TORONTO (miningweekly.com) – Canada-based gold miner Eldorado Gold reported a 38% drop in net profit at $46.6-million or 7c a share for the June quarter on the back of decreased production from several of its gold operations.
Most notably, the company’s Jinfeng mine, in China, produced 25 630 oz of gold at a cash cost of $432/oz in the quarter, which was less gold produced more expensively when compared with the same quarter in 2011, when the mine produced 31 977 oz at $343/oz.
The company said the mine was currently in a waste-stripping phase and lower-grade stockpile material was being treated at the plant to substitute for the lack of ore from the openpit.
The Vancouver-based Eldorado said the decrease in net income year-on-year was owing to lower earnings before taxes from gold mining operations ($18.9-million lower), as well as higher general and administrative expenses ($6.1-million higher), exploration expenses ($5.5-million higher) and tax expenses ($5.1-million higher).
Revenue from gold sales for the quarter was down by 13% to $214.2-million when compared with the second quarter last year, as a result of lower sales volumes, partially offset by higher prices. The company sold 132 919 oz in the quarter, compared with 162 164 oz during the same 2011 quarter.
Analysts had expected revenue of C$316.50-million.
Eldorado, with operations in Turkey, China, Greece, Brazil and Romania, revised its production guidance to 660 000 oz of gold, down from the previous guidance of 730 000 oz to 775 000 oz, at an average cash operating cost of $465/oz, owing to delayed treatment of Efemcukuru concentrate at the Kisladag mine, both in Turkey, and the delayed completion of construction of the Eastern Dragon project, in China, where permitting issues troubled the development project.
Investors saw opportunity for growth in the company, pushing the share price up by 5% to C$11.05 in early afternoon trade on the TSX. The company’s stock price had lost just less than half its value in the past 52 months.