Eldorado Gold Corporation
TSX : ELD
NYSE : EGO
ASX : EAU

Eldorado Gold Corporation

November 03, 2011 07:55 ET

Eldorado Gold Corporation: 2011 Third Quarter Financial and Operating Results: Record Gold Production, Record Earnings

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 3, 2011) - Paul N. Wright, President and Chief Executive Officer of Eldorado Gold Corporation ("Eldorado" the "Company" or "we") (TSX:ELD)(NYSE:EGO)(ASX:EAU) is pleased to report on the Company's financial and operational results for the third quarter ended September 30, 2011. Eldorado reported net income attributable to shareholders of the Company of $102.5 million for the period, generated $159.7 million in cash from operating activities before changes in non-cash working capital and paid down $29.7 million against outstanding debt acquired with the 2009 Sino Gold Mining Ltd. acquisition.

"During the third quarter, Eldorado produced 179,195 ounces of gold, a new quarterly record, at average cash operating costs of $397 per ounce. The performance of our mines during the third quarter reflects the success the Company has achieved in increasing the productive capacities and efficiencies of our mines through targeted capital investments and well managed mining practices," said Paul Wright, President and CEO of Eldorado Gold.

Q3 2011 Highlights

  • Record gold production of 179,195 ounces at an average cash operating cost of $397 per ounce.
  • Net income attributable to shareholders of the Company of $102.5 million or $0.19 per share compared to $69.6 million or $0.13 per share for the same quarter in 2010.
  • 60% increase in gold revenues over the same quarter in 2010, reflecting higher gold sales prices and volumes.
  • 105% increase in earnings from gold mining operations before taxes over the same quarter in 2010.
  • 57% increase in cash from operating activities before changes in non-cash working capital over the same quarter in 2010. In addition, the Company paid $29.7 million against its outstanding debt.
  • Payment of a Cdn$0.06 dividend per share to shareholders of the Company.
  • Announcement of the Company's intention to expand Kisladag's average production rate from 275,000 ounces per year to 475,000 ounces per year.
  • Commissioning of Efemcukuru began with approximately 14,400 contained ounces of gold in concentrate shipped to Kisladag for storage pending completion of the Concentrate Treatment Plant.

Outlook

The 2011 gold production operating guidance has been revised to 650,000 ounces at an average cash cost of $400 per ounce.

Financial Results

Eldorado's consolidated net income attributable to shareholders of the Company for the quarter was $102.5 million or $0.19 per share, compared with $69.6 million or $0.13 per share in the same quarter of 2010, a 47% increase in net income attributable to shareholders of the Company. Revenues from gold mining operations for the quarter increased $114.9 million, or 60%, from a year ago due to 38% higher selling prices as well as 16% higher sales volumes. The increase in sales volumes was mainly due to increased production at Kisladag as a result of an increase in tonnes treated on the leach pad, and at White Mountain due to higher average grade and tonnes processed.

Vila Nova contributed $8.6 million gross profit from iron ore sales, which included revenue of $20.9 million on shipments of 170,782 tonnes of iron ore during the third quarter.

Operating Performance

Kisladag

Kisladag placed 3.5 million tonnes of ore on the leach pad during the third quarter at a grade of 0.90 grams per tonne. Ore throughput has increased in 2011 since the completion of the Phase III expansion project. Kisladag produced 86,788 ounces of gold at a cash operating cost of $377 per ounce in Q3 2011 as compared to 62,086 ounces at a cash operating cost of $337 per ounce in Q3 2010. The increase in cash operating cost was mainly due to higher electricity and reagent costs.

Tanjianshan ("TJS")

TJS processed 218,330 tonnes of ore at a grade of 4.25 grams per tonne in Q3 2011 compared to 283,598 tonnes at a grade of 3.84 in Q3 2010. The mine produced 26,935 ounces of gold at a cash operating cost of $353 per ounce in Q3 2011 as compared to 28,847 ounces at a cash operating cost of $391 per ounce in Q3 2010. Gold production was impacted by a short-notice power grid shutdown by the local utility company that resulted in 16 days of downtime in the mill circuit.

