U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549



FORM 40-F



[    ] REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934



OR



[ X ] ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended: December 31, 2005       
Commission File Number: 001-31522



ELDORADO GOLD CORPORATION

(Exact name of Registrant as specified in its charter)



N/A

(Translation of Registrants name into English)



Canada

(Province or other jurisdiction of incorporation or organization)



1040

(Primary Standard Industrial Classification Code Number)



N/A

(I.R.S. Employer Identification Number)



Suite 1188  550 Burrard Street

Vancouver, British Columbia

Canada  V6C 2B5

(604) 687-4018

(Address and telephone number of Registrants principal executive offices)



CT Corporation

111 Eighth Avenue, 13 Floor

New York, NY  10011; Telephone: (212) 894-8940

(Name, address and telephone number of agent for service in the United States)



Securities registered or to be registered pursuant to Section 12(b) of the Act:



Title of each class

Name of each exchange on which registered



Common Shares, without par value

The American Stock Exchange



Securities registered or to be registered pursuant to Section 12(g) of the Act:

None



Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None



For annual reports, indicated by check mark the information filed with this Form:



[ X ] Annual information form

[ X ] Audited annual financial statements



Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report:  The registrant had 302,577,378 common shares issued and outstanding at December 31, 2005.



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Indicate by check mark whether the Registrant by filing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the Exchange Act).  If Yes is marked, indicate the filing number assigned to the Registrant in connection with such Rule.



YES

NO

X





Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.



YES X

NO







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EXPLANATORY NOTE



Eldorado Gold Corporation (the Company or the Registrant) is a Canadian issuer eligible to file its annual report pursuant to Section 13 of the Securities Exchange Act of 1934 (the 1934 Act) on Form 40-F.  The Company is a foreign private issuer as defined in Rule 3b-4 under the 1934 Act and in Rule 405 under the Securities Act of 1933.  Equity securities of the Company are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the 1934 Act pursuant to Rule 3a12-3.



The Company prepares its consolidated financial statements in accordance with Canadian GAAP and reconciled to U.S. GAAP.  Unless otherwise indicated, all dollar amounts in this report are in United States dollars.  The exchange rate of Canadian dollars into United States dollars, on December 30, 2005, based upon the noon buying rate in New York City for cable transfers payable in Canadian dollars as certified for customs purposes by the Federal Reserve Bank of New York, was U.S.$1.00 = CDN$1.1656.



FORWARD-LOOKING STATEMENTS



This annual report and the exhibits attached hereto contain forward-looking statements concerning the Companys plans at its properties, plans related to its business and other matters.  These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

Statements concerning reserves and mineral resource estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the property is developed, and in the case of mineral reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited.  Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as expects or does not expect, is expected, anticipates or does not anticipate, plans, estimates or intends, or stating that certain actions, events or results may, could, would, might or will be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements.  Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation:

·

The Companys ability to generate revenue from operations, or to continue to raise funds through other sources for the further exploration and development of its properties, will be highly dependent on the price of gold, which has a history of wide fluctuation.

·

The Company is in the business of exploring, developing, and operating natural resource properties, which by its nature involves a significant amount of risk.  Discrepancies between actual and estimated reserves, and between estimated and actual metallurgical recoveries for the Company may have significant financial impact.

·

All of the Companys operations are subject to environmental regulation which can make operations expensive or prohibit them altogether.

·

There may be challenges to the title of the Companys properties which, if successful, could impair its development and/or operations.

·

The Companys significant properties are located in Brazil, China and Turkey and subject to risks specific to those jurisdictions, including potential political or economic instability that may affect the Companys ability to operate.  Currency fluctuations may also impact the Companys profitability.



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·

There are a number of outstanding securities and agreements pursuant to which Common Shares of the Company may be issued in the future.  This would result in dilution to the Companys shareholders.

·

The Company operates in a competitive industry and competes with other more well established companies which have greater financial resources than the Company.

·

Operations in which the Company has an interest will be subject to all of the hazards and risks normally incidental to exploring, developing and operating natural resources, any of which could result in work stoppages, damage to persons or property and possible environmental damage.

·

The Company depends on a number of key employees, the loss of any one of whom could have an adverse effect on the Company.

·

The Company, where practical, maintains insurance against risks in the operations of its business.  Such insurance, however, contains exclusions and limitations on coverage.  There is no assurance that such insurance will continue to be available.

·

The Company has options to acquire interests in, or is party to joint ventures in respect of, certain of its properties.  None of these properties are core assets of the Company.  However, the Company may require additional financing to meet its obligations under these agreements and there is no guarantee that such funds will be available.

·

If the Company should require additional funds for exploration and development of its properties, which is likely, it would have to seek equity and/or debt financing which may not be available.



Some of the important risks and uncertainties that could affect forward-looking statements are described further in the exhibits attached to this Registration Statement.  Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements.  Forward-looking statements are made based on managements beliefs, estimates and opinions on the date the statements are made, and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change.  Investors are cautioned against attributing undue certainty to forward-looking statements.



Forward-looking statements are based on the estimates and opinions of the Companys management at the time the statements were made.  The Company assumes no obligation to update forward-looking statements should circumstances or managements estimates or opinion change.





NOTE TO UNITED STATES READERS-

DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES



The Company is permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare this annual report in accordance with Canadian disclosure requirements, which are different from those of the United States.  The Company prepares its financial statements, which are filed with this report on Form 40-F in accordance with Canadian generally accepted accounting practices (GAAP), and they may be subject to Canadian auditing and auditor independence standards.  They may not be comparable  to financial statements of the United States companies.  Significant differences between Canadian GAAP and United States GAAP are described in Note 15 of the audited consolidated financial statements of the Company.





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RESOURCE AND RESERVE ESTIMATES

The terms Mineral Reserve, Proven Mineral Reserve and Probable Mineral Reserve are Canadian mining terms as defined in accordance with National Instrument 43-101  Standards of Disclosure for Mineral Projects (NI 43-101) under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the CIM) CIM Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as may be amended from time to time by the CIM. These definitions differ from the definitions in the United States Securities & Exchange Commission (SEC) Industry Guide 7 under the Securities Act of 1933.  The definitions of proven and probable reserves used in NI 43-101 differ from the definitions in the United States Securities and Exchange Commission (SEC) Industry Guide 7.  Under SEC Guide 7 standards, a Final or Bankable feasibility study is required to report reserves, the three year history average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.

In addition, the terms mineral resource, measured mineral resource, indicated mineral resource and inferred mineral resource are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration statements filed with the SEC.  Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.  Inferred mineral resources have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases.



Accordingly, information contained in this report and the documents incorporated by reference herein containing descriptions of our mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.



ANNUAL INFORMATION FORM

The Companys Annual Information Form for the fiscal year ended December 31, 2005 is filed as Document 1 and incorporated by reference in this report on Form 40-F.

AUDITED ANNUAL FINANCIAL STATEMENTS AND
MANAGEMENTS DISCUSSION AND ANALYSIS

Audited Annual Financial Statements

The audited consolidated financial statements of the Company for the years ended December 31, 2005 and 2004, including the report of the auditors with respect thereto, filed as Document 2 and incorporated by reference in this report on Form 40-F.  For a reconciliation of important differences between Canadian and United States generally accepted accounting principles, see Note 15 to the Companys audited consolidated financial statements.

Managements Discussion and Analysis

The Companys managements discussion and analysis (MD&A) is filed as Document 3 and incorporated by reference in this report on Form 40-F.



DISCLOSURE CONTROLS AND PROCEDURES

At the end of the period covered by this report, an evaluation was carried out under the supervision of and with the participation of the Companys management, including the Chief Executive Officer (CEO) and



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Chief Financial Officer (CFO), of the effectiveness of the design and operations of the Companys disclosure controls and procedures (as defined in Rule 13a  14(c) and Rule 15d  14(c) under the Securities Exchange Act of 1934.  Based on that evaluation the CEO and the CFO have concluded that the design and operation of these disclosure controls and procedures were effective in ensuring that information required to be disclosed by the Company in reports that it files or submits to the Securities & Exchange Commission is recorded, processed, summarized and reported within the time periods required.



CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

During the period covered by this Annual Report on Form 40-F, no changes occurred in the Companys internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.

The Companys management, including the CEO and CFO, does not expect that its disclosure controls and procedures or internal controls and procedures will prevent all error and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.



CORPORATE GOVERNANCE AND BOARD COMMITTEES

Our Board has adopted a written mandate in which it has explicitly assumed responsibility for the stewardship and overseeing the management of our business. Our Board carries out its mandate directly or through its committees described below. For further information on our corporate governance practices, see our Management Information Circular dated March 20, 2006 filed on SEDAR at www.sedar.com and on the SECs website at www.sec.gov under the Companys name .

The Board has established three Committees of directors: the Compensation Committee, the Corporate Governance and Nominating Committee and the Audit Committee.

Compensation Committee

The Compensation Committee is currently composed of three independent directors. The Compensation Committee develops, reviews and monitors director and executive compensation and policies. This Committee is also responsible for annually reviewing the adequacy of compensation for directors and others, and the composition of the compensation packages. Terms of Reference for the Compensation Committee describe the Committees responsibilities, powers and operations.  The Terms of Reference for the Compensation Committee were approved by the Board of Directors on February 2, 2006 and are available in the Management Information Circular dated March 20, 2006 or on our website www.eldoradogold.com or by contacting our Corporate Secretary.

The Compensation Committee is composed of the following directors:





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Wayne Lenton, Chairman

Robert Gilmore

John Auston





Corporate Governance and Nominating Committee

The Corporate Governance and Nominating Committee was established by the Board of Directors in 2005.  The Terms of Reference for the Corporate Governance and Nominating Committee were approved by the Board of Directors on February 2, 2006 and are available in the Management Information Circular dated March 20, 2006 or on our website www.eldoradogold.com or by contacting our Corporate Secretary.

The Corporate Governance and Nominating Committee is composed of the following directors:



Ross Cory, Chairman

Hugh Morris

John Auston



Audit Committee

The Company has a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act.  The Audit Committee is currently composed of four independent directors. The Audit Committee is responsible for overseeing financial reporting, internal controls and public disclosure documents, as well as recommending the appointment of our external auditors, reviewing the annual audit plan and auditor compensation, approving non-audit services provided by the external auditor, reviewing hiring policies regarding former staff and auditors and evaluating our risk management procedures/systems.

The Audit Committee has adopted a Terms of Reference that reflects these and other responsibilities.  The Audit Committee has adopted, as part of its Terms of Reference, policies that requires its pre-approval of audit, audit-related, tax and non-audit services to be provided by Eldorados auditors.  The Terms of Reference for the Audit Committee were approved by the Board of Directors on February 2, 2006 and are available in the Management Information Circular dated March 20, 2006 or on our website www.eldoradogold.com or by contacting our Corporate Secretary.

Composition of and Education and Experience of Members of the Audit Committee

The Audit Committee is composed of the following directors:



Robert Gilmore, Chairman

Hugh Morris

Ross Cory

Donald Shumka



Each member of the Committee is independent and financially literate.  For particulars on the experience and education of the members of our Audit Committee that is relevant to the performance of his responsibilities as an audit committee member, please refer to the Directors and Officers section within this AIF and pages 5 and 6 of our Information Circular dated March 20, 2006.



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Audit Committee Financial Expert

The Companys Board of Directors has determined that Robert Gilmore, a member of the Audit Committee, qualifies as an audit committee financial expert (as defined in Item 401 of Regulation S-K under the Securities Exchange Act of 1934) and is independent as defined by the American Stock Exchange Corporate Governance Rules.





PRINCIPAL ACCOUNTING FEES AND SERVICES  INDEPENDENT AUDITORS



The aggregate fees billed for professional services rendered by our auditors, PricewaterhouseCoopers LLP, to us for the years ended December 31, 2005 and 2004 are as follows:



Years ended December 312004
Cdn$2005
Cdn$Audit:192,000121,000Audit Related:81,00033,000Tax:224,000321,000All Other Fees:----Total497,000475,000




In 2005, our Audit Committee determined that non-audit services would no longer be performed by the Companys external auditors and that management was instructed to establish agreements with other service providers for such non-audit services.

"Audit Fees" are the aggregate fees billed by PricewaterhouseCoopers LLP for the audit of the Companys consolidated annual financial statements, reviews of interim financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements.

"Audit-Related Fees" are fees charged by PricewaterhouseCoopers LLP for assurance and related services that are reasonably related to the performance of the audit or review of the Companys financial statements and are not reported under "Audit Fees." This category comprises fees billed for independent accountant review of the interim financial statements and Management Discussion and Analysis, as well as advisory services associated with the Companys financial reporting.

"Tax Fees" are fees for professional services rendered by PricewaterhouseCoopers LLP for tax compliance, tax advice on actual or contemplated transactions.



PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES PROVIDED BY
INDEPENDENT AUDITORS

The Audit Committee pre-approves all audit services to be provided to the Company by its independent auditors.  The Audit Committees policy regarding the pre-approval of non-audit services to be provided to the Company by its independent auditors is that all such services shall be pre-approved by the Audit Committee.  Non-audit services that are prohibited to be provided to the Company by its independent auditors may not be pre-approved.  In addition, prior to the granting of any pre-approval, the Audit Committee must be satisfied that the performance of the services in question will not compromise the independence of the independent auditors.  Since the enactment of the Sarbanes-Oxley Act of 2002, all non-audit services, performed by the Companys auditor, for the fiscal year ended December 31, 2005, have been pre-approved by the Audit Committee of the Company.  No non-audit services were approved pursuant to the de minimis exemption to the pre-approval requirement.





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OFF-BALANCE SHEET TRANSACATIONS



Information regarding off-balance sheet transactions is included in Managements Discussion and Analysis of the Company, which is filed as Document 3 and incorporated by reference in this report on Form 40-F.



CODE OF ETHICS



The Company has adopted a Code of Business Conduct and Ethics for all its directors, executive officers and employees, which is posted on the Companys website.



All amendments to the code, and all waivers of the code with respect to any of the officers covered by it, will be posted on the Companys web site, submitted on Form 6-K and provided in print to any shareholder who requests them.  The Companys website is located at www.eldoradogold.com.





CONTRACTUAL OBLIGATIONS



Information regarding contractual obligations of the Company is included in Note 7 to the Managements Discussion and Analysis of the Company, which is filed as Document 3 and incorporated by reference in this report on Form 40-F.



NOTICES PURSUANT TO REGULATION BTR



There were no notices required by Rule 104 of Regulation BTR that the Registrant sent during the year ended December 31, 2005 concerning any equity security subject to a blackout period under Rule 101 of Regulation BTR.



AMEX CORPORATE GOVERNANCE

The Companys common shares are listed on The American Stock Exchange (AMEX).  Section 110 of the AMEX company guide permits AMEX to consider the laws, customs and practices of foreign issuers in relaxing certain AMEX listing criteria, and to grant exemptions from AMEX listing criteria based on these considerations.  A company seeking relief under these provisions is required to provide written certification from independent local counsel that the non-complying practice is not prohibited by home country law.  A description of the significant ways in which the Companys governance practices differ from those followed by domestic companies pursuant to AMEX standards is as follows:

Shareholder Meeting Quorum Requirement:  The AMEX minimum quorum requirement for a shareholder meeting is one-third of the outstanding shares of common stock.  In addition, a company listed on AMEX is required to state its quorum requirement in its bylaws.  The Companys quorum requirement is set forth in its Memorandum and Articles.  A quorum for a meeting of members of the Company is two persons present and being, or representing by proxy, members holding not less than 5% of the issued shares entitled to be voted at such meeting.

Proxy Delivery Requirement:  AMEX requires the solicitation of proxies and delivery of proxy statements for all shareholder meetings, and requires that these proxies shall be solicited pursuant to a proxy statement that conforms to SEC proxy rules. The Company is a foreign private issuer as defined in Rule 3b-4 under the 1934 Act, and the equity securities of the Company are accordingly exempt from the proxy rules set forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Securities Exchange Act of 1934, as amended.  The Company solicits proxies in accordance with applicable rules and regulations in Canada.

The foregoing are consistent with the laws, customs and practices in Canada.

In addition, we may from time-to-time seek relief under from AMEX corporate governance requires on specific transactions under Section 110 of the AMEX Company Guide by providing written certification



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from independent local counsel that the non-complying practice is not prohibited by our home country law, in which case, we shall make the disclosure of such transactions available on our website at www.eldoradogold.com.  Information contained on our website is not part of this annual report.



UNDERTAKING



Company undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.





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CONSENT TO SERVICE OF PROCESS



The Company filed an Appointment of Agent for Service of Process and Undertaking on Form F-X on October 31, 2002 with respect to the class of securities in relation to which the obligation to file the Form 40-F arises, which Form F-X is incorporated herein by reference.



|                                       |                                                                                                                                       
|-------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------
|DOCUMENTS FILED AS PART OF THIS REPORT
|1.                                     | Annual Information Form of the Company for the year ended December 31, 2005                                                           
|2.                                     | The following audited consolidated financial statements of the Company, are exhibits to and form a part of this Report:               
|                                       | Auditors Report on Consolidated Financial Statements                                                                                 
|                                       | Comments by Auditors for U.S. Readers on Canada  U.S. Reporting Differences                                                          
|                                       | Consolidated Balance Sheets as of December 31, 2005 and 2004;                                                                         
|                                       | Consolidated Statements of Operations and Deficit for the years ended December 31, 2005, 2004 and 2003;                               
|                                       | Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2004 and 2003;                                           
|                                       | Notes to Consolidated Financial Statements (which include reconciliation with United States generally accepted accounting principles).
|3.                                     | Management Discussion and Analysis of Financial Conditions and Results of Operations                                                  
|4.                                     | Management Information Circular dated March 20, 2006                                                                                  

|EXHIBITS
|--------
|99.1    
|99.2    
|99.3    
|99.4    
|99.5    
|99.6    
|99.7    
|99.8    





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|       |                                                  
|------ | -------------------------------------------------
|99.9   | Consent of Norm Pitcher, P.Eng.                  
|99.10  | Consent of John Edward Hearne, B.Sc (Min) Maus1MM
|99.11  | Consent of Harry Warries, M.Sc.                  
|99.12  | Consent of Stephen Juras, P.Geo.                 
|99.13  | Consent of Micon International                   
|99.14* | Consent of Hatch & Associates                    
|99.15  | Consent of RSG Global                            
|       |                                                  



*

The Registrant is in the process of obtaining this consent and intends to file the consent on Form 6-K, which will be incorporated by reference into this annual report.



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SIGNATURES



Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.





ELDORADO GOLD CORPORATION





By: Paul N. Wright

Name:

Paul N. Wright

Title:

President and Chief Executive Officer



Date: March 23, 2006





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Document 1 - Annual Information Form of the Company for the year ended December 31, 2005



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ELDORADO
GOLD CORPORATION

Suite
1188 - 550 Burrard Street

Vancouver,
British Columbia  V6C 2B5

Telephone:
(604) 687-4018

Facsimile:
(604) 687-4026

Website
Address: www.eldoradogold.com













ANNUAL
INFORMATION FORM



FOR
THE YEAR ENDED DECEMBER 31, 2005























March
23, 2006



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2



TABLE
OF CONTENTS



PRELIMINARY
NOTES

4

CORPORATE
STRUCTURE

5

BUSINESS
OF THE COMPANY

6

DESCRIPTION
OF THE BUSINESS

7

SUMMARY
REVIEW

7

Production
and Operation

7

Reserves
and Resources

8

REGIONAL
REVIEW

13

Turkey

13

Kisladag

13

Efemçukuru

18

Exploration

19

Environment

20

Associated
Projects

21

Acquisition
and Dispositions

21

China

22

Acquisition
of Afcan Mining Corporation

29

TJS

30

Exploration

37

Associated
Projects

38

Brazil

39

São
Bento

39

Exploration

42

Environment

43

Associated
Projects

43

FINANCE

44

GOLD
MARKET AND PRICE

45

FOREIGN
CURRENCY EXPOSURE

45

GOLD
REFINING, SALES AND HEDGING ACTIVITIES

45

EMPLOYEE
RELATIONS AND PERSONNEL

46

COMPETITION

46

RISK
FACTORS

47

CAPITAL
STRUCTURE

58

MARKET
FOR SECURITIES

59

DIVIDEND
POLICY

59

DIRECTORS
AND OFFICERS

59







---

3







TABLE
OF CONTENTS

(continued)



CORPORATE
GOVERNANCE AND BOARD COMMITTEES

61

LEGAL
PROCEEDINGS

63

INTEREST
OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

63

TRANSFER
AGENTS & REGISTRARS

63

MATERIAL
CONTRACTS

64

INTEREST
OF EXPERTS

64

ADDITIONAL
INFORMATION

64

GLOSSARY
AND METRIC EQUIVALENTS

65









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4



PRELIMINARY
NOTES



Incorporation
of Financial Statements and MD&A



Eldorado
Gold Corporation (unless the context otherwise requires references to "Eldorado",
the "Company", "us", "we" or "our" include Eldorado Gold
Corporation and each of its subsidiaries) prepares and files its Annual
Information Form ("AIF"), consolidated financial statements and Management
Discussion & Analysis ("MD&A") in United States ("US") dollars
and in accordance with

Canadian
generally accepted accounting principles ("GAAP") and reconciled to US GAAP.
Unless otherwise indicated, all dollar amounts in this AIF are expressed in US
dollars.  Our consolidated financial statements and MD&A are included
with our Management Proxy Circular and 2005 Financial Review and filed with
Canadian and United States ("U.S.") regulatory authorities. These documents
are available at www.sedar.com under the
Company's name. A copy of the Management Proxy Circular dated March 20, 2006
and 2005 Financial Review are available upon request.

Date
of Information

All
information in this AIF is as of March 23, 2006, unless otherwise indicated.

Forward-Looking
Statements

Some of the statements in this document may contain forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934 and forward-looking information within the meaning of the
Securities Act (Ontario), which involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Forward-looking statements are subject to a variety of risks and uncertainties that could cause actual events or results to differ from those reflected in the forward-looking statements. If one or more of these risks and uncertainties materializes, or if underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements.  We do not update forward-looking statements to reflect changing conditions, and we refer you to the full discussion of our business contained in our reports filed with securities regulatory authorities.



The
terms "Mineral Reserve," "Proven Mineral Reserve" and "Probable
Mineral Reserve" are Canadian mining terms as defined in accordance with
National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI
43-101") under the guidelines set out in the Canadian Institute of Mining,
Metallurgy and Petroleum (the "CIM") CIM Standards on Mineral Resources
and Mineral Reserves, adopted by the CIM Council as may be amended from time
to time by the CIM.



The
definitions of proven and probable reserves used in NI 43-101 differ from the
definitions in the United States Securities and Exchange Commission
("SEC") Industry Guide 7. Under SEC Guide 7 standards, a
"Final" or "Bankable" feasibility study is required to
report reserves, the three year history average price is used in any reserve or
cash flow analysis to designate reserves and the primary environmental analysis
or report must be filed with the appropriate governmental authority.



In
addition, the terms "mineral resource", "measured mineral
resource", "indicated mineral resource" and "inferred
mineral resource" are defined in and required to be disclosed by NI 43-101;
however, these terms are not defined terms under SEC Industry Guide 7 and
normally are not permitted to be used in reports and registration statements
filed with the SEC. Investors are cautioned not to assume that any part or all
of mineral deposits in these categories will ever be converted into reserves.
"Inferred mineral resources" have a great amount of uncertainty as to
their existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of an inferred mineral
resource







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5



will
ever be upgraded to a higher category. Under Canadian rules, estimates of
inferred mineral resources may not form the basis of feasibility or
pre-feasibility studies, except in rare cases.



Accordingly,
information contained in this report and the documents incorporated by reference
herein containing descriptions of our mineral deposits may not be comparable to
similar information made public by U.S. companies subject to the reporting and
disclosure requirements under the United States federal securities laws and the
rules and regulations thereunder.



ELDORADO
GOLD CORPORATION

CORPORATE
STRUCTURE

We
were incorporated by Memorandum of Association on April 2, 1992 under theCompanies
Act (Bermuda) under the name "Eldorado Corporation Ltd." On April 23,
1996, Eldorado was continued under the Company Act (British Columbia) and
changed its name to "Eldorado Gold Corporation". On June 28, 1996, Eldorado
was continued under the Canada Business Corporations Act. On November 19,
1996, pursuant to a plan of arrangement, Eldorado and HRC Development
Corporation were amalgamated under the laws of Canada under the name
"Eldorado Gold Corporation".

Our
head and principal office is located at Suite 1188 - 550 Burrard Street,
Vancouver BC, Canada, V6C 2B5. The Company, through its subsidiaries, also
maintains offices in:



Ankara,
Turkey

Uşak,
Turkey

Izmir,
Turkey

Beijing,
China

Xining,
China

Haixi
District, China

Santa
Barbara, Brazil

Belo
Horizonte, Brazil

Our
registered and records office and address for service is care of our solicitors,
Fasken Martineau DuMoulin LLP, Suite 2100 - 1075 West Georgia Street, Vancouver
BC, Canada, V6E 3G2.

Our
mining operation, the São Bento mine ("São Bento") and its late stage
development projects, the Kisladag project ("Kisladag") and the Tanjianshan
project ("TJS") are each managed by a general manager as decentralized
business units. We centrally manage exploration and acquisition strategies,
corporate financing, global tax planning and metal and currency risk management
programs at our head office in Vancouver. Our risk management program is
developed by senior management and monitored by the Board of Directors.







---

6



Our material assets are
owned through nine subsidiaries, as shown on the organizational chart below.



Notes:

1.    Shares in
the company are 100% beneficially owned by Eldorado or a wholly-owned
subsidiary.  1% of the shares of the company may be held by a nominee
sharelholder.

2.    In
accordance with the laws of Brazil, 51% of property in Brazil is required to be
held by a Brazilian national.  Sergio Martins, our Sr. Geologist in Brazil,
holds 51% of our Brazilian property, which holdings are subject to a trust
agreement.



BUSINESS
OF THE COMPANY

We
are engaged in the production of, development of and exploration for gold.
 We are also engaged in the acquisition of gold properties. Our business is
presently focused in Brazil, Turkey and China.

We
are engaged in the production of gold through the mining and processing of ore.
 We have one mine in production, 100% owned São Bento located near Santa
Barbara, Brazil. Our key development properties, which we are currently focused
on, are Kisladag located near Uşak, Turkey and TJS located in Qinghai
Province, China.

Our
growth strategy is to actively pursue future opportunities by way of discovery
of new projects by grass-roots exploration and the acquisition of advanced
exploration, development or low cost production assets, preferably with sound
management and potential for increased resources.  At any given time,
discussions and activities with respect to such possible opportunities can be in
process on such initiatives, each at different stages of due diligence.  We
are currently engaged in discussions with respect to such possible opportunities
but have no binding agreements or commitments to enter into any such
transactions and there is no assurance that any potential transactions
will be successfully completed.







---

7



DESCRIPTION
OF THE BUSINESS

SUMMARY
REVIEW

Production
and Operation

The
following table summarizes São Bento's production and operating information
from 1998 through 2005:



|                                                 |                                                                 |                                                  |                                        |                                                                 |                                             |                                            
|------------------------------------------------ | --------------------------------------------------------------- | ------------------------------------------------ | -------------------------------------- | --------------------------------------------------------------- | ------------------------------------------- | -------------------------------------------
|Year                                             | Ore
      Tonnes                                                | Grade
      (g/t)
      (1)                      | Recovery
      (%)                     | Production
      (ozs.)                                         | Operating
      Cash Costs (2)              | Total
      Production Costs(2)            
|                                                 |                                                                 |                                                  |                                        |                                                                 | $                                           | $                                          
|2005                                             | 310,703                                                         | 7.67                                             | 89                                     | 64,298                                                          | 407                                         | 564                                        
|2004                                             | 366,729                                                         | 8.40                                             | 89                                     | 82,024                                                          | 294                                         | 358                                        
|2003                                             | 374,130                                                         | 9.13                                             | 92                                     | 95,049                                                          | 234                                         | 364                                        
|2002
      2001
      2000
      1999
      1998 | 381,295
      417,609
      525,893
      540,014
      467,215 | 9.47
      9.13
      7.95
      8.18
      7.60 | 93
      91
      93
      92
      93 | 103,533
      102,841
      112,950
      126,581
      108,572 | 184
      216
      195
      184
      250 | 282
      306
      270
      251
      324



(1)

Grams
of gold per metric tonne.

(2)

Calculated
in accordance with the Gold Institute Production Cost Standard, under which
total production costs are made up of total cash costs (operating cash costs
plus royalties) plus depreciation, depletion and reclamation provisions.



|                                |         |                
|------------------------------- | ------- | ---------------
|Projected
      2006 Production
|Mine                            | Ounces  | Cash
      Cost
|Kisladag                        | 120,000 | $215           
|TJS                             | 40,000  | $320           
|Total
      (TJS & Kisladag)    | 160,000 | $241           
|São
      Bento                 | 71,350  | $405           
|Grand
      Total               | 231,350 | $292           

We
expect our cash costs in 2007 to decrease significantly as higher cost of
production from São Bento is replaced by lower cost of production at Kisladag
Phase II, and we realize the benefit of a full year of production at TJS with a
lower strip ratio than in 2006.









---

8



Reserves
and Resources

Reserves



Eldorado
has estimated proven and provable mineral reserves for São Bento, Kisladag,
Efemçukuru, and TJS. Except for Efemçukuru, all reserves are calculated in
accordance with NI 43-101. The estimates for São Bento and TJS are as of
December 31, 2005 and were based on a gold price of $450. The December 31, 2004
estimate for Kisladag was not updated at the end of 2005 since there was no
processing of ore during 2005 and the pit economics are not particularly
sensitive to gold price.  The Kisladag estimate was calculated using a gold
price of $350. Our estimate of reserves for Efemçukuru was calculated as of
December 31, 2000 using a gold price of $325.

The
cut-off grades for the deposits are based on assumptions for plant recovery,
gold value, mining dilution and recovery, along with operating and capital cost
projections that are based on historical production figures. Estimated reserves
and resources may have to be recalculated based on actual production or
exploration results. Changes in the price of gold, increased production costs or
changes in the recovery rate may make it unprofitable to develop the proven and
probable reserves at a particular property or for a specific mine.

The
cut-off grades used in the reserve estimations are:



|                    |               
|------------------- | --------------
|Cutoff
      Grades | (Au
      g/t)
|                    |               
|Kisladag            |               
|Oxide               | 0.35          
|Sulfide             | 0.5           
|                    |               
|São Bento           | 4.5           
|                    |               
|TJS                 | 1.5           
|                    |               
|Efemçukuru          | 6.0           









---

9



Proven and Probable
Reserves

|              |          |                    |                    |                             
|------------- | -------- | ------------------ | ------------------ | ----------------------------
|Property      |          | Tonnes
      (000) | Grade
      g/t Au | Contained
      Ounces (000)
|              |          |                    |                    |                             
|São Bento     | Proven   | 235                | 9.25               | 70                          
|              | Probable | 103                | 7.60               | 25                          
|              | Total    | 338                | 8.75               | 95                          
|              |          |                    |                    |                             
|Kisladag      | Proven   | 54,008             | 1.25               | 2,170                       
|              | Probable | 81,012             | 1.11               | 2,891                       
|              | Total    | 135,020            | 1.16               | 5,062                       
|              |          |                    |                    |                             
|Efemçukuru(1) | Proven   |                    |                    |                             
|              | Probable | 1,856              | 13.14              | 784                         
|              | Total    | 1,856              | 13.14              | 784                         
|              |          |                    |                    |                             
|TJS           | Proven   | 2,125              | 3.36               | 230                         
|              | Probable | 6,331              | 4.35               | 885                         
|              | Total    | 8,456              | 4.10               | 1,115                       
|              |          |                    |                    |                             
|Total         | Proven   | 56,368             | 1.36               | 2,470                       
|              | Probable | 89,302             | 1.60               | 4,586                       
|              | Total    | 145,670            | 1.51               | 7,056                       
|              |          |                    |                    |                             



(1)
Reserve estimates for Efemçukuru were made before NI 43-101 came into force and
have not been revised in accordance with NI 43-101.

Reconciliation
of Reserves

|          |                                                        |                                               |                                                                        |                                                       
|--------- | ------------------------------------------------------ | --------------------------------------------- | ---------------------------------------------------------------------- | ------------------------------------------------------
|Mine      | Reserves
      December 31, 2004
      (000
      oz.) | Recovered
      in 2005
      (000
      oz.) | Other
      Increase (Decrease) in Reserves 2005
      (000
      oz.) | Reserves
      December 31, 2005
      (000
      oz.)
|São Bento | 307                                                    | 64                                            | 138                                                                    | 95                                                    

The
following table reconciles Eldorado's mineral reserves after taking into
account gold production for 2005:

Resources
(1)

















---

10



The
following table presents the measured, indicated and inferred mineral resources
for São Bento, Kisladag, Efemçukuru, TJS and some of our exploration projects
for a specific date and based on specific gold prices and cut-off grades. Except
as noted, all resources are calculated in accordance with NI 43-101.These
resource estimates include the estimated reserves outlined above.



|           |           |                    |                    |                             
|---------- | --------- | ------------------ | ------------------ | ----------------------------
|Property   | Resources | Tonnes
      (000) | Grade
      g/t Au | Contained
      Ounces (000)
|           |           |                    |                    |                             
|São Bento  | Measured  | 284                | 12.12              | 111                         
|           | Indicated | 84                 | 10.16              | 27                          
|           | M+I       | 368                | 11.73              | 138                         
|           | Inferred  | 0                  | 0.00               | 0                           
|           |           |                    |                    |                             
|Kisladag   | Measured  | 59,081             | 1.23               | 2,336                       
|           | Indicated | 155,723            | 0.97               | 4,856                       
|           | M+I       | 214,804            | 1.04               | 7,193                       
|           | Inferred  | 45,500             | 0.75               | 1,097                       
|           |           |                    |                    |                             
|Efemçukuru | Measured  | 665                | 15.11              | 323                         
|           | Indicated | 1,172              | 13.94              | 525                         
|           | M+I       | 1,837              | 14.36              | 848                         
|           | Inferred  | 522                | 12.07              | 203                         
|           |           |                    |                    |                             
|TJS (3)    | Measured  | 2,541              | 3.05               | 249                         
|           | Indicated | 9,325              | 3.66               | 1,097                       
|           | M+I       | 11,866             | 3.53               | 1,346                       
|           | Inferred  | 1,723              | 4.32               | 239                         
|           |           |                    |                    |                             
|Piaba (2)  | Measured  |                    |                    |                             
|           | Indicated | 6,273              | 1.27               | 256                         
|           | M+I       | 6,273              | 1.27               | 256                         
|           | Inferred  | 4,322              | 1.27               | 178                         
|           |           |                    |                    |                             
|Total      | Measured  | 62,571             | 1.50               | 3,019                       
|           | Indicated | 172,577            | 1.22               | 6,762                       
|           | M+I       | 235,148            | 1.29               | 9,782                       
|           | Inferred  | 52,067             | 1.03               | 1,717                       

(1)

Mineral
resources that are not mineral reserves do not have demonstrated economic
viability.

(2)

Piaba
resources in the above table represent Eldorado's 50% interest.

(3)

TJS
resources and reserves represent 100% of the project of which we control 85%.

(4)

Mineral
resources do not include mineral reserves.







---

11



The effective dates, cut-off gold grades (Au g/t) and specific gold prices for the resource estimates are:



Sao BentoDec 31 20056.4375.00KisladagDec 31 20040.4350.00EfemcukuruFeb 16 19996.0325.00TJSDec 22 20051.0400.00




(1)  Resource estimate for Piaba was made prior to NI43-101 came into force and have not be revised in accordance with NI 43-101.



The
following are the "qualified persons" (as defined in NI 43-101) who verified
the technical data disclosed in this AIF relating to the reserve and resource
estimates at São Bento, Kisladag, Efemçukuru and TJS.

São
Bento, Brazil

|               |                                                                                                                                                 |               |                                    
|-------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | -----------------------------------
|Name:          | Sergio Martins                                                                                                                                  | Company:      | São Bento
      Mineraçao SA       
|Position:      | Geology Manager                                                                                                                                 | Relationship: | Employee of our
      subsidiary   
|Qualification: | M.Sc. (Geo. &
      Mineral Resources)
      Member of the
      Assoc. of  P. Geologists of Brazil, Society of Economic Geologists of
      US |               |                                    
|               |                                                                                                                                                 |               |                                    
|Name:          | Norm Pitcher                                                                                                                                    | Company:      | Eldorado Gold
      Corporation    
|Position:      | Chief Operating
      Officer                                                                                                                   | Relationship: | Senior Officer of
      the Company
|Qualification: | P. Geo.
      Association of
      Professional Engineers and Geoscientists of British Columbia.                                                |               |                                    

Kisladag,
Turkey

|               |                                                                                                 |               |                                  
|-------------- | ----------------------------------------------------------------------------------------------- | ------------- | ---------------------------------
|Name:          | Gary Giroux                                                                                     | Company:      | Micon
      International Limited
|Position:      | Associate                                                                                       | Relationship: | Independent
      Consultant     
|Qualification: | P. Eng.
      Association of Professional Engineers and Geoscientists of British
      Columbia |               |                                  
|               |                                                                                                 |               |                                  
|Name:          | Callum Grant                                                                                    | Company:      | Formerly with
      Hatch Ltd.   
|Position:      | Associate                                                                                       | Relationship: | Independent
      Consultant     
|Qualification: | B.Eng.
      Association of
      Professional Engineers and Geoscientists of British Columbia  |               |                                  









---

12



TJS,
China

|               |                                                                                                 |               |                                
|-------------- | ----------------------------------------------------------------------------------------------- | ------------- | -------------------------------
|Name:          | Stephen Juras                                                                                   | Company:      | Eldorado Gold
      Corporation
|Position:      | Manager, Geology                                                                                | Relationship: | Employee of the
      Company  
|Qualification: | P. Geo.
      Association of Professional Engineers and Geoscientists of British
      Columbia |               |                                

Efemçukuru,
Turkey



|               |                                                                                                 |               |                                        
|-------------- | ----------------------------------------------------------------------------------------------- | ------------- | ---------------------------------------
|Name:          | Gary Giroux                                                                                     | Company:      | Micon
      International
      Limited
|Position:      | Associate                                                                                       | Relationship: | Independent
      Consultant           
|Qualification: | P. Eng.
      Association of Professional Engineers and Geoscientists of British
      Columbia |               |                                        







---

13



REGIONAL
REVIEW

Turkey

[aif001.jpg]

Although
gold mining in Turkey predates Roman times, production of gold in modern times
began in 2001 with the start-up of the Ovacik mining operation in Izmir
province. Turkey has considerable potential for gold exploration and production.
A substantial mining industry supported by well-developed infrastructure exists
throughout the country. Mineral production is dominated by industrial and base
metal sectors, operated by both domestic and foreign mining companies.

Kisladag

Kisladag
in Uşak Province, Turkey is our key development project and will begin
producing gold in 2006.

Property
Description

The
Kisladag land position consists of one pre-operating licence (number IR 7302),
having a total area of 15,717 hectares. Mineral licences are granted
indefinitely, assuming licence fees are paid in a timely manner.

Ownership
Interest

We
own a 100% interest in Kisladag through our wholly owned Turkish subsidiary Tüprag
Metal Madencilik Sanayi Ve Ticaret Limited Sirketi ("Tüprag").

Location,
Climate and Access

Kisladag
is located in western Turkey in Uşak Province, 35 kilometers southwest of
the city of Uşak and 180 kilometers from the Aegean port city of Izmir. The
project sits on the western edge of the Anatolian







---

14



Plateau,
in gentle rolling topography, at an elevation of approximately 1,000 meters. The
climate is arid with hot summers and cold winters. Annual rainfall is around 425
millimeters, occurring mainly from November to March. Economic activity in the
area consists of a mixture of subsistence farming and grazing. All-season access
to Kisladag is provided by paved highways and roads.

Acquisition

Kisladag
was acquired from Gencor Limited on July 4, 1996, as part of a portfolio of
assets.

Geology
and Mineralization

Kisladag
is located in one of several mid- to late-Tertiary volcanic complexes in western
Turkey, related to subduction along the Hellenic Trench southwest of Turkey. In
the Kisladag region, the volcanoes erupted onto a basement of schist at the
northeast margin of the Menderes Massif.

Gold
mineralization at Kisladag is hosted by a number of latitic intrusive bodies.
Our exploration has outlined two alteration zones. The Gökgöz Tepe alteration
zone covers approximately 12 square kilometers. At Gökgöz, a coarsely
porphyritic latite is host to the bulk of the gold mineralization and has
undergone extensive and intensive hydrothermal alteration. An early potassic
phase of alteration has been recognized, which is overprinted by later
quartz-tourmaline and advanced argillic alteration. Gold mineralization forms an
annular zone around a later weakly mineralized stock of similar composition.
Gold is associated with multiple phases of tourmaline-pyrite, pyrite and
quartz-pyrite veining and brecciation and is accompanied by small amounts of
base metals, principally zinc and molybdenum. Oxidation in the deposit is
shallow over the barren intrusive but extends to depths of 40 to 50 meters to
the west and east. Limonite is the most abundant oxide mineral, usually
occurring along fractures in thin colloform layers and in disseminated patches
around weathered pyrite.

The
Sayacik alteration zone is located six kilometers southwest of Gökgöz Tepe and
covers approximately six square kilometers. Moderate to strong silicification
occurs for approximately 1.5 kilometers in andesitic tuffs. Quartz barite
veinlets cutting the tuff contain up to 100 parts per million silver in grab
samples.

Data
Verification

The
original data used to prepare the Kisladag resource and reserves statements has
been reviewed by Micon International ("Micon"). Micon has carried out two
site visits to review our QA/QC procedures during drilling, sampling and sample
preparation. Micon's opinions are based on information in technical reports
prepared by Kilborn Engineering Pacific Limited ("Kilborn") or us.

Previous
Exploration

Since
1996, our exploration activities at Kisladag have focused primarily on the zone
known locally as Gökgöz Tepe, using stream sediment sampling, geochemical soil
sampling and an IP geophysical survey. On the basis of this work, we identified
a gold anomaly along the north slope of Gökgöz Tepe extending approximately
1,200 meters on strike by 600 meters wide. This work was followed in 1997 by
2,745 meters of trench sampling and 1,541 meters of percussion drilling.

In
1998, a six hole HQ diamond drilling program (1,059 m) probing the main anomaly
target followed the gold mineralization to depths of greater than 250 meters and
effectively confirmed the potential for a low grade bulk tonnage gold deposit,
and in 1999 an additional 5,212 meters of HQ core drilling and 1,600 meters
of trenching extended the strike length and depth of the deposit. Based on the
trenching, percussion drilling and core drilling data available to that date,
Micon and Eldorado identified a Measured and Indicated Resource of 42.8 million
tonnes of 1.49 g/t, plus an Inferred Resource of 31.1 million tonnes at
1.35 g/t (all based on a 0.8 g/t cut-off grade).







---

15



In
2000, an RC drill program totalling 7,605 meters (and 577 m of diamond drilling
"DDH") led to a revised resource estimate and a significant increase in the
deposit's contained metal content. That year, Micon reported a Measured and
Indicated Resource of 125.97 million tonnes for the deposit at an average grade
of 1.20 g/t gold, that is 4.85 million ounces of contained gold in oxides and
primary ore (using a cut-off grade of 0.4g/t Au).

In
2002, a combined total of 10,700 meters of RC and DDH drilling was completed.

The
metallurgical testwork we initiated during 1999 and 2000 indicated that the ore
would be amenable to heap leaching, and in 1999, we were granted a Site
Selection Permit by the Turkish authorities for a gold mining operation at
Kisladag. Early receipt of this permit was made possible by the high level of
support the project has received from within the Uşak province as well as
at the central government level.

Based
on this concept of recovering gold, in 2001 we commissioned a Prefeasibility
Study by Kilborn. This study considered an operation to treat 3.4 million tonnes
per year of material based on an owner-operated mining fleet and a three-stage
crushing circuit generating a final crush size of 100% minus 8 mm. The objective
of this approach was to minimize capital expenditures in the early years and
allow for expansion to develop the total resource at a later date. Initial
capital cost was estimated to be $47.4 million with a cash operating cost
estimated at $154 per ounce and an average annual gold production of 103,600
troy ounces.

Subsequent
to issuing the Prefeasibility Study, we asked Kilborn to review the project
conditions in light of the devaluation of the Turkish currency and to
incorporate the option of contracting the mining operation and utilising used
crushing equipment. In December 2001, an Addendum to the Prefeasibility Study
presented a revised initial capital cost estimate of $29.6 million and a cash
operating cost estimate of $149 per ounce.

Our
procedures for sample collection, sample preparation and security of samples
have been audited by Micon. Sample assaying is carried out by ALS Chemex in
Vancouver, BC, Canada. ALS Chemex has attained ISO 9002 Registration by KPMG
Quality Registrars for providing assay and geochemical analytical services. A
routine of check assay duplicates and standards has been followed for all assay
work completed.

