Eldorado Gold Corporation: Third Quarter 2002 Financial Results: Net Income $2.0 M, $0.01 Per Share.Business Editors VANCOUVER Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , British Columbia--(BUSINESS WIRE)--Oct. 24, 2002 (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 unless otherwise indicated) Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. 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), is pleased to announce the Company's Unaudited Third Quarter 2002 Financial Results. Highlights -- Profitability continues: 3Q Net Income $2.0 M (Nine months Net Income $4.2 M) -- Kisladag feasibility awarded to Hatch is scheduled for March 2003 completion -- Hedging reduced to 10,972 ounces, remainder to be liquidated by year end Financial Results The Company today reported its Third Quarter 2002 Unaudited Financial Results, with net earnings for the quarter amounting to a profit of $2.0 M ($0.01 per share) and nine months of $4.2 M ($0.03 per share) compared to a loss of $1.0 M ($0.01 per share) and a nine month loss of $3.3 M ($0.03 per share) in 2001. Third quarter 2002 gold revenues were $9.7 M with nine month gold revenues of $24.9 M compared to $8.0 M and nine months of $26.1 M in 2001. Cash flow for the third quarter from operating activities was $4.4 M with nine months of $6.1 M compared to $4.5 M and nine months of $9.0 M in 2001. The Company realized a gold price of $307/oz. in the third quarter compared to $296/oz. in the third quarter of 2001 resulting in a contribution margin (the difference between gold revenues and total cash costs) of $118/oz. or $3.4 M. This compares to a contribution margin of $85 /oz. or $2.1 M in the third quarter of 2001. Financial Position The Company further strengthened the balance sheet in the third quarter. Principal payments of $0.6 M in the quarter reduced the Company's outstanding bank debt to $2.2 M. The Company is currently delivering into the remaining hedge book which at the end of the quarter was 10,972 ounces. The gold hedge position will be liquidated DAMAGES, LIQUIDATED, contracts. When the parties to a contract stipulate for the payment of a certain sum, as a satisfaction fixed and agreed upon by them, for the not doing of certain things particularly mentioned in the agreement, the sum so fixed upon is called liquidated damages. (q.v. in the fourth quarter. 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. Gold production in the third quarter increased to 28,469 ounces compared with 27,702 ounces in the 2nd quarter 2002. This level of production reflects the mine returning to its normal level of production. Total cash costs for the quarter and year to date are at $189/oz. The Company forecasts production and cash costs for the year of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 105,000 ounces and $185/oz. respectively. Drilling at Sao Bento continues from an underground platform on the 23rd Level designed to both upgrade and extend the mine's resource base. At the Brumal bru·mal adj. Of, relating to, or occurring in winter. [Latin br  m project, located 5 kilometers from the Sao Bento
operation, drilling continues and an update will be provided toward the
end of the fourth quarter.Kisladag A total of 4,600 meters of infill in·fill n. 1. The use of vacant land and property within a built-up area for further construction or development, especially as part of a neighborhood preservation or limited growth program. 2. reverse circulation drilling was completed on the property during the quarter. The results will be used to update the resource and reserve statement for the Kisladag Feasibility Study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. . 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. test work to provide process design parameters for the Feasibility Study is ongoing and the Environmental Impact Assessment Study is also in progress. Project development continues to be on schedule with the Feasibility Study awarded to Hatch Hatch may refer to: Actions and objects
