed a positive feasibility study on Efemcukuru project and advanced land acquisition into the final phase prior to a construction decision

- Announced our decision to develop the Vila Nova Iron Ore deposit in Brazil

- Began reclamation and mine closure activities at our Sao Bento mine after 20 years of mining

- Expended $11.6 million in exploration drilling increasing our gold resources by 33%

2007 Results

The consolidated net profit for 2007 was $35.4 million or $0.10 per share compared with a net profit of $3.3 million or $0.01 per share for 2006; a net loss of $49.1 million or ($0.17) per share in 2005. Our gain in 2007 is a result of higher gold prices, increased gold production from our new mines and lower average production costs.

In 2007, we sold 266,012 ounces of gold for $179.3 million at an average realized selling price of $674 per ounce. This compares with 2006 gold sales of 127,552 ounces of gold for $77.6 million at an average realized selling price of $609 per ounce and with 2005 gold sales of 66,804 ounces for $29.7 million at an average realized price of $444 per ounce. Sales from Kisladag totaled 142,725 ounces of gold at an average price of $660 per ounces while production cash costs averaged $189 per ounce compared to 63,352 ounces at an average price of $619 per ounce while production cash costs averaged $206 per ounce in 2006. Sales from Tanjianshan totaled 112,646 ounces of gold at an average price of $694 per ounces while production cash costs averaged $288 per ounce. Sales from Sao Bento totaled 10,641 ounces of gold at an average price of $649 compared to 64,200 ounces at an average price of $598 in 2006.

Eldorado is in a strong financial position and at December 31, 2007 we held $46.0 million in unrestricted cash and short-term deposits and $74.0 million in a restricted account held against long term debt of $65.1 million, bank indebtedness of $8.5 million in environmental and electricity deposits with the Turkish authorities. We remain hedge free.

In 2007 we produced 281,135 ounces of gold a 107% increase over 2006 production of 135,653 ounces of gold and a 337% increase over 2005 production of 64,298 ounces of gold. The increased production was attributable to increased production at Kisladag and the start of production at Tanjianshan, offset by the end of production activities at Sao Bento. In 2007 Tanjianshan produced 138,162 ounces of gold at an average cash cost of $288 per ounce, 757,354 tonnes of ore were mined at an average grade of 6.23 grams per tonne. In 2007 Kisladag produced 135,306 ounces of gold at a cash cost of $189 per ounce and 4,547,860 tonnes of ore were mined at an average grade of 1.33 grams per tonne. In 2007 Sao Bento produced 7,667 ounces of gold at cash cost of $208 per ounce from the 20,069 tonnes of ore sent to the mill at an average grade of 11.71 grams per tonne. Production ounces was up 107% from the 2006 production of 135,653 and average cash costs at $236 per ounce were 27% lower than the 2006 cash cost of $324 per ounce.

2007 Resources and Reserves

Resources increased to 10.4 million ounces of measured and indicated and 3.7 million ounces of inferred an increase of 33% from 2006. Proven and Probable reserves increased to 7.7 million ounces an increase of 13% from 2006. Proven and Probable iron ore reserves are 9.3 million tonnes 61% Fe.

Corporate

The Eldorado Gold 2007 Annual General & Special Shareholders Meeting will be held Thursday, May 1 at 3:00 PM at the Bentall 5 Conference Center, Lobby Level, 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 2007 Financial 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 April 3, 2008 by dialing 416-695-5800 in Toronto or 1-800-408-3053 free in North America and entering the Pass code: 3253164#.

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 reports, including the Annual Information Form and FORM 40-F dated March 29, 2007 and technical reports filed under the Company's name at www.sedar.com.

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 29, 2007. 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 29, 2007. 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: laurelw@eldoradogold.com



PRODUCTION HIGHLIGHTS(1)

---------------------------------------------------------------------------
First Second Third Fourth Fourth
Quarter Quarter Quarter Quarter Quarter
2007 2007 2007 2007 2006 2007 2006
---------------------------------------------------------------------------

Gold
Production
-----------
Total
Ounces
Produced 88,780 98,970 61,385 32,000 50,425 281,135 135,653
Commercial
Production 76,288 98,970 61,385 32,000 50,425 268,643 135,653
Cash
Operating
Cost
($/oz)(4) 220 259 228 216 274 236 324
Total Cash
Cost
($/oz)(2,4) 233 287 264 262 278 263 330
Total
Production
Cost
($/oz)(3,4) 270 332 335 522 259 338 343
Realized
Price
($/oz-sold) 647 664 667 774 615 674 609
---------------------------------------------------------------------------

