Eldorado Gold Corporation: 2011 Third Quarter Financial and Operating Results: Record Gold Production, Record Earnings
(firmenpresse) - VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/03/11 -- 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
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 2011Vila 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, approx. 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 approx. 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 (approx. 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. . 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:
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:
Contacts:
Eldorado Gold Corporation
Nancy Woo
VP Investor Relations
604.601.6650 or 1.888.353.8166
604.687.4026 (FAX)
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Datum: 03.11.2011 - 11:55 Uhr
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