Eldorado (NYSE:EGO) Begins Iron Ore Shipments from Vila Nova

Already one of the top gold miners as measured by low costs, Eldorado Gold (NYSE:EGO) has launched its first shipment of iron ore from its Vila Nova Mine in Brazil, which could help lower gold production costs even more for the company.

The first shipment included 45,000 tons of lump ore grading approximately 63% Fe, which was sold to the Chinese spot market, according to a press release from the company.

Paul N. Wright, President and Chief Executive Officer of Eldorado said, "We are pleased to be able to realize the first shipment of iron ore from our Vila Nova Mine and I would like to thank our Brazilian team for their outstanding efforts. Vila Nova is part of our strategy to expand our business in Brazil which we see as an important component in the continued growth of Eldorado Gold."

A second shipment is expected to proceed in the latter part of November, which will include an additional 45,000 tons of sinter ore.

The two shipments are part of Eldorado's strategy to test the quality of the ore and operational factors to see how the work is performed. They plan on shipping another 90,000 tons to that end.

Eldorado was trading in New York at $17.99, gaining $0.09, or 0.50 percent at 1:08 PM EDT.

Eldorado (NYSE:EGO) and Low Cost Benefits

Eldorado Gold (NYSE:EGO) received a lot of attention recently when they were named as the fastest growing company in 2010 by Fortune, but growth isn't the only strengh of Eldorado, as their low operational costs puts them in an enviable place.

The two major benefits of any company with low costs advantage are the flexibility it has and the ability to navigate its way through difficult economic times.

In gold mining, and mining in general, that's one of the major differentiators and moats separating the miners as a quality investment.

Even though Eldorado suffered some negative media coverage when they were openly outbid for Andea Resources by Goldcorp (NYSE:GG), all it revealed is what everyone already knew: they aren't able to successfully wage a bidding war against the major miners.

But as Eldorado CEO Paul Wright noted recently, they have two solid in Turkey and China, with another in the permitting stage in Greece. That will keep them busy for several years even if nothing else happens.

Wright wasn't concerned over the major miners' strength to outbid them on companies either, as most the time they don't end up interested in the same assets.

While Wright has said he would be open to another potential acquisition, it would have to be a very opportunistic one. Much of that is related to geographic preferences for the company they want to work in.

In his mind it'll probably be a couple of years before they start looking in the acquisition area again.

Over the long term Wright says he making decisions on the assumption the price of gold will continue rising, and being one of the top low cost miners in the industry, can do well in strong and weak economic environments.

The cash cost for gold production in the latest quarter for Eldorado was $375 an ounce.

Eldorado (NYSE:EGO) Drops Andean (TSE:AND) Bid

Eldorado Gold Corp. (NYSE:EGO) announced it has officially dropped its bid for Andean Resources (TSE:AND), after Goldcorp (NYSE:GG) submitted a higher bid of $3.4 billion for the company.

Chief Executive Officer Paul Wright said, referring to losing value in a bidding war, “The gold industry, as a whole, has an appalling track record of value destruction and Eldorado has no intention of following in these unfortunate footsteps.”

Shareholders of Eldorado agreed with him according to Wright, who added they “expressed a note of caution in terms of Eldorado entering a value-destroying auction whose main result will be the enrichment of short-term market participants.”

The other side of the situation is it would have been a waste of time for Eldorado, who didn't have the resources at its disposal Goldcorp has.

The gold miner concluded in a statement that the Cerro Negro mining project, which is the reason behind the bidding for Andean, was a good asset, but not a must-have asset.

Eldorado Gold (NYSE:EGO) Offers $3.2 Billion for Andean (OTC:ANDPF)

Eldorado Gold Corp. has made a $3.2 Billion bid for Andean Resources Ltd. (OTC:ANDPF), a gold mining company based in Australia.

Terms of the transaction would be a straight stock deal for shares from Eldorado.

“The transaction is consistent with Eldorado’s stated strategy of building a geographically diversified, low cost, high growth gold producer,” said Eldorado’s chief executive officer Paul Wright,

Included with Andean will be an asset located in Argentina, which has 2.1 million ounces of gold coming with it.

Eldorado valued each Andean share at C$6.36, offering 0.31 share for each one of Andeans.