Eldorado continues turnaround in latest quarter

A year ago, Eldorado Gold (ELD-T) was in the red to the tune of US$115.6 million (or US$1.58 per share) for the 9-month period ended Sept. 30. A vigorous cost-cutting program has pushed the Vancouver-based gold producer back into the black, allowing it to post profits of US$3.4 million for the first nine months of 1999.

Eldorado produced 148,202 oz. gold during the first nine months of this year at a total cash cost of US$198 per oz, up from 143,369 oz. produced at US$259 per oz. a year earlier. Total costs for the 9-month period came in at US$268 per oz., down from US$324 per oz. a year ago.

In the latest quarter ended Sept. 30, Eldorado posted a gain of US$734,000 (US1 cents per share) on revenue of US$16.4 million. This quarter’s earnings compared with a loss of US$108 million (US$1.48 per share) on revenue of US$17.6 million in the corresponding period last year. The improved performance was attributed to a 12% reduction in operating costs.

The company produced 49,649 oz. gold at a cash cost of US$200 per oz. gold during its latest quarter, compared with 49,197 oz. at a cash cost of US$254 per oz. in the comparable period last year. Total costs (total cash costs plus depreciation, amortization and reclamation) also declined, ringing in at US$268 per oz., compared with US$317 per oz. during the third quarter of 1998.

Eldorado’s operating cash cost dropped 20% or US$51 per oz., from US$248 per oz. in the third quarter of 1998 to US$197. The company says the latest cost and production figures show that it is on track to produce 190,000 oz. at a cash cost of US$202 per oz. by the end of the year.

Eldorado has 540,000 oz. on its hedge books at an average price of US$297 per oz.

The Sao Bento mine in Brazil produced 32,939 oz. gold during the quarter, compared with 30,721 oz. in the third quarter of 1998. Operating cash costs rang in at US$191 per oz., compared with US$240 per oz. in 1998. Higher production at the mine is attributed to improved plant throughput.

At the La Colorada mine in Mexico, gold production hit 16,710 oz. at a cash cost of US$209 per oz., compared with 15,257 oz. at a cash cost of US$237 per oz. during the third quarter of 1998.