For
a detailed discussion of exploration activities conducted at Kisladag, including
sampling and analysis, see the Kisladag Reports listed on page 18 of this AIF
that are available at www.sedar.com.

Development
Activities

Since
we discovered Kisladag in 1997, it has advanced through various stages of
exploration to final feasibility stage. The following is a record of the
developments for the past three years and related technical reports.

We
completed a Scoping Study on the property in 2000, a Prefeasibility Study in May
2001, an Addendum Report to the Prefeasibility Study in November 2001, an
Updated Reserve Report in May 2002, a Feasibility Study in March 2003 and a
Feasibility Cost Update in May 2004.



In 2003,
Kisladag received two significant permits from the Turkish Government: the
Environmental Positive Certificate and the Establishment Permit. The acceptance
of the Environmental Impact Assessment Report ("EIA") and the issuance of
the Environmental Positive Certificate was a major achievement in the permitting
process. Receiving the Establishment Permit provides approval for water use and
effluent discharge plans, and it also defines the health protection zone and
medical treatment facilities for Kisladag.

In
March 2003, a Feasibility Study was prepared in accordance with the Standards of
Disclosure for Mineral Projects as defined by NI 43-101. This was followed by an
Optimization Study in July 2003 and







---

16



an
additional 7,057 meters of drilling in 2003, which culminated in a further
increase in the mineral resource as reported in September 2003.



On April
1, 2003, we announced the results of a Feasibility Study prepared by Hatch Ltd.
(formerly Associates Ltd.) of Vancouver ("Hatch"), which reported subject to
the qualifications, assumptions and exclusions set out in the Feasibility Study,
4,532,000 ounces of proven and probable reserves. By year-end, additional
drilling efforts increased reserves by 17% to proven and probable reserves of
5,310,900 ounces.



On July
29, 2003, we announced the results of the Optimization Study for Kisladag,
demonstrating the opportunities to both improve the financial performance of the
Kisladag project and accelerate the expansion of Kisladag to full production
levels.



In April
2004, we acquired all the necessary public and private land, updated the
Feasibility Study to reflect 2004 projected costs, completed the permitting
process and obtained all approvals from the Turkish authorities for constructing
Kisladag. In the fourth quarter of 2004, we began installing site services and
completing two process water wells. In December 2004, we began earthwork
excavation for constructing the first phase of the leach pad.

In
May 2004, we completed a Feasibility Cost Update to the Feasibility Study of
March 2003. The Cost Update included an updated review of the elements
contributing to the operating and capital cost structure of Kisladag, and
specifically included the addition of the Value Added Tax ("VAT") in Turkey
to the costs of goods and services used in constructing and operating the
project. The Cost Update also took into account the increased costs of
construction and operating materials, such as concrete, steel and fuel.

In
July 2004, the Government of Turkey passed two major pieces of legislation. The
Turkish VAT Law was amended to exempt the gold mining industry from paying VAT
on their activities, including exploration, construction, purchase of equipment,
mine operation, smelting and refining. The amendment positively impacted
Kisladag, with the initial capital investment decreasing by $10.7 million and
cash operating costs decreasing by $23 per ounce to $165 per ounce. In addition,
the Mining Law consolidated the activity of all sectors of the industry,
including hard rock, soft rock and industrial minerals mining, as well as
quarrying and aggregate industries. The amendments included the following:
access to lands previously restricted from mining activities is now possible
through a general regulation of the Council of Ministers; fund fees of 5% on
capital installations on certain forest lease lands no longer apply;
Expropriation Law No. 2942, which governs the procedure to acquire land critical
to fulfillment of investment, now applies to mining activities; finally, a
royalty on ore processed off-site must be paid to the State for mining
activities amounting to 2% of the sales value of the ore mined and a royalty on
ore processed onsite is reduced to 1%.

In
September 2004, we received the final permit for Kisladag, and began site
activities. The initial capital cost for construction is estimated to be $83.4
million. Life of mine (14 years) cash operating cost is estimated to be $165 per
ounce, based on $4.12 per tonne of ore processed.

Construction

Construction
of Kisladag will be completed in two major phases. The first phase will include
the bulk of the infrastructure, equipment and earthworks required to process
both oxide and primary ore during the first year of operation. The second phase,
to be completed in Q4 2006, will entail expanding the crushing circuit to
increase production throughput to the final design capacity of 10 million tonnes
annually. There will also be minor subsequent construction phases associated
with expanding the heap leach pad and closing the project.



During
2005, we began constructing the crushing, screening and gold recovery circuits.
 Preproduction mining using a mine contractor also got underway.
 Mechanical completion of the process and ancillary







---

17



facilities
should be complete by the first quarter of 2006, with commissioning and start-up
to follow. As at December 31, 2005 construction at Kisladag was 88% complete.
 Revisions to the capital budget estimates at Kisladag were reported in the
second quarter of 2005 and remain on target, with a forecasted estimate of
$83.40 million.  We have revised the production schedule to take into
account the new starting date and are currently projecting production of 120,000
ounces of gold in 2006, increasing to 240,000 ounces in 2007 with the completion
of Phase II of the plant construction.  Cash costs are estimated to be $215
in 2006.

Projected
Production

A
mine production rate of 5 million tonnes per year ("mtpa") of ore has been
set for the first year of the mine's life. The average daily production rate
is expected to be 16,100 tonnes per day ("tpd") in ore and 13,000 tpd in
waste during this initial year. Annual ore production is expected to increase to
10 mtpa the following year, remaining at that level until the end of mine life.
The highest daily production rate is expected to occur in Year 7, with a total
movement of 79,000 tpd (ore plus waste). Total quantities of ore and waste will
be 135 million tonnes and 108 million tonnes (respectively) over the mine life.
The overall strip ratio will be 0.8. A mining contractor will initially be
employed for waste movement and ore mining. In Year 3 of operations, we expect
to begin phasing in our own mining fleet (at an estimated cost of $47 million)
and mine workforce for completing the project.

Extensive
metallurgical bench scale studies and column leach tests have identified that
Kisladag ore is amenable to heap leaching technology. A gold recovery of 81% is
projected for the oxide ore. The primary ore has a higher sulphide content and
gold recovery is projected to be 60%. The ore will require a crush size of 80%
passing 6.3 mm and a leach period of 90 days.

The
Kisladag ore will be processed in a standard heap leach facility containing a
three-stage crushing circuit, an overland conveyor to the heap leach pad, mobile
conveyors and a stacker for placing the ore and a carbon adsorption facility (ADR
plant) for recovering the gold. The carbon will be treated on-site in a refinery
and the final mine product will be gold doré bar. The average gold production
in the first year of operation is expected to be 144,000 ounces, increasing to
240,000 ounces per year for the balance of mine life.



Personnel



The
project will employ 356 people at maximum production, with the majority of
workers drawn from the local region. Infrastructure to support the mine includes
an access road, a water well field with a 13- kilometer water pipeline and a
30-kilometer power transmission line. Supplies and services are accessed from
the city of Uşak, 35 kilometers to the north.

Permitting

We
received the Site Selection Permit for Kisladag from the Provincial Governors
Office in 1999, confirming that there are no development conflicts in the
proposed project area. In June 2003, we received the Environmental Positive
Certificate from the Ministry of Environment ("MOE") following a successful
review of the EIA. The permit contains agreed protocols between us and the
Ministry for mitigation methods, monitoring standards, closure procedures and
financial guarantees.



In
September 2003, the Turkish Ministry of Health changed regulations relating to
the permitting of industrial activities, which significantly reduced and
simplified the remaining permitting requirements for the Kisladag project and
will benefit subsequent mine permitting in Turkey. The changes incorporate
permission for water use, electrical use, sanitation and certain other design
features affecting public health issues into the Establishment Permit issued by
the Ministry of Health. Zoning approval is then required from the Ministry of
Public Works, a process clarification of intended land use with related
government agencies. Intended legal access to the lands in question is required
at this stage. Submission and approval of construction level drawings is
required for permission to begin construction of facilities.







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18



An
Operating Permit - the final stage of the permitting process - is issued
once operations have begun and the Company has complied with all received
approvals and permits.



Litigation

Litigation
by certain third parties continues against Tüprag and the Turkish MOE seeking
to cancel the Positive Certificate for Kisladag on the basis of an alleged
threat to the environment.  We are confident in both the methodology of the
EIA Report and Tüprag's compliance with all procedural steps taken in
obtaining the Positive Certificate.  We continue to believe that we will
successfully defend this litigation.  The litigation has not impacted the
ongoing construction of Kisladag.  If we are unsuccessful in defending this
litigation, our ability to conduct mining operations at Kisladag may be
adversely affected, which may adversely affect production and revenue from
Kisladag.

Kisladag
Reports

Kisladag
is the subject of the following independent reports (the "Kisladag Reports"):
"Estimation of Resources, Kisladag Project, Turkey" (October 1999), "Addendum
to October 1999 Report titled Estimation of Resources, Kisladag Project" (May
15, 2000) and "Update of Resources, Kisladag Project, Uşak, Turkey"
(October 2000 and amended November 2000 and January 2001), all prepared by Micon
International; "Kisladag Gold Project Pre-Feasibility Study" (May 2001) and
"Kisladag Gold Project Pre-Feasibility Study Addendum" (December 2001),
prepared by Kilborn Engineering Pacific; "Updated Reserve Report for the
Kisladag Gold Project Western Turkey" (April 18, 2002 and revised May 9,
2002), prepared by Micon International; and a Feasibility Study (March 2003),
the "Kisladag Optimization Study" (July 2003) and the "Feasibility Cost
Update" (May 2004), all prepared by Hatch. The Kisladag Reports are available
at www.sedar.com under our name, and they
should be reviewed to put the preceding discussion in context.

Efemçukuru

Efemçukuru
is located in Izmir province, and is our secondary development project in
Turkey.

Ownership
Interest

We
own a 100% interest in Efemçukuru through our subsidiaries. Efemçukuru
consists of two pre-operation licences covering 3,072 hectares.

Location
and Access

Efemçukuru
is located in Izmir Province near the coast of western Turkey, approximately 20
kilometers from the provincial capital of Izmir. The nearest settlement, the
village of Efemçukuru (population 500), is located two kilometers to the south.
The project is located in hilly terrain at an elevation of 520 to 760 meters.
Access to Efemçukuru is provided by various paved and unpaved roads connecting
the village with other local population centres.

Geology
and Mineralization

Gold
mineralization is hosted by the 1,800 meter Kestane Beleni Vein, which contains
the present resource, and the less explored Kokarpinar Vein, which is 2,500
meters in length. Both strike southeasterly (160°E), dip 60°E to 70°E
northeast and postdate the emplacement of rhyolitic dikes, although the veins
may follow dike-occupied fracture zones for short distances.

Mineralization
occurs as open space fillings. Multi-stage breccia, quartz carbonate veinlets,
cockade and laminated textures are common. Non-metallic host rock minerals
include quartz, rhodonite and rhodochrosite. Associated sulphides include
pyrite, pyrrhotite, chalcopyrite, sphalerite and galena, and their oxidized
products. Most of the gold is very fine (2.5 to 50 microns), occurring as free
grains in quartz and carbonate, and as inclusions in sulphide minerals. Lower
grade stockwork mineralization







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19



occurs
locally between ore shoots, and is relatively abundant in the hanging wall
irrespective of rock type. Such stockworks are not common in the footwall.

Previous
Exploration

The
target identified at Efemçukuru is a high-grade vein-hosted gold system. In
1997, we completed a drilling program along the north, middle and south ore
shoots. A total of 4,092 meters of diamond drilling further delineated the
initial identified resource of 660,000 ounces, which increased the resource to
1.1 million ounces contained in 2.52 million tonnes, at an average grade of
13.71 grams per tonne. The drill hole pattern was reduced to approximately 50 by
35 meters and additional diamond drilling was carried out for hydrogeological
testing in the vein structure as well as the hanging wall and footwall rocks.
Assay data from this program was incorporated into the database for the deposit.

In
1998, Micon evaluated the geological model and confirmed a measured and
indicated resource of 1.87 million tonnes at 14.26 g/t, with an inferred
resource of 660,000 tonnes at 11.99 g/t. Reserves of 784,000 ounces were
established during an internal Prefeasibility Study completed in 1999. As these
resource estimates were made according to Australasian classification before NI
43-101 came into effect, they may vary materially from estimates made in
accordance with NI 43-101. The estimates are provided in connection with the
discussions of previous exploration.

Development
Activities

In
2004, we continued our preparation of the EIA, which we submitted to the MOE in
2005.  We received the Positive Certificate in 3Q of 2005 signalling the
successful completion of the first stage of permitting for Efemçukuru.



In 2006,
we are proceeding with the permitting process and land acquisition.  A
Feasibility Study is expected to be completed by the end of the third quarter of
2006.  Our development schedule for Efemçukuru anticipates that
construction will begin in 2007 and the mine will begin producing gold in 2008.



Litigation



In 2004,
litigation was filed by certain third parties against the MOE and Tüprag
seeking to cancel the mineral license for Efemçukuru on the basis of an alleged
threat to the water quality in the local catchment area.  During the course
of this litigation a lower court issued an injunction, and while in effect the
injunction prevented the commencement of mining activities at Efemçukuru.
 The injunction was overturned in 2005 by a higher court and the mining
license has been re-issued.  We continue to proceed with our 2006 work
plan.



Exploration

In
2005, we continued to carry out exploration work through Tüprag in the Biga
Peninsula in western Turkey and the Western Pontide belt, and in the
west-central Anatolian Plateau around Kisladag. Primary targets remain low
sulphidation, epithermal high-grade vein systems as well as disseminated, high
sulphidation precious metals systems. The total 2006 exploration budget for
Turkey is $6.3 million.



AS
Project

Our
50/50 Joint Venture, the AS Project, consists of 27 licences covering a total of
58,642 hectares. This property, discovered during a reconnaissance program in
2001 and 2002, includes a porphyry-style gold-molybdenum-copper deposit that has
alteration styles similar to those at Kisladag. In 2004, we completed the
permitting and construction of six kilometers of roads through the center of the
anomaly for mapping, sampling and drill access.  Drilling results from the
2004 drill program have confirmed AS to be an extensive copper-gold porphyry
system.  In 2005, our exploration activities in Turkey focused on the AS







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20



Project.
 In 2006 we will use the 2005 drill results, along with recently completed
geophysical survey data (ground magnetics and IP), geologic mapping and soil
geochemistry, to continue to outline the porphyry-style mineralization over the
target areas.  We will also start preliminary metallurgical test work on
core samples and complete a preliminary site layout study.  The
2006 work plan consists of 23,000 meters of diamond drilling, 50 line-kilometers
of IP geophysics, and extending the gold and copper geochemical surveys.Tüprag's
share of the exploration budget for AS in 2006 is $3.1 million.  See also
Associated Projects - AS Joint Venture page 19.



Koyulhisar
Project

In
the Pontide Volcanic Belt in Eastern Turkey, work will continue at the
Koyulhisar project ("Koyulhisar").  The targets at Koyulhisar are both
bulk tonnage disseminated precious metal systems and higher grade vein systems.
Our 2006 work plan includes a magnetic survey over the existing geochemical
anomalies and 4,500 meters of core and reverse circulation drilling as a
first-pass drill program.  The Koyulhisar exploration budget is $1.2
million.



Mahmur
Tepe Project

In
the Biga Penninsula, we will be working at the Mahmur Tepe project ("Mahmur
Tepe"), where the target is high density, near surface gold bearing fractures
and quartz veins.  During 2005, a soil geochemical survey resulted in Au
values greater than 1 gram per ton in soils coincident with a strong magnetic
anomaly.  The extent of the gold anomaly is approximately 1,500 x 1,000
meters, and coarse crystalline gold has been panned from soils.  The Mahmur
Tepe 2006 work plan consists of trenching and 1,500 meters of core drilling with
an exploration budget of $500,000.



Bayramic
Project

In
western Turkey, we plan to complete 1,500 meters of RC drilling at the Bayramic
project ("Bayramic") in early 2006, where the target is a coincident
geochemical (Au and Cu) and geophysical (IP and Mag) anomaly in porphyritic
intrusive rocks.  The exploration budget for Bayramic in 2006 is
approximately $200,000.

To
continue the pipeline of projects in Turkey we will have two crews conducting
reconnaissance on our existing projects in western and eastern Turkey as well as
examining new prospects and acquiring new licenses as appropriate to our
expansion philosophy.



Environment

We
have conducted extensive environmental testing and monitoring at our Turkish
development projects to firmly establish baseline data and characteristics for
air, water and soil.

The
Environmental Impact Assessment report on the Kisladag project provided an
in-depth analysis of the potential environmental and social impacts of the
project and identified measures to mitigate these impacts. All aspects of the
project design have considered international best practices used by the mining
industry to protect the environment in the short and long term and to maintain
the health and safety of workers and the community in which it operates.

In
2004, we dedicated a potable water system for nine local villages surrounding
Kisladag. Also in 2004, we equipped a mobile community medical van with supplies
and equipment. In 2005, we continued to work with the Canadian International
Development Agency to implement one of the agriculture initiatives identified
through the Sustainable Development Plan we helped to develop the area.
  At the Kisladag we expanded our monitoring program of ground water
wells and dust monitors and implemented our EIA monitoring program and have
placed the environmental monitoring team.







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21



Associated
Projects



AS
Joint Venture



In May
2001, we signed an agreement with Demir Export A.S. that established the basis
for a 50-50 joint exploration, development and subsequent exploration of metal
mines in Turkey in 27 licenses covering over 58,642 hectares.  In April
2004, we agreed to extend the agreement for a further two-year period. See also
Exploration - AS Project page 18.



Acquisition
and Dispositions



Kaymaz
& Kuçükdere



In 2003,
we wrote down our Kaymaz and Kuçükdere projects from $4.275 million to nil as
the projects were no longer technically viable as an on-site mine and gold
recovery operation.  In 2005, Tüprag sold its Kaymaz and Küçükdere mine
operation licenses and immovable property together with all rights and
obligations to Koza Altın İşletmeleri A.Ş.  The sale
price of the licenses and property is $5.5 million; $3.0 million on signing the
agreement and $2.5 million on the first anniversary of the transaction date.





















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22



China

[aif002.jpg]

The
People's Republic of China ("PRC" or "China") is situated in Eastern
Asia and has a long coast bordering the East China Sea, Korea Bay, Yellow Sea
and South China Sea.  To the north of China is Mongolia and to the south
(heading east to west) are Vietnam, Laos, Myanmar (Burma), Bhutan, Nepal, India,
Pakistan, Tajikistan, Kyrgyzstan and Kazakhstan.  The total area of China
is 9.6 million km2 with an estimated population of 1.4 billion
people.

Qinghai
Province is in northwestern China.  The capital of the province is Xining
and the provincial population is approximately 5.3 million in a total area of
720,000 km2.

General
Background

China
is a significant producer of commodities with its mining industry ranking third
in the world.   Much of the mineral production is consumed nationally.
 Recently, the government has moved to increase foreign investment in
several sectors of the mining industry.

Since
1978, China has been moving from a planned economy to a more open,
market-oriented system, with the result that the economic influence of
privately-owned enterprises and foreign investors has been steadily increasing.
 The result of this economic development is a substantial increase in gross
domestic product since 1978.  Many industries have posted major gains,
especially in coastal areas near Hong Kong and opposite Taiwan, where foreign
investment helped spur output of both domestic and export goods.  Growth
has not been without setbacks, as bureaucracy coupled with inflation and
deterioration in the environment has periodically caused the State to backtrack,
re-tightening central controls from time to time.

The
PRC's legal system is comprised of written statutes and the interpretation of
these statutes by the People's Supreme Court.  Continuing efforts are being
made to improve the civil, administrative, criminal







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23



and
commercial legal system.  This includes the development of a regime for
Sino-foreign cooperative joint ventures and foreign participation in mineral
resource exploration and mining.

Co-Operative
Joint Ventures

Sino-foreign
cooperative joint ventures ("CJVs") are governed by the Law of the PRC on
Sino-foreign Cooperative Joint Ventures(implemented in 1988 and revised in
2000) and the PRC Sino-foreign Cooperative Joint Venture Law Implementing
Rules(implemented in 1995) (collectively the "CJV Law").  The
investor and its Chinese partner may choose to set up CJVs as the form of their
investment vehicles in China.  The CJV Law allows a CJV to choose to
operate as a "legal person" by forming a limited liability company that owns
all of the CJV's assets.  The liabilities of the investors are limited to
their subscribed capital contributions as provided in the cooperative joint
venture contract (the "CJV Contract").  Once the investors and their
Chinese partners have signed the CJV Contract and related documents, the
documents are submitted to relevant competent authorities to obtain the approval
of the CJV's project proposal, the establishment of the CJV and the issuance
of a business license.

CJV
Law requires investors in a CJV to make an investment or other contribution,
which can be cash, material, land use rights, or other property rights.  An
investor must fulfill its contribution obligations within the time frame
prescribed by the CJV Contract; otherwise, the relevant governmental authorities
will notify the offending party that it has a limited time frame in which to
make the contribution.  If the failure to make the capital contribution
continues, governmental authorities may revoke the approval for the CJV and its
business licence.

CJV
Law allows the investors to determine the equity percentage owned by each
investor in the CJV.  The percentage of the CJV's equity owned by each
investor need not be equivalent to the percentage of the capital contribution
each investor contributed.  The percentage of the CJV's equity owned by
each investor can be negotiated by the investors in the CJV.

The
duration of a CJV is determined by mutual consent of the CJV investors in
compliance with CJV Law and must be stated in the CJV Contract.  The CJV
Contract is the major corporate document of a CJV, as it includes all provisions
related to the board of directors, management, accounting and various other
matters.

Under
CJV Law, the governing law is PRC law; however, CJV Law entitles the parties to
choose either court or an arbitration tribunal of another country to deal with
any dispute arising from the CJV Contract or the operation of the CJV.  It
is common for foreign investors to choose arbitration tribunals located in other
countries, such as the Singapore International Arbitration Center, to conduct an
arbitration in accordance with the rules of such arbitration tribunals.

Foreign
Exchange Controls

Pursuant
to PRC foreign exchange regulations, foreign exchange dealings are administered
by the State Administration of Foreign Exchange and its local agencies (the "SAFE")
and transacted through designated financial institutions.  CJVs are
required to conduct their corporate activities in accordance with the relevant
PRC foreign exchange rules and regulations.

A
CJV is entitled to borrow funds from overseas within the difference between its
total investment amount and registered capital.  Once a loan agreement has
been registered with the SAFE in accordance with the formal requirements, the
principal and interest of the loan can be paid out of China.

A
CJV is also entitled to remit the profit/dividends derived from the CJV out of
China once the relevant taxes of the CJV have been paid in compliance with PRC
Law, provided that its foreign investor has made its capital contribution in
compliance with the contribution schedule set out in the CJV Contract.







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24



Taxation
and Fees

There
are several taxes, charges and fees that apply to CJVs in China, including, but
not limited to corporate income tax, business tax, value added tax, resources
tax, mineral resources compensation (royalties), land use tax and other taxes or
assessments.

Income
Tax for CJVs

The
income tax rates in the PRC for CJVs are governed by the Income Tax Law for
Enterprises with Foreign Investment and Foreign Enterprises, the Implementation
Rules of 1991, the State Council Regulations Concerning Encouragement of
Foreign Investment (October 11, 1986), the Measures of the Ministry of
Finance for the Implementation of the Preferential Tax Treatment Provisions of
the State Council Regulations Concerning Encouragement of Foreign Investment
(January 31, 1987) and the other relevant local regulations promulgated by
local authorities (collectively the "Income Tax Law").  Under the
Income Tax Law, the standard rate for CJVs is 33 percent, comprised of a
national income tax of 30 percent and a local income tax of three percent.

CJVs
engaged in productive activities, and which have a term of more than ten years
may be exempt from income tax for their first two profitable years and entitled
to a 50 percent reduction of the otherwise applicable income tax rate during the
subsequent three-year period.  However, such preferential tax rates do not
apply to foreign investment companies that undertake the development of rare
metals and precious metals (including gold), unless the State Council provides
otherwise.

According
to PRC income tax laws, foreign enterprises that do not have establishments in
the PRC but derive profits from sources in PRC, are required to pay income tax.
 However, pursuant to the Notice Regarding the Issue of Income Tax for
Income from Share Transfer and Dividends for Foreign Investment Enterprises,
Foreign Enterprises and Foreign Individuals,a foreign investor is exempted
from income tax for any profits and dividends received from a CJV.
 Therefore, after CJVs have paid related income tax, no further income tax
will be levied on the foreign investor for the profits/dividends obtained from
China.

Other
Capital Gains Tax and Withholding Tax

The
PRC State Administration of Taxation issued the Notice Concerning the
Taxation of Gains on Transfer and Dividends from Shares (Equities) Received by
Foreign Investment Enterprises, Foreign Enterprises and Foreign Individualson
July 21, 1993 and the Notice Regarding the Issue of Income Tax for Income
from Share Transfer for Foreign Investment Enterprises and Foreign Enterpriseson
April 17, 1997 (collectively the "Tax Notice").  Under the Tax Notice,
income tax is payable on gains derived by (i) foreign investment enterprises
(including CJVs) on the transfer of shares or equities, and (ii) enterprises
established by foreign enterprises in the PRC on the transfer of domestic entity
shares.  Currently there is no withholding tax on capital gains that are
realized by (i) a foreign enterprise on the sale of overseas shares that are not
held by an entity established by the foreign enterprise in the PRC, or (ii) a
foreign individual on the sale of overseas shares.  Where a foreign
enterprise or foreign individual transfers shares of a foreign investment
enterprise (including shares of a CJV) and receives gains in excess of the
contribution of the foreign enterprise or foreign individual to the foreign
investment enterprise, the excess part of such gains will be subject to 20
percent withholding tax, or individual income tax, as the case may be.

On
November 18, 2000, the State Council issued the Notice Regarding the Income
Tax Reduction for Interest and Other Income that Foreign Enterprises Derive in
the PRC(the "Tax Reduction Notice").  Under the Tax Reduction
Notice, beginning January 1, 2001, income tax is reduced to a rate of 10 percent
for interest, rental, license fees and other income obtained in the PRC by (i)
foreign enterprises that do not have agencies or establishments in the PRC, or
(ii) foreign enterprises without any substantive relationship with their agency
or establishment in the PRC.  If the exemption from withholding tax
described in the preceding paragraph in respect of overseas shares does not
apply, and the Tax Reduction







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25



Notice
does not apply, a shareholder of a foreign enterprise may be subject to the 20
percent tax on capital gains, unless reduced by an applicable double taxation
treaty.

No
withholding tax is levied on after-tax profits remitted overseas as dividends to
a foreign investor from a CJV.

Mineral
Resource Taxes and Compensation Fee

Resource
tax is levied on natural resources exploitation, generally on a tonnage or
volume basis, at amounts specified by the Ministry of Finance in consultation
with relevant ministries of the State Council, the highest executive branch of
the State.  The resources taxed include crude oil, natural gas, coal, other
raw non-metallic minerals, raw ferrous metals, non-ferrous metallic minerals,
and salt.  The standard tax amount range for non-ferrous metal ores is RMB
0.4-30/tonne.

The
resource compensation fee is a royalty collected by the State, and calculated at
a rate prescribed by the State (the rate is four percent for gold) based on
sales income and mining recovery rates.  In some cases, CJVs may be
exempted from resource compensation or benefit from reduced rates, such as CJVs
that make use of tailings.

Additional
Taxation

CJVs
engaging in non-service/production activities are subject to value added tax ("VAT").
CJVs pay VAT on inputs and collect VAT on outputs.  The standard VAT rate
is 17 percent.  Exports are generally zero-rated.  Exporters are
eligible to apply for a refund for VAT paid, which may be significant, as VAT is
not collected on exports.

Stamp
tax (at a maximum rate of 0.1 percent) is levied on the execution or receipt in
China of all taxable documents listed in the Stamp Tax Regulations, such
as contracts for the sale of goods, the undertaking of processing work, leases,
agency and other non-trade contracts.  Stamp tax is also levied on
certification in evidence of rights and licenses.

Other
applicable taxes may include deed tax on the transfer of ownership of land use
rights, vehicle and vessel taxes and customs duties.

Labour
Management

The
Labour Law of the PRCsets forth certain restrictions on labour
management, including, but not limited to, restrictions on the hiring and
discharge of employees, establishment of wages, maintenance of insurance and
welfare and other benefits.  In recent years, the PRC has enacted many
labour-related laws and regulations in an effort to maintain and develop a
stable social structure for its economic development.  The labour
authorities in most major cities have enhanced measures to implement the labour
laws and regulations and improve the social welfare system.  In the
meantime, the labour authorities impose sanctions on those employers not
complying with their obligations under the labour protection regulations.

Under
relevant PRC labour laws and regulations, there are many compulsory rules
governing various aspects of labour relationships, including rules regarding
probation periods, minimum salary, causes for early termination, severance
payment, maximum non-competition periods, most of which are designed to protect
employees.  A clause in an employment contract may be rendered void if it
violates the compulsory regulations.  The compulsory regulations
automatically apply if an employment contract fails to address the relevant
matters covered by those regulations.







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26



Gold
Exploration and Mining in China

In
additional to general PRC laws, rules and regulations which are applicable to
foreign investment in all industries, foreign investors conducting exploration
or mining activities in China are also subject to rules or regulations specific
to the mining industry.

The
Provisions in Foreign Investment Guidelines for Foreign Investment, which
were implemented on April 1, 2002 and January 1, 2005 (collectively the "Investment
Guidelines"), categorize industries into four types: (i) encouraged; (ii)
permissible; (iii) restricted; and (iv) prohibited.  According to the
Investment Guidelines, CJVs conducting exploration or mining activities are
listed in following categories: (i) class A "encouraged" projects, including
the exploration and mining of coal (and its derived resources), iron, manganese,
copper and zinc minerals, gold low grade and non-refractory ore projects, etc.,
(ii) class B "restricted" projects, including the exploration and mining of
the minerals of gold and other precious metals, etc., (iii) class C "prohibited"
minerals, including radioactive minerals, and rare earth, and (iv) class D, the
exploration and mining of the minerals not included in classes A, B or C, in
which projects foreign companies are allowed to invest and are subject to few
restrictions.

Therefore,
in China, CJVs that conduct gold exploration or mining are subject to two
categories: (i) encouraged if it is low grade and non-refractory ore projects;
and (ii) restricted. In practice, for the projects under "restricted"
category, the various approving authorities will use their discretion when they
review the application documents of establishment or operation of such CJVs.
 The foreign investor may therefore invest in projects under both the "encouraged"
and "restricted" categories after such projects have obtained approvals from
the relevant competent authorities.

Overview
of Mining Industry Regulations

Exploration
for and exploitation of mineral resources in the PRC is governed by the Mineral
Resources Law of the PRCof 1986, amended effective January 1, 1997, and the
Implementation Rules for the Mineral Resources Law of the PRC, effective
March 26, 1994.  In order to further implement these laws, on February 12,
1998, the State Council issued three sets of regulations: (i) Regulation for
Registering to Explore Mineral Resources Using the Block System, (ii) Regulation
for Registering to Mine Mineral Resources, and (iii) Regulation for
Transferring Exploration and Mining Rights(together with the mineral
resources law and implementation rules being referred to herein as "Mineral
Resources Law").

Under
Mineral Resources Law, the Ministry of Land and Resources and its local
authorities (the "MLR") is in charge of the supervision of mineral resource
exploration and development.  The mineral resources administration
authorities of provinces, autonomous regions and municipalities, under the
jurisdiction of the State, are in charge of the supervision of mineral resource
exploration and development in their respective administration areas.  The
people's governments of provinces, autonomous regions and municipalities, under
the jurisdiction of the State, are in charge of coordinating the supervision by
the mineral resources administration authorities on the same level.

The
Mineral Resources Law, together with the Constitution of the PRC,
provides that mineral resources are owned by the State, and the State Council,
the highest executive organization of the State, regulates mineral resources on
behalf of the State.  The ownership rights of the State include the rights
to: (i) occupy, (ii) use, (iii) earn, and (iv) dispose of, mineral resources,
regardless of the rights of owners or users of the land under which the mineral
resources are located.  Therefore, the State is free to authorize third
parties to enjoy its rights to legally occupy and use mineral resources and may
collect resource taxes and royalties pursuant to its right to earn.  In
this way, the State can control and direct the development and use of the
mineral resources of the PRC.

Mineral
Resources Licenses

China
has adopted, under the Mineral Resources Law, a licensing system for the
exploration and exploitation of mineral resources.  The MLR is responsible
for approving applications for exploration







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27



licenses
and mining licenses.  The approval of the MLR is also required to transfer
exploration licenses and mining licenses.

Applicants
must meet certain conditions as required by related rules/regulations.
 Pursuant to the Regulations for Registering to Mine Mineral Resources,
the applicant for mining rights must present the required documents, including a
plan for development and use of the mineral resources and an environmental
impact evaluation report.  The Mineral Resources Law allows individuals to
excavate sporadic resources, sand, rocks and clay for use as construction
materials and a small quantity of mineral resources for sustenance.
 However, individuals are prohibited from mining mineral resources that are
more appropriately mined at a certain scale by a company, specified minerals
that are subject to protective mining by the State and certain other designated
mineral resources.

Once
granted, all exploration and mining rights under the licenses are protected by
the State from encroachment or disruption under the Mineral Resources Law.
 It is a criminal offence to steal, seize or damage exploration facilities,
or disrupt the working order of exploration areas.

Exploration
Rights

In
order to conduct gold exploration, a CJV must apply to the MLR for an
exploration license.  Owners of exploration licenses are "licensees".
 The period of validity of an exploration license can be no more than three
years.  An exploration license area is described by a "basic block".
 An exploration license for metallic and non-metallic minerals has a
maximum of 40 basic blocks.  When mineral resources that are feasible for
economic development have been discovered, a licensee may apply for the right to
develop such mineral resources.  The period of validity of the exploration
license can be extended by application and each extension can be for no more
than two years.  The annual use fee for an exploration license is RMB 100
per km2 for the first three years and increases by RMB 100 per km2
for each subsequent year, subject to a maximum fee of RMB 500 per km2.

During
the term of the exploration license, the licensee has the privileged priority to
obtain mining rights to the mineral resources in the exploration area, provided
that the licensee meets the qualifying conditions for mining rights owners.
 An exploration licensee has the rights, among others, to: (i) explore
without interference within the area under license during the license term, (ii)
construct exploration facilities, and (iii) pass through other exploration areas
and adjacent ground to access the licensed area.

After
the licensee acquires the exploration license, the licensee is obliged to, among
other things: (i) begin exploration within the prescribed term, (ii) explore
according to a prescribed exploration work scheme, (iii) comply with State laws
and regulations regarding labour safety, water and soil conservation, land
reclamation and environmental protection, (iv) make detailed reports to local
and other licensing authorities, (v) close and occlude the wells arising from
exploration work, (vi) take other measures to protect against safety concerns
after the exploration work is completed, and (vii) complete minimum exploration
expenditures as required by the Regulations for Registering to Explore
Resources Using the Block.

Mining
Rights

In
order to conduct mining activities, a CJV must also apply for a mining license
from the MLR.  Owners of mining rights, or "concessionaires", are
granted a mining license to mine for a term of no more than ten to thirty years,
depending on the magnitude or size of the mining project.  A mining license
owner may extend the term of a mining license with an application 30 days prior
to expiration of the term.  The annual use fee for a mining license is RMB
1,000 per km2 per year.

In
addition to obtaining mining licenses, before a CJV conducts any gold mining
activities, it must obtain a Gold Mining Approval Certificate from the relevant
competent authority in accordance with the Gold Mining Approval Certificate
Administrative Regulation issued by the State Development Regulatory Committee,
which became effective as of January 1, 2004.







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28



A
mining license owner has the rights, among others, to: (i) conduct mining
activities during the term and within the mining area prescribed by the mining
license, (ii) sell mineral products (except for mineral products that the State
Council has identified for unified purchase by designated units), (iii)
construct production and living facilities within the mine area, and (iv) use
the land necessary for production and construction, in accordance with
applicable laws.

A
mining license owner is required to, among other things: (i) conduct mine
construction or mining activities within a defined time period, (ii) conduct
efficient production, rational mining and comprehensive use of the mineral
resources, (iii) pay resources tax and mineral resources compensation
(royalties) pursuant to applicable laws, (iv) comply with State laws and
regulations regarding labour safety, water and soil conservation, land
reclamation and environmental protection, (v) be subject to the supervision and
management by the departments in charge of geology and mineral resources, and
(vi) complete and present mineral reserves forms and mineral resource
development and use statistics reports, in accordance with applicable law.

Transfer
of Exploration and Mining Rights

A
mining company may transfer its exploration or mining licenses to others,
subject to the approval of MLR.

An
exploration license may only be transferred if the transferor has: (i) held the
exploration license for two years as of the issue date, or discovered minerals
in the exploration block, which are able to be explored or mined further, (ii) a
valid and subsisting exploration license, (iii) completed the stipulated minimum
exploration expenditures, (iv) paid the user fees and the price for exploration
rights pursuant to the relevant regulations, and (v) obtained the necessary
approval from the authorized department in charge of the minerals.

Mining
rights may only be transferred if the transferor needs to change the ownership
of such mining rights because it is: (i) engaging in a merger or split, (ii)
entering into equity or cooperative joint ventures with others, (iii) selling
its enterprise assets, or (iv) engaging in a similar transaction that will
result in an alteration of the property ownership of the enterprise.

Additionally,
when state-owned assets or state funds are involved in a transfer of exploration
licenses and mining licenses, the related state-owned assets rules and
regulations apply and a proper evaluation report must be completed and filed
with the MLR.

Speculation
in exploration and mining rights is prohibited.  The penalties for
speculation are that the rights of the speculator may be revoked, illegal income
from speculation confiscated and a fine levied.

Gold
Sale Policy

Under
the PRC Regulations on Administration of Gold and Silverand its
implementing rules, the People's Bank of China is the competent agent
authorized to supervise and control the purchase and distribution of gold and
silver in China.  It is responsible for the State's reserves of gold and
silver and, jointly with other competent authorities, for regulating and
supervising the gold and silver markets.

With
the opening of Shanghai Gold Exchange in October 2002, the trading and exchange
of gold in the domestic market may be conducted on the Exchange at market
prices.  The members of the Shanghai Gold Exchange can sell their gold
products directly to gold refineries, smelters and banks through the Exchange.
Those non-member gold producers who want to trade through the Shanghai Gold
Exchange may authorize the members of the Exchange to trade on their behalf.

The
PRC State Council announced in 2003 that wholesale, retailing, production, and
processing of gold in the domestic market would no longer require the approval
of the People's Bank of China.  However, all gold, including that
extracted from ore deposits and refined as a by-product, may not be sold outside
China without the approval of the People's Bank of China.







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29



Environmental
Laws

In
the past ten years, PRC laws and policies regarding environmental protection
have moved towards stricter compliance standards and stronger enforcement.
 In accordance with the Environmental Protection Law of the PRCadopted
by the Standing Committee of the PRC National People's Congress on 26 December
1989, the General Administration of Environmental Protection Bureau under the
State Council sets national environmental protection standards. The various
local environmental protection bureaus may set stricter local standards for
environmental protection. CJVs are required to comply with the stricter of the
two standards.

The
basic laws in China governing environmental protection in the mineral industry
sector of the economy are the Environmental Protection Law and the Mineral
Resources Law.  Applicants for mining licenses must submit
environmental impact assessments, and those projects that fail to meet
environmental protection standards will not be granted licenses.  In
addition, after exploration, a licensee must take further actions for
environmental protection, such as performing water and soil maintenance.
 After the mining licenses have expired or a licensee stops mining during
the license period and the mineral resources have not been fully developed, the
licensee shall perform other obligations such as water and soil maintenance,
land recovery and environmental protection in compliance with the original
development scheme, or must pay the costs of land recovery and environmental
protection.  After mine closure, the mining enterprise must perform water
and soil maintenance, land recovery and environmental protection in compliance
with mine closure approval reports, or must pay certain costs, which include the
costs of land recovery and environmental protection.

Acquisition
of Afcan Mining Corporation

On
September 13, 2005, we completed the court-approved compromise transaction with
Afcan Mining Corporation ("Afcan"), whereby we acquired all of the issued
and outstanding shares of Afcan.  Afcan indirectly owns 85% of TJS Project.
 Under the terms of the compromise agreement with Afcan, outstanding common
shares of Afcan were exchanged for Common Shares on the basis of one Common
Share for 6.5 Afcan common shares, resulting in the issuance of a total of
23,045,151 Common Shares.

In
addition, outstanding warrants of Afcan (the "Afcan Warrants") were
exchanged for warrants of Eldorado (the "Replacement Warrants") on the basis
of one Replacement Warrant for each 6.5 Afcan Warrants.  Each Replacement
Warrant has an exercise price equal to six and one half (6.5) times the exercise
price of the Afcan Warrants in respect of which such Replacement Warrant was
issued.  All other terms and conditions of the Replacement Warrants,
including expiry terms, are identical to those of the Afcan Warrants.  In
total, Eldorado issued 1,385,789 Replacement Warrants (exercise price Cdn$2.4375
per Common Share) which expired on September 30, 2005 and 3,210,163 Replacement
Warrants (exercise price Cdn$2.4375 per Common Share) expiring on November 18,
2006.  As of January 15, 2006, we have 760,000 Replacement Warrants
outstanding.

The
outstanding options to purchase common shares of Afcan (the "Afcan Options")
held by directors, officers, employees and service providers of Afcan who
entered into employment or service agreements with the Company were exchanged
for replacement options (the "Replacement Options") to purchase Common
Shares on the basis of one Replacement Option for every six and one half (6.5)
Afcan Options.  Each such Replacement Option had an exercise price equal to
six and one half (6.5) times the exercise price of the Afcan Options in respect
of which such Replacement Option were issued.  The Company issued a total
of 91,538 Replacement Options.  All other Afcan Options immediately vested
and were either exercised or cancelled, prior to closing the transaction.



TJS is
on schedule to produce gold in October 2006.  Capital costs are now
estimated at $63.4 million.  The increase in capital costs is a result of
changes to the tailings dam design and general increases in Engineering,
Procurement and Construction Management ("EPCM") costs.
  Additional capacity has also been added to the process circuit to
allow for increased throughput. Construction at Tanjianshan is approximately 60%
complete.  Foundations for the crushing plant, SAG mill, and floatation
plant are







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30



complete
and the SAG mill has been secured on its foundation.  Pre-stripping has
begun at both Qinglongtan ("QLT") and Jinlonggou ("JLG") and ore has
been exposed in both pits.

Under
the terms of the Transaction, Eldorado made a $15 million credit facility
available to Afcan. Loans under the credit facility included interest at a rate
equal to LIBOR plus 3% per annum. On completion of the Transaction the credit
facility was converted to an inter-company loan.  Proceeds of the credit
facility were used primarily to fund TJS obligations of the joint venture
company ("Qinghai Dachaidan Mining Limited" or "QDML").

The
Business Acquisition Report regarding our acquisition of Afcan dated January 30,
2006 and filed on SEDAR is incorporated by reference in this AIF.

TJS

TJS,
our 85% controlled project, is located in Qinghai Province.

Project
Description

TJS
is located in the Qinghai Province of northwest China.  It is comprised of
four large contiguous exploration licences which total 338 km2 in the
area and which encompass two mining licences over two defined gold deposits,
namely the Jinlonggou ("JLG") and Qinlongtan ("QLT") deposits, as well
as numerous other prospects and anomalies.

Ownership
Interest

We
own an 85% interest in TJS through our subsidiary company QDML.  QDML is
85% owned by us with the remaining 15% owned equally by the Qinghai Number One
Geological Brigade ("Q1") and the Dachaidan Gold Mine.  Afcan's
holding in QDML was previously owned by Sino Mining Limited, which divested TJS
to Afcan in March 2003.  Under the QDML joint venture agreement we can
acquire up to 90% of TJS upon spending $50 million on TJS.

As
noted above, TJS is comprised of the following two mining licences and four
contiguous exploration licences:



|            |             |                  |                    |                  
|----------- | ----------- | ---------------- | ------------------ | -----------------
|Tenement    | Type        | Area
      (km2) | Date
      Granted | Date
      Expiry
|Jinlonggou  | Mining      | 1.0296           | 02
      Sep 2004  | 02
      Jul 2007
|Qinlongtan  | Mining      | 2.875            | 24
      Jan 2005  | 09
      Dec 2007
|Qinlongshan | Exploration | 73.50            | 12
      Feb 2004  | 12
      Feb 2006
|Qingshan    | Exploration | 72.07            | 03
      Nov 2005  | 03
      Nov 2007
|Jinlonggou  | Exploration | 87.98            | 12
      Feb 2004  | 12
      Feb 2006
|Xijingou    | Exploration | 100.86           | 03
      Nov 2005  | 03
      Nov 2007
|Total       |             | 338.31           |                    |                  

* Application has been made for the renewal of the QLT and JLG exploration licenses.

The
grant dates of the exploration licences listed above are also the anniversary
dates by which annual reports and expenditure commitments must be reported.