Kisladag Mine,
Turkey
-------------
Commercial
Production 43,601 68,095 23,610 - 36,546 135,306 70,895
Tonnes
to Pad 1,849,330 1,872,691 825,839 - 1,882,744 4,547,860 5,178,268
Grade
(grams/
tonne) 1.27 1.32 1.52 - 1.23 1.33 1.18
Cash
Operating
Cost
($/oz)(4) 192 187 191 - 191 189 206
Total Cash
Cost
($/oz)(2,4) 194 190 194 - 193 192 208
Total
Production
Cost
($/oz)(3,4) 225 221 234 - 185 224 229
---------------------------------------------------------------------------

Tanjianshan
Mine,
China(5)
-----------
Total
Ounces
Produced 39,252 29,135 37,775 32,000 n/a 138,162 n/a
Commercial
Production 26,760 29,135 37,775 32,000 n/a 125,670 n/a
Tonnes
Milled 142,859 237,909 202,641 173,945 n/a 757,354 n/a
Grade
(grams/
tonne) 7.17 4.41 6.87 7.20 n/a 6.23 n/a
Cash
Operating
Cost
($/oz)(4) 260 440 251 216 n/a 288 n/a
Total
Cash Cost
($/oz)(2,4) 291 522 307 261 n/a 342 n/a
Total
Production
Cost
($/oz)(3,4) 356 616 397 526 n/a 472 n/a
---------------------------------------------------------------------------

Sao Bento
Mine,
Brazil
---------
Commercial
Production 5,927 1,740 - - 13,879 7,667 64,758
Tonnes
Milled 20,069 - - - 69,295 20,069 334,814
Grade
(grams/
tonne) 8.88 - - - 6.06 11.71 6.71
Cash
Operating
Cost
($/oz)(4) 245 80 - - 492 208 454
Total Cash
Cost
($/oz)(2,4) 252 132 - - 502 224 464
Total
Production
Cost
($/oz)(3,4) 211 (50) - - 455 152 467
---------------------------------------------------------------------------

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 Total Cash Costs, 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 this MD&A.
5 The Tanjianshan gold mine commenced commercial production on February 1,
2007.


Eldorado Gold Corporation
Consolidated Balance Sheets
--------------------------------------------------------------------------

(Expressed in thousands of U.S. dollars)

December 31, December 31,
2007 2006
$ $
Assets

Current assets
Cash and cash equivalents 46,014 59,967
Restricted cash (note 4) 65,710 21,250
Accounts receivable and other (note 5) 30,335 28,306
Inventories (note 6) 57,525 35,697
Derivative contract (note 7) 2,956 -
Future income taxes (note 12) 959 10,182
--------------------------

203,499 155,402
Restricted cash (note 4) 8,300 58,300
Mining interests (note 8) 377,705 311,080
Other 2,238 2,238
--------------------------

591,742 527,020
--------------------------
--------------------------

Liabilities
Current liabilities
Bank indebtedness (note 9) - 15,367
Accounts payable and accrued liabilities 39,943 29,267
Debt - current (note 10) 65,422 333
Current portion of asset retirement
obligations (note 11) 509 8,271
--------------------------

105,874 53,238
Debt - long-term (note 10) 139 50,499
Contractual severance obligations 1,479 3,216
Asset retirement obligations (note 11) 8,290 5,420
Future income taxes (note 12) 26,781 18,742
--------------------------

142,563 131,115
--------------------------
--------------------------

Shareholders' Equity

Share capital (note 13(a)) 753,058 740,061
Contributed surplus (note 13(b)) 13,083 9,314
Accumulated other comprehensive income
(note 13(c)) 214 -
Deficit (317,176) (353,470)
--------------------------

449,179 395,905
--------------------------

591,742 527,020
--------------------------
--------------------------

Commitments (note 16)
Subsequent event (note 19)

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 and Deficit
For the years ended December 31,
--------------------------------------------------------------------------

(Expressed in thousands of U.S. dollars except per share amounts)

2007 2006 2005
$ $ $
Revenue
Gold sales 179,302 77,641 29,680
Interest and other income 9,397 7,048 4,117
-------------------------------------

