Q3, 2010 Financial and Operating Results Earnings of $0.09 per share; Cash flow from operations of $0.18 per share (all figures in United States dollars, unless otherwise noted)
NEWS RELEASE ELD No. 10-18 TSX: ELD NYSE: EGO ASX: EAU October 28, 2010
Q3, 2010 Financial and Operating Results Earnings of $0.09 per share; Cash flow from operations of $0.18 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 and operational results for the third quarter ended September 30, 2010. The Company reported net income of $48.8 million, or $0.09 per share, and cash flow from operations of $96.0 million or $0.18 per share for the third quarter ended September 30, 2010.
“ We maintain our guidance of 625,000 ounces of gold for 2010 at a cash operating cost of $375 per ounce, firmly positioning us in the lowest quartile of costs ” stated Paul N. Wright, President and Chief Executive Officer of Eldorado. “ We are pleased with our increase in reserves at Kisladag in Turkey and our exploration and development progress at Tocantinzinho (“TZ”) in Brazil. We expect to report our exploration progress in China and Turkey in the middle of the fourth quarter”.
Q3 2010 Highlights and Updates
- Produced 151,297 ounces of gold at an average cash operating cost of $386 per ounce;
- Sold 154,655 ounces of gold at a realized average price of $1,231 per ounce;
- Reported earnings of $0.09 per share;
- Generated $96.0 million of cash or $0.18 per share from operating activities before changes in non-cash working capital.
- Reported a 14% increase in reserves at Kisladag from the 27,000 meters drilled this year;
- Completed the acquisition of Brazauro Resources and reported an initial measured and indicated resource of 2.1 million ounces of gold at the TZ project;
- Completed the acquisition of the Xiaoshiren Central exploration license located 20 kilometers southeast of White Mountain.
Financial Results
Eldorado’s consolidated net income for the third quarter of 2010 was $48.8 million or $0.09 per share compared to $30.2 million or $0.08 in the third quarter of 2009. Net income for the nine-month period ended September 30, 2010 was $162.1 million or $0.30 per share, compared to $69.1 million or $0.18 per share in the comparable period from 2009.
During the third quarter, we sold 154,655 ounces of gold at an average price of $1,231 per ounce compared to 85,246 ounces of gold at an average price of $957 per ounce in the third quarter of 2009.
Corporate Activities
Completed the acquisition of Brazauro Resources On July 20, 2010 we completed the acquisition Brazauro Resources where we acquired 100% interest in the TZ project in Tapajos, Brazil which we had operated in a joint venture since July 2008. TZ is a late stage exploration project with a current Measured and Indicated Resource of 2.1 million ounces of gold. In addition we acquired option agreements to earn into 100% of the Agua Branca and Piranhas properties also located in the Tapajos District immediately adjacent to the TZ project.
Operating Performance
Kisladag During the quarter we produced 62,086 ounces of gold at a cash operating cost of $337 per ounce. We placed 2,767,179 tonnes of ore on the leach pad at an average grade of 0.98 grams per tonne of gold.
The mine continued to perform well during the quarter. Metallurgical test work on heap leach recoveries continues and we expect to be able to comment on the significance of the results at year end.
Jinfeng During the quarter we produced 46,116 ounces of gold at cash operating cost of $425 per ounce and we milled 387,427 tonnes of ore at a grade of 4.42 grams per tonne. Production from the open pit was 311,191 tonnes of ore and underground production totalled 96,272 tonnes of ore.
Mining from the open pit concentrated on the upper benches as seasonal rainfall slowed operations in the bottom of the pit.
Tanjianshan At Tanjianshan we produced 28,847 ounces of gold at cash operating cost of $391 per ounce. We milled a total of 283,598 tonnes of ore at an average grade of 3.84 grams per tonnes.
The plant continues to perform well. The roaster cyclones will be replaced during the fourth quarter along with an inspection of the two roasters during a planned major regional power shutdown. This is the first inspection since the plant was commissioned in 2009.
White Mountain During the quarter we produced 14,248 ounces of gold at a cash operating cost of $477 per ounce and we processed 154,125 tonnes of ore at a grade of 4.01 grams per tonnes.
Higher than normal rainfall and related dewatering issues reduced underground production in the third quarter. Construction of a culvert to contain and divert a local river that flows over the top of the southern workings is underway.
