EX-99.1 2 fins.htm Q2 2015 UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

June 30, 2015 Unaudited Condensed 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 Condensed Consolidated Balance Sheets

(Expressed in thousands of U.S. dollars)

				Note	June 30, 2015	December 31, 2014
					$	$
ASSETS
Current assets
Cash and cash equivalents					446,126	498,514
Term deposits					3,702	2,800
Restricted cash					258	262
Marketable securities					10,393	4,251
Accounts receivable and other					85,421	117,995
Inventories					219,485	223,412
					765,385	847,234
Deferred income tax assets					-	104
Other assets					62,245	43,605
Defined benefit pension plan					13,886	12,790
Property, plant and equipment					5,777,422	5,963,611
Goodwill					526,296	526,296
					7,145,234	7,393,640
LIABILITIES & EQUITY
Current liabilities
Accounts payable and accrued liabilities					223,808	184,712
Current debt				6	8,179	16,343
					231,987	201,055
Debt				6	588,298	587,201
Other non-current liabilities					2,177	49,194
Asset retirement obligations					110,182	109,069
Deferred income tax liabilities					839,690	869,207
					1,772,334	1,815,726
Equity
Share capital				7	5,319,101	5,318,950
Treasury stock					(12,005)	(12,949)
Contributed surplus					44,540	38,430
Accumulated other comprehensive loss					(17,218)	(18,127)
Deficit					(266,416)	(53,804)
Total equity attributable to shareholders of the Company					5,068,002	5,272,500
Attributable to non-controlling interests					304,898	305,414
					5,372,900	5,577,914
					7,145,234	7,393,640

Approved on behalf of the Board of Directors

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

The accompanying notes are an integral part of these consolidated financial statements.

Eldorado Gold Corporation

Unaudited Condensed Consolidated Income Statements

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

						Three months ended			Six months ended
						June 30,			June 30,
					Note
						2015	2014		2015	2014
						$	$		$	$
Revenue
Metal sales						214,185	265,497		452,496	545,367
Cost of sales
Production costs						115,548	122,524		234,853	257,309
Inventory write-down						-	-		6,210	-
Depreciation and amortization						40,866	44,095		86,275	89,667
						156,414	166,619		327,338	346,976
Gross profit						57,771	98,878		125,158	198,391
Exploration expenses						3,186	3,890		6,309	7,785
Mine standby costs						913	-		1,412	-
General and administrative expenses						13,197	19,099		29,475	34,943
Defined benefit pension plan expense						434	413		860	816
Share based payments						3,759	5,281		10,174	12,275
Impairment loss on property, plant and equipment					5	254,910	-		254,910	-
Foreign exchange loss (gain)						(1,588)	(1,553)		8,651	(2,914)
Operating profit (loss)						(217,040)	71,748		(186,633)	145,486
Loss on disposal of assets						5	1,819		16	1,825
Loss on marketable securities and other investments						-	550		-	1,322
Loss on investments in associates						-	-		-	102
Other income						(2,306)	(3,631)		(4,164)	(2,847)
Asset retirement obligation accretion						595	581		1,198	1,163
Interest and financing costs						4,833	7,916		10,008	16,321
Profit (loss) before income tax						(220,167)	64,513		(193,691)	127,600
Income tax expense (recovery)						(22,582)	24,999		10,407	57,443
Profit (loss) for the period						(197,585)	39,514		(204,098)	70,157
Attributable to:
Shareholders of the Company						(198,600)	37,632		(206,844)	68,900
Non-controlling interests						1,015	1,882		2,746	1,257
Profit (loss) for the period						(197,585)	39,514		(204,098)	70,157
Weighted average number of shares outstanding
Basic						716,587	716,249		716,585	716,239
Diluted						716,587	716,249		716,585	716,239
Earnings per share attributable to shareholders of the Company:
Basic earnings (loss) per share						(0.28)	0.05		(0.29)	0.10
Diluted earnings (loss) per share						(0.28)	0.05		(0.29)	0.10

The accompanying notes are an integral part of these consolidated financial statements.

