(RTTNews) - Low-cost gold producer Eldorado Gold Corp. (EGO) posted better-than-expected third-quarter profit, thanks to higher gold prices realized during the period.

Eldorado operates the Tanjishan mine in China, as well as other mines and projects in Brazil, Turkey and the U.S.

Profit for the quarter rose to 8 cents per share, from year-ago 5 cents, beating the consensus estimate of 7 cents by a penny.

Revenues rose to $82.6 million from $68.2 million last year, and gold sales to $81.6 million from $65 million. In the last three years, gold sales have grown to $277.7 million in 2008 from $77.6 million in 2006.

During the quarter, the company produced 88,918 ounces of gold at an average cash operating cost of $297 per ounce. Total production costs, which include cash costs, plus foreign exchange gain or loss, depreciation, amortization and reclamation expenses, were $430 per ounce.

But, the company sold 85,246 ounces of gold during the quarter at a realized average price of $957 per ounce. Rough calculations pitch the profit at more than $500 an ounce. The company owes its industry-leading margins to low cost production.

For the trailing twelve months as of June 30, 2009, Eldorado's gross margin was 64.25%, way higher than the industry's 40.91%. The company's operating margin for the period was 35.54%, more than five times the industry's 6.79%.

Earlier this week, the company announced a 32% increase in mineral resources at its Kisladag Mine, compared to a 2008 year-end estimate. The company says measured plus indicated resources at the Kisladag Mine have increased by 2.5 million ounces 10.4 million ounces. The Kisladag mine is expected to produce 230,000 Ounces of gold in 2009 at a cash cost of about $265/ounce.

The company is also seeking to expand its reserves through acquisitions. Late August, Eldorado announced plans to acquire Sino Gold, which operates two large mines in China. The company already owns a 20% stake in Sino Gold. The all-stock transaction values Sino Gold at A$2.2 billion or C$2.0 billion.

Early October, the proposed acquisition reeceived the blessings of the Australian government. Sino Gold is listed on the Australian stock exchange, while its assets are in China. The deal is awaiting the approval of Sino Gold shareholders.

If approved, the combination would have -- measured plus indicated resources of 18.8 million gold ounces and proven and provable reserves of 12.7 million gold ounces, compared to Eldorado's 11.8 million ounces in measured plus indicated resources and 7.6 million in proved and provable resources.

Eldorado has no hedges. In a rising price environment for gold, the unhedged position seems to bode well for the company.

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