EX-99.1 4 financials.htm FINANCIALS CC Filed by Filing Services Canada Inc. 403-717-3898





 

 

March 31, 2009

Unaudited Interim Consolidated Financial Statements

 

Suite 1188, 550 Burrard Street

Vancouver, British Columbia

V6C 2B5


Phone:  (604) 687-4018

Fax:      (604) 687-4026

 

 

 

 





 

Eldorado Gold Corporation

Unaudited Consolidated Balance Sheets


(Expressed in thousands of U.S. dollars)




 

 

March 31,

 

December 31,

2009

2008

$

$

Assets

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

  107,954 

 

  61,851 

Restricted cash (note 3)

 

  5,500 

 

  - 

Marketable securities

 

  14,618 

 

  43,610 

Accounts receivable and other

 

  14,917 

 

  36,109 

Inventories

 

  95,445 

 

  86,966 

Future income taxes

 

  - 

 

  175 

 

 

  238,434 

 

  228,711 

Restricted assets and other

 

  10,012 

 

  8,349 

Mining interests

 

  681,134 

 

  668,309 

 

 

  929,580 

 

  905,369 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

Accounts payable and accrued liabilities

 

  34,098 

 

  42,659 

Debt

 

  5,115 

 

  139 

Future income taxes

 

  2,974 

 

  1,097 

 

 

  42,187 

 

  43,895 

Asset retirement obligations

 

  4,872 

 

  4,812 

Future income taxes

 

  56,535 

 

  60,043 

 

 

  103,594 

 

  108,750 

 

 

 

 

 

Non-controlling interest

 

  5,161 

 

  4,799 

 

 

 

 

 

Shareholders* Equity

 

 

 

 

 

 

 

 

 

Share capital (note 5(a))

 

  947,736 

 

  931,933 

Contributed surplus (note 5(b))

 

  17,206 

 

  19,378 

Accumulated other comprehensive loss (note 5(c))

 

  (3,658)

 

  (5,971)

Deficit

 

  (140,459)

 

  (153,520)

 

 

  820,825 

 

  791,820 

 

 

  929,580 

 

  905,369 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Approved on behalf of the Board of Directors



(Signed) Robert Gilmore Director                  (Signed) Paul N. Wright Director 

See accompanying notes to consolidated financial statements.


Eldorado Gold Corporation

Unaudited Consolidated Statements of Operations and Deficit

For the three months ended March 31,


(Expressed in thousands of U.S. dollars except per share amounts)



 

 

2009

 

2008

$

$

Revenue

 

 

 

 

Gold sales

 

  52,206 

 

  68,675 

Interest and other income

 

  196 

 

  3,708 

 

 

  52,402 

 

  72,383 

 

 

 

 

 

Expenses

 

 

 

 

Operating costs

 

  18,442 

 

  19,819 

Depletion, depreciation and amortization

 

  4,460 

 

  8,824 

General and administrative

 

  8,762 

 

  9,795 

Exploration

 

  2,062 

 

  2,191 

Mine standby costs

 

  - 

 

  2,432 

Asset retirement obligation costs

 

  53 

 

  133 

Foreign exchange (gain) loss

 

  (3,089)

 

  854 

 

 

  30,690 

 

  44,048 

 

 

 

 

 

Loss (gain) on marketable securities

 

  964 

 

  (160)

Interest and financing costs

 

  81 

 

  1,028 

Loss on derivative contract

 

  - 

 

  739 

 

 

  31,735 

 

  45,655 

Income before income taxes and non-controlling interest

 

  20,667 

 

  26,728 

 

 

 

 

 

Income tax expense

 

 

 

 

Current

 

  (6,017)

 

  (5,682)

Future

 

  (1,227)

 

  (309)

 

 

  (7,244)

 

  (5,991)

 

 

 

 

 

Non-controlling interest

 

  (362)

 

  - 

 

 

 

 

 

Net income for the period

 

  13,061 

 

  20,737 

 

 

 

 

 

Deficit, beginning of period

 

  (153,520)

 

  (317,176)

 

 

 

 

 

Deficit, end of period

 

  (140,459)

 

  (296,439)

 

 

 

 

 

Weighted average number of shares outstanding

 

 

 

 

Basic

 

  369,862 

 

  344,542 

Diluted

  371,833 

 

  345,902 

 

 

 

 

 

Earnings per share

 

 

 

 

Basic income (loss) per share - US$

 

  0.04 

 

  0.06 

Diluted income (loss) per share - US$

 

  0.04 

 

  0.06 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




See accompanying notes to the consolidated financial statements.



