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June 30, 2010 | Unaudited Interim Consolidated Financial Statements |
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Suite 1188, 550 Burrard Street Vancouver, British Columbia V6C 2B5
Phone: (604) 687-4018 Fax: (604) 687-4026 |
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Eldorado Gold Corporation
Unaudited Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars)
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| June 30, |
| December 31, |
| 2010 | 2009 | ||
Assets |
| $ |
| $ |
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Current assets |
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Cash and cash equivalents |
| 306,983 |
| 265,369 |
Restricted cash (note 4) |
| 52,221 |
| 50,000 |
Marketable securities |
| 26,058 |
| 13,951 |
Accounts receivable and other |
| 29,598 |
| 26,434 |
Inventories |
| 122,835 |
| 129,197 |
Future income taxes |
| 1,495 |
| - |
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| 539,190 |
| 484,951 |
Inventories |
| 39,028 |
| 31,534 |
Investment in significantly influenced company |
| 5,375 |
| - |
Restricted assets and other |
| 17,325 |
| 13,872 |
Mining interests |
| 2,606,437 |
| 2,580,816 |
Goodwill |
| 324,935 |
| 324,935 |
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| 3,532,290 |
| 3,436,108 |
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Liabilities |
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Current liabilities |
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Accounts payable and accrued liabilities |
| 130,476 |
| 157,250 |
Debt - current (note 6) |
| 69,045 |
| 56,499 |
Future income taxes |
| 3,658 |
| 4,264 |
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| 203,179 |
| 218,013 |
Debt - long-term (note 6) |
| 110,556 |
| 134,533 |
Asset retirement obligations |
| 27,682 |
| 26,566 |
Future income taxes |
| 383,546 |
| 390,242 |
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| 724,963 |
| 769,354 |
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Non-controlling interest |
| 31,682 |
| 26,144 |
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Shareholders* equity |
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Share capital (note 7(b)) |
| 2,708,322 |
| 2,671,634 |
Contributed surplus |
| 19,052 |
| 17,865 |
Accumulated other comprehensive income (loss) (note 7(c)) |
| 12,391 |
| 2,227 |
Retained earnings (deficit) |
| 35,880 |
| (51,116) |
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| 2,775,645 |
| 2,640,610 |
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| 3,532,290 |
| 3,436,108 |
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Subsequent events (note 6(d) and note 11) |
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Approved on behalf of the Board of Directors
(Signed) Robert R. Gilmore Director (Signed) Paul N. Wright Director
See accompanying notes to consolidated financial statements.
Eldorado Gold Corporation
Unaudited Consolidated Statements of Operations
For the periods ended June 30,
(Expressed in thousands of U.S. dollars except per share amounts)
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| Three months ended |
| Six months Ended | ||||
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| 2010 |
| 2009 |
| 2010 |
| 2009 |
$ | $ | $ | $ | |||||
Revenue |
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Gold sales |
| 206,443 |
| 80,147 |
| 387,922 |
| 132,353 |
Interest and other income |
| 1,338 |
| 391 |
| 2,009 |
| 587 |
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| 207,781 |
| 80,538 |
| 389,931 |
| 132,940 |
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Expenses |
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Operating costs |
| 72,303 |
| 28,502 |
| 139,176 |
| 46,944 |
Depletion, depreciation and amortization |
| 29,504 |
| 6,538 |
| 52,746 |
| 10,998 |
General and administrative |
| 13,828 |
| 7,897 |
| 29,357 |
| 16,659 |
Exploration |
| 2,950 |
| 3,374 |
| 6,552 |
| 5,436 |
Mine standby costs |
| 607 |
| 936 |
| 1,313 |
| 936 |
Asset retirement obligation costs |
| 511 |
| 78 |
| 1,024 |
| 131 |
Foreign exchange (gain) loss |
| (1,353) |
| 1,962 |
| (5,033) |
| (1,127) |
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| 118,350 |
| 49,287 |
| 225,135 |
| 79,977 |
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Loss (gain) on disposal of assets |
| 21 |
| (1,463) |
| (1,485) |
| (1,463) |
Loss (gain) on marketable securities |
| 254 |
| (1,083) |
| (858) |
| (119) |
Interest and financing costs |
| 1,656 |
| 77 |
| 4,269 |
| 158 |
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| 120,281 |
| 46,818 |
| 227,061 |
| 78,553 |
Income before income taxes and non-controlling interest |
| 87,500 |
| 33,720 |
| 162,870 |
| 54,387 |
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Income tax (expense) recovery |
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Current |
| (26,808) |
| (7,636) |
| (47,939) |
| (13,653) |
Future |
| 3,835 |
| 469 |
| 5,247 |
| (758) |
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| (22,973) |
| (7,167) |
| (42,692) |
| (14,411) |
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Non-controlling interest |
| (4,019) |
| (653) |
| (6,825) |
| (1,015) |
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Net income for the period |
| 60,508 |
| 25,900 |
| 113,353 |
| 38,961 |
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Weighted average number of shares outstanding |
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Basic |
| 539,398 |
| 371,118 |
| 538,707 |
| 370,494 |
Diluted | 541,193 |
| 371,964 |
| 540,439 |
| 371,868 | |
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Earnings per share |
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Basic income per share - US$ |
| 0.11 |
| 0.07 |
| 0.21 |
| 0.11 |
Diluted income per share - US$ |
| 0.11 |
| 0.07 |
| 0.21 |
| 0.10 |
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See accompanying notes to the consolidated financial statements.
