With production at the Sao Bento mine in Brazil back to planned levels, Eldorado Gold (ELD-T) turned in a tidy profit for the first three months of 2003.
The company took in net profits of US$2.6 million (or a penny per share) on revenue of US$9.2 million, compared with a year-ago loss of US$300,000 (nil per share) on US$5 million. 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. of gold at a cash cost of US$215 apiece, up from the 16,963 oz. produced at US$166 per oz. the previous year. The jump in production and cash costs reflects the major shutdown for repair of one of Sao Bento’s two autoclaves coupled with Brazilian power restrictions during the 2002 first quarter.
For the quarter, Eldorado sold 23,854 oz. of gold at an average realized price of US$356 per oz., up from the US$292 each of the 13,792 ounces returned in the corresponding period of 2002.
With both autoclaves running at normal capacity, Eldorado pegs 2003 production at 105,000 oz. at US$190 per oz. The company is unhedged.
In early April, Eldorado announced that it will deepen by 370 metres to 1,300 metres the shaft at Sao Bento at a cost of around US$12 million. Preparations will begin in the second quarter; commissioning is 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.
At quarter’s end, the company had US$41.6 million in cash and equivalents.
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