Eldorado Gold Corporation

Unaudited Consolidated Statements of Cash Flows

For the three months ended March 31,


(Expressed in thousands of U.S. dollars, unless otherwise stated)




 

 

2009

 

2008

$

$

Cash flows generated from (used in):

 

 

 

 

 

 

 

 

 

Operating activities

 

 

 

 

Net income for the period

 

  13,061 

 

  20,737 

Items not affecting cash

 

 

 

 

Asset retirement obligations costs

 

  53 

 

  133 

Depletion, depreciation and amortization

 

  4,460 

 

  8,824 

Unrealized foreign exchange (gain) loss

 

  (2,683)

 

  418 

Future income taxes expense

 

  1,227 

 

  309 

Loss (gain) on marketable securities

 

  964 

 

  (160)

Imputed interest and financing costs

 

  - 

 

  10 

Stock-based compensation

 

  3,080 

 

  4,882 

Pension expense (note 4)

 

  198 

 

  - 

Non-controlling interest

 

  362 

 

  - 

Loss on derivative contract

 

  - 

 

  739 

 

 

  20,722 

 

  35,892 

   Bonus cash award units payments

 

  (2,059)

 

  - 

Property reclamation payments

 

  - 

 

  (652)

Contractual severance payments

 

  - 

 

  (231)

Changes in non-cash working capital (note 7)

 

  7,210 

 

  12,034 

 

 

  25,873 

 

  47,043 

 

 

 

 

 

Investing activities

 

 

 

 

Mining interests

 

 

 

 

Capital expenditures

 

  (19,029)

 

  (12,714)

Sales and disposals

 

  - 

 

  221 

Marketable securities

 

 

 

 

Purchases

 

 

 

  (1,792)

Disposals

 

  30,457 

 

  263 

Pension plan contributions

 

  (1,759)

 

  - 

Restricted cash and other restricted assets

 

  (5,525)

 

  (5,300)

 

 

  4,144 

 

  (19,322)

 

 

 

 

 

Financing activities

 

 

 

 

Capital stock

 

 

 

 

Issuance of common shares for cash

 

  11,110 

 

  1,213 

Long-term and bank debt

 

 

 

 

Proceeds

 

  4,976 

 

  5,000 

 

 

  16,086 

 

  6,213 

Net increase in cash and cash equivalents

 

  46,103 

 

  33,934 

Cash and cash equivalents - beginning of period

 

  61,851 

 

  46,014 

Cash and cash equivalents - end of period

 

  107,954 

 

  79,948 

 

 

 

 

 

Supplementary cash flow information (note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

 



See accompanying notes to the consolidated financial statements.




Eldorado Gold Corporation

Unaudited Consolidated Statements of Comprehensive Income

For the three months ended March 31,


(Expressed in thousands of U.S. dollars, unless otherwise stated)




 

2009

2008

 

$

$

 

 

 

Net earnings for the period ended March 31,

13,061

20,737

 



Other comprehensive income (loss)



Unrealized gains (losses) on available-for-sale investments (note 5(c))

2,313

(521)

 



Comprehensive income for the period ended March 31,

15,374

20,216

 




Eldorado Gold Corporation

Notes to the Unaudited Interim Consolidated Financial Statements

March 31, 2009


(Expressed in thousands of U.S. dollars, unless otherwise stated)



1.

Nature of operations


Eldorado Gold Corporation (“Eldorado” or “the Company”) is a gold exploration, development, mining and production company. The Company has ongoing exploration and development projects in Brazil, China, Turkey and Greece. On July 1, 2006, the Company began production in Turkey, and on February 1, 2007, the Company began production in China. Production at the Kişladağ mine in Turkey was suspended in August 2007 as a result of a court injunction and the mine remained shut down throughout the rest of that year. The court injunction was removed in February 2008 and the mine restarted production on March 6, 2008. Production operations in Brazil ceased in the second quarter of 2007 and the São Bento mine (“São Bento”) was sold to AngloGold Ashanti on December 15, 2008.

With the exception of changes in accounting policies as outlined in note 2 below, these unaudited interim consolidated financial statements were prepared by Eldorado in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”) consistent with those used to prepare Eldorado’s audited consolidated financial statements for the year ended December 31, 2008. As these unaudited interim consolidated financial statements do not contain all of the disclosures required by Canadian GAAP, they should be read in conjunction with the notes to the Company’s audited consolidated financial statements for the year ended December 31, 2008.

