Eldorado Gold Corporation
TSX : ELD
NYSE Amex : EGO

Eldorado Gold Corporation

May 07, 2009 17:00 ET

Eldorado Gold Corporation: Q1 2009 Financial and Operating Results

2009 Production and Cost Guidance Remains Intact (all figures in United States dollars, unless otherwise noted)

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 7, 2009) - Paul N. Wright, President and Chief Executive Officer of Eldorado Gold Corporation (TSX:ELD)(NYSE Amex:EGO), is pleased to report on the Company's financial and operational results for the first quarter ended March 31, 2009.

"Our cash operating costs for the quarter averaged $296 per ounce and our total cash cost of $315 per ounce remains one of the lowest in the industry. Our balance sheet remains strong with $108 million in cash," said Paul Wright, President and CEO of Eldorado Gold. "Production this quarter, was, as expected influenced by the commissioning of the sulphide ore processing facility at Tanjianshan and the record high levels of precipitation at Kisladag. We remain confident in our previously stated plan to produce approximately 330,000 ounces in 2009."

Q1 2009 Highlights

- Produced 61,426 ounces of gold at our Tanjianshan and Kisladag mines at an average cash operating cost of $296 per ounce;

- Sold 57,459 ounces of gold at a realized average price of $909 per ounce;

- Reported earnings of $0.04 per share; and

- Began commissioning of the sulphide ore processing facility at Tanjianshan

Financial Results

Our consolidated net income for the first quarter of 2009 was $13.1 million or $0.04 per share, compared with $20.7 million or $0.06 per share in the first quarter of 2008. Over the quarter, we sold 57,459 ounces of gold at an average price of $909 per ounce, compared to 73,604 ounces at an average price of $933 per ounce in the first quarter of 2008. Revenues decreased 24% compared to the same period in 2008 due to lower sales volumes and selling prices.

Operating Performance

Kisladag, Usak, Turkey

During the quarter, we placed 2,084,714 tonnes of ore on the leach pad at an average grade of 1.34 grams of gold per tonne. We produced 46,192 ounces of gold at a cash cost of $274 per ounce, up from production of 27,228 ounces of gold in the first quarter of 2008. We produced fewer ounces of gold at Kisladag compared to the fourth quarter of 2008 as a result of higher than average precipitation, which affected screening and stacking and diluted process solutions. Following the exceptionally high rainfall in January and February, production in March and April increased to normal levels in excess of 20,000 ounces monthly.

Tanjianshan, Qinghai China

We produced 15,234 ounces of gold at a cash cost of $362 per ounce in the first quarter, compared to 40,006 ounces of gold in the first quarter of 2008. The decrease in gold production resulted from the commissioning of the sulphide ore processing facilities and lower head grade as lower grade transition ore from stockpiles is utilized during commissioning. During the quarter, we invested $3.8 million in capital expenditures, primarily relating to constructing and commissioning the sulphide ore processing facilities.

Development

Efemcukuru, Izmir Turkey

We continued construction at Efemcukuru during the quarter, slowed somewhat due to the extremely wet weather. Drilling and blasting of the plant site was initiated, along with the construction of a major structure retaining wall. Engineering and procurement are on schedule including the semi-autogenous ball mills. We spent $5.5 million at Efemcukuru during the quarter.

Vila Nova Iron Ore, Amapa Brazil

We completed the construction and initial commissioning of our Vila Nova iron ore project. After we complete the plant commissioning in May 2009, we will put the project on care and maintenance status until global demand for iron ore increases and prices recover from current declines.

Perama Hill, Thrace Greece

At our Perama Hill project in Greece, we continued work on the Preliminary Environmental Impact Assessment, which we will submit to Greek authorities in the second quarter. We are also working on a National Instrument 43-101 report, which we will file in the third quarter of the year.

Exploration

Turkey

We continued exploration at the Sayacik project, which included soil sampling, outcrop mapping and the initiation of a ground magnetic geophysical survey. We also received permits for drill sites and began drilling in April. At Efemcukuru, we drilled six holes totaling 1,210 meters in the north ore shoot to test along strike and down dip extents in the ore zone.

Brazil

Exploration in Brazil consisted of diamond drilling at the Tocantinzinho project. We drilled more than 4,200 meters in 16 diamond drill holes, including 1,500 meters for metallurgical samples.

China

At Tanjianshan, we started a rotary air blast program, consisting of 41 holes, to test the area covered by alluvium between the QLT and JLG deposits.