188,699 84,689 33,797
-------------------------------------

Expenses
Operating costs 72,691 45,850 35,378
Depletion, depreciation and
amortization 20,041 1,763 9,798
General and administrative 26,798 19,030 14,937
Exploration 11,634 12,719 7,386
Mine standby and restructuring costs 6,575 - -
Accretion of asset retirement
obligation 604 661 484
Foreign exchange (gain) loss (4,658) (2,050) 547
(Gain) on disposal of assets (3,823) (945) (5,727)
Interest and financing costs 3,415 1,586 88
Unrealized gain on derivative contract (2,083) - -
Writedown of assets - 2,186 19,537
-------------------------------------

131,194 80,800 82,428
-------------------------------------
Income (loss) before income taxes 57,505 3,889 (48,631)
-------------------------------------

Income tax (expense) recovery
Current (4,823) (2,080) (152)
Future (17,261) 1,491 (343)
-------------------------------------

(22,084) (589) (495)
-------------------------------------

Net income (loss) for the year 35,421 3,300 (49,126)

Deficit, beginning of year:
As previously reported (353,470) (356,770) (307,644)
Change in accounting policy 873 - -
-------------------------------------
As adjusted (352,597) (356,770) (307,644)
-------------------------------------
Deficit, end of year (317,176) (353,470) (356,770)
-------------------------------------
-------------------------------------

Weighted average number of shares
outstanding
Basic 343,194 337,376 284,004
Diluted 344,621 339,177 284,004
Earnings per share
Basic income (loss) per share - US$ 0.10 0.01 (0.17)
Diluted income (loss) per share - US$ 0.10 0.01 (0.17)

Basic income (loss) per share - Cdn$ 0.11 0.01 (0.19)
Diluted income (loss) per share - Cdn$ 0.11 0.01 (0.19)

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, unless otherwise stated)

2007 2006 2005
$ $ $

Cash flows generated from (used in):

Operating activities
Net earnings (loss) for the year 35,421 3,300 (49,126)
Items not affecting cash
Accretion of asset retirement
obligation 604 661 484
Contractual severance expense 721 1,377 1,801
Depletion, depreciation and
amortization 20,041 1,763 9,798
Unrealized foreign exchange
loss (gain) 796 - -
Future income taxes 17,261 (1,491) 343
(Gain) loss on disposal of assets (3,601) 515 (227)
Imputed interest and financing costs 67 91 -
Stock-based compensation 7,267 3,542 2,426
Unrealized gain on derivative
contracts (2,083) - -
Writedown of assets - - 19,537
-------------------------------------

76,494 9,758 (14,964)
Property reclamation payments (5,496) - -
Contractual severance payments (2,458) (598) -
Changes in non-cash working
capital (note 15) 1,265 (31,668) 4,478
-------------------------------------
69,805 (22,508) (10,486)

Investing activities
Mining interests
Capital expenditures (94,461) (88,299) (88,758)
Sales proceeds 1,482 1,845 227
Available-for-sale securities
Purchases (1,556) - -
Disposals 663 - -
Pre-production gold sales
capitalized in mining interests 10,052 - -
Non-producing properties under
development (13,477) (6,871) (650)
Value added taxes recoverable
on mining interests - (7,579) (8,759)
Restricted cash 5,540 (29,550) (50,000)
Acquisition of Afcan, net of
cash received - - 664
-------------------------------------

(91,757) (130,454) (147,276)

Financing activities
Capital stock
Share issuance costs - (7,089) -
Issuance of common shares for cash 9,500 171,225 7,184
Long-term and bank debt
Proceeds 24,859 15,367 50,000
Repayments (26,360) (400) (986)
-------------------------------------

7,999 179,103 56,198
-------------------------------------
Net increase (decrease) in cash
and cash equivalents (13,953) 26,141 (101,564)
Cash and cash equivalents -
beginning of year 59,967 33,826 135,390
-------------------------------------

Cash and cash equivalents -
end of year 46,014 59,967 33,826
-------------------------------------
-------------------------------------
Supplementary cash flow information
(note 15)

See accompanying notes to consolidated financial statements.


Eldorado Gold Corporation
Consolidated Statements of Comprehensive Income
December 31, 2007 and 2006
--------------------------------------------------------------------------

(Expressed in thousands of U.S. dollars, unless otherwise stated)

2007
$

Net earnings for the period ended December 31, 2007 35,421

Other comprehensive income (loss)
Net unrealized gains (loss) on available-for-sale
investments (note 13(c)) (61)
----------

Comprehensive income for the period ended December 31, 2007 35,360
----------
----------


Click here for Consolidated Financial Statements, Management's Discussion and Analysis (pdf): http://media3.marketwire.com/docs/ELD.pdf

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

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