Eldorado Reports 2013 Year-End and Fourth Quarter Financial and Operational Results
February 21, 2014 (Source: Marketwired) — Paul N. Wright, Chief Executive Officer of Eldorado Gold Corporation (TSX:ELD)(NYSE:EGO), (“Eldorado” the “Company” or “we”) is pleased to report on the Company’s financial and operational results for the year ended December 31, 2013. Eldorado reported record gold production of 721,201 ounces at an average cash operating cost1 of $494 per ounce, compared to gold production of 656,324 ounces at an average cash operating cost of $483 per ounce for the year ended December 31, 2012. Adjusted net earnings1 for the year ended December 31, 2013 were $192.9 million, or $0.27 per share compared to adjusted net earnings of $327.4 million, or $0.48 per share for the year ended December 31, 2012, reflecting a 16% decline in gold prices year over year.
“The Company achieved record production of 721,201 ounces of gold in 2013 at $494 cash operating cost per ounce in line with our original guidance of 705,000 to 760,000 ounces of gold at cash operating costs of $515 to $530 per ounce. Steps taken by the Company mid-year, in light of a declining gold price, included rationalizing operating costs and focusing our capital resources on development projects that are expected to deliver near-term cash flows consistent with the Company’s strategic plan,” said Paul Wright, Chief Executive Officer of Eldorado.
Key Consolidated Financial Information
- At December 31, 2013 the Company recognized an impairment charge of $808.4 million, or $684.6 million, net of tax ($0.96 per share) related to Jinfeng and Eastern Dragon.
- Loss attributable to shareholders of the Company was $653.3 million ($0.91 per share), compared to net profit attributable to shareholders of the Company of $305.3 million ($0.44 per share) in 2012.
- Dividends paid were Cdn$0.12 per share (2012: Cdn$0.15 per share).
- Liquidity was $998.9 million at year end, including $623.9 million in cash, cash equivalents, and term deposits, and $375.0 million in lines of credit (2012: $1,191.8 million of liquidity).
Key Performance Measures
- Gold production of 721,201 ounces, including pre-commercial production from Olympias (2012: 656,324 ounces) increased 10% year over year.
- Total cash costs averaged $551 per ounce (2012: $554 per ounce)
- Gross profit from gold mining operations of $481.1 million fell 19% as compared to that of 2012 due to lower prices.
- Adjusted net earnings of $192.9 million ($0.27 per share) were down 41% compared to adjusted net earnings of $327.4 million ($0.48 per share) in 2012.
- Cash generated from operating activities before changes in non-cash working capital was $382.0 million (2012: $447.7 million).
- Year end 2013 Proven and Probable gold reserves of 27.7 million ounces and Measured and Indicated gold resources of 36.4 million ounces.
1 Throughout this release we use cash operating cost per ounce, total cash costs per ounce, gross profit from gold mining operations, adjusted net earnings, and cash flow from operating activities before changes in non-cash working capital as additional measures of Company performance. These are non-IFRS measures. Please see page 11 of our MD&A for an explanation and discussion of these non-IFRS measures.
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As a result of the impairment testing we performed at the end of December 31, 2013, the Company concluded that the carrying values of Jinfeng and Eastern Dragon were impaired and an impairment loss of $808.4 million was recorded against the property, plant and equipment, and goodwill of these properties ($283.5 million associated with Jinfeng and $524.9 million associated with Eastern Dragon). A deferred income tax recovery of $123.8 million was also recorded related to the impairment charge and reflected as a reduction in tax expense on the income statement.
The Company assumed gold metal prices of $1,200 per ounce for 2014, and $1,300 per ounce long-term. Discounted cash flows were calculated using discount rates between 10% and 12% for Eastern Dragon (3% higher than previous years’ impairment calculations) reflecting increased Chinese permitting risk.
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