The
exploration licenses are not surveyed tenements.  Exploration licences are
defined by latitude and longitude and marked on a plan, not on the ground.
 Definition of mining licenses may be based on either No. 3° or No. 6°
Qinghai Provincial Grid and is again recorded on a plan.  Sometimes the
tenements are marked by pegs on site, but the co-ordinate definition takes
precedence.

Owners
of an exploration license have the right to explore for all minerals, save those
preserved for the State, and to construct such facilities as are required by the
owner in the search for such minerals.  The owner also has a priority claim
over applications for mining licences within the exploration licence area.
 Owners are obligated to commence and complete exploration within the
timeframe of the licence and to







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31



submit
progress reports on a regular basis.  Excavations and other surface
disturbances are required to be rehabilitated on completion of the planned
exploration.  Annual maintenance costs are RMB100 per km2 for
years 1 to 3, thereafter increasing by RMB100 per year to a maximum of RMB500
per km2 per year.

Prescribed
exploration expenditures per km2 are RMB2,000 in year 1, RMB5,000 in
year 2 and RMB10,000 in subsequent years.  Currently the exploration
licenses expire in February 2006 and November 2007.  These licenses are
granted initially for three years, and may be extended for a further two years.
 There is no limit to the number of extensions that may be applied for.

The
mining license is granted for a maximum initial period of three years depending
on the scale of the mine; thereafter, renewal is reviewed before the expiration
upon the mining license holder's application.  Renewal is guaranteed,
provided there is compliance with mining regulations and all tax and royalty
payments have been made. Owners of a mining licence have the right to construct,
develop and mine the delineated mineral resource.

Currently
the JLG mining license is owned by QDML and extends from surface (3,556 mRL) to
3,378 mRL.  An application has been approved to extend the license from
surface down to 3,000 mRL.

The
QLT mining license, previously held by Q1 has been transferred to QDML.
 This mining license extends vertically from surface (3,710 m) to 3,450 mRL.

Surface
rights at TJS are currently sufficient for mining operations at the scale
indicated by the TJS proven and probable reserves, as disclosed above in the
table titled "Proven and Probable Reserves" on page 9.  To the extent
that such proven and probable reserves increase, TJS surface rights will not be
sufficient, and it would be necessary to obtain additional surface rights.

There
are three ways to obtain land use rights from the PRC government authorities:
allocation, grant and lease. Different levels of government organizations have
different authorities to approve the land use right application depending on the
nature and areas of the land concerned.   QDML may submit its
application to the competent government authorities to obtain the granted land
or lease land if it deems necessary.   So far, QDML has obtained the
lease right dated on July 11, 2005 under which QDML is entitled to use the
leased land for the area of 445,100 m2.

For
the allocated land use right, the government may approve the allocated land use
right in accordance with the Catalogue for Allocated Land, which lists certain
industries that may be able to use allocated land.  Although the gold
mining industry has not been listed in the Catalogue for Allocated Land, QDML
has obtained allocated land on July 11, 2005 for an area of 243,300 m2.

Royalty

The
CJV provides that Q1 and Dachaidan Gold Mine shall obtain a total of 4.5% of the
net sales revenue from the gold produced by QDML as their base income directly
transferred once each sale is transacted.  This revenue shall be directly
transferred to the account designated by each of Q1 and Dachaidan Gold Mine each
time QDML sells mineral products. The 4.5% royalty will be evenly split between
the two groups (2.25% each).  However, in order for Q1 and Dachaidan Gold
Mine to obtain such 4.5% royalty, approval from related tax authorities must be
obtained.

The
royalty percentage is unaffected by the percentage ownership interests of the
parties to the QDML joint venture.

Location,
Climate and Access

TJS
is located in the Dachaidan Region, Haixi Prefecture, Qinghai Province in the
northwest of the PRC. Qinghai is a relatively large province covering 720,000 km2
and supporting a population of approximately 5.3 million.  The capital of
Qinghai is Xining, which is situated in the eastern part of the







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32



province.
 At a local scale, the project area is located 80 km northwest of Dachaidan
in the Haixi Prefecture.

The
camp and the mill site at TJS are located at an elevation of 3,200 m with the
main resource at between 3,300 m and 3,550 m.  TJS is located in the
Saishiteng Mountains, and there is virtually no vegetation in the mountains.
 The landscape is composed of rugged mountains with slope angles of 45° to
50°.  The Aolao River lies approximately 2 km due east and is the
only permanent river in the area.

The
project area experiences a dry, continental, climate with low rainfall, high
evaporation and generally clears skies.  Winters are long and summers
short, with a large diurnal temperature range.  Meteorological data
collected between 1971 and 1980 at Dachaidan (75 km east south east), and at a
lower elevation than the site, record an average annual temperature of 1.6oC
and annual rainfall of 200 mm.  Maximum monthly temperatures are in July
and August (21oC) and minimum monthly temperatures are in January
(-15oC).  Maximum monthly rainfall is in June and July (40 mm),
whereas no precipitation is recorded in November, December and January.
 The highest temperature on record is 29.9oC on July 15, 1971
and the minimum, is -32.3oC on January 18, 1973.  Winds are
frequent and strong from the west and northwest averaging 8.6 km/h and peaking
at 70 km/h.

Prior
to 2005, field work and mining operations were restricted to the period from
April to October.  Mining and processing operations were on a care and
maintenance basis from November to March inclusive.  In 2005/2006 we have
elected to continue our field work and mine construction activities throughout
the winter months.

The
nearest centres are Dunhuang (265 km by road to the north) and Ge'ermu (260 km
by road to the south).  There are frequent flights during the summer months
(tourist season) between Beijing and Dunhuang.  There are also regular
flights from Xining to Ge'ermu throughout the year.

The
site is easily accessed by road.  There is a main highway between Dunhuang
(Gansu Province) and Ge'ermu or Dachaidan in Qinghai Province that passes
within 12 km of the plant site.  The road is in good condition and is
sealed and thus ensures year round access throughout the area.

Geology
and Mineralization

The
JLG gold deposit lies within a low, north-west trending, mountain range (Tanjianshan)
composed of Wandonggou and Tanjianshan Group rocks, with Early Palaeozoic gabbro
intruding the Proterozoic rocks and Late Paleozoic porphyritic plagiogranite
intruding all older units.  North-west striking thrust faults dissect the
units and commonly separate blocks.  Dips to both the north-east and
south-west are recorded.  The range to the north-west has the same mix of
rocks as Tanjianshan but also includes a large block of Late Paleozoic granite.
 This range is host to the QLT gold deposit.

The
JLG gold mineralization lies in a host rock sequence dominated by carbonaceous
phyllites.  The rocks are dark grey to black and display a well-developed
foliation.   In the central and southern parts of JLG a number of
orange brown sandstone bands are also present and act as key marker horizons.
 Two intrusive rock types occur within the limits of the mineralization and
are both of probable intermediate composition.  Both intrusive unit types
occur above and below the T2 thrust but in quite different styles.  Above
T2 fault, the intrusives occur as steep (60°- 70°) south west dipping, south
east trending thin bodies which clearly cut across the folded sedimentary units.
 Below T2 and above F30 faults, towards M7 and Pubugou areas, diorites are
volumetrically greater than above T2.   They occur as multiple
sheeted, near horizontal sills.

Throughout
JLG, common tight and isoclinal folds plunge dominantly to the south at between
20° and 30°.  The tight folding has only been recorded above T2.
 Most faults within the Jinlonggou are broadly contemporaneous.  Fault
patterns can be subdivided into two dominant families: northeast sinistral
faults parallel to primary layering (average orientation: 87° south east 019°)
and northwest dextral faults (average orientation: 74° south west 160°).
 The former occur on the northern and western parts of JLT







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33



whereas
the latter are developed throughout the property.  Fault T2, exposed
throughout many of the drives and crosscuts of adit PD2, is orientated
approximately 15° north west 060°.  This structure together with at least
two major flat dipping splays is sub parallel and may be related to fault F30
(25° - 45° north west 045°).  Both thrust faults bound the upper and
lower limits of the sub-horizontal package of diorites.

Two
host environments exist for gold mineralization at Jinlonggou, relative to the
T2 thrust fault: upper, moderately to steeply dipping, bedding plane parallel,
phyllite hosted mineralization, and lower, gently dipping diorite and phyllite
hosted mineralization.  The 160° trending dextral faults are interpreted
to represent feeder zones to the gold mineralization.  The JLG gold
mineralization defines a bowl shape volume having about a 500 m diameter
and extending up to 240 m below surface.

QLT
mineralization is confined to a 50-60° east-dipping zone comprising a
calcareous sandstone interlayer between two marble units.  The zone is
typically 5 m to 10 m wide, to a maximum of 14 m and is orientated approximately
parallel to the close to north south oriented layering.  QLT mineralization
has been defined 600 m along strike and up to 300 m down dip.

Gold
is hosted within the pyrite and arsenopyrite crystals.  Minor amounts occur
within quartz grains enclosed in pyrite.  A strong relationship exists
between gold and fine grained sulphide minerals.

Current
Exploration

The
main source of data from the programs is from DDH. Drilling totals at JLG and
QLT, from 2003 to 2005, consist of 33,136 m in 242 holes. The drilling was
carried out by a drill contractor.

The
exploration work we completed in 2005 was the culmination of a 3 year
exploration and delineation program (the "Program") at TJS.  In the
first two years, those programs were undertaken by Afcan.   The
objective of the programs was to obtain sufficient data to establish measured
and indicated mineral resources at JLG and QLT to support feasibility level mine
planning.  Those programs were successful and lead to the completion of the
feasibility study and the declaration of mineral reserves.

The
final year of the program, 2005 was spent fulfilling three goals: conversion of
any inferred mineral resources that were contained within the feasibility open
pit planned boundary to at least indicated mineral resource levels of
confidence; to test for extensions of gold mineralization at JLG (to the
north-east) and QLT (to the south); and to sterilize planned sites for major
infrastructure and waste rock dumps.

The
2005 Program goals were achieved with the exception of extending the gold
mineralization at QLT.

At
JLG, the majority of holes were sited at nominal spacings of 30 m apart on
30 m section lines normal to the bedding parallel zones above T2 fault, and
at similar spacings on the same grid orientated west, vertical and east to test
the subhorizontal diorite/phyllite sequence below T2 fault. In addition, a
drilling programme undertaken in the early part of 2004 targeted the 160°
trending fault corridors on an oblique grid. The severe topography also served
to restrict access to preferred drilling sites exacerbating the problem of less
than optimum intercept spacing and angle locally. Inevitably, given the
multiplicity of mineralized zone orientations, the variety of hole orientations
and the need to drill through one style to access deeper parts of another style,
the number, spacing and penetration angle of intercepts varies greatly from zone
to zone. Intercept attributes are taken into account on an individual basis in
the assessment of resource classification.  Data spacing (less than
30 m) is sufficient on well defined structures and close to the underground
workings to support Measured and Indicated Resources on the bedding parallel
faults above T2 and certain parts of the diorite/phyllite package. In general,
intercepts within the fault corridors are greater than 30 m and combined
with the less confident geological interpretation, will support classifications
no higher than Indicated.

At
QLT drill holes were sited on section lines 40 m apart and drilled normal
to the plane of the deposit. Intercept spacing averages 60 m down dip and
this, together with the 40 m cross-sectional spacing is







---

34



enough
to define a continuous zone. Data spacing and angle of intercept are both
considered sufficient to support an estimation of indicated mineral resources at
QLT.

Core
recoveries in mineralized intervals at both deposits were excellent.

Data
Quality and Verification

Quality
control procedures were instigated at the outset of the field programmes and
routine monitoring remained an essential part of the programmes.  Analysis
for gold is done on sawn half core samples using fire assay (AA finish) on a 50
g charge.  Standard reference materials, blank and field duplicate samples
are inserted prior to shipment from site to monitor the quality control of the
assay data.  In addition, about 10% of the samples are re-submitted for
duplicate analysis at a second laboratory.  These measures provided
controls and checks on both accuracy and precision of the analyses.

Aspects
of the field work such as survey and bulk density determinations were also
checked.  These were conducted by repeat measurements using different
operators or different methods.

Historic
data (pre-2004:  comprising about 30 percent of all data) was validated for
use in mineral resource estimation.  These data were validated by
re-sampling underground adits and crosscuts, re-assaying drill core sample pulp
material, reviewing collar and down hole survey data, and comparison of database
entries to source material (where available).

In
summary, the quality control programs and validation work demonstrated that the
assay data are sufficiently accurate and precise, and that the database
sufficiently free of error to be able to support mineral resource estimation of
the JLG and QLT deposits.

Previous
Exploration

Afcan
drill core data currently supports around 60% of the TJS mineral resource.
 The remaining 40% relies on older data from campaigns conducted by Q1 and
Sino.  A comprehensive validation program, under the supervision of DevMin,
was executed on those data from Q1 and Sino.  Devmin concluded that this
data is of sufficient quality to be included for use to estimate mineral
resources at TJS.

The
earliest exploration work in the area was in the late 1950's when Qinghai No.
5 Exploration Brigade conducted various exploration programmes for petroleum.
 No work was recorded during the 1960's.  Comprehensive
reconnaissance, prospect investigation and regional surveys started in the early
1970's with work undertaken mainly by Qinghai No. 5 and No. 6 Exploration
Brigades.  During this period, a number of mineral prospects were
discovered such as copper at Yixianshan, a pyrrhotite-pyrite prospect at
Huanglushan, pyrite at QLT and limonite at TJS.

Lode
gold in the area was discovered in the late 1970's by the Qinghai No. 5
Exploration Brigade Geology Team at Zhishigou and this discovery intensified
gold exploration work along the Chaidamu Northern Margin tectonic zone.

Gold
was initially discovered at JLG during the course of uranium exploration in 1989
by Q1, and subsequently limited mining of both that deposit and QLT has been
undertaken.  At JLG, the Q1 team generated exploration data in 29 surface
drilled core holes, underground development on three levels and accompanying
rises and sub-levels and extensive surface sampling in trenches, shallow pits or
shafts on section lines 30 m apart.

From
April to November 2003, Afcan carried out a programme comprising of data review,
data validation, geological mapping, underground and surface sampling and core
drilling.

In
2004, Afcan undertook additional drilling programmes at both JLG and QLT.







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35



Previous
Production

In
1992, a production team from Q1 (Jinlong Mining Company) commenced mining and
processing of near surface oxide ore by heap leaching.  That was
accompanied by mining primary material from underground commencing in 1995.
 That material was processed by roasting a float sulphide concentrate
followed by a CIL circuit.  Gold recovery by this method is estimated to
have been around 82%.  Heap leach recovery is estimated to be 48%.

The
mining at JLG was from underground workings that comprised development on three
levels (adits PD1 and PD4 at 3,408 mRL; adit PD2 at 3,378 mRL; and adit PD3 at
3,442 mRL) and accompanying cross-cuts, rises, sub-levels and open stopes.
 These workings, which total in excess of 4 km, lie within the currently
defined limits of the gold mineralization.

The
majority of the mined material was processed by heap leaching.  The sites
or pads (now inactive) are numerous but small, and are located in adjacent
valleys north and east of the workings.  Material on these pads is planned
to be re-processed through our mill through planned open pit mining.

Waste
rock generated by this past mining lies in small piles adjacent to each adit
entrance.  Some of it has been used for construction purposes during this
current activity.  The remainder will either be utilized for on-going
construction or re-processed through our mill during mining.

Production
at JLG since the start of operations in 1992 is summarized below.  Upon
signing of the CJV in 2002, JLG ceased operations.

Jinlonggou
Mine - Past Production

|      |                                   |                          |                        |                      |         |                      |        
|----- | --------------------------------- | ------------------------ | ---------------------- | -------------------- | ------- | -------------------- | -------
|Year  | Heap
      Leach
      Production | Primary
      Production | Total
      Production
|      | Tonnes                            | Grade
      (g/t Au)     | Tonnes                 | Grade
      (g/t Au) | Tonnes  | Grade
      (g/t/Au) | oz     
|1992  | 15,045                            | 7.27                     |                        |                      | 15,045  | 7.27                 | 3,517  
|1993  | 23,920                            | 8.60                     |                        |                      | 23,920  | 8.60                 | 6,614  
|1994  | 42,279                            | 7.13                     |                        |                      | 42,279  | 7.13                 | 9,692  
|1995  | 52,724                            | 6.05                     | 3,027                  | 8.01                 | 55,751  | 6.16                 | 11,035 
|1996  | 52,128                            | 6.38                     | 5,191                  | 8.40                 | 57,319  | 6.56                 | 12,095 
|1997  | 34,800                            | 6.41                     | 4,593                  | 7.99                 | 39,393  | 6.59                 | 8,352  
|1998  | 38,283                            | 7.54                     | 3,899                  | 14.32                | 42,182  | 8.17                 | 11,076 
|1999  | 38,028                            | 5.62                     | 16,856                 | 8.15                 | 54,884  | 6.40                 | 11,288 
|2000  | 36,610                            | 5.64                     | 21,062                 | 8.63                 | 57,672  | 6.73                 | 12,482 
|2001  | 33,245                            | 7.19                     | 23,133                 | 7.25                 | 56,378  | 7.21                 | 13,077 
|2002  | 26,088                            | 4.82                     | 28,404                 | 7.92                 | 54,492  | 6.44                 | 11,275 
|Total | 393,154                           | 6.52                     | 106,166                | 8.22                 | 499,321 | 6.88                 | 110,503

At
QLT Q1's exploration programme comprised excavation of 143 surface trenches
and 14 core holes.  Approximately 100,000 tonnes at 10 g/t Au of oxide ore
was mined over a period of four years.

Development
and Operations

TJS
is expected to produce, on average, 103,000 ounces of gold per annum over an
eight year mine life.  The plant is expected to treat 800,000 tonnes per
annum of ore.  The 2005 reserve has ben re-calculated based on a new mining
plan derived from the results of the 2005 drilling program.

All
ore and waste will be mined via conventional, open pit mining methods, using
mining contractors.  The operation is planned to utilize selective mining
techniques to separate ore and waste.  The mining







---

36



equipment
that is considered to be suitable for TJS will include 20 tonnes to 75 tonnes
back hoe excavators for ore zone mining and off-highway haul trucks with a
payload capacity of between 10 to 50 tonnes.  A contract ore haulage
operation will be required to transport the ore 19 km from QLT to the treatment
plant at JLG.

Waste
dumps will be located adjacent to the existing pits.

Provision
has been made for drilling and blasting from surface.

The
treatment plant flowsheet is based on material being fed into a ROM bin and
through a single stage crushing circuit to a mill feed stockpile.  This
stockpile is then fed through a single stage SAG mill and a classification
circuit.  QLT material will then be fed through a conventional CIL circuit
before the tailings are floated and the sulphide material removed for subsequent
treatment.

JLG
material will be treated based on the sulphide content.  If the sulphur
level is low, then the material will also be treated through a conventional CIL
circuit.  If the sulphur level is sufficiently high, the material will be
fed through a flotation circuit and then dewatered.  The QLT and JLG
flotation concentrate will then be blended for an optimal sulphur equivalent
amount before being fed to the two stage roasting circuit.

The
solid product from the roaster will then pass through a mill to remove any
roasting agglomerates and will then be leached in a CIL circuit.  The
roaster off-gas will pass through an electrostatic precipitator and a series of
scrubbers to remove the arsenic and any remaining SO2 gas.

There
is provision to place the JLG flotation tails through the CIL circuit, if the
remaining grade is sufficiently high.

The
carbon will then be removed from both adsorption circuits for gold removal by
Zadra methods.  Gold bullion will be produced for sale.

Test
work indicates that expected gold recoveries for TJS deposits, based on the
selected treatment route, will range from 82% to 93%.

The
primary source of raw water will be the Aolao River.  The raw water will be
pumped to a raw water tank located close to the plant and used to supply water
to the plant as well as, supplying the process water tank.

Electrical
power requirements for TJS are estimated to be approximately 8,000 kilowatts.
 The power line from Xitieshan will provide sufficient electrical power to
meet these requirements and will also cover any increase in power demand in case
of expansion.

Potable
water will be supplied to the plant and camp sites from the raw water system.

A
tailings management facility ("TMF") constructed at the favoured site can be
described as a "hill side tailings impoundment".  The proposed TMF is
to have a maximum height of about 40 m and uses the downstream construction
method to minimize risks associated with the TMF.  The TMF has been
designed as a 'nil discharge' facility with all free water returned to the
treatment plant during operation.  The tailings impound is located
approximately one km downstream from the plant site.

Personnel

QDML
is expected to employ approximately 260 people throughout the operating phase of
the project.  Initially selected positions requiring specific skills or
experience are expected to be filled by expatriates.  In addition to
performing their job function, expatriate personnel will be expected to transfer
knowledge and expertise in order to develop the capabilities of the national
staff.  In the longer term, it is anticipated







---

37



that
PRC nationals will fill most operating and management positions within TJS.
 In addition, the mining contractor will employ approximately 60 people for
a total of 320 people for TJS.

Construction

Construction
began in April, 2005 and is expected to be completed in the third quarter of
2006.



As of
this date construction at TJS is approximately 60% complete.  Foundations
for the crushing plant, SAG mill, and floatation plant are complete and the SAG
mill has been secured on its foundation.  Pre-stripping has begun at both
JLG and QLT and ore has been exposed in both pits.



TJS is
on schedule to produce gold in October 2006. Capital costs are now estimated at
$63.4 million. The increase in capital costs is a result of changes to the
tailings dam design and general increases in engineering, procurement and
construction management costs. Additional capacity has also been added to the
process circuit to allow for increased throughput.

Operating
costs are anticipated to be $31.40 per tonne milled as shown below.



|                                                                        |           |                             
|----------------------------------------------------------------------- | --------- | ----------------------------
|Tanjianshan
      Gold Project
      Life
      of Mine Operating Costs
|                                                                        |           |                             
|Item                                                                    | Value[M$] | Unit Cost [$/t
      milled]
|Mining Costs                                                            | 81.3      | 13.55                       
|Treatment Costs                                                         | 82.4      | 13.75                       
|On Site General
      and Administration Costs                          | 24.6      | 4.10                        
|Total                                                                   | 188.3     | 31.40                       

This
equates to a direct operating cost of $224 per oz of gold.  The total cash
costs, including the 4.5% royalty payable to the Chinese partners, are estimated
at $248 per ounce over life of mine.

TJS
Reports

TJS
is the subject of the following technical reports: Tanjianshan Gold Project,
China, Technical Report dated September 2005, revised January 30, 2006 and
effective September 2005, prepared for Eldorado in part by RSG Global and in
part by the Company, and Tanjianshan Gold Project, Qinghai Province, China,
Bankable Feasibility Study Report dated April 2004 and prepared for Afcan by RSG
Global.



Exploration

In
2005, exploration at TJS was successful and extended the JLG mineralization to
the east into the M7 and Pubugou area and consisted of 68 core holes for 9,378
meters which was focused on extending the two known deposits. Outside of these
deposits, we also drilled an additional 2,186 meters as part of a regional
exploration program that included mapping and trenching.



The 2006
work plan calls for 3,000 meters of core drilling, which will target existing
inferred resources and known areas of gold mineralization, and surface trenching
to define further drill targets.

The
2006 program will target:



1.

Inferred
mineral resources currently within the JLG pit design;

2.

Extensions
of the QLT high grade orebody; and

3.

A
belt of known mineralization in intrusive rocks between JLG and QLT.

4.

The
2006 exploration budget for TJS is $2.2 million.







---

38







Associated
Projects



In
October 2003, we signed an agreement with the China National Gold Group
Corporation ("CNGC") for the exclusive right to review their portfolio of
operating mines, development projects and exploration projects for a period of
five months. The review was then expanded to include joint reviews of other
identified opportunities in China external to CNGC. A further extension of our
agreement with CNGC terminated on August 31, 2004.



On
January 11, 2005, we signed a Memorandum of Understanding with Shandong Gold
Corporation ("Shandong") outlining possible joint ventures on one advanced
exploration property and two development projects.  The Memorandum of
Understanding with Shandong terminated on September 11, 2005.











---

39





Brazil



click map to
enlarge

São
Bento

Our
operating mine: São Bento is located near Santa Barbara, Brazil.

Ownership
Interest

We
own 100% of São Bento through our various subsidiaries, including our wholly
owned Brazilian subsidiary, São Bento Mineração SA. The mine site covers an
area of 800 hectares and consists of one mining concession. A single contiguous
mining concession of 1,221 hectares, also owned 100% by São Bento Mineração
SA, adjoins the northeastern boundary of the mine site.

Location
and Access

São
Bento is located in the municipality of Santa Barbara in Minas Gerais State,
Brazil, approximately 110 kilometers by road east of Belo Horizonte, the state
capital, and 375 kilometers north of Rio de Janeiro. The mine site is accessed
by good paved roads and a rail line serves the two cities.

Acquisition

São
Bento was acquired from Gencor Limited on July 4, 1996, as part of a portfolio
of assets.

History

The
area around São Bento has been worked for gold intermittently since the 1860s.
The mine was operated by various companies until 1947. Gencor acquired São
Bento in the 1970s and, in July 1984, began developing the mine in two phases.
The first phase, with a process capacity of 20,000 tonnes per month using an
internal winze system to access the ore body, was completed in late 1986. This
winze







---

40



system
was later replaced by inclines capable of handling 35,000 tonnes per month of
ore and waste. Gencor's second development phase began in 1988 and consisted
of sinking a vertical shaft and doubling the capacity of the grinding and
oxidation circuits in the processing plant. Gencor installed a one-tank BIOX®
pilot plant in 1991 and a second BIOX® tank in February 1995. Eldorado acquired
the São Bento mine from Gencor in July 1996, and in 1998 completed an
optimization and expansion program, converting the operations to trackless
long-hole sub-level mining.

Geology
and Mineralization

São
Bento is situated in the "Quadrilatero Ferrifero" ("Iron Quadrangle") of
Minas Gerais State. The stratigraphy is made up of volcanic rocks, chemical
sediments and pelitic sediments, all of which have been subjected to greenschist
metamorphism. The lithologies are typical of greenstone belts in Africa,
Australia and Canada and are dated as Archean in age.

The
formations have been strongly folded along a northeast trending axis. Dips are
steep, generally in the range of 45-50°. Mineralization at the São Bento mine
is restricted to a sequence of chemical and fine-grained sediments and tuffs of
the Nova Lima Group. Four formations have been identified on the property: the
Carrapato Formation, the Lower Iron Formation, the Basal Iron Formation and the
São Bento Formation. Gold mineralization is localized in the Basal Iron
Formation ("BIF").

On
the basis of lateral lithologic variations, the BIF is subdivided along strike
into three portions: Orebody No. 1, Orebody No. 2 and the São Bento/Pinta Bem
or Orebody No. 3. The BIF has its greatest thickness in the Orebody No. 1 area,
where it is approximately 35 meters thick, and at least six periods of gold/sulphide
mineralization are evident. The ore zone is distinctly banded and consists of
alternating layers of sulphide and iron carbonates. Gold occurs in close
association with sulphides and may be free, on crystal boundaries or enclosed in
sulphide grains. Grain sizes of the host rock minerals and sulphides range from
0.5 to 5.0 millimeters and gold grains range from 1 to 250 microns, with an
average of 70 microns. The ratio of sulphur to gold is consistent (in the range
of 0.62 to 0.64) and ore zones exhibit very uniform average gold content. Below
the mine's 26th level horizon, a meta basaltic dike dipping at approximately
42° bisects the BIF from footwall to hanging wall. A zone of fragmentation is
encountered local to the intrusive with localized flattening of the BIF dip
angle. Drilling below this horizon has identified continuation of the BIF
structure and mineralization subdivided into lower and upper ore zones, which
have been traced down to the 30th level boundary pillar.

Mining

São
Bento is an underground mine accessed by an adit on level 11 and a vertical
shaft that services the surface, level 11 and levels 17 to 28. The vertical
shaft is used to hoist ore and waste to the surface and to deliver workers and
materials to level 17 and below. In its current configuration, the vertical
shaft hoisting capacity is approximately 100,000 tonnes per month. A twin ramp
system accesses the orebody between levels 21 and 25, reverting to a single ramp
beyond level 25. The predominant mining method at São Bento is long hole open
stoping.

São
Bento employs 714 workers, and the mine and plant operate 24 hours per day,
seven days a week.

The
processing plant at São Bento is a conventional grinding and milling operation
using an autogenous mill. Once the ore is milled, it goes to a flotation unit
where the concentrate of sulphides containing gold is separated from the
tailings. This concentrate is then forwarded to an oxidation process through
three bioxidation reactors using the BIOX® process and/or through two
autoclaves. Gold is recovered in a six-stage CIL circuit to produce doré. The
processing plant has a current design capacity of 40,000 tonnes per month and
gold recovery is approximately 92%. Tailings are classified to produce a sand
product used for underground backfill and the final tailing is sent to the
tailings impound area. Production in 2005 was 64,297 ounces of gold at a cash
cost of $413 per ounce.







---

41



Development
Activities

From
Jan 1, 2003 to February 28, 2006, Eldorado invested $20.02 million in capital
expenditures at its São Bento mine in Brazil.



In Q1 of
2003, we scheduled and completed an overhaul of the #1 Autoclave. In Q2 2003, we
received an unconditional renewal of the Operating Licence from the State
Environmental Agency (FEAM).



On April
2, 2003, we announced our intent to deepen the shaft at São Bento (the "shaft-deepening
project") by approximately 370 meters, providing a bottom working elevation
approximately 1,300 meters below surface. The shaft-deepening project was
completed in October 2005 and commissioned in November 2005 at a total capital
cost of $13.33 million, which was funded through internally generated cash flows
from the São Bento mine. São Bento employees completed the project with no
lost-time accidents.



In 2004,
lower production levels resulted in higher cash costs per ounce. Production was
lower because of a high level of waste handling, poor ground conditions and the
presence of a metabasite intrusive that intersects the orebody in the area
scheduled for mining. The intrusive altered the local mineralogy of the ore,
resulting in higher oxygen and cyanide consumption.



The 2004
exploration drilling program of 2,791 meters of infill drilling and 17,612
meters of exploration drilling did not establish the continuity of the
mineralization below the intrusive at the mine's 34th level. Infill
drilling above the intrusive in an area previously defined as a probable reserve
resulted in a reduced estimate of probable reserves in this area.

In
2005, the São Bento Mine in Brazil produced 64,297 ounces of gold at a cash cost of
$407 per ounce.  Gold production was adversely affected during the year due
to problems with ground stability and interruptions during the completion of the
shaft deepening project.  Cash costs were impacted by lower gold
production, increased costs for ground support, and the appreciation of the
Brazilian Real against the U.S. dollar.

During
2005, 17 diamond drill holes were completed at São Bento for 6,600 meters.
 A study was undertaken by the Federal University in Belo Horizonte to
examine all geological, structural and geochemical data and comment on the
probability of down dip extensions of the ore zone.  The conclusion was
that there is a low probability of the ore zone continuing below the mafic dike
on the 33rd level. The mine at São Bento will enter its last full
year of production as we plan to cease mining operations the first half of 2007.
 The Company is in discussions to determine the future of the plant.

Capital
Expenditures

We
spent $9.0 million in capital expenditures on the São Bento in 2003 and
$5.7 million in 2004. Capital expenditures for 2005 were $7.36 million,
excluding the shaft-deepening capital expenditures.

Safety

On
March 16, 2003 a fatality occurred as a result of a fall of ground. Mine
management continues to work with the Ministry of Labor to improve worker
awareness and safe work practices to establish a safe working environment
throughout the mine.

The
incident rate of lost-time accidents to date compares favourably with the
average for similar underground operations in Ontario, Canada.







---

42



Data
Verification

The
original data, including drill hole logs assay results, were reviewed by Norman
Pitcher, P.Geo., a qualified person under NI 43-101 and our Chief Operating
Officer, and by Sergio Martins, Director, Exploration and Geology of São Bento.
No irregularities were found.

São
Bento Reports

São
Bento is the subject of the following independent reports (the "Reports"):
"Review of Ore Reserves and Metallurgical Operations at São Bento Mineraçao,
Brazil" (prepared by Watts Griffis & McOuat Limited and dated February 5,
1996), "Review of Operations at São Bento Mineraçao, Brazil" (prepared by
Watts, Griffis & McOuat Limited and dated May 13, 1996), "Addendum to
Review of Operations at São Bento Mineraçao, Brazil" (prepared by Watts,
Griffis & McOuat Limited and dated April 27, 2000 and revised May 10,
2000) and "Addendum to A Review of Operations at São Bento Mineraçao Brazil"
(prepared by Eldorado and dated April 15, 2002 and revised April 30, 2002).
Copies of the Reports are available at www.sedar.com
under the Company's name. The full Reports should be reviewed in order to put
the preceding discussion in context.

Exploration

In
2006, exploration in Brazil will focus on the Vila Nova projects and the grass
roots Tartarugalzinho project. The total 2006 exploration and development budget
for Brazil is $4.7 million.

Vila
Nova Gold

Under a joint venture agreement with DSI Consult & Mineracao Amapa (DSI) we have an option to acquire 84% of the Vila Nova gold project in Amapa State by making staged property payments totalling $5.2 million over three years (2005-2007).  In 2005 we drilled 9 diamond drill holes (764 meters) beneath garimpero workings, and conducted detailed mapping and sampling of those workings.  Field crews also completed a soil sampling survey on the extensions of the main trend of mineralization.  An airborne geophysical survey was undertaken to provide regional drill targets.  Earlier mapping and surface channel sampling helped identify the initial drill targets. Two target types emerged from this preliminary work: widespread, lower-grade gold envelopes (0.5 to 3.0 g/t) in silica and/or carbonate altered zones within and surrounding the iron formation units, and narrow high-grade intervals occurring in sulphide bearing, silica-rich iron formation layers where they intersect the hinge areas of the numerous tight folds in the project area.  Results from the initial 2005 drill program indicated that gold mineralization occurs both in wider, lower grade zones and in narrow, high grade shoots. Both types of mineralization are hosted by
BIF, similar to the host rock at São Bento.  The 2006 work program will consist of 12,000 meters of diamond drilling, additional mapping and sampling, magnetic and IP geophysics and initial metallurgical
testwork.  We are extremely encouraged by the results of our exploration program to date and we are looking forward to continued success in 2006.  The Vila Nova gold project will be the priority target for Brazilian exploration in 2006, the budget for the Vila Nova gold project for 2006 is $3.4 million.



Tartarugalzhino

We
own a 100% interest in the Tartarugalzhino project in Amapa State covering an
area of 80,000 hectares.  In 2005, work crews continued with geologic
mapping and sampling.  An airborne geophysical survey was completed.
 The work plan for Tartarugalzinho for 2006 consists of follow-up mapping
and sampling of both garimpero workings and geophysical anomalies discovered as
a result of the airborne survey in 2005.  Our first stage budget for
Tartarugalzinho is $370,000.

Vila
Nova Iron Ore Project

We
have an option to acquire 50% of the Vila Nova iron ore project from DSI by
spending $200,000 on exploration expenditures and $175,000 in option payments
over two years.







---

43



The
massive hematite forms a steeply dipping body 10 to 40 meters thick that trends
approximately north-south with a narrower fold limb extending to the northwest.
The resource contains massive and laminated hematite with minor intercalations
of schist in the central and southern part of the ore body and softer more
granular hematite in the north, particularly north of the Vila Nova River where
it becomes interspersed with iron rich schist (itabirite).

An inferred mineral resource of 8.7 million tonnes has been estimated with an iron content of 61.5% at the project.
 The inferred mineral resource is based on 19
diamond drill holes located on section lines 100 meters to 200 meters apart over
a strike length of 1,400 meters.  Our plan for the Vila Nova iron ore
project for 2006 is to prepare a feasibility study to allow us to convert this
mineral resource to proven and probable reserves and to continue with permitting
and project implementation.  Approximately 1,500 meters of infill and
extension drilling will be completed in 2006, as well as metallurgical testwork
and preliminary site layouts.  The budget for the Vila Nova iron ore
project in 2006 is $900,000.

Environment

São
Bento continues to operate within all Brazilian federal, state and local laws
and regulations and maintains a process of providing information to FEAM, the
state agency in charge of environmental protection and regulation. In those
instances where environmental laws have not evolved to cover certain aspects of
the operation, we adopt accepted world standards. We place considerable emphasis
on improving safeguards to the environment; for example, we modified the plant
drainage to capture all runoff in the tailings impoundment. The mine maintains a
greenhouse to cultivate native species for reclamation and is currently
revegetating an abandoned open pit.

In
2005 and 2004, there were no incidents adversely affecting the environment. The
mine is participating in a multi-stakeholder group studying background values of
arsenic in the area and communities surrounding the mine. In 2003, the São
Bento mine opened the Centre of Environmental Education and established
environmental education programs for employees and the public. In 2004, São
Bento won an Environmental Preservation Award for its environmental management
program, which includes the creation of a 180-hectare park area on the mine
site.

Associated
Projects

On
October 30, 2002, Eldorado completed an agreement with AngloGold under the basic
terms of a letter of intent signed in August 2000, including the following:

1)

Eldorado,
through its wholly owned subsidiary, São Bento Mineraçao SA, was granted a
mining lease under which it will have the right to explore, develop and mine any
reserves it discovers down dip beyond the 30th level, its existing
property boundary with Anglogold. In exchange, a net smelter royalty on the
production of gold recovered from Anglogold properties will be paid to Anglogold
according to a graduated scale ranging from 0.5% at a gold price less than $275
per ounce to a maximum of 4.0% at a gold price of $399 per ounce or greater.

2)

Anglogold
was granted an option valid for a period of three years, providing Anglogold
with the rights, in the event that a mining operation is developed on its
adjacent properties, to access any surplus capacity at the São Bento plant and
to expand the plant at Anglogold's sole cost and without disruption to Eldorado's
operations. Operating costs for the plant would be borne by both companies pro
rata according to their proportionate planned and actual use of the
facility. In addition to sharing in any unit cost savings from utilizing an
expanded plant, Eldorado will receive a net smelter royalty based on the same
graduated scale as Anglogold's royalty and payable on all gold produced from the
Anglogold property that is processed through the Eldorado facility.

On
November 21, 2005, Eldorado gave notice to AngloGold that there would be no
surplus capacity.







---

44



As
of March 1, 2002, an agreement was signed establishing the terms of an Option
Agreement between Eldorado and Companhia Vale do Rio Doce ("CVRD") whereby
Eldorado was granted an option to purchase the Brumal property (located near the
São Bento mine) in its entirety after spending $1.5 million in a staged work
program to be completed over 2.5 years. On March 3, 2003, Eldorado and CVRD
terminated the Option Agreement.

Piaba
Project, Maranhão State

We
own a 50% interest in the Piaba project through our 50% ownership of Aurizona
Goldfields Corporation. This project consists of one mining concession covering
an area of 9,981 hectares. Three additional applications for exploration permits
cover an additional area of approximately 20,100 hectares to the west.

In
February 2005, we contracted AMEC Americas to examine the viability of the Piaba
project in northeastern Brazil, which hosts a significant resource in weathered
and fresh rock. This study concluded that the project is economic at current
gold prices and recommended further metallurgical testwork. We do not intend to
advance this project in 2006 due to other priorities in Brazil.

Luziânia
Project, Goias State

We
have transferred our interest in the Luziânia project to our joint venture
partner. We retain a 5% royalty interest.

FINANCE

On
January 10, 2003, the SEC declared our registration statement on Form 40-F
effective.

On
January 23, 2003, our Common Shares began trading on the AMEX under the symbol
"EGO".

On
March 21, 2003, we were added to the S&P/TSX Composite Index and the Global
Industry Classification Standard Sector - Material, Gold.

On
August 25, 2003, we completed a financing of 25,000,000 units at a price of
Cdn$3.10 per unit with a syndicate of underwriters for gross proceeds of
Cdn$77,500,000 ($55,320,000). Net proceeds after paying all expenses relating to
the offering were Cdn$73,999,000 ($52,822,000). Each unit consisted of one
Common Share in the capital of the Company and one-half of one Common Share
purchase warrant. The warrants were issued pursuant to a Warrant Indenture dated
August 25, 2003 between Eldorado and Computershare Trust Company of Canada. Each
warrant entitled the holder to acquire one Common Share at a price of Cdn$4.10
until August 25, 2004. On August 16, 2004, the term of the warrants was extended
by one year and all warrants expired on August 25, 2005.



On
September 29, 2003, we eliminated our outstanding Convertible Debenture debt,
leaving us in a debt-free position.



On
November 12, 2004, we completed a financing of 20,700,000 shares at a price of
Cdn$3.75 per share with a syndicate of underwriters for gross proceeds of
Cdn$77,625,000 ($65,083,000). Net proceeds after paying all expenses relating to
the offering were Cdn$74,103,000 ($62,140,000).



On April
6, 2005 Tüprag entered into a revolving credit facility for $65,000 with HSBC
Bank USA, National Association.  The credit facility is secured by cash
deposits, equivalent to the amounts advanced by HSBC Bank to Tüprag, to a cash
collateral account over which the HSBC Bank holds security. At December 31,
2005, the total debt outstanding was $50,000 and bears interest at the LIBOR
rate plus 1.25% on the date of the draw.  On April 21, 2005 Tüprag drew
$15,000 at 4.19%, on June 15, 2005 Tüprag drew $20,000 at 4.35%, on July 29,
2005 Tüprag drew $5,000 at 4.66% and on September 2,







---

45



2005
Tüprag drew $10,000 at 4.64%. The facility is scheduled for repayment in 2006,
renewable annually at the Company's option for 5 years.



On
August 25, 2005, Eldorado made a credit facility available to Afcan in the
amount of $15 million. Loans under the facility had interest at a rate equal to
LIBOR plus 3% per annum. Upon the completion of the Transaction the loan was
converted to an inter-company loan.  Proceeds of the credit facility were
used primarily to fund Tanjianshan obligations of QDML.



On
September 13, 2005, as a result of the acquisition of Afcan, we inherited two
loans of $2.13 million payable to Sino Gold Limited.  The first loan of
$0.70 million and the first instalment of the second loan of $0.29 million were
paid in full at December 31, 2005.

On
February 7, 2006, we completed our financing of 30,000,000 Common Shares with a
syndicate of underwriters and the underwriters over-allotment of 4,500,000
common shares for a total of 34,500,000 Common Shares at CDN$5.40 per common
share for gross proceeds of CDN$186,300,000. The net proceeds to us were
CDN$178,848,000 and the Underwriters received a cash commission of
CDN$7,452,000.

GOLD
MARKET AND PRICE

Gold
is used primarily for product fabrication and investment. Gold is traded on
international markets and individual buyers and sellers generally are unable to
influence its price. The London price fixing for gold on December 30, 2005
was $513 per ounce.

FOREIGN
CURRENCY EXPOSURE

All
of Eldorado's revenues from gold sales are denominated in US dollars, while
the majority of its operating costs are denominated in the local currencies of
the countries in which it operates. We monitor the economic environment,
including foreign exchange rates, in these countries on an ongoing basis. As
much as possible, we hedge our local currency foreign exchange exposure in
relation to the US dollar with the goal of minimizing our
foreign-currency-denominated costs.

The
foreign exchange gains/(losses) realized in the last four financial years are:



|                    |             
|------------------- | ------------
|December
      2005 | $976,000    
|December
      2004 | $196,000    
|December
      2003 | $6,494,000  
|December
      2002 | ($1,046,000)
|December
      2001 | ($173,000)  



GOLD
REFINING, SALES AND HEDGING ACTIVITIES

Degussa
Brasil Ltda. in Brazil refines the São Bento mine's gold doré to market
delivery standards. In 2006, ValcambiSA, in Switzerland will begin refining the
gold doré production from our Turkish Kisladag mine to market delivery
standards. At the time of this report, a refiner in China has not been
identified for Tanjianhsan's gold doré production. Production at the
Tanjianshan mine is planned to commence in October 2006, at which time we expect
to enter into a contract with a refinery. We do not







---

46



believe
that there would be any negative impacts if we lost the services of our current
refiners, since other refiners are available.

We
use a variety of hedging techniques to mitigate the impact of downturns in the
gold market and provide adequate cash flow for operations. In 2005, we sold our
gold production to bullion dealers on a spot market basis. As of the date of
this report, we do not have any gold or currency hedges in place.

Our
future hedging activities will depend on an ongoing assessment of the gold
market, our hedging strategy, financing restrictions and other factors.



CURRENCY
AND EXCHANGE RATES

Our
revenue is derived primarily from the sale of gold, denominated in US dollars.
Our costs are incurred in a variety of currencies, including the Canadian
dollar, the Brazilian Real ("Real"), the Turkish Lira ("Lira") and the
Chinese Renminbi ("RMB"). Our accounts are maintained in US dollars.

The
noon rate of exchange on January 30, 2006, as reported by the Bank of Canada,
for converting Canadian dollars into US dollars was Cdn$0.8739 per US$1.00
(Cdn$1.00 equals US$1.1443).