Jinfeng

Jinfeng processed 378,352 tonnes of ore at a grade of 4.26 grams per tonne in Q3 2011 compared to 387,427 tonnes at a grade of 4.42 grams per tonne in Q3 2010. The mine produced 44,202 ounces of gold at a cash operating cost of $424 per ounce in Q3 2011 compared to 46,116 ounces at a cash operating cost of $425 in Q3 2010. Mining of the open pit was completed during the second quarter this year. Land is currently being acquired to allow mining the next phase cutback of the open pit. The process plant is processing ore stockpiles to make up the shortfall from open pit mining operations.

White Mountain

White Mountain processed 191,157 tonnes of ore at a grade of 4.15 grams of gold per tonne in Q3 2011 compared to 154,125 tonnes at a grade of 4.01 grams per tonne in Q3 2010. The mine produced 21,270 ounces of gold at a cash operating cost of $475 per ounce in Q3 2011 compared to 14,248 ounces at $477 per ounce in Q3 2010.

Vila Nova

During Q3 2011 Vila Nova mined 172,937 wet metric tonnes, treated 148,220 wet metric tonnes and sold 170,782 dry metric tonnes of iron ore. The weather improved significantly during the third quarter from previous quarters enabling Vila Nova to increase the number of shipments per month and draw down existing inventories. Operating costs averaged $63 per dry metric tonne. At quarter end 153,262 wet metric tonnes of processed ore were in inventory.

Development

Kisladag

During the quarter the Company released the results of the Kisladag expansion study. The overall concept of increasing crusher production to 25 million tonnes per year with an additional 8 million tonnes per year of low grade run of mine (ROM) ore has been determined to be the most balanced approach to achieving reasonable capital and operating costs and consistent gold production. Based on these concepts, preliminary engineering work was initiated to identify potential critical path items such as power supply and distribution and delivery of mining and processing equipment.

Efemcukuru

Efemcukuru continued to ramp up production during the quarter while commissioning tasks were completed within the concentrator plant. The grinding and flotation sections of the plant were fully operational at quarter end, and overall plant recovery through the flotation circuit of 88% exceeded design limits. During the quarter 58,912 tonnes were mined at a grade of 9.32 g/t Au, while 57,449 tonnes were processed at a grade of 8.88 g/t Au. Flotation concentrate produced during the quarter was shipped to Kisladag for storage pending completion of the Concentrate Treatment Plant.

Construction of the underground material handling system, including the jaw crusher ore storage bins and ore conveyor continued throughout the quarter. Underground development continued on schedule with the contractor completing all works associated with the preproduction development contract. Underground ancillary facilities such as the maintenance shop, permanent ventilation system and water management systems will be installed in the fourth quarter, completing the construction phase for the mine.

Construction continued at the Efemcukuru Concentrate Treatment plant at the Kisladag mine site. Civil and structural installations are now at or slightly ahead of schedule. The mechanical contract for piping and equipment installation has been let with some of the larger equipment now being rough set in the plant.

Eastern Dragon

Construction activity at Eastern Dragon continued throughout the quarter. The majority of civil work on site was completed and the contractors demobilized. Installation of structural steel around the crushing and ore storage facilities continued. At quarter end, ancillary facilities at site were nearing completion with a final push being made to finish any outside work before the winter season sets in. Piping and electrical installations in the process area were begun during the quarter. This work will be carried out to completion during the winter months. Further civil works to prepare the tailings storage site and the open pit and rock dumps will be carried over into 2012 pending the receipt of the Project Permit Approval.

Perama Hill

During the quarter the Company worked with the Greek Ministry of Environment on its technical evaluation of the Perama Hill project, a prerequisite step leading to approval of the Pre-Environmental Impact Assessment (PEIA). Technical issues arising from the evaluation were discussed with the Ministry and addressed in the preparation of the Environmental Impact Assessment (EIA), which is running concurrently with the Ministry evaluation of the PEIA. Preparations are underway to quickly initiate the project development phase as soon as approvals are obtained.