Eldorado Gold Corporation

Unaudited Condensed Consolidated Statements of Comprehensive Income

(Expressed in thousands of U.S. dollars)

		Three months ended			Six months ended
		June 30,			June 30,
		2015	2014		2015	2014
		$	$		$	$
Profit (loss) for the period		(197,585)	39,514		(204,098)	70,157
Other comprehensive income (loss):
Change in fair value of available-for-sale financial assets		1,020	336		909	(153)
Realized gains on disposal of available-for-sale financial assets		-	-		-	759
Total other comprehensive gain for the period		1,020	336		909	606
Total comprehensive income (loss) for the period		(196,565)	39,850		(203,189)	70,763
Attributable to:
Shareholders of the Company		(197,580)	37,968		(205,935)	69,506
Non-controlling interests		1,015	1,882		2,746	1,257
		(196,565)	39,850		(203,189)	70,763

The accompanying notes are an integral part of these consolidated financial statements.

Eldorado Gold Corporation

Unaudited Condensed Consolidated Statements of Cash Flows

(Expressed in thousands of U.S. dollars)

			Three months ended			Six months ended
			June 30,			June 30,
		Note	2015	2014		2015	2014
			$	$		$	$
Cash flows generated from (used in):
Operating activities
Profit (loss) for the period			(197,585)	39,514		(204,098)	70,157
Items not affecting cash:
Asset retirement obligation accretion			595	581		1,198	1,163
Depreciation and amortization			40,866	44,095		86,275	89,667
Unrealized foreign exchange loss (gain)			(87)	(508)		927	(124)
Deferred income tax expense (recovery)			(40,977)	471		(29,413)	9,667
Loss on disposal of assets			5	1,819		16	1,825
Loss on investments in associates			-	-		-	102
Impairment loss on property, plant and equipment			254,910	-		254,910	-
Loss on marketable securities and other investments			-	550		-	1,322
Share based payments			3,759	5,281		10,174	12,275
Defined benefit pension plan expense			434	413		860	816
			61,920	92,216		120,849	186,870
Property reclamation payments			(93)	-		(93)	-
Changes in non-cash working capital		10	(7,897)	(29,383)		8,180	(54,600)
			53,930	62,833		128,936	132,270
Investing activities
Net cash paid on acquisition of subsidiary		4(a)	-	-		-	(30,318)
Purchase of property, plant and equipment			(91,441)	(107,917)		(166,512)	(188,347)
Proceeds from the sale of property, plant and equipment			98	92		111	176
Proceeds on production from tailings retreatment			4,381	11,765		10,102	20,557
Purchase of marketable securities			-	(852)		(5,233)	(852)
Proceeds from the sale of marketable securities			-	243		-	865
Redemption of (investment in) term deposits			45,000	(20,000)		(902)	9,676
Decrease in restricted cash			(10)	(24)		591	2
			(41,972)	(116,693)		(161,843)	(188,241)
Financing activities
Issuance of common shares for cash			-	-		121	-
Proceeds from contributions from non-controlling interest		4(b)	-	-		-	40,000
Dividend paid to shareholders			-	-		(5,768)	(6,464)
Dividends paid to non-controlling interest			(3,262)	(815)		(3,262)	(815)
Purchase of treasury stock			-	(9)		(2,394)	(6,413)
Long-term and bank debt proceeds			-	-		8,171	16,363
Long-term and bank debt repayments			(8,178)	-		(16,349)	(16,382)
			(11,440)	(824)		(19,481)	26,289
Net increase (decrease) in cash and cash equivalents			518	(54,684)		(52,388)	(29,682)
Cash and cash equivalents - beginning of period			445,608	614,182		498,514	589,180
Cash and cash equivalents - end of period			446,126	559,498		446,126	559,498

The accompanying notes are an integral part of these consolidated financial statements.

Eldorado Gold Corporation

Unaudited Condensed Consolidated Statements of Changes in Equity

(Expressed in thousands of U.S. dollars)