Corporate Developments The Company is in the process of submitting a 40F Registration to the United States Securities and Exchange Commission. Subsequent to the filing we plan to begin the process of application for a listing on 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. . The Company announces the appointment of Nancy Nancy (näNsē`), city (1990 pop. 102,410), capital of Meurthe-et-Moselle dept., NE France, on the Meurthe River and the Marne-Rhine Canal. It is the administrative, economic, and educational center of Lorraine. E. Woo, Manager, Investor Relations Investor relations The process by which the corporation communicates with its investors. . Nancy is an investor relations professional who brings to our team working knowledge of North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. public markets and experience working with an exploration company listed on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. . Nancy is a graduate of the University of British Columbia Locations Vancouver The Vancouver campus is located at Point Grey, a twenty-minute drive from downtown Vancouver. It is near several beaches and has views of the North Shore mountains. The 7. and The American University American University, at Washington, D.C.; United Methodist; founded by Bishop J. F. Hurst, chartered 1893, opened in 1914. It was at first a graduate school; an undergraduate college was opened in 1925. Programs provide for student research at many government institutions. , Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. , DC, and currently serves on the Board of the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. Investor Relations Institute ("CIRI CIRI Canadian Investor Relations Institute CIRI Cook Inlet Region, Incorporated ") and on the CIRI BC Chapter Board. Eldorado has superior gold assets in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. and Turkey, two countries with enormous geological ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. potential. In Brazil we are focusing on the continuing improvement at the Sao Bento mine, and on the potential of the Brumal property. In Turkey, we continue to expand our asset base, with a resource of approximately 8.3 million ounces in an increasingly attractive jurisdiction. With our international expertise in mining, finance and project development, together with highly skilled and dedicated staff, 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. 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. We do not expect to update forward-looking statements continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. as conditions change and you are referred to the full discussion of the Company's business contained in the Company's Prospectus A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. , dated May 10, 2002, and AIF AIF Annual Information Form AIF Apoptosis-Inducing Factor AIF Agence Intergouvernementale de la Francophonie (French: Intergovernmental Agency for Francophony) AIF Australian Imperial Force dated May 17, 2002. This and other news releases complete with graphic attachments, if any, are available at the Company's website (www.eldoradogold.com) or may be acquired by fax or mail upon request.
PRODUCTION HIGHLIGHTS
----------------------------------------------------------------------
First Second Third Third First First
Quarter Quarter Quarter Quarter Nine Nine
2002 2002 2002 2001 Months Months
2002 2001
----------------------------------------------------------------------
Gold Production
Ounces 16,963 27,702 28,469 25,101 73,134 79,841
Cash Operating Cost
($/oz) 166 195 185 206 184 222
Total Cash Cost
($/oz)1 171 201 189 211 189 228
Total Production Cost
($/oz)2 310 296 259 300 285 311
Realized Price
($/oz) 3 292 304 307 296 302 299
----------------------------------------------------------------------
Sao Bento Mine, Brazil
Ounces 16,963 27,702 28,469 25,101 73,134 79,841
Tonnes to Mill 89,342 96,519 100,185 101,750 286,046 323,109
Grade (grams /
tonne) 9.85 9.23 8.87 9.16 9.30 9.26
Cash Operating Cost
($/oz) 166 195 185 206 184 222
Total Cash Cost
($/oz)1 171 201 189 211 189 228
Total Production Cost
($/oz)2 310 296 259 300 285 311
----------------------------------------------------------------------
1 Cash Operating Costs plus royalties and the cost of off-site
administration.