Development
Efemcukuru The installation of electrical and instrumentation hardware and cabling continues in the concentrator plant. Dry commissioning of some of the smaller equipment has begun. Structural steel erection at the filtration and backfill plants has been completed. The balance of the equipment is being installed prior to closure of the structures and commencement of services installation. Full commissioning of the concentrator is on schedule for the fourth quarter with the balance of the process to be commissioned in the first quarter 2011.
Preparations for both the rock dump and tailings dump have been completed. Approval for the construction of the final component of the mine water management system has been received. Site services and the construction of the ancillary buildings will be concluded in first quarter 2011.
Pre-production development of all three mine access ramps is now well underway. Spending in the quarter totalled $15.9 million.
Vila Nova Iron Ore Trial mining and processing at the mine continue. The first shipments of ore have been made from site through to the Anglo Ferrous loading terminal, with first ore sales planned for November.
Eastern Dragon Plans have been prepared for the start of winter construction upon receipt of the Project Permit which is currently before the Provincial authorities. This program will focus on closing in the concentrator buildings and installation of equipment foundations including ball mill foundations.
Perama Hill The status of the Pre Environmental Impact Assessment review at the Ministry of Environment continues to be monitored.
Tocantinzinho Field work for input into the Prefeasibility Report on TZ continues on schedule. Geotechnical drilling in the open pit has been completed as well as the installation of ground water monitoring devices for hydro geological analysis of the proposed pit. Condemnation and geotechnical auger drilling is being carried out for the plant site, rock and tailing impound areas. A survey of the area has been completed to assist in the final location of infrastructure and the location of the access road. Spending in the quarter was $1.3 million.
Exploration
Turkey Kisladag Eighteen diamond drill holes totalling 8,627 meters were drilled at Kisladag in the third quarter. These included seven geotechnical drill holes which constituted the remainder of the Phase 1 resource drilling program and some additional holes planned as a second phase of resource drilling. The 9,000 meter Phase 2 drilling program began in September and is designed to infill gaps mainly along the northern and western margins of the deposit and to further explore the newly-defined South-western Extension zone.
Efemcukuru No new drilling was completed at Efemcukuru during the third quarter as drilling permits are still pending for the planned 2010 program. Work during the quarter focused on defining targets on the Kokarpinar and NW extension of the Kestane Beleni veins for future drilling.
Reconnaissance programs Drilling programs were initiated during the quarter at Malatya-Hasancelebi and Sizma projects and will commence shortly at the Sayacik and AS projects. Results received to date on the drilling at both projects are encouraging. Reconnaissance sampling and soil surveys were completed on the early–stage Dolek, Catak and Atalan projects during the third quarter.
China Jinfeng Drilling programs continued during the quarter in the Jinfeng district, at the mine proper, at the Bannian prospect located approximately 20 kilometers southwest of Jinfeng mine and at the Lintan and Yaojiatan prospects located immediately north of the mine. At the Jinfeng mine, underground and surface drilling focused both on upgrading zones of inferred resources and testing new targets. Structural mapping completed in the open pit helped define controls on gold distribution leading to both a revision of the deposit structural model and the identification of new exploration targets in the surrounding area.
White Mountain In the White Mountain district drilling is underway targeting the open down-dip and along strike extensions of the known ore body, and testing exploration targets in the Xiaoshiren exploration licenses. The acquisition of the Xiaoshiren Central exploration license located 20 kilometers south west of White Mountain was competed during the quarter. Soil sampling and trenching in the Xiaoshiren Central exploration areas containing high grade boulders is underway and diamond drilling has commenced. At Dongdapo mapping and soil sampling programs were completed with drilling scheduled for 2011.
Eastern Dragon
At Eastern Dragon we conducted ground magnetic surveys, float and outcrop sampling and prospecting within the EL 53 license area.
Tanjianshan At 323 Zone nineteen drill holes totalling 4,157 meters were drilled testing the northern and southern limits to mineralization. Grade and continuity of gold mineralization drop to both the north and south of the previously defined high-grade zone, and the depth to mineralization continues to increase southward. The geological model has been updated to include the new drilling and a preliminary resource estimate is presently being prepared. At ZXS prospects area located between 323 Zone and the Jinloggou deposit we conducted shallow RC drilling, mapping and sampling.
Brazil
Tocantinzinho Exploration activities resumed in the third quarter at TZ. Approximately 38.5 line kilometres of induced polarization surveying was completed over areas peripheral to the known deposit and several zones of anomalous chargeability/resistivity have been identified for drill-testing. The geological model for the TZ deposit was updated and wireframes were produced for key geological surfaces in preparation for an updated resource model and several areas requiring infill drill holes were identified.
