Eldorado Reports Year-End and Fourth Quarter Financial and Operational Results
NEWS RELEASE ELD No. 13-03 TSX: ELD NYSE: EGO February 22, 2013
Eldorado Reports Year-End and Fourth Quarter Financial and Operational Results Earnings: $0.16 per share – Q4; $0.44 per share – full year 2012 (all figures in United States dollars unless otherwise noted)
VANCOUVER, BC – Paul N. Wright, Chief Executive Officer of Eldorado Gold Corporation, (“Eldorado” the “Company” or “we”) is pleased to report on the Company's financial and operational results for the year ended December 31, 2012. Eldorado reported profit attributable to shareholders of the Company of $305.3 million for the year ended December 31, 2012 on sales of 625,394 ounces of gold at an average price of $1,674 per ounce.
“In addition to the continued strong earnings and production achieved in 2012, the Company completed its acquisition of European Goldfields Limited (“EGU”) during the year, significantly increasing our gold reserves” said Paul Wright, President and CEO of Eldorado Gold. “As well, the Company strengthened its cash position through the issuance of Senior Notes totalling $600.0 million, proceeds of which will be used to fund a strong set of development projects in the pipeline.”
2012 Results and Corporate Developments
- Gold production, including pre-commercial production from Efemcukuru: 656,324 ounces – 2012; 658,652 ounces – 2011.
- Gold revenues: $1,047.1 million – 2012; $1,042.1 million – 2011.
- Basic earnings per share: $0.44 per share – 2012; $0.58 per share – 2011.
- Cash generated from operating activities before changes in non-cash working capital (a non- IFRS measure): $447.7 million – 2012; $502.1 million – 2011. Additionally, sales of precommercial production from Efemcukuru generated proceeds of $54.7 million.
- The Company paid dividends totalling Cdn$0.15 per share compared to Cdn$0.11 per share in 2011.
- European Goldfields Limited was acquired on February 24, 2012.
- Reserves increased significantly year over year.
- The Company issued Senior Notes totalling $600.0 million in December 2012.
Change in Greek corporate income tax rate post acquisition
On January 11, 2013 the government of Greece enacted legislation increasing the corporate income tax rate from 20% to 26%, effective January 1, 2013. The Company calculated its deferred tax liability with respect to its Greek assets including the assets acquired as part of the EGU acquisition based on the 20% Greek income tax rate (the legislated tax rate at the acquisition date). As required by IAS 12, “Income Taxes”, when an income tax rate changes, the deferred tax liability must be adjusted to reflect the change in the income tax rate. The adjustment is required to be charged to deferred income tax expense. The Company anticipates that the increase in the Greek income tax rate from 20% to 26% will increase the deferred tax liability and the deferred tax expense by approximately $130.0 million or approximately $0.18 per share in the first quarter of 2013.
Summarized Annual Financial Results
| ($millions except as noted) | 2012 | 2011 | 2010 |
| Revenues(1) | $1,147.5 | $1,103.7 | $793.7 |
| Gold sold (ounces) | 625,394 | 658,919 | 639,949 |
| Average realized gold price ($/ounce) | $1,674 | $1,581 | $1,223 |
| Average London spot gold price ($/ounce) | $1,669 | $1,572 | $1,225 |
| Cash operating costs ($/ounce)(2) | $483 | $405 | $382 |
| Total cash costs ($/ounce)(2) | $554 | $472 | $423 |
| Gross profit from gold mining operations(2) | $595.0 | $610.8 | $400.7 |
| Profit(3) | $305.3 | $318.7 | $221.0 |
| Earnings per share – Basic ($/share)(3) | $0.44 | $0.58 | $0.41 |
| Earnings per share – Diluted ($/share)(3) | $0.44 | $0.58 | $0.40 |
| Cash flow from operating activities before changes in non-cash | $447.7 | $502.1 | $357.9 |
working capital(2)
| Capital Spending – cash basis | $426.2 | $272.8 | $226.3 |
| Dividends paid – (Cdn$/share) | $0.15 | $0.11 | $0.05 |
| Cash and cash equivalents | $816.8 | $393.8 | $314.3 |
| Total Assets | $7,928.1 | $3,960.4 | $3,685.4 |
| Total long-term financial liabilities(4) | $662.9 | $63.2 | $113.4 |
(1) Revenues include proceeds from the sale of lead and zinc concentrates produced by Stratoni in the amount of $47.9 million (Stratoni was acquired in 2012), the sale of iron ore from Vila Nova in the amount of $45.6 million in 2012 ($56.8 million – 2011; $8.3 million – 2010), the sale of pyrite from Olympias in the amount of $0.8 million (Olympias was acquired in 2012), and the sale of silver in the amount of $6.1 million from our gold mines ($4.8 million – 2011; $2.6 million – 2010). (2) We use cash operating cost per ounce, total cash costs per ounce, gross profit from gold mining operations, and cash flow from operating activities before changes in non-cash working capital as additional measures of Company performance. These are non-IFRS measures. Please see page 16 of our Management Discussion and Analysis for an explanation and discussion of these non-IFRS measures. (3) Attributable to shareholders of the Company. (4) Includes long-term debt net of deferred financing costs, defined benefit plans, and asset retirement obligations.
