2009 Year End Financial Results Gold sales up 29 percent; Cash Flow $0.38 per share; Earnings $0.26 per share (All figures in United States dollars, unless otherwise noted)
NEWS RELEASE ELD No. 10-06 TSX: ELD NYSE: EGO ASX: EAU March 18, 2010
2009 Year End Financial Results Gold sales up 29 percent; Cash Flow $0.38 per share; Earnings $0.26 per share (All figures in United States dollars, unless otherwise noted)
VANCOUVER, BC – Paul N. Wright, President and Chief Executive Officer of Eldorado Gold Corporation, ("Eldorado" the "Company" or "we") is pleased to report on the Company's financial results for the fourth quarter and for the year ended December 31, 2009. Eldorado reported net income of $33.3 million or $0.08 per share for the quarter and for the year net income of $102.4 million or $0.26 per share. Eldorado reported cash generated from operating activities before changes in non-cash working capital of $56.6 million or $0.13 per share for the quarter and for the year of $146.9 million or $0.38 per share.
“This was a very successful quarter and year for Eldorado,” stated Paul Wright. “We had record quarterly production with strong performance from both our Kisladag and Tanjianshan gold mines. And with the successful completion of our acquisition of Sino Gold and the continued development of our projects in Turkey, China and Greece, we are solidifying our position as one of the world’s lowest cost gold producers. Our gold sales revenue increased by 29 percent to $358.5 million as we benefited from increased production and gold prices. Looking ahead, we anticipate 2010 production of 550,000 to 600,000 ounces of gold at a cash operating cost of between $385 and $400 per ounce.”
Q4 2009 Highlights
- Produced 107,904 ounces of gold at our Tanjianshan and Kisladag mines at an average cash operating cost of $308 per ounce;
- Sold 131,068 ounces of gold at a realized average price of $1,103 per ounce;
- Reported earnings of $0.08 per share; and
- Completed our acquisition of Sino Gold Mining by purchasing all of Sino Gold’s issued and outstanding shares – a transaction that values Sino Gold at approximately CDN$1.7 billion.
Financial Results
Eldorado’s consolidated net income for the fourth quarter of 2009 was $33.3 million or $0.08 per share, compared with $28.2 million or $0.08 per share (excluding the gain on the sale of Sao Bento mine) in the fourth quarter of 2008. Net income for the twelve-month period ended December 31, 2009 was $102.4 million or $0.26 per share, compared to $163.7 million or $0.46 per share in 2008. Net income in 2008 included a gain on the sale of Sao Bento of $72.5 million or $0.20 per share. Eldorado cash generated from operating activities before changes in non-cash working capital for the fourth quarter of 2009 was $56.6 million or $0.13 per share compared with $27.3 million or $0.07 per share in the fourth quarter of 2008. Cash generated from operating activities before changes in non-cash working capital for the twelve month period ended December 31, 2009 was $146.9 million or $0.38 per share compared to $125.9 million or $0.35 per share in 2008.
Over the quarter, we sold 64 per cent more ounces of gold at a 38 percent increase in price as compared to the same period in 2008. In Q4 2009 we sold 131,068 ounces of gold at an average price of $1,103 per ounce, compared to 79,965 ounces at an average price of $800 per ounce in the fourth quarter of 2008.
Corporate Activities
Completion of Sino Gold acquisition On December 15, 2009, we acquired all the remaining shares of Sino Gold that had not previously been held by us. With this acquisition, we have acquired Sino Gold’s interests in the Jinfeng Gold mine (the second-largest gold mine in China) as well as the White Mountain Gold mine and the Eastern Dragon Gold project.
Operating Performance
Kisladag During the quarter, we placed 3,679,685 tonnes of ore on the leach pad at an average grade of 0.86 grams of gold per tonne. We produced 70,131 ounces of gold at a cash cost of $296 per ounce, compared to production of 57,902 ounces of gold in the third quarter of 2009 and 60,753 ounces in the fourth quarter of 2008.
Tanjianshan We produced 37,773 ounces of gold at a cash operating cost of $330 per ounce in the fourth quarter, up from 31,016 ounces in the third quarter and compared to 21,092 ounces in the fourth quarter of 2008. Gold production has increased with the commissioning of the roaster, and recoveries in the flotation circuit have increased from around 65 percent to over 80 percent.
