Eldorado Gold Corporation: First Quarter 2005 Financial Results.VANCOUVER, British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography -- (all figures in United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. dollars) Paul N. Wright, President and Chief Executive Officer of Eldorado Gold Eldorado Gold Corporation TSX: ELD is a Vancouver, British Columbia based company involved in the mining, exploration and development of gold properties in Brazil and Turkey. See also
TSX Transfer from Stack Pointer to Index TSX True Space Extension :ELD)(AMEX AMEX See: American Stock Exchange :EGO ego: see psychoanalysis. ego (Latin; “I”) In psychoanalytic theory, the portion of the psyche experienced as the “self” or “I. ) is pleased to report on the financial and operational results of the Company for the 2005 first quarter ended March 31, 2005. First Quarter Highlights - Signed an agreement on April 7, 2005 to acquire 84% of the Vila Nova There are parishes and municipalities that have the name Vila Nova (Portuguese for new town) in Portugal and Cape Verde: In the Azores
- Net loss of $8.96 million or $0.03 per share - Produced 14,311 ounces of gold at a cash cost of $407 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. - $120.70 million in cash and short-term deposits - Continued exploration in Brazil and Turkey - Construction at Kisladag proceeding satisfactorily Financial Results The consolidated net loss for the first quarter 2005 was $8.96 million or ($0.03) per share, compared with a net loss of $0.66 million or $0.00 per share in the first quarter of 2004. The increased loss results from lower gold sales and higher operating costs operating costs npl → gastos mpl operacionales at the Sao Bento A data structure used to store embedded documents in an OpenDoc compound document. Bento, which stands for lunch box in Japanese, provides a "container" to hold the data and a format for defining its contents. mine, Brazil. In the first quarter 2005, we sold 16,910 ounces of gold at an average realized selling price of $428 per ounce. For comparison, in the first quarter of 2004, we sold 22,793 ounces of gold at an average realized price of $394 per ounce, or $408 per ounce excluding $0.33 million in hedging loss amortization. We continue to be in a strong financial position. At March 31, 2005, we held $120.70 million in cash and short-term deposits. We have sufficient funds to construct and expand the Kisladag mine and continue to develop the Efemcukuru project in Turkey, carry out our planned 2005 exploration programs in Turkey and Brazil and pursue new opportunities in China and elsewhere. On April 6, 2005, Tuprag Metal Madencilik ("Tuprag"), a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Eldorado, entered into a $65.00 million Revolving Credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. Facility with HSBC Bank USA HSBC Bank USA, N.A., the United States subsidiary of the HSBC Holdings plc, is a bank with its head office in New York City. History The Hongkong and Shanghai Banking Corporation acquired a 51% shareholding in Marine Midland Bank of New York State, headquartered in (the "Credit Facility"). Eldorado has guaranteed the Credit Facility, which is fully secured by cash deposits (equivalent to the amounts advanced by HSBC Bank USA to Tuprag) to a cash collateral account over which HSBC Bank USA holds security. No hedging is required under this agreement. Funds advanced under the Credit Facility will be used to construct the Kisladag mine. When the Kisladag mine achieves production Tuprag's net earnings will be directed to repaying the Credit Facility and funds in the cash collateral account will be released to Eldorado in parallel with these repayments. The Credit Facility will finance construction at the Kisladag mine in the most efficient manner. Operating Performance In the first quarter of 2005, we produced 14,311 ounces of gold at the Sao Bento mine at a cash cost of $407 per ounce, compared to 21,158 ounces of gold at a cash cost of $276 per ounce in the first quarter of 2004. Production was lower as we prioritized shaft shaft (shaft) a long slender part, such as the diaphysis of a long bone. shaft n. 1. An elongated rodlike structure, such as the midsection of a long bone. 2. deepening deep·en tr. & intr.v. deep·ened, deep·en·ing, deep·ens To make or become deep or deeper. Noun 1. deepening - a process of becoming deeper and more profound activities while deferring stope stope n. An excavation in the form of steps made by the mining of ore from steeply inclined or vertical veins. tr.v. stoped, stop·ing, stopes To remove (ore) from or mine by means of a stope. production. The shaft deepening project is scheduled for completion in the third quarter 2005. Cash costs have increased due to the challenging work conditions caused by the high level of waste handling required by the shaft deepening project and the appreciation of the Brazilian currency. We are forecasting 2005 production of 72,000 ounces at our Sao Bento mine, at a cash cost of $320 per ounce. Development Kisladag Construction activities proceeded well during the first quarter despite exceptionally high seasonal rainfall which delayed leach leach v. leached, leach·ing, leach·es v.tr. 1. To remove soluble or other constituents from by the action of a percolating liquid. 2. pad construction in the quarter. Work activities included process water line installation, power line installation, leach pad and earthworks earthworks: see land art. , bypass and access road construction as well as initiating development within the pit with the mining contractor. Eldorado's on-site management team continues to be built in an orderly orderly /or·der·ly/ (or´der-le) an attendant in a hospital who works under the direction of a nurse. or·der·ly n. An attendant in a hospital. manner to ensure an efficient transition to an operating mine at year end. We continue to work towards construction completion in the fourth quarter with commissioning leading to start up as planned by year end. The Company is experiencing higher than planned construction costs due principally to a continued strengthening of the Turkish Lira 1.3 million Turkish Lira/$ ("MTL/$") compared with 1.5 MTL/$ planned. In May the Company will be providing an updated forecast cost of completion accompanied by an updated projection of operating costs. Efemcukuru As part of the Environmental Impact Assessment ("EIA (Electronic Industries Alliance, Arlington, VA, www.eia.org) A membership organization founded in 1924 as the Radio Manufacturing Association. It sets standards for consumer products and electronic components. ") process for the Efemcukuru project, the Turkish Ministry of Forestry