Reconnaissance Field work was completed at the optioned Triguiero project in NE Brazil. Results did not produce sufficient encouragement to continue the option. At the Agua Branca project three drill holes were completed testing previously defined targets. Although the litho logic and alteration characteristics of units intersected in these drill holes are similar to those associated with the TZ deposit, gold grades are sub economic.
United States
Nevada Fieldwork at the Nevada projects focused on the Richmond Mountain option property where targets for drilling during fourth quarter have been identified. Due to continued permitting delays, the option on the Green Monster project was dropped and the drilling program planned for the Buffalo Canyon project was deferred until 2011.
Eldorado is a gold producing, exploration and development company actively growing businesses in Brazil, China, Greece, and Turkey and surrounding regions. We are one of the lowest cost pure gold producers. 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 October 29, 20010 to discuss the 2010 Third Quarter Financial and Operating Results at 1:00 p.m. ET (10:00 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 November 5, 2010 by dialling 416-695-5800 in Toronto or 1-800-408-3053 toll free in North America and entering the Pass code 2583817.
Cautionary Note Concerning Forward-Looking Statements
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. Often, but not always, forward-looking statements and forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.
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: 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, 2010.
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.
Cautionary Note Regarding Mineral Reserves and Mineral Resources
The terms “Mineral Reserve”, “Proven Mineral Reserve” and “Probable Mineral Reserve” used in this release are Canadian mining terms as defined in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council on August 20, 2000 as may be amended from time to time by the CIM. These definitions differ from the definitions in the United States Securities & Exchange Commission (“SEC”) Guide 7. In the United States, a mineral reserve is defined as a part of a mineral deposit which could be economically and legally extracted or produced at the time the mineral reserve determination is made.
The terms “Mineral Resource”, “Measured Mineral Resource”, “Indicated Mineral Resource”, “Inferred Mineral Resource” used in this release are Canadian mining terms as defined in accordance with National Instruction 43-101 – Standards of Disclosure for Mineral Projects under the guidelines set out in the CIM Standards. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.
For a detailed discussion of resource and reserve estimates and related matters see the Company’s reports, including the Annual Information Form and Form 40-F dated March 31, 2010 and technical reports filed under the Company’s name at www.sedar.com and www.sec.gov respectively.
Cautionary Note to US Investors Concerning Estimates of Measured, Indicated and Inferred Resources Note to U.S. Investors. While the terms “mineral resource”, “measured mineral resource,” “indicated mineral resource”, and “inferred mineral resource” are recognized and required by Canadian regulations, they are not defined terms under standards in the United States and normally are not permitted to be used in reports and registration statements filed with the SEC. As such, information contained in this report concerning descriptions of mineralization and resources under Canadian standards may not be comparable to similar information made public by U.S companies in SEC filings. With respect to “indicated mineral resource” and “inferred mineral resource” there is a great amount of uncertainty as to their existence and a great uncertainty as to their economic and legal feasibility. It can not be assumed that all or any part of an “indicated mineral resource” or “inferred mineral resource” will ever be upgraded to a higher category. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. Eldorado Gold Corporation’s common shares trade on the Toronto Stock Exchange (TSX: ELD) and the NYSE (NYSE: EGO). Eldorado’s CDI trade on the Australian Securities Exchange (ASX: EAU).