Jinfeng For the month of December 2009, Jinfeng produced 14,541 ounces of gold at a cash operating cost of $472 per ounce. During the month 136,054 tonnes were milled at an average grade of 3.97 grams per tonne gold.
White Mountain For the month of December 2009, White Mountain produced 6,148 ounces of gold at a cash operating cost of $364 per ounce. The mine reported 58,074 tonnes were milled at an average grade of 4.26 grams per tonne gold.
Eldorado is a gold producing and exploration company actively growing businesses in Turkey, China, Brazil, Greece and the surrounding regions. We have four operating mines, two mines under construction, a project in the developing stages and an extensive exploration program with 125,000 meters of drilling planned for 2010. With our international expertise in mining, finance and project development, together with highly skilled and dedicated staff, we believe that Eldorado is well positioned to grow in value as we create and pursue new opportunities.
ON BEHALF OF ELDORADO GOLD CORPORATION
“Paul N. Wright”
Paul N. Wright President and Chief Executive Officer
Eldorado will host a conference call Friday March 19, 2010 to discuss the Year End 2009 Financial Results at 11:30 a.m. ET (8:30 a.m. PT). You may participate in the conference call by dialling 416-695-6622 in Toronto or 1-800-355- 4959 toll free in North America and asking for the Eldorado Conference Call with Chairperson: Paul Wright, President and CEO of Eldorado Gold. The call will be available on Eldorado’s website www.eldoradogold.com. A replay of the call will be available until March 26, 2010 by dialling 416-695-5800 in Toronto or 1-800-408-3053 toll free in North America and entering the Pass code 8574327.
Certain of the statements made herein may contain forward-looking statements or information within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Such forward-looking statements or information include, but are not limited to statements or information with respect to the Transaction and the impact of the implementation of the Transaction on Eldorado, its operations, financial position and gold production.
Forward-looking statements and forward-looking information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. We have made certain assumptions about the forward-looking statements and information and even though our management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that the forward-looking statement or information will prove to be accurate. Furthermore, should one or more of the risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. These risks, uncertainties and other factors include, among others, the following: the number of shares issued is subject to certain adjustments; gold price volatility; discrepancies between actual and estimated production, mineral reserves and resources and metallurgical recoveries; mining operational and development risk; litigation risks; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign investment; currency fluctuations; speculative nature of gold exploration; global economic climate; dilution; share price volatility; competition; loss of key employees; additional funding requirements; and defective title to mineral claims or property, as well as those factors discussed in the sections entitled “Forward- Looking Statements” and "Risk Factors" in the Company's Annual Information Form & Form 40-F dated March 31, 2009.
There can be no assurance that forward-looking statements or information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, you should not place undue reliance on the forward-looking statements or information contained herein. Except as required by law, we do not expect to update forward-looking statements and information continually as conditions change and you are referred to the full discussion of the Company's business contained in the Company's reports filed with the securities regulatory authorities in Canada and the U.S.
Eldorado Gold Corporation’s common shares trade on the Toronto Stock Exchange (TSX: ELD) and the New York Stock Exchange (NYSE: EGO). Eldorado’s CDIs trade on the Australian Securities Exchange (ASX: EAU). The TSX has neither approved nor disapproved the form or content of this release.