Eldorado Gold Corporation
Unaudited Consolidated Statements of Cash Flows
For the periods ended June 30,
(Expressed in thousands of U.S. dollars, unless otherwise stated)
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| Three months ended |
| Six months Ended | ||||
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| 2010 |
| 2009 |
| 2010 |
| 2009 |
$ | $ | $ | $ | |||||
Cash flows generated from (used in): |
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Operating activities |
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Net income for the period |
| 60,508 |
| 25,900 |
| 113,353 |
| 38,961 |
Items not affecting cash |
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Asset retirement obligations costs |
| 511 |
| 78 |
| 1,024 |
| 131 |
Depletion, depreciation and amortization |
| 29,504 |
| 6,538 |
| 52,746 |
| 10,998 |
Unrealized foreign exchange (gain) loss |
| (2,921) |
| 2,257 |
| (5,041) |
| (426) |
Future income taxes (recovery) expense |
| (3,835) |
| (469) |
| (5,247) |
| 758 |
Loss (gain) on disposal of assets |
| 21 |
| (1,463) |
| (1,485) |
| (1,463) |
Loss (gain) on marketable securities |
| 254 |
| (1,083) |
| (858) |
| (119) |
Stock-based compensation (note 8(b)) |
| 3,645 |
| 2,721 |
| 10,592 |
| 5,801 |
Pension expense (note 5) |
| 622 |
| 605 |
| 1,245 |
| 803 |
Non-controlling interest |
| 4,019 |
| 653 |
| 6,825 |
| 1,015 |
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| 92,328 |
| 35,737 |
| 173,154 |
| 56,459 |
Bonus cash award units payments (note 8(c)) |
| - |
| (484) |
| - |
| (2,543) |
Changes in non-cash working capital (note 9) |
| (13,881) |
| 1,448 |
| (32,267) |
| 8,658 |
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| 78,447 |
| 36,701 |
| 140,887 |
| 62,574 |
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Investing activities |
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Mining interests |
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Capital expenditures |
| (50,332) |
| (19,823) |
| (97,632) |
| (38,852) |
Sales and disposals |
| 18,083 |
| 35 |
| 20,348 |
| 35 |
Marketable securities disposals |
| - |
| 5,931 |
| 692 |
| 36,388 |
Purchases |
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| - |
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| - |
Investment purchases |
| (5,375) |
| - |
| (5,375) |
| - |
Pension plan contributions |
| - |
| (97) |
| - |
| (1,856) |
Restricted cash |
| (100) |
| - |
| (2,221) |
| (5,500) |
Restricted assets and other |
| 29 |
| 2,520 |
| (2,483) |
| 2,495 |
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| (37,695) |
| (11,434) |
| (86,671) |
| (7,290) |
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Financing activities |
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Capital stock |
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Issuance of common shares for cash (note 7(b)) |
| 21,689 |
| 2,493 |
| 27,283 |
| 13,603 |
Dividend paid to non-controlling interest |
| - |
| - |
| (1,286) |
| - |
Dividend paid to shareholders |
| (26,357) |
| - |
| (26,357) |
| - |
Long-term and current debt |
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Proceeds |
| 2,484 |
| 6 |
| 2,484 |
| 4,982 |
Repayments |
| (14,726) |
| - |
| (14,726) |
| - |
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| (16,910) |
| 2,499 |
| (12,602) |
| 18,585 |
Net increase in cash and cash equivalents |
| 23,842 |
| 27,766 |
| 41,614 |
| 73,869 |
Cash and cash equivalents - beginning of period |
| 283,141 |
| 107,954 |
| 265,369 |
| 61,851 |
Cash and cash equivalents - end of period |
| 306,983 |
| 135,720 |
| 306,983 |
| 135,720 |
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Supplementary cash flow information (note 9) |
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See accompanying notes to the consolidated financial statements.
