A Brazilian government decree limiting the use of electricity has forced
Situated in Minas Gerais state, the mine is now expected to crank out 94,000 oz. in 2001, 20% less than anticipated. The mine has been operating at 80% of its normal energry usage since June 1.
Operating costs, in turn, are slated to rise to US$225 per oz. from US$209.
Brazil, which relies heavily on hydroelectric power, has been suffering drought conditions. Accordingly, the duration of the energy rationing is unclear.
The revision has also prompted Eldorado to close its forward gold-hedging contracts maturing after 2001, as well as all of its Real currency contracts. Proceeds are earmarked for debt reduction.
In the first quarter, Sao Bento produced 28,086 oz. at a total production cost of US$311 per oz., compared with 31,143 oz. US$299 per oz. in the corresponding period of 2000. However, head grades improved to 9.25 grams gold per tonne from 7.98 grams
Meanwhile, Eldorado has accepted an insurance settlement for the autoclave, which failed in 1998. The junior was paid US$6.4 million to repair the autoclave and will receive ongoing payments for losses incurred during the downtime.
Eldorado has shifted focus to Turkey, where it aims to become a low-cost producer through its wholly owned Kisladag and Efemcukuru advanced gold projects. Earlier this year, an independent prefeasibility study concluded that the former could support an operation producing 103,600 oz. gold annually over 11.5 years.
Capital costs are pegged at US$47.4 million, and cash operating costs, at US$154 per oz.
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