Eldorado Gold Corporation: Third 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) ("Eldorado", the "Company" or "we") announces the Company's financial and operational results for the third quarter of the year, ended September 30, 2005. Third Quarter Highlights In the third quarter, we: - Acquired all of the issued and outstanding shares of Afcan Mining Corporation ("Afcan"), a TSX listed company listed company n → compañía cotizable listed company n → société cotée en Bourse listed company list n → with an 85% interest in the Tanjianshan Gold Project ("TJS TJS Tajikistan Somoni (ISO currency code) TJS Tactical Jamming System TJS Tommy John Surgery (baseball pitcher's damaged elbow) ") in Western China - Received an Environmental Positive Certificate ("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. ") for the Efemcukuru Gold Project in Western Turkey from the Turkish Ministry of the Environment and Forestry ("MOE Moe continually exasperated at Larry and Curly for their mischievous pranks. [TV: “The Three Stooges” in Terrace, II, 366] See : Exasperation ") - Recorded a net loss of $6.51 million or ($0.02) per share - Produced 18,842 ounces of gold at a cash cost of $372 per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. - Held $68.68 million in cash and short-term deposits - Continued construction at Kisladag Gold Project ("Kisladag") for expected start-up in February 2006 - Continued construction at TJS for expected start-up in October 2006 - Announced positive initial drill results from the AS Project in Turkey and initial results from the TJS 2005 drill program in China Afcan Acquisition Complete Effective as of September 13, 2005, we acquired all issued and outstanding shares of Afcan, giving us an 85% interest in TJS. A feasibility study "A Feasibility Study" is an episode of the original The Outer Limits television show. It first aired on 13 April, 1964, during the first season. It was remade in 1997 as part of the revived The Outer Limits series with a minor title change. compiled by independent consultants in April 2005 estimates that TJS has proven and probable reserves of 944,000 ounces of gold. The 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. projects total gold production of 842,000 ounces over an eight-year mine life, with an Internal Rate of Return of 32%. Construction at TJS is ongoing, with expected start-up in Q4 2006. Financial Results The consolidated net loss for Q3 2005 was $6.51 million or ($0.02) per share, compared with a net loss of $1.34 million or ($0.00) per share in Q3 2004. The increased loss results from higher operating costs operating costs npl → gastos mpl operacionales and depreciation 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 in Brazil, increased general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. associated with the start-up of the Kisladag mine, Afcan acquisition and higher exploration expenditures. In Q3 2005, we sold 21,057 ounces of gold at an average realized selling price of $435 per ounce. This compares to gold sales in Q3 2004 of 21,732 ounces at an average realized price of $400 per ounce. We continue to be in a strong financial position. At September 30, 2005, we held $68.68 million in cash and short-term deposits, and $50.45 million in a reserve account, such reserve account substantially offsetting our debt of $52.74 million. Operating Performance In Q3 2005, we produced 18,842 ounces of gold at a cash cost of US$372 per ounce compared to 21,399 ounces of gold at a cash cost of $295 per ounce in Q3 2004. The increase in our cash costs on a per ounce basis in 2005 results from decreased gold production caused by challenging ground conditions at depth and lower grades due to production scheduling and the appreciation of the Brazilian Real The real (IPA: [xe'aw] or [ʁe'aɫ], symbol: R$, ISO 4217 code: BRL, plural: reais) is the currency of Brazil. It is also the name of the earliest Brazilian currency (see from the Colonial period to 1942. . Given the poor performance of the Sao Bento mine we are reviewing alternatives regarding the mine's future. Development Kisladag Mine construction at Kisladag is on track, and we expect mechanical completion in February 2006. The majority of earthworks earthworks: see land art. and foundations have been completed with the emphasis now on completing the mechanical and electrical installations. The ADR ADR - Astra Digital Radio plant and ancillary Subordinate; aiding. A legal proceeding that is not the primary dispute but which aids the judgment rendered in or the outcome of the main action. A descriptive term that denotes a legal claim, the existence of which is dependent upon or reasonably linked to a main claim. buildings are expected to be complete by year end. Mechanical completion of the crushing crushing deaths of newborn animals, especially those in litters, caused by the mother lying on them accidentally. Contributed to by weakness of the neonate or awkward accommodation. A problem in piglets and puppies. Called also overlying. , screening and conveying system will be early in 2006. We estimate gold production for 2006 of 144,000 