Eldorado Gold Director Times Options Just Right

Eldorado Gold Corp. (EGO) director John Auston proved that timing is everything after recently exercising options on company shares for a tidy profit of more than $500,000. On July 6, 2007, Mr. Auston exercised 100,000 options for company shares at $1.90 each and then sold these shares the same day at prices ranging from $7.28 to $7.32, giving him a pre-tax profit after the transactions of $539,188.

A week later on July 12, shares in Eldorado tumbled more than 35% from a day earlier to close at $5.33, after the company announced that its Kisladag mine in Turkey was ordered shut down by the courts.

The shut down was ordered pending the court's decision on an appeal of an earlier lower court decision, ruled in favor of Eldorado, confirming the legality and validity of the mine's environmental impact assessment.

Had Mr. Auston waited just one week more to exercise his options, his pre-tax profit, while still handsome, would have dropped by roughly $196,000 to $343,000.

Mr. Auston, who had held these particular options for over four years, chose the 6th day of the month to make his trades, in order not to violate a mandatory blackout that was coming into effect on July 9, which forbids Eldorado insiders from trading in the stock for a three week period leading up to the reporting of the company's quarterly financial results.

As for the injunction, Eldorado chief financial officer, Earl Price, said in an interview there is no way Mr. Auston could have known in advance of the Turkish court's decision. "The first anyone in the company knew about this ruling from the Turkish courts was on Wednesday night after close of market," Mr. Price said. According to Mr. Price, Eldorado received an email from its Turkish management on Wednesday night regarding the injunction registration and then made immediate disclosure before markets opened this past Thursday.

The fact that it was registered with the courts meant it was possible the Turkish media could pick up the story, Mr. Price said, adding he didn't want investors hearing about the injunction through a third party, especially since Eldorado had yet to be officially notified of the injunction.

Under the Turkish system, Mr. Price explained, Eldorado isn't officially notified until it receives a certified mailed package containing the judgment and the reason behind it.

"That can take from two to four business days to be delivered to our [Vancouver] offices," Mr. Price added.

John knew the blackout period was coming and has held those options for over four years. He's the only insider who has traded shares recently and if any of us had inside information, I think you would have seen a few more active trades than just John's.