Sao Bento returns Eldorado to black (May 19, 2003)

With production levels restored at the Sao Bento mine in Brazil, Eldorado Gold (ELD-T) turned in a tidy profit for the first three months of 2003.

The company earned US$2.6 million (or a penny per share) on revenue of US$9.2 million, compared with a loss of US$300,000 (nil per share) on US$5 million in the first quarter of 2002. The turnaround is attributed to increased production and higher gold prices.

First-quarter cash flow nearly doubled to US$1.2 million.

During the latest quarter, Sao Bento pumped out 21,831 oz. gold at a cash cost of US$215 apiece, up from the 16,963 oz. produced at US$166 per oz. a year earlier. The disappointing figures of last year were largely the result of Brazilian power restrictions.

For the recent quarter, Eldorado sold 23,854 oz. gold at an average realized price of US$356 per oz., up from 13,792 oz. at US$292 per oz. a year earlier.

With two autoclaves running at normal capacity, Eldorado expects to produce 105,000 oz. at US$190 per oz. this year.

Eldorado will deepen the shaft at Sao Bento by 370 metres, to 1,300 metres. The cost of doing so is pegged at US$12 million. Preparations will begin in the second quarter, with commissioning slated for December 2004.

At the same time, the company tabled a positive feasibility study for its wholly owned Kisladag gold project in western Turkey. Eldorado expects production to crank up by the end of 2003, following permitting and financing. Environmental approval should be in hand by mid-year.

Eldorado’s gold reserves now stand at 5.8 million oz. They consist of 1.8 million tonnes grading 9.22 grams gold at Sao Bento, 115 million tonnes of 1.23 grams gold at Kisladag, and 1.8 million tonnes of 13.14 grams gold at Efemcukuru, which is also situated in Turkey.

Eldorado is unhedged and has US$41.6 million in cash and equivalents.