ounces, and we expect the mine will thereafter produce at an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. average rate of 240,000 ounces. Cash operating costs are anticipated to be $181 per ounce for a planned mine life of 14 years. Tanjianshan Construction at TJS continues for start-up in October 2006. The SAG (1) A momentary drop in voltage from the power source. Contrast with spike. (2) (SAG) (SQL Access Group) See CLI. mill arrived at port in China and will begin the overland o·ver·land adj. Accomplished, traversing, or passing over the land instead of the ocean: an overland journey; an overland route. adv. transport to site for a scheduled arrival late in Q4 2005. Major steel structures for the warehouse, boiler boiler, device for generating steam. It consists of two principal parts: the furnace, which provides heat, usually by burning a fuel, and the boiler proper, a device in which the heat changes water into steam. house, and mechanical and maintenance workshop have been completed. Foundations for the mill and floatation tanks are being poured. The earthworks for the tailings Tailings (also known as tailings pile, tails, leach residue, or slickens[1]) are the materials left over[2] after the process of separating the valuable fraction from the worthless fraction of an ore. dam are nearing completion in preparation of laying synthetic liner liner /lin·er/ (lin´er) material applied to the inside of the walls of a cavity or container for protection or insulation of the surface. liner see teat cup liner. in Q2 2006. New accommodation buildings will be available in November, 2005 so that construction activities can proceed throughout the winter. Efemcukuru Subsequent to the submission of the EIA at Efemcukuru to the MOE in Q2 2005, we received a Positive Certificate in Q3 2005, signaling the successful completion of the first stage of the permitting process at Efemcukuru. We will prepare a feasibility study and proceed with obtaining the necessary permits to enable the construction and operation of the mine. Our development schedule for Efemcukuru indicates that the mine will begin producing gold in late 2007. Exploration Brazil We began 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 at 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
Turkey Exploration at our 50%-owned AS Project was encouraging and indicates the potential for a significant mineralized min·er·al·ize v. min·er·al·ized, min·er·al·iz·ing, min·er·al·iz·es v.tr. 1. To convert to a mineral substance; petrify. 2. To transform a metal into a mineral by oxidation. 3. zone in this large copper-gold system. In Q4 2005, we will further test the 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. at depth with a diamond drilling program, and in 2006 we are planning expanded geophysics geophysics, study of the structure, composition, and dynamic changes of the earth, its atmosphere, hydrosphere and magnetosphere, based on the principles of physics. , geochemical sampling and diamond and reverse circulation drilling. China Our 52-hole program at Jinlonggou forming a part of the TJS 2005 drill program validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. our 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. model of the area and delineated de·lin·e·ate tr.v. de·lin·e·at·ed, de·lin·e·at·ing, de·lin·e·ates 1. To draw or trace the outline of; sketch out. 2. To represent pictorially; depict. 3. numerous mineralized zones in the predicted target area. After updating the resource model in Q4 2005, we will prepare a new resource and reserve statement and a new life of mine plan in early 2006. "Our international team has been extremely busy this last quarter," 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 the 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 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 and Form 40-F dated 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 and 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 in Canada and the U.S. 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)
September 30, December 31,
2005 2004
--------------------------------------------------------------------
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(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 68,684 $ 135,390
Accounts and other receivables 15,606 8,705
Inventories 6,363 5,927
-----------------------
90,653 150,022
Property, plant and equipment 186,656 52,337
Mineral properties and deferred development 23,168 22,676
Deposits (Note 4) 50,447 -
Investments 562 1,224
-----------------------
$ 351,486 $ 226,259
-----------------------
-----------------------
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities $ 14,755 $ 6,005
Current portion of long term debt (Note 4) 1,604 -
-----------------------
16,359 6,005
Asset retirement obligation 9,882 8,059
Contractual severance obligation 954 636
Future income taxes (Note 3) 27,691 4,598
Long term debt (Note 4) 51,141 -
-----------------------
106,027 19,298
SHAREHOLDERS' EQUITY
Share capital (Note 5) 571,156 508,373
Contributed surplus 2,330 1,094
Stock based compensation 6,144 5,138
Deficit (334,171) (307,644)