The
following table sets forth: (i) the rate of exchange for the Canadian dollar,
expressed in US dollars, in effect at the end of the periods indicated, (ii) the
average of exchange rates in effect on the last day of each month during such
periods and (iii) the high and low exchange rates during such periods, each
based on the noon rate of exchange as reported by the Bank of Canada for
converting Canadian dollars into US dollars.



|                              |                               |        |        |       
|----------------------------- | ----------------------------- | ------ | ------ | ------
|                              | Year
      Ended December 31,
|                              | 2005                          | 2004   | 2003   | 2002  
|Rate at end of
      period   | 0.8577                        | 0.8305 | 0.7730 | 0.6339
|Average rate for
      period | 0.8254                        | 0.7684 | 0.7135 | 0.6368
|High for period               | 0.8691                        | 0.8494 | 0.7738 | 0.6618
|Low for period                | 0.7872                        | 0.7160 | 0.6350 | 0.6199

EMPLOYEE
RELATIONS AND PERSONNEL

As
at February 28, 2005, Eldorado and its subsidiaries had 1,264 hourly workers,
contractors and permanent employees worldwide (Brazil: 714, Canada: 20, Turkey:
230, China: 300). We also engage a number of contractors to work on specific
projects. None of our employees belong to a union, except for the hourly workers
at the São Bento mine. Labour agreements in Brazil are mandated to one-year
contracts. A labour agreement with the Santa Barbara Gold and Precious Metals
Extraction Industry Workers Union was signed in Q3 2004 without disruption.
Kisladag will employ approximately 365 people at maximum production, and the
majority of the workers will be drawn from the local region. We consider our
employee relations to be good.

COMPETITION

We
compete with other mining companies for acquiring mineral claims, permits,
concessions and other mineral interests as well as for recruiting and retaining
qualified employees. There is significant competition for the limited number of
gold acquisition opportunities and, as a result, we may be unable to acquire
attractive gold mining properties on terms we consider acceptable.







---

47



RISK
FACTORS

We
are engaged in mining, development and exploration activities which, by their
nature, are speculative due to the high-risk nature of our business and the
present stage of our various properties.  Our securities should be
considered a highly speculative investment due to the nature of our business.
 Prospective investors should carefully consider all of the information
disclosed in this prospectus, including all documents incorporated by reference,
and in particular the risk factors set out below and under the heading "Risk
Factors" contained in the AIF incorporated herein by reference prior to
making an investment in us.  Such risk factors could materially affect our
future financial results and could cause actual events to differ materially from
those described in forward-looking statements relating to us or our business,
property or financial results, each of which could cause investors to lose part
or all of their investment in our Common Shares.

Risks
related to Financial Matters

Gold
price volatility may affect our profitability.

The
profitability of our operations is significantly affected by changes in the gold
price.  The gold price can fluctuate widely and is affected by numerous
factors beyond our control, including industrial and jewellery demand, inflation
and expectations with respect to the rate of inflation, the strength of the U.S.
dollar and of other currencies, interest rates, gold sales by central banks,
forward sales by producers, global or regional political or economical events,
and production and cost levels in major gold-producing regions such as South
Africa.  In addition, the gold price is sometimes subject to rapid
short-term changes because of speculative activities.  The supply of gold
consists of a combination of new production from mining and existing stocks of
bullion and fabricated gold held by governments, public and private financial
institutions, industrial organizations and private individuals.  As the
amounts produced in any single year constitute a small portion of the total
potential supply of gold, typical variations in current production do not
necessarily have a significant impact on the supply of gold or its price.

Between
2001 and 2005 the price of gold as quoted on the London Bullion Market ranged
between a low of $255.95 and a high of $536.50 per ounce, based on the P.M.
fixing price for gold.

The
gold price used in the 2005 reserves and resources calculations for São Bento
and the TJS Project was $450 per ounce and $350 per ounce for Kisladag.
 Currently, our five year plan assumes a gold price of $450 for 2006, $425
for 2007, $400 for 2008, $375 for 2009, and $375 for 2010, for an average of
$405 per ounce.  Consequently, reserve calculations and life-of-mine plans
using significantly lower gold prices could result in reduced estimates of
reserves and resources and in material write-downs of our investment in mining
properties and increased amortization, reclamation and closure charges.

If
gold prices were to decline significantly or for an extended period of time, we
might be unable to continue our operations, develop our properties or fulfill
our obligations under our agreements with our partners or under our permits and
licenses.  As a result, we might lose our interest in, or be forced to
sell, some of our properties.

If
we engage in gold hedging activities it may minimize the effect of a decline in
the gold price on the results of our operations but it may also limit the price
that can be realized on our gold.

As
of the date hereof, we have no gold hedges in place but may engage in hedging
activities in the future. Hedging activities are intended to protect a company
from the fluctuations of the price of gold and to minimise the effect of
declines in gold prices on results of operations for a period of time.
 Although hedging activities may protect a company against low gold prices,
they may also limit the price that can be realized on gold that is subject to
forward sales and call options where the market price of gold exceeds the gold
price in a forward sale or call option contract.







---

48



Mineral
reserve and resource estimates are only estimates and there is no certainty that
the indicated levels of gold production will be realized by us.

The
proven and probable reserve figures set forth in this prospectus are estimates,
and there is no certainty that the indicated levels of gold production will be
realized.  Reserve estimates may require revision based on various factors
such as actual production experience, market price fluctuations of gold, results
of drilling, metallurgical testing, production costs or recovery rates.
 For example, cut-off grades for our deposit estimates are based on certain
assumptions for plant recovery, gold value, mining dilution and recovery, along
with operating and capital costs projections that are based on the historical
production figures.  Estimated reserves and resources may have to be
recalculated based on actual production or exploration results.  Market
price fluctuation of gold, as well as increased production costs or alteration
in recovery rate may render the proven and probable reserves unprofitable to
develop at a particular property or for a specific mine.  Any material
reduction in estimates of our reserves or our ability to extract these reserves
could have a material adverse effect on our future cash flow, results of
operations and financial condition.

There
are numerous uncertainties inherent in estimating proven and probable reserves
and measured, indicated and inferred mineral resources, including many factors
beyond our control.  The estimation of reserves and resources is a
subjective process, and the accuracy of any such estimates are a function of the
quantity and quality of available data and of the assumptions made and judgments
used in engineering and geological interpretation, which may prove to be
unreliable.  There can be no assurance that these estimates will be
accurate, that reserves and resource figures will be accurate, or that reserves
or resources can be mined or processed profitably.

Mineral
resources which are not mineral reserves do not have demonstrated economic
viability.

Certain
reserve and resource estimates included in documents incorporated by reference
were made before NI 43-101 came into force and may vary materially from
estimates made in accordance with NI 43-101.

Definitional
standards for reporting mineralized material differ between United States
reporting standards and the Canadian standards used in this prospectus.

The
disclosure in this Annual Information Form and documents incorporated by
reference use terms that comply with reporting standards in Canada and certain
estimates are made in accordance with Canadian NI 43-101.  For example, we
use the terms "measured mineral resources," "indicated mineral resources"
and "inferred mineral resources" in this prospectus to comply with the
reporting standards in Canada.  We advise investors that while those terms
are recognized and required by Canadian regulations, the United States
Securities and Exchange Commission, or the SEC, does not recognize them.
 Investors are cautioned not to assume that any part or all of the mineral
deposits in these categories will ever be converted into mineral reserves.
 These terms have a great amount of uncertainty as to their existence, and
great uncertainty as to their economic and legal feasibility.  It cannot be
assumed that all or any part of measured mineral resources, indicated mineral
resources, or inferred mineral resources will ever be upgraded to a higher
category.  In accordance with Canadian rules, estimates of inferred mineral
resources cannot form the basis of feasibility or other economic studies.
 Investors are cautioned not to assume that any part of the reported
measured mineral resources, indicated mineral resources, or inferred mineral
resources in this prospectus is economically or legally mineable.

In
addition, the definitions of proven and probable reserves used in NI 43-101
differ from the definitions in the SEC Industry Guide 7.  Accordingly,
information contained in this prospectus and the documents incorporated by
reference herein containing descriptions of our mineral deposits may not be
comparable to similar information made public by U.S. companies subject to the
reporting and disclosure requirements under the United States federal securities
laws and the rules and regulations thereunder.







---

49



Our
failure to achieve our production estimates could have a material adverse effect
on our future cash flows, results of operations and financial condition.

Estimates
of future production for our mining operations as a whole are derived from our
five-year mining plans.  These estimates are subject to change.  For
example, São Bento is facing increasingly challenging ground conditions at
depth, including adverse ventilation and temperature levels underground and
lower grade production scheduling.  These conditions combined with
appreciation in the Real have resulted in an increase in cash costs per ounce.
 We reduced our estimate of probable reserves in this area and reduced mine
life of the São Bento operation.

We
cannot give any assurance that we will achieve our production estimates.
 Our failure to achieve our production estimates could have a material and
adverse effect on any or all of our future cash flows, results of operation and
financial condition.  The plans are developed based on, among other things,
mining experience, reserve estimates, assumptions regarding ground conditions
and physical characteristics of ores (such as hardness and presence or absence
of certain metallurgical characteristics) and estimated rates and costs of
production.  Actual production may vary from estimates for a variety of
reasons, including risks and hazards of the types discussed above, and as set
out below:

·

actual
ore mined varying from estimates in grade, tonnage, and metallurgical and other
characteristics;

·

mining
dilution;

·

pit
wall failures or cave-ins;

·

ventilation
and adverse temperature levels underground;

·

industrial
accidents;

·

equipment
failures;

·

natural
phenomena such as inclement weather conditions, floods, blizzards, droughts,
rock slides and earthquakes;

·

encountering
unusual or unexpected geological conditions;

·

changes
in power costs and potential power shortages;

·

shortages
of principal supplies needed for operation, including explosives fuels, chemical
reagents, water, equipment parts and lubricants;

·

strikes
and other actions by labour at unionized locations; and

·

restrictions
imposed by government agencies.

Such
occurrences could result in damage to mineral properties, interruptions in
production, injury or death to persons, damage to our property or the property
of others, monetary losses and legal liabilities.  These factors may cause
a mineral deposit that has been mined profitably in the past to become
unprofitable.  Estimates of production from properties not yet in
production or from operations that are to be expanded are based on similar
factors (including, in some instances, feasibility studies prepared by our
personnel and/or outside consultants) but it is possible that actual cash
operating costs and economic returns will differ significantly from those
currently estimated. It is not unusual in new mining operations to experience
unexpected problems during the start-up phase.  Delays often can occur in
the commencement of production.







---

50



We
may need to raise additional financing in the future to fund our exploration and
development program.

We
estimate that our current financial resources and the proceeds from this
offering, will be sufficient to undertake our presently planned exploration and
development program.  Further exploration on, and development and
construction of, our mineral resource projects in Brazil, Turkey and China will
require additional capital. In addition, a positive production decision on any
of our current projects would require significant capital for project
engineering and construction. Accordingly, the continuing development of our
properties will depend upon our ability to obtain financing through the joint
venturing of projects, debt financing, and equity financing or other means.
There is no assurance that we will be successful in obtaining the required
financing on terms acceptable to us, if at all.

We
may incur losses associated with foreign currency fluctuations.

We
operate in a number of jurisdictions outside of North America, namely Brazil,
Turkey and China, and incur certain expenses in foreign currencies.
 Currently, revenue from operations are received in United States dollars
while a significant portion of our operating expenses are incurred in Real, Lira
and RMB.  We incur certain production costs at São Bento in Real, which
appreciated 25% during 2005 and increased production costs at São Bento.
 We anticipate that we will incur exploration costs related to our
operations in China in RMB, the value of which fluctuates and is subject to
changes in the PRC's political and economic conditions.  A significant
portion of our construction costs and operating expenses are in Lira and are
subject to currency exposure.

We
are subject to fluctuations in the rates of currency exchange between United
States dollars and these currencies, and such fluctuations may materially affect
our future cash flow, results of operations and financial condition.
 Consequently, construction, development and other costs may be higher than
we anticipate.  We currently do not hedge against currency exchange risks,
although we may do so from time to time in the future.

Risks
related to our business and operations.

Regulatory
requirements significantly affect our mining operations and may have a material
adverse impact on our future cash flow, results of operations and financial
condition.

We
conduct operations in a number of jurisdictions outside of North America, namely
Brazil, Turkey and China.  The laws in each of these countries differ
significantly and may change.  Mining operations, development and
exploration activities are subject to extensive laws and regulations governing
prospecting, development, production, exports, taxes, labour standards,
occupational health, waste disposal, environmental protection and remediation,
protection of endangered and protected species, mine safety, toxic substances
and other matters.  Mining is subject to potential risks and liabilities
associated with pollution of the environment and the disposal of waste products
occurring as a result of mineral exploration and production.  The costs of
discovering, evaluating, planning, designing, developing, constructing,
operating and closing our mines and other facilities in compliance with such
laws and regulations are significant.

Failure
to comply with applicable laws and regulations, may result in enforcement
actions thereunder, and may include corrective measures requiring capital
expenditures, installation of additional equipment, or remedial actions.
 Parties engaged in mining operations may be required to compensate those
suffering loss or damage by reason of the mining activities and may have civil
or criminal fines or penalties imposed for violations of applicable laws or
regulations.

New
laws and regulations, amendments to existing laws and regulations,
administrative interpretation of existing laws and regulations, or more
stringent enforcement of existing laws and regulations, could have a material
adverse impact on our future cash flow, results of operations and financial
conditions.







---

51



There
are numerous additional risks related to our foreign investments and operations
which may limit or disrupt a project.

The
majority our activities and investments are located in foreign countries.
 Our material foreign investments include operations in Brazil and
exploration and development projects in Brazil, Turkey and China.

These
investments are subject to the risks normally associated with conducting
business in foreign countries.  Some of these risks are more prevalent in
countries which are less developed or have emerging economies, including
uncertain political and economical environments, as well as risks of war and
civil disturbances or other risks which may limit or disrupt a project, restrict
the movement of funds or result in the deprivation of contract rights or the
taking of property by nationalization or appropriation without fair
compensation, risk of adverse changes in laws or policies of particular
countries, increases in foreign taxation, delays in obtaining or the inability
to obtain necessary governmental permits, limitations on ownership and
repatriation of earnings and foreign exchange controls and currency
devaluations.  In addition, we may face import and export regulations,
including restrictions on the export of gold, disadvantages of competing against
companies from countries that are not subject to Canadian and U.S. laws,
including the Foreign Corrupt Practices Act, restrictions on the ability to pay
dividends offshore, and risk of loss due to disease and other potential endemic
health issues.  Although we are not currently experiencing any significant
or extraordinary problems in foreign countries arising from such risks, there
can be no assurance that such problems will not arise in the future.

In
the countries where we have operations or conduct exploration activities, the
mineral rights or certain portions of such rights are owned by the relevant
governments.  Such governments have entered into contracts with us and our
subsidiaries, or granted permits or concessions that enable us to conduct
operations or development and exploration activities on such lands.
 Notwithstanding such arrangements, our ability to conduct our operations
or development and exploration activities on such lands is subject to changes in
government policy over which we have no control.  If such a change were to
occur that affected our right or the rights of any of our subsidiaries to
conduct operations or development and exploration activities, it could have a
material adverse effect on the results of our operations.

We
can not provide any assurances that we will be issued the necessary exploration
and mining permits and licences, or if issued that they will be renewed or that
we can comply with the conditions imposed.

All
mineral resources in the countries where we operate are owned by their
respective governments, and mineral exploration and mining activities may only
be conducted by entities that have obtained or renewed exploration or mining
permits and licenses in accordance with the relevant mining laws and
regulations. No guarantee can be given that the necessary exploration and mining
permits and licenses will be issued to us or, if they are issued, that they will
be renewed, or that we will be in a position to comply with all conditions that
are imposed.

Nearly
all mining projects require government approval. There can be no certainty that
these approvals will be granted to us in a timely manner, or at all.

We
can not provide any assurances that our joint venture partners will not veto our
plans for the business and prevent us from achieving our objectives.

Mining
projects are often conducted through an unincorporated joint venture or an
incorporated joint venture company.  Joint ventures can often require
unanimous approval of the parties to the joint venture or their representatives
for certain fundamental decisions such as an increase or reduction of registered
capital, merger, division, dissolution, amendment of the constating documents,
and the pledge of the joint venture assets, which means that each joint venture
party has a veto right with respect to such decisions which could lead to a
deadlock.







---

52



As
gold exploration is highly speculative and involves many risks, we cannot
provide any assurance that our gold exploration efforts will be successful.

Gold
exploration is highly speculative in nature, involves many risks and frequently
is not productive.  There can be no assurance that our gold exploration
efforts will be successful.  Success in increasing reserves is a result of
a number of factors, including the quality of our management, its level of
geological and technical expertise, the quality of land available for
exploration and other factors.  Once gold mineralization is discovered, it
may take several years in the initial phases of drilling until production is
possible, during which time the economic feasibility of production may change.
 Substantial expenditures are required to establish proven and probable
reserves through drilling, to determine the optimal metallurgical process to
extract the metals from the ore and, in the case of new properties, to construct
mining and processing facilities.  As a result of these uncertainties, no
assurance can be given that our exploration programs will result in the
expansion or replacement of current reserves with new reserves.

Development
projects are uncertain and consequently it is possible that actual cash
operating costs and economic return will differ significantly for those
estimated for a project prior to production.

Mine
development projects, including our development at Kisladag and Tanjianshan,
typically require a number of years and significant expenditures during the
development phase before production is possible.

Development
projects are subject to the completion of successful feasibility studies and
environmental assessments, issuance of necessary governmental permits and
receipt of adequate financing.  The economic feasibility of development
projects is based on many factors such as:

·

estimation
of reserves;

·

anticipated
metallurgical recoveries;

·

environmental
considerations and permitting;

·

future
gold prices; and

·

anticipated
capital and operating costs of such projects.

Our
development projects have no operating history upon which to base estimates of
future cash operating costs.  Particularly for development projects,
estimates of proven and probable reserves and cash operating costs are, to a
large extent, based upon the interpretation of geologic data obtained from drill
holes and other sampling techniques, and feasibility studies which derive
estimates of cash operating costs based upon anticipated tonnage and grades of
ore to be mined and processed, the configuration of the ore body, expected
recovery rates of gold from the ore, estimated operating costs, anticipated
climatic conditions and other factors.  As a result, it is possible that
actual cash operating costs and economic returns will differ significantly from
those currently estimated for a project prior to production.

Any
of the following events, among others, could affect the profitability or
economic feasibility of a project:

·

unanticipated
changes in grade and tonnage of ore to be mined and processed;

·

unanticipated
adverse geotechnical conditions;

·

incorrect
data on which engineering assumptions are made;

·

costs
of constructing and operating a mine in a specific environment;







---

53



·

availability
and costs of processing and refining facilities;

·

availability
of economic sources of power

·

adequacy
of water supply;

·

adequate
access to the site, including competing land uses (such as agriculture and
illegal mining);

·

unanticipated
transportation costs;

·

government
regulations (including regulations to prices, royalties, duties, taxes,
permitting, restrictions on production, quotas on exportation of minerals, as
well as the costs of protection of the environment and agricultural lands);

·

fluctuations
in gold prices; and

·

accidents,
labour actions and force majeure events.

It
is not unusual in new mining operations to experience unexpected problems during
the start-up phase, and delays often can occur in the commencement of
production.  In the past, we have adjusted our estimates based changes in
to our assumptions and actual results.

We
need to continually obtain additional reserves for gold production

Because
mines have limited lives based on proven and probable reserves, we must
continually replace and expand our reserves as our mines produce gold.  Our
ability to maintain or increase our annual production of gold will be dependent
in significant part on our ability to bring the Kisladag Project and the TJS
Project into production and to expand existing operations.

We
are subject to a number of risks and hazards that may result in damage to our
property, delays in our business and possible legal liability.

Our
operations are subject to a number of risks and hazards including:

·

environmental
hazards;

·

discharge
of pollutants or hazardous chemicals;

·

industrial
accidents;

·

failure
of processing and mining equipment;

·

labour
disputes;

·

supply
problems and delays;

·

changes
in regulatory environment;

·

encountering
unusual or unexpected geologic formations or other geological or grade problems;

·

unanticipated
changes in metallurgical characteristics and gold recovery;

·

encountering
unanticipated ground or water conditions;

·

cave-ins,
pit wall failures, flooding, rock bursts and fire;







---

54



·

periodic
interruptions due to inclement or hazardous weather conditions; and

·

other
acts of God or unfavourable operating conditions and bullion losses.

Such
risks could result in damage to, or destruction of, mineral properties or
processing facilities, personal injury or death, loss of key employees,
environmental damage, delays in mining, monetary losses and possible legal
liability.  Satisfying such liabilities may be very costly and could have a
material adverse effect on our future cash flow, results of operations and
financial condition.

Our
properties in China are subject to a variety of additional risks.

Risks
related to Joint Venture

Our
interest in the TJS Project is through a joint venture company established under
and governed by the laws of China.

China's
economy has been undergoing a transition from a planned economy to a more
market-oriented economy. Although the Chinese government has recently
implemented economic reforms, reduced state ownership and established corporate
governance in business enterprises, a substantial proportion of productive
assets in China is still owned by the Chinese government. Our joint venture
partner in China is a state-sector entity and, like other state-sector entities,
its actions and priorities may be dictated by government policies, instead of
purely commercial considerations.

Policy
Risks

The
Chinese government plays a significant role in regulating the mining industry by
implementing industrial policies. It also exercises significant control over
China's economic growth through the allocation of resources, control of
foreign currency-denominated obligations and provisions in its Foreign
Investment Guidelines for Foreign Investment.

The
Chinese economy has experienced significant growth in the past 20 years.
 Such growth has been uneven both geographically and among various sectors
of the economy. The Chinese government has implemented various measures from
time to time to control the rate of economic growth.

Companies
with a foreign ownership component operating in China may be required to work
within a framework which is different to that imposed on domestic Chinese
companies. The Chinese government currently allows foreign investment in certain
mining projects under central government guidelines.

Regulation
of Gold Market

In
the PRC, the exporting of gold requires certain approvals.  There is no
assurance that such approvals can be obtained.  Hence, most gold producers
in the PRC sell their gold through the Shanghai Gold Exchange. Currently the
Shanghai Gold Exchange serves as a spot market of gold for its members and gold
is traded through it at market price.

Foreign
Exchange Control

Foreign
exchange transactions in China (including the repatriation of investment returns
and capital) continue to be subject to foreign exchange controls.
 Currently we may repatriate our profits and dividends in foreign currency
but may not repatriate our capital except with the approval of the Chinese State
Administration of Foreign Exchange.

We
may not be able to maintain adequate insurance against the risks of our
business.

Where
considered practical to do so we maintain insurance against risks in the
operation of our business in amounts which we believe to be reasonable.
 Such insurance, however, contains exclusions and







---

55



limitations
on coverage.  We cannot provide any assurance that such insurance will
continue to be available, will be available at economically acceptable premiums
or will be adequate to cover any resulting liability.  In some cases,
coverage is not available or considered too expensive relative to the perceived
risk.

We
compete with other companies with greater financial resources.

We
operate in a competitive industry and compete with other more well established
companies which have greater financial resources than we do.  We face
strong competition from other mining companies in connection with the
acquisition of properties producing, or capable of producing, base and precious
metals.  Many of these companies have greater financial resources,
operational experience and technical capabilities than us.  As a result of
this competition, we may be unable to maintain or acquire attractive mining
properties on terms it considers acceptable or at all.  Consequently, our
revenues, operations and financial condition could be materially adversely
affected.

If
we fail to hire and retain our key personnel, it may have an adverse effect on
our operations.

We
depend on a number of key personnel, including Paul Wright, our President and
Chief Executive Officer, Norm Pitcher, our Chief Operating Officer, and Earl
Price, our Chief Financial Officer, the loss of any one of whom could have an
adverse effect on our operations.  We have employment contracts with each
of these key personnel.  We do not have key man life insurance.

Our
ability to manage growth effectively will require us to continue to implement
and improve our management systems and to recruit and train new employees.
 Although we have done so in the past and expect to do so in the future, we
cannot assure that we will be successful in attracting and retraining skilled
and experienced personnel.

We
cannot give any assurance that title to our mineral properties will not be
challenged.

While
we have has investigated title to all of our mineral claims and to the best of
our knowledge, title to all our properties is in good standing, the properties
may be subject to prior unregistered agreements or transfers and title may be
affected by undetected defects.  There may be valid challenges to the title
of our properties which, if successful, could impair development and/or
operations.  We cannot give any assurance that title to our properties will
not be challenged.

We
are subject to litigation risks.

All
industries, including the mining industry, are subject to legal claims, with and
without merit.  In addition to the litigation in Turkey as described under
the heading "Recent Developments - Turkey" above and under the
heading "Development Projects - Turkey Projects" in this Annual
Information Form, we are also involved in various routine legal proceedings.
 We believe it is unlikely that the final outcome of these legal
proceedings will have a material adverse effect on our financial position or
results of operation.  However, defense and settlement costs can be
substantial, even with respect to claims that have no merit.  Due to the
inherent uncertainty of the litigation process, there can be no assurance that
the resolution of any particular legal proceeding will not have a material
adverse effect on our future cash flow, results of operations or financial
condition.

Risks
related to acquisitions

Risks
inherent in acquisitions that we may undertake could adversely affect our growth
and financial condition.

We
are actively pursuing the acquisition of advanced exploration, development and
production assets consistent with our acquisition and growth strategy.
 From time to time, we may also acquire securities of or other interests in
companies with respect to which we may enter into acquisitions or other
transactions.  Acquisition transactions involve inherent risks, including:







---

56



·

accurately
assessing the value, strengths, weaknesses, contingent and other liabilities and
potential profitability of acquisition candidates;

·

ability
to achieve identified and anticipated operating and financial synergies;

·

unanticipated
costs;

·

diversion
of management attention from existing business;

·

potential
loss of our key employees or the key employees of any business we acquire;

·

unanticipated
changes in business, industry or general economic conditions that affect the
assumptions underlying the acquisition; and

·

decline
in the value of acquired properties, companies or securities.

Any
one or more of these factors or other risks could cause us not to realize the
benefits anticipated to result from the acquisition of properties or companies,
and could have a material adverse effect on our ability to grow and on our
financial condition.

We
cannot give any assurance that we will successfully identify and complete an
acquisition transaction and if completed, the business acquired will be
successfully integrated into our operations.

While
we continue to seek acquisition opportunities consistent with our acquisition
and growth strategy, we cannot be certain that we will be able to identify
additional suitable acquisition candidates available for sale at reasonable
prices, to consummate any acquisition, or to integrate any acquired business
into our operations successfully.  Acquisitions may involve a number of
special risks, circumstances or legal liabilities, some or all of which could
have a material adverse effect on our business, results of operations and
financial condition.  Risks related to acquiring and operating acquired
properties and companies could have a material adverse effect on our results of
operations and financial condition.  In addition, to acquire properties and
companies, we would use available cash, incur debt, issue our common shares or
other securities, or a combination of any one or more of these.  This could
limit our flexibility to raise capital, to operate, explore and develop our
properties and to make additional acquisitions, and could further dilute and
decrease the trading price of our common shares.  When evaluating an
acquisition opportunity, we cannot be certain that we will have correctly
identified and managed the risks and costs inherent in the business that we are
acquiring.

From
time to time, we engage in discussions and activities with respect to possible
acquisitions.  At any given time, discussions and activities can be in
process on a number of initiatives, each at different stages of development.
 While at the present time we have no binding agreement or commitment to
enter into any such transaction, we are actively pursuing  potential
acquisitions.  We can provide no assurance that any potential transaction
will be successfully completed, and, if completed, that the business acquired
will be successfully integrated into our operations.  If we fail to manage
our acquisition and growth strategy successfully it could have a material
adverse effect on our business, results of operations and financial condition.

There
may be no right for shareholders to evaluate the merits or risks of any future
acquisition undertaken by us.

There
may be no right for our shareholders to evaluate the merits or risks of any
future acquisition undertaken by us except as required by applicable laws and
regulations.

We
do not expect to pay dividends on our Common Shares in the foreseeable future.

We
have never paid cash dividends on our Common Shares.  We currently intend
to retain our future earnings, if any, to fund the development and growth of our
business, and do not anticipate paying any







---

57



cash
dividends on our Common Shares for the foreseeable future.  As a result,
you will have to rely on capital appreciation, if any, to earn a return on your
investment in our Common Shares in the foreseeable future.  Furthermore, we
may in the future become subject to contractual restrictions on, or prohibitions
against, the payment of dividends.

A
number of existing agreements provide for additional issuances of shares that
would result in dilution to shareholders.

We
may issue additional Common Shares in the future pursuant to a number of
existing agreements.

Sales
of substantial amounts of our securities may have an adverse effect on the
market price of our securities.

Sales
of substantial amounts of our securities, or the availability of such securities
for sale, could adversely affect the prevailing market prices for our
securities.  A decline in the market prices of our securities could impair
our ability to raise additional capital through the sale of securities should we
desire to do so.

Our
shareholder rights plan may discourage certain transactions.

We
have adopted a shareholder rights plan designed to provide our Board of
Directors with the means to negotiate with an offeror and with sufficient time
to seek out and identify alternative transactions on behalf of our shareholders.
The rights plan has not been adopted in response to, or in anticipation of, any
acquisition or take-over bid and is not intended to prevent a take-over of the
company, to secure continuance of current management or the directors in office
or to deter fair offers for our common shares. The rights plan may, however,
increase the price to be paid by a potential offeror to obtain control of us and
may discourage certain transactions.

We
follow corporate governance requirements of Canadian corporate and securities
laws.

Non-Canadian
residents holding our Common Shares should be aware that we follow the corporate
governance requirements of applicable Canadian corporate and securities laws
which may differ from corporate governance requirements under laws applicable in
their place of residence.  In addition, although we substantially comply
with the corporate governance guidelines of AMEX, we have obtained exemptions
from AMEX permitting us to follow the shareholder meeting quorum requirements of
our bylaws, which provide that a quorum is met by two persons holding or
representing not less than 5% of the outstanding voting shares (as compared to
33 1/3% under AMEX requirements).



In
addition, we may from time-to-time seek relief under from AMEX corporate
governance requires on specific transactions under Section 110 of the AMEX
Company Guide by providing written certification from independent local counsel
that the non-complying practice is not prohibited by our home country law, in
which case, we shall make the disclosure of such transactions available on our
website at www.eldoradogold.com. Information contained on our website is not
part of this annual report.

If
any of the foregoing events, or other risk factor events as described herein and
incorporated by reference herein occur, our business, financial condition or
results of operations could likely suffer.  In that event, the market price
of our securities could decline and investors could lose all or part of their
investment.











---

58



CAPITAL
STRUCTURE



Share
Capital



Our
authorized capital consists of an unlimited number of Common Shares and an
unlimited number of convertible non-voting shares ("Non-Voting Shares"), of
which, as of December 31, 2005, 302,577,378  Common Shares were issued and
outstanding, and no Non-Voting Shares were issued and outstanding.



All of
the Common Shares rank equally as to voting rights, participation in a
distribution of our assets on a liquidation, dissolution or winding-up, or other
distribution of our assets for the purpose of winding up our affairs and the
entitlement to dividends. Distributions in the form of dividends, if any, will
be set by the Board of Directors. For more information, see "Dividend Policy".
Holders of Common Shares are entitled to receive notice of all shareholder
meetings and to attend and vote their shares at the meetings. Each Common Share
carries with it the right to one vote.



If
Non-Voting Shares were outstanding, the holders of these shares would be
entitled to participate equally with the holders of the Common Shares with
respect to dividend payment; asset distribution resulting from a liquidation,
dissolution or winding-up; or the distribution of our assets for the purpose of
winding up our affairs. Holders of Non-Voting Shares are entitled to receive
notice of and to attend all meetings of the shareholders, but (except as
required by law) they are not entitled to vote at any such meeting. Our articles
state that holders of Non-Voting Shares may not vote separately as a class but
will have one vote for each share on a proposal to amend the articles to
increase or decrease any maximum number of authorized Non-Voting Shares or
increase any maximum number of authorized shares having rights or privileges
equal or superior to the Non-Voting Shares, effect an exchange, reclassification
or cancellation of all or part of Non-Voting Shares, or create a new class of
shares equal or superior to the Non-Voting Shares. Each issued Non-Voting Share
may at any time be converted at the option of the holder into one Common Share,
provided that no such conversion may occur, if on the date of the conversion and
after giving effect to the conversion, the holder and its affiliates would
beneficially own 40% or more of the issued and outstanding Common Shares.



If
Non-Voting Shares were outstanding, neither the Common Shares nor the Non-Voting
Shares may be subdivided, consolidated, reclassified or otherwise changed unless
at the same time the other class of shares is subdivided, consolidated,
reclassified or otherwise changed in the same proportion and in the same manner.
No stock dividend may be declared or paid in respect of either the Common Shares
or the Non-Voting Shares unless the stock dividend is declared equally on both
classes of shares. No rights offering may be made to holders of Common Shares or
Non-Voting Shares unless the rights offering is made equally to all holders of
both classes of shares.



Provisions
as to the modifications, amendment or variation of the rights attached to our
shares are contained in our articles and the Canada Business Corporations Act.
Generally speaking, substantive changes to the share capital require the
approval of the shareholders by special resolution (at least 2/3 of the votes
cast).



Warrants



As of
February 28, 2006, 760,000 Warrants were issued and outstanding. The Warrants
were issued as part of the Compromise Agreement with Afcan.



Subject
to certain adjustments, each whole Warrant entitles the holder to purchase one
Common Share at an exercise price of Cdn$2.4375 per Common Share.









---

59



MARKET
FOR SECURITIES

Our
common shares are listed and posted for trading on the Toronto Stock Exchange
(the "TSX") under the symbol "ELD" and on the AMEX under the symbol "EGO".
Our common shares were listed on the TSX on October 23, 1993 and on the AMEX on
January 23, 2003. The following sets out the price range and volumes traded or
quoted on the TSX on a monthly basis for each month of the most recently
completed financial year:

Trading
Price and Volume

|             |                 |                |                  |           
|------------ | --------------- | -------------- | ---------------- | ----------
|Month        | High
      Cdn$ | Low
      Cdn$ | Close
      Cdn$ | Volume    
|January/05   | 3.52            | 3.22           | 3.34             | 17,723,700
|February/05  | 3.97            | 3.22           | 3.80             | 22,048,400
|March/05     | 4.07            | 3.21           | 3.45             | 23,759,000
|April/05     | 3.57            | 2.84           | 3.00             | 22,203,300
|May/05       | 3.03            | 2.55           | 2.90             | 17,031,800
|June/05      | 3.34            | 2.82           | 3.25             | 21,826,600
|July/05      | 3.49            | 3.09           | 3.31             | 10,755,100
|August/05    | 3.93            | 3.20           | 3.57             | 31,828,500
|September/05 | 4.40            | 3.63           | 4.11             | 36,128,100
|October/05   | 4.36            | 3.35           | 3.61             | 31,729,200
|November/05  | 5.09            | 3.50           | 4.67             | 66,168,900
|December/05  | 5.95            | 4.52           | 5.69             | 70,337,700



DIVIDEND
POLICY

We
have not paid dividends on common shares since incorporation, nor do we
currently intend to pay dividends. We anticipate using our cash resources to
undertake exploration, development and expansion programs on our mineral
properties and to acquire additional mineral resource properties.

DIRECTORS
AND OFFICERS



The
Company's Articles and bylaws state that the Board is to consist of a minimum
of three (3) and a maximum of twenty (20) directors. The number of directors has
been fixed at seven (7).



At each
annual meeting of the Company's shareholders, the entire Board of Directors
retires and directors are elected for the next term. Each director serves until
the close of the next annual meeting or until his or her successor is elected or
appointed, unless his or her office is earlier vacated in accordance with our
Articles or with the provisions of the CBCA. To meet CBCArequirements,
at least 25% of the members of our Board of Directors must be resident
Canadians.

The
names and provinces of residence, offices held within the Company and principal
occupations of the directors and executive officers of the Company are listed
below:



|                                                                                           |                                                                                                                                                                                        
|------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name
      and Province/State of Residence                                                 | Principal
      Occupation                                                                                                                                                             
|John
      S. Auston (2) (3)British Columbia
      Canada
      Independent
      Director | Director
      of the Company since April 30, 2003.
      President &
      CEO of Ashton Mining (1996 - 2000); currently a director of Cameco
      Corporation and Centerra Gold Inc.







---

60





|                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|K.
      Ross Cory (1) (3)British Columbia
      Canada
      Independent Director                                                       | Director
      of the Company since April 30, 2003. Various senior executive &
      director capacities with Raymond James Ltd. (formerly Goepel McDermid)
      since 1989; currently a director of Regalito Copper Corp., Northern Peru
      Copper Corp. and Lumina Resources Corp.                                                                                                                                                                                              
|Robert
      R. Gilmore(1) (2)
      Colorado
      United States
      Independent
      Director
      Chairman, Audit
      Committee | Director
      of the Company since April 30, 2003.
      Independent
      Financial Consultant; formerly
      Chief Financial
      Officer of Teamshare Inc. (2000-2002); Chief Financial Officer US Gold;
      Independent Financial Consultant (1997-2000).                                                                                                                                                                                                                    
|Berne Jansson
      British Columbia
      Canada
      Vice President,
      Operations                                                 | Vice
      President, Operation since March 2005. General Manager, Kisladag in Turkey
      from 2003-2005.                                                                                                                                                                                                                                                                                                                                                                           
|Wayne
      D. Lenton (2)Arizona
      United States
      Independent Director                                                          | Director
      of the Company since June 1995. Independent Mining Consultant since March
      1995; currently a director of Energold Drilling Ltd. and North American
      Tungsten Corporation Ltd.                                                                                                                                                                                                                                                                                
|Hugh
      C. Morris (1) (3)British Columbia
      Canada
      Independent Director
      Non-Executive
      Chairman                  | Chairman
      of the Board of the Company since January 1995. Acting President from
      November 24, 1998 to March 24, 1999 and Acting Chief Executive Officer of
      the Company from November 24, 1998 to October 1, 1999; Independent Mining
      Consultant since April, 1993; currently a director of Pacific Institute
      for the Mathematical Sciences, Diamondex Resources Ltd., Eureka Resources
      Ltd. and Pacific Northern Gas and Triex Minerals Corporation.
|Dawn
      L. Moss
      British Columbia
      Canada
      Corporate Secretary                                                         | Corporate
      Secretary since October 27, 2000. Corporate Administrator of the Company
      from November 1998 to October 2000; Corporate Development Officer of
      Diagem International Inc. from February 1998 to November 1998.                                                                                                                                                                                                                                              
|Norman S. Pitcher
      British Columbia
      Canada
      Chief Operating
      Officer                                                | Chief
      Operating Officer since July 2005.
      Vice President,
      Exploration & Development from May 2004- July 2005. Manager,
      Evaluations of the Company from November 2003 to May 2004; Chief Geologist
      for Pan American Silver 1997 to November 2003.                                                                                                                                                                                                         







---

61





|                                                                                                         |                                                                                                                                                                                                                                                                                                                                
|-------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Earl
      W. Price
      British Columbia
      Canada
      Chief Financial Officer                    | Chief
      Financial Officer since Jan 1, 2003. Vice President, Finance of the
      Company from October 2001 to December 31, 2002; Senior Operations
      Controller of the Company since March 1997.                                                                                                                      
|Donald
      Shumka British Columbia (1)Canada
      Independent Director                                | Director
      of the Company since May 3, 2005. President and Managing Director of
      Walden Management Ltd., the Vice President Finance and Chief Financial
      Officer of West Fraser Timber Company.                                                                                                                  
|Paul
      N. Wright
      British Columbia
      Canada President, Chief Executive Officer and Director | Director
      of the Company since March 1999. President and Chief Executive Officer
      since October 1, 1999; President and Chief Operating Officer from March
      1999 to October 1999; Senior Vice President, Operations from October 1997
      to March 1999; Vice President, Mining from July 1996 to October 1997.

(1)

Member
of Audit Committee

(2)

Member
of Compensation Committee

(3)

Member
of the Corporate Governance & Nominating Committee

Six
of Eldorado's directors have been directors since the last annual shareholders'
meeting of the Company. Donald Shumka was appointed to the Board at a Board of
Directors meeting held April 28, 2005.  Each of the Director's terms will
expire at the next annual shareholders meeting of the Company. See the
Management Information Circular dated March 20, 2006. None of the directors or
officers of the Company have been or are subject to a cease trade order,
insolvency proceedings or securities penalties or was with an issuer subject to
a cease trade order, insolvency proceedings or securities penalties.

As
at February 28, 2006, 3,871,700 (or less than 1.14% of the Common Shares
outstanding) were beneficially owned, directly or indirectly, or control or
direction was exercised over those shares, by the directors and senior officers
of the Company as a group.



CORPORATE
GOVERNANCE AND BOARD COMMITTEES

Our
Board has adopted a written mandate in which it has explicitly assumed
responsibility for the stewardship and overseeing the management of our
business. Our Board carries out its mandate directly or through its committees
described below. For further information on our corporate governance practices,
see our Management Information Circular dated March 20, 2006 filed on SEDAR at www.sedar.com
under the Company's name.

The
Board has established three Committees of directors: the Compensation Committee,
the Audit Committee and the Corporate Governance and Nominating Committee.

Compensation
Committee

The
Compensation Committee is composed of three independent directors. The
Compensation Committee develops, reviews and monitors director and executive
compensation and policies. The Committee is responsible for annually reviewing
the compensation of directors and officers, and make recommendations to the
Board. Terms of Reference for the Compensation Committee describe the







---

62



Committee's
responsibilities, powers and operations. These Terms of reference, incorporated
by reference in this AIF, were approved by the Board of Directors on February 2,
2006 and are available in the Management Information Circular dated March 20,
2006 and on our website www.eldoradogold.com
or by contacting our Corporate Secretary.

The
Compensation Committee is composed of the following directors:

Wayne
Lenton, Chairman

Robert
Gilmore

John
Auston

Audit
Committee

The
Audit Committee is currently composed of four independent directors. The Audit
Committee is responsible for overseeing financial reporting, internal controls
and public disclosure documents, as well as recommending the appointment of our
external auditors, reviewing the annual audit plan and auditor compensation,
approving non-audit services provided by the external auditor, reviewing hiring
policies regarding former staff and auditors and evaluating our risk management
procedures/systems.

The
Audit Committee has adopted a Terms of Reference that reflects these and other
responsibilities. The Audit Committee has adopted, as part of its Terms of
Reference, policies that requires its pre-approval of audit, audit-related, tax
and non-audit services to be provided by Eldorado's auditors. The Terms of
Reference for the Audit Committee, incorporated by reference into this AIF, were
approved by the Board of Directors on February 2, 2006 and are available in the
Management Information Circular dated March 20, 2006 or on our website www.eldoradogold.com
or by contacting our Corporate Secretary.

Composition
of and Education and Experience of Members of the Audit Committee

The
Audit Committee is composed of the following directors:

Robert
Gilmore, Chairman

Hugh
Morris

Ross
Cory

Donald
Shumka



Each
member of the Audit Committee is independent and financially literate. For
particulars on the experience and education of the members of our Audit
Committee that is relevant to the performance of his responsibilities as an
audit committee member, please refer to the "Directors and Officers" section
within this AIF and pages 5 and 6 of our Information Circular dated March 20,
2006.



The
aggregate fees billed for professional services rendered by our auditors,
PricewaterhouseCoopers LLP, to us for the years ended December 31, 2005 and 2004
are as follows:



|                |                               |                
|--------------- | ----------------------------- | ---------------
|                | Years
      ended December 31
|                | 2004
      Cdn$               | 2005
      Cdn$
|Audit:          | 192,000                       | 121,000        
|Audit Related:  | 81,000                        | 33,000         
|Tax:            | 224,000                       | 321,000        
|All Other Fees: | --                            | --             
|Total           | 497,000                       | 475,000        



In 2005,
our Audit Committee determined that non-audit services would no longer be
performed by the Company's external auditors and that management was
instructed to establish agreements with other service providers for such
non-audit services.









---

63







Corporate
Governance and Nominating Committee

The
Corporate Governance and Nominating Committee was established by the Board of
Directors in 2005.  The Terms of Reference for the Corporate Governance and
Nominating Committee are incorporated by reference into this AIF and were
approved by the Board of Directors on February 2, 2006 and are available in the
Management Information Circular dated March 20, 2006 or on our website www.eldoradogold.com
or by contacting our Corporate Secretary.

The
Corporate Governance and Nominating Committee is composed of the following
directors:

Ross
Cory, Chairman

Hugh
Morris

John
Auston

LEGAL
PROCEEDINGS



Other
than has been disclosed in this AIF concerning the Turkish projects, we are not
aware of any material legal proceedings to which we are a party or to which our
property is subject, nor are we aware that any such proceedings are
contemplated.



INTEREST
OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS



As of
March 27, 2006 we are not aware of any material interest, either direct or
indirect, of (i) any shareholder that is a direct or indirect beneficial owner
of, or who exercises control or direction over, more than 10% of the voting
rights attached to the Common Shares, (ii) any of our or our subsidiaries'
directors or executive officers, or (iii) any associate or affiliate of any of
the foregoing, in any transaction that has been entered into within our three
most recent completed financial years or during the current financial year that
has materially affected or will materially affect us.