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 2010 | Second Quarter 2010 | Third Quarter 2010 | Third Quarter 2009 | First Nine Months 2010 | First Nine Months 2009 | |
|---|---|---|---|---|---|---|
| Gold Production Ounces Sold Ounces Produced Cash Operating Cost ($/oz)1,3,4 Total Cash Cost ($/oz)2,3,4 Realized Price ($/oz - sold) | 163,446 164,928 370 397 1,110 | 172,826 167,940 357 410 1,195 | 154,655 151,297 386 431 1,231 | 85,246 88,918 296 325 957 | 490,927 484,165 371 412 1,178 | 229,158 234,916 297 321 934 |
| Kişladağ Mine, Turkey Ounces Sold Ounces Produced Tonnes to Pad Grade (grams / tonne) Cash Operating Cost ($/oz)3,4 Total Cash Cost ($/oz)2,3,4 | 83,974 82,240 2,898,199 1.12 304 307 | 69,197 70,451 2,686,284 1.12 304 345 | 66,113 62,086 2,767,179 0.98 337 359 | 55,902 57,902 2,523,546 1.22 275 277 | 219,284 214,777 8,351,662 1.08 314 335 | 166,598 167,079 7,036,871 1.24 273 275 |
| Tanjianshan Mine, China Ounces Sold Ounces Produced Tonnes Milled Grade (grams / tonne) Cash Operating Cost ($/oz)3,4 Total Cash Cost ($/oz)2,3,4 | 18,947 25,423 249,738 4.01 420 517 | 38,261 28,884 271,749 4.38 387 483 | 28,847 28,847 283,598 3.84 391 493 | 29,344 31,016 257,730 5.73 336 417 | 86,055 83,154 805,085 4.07 396 494 | 62,560 67,837 717,670 5.14 361 444 |
| Jinfeng Mine, China Ounces Sold Ounces Produced Tonnes Milled Grade (grams / tonne) Cash Operating Cost ($/oz) 3,4 Total Cash Cost ($/oz) 2,3,4 | 49,674 45,615 389,851 4.23 422 462 | 48,623 52,659 392,211 4.51 381 423 | 45,447 46,116 387,427 4.42 425 473 | - - - - - - | 143,744 144,390 1,169,489 4.39 409 452 | - - - - - - |
| White Mountain Mine, China Ounces Sold Ounces Produced Tonnes Milled Grade (grams / tonne) Cash Operating Cost ($/oz) 3,4 Total Cash Cost ($/oz) 2,3,4 | 10,851 11,650 130,643 4.09 550 589 | 16,745 15,946 167,981 3.78 442 474 | 14,248 14,248 154,125 4.01 477 507 | - - - - - - | 41,844 41,844 452,749 3.95 482 515 | - - - - - - |
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 Cash operating costs and total cash costs are non-GAAP measures. See the section "Non-GAAP Measures" of this Review. Cash operating costs and total cash costs have been recalculated for prior quarters based on ounces sold.
Unaudited Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars)
Sepember 30, December 31, 2010 2009 Assets $ $
Current assets
| Cash and cash equivalents | 339,403 | 265,369 |
| Restricted cash (note 4) | 52,221 | 50,000 |
| Marketable securities | 1,564 | 13,951 |
| Accounts receivable and other | 35,490 | 26,434 |
| Inventories | 130,257 | 129,197 |
| Future income taxes | 2,703 | - |
561,638 484,951
| Inventories | 40,280 | 31,534 |
| Investment in significantly influenced company | 5,130 | - |
| Restricted assets and other | 28,211 | 13,872 |
| Mining interests | 2,794,125 | 2,580,816 |
| Goodwill | 323,294 | 324,935 |
3,752,678 3,436,108
Liabilities
Current liabilities
| Accounts payable and accrued liabilities | 139,453 | 157,250 |
| Debt - current (note 6) | 89,909 | 56,499 |
| Future income taxes | 2,313 | 4,264 |
231,675 218,013
| Debt - long-term (note 6) | 97,247 | 134,533 |
| Asset retirement obligations | 28,273 | 26,566 |
| Future income taxes | 442,131 | 390,242 |
799,326 769,354
Non-controlling interest 36,808 26,144
Shareholders’ equity
| Share capital (note 7(b)) | 2,810,109 | 2,671,634 |
| Contributed surplus | 21,317 | 17,865 |
| Accumulated other comprehensive income (note 7(c)) | 465 | 2,227 |
| Retained earnings (deficit) | 84,653 | (51,116) |
2,916,544 2,640,610 3,752,678 3,436,108
Approved on behalf of the Board of Directors
(Signed) Robert R. Gilmore Director (Signed) Paul N. Wright Director Unaudited Consolidated Statements of Operations
(Expressed in thousands of U.S. dollars except per share amounts)
Three months ended Nine months ended
$ $ $ $ Revenue
Gold sales 190,305 81,608 578,227 213,961
Expenses
| Operating costs | 69,095 | 28,109 | 208,271 | 75,053 |
