CHINA - Eldorado quarterly production down

Canadian gold producer Eldorado Gold says reduced production at its Chinese operations during the second quarter of 2012 has contributed to a 38% decline in net income. Profit for the quarter to June 30 was $46.6 million compared to $74.9 million for the corresponding 2011 quarter. The company says the decrease was due to lower earnings before taxes from gold mining operations, as well as higher general, exploration, tax and administrative expenses. 

While revenue from gold sales for the quarter reached $214.2 million, this was down $30.7 million or 13% from the second quarter of 2011 due to lower sales volumes partially offset by higher prices. Eldorado sold 132,919 ounces in the period compared with 162,164 ounces in the second quarter of 2011.

The company has revised its 2012 production guide from all operations in China and Turkey to 660,000 ounces, partly due to reductions at Tanjianshan and Jinfeng and delays to construction completion at its Eastern Dragon project because of necessary project permit approval processes.

Eldorado has been informed by the Heilongjiang Provincial Development and Reform Commission that it will require the formal approval of the project permit approval for Eastern Dragon by the National Development and Reform Commission (NDRC) in Beijing. The company is preparing the necessary paperwork to submit to NDRC, as well as determining the timeline for review and approval.

Exploration drilling in China during the quarter included programs in the Guizhou, Jilin and Qinghai regions. In Guizhou, exploration drilling was conducted within the Jinfeng mining licence and on surrounding exploration licences.

At Jinfeng mine itself, 40 drill holes over 10,400 metres were completed from surface and underground rigs to revise the company’s structural model for the deposit. Positive results were obtained from all areas tested and best intersections were 29 metres @ 5.92 grams/tonne gold, 19 metres @ 6.19 grams/tonne gold, 55 metres @ 5.3 grams/tonne, 80 metres @ 2.63 grams/tonne, 4 metres @ 12.58 grams/tonne, 11 metres @ 12.34 grams/tonne and 11 metres @ 21.56 grams/tonne gold.

At Tanjianshan in Qinghai, exploration drilling has been carried out at the Xijingou deposit and at the Qinlongtan North target area, with more than 4000 metres completed between the areas. Assay results are pending.

www.eldoradogold.com