2 Total Cash Cost plus depreciation, amortization and reclamation.
3 Excludes amortization of deferred gain.
Eldorado Gold Corporation
Consolidated Balance Sheets
Expressed in thousands of U.S. dollars
September September December 31
2002 2001 2001
ASSETS (unaudited) (unaudited) (audited)
Current Assets
Cash $ 9,078 $ 3,826 $ 4,752
Restricted cash 1,011 400 475
Accounts receivable 3,317 3,483 3,747
Inventories 5,619 5,019 5,069
-----------------------------------
19,025 12,728 14,043
Mine property, plant and equipment 63,183 67,667 66,495
Mineral properties and deferred
development 32,184 30,425 30,673
Investments and advances 122 241 122
Other assets and deferred charges 878 1,998 1,961
-----------------------------------
$ 115,392 $ 113,059 $ 113,294
-----------------------------------
-----------------------------------
LIABILITIES
Current Liabilities
Accounts payable and accrued
liabilities $ 7,442 $ 8,117 $ 11,769
Current portion of long term debt 2,200 6,316 6,243
-----------------------------------
9,642 14,433 18,012
Provision for reclamation costs 3,467 3,467 3,467
Deferred gain 2,743 6,200 5,621
Future income taxes 188 172 178
Convertible debentures 6,758 8,438 8,482
Long term debt - 10,602 9,103
-----------------------------------
22,798 43,312 44,863
SHAREHOLDERS' EQUITY
Share capital (Note 4) 336,633 316,401 316,406
Equity portion of convertible
debentures 1,094 1,400 1,400
Deficit (245,133) (248,054) (249,375)
-----------------------------------
92,594 69,747 68,431
-----------------------------------
$ 115,392 $ 113,059 $ 113,294
-----------------------------------
-----------------------------------
Approved by the Board Approved by the Board
Paul N. Wright Hugh C. Morris
Director Director
Eldorado Gold Corporation
Consolidated Statements of Operations and Deficit
Expressed in thousands of U.S. dollars except per share amounts
Three Three
months months
Ended Ended Nine months ended
September September September 30
30, 2002 30, 2001 2002 2001
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue
Gold sales $ 9,666 $ 7,994 $ 24,881 $ 26,138
Interest and other
income 2,198 54 5,334 643
------------------------------------------------
11,864 8,048 30,215 26,781
Expenses
Operating costs 5,385 5,306 13,851 18,185
Depletion, depreciation
and amortization 2,432 2,262 7,315 6,726
General and administrative 827 851 2,230 2,336
Exploration expense 174 64 901 429
Interest and financing
costs 237 538 947 2,189
Gain on conversion of
convertible debenture - - (463) -
Foreign exchange loss 150 (62) 237 58
------------------------------------------------
9,205 8,959 25,018 29,923
Profit (loss) before the
undernoted items 2,659 (911) 5,197 (3,142)
------------------------------------------------
Writedown of mine property,
plant and equipment (363) - (363) -
Gain (loss) on disposals
of mine property, plant
and equipment 4 (29) (192) 60
------------------------------------------------
Profit (loss) before
income taxes 2,300 (940) 4,642 (3,082)
Taxes
Current (341) (98) (400) (17)
Future - - - (203)
------------------------------------------------
Net income (loss)
for the period $ 1,959 (1,038) $ 4,242 $ (3,302)
------------------------------------------------
------------------------------------------------
Deficit at the beginning
of the period (247,092) (247,016) (249,375) (244,752)
------------------------------------------------
Deficit at end of
the period $ (245,133) $ (248,054) $ (245,133) $ (248,054)
------------------------------------------------
Weighted average number
of shares
outstanding 172,294,114 102,285,772 137,403,755 98,877,280
------------------------------------------------
------------------------------------------------
Basic - Income (loss)
per share - U.S.$ $ 0.01 $ (0.01) $ 0.03 $ (0.03)
------------------------------------------------
------------------------------------------------
Basic - Income (loss)
per share - CDN.$ $ 0.02 $ (0.02) $ 0.04 $ (0.05)
------------------------------------------------
------------------------------------------------
Diluted - Income (loss)
per share - U.S.$ $ 0.01 $ (0.01) $ 0.02 $ (0.03)
------------------------------------------------
------------------------------------------------
Eldorado Gold Corporation
Consolidated Statements of Cash Flows
Expressed in thousands of U.S. dollars
Three Three
months months
Ended Ended Nine months ended
September September September 30
30, 2002 30, 2001 2002 2001
(unaudited) (unaudited) (unaudited) (unaudited)
Cash flows from
operating activities
Net Income (loss)
for the period $ 1,959 $(1,038) $ 4,242 $(3,302)
Items not affecting cash
Depletion, depreciation
and amortization 2,432 2,262 7,315 6,726
