Eldorado Gold Slighly Lower as Credit Suisse keeps Outperform rating
Credit Suisse has kept an Outperform rating on Eldorado Gold (ELD.TO) after it released its Q3 result showing EPS of $0.09 vs. Credit Suisse and street forecasts of $0.10.
Credit Suisse calculated adj. EPS of $0.10 after adjusting for an FX loss and gain on sales of assets and securities. "Production was in-line and higher cost of sales (+$7M) was offset by lower exploration expense (-$5M).°
Credit Suisse noted the Eastern Dragon project is dragging on, as it had expected. "Eastern Dragon has not yet received construction permits and will commence construction when permits are received. ELD had indicated a 9 to 12-month construction timeline. We are already forecasting production in Q4/11 or 30k ozs vs last guidance of 70-80k ozs for 2011. We do not expect this delay will affect our two year growth profile or NAV. Efemcukuru is on budget and on schedule for mid 2011."
On its Investment Thesis, Credit Suisse said: "We maintain our Outperform rating on ELD as it provides good leverage to gold, while offering exceptional production growth and exploration potential. We expect 2010FY to be a relatively higher cost year for ELD (asset integration) and the normal (3-6 month) timeline delays with new mine startups (Eastern Dragon?) to be a buying opportunity as lower cost production comes on-line in 2011 with Efemcukuru and Eastern Dragon in late 2011 or early 2012."
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