Eldorado Gold Corporation
Unaudited Consolidated Statements of Shareholders’ Equity
For the periods ended June 30,
(Expressed in thousands of U.S. dollars, unless otherwise stated)
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| Three months ended |
| Six months Ended | ||||
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| 2010 |
| 2009 |
| 2010 |
| 2009 |
$ | $ | $ | $ | |||||
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Share capital |
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Balance beginning of period |
| 2,679,209 |
| 947,736 |
| 2,671,634 |
| 931,933 |
Shares issued upon exercise of share options, |
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for cash |
| 21,689 |
| 2,493 |
| 27,283 |
| 13,603 |
Estimated fair value of share options exercised |
| 7,424 |
| 1,026 |
| 9,405 |
| 5,719 |
Balance at the end of the period |
| 2,708,322 |
| 951,255 |
| 2,708,322 |
| 951,255 |
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Contributed surplus |
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Balance beginning of period |
| 22,831 |
| 17,206 |
| 17,865 |
| 19,378 |
Non-cash stock-based compensation |
| 3,645 |
| 2,721 |
| 10,592 |
| 5,242 |
Options exercised, credited to share capital |
| (7,424) |
| (1,026) |
| (9,405) |
| (5,719) |
Balance at the end of the period |
| 19,052 | - | 18,901 |
| 19,052 | - | 18,901 |
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Retained earnings (deficit) |
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Balance beginning of period |
| 1,729 |
| (140,459) |
| (51,116) |
| (153,520) |
Dividends paid |
| (26,357) |
| - |
| (26,357) |
| - |
Net income for the period |
| 60,508 |
| 25,900 |
| 113,353 |
| 38,961 |
Balance at the end of the period |
| 35,880 |
| (114,559) |
| 35,880 |
| (114,559) |
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Accumulated other comprehensive income (loss) |
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Balance beginning of period |
| 3,686 |
| (3,658) |
| 2,227 |
| (5,971) |
Other comprehensive income (loss) |
| 8,705 |
| 4,177 |
| 10,164 |
| 6,490 |
Balance at the end of the period |
| 12,391 |
| 519 |
| 12,391 |
| 519 |
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Total shareholders' equity |
| 2,775,645 |
| 856,116 |
| 2,775,645 |
| 856,116 |
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See accompanying notes to the consolidated financial statements.
Eldorado Gold Corporation
Unaudited Consolidated Statements of Comprehensive Income
For the periods ended June 30,
(Expressed in thousands of U.S. dollars, unless otherwise stated)
| Three months ended |
| Six months ended | ||||
| 2010 |
| 2009 |
| 2010 |
| 2009 |
| $ |
| $ |
| $ |
| $ |
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Net earnings for the period ended June 30, | 60,508 | 25,900 | 113,353 | 38,961 | |||
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Other comprehensive income (loss) | |||||||
Unrealized gains on available-for-sale investments | 10,089 | 3,246 | 11,654 | 5,559 | |||
Future income taxes on unrealized gains on | (1,384) | (269) | (1,490) | (269) | |||
Realized losses on available-for-sale investments | - | 1,200 | - | 1,200 | |||
Other comprehensive income | 8,705 | 4,177 | 10,164 | 6,490 | |||
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Comprehensive income for the period ended June 30, | 69,213 | 30,077 | 123,517 | 45,451 | |||
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See accompanying notes to the consolidated financial statements.
Eldorado Gold Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
June 30, 2010
(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 Turkey, China, Greece and Brazil. The Company acquired control of Sino Gold Mining Ltd. (“Sino Gold”) in December 2009, along with its two producing mines, Jinfeng and White Mountain, as well as the Eastern Dragon exploration project.
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, 2009 except for the long-term investment new policy described in note 2(a). As these unaudited interim consolidated financial statements do not contain all of the disclosures required by Canadian GAAP for annual financial statements, they should be read in conjunction with the notes to the Company’s audited consolidated financial statements for the year ended December 31, 2009.
In the opinion of management, Eldorado has made all adjustments necessary to present fairly the Company’s consolidated financial position as at June 30, 2010 and the consolidated results of operations, comprehensive income and cash flows for the three- and six-month periods ended June 30, 2010 and 2009.
Certain comparative figures have been reclassified to conform to the current period’s presentation.
2.
Changes in accounting policies and new accounting developments
(a)
Changes in accounting policies
During the three-month period ended June 30, 2010, the Company adopted an accounting policy for long-term investments. Investments in significantly influenced companies are accounted for using the equity method. Under the equity method, the original cost of the shares is adjusted for the Company’s share of post-acquisition earnings or losses less dividends.
