Eldorado Gold outlook bullish

As Eldorado Gold continues to experience some success in navigating the political minefields of Turkey, Haywood Securities Tuesday declared, "We remain bullish on the outlook for Eldorado, as the company has a solid growth profile from good-quality, low-cost operations."

Haywood Metals Analysts Kerry Smith and Shane Nagle increased Eldorado's 2008 EPS estimated by two-cents to US27-cents due to "lower than expected cash costs at Tanjianshan and a slight increase in Tanjianshan production this year."

Gold production estimates at Tanjianshan have been increased from Haywood's previous estimate of 110,000 ounces to 125,000 ounces annually.

However, Haywood's other forecasts, target price of $9.75/sh, and SECTOR OUTPERFORM rating remain unchanged. Haywood is now forecasting 320,000 ounces of gold production this year at a total cash cost of US$250/oz, generating US$0.34 per share of cash flow.

"Eldorado continued to exhibit expanding margins in Q2, with a realized margin of 71%," said Smith and Nagle. "Eldorado continues to report costs in the bottom 15% of the world cost curve, and with increasing energy and commodity prices, maintaining low cash costs is extremely important moving through H2/08."

Haywood also noted that Eldorado restarted operations at the Kisladag mine, while start-up of the Efemçukuru gold mine is now expected in the first quarter of 2010. The company's Villa Nova iron ore JV project in Brazil is expected to start production in the first quarter of 2009 as BHP Billiton purchases 100% of the product under a long-term contract.

Eldorado reported a consolidated net income for the second quarter of 2008 of $25.2 million or $0.07 per share, compared with net income of $26.7 million or $0.08 per share in the second quarter of 2007. Revenues increased 7% over the same period in 2007 due to increases in selling prices, partially offset by lower ounces sold.

In the second quarter of 2008, the company reported selling 88,610 ounces of gold at an average price of $904/oz, compared to 112,702 ounces at an average price of $664/oz in the second quarter of 2007.

BRAZAURO RESOURCES SHARE PURCHASE

Meanwhile, Eldorado announced Tuesday that the company will own 12,304,000 common shares representing 14.4% of Brazauro Resources' issued and outstanding common shares (as of July 31, 2008). In addition, Eldorado owns 4,400,000 Warrants. If Eldorado exercises all of the Warrants, it will own 16,704,000 common shares of Brazauro (TSX-V: BZO), representing approximately 18.6% of the junior explorer's shares.

Eldorado is seeking an option to acquire an initial 60% interest in Brazauro's Tocantinzinho gold project in Pára State, Brazil. A scoping study suggests a 13-year mine life with an annual average annual gold production of 123,000 ounces. Capex was initially estimated at $128 million, with an operating cash cost of $367/oz.