		Three months ended			Six months ended
		June 30,			June 30,
	Note	2015	2014		2015	2014
		$	$		$	$
Share capital
Balance beginning of period		5,319,101	5,314,813		5,318,950	5,314,589
Shares issued upon exercise of share options, for cash		-	-		121	-
Transfer of contributed surplus on exercise of options		-	-		30	-
Transfer of contributed surplus on exercise of deferred
phantom units		-	-		-	224
Balance end of period		5,319,101	5,314,813		5,319,101	5,314,813
Treasury stock
Balance beginning of period		(12,662)	(17,357)		(12,949)	(10,953)
Purchase of treasury stock		-	(9)		(2,394)	(6,413)
Shares redeemed upon exercise of restricted share units		657	2,521		3,338	2,521
Balance end of period		(12,005)	(14,845)		(12,005)	(14,845)
Contributed surplus
Balance beginning of period		41,371	35,424		38,430	78,557
Share based payments		3,936	5,035		10,241	11,750
Shares redeemed upon exercise of restricted share units		(657)	(2,521)		(3,338)	(2,521)
Recognition of other non-current liability and related costs		(110)	(741)		(763)	(50,365)
Transfer to share capital on exercise of options and deferred
phantom units		-	-		(30)	(224)
Balance end of period		44,540	37,197		44,540	37,197
Accumulated other comprehensive loss
Balance beginning of period		(18,238)	(16,786)		(18,127)	(17,056)
Other comprehensive gain for the period		1,020	336		909	606
Balance end of period		(17,218)	(16,450)		(17,218)	(16,450)
Deficit
Balance beginning of period		(67,816)	(118,597)		(53,804)	(143,401)
Dividends paid		-	-		(5,768)	(6,464)
Profit (loss) attributable to shareholders of the Company		(198,600)	37,632		(206,844)	68,900
Balance end of period		(266,416)	(80,965)		(266,416)	(80,965)
Total equity attributable to shareholders of the Company		5,068,002	5,239,750		5,068,002	5,239,750
Non-controlling interests
Balance beginning of period		305,510	312,503		305,414	273,128
Profit attributable to non-controlling interests		1,015	1,882		2,746	1,257
Dividends declared to non-controlling interests		(1,627)	(3,410)		(3,262)	(3,410)
Increase during the period	4(b)	-	-		-	40,000
Balance end of period		304,898	310,975		304,898	310,975
Total equity		5,372,900	5,550,725		5,372,900	5,550,725

The accompanying notes are an integral part of these consolidated financial statements.

Eldorado Gold Corporation

Notes to the unaudited condensed consolidated financial statements

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

1. General Information

Eldorado Gold Corporation (“Eldorado” or the “Company”) is a gold exploration, development, mining and production company. The Company has operations and ongoing exploration and development projects in Turkey, China, Greece, Brazil and Romania.

Eldorado is a public company which is listed on the Toronto Stock Exchange and New York Stock Exchange and is incorporated and domiciled in Canada.

2. Basis of preparation

a) Statement of compliance

These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 ‘Interim Financial Reporting’. They do not include all of the information and footnotes required by the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board for full annual financial statements and should be read in conjunction with the Company’s annual financial statements for the year ended December 31, 2014.

The same accounting policies are used in the preparation of these unaudited condensed consolidated interim financial statements as for the most recent audited annual financial statements and reflect all the adjustments necessary for fair presentation in accordance with IFRS for the interim periods presented.

b) Judgement and estimates

The preparation of these unaudited condensed consolidated interim financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

The significant judgements made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2014.

3. Adoption of new accounting standards and upcoming changes

The following standards have been published and are mandatory for Eldorado’s annual accounting periods no earlier than January 1, 2017:

· IFRS 9 ‘Financial Instruments’ – This standard was published in July 2014 and replaces the existing guidance in IAS 39, ‘Financial Instruments: Recognition and Measurement’. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted. The Company is currently evaluating the extent of the impact of the adoption of this standard.

· IFRS 15 ‘Revenue from Contracts with Customers’ – This standard contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized. This standard is effective for fiscal years ending on or after December 31, 2017, with early adoption permitted. The Company does not expect this standard to have a material impact on its financial statements.

There are other new standards, amendments to standards and interpretations that have been published and are not yet effective. The Company believes they will have no material impact to its consolidated financial statements.

( 1 )

Eldorado Gold Corporation

Notes to the unaudited condensed consolidated financial statements

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

4. Acquisitions and other transactions

a) Acquisition of Glory

In March 2014, Eldorado completed the acquisition of all of the issued and outstanding common shares of Glory that it did not already own. As a result, Eldorado acquired a 100% interest in the Sapes project in Thrace, Greece. Prior to the transaction, Eldorado owned 19.9% interest in Glory and the investment was accounted for as an investment in associate.

Total consideration of $39,219 included cash for 179,504,179 shares in the amount of $27,583, an option buy-out payment of $1,590 to holders of Glory options, and $10,046 related to the 44,595,920 shares of Glory that Eldorado had purchased prior to the off-market takeover bid. A total of $1,229 was incurred as transaction costs and was capitalized as property, plant and equipment.