Review of Annual Financial Results
Profit attributable to shareholders of the Company for the year ended December 31, 2012 was $305.3 million, or $0.44 per share, compared to $318.7 million, or $0.58 per share in 2011. The main factors that impacted our profit as compared to the profit for the year ended December 31, 2011 were: 1) higher production costs due to higher operating costs at our Chinese gold mines; 2) lower depreciation and amortization expense mainly as a result of lower sales volumes; 3) higher exploration expenses due to an increase in the Company’s worldwide exploration activities; 4) higher general and administrative expenses mainly as a result of the additional costs of managing the general and administrative activities of our Greek and Romanian subsidiaries from our acquisition of EGU; 5) transaction costs of $21.2 million connected with the acquisition of EGU; and 6) lower income tax expense due to recognition of $15.8 million of investment incentive tax credits in Turkey related to Efemçukuru and the impact of Turkish lira exchange rate changes on the tax basis of our Turkish tax assets. The effective tax rate decreased from 32% to 29% year over year for the same reasons.
Review of Quarterly Results
Profit attributable to shareholders of the Company for the quarter ended December 31, 2012 was $115.0 million, or $0.16 per share, compared to $88.8 million, or $0.16 per share for the same period in 2011. The main factors that impacted our profit as compared to the profit for the quarter ended December 31, 2011 were: 1) Increased gold revenues from Efemçukuru concentrate sales; 2) Higher operating costs at our Chinese gold mines; and 3) Lower income tax expense due to recognition of $14.6 million of investment incentive tax credits in Turkey. The effective tax rate decreased from 32% to 20% quarter over quarter for the same reasons.
Operations review and outlook Gold Operations
| 2012 | 2011 | 2013 outlook(1) | |
| Total Operating Gold Mines |
| Gold ounces produced | 656,324 | 658,652 705,000 to 760,000 | |
| Cash operating costs ($ per ounce) | 483 | 405 | 515 to 530 |
| Total cash costs ($ per ounce) | 554 | 472 | n/a |
| Capital expenditure (millions) | 331.8 | 241.9 | 410.0 |
Kısladağ
| Gold ounces produced | 289,294 | 284,648 290,000 to 300,000 | |
| Cash operating costs ($ per ounce) | 332 | 374 | 350 to 360 |
| Total cash costs ($ per ounce) | 361 | 398 | n/a |
| Capital expenditure ($ millions) | 104.9 | 53.1 | 200.0 |
Efemçukuru
| Gold ounces produced | 66,870 | n/a 125,000 to 135,000 | |
| Cash operating costs ($ per ounce) | 583 | n/a | 470 to 490 |
| Total cash costs ($ per ounce) | 613 | n/a | n/a |
| Capital expenditure ($ millions) | 73.2 | 103.8 | 45.0 |
Tanjianshan
| Gold ounces produced | 110,611 | 114,972 90,000 to 100,000 | |
| Cash operating costs ($ per ounce) | 415 | 377 | 485 to 500 |
| Total cash costs ($ per ounce) | 612 | 567 | n/a |
| Capital expenditure ($ millions) | 23.9 | 8.9 | 10.0 |
Jinfeng
| Gold ounces produced | 107,854 | 177,757 105,000 to 115,000 | |
| Cash operating costs ($ per ounce) | 817 | 442 | 800 to 820 |
| Total cash costs ($ per ounce) | 901 | 507 | n/a |
| Capital expenditure ($ millions) | 59.0 | 32.2 | 55.0 |
White Mountain
| Gold ounces produced | 80,869 | 81,275 | 60,000 to 70,000 |
| Cash operating costs ($ per ounce) | 625 | 474 | 760 to 780 |
| Total cash costs ($ per ounce) | 671 | 517 | n/a |
| Capital expenditure ($ millions) | 27.2 | 17.2 | 30.0 |
Olympias
| Gold ounces produced | 826 | n/a | 35,000 to 40,000 |
| Cash operating costs ($ per ounce) | n/a | n/a | 780 to 800 |
| Total cash costs ($ per ounce) | n/a | n/a | n/a |
| Capital expenditure ($ millions) | 43.6 | n/a | 70.0 |
(1) Outlook metal prices: gold - $1,700/oz. silver - $30/oz.
Annual review – Operations
Kişladağ
Gold production for 2012 of 289,294 ounces, was 2% higher than 2011. A total of 12,606,575 tonnes of ore were placed on the leach pad at a head grade of 1.20 g/t Au (2011 – 12,430,447; 0.95 g/t Au). Gold inventory levels on the leach pad increased 33% as a result of the higher rates of ore placement as compared with leaching rates. The heap leach gold inventory level is expected to decline as these additional gold ounces place on the pad in 2012 are leached and recovered into dore in 2013.
Cash operating costs of $332 per ounce (2011 - $374 per ounce) were lower year over year as a result of the higher grade material placed on the pad as well as lower annual average exchange rates for the Turkish lira year over year.