Writedown of property,
plant and equipment 363 - 363 -
Future income taxes - - - 203
Gain (loss) on disposals
of mine property, plant
and equipment (4) 29 192 (60)
Interest and financing
costs 39 45 139 135
Gain on conversion of
convertible debenture - - (463) -
Amortization of hedging
gain (927) (555) (2,764) (2,212)
Amortization of
financing fees 9 - 59 193
Foreign exchange loss 1,450 429 1,940 515
---------------------------------------------
5,321 1,172 11,023 2,198
Decrease (increase)
in accounts receivable 1,049 275 430 1,461
Decrease (increase)
in inventories 283 (372) (550) (350)
Increase (decrease)
in accounts payable
and accrued liabilities (2,236) 1,315 (4,827) 1,564
Liquidation of hedges - 2,090 - 4,090
---------------------------------------------
4,417 4,480 6,076 8,963
Cash flow from investing
activities
Mine property, plant
and equipment (1,095) (815) (4,059) (3,580)
Proceeds from disposals
of mine property,
plant and equipment - - 50 215
Mineral properties
and deferred development (756) (298) (1,511) (983)
Investments and advances - 21 - 36
Restricted cash (3) (400) (536) 6,653
---------------------------------------------
(1,854) (1,492) (6,056) 2,341
Cash flow from financing
activities
Repayment of long/short
term debt (850) (944) (12,204) (9,089)
Issue of common shares:
Voting - for cash 555 28 18,553 34
Other assets and deferred
charges - (86) (114) (171)
---------------------------------------------
(295) (1,002) 6,235 (9,226)
Foreign exchange (loss)
gain on cash held
in foreign currency (1,456) (450) (1,929) (552)
---------------------------------------------
Net Increase (decrease)
in cash and cash
equivalents 812 1,536 4,326 1,526
Cash and cash equivalents
at beginning of
the period 8,266 2,290 4,752 2,300
---------------------------------------------
Cash and cash equivalents
at end of the period $ 9,078 $ 3,826 $ 9,078 $ 3,826
---------------------------------------------
---------------------------------------------
Supplemental cash flow
information - (Note 6)
Interest paid $ 69 $ 162 $ 624 $ 1,260
Income tax paid $ 245 $ 62 $ 304 $ 188
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge 3rd Quarter ended September September: see month. 30, 2002 and 2001 (in thousands of U.S. dollars except for per share and per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. amounts. 1. Nature of Operations Eldorado Gold Corporation ("Eldorado", "the Company") is engaged in gold mining and related activities, including exploration, extraction extraction /ex·trac·tion/ (eks-trak´shun) 1. the process or act of pulling or drawing out. 2. the preparation of an extract. , processing and reclamation Reclamation A claim for the right to return or the right to demand the return of a security that has been previously accepted as a result of bad delivery or other irregularities in the delivery and settlement process. . Gold, the primary product, is produced in Brazil and exploration activities are carried on in Brazil and Turkey. The Company has not determined whether all its development properties contain ore ore, metal-bearing mineral mass that can be profitably mined. Nearly all rock deposits contain some metallic minerals, but in many cases the concentration of metal is too low to justify mining the ore. reserves that are economically ec·o·nom·i·cal adj. 1. Prudent and thrifty in management; not wasteful or extravagant. See Synonyms at sparing. 2. Intended to save money, as by efficient operation or elimination of unnecessary features; economic: recoverable. The recoverability of the amount shown for mineral properties and deferred development is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing, licenses and permits to complete the exploration and development of its properties, and upon future profitable production or proceeds from the disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of of the properties. The amounts shown as mineral properties and deferred development represent net costs to date, less amounts amortized and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. written off and do not necessarily represent present or future values. 2. Significant Accounting Policies Basis of presentation These interim financial statements do not include all of the financial notes required in annual audited statements. These interim financial statements should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the most recent annual financial statements of the company. These financial statements follow the same accounting policies and methods of application as the most recent annual financial statements of the company. Earnings (loss) per share Earnings (loss) per share amounts are calculated using the weighted average number of shares outstanding during the nine months ended of 137,403,755 (Nine months 2001 - 98,877,280). 3. Hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. Commitments Gold hedging At September 30, 2002, Eldorado's hedging program consists of the following spot deferred gold contracts:
