European Gold Share Discussion Threads

[mcmather] 03/5/2012 23:07

Profits Increase 29%, Gold Revenue Up 24%

"During the first quarter, Eldorado produced 155,535 ounces of gold at an average cash operating cost of $452 per ounce. Our gold mines continue to perform to plan and generate significant cash flows which will be applied to the construction of our development projects. With total production ahead of plan and cash operating costs below plan in the quarter, we have had a very good start to 2012, and as a result maintain our guidance to produce 730,000-775,000 oz. @ $430-$450/oz. cash operating cost for the year." said Paul Wright

[mcmather] 03/5/2012 15:38

Eldorado Gold Corporation (TSX:ELD)(NYSE:EGO)(ASX:EAU) will release its 2012 First Quarter Financial and Operating Results after the market closes Thursday, May 3, 2012

[mcmather] 12/4/2012 16:17

"Eldorado plans on expanding gold production by roughly 160% over the next five years, making it one of the fastest growing emerging senior gold producers globally. With industry leading cash costs of ~$350/oz expected over the same period, the Company's extensive mine development, construction and expansion programs can be funded largely by growing internal cash flows. Eldorado intends to invest over $1.0 billion in Greece over the next several years in new mine development and related infrastructure. This significant investment will result in material direct and indirect job creation," said Paul Wright, President and CEO of Eldorado Gold.


Market seems to like this over in canada.

[mcmather] 11/4/2012 23:53

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 22, 2012) - Paul N. Wright, President and Chief Executive Officer of Eldorado Gold Corporation ("Eldorado", the "Company" or "We") (TSX:ELD)(NYSE:EGO)(ASX:EAU), is pleased to provide a brief update on the Company's activities and progress on its Greek asset base post the closing of the European Goldfields transaction on February 24, 2012.

The Company will provide on April 12, 2012 updated guidance in respect to construction schedules, production levels, and capital and operating costs estimates for all Eldorado's assets for the period 2012 -2016.

[bangor] 12/3/2012 08:35

All my EGU have now been transferred to Eldorado Gold shares on my behalf. This crystallised solid gains since I had held for years. A pity as I wanted them longer term. For the moment I will keep ELD but still don't know much about them. I wonder if there will be enough interest for someone to start a thread?

[nermil] 01/3/2012 17:58

i logged a query about this corporate action to our Corporate Actions department and they are currently in the process of arranging to claim the out-turn ie Eldorado Gold Corporation shares, from this event but are not yet in a position whereby they can advise when these will be available to credit to accounts. However we will process this as soon as is possible.

--response from my broker. So just a matter of waiting a bit longer then.

[mcmather] 29/2/2012 21:00

EGU shares are still trading over on tsx. 28th (Feb) was initially envisaged to be the last day of trading for EGU shares on tsx. Once they are fully cancelled I suspect that the formal / full transfer (to ELD shares) will take place?

[nermil] 29/2/2012 16:39

I've asked my broker to chase the issue. Seems its a matter of receiving the new stock before it can show in my account...

[bangor] 29/2/2012 08:49

nermil

I have the same experience, though different provider. I guess it is just taking time. If someone has an which account doesn't hold Canadian stocks perhaps you get paid out.

[nermil] 28/2/2012 21:22

Is anyone seeing ELD shares in their SIPP or ISA? I see my entire EGU holding as £0. With no ELD shares.

I'm with TD Waterhouse. The terms of the deal is 0.85 ELD shares for each EGU. I assume there is some delay before we see these? I am going to call TD tomorrow. Just wondering what everyone else sees now.

[mcmather] 24/2/2012 20:36

Me too nermil. I'm surmising that it will just be your holding in ELD - perhaps with a C$ valuation showing?

"The European Goldfields shares will be suspended from trading on AIM as of 7:30 am (GMT) on February 24, 2012, with cancellation and de-listing from AIM expected to occur on February 27, 2012. The last trading day of the European Goldfields shares on the TSX is expected to be on or about February 28, 2012."

Highlights of the Transaction

•Creates the premier high growth, low cost intermediate gold producer with a combined market capitalization of approximately C$10.5 billion

•Leading growth profile with expected annualized production growth of 30% over the next four years, reaching over 1.5 million ounces of gold production by 2015

•Strongly enhances Eldorado's project pipeline with high quality near-term producing projects

•Ability to finance planned growth opportunities with current balance sheet and strong cash flows from existing production

•Eldorado's dividend will remain unchanged with enhanced ability for growth as European Goldfields' development projects are built

•Exceptional re-valuation opportunity driven by compelling valuation, growth potential, transaction rationale and management track record

[nermil] 24/2/2012 16:50

So now that's complete and EGU is suspended what happens next? I hold in my SIPP, just wondering what I will see next week?

[mcmather] 24/2/2012 13:18

Be interesting to see whether there will be any dramatic moves over in toronto. Don't think there will be but, if there is, suspect it will be to the positive.

[mcmather] 22/2/2012 20:32

This might be of some use going forward (ELD's trades on TSX):



Currently 14.23 (bid) / 14.24 (offer)

But then showing 14.79 on here?? -

(either way it appears to be heading in the right direction)

[bangor] 22/2/2012 17:59

Thanks Mc

No doubt someone will let us know here if they get word.

[mcmather] 22/2/2012 13:30

Not sure Bangor but can see ELD making gains once all completely / formally done and dusted. I'm holding.

[bangor] 22/2/2012 09:29

It is not the company I intended but have profited so far and continue to hold.

But will there be a London listing?

[mcmather] 21/2/2012 21:03

Anyone still holding?

