In the first quarter of 2000,
The company’s goal is to produce 185,000 oz. of the yellow metal at a total cash cost of US$200 per oz. this year.
The first-quarter profit amounted to US1 per share, on revenue of US$14.6 million, compared with US$1.5 million, or US2 per share, on revenue of US$14.8 million in the corresponding period in 1999. Cash flow from operations dipped into the red, reflecting a loss of US$1 million (US1 per share), compared with a gain of US$4.1 million (US6 per share) in the first three months of 1999.
Eldorado produced 43,338 oz. gold at a cash cost of US$207 per oz. and a production cost of US$274 per oz. in the recent quarter, whereas year-ago output totalled 43,931 oz. at US$201 and US$265 per oz., respectively.
The company’s hedge position provided an average gold price of US$300 per oz., which resulted in a contribution margin (the difference between revenue and total cash cost) of US$93 per oz., or US$4 million. At present, the company has 460,126 oz. gold hedged at an average price of US$300 per oz.
In Brazil, the Sao Bento mine produced 31,143 oz. at a total cash cost of US$179 per oz. and a total production cost of US$238 per oz., compared with year-earlier output of 31,093 oz. gold at US$188 and US$241 per oz., respectively.
The mine sent 140,260 tonnes of ore to the mill at a head grade of 7.48 grams gold, compared with 135,922 tonnes at 8.4 grams in the first quarter of 1999. Capital expenditures at the mine were on budget at US$1.1 million.
Gold production at Sao Bento is on schedule, and total cash costs during the recent first quarter were lower than a year ago as a result of the company’s currency hedging. Proceeds from hedging offset the stronger Brazilian currency, the real, which improved against the U.S. greenback.
An exploration program is currently attempting to define a mineralized structure known as the Eastern trend, where drilling has confirmed economic grades. (It is the Main zone that is currently being mined.)
In Mexico, the La Colorada mine produced 12,195 oz. gold during the first quarter at a cash cost of US$279 per oz. and a production cost of US$367 per oz. Year-ago production amounted to 12,838 oz. at cash and production costs of US$234 and US$321 per oz.
The mine sent 616,065 tonnes of ore to the leach pad, the average grade being 0.96 gram gold per tonne, compared with 563,167 tonnes in the first quarter of 1999, when the average grade was 1 gram.
The decrease in La Colorada production is attributed to lower grades and harder ores, which restricted crusher throughput. In early April, the company installed an additional primary crusher to increase capacity.
During the recent quarter, Eldorado reduced its bank debt by US$1 million, to US$29 million. A further US$5-million reduction is planned for the remainder of the year.
In late January, Eldorado completed a US$5.5-million financing, which was ear-marked for projects in Turkey and for capital programs at the Sao Bento mine.
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