Tocantinzinho ("TZ")

Final submission of the project EIA document was made to the Para state Ministry of Environment in July. A period of review and public hearings will follow. The Company continues to work with the state and central government authorities to move the project to approval stage projected to occur in mid-2012.

Exploration

Turkey

Six drillholes (3,750 metres) were completed at Kisladag during the quarter. Most of the drillholes were condemnation holes for proposed mine expansion infrastructure sites or hydrological holes, and encountered no significant mineralization. During the quarter, soil geochemical and three dimensional induced polarization (IP) surveys were initiated over an approximately 20 square kilometre area surrounding the deposit.

As previously announced on October 6, 2011, drilling at Efemcukuru continued on both the Kestane Beleni Northwest Extension and Kokarpinar vein targets during the quarter, with 17 drillholes (3,565 metres) completed. Significant results include 6.3 metres at 16.6 g/t Au in drillhole KV-387 and 5.1 metres at 4.2 g/t Au in drillhole KV-390.

Three drillholes (1,048 metres) were completed during the quarter at the Konya-Sizma prospect. Assays received during the quarter from several drillholes include multiple narrow, multi-gram intercepts flanked by moderate to low-grade material. The final drillholes for this year will test the larger-scale potential to the north and will provide the information needed to decide if further work is warranted at Sizma.

China

At Tanjianshan, diamond drilling during the quarter focused on the 323 Deposit (31 infill drillholes, ~6,200 metres) and the Qinlongtan deeps target (2 infill drillholes, 566 metres). Assay results at 323 indicate a good correlation of gold values from section to section and support the existing geological and resource models. Reverse circulation drilling was completed during the quarter in the ZXS target area, directed towards identifying possible geochemically anomalies concealed beneath Quaternary gravels (60 drillholes, 2,972 metres). Results of this program are pending.

At the Jinfeng mine, five underground drills and two surface drills conducted exploration drilling during the quarter, with a total of 11,300 metres completed in 40 drillholes. Underground drilling targets included the F3 and F7 fault zones, as well as conceptual targets in the footwall to the deposit. Results to date broadly support the revised structural model for grade distribution within the deposit. During the quarter the Company was also active on 4 exploration license areas in the Jinfeng district. Drilling results are pending.

At White Mountain, stepout drilling of the deep zone at the north end of the deposit area continued. The final drillhole of the campaign is now in progress, testing a ~150 metres stepout of the high grade intersections in previous drillholes 337, 342, and 344.

At the Xiaoshiren central exploration license, ten drillholes (3,182 metres) were completed during the quarter. Results received from drillholes HDDS016, 017, 018, and 020 contained no significant results. The final two holes for the season are currently underway.

At the Zhenzhumen exploration license (adjoining White Mountain to the west), two drillholes (750 metres) were completed during the quarter, testing strong gold in soil anomalies within an area underlain by the dolomitic marble and slate units equivalent to footwall units at White Mountain.

Brazil

Twenty two drillholes (~6,200 metres) were completed during the quarter at the Tocantinzinho project, testing targets including the along-strike extension of the Tocantinzinho trend southeast of the deposit, and gold-in-soil and augur drill anomalies south of the deposit. Results to date have not defined significant mineralization. Drilling in the fourth quarter will test the strong geochemical anomaly located along the Tocantinzinho trend northwest of the property.

The 2011 program of eight drillholes (1,511 metres) testing targets at Agua Branca was completed in early September. The most significant intercept, as previously announced on October 6, 2011, was obtained in hole AB46 (154 metres at 1.1 g/t Au), which extends and improves upon the previously drilled stockwork veining at Camarao. Based on the results of this drillhole and the exploration potential surrounding the Camarao target, the final payment of $1.87 million was made for the project and it is now 100% owned by Eldorado.