[nermil] 26/1/2012 16:25

Helicopter Ben to the rescue!

[nermil] 19/12/2011 18:47

You're not completely wrong kickstart. I think the premium is quite poor as well. On the 1st of December ELD was trading at around C$18.46 while EGU was down around £6.39 on the LSE. On the offer that would have valued EGU shares at around £9.80. That's a few days before the offer was made. There was clearly some leakage going on in the few days prior to the offer as ELD started tracking down and EGU started tracking up.



Even at ELD's pre offer share price that's still a significant discount to NAV of 1100p per share of EGU. A semi bad offer for EGU but a very good deal for ELD. I would expect ELD to start ticking back up again as the value of the deal from its own NAV is recognised. Its still a fair bit better than the Qataris however. The problem is credit markets are virtually frozen in the Euro Zone. EGU needed the financing to get to the gold and were hamstrung. The management at EGU may have thought this offer was better than the alternative of going cap in hand to the banks. ELD picks up a bargain. But as that stock moves back up so should EGU. Just not as high and as quickly as I might have hoped.

[mcmather] 19/12/2011 17:02

Aye - there appears to be a $75m forfeit if either party reneges on the agreement; ie any counter offer will need to be something special to incur such a penalty.

Looks like it is a waiting game but I don't think the price is 'expensive' as far as ELD is concerned and so hopefully the share price will start to head back towards the giddy heights of C$21.

[nermil] 19/12/2011 16:46

Investec note on the deal taken from FT Alphaville below. Seems to stack up with my view, ie a tad disappointing all round. Investec don't seem to expect an alternative bid. Sorry its a bit wordy but interesting.


ELD has now officially made an offer for ELD, valuing the company at
approximately 812p per share. While this appears to be a miserly 6% premium to
the closing price, it is a 25% premium to the price when first news of a potential
bid came out and a 32% premium to the 30-day VWAP at the time. This is in line
with takeover multiples in the sector (although perhaps at the lower end) and is
coincidentally exactly the same takeover premium that ELD paid for Sino Gold
(SGX.ASX), as mentioned in our previous note.
BE
The key points surrounding the offer are:
n Signed agreement, unanimously recommended by the EGU board
n 0.85 ELD shares plus C$0.0001 cash for every EGU share
n EGU shareholders will end up with 22% of ELD
n Transaction is to be through a court-approved plan of arrangement, requiring
approval from at least two-thirds of EGU shareholders. A special meeting is
expected to take place in mid-February 2012.
n The transaction also requires majority ELD shareholder approval.
n There is a break fee of C$75m, or an expense fee of up to C$30m "upon
occurrence of certain other termination events".
n No mention of a London main board listing, or a London listing at all.
BE
Investment thesis. As mentioned in our previous note, ELD is not known for
unfriendly takeovers and does not like to revise up its own bid. It likes to have a
fully recommended offer to bring to shareholders and this is what it has achieved.
While EGU is now "in play" we do not see a strong potential for an alternative bid,
given that ELD is in our view the natural acquirer of the EGU assets, given its
established presence in the region. While the bid can be seen as opportunistic,
given that we feel that EGU's share price did not fully reflect the inherent value of
the assets, it does also remove a large layer of development risk, given ELD's
strong experience in this regard.
On our NAV valuation the transaction undervalues the EGU asset. We
estimate the 1.0x P/NAV valuation of EGU's portfolio at 1100p. This allshare
deal values them at 812p. What the transaction does do for EGU
shareholders is give them an existing c.600k Au oz production base, a
strong balance sheet and technical expertise to bring the Skouries and
Olympias projects to production. The CAD$13.08/share offer is above the
$10/share Qatar Holdings paid for a 9.9% stake recently and well above the
$9/share the warrants associated with the loan deal were struck at.


And from Olivetree...A bit interesting on possible strategy on part of EGU (extending deadline by accepting ELD bid to give them till after New Year for more approaches...


European Goldfields Perspective
In Friday's note (below) we highlighted the fact that the key to valuing the projects NPVs was to determine an appropriate cost of capital. For example, one could argue that the see-through yield on the Qatari Loans was 14% after adjusting for the dilution implied value of the warrant packages.

European Goldfields Perspective
In Friday's note (below) we highlighted the fact that the key to valuing the projects NPVs was to determine an appropriate cost of capital. For example, one could argue that the see-through yield on the Qatari Loans was 14% after adjusting for the dilution implied value of the warrant packages.

Despite talking of "a number of approaches", it is curious that EGU management have so readily recommended a transaction at only a minimal premium to market – and indeed all-stock (which will trade weakly today). This can perhaps be explained by the pressing timeline though – remembering that there was a shareholder vote re the proposed Qatari financing pacakge scheduled for 22nd Dec (this Thursday). By agreeing to the Eldorado transaction, management have locked in a transaction shareholders can vote upon (it requires a 66% approval) – whilst extending the effective deadline for any interested third parties until the New Year. It is likely therefore that the market prices in some optionality of another bid – although we await further details of Blackrock's lock-up agreement.

Early indications (from the illiquid EAU AU) are that ELD CN will fall 3.5% as arbs look to hedge the deal. However, we think the longer-term the market should reward ELD for a visibly accretive transaction.

[nermil] 19/12/2011 16:37

Bit disappointing this. 0.85 for each ELD share and that makes around £7.30 for EGU based on ELD price right now. Yes mpclag its directly linked to ELD share price. Explains the drop. It seems our fortunes are now tied to ELD's, at least for the time being. Does anyone have any opinions on this company? I've been on holiday and have been trying to avoid my dire SIPP (too much a downer!).