Eldorado Gold posts profit

Vancouver — With production back to normal at Sao Bento Eldorado Gold (ELD-T) posted a profit during the third quarter. The Kisladag project remains on track and a feasibility study is expected early next year.

Eldorado Gold tabled third quarter net earnings of US$2.0 million, or US1 per share, on revenue of US$9.7 million. This compares with a net loss of US$1.0 million, or US$1 per share, on revenues of US$8.0 million over the corresponding period last year.

For the first nine months of the year Eldorado posted a profit of US$4.2 million, or 3 per share, on revenues of US$24.9 million. This compares with a nine month loss of US$3.3 million, or 3 per share, on revenues of US$26.1 million in 2001.

Cash flow from operating activities during the third quarter rang in at US$4.4 million and nine months hitting US$6.1 million. This is down from US$4.5 million and US$9 million in the year-earlier period. Eldorado reports that it realized a gold price of US$307 per oz. during the third quarter compared to US$296 per oz. during the third quarter last year. The resulting contribution margin (the difference between gold revenues and total cash costs) rang in at US$118 per oz. or US$3.4 million.

Over the last three months Eldorado has continued to strengthen its balance sheet. Principal payments of US$0.6 million during the quarter reduced the company’s outstanding bank debt to US$2.2 million. Eldorado is currently delivering into the remaining hedge book which at the end of the quarter was 10,972 ounces. The company states that its gold hedge position will be liquidated in the fourth quarter.

At the Sao Bento mine in Brazil, gold production during the recent quarter increased to 28,469 oz. compared with 27,702 ounces last year. Eldorado states that the increase is a reflection on the mine returning to its normal level of production. Total cash costs for the quarter and year to date are pegged at US$189 per oz. Eldorado forecasts 105,000 oz. of production for the year at cash costs of US$185 per oz.

Drilling at Sao Bento is still in progress from an underground platform on the 23rd level. This activity is designed to both upgrade and extend the mine’s resource base. At the Brumal project, located five km from the Sao Bento operation, drilling continues and an update is expected by the end of the fourth quarter.

Moving to the Kisladag project in Turkey, Eldorado reports that it has completed 4,600 metres of infill reverse circulation drilling. The results will be used to update the resources and reserve statement for the Kisladag feasibility study. In addition, metallurgical test work for process design parameters continues and the Environmental Impact Assessment Study is also in progress. Eldorado reports that project development remains on schedule with the feasibility study expected to be completed during the first quarter next year.

Meanwhile, the company is in the process of submitting a 40F Registration to the United States Securities and Exchange Commission. Subsequent to the filing Eldorado plans to initiate the process of applying for a listing on the American Stock Exchange.