EX-99.1 2 financials.htm INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2010 MD Filed by Filing Services Canada Inc.  (403) 717-3898



 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

June 30, 2010

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)

 


 

 

June 30,

 

December 31,

 

2010

2009

Assets

 

$

 

$

 

 

 

 

 

Current assets

 

 

 

 

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 

 

  - 

 

 

  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 

 

 

  3,532,290 

 

  3,436,108 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

Accounts payable and accrued liabilities

 

  130,476 

 

  157,250 

Debt - current (note 6)

 

  69,045 

 

  56,499 

Future income taxes

 

  3,658 

 

  4,264 

 

 

  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 

 

 

  724,963 

 

  769,354 

 

 

 

 

 

Non-controlling interest

 

  31,682 

 

  26,144 

 

 

 

 

 

Shareholders* equity

 

 

 

 

 

 

 

 

 

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)

 

 

  2,775,645 

 

  2,640,610 

 

 

  3,532,290 

 

  3,436,108 

 

 

 

 

 

Subsequent events (note 6(d) and note 11)

 

 

 

 

 

 

 

 

 


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)



 

 

Three months ended

 

 Six months Ended

 

 

2010

 

2009

 

2010

 

2009

$

$

$

$

Revenue

 

 

 

 

 

 

 

 

Gold sales

 

  206,443 

 

  80,147 

 

  387,922 

 

  132,353 

Interest and other income

 

  1,338 

 

  391 

 

  2,009 

 

  587 

 

 

  207,781 

 

  80,538 

 

  389,931 

 

  132,940 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

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)

 

 

  118,350 

 

  49,287 

 

  225,135 

 

  79,977 

 

 

 

 

 

 

 

 

 

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 

 

 

  120,281 

 

  46,818 

 

  227,061 

 

  78,553 

Income before income taxes and non-controlling interest

 

  87,500 

 

  33,720 

 

  162,870 

 

  54,387 

 

 

 

 

 

 

 

 

 

Income tax (expense) recovery

 

 

 

 

 

 

 

 

Current

 

  (26,808)

 

  (7,636)

 

  (47,939)

 

  (13,653)

Future

 

  3,835 

 

  469 

 

  5,247 

 

  (758)

 

 

  (22,973)

 

  (7,167)

 

  (42,692)

 

  (14,411)

 

 

 

 

 

 

 

 

 

Non-controlling interest

 

  (4,019)

 

  (653)

 

  (6,825)

 

  (1,015)

 

 

 

 

 

 

 

 

 

Net income for the period

 

  60,508 

 

  25,900 

 

  113,353 

 

  38,961 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

 

 

 

 

 

 

Basic

 

  539,398 

 

  371,118 

 

  538,707 

 

  370,494 

Diluted

  541,193 

 

  371,964 

 

  540,439 

 

  371,868 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

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 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




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)




 

 

Three months ended

 

 Six months Ended

 

 

2010

 

2009

 

2010

 

2009

$

$

$

$

Cash flows generated from (used in):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating activities

 

 

 

 

 

 

 

 

Net income for the period

 

  60,508 

 

  25,900 

 

  113,353 

 

  38,961 

Items not affecting cash

 

 

 

 

 

 

 

 

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 

 

 

  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 

 

 

  78,447 

 

  36,701 

 

  140,887 

 

  62,574 

 

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

Mining interests

 

 

 

 

 

 

 

 

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

 

 

 

  - 

 

 

 

  - 

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 

 

 

  (37,695)

 

  (11,434)

 

  (86,671)

 

  (7,290)

 

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

 

Capital stock

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Proceeds

 

  2,484 

 

  6 

 

  2,484 

 

  4,982 

Repayments

 

  (14,726)

 

  - 

 

  (14,726)

 

  - 

 

 

  (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 

 

 

 

 

 

 

 

 

 

Supplementary cash flow information (note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




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)




 

 

Three months ended

 

 Six months Ended

 

 

2010

 

2009

 

2010

 

2009

$

$

$

$

 

 

 

 

 

 

 

 

 

Share capital

 

 

 

 

 

 

 

 

Balance beginning of period

 

  2,679,209 

 

  947,736 

 

  2,671,634 

 

  931,933 

Shares issued upon exercise of share options,

 

 

 

 

 

 

 

 

      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 

 

 

 

 

 

 

 

 

 

Contributed surplus

 

 

 

 

 

 

 

 

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 

 

 

 

 

 

 

 

 

 

Retained earnings (deficit)

 

 

 

 

 

 

 

 

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)

 

 

 

 

 

 

 

 

 

Accumulated other comprehensive income (loss)

 

 

 

 

 

 

 

 

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 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

  2,775,645 

 

  856,116 

 

  2,775,645 

 

  856,116 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




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

 

 $

 

 $

 

 $

 

 $

 

 

 

 

 

 

 

 

Net earnings for the period ended June 30,

60,508


25,900


113,353


38,961

 








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
          available-for-sale investments

(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

 








 








Comprehensive income for the period ended June 30,

69,213


30,077


123,517


45,451

 










 

 

 

 

 


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:


 

 

June 30,

2010

$

 

December 31,

2009

$

 

 


 


Collateral account against Eastern Dragon CMB Standby letter of credit loan

 

52,221

 

-

Collateral account against Eastern Dragon CCB loan

 

-

 

50,000

 

 


 


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

 

 

Three months ended

 

Six months ended

 

 

June 30,

 

June 30,

 

 

2010

$

 

2009

$

 

2010

$

 

2009

$

         

 

 

 

 

 

 

 

 

Pension plan expense

 

50

 

39

 

100

 

56

SERP expense *

 

572

 

566

 

1,145

 

747

 

 


 


 


 


Total

 

622

 

605

 

1,245


803

* Non-registered supplemental 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

$

 

 

 

 

 

Balance, December 31, 2009

 

537,136,235

 

2,671,634

 

 


 


Shares issued upon exercise of share options, for cash

 

3,997,143

 

27,283

Estimated fair value of share options exercised

 

-

 

9,405

 

 


 


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)



238


(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)



238


(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.


.