Vancouver – Eldorado Gold reported higher than planned costs at its Sao Bento gold mine in Brazil because of an intrusive intersecting the orebody. This intrusive will continue to adversely affect the operation throughout 2004 as more cyanide and oxygen will be required.
The company’s wholly-owned Sao Bento underground mine is located in Minas Gerais State in Brazil, some 110 km east of Belo Horizonte. Sao Bento produced 21,158 oz. at a total cash cost of US$284 per oz. for the first quarter of 2004, compared with 21,831 oz. at US$222 per oz. for the first quarter of 2003.
Cash flow from operations at Sao Bento was $1.6 million. During the first quarter the company sold 22,793 ounces gold at an average realized price of US$408 per ounce compared with the sale of 23,854 ounces at an average US$356 per ounce in the first quarter of 2003. Revenue was up marginally during the quarter to $9.9 million compared with $9.4 million a year ago.
The company stated that production will be scaled back at the mine for the rest of the year due to ongoing interference from the shaft deepening and infrastructure development at depth.
Projections for gold production have been revised to 85,000 oz. of gold at a cash cost of $270 per oz. for 2004. This is expected to increase to 94,000 oz. at a cash cost of $240 per oz. in 2005.
The company reported a net loss of $0.7 million for the first quarter of 2004 compared with a net income of $1.7 million in the same period a year ago. The net loss was blamed on foreign exchange, the cost of expensing options, and a net tax gain on debt restructuring.
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