Eldorado trims costs, ramps up production

In pursuit of its goal of producing 190,000 oz. gold by the end of the year, Eldorado Gold (ELD-T) cut cash costs and increased output during second quarter.

In the second 3-month period of the year, the company produced 52,442 oz. gold at a cash cost of US$199 per oz. gold, compared with 50,647 oz. at a cash cost of US$251 per oz. in the comparable period last year.

Total production costs (total cash costs plus depreciation, amortization and reclamation) rang in at US$273 per oz., compared with US$323 per oz. during the second quarter of 1998.

Eldorado’s operating cash cost rose 11%, or US$20 per oz., from US$179 per oz. in the first quarter. According to the company, the latest cost and production figures show that it is on track to produce by the end of the year 190,000 oz. at a cash cost of US$202 per oz.

Eldorado’s hedge position provided an average gold price of US$312 per oz. during the second quarter, resulting in a contribution margin (the difference between revenue and total cash cost) of US$106 per oz., or US$5.6 million.

The company’s Sao Bento mine in Brazil produced 32,801 oz. gold during the quarter, compared with 28,678 oz. in the second quarter of 1998. Operating cash costs rang in at US$178 per oz., compared with US$255 per oz. in 1998. Higher production at the mine is attributed to slightly higher grades and improved plant throughput.

At the La Colorada mine in Mexico, gold production hit 19,641 oz. at a cash cost of US$233 per oz., compared with 16,596 oz. at a cash cost of US$235 per oz. during the second quarter of 1998. Lower costs were linked with the development of the Gran Central and La Colorada pits, the company says.