2002
Forward gold sales contracts (ounces) 10,972
Average price ($/oz.) 306
The positions held by Eldorado are in the form of spot deferred contracts of 10,972 ounces to be delivered at a rate of 5,000 ounces per month, at a price of $306.30 The mark to market value of the Company's hedge position at September 30, 2002 was negative $200 at a spot price of $322.00 per ounce using a contango Contango When the futures price is above the expected future spot price. Consequently, the price will decline to the spot price before the delivery date. Notes: This is the opposite of backwardation. rate of 1.65%. 4. Share Capital Effective January January: see month. 1, 2002, the Company adopted the new standard for accounting for Stock based Compensation. As at September 30, 2002, the Company has a share option plan as described below. No compensation expense is recognized in the consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: statements of operations and deficit for this plan when options are granted pursuant to the plan. Consideration paid for shares on exercise of the share options is credited to share capital. Stock option plan The Company established a share purchase option plan ('the Plan") in June June: see month. 1994. Amendments to the Plan were approved in June 1995, June 1996 and May 2000. The Board of Directors administers the Plan, whereby it may from time to time grant up to a total of 10,200,000 options to directors, officers, employees, consultants or advisors. All options granted under the Plan shall expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. not later than the tenth Tenth can mean: In mathematics:
The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: and terms are at the discretion of the Board of Directors. A summary of the Company's options at September 30,2002 and the changes for the period ending on that date is presented below:
Nine month ended
September 30, 2002
-------------------------------
Shares Weighted average
exercise price
-------------------------------
Outstanding at the beginning
of the period 4,479,500 0.51
Granted 1,742,500 0.74
Exercised (905,000) 1.15
Expired/Cancelled (584,500) 0.81
-------------------------------
Outstanding at the end
of the period 4,732,500 0.56
Options exercisable at period end 4,672,500 0.55
The following table summarizes information about options granted
during the period ended September 30, 2002.
Shares Weighted average Weighted average
exercise price fair value
1,432,500 0.71 0.34
145,000 0.70 0.34
90,000 1.32 0.36
90,000 1.32 0.72
The following table summarizes information about share options
outstanding as at September 30, 2002.
Stock Options
----------------------------------------------------------------------
Range Of Number Weighted-Average Weighted
Exercise Outstanding At Remaining Average
Price ($) September 30, Contractual Exercise
2002 Life (years) Price ($)
----------------------------------------------------------------------
0.80 to 9.40 242,500 0.20 1.34
0.40 to 1.00 500,000 0.25 0.46
0.50 to 0.65 821,500 1.21 0.54
0.70 to 0.80 110,000 2.74 0.71
0.24 to 0.51 1,521,000 3.88 0.29
0.70 to 1.32 1,537,500 4.30 0.76
----------------------------------------------------------------------
0.24 to 9.40 4,732,500 2.94 0.56
Warrants
----------------------------------------------------------------------
Number Weighted-Average Weighted
Conversion Outstanding At Remaining Average
Price ($) September 30, Contractual Conversion
2002 Life (years) Price ($)
----------------------------------------------------------------------
----------------------------------------------------------------------
0.80 6,220,459 0.39 0.80
----------------------------------------------------------------------
Had the company determined compensation costs on this Plan based
on the fair value at the grant dates for those share options
consistent with the fair value method of accounting for stock-based
compensation, the Company's net income and earnings per share would
have been reduced to the pro forma amounts indicated below:
U.S.$ CDN.$
Net income (loss) for the period As reported $ 4,242 $ 6,662
Pro Forma $ 3,870 $ 6,078
Basic and diluted earnings per share As reported $ 0.03 $ 0.05
Pro Forma $ 0.03 $ 0.05
The pro forma amounts presented above, do not include the effect
of share options granted before January 1, 2002.
