What happened
Shares of Eldorado Gold Corp. (EGO 1.56%) are falling on Thursday and were down more than 10% at 2:30 p.m. EDT. Driving the sell-off was the company's disappointing fourth-quarter report.
So what
Eldorado Gold posted a loss of $20.7 million, or $0.03 per share, for the fourth quarter, falling short of the break-even results anticipated by analysts. In addition, even after making adjustments for some asset writedowns, the company still lost about $400,000 during the quarter, a steep drop from the $2.9 million it earned in the year-ago period due to a decline in sales volumes and higher costs, which came in above the company's guidance range.
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In addition to those weaker results, the company reported a 10% decline in gold reserves. Driving the drop was the company's decision to go with a different option to develop its Kisladag mine in Turkey, opting to build a mill, which will optimize cash flow and returns at the expense of reserves and higher processing costs.
Now what
Today's tumble is more of the same for Eldorado Gold. The stock is now down more than 70% over the past year due to a costly acquisition, production problems, and a dispute with the government of Greece. While the company believes it has a plan to create value going forward, investors seeking a gold stock have better options than Eldorado.
