Eldorado Gold Corporation Stock Price Plunged Below $1

Eldorado Gold

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.

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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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