Investment interest in Eldorado rises on back of effective Q1 ops

VANCOUVER (miningweekly.com) – Canadian miner Eldorado Gold has swung back into the black after reporting strong results for the three months ended March, logging profit attributable to shareholders of $3.8-million, or $0.01 per share, compared with a loss of $2.5-million, or nil per share in the comparable period of 2016.

Adjusted net earnings, which excludes special items during the period, were $8-million, or $0.01 a share, an improvement over the loss of $700 000, or nil per share a year earlier, and on target with analyst expectations.

Vancouver-based Eldorado said late Thursday that the difference between profit and adjusted earnings in the period was a $3-million adjustment related to closing cash/working capital recorded on finalisation of the sale of the company's Chinese assets.

Gold output from the company’s two operations in Turkey, and one in Greece, was slightly lower at 75 172 oz, compared with 79 892 oz from continuing operations.

Revenues totalled $90.5-million, on sales of 74 068 oz of gold, at an improved average realised gold price of $1 222/oz.

All-in sustaining cash costs averaged $791/oz; considerably lower than 2017 guidance of $845/oz to $875/oz.

Gold sales of 74,068 ounces from continuing operations were consistent year over year, while gross profit from continuing gold mining operations increased $4.9-million due to higher gold prices and lower cash operating costs. General and administrative expenses increased $2.1-million year over year due to reorganisation costs in Vancouver and Turkey. Exploration expense increased $3.2-million, including $900 000 related to development of an exploration drift at Stratoni, in Greece.

Eldorado reported strong liquidity of about $1.1-billion, including $873.9-million in cash, cash equivalents and term deposits, and $250-million in undrawn lines of credit at quarter end.

Meanwhile, the company was making solid progress on its Greece-based development projects, including the Olympias Phase II starting commissioning in the quarter. The company expects to declare commercial production in the third quarter.

Eldorado also announced that it has received multiple tenders for significantly better concentrate sales terms for gold concentrate produced for beyond 2017 at Olympias Phase II.

Construction at Skouries continued, on track for an expected 2019 start-up.

“Both Tocantinzinho and Certej [Romania] are progressing with engineering optimisations. As I leave my current role, I am confident that the incoming president and CEO, George Burns, and the Eldorado team are well positioned to continue to grow our company in a manner that provides significant additional value for shareholders,” outgoing president and CEO Paul Wright stated. Burns took over the Eldorado reins on Friday.

In 2017, Eldorado expects to produce 365 000 oz to 400 000 oz of gold, including pre-commercial ounces from Olympias Phase II. All-in sustaining cash costs expected to range from $845/oz to $875/oz.

The company's balance sheet remains one of the strongest in its peer group, with about $874-million in cash, cash equivalents and term deposits and $250-million in undrawn credit lines.

Eldorado’s NYSE-listed stock climbed 8% to $3.60 a share on Friday, after dropping 13% since the start of the year.