TRANSFER
AGENTS & REGISTRARS

The
registrar and transfer agent for our Common Shares is Computershare Trust
Company of Canada ("Transfer Agent") at its principal offices located at 9th
Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1.

The
registrar and transfer agent for our Warrants is Computershare Trust Company of
Canada at its principal offices located at 9th Floor, 100 University
Avenue, Toronto, Ontario, M5J 2Y1 and 3rd Floor, 510 Burrard Street,
Vancouver, BC V6C 3B9.



As part
of the Afcan Transaction, Eldorado entered into an Exchange Agreement dated
September 13, 2005 among Afcan, Eldorado and Natcan Trust Company (the "Exchange
Agreement") to facilitate the exchange of Afcan Shares and Aafacan Warrants to
purchase Common Shares in the capital of Afcan for Eldorado Common Shares and
Eldorado Warrants to purchase Common Shares in the capital of Eldorado. As part
of the Exchange Agreement, Natcan Trust Company holds, as exchange agent, the
Eldorado Share consideration and Eldorado Warrant consideration necessary for
the exchange of Afcan Shares and Afcan Warrants and acts as agent for this
exchange. The Exchange Agreement terminates on the earlier of (i) September 13,
2011; or (ii) the date on which the Eldorado Share consideration and Eldorado
Warrant consideration have been delivered to the former holders of Afcan Shares
and Afcan Warrants in accordance with the Exchange Agreement.

The
register of transfers for our:







---

64



(i)

Common
Shares is located at our Transfer Agent's principal office in Vancouver,
British Columbia, and branch registers of transfer at its principal offices in
Toronto, Ontario; and

(ii)

Warrants
are located at the Warrant Trustees's principal offices in Vancouver, British
Columbia and Toronto, Ontario.



(iii)

Eldorado
Warrants exchanged for Afcan Warrants pursuant to the Exchange Agreement are
located at the offices of Eldorado Gold Corporation in Vancouver, British
Columbia.

MATERIAL
CONTRACTS



Except
for contracts entered into in the ordinary course of business, there are no
material contracts we have entered into within the most recently completed
financial year or before the most recently completed financial year (but after
January 1, 2003) other than described in this document.

INTEREST
OF EXPERTS

Our auditors, PricewaterhouseCoopers LLP, report that they are independent of the Company in accordance with the rules of professional conduct of the Institute of Chartered Accountants of British Columbia.  The following is a list of persons or companies whose profession or business gives authority to a statement made by the person or company named as having prepared or certified a part of that document or a report or valuation described in this AIF:

(1) Gary Giroux, of Micon International Limited;

(2) Callum Grant, formerly of Hatch Ltd.; and

(3) John Edward Hearne and Harry Warries of RSG Global Pty Ltd.

To the knowledge of the Company, none of the persons referred to above and none of the corporations by which they are employed have received or will receive any direct or indirect interests in the property of the Company or of an associated party or an affiliate of the Company or have any beneficial ownership, direct or indirect, of securities of the Company or of an associated party or an affiliate of the Company.  Please refer to the information under the headings Kisladag Reports, TJS Reports and São Bento Reports for detailed lists of technical reports regarding these projects and the related qualified persons who prepared them.

ADDITIONAL
INFORMATION

Additional
information, including directors' and officers' remuneration and
indebtedness, principal holders of the Company's securities, options to
purchase securities and a statement of interests of insiders in material
transactions, is contained in the Management Information Circular dated March
20, 2006 that involves the election of directors and in respect of the year
ended December 31, 2005. As well, additional financial information is provided
in our comparative Financial Statements and MD&A. This additional
information is available on SEDAR at www.sedar.com
under the Company name. We will also provide this information upon request to
our Corporate Secretary.







---

65





GLOSSARY
AND METRIC EQUIVALENTS



For
ease of reference, the following factors for converting metric measurements into
imperial equivalents are provided:



|                             |                         |                  
|---------------------------- | ----------------------- | -----------------
|To
      convert from metric | To
      imperial       | Multiply
      by
|Hectares                     | Acres                   | 2.47110          
|Meters                       | Feet                    | 3.28080          
|Kilometers                   | Miles                   | 0.62140          
|Tonnes                       | Tonnes                  | 1.023            
|Grams/Tonne                  | Ounces
      (Troy)/Ton | 0.03215          



The
following is a glossary of technical terms that may in this document and in the
documents incorporated by reference:

adit

A
passage driven horizontally into a mountainside to provide access to a mineral
deposit from the surface of the working of a mine.

adsorption

The
attachment of one substance to the surface of another.

andesitic

A
rock condition where andesite, an igneous rock that has a silica content of
approximately 60%, is present.

argillic

An
alteration characterized by quartz clay mix chloride.

arsenopyrite

A
whitish to steel gray coloured arsenian mineral (FeAsS).

Au

Gold.

Australasian
Code

The
Australasian Code for Reporting of Identified Mineral Resources and Ore
Reserves.

autoclave

The
equipment used in an oxidation process in which high temperatures and pressures
are applied to convert refractory sulphide mineralization into amenable oxide
ore.

autogenous
grinding

Grinding
ore without the use of media such as steel balls or rods.

back
fill

Waste
material used to fill and support the void created by mining an ore body.

banded
iron

formation

A
rock formation that shows pronounced banding of iron-rich minerals and
fine-grained quartz. Where mineralized, the formation contains sulfide and
carbonate mineral.

calcareous

A
substance that contains calcium carbonate.

CIL

Carbon
in leach.CIL isa recovery process in which a slurry of gold ore,
carbon granules and cyanide are mixed together. The cyanide dissolves the gold,
which







---

66



is
then adsorbed on the carbon. The carbon is subsequently separated from the
slurry, and the gold removed from the carbon.

classified
tailings

Tailings
material (sub-economic ground residue from mineral processing operations) that
has been processed to remove fine-grained solids to promote free drainage of
water. Commonly used as underground fill material.

continued

A
corporation formed under laws other than the federal laws of Canada may apply to
be "continued" under the federal Canada Business Corporations Act
(the "CBCA") by applying for a certificate of continuance from the
Corporations Directorate. Once the certificate is issued, the CBCA applies to
the corporation as if the corporation was incorporated under the CBCA.

crushing
plant

A
plant in which run-of-mine ore is reduced in size by mechanical crushing to
improve the liberation of gold particles for downstream recovery.

crosscuts

An
underground working or tunnel that is perpendicular to the trend of the rock
layering.

Cu

Copper.

cut
and fill

A
method of stoping in which ore is removed in slices (or lifts) and then the
excavation is filled with rock or other waste material known as back fill,
before the subsequent slice is mined.

cyanidation

The
process of extracting gold or silver through dissolution in a weak solution of
sodium cyanide.

decline

An
underground passageway connecting one or more levels in a mine, providing
adequate traction for heavy, self-propelled equipment. These underground
openings are often driven in a downward spiral, much the same as a spiral
staircase.

dextral
faults

Faults
whose apparent direction of relative movement to each side is towards the right.



diamond
drill 
("DDH")

A
type of rotary drill in which the cutting is done by abrasion rather than percussion. The cutting bit is set with diamonds and is attached to the
end of  long hollow rods through which water is pumped to the cutting face.
The drill cuts a core of rock that is recovered in long cylindrical sections, an
inch or more in diameter.

diorites

A
light to dark coloured, crystalline intrusive igneous rock, composed of calcium,
sodium and iron bearing alumino-silicate minerals.

dilution

Waste
material not separated from mined ore that was below the calculated economic
cut-off grade of the deposit. Dilution results in increased tonnage mined and
reduced overall grade of the ore.

dip

The
angle that a geological structure forms with a horizontal surface, measured
perpendicular to the strike of the structure.

doré

Unrefined
gold and silver in bullion form.

electrostatic

A
device or technology that recovers airborne particular matter.







---

67



precipitator

fault

A
surface or zone of rock fracture along which there has been displacement, from a
few centimeters to a few kilometers in scale.

feeder
zones

A
channelway in a rock through which mineral- and/or metal-bearing solutions or
gases likely moved.

fire
assay

A
type of analytical procedure that involves the heat of a furnace and a fluxing
agent to fuse a sample to collect any precious metals (such as gold) in the
sample. The collected material is then analyzed for gold or other precious
metals  by weight or spectroscopic methods.



float
sulphideA
byproduct of the flotation process containing primary metals.

concentrate

flotation

A
process by which some mineral particles are induced to become attached to
bubbles and float, and other particles to sink, so that the valuable minerals
are concentrated and separated from the host rock.

foliation

A
parallel orientation of platy minerals or mineral banding in rocks. Most common
in metamorphic rocks.

gabbro

A
dark coloured, crystalline intrusive igneous rock, composed principally of the
calcium, iron and magnesium bearing alumino-silicate minerals.

gangue

Minerals
that are sub-economic to recover as ore.

grade

The
weight of precious metals in each tonne of ore.

g/t

Grams
of gold per metric tonne.

ha

Hectare.

heap
leaching

The
process of stacking ore in a heap on an impermeable pad and percolating a
solution through the ore that contains a leaching agent such as cyanide. The
gold that leaches from the ore into the solution is recovered from the solution
by carbon absorption or precipitation. After adding the leaching agent, the
solution is then recycled to the heap to effect further leaching.

host
rock

The
body of rock in which mineralization of economic interest occurs.

HQ

Denotes
the specific diameter of core in diamond drill.

IP

Induced
polarization, a method of ground geophysical surveying using an electrical
current to determine indications of mineralization.

isoclinal

Refers
to a folded rock, in which two adjacent limbs are parallel.

km

Kilometer.

km2

Square
kilometers.

km/h

Kilometers
per hour







---

68



leach

Gold
being dissolved in cyanide solution in heap leaching or in tanks in a processing
plant (agitated leach, carbon in pulp, carbon in leach).

long
hole open stope

A
method of mining that involves drilling holes (typically up to 30 meters long)
into an ore body and then blasting a slice of rock that falls into an open
space. The broken ore is extracted and the resulting open chamber is not filled
with supporting material.

m

Meters.

m2

Square
meters.

m3

Cubic
meters.

mm

Millimeters.

micron

0.000001
meters.

mill

A
plant where ore is crushed and ground to expose metals or minerals of economic
value, which then undergo physical and/or chemical treatment to extract the
valuable metals or minerals.

mine

An
excavation in the earth for the purpose of extracting minerals. The excavation
may be an open pit on the surface or underground workings.

mineral
reserve

The
part of a measured or indicated mineral resource that could be economically
mined, demonstrated by at least a preliminary feasibility study that includes
adequate information on mining, processing, metallurgical, economic and other
relevant factors that demonstrate (at the time of reporting) that economic
extraction can be justified. A mineral reserve includes diluting materials and
allowances for losses that may occur when the material is mined. Mineral
reserves are those parts of mineral resources which, after applying all mining
factors, result in an estimated tonnage and grade that, in the opinion of the
qualified person(s) making the estimates, is the basis of an economically viable
project after taking account of all relevant processing, metallurgical,
economic, marketing, legal, environment, socio-economic and government factors.
The term "mineral reserve" need not necessarily signify that extraction
facilities are in place or operative or that all governmental approvals have
been received, although it does signify that there are reasonable expectations
of such approvals. Mineral reserves are subdivided into proven mineral reserves
and probable mineral reserves. Mineral reserves fall under the following
categories:

proven
mineral reserves

That
part of a measured mineral resource that is economically mineable, demonstrated
by at least a preliminary feasibility study that includes adequate information
on mining, processing, metallurgical, economic and other relevant factors that
demonstrate (at the time of reporting) that economic extraction is justified.

probable
mineral reserves

That
part of an indicated (and in some circumstances a measured) mineral resource
that is economically mineable, demonstrated by at least a preliminary
feasibility study that includes adequate information on mining, processing,







---

69



metallurgical,
economic and other relevant factors that demonstrate (at the time of reporting)
that economic extraction can be justified.

mineral
resource

A
concentration or occurrence of natural, solid, inorganic or fossilized organic
material in or on the Earth's crust in such form and quantity and of such a
grade or quality that it has reasonable prospects for economic extraction. The
location, quantity, grade, geological characteristics and continuity of a
mineral resource are known, estimated or interpreted from specific geological
evidence and knowledge. Mineral resources fall under the following categories:

measured
mineral resource

That
part of a mineral resource for which quantity, grade or quality, densities,
shape, and physical characteristics are so well established that they can be
estimated with confidence sufficient to allow the appropriate application of
technical and economic parameters to support production planning and evaluation
of the economic viability of the deposit. The estimate is based on detailed and
reliable exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings
and drill holes that are spaced closely enough to confirm both geological and
grade continuity.

indicated
mineral resource

That
part of a mineral resource for which quantity, grade or quality, densities,
shape and physical characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and economic
parameters to support mine planning and evaluation of the economic viability of
the deposit. The estimate is based on detailed and reliable exploration and
testing information gathered through appropriate techniques from locations such
as outcrops, trenches, pits, workings and drill holes that are spaced closely
enough for geological and grade continuity to be reasonably assumed.

inferred
mineral resource

That
part of a mineral resource for which quantity and grade or quality can be
estimated on the basis of geological evidence, limited sampling and reasonably
assumed (but not verified) geological and grade continuity.  The estimate
is based on limited information and sampling gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings and drill
holes.

mineralization

Rock
containing minerals or metals of potential economic interest.

metallurgy

The
science of extracting metals from ores by mechanical and chemical processes and
preparing them for use.

monzonite

A
coarse-grained igneous rock containing less than 10% quartz.

mRL

Meters
above sea level.

open-pit
mine

An
excavation for removing minerals that is open to the surface.

ounce
(or oz)

Troy
ounce, equal to 31.103 grams.







---

70



ore

A
natural aggregate of one or more minerals that, at a specified time and place,
may be mined and sold at a profit, or from which some part may be profitably
separated.

oxide
ore

Mineralized
rock in which some of the original minerals, usually sulphide, have been
oxidized. Oxidation tends to make the ore more porous and permits a more
complete permeation of cyanide solutions so that minute particles of gold in the
interior of the minerals will be readily dissolved.

oz/t

Troy
ounces per short ton.

Paleozoic

Unit
of geologic time spanning from 570 to 245 million years ago.

phyllite

A
metamorphic rock containing fine-grained, planar-oriented mica minerals.
 This orientation imparts a layering to the rock.

plagiogranite

A
light-coloured, crystalline intrusive igneous rock, composed of sodium and
calcium bearing alumino-silicate minerals and quartz (SiO2).

porphyritic

Texture
of an igneous rock in which larger crystals are set in a finer groundmass.

potassic

An
alteration type characterized by the pressure of quartz, potassium, feldspar and
biotite.

Proterozoic

Unit
of geologic time spanning from 2500 to 570 million years ago.

ramp

An
inclined underground tunnel that provides access for mining or a connection
between the levels of a mine.

RC

Reverse
circulation.

recovery

A
term, generally stated as a percentage, used in process metallurgy to indicate
the proportion of valuable material obtained in the processing of an ore.

refractory
material

Gold
mineralized material in which the gold is not amenable to recovery by
conventional cyanidation without any pre-treatment. The refractory nature can be
either silica or sulphide encapsulation of the gold or the presence of naturally
occurring carbon, which reduces gold recovery.

roasting

A
method of oxidizing refractory ore using heat.

roasting
agglomerates

A
product of the roasting process.

ROM

Run
of mine. Pertains to the ore that has been mined but not crushed.

run
of mine

Pertains
to the ore that has been mined but not crushed.

SAG

Semi-autogenous
grinding. A method of grinding rock into fine powder whereby the grinding media
consist of larger chunks of rocks and steel balls.

scrubber

A
device that removes SO2 from gaseous emissions.

shaft

A
vertical or sub-vertical passageway to an underground mine for moving personnel,
equipment, supplies and material, including ore and waste rock.

short
ton

Equal
to 2,000 pounds, equivalent to 0.893 long tonnes or 907.185 kilograms.







---

71



shrinkage
stoping

A
method of stoping that uses part of the broken ore as a working platform and as
support for the walls.

sills

A
tabular intrusive igneous rock that parallels the planar structure of the
surrounding rock.

sinistral
faults

Faults
whose apparent direction of relative movement to each side is towards the left.

SO2

Sulphur
dioxide gas.

splays

A
series of minor faults at the extremities of a major fault.

stope

An
underground excavation from which ore is being extracted.

strike

Azimuth
of a plane surface aligned at right angles to the dip of the plane used to
describe the orientation of stratigraphic units or structures.

sulphide
ore

Ore
containing a significant quantity of unoxidized sulfides.

tailings

The
material that remains after all metals or minerals of economic interest have
been removed from ore during milling.

tonne

A
metric tonne: 1000 kilograms or 2,204.6 pounds.

trachyte

A
type of fine-grained igneous rock.

waste

Barren
rock in a mine, or mineralized material that is too low in grade to be mined and
milled at a profit.

winze

A
vertical or inclined shaft sunk from a point inside a mine.

Zadra
methods

A
chemical process whereby gold in solution is collected on carbon particles.





---





Document 2  Audited Financial Statements of the Company  for the Year Ended December 31, 2005



---







> [financials002.gif]









|                        |                                                                                                                                                                                                
|----------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|December
      31, 2005 | Report to
      Shareholders                                                                                                                                                                   
|                        | Suite 1188,
      Bentall 5
      550 Burrard
      Street
      Vancouver,
      British Columbia
      V6C 2B5
      
      Phone:
       (604) 687-4018
      Fax:
           (604) 687-4026





---







Management's
Responsibility for Financial Reporting



The
financial statements and the information contained in the annual report have
been prepared by and are the responsibility of Management of the Company. The
financial statements have been prepared in accordance with accounting principles
generally accepted in Canada and reconciled to accounting principles generally
accepted in the United States as set out in note 16 and, where appropriate,
reflect management's best estimates and judgements based on currently
available information.



The
Audit Committee of the Board of Directors, consisting of four members, meets
regularly with management and the independent auditors to review the scope and
results of the annual audit and to review the financial statements and related
financial reporting matters prior to submitting the financial statements to the
Board for approval.



The
Company has developed and maintains a system of internal control to provide
reasonable assurance that financial information is accurate and reliable.



The
Company's independent auditors, PricewaterhouseCoopers LLP were appointed by
the shareholders and they have conducted an audit in accordance with Canadian
generally accepted auditing standards and their report follows.





"Earl
Price"

"Paul
N. Wright"





Chief
Financial Officer

President
and Chief Executive Officer



March
21, 2006





AUDITORS'
REPORT

To
the Shareholders of Eldorado Gold Corporation



We
have audited the consolidated balance sheets of Eldorado Gold Corporation as at
December 31, 2005 and 2004 and the consolidated statements of operations and
deficit and cash flows for the years ended December 31, 2005, 2004 and 2003.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.



We
conducted our audits in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.



In
our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2005
and 2004 and the results of itsoperations and
its cash flows for the years ended December 31, 2005, 2004 and 2003 in
accordance with Canadian generally accepted accounting principles.



"PricewaterhouseCoopers
LLP"



Chartered
Accountants



Vancouver,
BC

Canada

March
3, 2006



2

---



|                                                            |                  |        |           |         |   |        
|----------------------------------------------------------- | ---------------- | ------ | --------- | ------- | - | -------
|Eldorado Gold
      Corporation                            
|Consolidated Balance Sheets                                
|As At December 31                                          
|(Expressed in thousands of U.S. dollars)                   
|                                                            |                  |        |           | 2005    |   | 2004   
|                                                            |                  |        |           |         |   |        
|ASSETS                                                     
|Current
      Assets                                       
|Cash
      and cash equivalents                             | $                | 33,826 | $         | 135,390
|Accounts
      receivable                                   | 8,264            |        | 8,705    
|Prepaids                                                    | 2,024            |        | -        
|Inventories
       (Note 5)                                 | 7,597            |        | 5,927    
|                                                            |                  |        |           | 51,711  |   | 150,022
|                                                            |                  |        |           |         |   |        
|Property,
      plant and equipment  (Note 6)               | 186,610          |        | 52,337   
|Other
      assets                                          | 6,288            |        | -        
|Mineral
      properties and deferred development  (Note 6) | 23,326           |        | 22,676   
|Investments
      and advances (Note 9)                     | 562              |        | 1,224    
|Deposits
      (Note 4)                                     | 50,000           |        | -        
|Goodwill
      (Note 3)                                     | 2,238            |        | -        
|                                                            |                  |        | $         | 320,735 | $ | 226,259
|                                                            |                  |        |           |         |   |        
|LIABILITIES                                                
|Current
      Liabilities                                  
|Accounts
      payable and accrued liabilities              | $                | 19,730 | $         | 6,005  
|Current
      portion of capital lease obligation           | 37               |        | -        
|Current
      portion of long term debt (Note 4)            | 1,488            |        | -        
|                                                            |                  |        |           | 21,255  |   | 6,005  
|                                                            |                  |        |           |         |   |        
|Asset
      retirement obligation (Note 7)                  | 11,143           |        | 8,059    
|Capital
      lease obligation                              | 90               |        | -        
|Contractual
      severance obligation                      | 2,437            |        | 636      
|Future
      income taxes  (Note 10)                        | 10,051           |        | 4,598    
|Long
      term debt (Note 4)                               | 50,832           |        | -        
|                                                            |                  |        |           | 95,808  |   | 19,298 
|                                                            |                  |        |           |         |   |        
|SHAREHOLDERS'
      EQUITY                                 
|Share
      capital  (Note 8)                               | 573,721          |        | 508,373  
|Contributed
      surplus                                   | 1,996            |        | 1,094    
|Stock
      based compensation (Note 8)                     | 5,980            |        | 5,138    
|Deficit                                                     | (356,770)        |        | (307,644)
|                                                            |                  |        |           | 224,927 |   | 206,961
|                                                            |                  |        | $         | 320,735 | $ | 226,259
|                                                            |                  |        |           |         |   |        
|Commitments
      and Contingencies (Note 11)              
|Subsequent
      event (Note 14)                           
|                                                            |                  |        |           |         |   |        
|Approved by the Board                                      
|                                                            |                  |        |           |         |   |        
|"Paul N. Wright"                                            | "Robert Gilmore"
|                                                            |                  |        |           |         |   |        
|Director                                                    | Director         |       



3

---





|                                                                        |             |           |             |           |             |          
|----------------------------------------------------------------------- | ----------- | --------- | ----------- | --------- | ----------- | ---------
|Eldorado Gold
      Corporation                                        
|Consolidated Statements of Operations and Deficit                      
|For The Years Ended December 31                                        
|(Expressed in thousands of U.S. dollars except
      per share amounts)
|2005                                                                    |             | 2004      |             | 2003     
|                                                                        |             |           |             |           |             |          
|Revenue                                                                
|Gold
      sales                                                        | $           | 29,680    | $           | 33,153    | $           | 36,814   
|Interest
      and other income                                         | 4,117       |           | 2,762       |           | 1,415      
|                                                                        |             | 33,797    |             | 35,915    |             | 38,229   
|Expenses                                                               
|Operating
      costs                                                   | 35,378      |           | 33,109      |           | 22,863     
|Depletion,
      depreciation and amortization                          | 9,798       |           | 4,431       |           | 10,321     
|General
      and administrative                                        | 12,976      |           | 5,531       |           | 4,961      
|Exploration
      expense                                               | 7,386       |           | 4,312       |           | 2,009      
|Interest
      and financing costs                                      | 88          |           | 25          |           | 569        
|Loss
      on settlement of convertible debenture                       | -           |           | -           |           | 227        
|Stock
      based compensation expense                                  | 1,961       |           | 2,894       |           | 1,106      
|Accretion
      of asset retirement obligation                          | 484         |           | 430         |           | 406        
|Writedown
      of assets                                               | 19,537      |           | -           |           | 44,645     
|Loss
      (gain) on disposals of property, plant & equipment           | (5,727)     |           | (30)        |           | 186        
|Foreign
      exchange loss (gain)                                      | 547         |           | (196)       |           | (6,494)    
|                                                                        |             | 82,428    |             | 50,506    |             | 80,799   
|                                                                        |             |           |             |           |             |          
|Loss
      before income taxes                                          | (48,631)    |           | (14,591)    |           | (42,570)   
|                                                                        |             |           |             |           |             |          
|Tax
      recovery (expense)  (Note 10)                                
|Current                                                                 | (152)       |           | 1,406       |           | 1,107      
|Future                                                                  | (343)       |           | (757)       |           | (3,570)    
|Net
      loss for the year                                             | $           | (49,126)  | $           | (13,942)  | $           | (45,033) 
|                                                                        |             |           |             |           |             |          
|Deficit
      at the beginning of the year:                            
|As
      previously reported                                            | (307,644)   |           | (293,702)   |           | (247,649)  
|Change
      in accounting policy                                       | -           |           | -           |           | (1,020)    
|As
      restated                                                       | $           | (307,644) | $           | (293,702) | $           | (248,669)
|                                                                        |             |           |             |           |             |          
|Deficit
      at the end of the year                                    | $           | (356,770) | $           | (307,644) | $           | (293,702)
|                                                                        |             |           |             |           |             |          
|Weighted
      average number of shares outstanding                     | 284,004,311 |           | 257,643,212 |           | 221,770,349
|Basic
      loss per share - U.S.$                                      | $           | (0.17)    | $           | (0.05)    | $           | (0.20)   
|Basic
      loss per share - CDN.$ - (yearly avg. rate)                 | $           | (0.19)    | $           | (0.07)    | $           | (0.28)   
|Diluted
      loss per share - U.S.$                                    | $           | (0.17)    | $           | (0.05)    | $           | (0.20)   





4

---





|                                                                    |           |          |          |          |         |         
|------------------------------------------------------------------- | --------- | -------- | -------- | -------- | ------- | --------
|Eldorado
      Gold Corporation                                    
|Consolidated Statements of Cash Flows                              
|For The Years Ended December 31                                    
|(Expressed in thousands of U.S. dollars)                           
|2005                                                                |           | 2004     |          | 2003    
|                                                                    |           |          |          |          |         |         
|Cash
      flows from operating activities                         
|Net
      loss for the year                                         | $         | (49,126) | $        | (13,942) | $       | (45,033)
|Items
      not affecting cash                                     
|Depletion,
      depreciation and amortization                      | 9,798     |          | 4,431    |          | 10,321 
|Future
      income taxes                                           | 343       |          | 757      |          | 3,570  
|Writedown
      of assets                                           | 19,537    |          | 28       |          | 44,929 
|(Gain)
      loss on disposals of property, plant and equipment     | (227)     |          | 8        |          | -      
|Loss
      on settlement of convertible debenture                   | -         |          | -        |          | 227    
|Interest
      and financing costs                                  | -         |          | -        |          | 127    
|Amortization
      of hedging gain                                  | -         |          | 329      |          | (2,286)
|Stock
      based compensation expense                              | 2,426     |          | 3,720    |          | 1,418  
|Contractual
      severance expense                                 | 1,801     |          | 318      |          | 318    
|Accretion
      of asset retirement obligation                      | 484       |          | 430      |          | 406    
|Foreign
      exchange (gain) loss                                  | (976)     |          | 450      |          | (6,850)
|Change
      in non-cash working capital                            | 2,006     |          | (6,955)  |          | (3,501)
|                                                                    |           | (13,934) |          | (10,426) |         | 3,646   
|Cash
      flow from investing activities                          
|Acquisition
      of Afcan Mining Corporation - net cash acquired   | 664       |          | -        |          | -      
|Property,
      plant and equipment                                 | (88,757)  |          | (22,772) |          | (9,391)
|Proceeds
      from disposals of property, plant and equipment      | 227       |          | 357      |          | -      
|Mineral
      properties and deferred development                   | (650)     |          | (573)    |          | (3,604)
|Investments
      and advances                                      | -         |          | -        |          | (1,196)
|Proceeds
      from disposals of investments and advances           | -         |          | 70       |          | -      
|                                                                    |           | (88,516) |          | (22,918) |         | (14,191)
|Cash
      flow from financing activities                          
|Long-term
      debt                                                | 50,000    |          | -        |          | -      
|Repayment
      of long-term debt                                   | (986)     |          | -        |          | -      
|Repayment
      of convertible debentures                           | -         |          | -        |          | (7,150)
|Deposits                                                            | (50,000)  |          | -        |          | -      
|Issue
      of common shares:                                      
|Voting
      - for cash                                             | 7,184     |          | 63,708   |          | 78,619 
|Other
      assets                                                  | (6,288)   |          | -        |          | -      
|                                                                    |           | (90)     |          | 63,708   |         | 71,469  
|Foreign
      exchange gain (loss) on cash held in foreign currency | 976       |          | (439)    |          | 6,914  
|Net
      (decrease) increase in cash and cash equivalents          | (101,564) |          | 29,925   |          | 67,838 
|Cash
      and cash equivalents at beginning of the year            | 135,390   |          | 105,465  |          | 37,627 
|Cash
      and cash equivalents at end of the year                  | $         | 33,826   | $        | 135,390  | $       | 105,465 



5

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts







1.

Nature
of operations

Eldorado
Gold Corporation ("Eldorado", or "Company") is engaged in gold mining
and related activities, including exploration and development, extraction,
processing and reclamation. Gold, the primary product, is produced in Brazil.
 Development and construction of mines and processing facilities are
underway in Turkey and China.  Exploration activities are carried on in
Brazil, Turkey and China.



The
Company has not determined whether all of its development properties contain ore
reserves that are economically recoverable. The recoverability of the amount
shown for mineral properties and deferred development is dependent upon the
existence of economically recoverable reserves, the ability of the Company to
obtain the necessary financing, licenses and permits to complete the exploration
and development of its properties, and upon future profitable production or
proceeds from the disposition of the properties. The amounts shown as mineral
properties and deferred development represent net costs to date, less amounts
amortized and/or written off, and do not necessarily represent present or future
values.



2.

Significant
accounting policies

Basis
of consolidation



The
consolidated financial statements include the accounts of Eldorado and its
subsidiaries. The consolidated financial statements have been prepared using
accounting principles generally accepted in Canada. As described in Note 15,
these principles differ in certain material respects from accounting principles
generally accepted in the United States.



Foreign
currency translation



Eldorado's
subsidiaries are integrated operations. The financial statements and other
transactions stated in foreign currencies are translated into U.S. dollars using
the temporal method, as noted below:



·

Monetary
assets and liabilities are translated at the exchange rate at the balance sheet
dates;

·

Non-monetary
assets are translated at historical rates;

·

Revenue
and expense items are translated at the average rate for the year except for
depletion,

depreciation
and amortization of property, plant and equipment which are translated at the
same rate as the assets to which they relate; and

·

Translation
gains and losses are included in operations.



Cash
and cash equivalents



Cash and
cash equivalents include those short-term money market instruments which on
acquisition have a term to maturity of three months or less.



Inventories



In-process
inventories consists of costs related to ore on the leach pad and in stock piles
and metals in process and is valued at the lower of average production costs and
net realizable value, after a reasonable allowance for further processing
costs.  Materials and supplies inventory is valued at average cost and
where appropriate less a provision for obsolescence.



Investments



Investments
in shares of other companies are carried at the lower of cost or market value.

6

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts



Property,
plant and equipment



Property,
plant and equipment are carried at cost, including costs associated with
properties under development. Assets used in commercial production are subject
to depreciation and depletion over their estimated useful lives, on the basis
described below:



Mineral
properties and capitalized development costs for an underground operation -
where the mine operating plan calls for production from well defined ore
reserves, the life of mine method is applied. Buildings, machinery, mobile and
other equipment - depreciated on a straight-line basis over the estimated life
not exceeding the life of the mine.



Management
of the Company regularly reviews the carrying value of each mineral property.
  Where information is available and conditions suggest impairment of
long lived assets, estimated future net cash flows from each property are
calculated using estimated future gold prices, proven and probable reserves,
value beyond proven and probable reserves, operating, capital and reclamation
costs and estimated proceeds from the disposition of assets on an undiscounted
basis.  If projected future cash flows are less than the carrying value and
the fair value is less than the carrying value, a write-down to the estimated
fair value is made with a charge to operations. Where estimates of future net
cash flows are not available and where other conditions suggest impairment,
management assesses if the carrying value can be recovered.

Certain
general and administrative costs incurred during start up are expensed as
incurred.



Management's
estimates of mineral prices, recoverable proven and probable reserves,
resources, operating capital and reclamation costs are subject to risks and
uncertainties, which may affect the assessment of recoverability of mineral
property costs. Although management has made its best estimate of these factors,
it is possible that changes could occur in the near term, which could adversely
affect management's estimate of the net cash flow to be generated from its
properties.



Exploration
and development



Exploration
costs are charged against operations as incurred until a mineral resource is
established on a property, from which time exploration expenditures are
capitalized.



Goodwill



Acquisitions
are accounted for using the purchase method whereby acquired assets and
liabilities are recorded at fair value as of the date of acquisition.
  The excess of the purchase price over such fair value is recorded as
goodwill.  Goodwill represents a combination of the potential for the
discovery of additional mineable ounces from properties or mining rights
acquired in the transaction and the potential for increased revenues as a result
of higher realized gold prices.   Goodwill is assigned to assets
acquired and is not amortized.



On at
least an annual basis, the carrying amount of goodwill is evaluated to determine
whether current events and circumstances indicate that such carrying amounts may
no longer be recoverable.  This assessment involves estimating the fair
value of each reporting unit that includes goodwill.  Eldorado compares
this fair value to the total carrying amount of the reporting unit, including
goodwill.  If the fair value exceeds this carrying amount, Eldorado
considers the goodwill is not impaired.  If the fair value is less than
this carrying amount, then Eldorado estimates the fair values of all
identifiable assets and liabilities in the reporting unit, and compares this net
fair value of assets less liabilities to the estimated fair value of the entire
reporting unit.  The difference represents the fair value of goodwill, and
if necessary, Eldorado reduces the carrying amount of goodwill to this fair
value with a charge to operations.  Assumptions underlying fair value
estimates are subject to significant risks and uncertainties.



7

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts



Asset
Retirement Obligation



The fair
value of liabilities for asset retirement obligations is recognized in the
period they are incurred. A corresponding increase to the carrying amount of the
related asset is recorded and depreciated over the life of the asset. The amount
of the liability is subject to re-measurement at each reporting period.



Revenue
recognition



Revenues
from the sale of bullion are recognized when the goods have been delivered and
title passes to the purchaser.



Use
of estimates



The
preparation of consolidated financial statements in conformity with Canadian
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period.  Financial statement items subject to
significant estimates include recovery of receivables, net realizable value of
inventories, expected mine life and future cash flows, ore reserves, property,
plant and equipment and related depletion, depreciation and amortization, the
recoverability of mineral properties and deferred development costs, asset
retirement obligations, stock based compensation and goodwill. Actual results
could differ from those estimates.



Share
option plan



The
Company uses fair-value accounting for awards of all stock options and
recognizes compensation expense of all stock options awarded based upon their
fair value on the date of grant as determined by using an option pricing model.
 The fair value of the options is expensed over the vesting period of the
options. Any consideration paid upon the exercise of stock options, in addition
to the fair value attributable to stock options granted is credited to share
capital.  The fair value attributable to stock options that expire
unexercised is credited to stock based compensation balance sheet.  The
fair value attributable to stock options that are forfeited is credited to
earnings.



Income
taxes



Future
income taxes are recognized for the future income tax consequences attributable
to differences between the carrying values of assets and liabilities and their
respective income tax bases. Future income tax assets and liabilities are
measured using enacted income tax rates expected to apply to taxable income in
the years in which temporary differences are expected to be recovered or
settled. The effect on future income tax assets and liabilities of a change in
rates is included in operations in the period that includes the enactment date.
A future income tax asset is recorded when the probability of the realization is
more likely than not.



Earnings
(loss) per share



Earnings
or loss per share are presented for basic and diluted net income (loss). A basic
earnings per share is computed by dividing net income or loss by the weighted
average number of outstanding common shares for the year. The computation of
diluted earnings per share reflects the dilutive effect of the exercise of stock
options and warrants outstanding as at year-end using the treasury stock method.



8

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts





Variable
Interest Entities



Effective
January 1, 2005, the Company adopted Accounting Guideline AcG-15, "Consolidation
of Variable Interest Entities," which requires consolidation of entities in
which the Company has a controlling financial interest.  The Company has
determined that it has no variable interest entities.



3.
  Acquisition of Afcan Mining Corporation



Effective
September 13, 2005, the Company completed a Compromise Agreement (the "Afcan
transaction") with Afcan Mining Corporation ("Afcan").  As a result
Eldorado acquired an 85% interest in the Tanjianshan Gold Project ("Tanjianshan")
a late stage development project located in Qinghai Province in Western China.
 In addition to Tanjianshan, exploration opportunities exist within the
property acquired.  Once Eldorado has invested $50,000 of capital in
Tanjianshan, Eldorado's ownership will increase to 90%.  Under the terms
of the agreement, the Company issued 23,045,151 Eldorado shares to the
shareholders of Afcan for all of the common shares outstanding of Afcan.
 In addition, Eldorado issued (or assumed the obligation to issue)
4,595,952 share purchase warrants and 91,538 stock options.  Acquisition
costs of $1,258 were incurred by the Company.



This
business combination has been accounted for as a purchase transaction, with
Eldorado being identified as the acquirer and Afcan as the acquiree in
accordance with CICA Handbook Section 1581 "Business Combinations".
 These consolidated financial statements include 100% of Afcan's
operating results for the period from September 14, 2005 to December 31, 2005.



The
allocation of the purchase price of the shares of Afcan is summarized in the
following table:



|                                                 |          | 
|------------------------------------------------ | -------- | 
|Purchase price:                                 
|Share consideration                              | $56,235 
|Share purchase warrants                          | 1,204   
|Stock options                                    | 41      
|Acquisition costs                                | 1,258   
|                                                 |          | 
|Total purchase price                             | $58,738 
|                                                 |          | 
|Fair value of net assets acquired:              
|Cash                                             | $11,922 
|Accounts receivable and advances                 | 1,991   
|Inventory                                        | 437     
|Fixed assets                                     | 497     
|Property, plant and equipment                    | 64,500  
|Goodwill                                         | 2,238   
|Accounts payable                                 | (5,600) 
|Loans payable to Sino Gold Limited               | (2,127) 
|Loan payable to Eldorado Gold
      Corporation1 | (10,000)
|Future income taxes payable                      | (5,120) 
|                                                 |          | 
|                                                 | $58,738 







9

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts





3.
  Acquisition of Afcan Mining Corporation (continued)



1At September 13, 2005 Afcan had borrowed $10,000 from the Company to
fund ongoing development, exploration and administration costs.  Amounts
owing are eliminated on consolidation from September 14, 2005 forward.



Eldorado
received net cash proceeds from the Afcan Transaction of $664.  Net cash
proceeds result from the cash balance acquired of $11,922 less acquisition costs
incurred of $1,258 and less intercompany debt outstanding of $10,000.



4.
  Long Term Debt and Deposits



|                |                         |         |              |             
|--------------- | ----------------------- | ------- | ------------ | ------------
|                |                         |         | December 31, | December 31,
|                |                         |         | 2005         | 2004        
|Deposits       
|                | Reserve account         | $50,000 | $-          
|                |                         |         | $50,000      | $-          
|                |                         |         |              |             
|Long term debt 
|                | Corporate loan facility | $50,000 | $-          
|                | Sino Gold Limited       | 832     |             
|                |                         |         | $50,832      | $-          
|Current portion
|                | Corporate loan facility | $1,179  | $-          
|                | Sino Gold Limited       | 309     | -           
|                |                         |         | $52,320      | $-          





On April
6, 2005 Tüprag Metal Madencilik Sanayi Ve Ticaret Limited Surketi ("Tüprag"),
a wholly-owned subsidiary of the Company, entered into a Revolving Credit
Facility ("Facility") for $65,000 with HSBC Bank USA, National Association ("HSBC
Bank").  The Facility is secured by cash deposits, equivalent to the
amounts advanced by HSBC Bank to Tüprag, to a cash collateral account over
which the HSBC Bank holds security. At December 31, 2005, the total debt
outstanding is $50,000 and bears interest at the LIBOR rate plus 1.25% on the
date of the draw.  On April 21, 2005 Tüprag drew $15,000 at 4.19%, on June
15, 2005 Tüprag drew $20,000 at 4.35%, on July 29, 2005 Tüprag drew $5,000 at
4.66% and on September 2, 2005 Tüprag drew $10,000 at 4.64%. The facility is
scheduled for repayment in 2006, renewable annually at the Company's option
for 5 years.  The Company will renew all scheduled repayments in 2006.





10

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts





4.
  Long Term Debt and Deposits (continued)



Resulting
from the Afcan Transaction, the Company assumed two loans payable to Sino Gold
Limited of which one has been fully repaid as of December 31, 2005.



|                                                                         |             
|------------------------------------------------------------------------ | ------------
|                                                                         | December 31,
|                                                                         | 2005        
|                                                                         |             
|Non-interest bearing loan discounted using an
      interest rate of 8%,
|repayable on December 31 over the next 4 years.                          | $1,141      
|Less:  Current portion of long term debt                                 | 309         
|                                                                         | $832        
|                                                                         |             
|Minimum repayments required on debt are as follows:                     
|December 31, 2006                                                        | 309         
|December 31, 2007                                                        | 333         
|December 31, 2008                                                        | 360         
|December 31, 2009                                                        | 139         
|                                                                         | $1,141      





5.

Inventories



|                       |        |        |        |       
|---------------------- | ------ | ------ | ------ | ------
|                       |        | 2005   |        | 2004  
|                       |        |        |        |       
|In process inventory   | $4,804 |        | $1,913
|                       |        |        |        |       
|Materials and supplies | 2,793  |        | 4,014 
|                       |        |        |        |       
|                       |        | $7,597 |        | $5,927





11

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts





6.
       Property, Plant and Equipment and
Mineral Properties



|                                            |                |          |          |         |       
|------------------------------------------- | -------------- | -------- | -------- | ------- | ------
|                                            |                |          | 2005     |         | 2004  
|Property, plant and equipment              
|                                            | São Bento mine | $96,694  |          | $88,688
|Accumulated depreciation and depletion      | (73,461)       |          | (63,998)
|                                            |                |          | 23,233   |         | 24,690
|                                            | Write downs    | (12,373) |          | -      
|                                            |                |          | 10,860   |         | 24,690
|                                            |                |          |          |         |       
|Kisladag project, under construction        | 89,588         |          | 26,353  
|                                            |                |          |          |         |       
|Tanjianshan project, under construction     | 82,503         |          | -       
|                                            |                |          |          |         |       
|Office furniture and equipment              | 5,649          |          | 3,076   
|Assets under capital lease                  | 127            |          | -       
|Accumulated depreciation                    | (2,117)        |          | (1,782) 
|                                            |                |          | 3,659    |         | 1,294 
|                                            |                |          |          |         |       
|Total property, plant and equipment         | $186,610       |          | $52,337 
|                                            |                |          |          |         |       
|Mineral properties and deferred development | $23,326        |          | $22,676 



|Future minimum lease
      payments under the capital lease expiring December 2009 together
|-------------------------------------------------------------------------------------------
|with the balance of the obligation under capital
      lease:                              
|                                                                                           
|2007                                                                                       
|2008                                                                                       
|2009                                                                                       
|Total minimum lease payments                                                               
|Amount representing interest                                                               
|Balance of the obligation                                                                  



12

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts



7.

Asset
Retirement Obligation



São Bento mine



In 2003,
the Company obtained an independent study to evaluate the fair value of the
expected closure costs of the Company's São Bento mine.  The total
undiscounted amount of the estimated closure costs as determined by the study
total $9,822.  In assessing the carrying amount for the asset retirement
obligation management used the following key assumptions in deriving our
reported figures.



Mine
closure date:

December
31, 2006

Credit
adjusted risk-free rate

6%

7.
  Asset Retirement Obligation (continued)



Kisladag mine



In 2005,
management estimated the fair value of the expected closure costs of the Company's
 Kisladag mine.  The total undiscounted amount of the estimated
closure costs as determined by the study total $3,116.  In assessing the
carrying amount for the asset retirement obligation management used the
following key assumptions in deriving our reported figures.



Mine
closure date:

December
31, 2018

Credit
adjusted risk-free rate:

6%



Tanjianshan mine



In 2005,
management estimated the fair value of the expected closure costs of the Company's
Tanjianshan mine.  The total undiscounted amount of the estimated closure
costs as determined by management total $1,000.  In assessing the carrying
amount for the asset retirement obligation management used the following key
assumptions in deriving our reported figures.



Mine
closure date:

December
31, 2014

Credit
adjusted risk-free rate:

6%

8.