Nevada

Reverse circulation drilling commenced at the Buffalo Canyon project in September. Six holes (1,537 metres) were completed by month-end, targeting skarn, vein, and sediment-hosted mineralization. Hole BCR-3 intersected approximately 200 metres of magnetite skarn and hole BCR-06 intersected approximately 60 metres of oxidized jasperoid; results are pending. A core rig will begin testing targets in Q4.

Kopy Goldfields Agreement

On October 19, 2011 shareholders of Kopy Goldfields ("Kopy") have approved at their Extraordinary General Meeting Eldorado's right to acquire an additional 1,000,000 common shares of Kopy. Eldorado's 2,700,000 common shares represent 28.9% of Kopy. Kopy holds seven exploration licenses totalling 255 km2 located in the Lena Goldfields north of Bodaibo in the Irkutsk Region of Russia.

Glory Resources Subscription Agreement

On November 2, 2011 Eldorado entered into a binding subscription agreement with Glory Resources Limited ("Glory") (ASX:GLY) whereby a wholly owned subsidiary of Eldorado will acquire a 19.9% interest in Glory as part of that company's proposed capital raising to fund the acquisition of the high- grade Sappes Gold Project ("Sappes") in north-eastern Greece. The subscription agreement is subject to a number of conditions, including Glory's completion of the Sappes acquisition. Shares of Glory are being held for investment purposes.

Eldorado is a gold producing, exploration and development company actively growing businesses in Turkey, China, Brazil and Greece. 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 Thursday, November 3, 2011 to discuss the 2011 Third Quarter Financial and Operating Results at 11:30 a.m. ET (8:30 a.m. PT). 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 November 10, 2011 by dialling 905-694-9447 in Toronto or 1-800-408-3053 toll free in North America and entering the Pass code: 1412061.

JORC Competent Person Statement

The information in this news release that relates to Exploration Results is based on information compiled by Peter Lewis, PhD., P.Geo. and VP, Exploration who is a Member of the Association of Professional Engineers and Geoscientists of BC.

Dr. Lewis is a full time employee of Eldorado Gold Corporation.

Dr. Lewis has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and is the Qualified Person as defined in the Canadian National Instrument 43-101 (Standards of Disclosure for Mineral Projects). Dr. Lewis consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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 Q3, 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).

Request for information packages: Reception@eldoradogold.com

PRODUCTION HIGHLIGHTS
First
Quarter
2011
Second
Quarter
2011
Third
Quarter
2011
Third
Quarter
2010
First
Nine Months
2011
First
Nine Months
2010
Gold Production
Ounces Sold 148,530 162,164 179,513 154,655 490,207 490,927
Ounces Produced 148,577 162,429 179,195 151,297 490,201 484,165
Cash Operating Cost ($/oz)1,3,4 410 397 397 386 401 371
Total Cash Cost ($/oz)2,3,4 462 477 463 431 467 412
Realized Price ($/oz - sold) 1,397 1,510 1,700 1,231 1,546 1,178
Kisladag Mine, Turkey
Ounces Sold 50,832 66,392 87,121 66,113 204,345 219,284
Ounces Produced 50,833 66,688 86,788 62,086 204,309 214,777
Tonnes to Pad 2,341,635 3,194,051 3,520,220 2,767,179 9,055,906 8,351,662
Grade (grams / tonne) 1.04 0.92 0.90 0.98 0.94 1.08
Cash Operating Cost ($/oz)3,4 386 389 377 337 383 314
Total Cash Cost ($/oz)2,3,4 408 411 401 359 406 335
Tanjianshan Mine, China
Ounces Sold 28,493 31,977 26,935 28,847 87,405 86,055
Ounces Produced 28,493 31,977 26,935 28,847 87,405 83,154
Tonnes Milled 238,070 264,698 218,330 283,598 721,098 805,085
Grade (grams / tonne) 3.90 4.23 4.25 3.84 4.12 4.07
Cash Operating Cost ($/oz)3,4 402 343 353 391 365 396
Total Cash Cost ($/oz)2,3,4 515 596 541 493 552 494
Jinfeng Mine, China
Ounces Sold 48,518 46,381 44,187 45,447 139,086 143,744
Ounces Produced 48,564 46,350 44,202 46,116 139,116 144,390
Tonnes Milled 384,400 397,987 379,352 387,427 1,161,739 1,169,489
Grade (grams / tonne) 4.32 4.05 4.26 4.42 4.21 4.39
Cash Operating Cost ($/oz) 3,4 430 401 424 425 418 409
Total Cash Cost ($/oz) 2,3,4 482 457 509 473 483 452
White Mountain Mine, China
Ounces Sold 20,687 17,414 21,270 14,248 59,371 41,844
Ounces Produced 20,687 17,414 21,270 14,248 59,371 41,844
Tonnes Milled 140,211 192,558 191,157 154,125 523,926 452,749
Grade (grams / tonne) 5.71 3.71 4.15 4.01 4.40 3.95
Cash Operating Cost ($/oz) 3,4 438 518 475 477 475 482
Total Cash Cost ($/oz) 2,3,4 475 564 519 507 517 515