Tanjianshan
Gold production for 2012 of 110,611 ounces, was 4% lower than 2011 mainly as a result of lower average treated head grade and lower additional flotation concentrate feed. Ore milled of 1,056,847 tonnes was 5% higher than 2011 while average treated head grade of 3.67 g/t Au was 7% lower than 2011. Circuit recoveries of 82.6% remained relatively constant with a slight increase in average recovery rate year over year (2011 – 82.1%). Additionally, flotation concentrate produced in prior years from ore mined from the Qinlongtan pit between 2007 and 2008 and added to the roaster feed was responsible for approximately 7,700 ounces of production in 2012 (2011 – approximately 12,000 ounces).
Cash operating costs of $415 per ounce (2011 - $377 per ounce) were 10% higher year over year mainly as a result of lower grade ore and lower flotation concentrate feed.
Jinfeng
Gold production for 2012 of 107,854 ounces was 39% lower than 2011 mainly as a result of lower throughput and head grade due to impact of limited production from the open pit pending completion of a cutback. A total of 96,800 tonnes of ore was mined from the open pit in 2012 (2011 - 689,737 tonnes). Mining of ore was also impacted by pit wall instability due to excessive rainfall during the second quarter. It is expected that ore production will recommence from the pit in the second quarter of 2013 once the waste stripping has uncovered the ore body. A total of 541,555 tonnes of ore were mined from the underground during the year (2011 - 494,422 tonnes). Additionally, a total of 491,101 tonnes of low grade stockpiled ore and 293,338 tonnes of mineralized waste were fed to the plant during 2012.
Cash operating costs of $817 per ounce (2011 - $442 per ounce) were 85% higher year over year reflecting the impact of the decrease in treated head grade and the slightly lower throughput.
White Mountain
Gold production for 2012 of 80,869 ounces was slightly lower than 2011 with higher ore throughput offsetting lower grade. A total of 754,673 tonnes were processed at a grade of 3.85 g/t Au (2011 – 708,882 tonnes at 4.37 g/t Au). The increase in tonnes was due to an increase in underground mining efficiency as a result of increased mine development. The average recovery rate of 86.3% was higher than that of 2011 of 81.8% as a result of the process plant changes related to caustic pre-treatment of sulfide ore made in late 2011.
Cash operating costs per ounce of $625 per ounce (2011 - $474 per ounce) were 32% higher year over year as a result of the decrease in head grade and higher costs related to increased backfill and secondary development rates to sustain higher production tonnage.
Efemçukuru
Efemçukuru began milling ore at its process plant on a pre-commercial production basis in June 2011 and the facility reached commercial production rates by the end of 2011. Unseasonably cold and wet weather impacted production during the first quarter of 2012 while delays in commissioning the underground crushing system and the paste fill system affected the second quarter of 2012. By the fourth quarter of 2012 all systems were in place and operating as expected, and production rates increased accordingly.
During 2012 Efemçukuru shipped its concentrate to the Kişladağ Concentrate Treatment Plant (“KCTP”) and operated the KCTP on a pre-commercial production basis while modifying the facility in an effort to reach full commercial production. The KCTP was unable to achieve expected production rates during the year and in September 2012 the plant was placed on care and maintenance pending completion of metallurgical testwork, and development of design alternatives with a view to commissioning the upgraded plant in 2013. Approximately 30,000 ounces of gold were produced and sold on a precommercial basis during the KCTP testing period. The revenues, net of cost to produce, were credited to plant and equipment.
In November 2012 Efemçukuru began selling its concentrate to third parties for shipment to smelters in China and had sold 36,450 ounces by year end as well as 597 ounces poured from the gravity circuit at Efemçukuru. These sales were recorded as commercial production and the revenues and costs were reflected in the income statement in 2012. At the end of 2012 approximately 35,000 contained ounces in concentrate remained in inventory. These ounces are expected to be sold in the first quarter of 2013.
Vila Nova
Vila Nova processed 710,909 tonnes of iron ore at an average grade of 63.9% Fe during 2012 (2011 – 623,684 tonnes at 63.9% Fe). A total of 603,668 tonnes of iron ore were sold on the spot market during 2012 at an average price of $76 per tonne (2011 – 473,387 tonnes at $120 per tonne). Iron ore prices were weak during 2012 as compared with 2011 prices but recovered somewhat in the fourth quarter of 2012. Operating costs of $60 per tonne (2011 - $64 per tonne) fell slightly year over year mainly due to the weaker Brazilian real.
Stratoni
Stratoni processed 191,602 tonnes of ore and produced 50,680 tonnes of lead/zinc concentrates during 2012 subsequent to the acquisition of EGU by the Company. A total of 52,934 tonnes of lead/zinc concentrates were sold during that same period at an average price of $905 per tonne and average cash operating costs of $729 per tonne.
Annual review – Development projects
Kişladağ Phase IV Mine Expansion
The basic engineering package for the process circuit and mine infrastructure for the Phase IV Mine Expansion was completed in the third quarter of 2012. The capital cost estimate for the project is being updated based on the basic engineering designs. A Connection Agreement was reached with the high voltage power supplier to provide an additional 154 kV power line to the site. Temporary power distribution facilities will be required for start up of the first electric shovel. Work continued on design of the North Leach Pad and North Rock dump including detailed designs for initial construction work.
