Eldorado boosts resources and set to restart Kisladag

Vancouver – With gold reserves up and the court-ordered closure of its Kisladag mine over for now, Eldorado Gold (ELD-T) looks to be back on track.

A surprise court injunction forced Eldorado to temporarily shut down its Kisladag mine in late August. The injunction is part of a court case against the completeness of Kisladag’s environmental impact assessment.

On Feb. 11 Eldorado released its first news on the closure since August, reporting that the High Administrative Court in Ankara has concluded the existing expert reports prepared for the Lower Administrative Court were insufficient to make either a positive or negative decision on the case. The case will therefore now be returned to the Lower Administrative Court where a new expert committee will likely be assigned to review the case.

Though the case is far from over the closure injunction expired with this decision by the high court, leaving Eldorado free to restart the mine. The company says it expects to restart eh mine by the end of the quarter.

Eldorado also released its resource and reserve numbers as of Dec 31, 2007. The new numbers for Kisladag up its proven and probable resources 14% to 153 million tonnes grading 1.12 grams gold per tonne, for 5.5 million oz. contained gold. Total resources are up 37%, to 11.1 million contained oz. gold, with most of the increase in the inferred category.

The company used a gold price of $600 per oz. for the new reserve calculations, compared to $450 per oz. in the previous estimate, however Eldorado says most of the increase is due to new drilling. The 2007 infill drilling program at Kisladag uncovered new areas of gold mineralization, including a high-grade deep zone. The drilling focused on less-explored areas of the deposit, primarily to the west and the south. Many drill holes ended in gold mineralization, thus the deposit is still open to the west and southwest and at depth.

Until its forced closure in August Kisladag produced 135,306 oz. of gold at a cash cost of $198 per oz. in 2007. Eldorado anticipates 2008 will see 109,000 oz. gold produced at Kisladag, at a cash costs of $298 per oz., assuming operations resume early in the year.

Less than 100 km from Kisladag sits Efemcukuru, Eldorado’s next major mine. The gold deposit saw a positive feasibility study in late 2007 and, even though plans call for the flotation concentrate from Efemcukuru to be transported to the currently-closed Kisladag mine for regrinding and cyanidation, Eldorado is forging ahead with development. The company also continued drilling at the site and in doing so increased Efemcukuru’s resource count slightly, compared to the recent feasibility study estimate, by adding a new section of the North Ore Shoot.

Efemcukuru now hosts measured and indicated resources totaling 4.09 million tonnes grading 11.01 grams gold, plus inferred resources of 891,000 tonnes grading 8.32 grams gold. Incorporating a pit design, the project offers proven and probable reserves of 3.79 million tonnes grading 10.04 grams gold, for 1.22 million oz. contained gold.

Eldorado is currently working to incorporate results from more recent drilling on the two main regions of mineralization the South and Main Ore Shoots into an updated geological and structural model. The new data are within the bounds of mineralization defined in the feasibility study and so Eldorado expects to be able to upgrade inferred resources and probable reserves.

At Tanjianshan, Eldorado’s recently-completed gold mine in western China, reserves decreased some 20% while resources went down 8% compared to the Dec. 2006 estimate. But it is likely 2008 will see growth as the company completed some 20,000 metres of drilling in 2007, aimed at exploration outside of the existing resource areas. The focus in 2007 was on production, since it was the mine’s first year of operation, but Eldorado plans to spend US$3.5 million on further exploration drilling in 2008 to add to the resource base.

Tanjianshan produced 138,162 oz. gold in 2007 at a cash cost of $291 per oz. Unit costs went down every quarter as the strip ratio decreased, according to the mine plan. Production in 2008 is forecast at 109,000 oz. at a cash cost of $289 per oz.

Finally, Eldorado is also working to develop the Vila Nova iron ore deposit in Brazil. A positive feasibility study for Vila Nova in July estimated initial development and working capital at only US$32.7 million for a project with a net present value of US$69.1 million using a 5% discount rate.

Vila Nova hosts measured and indicated resources of 9.96 million tonnes grading 61.6% iron and inferred resource of 2.02 million tonnes grading 61.2% iron. Those resources translate into proven and probable reserves of 9.27 million tonnes grading 61% iron.