Share
Capital



(a)
       Authorized and Issued Share Capital



Eldorado's
authorized share capital consists of an unlimited number of voting and
non-voting common shares with no par value.  At December 31, 2005 the
Company has nil non voting shares outstanding.  The details of the voting
common shares issued and outstanding are as follows:



|                                                |             |               |          |         
|----------------------------------------------- | ----------- | ------------- | -------- | --------
|2004                                            |             | Shares Issued |          | Amount  
|                                                |             |               |          |         
|Shares  at beginning of the year                | 253,961,176 |               | $444,665
|Shares for exercised stock options              | 1,592,500   |               | 1,536   
|Shares for cash consideration - Financing       | 20,700,000  |               | 62,140  
|Shares for cash consideration - Warrants        | 10,100      |               | 32      
|Shares at December 31, 2004                     |             | 276,263,776   |          | $508,373
|                                                |             |               |          |         
|2005                                            |             |               |          |         
|                                                |             |               |          |         
|Shares  at beginning of the year                | 276,263,776 |               | $508,373
|Shares for exercised stock options              | 1,282,666   |               | 3,070   
|Shares for exercised of Afcan warrants (Note 3) | 1,985,785   |               | 4,114   
|Shares for Afcan acquisition (Note 3)           | 23,045,151  |               | 56,235  
|Estimated fair value of stock options exercised | -           |               | 1,626   
|Fair Value of Afcan warrants                    | -           |               | 303     
|Shares at December 31, 2005                     |             | 302,577,378   |          | $573,721





During
2004 an additional 10,100 shares were issued for the warrants associated with
the August 25, 2003 financing and proceeds of $32 were received, 12,442,650
warrants remain outstanding at December 31, 2004 and these warrants expired on
August 25, 2005 as unexercised.



13

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts



8.

Share
Capital (continued)



On
November 12, 2004, the Company completed a financing of 20,700,000 shares at a
price of Cdn$3.75 per share with a syndicate of underwrites for gross proceeds
of Cdn$77,625,000 ($65,083).  Net proceeds after payments of all expenses
relating to the offering were Cdn$74,103,000 ($62,140).



(b)
     Share option plan



As at
December 31, 2005, the Company has three share option plans (the "Plans") as
described below. The Company accounts for its grants under the Plans in
accordance with the fair value based method of accounting for stock based
compensation. Compensation costs charged against net income in 2005 for the
Plans were $2,426.



The
Company established a share option plan (the "Employee Plan") in June 1994.
  Amendments to the Employee Plan were approved in June 1995, June
1996, May 2000, April 2003, May 2004 and May 2005.  The Board of Directors
administers the Employee Plan whereby from time to time, share option grants
have been provided for up to a total of 13,813,688 share options to directors,
officers, employees, consultants or advisors.



At the
Annual Meeting of Shareholders held on April 30, 2003, the Company received
approval from the shareholders for the implementation of a share option plan to
provide for grants of options to directors and officers of the Company separate
from the Employee Plan (the "D & O Plan").



The Employee Plan



The
Board of Directors administers the Plan, whereby it may from time to time grant
share options in accordance with the terms and conditions of the Plan. Under the
Plan 13,813,688 Common Shares (the "Optioned Shares") are reserved, set
aside and made available for issue provided that in no event shall options be
granted entitling any single individual to purchase in excess of one half of one
percent (0.5%) of the then outstanding common shares. All share options granted
under the Plan are granted for five years.  At the discretion of the Board
of Directors this term may be extended for a further five years.  All
options shall expire not later than tenth anniversary of the date the options
were granted.  The exercise price of an option is determined by the Board
of Directors, but shall not be less than the quoted price of the common shares
of the Company on the Toronto Stock Exchange on the last business day before the
date on which the option is granted.



The D & O Plan



The
Board of Directors administers the D & O Plan, whereby it may from time to
time grant share options in accordance with the terms and conditions of the D
& O Plan.  Under the D & O Plan 11,058,350 common shares are
reserved, set aside and made available for issue. The total number of shares
that may be reserved for issuance to any one optionee pursuant to options shall
not exceed 1% of the shares of the Company outstanding on a non-diluted basis on
the grant date of the options.  All share options granted under the D &
O Plan are granted for five years.  At the discretion of the Board of
Directors this term may be extended for a further five years.  All options
shall expire not later than tenth anniversary of the date the options were
granted.  The exercise price of an option is determined by the Board of
Directors, but shall not be less than the quoted price of the common shares of
the Company on the Toronto Stock Exchange on the last business day before the
date on which the option is granted.







14

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts



8.

Share
Capital (continued)



The
Afcan Plan



At the
date of the Afcan Transaction there was an incentive stock option plan (the "Afcan
Plan") in place whereby there were 594,997 options (the "Afcan Options")
outstanding to three employees of Afcan (the "Afcan Employees") who
continued into the employment of Eldorado or Qinghai Dachaidan Mining Limited, a
subsidiary of the Company.  In accordance with the terms of the Transaction
and the approval of the TSX the Afcan Options were converted and the Afcan
Employees received one option (the "New Afcan Option") for every 6.5 Afcan
Options.  The TSX approved a total of 91,538 New Afcan Options to be held
under a separate share reserve in addition to the Plans.  The Afcan Options
continue to be directed under the terms and conditions of the Afcan Plan and the
option agreements with the Afcan Employees until the expiry or exercise of the
New Afcan Options, at which time the reserve will be depleted and no longer in
effect.  The number of Eldorado shares reserved for the Afcan Options is
91,538.



A
summary of the terms and status of Company's outstanding options at December
31, 2005 and 2004 and the changes for the years ending on those dates is
presented below:



|                                            |             |         |                  |               
|------------------------------------------- | ----------- | ------- | ---------------- | --------------
|Options (Cdn$)                              | Outstanding |         | Weighted Average
|                                            |             | Options |                  | Exercise Price
|2004                                        |             |         |                  |               
|Outstanding options as at January 1, 2004   | 3,355,500   |         | $1.82           
|Granted                                     | 3,875,000   |         | 3.67            
|Exercised                                   | (1,592,500) |         | 1.25            
|Outstanding options as at December 31, 2004 | 5,638,000   |         | $3.25           
|                                            |             |         |                  |               
|Exercisable options as at December 31, 2004 | 4,729,666   |         | $3.21           
|                                            |             |         |                  |               
|2005                                        |             |         |                  |               
|Outstanding options as at January 1, 2005   | 5,638,000   |         | $3.25           
|Granted                                     | 2,805,000   |         | 3.29            
|Granted Afcan plan (Note 3)                 | 91,538      |         | 1.47            
|Exercised                                   | (1,282,666) |         | 2.82            
|Expired                                     | (75,000)    |         | 3.53            
|Outstanding options as at December 31, 2005 | 7,176,872   |         | $3.34           
|                                            |             |         |                  |               
|Exercisable options as at December 31, 2005 | 5,373,739   |         | $3.33           





15

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts



8.

Share
Capital (continued)



The
following table summarises information about share options granted during the
twelve months ended December 31, 2005:



|                 |      |     
|---------------- | ---- | ----
|Weighted average
|exercise price  
|Shares           | Cdn$
|1,670,000        |      | 3.37
|75,000           |      | 3.76
|125,000          |      | 3.30
|145,000          |      | 3.01
|320,000          |      | 3.00
|120,000          |      | 3.12
|15,385           |      | 1.37
|69,230           |      | 1.43
|6,923            |      | 2.15
|275,000          |      | 3.50
|75,000           |      | 4.60
|2,896,538        |      | 3.29





As at
December 31, 2005, options to purchase up to 7,232,396 (December 31, 2004 -
4,831,821) shares remained available to be granted under the Plans. Summaries of
the Company's options, including the New Afcan Options, outstanding, exercise
prices and expiry dates are presented below.



|                     |                                    |                   |                    |      |      |     
|-------------------- | ---------------------------------- | ----------------- | ------------------ | ---- | ---- | ----
|Stock Options (Cdn$)
|                     |                                    |                   |                    |      |      |     
|Range of             | NumberWeighted-AverageWeighted     |                   |                    |      |     
|Exercise Prices      | Outstanding atLifeAverage Exercise |                   |                    |      |     
|($)                  |                                    | December 31, 2005 | RemainingPrice ($) |      |     
|(years)              |                                    |                  
|                     |                                    |                   |                    |      |      |     
|Less than 0.41       |                                    | 45,000            |                    | 0.74 |      | 0.25
|0.51 to 0.60         |                                    | 50,000            |                    | 0.41 |      | 0.51
|0.61 to 0.70         |                                    | 100,000           |                    | 1.15 |      | 0.70
|1.21 to 1.80         |                                    | 184,615           |                    | 2.16 |      | 1.44
|1.81 to 2.70         |                                    | 385,923           |                    | 2.29 |      | 1.93
|2.71 to 4.05         |                                    | 6,161,334         |                    | 3.54 |      | 3.54
|Greater than 4.05    |                                    | 250,000           |                    | 3.48 |      | 4.48
|Total                | 7,176,872                          |                   | 3.36               |      | 3.34



16

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts



8.

Share
Capital (continued)



|                     |           |                   |                          |      |      |     
|-------------------- | --------- | ----------------- | ------------------------ | ---- | ---- | ----
|Stock Options (Cdn$)
|                     |           |                   |                          |      |      |     
|Range of             |           | Number            | Weighted-AverageWeighted |      |     
|Exercise Prices      |           | Outstanding at    | LifeAverage Exercise     |      |     
|($)                  |           | December 31, 2004 | RemainingPrice ($)       |      |     
|(years)              |           |                  
|                     |           |                   |                          |      |      |     
|Less than 0.41       |           | 45,000            |                          | 1.74 |      | 0.25
|0.51 to 0.60         |           | 50,000            |                          | 1.41 |      | 0.51
|0.61 to 0.70         |           | 100,000           |                          | 2.15 |      | 0.70
|0.71 to 0.80         |           | 79,000            |                          | 1.84 |      | 0.72
|1.21 to 1.80         |           | 195,000           |                          | 2.73 |      | 1.43
|1.81 to 2.70         |           | 669,000           |                          | 3.19 |      | 1.99
|2.71 to 4.05         |           | 4,325,000         |                          | 4.10 |      | 3.67
|Greater than 4.05    |           | 175,000           |                          | 3.84 |      | 4.43
|Total                | 5,638,000 |                   | 3.82                     |      | 3.25



The fair
values of options used in the determination of compensation cost for 2005, 2004
and 2003 have been estimated using an option-pricing model. Assumptions used in
the pricing model are as follows:



|                                                          |              |              |               
|--------------------------------------------------------- | ------------ | ------------ | --------------
|December 31, 2005December 31,
      2004December 31, 2003 |              |             
|                                                          |              |              |               
|Ranging fromRanging fromRanging from                      |              |             
|Average risk-free interest rate                           | 3.5% to 4.5% | 2.5% to 3.5% | 3.76% to 4.32%
|Expected life                                             | 4 years      | 3 years      | 5 years       
|Expected volatility                                       | 0.500000     | 0.500000     | 0.500000      
|Expected dividends                                        | nil          | nil          | nil           





17

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts





8.

Share
Capital (continued)



The
following table summarizes information about the warrants outstanding as at
December 31, 2005 and 2004.



|                                                                |              |  |      |  |             |          | 
|--------------------------------------------------------------- | ------------ |  | ---- |  | ----------- | -------- | 
|                                                                |              |  |      |  | Outstanding | Weighted
|                                                                |              |  |      |  | Warrants    | Average 
|Exercise Price                                                 
|(Cdn$)                                                         
|                                                                |              |  |      |  |             |          | 
|Warrants outstanding at January 1, 2004                         | 12,452,750   |  | 4.10
|Exercised                                                       | (10,100)     |  | 4.10
|Warrants outstanding and exercisable at December 31,
      2004 | 12,442,650   |  | 4.10
|                                                                |              |  |      |  |             |          | 
|Warrants outstanding at January 1, 2005                         | 12,442,650   |  | 4.10
|Granted under Afcan acquisition (Note 3)                        | 4,595,952    |  | 2.44
|Exercised                                                       | (1,985,785)  |  | 2.44
|Expired                                                         | (12,458,039) |  | 4.10
|Warrants outstanding and exercisable at December 31,
      2005 | 2,594,778    |  | 2.44





(c)
      Shareholder rights plan



On March
8, 1995, the Board of Directors of Eldorado adopted a Shareholder Rights Plan,
which was approved by the shareholders at the Annual General meeting on June 5,
1995.  Under the terms of the plan, rights are attached to the common
shares.  The rights become marketable and exercisable only upon the
occurrence of certain specified events.  If a person or group acting in
concert acquires or announces its intention to acquire 20% or more of the
outstanding common shares in a non-permitted bid, each right, on exercise,
entitles the holders (other than the acquiring person or group) to purchase
common shares of Eldorado at half the current market price per common share.
 At a meeting of the Shareholders in 2002 the Shareholder Rights Plan was
re-confirmed by the Shareholders.



The
rights are not triggered by a "permitted bid" which is, in effect, a bid
made to all shareholders for all of the voting shares by way of a bid circular.
 Such an offer must remain outstanding for at least 75 days and must be
accepted by shareholders holding at least 50% of the outstanding shares that are
not held by the bidder.  At any time prior to the rights becoming
exercisable, the Board of Directors may redeem all the rights at $.00001 per
right.



(d)
       Net income (loss) per share



Net
income (loss) per share was calculated on the basis of the weighted average
number of shares outstanding for the year which amounted to 284,004,311 (2004
- 257,643,212, 2003 - 221,770,349). Diluted net income (loss) per share
reflects the dilutive effect of the exercise of stock options and warrants
outstanding as at year-end using the treasury stock method. The effect of common
stock options and warrants on the net loss per share in 2005, 2004 and 2003 was
not reflected as to do so would be anti dilutive.



18

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts



9.

Financial
Instruments



Fair value of
financial instruments



At
December 31, 2005 and 2004, the fair value of cash, and cash equivalents,
accounts receivable, accounts payable and accrued liabilities and long term debt
approximate their respective carrying values.



The
aggregate estimated fair value of the Company's investments at December 31,
2005 was $609 and in 2004 was $987.



10.

Taxes



Details of income tax
expense related to operations are as follows:



|                   |         |         |  |        |       |         
|------------------ | ------- | ------- |  | ------ | ----- | --------
|                   |         |         |  | 2005   | 2004  | 2003    
|Income Taxes      
|                   |         |         |  |        |       |         
|Recovery (Expense)
|                   | Current |         |  |        |      
|                   |         | Canada  |  | $(60)  | $(26) | $(41)   
|                   |         | Foreign |  | (92)   | 1,432 | 1,148   
|                   |         |         |  |        |       |         
|                   | Future  |         |  |        |      
|                   |         | Canada  |  | -      | -     | -       
|                   |         | Foreign |  | (343)  | (757) | (3,570) 
|                   |         |         |  |        |       |         
|                   |         |         |  | $(495) | $649  | $(2,463)





The
reconciliation of the combined Canadian federal and provincial statutory income
tax rates to the effective tax rate on earnings before taxes and other items is
as follows:





|                                              |         |         |         |     
|--------------------------------------------- | ------- | ------- | ------- | ----
|                                              |         | 2005    | 2004    | 2003
|%                                             | %       | %      
|                                              |         |         |         |     
|Statutory Rate                                | (34.86) | (35.62) | (37.62)
|                                              |         |         |         |     
|Losses not recognized                         | 28.93   | 27.75   | 45.79  
|                                              |         |         |         |     
|Foreign income subject to different tax rates | (2.07)  | (8.71)  | (17.70)
|                                              |         |         |         |     
|Foreign exchange                              | 6.89    | 26.15   | 21.37  
|                                              |         |         |         |     
|Loss not previously recognized                | (0.49)  | (8.61)  | (3.72) 
|                                              |         |         |         |     
|Non-deductible expense and other items        | 2.62    | (5.41)  | (2.33) 
|                                              |         |         |         |     
|Effective income tax rate                     | 1.02    | (4.45)  | 5.79   



19

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts

10.

Taxes
(continued)



Eldorado
and its subsidiaries have tax losses from prior years, which are available to
offset taxable income of future years. These tax losses expire as follows:





|               |        |        |         |        |       
|-------------- | ------ | ------ | ------- | ------ | ------
|Year of expiry | 2008   | 2009   | 2010    | 2014   | 2015  
|               |        |        |         |        |       
|Amount         | $4,113 | $6,864 | $25,803 | $5,114 | $7,584





In
addition, the Brazilian subsidiaries have losses of $176,878 which can be used
to offset taxable income and $160,445 which can be used to offset income for
social contribution tax.  These losses have no expiry date and can be used
to offset 30% of income in any one year.



Significant
components of Eldorado's future income tax assets (liability) at December 31
were as follows:



|                                       |           |         
|-------------------------------------- | --------- | --------
|                                       | 2005      | 2004    
|                                       |           |         
|Tax losses                             | $76,916   | $53,634 
|Liabilities                            | (1,381)   | (3,062) 
|Mineral properties                     | 2,955     | 7,705   
|Capital assets                         | 7,523     | 9,090   
|Undistributed earnings of a subsidiary | (28)      | (271)   
|Investment allowance and other         | 11,174    | 4,032   
|                                       | $97,159   | $71,128 
|Valuation allowance                    | (107,210) | (75,726)
|Future income tax liability            | $(10,051) | $(4,598)





11.

Commitments
and Contingencies



The
Company's contractual obligations at December 31, 2005, including payments due
for each of the periods indicated, are summarized as follows:



|                      | Payments due in   
|--------------------- | ------------------
|                      | 2006              
|                      |                   
|Operating leases      | $       
      429
|Capital leases        | 37                
|Capital expenditures  | 16,288            
|Purchase obligations  | 7,032             
|Property expenditures | 952               
|                      |                   
|Total                 | $   
      24,734 





Capital
expenditures in 2006 represent purchases relating to the construction of the
Kisladag and Tanjianshan mines. Purchase obligations from 2006 through 2007
relate to energy, oxygen and other contracts at the São Bento mine. Property
expenditures of $1,467 million relate to land fees and contractual exploration
for Vila Nova and Tanjianshan.



The
nature of our business subjects Eldorado to regulatory oversight, claims,
lawsuits and other proceedings in the ordinary course of business and we can not
predict the outcome of any legal proceedings with certainty.



20

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts

12.

Segmented
Information



All of
Eldorado's operations are related to the gold mining industry.  In 2005,
2004 and 2003 Eldorado had a single producing mine, São Bento, with mining and
exploration assets located in South America, Turkey and China.



|                                                                |          |             |          |             |                     |          |        |  |       
|--------------------------------------------------------------- | -------- | ----------- | -------- | ----------- | ------------------- | -------- | ------ |  | ------
|                                                                |          |             |          |             | Twelve months ended
|December
      31                                               |          | December 31 |          | December 31
|2005                                                            |          | 2004        |          | 2003       
|                                                                |          |             |          |             |                     |          |        |  |       
|Gold sales                                                     
|São
      Bento Mine                                            | $        | 29,680      | $        | 33,153      | $                   | 36,814  
|                                                                |          |             |          |             | 29,680              |          | 33,153 |  | 36,814
|                                                                |          |             |          |             |                     |          |        |  |       
|Operating costs                                                
|São
      Bento Mine                                            | 35,378   |             | 33,109   |             | 22,863             
|Accretion of
      asset retirement obligation                  | 484      |             | 430      |             | 406                
|                                                                |          |             |          |             | 35,862              |          | 33,539 |  | 23,269
|                                                                |          |             |          |             |                     |          |        |  |       
|Depletion,
      depreciation and amortization                 
|São
      Bento Mine                                            | 9,463    |             | 4,333    |             | 10,192             
|                                                                |          |             |          |             | 9,463               |          | 4,333  |  | 10,192
|                                                                |          |             |          |             |                     |          |        |  |       
|Corporate
      expenses, net of interest and other income      | (4,329)  |             | (2,696)  |             | 2,250              
|(Loss) gain on
      settlement of convertible debenture        | -        |             | -        |             | (227)              
|Stock based
      compensation expense                          | (1,961)  |             | (2,894)  |             | (1,106)            
|Exploration
      expense                                       | (7,386)  |             | (4,312)  |             | (2,009)            
|Writedown of
      assets                                       | (19,537) |             | -        |             | (44,645)           
|Gain (loss) on
      disposals of property, plant and equipment | 227      |             | 30       |             | (186)              
|                                                                |          |             |          |             |                     |          |        |  |       
|(Loss) profit
      before income taxes                         | (48,631) |             | (14,591) |             | (42,570)           
|                                                                |          |             |          |             |                     |          |        |  |       
|Tax recovery
      (expense)                                   
|Current                                                         | (152)    |             | 1,406    |             | 1,107              
|Future                                                          | (343)    |             | (757)    |             | (3,570)            
|                                                                |          |             |          |             |                     |          |        |  |       
|Net (loss)
      income for the year                            | $        | (49,126)    | $        | (13,942)    | $                   | (45,033)





21

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts



12.

Segmented
Information (continued)



|                                           |          |              |              |          |              |         
|------------------------------------------ | -------- | ------------ | ------------ | -------- | ------------ | --------
|                                           |          |              |              |          |              |         
|                                           |          | Year ended   | Year ended   |          | Year ended  
|                                           |          | December 31, | December 31, |          | December 31,
|                                           |          | 2005         |              | 2004     |              | 2003    
|                                           |          |              |              |          |              |         
|Segment assets                            
|São
      Bento - Consolidated             | $        | 23,517       | $            | 91,877   |              |         
|                                           |          |              |              |          |              |         
|Total assets
      for reportable segments | 23,517   |              | 91,877       |          |             
|                                           |          |              |              |          |              |         
|Turkey
      - Consolidated                | 138,737  |              | 55,089       |          |             
|China                                      | 97,901   |              | -            |          |             
|Canada                                     | 60,580   |              | 79,293       |          |             
|                                           | $        | 320,735      | $            | 226,259  |              |         
|                                           |          |              |              |          |              |         
|Revenues by
      geographic area         
|North
      America                        | $        | (2,530)      | $            | (1,664)  | $            | 1,216   
|South
      America                        | (30,360) |              | (34,104)     |          | 36,993      
|Turkey                                     | (876)    |              | (147)        |          | 20          
|China                                      | (31)     |              | -            |          | -           
|                                           | $        | (33,797)     | $            | (35,915) | $            | 38,229  
|                                           |          |              |              |          |              |         
|Net (loss)
      income by geographic area
|North
      America                        | $        | (9,141)      | $            | (8,031)  | $            | 1,273   
|South
      America                        | (40,199) |              | (4,326)      |          | (40,628)    
|Turkey                                     | 397      |              | (1,585)      |          | (5,678)     
|China                                      | (183)    |              | -            |          | -           
|                                           | $        | (49,126)     | $            | (13,942) | $            | (45,033)
|                                           |          |              |              |          |              |         
|                                           |          |              |              |          |              |         
|Assets by
      geographic area           
|North
      America                        | $        | 60,580       | $            | 79,293   |              |         
|South
      America                        | 23,517   |              | 91,877       |          |             
|Turkey                                     | 138,737  |              | 55,089       |          |             
|China                                      | 97,901   |              | -            |          |             
|                                           | $        | 320,735      | $            | 226,259  |              |         



22

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts



13.
    Supplementary cash flow information



|                                                                | 2005     | 2004     | 2003    
|--------------------------------------------------------------- | -------- | -------- | --------
|Change in non-cash working capital                             
|Accounts receivable                                             | $(2,339) | $(5,492) | $(1,833)
|Prepaids                                                        | (2,024)  | -        | -       
|Inventories                                                     | (2,867)  | (304)    | (607)   
|Accounts payable and accrued liabilities                        | 9,236    | (1,159)  | (1,061) 
|                                                                | $2,006   | $(6,955) | $(3,501)
|                                                                |          |          |         
|Non-cash financing and investing activities                    
|Shares issued on acquisition of Afcan                           | $56,235  | $-       | $-      
|Warrants issued in exchange for those of
      Afcan            | 1,204    | -        | -       
|Options issued in exchange for those of
      Afcan             | 41       | -        | -       
|                                                                |          |          |         
|Operating Activities included the following cash
      payments
|Interest paid                                                   | $16      | $-       | $541    
|Income taxes paid                                               | $262     | $166     | $242    





14.
    Subsequent event



On
February 7, 2006 the Company announced the closing of a bought deal financing
with a syndicate of underwriters.  A total of 34,500,000 common shares were
issued at CDN$5.40 per common share for gross proceeds totaling CDN$186,300,000
($161,494).  CDN$178,848,000 ($155,035) of the gross proceeds were released
to the Company and CDN$7,452,000 ($6,460) of the gross proceeds were released to
the underwriters.  This financing provides funds to acquire late-stage
development gold properties in China, complete the development and continue
exploration of our properties in Turkey, China and Brazil, acquire other
properties and carryout general corporate activities.



23

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts





15.

Significant
differences from United States accounting principles

Canadian
generally accepted accounting principles (Canadian GAAP) vary in certain
significant respects from the principles and practices generally accepted in the
United States (U.S. GAAP). The effect of the principal measurement differences
on the Company's consolidated financial statements are quantified below and
described in the accompanying notes:



|                                                                     |           |                                  |           |     
|-------------------------------------------------------------------- | --------- | -------------------------------- | --------- | ----
|                                                                     |           | Twelve months ended December 31,
|                                                                     |           | 2005                             | 2004      | 2003
|                                                                     |           |                                  |           |     
|Net loss for the period                                             
|reported under Canadian GAAP                                         | $(49,126) | $(13,942)                        | $(45,033)
|Add (deduct)                                                        
|Property, plant and equipment costs (a)                              | -         | -                                | 14,915   
|Exploration costs (a)                                                | (650)     | (509)                            | 671      
|Accretion on convertible debentures ( c)                             | -         | -                                | 127      
|Loss (gain) on settlement of convertible                            
|debentures - Canadian GAAP (c)                                       | -         | -                                | 227      
|                                                                     |           |                                  |           |     
|Net loss before change in accounting policy                          | (49,776)  | (14,451)                         | (29,093) 
|                                                                     |           |                                  |           |     
|Cumulative effect adjustment - asset retirement
      obligation (d) | -         | -                                | (1,020)  
|                                                                     |           |                                  |           |     
|                                                                     |           |                                  |           |     
|Net loss for the period before                                      
|comprehensive income adjustments                                     | $(49,776) | $(14,451)                        | $(30,113)
|                                                                     |           |                                  |           |     
|Net loss per common share U.S. GAAP                                 
|Basic and diluted                                                    | $(0.18)   | $(0.06)                          | $(0.14)  
|                                                                     |           |                                  |           |     
|Other comprehensive income                                          
|Opening balance                                                      | $(237)    | $233                             | $1,957   
|Gold sales contracts (b)                                             | -         | -                                | (2,286)  
|Unrealized gain on investments (e)                                   | 284       | (470)                            | 562      
|                                                                     |           |                                  |           |     
|Closing balance                                                      | $47       | $(237)                           | $233     



24

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts



|                                                       |          |                         |          |     
|------------------------------------------------------ | -------- | ----------------------- | -------- | ----
|                                                       |          | Year ended December 31,
|                                                       |          | 2005                    | 2004     | 2003
|                                                       |          |                         |          |     
|Shareholders* equity reported under                   
|Canadian GAAP                                          | $224,927 | $206,961                | $153,475
|                                                       |          |                         |          |     
|Cumulative adjustments to shareholders* equity        
|add (deduct)                                          
|                                                       |          |                         |          |     
|Exploration costs (a)                                  | (16,524) | (15,874)                | (15,365)
|Deferred gain (loss) on gold sales
      contracts (b) | -        | -                       | (329)   
|Accretion on convertible debentures (c)                | -        | -                       | 1,036   
|Contributed surplus                                    | -        | -                       | (1,094) 
|Loss (gain) on settlement of convertible              
|debentures - Canadian GAAP
      (c)                   | -        | -                       | (236)   
|Gain on settlement of convertible                     
|debentures - U.S. GAAP (c)                             | -        | -                       | 294     
|Unrealized gain (loss) on investments
      (e)        | 47       | (237)                   | 562     
|                                                       |          |                         |          |     
|Shareholders* equity under U.S. GAAP                   | $208,450 | $190,850                | $138,343
|                                                       |          |                         |          |     
|Total assets reported under                           
|Canadian GAAP                                          | $320,735 | $226,259                | $171,959
|Add (deduct)                                          
|Exploration costs (a)                                  | (16,524) | (15,874)                | (15,365)
|Investments (e)                                        | 47       | (237)                   | 562     
|                                                       |          |                         |          |     
|Total assets under U.S. GAAP                           | $304,258 | $210,148                | $157,156
|                                                       |          |                         |          |     
|Total liabilities reported under                      
|Canadian GAAP                                          | $95,808  | $19,298                 | $18,484 
|Add (deduct)                                          
|Deferred gain on gold sales contracts
      (b)        | -        | -                       | 329     
|                                                       |          |                         |          |     
|Total liabilities under U.S. GAAP                      | $95,808  | $19,298                 | $18,813 



25

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts



|                                                 |           |                               |          |     
|------------------------------------------------ | --------- | ----------------------------- | -------- | ----
|                                                 |           | Year
      ended December 31,
|                                                 |           | 2005                          | 2004     | 2003
|                                                 |           |                               |          |     
|Cash flows
      from operating activities      
|under
      Canadian GAAP                        | $(13,934) | $(10,426)                     | $3,646  
|Exploration
      costs                          | (650)     | (509)                         | (3,604) 
|                                                 |           |                               |          |     
|Cash flows
      from operating activities      
|under
      U.S. GAAP                            | (14,584)  | (10,935)                      | 42      
|                                                 |           |                               |          |     
|Cash flows
      from investing activities under
|Canadian
      GAAP                              | (88,516)  | (22,918)                      | (14,191)
|Exploration
      costs                          | 650       | 509                           | 3,604   
|                                                 |           |                               |          |     
|Cash flows
      from investing activities      
|under
      U.S. GAAP                            | (87,866)  | (22,409)                      | (10,587)
|                                                 |           |                               |          |     
|Cash flows
      from financing activities      
|under
      Canadian and U.S. GAAP               | (90)      | 63,708                        | 71,469  
|                                                 |           |                               |          |     
|Foreign
      exchange loss on cash             
|held
      in foreign currency                   | 976       | (439)                         | 6,914   
|                                                 |           |                               |          |     
|Increase
      (decrease) in cash and           
|cash
      equivalents                           | (101,564) | 29,925                        | 67,838  
|                                                 |           |                               |          |     
|Cash and
      cash equivalents -               
|Beginning
      of period                        | 135,390   | 105,465                       | 37,627  
|                                                 |           |                               |          |     
|Cash and
      cash equivalents -               
|End of
      period                              | $33,826   | $135,390                      | $105,465



a)

Property,
plant and equipment and exploration costs

Exploration
costs are accounted for in accordance with Canadian GAAP as disclosed in
Note 2. For U.S. GAAP purposes, the Company expenses all exploration costs
incurred relating to unproven mineral properties. When proven and probable
reserves are determined for a property and upon completion of a feasibility
study, subsequent exploration and development costs on the property are
capitalized.



In 2002
the Company recorded a write down at its São Bento mine of $14,915 due to the
exclusion of inferred resources per SFAS 144 which was reversed in 2003.





26

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts











b)

Forward
gold sales contracts and foreign exchange purchase commitments

Derivative
instruments



For U.S.
GAAP, the Company adopted Statement of Financial Accounting Standards No. 133 (SFAS
No. 133) effective January 1, 2001. SFAS No. 133 requires that all
derivatives be recorded on the balance sheet as either assets or liabilities at
their fair value. Changes in a derivative's fair value are recognized in the
earnings of the current period unless specific hedge accounting criteria are
met. Management has currently not designated any of the Company's financial
instruments as hedges for U.S. GAAP purposes under SFAS No. 133. Gains from
hedges previously closed out are classified in other comprehensive income on
transition to SFAS No. 133.



A
similar guidance has been introduced in Canada, Accounting Guideline 13, "Hedging
Relationships", (AcG 13) which is effective for the years beginning July 1,
2003. AcG 13 addresses the identification, designation, documentation, and
effectiveness of hedging transactions for the purposes of applying hedge
accounting. It also establishes conditions for applying or discontinuing hedge
accounting. Under the guideline, the Company will be required to document its
hedging transactions and explicitly demonstrate that the hedges are sufficiently
effective in order to continue accrual accounting for positions hedged with
derivatives.



c)

Convertible
debentures

Canadian
GAAP requires that a portion of the convertible debentures be classified as
equity. The difference between the carrying amount of the debentures and their
face value is accreted over the life of the debt and charged to earnings (loss)
for the year. Under U.S. GAAP the debentures would be classified as a liability
at their face value.



A
portion of the convertible debentures was settled during 2002, resulting in a
gain of $463 under Canadian GAAP. Under U.S. GAAP, the gain on settlement would
have been $294 and would be classified as an extraordinary item. During 2003 the
outstanding balance was paid resulting in a loss of $227 under Canadian GAAP.
Under US GAAP there would be no gain or loss on repayment of the outstanding
convertible debentures.



d)

Asset
retirement obligation

SFAS No.
143, "Accounting for Asset Retirement Obligations" was issued in June 2001.
This statement addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. It requires that the fair value of a liability for an
asset retirement obligation be recognized in the period in which it is incurred
if a reasonable estimate of fair value can be made. The associated asset
retirement costs are capitalized as part of the carrying amount of the
long-lived asset. FAS 143 requires no restatement of prior year balances and the
cumulative effect is included in the net loss for the year. Under SFAS 143, the
cumulative effect for the change in accounting policy is recorded into loss for
the period.



e)

Investments



Under US
GAAP, marketable securities would be divided between held-to-maturity securities
and available-for-sale securities. These securities classified as
available-for-sale would be recorded at market value and the unrealized gain or
loss would be recorded as a separate component of shareholders equity.



27

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts



f)

New
accounting pronouncements

The
recent consensus reached by the US Emerging Issues Task Force in EITF 04-06, Accounting
for Stripping Costs Incurred during Production in the Mining Industry This
consensus was ratified by the Financial Accounting Standards Board (FASB) at its
March meeting and, if finalized as proposed, will give rise to a GAAP
difference.  Under EITF 04-06, stripping costs incurred during the
production phase of a mine should be considered variable production costs
included in the costs of the inventory produced during the period that the
stripping costs are incurred.  EITF 04-06 is effective for the first
reporting period in fiscal years beginning after December 15, 2005.  The
Company will record a cumulative adjustment effective January 1, 2006 that has
not yet been determined, however it does not expect the adoption of EITF 04-6
have a material impact on its financial position, results of operations or cash
flows.

During
June 2005, the FASB issued SFAS No. 154, Accounting for Changes and Error
Corrections. The new standard requires that entities which make a voluntary
change in accounting principle apply that change retroactively to prior period
financial statements, unless this would be impracticable. For changes in methods
of depreciation, amortization or depletion for long-lived assets, the change
must be accounted for prospectively, as a change in estimate. SFAS No. 154 is
effective for the company's 2006 financial statements.

Recent Canadian
Accounting Pronouncements

(i)
       Deferred Stripping Costs

In October 2005, the CICA Emerging Issues Committee (EIC) issued for comment a
draft abstract, EIC D56 "Accounting for Deferred Stripping Costs in the Mining
Industry". If adopted, this EIC would require stripping costs to be accounted
for as variable production costs to be included in inventory unless the
stripping activity can be shown to be a betterment of the mineral property, in
which case the stripping costs would be capitalized. A betterment occurs when
stripping activity increases future output of the mine by providing access to
additional sources of reserves. Capitalized stripping costs would be amortized
on a units-of-production basis over the proven and probable reserves to which
they relate.
As at December 31, 2005 the company has no deferred stripping costs.



(ii)
       Non-monetary Transactions

CICA Handbook Section 3831 "Non-Monetary Transactions" will be applicable to
the company commencing with the 2006 financial year.



(iii)
       Derivative Instruments



In
January 2005, the Canadian Institute of Chartered Accountants (CICA) issued
three new standards relating to financial instruments. These standards are
applicable for fiscal years beginning on or after October 1, 2006. The company
is currently reviewing the impact of these new standards. These standards are as
follows:

Financial Instruments - Recognition and Measurement, Section 3855

This standard prescribes when a financial asset, financial liability, or
non-financial derivative is to be recognized on the balance sheet and whether
fair value or cost-based measures are used. It also specifies how financial
instrument gains and losses are to be presented.

Hedges, Section 3865

This standard is applicable when a company chooses to designate a hedging
relationship for accounting



28

---





NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year ended December 31, 2005, 2004 and 2003

Expressed in thousands of U.S. dollars except per share
amounts





purposes.
It builds on the existing Accounting Guideline AcG-13 "Hedging Relationships",
and Section 1650 "Foreign Currency Translation", by specifying how hedge
accounting is applied and what disclosures are necessary when it is applied.



Comprehensive
Income, Section 1530

This standard introduces new rules for the reporting and display of
comprehensive income. Comprehensive income, which is currently reported under US
GAAP, is the change in shareholders' equity (net assets) of an enterprise
during a reporting period from transactions and other events and circumstances
from non-owner sources. It includes all changes in equity during a period except
those resulting from investments by owners and distributions to owners. These
items include minimum pension liability adjustments, holding gains and losses on
certain investments, gains and losses on certain derivative instruments and
foreign currency gains and losses related to self-sustaining foreign operations
(cumulative translation adjustment).



29

---



Document 3  Managements Discussion and Analysis of Financial Condition and Results of Operation



---



MANAGEMENT'S
DISCUSSION AND ANALYSIS

For the years ended
December 31, 2005, 2004 and 2003





Management's
Discussion & Analysis of Financial Condition and Results of Operations



This
Management's Discussion and Analysis (MD&A) reviews the business of
Eldorado Gold Corporation ("Eldorado", "we" or "the Company") and
compares the Company's financial results for 2005 with those of 2004 and 2003.
For a comprehensive understanding of Eldorado's financial condition and
results of operations, you should read this MD&A together with the
consolidated financial statements and accompanying notes. Unless otherwise
noted, all monetary amounts are in United States dollars.



Certain
of the statements made herein may contain forward-looking statements or
information within the meaning of the United States Private Securities
Litigation Reform Act of 1995, and forward looking statements or information
within the meaning of the Securities Act (Ontario).  Such forward looking
statements or information include, but are not limited to statements or
information with respect to  unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company,
or industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Forward-looking statements or information are subject to a variety
of risks and uncertainties, which could cause actual events, or results to
differ from those reflected in the forward-looking statements or information.
Should one or more of these risks and uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described in forward looking statements.  Specific reference is made
to "Forward Looking Statements and Risk Factors" in the Company's
Prospectus dated January 31, 2006.  Forward-looking statements herein
include statements regarding the expectations and beliefs of management.
 Such factors included, amongst others the following:  gold price
volatility; impact  of any hedging activities, including margin limits and
margin calls; discrepancies between actual and estimated production, between
actual and estimated reserves, and between actual and estimated metallurgical
recoveries; mining operational risk; regulatory restrictions, including
environmental regulatory restrictions and liability; risks of sovereign
investment; speculative nature of gold exploration; dilution; competition; loss
of key employees; additional funding requirements; and defective title to
mineral claims or property, as well as those factors discussed in the section
entitled "Risk Factors" in the Company's Prospectus dated January 31, 2006
and Annual Information Form dated March 31, 2005.  We do not expect to
update forward-looking statements continually as conditions change and you are
referred to the full discussion of the Company's business contained in the
Company's reports filed with the securities regulatory authorities in Canada
and the U.S. This MD&A is effective as at March 21, 2005.



Eldorado's
consolidated financial statements are prepared in accordance with Canadian
Generally Accepted Accounting Principles ("GAAP") and are filed with
appropriate regulatory authorities in Canada and the United States.



Eldorado's
Chief Executive Officer and Chief Financial Officer are responsible for
establishing and maintaining disclosure controls and procedures.   The
Chief Executive Officer and Chief Financial Officer have designed such
disclosure controls and procedures or caused them to be designed under their
supervision, to provide reasonable assurance that material information relating
to the Company, including its consolidated subsidiaries, is made known,
particularly during the period in which the annual filings are being prepared.



1.
2005 - Year in Review



Eldorado
is a gold producer based in Vancouver, Canada. We own and operate the São Bento
gold mine (the "São Bento mine" or "São Bento") in Brazil and are
constructing the Kisladag gold mine ("Kisladag mine" or "Kisladag") in
Turkey and the Tanjianshan gold mine ("Tanjianshan mine" or "Tanjianshan")
in China. We also explore for and/or acquire precious mineral properties for
exploration and develop gold mineralized properties into mines.







---

MANAGEMENT'S
DISCUSSION AND ANALYSIS

For the years ended
December 31, 2005, 2004 and 2003



Afcan
Acquisition

Effective
September 13, 2005, we acquired Afcan Mining Corporation ("Afcan"). As a
result, we acquired an 85% interest in the Tanjianshan mine located in Qinghai
Province in western China. Once we have invested $50.00 million of capital in
Tanjianshan, our ownership will increase to 90%. Based on our current capital
expenditure program, we anticipate incurring such expenditures to raise our
interest to 90% in 2006. In addition to Tanjianshan, there are other exploration
opportunities within the 344 square kilometre property acquired as part of the
Afcan acquisition.



Under
the terms of the agreement, we issued 23,045,151 Eldorado shares to the
shareholders of Afcan in return for all of Afcan's outstanding common shares.
We also issued (or assumed the obligation to issue) 4,595,952 share purchase
warrants and 91,538 stock options. Our out-of-pocket costs associated with the
transaction were $1.26 million.



This
business combination has been accounted for as a purchase transaction, with
Eldorado being identified as the acquirer and Afcan as the acquiree in
accordance with CICA Handbook Section 1581 "Business Combinations".
Our consolidated financial statements include 100% of Afcan's operating
results for the period from September 14, 2005 to December 31, 2005.



This
acquisition affected our balance sheet as explained in Note 3 of the
consolidated financial statements. We recorded a future income tax liability of
$5.12 million, which results from an imputed income tax liability we incurred
due to the difference between the allocated fair values and tax values of the
property, plant and equipment assets we acquired.



We
recorded goodwill of $2.24 million, representing the excess of the purchase
price over the fair value of the acquired assets and liabilities. Goodwill
represents a combination of the potential for the discovery of additional
mineable ounces from properties or mining rights acquired in the transaction and
the potential for increased revenues as a result of higher realized gold prices
due to an increase in the price of gold.



Net
Loss for the Year

The
consolidated net loss for 2005 was $49.13 million or ($0.17) per share compared
with a net loss of $13.94 million or ($0.05) per share in 2004 and $45.03
million or ($0.20) per share in 2003.



In
December 2005, we wrote down assets of $18.88 million relating to the São Bento
mine. During 2005, we determined that there is a low probability that the ore
zone continues at depth. Based on current cash flow analyses and current reserve
estimates, we wrote down the balance sheet carrying value of the mine asset by
$12.37 million to state the asset at its deemed fair value. We also determined
that the realization of certain Brazilian federal tax credits is in question
given that, based on current estimates, Sao Bento will not generate sufficient
income to use these credits. This resulted in a write-down of $4.87 million.
After reviewing the material and supplies inventory, and based on the shorter
mine life, we wrote off certain items at year-end, totaling $1.64 million. In
2006, São Bento will enter its last full year of production as we plan to cease
mining operations in the first half of 2007.



Other
contributing factors to the net loss for the year were higher operating costs
and depreciation at the São Bento mine, increased general and administrative
costs associated with the start-up of the Kisladag mine and higher exploration
expenditures.



Gold
Sales

In 2005,
we sold 66,804 ounces of gold for $29.68 million at an average realized selling
price of $444 per ounce. This compares to 2004 gold sales of 81,913 ounces for
$33.48 million (excluding a hedging loss of $0.33 million) at an average
realized price of $409 per ounce and 2003 gold sales of 95,544 ounces for $34.52
million at an average realized price of $361 per ounce. We had lower gold sales
in 2005 because of lower gold production, caused by problems with ground
stability, lower grades and interruptions in mining operations during the
completion of the shaft-deepening project at São Bento.



---

MANAGEMENT'S
DISCUSSION AND ANALYSIS

For the years ended
December 31, 2005, 2004 and 2003



Financial
Position

At
December 31, 2005, we held $33.83 million in cash and short-term deposits and
$50.00 million in a reserve account, substantially offsetting our debt of $50.83
million. We remain hedge free.



On
February 7, 2006, we announced the closing of a bought deal financing with a
syndicate of underwriters. A total of 34,500,000 common shares were issued at
CDN$5.40 per common share for gross proceeds totaling CDN$186.30 million
($161.49 million) and net proceeds of CDN$178.85 million ($155.04 million). This
financing gives us sufficient funds to acquire late-stage development gold
properties in China, complete the development and continue exploration of our
properties in Turkey, China and Brazil, acquire other properties and carry out
general corporate activities.



At
December 31, 2005, Tüprag Metal Madencilik Sanayi Ve Ticaret Limited Surketi ("Tüprag"),
a wholly owned subsidiary of Eldorado, has drawn $50.00 million on its Revolving
Credit Facility, which is secured by cash deposits in a cash collateral account
over which HSBC Bank USA, National Association holds security.