Procurement of long lead equipment has been ongoing with orders prepared or placed for the mobile mining fleet as well as fixed plant equipment for the crushing and screening circuits.
Construction activity on site has been focused on earthworks in the proposed plant site and crusher pad areas. The total amount of cut and fill material within the existing permitted area has been substantially completed. Safety continues to be a major focus on the site with 150,393 man-hours spent to date on the project this year with no medical aid or lost time incidents.
Capital spending at Kişladağ for the Phase IV Mine Expansion amounted to $74.4 million in 2012, this included $28.7 million for procurement of long lead equipment.
Olympias
Olympias was acquired by the Company in February 2012 as part of the EGU transaction. The Olympias orebody is a carbonate replacement deposit containing proven and probable gold reserves of 3.8 million ounces of gold with significant lead and zinc values. Olympias was mined in the past from underground and produced lead and zinc concentrates as well as an arsenopyrite-gold concentrate. At the time of its acquisition the mine was on care and maintenance.
The Company is planning to develop Olympias in three phases. In Phase I the plan is to refurbish and recommission the existing mill and flotation circuits and to reprocess approximately 2.41 million tonnes of historic tailings grading 3.4 g/t gold, at a rate of approximately 900,000 tonnes per annum. The reprocessing facility is designed to produce a flotation concentrate which can be sold commercially.
Approximately 28,300 tonnes of tailings were reprocessed during the final quarter of 2012 at a grade of 5.07 grams per tonne during the re-commissioning of the reprocessing facility. Approximately 826 payable ounces of gold in concentrate were shipped to a smelter prior to year end and were accounted for as pre-commercial production.
Underground refurbishment was begun during 2012 in tandem with the tailings retreatment with the goal of beginning underground mining in Phase II. Approximately 1,000 meters of underground drifts were rehabilitated and 1,377 meters of new drifts were completed. Mine production during Phases II and III, is estimated to be 450,000 and 850,000 tonnes per annum respectively. A core relogging and geologic interpretation program was begun in 2012 to better understand the full extent and distribution of gold mineralization. Based on results of this work the production rates may be increased for Phases II and III.
In Phase III (projected to begin in 2018) the Company plans to construct a new metallurgical plant at Stratoni to treat Olympias ore which will be accessed via an 8 kilometer tunnel, transporting ore to the plant and tailings back to the underground for backfill.
Capital costs incurred in 2012 since the date of the EGU acquisition were $43.6 million for mine development and rehabilitation, and for mill refurbishment.
Skouries
Skouries is a copper\gold porphyry deposit that the Company plans to develop using both open pit and underground mining methods. The deposit currently hosts proven and probable reserves of 3.6 million ounces of gold and 743,000 tonnes of copper.
From the date of the EGU acquisition a total of $20.6 million was spent on capital development at Skouries. The work consisted mainly of site clearing and preparation, geotechnical drilling (835 meters), detailed engineering studies and road building.
On February 17, 2013 the Skouries project site was attacked by a group of armed intruders. Office trailers and mobile equipment were destroyed. The Company is cooperating with the police and other relevant authorities to ensure the safety of our employees and assets.
Certej
The Certej development project in Romania was also acquired as part of the EGU transaction. This deposit hosts a 4.3 million ounce measured and indicated resource that will be developed using open pit mining methods. The Environmental Permit for Certej was approved by the Timisoara Regional Department of Environment during the third quarter of 2012.
Exploration drilling during 2012 significantly expanded the resource at Certej and work is currently underway to convert the resource into an updated and expanded pit design and ore reserve. In addition, metallurgical testwork is ongoing, both to validate the appropriateness of the currently designed metal recovery process and to examine alternative metallurgical processes.
From the date of the EGU acquisition at total of $9.9 million was spent on capital development including land acquisition, metallurgical drilling and testwork, and exploration drilling.
Perama Hill
The Ministry of Environment completed the review of the Preliminary Environmental Impact Assessment (“PEIA”) application and issued the Approval of the PEIA study in February 2012. Processing of the EIA will be carried out under the Fast Track program established by the Greek government in 2012. Approval of the EIA is expected to be received in the first quarter of 2013.
Geotechnical drilling in the plant site and tailings disposal basin as well as geotechnical holes in the pit area was begun during 2012. Samples for metallurgical testwork were recovered from selected drill holes.
The basic engineering package for the process plant and ancillary facilities was completed in the fourth quarter of 2012. Detailed engineering including foundation and structural design was initiated for the process plant, ancillary buildings and filtration plant.
Capital spending for Perama Hill in 2012 amounted to $7.6 million.
Eastern Dragon
Due to delays in the permitting process for Eastern Dragon the Company elected to reduce activity on site until resolution of the issues can be achieved. During the course of the year construction work at the site was focused on completing critical work already in progress as well as securing the site and equipment for care and maintenance.
Capital costs incurred at Eastern Dragon totalled $13.9 million spent on completion of construction work and care and maintenance of the site facilities.
