Eldorado Gold Q1 2010 Earnings Call Transcript

Eldorado Gold Q1 2010 Earnings Call Transcript
Publish date:

Eldorado Gold (ELD)

Q1 2010 Earnings Call

May 07, 2010 11:30 am ET


Edward Miu - Chief Financial Officer and Principal Accounting Officer

Nancy Woo - Vice President of Investor Relations

Paul Wright - Chief Executive Officer, President and Director

Norm Pitcher - Chief Operating Officer


Dan Rollins - UBS Investment Bank

Kerry Smith - Haywood Securities

Anita Soni - Crédit Suisse First Boston, Inc.

Steven Butler - Canaccord Genuity

Haytham Hodaly - Salman Partners Inc.

Barry Cooper - CIBC World Markets Inc.

David Christie - Scotia Capital Inc.

David Haughton - BMO Capital Markets Canada



» Eldorado Gold Corporation Q4 2009 Earnings Call Transcript
» Eldorado Gold Corporation Q3 2009 Earnings Call Transcript
» Eldorado Gold Q1 2010 Earnings Call Transcript

Good morning, ladies and gentlemen. Welcome to the Eldorado Gold 2010 First Quarter Financial and Operating 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 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 statements 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 action 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 discussion analysis available on our website and on SEDAR identifies 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 in their entirety by this cautionary statement and the cautionary statement contained in our press release. I will now turn the call over to Paul Wright, President and CEO of Eldorado Gold.

Paul Wright

Thank you, Nancy, and good morning, ladies and gentlemen. And welcome to our First Quarter Financial and Operating Results Conference Call. Joining me today in the call from Vancouver are: Norm Pitcher, Chief Operating Officer; and Ed Miu, Chief Financial Officer; and the voice you just heard from Nancy Woo, our VP of Investor Relations.

We will proceed in the customary manner. I will provide some brief introductory remarks. Norm and Ed will walk you through the results and outlook from an operating and financial perspective. And then we'll open up for questions.

We are all, I think, understandably pleased with the strong start to the year. Our mines all performed well in the first quarter, including an exceptional performance by Kisladag. Based on QT performance to date, we anticipate a strong second quarter. These factors have contributed to a modest positive adjustment in our guidance for 2010, which now anticipates production at 575,000 to 620,000 ounces at cash cost of $375 to $395 an ounce.

We continue to operate with strong cash margins and with higher realized price than we planned for, and as a result, are accumulating cash beyond our capital requirement needs. These factors have contributed to our decision to adopt a dividend policy at this time, perhaps a year earlier than previously envisaged. We look forward to this dividend being sustainable and we'll continue to work hard to ensure that over time, it becomes an increasing valuable reason to invest in Eldorado. The results, I believe, speak to the successful ongoing integration of the Sino Gold assets and the teams over the last six months.

Briefly on the exploration front, as we have described previously, 2010 will be a very active year for us with a budget of approximately $35 million in excess of 125,000 meters of drilling planned. Given that the majority of our projects are in the Northern Hemisphere, exploration activities tend to be focused on the second and third quarters in terms of physical activity, with news flow tending to be biased towards the third and fourth quarters. With those comments, I'll hand it over to Norm who will take you again through the performance of the operations.

Norm Pitcher

Thank you, Paul, and good morning, everyone. I guess, if I had an option not to say anything about the operations, I'll do that, because I think the results sort of speak for themselves. But I would like to thank all of our operating team throughout the world for an outstanding quarter. We have some hard-working, dedicated employees out there. And we've got some hard-working and dedicated new employees as well from the Sino Gold transaction. We're working very, very hard to make this work along with our own operating teams.

On the Kisladag, we produced 82,240 ounces at cash cost of $305 per ounce, which is a quarterly record for gold production. We placed a 2.9 million tonnes of ore on the leach pad, a 1.12 grams per ton. And we mined at a strip ratio of 1.17:1. The higher gold production that was largely as a result of intermediate leaching, where low-grade solution can be re-circulated back to the leach pad in larger carbon columns.

We are reviewing our recovery rates for sulphide ore. As I got mentioned in calls before, we've got a couple of different alteration types in our sulphide ore that probably aren't giving us the exact same 61% recovery, and it looks like one of them may be somewhat higher. So we're reviewing that now and we'll report on that later on in the year.

Read the rest of this transcript for free on seekingalpha.com