Eldorado bleeds US$7.5 million in Q1

Vancouver – During its transition phase of winding down one mine and bringing two others into production, Eldorado Gold (ELD-T, EGO-X) posted a first quarter net loss of almost US$7.5 million in 2006, a slight improvement over the US$9 million loss tabled in last year’s Q1.

The latest loss is attributed to higher exploration expenses in addition to foreign currency exchange losses from Canadian dollars held and from a non-cash future income tax expense due to an increased valuation of the Brazilian Real.

Eldorado logged slightly lower gold sales in the quarter, at 15,656 oz. versus 16,910 oz. last year, however this year’s realized price was higher at US$549 per oz. for a total of US$8.6 million, improving over last year’s US$428 per oz. for US$7.2 million.

The aspiring mid-tier gold producer is seeing its Sao Bento gold mine in Brazil near depletion and expects the operation to cease output in the first-half of 2007. A shaft deepening effort in 2005 allowed access to new ore, giving the mine a boost in Q1-2006 production to 19,111 oz. of gold at total cash costs of US$429 per oz., versus 14,311 oz. at of US$413 per oz. in last year’s corresponding quarter. Closure costs of about US$10 million have been earmarked for the mine.

Just subsequent to the end of the first quarter, the company’s Kisladag heap leach gold mine in western Turkey began operations with the first gold pour anticipated by late-May. Eldorado reports the project on budget with its forecast capital expenditures of US$83.4 million to completion. The operation is expected to produce about 120,000 oz. of gold in 2006 at estimated cash costs of US$215 per oz. Output for 2007 and beyond is projected at about 240,000 oz. annually over its 14-year mine life.

Construction at Eldorado’s 85%-owned Tanjianshan gold mine, in western China’s Qinghai Province, is also reported on track for a production start by October 2006. Pre-stripping of two planned open pits (Jinlonggou and Qinglongtan) continues while processing equipment is being installed. Eldorado anticipates 2006 gold production of about 40,000 oz at a cash cost of US$320 per oz., then rising to the 150,000 oz per year level over its 8-year mine life.

The company also continues to permit its Efemcukuru gold project, in western Turkey, where it hopes to have a mine in operation by 2008. A preliminary mine plan anticipates about 90,000 oz. of gold production annually over a 12-year mine life. A feasibility study should be completed by mid-2006, with programs of infill and step-out drilling also planned for this year.

Eldorado has budgeted US$14 million for exploration programs in 2006, earmarked for Turkey, Brazil and China.

Earlier this year, Eldorado closed a $186 million equity financing to top up its treasury for completion of its mine plans and possible acquisition of late-stage development gold projects in China.