and Environment held its public meeting in Efemcukuru Village to obtain input from the local community regarding the Company's planned mine development. Subsequent to this meeting and incorporating contributions from the meeting, the Company is finalizing its EIA Study which will be submitted to the Ministry in May 2005. Exploration We continue to focus our exploration activities on Brazil and Turkey, completing detailed mapping, sampling and initial drill programs at various sites in these two countries. Brazil On April 7, 2005, we signed an agreement to acquire 84% of the Vila Nova project, where we believe there is excellent potential for both additional oxide oxide, chemical compound containing oxygen and one other chemical element. Oxides are widely and abundantly distributed in nature. Water is the oxide of hydrogen. Silicon dioxide is the major component of sand and quartz. mineralization Mineralization The process by which the body uses minerals to build bone structure. Mentioned in: Rickets mineralization, n the bioprecipitation of an inorganic substance. and a structurally controlled banded iron formation Banded iron formations (also known as banded ironstone formations or BIFs) are a distinctive type of rock often found in primordial sedimentary rocks. The structures consist of repeated thin layers of iron oxides, either magnetite or hematite, alternating with bands hosted deposit. Under the terms of the agreement, we will spend a minimum of $200,000 in exploration before March 20, 2006 and pay $5.2 million in a series of payments over a three-year period. We have budgeted $1.8 million in exploration expense for this project in 2005, and are immediately embarking on a work program consisting of mapping and channel sampling. We will also continue our exploration work at Cassipore and Tartarugalzinho. Turkey We drilled six reverse circulation holes at Toplak Tepe in Turkey's Western Pontide belt to test a gold and base metal anomaly Abnormality or deviation. Pronounced "uh-nom-uh-lee," it is a favorite word among computer people when complex systems produce output that is inexplicable. See software conflict and anomaly detection. . All of the holes show anomalous a·nom·a·lous adj. 1. Deviating from the normal or common order, form, or rule. 2. Equivocal, as in classification or nature. copper, lead, and zinc zinc, metallic chemical element; symbol Zn; at. no. 30; at. wt. 65.38; m.p. 419.58°C;; b.p. 907°C;; sp. gr. 7.133 at 25°C;; valence +2. Zinc is a lustrous bluish-white metal. It is found in Group 12 of the periodic table. values and the current interpretation is that Toplak Tepe may represent the periphery periphery /pe·riph·ery/ (pe-rif´er-e) an outward surface or structure; the portion of a system outside the central region.periph´eral pe·riph·er·y n. 1. of a gold bearing volcanogenic vol·ca·no·gen·ic adj. Of volcanic origin. massive sulfide sulfide, chemical compound containing sulfur and one other element or sulfur and a radical. Sulfides may be salts or esters of hydrogen sulfide, H2S, or may be formed directly, e.g., by heating a metal with sulfur. system. We are considering a geophysical ge·o·phys·ics n. (used with a sing. verb) The physics of the earth and its environment, including the physics of fields such as meteorology, oceanography, and seismology. program (EM or IP) prior to conducting more drilling. We also drilled five holes at Keditasi in Western Turkey, targeting a gold soil geochemistry geochemistry, study of the chemical changes on the earth. More specifically, it is the study of the absolute and relative abundances of chemical elements in the minerals, soils, ores, rocks, water, and atmosphere of the earth and the distribution and movement of anomaly and an area of pervasive pervasive, adj indicates that a condition permeates the entire development of the individual. silification. Generally, the holes have yielded only low grade gold values. At the AS Project (Demir Joint Venture) we began bulldozer work on a road that will provide access for mapping, sampling and diamond drilling Diamond Drilling is a highly specialized industry used for mineral exploration around the world. Most commonly using wireline and core bits with diamond encrusted matrix. To drill holes to max depths of twelve thousand feet, for the recovery of core used in verifying mineral . In the months ahead, we will focus on diamond drilling on the AS project and the Koyulhisar project in the Western Pontides. Corporate Development "We have high expectations for the potential of the Vila Nova project, which we believe will be a tremendous addition to our asset base," said Paul Wright Paul Wright may refer to:
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 Certain of the statements made may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 21E of the Securities Exchange Act of 1934, which involve known and unknown risk, 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 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. Should one or more of these risks and uncertainties materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward looking statements. Specific reference is made to "Narrative Description of the Business - Risk Factors" in the Company's Annual Information Form, Form 40-F drafted March 30, 2005. Forward-looking statements in this release 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 met·al·lur·gy n. 1. The science that deals with procedures used in extracting metals from their ores, purifying and alloying metals, and creating useful objects from metals. 2. recoveries; mining operational risk; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign investment; speculative nature of gold exploration; dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. ; competition; loss of key employees; additional funding requirements; and defective title defective title n. an apparent title to real property which fails because a claimed prior holder of the title did not have title, or there is a faulty description of the property or some other "cloud" over it, which may or may not be apparent from reading the deed. to mineral claims or property, as well as those factors discussed in the section entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Business - Risk Factors" in the Company's Annual Information Form, Form 40F dated March 30 ,2005. 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 Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities . Eldorado Gold Corporation's shares trade on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. (TSX:ELD) and the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. (AMEX:EGO). Request for information packages: info@eldoradogold.com.
