Eldorado Gold Corp. (EGO, Financial) announced its preliminary operational results for 2016 and its guidance for 2017 last Friday.
For the full year of 2016, the Canadian gold miner produced 485,994 ounces of gold at an average cash operating cost of $578 per ounce.
The gold production and cash operating costs sustained by the miner were lower than the expected guidance given in the third quarter of 2016. Eldorado expected production of 495,000 ounces of gold at cash operating costs between $585 and $620 per ounce.
Eldorado Gold expects AISC of $915 per ounce of gold mined versus $940 to $980 per ounce of gold mined.
The amount of cash on hand and securities readily converted into cash increased to $880 million from $409.1 million in the third quarter. The company can rely on a total liquidity of $1.1 billion, including a $250 million line of credit.
During the last quarter of 2016, the miner completed the sale of its Chinese assets for approximately $822.7 million. The miner now has plenty of cash to spend on developing its gold projects in Greece, the Balkans and Brazil.
At Skouries in Greece, the development of the project is advancing as scheduled. At Olympias, Eldorado expects to commence production in the first quarter of 2017. The estimated production will be approximately 72,000 ounces of gold at cash costs between $180 and $350 for the first five years.
Eldorado Gold closed at $3.35 on Monday, down five cents or -1.47% from the previous close. The stock is trading at 0.68 times its book value and 9.24 times its Ebitda.
The analyst average target price is $4.87 per share and ranges between a low of $3.78 per share and a high of $6.75 per share. The majority of analysts recommend to buy Eldorado Gold Corp.
During the third quarter, Joel Greenblatt (Trades, Portfolio) and Charles Brandes (Trades, Portfolio) established positions in Eldorado Gold. Greenblatt bought 926,863 shares and Brandes bought 30,000 shares.
Mario Gabelli (Trades, Portfolio) increased his position in Eldorado by 11.81%.
Van Eck Associates Corp. and FMR LLC are the top institutional holders. Van Eck holds 50,232,187 shares, which is approximately 7.01% of Eldorado's shares outstanding. The holding is valued at $197,412,494. FMR holds 44,302,695 shares, which is approximately 6.18% of the company’s shares outstanding. The holding is valued at $174,109,591.
Disclosure: I have no positions in Eldorado Gold Corp.
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