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 action "Non-GAAP Measures" of this Review.

4 Cash operating costs and total cash costs have been recalculated for prior quarter based on ounces sold.

Eldorado Gold Corporation

Unaudited Condensed Consolidated Balance Sheets

(Expressed in thousands of U.S. dollars)

Note September 30, 2011 December 31, 2010
ASSETS
Current assets
Cash and cash equivalents 356,543 314,344
Restricted cash 6 55,417 52,425
Marketable securities 4,272 8,027
Accounts receivable and other 38,437 42,437
Inventories 160,564 147,263
615,233 564,496
Non-current inventories 27,549 29,627
Investments in significantly influenced companies 5 7,129 6,202
Deferred income tax assets 4,329 -
Restricted assets and other 29,950 19,328
Property, plant and equipment 2,821,366 2,699,787
Goodwill 365,928 365,928
3,871,484 3,685,368
LIABILITIES & EQUITY
Current liabilities
Accounts payable and accrued liabilities 167,579 145,695
Current debt 7 85,687 98,523
253,266 244,218
Debt 7 19,255 68,140
Asset retirement obligations 34,417 33,228
Pension fund obligation 12,166 12,019
Deferred income tax liabilities 335,145 330,512
654,249 688,117
Equity
Share capital 10 2,854,369 2,814,679
Treasury stock 11(b) (4,213) -
Contributed surplus 27,357 22,967
Accumulated other comprehensive loss (3,454) (1,637)
Retained earnings 293,870 125,221
Total equity attributable to shareholders of the Company 3,167,929 2,961,230
Attributable to non-controlling interests 49,306 36,021
3,217,235 2,997,251
3,871,484 3,685,368
Subsequent events 5(a), 7(a)(f), 14