This transaction has been accounted for as an acquisition of assets and liabilities as Glory did not constitute a business as defined in IFRS 3. Other than a small working capital amount, the remainder of the value for this transaction was assigned to property, plant and equipment.

Eldorado paid net cash of $30,318 as a result of the transaction. This amount was a result of an acquired cash balance of $84 less cash consideration of $29,173 and transaction costs of $1,229.

b) Eastern Dragon agreement

In March 2014, the Company, through one of its subsidiaries, entered into a Subscription and a Shareholders agreement (“Agreements”) with CDH Fortune II Limited (“CDH”).

As a result of these Agreements, CDH acquired 21.5% of the total ordinary shares of Sino Gold Tenya (HK) Limited (“Tenya”), a subsidiary of the Company, and indirectly a 20% interest in the Eastern Dragon Project.

Under the terms of the Agreements, CDH has the right to require Eldorado to purchase or procure the purchase by another party of CDH’s shares in Tenya at a fixed price (“Put Option”) for 90 days following the second anniversary of the Agreements.

The Agreements include other rights and obligations of the Company and CDH associated with the advancement of the Eastern Dragon Project.

This transaction has been accounted as an equity transaction with the recognition of a non-controlling interest in the amount of $40,000 representing the consideration received. A liability in the amount of $46,970 has been recorded at the transaction date, representing the present value of the redemption amount of the Put Option, as well as $2,654 of transaction costs. The sum of these amounts was recorded against equity. Future changes in the present value of the redemption amount of the Put Option are being charged against equity. The present value of the liability representing the Put Option as of June 30, 2015 is $49,957 and is included in accounts payable and accrued liabilities in the balance sheet.

5. Impairment of Romania project

During the quarter ended June 30, 2015, the Company completed a feasibility study of our Certej project in Romania, which reflected higher capital and operating costs than had been assumed in the purchase price allocation used to record the Company’s acquisition of European Goldfields Inc. As a result, the Company assessed the recoverable amounts of property, plant and equipment for Certej.

The recoverable amount of an asset is the higher of its value-in-use and fair value less costs to sell. An impairment loss is recognized for any excess of the carrying amount of an asset over its recoverable amount.

( 2 )

Eldorado Gold Corporation

Notes to the unaudited condensed consolidated financial statements

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

5. Impairment of Romania project (continued)

The key assumptions used for the fair value less costs to sell calculations are as follows:

Gold price ($/oz)	$1,300
Silver price ($/oz) Inflation Rate Discount rate	$20 2% 7%

As at June 30, 2015 we recorded an impairment charge of $254,910 ($214,125 net of deferred income tax recovery) on our Certej project. The carrying amount of the Certej CGU after the impairment charge is $347,018.

The values assigned to the key assumptions represent management’s assessment of future trends in the gold mining industry and in the global economic environment. The assumptions used are management’s best estimates and are based on both current and historical information from external and internal sources.

6. Debt

	June 30, 2015 $	December 31, 2014 $
Current:
Jinfeng China Merchant Bank (“CMB”) working capital loan (a)	8,179	16,343
Non-current:
Senior notes  (b)	588,298	587,201
Total debt	596,477	603,544

(a) Jinfeng CMB working capital loan

On January 16, 2013, Jinfeng entered into a RMB 100.0 million ($16,357) working capital loan with CMB. Each drawdown bears fixed interest rate of 5.6% and has a term of six months. The proceeds have been used to fund working capital obligations.

During the quarter ended June 30, 2015, Jinfeng repaid RMB 50.0 million ($8,179) on this facility. The last payment on the amount of RMB 50.0 million ($8,179) was made on July 28, 2015.

(b) Senior notes

On December 10, 2012, the Company completed an offering of $600.0 million senior notes (“the notes”) at par value, with a coupon rate of 6.125% due December 15, 2020. The notes pay interest semi-annually on June 15 and December 15. Net deferred financing costs of $11,702 have been included as an offset in the balance of the notes in the financial statements and are being amortized over the term of the notes.

The fair market value of the notes as at June 30, 2015 was $596.3 million.

(c) Entrusted loan

In November 2010, Eastern Dragon, HSBC Bank (China) and Qinghai Dachaidan Mining Ltd (“QDML”), our 90% owned subsidiary, entered into a RMB 12.0 million ($1,963) entrusted loan agreement, which has been increased to RMB 720.0 million ($117,770) through a series of amendments.

