QUOTE AND NEWS
SeekingAlpha  Aug 12  Comment 
ByHebba Investments: Introduction In our previous complete Q3FY13 cost analysis, we went over a number of the industry's all-in costs to mine an ounce of gold in 2013 and discussed one of the most important metrics to analyze the gold...
SeekingAlpha  Aug 12  Comment 
By Charles Sherwood: Eldorado Gold (NYSE: EGO) recently reported solid second quarter results with earnings of $0.05 per share, equaling analysts' expectations. Gold production for the quarter came in at 200,551 ounces which was a 9% increase,...
SeekingAlpha  Aug 2  Comment 
Eldorado Gold Corporation (OTCQB:ELDXF) Q2 2014 Earnings Conference Call August 1, 2014 11:30 AM ET Executives Paul N. Wright – Chief Executive Officer Norman S. Pitcher – President Fabiana E. Chubbs – Chief Financial...
TheStreet.com  Aug 1  Comment 
NEW YORK (TheStreet) -- Eldorado Gold was gaining 6.3% to $7.89 Friday after meeting analysts' expectations in the second quarter and increasing its full-year production guidance. For the second quarter Eldorado Gold reported earnings of 5...
Benzinga  Jul 10  Comment 
In a report released Thursday, Canaccord analyst Tony Lesiak downgraded Eldorado Gold (NYSE: EGO) from Buy to Hold and increased its price target to $9.00 per share. Analysts at Canaccord favor Eldorado Gold for being the leader amongst its...
TheStreet.com  Jun 27  Comment 
NEW YORK (TheStreet) --TheStreet Ratings team rates Eldorado Gold Corp.  as a "sell" with a ratings score of D+.  Shares of Eldorado are higher by 5.12% to $7.49 on heavy volume in afternoon trading on Friday.TheStreet Ratings Team has this to...
StreetInsider.com  Jun 26  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/Eldorado+Gold+%28EGO%29+Gets+Clearance+from+EIA+in+Turkey+for+Mine+Expansion+/9618078.html for the full story.
TheStreet.com  Jun 19  Comment 
NEW YORK (TheStreet) -- Eldorado Gold  rose Thursday after gold prices rose to their highest level in three weeks. Federal Chairwoman Janet Yellen gave a positive outlook on the U.S. economy on Tuesday and said rates would stay low for the...
SeekingAlpha  May 2  Comment 
Eldorado Gold Corp (EGO) Q1 2014 Earnings Conference Call May 2, 2014 11:30 PM ET Executives Nancy Woo - VP of IR Paul Wright - CEO Norm Pitcher - President Paul Skayman - COO Fabiana Chubbs - CFO Analysts Dave...
TheStreet.com  Apr 8  Comment 
NEW YORK (TheStreet) -- Eldorado Gold gained 2.2% to $6.04 Tuesday after providing and update on its Deva Gold SA Certej project in Romania. The gold producer announced it expects the project to produce 135,000 ounces of gold and 800,000 ounces...




RELATED WIKI ARTICLES
 

Eldorado Gold Corporation (TSX:ELD, NYSE:EGO, ASX:EAU) is a Canada based gold producer that also engages in exploration and development activity related to both gold and iron ore (owns 100% of the Vila Nova Mine in Brazil which has pp reserves of 9.272 mil tonnes-61% iron, and a nine year mine life).[1] It oversees mining activity in Brazil, China, Greece, Turkey (production at Kışladağ, development at the Efemçukuru gold project) and the surrounding areas. As one of the lowest cost gold producers (in the third quarter of 2010 it produced gold at an average cost of $386/oz and sold it an average price of $1231/oz a ratio of 3.2)) with a strong balance sheet and no hedge positions, Eldorado is well positioned for further growth.[1][2] While the 2009 $2 billion acquisition it made of Sino Gold gave it a much needed presence in a country with a rapidly growing gold industry (China leads all nations in gold production and consumption) it also gave it the distinction of largest international gold company in China. As of December 18, 2011 when Eldorado initiated a $2.5B takeover of European Goldfields it also owns the Skouries and Olympias gold projects in Greece as well as other operations in Romania. The takover comes a couple days prior to a key European Goldfields vote on whether to approve the $600M financing package offered by Quatar Holdings Inc (needed for Skouries and Olympias).[3]