Approved on behalf of the Board of Directors

(Signed) Robert Gilmore, Director

(Signed) Paul N. Wright, Director

Eldorado Gold Corporation

Unaudited Condensed Consolidated Income Statements

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

Three months ended
September 30,
Nine months ended
September 30,
Note 2011 2010 2011 2010
Revenue
Metal sales 326,087 190,305 795,570 578,227
Cost of sales
Production costs 95,020 68,257 250,762 204,287
Depreciation and amortization 29,954 27,323 91,014 80,252
Total cost of sales 124,974 95,580 341,776 284,539
Gross profit 201,113 94,725 453,794 293,688
Exploration expenses 6,913 4,877 15,359 11,013
Mine standby costs - 22 - 1,335
General and administrative expenses 11,207 7,202 45,815 27,770
Defined benefit plan expense 8 418 178 1,274 915
Share based payments 3,599 3,837 15,403 14,429
Foreign exchange loss 3,530 1,722 5,558 1,685
Operating profit 175,446 76,887 370,385 236,541
Loss (gain) on disposal of assets 420 (250) (2,672) (1,735)
Loss (gain) on marketable securities 1,528 (4,489) 239 (5,347)
Loss on investments in significantly influenced companies 5 1,067 245 2,861 245
Other (income) (4,069) (9,215) (8,326) (10,899)
Asset retirement obligation costs 387 511 1,160 1,535
Interest and financing costs 2,293 1,992 5,407 6,261
Profit before income tax 173,820 88,093 371,716 246,481
Income tax expense 63,077 13,327 120,520 58,682
Profit for the period 110,743 74,766 251,196 187,799
Attributable to:
Shareholders of the Company 102,478 69,640 229,816 175,848
Non-controlling interests 8,265 5,126 21,380 11,951
Profit for the period 110,743 74,766 251,196 187,799
Weighted average number of shares outstanding
Basic 549,085 546,039 548,800 541,164
Diluted 551,309 547,731 550,737 543,041
Earnings per share attributable to shareholders
of the Company:
Basic earnings per share 0.19 0.13 0.42 0.32
Diluted earnings per share 0.19 0.13 0.42 0.32

See accompanying notes to the unaudited condensed consolidated financial statements.

Eldorado Gold Corporation

Unaudited Condensed Consolidated Statements of Comprehensive Income

(Expressed in thousands of U.S. dollars)

Three months ended
September 30,
Nine months ended
September 30,
2011 2010 2011 2010
Profit for the period 110,743 74,766 251,196 187,799
Other comprehensive income (loss):
Change in fair value of available-for-sale financial assets (399) 1,134 (1,395) 12,788
Income tax on items taken to equity - 1,475 12 (15)
Reversal of unrealized gains on available-for-sale investment
on acquisiton of subsidiary - (11,424) - (11,424)
Realized gains on disposal of available-for-sale financial
assets transferred to net income - (3,111) (434) (3,111)
Total other comprehensive loss for the period (399) (11,926) (1,817) (1,762)
Total comprehensive income for the period 110,344 62,840 249,379 186,037
Attributable to:
Shareholders of the Company 102,079 57,714 227,999 174,086
Non-controlling interests 8,265 5,126 21,380 11,951
Total comprehensive income for the period 110,344 62,840 249,379 186,037

See accompanying notes to the unaudited condensed consolidated financial statements.

Eldorado Gold Corporation

Unaudited Condensed Consolidated Statements of Cash Flows

(Expressed in thousands of U.S. dollars)

Three months ended
September 30,
Nine months ended
September 30,
Note 2011 2010 2011 2010
Cash flows generated from (used in):
Operating activities
Profit for the period 110,743 74,766 251,196 187,799
Items not affecting cash
Asset retirement obligation costs 387 511 1,160 1,535
Depreciation and amortization 29,954 27,323 91,014 80,252
Unrealized foreign exchange loss 1,500 7,609 6,261 2,568
Deferred income tax expense (recovery) 10,079 (8,325) 374 (10,909)
Loss (gain) on disposal of assets 420 (250) (2,672) (1,735)
Loss on investment in significantly influenced company 1,067 245 2,861 245
Loss (gain) on marketable securities 1,528 (4,489) 239 (5,347)
Share based payments 3,599 3,837 15,403 14,429
Defined benefit plan expense 418 178 1,274 915
159,695 101,405 367,110 269,752
Changes in non-cash working capital 12 13,933 (19,870) (2,389) (47,329)
173,628 81,535 364,721 222,423
Investing activities
Acquisition of Brazauro, net - (5,565) - (5,565)
Purchase of property, plant and equipment (76,028) (54,844) (201,630) (152,476)
Proceeds from the sale of property, plant and equipment 24 2,843 41 23,191
Purchase of marketable securities (1,609) (5,698) (1,823) (5,698)
Proceeds from the sale of marketable securities - 13,144 6,345 13,836
Non-registered supplemental retirement plan investments, net 43 - (4,937) -
Investment purchases (2,470) - (3,788) (5,375)
Increase in restricted cash 35 - (2,963) (2,221)
Increase in restricted asset and other - (9,880) - (12,363)
(80,005) (60,000) (208,755) (146,671)
Financing activities
Issuance of common shares for cash 22,631 5,087 30,616 32,370
Dividend paid to non-controlling interests (4,473) - (8,095) (1,287)
Dividend paid to shareholders (33,426) - (61,167) (26,357)
Purchase of treasury stock (280) - (6,438) -
Long-term and bank debt proceeds 2,579 56,560 5,782 59,044
Long-term and bank debt repayments (29,749) (50,762) (74,465) (65,488)
(42,718) 10,885 (113,767) (1,718)
Net increase in cash and cash equivalents 50,905 32,420 42,199 74,034
Cash and cash equivalents - beginning of period 305,638 306,983 314,344 265,369
Cash and cash equivalents - end of period 356,543 339,403 356,543 339,403