( 3 )

Eldorado Gold Corporation

Notes to the unaudited condensed consolidated financial statements

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

6. Debt (continued)

Under the terms of the entrusted loan, QDML with its own funds entrusts HSBC Bank (China) to provide a loan facility in the name of QDML to Eastern Dragon. The loan can be drawn down in tranches. Each drawdown bears interest fixed at the prevailing lending rate stipulated by the People’s Bank of China on the date of drawdown. Each draw down has a term of three months and can be rolled forward at the discretion of QDML. The interest rate on this loan as at June 30, 2015 was 4.59%.

As at June 30, 2015, RMB 658.8 million ($107,760) had been drawn under the entrusted loan.

The entrusted loan has been recorded on a net settlement basis.

7.    Share capital

Eldorado’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 June 30, 2015 there were no non-voting common shares outstanding (December 31, 2014 – none).

Voting common shares	Number of Shares	Total $
At January 1, 2015	716,564,524	5,318,950
Shares issued upon exercise of share options, for cash	22,610	121
Estimated fair value of share options exercised	-	30
At June 30, 2015	716,587,134	5,319,101

8. Share-based payments

(a) Share option plans

Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

	2015
	Weighted average exercise price Cdn$	Number of options
At January 1,	11.75	20,995,992
Granted	6.68	8,174,440
Exercised	6.64	(22,610)
Forfeited	12.79	(2,703,596)
At June 30,	10.08	26,444,226

At June 30, 2015, 18,984,305 share options (June 30, 2014 – 16,040,895) with a weighted average exercise price of Cdn$11.30 (June 30, 2014 – Cdn$12.89) had vested and were exercisable.

Share based compensation expense related to share options for the quarter ended June 30, 2015 was $2,119 (YTD – $7,049).

( 4 )

Eldorado Gold Corporation

Notes to the unaudited condensed consolidated financial statements

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

8. Share-based payments (continued)

(b) Restricted share unit plan

A total of 596,089 restricted share units (“RSUs”) at a grant-date fair value of Cdn$6.67 per unit were granted during the six-month period ended June 30, 2015 under the Company’s RSU plan and 198,696 RSUs were exercisable as at June 30, 2015.

The fair value of each RSU issued is determined as the closing share price at grant date. The current maximum number of common shares authorized for issue under the RSU plan is 5,000,000.

A summary of the status of the restricted share unit plan and changes during the period ended June 30, 2015 is as follows:

	Total RSUs
Balance at December 31, 2014	1,086,523
RSUs Granted	596,089
Redeemed	(446,604)
Forfeited	(81,877)
Balance at June 30, 2015	1,154,131

As at June 30, 2015, 1,154,131 common shares purchased by the Company remain held in trust in connection with this plan. At the end of the period, 494,691 restricted share units are fully vested and exercisable. These shares purchased and held in trust have been included in treasury stock in the balance sheet.

Restricted share units expense for the quarter ended June 30, 2015 was $1,461 (YTD – $2,836)

(c) Deferred share units plan

At June 30, 2015, 359,606 deferred share units (“DSUs”) were outstanding with a value of $1,491 which is included in accounts payable and accrued liabilities.

Compensation income related to the DSUs was $177 for the quarter ended June 30, 2015 (YTD – $67)

(d) Performance share units plan

A total of 623,410 performance share units (“PSUs”) were granted during the six-month period ended June 30, 2015 under the Company’s PSU plan. The PSUs vest on the third anniversary of the grant date, subject to achievement of pre-determined performance criteria. When fully vested, the number of PSUs redeemed will range from 0% to 200% of the target award, subject to the performance of the share price over the 3 year period. The current maximum number of common shares authorized for issuance from treasury under the PSU plan is 3,130,000.

Compensation expense related to PSUs for the quarter ended June 30, 2015 was $356 (YTD – $356).

9. Fair value of financial instruments

Fair values are determined directly by reference to published price quotations in an active market, when available, or by using a valuation technique that uses inputs observed from relevant markets.

The three levels of the fair value hierarchy are described below:

· Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

· Level 2 – Inputs that are observable, either directly or indirectly, but do not qualify as Level 1 inputs (i.e.,quoted prices for similar assets or liabilities).

· Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The only assets measured at fair value as at June 30, 2015 are marketable securities. No liabilities are measured at fair value on a recurring basis as at June 30, 2015.

( 5 )

9. Fair value of financial instruments (continued)

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in Level 1. Instruments included in Level 1 comprise primarily publicly-traded equity investments classified as available-for-sale securities.