Tocantinzinho
The Preliminary Environmental License for the Tocantinzinho project was issued in September 2012. Public participation meetings held in the project area in June were positive and supportive of the project development. Engineering efforts have focused on preparation of a Feasibility Study for the mine and infrastructure and the backup data and designs required for the study. Preliminary results from the feasibility work have revealed a number of areas which could be optimized to improve on the economic performance of the project. A critical review of the project will be undertaken in 2013 to address areas which can potentially impact both capital and operating costs.
Project spending in 2012 was $12.1 million, not including capitalized exploration costs.
Annual review – Exploration
During 2012 the Company conducted grassroots, advanced stage and minesite exploration activities which included drilling approximately 184,000 meters of drill holes, and involved 32 projects across Turkey, China, Brazil, Greece, and Romania.
Turkey
Kişladağ At Kişladağ, a total of 10,200 meters of diamond drilling was completed in 2012 testing multiple deep targets defined by a combination of geophysical surveys, soil geochemistry, and geological modelling. The drilling program was not successful at identifying new mineralized porphyry centers, and most of the mineralization and alteration identified is likely a peripheral footprint of the Kişladağ deposit. Two final targets remain to be tested once drill-site permitting has been granted.
Efemçukuru At Efemçukuru, approximately 30,700 meters of exploration drilling was completed during the year on both the Kestane Beleni and the Kokarpinar vein systems. At Kestane Beleni, drilling was focussed on the Northwest Extension target area (“KBNW”), and also on the down-dip stepouts in the South Ore Shoot (“SOS”) and Middle Ore Shoot / North Ore Shoot (“MOS/NOS”) transition area. In the KBNW target area, 2012 drilling defined a new shallowly-plunging ore shoot with high gold grades. This ore shoot remains open down plunge to the northwest. In both the SOS and MOS/NOS transition areas, the new drilling extended the known mineralization downdip, and ore shoots remain open at depth. Drilling on the Kokarpinar vein system focused on the relatively untested central portion of the vein. Two new ore shoots were identified: a northern ore shoot supported to date by multiple bonanza grade intercepts, and a more limited southern ore shoot, dominated by stockwork mineralization in the hangingwall to the principal vein. The northern Kokarpinar ore shoot is open downdip, and has also not been tested in the approximately 300 meter interval between the drillhole intercepts and the surface. Most of the mineralization identified in 2012 drilling at both Kestane Beleni and Kokarpinar falls in the Inferred Resource category. Infill drilling of these zones is planned for 2013.
China
Tanjianshan district The 2012 exploration program in the Tanjianshan district included drilling programs at the Xijongou (“XJG”) deposit, the Qinlongtan (“QLT”) north target area, the Zhongxinshan (ZXS) prospect, and the Jinlonggou (“JLG”) deposit. At XJG, a total of 5,700 meters of drilling was conducted on infill and stepout holes, providing further definition of the two main mineralized zones as well as testing new target areas. At QLT north, drilling tested the mineralized fault zone at depth beneath the north end of the open pit. Several high-grade intercepts contributed to a new inferred resource in this target area, which is included in the exploration program for 2013. In addition, exploration drilling by our joint venture partner at QLT north encountered a strongly-mineralized intrusion with high gold grades adjacent to the controlling fault. Follow-up drilling of this new zone of mineralization began in late 2012 and is included in the 2013 exploration program.
At the Jinlonggou pit, a total of 10,800 meters of drilling targeted zones of inferred mineralization beneath the floor of the current design pit, and also tested the continuity of mineralized fault zones behind the west and south pit walls. This drilling yielded several new zones of Inferred Resources, which are included in the planned infill and stepout drilling program for 2013.
Jinfeng district At the Jinfeng mine, drilling included surface and underground programs (16,500 meters and 14,200 meters respectively) which targeted step-outs along the known major mineralized fault zones (F2, F3, F6), infilled gaps in the existing resource model, and tested new conceptual targets. The exploration drilling was successful in maintaining Measured and Indicated Resources at the deposit.
White Mountain district Exploration drilling of the White Mountain deposit was delayed pending development of additional underground drill stations.
Brazil
Tocantinzinho district At Tocantinzinho, 2012 exploration activities included 5,700 meters of diamond drilling testing geophysical and geochemical targets peripheral to the deposit. Significant results included the discovery of a zone of copper-molybdenum porphyry-style mineralization several kilometers west of Tocantinzinho, with a drillhole intercept of 295.0 meters grading 0.19% copper and 0.015% molybdenum. Narrow intervals of high grade gold mineralization were also encountered in several drillholes, and will be further tested in 2013.
Reconnaissance At the Agua Branca project, 8,800 meters of drilling tested the Camarao Hill zone over a 2 kilometer strike length. Although the drilling confirmed continuity of the northeast-striking mineralized zone, significant gold values were typically restricted to narrow intervals within broad low grade zones, and none of the new holes improved on results from previous drill programs. Additional auger testing is planned for early 2013.
Reconnaissance fieldwork aimed at defining drill targets was completed during the year at the Piranhas and Chapadinha projects, both being explored under option agreements with private owners.