As a
result of the Afcan acquisition, we assumed two loans totaling $2.13 million
that are payable to Sino Gold Limited. The first loan of $0.70 million was paid
in full on December 31, 2005. The second loan of $1.43 million is a non-interest
bearing loan discounted using an interest rate of 8%. We paid the first
installment of $0.29 million on December 31, 2005 and will repay the remaining
balance of $1.14 million in installments on December 31 over the next four
years.



At March
21, 2006, there were 339,901,489 voting common shares issued and outstanding.



2.
Development



Kisladag
Mine Construction

At
December 31, 2005 construction at the Kisladag mine was approximately 90%
complete.  The Kisladag construction schedule was delayed by unseasonably
cold temperatures and snow during the first two months of 2006. We now expect
mechanical completion of all major components by the end of March 2006. The ADR
Plant is complete and is currently being commissioned. Overliner ore has been
completed on four of the six leach pad cells and is continuing on cells five and
six. Approximately 130,000 tonnes of oxide ore have been placed on cell one and
an additional 500,000 tonnes of oxide ore have been stockpiled prior to being
loaded on the pad.



Revisions
to the capital budget estimates reported in Q2 2005 remain on target, with a
forecasted estimate of total costs of $83.4 million to completion. We have
revised the production schedule to take into account the new starting date and
are currently projecting production of 120,000 ounces of gold in 2006 at a cash
cost of $215 per ounce. We anticipate that the mine will produce at an
annualized rate of 240,000 ounces in 2007 and beyond.



Litigation
by certain third parties continues against Tüprag and the Turkish Ministry of
the Environment and Forestry seeking to cancel the Positive Certificate for the
Kisladag Project on the basis of an alleged threat to the environment.  We
are confident in both the methodology of the Environment Impact Assessment
Report and Tüprag's compliance with all procedural steps taken in obtaining
the Positive Certificate.  We continue to believe that we will successfully
defend this litigation.  The litigation has not impacted the ongoing
construction of Kisladag.  If we are unsuccessful in defending this
litigation, our ability to conduct mining operations at Kisladag may be
adversely affected, which may adversely affect production and revenue from
Kisladag.



Efemçukuru

In
September 2005, we received an Environmental Positive Certificate for
Efemçukuru, representing the successful completion of the first stage of the
permitting process. We are proceeding with the permitting process and land
acquisition in 2006. Our 2006 work plan includes an infill drilling program and
a step-



---

MANAGEMENT'S
DISCUSSION AND ANALYSIS

For the years ended
December 31, 2005, 2004 and 2003



out
drilling program designed to test the down-dip potential of the ore zone.
Preliminary engineering has begun and we expect to complete a Feasibility Study
by the end of Q3 2006. Construction is targeted to begin in 2007 with production
planned to begin in 2008.



In 2004,
Litigation was filed by certain third parties against the Turkish Ministry of
Energy and Natural Resources ("MOE") and Tuprag seeking to cancel the
mineral license for the Efemçukuru project on the basis of an alleged threat to
the water quality in the local catchment area.  During the course of this
litigation, a lower court issued an injunction, and while in effect, the
injunction would have prevented the commencement of mining activities at the
Efemcukuru Project.  In 2005 this injunction was subsequently overturned by
a higher court.



Tanjianshan

Construction
at Tanjianshan is approximately 60% complete and continues on schedule for
start-up in Q4 2006. Foundations for the crushing plant, SAG mill and flotation
plant are complete and the SAG mill has been secured on its foundation.
Pre-stripping has begun at both Jinlonggou ("JLG") and Qinglongtan ("QLT")
deposits and ore has been exposed in both pits.



We now
estimate capital costs of $63.4 million at Tanjianshan, due to changes to the
tailings dam design and general increases in engineering, procurement and
construction management costs. Additional capacity has also been added to the
process circuit to allow for increased throughput. We expect to produce 40,000
ounces of gold at a cash cost of $320 per ounce in 2006.



3.
Exploration Review



In 2006,
we will continue to explore in Turkey, China and Brazil with a total exploration
budget of $14.00 million. It is our philosophy to advance a pipeline of projects
that take advantage of our strategic positions in the countries where we
operate.



Turkey

In 2005,
our exploration activities in Turkey focused on the AS project, which is 50%
owned by Eldorado. Drilling results have confirmed AS to be an extensive
copper-gold porphyry system. In 2006, we will use the 2005 drill results, along
with recently completed geophysical survey data (ground magnetics and IP),
geologic mapping and soil geochemistry, to continue to outline the
porphyry-style mineralization over the target areas. We will also start
preliminary metallurgical test work on core samples and complete a preliminary
assessment.



In the
Pontide Volcanic Belt in Eastern Turkey, work will continue at the Koyalhisar
project. The targets at Koyalhisar are both bulk tonnage disseminated precious
metal systems and higher grade vein systems. Our 2006 work plan includes a
magnetic survey over the existing geochemical anomalies and 4,500 metres of core
and reverse circulation drilling as a first-pass drill program.



Also in
the Pontides, we will be working at the Mahmur Tepe project, where the target is
high density, near-surface gold-bearing fractures and quartz veins. During 2005,
a soil geochemical survey resulted in gold values greater than 1 gram per ton in
soils coincident with a strong magnetic anomaly. The Mahmur Tepe 2006 work plan
consists of trenching and 1,500 metres of core drilling.



In
Western Turkey, we plan to complete 1,500 metres of reverse circulation drilling
at the Bayramic project in early 2006, where the target is a coincident
geochemical gold and copper and geophysical (IP and Mag) anomaly in porphyritic
intrusive rocks.



To
advance our pipeline of projects in Turkey, two crews will conduct
reconnaissance on our existing projects in Western and Eastern Turkey, examine
new prospects and acquire new licences as appropriate to our growth strategy.





---

MANAGEMENT'S
DISCUSSION AND ANALYSIS

For the years ended
December 31, 2005, 2004 and 2003



Brazil

In
Brazil we have the Vila Nova project which consists of two separate ore bodies,
Vila Nova gold and Vila Nova iron.  Initial drill results from our diamond
drilling program at the Vila Nova gold project in Amapa State have been positive
with all drill holes intersecting gold mineralization. Our exploration plan for
2006 includes mapping and sampling the on-strike extensions of the main gold
trends, as well as carrying out a detailed ground geophysical survey. Drilling
will continue on the down-plunge extensions of the main target areas, and we
will begin metallurgical test work on surface and core samples.



Drill
results from the 19 diamond drill holes over a strike length of 1,400 meters at
the Vila Nova iron ore project produced an inferred resource of 8.7 million
tonnes with a grade of 61% iron.  Our 2006 work plan includes completing
1,500 meters of infill and extension drilling, conducting metallurgical testing,
preparing a feasibility study, and continuing permitting and project
implementation.



China

We
completed the 2005 exploration drilling program at the Tanjianshan project,
which focused on resource extensions at JLG and QLT pits. The program was
successful in extending mineralization at JLG to the east. The 2006 exploration
program is designed to target inferred mineral resources currently within the
pit design at JLG and to extend the high grade portion of QLT and a belt of
known mineralization in intrusive rocks between JLG and QLT.



4.
Production



|                                       |         |         |        
|-------------------------------------- | ------- | ------- | -------
|                                       |         |         |        
|São Bento mine                        
|                                       | 2005    | 2004    | 2003   
|Operating data1                       
|Gold production                       
|Ounces                                 | 64,298  | 82,024  | 95,049 
|Cash operating costs ($/oz)5           | $407    | $294    | $234   
|Total cash costs ($/oz)2,5             | $416    | $302    | $241   
|Total production costs
      ($/oz)3,5 | $564    | $358    | $364   
|Realized price ($/oz sold)4            | $444    | $409    | $361   
|                                       |         |         |        
|São Bento mine                        
|Tonnes to mill                         | 310,703 | 366,729 | 374,130
|Grade (grams/tonne)                    | 7.67    | 7.81    | 8.50   
|Average recovery rate (%)              | 89.3    | 89.1    | 92.0   





1
Cost figures calculated in accordance with the Gold Institute Standard.

2
Cash Operating Costs, plus royalties and the cost of off-site administration.

3
Total Cash Costs, plus foreign exchange gain or loss, depreciation, amortization
and reclamation expenses.

4
Excludes amortization of deferred gain or loss.

5
Cash operating, total cash and total production costs are non-GAAP measures that
do not have any standardized meaning as prescribed by GAAP and are therefore
unlikely to be comparable to similar measures presented by other entities.
Please see the section "Non-GAAP Measures" of the MD&A.



São
Bento produced 64,298 ounces of gold in 2005, 21.6% lower than production in
2004 and 32.4% lower than production in 2003. Gold production was adversely
affected in 2005 because of problems with ground stability, lower grade and
interruptions in mining activities incurred during the completion of the
shaft-deepening project. Cash costs were affected by lower gold production,
increased costs for ground support and the appreciation of the Brazilian Real
against the US dollar.



The
shaft-deepening project was completed in October 2005 and commissioned in
November at a total cost of $13.33 million.





---

MANAGEMENT'S
DISCUSSION AND ANALYSIS

For the years ended
December 31, 2005, 2004 and 2003



Throughout
2005, we drilled 17 diamond drill holes at São Bento and examined all
geological, structural and geochemical data to determine the probability of
down-dip extensions of the ore zone. We concluded that there is a low
probability of the ore zone continuing below the 33rd level. The mine
at São Bento will enter its last full year of production in 2006 as we plan to
cease mining operations in the first half of 2007. We are reviewing alternatives
regarding the future of this asset.



|                                         |      |      |     
|---------------------------------------- | ---- | ---- | ----
|São Bento mine                          
|Gold Production and Cost per Ounce       | 2005 | 2004 | 2003
|                                         |      |      |     
|Direct mining expense                    | $406 | $287 | $227
|Inventory change                         | (6)  | -    | 1   
|Refining and selling costs               | 7    | 6    | 5   
|Vancouver costs                          | 1    | 2    | 1   
|By-product credits                       | (1)  | (1)  | -   
|Cash operating costs per ounce           | $407 | $294 | $234
|                                         |      |      |     
|Royalties and production taxes           | 9    | 8    | 7   
|Total cash costs per ounce               | $416 | $302 | $241
|                                         |      |      |     
|Depletion, depreciation and amortization | 147  | 53   | 107 
|Foreign exchange (gain) loss             | (7)  | (3)  | 12  
|Accretion of asset retirement expense    | 8    | 6    | 4   
|Total production costs per ounce         | $564 | $358 | $364



5.
Review of Financial Results



Net
(Loss) Income

Our
consolidated net loss for 2005 was $49.13 million or ($0.17) per share compared
with a net loss of $13.94 million or ($0.05) per share in 2004 and $45.03
million or ($0.20) per share in 2003.



Revenues

Our
revenues consist of sales of gold bullion that we sell to a number of large
institutions.



|                          |         |         |        
|------------------------- | ------- | ------- | -------
|                          |         |         |        
|                          |         |         |        
|REVENUE - ($000)          | 2005    | 2004    | 2003   
|                          |         |         |        
|Gold sales                | $29,680 | $33,482 | $34,528
|Effect of hedging         | -       | (329)   | 2,286  
|Total                     | 29,680  | 33,153  | 36,814 
|                          |         |         |        
|Interest and other income | 4,117   | 2,762   | 1,415  
|                          | $33,797 | $35,915 | $38,229



Interest
and Other Income

Interest
income earned on cash, short-term money market investments and deposits held in
2005 was $3.55 million compared to $1.75 million in 2004 and $1.20 million in
2003. Other income of $0.57 million in 2005 ($1.01 million in 2004 and $0.22
million in 2003) resulted from the sale of Brazilian tax credits.













---

MANAGEMENT'S
DISCUSSION AND ANALYSIS

For the years ended
December 31, 2005, 2004 and 2003



Expenses

|                                                          |         |         |        
|--------------------------------------------------------- | ------- | ------- | -------
|                                                          |         |         |        
|EXPENSES - ($000)                                         | 2005    | 2004    | 2003   
|Operating costs                                           | $35,378 | $33,109 | $22,863
|Depletion,
      depreciation and amortization            | 9,798   | 4,431   | 10,321 
|General and
      administrative                          | 12,976  | 5,531   | 4,961  
|Exploration
      expense                                 | 7,386   | 4,312   | 2,009  
|Stock-based
      compensation expense                    | 1,961   | 2,894   | 1,106  
|Foreign exchange
      (gain) loss                        | 547     | (196)   | (6,494)
|Write-down of
      investments                           | 662     | -       | -      
|Write-down of
      assets                                | 18,875  | -       | 44,645 
|Gain on disposal
      of property previously written off | (5,500) | -       | -      
|Other                                                     | 345     | 425     | 1,388  
|                                                          | $82,428 | $50,506 | $80,799



Operating
Costs

Operating
costs for the São Bento mine in 2005 included $5.26 million of development
costs that were charged to operating costs based on the reduced estimate of
probable reserves reported at December 31, 2004 and $1.80 million of contractual
severance expense. Higher cash costs per ounce for 2005 resulted from reduced
production rates as we focused on completing the shaft-deepening project, as
well as tighter ground control practices at depth and the appreciation of the
Brazilian Real.  From January 1, 2005 through to December 31, 2005 the
Brazilian Real appreciated 12.1%.



Depletion,
Depreciation and Amortization

Depletion,
depreciation and amortization expense increased in 2005 due to the reduced mine
life of the São Bento mine resulting from the reduced estimate of probable
reserves reported at December 31, 2004. At December 31, 2005, the São Bento
mine was written down to its fair value, and depreciation and amortization
expense in 2006 will therefore be nil.



General
and Administrative

General
and administrative expense includes $1.00 million of liabilities that were
accrued at December 31, 2005 in connection with the São Bento mine as it enters
its last full year of production. General and administrative costs at the
Kisladag mine increased by $4.44 million, attributable to start-up costs. We
have brought on administrative staff to hire and train a core operating team at
the Kisladag mine. Head office general and administrative expense is up by $1.66
million in 2005 because we hired additional staff to support our expansion and
increased travel associated with support of our international operations.



Exploration
Expense

Our
increased exploration expense in 2005 is a result of greater levels of
exploration activity in Brazil, Turkey and China. Drilling activities at Vila
Nova in Brazil of $4.69 million, at the AS Project in Turkey of $0.86 million
and at Tanjianshan in China of $1.23 million account for the majority of these
exploration costs. In 2006, we will continue to advance a pipeline of projects
in these countries with a total corporate exploration budget of $14.00 million.



Stock-Based
Compensation Expense

Eldorado
uses fair-value accounting for awards of stock options to employees, officers
and directors under its share option plans. In 2005, 2,805,000 options were
granted to employees, officers and directors.











---

MANAGEMENT'S
DISCUSSION AND ANALYSIS

For the years ended
December 31, 2005, 2004 and 2003



Foreign
Exchange (Gain) Loss

During
the first six months of 2005, the Canadian dollar weakened against the US
dollar, resulting in a foreign exchange loss on Canadian funds held. In the last
six months of 2005, the Canadian dollar strengthened against the US dollar,
resulting in a foreign exchange gain that partially offset the year-to-date
losses.



Write-Down
of Investments and advances

On
November 28, 2003, we purchased 2,500,000 units of Fury Explorations Ltd. ("Fury")
at a price of $0.47 per unit. Despite a strong gold price, Fury's share price
fell during the first quarter of 2005, and as a result, we wrote down the
investment to market at the quarter-end. Fury's share price remained stable
for the rest of 2005 and no further write-down of the investment is contemplated
at this time.



Write-down
of Assets

We wrote
down assets of $18.88 million relating to the São Bento mine as we determined
that there is a low probability that the ore zone continues at depth
 Write-down of assets includes $12.37 million of the Sao Bento mine, $4.87
of certain Brazilian federal tax credits and $1.64 million for certain inventory
items.



Gain
on Disposal of Property Previously Written off

Gain on
disposal of property of $5.50 million results from Tuprag's sale of its Kaymaz
and Kucukdere mine operation licences and immoveable property, together with all
rights and obligations, to Koza Altin Isletmeleri A.S. The sale price of the
licences and property was $5.50 million, which equals the gain on sale as we had
written off the properties to nil in 2003 and 1998 respectively.



Income
Taxes

Current
tax expense for 2005 was $0.15 million compared to a tax recovery of $1.41
million in 2004. The recovery in 2004 resulted from the reversal of the
remaining Brazilian withholding tax liability after we restructured our
inter-company debt.



Future
income tax expense for 2005 was $0.34 million compared to a future income tax
expense of $0.76 million in 2004. The expense in 2005 and 2004 results from a
strengthening Brazilian Real against the US dollar.



6.
Financial Conditions and Liquidity



Cash
from Operations

The
decrease in cash from operations from 2004 to 2005 resulted primarily from
higher cash operating costs at São Bento and increased exploration and
administrative expenses.



The net
increase in non-cash working capital in 2005 of $2.01 million results primarily
from the increase in accounts payable balances, partially offset by the increase
in accounts receivable and inventory balances from the prior year-end. Accounts
payable increased $13.73 million due to the construction of both the Kisladag
and Tanjianshan mines. Accounts receivable decreased by $0.44 million because of
the write-off of certain federal Brazilian tax credits offset by an increase in
the Value Added Tax receivable in
Turkey.Inventory increase of $1.67 million
over 2004 reflects the initial ore inventory from the Kisladag and Tanjianshan
mines, partially offset by the write-off of certain materials and supplies
inventory at the São Bento mine.



Investing
Activities

In 2005,
we invested $88.76 million in property, plant and equipment. At São Bento, our
capital expenditures of $7.36 million were primarily related to underground
ventilation and development. Capital expenditures of $60.60 million at the
Kisladag mine relate to construction activities. Capital expenditures of $18.49
million at Tanjianshan relate to construction activities.  Other
expenditures were  $2.31 million.





---

MANAGEMENT'S
DISCUSSION AND ANALYSIS

For the years ended
December 31, 2005, 2004 and 2003



We
received net cash proceeds from the Afcan acquisition of $0.66 million. Net cash
proceeds resulted from the cash balance acquired of $11.92 million, less
acquisition costs incurred of $1.26 million and less intercompany debt
outstanding of $10.00 million.



Financing
Activities

We
received cash of $7.18 million resulting from the exercise of stock options and
warrants throughout the year.



As a
result of the Afcan acquisition, we assumed two loans of $2.13 million payable
to Sino Gold Limited. The first loan of $0.70 million and the first installment
of the second loan of $0.29 million were paid in full at December 31, 2005.



Other
assets of $6.29 million relate primarily to the long-term portion of the Value
Added Tax receivable in Turkey.



Cash
Resources and Liquidity

At
December 31, 2005, we had cash and short-term investments of $33.83 million
resulting in working capital of $30.46 million, compared with $135.39 million of
cash and short-term investments and working capital of $144.02 million at the
beginning of the year. The decrease in cash and short-term investments was
primarily caused by our expenditures for property, plant and equipment related
to constructing Kisladag and Tanjianshan.  As noted elsewhere herein under
Financial Position, the Company completed the sale of 34,500,000 shares of
common stock for net proceeds of $155.04 million in February 2006.



7.
Contractual Obligations



Our
contractual obligations at December 31, 2005, including payments due for each of
the periods indicated, are summarized as follows:



|                                     |         |        |                       |        |        |        |        
|------------------------------------ | ------- | ------ | --------------------- | ------ | ------ | ------ | -------
|                                     |         |        | Payments due
      in
|Contractual
      obligations ($000) | 2006    | 2007   | 2008                  | 2009   | 2010   | 2011+  | Total  
|                                     |         |        |                       |        |        |        |        
|Operating
      leases               | $429    | $363   | $363                  | $367   | $389   | $1,498 | $3,409 
|Capital leases                       | 37      | 36     | 36                    | 37     | -      | -      | 146    
|Capital
      expenditures           | 16,288  | 1,011  | 1,000                 | 1,000  | 1,000  | 2,250  | 22,549 
|Purchase
      obligations           | 7,032   | 1,935  | -                     | -      | -      | -      | 8,967  
|Property
      expenditures          | 952     | 57     | 57                    | 57     | 57     | 287    | 1,467  
|                                     |         |        |                       |        |        |        |        
|Total                                | $24,738 | $3,402 | $1,456                | $1,461 | $1,446 | $4,035 | $36,538





Capital
expenditures in 2006 represent purchases relating to the construction of the
Kisladag and Tanjianshan mines. Purchase obligations from 2006 through 2007
relate to energy, oxygen and other contracts at the São Bento mine. Property
expenditures of $1.47 million relate to land fees and contractual exploration
expenditures for Vila Nova and Tanjianshan.

























---

MANAGEMENT'S
DISCUSSION AND ANALYSIS

For the years ended
December 31, 2005, 2004 and 2003



8.
Summary of Quarterly Results and Fourth Quarter Review



|                                                      |                   |             |             |            
|----------------------------------------------------- | ----------------- | ----------- | ----------- | -----------
|                                                      |                   |             |             |            
|                                                      | 4th Quarter       | 3rd Quarter | 2nd Quarter | 1st Quarter
|$000 except per share amounts                         | 2005              | 2005        | 2005        | 2005       
|Revenue                                               | $9,239            | $10,522     | $6,154      | $7,882     
|Net income (loss)                                     | $(22,599)         | $(6,507)    | $(11,063)   | $(8,957)   
|                                                      |                   |             |             |            
|Basic and diluted
      (loss) income per share - US$ | (0.08)            | (0.02)      | (0.04)      | (0.03)     
|                                                      |                   |             |             |            
|                                                      | 4th
      Quarter | 3rd Quarter | 2nd Quarter | 1st Quarter
|                                                      | 2004              | 2004        | 2004        | 2004       
|Revenue                                               | $9,560            | $9,156      | $7,259      | $9,940     
|Net income (loss)                                     | $(10,263)         | $(1,343)    | $(1,673)    | $(663)     
|                                                      |                   |             |             |            
|Basic and diluted
      (loss) income per share - US$ | (0.04)            | -           | (0.01)      | -          



Lower
production levels, lower sales volumes and higher operating costs have led to
net loss in each of the eight quarters in 2004 and 2005. The losses reported in
Q4 2004, Q1 2005, Q2 2005 and Q3 2005 were affected by results of the 2004
exploration drilling program at the São Bento mine that did not establish the
continuity of the mineralization at depth, resulting in a reduced estimate of
probable reserves and a reduction in the mine life. Based on these drilling
results, we have charged certain development costs to operating costs and
increased our depreciation rate to reflect the shorter mine life. In Q4 2005,
the write-off of the São Bento mine to fair value of $12.37 million accounted
for a majority of the reported loss.



9.
Critical Accounting Estimates



We use
the following critical accounting estimates:



Reserves
and Resources

Mineral
reserves are calculated in accordance with National Instrument 43-101, as
required by Canadian Securities regulatory authorities. For United States
reporting purposes, Industry Guide 7 (under the Securities Exchange Act
of 1934, as interpreted by the staff of the Securities and Exchange Commission)
applies different standards to classify mineralization as a reserve. The
projected mineral reserves are classified as such by both Canadian and US
regulatory authorities.



We
advise US investors that while the terms "mineral resource", "measured
mineral resource," "indicated mineral resource", and "inferred mineral
resource" are recognized and required by Canadian regulations, they are not
defined terms under standards in the United States and normally are not
permitted to be used in reports and registration statements filed with the SEC.
As such, information contained in this report concerning descriptions of
mineralization and resources under Canadian standards may not be comparable to
similar information made public by US companies in SEC filings. With respect to
"indicated mineral resource" and "inferred mineral resource" there is a
great amount of uncertainty as to their existence and a great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all or any part
of an "indicated mineral resource" or "inferred mineral resource" will
ever be upgraded to a higher category. Investors are cautioned not to assume
that any part or all of the mineral deposits in these categories will ever be
converted into reserves.



Recoverable
Values

Where
information is available and conditions suggest impairment of long-lived assets,
estimated future net cash flows from each property are calculated using
estimated future gold prices, proven and probable



---

MANAGEMENT'S
DISCUSSION AND ANALYSIS

For the years ended
December 31, 2005, 2004 and 2003



reserves,
value beyond proven and probable reserves, operating, capital and reclamation
costs and estimated proceeds from the disposition of assets on an undiscounted
basis.



Gold
Price

We
estimate the future price of gold based on historical trends and published
forecasted estimates. Our five-year plan currently assumes the following prices:



2006
      2007
      2008
      2009
      2010Gold
        price (US$/oz)
      475
      450
      425
      400
      400




The
resulting average five-year price is $430 per ounce.



Operating
Costs

We
report our operating costs in accordance with the Gold Institute Standard.
Future operating costs include estimates of currency foreign exchange and
inflation trends.



Stock-Based
Compensation

We use
the Black-Scholes Model to determine the fair value for awards of stock options
to employees, officers and directors.



Asset
Retirement Obligation

When
assessing the carrying value of the asset retirement obligation, we estimate,
among other things, the mine closure date and the credit-adjusted risk-free
rate.



10.
Risks and Uncertainties



Gold
Price

Eldorado's
profitability is linked to the price of gold because our revenues are derived
primarily from gold mining. Gold prices are affected by numerous factors beyond
our control, including central bank sales, producer hedging activities, the
relative exchange rate of the US dollar with other major currencies, global and
regional demand and political and economic conditions. Worldwide gold production
levels also affect gold prices, and the price of gold is occasionally subject to
rapid short-term changes due to speculative activities.



Exploration
and Development

The
costs and results of our exploration and development programs affect Eldorado's
profitability and value. Since mines have finite lives based on proven reserves,
we actively seek to replace and expand our reserves, primarily through
acquisitions, exploration and development of our existing operations, and
recognizance exploration. Exploration for minerals involves many risks and may
not result in any new economically viable mining operations or yield new
reserves to replace and expand current reserves. Determination of reserves is a
process of estimation and, as such, reserve calculations are subject to the
assumptions and limitations of the estimation process.



Acquiring
title to mineral properties is a detailed and time-consuming process. We take
steps, in accordance with industry standards, to verify and secure legal title
to mineral properties in which we have or are seeking an interest. Although we
take every precaution to ensure that legal title to our properties is properly
recorded in the name of Eldorado, there can be no assurance that such title will
ultimately be secured on every property. The legal title to our properties
depends on the appropriate and consistent application of the laws in the
countries in which we operate.









---

MANAGEMENT'S
DISCUSSION AND ANALYSIS

For the years ended
December 31, 2005, 2004 and 2003



Capital
and Operations

The
business of gold mining involves many operational risks and hazards. Through
high operational standards, an emphasis on hiring and training appropriately
skilled personnel and operational improvements, we work to reduce the risks
associated with our projects. We also maintain adequate insurance to cover
normal business risk.



As we
currently have only one producing mine, any adverse development affecting São
Bento may have a negative impact on our financial performance.



We also
rely on a number of key employees. Our success depends on attracting and
retaining qualified personnel in a competitive labour environment.



Further
exploration and development of mineral resource properties or acquisitions
beyond this may require additional capital. Accordingly, the continuing
development of our projects will depend on our ability to obtain financing
through joint venture projects, debt financing and equity financing or other
means. There is no assurance that we will be successful in obtaining the
required financing.



Environment

Our
activities are subject to extensive federal, provincial, state and local laws
and regulations governing environmental protection and employee health and
safety. We must obtain governmental permits and provide associated financial
assurance to carry on certain activities. We are also subject to various
reclamation-related conditions imposed under federal, state or provincial air,
water quality and mine reclamation rules and permits.



While we
have budgeted for future capital and operating expenditures to maintain
compliance with environmental laws and permits, any future changes to these laws
could adversely affect Eldorado's financial condition, liquidity or results of
operations.



Laws
and Regulations

Eldorado's
mining operations and exploration activities are subject to extensive federal,
provincial, state and local laws and regulations governing prospecting,
development, production, exports, taxes, labour standards, occupational health
and safety, mine safety and other matters. These laws and regulations are
subject to change, which may restrict our ability to operate. We draw on the
expertise and commitment of our management team, advisors, employees and
contractors to ensure compliance with current laws, and we foster a climate of
open communication and co-operation with regulatory bodies.



Legal
Proceedings

The
nature of our business subjects us to regulatory investigation, claims, lawsuits
and other proceedings in the ordinary course of business. We cannot predict the
outcome of these legal proceedings with certainty.



Currency
Fluctuations

We
operate in numerous countries - including the US, Canada, Brazil, Turkey and
China - and we are therefore affected by currency fluctuations in these
jurisdictions.



Political
Risk

Eldorado
conducts operations in a number of countries outside of North America, namely
Brazil, Turkey and China. These operations are potentially subject to a number
of political, economic and other risks that may affect our future operations and
financial position.













---

MANAGEMENT'S
DISCUSSION AND ANALYSIS

For the years ended
December 31, 2005, 2004 and 2003



11.
Non-GAAP Measures



Throughout
this document, we have provided measures prepared according to Canadian GAAP, as
well as some non-GAAP performance measures. Because the non-GAAP performance
measures do not have any standardized meaning prescribed by GAAP, they are
unlikely to be comparable to similar measures presented by other companies. We
provide these non-GAAP measures as they are used by some investors to evaluate
Eldorado's performance. Accordingly, they are intended to provide additional
information and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with Canadian GAAP. We have
defined the non-GAAP measures below and reconciled them to reported GAAP
measures.



Unit
costs

A
reconciliation of cash operating costs calculated in accordance with the Gold
Institute Standard to the cost of sales is included below:



|                                                   |         |         |        
|-------------------------------------------------- | ------- | ------- | -------
|Reconciliation of Cash Operating Costs per Ounce 1
|                                                   | 2005    | 2004    | 2003   
|                                                   |         |         |        
|Gold ounces sold                                   | 66,804  | 81,913  | 95,544 
|Cash operating cost - ($000)                      
|Operating costs                                    | $35,378 | $33,109 | $22,863
|Royalty expense and production taxes               | (564)   | (634)   | (652)  
|Effects of inventory adjustments                   | (400)   | 332     | 405    
|FV of stock option grants                          | (171)   | (650)   | (259)  
|Expense of contractual severance costs             | (1,801) | -       | -      
|Expense of certain development costs               | (5,260) | (8,075) | -      
|Cash operating cost                                | $27,182 | $24,082 | $22,357
|                                                   |         |         |        
|Cash operating cost per ounce                      | $407    | $294    | $234   



Cash
operating costs are calculated in accordance with the Gold Institute Standard.
Cash costs are derived from amounts included in the Statement of Operations.





---



Document 4  Management Information Circular dated March 20, 2006





[noticeofmeeting001.jpg]





ELDORADO
GOLD CORPORATION

THE ANNUAL MEETING OF SHAREHOLDERS

To Be Held On May 4, 2006





TO:

The Shareholders of
Eldorado Gold Corporation

NOTICE IS
HEREBY GIVEN that the annual general meeting (the "Meeting") of the
shareholders of Eldorado Gold Corporation (the "Company") will be held at
the Terminal City Club, 837 West Hastings Street, British Columbia on Thursday,
the 4th day of May, 2006, at 3:00 p.m., for the following purposes:

1.

To receive the
consolidated financial statements of the Company for the financial year ended
December 31, 2005 and the report of the auditors thereon;

2.

To fix the number of
directors of the Company for the ensuing year at seven (7);

3.

To elect seven (7)
directors to hold office until the close of the next annual meeting of
shareholders of the Company;

4.

To appoint auditors for
the ensuing year;

5.

To authorize the
directors to fix the remuneration to be paid to the auditors of the Company;

6.

To consider and if
considered appropriate, pass an ordinary resolution approving the adoption of
amendments to the Company's shareholders rights plan;

7.

To transact such other
business as may properly come before the meeting or any adjournment or
adjournments thereof.

Accompanying
this Notice of Meeting are: (1) a management information circular, which
provides additional information relating to the matters to be dealt with at the
Meeting; (2) a form of proxy and notes to proxy; (3) a return envelope for use
by shareholders to send in their proxy; (4) a request card for use by
shareholders who wish to receive our interim and annual financial statements;
and (5) the Company's 2005 Annual Report.

The Board of
Directors of the Company have fixed March 20, 2006 as the record date for the
determination of shareholders of the Company entitled to receive this Notice of
Meeting and to attend and vote at the Meeting.

If you are a
registered holder (a "Shareholder") of Common Shares and are unable to
attend the Meeting in person, please complete, sign, date and return the
enclosed form of proxy.  A proxy will not be valid unless it is deposited
at the office of Computershare Trust Company, 9th Floor, 100
University Avenue, Toronto, Ontario, M5J 2Y1 by 3 p.m., Vancouver time, on May
2, 2006.

If you are a
non-registered Shareholder and a non-objecting beneficial owner, and receive a
voting instruction form from our transfer agent, Computershare, please complete
and return the form in accordance with the instructions of Computershare.
 If you do not complete and return the form in accordance with such
instructions, you may lose your right to vote at the meeting, either in person
or by proxy.



---

If you are a
non-registered Shareholder of the Company and an objecting beneficial owner and
receive these materials through your broker or through another intermediary,
please complete and return the materials in accordance with the instructions
provided to you by your broker or such other intermediary. If you do not
complete and return the materials in accordance with such instructions, you may
lose your right to vote at the Meeting, either in person or by proxy.

DATED at
Vancouver, British Columbia, this 20th day of March, 2006.



BY
ORDER OF THE BOARD OF DIRECTORS

"Paul
N. Wright"



Paul N. Wright

President & Chief Executive
Officer



These
securityholder materials are being sent to both registered and non-registered
owners of the securities.  If you are a non-registered owner, and the
issuer or its agent has sent these materials directly to you, your name and
address and information about your holdings of securities, have been obtained in
accordance with applicable securities regulatory requirements from the
intermediary holding on your behalf.



By choosing to send these materials
to you directly, the issuer (and not the intermediary holding on your behalf)
has assumed responsibility for (i) delivering these materials to you, and (ii)
executing your proper voting instructions.  Please return your voting
instructions as specified in the request for voting instructions.



---





ELDORADO GOLD CORPORATION
MANAGEMENT INFORMATION CIRCULAR
MARCH 20, 2006



FOR
THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON May 4, 2006







PURPOSE
OF SOLICITATION

This
management information circular (the "Information Circular") is being
provided to you in connection with the solicitation of proxies by management ("Management")
of Eldorado Gold Corporation (the "Company", "us", "we" or "our")
for use at our annual general meeting of shareholders ("Shareholders") of
the Company to be held at 3:00 p.m. on May 4, 2006 and at any and all
adjournments thereof (the "Meeting"), at the place and for the purposes set
forth in the Notice of Meeting.

The
solicitation is made by Management.  The cost of this solicitation will
be borne by us.  It is expected that the solicitation will be primarily by
mail. Proxies may also be solicited personally or by telephone by our directors,
officers or regular employees at nominal cost.  We will also pay the
broker-dealers, banks or other nominee Shareholders of record their reasonable
expenses in mailing copies of the meeting materials to beneficial owners of
common shares ("Common Shares") of the Company.

Unless otherwise
specified, all information provided in this Information Circular is as at March
20, 2006.  All dollar amounts in this Information Circular are in Canadian
currency, unless otherwise specified.

RECORD
DATE

The
directors have set March 20, 2006 as the record date for determining which
Shareholders holding Common Shares of record shall be entitled to receive the
Notice of the Meeting and to attend and vote at the Meeting.

APPOINTMENT
OF PROXIES

The
persons named in the accompanying form of proxy are officers and directors of
the Company and are Management designees. You as Shareholder of record have the
right to designate a person (who need not be a Shareholder) to attend and vote
for you at the Meeting.  You may exercise this right by either striking out
the printed names and inserting in the blank space provided in the enclosed form
of proxy the person's name which you wish to designate or by completing
another proper form of proxy and in either case delivering the completed proxy
to the office of our registrar and transfer agent, Computershare Trust Company,
9th Floor, 100 University Avenue, Toronto, Ontario, M5J
2Y1 by 3 p.m., Vancouver time, on May 2, 2006.

A proxy will not
be valid unless signed by you as Shareholder of record or by your attorney duly
authorized in writing.  If you are the representative of a Shareholder of
record that is a corporation or association, the form of proxy should bear the
seal of the corporation or association, and must be executed by an officer or an
attorney duly authorized in writing.  If the form of proxy is executed by
an attorney for an individual Shareholder or by an officer or attorney of a
Shareholder that is a corporation or association, the instrument so empowering
the officer or attorney, as the case may be, or a notarial copy thereof, must
accompany the form of proxy.







---

2



REVOCATION
OF PROXIES

In
addition to revocation in any manner permitted by law, you may revoke your proxy
by an instrument in writing signed by you as Shareholder of record or by your
attorney duly authorized in writing.  If you are a representative of a
Shareholder that is a corporation or association, the instrument in writing
should bear the seal of the corporation or association and must be executed by
an officer or by an attorney duly authorized in writing.  To be effective
the revocation instrument must be deposited with the Company's registered
office, c/o Fasken Martineau DuMoulin LLP, Suite 2100, 1075 West Georgia Street,
Vancouver, British Columbia, V6E 3G2, Attention: Josh Lewis, at any time up to
and including the last business day preceding the day of the Meeting or any
adjournment thereof, or, as to any matter in respect of which a vote shall not
already have been cast pursuant to such proxy, with the Chairman of the Meeting
on the day of the Meeting, or at any adjournment thereof, and upon either of
such deposits the proxy is revoked.

VOTING
OF PROXIES

All
Common Shares represented at the Meeting by properly executed proxies will be
voted (including the voting on any ballot) or withheld from voting in accordance
with your instruction as a Shareholder of record.  If you, as a
Shareholder, specify a choice on the enclosed form of proxy with respect to any
matter to be acted upon, your shares will be voted in accordance with your
instructions as specified in the proxy you deposit.In the
absence of any such specification, the Management designees, if named in the
enclosed form of proxy, will vote in favour of the matters set out therein.

The Management
designees named in the enclosed form of proxy are directors and officers of the
Company and have indicated their willingness to represent as Proxyholder the
Shareholder who appoints them.

The enclosed
form of proxy, when properly signed, confers discretionary authority upon the
persons named therein with respect to amendments or variations of matters
identified in the Notice of Meeting and any other matters which may properly be
brought before the Meeting.  As of the date hereof, Management is not aware
that any such amendments to, variations of or other matters are to be presented
for action at the Meeting.  However, if any other matters which are not now
known to Management should properly come before the Meeting, then the Management
designees intend to vote in accordance with the judgment of Management.

The number of
votes required for approval of any matter that will be submitted to a vote of
Shareholders at the Meeting is a simple majority of the votes cast, unless
otherwise indicated in this Information Circular.

SPECIAL
INSTRUCTIONS FOR VOTING BY NON-REGISTERED HOLDERS

Only
registered Shareholders or duly appointed proxyholders are permitted to vote at
the Meeting.  Many Shareholders are "non-registered" shareholders
because the shares of the Company they own are not registered in their names but
are instead registered in the name of the brokerage firm, bank or trust company
through which they purchased the shares.  More particularly, a
person is not a registered Shareholder in respect of shares which are held on
behalf of that person (the "Non-Registered Holder") but which are registered
either: (a) in the name of an intermediary (an "Intermediary") that the
Non-Registered Holder deals with in respect of the shares (Intermediaries
include, among others, banks, trust companies, securities dealers or brokers and
trustees or administrators of self-administered RRSP's, RRIF's, RESP's and
similar plans); or (b) in the name of a clearing agency (such as The Canadian
Depository for Securities Limited) of which the Intermediary is a participant.

There are two
kinds of Non-Registered Holders - those who object to their name being made
known to the issuers of securities which they own (called OBOs for Objecting
Beneficial Owners) and those who do not object to the issuers of the securities
they own knowing who they are (called NOBOs for Non-Objecting Beneficial
Owners).   Subject to the provision of National Instrument 54-101 -
Communication with Beneficial Owners of Securities of Reporting Issuers ("NI
54-101"), issuers can request and obtain a list of their NOBOs from
intermediaries via their transfer agents and use the NOBO list for distribution
of proxy-related materials directly (not via ADP) to NOBOs.

This year, we
have decided to take advantage of those provisions of NI 54-101 that permit us
to directly deliver proxy-related materials to our NOBOs who have not waived the
right to receive them.  As a result NOBOs can expect to receive a scannable
Voting Instruction Form (VIF) together with the Notice of Meeting, this
Information Circular, the 2005 Annual Report and related documents from our
transfer agent, Computershare Trust Company of Canada (or Computershare Investor
Services Inc., as the case might be) "Computershare". These VIFs are
to be completed and returned to Computershare in the envelope provided or by
facsimile. In addition, Computershare provides both telephone voting and
internet voting as described on the VIF itself which contain complete
instructions.  In that regard, Computershare is required to follow the
voting instructions properly received from NOBOs.  Computershare will
tabulate the results of the VIFs received from NOBOs and will provide
appropriate instructions at the Meeting with respect to the Common Shares
represented by the VIFs they receive.  NOBOs should carefully follow the
instructions of Computershare, including those regarding when and where to
complete VIFs that are to be returned to Computershare.Should a NOBO
wish to vote at the Meeting in person, the NOBO must request a form of legal
proxy from Computershare that will grant the NOBO the right to attend the
Meeting and vote in person.



---

3



NOBOs that
wish to change their vote must in sufficient time in advance of the Meeting
contact Computershare to arrange to change their vote.

In accordance
with the requirements of NI 54-101, we have distributed copies of the Notice of
Meeting, this Information Circular, the form of proxy and related documents
together with the 2005 Annual Report (collectively, the "Meeting Materials")
to the clearing agencies and Intermediaries for onward distribution to OBOs.
 Intermediaries are required to forward the Meeting Materials to OBOs
unless in the case of certain proxy-related materials the OBO has waived the
right to receive them.  Very often, Intermediaries will use service
companies to forward the Meeting Materials to OBOs.  With those Meeting
Materials, Intermediaries or their service companies should provide OBOs of
Common Shares with a "request for voting instruction form" which, when
properly completed and signed by such OBO and returned to the Intermediary or
its service company, will constitute voting instructions which the
Intermediary must follow.  The purpose of this procedure is to permit OBOs
of Common Shares to direct the voting of the Common Shares that they
beneficially own. Should an OBO of Common Shares wish to vote at the Meeting in
person, the OBO should follow the procedure in the request for voting
instructions provided by or on behalf of the Intermediary and request a form of
legal proxy which will grant the OBO the right to attend the Meeting and vote in
person.  OBOs should carefully follow the instructions of their
Intermediary, including those regarding when and where the completed request for
voting instructions is to be delivered.

Only
registered Shareholders have the right to revoke a proxy.  OBOs of Common
Shares who wish to change their vote must in sufficient time in advance of the
Meeting, arrange for their respective Intermediaries to change their vote and if
necessary revoke their proxy in accordance with the revocation procedures set
above.

COMMON
SHARES AND PRINCIPAL HOLDERS THEREOF

As
at the date of this Information Circular, we have 339,901,489 (calculated as at
March 20, 2006)Common Shares issued and outstanding.  Each
Shareholder of record at the close of business on March 20, 2006 (the "Record
Date") is entitled to one vote on a ballot at the Meeting for each Common
Share held by such Shareholder.  Two voting persons present or deemed to be
present and authorized to cast in the aggregate not less than 5% of the total
votes attaching to all shares carrying the right to vote at the Meeting will
constitute a quorum at the Meeting.  Voting persons are Shareholders, duly
authorized representatives of Shareholders or proxyholders of Shareholders,
entitled to vote at the meeting.

As at March 20,
2006, there is no person who is known to the Company, its directors or officers,
to beneficially own, directly or indirectly, or to exercise control or direction
over, shares carrying more than 10% of the votes attached to shares of the
Company.



ELECTION
OF DIRECTORS

Our
Articles and By-Laws provide that our Board of Directors (the "Board" or the
"Board of Directors") is to consist of a minimum of three (3) directors and
a maximum of twenty (20) directors.  The existing Board consists of seven
(7) directors and for this forthcoming year, the Board proposes to fix the
number of directors at seven (7).   Accordingly, we intend to place
before the Meeting for approval, a resolution fixing the number of directors at
seven (7) directors. We also propose the persons named in the table below be
nominated at the Meeting to serve as directors of the Company for the ensuing
year.  All nominees are currently directors of the Company.  Each
director elected will hold office until the next annual general meeting or until
his successor is duly elected or appointed, unless his office is earlier vacated
in accordance with our Articles and By-Laws, he becomes disqualified to act as a
director or is removed in accordance with theCanada Business
Corporation Act (the "CBCA").



---

4



The Corporate
Governance and Nominating Committee (the "CGNC") is responsible for the
identification of nominee directors to the Board.  On an annual basis the
CGNC reviews the size and composition of the Board and qualification criteria
for Board members that reflects an appropriate mix of expertise, skills,
attributes and personal and professional backgrounds for service as directors
 of the Company.  The CNGC also performs an annual review of incumbent
directors' performance and attendance at Board and Committee meetings in
connection with the CGNC's consideration of Directors to be recommended for
election at the Company's annual meeting.  The review seeks to identify
specific areas, if any, in need of improvement or strengthening and advance
discussions by the Board in an assessment of the Board's composition and
independence.