Contact:
Nancy Woo, VP Investor Relations Eldorado Gold Corporation Phone: 604.601-6650 or 1.888.353.8166 1188, 550 Burrard Street Fax: 604.687.4026 Vancouver, BC V6C 2B5 Email: [email protected] Website www.eldoradogold.com Request for information packages:[email protected]
PRODUCTION HIGHLIGHTS
| First Quarter 2009 | Second Quarter 2009 | Third Quarter 2009 | Fourth Quarter 2009 | Fourth Quarter 2008 | 2009 | 2008 | |
| Gold Production Ounces Produced Cash Operating Cost ($/oz)1,4 Total Cash Cost ($/oz)2,4 Total Production Cost ($/oz)3,4 Realized Price ($/oz - sold) | 61,426 296 315 375 909 | 84,572 300 322 387 927 | 88,918 297 326 430 957 | 128,593 329 364 486 1,103 | 81,845 298 319 404 800 | 363,509 309 337 430 995 | 308,802 257 289 370 876 |
| Kisladag Mine, Turkey5 Ounces Produced Tonnes to Pad Grade (grams / tonne) Cash Operating Cost ($/oz)4 Total Cash Cost ($/oz)2,4 Total Production Cost ($/oz)3,4 | 46,192 2,084,714 1.34 274 276 315 | 62,985 2,428,611 1.18 269 271 309 | 57,902 2,523,546 1.22 276 278 336 | 70,131 3,679,685 0.86 296 298 354 | 60,753 2,371,101 1.34 279 281 314 | 237,210 10,716,556 1.11 280 282 330 | 190,334 7,555,881 1.27 254 256 291 |
| Tanjianshan Mine, China Ounces Produced Tonnes Milled Grade (grams / tonne) Cash Operating Cost ($/oz)4 Total Cash Cost ($/oz)2,4 Total Production Cost ($/oz)3,4 | 15,234 228,066 3.97 362 432 557 | 21,587 231,874 5.63 390 470 616 | 31,016 257,730 5.73 338 414 604 | 37,773 256,828 5.81 330 424 670 | 21,092 216,273 4.33 352 429 664 | 105,610 974,498 5.31 349 432 623 | 118,468 858,829 5.31 261 343 496 |
| Jinfeng Mine, China6 Ounces Produced Tonnes Milled Grade (grams / tonne) Cash Operating Cost ($/oz)4 Total Cash Cost ($/oz)2,4 Total Production Cost ($/oz)3,4 | - - - - - - | - - - - - - | - - - - - - | 14,541 136,054 3.97 472 516 623 | - - - - - - | 14,541 136,054 3.97 472 516 623 | - - - - - - |
| White Mountain Mine, China6 Ounces Produced Tonnes Milled Grade (grams / tonne) Cash Operating Cost ($/oz)4 Total Cash Cost ($/oz)2,4 Total Production Cost ($/oz)3,4 | - - - - - - | - - - - - - | - - - - - - | 6,148 58,074 4.26 364 400 535 | - - - - - - | 6,148 58,074 4.26 364 400 535 | - - - - - - |
1 Cost figures calculated in accordance with the Gold Institute Standard.
2 Cash Operating Costs, plus royalties and the cost of off-site administration.
3 Total Cash Costs, plus foreign exchange gain or loss, depreciation, amortization and reclamation expenses.
4 Cash operating, total cash and total production costs are non-GAAP measures. See the section "Non-GAAP Measures" of this Review. The Kisladag mine temporarily ceased operations on August 18, 2007 and reopened on March 6, 2008.
Jinfeng and White Mountain production for the period December 4 to December 31, 2009 only.
Eldorado Gold Corporation
Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars)
December 31, December 31, 2009 2008 $ $ Assets
Current assets
| Cash and cash equivalents | 265,369 | 61,851 |
| Restricted cash (note 5 and 13(g)) | 50,000 | - |
| Marketable securities (note 6) | 13,951 | 43,610 |
| Accounts receivable and other (note 7) | 32,041 | 36,109 |
| Inventories (note 8) | 129,197 | 86,966 |
| Future income taxes (note 16) | - | 175 |
490,558 228,711
| Inventories (note 8) | 31,534 | - |
| Restricted assets and other (note 10) | 8,265 | 6,111 |
| Mining interests (note 11) | 2,580,816 | 668,309 |
| Goodwill (note 12) | 324,935 | 2,238 |
3,436,108 905,369
Liabilities
Current liabilities
| Accounts payable and accrued liabilities | 157,250 | 42,659 |
| Debt - current (note 13) | 56,499 | 139 |
| Future income taxes (note 16) | 4,264 | 1,097 |
218,013 43,895
| Debt - long-term (note 13) | 134,533 | - |
| Asset retirement obligations (note 14) | 26,566 | 4,812 |
| Future income taxes (note 16) | 390,242 | 60,043 |
769,354 108,750
Non-controlling interests 26,144 4,799
Shareholders’ Equity
| Share capital (note 17(b)) | 2,671,634 | 931,933 |
| Contributed surplus (note 17(c)) | 17,865 | 19,378 |
| Accumulated other comprehensive income (note 17(d)) | 2,227 | (5,971) |
| Deficit | (51,116) | (153,520) |
2,640,610 791,820 3,436,108 905,369 Subsequent events (note 13(g) and note 25)
Commitments and contingencies (note 20)
Approved on behalf of the Board of Directors
(Signed) Paul N. Wright Director (Signed) Robert R. Gilmore Director
See accompanying notes to the consolidated financial statements.
