Eldorado Gold CEO Discusses Q3 2010 Results - Earnings Call Transcript

Eldorado Gold CEO Discusses Q3 2010 Results - Earnings Call Transcript
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Eldorado Gold Corporation (



Q3 2010 Earnings Call

October 29, 2010 1:00 p.m. ET


Nancy Woo - VP, IR

Paul Wright - President & CEO

Norm Pitcher - COO

Ed Miu - CFO


[Ron Paul - Canaccord Genuity]

Mike Curran - RBC Billing and Securities

David Haughton - BMO

Kerry Smith - Haywood Securities

Anita Soni - Credit Suisse

Dan Rollins – UBS Securities

Barry Cooper - CIBC

David Christie - Scotia Capital

Harish Srinivasa - Dundee Securities

Don MacLean - Paradigm Capital

Tanya Jakusconek - National Bank Financial



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Good morning ladies and gentlemen. Welcome to the Eldorado Gold Corporation Third Quarter Financial Results Conference Call. This call is also being webcast and is available on the Eldorado Gold website at www.eldoradogold.com.

I would now like to turn the meeting over to Ms. Nancy Woo. Please go ahead.

Nancy Woo

Thank you, operator. This presentation includes statements that may constitute forward-looking statements or information. Any forward-looking statement made and information provided reflect our current plans, estimates and views.

Forward-looking statements are information which include all statements that are not historical facts, are based on certain material factors and assumptions, and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in or suggested by the forward-looking statements or information. Consequently, undue reliance should not be placed on these forward-looking statements and information.

The information contained in our Annual Information Form and in our annual quarterly management discussions and analysis available on our website and on SEDAR identifies factors and assumptions upon which the forward-looking statements and information are based on and the risks, uncertainties and other factors that could cause actual results to differ.

All forward-looking statements and information made or provided during this presentation are expressed, qualified in their entirety by this cautionary statement and the cautionary statement contained in our press release, dated October 28th 2010.

I will now turn the call over to Paul Wright, President and CEO of Eldorado Gold.

Paul Wright

Thank you, Nancy and good morning. Good afternoon ladies and gentlemen. Welcome our Third Quarter financial and operating results conference call. Joining me today in Vancouver are Norm Pitcher, Chief Operating Officer; Ed Miu, Chief Financial Officer and the voice you just heard, Nancy Woo, our Vice President, Investor Relations.

We will follow the usual somewhat boring format. Following a few introductory comments provided by myself, Norm will give you a run down on the third quarter operating performance and provide some color and guidance in terms of the balance of the year. This will then be followed by Ed, who will give you a brief walkthrough on the balance sheet, income statement and cash flow and then we'll open up for questions.

I am very pleased with the quarter's results. Our mines continue to deliver into the plan. This quarter's production of a 151,297 ounces at cash cost of $386 per ounce, keeps us right on track to deliver the 625,000 ounces at cash costs of $375 per ounce at year end.

Development at Efemcukuru is proceeding very well. We now have three deep mines being advanced concurrently and with our Turkish mining contractors increasing advance rates weekly and we look forward to starting production at this operation in the middle of 2011.

At Eastern Dragon we are gearing up to resume construction and work through the winter, pending receipt of our project permit. We anticipate seeing production starting in Eastern Dragon late in 2011. We are busy reviewing plans and budgets for 2011 and with board approval, anticipate being able to give you firm guidance for 2011 in terms of operating performance and capital expenditures by year end.

The company continues to strengthen its balance sheet through strong operational performance and healthy metal prices. This is resulting in the company that is uniquely positioned to continue to grow its high quality production base, expand its reserves, make exploration discoveries that matter and year-by-year increase our return to our investors through increased dividend.

With that, I'll hand over to Norm.

Norm Pitcher

Thanks, Paul and good morning or good afternoon, everyone. Let's start with the operations and we'll start at Kisladag. We produced 62,086 ounces and sold 66,113 at a cash cost of 337 per ounce. During the quarter we placed 2.8 million tons of ore in the pad at a grade of 0.98 grams per ton. Strip ratio for the quarter was 1.9:1, and just a comment on the strip ratio at Kisladag. We're stripping a little bit higher than our budget right now.

Year to date actual is about 1.5:1 and that's really because as this peak rolls bigger, the strip ratio is going to slowly increase a little bit, and we've got excess capacity in the fleet right now. So we're doing the right thing by increasing the stripping a little bit.

The phase three leach pad expansion is on schedule. The pads will be finished in Q4 and we're finishing up engineering and procurement on the conveying and stocking system for that. That complete system will be ready in Q1 2011. We've had a ten day shutdown of the crushing system to tie in some of the new equipment. During that time the ADR plant kept going. The next shutdown that we expect to finish that up; will be about a five day shutdown in the first quarter of next year.

On to Jinfeng; we produced 46,116 ounces and sold 45447 at a cash cost of $425 per ounce. We processed 387,000 tons of ore at 4.42 grams per ton. We mined just about a 100,000 tons from underground and 312,000 tons from the open pit and the strip ratio for the quarter, from the open pit, was about 11:1.

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