Vancouver — Having completed a $25-million equity placement and improved its balance sheet,
During the first quarter of 2002, Eldorado enjoyed net earnings of US$384,000 (or nil per share) on revenue of US$7.1 million, compared with a loss of US$1.1 million (US1 per share) on revenue of US$9.4 million during the corresponding period of the previous year. Gold revenue between the periods slipped to US$5.9 million from US$9.3 million, while cash flow from operations fell to US$700,000 (US1 per share) from US$3.4 million (US4 per share).
The company produced 16,963 oz. gold during the recent quarter at a total cash cost of US$171 per oz. gold, compared with 28,086 oz. at US$228 per oz. a year earlier. (Total cash costs consist of cash operating costs plus royalties and the cost of off-site administration.)
Production at the Sao Bento gold mine in Brazil was reduced so that the no. 2 autoclave could be repaired. The repair was completed at the end of March, and the unit is now operating at peak performance. The total cost of the repair, including full business interruption coverage, has been settled with the insurance company Brazil Resseguros.
Sao Bento sent 89,342 tonnes of ore to the mill, with an average millhead grade of 9.85 grams gold per tonne. Cash operating costs for the quarter were US$166 per oz.; total production costs (total cash costs plus depreciation, amortization and reclamation), US$310 per oz.
Eldorado’s hedge position provided an average realized gold price of US$292 per oz. during the first quarter. This resulted in a contribution margin (the difference between revenue and total cash cost) of US$121 per oz., or US$2.1 million.
Drilling at the Brumal project, 5 km from the Sao Bento mine, is expected to continue throughout 2002. Eldorado hopes to table a resource estimate in September. Previous drilling located the mineralized horizon within the banded iron formation, 500 metres below the surface. The deepest hole intersected 13.3 grams gold per tonne over a true width of 3.6 metres at a vertical depth of 475 metres. Three ore horizons similar to Sao Bento exist close to the upper and lower contacts of the main iron formation. The company plans to utilize its excess milling capacity at Sao Bento to process the ore. Eldorado intends to develop the Brumal project through a decline access and run it as an underground operation supported by the Sao Bento infrastructure.
At the Kisladag project in Turkey, Eldorado kicked off a 3,400-metre drill program designed to test the northern and southern flanks of the gold porphyry system, as well as investigate higher-grade sulphide zones at depth. The campaign will also test the validity of a target exceeding the currently defined resource. Eldorado plans to drill eight holes to depths of up to 550 metres. Results will be incorporated into an updated resource estimate scheduled for release during the second quarter.
In addition, another 4,000 metres of reverse-circulation drilling will further infill the Kisladag deposit. This program is scheduled for completion during the third quarter. Further metallurgical work is in progress, as is the environmental impact study.
The Kisladag resource is pegged at 126 million tonnes grading 1.2 grams gold per tonne in the measured and indicated category, plus 55.5 million tonnes grading 1.02 grams gold in the inferred category. Proven and probable reserves stand at 65.7 million tones grading 1.34 grams gold per tonne.
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