Consolidated Statements of Operations and Deficit
(Expressed in thousands of U.S. dollars except per share amounts)
$ $ Revenue
Gold sales 358,467 277,723 Interest and other income 2,262 10,508
360,729 288,231
Expenses
| Operating costs | 132,464 | 92,004 |
| Depletion, depreciation and amortization | 38,658 | 25,995 |
| General and administrative | 32,530 | 38,299 |
| Exploration | 11,970 | 12,316 |
| Mine standby costs | 2,580 | 2,432 |
| Asset retirement obligation costs (note 14) | 291 | 3,108 |
| Foreign exchange (gain) loss | (2,966) | 176 |
215,527 174,330
| Gain on disposal of assets | (854) | (70,774) |
| Gain on marketable securities | (1,689) | (2,475) |
| Interest and financing costs | 824 | 2,940 |
| Loss on derivative contract (note 9) | - | 2,956 |
213,808 106,977 Income before income taxes and non-controlling interests 146,921 181,254
Income tax (expense) recovery (note 16)
Current (44,862) (25,403) Future 2,972 12,904
(41,890) (12,499)
| Non-controlling interests | (2,627) | (5,099) |
| Net income for the year | 102,404 | 163,656 |
| Deficit, beginning of year | (153,520) | (317,176) |
| Deficit, end of year | (51,116) | (153,520) |
Weighted average number of shares outstanding
Basic 389,384 355,132 Diluted 391,707 356,308
Earnings per share
Basic income per share - US$ 0.26 0.46 Diluted income per share - US$ 0.26 0.46
See accompanying notes to the consolidated financial statements.
Consolidated Statements of Cash Flows
$ $ Cash flows generated from (used in):
Operating activities
Net earnings for the year 102,404 163,656 Items not affecting cash
| Asset retirement obligations costs | 291 | 3,108 |
| Depletion, depreciation and amortization | 38,658 | 25,995 |
| Unrealized foreign exchange loss (gain) | 281 | (3,950) |
| Future income taxes expense (recovery) | (2,972) | (12,904) |
| Gain on marketable securities | (1,689) | (2,475) |
| Gain on disposal of assets | (854) | (70,774) |
| Imputed interest and financing costs | - | 39 |
| Stock-based compensation | 9,091 | 11,866 |
| Fair value of bonus cash award units | (2,543) | 1,815 |
| Pension expense | 1,689 | 1,478 |
| Non-controlling interest | 2,627 | 5,099 |
| Loss (gain) on derivative contract | - | 2,956 |
146,983 125,909
| Property reclamation payments | - | (1,225) |
| Contractual severance payments | - | (953) |
| Changes in non-cash working capital (note 19) | 45,059 | (18,187) |
192,042 105,544
Investing activities
Mining interests
| Acquisition of subsidiary net of cash received (note 4) | 54,179 | 7,479 |
| Capital expenditures | (106,614) | (123,950) |
| Sales and disposals | 35 | 5,214 |
Marketable securities
| Purchases | (3,967) | (20,462) |
| Proceeds on disposals | 42,770 | 25,737 |
| Pension plan contributions (note 15) | (1,856) | (3,791) |
| Restricted cash | 1,877 | 71,515 |
(13,576) (38,258)
Financing activities
Capital stock Issuance of common shares for cash 25,201 14,730 Dividend paid to non-controlling interest (149) (300) Long-term and bank debt Proceeds 4,983 5,000 Repayments (4,983) (70,879) 25,052 (51,449)
| Net increase (decrease) in cash and cash equivalents | 203,518 | 15,837 |
| Cash and cash equivalents - beginning of year | 61,851 | 46,014 |
| Cash and cash equivalents - end of year | 265,369 | 61,851 |
Supplementary cash flow information (note 19)
See accompanying notes to the consolidated financial statements.