The fair values of options included in the pro forma amounts
presented above, have been estimated using an option-pricing model.
Assumptions used in the pricing model are as follows:
a) average risk-free interest rate ranging from 4.18% to 4.3%
b) expected life 5 years
c) expected volatility 50%
d) expected dividends nil
5. Segmented Information All of Eldorado's operations are related to the gold mining industry. In 2002 and 2001 Eldorado had one producing mine, Sao Bento, with mining and exploration assets located in South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. and Turkey.
Three months ended Nine months ended
September September September September
30 30 30 30
2002 2001 2002 2001
(Restated) (Restated)
(unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------
Gold sales
Sao Bento Mine $ 9,666 $ 7,994 $ 24,881 $ 26,138
-----------------------------------------------
9,666 7,994 24,881 26,138
-----------------------------------------------
Operating costs
Sao Bento Mine 5,385 5,306 13,851 18,185
-----------------------------------------------
5,385 5,306 13,851 18,185
-----------------------------------------------
Depletion, depreciation
and amortization
Sao Bento Mine 2,262 2,104 6,786 6,311
-----------------------------------------------
2,262 2,104 6,786 6,311
-----------------------------------------------
Corporate expenses, net
of interest and other
income 814 (1,431) 1,854 (4,355)
Exploration expense (174) (64) (901) (429)
Writedown of property,
plant and equipment (363) - (363) -
Gain (loss) disposals
mine property,
and equipment 4 (29) (192) 60
-----------------------------------------------
Profit (loss) before
income taxes 2,300 (940) 4,642 (3,082)
-----------------------------------------------
Taxes
Current (341) (98) (400) (17)
Future - - - (203)
-----------------------------------------------
Net income (loss) for
the period $ 1,959 $(1,038) $ 4,242 $ (3,302)
-----------------------------------------------
Three months ended Nine months ended
September September September September
30 30 30 30
2002 2001 2002 2001
(Restated) (Restated)
(unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------
Revenues by geographic
area
North America $ 26 $ 16 $ 137 $ 190
South America 11,838 8,030 30,078 26,588
Turkey - 2 - 3
Australia - - - -
--------------------------------------------
$11,864 $ 8,048 $30,215 $26,781
--------------------------------------------
Net income (loss) by
geographic area
North America $(1,224) $(1,328) $(2,641) $(4,413)
South America 3,285 364 7,272 1,374
Turkey (108) (21) (368) (223)
Australia 6 (53) (21) (40)
--------------------------------------------
$ 1,959 $(1,038) $ 4,242 $(3,302)
--------------------------------------------
Nine months ended
September September December
30 30 31
2002 2001 2001
(Restated) (Restated)
(unaudited) (unaudited) (audited)
----------------------------------------------------------------------
Segment assets
Sao Bento Mine $ 76,248 $ 78,135 $ 78,855
------------------------------------
Total assets for reportable segments 76,248 78,135 78,855
Mineral properties and deferred
development 32,184 30,425 30,673
Other 6,960 4,499 3,766
------------------------------------
$115,392 $113,059 $113,294
------------------------------------
Assets by geographic area
North America $ 6,126 $ 3,974 $ 3,324
South America 76,359 78,321 79,011
Turkey 32,902 30,762 30,959
Australia 5 2 -
------------------------------------
$115,392 $113,059 $113,294
------------------------------------
6. Supplementary Cash Flow Information
Nine months Nine months
ended ended
September 30, September 30,
2002 2001
Restated
(unaudited) (unaudited)
----------------------------------------------------------------------
Financing activities
Long term debt backend fees accrual $ (135) $ (493)
Increase in long term debt 135 493
Interest accrual on convertible
debentures 139 135
Convertible debentures 1,724 (135)
Gain on conversion of convertible
debenture (463) -
Shares issued for convertible debenture (1,706) -
