Vancouver — Lower production and higher costs at the Sao Bento mine in Brazil contributed to a loss for
In 2004, Sao Bento produced 82,000 oz. gold at a cash cost of US$294 per oz., versus 95,000 oz. at US$234 apiece in 2003.
Waste handling and poor ground conditions drove up costs, as did the presence of a large unmineralized intrusion in the orebody. As a result, forecast gold production for 2005 has been trimmed by about 20% to 72,000 oz. at an estimated cash cost of US$320 per oz.
The mine has a proven and probable reserve of 1.2 million tonnes grading 8.3 grams gold per tonne, as well as a measured and indicated resource of 1 million tonnes grading 11.7 grams gold.
“Our 2004 drilling campaign was unsuccessful in confirming continuity of the orebody at depth, and negatively influenced our reserves,” said Eldorado President Paul Wright.
Substantial cost increases resulted from a $12-million, 370-metre deepening of the main Sao Bento shaft, which is expected to be completed by mid-2005.
“The underground mine itself struggled throughout the year,” said Wright, adding that the orebody is expected to be depleted by 2008.
Meanwhile, Eldorado is developing its Kisladag deposit in western Turkey, where the proven and probable reserve exceeds 135 million tonnes grading 1.2 grams gold per tonne. There is a further measured and indicated resource of 215 million tonnes grading 1 gram gold per tonne.
Production from the open pit mine is to begin in late 2005. Gold output in year one is forecast to be 164,000 oz., whereas 240,000 oz. is projected for each of the subsequent 14 years.
“Despite a wet winter at Kisladag, we have made good progress on construction and are on schedule to start up prior to year-end,” said Wright.
In late 2004, the company closed a $77.6-million financing earmarked for Kisladag, where construction costs are pegged at US$63 million. Eldorado’s year-end cash position (including short-term deposits) stood at more than US$135 million.
The Efemcukuru gold project, also in western Turkey, is now in the final permitting stage. Proven and probable reserves are estimated at 1.9 million tonnes averaging 13.1 grams gold, plus 1.8 million tonnes grading 14.4 grams gold in the measured and indicated category. Startup is slated for late 2007.
Eldorado has 276.3 million shares outstanding and a market capitalization of $960 million.
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