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Eldorado Gold Corp First-Quarter Operating and Financial Results

- By Alberto Abaterusso

Eldorado Gold Corporation (EGO) closed the first quarter of 2017 reporting an EPS, adjusted to one time charges, of 1 cent (U.S. Dollars) and matched analysts' expectations on earnings. At the end of the comparable quarter of 2016, the Canadian gold producer reported an EPS, adjusted to one time charges, of nil cents.

The profit for the first quarter of 2017 was $3.8 million, up 252% year over year, or 1 cent per share. Eldorado Gold Corp. closed the same quarter of one year go with a loss of $2.5 million.

Source: Yahoo Finance

In the first quarter of 2017, revenue came in at $111.88 million, a 18.2% increase from the restated figure of one year ago, and missed analysts' expectations on revenue by $8.67 million. For the first quarter of 2017, Eldorado Gold Corporation should have closed the period with revenue come in at $120.55 million. This was an average of six estimates of analysts, who were surveyed on Eldorado Gold Corporation's first-quarter 2017 revenue.

Source: Yahoo Finance

During the first quarter, Eldorado Gold Corporation sold 74,068 ounces of gold, down 44.5% year over year, and from the sale of one ounce of gold, Eldorado Gold realized an average price of $1,222, up $24 per ounce thanks to rising gold prices on the London Bullion Market. Therefore, gold revenues came in at $90.5 million.

The volume of ounces of gold sold during the first quarter was backed by a production of 75,172 ounces of gold, a 5.9% decrease on a year over year basis due to the sale of the company's Chinese assets, that was completed during the last quarter of 2016 for a total amount of approximately $881.6 million. At Kisladag (Turkey), the gold production was 52,644 ounces, flat compared to the same quarter of one year ago, while at Efemcukuru (Turkey) the production decreased by 18.1% to 22,528 ounces, mainly because of less tonnes of mineral milled and a lower concentration of the metal in the mineral. Due to the same reasons the company sustained higher operating costs at Efemcukuru than the first quarter of 2016.

The company produced the precious metal at a lower than guided AISC per ounce for 2017 of $791 and at a lower than guided cash operating cost per ounce for 2017 of $466. For 2017, Eldorado Gold Corporation guides AISCs to range between $845 per ounce and $875 per ounce and cash operating costs to range between $484 per ounce and $535 per ounce. The total Cash Cost per ounce of gold was $483, a 26.6% decrease on a year over year basis.

Eldorado Gold Corporation closed the first quarter with an impressive improvement in the cash flow from ongoing operations (CFO) that was $ 47.774 million while one year ago the CFO was negative, $6.867 million.

At the end of March 31, 2017, the amount of cash on hand and securities is $873.9 million plus a line of available credit of $250 million that brings the company's total liquidity to $1.124 billion. Plenty of cash that the company can use in 2017 to cover the expenses related to the running of its producing assets (approximately $70 million), for the advancement of the gold projects in which Eldorado Gold is engaged (approximately $345 million) and for exploration activities (approximately $35 million).

For 2017, gold production is expected to be 365,000 ounces to 400,000 ounces. This volume of forecasted production includes ounces of pre-commercial production from Olympias Phase II where, according to Paul Wright, Eldorado Gold's former President and CEO, commissioning is progressing as planned and the commercial production is expected to be declared sometime between September-December 2017.

Paul Wright left the position to Mr. George Burns who is now the President and the CEO of Eldorado Gold Corporation.

Concerning the development of the other projects which Eldorado Gold Corporation is engaged in, at Skouries (Greece) the beginning of production is still targeted for 2019 and at both Tocantinzinho (Brazil) and Certej (Romania) activities "are progressing with engineering optimizations", the company says.

Yesterday, Eldorado Gold Corporation closed at $3.66 per share up 28 cents or plus 8.28% from the previous trading day with a price to book ratio of 0.75 and an EV to Ebitda ratio of 15.12.

Disclosure: I have no positions in Eldorado Gold Corporation.

This article first appeared on GuruFocus.