Corporate

Effective May 15, 2009 Dr. Peter Lewis, P.Geo. has been appointed as Vice-President, Exploration. Dr. Lewis obtained his undergraduate degree in Geological Sciences from Stanford University and his M.Sc. and Ph.D. from the University of British Columbia, and has worked as a consulting structural geologist on ore deposits throughout the world since 1993.

Eldorado is a gold producing, exploration and development company actively growing businesses in Brazil China, Greece, and Turkey and surrounding regions. We are one of the lowest cost pure gold producers. With our international expertise in mining, finance and project development, together with highly skilled and dedicated staff, we believe that Eldorado is well positioned to grow in value as we create and pursue new opportunities.

ON BEHALF OF ELDORADO GOLD CORPORATION

Paul N. Wright, President and Chief Executive Officer

Eldorado will host a conference call Friday, May 8, 2009 to discuss the 2009 First Quarter Financial Results at 11:30 a.m. EDT (8:30 a.m. PDT). You may participate in the conference call by dialing 416-340-2216 in Toronto or 1-866-226-1792 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 May 15, 2009 by dialing 416-695-5800 in Toronto or 1-800-408-3053 free in North America and entering the Pass code: 7106314.

Certain of the statements made herein may contain forward-looking statements or information within the meaning of the United States Private Securities Litigation Reform Act of 1995, and forward looking statements or information within the meaning of the Securities Act (Ontario). Such forward looking statements or information include, but are not limited to statements or information with respect to unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements or information are subject to a variety of risks and uncertainties, which could cause actual events, or results to differ from those reflected in the forward-looking statements or information. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward looking statements. Specific reference is made to "Forward Looking Statements and Risk Factors" in the Company's Annual Information Form and Form 40-F dated March 31, 2009. 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; risks from litigation; 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 31, 2009. 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 common shares trade on the Toronto Stock Exchange (TSX:ELD) and the NYSE-Amex US (NYSE Amex:EGO).

Request for information packages:laurelw@eldoradogold.com



PRODUCTION HIGHLIGHTS

First First Second Third Fourth
Quarter Quarter Quarter Quarter Quarter
2009 2008 2008 2008 2008
----------------------------------------------------------------------------
Gold Production
Ounces Produced 61,426 67,234 87,380 72,343 81,845
Cash Operating Cost
($/oz)(1,4) 296 213 229 283 298
Total Cash Cost
($/oz)(2,4) 315 268 259 313 319
Total Production Cost
($/oz)(3,4) 375 393 293 402 404
Realized Price ($/oz - sold) 909 933 904 870 800
----------------------------------------------------------------------------
Kisladag Mine, Turkey
Ounces Produced 46,192 27,228 55,490 46,863 60,753
Tonnes to Pad 2,084,714 529,480 2,092,957 2,562,343 2,371,101
Grade (grams / tonne) 1.34 1.18 1.47 1.05 1.34
Cash Operating Cost
($/oz)(4) 274 217 230 270 279
Total Cash Cost
($/oz)(2,4) 276 218 232 273 281
Total Production Cost
($/oz)(3,4) 315 246 273 310 314
----------------------------------------------------------------------------
Tanjianshan Mine, China
Ounces Produced 15,234 40,006 31,890 25,480 21,092
Tonnes Milled 228,066 223,395 193,035 226,126 216,273
Grade (grams / tonne) 3.97 6.83 6.04 4.16 4.33
Cash Operating Cost
($/oz)(4) 362 211 229 306 352
Total Cash Cost
($/oz)(2,4) 432 302 305 387 429
Total Production Cost
($/oz)(3,4) 557 493 327 571 664
----------------------------------------------------------------------------

(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.



Eldorado Gold Corporation
Unaudited Consolidated Balance Sheets

(Expressed in thousands of U.S. dollars)

March 31, December 31,
2009 2008
$ $
Assets

Current assets
Cash and cash equivalents 107,954 61,851
Restricted cash (note 3) 5,500 -
Marketable securities 14,618 43,610
Accounts receivable and other 14,917 36,109
Inventories 95,445 86,966
Future income taxes - 175
--------------------------
238,434 228,711
Restricted assets and other 10,012 8,349
Mining interests 681,134 668,309
--------------------------
929,580 905,369
--------------------------
--------------------------