Greece
Chalkidiki district In the Chalkidiki district, drilling programs were completed in 2012 at the Skouries, Piavitsa, and Fisoka project areas. At Piavitsa, 14,000 meters of drilling tested the mineralized Stratoni Fault zone over approximately a 2 kilometer strike length, constraining a new Inferred Resource for the deposit. Strongest mineralization was encountered in two areas: one near the central portion of the tested area; and the other in the Piavitsa West area, where the Stratoni Fault appears to be offset by a north-striking younger fault. Several drillholes also cut mineralized veins with intermediate sulfidation epithermal characteristics and moderate gold grades. This discovery represents a style of mineralization not previously known in the district.
At Skouries, a total of 12,100 meters of drilling was completed including 19 infill drillholes in the design pit area, and two deep confirmation drillholes. Infill drillholes converted portions of the low-grade Inferred Resource peripheral to the deposit core into Measured and Indicated Resources. The two deep confirmation holes intersected intense porphyry-style mineralization within potassically altered syenite and lesser wallrock zones, with grades similar to those predicted by the resource model.
At Fisoka, a total of 2,700 meters of drilling was completed testing the three primary porphyry target areas. Best results were from a shallow supergene blanket over the northern porphyry body, with grades similar to those obtained from previous drilling programs.
Perama district In the Perama district, exploration activities during 2012 focused on mapping and sampling of the Perama South deposit area, directed towards identifying controls on mineralization for future drill targeting. At Perama Hill, infill drilling along the western margin of the deposit began late in the year.
Romania
Certej district Exploration activities in the Certej district during 2012 included drilling programs at the Certej deposit and at the Sacaramb prospect. At the Certej deposit, drilling focused on two areas referred to as the link zone and the west pit areas. A total of 13,900 meters of drilling was completed which identified new high grade zones of mineralization within the deeper parts of the link zone, and significantly increased the deposit resource. At Sacaramb, drilling tested geophysical anomalies along the inferred extension of vein systems that were mined historically. This drill program did not encounter significant new mineralization.
Reserves and Resources
As a result of our acquisition of EGU the Company reported an additional 6.8 million contained ounces of gold in Proven and Probable Reserves and 13.4 million contained ounces of Measured and Indicated Resources at the end of 2012. Proven and Probable Reserves do not include Certej project. Work is currently underway to convert the expanded resource at Certej into reserves, which we plan to complete during 2013. The previous reserve of 46.7 million tonnes at 1.60 g/t Au and 11.5 g/t Ag was calculated on a smaller resource base and is now considered historical. Reserves at the end of 2012 totalled 25.8 million contained ounces of gold, compared with 19.0 million ounces at the end of 2011. Measured and Indicated Resources at the end of 2012 totalled 36.3 million contained ounces of gold, compared with 22.9 million ounces at the end of 2011. Complete mineral reserve and resource data including tonnes, grades and ounces as well as major assumptions and qualified persons responsible for these numbers are shown below in Table 1.
Table 1: Eldorado Gold Mineral Reserves, as of December 2012 Project Proven Mineral Reserves Probable Mineral Reserves Total Proven and Probable Gold Tonnes Au In-situ Au Tonnes Au In-situ Au Tonnes Au In-situ Au ounces ounces ounces (x1000) g/t (x1000) g/t (x1000) g/t (x1000) (x1000) (x1000) Certej (See Mineral Reserve Note 3)