In the opinion of management, Eldorado has made all adjustments necessary to present fairly the Company’s consolidated financial position as at March 31, 2009 and the consolidated results of operations, cash flows and comprehensive income for the three-month periods then ended.

Certain comparative figures have been reclassified to conform to the current period’s presentation.


2.

Changes in accounting policies and new accounting developments


Goodwill and intangible assets (Section 3064)

In February 2008, the Canadian institute of Chartered Accountants (“CICA”) issued Section 3064, “Goodwill and Intangible Assets”, which replaces Section 3062, “Goodwill and Other Intangible Assets”. This new standard provides guidance on recognizing, measuring, presenting and disclosing goodwill and intangible assets and is effective for the Company beginning January 1, 2009 and applies retrospectively.


Concurrent with the adoption of this standard, CICA Emerging Issues Committee Abstract 27 (“EIC-27”), “Revenues and Expenditures in the Pre-operating Period”, was withdrawn. This resulted in a change to the Company’s accounting for the start-up of mining operations, as pre-commercial production costs are no longer capitalized as an asset.


The adoption of this new accounting policy did not have a material impact on Eldorado’s consolidated financial statements.








Eldorado Gold Corporation

Notes to the Unaudited Interim Consolidated Financial Statements

March 31, 2009


(Expressed in thousands of U.S. dollars, unless otherwise stated)



2.    Changes in accounting policies and new accounting developments (continued)


Credit Risk and the Fair Value of Financial Assets and Financial Liabilities (EIC Abstract 173)


In January 2009, the CICA issued EIC Abstract 173, “Credit Risk and the Fair Value of Financial Assets and Financial Liabilities”. The EIC requires the Company to take into account the Company’s own credit risk and the credit risk of the counterparty in determining the fair value of financial assets and financial liabilities, including derivative instruments. This abstract applies to interim and annual financial statements relating to fiscal years beginning on or after January 1, 2009. The adoption of this new accounting policy did not have any material impact on Eldorado’s consolidated financial statements.


Mining Exploration Costs (EIC Abstract 174)


In March 2009, the CICA issued EIC Abstract 174, “Mining Exploration Costs”. The EIC provides guidance on the accounting and the impairment review of exploration costs. This abstract applies to interim and annual financial statements relating to fiscal years beginning on or after January 1, 2009. The adoption of this new accounting policy did not have any material impact on Eldorado’s consolidated financial statements.


3.

Restricted cash

Restricted cash represents short-term interest-bearing money market securities and funds held on deposit as collateral. As at March 31, 2009, the Company had the following restricted cash:


 

 

March 31,

2009

$

 

December 31,

2008

$

 

 


 


Collateral account against the HSBC bank loan – China

 

5,500

 

-



4.

Defined benefit plans expense


 

 

March 31,

2009

$

 

March 31,

2008

$

 

 


 


Pension plan expense

 

17

 

-

SERP expense

 

181

 

-

 

 


 


Total

 

198

 

-







Eldorado Gold Corporation

Notes to the Unaudited Interim Consolidated Financial Statements

March 31, 2009


(Expressed in thousands of U.S. dollars, unless otherwise stated)



5.

Shareholders’ equity


(a)

Authorized share capital

The Company’s authorized share capital consists of an unlimited number of voting common shares without par value and an unlimited number of non-voting common shares without par value. At March 31, 2009 there were no non-voting common shares outstanding.



Voting common shares

 

Number of shares

 

Amount

$

 

 

 

 

 

Balance, December 31, 2008

 

368,278,029

 

931,933

 

 


 


Shares issued upon exercise of share options, for cash

 

2,639,361

 

11,110

Estimated fair value of share options exercised

 


 

4,693

 

 


 


Balance, March 31, 2009

 

370,917,390

 

947,736



(b)

Contributed surplus


The continuity of contributed surplus on the Consolidated Balance Sheet is as follows:


 

 

 Contributed surplus attributable to:

 

 

 Stock-based

 compensation

 $

 

 Other

 $

 

Total

$

 

 

 

 

 

 

 

Balance, December 31, 2008

 

18,284

 

1,094

 

19,378

 

 

 

 

 

 

 

Non-cash stock-based compensation

 

2,521

 

-

 

2,521

Options exercised, credited to share capital

 

(4,693)

 

-

 

(4,693)

 

 


 


 


Balance, March 31, 2009

 

16,112

 

1,094

 