(b)
New accounting developments
Business Combinations (Section 1582)
In January 2009, the CICA issued Section 1582,Business Combinations, which requires that all assets and liabilities of an acquired business be recorded at fair value at acquisition. Obligations for contingent considerations and contingencies will also be recorded at fair value at the acquisition date. The standard also states that acquisition-related costs will be expensed as incurred and that restructuring charges will be expensed in the periods after the acquisition date. The Section applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period on or after January 1, 2011. Earlier application is permitted. If an entity applies this Section before January 1, 2011, it shall also adopt CICA Sections 1601 and 1602. The Company has not yet adopted this standard.
Eldorado Gold Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
June 30, 2010
(Expressed in thousands of U.S. dollars, unless otherwise stated)
2. Changes in accounting policies and new accounting developments(continued)
Consolidations (Section 1601) and Non-Controlling Interest (Section 1602)
In January 2009, the CICA issued Section 1601,Consolidations, and Section 1602,Non-Controlling Interests. Section 1601 establishes standards for preparing consolidated financial statements and Section 1602 establishes standards for accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination. These standards apply to interim and annual consolidated financial statements relating to fiscal years beginning on or after January 1, 2011. Earlier adoption is permitted as of the beginning of a fiscal year. An entity adopting these sections for a fiscal year beginning before January 1, 2011 also must adopt CICA Section 1582. The Company has not yet adopted these standards.
International Financial Reporting Standards
Canadian public companies will be required to prepare their financial statements in accordance with IFRS, as issued by the International Accounting Standards Board, for financial years beginning on or after January 1, 2011. Effective January 1, 2011, the Company will adopt IFRS as the basis for preparing its consolidated financial statements. The Company will issue its financial results for the quarter ended March 31, 2011 prepared on an IFRS basis and provide comparative data on an IFRS basis as required.
3.
Business acquisition
On December 15, 2009, Eldorado acquired all of the outstanding Sino Gold Securities not previously held by the Company. A preliminary allocation of the purchase price was disclosed in our December 31, 2009 Consolidated Financial Statements.
As of June 30, 2010 there have been no changes to the preliminary allocation.
4.
Restricted cash
Restricted cash represents short-term interest-bearing money market securities and funds held on deposit as collateral. The Company had the following restricted cash:
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| June 30, 2010 $ |
| December 31, 2009 $ |
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Collateral account against Eastern Dragon CMB Standby letter of credit loan |
| 52,221 |
| - |
Collateral account against Eastern Dragon CCB loan |
| - |
| 50,000 |
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Total |
| 52,221 |
| 50,000 |
Eldorado Gold Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
June 30, 2010
(Expressed in thousands of U.S. dollars, unless otherwise stated)
5.
Defined benefit plans expense
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| Three months ended |
| Six months ended | ||||||
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| June 30, |
| June 30, | ||||||
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| 2010 $ |
| 2009 $ |
| 2010 $ |
| 2009 $ | ||
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Pension plan expense |
| 50 |
| 39 |
| 100 |
| 56 | ||
SERP expense * |
| 572 |
| 566 |
| 1,145 |
| 747 | ||
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Total |
| 622 |
| 605 |
| 1,245 | 803 |
*Non-registeredsupplemental executive retirement plan
6.
Debt
(a)
HSBC revolving loan facility
In May 2010, Heihe Rock Mining Industry Development Company Limited (“Eastern Dragon”), our 95% owned subsidiary, entered into a RMB 80.0 million ($11,780) revolving facility (“the Facility) with HSBC Bank (China). The Facility can be drawn down in minimum tranches of RMB 1 million ($147) or its multiples. Each drawdown bears interest fixed at the prevailing lending rate stipulated by the People’s Bank of China on the date of drawdown. The Facility has a term of up to one year and matures on April 30, 2011.
The facility is secured by a letter of Guarantee issued by Eldorado. Eldorado must maintain at all times a security coverage ratio of 110% of the amounts drawn down. As at June 30, 2010, the security coverage is $2,122.
As at June 30, 2010, RMB 13.1 million ($1,929) had been drawn under the Facility.
(b)
Jinfeng construction loan
In 2009, Guizhou Jinfeng Mining Ltd. (“Jinfeng”), our 82% owned subsidiary acquired as part of the Sino Gold acquisition, entered into a RMB 680.0 million ($99,610) construction loan facility (“the construction loan”) with China Construction Bank (“CCB’).
The construction loan has a term of 6 years commencing from February 27, 2009 and is subject to a floating interest rate adjusted annually at the prevailing lending rate stipulated by the People’s Bank of China for similar loans with a 5% discount.
In June 2010, Jinfeng pre-paid RMB 50.0 million ($7,363) on the outstanding balance of this loan.
