Eldorado revises production estimates at Sao Bento

Vancouver — The strengthening Brazilian currency combined with Eldorado Gold’s (ELD-T) capital expansion plan has led the company to revise its anticipated gold production and production costs at the Sao Bento mine in Minas Gerais, Brazil.

The company states that after reviewing factors which influence mine operating costs, it decided to revise this year’s forecasted production and cash costs from 105,000 oz. gold at US$190 per oz. to 95,000 oz. gold at US$230 per oz. Production and operating costs are projected to remain at similar levels through 2004. Once the shaft deepening project is completed in 2005, Eldorado expects cash costs and production to improve to about 110,000 oz. gold at US$195 per oz.

Sao Bento’s operating performance has been affected by a number of internal and external factors, specifically; the Brazilian currency, expanded capital outlay and producer inflation.

The strengthening of the Brazilian currency relative to the US dollar over past year from a high of 3.95 Reals per US dollar in 2002 to a low of 2.86 Reals per US dollar in 2003. Since 65% of Sao Bento’s operating costs are in Reals, the currency strengthening has negatively affected the mine’s cost structure. The new production forecast for Sao Bento is based on an exchange ratio of 3.00 Reals per US dollar. As of May 16, the Real traded at 2.95 Reals/$US.

Earlier this spring, Eldorado announced plans to deepen its existing shaft at Sao Bento by about 370 metres. The estimated cost of the expansion is pegged at US$12 million. This investment will extend the profitability of the mine and provide the opportunity to increase resources and mine life at depth. Preparations for shaft deepening are currently underway and a completion date is targeted for December of 2004. Eldorado states that until construction is complete, ore delivery will be negatively affected.

Producer inflation in Brazil is currently between 15 and 20% and is in excess of the 12% planned for 2003. Sao Bento’s revised forecast is based on 18% on a go forward basis.

Eldorado is now in the midst of a 12,000 metre underground exploration drilling campaign that is designed extend and upgrade its resource base.

In March, Eldorado terminated its option agreement with CVRD for the Brumal property due to problems with the continuity of mineralization. The property is situated 5 km from Sao Bento mine and last year was the target of 3,069 metres of diamond drilling. Eldorado had hopes of incorporating additional resources into Sao Bento’s operating plan.