Eldorado Gold Corporation
Consolidated Balance Sheets
(Expressed in thousands of
U.S. dollars) March 31, December 31,
2005 2004
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(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 120,703 $ 135,390
Accounts and other receivables 7,925 8,705
Inventories 5,875 5,927
------------------------------
134,503 150,022
Property, plant and equipment 62,718 52,337
Mineral properties and
deferred development 22,818 22,676
Investments and advances 562 1,224
------------------------------
$ 220,601 $ 226,259
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------------------------------
LIABILITIES
Current Liabilities
Accounts payable and accrued
liabilities $ 7,467 $ 6,005
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7,467 6,005
Asset retirement obligation 8,180 8,059
Contractual severance obligation 742 636
Future income taxes 4,499 4,598
------------------------------
20,888 19,298
SHAREHOLDERS' EQUITY
Share capital (Note 3) 509,405 508,373
Contributed surplus 1,094 1,094
Stock based compensation 5,815 5,138
Deficit (316,601) (307,644)
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199,713 206,961
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$ 220,601 $ 226,259
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Commitments and Contingencies (Note 4)
Subsequent Events (Note 7)
Approved by the Board Approved by the Board
Paul N. Wright Robert Gilmore
Director Director
Eldorado Gold Corporation
Consolidated Statements of Operations and Deficit
(Expressed in thousands of
U.S. dollars except per share amounts)
Three months ended
March 31, March 31,
2005 2004
--------------------------------------------------------------------
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(Unaudited) (Unaudited)
Revenue
Gold sales $ 7,234 $ 8,973
Interest and other income 648 967
------------------------------
7,882 9,940
Expenses
Operating costs 7,982 6,265
Depletion, depreciation and
amortization 2,515 1,059
General and administrative 2,457 1,245
Exploration expense 1,154 927
Stock based compensation expense 1,364 3,316
Accretion of asset retirement
obligation 121 107
Gain on disposal of
investments and advances - (37)
Writedown of investments and advances 662 -
Foreign exchange loss 608 236
------------------------------
16,863 13,118
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Loss before income taxes (8,981) (3,178)
------------------------------
Tax recovery (expense)
Current (72) 1,845
Future 96 670
------------------------------
Net loss for the period (8,957) $ (663)
------------------------------
Deficit at the beginning of the period: (307,644) (293,702)
Deficit at the end of the period (316,601) $(294,365)
------------------------------
------------------------------
Weighted average number
of shares outstanding 276,336,250 254,236,824
------------------------------
------------------------------
Basic and Diluted loss per
share - U.S.$ (0.03) $ -
------------------------------
------------------------------
Basic and Diluted loss per
share - CDN.$ (0.04) $ -
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Eldorado Gold Corporation
Consolidated Statements of Cash Flows
(Expressed in thousands of
U.S. dollars) Three months ended
March 31, March 31,
2005 2004
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(Unaudited) (Unaudited)
Cash flows from (used in)
operating activities
Net loss for the period $ (8,957) $ (663)
Items not affecting cash
Depletion, depreciation and
amortization 2,515 1,059
Future income taxes (96) (670)
Interest and financing costs - -
Writedown of investments and advances 662 -
Amortization of hedging loss - 329
Stock based compensation expense 1,364 3,316
Contractual severance expense 106 80
Accretion of asset retirement
obligation 121 107
Foreign exchange loss 795 516
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(3,490) 4,074
(Increase) decrease in
accounts receivable 780 (769)
(Increase) decrease in inventories 52 427
(Decrease) increase in accounts payable
and accrued liabilities 1,462 (2,167)
------------------------------
(1,196) 1,565
Cash flow from investing activities
Property, plant and equipment (12,896) (2,979)
Mineral properties and
deferred development (142) (10,394)
Investments and advances - (35)
Proceeds from disposals of
investments and advances - 69
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(13,038) (13,339)
Cash flow from financing activities
Issue of common shares:
Voting - for cash 345 450
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345 450
Foreign exchange loss on cash
held in foreign currency (798) (511)
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Net decrease in cash and cash
equivalents (14,687) (11,835)
Cash and cash equivalents at
beginning of the period 135,390 105,465
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Cash and cash equivalents at
end of the period $ 120,703 $ 93,630
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The TSX has neither approved nor disapproved the form or content of this release. Eldorado Gold Corporation (TSX:ELD) (AMEX:EGO) |
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