Eldorado Gold Corp. (EGO, Financial) announced today it has closed the deal for the transfer of the ownership of its Chinese assets, White Mountain and Tanjianshan Mines and the Eastern Dragon Development Project, to a partner of Yintai Resources Co. Ltd.
The sale of these assets add to the sale of the Jinfeng mine to a wholly-owned subsidiary of China National Gold Group Corp. that was completed on Sept. 6.
The Canadian gold miner has not disclosed the total amount of the transaction yet, but it is estimated to be approximately $900 million, which will provide the miner with sufficient liquidity to advance various projects.
"We are very pleased to have completed the monetization of our Chinese assets and look forward to advancing our internal project pipeline with the enhanced financial flexibility resulting from the sale process," said Paul Wright, president and CEO of Eldorado Gold (Eldorado Gold Corp.’s PR).
Eldorado is advancing several gold projects. Last week, the miner received a building permit for the development of the Skouries mine in Greece. In additon, the company has projects in Serbia, Romania and Brazil.
The proceeds from the sale of the Chinese assets will also strengthen the company’s balance sheet. As of the third quarter of 2016, the company had $409.10 million in cash on hand and securities that can readily be converted into cash. The company also has the additional flexibility of a revolving credit facility that has been extended to June 13, 2020.
After the sale of the Chinese assets the miner will produce approximately 185,000 less ounces of gold, taking into consideration Eldorado's future gold production at Olympias. However, operations in China were more costly than those that the miner will undertake in Greece. In China, Eldorado dug up gold at cash operating costs of approximately $694 per ounce (computed as an average for 2016).
At the moment, Eldorado is trading at $2.83 per share, up one cent, or 0.18%, from the previous trading day and has lost 5.05% year to date.
The 52-week range is between $1.87 per share and $5.16 per share.
The stock is more volatile than the stock market (beta = 1.78).
Eldorado Gold Corp. has a market capitalization of $2.06 billion and has 715.35 million shares outstanding. The number of shares available for trading is 712.15 million. The price-earnings (P/E) ratio is -1.30 and the EPS is $-2.16.
The company has approximately $409.1 million of cash on hand, or 57 cents per share. The total debt (mrq) is $601.04 million and the book value per share (mrq) is $4.93.
The price-book ratio (mrq) is 0.57 and the EV/EBITDA is 7.90.
Disclosure: I have no positions in Eldorado Gold Corp.
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