Vancouver — With higher gold prices and production back to normal at the Sao Bento mine in Brazil,
After raising US$48 million last year, the company eliminated its debt, topped up its cash and is now looking to advance its Kisladag project in Turkey to the construction phase by the end of 2003.
The company’s 2002 earnings translate into US1 per share, with sales revenue amounting to US$39.3 million. By comparison, at the end of 2001, Eldorado posted a loss of US$4.4 million, or US4 per share, on sales revenue of US$35.4 million.
In 2002, Eldorado produced 103,533 oz. gold at a cash cost of US$184 per oz. and a total cost of US$282 per oz., compared with 102,841 oz. in 2001 at US$216 and US$306 per oz.
Says President Paul Wright: “2002 was a year of achievement for Eldorado. We’re profitable, we’ve reduced our operating costs, improved our production, strengthened our balance sheet and increased our share value. In 2003 we look forward to a continued strong performance at Sao Bento, where we plan to produce 105,000 ounces at a cash cost of US$190 per oz. Our Kisladag project continues to proceed according to plan, with the bankable feasibility study to be completed this month.”
During the fourth quarter of 2002, Sao Bento produced 30,399 oz. at a cash cost of US$183 per oz. and a total production cost of US$274 per oz., compared with 23,001 oz. in the fourth quarter of 2001 at US$193 and US$287 per oz.
Sao Bento returned to steady production during the second quarter of 2002, following repairs to the autoclave and the elimination of Brazilian power restrictions. The mine sent 95,249 tonnes of ore to the mill with an average grade of 10.01 grams gold per tonne during the fourth quarter. For the year, Sao Bento sent 381,295 tonnes to the mill with an average grade of 9.47 grams gold per tonne.
Cash flow from operations during 2002 were US$9.3 million. In addition, the company raised US$48 million and increased its cash flow by US$32.9 million while eliminating its US$15.5-million debt. In January, Eldorado was listed on the American Stock Exchange.
For the year, the company’s hedge position provided an average realized gold price of US$306 per oz. sold, resulting in a contribution margin (the difference between revenue and total cash costs) of US$115 per oz. sold, or US$11.5 million. In November 2002, Eldorado closed out its hedge book, and it remains unhedged.
Eldorado has submitted the environmental impact assessment for its Kisladag project to the Turkish government and anticipates approval by July. A final feasibility study is nearing completion, and, provided financing can be arranged, construction at Kisladag is expected to begin by year-end.
The measured and indicated resource at Kisladag is 166 million tonnes averaging 1.13 grams gold, or 6.05 million contained ounces. The inferred resource is pegged at 69 million tonnes averaging 0.81 gram gold, or 1.8 million oz. These calculations are based on a cutoff grade of 0.4 gram gold per tonne and data from more than 29,900 metres of drilling and trenching. About 828,000 oz. gold occur in oxide material, with the balance being in primary material.
Metallurgical tests by Kappes Cassiday & Associates in Reno, Nev., estimate gold recoveries of 86% for the oxide material and 73% for the primary.
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