Liabilities

Current liabilities
Accounts payable and accrued liabilities 34,098 42,659
Debt 5,115 139
Future income taxes 2,974 1,097
--------------------------
42,187 43,895
Asset retirement obligations 4,872 4,812
Future income taxes 56,535 60,043
--------------------------
103,594 108,750
--------------------------

Non-controlling interest 5,161 4,799

Shareholders' Equity

Share capital (note 5(a)) 947,736 931,933
Contributed surplus (note 5(b)) 17,206 19,378
Accumulated other comprehensive loss (note 5(c)) (3,658) (5,971)
Deficit (140,459) (153,520)
--------------------------
820,825 791,820
--------------------------
929,580 905,369
--------------------------
--------------------------

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
Unaudited Consolidated Statements of Operations and Deficit
For the three months ended March 31,

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

2009 2008
$ $
Revenue
Gold sales 52,206 68,675
Interest and other income 196 3,708
--------------------------
52,402 72,383
--------------------------

Expenses
Operating costs 18,442 19,819
Depletion, depreciation and amortization 4,460 8,824
General and administrative 8,762 9,795
Exploration 2,062 2,191
Mine standby costs - 2,432
Asset retirement obligation costs 53 133
Foreign exchange (gain) loss (3,089) 854
--------------------------
30,690 44,048

Loss (gain) on marketable securities 964 (160)
Interest and financing costs 81 1,028
Loss on derivative contract - 739
--------------------------
31,735 45,655
--------------------------
Income before income taxes and non-controlling
interest 20,667 26,728
--------------------------

Income tax expense
Current (6,017) (5,682)
Future (1,227) (309)
--------------------------
(7,244) (5,991)
--------------------------

Non-controlling interest (362) -
--------------------------

Net income for the period 13,061 20,737
--------------------------

Deficit, beginning of period (153,520) (317,176)

Deficit, end of period (140,459) (296,439)
--------------------------
--------------------------

Weighted average number of shares outstanding
Basic 369,862 344,542
Diluted 371,833 345,902

Earnings per share
Basic income (loss) per share - US$ 0.04 0.06
Diluted income (loss) per share - US$ 0.04 0.06

See accompanying notes to the consolidated financial statements.



Eldorado Gold Corporation
Unaudited Consolidated Statements of Cash Flows
For the three months ended March 31,

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

2009 2008
$ $
Cash flows generated from (used in):

Operating activities
Net income for the period 13,061 20,737
Items not affecting cash
Asset retirement obligations costs 53 133
Depletion, depreciation and amortization 4,460 8,824
Unrealized foreign exchange (gain) loss (2,683) 418
Future income taxes expense 1,227 309
Loss (gain) on marketable securities 964 (160)
Imputed interest and financing costs - 10
Stock-based compensation 3,080 4,882
Pension expense (note 4) 198 -
Non-controlling interest 362 -
Loss on derivative contract - 739
--------------------------
20,722 35,892

Bonus cash award units payments (2,059) -
Property reclamation payments - (652)
Contractual severance payments - (231)
Changes in non-cash working capital (note 7) 7,210 12,034
--------------------------
25,873 47,043

Investing activities
Mining interests
Capital expenditures (19,029) (12,714)
Sales and disposals - 221
Marketable securities
Purchases - (1,792)
Disposals 30,457 263
Pension plan contributions (1,759) -
Restricted cash and other restricted assets (5,525) (5,300)
--------------------------
4,144 (19,322)

Financing activities
Capital stock
Issuance of common shares for cash 11,110 1,213
Long-term and bank debt
Proceeds 4,976 5,000
--------------------------
16,086 6,213
--------------------------
Net increase in cash and cash equivalents 46,103 33,934
Cash and cash equivalents - beginning of period 61,851 46,014
--------------------------
Cash and cash equivalents - end of period 107,954 79,948
--------------------------
--------------------------

Supplementary cash flow information (note 7)

See accompanying notes to consolidated financial statements.



Eldorado Gold Corporation
Unaudited Consolidated Statements of Comprehensive Income
For the three months ended March 31,

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

2009 2008
$ $

Net earnings for the period ended March 31, 13,061 20,737

Other comprehensive income (loss)
Unrealized gains (losses) on available-for-sale
investments (note 5(c)) 2,313 (521)
--------------------------

Comprehensive income for the period ended
March 31, 15,374 20,216
--------------------------
--------------------------


Click here for Unaudited Interim Consolidated Financial Statements, Management's Discussion and Analysis PDF (http://media3.marketwire.com/docs/Eldorado%2009-11%20Financial%20Statements.pdf).

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