(c)
Jinfeng working capital loan
In 2009, Jinfeng entered into a RMB 85.0 million ($12,452) working capital loan (“the working capital loan”) with CCB.
Eldorado Gold Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
June 30, 2010
(Expressed in thousands of U.S. dollars, unless otherwise stated)
6. Debt(continued)
The working capital loan has a term of 3 years and is due on August 17, 2012. This loan is subject to a floating interest rate adjusted annually at the prevailing lending rate stipulated by the People’s Bank of China for similar loans with a 5% discount.
In June 2010, Jinfeng pre-paid RMB 50.0 million ($7,363) on the outstanding balance of this loan.
(d)
White Mountain working capital loan
In July 2010, Sino Gold Jilin BMZ Mining Limited (“White Mountain”), our 95% owned subsidiary, entered into a RMB 50.0 million ($7,363) working capital loan (“working capital loan”) with China Merchants Bank Co (“CMB”).
Each drawdown bears interest at the prevailing lending rate stipulated by the People’s Bank of China on the date of drawdown adjusted quarterly. The working capital loan has a term of one year and can be extended, subject to CMB’s approval
The working capital loan is secured by a letter of Guarantee issued by Eldorado.
7.
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 June 30, 2010 there were no non-voting common shares outstanding.
(b)
Issued and outstanding share capital
Voting common shares |
| Number of shares |
| Amount $ |
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Balance, December 31, 2009 |
| 537,136,235 |
| 2,671,634 |
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Shares issued upon exercise of share options, for cash |
| 3,997,143 |
| 27,283 |
Estimated fair value of share options exercised |
| - |
| 9,405 |
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Balance, June 30, 2010 |
| 541,133,378 |
| 2,708,322 |
Eldorado Gold Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
June 30, 2010
(Expressed in thousands of U.S. dollars, unless otherwise stated)
7. Shareholders’ equity(continued)
(c)
Accumulated other comprehensive income (loss)
Accumulated other comprehensive income includes the following:
| Three months ended June 30, 2010 $ |
| Year ended December 31, 2009 $ |
|
|
|
|
Balance, beginning of period | 2,227 | (5,971) | |
| |||
Unrealized gains on available-for-sale investments | 11,654 | 129,418 | |
Reversal on acquisition of subsidiary | - | (122,617) | |
Realized losses on sale of available-for-sale investment transferred to net income | - | 1,717 | |
Future income tax on unrealized gains on available-for-sale investments | (1,490) | (320) | |
| |||
Balance, end of period | 12,391 | 2,227 |
8.
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, 2009 |
| 6.11 |
| 8,928,901 |
| 3.3 |
Granted |
| 13.29 |
| 5,382,500 |
| |
Exercised |
| 7.10 |
| (3,997,143) |
| |
Forfeited |
| 10.76 |
| (323,668) |
| |
|
|
|
| |||
Balance, June 30, 2010 |
| 9.43 |
| 9,990,590 |
| 4.0 |
At June 30, 2010, 4,508,238 share purchase options (December 31, 2009 – 5,528,557) with a weighted average exercise price of Cdn$8.60 (December 31, 2009 – Cdn$6.16) had vested and were exercisable.
Eldorado Gold Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
June 30, 2010
(Expressed in thousands of U.S. dollars, unless otherwise stated)
8. Stock-based compensation(continued)
Options outstanding at June 30, 2010 are as follows:
|
| Total options outstanding |
| Exercisable option | ||||||
