Eldorado Gold Corporation (NYSE: EGO) is among the worst performers in fiscal 2017. The gold mining company extended it’s down streak into FY2018 – EGO stock trades below $1 at present, down substantially from the 52-week high of $3.32 a share. EGO stock has total market capitalization $656 million. The latest selloff was supported by wider than expected loss in the final quarter of fiscal 2017.
Eldorado Gold posted adjusted fourth-quarter loss of $400K relative to earnings of $2.9M in the past year period, impacted by lower sales volumes. Its full-year gold production fell 6% to 293K oz. from the prior year period despite the inclusion of Olympias pre-commercial production and 7K oz. from the newly acquired Lamaque project in Quebec.
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It ended last year with proven gold reserves of 392 million tonnes, down 10% from the year-ago period.
Its CEO says last year was challenging for them considering technical issues. He said, “There is no beating around the bush for 2017 was a challenging year for the company. Looking back despite acquiring Lamaque project from Integra Gold in July, technical challenges at a guess today seem to overshadow and Eldorado value proposition.”
The gold mining company expects its gold production in FY2018 to stand around 290,000-330,000 ounces of gold, while cash costs are expected to increase in the range of $580-630 per ounce from $500 per ounce in the previous quarter. The increase in cash costs of the prior quarter could create additional pressure on its earnings.
On the positive side, the company continues experiencing solid support from gold prices. Gold price jumped sharply since the start of this year; gold spot price currently stands around $1337 per ounce, higher from $1250 per ounce at the beginning of the year. Gold prices are likely to remain strong amid increasing pressure on U.S. dollar due to the trade war.
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