Eldorado continues to leak red ink

Vancouver-based miner Eldorado Gold (TSX-V: ELD) reported a US$1.7mn net loss for 2Q04, following on from the US$700,000 net loss in the previous quarter, the company announced. The company blamed foreign exchange losses. The result compares to a US$1.4mn net profit for 2Q03 according to the company's quarterly report. However, Eldorado ended 2003 with a net loss of US$45mn due to large non-cash writedowns. Production for 2Q04 was affected by disruptions to operations at the company's Sao Bento mine in Brazil's Minas Gerais state where a shaft is being deepened. Sao Bento, Eldorado's only producing mine, produced 18,007oz of gold at cash operating costs of US$303/oz over the quarter, compared to 26,777oz at US$230/oz in 2Q03. Gold processing was hampered by a change in the ore's mineralogy caused by an intrusion which cuts the orebody in the area scheduled for mining in 2004, which has led to increased cyanide and oxygen consumption rates. For the first six months of the year, sales came to 40,217oz at an average price of US$403/oz. This compares to 48,222oz at an average price of US$350/oz for same-period 2003. When it announced its 2003 results, Eldorado forecast 2004 production of 95,000oz at cash costs of US$245/oz. Eldorado Gold has exploration projects in Brazil and Turkey, and last quarter signed a lease for office space in Beijing, where it is working with the China National Gold Corporation to acquire three properties.