Range of exercise price Cdn$ |
| Shares
|
| Weighted average remaining contractual life (years) |
| Weighted average exercise price Cdn$ |
| Shares
|
| Weighted average exercise price Cdn$ |
|
|
|
|
|
|
|
|
|
|
|
$4.00 to $4.99 |
| 3,061,458 |
| 3.6 |
| 4.88 |
| 1,207,441 |
| 4.88 |
$5.00 to $5.99 |
| 123,725 |
| 2.4 |
| 5.24 |
| 118,725 |
| 5.25 |
$6.00 to $6.99 |
| 881,000 |
| 2.9 |
| 6.44 |
| 867,666 |
| 6.44 |
$7.00 to $7.99 |
| 666,900 |
| 2.3 |
| 7.29 |
| 559,900 |
| 7.19 |
$9.00 to $9.99 |
| 444,000 |
| 4.0 |
| 9.60 |
| 265,999 |
| 9.69 |
$11.00 to $11.99 |
| 90,000 |
| 4.4 |
| 11.83 |
| 40,000 |
| 11.73 |
$12.00 to $12.99 |
| 391,000 |
| 5.0 |
| 12.86 |
| 124,333 |
| 12.86 |
$13.00 to $13.99 |
| 4,132,507 |
| 4.8 |
| 13.23 |
| 1,124,174 |
| 13.23 |
$15.00 to $15.99 |
| 200,000 |
| 2.4 |
| 15.53 |
| 200,000 |
| 15.53 |
|
|
|
|
|
| |||||
|
| 9,990,590 |
| 4.0 |
| 9.43 |
| 4,508,238 |
| 8.60 |
(b)
Stock-based compensation expense
Stock-based compensation expense incurred to June 30, 2010 has been included in the undernoted expenses in the Consolidated Statements of Operations as follows:
|
| Three months ended |
| Six months ended | ||||||
|
| June 30, |
| June 30, | ||||||
|
| 2010 $ |
| 2009 $ |
| 2010 $ |
| 2009 $ | ||
|
|
|
|
|
|
|
|
| ||
Operating costs |
| 863 |
| 422 |
| 3,146 |
| 1,178 | ||
Exploration |
| 147 |
| 349 |
| 416 |
| 575 | ||
General and administrative |
| 2,635 |
| 1,950 |
| 7,030 |
| 3,489 | ||
|
|
|
|
| ||||||
|
| 3,645 |
| 2,721 |
| 10,592 | 5,242 |
The assumptions used to estimate the fair value of Options granted were:
| June 30, 2010 |
| December 31, 2009 | |
|
|
|
|
|
Risk-free interest rate (range) |
| 1.69% – 1.99% |
| 1.40% – 2.11% |
Expected volatility (range) |
| 47% – 73% |
| 64% – 76% |
Expected life (range) |
| 0.8 - 2.8 years |
| 1.5 - 3.8 years |
Expected dividends |
| Nil |
| Nil |
Weighted average fair value per stock option (CAD$) |
| $ 4.11 |
| $ 4.80 |
Eldorado Gold Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
June 30, 2010
(Expressed in thousands of U.S. dollars, unless otherwise stated)
8. Stock-based compensation(continued)
(c)
Bonus Cash Award Units plan
As of June 30, 2010 all Bonus Cash Award Units awarded by the Company were exercised. The Company paid $2,543 in bonus cash award units in the six months ended June 30, 2009. The related cost in the amount of $559 was included in general and administrative expense in the Consolidated Statements of Operations for the same period.
9.
Supplementary cash flow information
|
| Three months ended |
| Six months ended | ||
|
| June 30, |
| June 30, | ||
|
| 2010 $ | 2009 $ |
| 2010 $ | 2009 $ |
|
|
|
|
|
|
|
Changes in non-cash working capital |
|
|
|
| ||
Accounts receivable and other |
| (2,517) | (2,649) |
| (2,336) | 18,528 |
Inventories |
| (2,031) | (5,685) | (1,789) | (12,077) | |
Accounts payable and accrued liabilities |
| (9,333) | 9,782 |
| (28,142) | 2,207 |
|
|
| ||||
|
| (13,881) | 1,448 |
| (32,267) | 8,658 |
|
|
| ||||
Supplementary cash flow information |
|
| ||||
Income taxes paid |
| 13,265 | 12,862 |
| 33,973 | 12,862 |
Interest paid |
| - | 122 |
| 2,638 | 122 |
10.
Segmented information
During the period ended June 30, 2010, 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 development project and exploration activities in Turkey. The China reporting segment includes the operations of the Tanjianshan mine, Jinfeng mine, White Mountain mine, the Eastern Dragon project 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.