See accompanying notes to the unaudited condensed consolidated financial statements.

Eldorado Gold Corporation

Unaudited Condensed Consolidated Statements of Changes in Equity

(Expressed in thousands of U.S. dollars)

Attributable to shareholders of the Company
Note Share
capital
Treasury
stock
Contributed
surplus
Accumulated
other
comprehensive
income
(loss)
Retained
earnings
Total Non-controlling
interests
Total
equity
Balance at January 1, 2011 10 2,814,679 - 22,967 (1,637) 125,221 2,961,230 36,021 2,997,251
Total comprehensive (loss)
income for the period

-

-

-

(1,817)

229,816

227,999

21,380

249,379
Dividends declared to Non-
controlling interests

-

-

-

-

-

(8,095)

(8,095)
Purchase of treasury stock - (6,438) - - - (6,438) - (6,438)
Shares issued upon exercise
of share options, for cash

29,131

-

-

-

-

29,131

-

29,131
Estimated fair value of
employee options and
warrants exercised

9,074

-

(9,074)

-

-

-

-

-
Shares issued upon exercise
of warrants, for cash

1,485

-

-

-

-

1,485

-

1,485
Shares redeemed upon exercise
of restricted share units

-

2,225

(2,225)

-

-

-

-

-
Share based payments - - 15,689 - - 15,689 - 15,689
Dividend declared to shareholders of the Company - - - - (61,167) (61,167) - (61,167)
Balance at September 30, 2011 2, 854,369 (4,213) 27,357 (3,454) 293,870 3,167,929 49,306 3,217,235

Attributable to shareholders of the Company
Note Share
capital
Contributed
surplus
Accumulated
other
comprehensive
income
Retained
earnings
(deficit)
Total Non-
controlling
interests
Total equity
Balance at January 1, 2010 2,671,634 17,865 2,227 (69,423) 2,622,303 26,144 2,648,447
Total comprehensive (loss)
income for the period

-

-

(1,762)

175,848

174,086

11,951

186,037
Dividends declared to Non-
controlling interests

-

-

-

-

-

(1,287)

(1,287)
Shares issued in consideration
for interests acquired

95,118

-

-

-

95,118

-

95,118
Shares issued upon exercise
of share options, for cash

32,370

-

-

-

32,370

-

32,370
Estimated initial fair value of
employee options exercised

10,987

(10,987)

-

-

-

-

-
Share based payments - 14,439 - - 14,439 - 14,439
Dividend declared to shareholders of the Company - - - (26,357) (26,357) - (26,357)
Balance at September 30, 2011 2,810,109 21,317 465 80,068 2,911,959 36,808 2,948,767

See accompanying notes to the unaudited condensed consolidated financial statements.

Click here for the Unaudited Consolidated Financial Statements for the quarter ended September 30, 2011 in PDF: http://media3.marketwire.com/docs/e112fs.pdf

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