Equity portion of convertible debenture 306 -
------------------------
$ - $ -
------------------------
MANAGEMENT DISCUSSION AND ANALYSIS 3rd Quarter ended September 30, 2002 and 2001 (in thousands of U.S. dollars except per share and per ounce amounts) Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial ("MD&A") of the financial condition and results of operations of Eldorado Gold Corporation (the "Company" or "Eldorado") should be read in conjunction with the unaudited consolidated financial statements and the notes. The Company prepares and files its interim consolidated financial statements and MD&A in United States dollars ("US$") and in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Canadian generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). Third Quarter 2002 Financial Performance Eldorado's unaudited net income for the third quarter of 2002 was a profit of $1,959 or $0.01 per share compared to a loss of $1,038 or ($0.01) per share in the third quarter of 2001. Revenues were higher in the third quarter of 2002 as gold production of 28,469 ounces exceeded gold production of 25,101 ounces in the third quarter of 2001. Realized gold price of $307 in third quarter of 2002 exceeded the previously comparable quarter of 2001 of $296. Other income for the quarter was higher than the third quarter of 2001 as $2,065 of autoclave autoclave Vessel, usually of steel, able to withstand high temperatures and pressures. The chemical industry uses various types of autoclaves in manufacturing dyes and in other chemical reactions requiring high pressures. repair insurance contingency contingency n. an event that might not occur. was released from the balance sheet as the repair project was completed under budget and the balance of $133 was interest and other income from other source. The Company's unaudited net income for the first nine months of 2002 was a profit of $4,242 or $0.03 per share compared to a loss of $3,302 or ($0.03) per share in the first nine months of 2001. The Company ended the third quarter 2002 with unrestricted cash of $9,078 compared to $4,752 as at December December: see month. 31, 2001. Total debt was reduced from $15,346 as at December 31, 2001 to $2,200 excluding fees of $1,059 in the nine month period ended September 30, 2002 which has been included in the current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. . Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses after working capital changes for the nine months ending September 30, 2002 was $6,076 compared with cash generation of $8,963 for the nine months ending September 30, 2001.
Thousands of U.S. dollars except share amounts
3rd 3rd Nine Nine
Quarter Quarter months months
2002 2001 2002 2001
Gold Revenue $ 9,666 $ 7,994 $ 24,881 $ 26,138
Net Income (loss) $ 1,959 $ (1,038)$ 4,242 $ (3,302)
Net Income per share (loss) $ 0.01 $ (0.01)$ 0.03 $ (0.03)
Cash Flow from operations $ 4,417 $ 4,480 $ 6,076 $ 8,963
Decreased revenues in the nine months of 2002 compared with the same period in 2001 occurred as a result of reduced production due to the December 10, 2001 shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down of the #2 autoclave at Sao Bento for major repairs. Repairs were completed and the autoclave was restarted on March 23, 2002 and is operating at full capacity. The average realized price of gold per ounce in the nine month period of 2002 was $302 per ounce compared to $299 in the same nine month period of 2001. Other income of $5,334 an increase of $4,691 over the first nine months of 2001, a result of recording $1,118 of cash received from the autoclave business interruption insurance Noun 1. business interruption insurance - insurance that provides protection for the loss of profits and continuing fixed expenses resulting from a break in commercial activities due to the occurrence of a peril claim and $3,965 in autoclave repair insurance claim during the nine months ended September 30, 2002 and the balance of $251 from interest and other income.