Eldorado Gold Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
June 30, 2010
(Expressed in thousands of U.S. dollars, unless otherwise stated)
10. Segmented information(continued)
|
| June 30, 2010 | ||||||||||
|
| Turkey $ |
| China $ |
| Brazil $ |
| Greece $ |
| Other $ | Total $ | |
|
|
|
|
|
|
|
|
|
|
|
| |
Net mining interests |
|
|
|
|
|
|
|
|
|
|
| |
Producing properties |
| 208,440 |
| 1,231,176 |
| - |
| - |
| - | 1,439,616 | |
Properties under development |
| 129,283 |
| - |
| - |
| 210,291 |
| - | 339,574 | |
Iron ore property |
| - |
| - |
| 47,362 |
| - |
| - | 47,362 | |
Other mining interests |
| 10,314 |
| 748,872 |
| 18,111 |
| - |
| 2,588 | 779,885 | |
|
|
|
|
|
|
|
|
|
|
|
| |
|
| 348,037 |
| 1,980,048 |
| 65,473 |
| 210,291 |
| 2,588 | 2,606,437 |
Goodwill |
| - |
| 324,935 |
| - |
| - |
| - | 324,935 |
|
| December 31, 2009 | ||||||||||
|
| Turkey $ |
| China $ |
| Brazil $ |
| Greece $ |
| Other $ | Total $ | |
|
|
|
|
|
|
|
|
|
|
|
| |
Net mining interests |
|
|
|
|
|
|
|
|
|
|
| |
Producing properties |
| 196,066 |
| 1,261,367 |
| - |
| - |
| - | 1,457,433 | |
Properties under development |
| 96,275 |
| - |
| - |
| 209,408 |
| - | 305,683 | |
Iron ore property |
| - |
| - |
| 47,212 |
| - |
| - | 47,212 | |
Other mining interests |
| 7,214 |
| 745,187 |
| 15,544 |
| - |
| 2,543 | 770,488 | |
|
|
|
|
|
|
|
|
|
|
|
| |
|
| 299,555 |
| 2,006,554 |
| 62,756 |
| 209,408 |
| 2,543 | 2,580,816 |
Goodwill |
| - |
| 324,935 |
| - |
| - |
| - | 324,935 |
Operations
|
| For the three months ended June 30, 2010 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Turkey $ |
| China $ |
| Brazil $ |
| Greece $ |
| Other $ | Total $ | |
|
|
|
|
|
|
|
|
|
|
|
| |
Revenue |
|
|
|
|
|
|
|
|
|
|
| |
Gold sales |
| 82,546 |
| 123,897 |
| - |
| - |
| - | 206,443 | |
Interest and other income |
| 151 |
| 997 |
| - |
| - |
| 190 | 1,338 | |
|
| 82,697 |
| 124,894 |
| - |
| - |
| 190 | 207,781 | |
Expenses (income) except the undernoted |
| 24,686 |
| 54,573 |
| 65 |
| (3,291) |
| 11,166 | 87,199 | |
Depletion, depreciation and amortization |
| 3,525 |
| 25,646 |
| 15 |
| - |
| 318 | 29,504 | |
Exploration |
| 1,321 |
| 219 |
| 794 |
| - |
| 616 | 2,950 | |
Mine standby costs |
| - |
| - |
| 607 |
| - |
| - | 607 | |
Gain on disposal of assets |
| - |
| 81 |
| (60) |
| - |
| - | 21 | |
|
|
|
|
|
|
|
|
|
|
|
| |
Income (loss) before tax |
| 53,165 |
| 44,375 |
| (1,421) |
| 3,291 |
| (11,910) | 87,500 | |
Income tax (expense) recovery |
| (11,895) |
| (12,462) |
| - |
| - |
| 1,384 | (22,973) | |
Non-controlling interest |
| - |
| (4,019) |
| - |
| - |
| - | (4,019) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Net income (loss) |
| 41,270 |
| 27,894 |
| (1,421) |
| 3,291 |
| (10,526) | 60,508 |
Eldorado Gold Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
June 30, 2010
(Expressed in thousands of U.S. dollars, unless otherwise stated)
10. Segmented information(continued)
|
| For the three months ended June 30, 2009 | ||||||||||
|
|
|
|
|
|
|
|
|
|
| ||
|
| Turkey $ |
| China $ |
| Brazil $ |
| Greece $ |
| Other $ | Total $ | |
|
|
|
|
|
|
|
|
|
|
|
| |
Revenue |
|
|
|
|
|
|
|
|
|
|
| |
Gold sales |
| 60,526 |
| 19,621 |
| - |
| - |
| - | 80,147 | |
Interest and other income |
| 281 |
| 21 |
| - |
| - |
| 89 | 391 | |
|
| 60,807 |
| 19,642 |
| - |
| - |
| 89 | 80,538 | |
Expenses (income) except the undernoted |
| 19,103 |
| 10,497 |
| (259) |
| 1,958 |
| 6,134 | 37,433 | |
Depletion, depreciation and amortization |
| 3,090 |
| 3,335 |
| (99) |
| - |
| 212 | 6,538 | |
Exploration |
| 1,615 |
| 416 |
| 637 |
| - |
| 706 | 3,374 | |
Mine standby costs |
| - |
| - |
| 936 |
| - |
| - | 936 | |
Gain on disposal of asset |
| - |
| - |
| - |
| - |
| (1,463) | (1,463) | |
|
|
|
|
|
| |||||||
Income (loss) before tax |
| 36,999 |
| 5,394 |
| (1,215) |
| (1,958) |
| (5,500) | 33,720 | |
Income tax (expense) recovery |
| (7,017) |
| (402) |
| - |
| - |
