Eldorado Gold Corp.(ELD)
Q2 2010 Earnings Conference Call
July 29, 2010 8:30 AM ET
Nancy Woo – VP of Investor Relations
Paul Wright - CEO
Norm Pitcher - COO
Ed Mui - CFO
Steven Butler - Canaccord
David Houghton - BMO Capital Markets
Barry Cooper - CIBC
Kerry Smith - Haywood Securities
Anita Soni - Credit Suisse
Previous Statements by ELD
» Eldorado Gold Q1 2010 Earnings Call Transcript
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» Eldorado Gold Corporation Q3 2009 Earnings Call Transcript
Good morning ladies and gentlemen and welcome to the El Dorado Gold Corporation second quarter 2010 financial results conference call. This call is also being webcast is available on the El Dorado Gold Website at www.eldoradogold.com
I would now like to turn the meeting over to Miss Nancy Woo. Please go ahead Miss Woo.
Thank you operator. This presentation includes statements that may constitute forward looking statements or information. Any forward looking statements made and information provided, reflect their current plans, estimates and views. Forward looking statements and information which include all statements that are not historical facts are based on certain material factors and assumptions are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated again 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 cordially management’s discussion and analysis available on our website and on CEDAR, identified factors and assumptions upon which the forward looking statements or 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 of their entirety by this cautionary statement and the cautionary statements contained in our press release dated July 29
I will now turn the call over to Paul Wright, President and CEO of El Dorado Gold.
Well thank you Nancy and good morning ladies and gentlemen and welcome to the El Dorado Gold second quarter financial and operating results conference call.
Joining me this evening in Beijing are Norm Pitcher, Chief Operating Officer and Ed Mui, Chief Financial Officer and you’ve just heard from our VP of Investor Relations, Nancy Woo who’s in Vancouver.
We will continue with our customary program with Norm providing commentary on the operating performance and the outlook for the company. Followed by which, Ed will review the quarter’s financial results and then we’ll open up for questions. But before doing so, I would like to make a few brief remarks.
We continue to be very pleased with these results. A strong performance from our mines delivering a 1,67,940 ounces, at an average cash cost of to $357 per ounce, has enabled us to firm up and upgrade our guidance for the year to 6,25,000 ounces at $375 an ounce.
El Dorado continues to distinguish itself through continued deliverance into its stated plan. The strong operating performance has enabled the company to report net income for the quarter of $60.5 million or $0.11 cents per share for the period. In the quarter, we completed the acquisition of all the shares of Brazauro Resources Corporation that we did not own, allowing the company to push forward now for the development of the Tocantinzinho project in Brazil.
While we look forward to delivering a full feasibility a year from now and being in a position to make a construction decision by year end 2011, our development and exploration programs are progressing largely in accordance to plan and Norm will provide some commentary on the individual programs momentarily.
I am particularly pleased to see the significant improvement in production and costs from our three mines in China where productions has jumped from 82,688 ounces in Q1 to 97,489 ounces in Q2 and where we have seen a significant cost reduction in all three mines between the quarters.
I would like to thank all of our employees and all of our contractors for another great quarter and we look forward to the balance of the year. I will now hand over to Norm who will provide some additional color on the operations and outlook for the balance of the year. Norm?
Thanks Paul and good morning everyone. Why don’t we start on the operation side and we’ll go to Kisladag first, another great quarter there. We produced 70, 451 ounces or $304 per ounce and placed $2.7 million tons of ores on the leach pad at the rate of 1.12 grams per ton.
Our strip ratio about 1.55 to 1, very close to micro mine average. We’re obviously very pleased with the operation of both the mines and processing circuits at Kisladag and we’re now in the process of looking at IT heap recoveries in light of the good production we’ve had in the first half of this year.
At Jinfeng in China, we produced 52,659 ounces and 381 per ounce and milled 392 ounces of ore, tons of ore at 4.51 grams per ton at the open pit produced 335,000 tons which is a little bit above budget and we did 97,000 tons from underground which is pretty much bang on budget. Strip ratio was a little bit lower than the year average, was 12.6 to 1 as we concentrated on ore ahead of the rainy season, which is we are in right now at Jinfeng.
Recoveries there are averaging about 1.5% above budget so far and just as a general comment, now we’ve got sort of six months operating under our belt at Jinfeng and I’m quite pleased with the progress we’ve made in both the open head operation and the underground and also just started to get a handle on the overall structural setting of the ore body controls and their mineralization etcetera.