Consolidated Statements of Comprehensive Income
For the year ended December 31,
2009 2008 $ $
Net earnings for the year ended December 31, 102,404 163,656
Other comprehensive income (loss)
Unrealized gains (losses) on available-for-sale investments – net of taxes
| of $320 (2008 – nil) (note 17(d)) | 129,098 | (6,431) |
| Reversal on acquisition of subsidiary (note 4 (a)) | (122,617) | (153) |
| Realized losses (gains) on available-for-sale investments (note 17(d)) | 1,717 | (61) |
| Other than temporary impairment charges | - | 460 |
| Comprehensive income for the year ended December 31, | 110,602 | 157,471 |
See accompanying notes to the consolidated financial statements.
1. Nature of operations
Eldorado Gold Corporation (“Eldorado” or “the Company”) is a gold exploration, development, mining and production company. The Company has ongoing exploration and development projects in Brazil, China, Turkey and Greece. Production operations in Brazil ceased in the second quarter of 2007 and the São Bento mine (“São Bento”) was sold to AngloGold Ashanti in December 2008. The Company acquired control of Sino Gold Mining Ltd. (“Sino Gold”) in December 2009 along with its two producing mines, Jinfeng and White Mountain, as well as the Eastern Dragon exploration project.
2. Significant accounting policies
(a) Basis of presentation and principles of consolidation
These consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”) and presented in United States dollars. As disclosed in note 24, Canadian GAAP differs in certain material respects from accounting principles generally accepted in the United States (“US GAAP”). The consolidated financial statements include the wholly owned and partially owned subsidiaries of the Company, the most significant of which are presented below:
Ownership Operations and development Subsidiary Location interest Status projects owned
Qinghai Dachaidan Mining Ltd (QDML) China 90% Consolidated TJS Gold Mine Tüprag Metal Madencilik Sanayi ve Ticaret AS Turkey 100% Consolidated Kişladağ Gold Mine Efemcukuru Project
| Unamgen Mineração e Metalurgia S/A | Brazil | 100% | Consolidated Vila Nova Iron Ore Mine |
| Thracean Gold Mining SA | Greece | 100% | Consolidated Perama Hill Project |
| Sino Gold Mining Ltd. | China | 100% | Consolidated Jinfeng (82% owned) |
White Mountain (95% owned) Eastern Dragon (95% owned)
All material inter-company balances and transactions have been eliminated.
(b) Use of estimates
The preparation of financial statements in accordance with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Significant areas requiring the use of management estimates include assumptions and estimates relating to determining defined ore bodies, value beyond proven and probable reserves, fair values for purposes of purchase price allocations for business acquisitions, impairment analysis and valuation of derivative contracts, determination of recoverable metal on leach pads, reclamation obligations, non-cash stock-based compensation and warrants, pension benefits, valuation allowances for future income tax assets and the provision for income tax liabilities and assessing and evaluating contingencies. Actual results could differ from these estimates.
(c) Cash and cash equivalents
Cash and cash equivalents consist of cash and highly liquid investments having maturity dates of three months or less from the date of acquisition that are readily convertible to cash. Cash and cash equivalents and restricted cash are designated as held-for-trading and measured at fair value.
(d) Inventories
i. Product inventory consists of stockpiled ore, ore on leach pads, crushed ore, in-circuit material at properties with milling or processing operations, doré awaiting refinement and unsold bullion, all of which are valued at the lower of average cost and net realizable value. Product inventory costs consist of direct production costs including mining, crushing and processing; site administration costs; and allocated indirect costs, including depreciation, depletion and amortization of mining interests.
Inventory costs are charged to operations on the basis of ounces of gold sold. The Company regularly evaluates and refines estimates used in determining the costs charged to operations and costs absorbed into inventory carrying values based upon actual gold recoveries and operating plans.
Inventories for which processing and sale is not expected to complete within one year is classified as non-current.
ii. Materials and supplies inventory consists of consumables used in operations, such as fuel, chemicals, reagents and spare parts, which are valued at the lower of average cost and replacement cost and, where appropriate, less a provision for obsolescence.