With the exception of the fair market value of our senior notes (note 6b), all carrying amounts of financial instruments approximate their fair value.

10. Supplementary cash flow information

	Three months ended June 30,			Six months ended June 30,
	2015 $	2014 $		2015 $	2014 $
Changes in non-cash working capital
Accounts receivable and other	(12,863)	(4,449)		13,466	(11,055)
Inventories	(4,077)	(4,975)		6,104	4,365
Accounts payable and accrued liabilities	9,043	(19,959)		(11,390)	(47,910)
Total	(7,897)	(29,383)		8,180	(54,600)
Supplementary cash flow information
Income taxes paid	23,235	28,981		45,799	40,333
Interest paid	17,047	17,156		17,275	17,360

11. Segment information

Identification of reportable segments

The Company has identified its operating segments based on the internal reports that are reviewed and used by the chief executive officer and the executive management (the chief operating decision makers or CODM) in assessing performance and in determining the allocation of resources.

The CODM considers the business from both a geographic and product perspective and assesses the performance of the operating segments based on measures of profit and loss as well as assets and liabilities. These measures include gross profit (loss), expenditures on exploration, property, plant and equipment and non-current assets, as well as total debt. As at June 30, 2015, Eldorado had six reportable segments based on the geographical location of mining and exploration and development activities.

11.1 Geographical segments

Geographically, the operating segments are identified by country and by operating mine or mine under construction. The Turkey reporting segment includes the Kişladağ and the Efemçukuru mines and exploration activities in Turkey. The China reporting segment includes the Tanjianshan (“TJS”), Jinfeng and White Mountain mines, the Eastern Dragon project and exploration activities in China. The Brazil reporting segment includes the Vila Nova mine, Tocantinzinho project and exploration activities in Brazil. The Greece reporting segment includes the Stratoni mine, the Olympias, Skouries, Perama Hill and Sapes projects and exploration activities in Greece. The Romania reporting segment includes the Certej project and development activities in Romania. Other reporting segment includes operations of Eldorado’s corporate office and exploration activities in other countries.

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Eldorado Gold Corporation

Notes to the unaudited condensed consolidated financial statements

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

11. Segment information (continued)

Financial information about each of these operating segments is reported to the CODM on at least a monthly basis. The mines in each of the different segments share similar economic characteristics and have been aggregated accordingly.

For the three months ended June 30, 2015
	Turkey	China	Brazil	Greece	Romania	Other	Total
	$	$	$	$	$	$	$
Information about profit and loss
Metal sales from external customers	115,820	89,624	(691)	9,432	-	-	214,185
Production costs	56,594	49,755	115	9,084	-	-	115,548
Depreciation	19,600	18,280	504	2,362	-	120	40,866
Gross profit (loss)	39,626	21,589	(1,310)	(2,014)	-	(120)	57,771
Other material items of income and expense
Impairment loss on property, plant and equipment	-	-	-	-	254,910	-	254,910
Exploration costs	428	374	387	571	679	747	3,186
Income tax expense (recovery)	14,296	7,383	(480)	(2,557)	(41,225)	1	(22,582)
Additions to property, plant and
equipment during the period	15,918	16,289	354	55,808	4,008	70	92,447

For the three months ended June 30, 2014
	Turkey	China	Brazil	Greece	Romania	Other	Total
	$	$	$	$	$	$	$
Information about profit and loss
Metal sales from external customers	127,946	120,963	3,851	12,737	-	-	265,497
Production costs	49,704	56,356	5,943	10,521	-	-	122,524
Depreciation	13,179	27,783	928	2,030	-	175	44,095
Gross profit (loss)	65,063	36,824	(3,020)	186	-	(175)	98,878
Other material items of income and expense
Exploration costs	566	654	1,526	255	68	821	3,890
Income tax expense (recovery)	13,655	9,517	(406)	2,855	-	(622)	24,999
Additions to property, plant and
equipment during the period	23,160	12,995	517	69,944	2,317	52	108,985