| 252 | (7,167) | |
Non-controlling interest |
| - |
| (653) |
| - |
| - |
| - | (653) | |
|
|
|
|
|
| |||||||
Net income (loss) |
| 29,982 |
| 4,339 |
| (1,215) |
| (1,958) |
| (5,248) | 25,900 |
|
| For the six months ended June 30, 2010 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Turkey $ |
| China $ |
| Brazil $ |
| Greece $ |
| Other $ | Total $ | |
|
|
|
|
|
|
|
|
|
|
|
| |
Revenue |
|
|
|
|
|
|
|
|
|
|
| |
Gold sales |
| 175,556 |
| 212,366 |
| - |
| - |
| - | 387,922 | |
Interest and other income |
| 281 |
| 1,482 |
| - |
| - |
| 246 | 2,009 | |
|
| 175,837 |
| 213,848 |
| - |
| - |
| 246 | 389,931 | |
Expenses (income) except the undernoted |
| 52,209 |
| 98,417 |
| 243 |
| (5,218) |
| 22,284 | 167,935 | |
Depletion, depreciation and amortization |
| 8,002 |
| 44,102 |
| 33 |
| - |
| 609 | 52,746 | |
Exploration |
| 2,595 |
| 1,176 |
| 1,318 |
| - |
| 1,463 | 6,552 | |
Mine standby costs |
| - |
| - |
| 1,313 |
| - |
| - | 1,313 | |
Gain on disposal of assets |
| - |
| (1,423) |
| (60) |
| - |
| (2) | (1,485) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Income (loss) before tax |
| 113,031 |
| 71,576 |
| (2,847) |
| 5,218 |
| (24,108) | 162,870 | |
Income tax (expense) recovery |
| (24,425) |
| (19,734) |
| - |
| - |
| 1,467 | (42,692) | |
Non-controlling interest |
| - |
| (6,825) |
| - |
| - |
| - | (6,825) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Net income (loss) |
| 88,606 |
| 45,017 |
| (2,847) |
| 5,218 |
| (22,641) | 113,353 |
Eldorado Gold Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
June 30, 2010
(Expressed in thousands of U.S. dollars, unless otherwise stated)
10. Segmented information(continued)
|
| For the six months ended June 30, 2009 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Turkey $ |
| China $ |
| Brazil $ |
| Greece $ |
| Other $ | Total $ | |
|
|
|
|
|
|
|
|
|
|
|
| |
Revenue |
|
|
|
|
|
|
|
|
|
|
| |
Gold sales |
| 101,606 | 30,747 | - |
| - | 132,353 | |||||
Interest and other income |
| 357 | 53 | 2 |
| 175 | 587 | |||||
|
| 101,963 | 30,800 | 2 |
| 175 | 132,940 | |||||
Expenses (income) except the undernoted |
| 32,263 | 16,187 | 91 | (238) | 14,343 | 62,646 | |||||
Depletion, depreciation and amortization |
| 5,284 | 5,282 | 44 | - | 388 | 10,998 | |||||
Exploration |
| 2,849 | 607 | 799 |
| 1,181 | 5,436 | |||||
Mine standby costs |
| - | - | 936 |
| - | 936 | |||||
Gain on disposal of asset |
| - | - | - |
| (1,463) | (1,463) | |||||
|
| |||||||||||
Income (loss) before tax |
| 61,567 | 8,724 | (1,868) |
| (14,274) | 54,387 | |||||
Income tax (expense) recovery |
| (13,626) | (1,020) | - |
| 235 | (14,411) | |||||
Non-controlling interest |
| - | (1,015) | - |
| - | (1,015) | |||||
|
| |||||||||||
Net income (loss) |
| 47,941 | 6,689 | (1,868) |
| (14,039) | 38,961 |
11.
Subsequent events
On July 20, 2010, the Company acquired, through a court approved plan of arrangement under the laws of British Columbia (the “Arrangement”), all the issued and outstanding securities of Brazauro Resources Corporation (“Brazauro”) that the Company did not already own for total consideration of 5,993,898 common shares of Eldorado.
Under the terms of the Arrangement, former Brazauro shareholders other than Eldorado received 0.0675 of an Eldorado common share for each Brazauro share held, as well as 1/3 of a share of TriStar Gold Inc. (“TriStar”), a new exploration company that Eldorado funded with C$10 million at time of closing as part of the Arrangement. TriStar will hold certain exploration properties previously owned by Brazauro.
The principal asset of Brazauro, the Tocantinzinho Project in Tapajós, Brazil, is a late stage exploration project with a current Measured and Indicated Resource of 2.1 million ounces of gold. In addition, Eldorado acquired option agreements to earn into 100% of the Água Branca and Piranhas properties, located in the Tapajos District immediately adjacent to the Tocantinzinho Project.
.