Eldorado Gold Corp. (EGO, Financial) will release its third quarter results after market close on Oct. 27.
For the third quarter, analysts estimate an average earnings per share of three cents, up 400% from the same quarter a year ago. Analysts give a high estimate of 9 cents for EPS.
Source: Yahoo Finance
Concerning revenue, for the third quarter, analysts estimate a 12.70% decrease on a year-over-year basis. The average estimate is $184.63 million and ranges between a high of $231.21 million and a low of $125.77 million.
Source: Yahoo Finance
Eldorado owns and operates mines in Brazil, China, Greece, Turkey and Romania.
The miner is improving the quality of its assets base, extending the life of mines through development projects in Greece, and is lowering operating costs and company's risk profile through the divestment of Chinese assets.
In Greece, the miner is developing its projects at Olympias and Skouries. At Olympias, Eldorado expects to commence production in the first quarter of 2017 and will average approximately 72,000 ounces of gold at cash costs between $180 and $350 for the first five years. At Skouries, production is expected to begin in 2019. It will be from Phase I of operations, which includes open pit and underground.
The average reserve grade for Skouries is 0.77 grams per tonne (g/t) of gold and for Olympias is 7.87 g/t of gold.
On Sept. 6, Eldorado completed the closing of the Jinfeng mine transaction to a wholly-owned subsidiary of China National Gold Group Corp., as announced on April 26. The transaction is part of a divestment program that includes the sale of other Chinese assets, including the White Mountain and Tanjianshan mines as well as the Eastern Dragon project. The sale is expected to close in the fourth quarter of 2016 and the proceeds will provide the miner with plenty of cash to be invested in the development other projects. Having said this, approximatley185,000 less ounces of gold will be produced by Eldorado after the sale of the Chinese assets. However, investors should not be concerned since the gold production in China was at much higher cash operating cost (an average of $694 per ounce for 2016) than the production the miner anticipates from Olympia in the future.
The sale of the Chinese assets will also strengthen the balance sheet with approximately $900 million, which will provide the miner with sufficient liquidity to advance the projects.
On Sept. 6, Eldorado also released the results from the first 11 drill holes completed in the 2016 exploration program at the Karavansalija Mineralized Center (KMC) Project in Serbia:
"Our drilling results to date confirm our view of the outstanding potential of the KMC project. After a systematic analysis of historic exploration data including relogging of all previous drill core, reprocessing geophysical data and geological modeling we have commenced testing extensions to previous high-grade intercepts and have defined new drill targets. Based on initial results, we have budgeted an additional 7,500 meters of drilling for 2016 and have added a fourth drill rig to the program." – Peter Lewis, vice president of exploration at Eldorado
Nine out of 13 analysts recommend buying Eldorado, and the recommendation rating is 2.1. The recommendation rating ranges between 1 (Strong Buy) and 5 (Sell). The average target price is $5.52, the lowest is $4.50 and the highest is $7.
On Oct. 25, Eldorado closed at $3.61 per share, up 1.12% from the previous trading day, with a volume of 5,471,759 shares traded on the New York Stock Echange.
The price/book (mrq) is 0.74 and the enterprise value/EBITDA is 11.86.
Disclosure: I have no positions in Eldorado Gold Corp.
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