As long as benchmark currencies continue to struggle gold prices will continue to rise in the long term even after undergoing seasonal fluctuations and short term record highs.[4] According to Newmont, the highest ranked Forbes 2010 The Global 2000 gold company[5] CEO, upward pressures will push gold prices up to at least $1500 an ounce.[6]

2010 gold production totalled 632,537 ounces 74% higher than the year before (363,509 ounces). Cash costs were $382/oz up slightly (2011 forecast is 770,000 ounces at a cash cost of between $375 and $395) Most of the increase in production expected in 2011 will come from Turkey where the 110,000 ounces/year Efemcukuru gold mine will begin operating. China's Eastern Dragon mine will also start production (expected to be 80,000 ounces per year); China will be the recipient of 44.4% the company's exploration capital expenditure ($24 million). Eldorado also doubled its dividend in 2010 (to 10 cents per share).[7] The company more than exceeded its expectations for 2010 (in March 2010 it forecast gold production in 2010 at between 550 and 600 thousand ounces at a cash cost of between $385 and $400 (ended up being on the very low end of that estimate).[8]

Company Overview

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Although the company's most important exploration projects and sources of growth are in China (largest mine there is 82% owned, partner is Guizhou Gold Mining Limited (the mine is in China's Guizhou province and is China's 2nd largest with 3.2 million ounces of proven plus probable reserves (eldorado's total is 15.1 million ounces), the mine with the greatest production is Kışladağ in Turkey (6.8 million ounces in proven plus probable reserves (2010 3Q, up 14%), forecast to remain the largest single source of production through 2013, reserves are about 4.5 times higher than Efemçukuru)). Production at Kışladağ was up 24.6% in 2009 yoy to 237,210 oz, for the first half of 2010 production was 152,691 oz.[9]

In Greece the Perama Hill mine (966,000 ounces) is scheduled to open in 2013 when it will be capable of producing 110,000 ounces of gold annually.

In total El Dorado produced 484,165 ounces of gold in the first three quarters of 2010 a 60.3% increase when compared to the 302,083 ounces of gold produced in the three quarters prior to that (2nd, 3rd, 4th quarters of 2009).[9][10] Total 2009 production was 363,509 oz 17.7% higher than 2008.[10] 2010 gold production totalled 632,537 ounces 74% higher than the year before (363,509 ounces). Cash costs were $382/oz up slightly (2011 forecast is 770,000 ounces at a cash cost of between $375 and $395) Most of the increase in production expected in 2011 will come from Turkey where the 110,000 ounces/year Efemcukuru gold mine will begin operating. China's Eastern Dragon mine will also start production (expected to be 80,000 ounces per year); China will be the recipient of 44.4% the company's exploration capital expenditure ($24 million).[7]

2011 Gold Production

In total El Dorado produced 490,201 ounces of gold in the first nine months of 2011 which is only 6,036 ounces more than it did the same period the year before (though it sold 490,207 oz down 720 ounces). Cash operationg cost per ounce was $401 up 8.1% (from $371/oz) but because gold prices were higher the company's realized price was up 31.24% to $1571/oz (from 1178/oz) however the realized price was up even more in Q3 of 2011 (38.1% increase to $1700 even). Realized price was $1397, $1510 & $1700 per ounce in the 1st, 2nd and 3rd quarters of 2011 respectively averaging $1546 overall.

1st 9 months 2011: total cash costs per ounce by mine from lowest to highest - Kisladag Mine, Turkey $406 (up from $335), Jinfeng Mine, China $483 (up from $452), White Mountain Mine, China $517 (up from $515), Tanjianshan Mine, China $552 (up from $494).[11] Between the 2nd & 3rd quarters total production costs fell for Kisladag Mine, Turkey ($411-->$401), White Mountain Mine, China ($564-->$519) and Tanjianshan Mine, China ($596-->$541) and increased for Jinfeng Mine, China ($457-->$509).

Integration of European Goldfields assets into Eldorado adds a further 10 million ounces of gold and approximately 80 million ounces of silver to reserves.

