Analyst Actions: Eldorado Gold Q3 Analyzed at Credit Suisse; Maintains Outperform


Q3/12 in-line, delivering on back end loading

EGO reported Q3/12 EPS of $0.11, in-line vs. Credit Suisse at $0.11 and Bloomberg consensus of $0.11. Slight beat on production and costs offset by slightly higher than forecast depreciation and G&A vs. Credit Suisse estimates.

Q3 operating highlights, production a slight beat: Gold production of 170kozs (commercial+non-commercial) was ahead of Credit Suisse est. of 163kozs. Cash op. costs of $493/oz largely in-line, coming in 3% lower than $508/oz Credit Suisse est. Total cash costs of $567/oz also in-line vs. $578/oz Credit Suisse est.

Kisladag strong offsets weakness at Jinfeng, White Mountain. TJS in-line: Kisladag beat with 84kozs at $363/oz ( TCC ) vs. 78kozs at $472/oz. Stronger QoQ leach performance was expected but came through better than expected on leach cycle recoveries. TJS was in-line with 29kozs at $593/oz vs. Credit Suisse est. of 28kozs at $588/oz. Jinfeng production was in-line with 26kozs vs. 25kozs Credit Suisse est., but costs were impacted by more stockpile material being processed than we had forecast (Jinfeng is known to be in a waste stripping phase). White Mountain production and costs weak on the back of lower than forecast grades.

As expected, Efemcukuru concentrate backlog to be sold: Efemcukuru produced 14kozs vs. 13kozs Credit Suisse est. (pre-commercial); this includes no operation of the concentrate treatment plant at Kisladag in Sept., now pending modifications to the circuit. As noted in our Oct. 15th note "In depth review of Aegean assets," the concentrate treatment plant is experiencing a metallurgical issue regarding copper, which was insoluble in the metallurgical testwork but appears to be soluble in the plant and is currently impacting the electrowinning process. EGO expects a three to six month timeframe to resolve the issues (the solution could be either a SART plant or adding more carbon). In the meantime, EGO is negotiating third party concentrate treatment. Efemcukuru produced 27kozs in concentrate during the quarter and EGO now has 51kozs contained in concentrate.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: TCC

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