Eldorado in the black

Vancouver — With the successful completion of a $25-million equity placement, Eldorado Gold (ELD-T) has improved its balance sheet and is now focusing on advancing its assets in Turkey and Brazil.

During the first quarter of 2001, Eldorado posted net income of US$384,000, or nil per share, on revenues of US$7.09 million. This compares with a loss of US$1.09 million, or US$0.01 per share, on revenues of US$9.45 million during the same period last year. Gold revenues for the quarter rang in at US$5.9 million compared with US$9.3 million last year. Cash flow from operating activities was pegged at US$700,000, or US$0.01 per share, compared with US$3.4 million, or US$0.04 per share during the first quarter last year.

The company produced 16,963 oz. gold during quarter at a total cash cost of US$171 per oz. gold. This compares with 28,086 oz. at a total cash cost of US$228 per oz. in the corresponding period last year. 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 during the quarter as a result of the scheduled repair of the #2 autoclave. The repair was completed at the end of March and the autoclave is now operating at peak performance. The total costs for the repair including full business interruption coverage during the repair period have been settled with the insurance company, Brazil Resseguros.

During the first quarter, Sao Bento sent 89,342 tonnes of ore to the mill with an average mill-head grade of 9.85 grams gold per tonne. Cash operating costs for the quarter rang in at US$166 per oz. and total production costs were pegged at US$310 per oz.

Eldorado’s hedge position provided an average realized gold price of US$292 per oz. during the first quarter, which resulted in a contribution margin (the difference between revenues and total cash cost) of US$121 per oz., or US$2.1 million.

In February, the Brazilian Government announced the complete elimination of energy restrictions that came into effect in March 2000. As a result, Eldorado has set its production target at 105,000 oz. gold at cash costs of US$185 per oz. for this year.

Drilling is underway at the Brumal project, 5 km from the Sao Bento mine, and is expected to continue throughout 2002. Eldorado hopes to table a resource estimate for 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. Eldorado reports that three ore horizons similar to Sao Bento have been recognized 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 has envisioned developing the Brumal project through a decline access and running it as underground operation supported by the Sao Bento infrastructure and operating team.

At the company’s Kisladag project, Eldorado kicked off a 3,400-metre drilling program during the first quarter. The program is 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 in excess of the presently defined resource. Eldorado plans to drill eight holes to depths of up to 550 metres, and the results will be incorporated into an updated resource estimate scheduled for release during the second quarter.

Another 4,000 metres of reverse-circulation drilling will further infill the Kisladag deposit. This program is scheduled for completion during the third quarter. Eldorado reports that further metallurgical work and the environmental impact study are proceeding concurrent with drilling.

The Kisladag resource is pegged at 126 million tonnes grading 1.20 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.