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Eldorado Gold Corporation

Notes to the unaudited condensed consolidated financial statements

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

11. Segment information (continued)

For the six months ended June 30, 2015
	Turkey	China	Brazil	Greece	Romania	Other	Total
	$	$	$	$	$	$	$
Information about profit and loss
Metal sales from external customers	235,507	194,762	(355)	22,582	-	-	452,496
Production costs	111,450	100,906	1,587	20,910	-	-	234,853
Inventory write-down	-	-	6,210	-	-	-	6,210
Depreciation	36,082	43,686	1,010	5,229	-	268	86,275
Gross profit (loss)	87,975	50,170	(9,162)	(3,557)	-	(268)	125,158
Other material items of income and expense
Impairment loss on property, plant and equipment	-	-	-	-	254,910	-	254,910
Exploration costs	872	643	773	1,400	1,155	1,466	6,309
Income tax expense (recovery)	27,087	16,056	3,098	4,892	(40,753)	27	10,407
Additions to property, plant and
equipment during the period	29,886	24,250	726	104,846	9,103	151	168,962
Information about assets and liabilities
Property, plant and equipment (*)	887,260	1,387,182	204,809	2,906,022	390,324	1,825	5,777,422
Goodwill	-	52,514	-	473,782	-	-	526,296
	887,260	1,439,696	204,809	3,379,804	390,324	1,825	6,303,718
Debt	-	8,179	-	-	-	588,298	596,477

For the six months ended June 30, 2014
	Turkey	China	Brazil	Greece	Romania	Other	Total
	$	$	$	$	$	$	$
Information about profit and loss
Metal sales from external customers	251,972	245,792	22,496	25,107	-	-	545,367
Production costs	97,521	119,841	19,028	20,919	-	-	257,309
Depreciation	26,017	56,004	3,071	4,160	-	415	89,667
Gross profit (loss)	128,434	69,947	397	28	-	(415)	198,391
Other material items of income and expense
Exploration costs	1,114	1,119	2,170	646	1,121	1,615	7,785
Income tax expense (recovery)	33,695	19,553	(805)	5,000	-	-	57,443
Additions to property, plant and
equipment during the period	41,039	20,478	1,879	120,036	5,673	270	189,375
Information about assets and liabilities
Property, plant and equipment (*)	869,346	1,433,258	200,308	2,679,303	622,578	2,121	5,806,914
Goodwill	-	52,514	-	473,782	-	-	526,296
	869,346	1,485,772	200,308	3,153,085	622,578	2,121	6,333,210
Debt	-	16,253	-	-	-	586,104	602,357

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Eldorado Gold Corporation

Notes to the unaudited condensed consolidated financial statements

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

11. Segment information (continued)

For the year ended December 31, 2014
	Turkey	China	Brazil	Greece	Romania	Other	Total
	$	$	$	$	$	$	$
Information about assets and liabilities
Property, plant and equipment (*)	895,035	1,407,558	205,091	2,817,855	636,134	1,938	5,963,611
Goodwill	-	52,514	-	473,782	-	-	526,296
	895,035	1,460,072	205,091	3,291,637	636,134	1,938	6,489,907
Debt	-	16,343	-	-	-	587,201	603,544

* Net of revenues from sale of production from tailings retreatment

The Turkey and China segments derive their revenues from sales of gold. The Brazil segment derives its revenue from sales of iron ore. The Greece segment derives its revenue from sales of zinc, lead and silver concentrates.

The measure of total debt represents the current and long-term portions of debt.

11.2 Economic dependence

At June 30, 2015, each of our Chinese mines had one major customer, to whom each sells its entire production, as follows:

TJS Mine                                                  Henan Zhongyuan Gold Smelter Factory Co. Ltd.of Zhongjin Gold Holding Co. Ltd.

Jinfeng Mine                                           China National Gold Group

White Mountain Mine                           Refinery of Shandong Humon Smelting Co. Ltd.

11.3 Seasonality/cyclicality of operations

Management does not consider operations to be of a significant seasonal or cyclical nature.

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Eldorado Gold Corporation

Notes to the unaudited condensed consolidated financial statements

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

12. Event occurring after the reporting date

On July 16, 2015 the government of Greece has enacted legislation increasing the corporate income tax rate from 26% to 29%, effective for fiscal year 2015. The Company has calculated its deferred tax liability with respect to its Greek assets including the assets acquired as part of its acquisition in 2012 based on the 26% Greek income tax rate.

As required by IAS 12, “Income Taxes”, when an income tax rate has changed the deferred tax liability must be adjusted to reflect the change in the income tax rate. The adjustment is required to be charged to deferred income tax expense. The Company anticipates that the increase in the Greek income tax rate from 26% to 29% will increase the deferred tax liability and the deferred tax expense by $65.0 million or approximately $0.09 per share in the third quarter of 2015.