Mines, Production and Production costs by mine by year and period

In September 30,2010 operations included

  • Kişladağ, in Turkey (100% owned), Tanjianshan (TJS) in China (90%), Jinfeng (acquired when it purchased Sino Gold), in China (82%), White Mountain (acquired when it purchased Sino Gold), in China (95%) and 4 development stage mines (3 100% owned, 1 in China 95% owned) in addition to the iron ore mine Vila Nova in Brazil that's 100% owned.

Business & Financials

El Dorado's 2010 exploration budget was $32.9 million with 36.5% of that going to Turkey, 31.6% to China and 22.8% to Brazil.[2] As of September 30, 2011 long term debt is $19.25m, down 72.16% since the start of 2011 and only 19.8% as much as it was a year earlier ($97.25m).

Key Financial Metrics $US mil 2006[12] 2007[12] 2008[13] 2009[13] 1HFY09[14] 1HFY10[9] 9M10[15] 9M11[16]
revenue 84.689 188.699 288.231 360.729 132.94 389.931 578.227 795,570
expenses 80.8 131.194 174.33 215.527 79.977 225.135 350.822 425.185
ebit 3.889 57.505 181.254 146.921 54.387 162.87 238.88 451.05
net income 3.3 35.421 163.656 102.404 38.961 113.353 162.126 251.196
comprehensive inc na 35.36 157.471 110.602 45.451 123.517 160.364 249.379
current assets 155.402 203.499 61.851 265.369 484.951 539.19 561.638 615.233
total assets 527.02 591.742 905.369 3436.108 977.392 3532.29 3752.678 3871.484
long term debt 50.499 0.139 0 134.533 na 110.556 97.247 19.25
shareholders
equity
395.905 449.179 791.82 2640.61 856.116 2775.645 2916.544 3167.929

Trends and Forces

Hedging and Higher Gold Prices

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Because the company has no hedge positions (May 2010) it benefits more when the price of gold increases.[17] Higher demand for gold from countries like China and unstable production rates in top producing countries (down 15% in South Africa first quarter 2010) have more recently put positive pressure on the market price of the commodity.[18][19]

As long as benchmark currencies continue to struggle gold prices will continue to rise in the long term even after undergoing seasonal fluctuations and short term record highs.[20] According to Newmont, the highest ranked Forbes 2010 The Global 2000 gold company[21] CEO, upward pressures will push gold prices up to at least $1500 an ounce.[22]

References

  1. 1.0 1.1 2010 #3 strongest B.C. company:El Dorado Gold (2010-10-27).
  2. 2.0 2.1 Eldorado Gold Third Quarter 2010 Report (2010-10-28).
  3. Eldorado Gold Corp. makes $2.5B all-stock bid for European Goldfields Ltd. (December 18, 2011).
  4. With Gold Prices Climbing, Is Now A Wise Time To Invest? (2010-10-14).
  5. highest ranked gold company
  6. CNBC: Gold will hit $1,500 thanks to QE's "upward pressure," Newmont Mining exec says (2010-11-03).
  7. 7.0 7.1 Eldorado Gold says 2010 gold production jumped 74% (2011-01-11).
  8. Eldorado Gold sees 2010 gold production between 550,000 and 600,000 ounces (2010-03-22).
  9. 9.0 9.1 9.2 Eldorado Gold 2009 First Half Results and Report page 24 (2010-06-30).
  10. 10.0 10.1 Eldorado Gold 2009 Annual Report (2010).
  11. 12.0 12.1 Eldorado Gold 2007 Consolidated Financial Statement (2008-03-25).
  12. 13.0 13.1 Eldorado Gold 2009 Consolidated Financial Statement (2010-03-18).
  13. Eldorado Gold 2009 Half Year Consolidated Financial Statement (2009-06-30).
  14. Eldorado Gold 2010 Third Quarter Consolidated Financial Statement (2010-10-28).
  15. Eldorado Gold 2011 Third Quarter Report
  16. Eldorado Gold Investor Relations (2010-05-20).
  17. China's Gold Production Drops in July (2010-09-14).
  18. South African gold production drops sharply (2010-06-02).
  19. With Gold Prices Climbing, Is Now A Wise Time To Invest? (2010-10-14).
  20. highest ranked gold company
  21. CNBC: Gold will hit $1,500 thanks to QE's "upward pressure," Newmont Mining exec says (2010-11-03).
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