(e) Investments
Investments classified as available-for-sale are reported at fair value with unrealized gains or losses excluded from earnings and reported as other comprehensive income or loss until such gains or losses are realized or an other than temporary decline in fair value has been determined to have occurred. Factors that contribute to an other than temporary decline include a significant and prolonged decline in fair value below its cost, and the existence of factors such as significant adverse changes in the market and economic environments in which the Company operates, which indicate the prospects for recovery in the fair value of the investment are compromised in the near term.
Investments classified as held-for-trading are reported at fair value with unrealized gains or losses included in earnings in “Gain/loss on marketable securities”. Marketable securities and investments in equity securities held for the purpose of trading are classified as held-for-trading and those that are not held for the purpose of trading are classified as available-for-sale.
(f) Deposits
Deposits, such as those required by governmental authorities for possible environmental liabilities, are classified as held-for-trading.
(g) Financial instruments
Fair value estimates are made at the balance sheet date, based on relevant market information and other information about the financial instruments.
Derivative financial instruments are reported at fair value with unrealized gains or losses included in earnings in “Gain/loss on derivative contract”. Fair values are determined directly by reference to published price quotations in an active market, when available, or by using a valuation technique that uses inputs observed from the markets.
(h) Mining interests
Mining interests include development expenditures and property, plant and equipment recorded at cost. Cost includes expenditures incurred on properties under development and the estimated fair value of any related asset retirement obligation at the time the obligation is originally recorded. Significant payments related to the acquisition of land and mineral rights are capitalized as incurred.
Mineral properties, buildings, plant and equipment, and other assets whose estimated useful life is the same as the remaining life of the mine are depreciated, depleted and amortized over a mine’s estimated life using the units of production method calculated based on proven and probable reserves. Capitalized development costs related to a multi-pit operation are amortized on a pit-by-pit basis over the pit’s estimated life using the unit of production method calculated based on proven and probable reserves related to each pit. Furniture and fixtures, vehicles, computers and other plant and equipment whose estimated useful lives are less than the remaining life of the mine are depreciated on a straight-line basis over the estimated useful life of the assets.
When events or changes in circumstances suggest impairment of long-lived assets, estimated undiscounted future net cash flows are calculated using estimated future gold prices, proven and probable reserves, value beyond proven and probable reserves, and estimated net proceeds from the disposition of assets on retirement less operating, sustaining capital and reclamation costs.
If projected undiscounted future cash flows are less than the carrying value, the estimated fair value is calculated using discounted future net cash flows and the asset is written down to fair value with an impairment charge to operations. Management assesses the asset for impairment by comparing its fair value, determined using best estimates of fair value based on the information available.
(i) Goodwill
Goodwill is the excess of the cost of an acquired business over the net amounts assigned to assets acquired and liabilities assumed. Goodwill is not amortized. It is tested for impairment annually or more frequently if events or changes in circumstances indicate that it is impaired. Goodwill is allocated to a reporting unit and any potential goodwill impairment is identified by comparing the carrying amount of the reporting unit with its fair value. If any potential impairment is identified, the impairment loss is quantified by comparing the carrying amount to its fair value and is recognized in earnings.
(j) Exploration and development
Exploration costs are charged against operations as incurred until a mineral resource having economic potential is identified on a property, from which time a property is considered to be a development project and such expenditures are capitalized as development costs. Costs incurred after the property is placed into production that increase production volume or extends the life of the mine are capitalized.
A mineral resource is considered to have economic potential when it is expected that proven and probable reserves can be economically developed considering long-term metal prices. Therefore, prior to capitalizing such costs, management determines that the following conditions have been met:
i. There is a probable future benefit that will contribute to future cash inflows;
ii. The Company can obtain the benefit and control access to it, and;
iii. The transaction or event giving rise to the benefit has already occurred.
(k) Deferred financing charges
Deferred financing costs represent the issuance costs of the Company’s long-term debt. Deferred costs are netted against the carrying value of long-term debt on the consolidated balance sheet and amortized using the effective interest rate method over the expected life of the related liability.
(l) Foreign currency translation
Monetary assets and liabilities denominated in currencies other than the United States dollar are translated into United States dollars using rates of exchange in effect at the balance sheet date. Revenue and expense items denominated in foreign currencies are translated at average rates. Non-monetary items are translated at historical rates. Any gains and losses are reflected in earnings.