-----------------------
245,459 206,961
-----------------------
$ 351,486 $ 226,259
-----------------------
-----------------------
Commitments and Contingencies (Note 6)
Supplementary Cash Flow Information (Note 9)
Approved by the Board Approved by the Board
Paul Wright, Director Robert Gilmore, Director
Eldorado Gold Corporation
Consolidated Statements of Operations and Deficit
(Expressed in thousands of U.S. dollars except per share amounts)
Three months ended Nine months ended
September September September September
30, 30, 30, 30,
2005 2004 2005 2004
--------------------------------------------------------------------
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(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue
Gold sales $ 9,170 $ 8,702 $ 21,532 $ 24,569
Interest and other
income 1,352 454 3,026 1,786
-----------------------------------------------
10,522 9,156 24,558 26,355
Expenses
Operating costs 9,502 6,651 24,379 18,166
Depletion,
depreciation and
amortization 2,467 1,125 7,384 3,248
General and
administrative 3,573 1,437 8,240 3,806
Exploration expense 2,557 1,256 5,251 2,981
Interest and
financing costs 8 25 44 25
Stock based
compensation expense 134 117 1,907 3,567
Accretion of asset
retirement
obligation 120 107 362 322
Gain on disposals (39) (1) (39) (38)
Writedown of
investments - - 662 -
Foreign exchange
(gain) loss (1,897) (1,600) (189) 351
-----------------------------------------------
16,425 9,117 48,001 32,428
-----------------------------------------------
Loss before income
taxes (5,903) 39 (23,443) (6,073)
-----------------------------------------------
Tax recovery (expense)
Current (164) (324) (234) 1,579
Future (440) (1,058) (2,850) 815
-----------------------------------------------
Net loss for the
period $ (6,507) $ (1,343) $ (26,527) $ (3,679)
-----------------------------------------------
Deficit at the
beginning of the
period: (327,664) (296,038) (307,644) (293,702)
-----------------------------------------------
Deficit at the end
of the period $ (334,171) $ (297,381) $ (334,171) $ (297,381)
-----------------------------------------------
-----------------------------------------------
Weighted average
number of shares
outstanding 277,933,154 254,940,553 277,892,706 254,626,427
-----------------------------------------------
-----------------------------------------------
Basic and Diluted
loss per share -
U.S.$ $ (0.02) $ - $ (0.10) $ (0.01)
-----------------------------------------------
-----------------------------------------------
Basic and Diluted
loss per share -
CDN.$ $ (0.03) $ - $ (0.12) $ (0.02)
-----------------------------------------------
-----------------------------------------------
Eldorado Gold Corporation
Consolidated Statements of Cash Flows
(Expressed in thousands of U.S. dollars)
Three months ended Nine months ended
September September September September
30, 30, 30, 30,
2005 2004 2005 2004
--------------------------------------------------------------------
--------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash flows from
(used in) operating
activities
Net loss for the
period $ (6,507) $ (1,343) $ (26,527) $ (3,679)
Items not affecting
cash
Depletion,
depreciation and
amortization 2,467 1,125 7,384 3,248
Future income taxes 440 1,058 2,850 (815)
Writedown of
investments - - 662 -
Gain on disposal of
property, plant and
equipment (39) - (39) -
Interest and
financing costs 8 - 44 -
Amortization of
hedging loss - - - 329
Stock based
compensation expense 134 117 1,907 3,567
Contractual
severance expense 106 80 318 239
Accretion of asset
retirement
obligation 120 107 362 322
Foreign exchange
(gain) loss (1,963) (200) (434) 985
Change in non-cash
working capital (927) (1,100) (719) (4,070)
-----------------------------------------------
(6,161) (156) (14,192) 126
Cash flow from
investing activities
Acquisition of Afcan
Mining Corporation -
net of cash acquired 895 - 895 -
Property, plant and
equipment (25,150) (4,983) (58,373) (23,094)
Proceeds from
disposals 40 - 40 34
Mineral properties
and deferred
development (198) (129) (492) (412)
-----------------------------------------------
(24,413) (5,112) (57,930) (23,472)
Cash flow from
financing activities
Long term debt 15,459 - 50,618 -
Deposits (15,332) - (50,447) -
Issue of common
shares:
Voting - for cash 4,485 878 4,827 1,448
-----------------------------------------------
4,612 878 4,998 1,448
Foreign exchange
gain (loss) on cash
held in foreign
currency 1,953 210 418 (993)
-----------------------------------------------
Net decrease in cash
and cash equivalents (24,009) (4,180) (66,706) (22,891)
Cash and cash
equivalents at
beginning of the
period 92,693 86,754 135,390 105,465
-----------------------------------------------
Cash and cash
equivalents at end
of the period $ 68,684 $ 82,574 $ 68,684 $ 82,574
-----------------------------------------------
-----------------------------------------------
Supplementary cash flow information (Note 9)
The TSX has neither approved nor disapproved the form or content o f this release. Eldorado Gold Corporation (TSX:ELD) (AMEX:EGO) |
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