Eldorado Gold (EGO) a gold company that can turn a profit

Eldorado Gold Corporation (Public, AMEX:EGO) is one of only a handful of gold mining companies that actually turn a profit.

Mining requires more energy per unit of production than any other industry,  which is why a lot of operators may be required to close a mine due to spikes in energy costs, or produce wildly fluctuating net earnings.

However, EGO's cost of production is one of the lowest in the world, which becomes a significant factor during times of high energy costs rising faster than the gold price.

During Q2, the Company reported net income of $25.9 million or $0.07 per share and cash flow from operations of $36.7 million or $0.10 per share for the second quarter ended June 30, 2009.

Paul N. Wright, President and Chief Executive Officer of Eldorado, commented that "We are pleased with the performance of our mines, our total production increased by close to 38% over production in the first quarter of 2009. We're also proud to have robust margins and remain one of the lowest cost pure gold producers in the industry. These results keep us on track with our forecasted 2009 total production of approximately 330,000 ounces at a cash operating cost of $300 per ounce. Other highlights of the quarter also underline our strong position: our cash balances have more than doubled since year-end, and with our recent investment in Sino Gold we will continue to focus on our strategy of regional growth."

Gold Prices have been holding steady between $850 and ounce and $1,000 and ounce so far YTD.

Investors who like low cost producers find El Dorado attractive. That may be one reason why it has a 26 forward PE ratio for 2010..

With a long term hold mentality, Eldorado Gold could produce some decent gains for your portfolio.

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