Production Sao Bento Mine
2002 2001 2002 2001
3rd 3rd Nine Nine
Quarter Quarter Months Months
Gold Production
Ounces 28,469 25,101 73,134 79,841
Cash Operating Cost ($/oz) 185 206 184 222
Total Cash Cost ($/oz) 189 211 189 228
Total Production Cost ($/oz) 259 300 285 311
Realized Price 307 296 302 299
Sao Bento Mine, Brazil
Ounces 28,469 25,101 73,134 79,841
Ore tonnes 100,185 101,750 286,046 323,109
Grade (grams/tonne) 8.87 9.16 9.30 9.26
Cash Operating Cost ($/oz) 185 206 184 222
Total Cash Cost ($/oz) 189 211 189 228
Total Production Cost ($/oz) 259 300 285 311
Gold production in the third quarter of 2002 for the Sao Bento mine was 28,469 ounces (Y-T-D 73,134 ounces). This compares to third quarter 2001 gold production at Sao Bento of 25,101 ounces (79,841 ounces for the first nine months of 2001). The mine has returned to its normal levels of production after the completion of the repair at the #2 autoclave and elimination of power restrictions in the first quarter of 2002. In the third quarter of 2002 the Sao Bento mine produced 100,185 tonnes of ore at a grade of 8.87 grams per tonne tonne measure of weight or mass; 1 tonne=1000 kg. See also ton. (Y-T-D 286,046 tonnes at 9.30 g/t). This compares to 101,750 tonnes of production in the third quarter of 2001 at a grade of 9.16 grams per tonne (323,109 tonnes at 9.26 g/t for the first nine months of 2001). At the end of the third quarter of 2002 the mine had approximately 27,000 tonnes of ore in above ground inventory. The additional ore inventory is reflected as an increase in inventory on the balance sheet in the amount of $1,239. Third quarter 2002 total cash costs at Sao Bento were $189 per ounce compared to $211 per ounce in 2001 (Y-T-D $189 per ounce vs. $228 per ounce in the first nine months of 2001). The total cash costs for the third quarter of 2002 include $13 per ounce increase in costs a result of decrease in ore inventory at the mine site. The decrease in ore inventory in the third quarter is the result of operating the processing plant at full capacity. The majority of the remaining ore stockpile stock·pile n. A supply stored for future use, usually carefully accrued and maintained. tr.v. stock·piled, stock·pil·ing, stock·piles To accumulate and maintain a supply of for future use. will be processed over the remainder of 2002 to assure maximum production from the autoclaves.
Consolidated Gold Production Cost per Ounce
3rd 3rd 9 9
Quarter Quarter Months Months
2002 2001 2002 2001
Direct mining expenses $ 168 $ 177 $ 197 $ 189
Currency hedging - 36 - 32
Inventory change 13 (15) (4) (5)
Third party smelting, refining and
transportation 3 5 3 5
Vancouver Costs 1 3 2 1
By-product credits - - - -
Business Interruption credit - - (14) -
-------- -------- -------- --------
Cash operating cost per ounce $ 185 $ 206 $ 184 $ 222
Royalties and Production taxes 4 5 5 6
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Total cash costs per ounce $ 189 $ 211 $ 189 $ 228
Depreciation/Depletion 79 84 93 78
Exchange (Gain)/ Loss (9) 5 3 5
Reclamation and mine closure - - - -
-------- -------- -------- --------
Total production costs per ounce $ 259 $ 300 $ 285 $ 311
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Financial Condition and Liquidity Cash from operations Operations, after changes in working capital, generated cash flow of $6,076 in the nine months of 2002 compared to $8,963 in the first nine months of 2001. The decrease in cash from operations in the nine months of 2001 is mainly due to $4,090 earned in hedge liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy that occurred in the first quarter 2001 which was not duplicated in 2002. Forward Sales forward sales npl → ventas fpl a término and Other Commitments At September 30, 2002, Eldorado's hedging program consists of the following spot deferred gold contracts. Gold Hedge Position after giving effect to closed hedges 2002 2003 2004 Gold ounces Spot deferred contracts Amount hedged 10,972 - - Average price ($/oz.) $ 302 $ - $ - The positions held by Eldorado are in the form of spot deferred contracts including 10,972 ounces to be delivered at a rate of 5,000 ounces per month, at a price of $306.30. The mark to market value of the Company's hedge position at September 30, 2002 was negative $200 at a spot price of $322.00 per ounce using a contango rate of 1.65%. Forecast The Company is forecasting gold production for 2002 of 105,000 ounces at a cash cost of $185 per ounce. The Toronto Stock Exchange has neither approved nor disapproved the form or content of this release. |
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