| Depletion, depreciation and amortization | 27,232 | 9,017 | 79,978 | 20,015 |
| General and administrative | 10,771 | 7,442 | 39,803 | 24,101 |
| Exploration | 5,021 | 3,182 | 11,573 | 8,618 |
| Mine standby costs | 22 | 881 | 1,335 | 1,817 |
| Asset retirement obligation costs | 511 | 65 | 1,535 | 196 |
| Foreign exchange loss (gain) | 13,360 | (442) | 8,327 | (1,569) |
| 126,012 | 48,254 | 350,822 | 128,231 | |
| (Gain) loss on disposal of assets | (250) | 119 | (1,735) | (1,344) |
| Gain on marketable securities | (4,489) | (1,168) | (5,347) | (1,287) |
| Interest expense and financing costs | 1,992 | 77 | 6,261 | 235 |
| Interest and other income | (8,970) | (996) | (10,654) | (1,583) |
| 114,295 | 46,286 | 339,347 | 124,252 | |
| Income before income taxes and non-controlling interest | 76,010 | 35,322 | 238,880 | 89,709 |
Income tax (expense) recovery
| Current | (21,652) | (13,812) | (69,591) | (27,465) |
| Future | (459) | 8,873 | 4,788 | 8,115 |
| (22,111) | (4,939) | (64,803) | (19,350) | |
| Non-controlling interest | (5,126) | (229) | (11,951) | (1,244) |
| Net income for the period | 48,773 | 30,154 | 162,126 | 69,115 |
Weighted average number of shares outstanding
Basic 546,039 391,583 541,164 377,601 Diluted 547,731 392,328 543,041 378,821
Earnings per share
Basic income per share - US$ 0.09 0.08 0.30 0.18 Diluted income per share - US$ 0.09 0.08 0.30 0.18 Unaudited Consolidated Statements of Cash Flows
Three months ended Nine months ended
$ $ $ $ Cash flows generated from (used in):
Operating activities
Net income for the period 48,773 30,154 162,126 69,115 Items not affecting cash
| Asset retirement obligations costs | 511 | 65 | 1,535 | 196 |
| Depletion, depreciation and amortization | 27,232 | 9,017 | 79,978 | 20,015 |
| Unrealized foreign exchange loss | 14,702 | 2,050 | 9,661 | 1,624 |
| Future income taxes expense (recovery) | 459 | (8,873) | (4,788) | (8,115) |
| (Gain) loss on disposal of assets | (250) | 119 | (1,735) | (1,344) |
| (Gain) loss on marketable securities | (4,489) | (1,168) | (5,347) | (1,287) |
| Stock-based compensation (note 8(b)) | 3,282 | 1,867 | 13,874 | 7,668 |
| Pension expense (note 5) | 622 | 442 | 1,867 | 1,245 |
| Non-controlling interest | 5,126 | 229 | 11,951 | 1,244 |
| 95,968 | 33,902 | 269,122 | 90,361 | |
| Bonus cash award units payments (note 8(c)) | - | - | - | (2,543) |
| Changes in non-cash working capital (note 9) | (14,433) | (6,317) | (46,700) | 2,341 |
| 81,535 | 27,585 | 222,422 | 90,159 |
Investing activities
Acquisition of Brazauro, net (note 3(a)) (5,565) - (5,565) - Mining interests Capital expenditures (54,844) (24,151) (152,476) (63,003) Proceeds on sales and disposals 2,843 - 23,191 35 Marketable securities disposals
| Purchases | (5,698) | (646) | (5,698) | (646) | |||
| Proceeds on sales and disposals | 13,144 | 5,766 | 13,836 | 42,154 | |||
| Equity investment purchase | - | - | (5,375) | - | |||
| Pension plan contributions | - | - | - | (1,856) | |||
| Restricted cash | - | - | (2,221) | - | |||
| Restricted assets and other | (9,880) | 4,893 | (12,363) | 1,888 | |||
| (60,000) | (14,138) | (146,671) | (21,428) |
Financing activities
Capital stock
| Issuance of common shares for cash (note 7(b)) | 5,087 | 5,366 | 32,370 | 18,969 |
| Dividend paid to non-controlling interest | - | - | (1,286) | - |
| Dividend paid to shareholders | - | - | (26,357) | - |
Long-term and current debt
| Proceeds | 9,501 | - | 59,044 | 4,982 | |
| Repayments | (3,703) | (4,982) | (65,488) | (4,982) | |
| 10,885 | 384 | (1,717) | 18,969 | ||
| Net increase in cash and cash equivalents | 32,420 | 13,831 | 74,034 | 87,700 | |
| Cash and cash equivalents - beginning of period | 306,983 | 135,720 | 265,369 | 61,851 | |
| Cash and cash equivalents - end of period | 339,403 | 149,551 | 339,403 | 149,551 |
See accompanying notes to the consolidated financial statements.