17,206










Eldorado Gold Corporation

Notes to the Unaudited Interim Consolidated Financial Statements

March 31, 2009


(Expressed in thousands of U.S. dollars, unless otherwise stated)



5.    Shareholders’ equity (continued)


(c)

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income includes the following:

 

March 31, 2009

$

 

December 31, 2008

$

 

 

 

 

Balance, beginning of period

(5,971)


214

 




Unrealized gains (losses) on available-for-sale investment-net of taxes

2,313


(6,431)

Other than temporary impairment charges

-


460

Realized gains on sale of available-for-sale investment transferred to net income

-


(61)

Reversal on acquisition of Frontier

-


(153)

 




Balance, end of period

(3,658)


(5,971)


6.

Stock-based compensation

(a)

Share option plans

The continuity of share purchase options outstanding is as follows:


 

 

Weighted average exercise price

Cdn$

 

Number of options

 

Contractual weighted average remaining life

(years)

 

 

 

 

 

 

 

Balance, December 31, 2008

 

5.71

 

13,438,914

 

3.9

Granted

 

 9.25

 

318,000

 


Exercised

 

 4.21

 

(2,639,361)

 


Cancelled

 

 6.46

 

(55,000)

 


 

 


 


 


Balance, March 31, 2009

 

 5.92

 

11,062,553

 

 4.0



At March 31, 2009, 5,505,695 share purchase options (December 31, 2008 – 6,119,729) with a weighted average exercise price of Cdn$6.38 (December 31, 2008 – Cdn$5.69) had vested and were exercisable.






Eldorado Gold Corporation

Notes to the Unaudited Interim Consolidated Financial Statements

March 31, 2009


(Expressed in thousands of U.S. dollars, unless otherwise stated)



6.    Stock-based compensation (continued)


Options outstanding at March 31, 2009 are as follows:

 

 

 Total options outstanding

 

 Exercisable options

Range of

exercise price

Cdn$

 

 Shares

 

 

 Weighted

 average

 remaining

 contractual

 life

 (years)

 

 Weighted

 average

 exercise

 price

 Cdn$

 

 Shares

 

 

 Weighted

 average

 exercise

 price

 Cdn$

 

 

 

 

 

 

 

 

 

 

 

$3.00 to $3.99

 

132,000

 

1.2

 

3.47

 

132,000

 

3.47

$4.00 to $4.99

 

4,613,075

 

4.7

 

4.88

 

762,407

 

4.88

$5.00 to $5.99

 

1,036,807

 

2.7

 

5.45

 

777,626

 

5.54

$6.00 to $6.99

 

2,337,800

 

4.0

 

6.44

 

1,350,125

 

6.44

$7.00 to $7.99

 

2,624,871

 

3.3

 

7.20

 

2,377,537

 

7.13

$9.00 to $9.99

 

318,000

 

5.0

 

9.25

 

106,000

 

9.25

 

 


 


 


 


 


 

 

11,062,553

 

4.0

 

5.92

 

5,505,695

 

6.38


(b)

Stock-based compensation expense

Stock-based compensation expense incurred to March 31, 2009 has been included in the undernoted expenses in the Consolidated Statements of Operations and Deficit as follows:

 

 

Three months ended March 31,

 

 

2009

$

 

2008

$

 

 

 

 

 

Operating costs

 

756

 

434

Exploration

 

226

 

553

Administrative

 

1,539

 

2,670

 

 


 


Total

 

2,521

 

3,657


(c)

Bonus Cash Award Units plan

As of March 31, 2009, all Bonus Cash Award Units (“BCAUs”) awarded by the Company were exercised. The Company paid $2,059 in bonus cash award units in the three months ended March 31, 2009. The related cost in the amount of $559 is included in general and administrative expense in the Consolidated Statements of Operations and Deficit.







Eldorado Gold Corporation

Notes to the Unaudited Interim Consolidated Financial Statements

March 31, 2009


(Expressed in thousands of U.S. dollars, unless otherwise stated)



7.

Supplementary cash flow information


 

 

Three months ended March 31,

 

 

2009

$

 

2008

$

Changes in non-cash working capital

 


 


Accounts receivable and prepaids

 

21,177

 

179

Inventories

 

(6,392)

 

2,657

Accounts payable and accrued liabilities

 

(7,575)

 

9,198

 

 


 


 

 

7,210

 

12,034

 

 


 


Supplementary cash flow information

 


 


Income taxes paid

 

-

 

-

Interest paid

 

-

 

-



8.

