Eldorado Gold debt free and posts profit

Vancouver With higher gold price and production back to normal at the Sao Bento mine, Eldorado Gold (ELD-T) posted a US$2.1 million profit. After raising US$48 million last year, the company eliminated its debt, topped up its cash and is now looking to advance its Kisladag project to the construction phase by the end of 2003.

During 2002, the company posted a net profit of US$2.1 million or US$0.01 per common share, on sales revenues of US$39.3 million. This compares with a net loss of US$4.4 million, or US$0.04 per share, on sales revenue of US$35.4 million in 2001.

For the year, Eldorado produced 103,533 oz. gold at cash and total costs of US$184 per oz. and US$282 per oz., respectively. This compares with 102,841 oz. at cash and total costs of US$216 per oz. and US$306 per oz., respectively.

"2002 was a year of achievement for Eldorado," said Paul Wright, President and CEO of the company. "We’re profitable, we’ve reduced our operating costs, improved our production, strengthened our balance sheet and increased our share value. In 2003 we look forward to a continued strong performance at Sao Bento where we plan to produce 105,000 ounces at a cash cost of US$190 per oz. Our Kisladag project continues to proceed according to plan with the bankable feasibility study to be completed this month."

During the fourth quarter of 2002, production from the Sao Bento mine was 30,399 oz. at cash costs of US$183 per oz. Total production costs were US$274 per oz. This compares with 23,001 oz. at cash and total costs of US$193 per oz. and US$287 per oz., in the comparable period last year.

The increase in production is attributed to Sao Bento mine returning to steady production during the second quarter following the total elimination of the Brazilian power restrictions and the completion of the autoclave repair. The mine sent 95,249 tonnes of ore to the mill with an average grade of 10.01 grams gold per tonne during the fourth quarter. For the year, Sao Bento sent 381,295 tonnes to the mill with an average grade of 9.47 grams gold per tonne.

Cash flow from operations during 2002 were US$9.3 million. In addition, the company raised US$48 million and increased its cash by US$32.9 million while eliminating its US$15.5 million debt. In January, Eldorado was listed on the American Stock Exchange.

For the year, the corporation’s hedge position provided an average realized gold price of US$306 per oz. sold, resulting in a contribution margin, (the difference between revenues and total cash cost), of US$115 per oz. sold, or US$11.5 million. Eldorado reports that in November it closed out its hedge book and remains unhedged.

Eldorado has submitted the Environmental Impact Assessment for its Kisladag project to the Turkish government and anticipates approval by July this year. A final feasibility study is expected to be completed in March and provided financing can be arranged, construction at Kisladag is planned to begin by year end.

The measured and indicated resource at Kisladag now stands at 166 million tonnes averaging 1.13 grams gold, or 6.05 million contained ounces. The inferred resource is pegged at 69 million tonnes averaging 0.81 gram gold, or 1.8 million oz.

These calculations are based on a cutoff grade of 0.4 gram gold per tonne and include data from more than 29,900 metres of drilling and trenching. About 828,000 oz. gold occur in oxide material, with the balance being in primary ore.

Metallurgical tests by Kappes Cassiday & Associates in Reno, Nev., estimate gold recoveries of 86% for the oxide material and 73% for primary ore.