Eastern Dragon 837 11.07 297 2,253 6.46 467 3,090 7.71 764 1,182 10.81 411 4,019 6.87 886 5,201 7.77 1,297
Efemcukuru
Jinfeng 7,775 3.97 993 8,859 3.62 1,032 16,634 3.79 2,025 102,695 0.88 2,913 344,915 0.64 7,148 447,610 0.70 10,061
Kisladag
11,294 7.57 2,749 4,686 8.70 1,311 15,980 7.90 4,060
Olympias
Perama 2,477 4.44 354 7,220 2.68 621 9,697 3.13 975 65,536 0.88 1,850 82,386 0.66 1,751 147,922 0.76 3,601
Skouries
Tanjianshan 3,505 2.94 331 1,156 2.96 109 4,661 2.95 440 17,735 1.39 792 31,315 1.17 1,183 49,050 1.25 1,975
Tocantinzinho
| White Mountain | 3,270 | 3.10 | 326 | 2,140 | 3.37 | 232 | 5,410 | 3.21 | 558 |
| TOTAL GOLD | 216,306 | 1.58 | 11,016 | 488,949 | 0.94 | 14,740 | 705,255 | 1.14 | 25,756 |
| Tonnes | Ag | Tonnes | Ag | Tonnes | Ag | ||||
| Silver | In-situ Ag | In-situ Ag | In-situ Ag | ||||||
| ounces | ounces | ounces | |||||||
| (x1000) | g/t | (x1000) | g/t | (x1000) | g/t | ||||
| (x1000) | (x1000) | (x1000) |
Certej (See Mineral Reserve Note 3)
Eastern Dragon 837 81 2,178 2,253 67 4,848 3,090 71 7,026 11,294 104 37,763 4,686 140 21,092 15,980 115 58,855
Olympias
Perama 2,477 3 254 7,220 4 897 9,697 4 1,151 784 195 4,915 112 107 385 896 184 5,300
Stratoni
| TOTAL SILVER | 15,392 | 91 | 45,110 | 14,271 | 59 | 27,222 | 29,663 | 76 | 72,332 |
| Tonnes | Cu | Tonnes | Cu | Tonnes | Cu | ||||
| Copper | In-situ Cu | In-situ Cu | In-situ Cu | ||||||
| tonnes | tonnes | tonnes | |||||||
| (x1000) | % | (x1000) | % | (x1000) | % | ||||
| (x1000) | (x1000) | (x1000) | |||||||
| 65,536 | 0.64 | 343 | 82,386 | 0.51 | 406 | 147,922 | 0.57 | 749 |
Skouries TOTAL COPPER 65,536 0.64 343 82,386 0.51 406 147,922 0.57 749
Tonnes Pb In-situ Pb Tonnes Pb In-situ Pb Tonnes Pb In-situ Pb Lead
| tonnes | tonnes | tonnes | ||||||
|---|---|---|---|---|---|---|---|---|
| (x1000) | % | (x1000) | % | (x1000) | % | |||
| (x1000) | (x1000) | (x1000) | ||||||
| 8,886 | 4.3 | 382 | 4,686 | 4.7 | 220 | 13,572 | 4.4 | 602 |
Olympias
| Stratoni | 784 | 7.4 | 58 | 112 | 3.9 | 4 | 896 | 6.9 | 62 |
| TOTAL LEAD | 9,670 | 4.6 | 440 | 4,798 | 4.7 | 224 | 14,468 | 4.6 | 664 |
| Zinc | Tonnes | Zn | In-situ Zn | Tonnes | Zn | In-situ Zn | Tonnes | Zn | In-situ Zn |
| tonnes | tonnes | tonnes | |||||||
| (x1000) | % | (x1000) | % | (x1000) | % | ||||
| (x1000) | (x1000) | (x1000) | |||||||
| Olympias | 8,886 | 5.7 | 507 | 4,686 | 6.2 | 291 | 13,572 | 5.9 | 798 |
| Stratoni | 784 | 11.3 | 89 | 112 | 12.9 | 14 | 896 | 11.5 | 103 |
| TOTAL ZINC | 9,670 | 6.2 | 596 | 4,798 | 6.4 | 305 | 14,468 | 6.2 | 901 |
| Tonnes | Fe | Tonnes | Fe | Tonnes | Fe |
Iron
| (x1000) | % | (x1000) | % | (x1000) | % |
|---|---|---|---|---|---|
| Vila Nova 2,810 | 59.4 | 6,940 | 58.5 | 9,750 | 58.8 |
| TOTAL IRON 2,810 | 59.4 | 6,940 | 58.5 | 9,750 | 58.8 |
| Table 2: Eldorado Gold Mineral Resources as of December 2012 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Project | Measured Resources | Indicated Resources Total Meaured and Indicated | Inferred Resources | |||||||||
| Gold | Tonnes | Au | In-situ Au | Tonnes | Au | In-situ Au | Tonnes | Au | In-situ Au | Tonnes | Au | In-situ Au |
| (x1000) | g/t | ounces (x1000) | (x1000) | g/t | ounces (x1000) | (x1000) | g/t | ounces (x1000) | (x1000) | g/t | ounces (x1000) | |
| Certej | 14,500 | 1.84 | 860 | 92,200 | 1.19 | 3,520 | 106,700 | 1.27 | 4,380 | 24,400 | 1.01 | 800 |
| Eastern Dragon | 800 | 12.48 | 322 | 2,700 | 6.04 | 530 | 3,500 | 7.50 | 852 | 2,200 | 2.67 | 190 |
| Efemcukuru | 1,271 | 11.85 | 485 | 4,614 | 7.85 | 1,165 | 5,885 | 8.71 | 1,650 | 5,242 | 4.96 | 835 |
