Eldorado posts loss

Vancouver — Eldorado Gold (ELD-T) slipped into the red during the first quarter as a result of lower overall production. The shortfall is attributed to a change in mining methods at the Sao Bento mine in Brazil, and to the sale of the La Colorada mine in Mexico.

The company incurred a loss of US$900,000 (or 1 per share) on gold revenue of US$9.3 million, compared with earnings of US$1 million (1 per share) on revenue of US$14.6 million in the first three months of 2000. However, cash flow from operations increased to US$3.4 million from US$1 million.

Eldorado produced 28,086 oz. gold during the recent quarter at a cash cost of US$228 per oz., compared with year-ago output of 43,338 oz. at US$207 per oz. The company’s hedge position added US$2.1 million to its coffers at an averaged realized gold price of US$302 per oz.

The company ended the recent quarter with US$8.5 million in cash, of which US$5.3 million is restricted. Total debt, excluding convertible debentures, was reduced to US$22.8 million, from US$25.3 million in the year-ago period.

Gold production at Sao Bento was down 10%, to 28,086 oz., from the first quarter of last year. The decrease is a consequence of mine modifications aimed at reducing dilution and ground instability. In addition, the mine’s oxygen supplier malfunctioned and had to be shut down temporarily.

During the recent quarter, the mine produced 113,855 tonnes at an average grade of 9.25 grams gold per tonne, compared with 140,260 tonnes at 7.48 grams a year ago.

Proven and probable reserves at Sao Bento are now pegged at 2.5 million tonnes grading 9.11 grams gold, or 747,000 ounces contained gold.

In November 2000, Eldorado sold its subsidiaries in Mexico. As a result, gold production from the nearly depleted La Colorada mine was wiped from the balance sheet.