Eldorado Gold (EGO)

2011 Earnings Call

February 24, 2012 11:30 am ET

Executives

Nancy E. Woo - Vice President of Investor Relations

Paul N. Wright - Chief Executive Officer, President and Director

Norm Pitcher - Chief Operating Officer

Fabiana Chubbs - Chief Financial Officer, Treasurer and Risk Manager

Analysts

Patrick Chidley - HSBC, Research Division

Brian Christie - Desjardins Securities Inc., Research Division

Andrew Schopick - Nutmeg Securities Ltd., Research Division

Presentation

Operator

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Good morning, ladies and gentlemen. Welcome to the Eldorado Gold Year-end Financial and Operating Results Conference Call. This conference call is being recorded and is available on the Eldorado website at www.eldoradogold.com or on www.earnings.com.

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

Nancy E. Woo

Thank you, operator. This presentation includes statements that may constitute forward-looking statements or information. Any forward-looking statements made or information provided reflect our current plans, estimates and views. Forward-looking statements or information, which include all statements that are not historical fact, 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's Discussion and 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 statements and the cautionary statements contained in our press release dated February 24, 2012.

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

Paul N. Wright

Well, thank you, Nancy, and good morning, ladies and gentlemen. And as Nancy said, welcome to Eldorado Gold's Year-end Financial and Operating Results Conference Call. Joining me this morning in Vancouver are Norm Pitcher, our Chief Operating Officer; Fabiana Chubbs, our Chief Financial Officer; and Nancy Woo, our Vice President of Investor Relations.

I will follow the usual format with Norm and Fabi taking you through the operating and financial performance of the company, respectively, and providing some commentary in regards to our outlook for 2012. We'll then open up for questions.

As we previously disclosed, our operating results for 2011 and our guidance for 2012, my comments on these topics will be fairly brief. 2011 was another very strong year for Eldorado. Gold production increased, gold revenues increased, earnings per share increased, dividends increased to a level where dividends attributable to 2011 production as a percentage of 2011 earnings is in excess of 25%, one of the highest payouts in the sector.

Modest increases were made in our reserves and resources, and importantly, production commenced at our second mine in Turkey, Efemçukuru. Looking to 2012, we see further growth in production to approximately 750,000 ounces whilst maintaining some of the lowest cost in the industry in the mid-$400 range.

Turning to the European Goldfields transaction. This transaction closed today following overwhelming shareholder support from both companies. We are tremendously excited with the opportunity that this transaction provides for Eldorado. We're adding sizable, high-quality, long-life assets with robust resource base. We are increasing Eldorado's gold reserves by 53% to an excess of 29 million ounces. We are expanding future production growth whilst maintaining low cash costs. We are strengthening our regional presence in the extremely prospective area, and we are utilizing the strength of our balance sheet and executing on the expanded growth plan.

As previously described, we will, in April, update the market on the details of our plans for the development of these assets within Eldorado. And beyond my next few comments, questions regarding time frame, capital, operating cost estimates, production levels will have to wait until April.

Following the approval of the EIS for both Olympias and Skouries by EGU, activities have begun. The Olympias mill is presently being furbished and will be commissioned in Q2 of this year with first production planned for Q3. Underground rehabilitation and refurbishment is underway. At Skouries, we expect earthworks to commence on-site in the second quarter of this year.

In Romania, very good progress is being made on the permitting front, and we expect Certej to be through its major permitting by midyear.

We're extremely impressed with the quality of the management teams in both Greece and Romania that are coming on board, and we look forward to working with them to bring these assets to account.

With that, I'll hand it over to Norm.

Norm Pitcher

Thanks, Paul, and good morning, everyone. I think that with the growth of the company over the last few years, I'll change things up a little bit in terms of the way I present. I don't intend to go through all of the numbers for all of the operations. And I think what I'll do instead is refer you to the press release and the MD&A for details of things like tonnes grade and the associated cash cost.

Because it is year end, I would like to make sure that we thank our teams throughout the world, both in the operations, development and exploration. They have certainly been the reason for our success in 2011.

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