Eldorado Gold Corp.salshes full-year loss, moves on growth plans

22 March 2005 | 16:56 Code : 4834 Geoscience events
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The end may be nigh for Eldorado Gold Corp.'s Sao Bento mine in Brazil, but the company says it has enough money to build its $63.1-million Kisladag mine in Turkey and carry out its .
The end may be nigh for Eldorado Gold Corp.'s Sao Bento mine in Brazil, but the company says it has enough money to build its $63.1-million Kisladag mine in Turkey and carry out its
  
   "We now can see the likely end of the Sao Bento ore body in 2008," CEO Paul Wright told a conference call with analysts Monday.
  
  
   "Management's efforts are designed to successfully maximize the free cash flow from the existing reserves and establish the best alternatives to realize maximum value for the remaining infrastructure."
  
  
   The Vancouver-based miner reported earlier Monday it narrowed its losses by more than two-thirds last year but had lower sales from international operations.
  
  
   Eldorado lost $13.9 million US or five cents a share for the year, compared with a loss of $45 million US or 20 cents a share in 2003.
  
  
   The loss in 2004 was due to lower gold sales and higher operating costs at the Sao Bento mine, Eldorado said.
  
  
   "The operation, as in most mining operations, is under considerable pressure due to escalation in energy, consumables and labour," Wright said.
  
  
   "The Brazilian context has added to the price pressure, with a strengthening of the Brazilian currency, the real, and an extremely demanding environment for skilled labour in the mining sector." 
   
   Production at the Sao Bento mine totalled 82,024 ounces of gold at a cash cost of $294 US per ounce in 2004. In 2005 we are forecasting production of 72,000 ounces at a cash cost of $320 an ounce.
  
  
   Annual revenues fell to $35.9 million US from $38.2 million, said Eldorado, which reports in U.S. dollars. 
   
    In 2004, Eldorado sold 81,913 ounces of gold for an average realized selling price of $405 US per ounce. That compared with 2003 gold sales of 95,544 ounces, at an average price of $385 per ounce. 
   
   Despite its losses, Eldorado said it's in a strong financial position, with $135.4 million in cash and short-term deposits at the end of 2004 and no debt or gold hedge contracts.
  
  
   The company (TSX:ELD - news) said it has enough money to build its Kisladag mine, carry out exploration in Turkey and Brazil and pursue new opportunities in China and elsewhere. 
   
    Eldorado began installing site services and completing two process water wells at Kisladag in October, and started earthwork excavation for construction of the first phase of a leach pad in December. 
   
   The company said mine construction is on budget and on schedule to begin production in December 2005. 
     Kisladag is expected to produce 164,000 ounces of gold in its first year of operations, increasing in the second year to 240,000 ounces. Cash operating costs are expected to be $165 per ounce for a planned mine life of 14 years. 
   Eldorado shares were down seven cents at $3.69 Cdn in trading Monday afternoon on the Toronto Stock Exchange.
NGDIR

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