| Jinfeng | 11,353 | 3.94 | 1,437 | 13,704 | 3.40 | 1,499 | 25,057 | 3.64 | 2,936 | 10,422 | 3.07 | 1,029 |
| Kisladag | 105,533 | 0.87 | 2,938 | 458,222 | 0.59 | 8,618 | 563,755 | 0.64 | 11,556 | 379,725 | 0.40 | 4,908 |
| Olympias | 10,545 | 8.49 | 2,878 | 4,298 | 10.00 | 1,382 | 14,843 | 8.93 | 4,260 | 1,666 | 8.90 | 477 |
| Perama | 3,064 | 4.30 | 424 | 9,375 | 3.18 | 958 | 12,439 | 3.46 | 1,382 | 8,766 | 1.96 | 554 |
| Piavitsa | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 0 | 0.00 | 0 | 10,854 | 4.95 | 1,727 |
| Skouries | 99,135 | 0.80 | 2,552 | 184,493 | 0.49 | 2,853 | 283,628 | 0.60 | 5,405 | 168,063 | 0.31 | 1,673 |
| Tanjianshan | 4,383 | 2.77 | 389 | 3,694 | 2.49 | 295 | 8,077 | 2.64 | 684 | 3,541 | 3.85 | 439 |
| Tocantinzinho | 19,777 | 1.29 | 820 | 50,457 | 0.97 | 1,574 | 70,234 | 1.06 | 2,394 | 6,950 | 0.66 | 147 |
| White Mountain | 4,029 | 3.47 | 450 | 3,337 | 3.23 | 346 | 7,366 | 3.36 | 796 | 4,193 | 5.22 | 704 |
| TOTAL GOLD | 274,390 | 1.54 | 13,555 | 827,094 | 0.86 | 22,740 | 1,101,484 | 1.02 | 36,295 | 626,022 | 0.67 | 13,483 |
| Silver | Tonnes | Ag | In-situ Ag | Tonnes | Ag | In-situ Ag | Tonnes | Ag | In-situ Ag | Tonnes | Ag | In-situ Ag |
| (x1000) | g/t | ounces (x1000) | (x1000) | g/t | ounces (x1000) | (x1000) | g/t | ounces (x1000) | (x1000) | g/t | ounces (x1000) | |
| Certej | 14,500 | 7 | 3,170 | 92,200 | 9 | 27,500 | 106,700 | 9 | 30,670 | 24,400 | 6 | 4,870 |
| Eastern Dragon | 800 | 91 | 2,400 | 2,700 | 67 | 5,900 | 3,500 | 73 | 8,300 | 2,200 | 20 | 1,500 |
| Olympias | 10,545 | 117 | 39,666 | 4,298 | 161 | 22,248 | 14,843 | 130 | 61,914 | 1,666 | 155 | 8,302 |
| Perama | 3,064 | 3 | 335 | 9,375 | 9 | 2,833 | 12,439 | 8 | 3,168 | 8,766 | 7 | 1,860 |
| Piavitsa | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 10,854 | 39 | 13,610 |
| Stratoni | 1,141 | 181 | 6,640 | 0 | 0 | 0 | 1,141 | 181 | 6,640 | 705 | 89 | 2,017 |
| TOTAL SILVER | 30,050 | 54 | 52,211 | 108,573 | 17 | 58,481 | 138,623 | 25 | 110,692 | 48,591 | 21 | 32,159 |
| Copper | Tonnes | Cu | In-situ Cu | Tonnes | Cu | In-situ Cu | Tonnes | Cu | In-situ Cu | Tonnes | Cu | In-situ Cu |
| (x1000) | % | tonnes (x1000) | (x1000) | % | tonnes (x1000) | (x1000) | % | tonnes (x1000) | (x1000) | % | tonnes (x1000) | |
| Skouries | 99,135 | 0.49 | 484 | 184,493 | 0.41 | 750 | 283,628 | 0.43 | 1,234 | 168,063 | 0.34 | 575 |
| TOTAL COPPER | 99,135 | 0.49 | 484 | 184,493 | 0.41 | 750 | 283,628 | 0.43 | 1,234 | 168,063 | 0.34 | 575 |
| Lead | Tonnes | Pb | In-situ Pb | Tonnes | Pb | In-situ Pb | Tonnes | Pb | In-situ Pb | Tonnes | Pb | In-situ Pb |
| (x1000) | % | tonnes (x1000) | (x1000) | % | tonnes (x1000) | (x1000) | % | tonnes (x1000) | (x1000) | % | tonnes (x1000) | |
| Olympias | 8,137 | 4.9 | 399 | 4,298 | 5.4 | 232 | 12,435 | 5.1 | 631 | 1,666 | 5.1 | 85 |
| Stratoni | 1,141 | 6.8 | 78 | 0 | 0.0 | 0 | 1,141 | 6.8 | 78 | 705 | 4.3 | 30 |
| TOTAL LEAD | 9,278 | 5.1 | 477 | 4,298 | 5.4 | 232 | 13,576 | 5.2 | 709 | 2,371 | 4.9 | 115 |
| Zinc | Tonnes | Zn | In-situ Zn | Tonnes | Zn | In-situ Zn | Tonnes | Zn | In-situ Zn | Tonnes | Zn | In-situ Zn |
| (x1000) | % | tonnes (x1000) | (x1000) | % | tonnes (x1000) | (x1000) | % | tonnes (x1000) | (x1000) | % | tonnes (x1000) | |
| Olympias | 8,137 | 6.6 | 537 | 4,298 | 7.1 | 305 | 12,435 | 6.8 | 842 | 1,666 | 7.2 | 120 |
| Stratoni | 1,141 | 11.3 | 129 | 0 | 0.0 | 0 | 1,141 | 11.3 | 129 | 705 | 12.5 | 88 |
| TOTAL ZINC | 9,278 | 7.2 | 666 | 4,298 | 7.1 | 305 | 13,576 | 7.2 | 971 | 2,371 | 8.8 | 208 |
| Iron | Tonnes | Fe | Tonnes | Fe | Tonnes | Fe | Tonnes | Fe | ||||
| (x1000) | % | (x1000) | % | (x1000) | % | (x1000) | % | |||||
| Vila Nova | 3,095 | 59.4 | 11,480 | 58.5 | 14,575 | 58.7 | 10,323 | 59.8 | ||||
| TOTAL IRON | 3,095 | 59.4 | 11,480 | 58.5 | 14,575 | 58.7 | 10,323 | 59.8 |