Segmented information

During the period ended March 31, 2009, Eldorado had five reporting segments. The Brazil reporting segment includes the development activities of Vila Nova and exploration activities in Brazil. The Turkey reporting segment includes the operations of the Kişladağ mine, development activities of the Efemçukuru project and exploration activities in Turkey. The China reporting segment includes the operations of the Tanjianshan mine and exploration activities in China. The Greece reporting segment includes development activities on the Perama Hill project. The other reporting segment includes the operations of the Company’s corporate office and exploration activities in other countries.


 

 

 March 31, 2009

 

 

 


 

 

 

 

 

 

 

 

 

 

 Turkey

 $

 

 China

 $

 

 Brazil

 $

 

 Greece

 $

 

 Other

 $

 Total

 $

Net mining interests

 

 

 

 

 

 

 

 

 

 

 

Producing properties

 

 190,403

 

 163,623

 

 -

 

 -

 

 -

 356,155

Properties under development

 

 59,392

 

 -

 

 42,738

 

 207,674

 

 -

 309,804

Other mining interests

 

 6,283

 

 -

 

 8,892

 

 -

 

 2,129

 15,175

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 256,078

 

 163,623

 

 51,630

 

 207,674

 

 2,129

 681,134



 

 

 December 31, 2008

 

 

 


 

 

 

 

 

 

 

 

 

 

 Turkey

 $

 

 China

 $

 

 Brazil

 $

 

 Greece

 $

 

 Other

 $

 Total

 $

Net mining interests

 

 

 

 

 

 

 

 

 

 

 

Producing properties

 

 190,881

 

 163,157

 

 -

 

 -

 

 -

 354,038

Properties under development

 

 54,378

 

 -

 

 38,986

 

 207,407

 

 -

 300,771

Other mining interests

 

 4,151

 

 -

 

 7,359

 

 -

 

 1,990

 13,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 249,410

 

 163,157

 

 46,345

 

 207,407

 

 1,990

 668,309





Eldorado Gold Corporation

Notes to the Unaudited Interim Consolidated Financial Statements

March 31, 2009


(Expressed in thousands of U.S. dollars, unless otherwise stated)





8.    Segmented information (continued)



Operations


 

 

 For the three ended March 31, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Turkey

 $

 

 China

 $

 

 Brazil

 $

 

 Greece

 $

 

 Other

 $

 Total

 $

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Gold sales

 

 41,080

 

 11,126

 

 -

 

 -

 

 -

 52,206

Interest and other income

 

 76

 

 32

 

 2

 

 -

 

 86

 196

 

 

 41,156

 

 11,158

 

 2

 

 -

 

 86

 52,402

Expenses except the undernoted

 

 13,160

 

 5,690

 

 350

 

 (2,196)

 

 8,209

 25,213

Depletion, depreciation and amortization

 

 2,194

 

 1,947

 

 143

 

 -

 

 176

 4,460

Exploration

 

 1,234

 

 191

 

 162

 

 -

 

 475

 2,062

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before tax

 

 24,568

 

 3,330

 

 (653)

 

 2,196

 

 (8,774)

 20,667

Income tax expense

 

 (6,609)

 

 (618)

 

 -

 

 -

 

 (17)

 (7,244)

Non-controlling interest

 

 -

 

 (362)

 

 -

 

 -

 

 -

 (362)

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 17,959

 

 2,350

 

 (653)

 

 2,196

 

 (8,791)

 13,061




 

 

 For the three months ended March 31, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 Turkey

 $

 

 China

 $

 

 Brazil

 $

 

 Corporate

 $

 

 Total

 $

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

Gold sales

 

 22,314

 

 46,361

 

 -

 

 -

 

 68,675

Interest and other income

 

 89

 

 95

 

 2,768

 

 756

 

 3,708

 

 

 22,403

 

   46,456

 

 2,768

 

 756

 

 72,383

Expenses except the undernoted

 

 10,794

 

 14,907

 

 1,129

 

 7,810

 

 34,640

Depletion, depreciation and amortization

 

 889

 

 7,852

 

 -

 

 83

 

 8,824

Exploration

 

 1,243

 

 92

 

 448

 

 408

 

 2,191

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before tax

 

 9,477

 

 23,605

 

 1,191

 

 (7,545)

 

 26,728

Income tax recovery (expense)

 

 (1,703)

 

 (3,919)

 

 (352)

 

 (17)

 

 (5,991)

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 7,774

 

 19,686

 

 839

 

 (7,562)

 

 20,737