Unaudited Consolidated Statements of Shareholders’ Equity
Three months ended Nine months ended 2010 2009 2010 2009 $ $ $ $
Share capital
Balance beginning of period 2,708,322 951,255 2,671,634 931,933 Shares issued upon exercise of share options, for cash 5,087 5,366 32,370 18,969 Estimated fair value of share options exercised 1,582 2,037 10,987 7,756 Share issued in consideration for interests acquired 95,118 263,293 95,118 263,293 Balance at the end of the period 2,810,109 1,221,951 2,810,109 1,221,951
Contributed surplus
Balance beginning of period 19,052 18,901 17,865 19,378 Non-cash stock-based compensation 3,282 1,867 13,874 7,109 Non-cash stock-based compensation on
| Brazauro warrants & options converted | 565 | - | 565 | - |
| Options exercised, credited to share capital | (1,582) | (2,037) | (10,987) | (7,756) |
| Balance at the end of the period | 21,317 | 18,731 | 21,317 | 18,731 |
Retained earnings (deficit)
| Balance beginning of period | 35,880 | (114,559) | (51,116) | (153,520) |
| Dividends paid | - | - | (26,357) | - |
| Net income for the period | 48,773 | 30,154 | 162,126 | 69,115 |
| Balance at the end of the period | 84,653 | (84,405) | 84,653 | (84,405) |
Accumulated other comprehensive income (loss)
| Balance beginning of period | 12,391 | 519 | 2,227 | (5,971) |
| Other comprehensive (loss) income | (11,926) | 73,582 | (1,762) | 80,072 |
| Balance at the end of the period | 465 | 74,101 | 465 | 74,101 |
| Total shareholders' equity | 2,916,544 | 1,230,378 | 2,916,544 | 1,230,378 |
See accompanying notes to the consolidated financial statements.
Unaudited Consolidated Statements of Comprehensive Income
Three months ended Nine months ended 2010 2009 2010 2009 $ $ $ $
Net earnings for the period ended September 30, 48,773 30,154 162,126 69,115
Other comprehensive income Unrealized gains on available-for-sale investments 1,134 83,049 12,788 88,608 Future income taxes on changes in available-for-sale investments 1,475 (9,984) (15) (10,253) Reversal of unrealized gains on available-for-sale investment on acquisition of subsidiary (note 3(a)) (11,424) - (11,424) - Realized (gains) losses on available-for-sale investments transferred to net income (3,111) 517 (3,111) 1,717 Other comprehensive (loss) income (11,926) 73,582 (1,762) 80,072
Comprehensive income for the period ended September 30, 36,847 103,736 160,364 149,187
See accompanying notes to the consolidated financial statements.
Notes to the Unaudited Interim Consolidated Financial Statements
September 30, 2010
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 Turkey, China, Greece and Brazil. 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 development project. It also completed the acquisition of Brazauro Resources Corporation (“Brazauro”) in July 2010 whose main asset is the Tocantinzinho exploration and development project in Tapajós, Brazil.
These unaudited interim consolidated financial statements were prepared by Eldorado in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”) consistent with those used to prepare Eldorado’s audited consolidated financial statements for the year ended December 31, 2009 except for the new long-term investment policy described in note 2(a). As these unaudited interim consolidated financial statements do not contain all of the disclosures required by Canadian GAAP for annual financial statements, they should be read in conjunction with the notes to the Company’s audited consolidated financial statements for the year ended December 31, 2009.
In the opinion of management, Eldorado has made all adjustments necessary to present fairly the Company’s consolidated financial position as at September 30, 2010 and the consolidated results of operations, comprehensive income and cash flows for the three- and nine-month periods ended September 30, 2010 and 2009.
Certain comparative figures have been reclassified to conform to the current period’s presentation.
2. Changes in accounting policies and new accounting developments
(a) Changes in accounting policies
During the three-month period ended June 30, 2010, the Company adopted an accounting policy for long-term investments. Investments in significantly influenced companies are accounted for using the equity method. Under the equity method, the original cost of the shares is adjusted for the Company’s share of post-acquisition earnings or losses less dividends.
(b) New accounting developments
Business Combinations (Section 1582)
In January 2009, the CICA issued Section 1582, Business Combinations, which requires that all assets and liabilities of an acquired business be recorded at fair value at acquisition. Obligations for contingent considerations and contingencies will also be recorded at fair value at the acquisition date. The standard also states that acquisition-related costs will be expensed as incurred and that restructuring charges will be expensed in the periods after the acquisition date. The Section applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period on or after January 1, 2011. Earlier application is permitted. If an entity applies this Section before January 1, 2011, it shall also adopt CICA Sections 1601 and 1602. The Company has not yet adopted this standard.