Based on its
review, the CGNC recommends a slate of nominee Directors to be elected at the
annual shareholders meeting who meet the established criteria and who have
sufficient time available to devote to the affairs of the Company.  This
year the CGNC has recommended that the persons named in the table below be put
forth to the shareholders as director nominees.

Except as noted
under "Voting of Proxies", proxies received in favour of Management
designees will be voted for the following proposed director nominees (or for
substitute nominees in the event of contingencies not known at present).
 No class of shareholders has the right to elect a specified number of
directors or to cumulate their votes with respect to the election of directors.

The following
table sets forth certain information with respect to persons to be nominated for
election as a director.  All proposed nominees are currently directors of
the Company whose current term of office will expire as of the close of the
Meeting.  The following information concerning the respective nominees has
been furnished by each of them:

Name
        of and Province and Country of Residence of Proposed Nominee Directors
        and Present Position with the Company
      Principal
        Occupation(1)
      Director
        Since
      Approximate
        Number of Common Shares Beneficially Owned Directly or Indirectly or
        over which Control or Direction is Exercised as of the Date Hereof(2)JOHN
        S. AUSTON (4) (5)
        British Columbia,
        Canada
        Independent
        Director (6)
      Corporate
        Director
      April
        2003
      8,000K.
        ROSS CORY (3) (5)
        British Columbia,
        Canada
        Independent
        Director  (6)
      Senior
        Vice President,
        Raymond
        James Ltd.
      April
        2003
      NilROBERT
        R. GILMORE (3)(4)
        Colorado, U.S.A.
        Independent
        Director  (6)
      Independent
        Mining Consultant
      April
        2003
      NilWAYNE
        D. LENTON (4)
        Arizona, U.S.A.
        Independent
        Director  (6)
      Independent
        Mining Consultant
      June
        1995
      40,700HUGH
        C. MORRIS (3) (5)
        British Columbia,
        Canada
        Independent
        Director  (6)
      Independent
        Mining Consultant
      January
        1995
      110,000








---

5





Name
        of and Province and Country of Residence of Proposed Nominee Directors
        and Present Position with the Company
      Principal
        Occupation(1)
      Director
        Since
      Approximate
        Number of Common Shares Beneficially Owned Directly or Indirectly or
        over which Control or Direction is Exercised as of the Date Hereof(2)DONALD
        SHUMKA(3)
        British Columbia,
        Canada
        Independent
        Director  (6)
      President
        & Managing Director
        Walden
        Management Ltd.
      May
        2005
      NilPAUL
        N. WRIGHT
        British Columbia,
        Canada
        President &
        Chief Executive Officer
        Eldorado Gold
        Corporation
      President
        & Chief Executive Officer of the Company
      March
        1999
      100,000


Note:

(1)

Except
as set out below, the information as to occupation of the directors of the
Company includes present principal occupation and occupations for the preceding
five years unless the director was elected at a previous meeting of the
Shareholders and was shown as a nominee for election as a director in the
Information Circular of that meeting.

(2)

See
"Compensation of Directors" for options granted to directors other than the
President & Chief Executive Officer and, "Statement of Executive
Compensation" for options granted to the President & Chief Executive
Officer.

(3)

Member
of the Audit Committee.

(4)

Member
of the Compensation Committee.

(5)
    Member of the Corporate Governance and Nominating
Committee.

(6)

A
director is considered independent if he has no direct or indirect material
relationship with the Company, which in the view of the Board could reasonably
be expected to materially interfere with the director's independent judgment.



John S. Auston (B.Sc Honours Geology,
McGill University; M.Sc Mineral Exploration, McGill University) was first
elected to the Board of Directors of Eldorado Gold Corporation on April 30,
2003.  Mr. Auston also serves as a Corporate Director at Cameco Corporation
and Centerra Gold Inc.  Previously he was President & CEO of Ashton
Mining of Canada Inc. from 1996 to 2000 and President & CEO of Granges Inc.
from 1993 to 1995.  Prior to this he held various senior executive
positions in the minerals arm of the British Petroleum Group from 1980 to 1992.
 Mr. Auston is an independent director and a member of the Compensation
Committee and the Corporate Governance and Nominating Committee.



K. Ross Cory (MBA, Finance and
International Business, UBC; B.Sc General Science, UBC) was elected to the Board
of Directors of Eldorado Gold Corporation on April 30, 2003.  Mr. Cory also
serves as a Corporate Director of Regalito Copper Corp., Northern Peru Copper
Corp. and Lumina Resources Corp.  Mr. Cory has served in various senior
executive and director capacities with Raymond James Ltd. (formerly Goepel,
McDermid Inc. and Goepel Shields & Partners Inc.) since 1989 and is
currently on long term leave.  Mr. Cory is an Independent Director and a
member of the Audit Committee and the Corporate Governance and Nominating
Committee.



Robert R. Gilmore (BSBA Accounting,
University of Denver; CPA, Colorado) was elected to the Board of Directors of
Eldorado Gold Corporation on April 30, 2003.  Mr. Gilmore is an Independent
Financial Consultant.  From 1991 to 1997 Mr. Gilmore was the Chief
Financial Officer of Dakota Mining Corporation and was the Chief Financial
Officer of Teamshare Inc. in 2002. Mr. Gilmore is an Independent Director,
Chairman of the Audit Committee and a member of the Compensation Committee.



Wayne D. Lenton (B.Sc Metallurgical
Engineering, Montana School of Mines) was elected to the Board of Directors of
Eldorado Gold Corporation in June 1995.  Mr. Lenton is an Independent
Mining Consultant and serves on the Board of Directors of  Energold
Drilling Ltd. and North American Tungsten Corp. Ltd.  From 1993 to 1995 Mr.
Lenton served as the President & CEO of Canada Tungsten Inc., 1989 to 1993
President & CEO and Chairman of the Board of Canamax Resource Inc., 1985 to
1993 President & CEO and Chairman of the Board of Canada Tungsten Mining
Corporation. Mr. Lenton is an Independent Director and the Chairman of the
Compensation Committee.



Hugh C. Morris (B.Sc Mining Geologist,
University of the Witwatersand; PhD Mining Geology, University of the
Witwatersand; Fellow of the Royal Society of Canada; President, Canadian Global
Change Program; Past President, Geological Association of Canada) was elected to
the Board of Directors of Eldorado Gold Corporation in January 1995.  Mr.
Morris is an Independent Mining Consultant and serves on the Board of Pacific
Institute for the Mathematical Sciences, Diamondex Resources Ltd., Eureka
Resources Ltd., Pacific Northern Gas Co. and Triex Minerals Corporation.
 Mr. Morris served as the Chief Executive Officer and Chairman of Imperial
Metals Corporation from 1983 to 1993 and was the acting President & Chief
Executive Officer of Eldorado Gold Corporation from November 1998 to March 1999.
 Mr. Morris is an Independent Director, the Non-Executive Chairman of the
Board of Eldorado and a member of the Audit Committee and the Corporate
Governance and Nominating Committee.



---

6



Donald Shumka (MBA, Harvard University;
BA, UBC) was appointed to the Eldorado Board of Directors effective May 3, 2005.
 Mr. Shumka is and has been since 2004, the  President and Managing
Director of Walden Management Ltd a firm that provides financial consulting and
advisory service to financial, manufacturing and processing industries. From
1993 to 2004, he was Managing Director, Raymond James Ltd.  He has
extensive financial and management experience - 15 years in investment banking
with Raymond James and CIBC World Markets, Canadian investment firms and 25
years in the forest industry where he was for a decade the Vice President
Finance and Chief Financial Officer of West Fraser Timber Co. Ltd., Mr. Shumka
is an Independent Director and a member of the Audit Committee.



Paul N. Wright (B.Sc Mining Engineering,
Newcastle University; Member, Canadian Institute of Mining & Metallurgy) was
elected to the Board of Directors of Eldorado Gold Corporation in 1999.
 Mr. Wright has served as the President & CEO of Eldorado Gold
Corporation since March 1999.  Prior to his appointment as President &
CEO Mr. Wright was the President & Chief Operating Officer of the Company,
the Senior Vice President Operations and the Vice President Mining.  Prior
to joining the Company in 1996, Mr. Wright was the Vice President Mining &
Project Development with Granges Inc. from 1991 to 1996, and the Manager Western
Operations, Redpath Group of Cos. from 1986 - 1991.   Mr. Wright is
an inside director of the Company.



On an annual basis the Company's
directors are asked to confirm that they have disclosed all their directorships.

STATEMENT
OF EXECUTIVE COMPENSATION

Summary
Compensation Table

The following
table provides a summary of compensation earned during the financial year ended
December 31, 2005 by our Chief Executive Officer ("CEO"), Chief Financial
Officer ("CFO") and up to three of our most highly compensated executive
officers (other than the CEO and CFO) whose total annual salary and bonus was in
excess of $150,000, and any of our former executive officers that would have
been one of up to three of the most highly compensated executive officers except
that the individual was not serving as an officer for us as of December 31, 2005
(collectively, the "Named Executive Officers").











---

7





Name and
        Principal Position with the Company
      Year
      Annual
        Compensation
      Long
        Term Compensation
      All
        Other
        Compensa-tion(2)CDN($)Salary
        CDN($)
      Bonus
        CDN
        ($)
      Other
        Annual Compensation(1)CDN($)
      Awards
      PayoutsSecurities
        Under
        Options/
        SARs
        Granted
        (#)
      Restricted
        Shares
        Or
        Share
        Units
        CDN($)
      LTIP
        Payouts
        CDN($)Paul
        N. Wright
        President
        & Chief Executive Officer
      2005
        2004
        2003
      446,250
        425,000
        400,000
      541,078
        358,294
        225,000
      Nil
        Nil
        Nil
      400,000
        1,000,000
        400,000
      Nil
        Nil
        Nil
      Nil
        Nil
        Nil
      30,781
        21,306
        18,518Earl
        W. Price
        Chief
        Financial Officer
      2005
        2004
        2003
      227,160
        216,300
        210,000
      176,049
        110,854
        91,875
      Nil
        Nil
        Nil
      150,000
        450,000
        110,000
      Nil
        Nil
        Nil
      Nil
        Nil
        Nil
      9,714
        17,282
        13,222Norm
        Pitcher
        Chief
        Operating Officer
      2005
        2004
          2003(3)
      225,280
        148,130
      136,450
        79,002
        Nil
      Nil
        Nil
        Nil
      300,000
        175,000
        175,000
      Nil
        Nil
        Nil
      Nil
        Nil
        Nil
      20,041
        8,065
        734Berne
        Jansson (4)
        Vice
        President, Operations
      2005
        2004
        2003
      223,750
        169,195
        68,444
      75,421
        71,370
      Nil
        Nil
        Nil
      125,000
      Nil
        Nil
      Nil
        Nil
      31,429
        32,344Dawn
        Moss
        Corporate
        Secretary
      2005
        2004
        2003
      123,600
        114,000
        95,000
      79,104
        49,020
        33,250
      Nil
        Nil
        Nil
      150,000
        175,000
        50,000
      Nil
        Nil
        Nil
      Nil
        Nil
        Nil
      20,151
        16,160
        12,631


Note:

(1)

The
aggregate amount of perquisites and other personal benefits that are less than
$50,000 and 10% of the total annual salary and bonus for any of the Named
Executives are not reported.

(2)

Unless
otherwise specified, amounts reported in this column refer to the dollar values
of insurance premiums paid with respect to term life insurance, medical benefits
and amounts contributed in respect of an employee savings plan.

(3)

Norman
Pitcher joined the Company on November 3, 2003 in the position of Manager,
Exploration  and was appointed Vice President, Exploration &
Development on May 14, 2004 and further to the position of Chief Operating
Officer on July 1,  2005

(4)

Berne
Jansson joined the Company on September 1, 2003 in the position of General
Manager, Kisladag Project, Turkey and was appointed Vice President, Operations
on March 31, 2005.

Option Grants During the
Financial Period Ended December 31, 2005

We granted the
following options to the Named Executive Officers during the financial year
ended December 31, 2005:

Option/SARs
Grants During 2005 Financial Year



Name
      Common
        Shares Under Options/SARs Granted
        (#)
      %
        of Total Options/SARs
        Granted to Employees in financial year
      Exercise
        or Base Price (CDN$/Share)
      Market
        Value of Common Shares Underlying Options on the Date of Grant(CDN$/Share)
      Expiration
        DatePaul
        N. Wright
      400,000
      14.3%
      $3.37
      $3.37
      January
        27, 2010Earl W. Price
      150,000
      5.3%
      $3.37
      $3.37
      January
        27, 2010Norman Pitcher
      300,000
      10.7%
      $3.37
      $3.37
      January
        27, 2010Berne Jansson
      125,000
      4.5%
      $3.30
      $3.30
      March
        30, 2010Dawn Moss
      150,000
      5.3%
      $3.37
      $3.37
      January
        27, 2010


Note:

(1)

See
"Incentive Stock Option Plans" for a description of the terms that apply to
the options.



---

8



Aggregated
Options Exercised During 2005 Financial Year
and Financial Year-End Option Values



|                     |                                                       |                                                   |                                                                                                      |                                                                                                                                   
|-------------------- | ----------------------------------------------------- | ------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------
|Name                 | Securities
      Acquired on
      Exercise
      (#) | Aggregate
      Value
      Realized
      (CDN$) | Unexercised
      Options/SARs at December 31, 2005
      Exercisable/
      Unexercisable
      (#) | Value
      of Unexercised
      in-the-Money Options/SARs
      at December 31, 2005
      Exercisable/
      Unexercisable(1)($)
|Paul
      N. Wright | 275,000                                               | 358,323                                           | 1,133,333
      /266,667                                                                             | 2,299,333
      / 61,867                                                                                                          
|Earl W. Price        | 0                                                     | 0                                                 | 500,000
      /100,000                                                                               | 1,011,500/232,000                                                                                                                 
|Norman Pitcher       | 100,000                                               | 147,108                                           | 275,000
      / 275,000                                                                              | 452,500
      /662,000                                                                                                            
|Berne Jansson        | 75,000                                                | 106,645                                           | 225,000/100,000                                                                                      | 459,000/239,000                                                                                                                   
|Dawn Moss            | 65,000                                                | 122,183                                           | 225,000
      /100,000                                                                               | 464,250
      / 232,000                                                                                                           

Note:

(1)

Based
on a market value of Cdn$5.69 per share, being the closing trading price per
Common Share on the TSX as of December 31, 2005.

Employment Contracts

Mr. Paul Wright
entered into an employment agreement with the Company dated May 13, 2004.
 Under the terms of Mr. Wright's agreement upon termination without
cause, relocation prior to March 24, 2006, adverse change in his salary, duties
or responsibilities, or in the case of change of control(1) Mr.
Wright is entitled to receive any amounts owed in respect of vacation or sick
leave and an amount equal to three times his annual salary and bonus (based upon
his salary and bonus in the twelve months prior to termination) and continuation
of his benefits for 12 months after his termination.

Mr. Earl Price
entered into an employment agreement with the Company dated May 13, 2004.
 Under the terms of Mr. Price's agreement upon termination without cause,
adverse change in his salary, duties or responsibilities, or in the case of
change of control(1) Mr. Price is entitled to receive any amounts
owed in respect of vacation or sick leave and an amount equal to two years times
his annual salary and bonus (based upon his salary and bonus in the twelve
months prior to termination) and continuation of his benefits for 12 months
after his termination.

Mr. Norman
Pitcher entered into an employment agreement with the Company dated May 13,
2004.  Under the terms of Mr. Pitcher's agreement, upon termination
without cause; adverse change in his salary, duties or responsibilities; or in
the case of change of control(1) Mr. Pitcher is entitled to receive
any amounts owed in respect of vacation or sick leave and an amount equal to two
years times his annual salary and bonus (based upon his salary and bonus in the
twelve months prior to termination) and continuation of his benefits for 12
months after his termination.

Mr. Berne
Jansson entered into an employment agreement with the Company dated September
2003 which was amended in March 2005.  The Employment Agreement is for an
indefinite term and contains provisions regarding base salary, paid vacation
time, eligibility for benefits and option grants.  The Employment Agreement
also contains confidentiality provisions of indefinite application and
non-competition clauses that apply for one year following termination.Under
the terms of Mr. Jansson's agreement upon termination without cause, the
Employment Agreement entitles Mr. Jansson to continuation of health benefits for
up to twelve months, payment of all wages owing, and a severance payment of two
times annual salary and bonus (collectively, the "Severance Package").
 In addition, if a change in control (as defined in the Employment
Agreement) occurs, Mr. Jansson has the right to elect, under his Employment
Agreement, to terminate his employment by notice in writing within 30 calendar
days of the change and receive his Severance Package.

Ms. Dawn Moss
entered into an employment agreement with the Company dated May 13, 2004.
 Under the terms of Ms. Moss's agreement, upon termination without cause;
adverse change in her salary, duties or responsibilities; or in the case of
change of control (1)Ms. Moss is entitled to receive any amounts
owed in respect of vacation or sick leave and an amount equal to two years times
her annual salary and bonus (based upon his salary and bonus in the twelve
months prior to termination) and continuation of her benefits for 12 months
after his termination.



---

9



Note:

(1)

Change
of control means:

(i)

an
acquisition of 40% or more of the voting rights attached to all outstanding
voting shares of the Company;

(ii)

the
amalgamation or consolidation (the "Transaction") of the Company with, or
merger of the Company unless (a) the Company is the surviving company after the
Transaction; and (b) after giving effect to the Transaction at least 60% of the
voting rights attached to all outstanding voting shares of the Company or the
company resulting from the Transaction are held by at least 60% of the voting
rights attached to all outstanding voting shares of the Company immediately
before giving effect to the Transaction;

(iii)

the
direct or indirect transfer, conveyance, sale, lease or other disposition, by
virtue of a single event or a related series of such events, of 90% or more of
the assets of the Company in terms of gross fair market value to any person
unless (a) the disposition is to a corporation; and (b) immediately after the
disposition, at least 60% of the voting rights attached to all outstanding
voting shares of the corporation are owned by the Company or its affiliates or
by persons who held at least 60% of the voting rights to all outstanding voting
shares of the Company immediately before giving effect to the disposition.

Indebtedness of Directors,
Executive Officers, Officers and Employees

As of March 20,
2006 there was no indebtedness to us or any of our subsidiaries (other than
routine indebtedness) or to another entity if the indebtedness is the subject of
a guarantee, support agreement, letter of credit or similar arrangement provided
by us or any of our Subsidiaries by our current and former directors, officers
and employees.

Composition of the
Compensation Committee

During the year
ended December 31, 2005, the following individuals served as members of our
Compensation Committee:  Wayne Lenton (Chairman), John Auston and Robert
Gilmore, who were all Independent Directors of the Company during the time they
served.  None of the members of our Compensation Committee are officers or
employees or were former officers or employees of the Company or any of our
subsidiaries, had or has any relationship that requires disclosure hereunder in
respect of indebtedness owed to the Company or any interest in material
transactions involving the Company. In addition, none of our executive officers
have served on the Compensation Committee (or in the absence of such committee
the entire Board of Directors) of another issuer whose executive officer is a
member of our Compensation Committee or Board of Directors.   See "Corporate
Governance - Compensation Committee".

Report On Executive
Compensation

The Company's
commitment is to enhance shareholder value through the discovery and acquisition
of gold reserves, and the operation of profitable mines.  In order to
maximize its commitment, the Company designs its compensation packages to
attract highly skilled, experienced and knowledgeable employees in a competitive
human resource market by providing appropriate salaries and incentives and by
creating a work environment that allows employees to maximize his/her potential
within their chosen careers.

The Compensation
Committee is responsible for, among other things, the annual review of the
Company's short-term and long-term policies for attracting, developing and
motivating executive officers of the Company.  The Compensation Committee
met 6 times in 2005 to review compensation policies relating to the Company and
its subsidiaries and to approve specific compensation awards and benefits.

Executive Compensation
Practices

The mandate of
the Compensation Committee is to review the terms of employment of the Company's
executive officers annually, to review and approve, on an annual basis the Chief
Executive Officer's and the senior executives performance objectives and
assess the performance of the Chief Executive Officer for the prior year, to
review the competitiveness and effectiveness of the Company's compensation plan,
and to report to the Board the Committee's findings and recommendations.
 The Terms of Reference for the Compensation Committee approved by the
Board of Directors on February 3, 2006 are attached as Schedule "A" hereto
and can be found on the Company's website www.eldoradogold.com.

The Compensation
Committee's executive compensation practices are based on combining the
talents of the executive officers with the Company's stated commitments.
 Executive compensation addresses both the short-term and long-term
interests of the Company and is linked to the performance of the Company and
individual accomplishments.  The Company compensates executive officers at
a level and in a manner that allows the Company to be able to attract, motivate
and retain individuals with exceptional executive skills.  In addition, the
executive compensation packages recognize and reward executive officers based
upon their individual and corporate performance as determined and approved on an
annual basis by the Board of Directors.  The Compensation Committee
monitors levels of executive remuneration to determine whether overall
compensation reflects the Company's objectives and philosophies and meets the
Company's desired relative compensation position.  The key components
comprising executive officer compensation are base salary, annual bonus
(short-term incentives), participation in the executive's RRSP contribution
and in an incentive stock option plan (long-term incentives).



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10



The Compensation
Committee approves salary ranges for executive officers of the Company based on
competitive industry data for the markets in which the Company operates,
including the Coopers Consulting 2005 Mining Salary Survey Corporate Report -
Canadaand the Western Compensation & Benefits 2005 National
Executive Compensation Survey.  In establishing base salaries and salary
ranges, the objective of the Compensation Committee sets target levels which,
over time, will be competitive with market salaries.  The Company's
compensation practices set target levels consistent with the median level in the
group of comparable companies.Individual levels, which are set annually,
may vary from this objective, depending upon individual performance levels.
 The Chief Executive Officer does not participate in discussions or reviews
relating to his own compensation.

As noted above,
the Company provides annual incentive compensation to executive officers,
including the Named Executives, through the provision of incentive bonuses
(Short Term Incentive Plan "STIP").  The STIP is designed to give an
incentive to stretch the participant's contribution; align the individual's
contribution with Company objectives, communicate key objectives which are
valued most highly and reward senior management employees for achieving
objectives commensurate with the business and operations of the Company.
 The STIP provides for annual cash awards based on corporate, operational
and individual results when measured against predetermined objectives and
performance measures.Incentive bonuses are awarded annually to
executive officers, based on criteria as approved by the Board of Directors, and
upon a detailed review of Company and individual performance over the prior
financial year relative to each executive officer's area of responsibility.
The bonuses for the Named Executive Officers are set out under the Summary
Compensation Table.

In determining
the annual cash awards the Compensation Committee undertakes a process beginning
in the first quarter of each calendar year.  The Committee meets with
senior management to confirm the participants in the STIP and the corporate,
operational and personal objectives of each participant.  In determining
the objectives of the STIP Management and the Committee take into consideration
the Company's budget and business plan for the coming year and the individual
participant's role within the Company.  Objectives are assigned to the
individual participant according to their position, their expertise and their
level of influence in the corporate and operational areas of the Company's
activities.  Personal objectives are decided in consultation between
Management and the individual participant and recommended to the Compensation
Committee for approval.  Weightings are applied to the individual
participant's objectives according to his/her ability to impact the success of
the objectives.  The STIP is recommended by the Compensation Committee to
the Board of Directors for approval.



During the first quarter of the following
year, the Compensation Committee reviews with Management the performance of the
Company and the individual participant's contribution to the success of the
objectives.   The Committee may also take into consideration major
events that have significant impact on the Company, but were outside the stated
objectives in the STIP.  In consultation with Management the Compensation
Committee will make a determination of the cash award to be paid in accordance
with the STIP and make a recommendation to the Board of Directors for approval
of the payment of the STIP to the participants.

The Company also
has in place an incentive stock option plan, the Incentive Stock Option Plan,
Officers and Directors (the "D&O Plan").  The D&O Plan was
designed to encourage executive officers to focus on the long-term interests of
the Company and its Shareholders.  The Board has the authority to establish
terms and conditions of each granted option, so long as such terms and
conditions are not inconsistent with the provisions of the D&O Plan. Stock
Options granted under the D&O Plan are vested over three years and are
issued at the closing price of the Company's shares on the TSX on the day
prior to the granting of the options.  (Refer to the section on "Incentive
Stock Option Plans" for additional information).  The Company issued
1,125,000 options to the Named Executives under the incentive stock option plan
during 2005.

CEO Compensation

The Compensation
Committee's CEO Compensation evaluates the President & CEO's
compensation package and compares such package with competitive compensation
packages for positions of similar responsibility at gold mining companies that
are, like the Company, publicly held.  By undertaking this evaluation the
Compensation Committee determined that the President & CEO's compensation
package is appropriately designed to enhance shareholder value and  to
provide compensation commensurate with the performance of the President &
CEO.  In assessing the compensation paid to the President & CEO, the
Committee also reviews available industry data relating to such companies
collected from independent compensation surveys including the Coopers Consulting
2005 Mining Salary Survey Corporate Report - Canada,  the Western
Compensation & Benefits 2005 National Executive Compensation Survey and
information available in the public records.  The President & CEO's
salary increase for 2005 (an increase from Cdn$425,000 to Cdn$446,250 per year)
was recommended by the Compensation Committee and approved by the Board of
Directors and was determined to be competitive with similar positions and
recognizes his contribution to the achievement of the Company's goals.  A
bonus of Cdn$541,078 was given to the President & CEO in recognition of his
achievements in 2005.  His total compensation package for 2005 was
$987,328.



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11



Compensation Committee report
approved by:

Wayne Lenton, Chairman
John Auston
Robert Gilmore

Incentive Stock Option Plans

We have an
incentive stock option plan (the "Employee Plan") in place for our
employees.  The Employee Plan was established on June 6, 1994.
 Subsequent amendments to the Employee Plan dated June 5, 1995,
June 27, 1996, May 31, 2000, April 30, 2003, May 13, 2004 and April
28, 2005 were approved by resolutions of our Shareholders. As noted above, we
also have an incentive stock option plan for our director and officers.  We
established the D&O Plan on April 30, 2003.  Subsequent amendments to
the D&O Plan was approved by the resolution of our Shareholders on April 28,
2005.  A subsequent housekeeping amendment was approved for the D&O
Plan and the Employee Plan (collectively, the "Plans") by our Board.

The Plans permit
the granting of options to eligible participants to purchase up to a maximum of
24,881,297Common Shares (13,822,947 for the Employee Plan and 11,058,350
for the D&O Plan) (representing a maximum of 8% (4.5% for the Employee Plan
and 3.5% for the D&O Plan) of the issued and outstanding Common Shares as of
the date hereof) which have been reserved for issuance under the Plans.  As
of the date hereof, 7,016,539 options (2,990,001 for the Employee Plan and
3,935,000 for the D&O Plan and 91,538 for the Afcan Plan (see page 14 "Afcan
Plan")) to purchase 7,016,539 Common Shares or 2.1% of the issued and
outstanding Common Shares have been granted to eligible participants, 11,543,641
Common Shares have been issued pursuant to the exercise of 11,543,641 options
and a total of 6,403,396 (2,520,046 for the Employee Plan and 3,883,350 for the
D&O Plan) options remain available to grant under the Plans.

Options that
have expired or were exercised, cancelled or otherwise terminated are available
for subsequent grants under the Plans.



Plan
        Category
      Number
        of securities to be issued upon exercise of outstanding options,
        warrants and rights
        As
        at December 31, 2005
        (a)
      Weighted-average
        exercise price of outstanding options, warrants and rights
        As
        at December 31, 2005
        (b)
      Number
        of securities remaining available for future issuance under equity
        compensation plans (excluding securities reflected in column (a))
        As
        at December 31, 2005
        (c)Equity
        compensation plans approved by securityholders
      9,771,650
      3.34
      13,328,397Equity compensation
        plans not approved by securityholders
      N/A
      N/A
      N/ATotal
      9,771,650
      3.34
      13,328,397




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12



The Employee
Plan provides that, the Board of Directors may from time to time grant options
to acquire Common Shares to any person who is an employee, consultant or advisor
of us or our affiliates or a director or officer of our affiliates.  The
D&O Plan provides that the Board of Directors may from time to time grant
options to acquire Common Shares to our directors and officers.  Options
under the Plans are non-assignable and non-transferable otherwise than by will
or by laws governing the devolution of property in the event of death.
 Each option entitles the holder to one Common Share, subject to certain
adjustments.  The exercise price for options granted under the Plans will
be determined by the Board of Directors on the date of the grant, which price
may not be less than the market value.  Market value is defined under the
Option Plan as the closing price of the Common Shares on the TSX on the trading
day immediately preceding the grant day and if there is no closing price, the
last sale prior thereto.  The term of the Options granted is determined by
the Board of Directors, options are granted in five year terms
  Pursuant to the terms of the Plans, additional terms and conditions
may be imposed by the Board of Directors on options granted under the Plans.
 The Board imposes vesting restrictions on options granted under the Plans.
 The Plans do not provide for the Company financially assisting any
optionee in connection with the exercise of options.

Each Plan
provides that the maximum number of Common Shares that may be issued and
issuable to eligible participants pursuant to options granted under the Plan,
when taken together with the number of Common Shares issued and issuable to
eligible participants under our other previously established or proposed share
compensation arrangements, may not exceed 9% of the issued and outstanding
Common Shares on a non-diluted basis.  The Employee Plan provides that the
maximum number of Common Shares issued and issuable pursuant to options granted
under the Employee Plan to eligible participants, together with the number of
Common Shares issued and issuable to such participants under any other
previously established or proposed share compensation arrangements may not
exceed 5% of the Common Shares outstanding on a non-diluted basis at the date of
grant of the options.  The D&O Plan provides that the maximum number of
Common Shares issued and issuable pursuant to options granted under the D&O
Plan to eligible participants, together with the number of Common Shares issued
and issuable to such participants under any other previously established or
proposed share compensation arrangements, may not exceed 4% of the Common Shares
outstanding on a non-diluted basis at the grant of the options.

The total number
of Common Shares that may be reserved for issuance to any one participant
pursuant to options granted under the D&O Plan may not exceed 1% of the
Common Shares outstanding (on a non-diluted basis) on the grant date of the
options.  The Employee Plan prohibits the granting of options to any single
individual to purchase in excess of one-half of one percent (0.5%) of the then
outstanding Common Shares. The total number of Common Shares that may be
reserved for issuance to non-executive directors under both  Plans is
limited to 0.5% of the issued Common Shares on the date of grant.

Subject to the
limitations set out above the Plans permit reloading of Common Shares in
circumstances where options have been exercised, which provision would need to
be re-approved every three years in accordance with TSX requirements.

Unless otherwise
determined by the Board in accordance with the terms of the Plan, if the holder
of an option ceases to be an eligible participant under a Plan due to

(a)

retirement or
disability, the holder has up to 365 days to exercise any vested options;

(b)

in the case of the
D&O Plan only, termination of employment within the six months following a
change of control , the holder has 180 days from the date of such termination to
exercise vested options;

(c)

death, the holder's
estate has 365 days to exercise vested options;

(d)

any reason other than
death, disability, retirement, change of control or cause, in the case of the
Employee Plan, the Board may in its discretion provide holders with 30 days to
exercise vested option and in the case of the D&O Plan, a holder has 30 days
or such later date as the Board may fix to exercise vested options;

provided that no
option may be exercised following the expiration of the applicable exercise
period.

In the event
that:

(a)

we amalgamate,
consolidate with or merge with or into another body corporate, holders of
options under the D&O Plan will, upon exercise thereafter of such option, be
entitled to receive and compelled to accept, in lieu of Common Shares, such
other securities, property or cash which the holder would have received upon
such amalgamation, consolidation or merger if the option was exercised
immediately prior to the effective date of such amalgamation, consolidation or
merger;

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13







(b)

the exchange or
replacement of Common Shares with those in another company is imminent because
of a proposed merger, amalgamation or other corporate arrangement or
reorganization, the Board may, in its discretion, determine the manner in which
all unexercised options, granted under the Plans shall be treated including, for
example, requiring the acceleration of the time for the exercise of outstanding
Options and of the time for the fulfillment of any conditions or restrictions on
such exercise; and

(c)

an offer to purchase
all of the Common Shares is made by a third party, the Board may, in its
discretion, require the acceleration of the time for the exercise of the options
granted under the Plans and of the time for the fulfillment of any conditions or
restrictions on such exercise.

The Board may,
subject where required to the terms and conditions in the Plans, securities
regulators, the TSX and/or AMEX approval, from time to time amend, suspend or
terminate the Plans in whole or in part.  Pursuant to the Plans, the Board
is specifically authorized to amend or revise the terms of the Plans without
obtaining Shareholder approval in the following circumstances:

(a)

to change the vesting
provisions;

(b)

to change the
termination provisions of the options or Plan which does not extend beyond the
original expiry date;

(c)

to amend the
eligibility requirements of eligible participants which would have the potential
of broadening or increasing insider participation;

(d)

to add cashless
exercise feature, payable in cash or securities, whether or not the feature
provides for a full deduction of the number of underlying Common Shares from the
reserved Common Shares;

(e)

to add a deferred or
restricted share unit or any other provision which results in an eligible
participant receiving securities while no cash consideration is received by the
Company; and

(f)

other amendments of a
housekeeping nature.

Pursuant to the
TSX requirements, shareholder approval is required for amendments that involve:

(a)

amendments to the
number of securities issuable under the arrangement, including an increase to a
fixed maximum, increase to a fixed maximum percentage or a change from a fixed
maximum number to a fixed maximum percentage (an increase does not include
reloading after exercise provided that the fixed maximum is not increased);

(b)

the introduction of a
provision permitting reloading upon exercise;

(c)

the addition of any
form of financial assistance;

(d)

any amendment to the
financial assistance provision which is more favourable to participants;

(e)

in circumstances where
the amendment could lead to a significant or unreasonable dilution in the
issuer's outstanding securities or may provide additional benefits to eligible
participants, especially insiders at the expense of the issuer and its existing
securityholders.

The exercise
price of any outstanding option may not be reduced unless Shareholder approval
is obtained.  The Plans and the TSX also requires that disinterested
shareholder approval be obtained in accordance with regulatory requirements if
the exercise price of any outstanding option granted to an insider is reduced or
the exercise period extended to the benefit of insiders.



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14



Subject to
certain limited exceptions, shareholder approval is required under the AMEX
rules for any "material amendment" to a stock option plan pursuant to which
options may be acquired by officers, directors, employees or consultants of an
AMEX listed company.  A "material amendment" includes, but is not
limited to the following:

(a)

any material increase
in the number of shares to be issued under the plan (other than to reflect a
reorganization, stock split, merger, spin-off or similar transaction);

(b)

any material increase
in benefits to participants, including any material change to:



(i)

permit a repricing (or
decrease in exercise price),

(ii)

reduce the price at
which shares or options to purchase shares may be offered, or

(iii)

extend the duration of
the plan;



(c)

any material expansion
of the class of participants eligible to participate in the plan; and



(d)

any
expansion in the types or options or awards provided under the plan.

The Plans must
be reconfirmed, every three years, by a resolution passed by a majority of the
votes cast by Shareholders at a meeting of Shareholders and if the Plan is not
reconfirmed by the Shareholders as required by this provision, no further grants
of options may be made under the Plan.

In addition, the
Plans and any outstanding options thereunder may be amended or terminated by the
Board if the amendment or termination is required by any securities regulators,
a stock exchange or a market as a condition of approval of a distribution to the
public of Common Shares, or to obtain or maintain a listing or quotation of our
Common Shares.

The Board may
also amend or terminate any outstanding option, including, but not limited to,
substituting another award of the same or of a different type or changing the
date of exercise; provided, however that, the holder of the option must consent
to such action if it would materially and adversely affect the holder.

A copy of the
Plans may be obtained by any Shareholder by request in writing to our Corporate
Secretary at #1188 - 550 Burrard Street, Vancouver, British Columbia, V6C 2B5.

Under a Compromise
Agreement, dated September 12, 2005 (the "Afcan Transaction"), we acquired
all of the issued and outstanding shares of Afcan Mining Corporation ("Afcan"),
a gold mining company listed on the TSX with a late stage development project in
the People's Republic of China.  At the date of the Afcan Transaction,
Afcan had in place an incentive stock option plan (the "Afcan Plan") whereby
there were 594,997options (the "Afcan Options")outstanding
to three employees of Afcan (the "Afcan Employees") who continued into the
employment of Eldorado or Qinghai Dachaidan Mining Limited, a subsidiary of the
Company.  Pursuant to the Afcan Transaction and approval of the TSX the
Afcan Options were converted and the Afcan Employees received one option (the
"New Afcan Option") for every 6.5 Afcan Options.  A total of 91,538
Afcan Options were converted into New Afcan Options under a separate share
reserve in addition to the Plans.  The Afcan Options continue to be
directed under the terms and conditions of the Afcan Plan and the option
agreements with the Afcan Employees.  The number of Eldorado shares
reserved for the New Afcan Options as of today's date is 91,538.  Terms
and conditions of the Afcan Plan are available at www.sedar.com as adopted by
the Board of Directors on March 17, 1998 and approved by the shareholders on
January 11, 1999 and amendments thereto.



PERFORMANCE
GRAPH

The following
chart compares the total cumulative shareholder return for CDN$100 invested in
common shares of Eldorado with the total cumulative shareholder return of the
S&P/TSX Composite Index  and the total cumulative shareholder return of
the TSE Gold Index for the period commencing December 31, 2000 and ending
December 31, 2005.



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15



[noticeofmeeting003.gif]



COMPENSATION OF
DIRECTORS

Directors of the
Company who are not officers or employees (the "Independent Directors") are
compensated for their services as directors through a combination of retainer
fees and meeting attendance fees. In 2005, the annual retainer fee paid to such
directors other than the Chairman of the Board was $20,000 and the annual
retainer paid to our Non-Executive Chairman was $30,000.  The Chairman of
the Audit Committee received an additional annual retainer of $5,000.  The
Chairman of the Corporate Governance and Nominating Committee and the Chairman
of the Compensation Committee received an additional annual retainer of $3,000
and Directors receive a fee of $1,500 for each director meeting and $1,500 for
each committee meeting attended.  In 2005 Directors who were required to
travel to Board and/or Committee Meetings from other countries or cities were
paid US$375 per day (the "Travel Allowance").  At a meeting of the
Board on February 2, 2006 it was resolved to amend the Travel Allowance to
Cdn$750 per day.  Directors are reimbursed for their incidental expenses
incurred in connection with their services as directors.

The Independent
Directors were paid the following amounts as directors' fees and retainer for
the year ended December 31, 2005:



|                            |        
|--------------------------- | -------
|Independent Directors       | CDN $  
|John Auston                 | 45,500 
|Ross Cory                   | 49,250 
|Robert Gilmore              | 56,500 
|Hugh Morris                 | 51,000 
|Donald Shumka               | 25,334 
|Wayne Lenton                | 48,500 
|Total Director Compensation | 276,084

Pursuant to the
Company's Directors' Compensation Policy our directors are eligible to
participate in the D&O Plan.  The terms of the Directors'
Compensation Policy include the provision of a grant of 100,000 fully vested
options to newly elected Directors.  All subsequent options granted to
non-executive Directors would be subject to vesting requirements as determined
by the Board.  In 2005, Mr. Donald Shumka was appointed to the Board and
was granted 100,000 options pursuant to the Directors' Compensation Policy.
 Each option entitles Mr. Shumka to acquire one common share at the
exercise price of Cdn$3.00 per share until April 28, 2010.  See "Incentive
Stock Option Plans" for a description of the terms and conditions that apply
to the Options.

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16

DIRECTORS AND
OFFICERS INDEMNIFICATION AND INSURANCE

There was no
indemnification payable this financial year to our directors or officers.

We maintain
liability insurance for our directors and officers in the aggregate amount of
US$20,000,000 subject to a US$250,000 deductible loss payable by us.  The
premium, in the amount of US$265,650 was paid by us for the period from July 1,
2005 to July 1, 2006.  The Company, on an annual basis, examines the
relevancy of the liability insurance and determines if the amount or the terms
of the policy should be adjusted.

CORPORATE
GOVERNANCE

Major regulatory
changes in respect of corporate governance have recently come into effect.
 In particular, the Canadian Securities Administrators (the "CSA") have
issued National Policy 58-201 - Corporate Governance Guidelines and National
Instrument 58-101 - Disclosure of Corporate Governance Practices ("NI 58-101").
 The TSX also requires each listed company to discuss its approach to
corporate governance annually in accordance with the NI 58-101.  Additional
changes also have arisen from the U.S. Sarbanes-Oxley Act of 2002, and the
subsequent rules and regulations, adopted by the U.S. Securities and Exchange
Commission and the rules and regulations recently adopted by the AMEX.

In 2006 the
Board formed the CGNC and appointed three Independent Directors to the CGNC.
 In its role of corporate governance the CGNC monitors the various changes
and proposed changes to corporate governance regulations and guidelines and,
where appropriate amends its corporate governance practices to maintain a best
practices approach to corporate governance matters. The Board believes that our
practices are consistent with and in some cases go beyond most corporate
governance rules and guidelines as recommended by the securities commissions and
stock exchanges in the jurisdictions where the Company's shares are listed.

The following
describes the Company's corporate governance practices in accordance with the
disclosure requirements of  Proposed NI 58-101.

Board of Directors

The Board is
currently comprised of seven Directors, six of whom are independent and the
seventh is the CEO.  A director is considered independent if he has no
direct or indirect material relationship with the Company, which in the view of
the Board could reasonably be expected to materially interfere with the exercise
of the director's independent judgment.  The Board of Directors approved
the Terms of Reference for a Director on February 2, 2006.  These Terms of
Reference can be found on the Company's website at www.eldoradogold.com and
attached to this Information Circular as Schedule C.

Meaning of
independence is defined by the following:

1)

A Director is
independent if he or she has no direct or indirect material relationship with
the issuer.

2)

A "material
relationship" is a relationship which could, in the view of the issuer's
board of directors, be reasonably expected to interfere with the exercise of a
Director's independent judgment.

3)

Despite (2) above, the
following individuals are considered to have a material relationship with the
issuer.

a)

an individual who is,
or has been within the last three years, an employee or executive officer of the
issuer;

b)

an individual whose
family member is, or has been within the last three years, an executive officer
of the issuer;

c)

an individual who:

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17

i.

is a partner of a firm
that is the issuer's internal or external auditor;

ii.

is an employee of that
firm; or

iii.

was within the last
three years a partner or employee of that firm and personally worked on the
issuer's audit within that time;



The Board has
determined that the six directors identified below, including our Chair, are
Independent Directors:



|                      |            
|--------------------- | -----------
|John Auston           | Independent
|Ross Cory             | Independent
|Robert Gilmore        | Independent
|Wayne Lenton          | Independent
|Hugh Morris, Chairman | Independent
|Donald Shumka         | Independent



Paul Wright, our
President & Chief Executive Officer is a member of our management and
therefore is not an Independent Director.

The Board is
satisfied that its current number of directors is appropriate, providing a
diversity of views and experience while maintaining effective stewardship. The
Board believes that the composition of the Board fairly represents the interests
of Shareholders.

The Independent
Directors hold regularly scheduled meetings at which members of management are
not in attendance ("In Camera Meetings").  In 2005, the Independent
Directors held three In Camera Meetings.   An Independent Director of
 the Company is appointed at the In Camera Board Meetings to take and
maintain the Minutes of such meetings.

Our Board
expects that all directors should attend all meetings of the Board and all
meetings of each committee on which a director is a member.  The following
table summarizes the attendance of Board members from January 1, 2005 to the
date hereof:



|                      |                        
|--------------------- | -----------------------
|Name                  | Board Meetings Attended
|John Auston           | 8of 9                  
|Ross Cory             | 9 of 9                 
|Robert Gilmore        | 9 of 9                 
|Wayne Lenton          | 9 of 9                 
|Hugh Morris, Chairman | 7 of 9                 
|Donald Shumka(1)      | 4 of 9                 
|Paul Wright           | 9 of 9                 

(1) Mr. Shumka
was appointed to the Board of Directors on April 28, 2005.

Certain of our
Independent Directors are also directors of other reporting issuers in Canada.
 Refer to the Independent Directors personal information on pages 5 & 6
of this circular.

The Chairman of
the Board is the chief administrative officer of the Board of Directors,
responsible for providing strategic and tactical leadership to the Directors and
for ensuring the smooth functioning of the Board's processes.



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18



Board Mandate

The principal
role of our Board of Directors is stewardship of the Company, with its
fundamental objective being the creation of shareholder value, including the
protection and enhancement of the value of the Company's assets.  The
stewardship responsibility means that the Board oversees the conduct of the
business and supervises Management, which is responsible for the day-to-day
conduct of the business.  The Board shall assess and monitor the systems in
place to manage the risks of the Company's business with the objective of
safeguarding the Company's assets.  In its supervisory role, the Board
sets the attitude and disposition of the Company towards ethics, risk
management, compliance with applicable laws and regulatory policies,
environmental, safety and health practices and procedures, financial practices,
disclosure and reporting.  In addition to its primary accountability to
shareholders, the Board is also accountable to securities and regulatory
authorities in the jurisdictions where the Company is listed, and other
stakeholders, such as employees, contractors, communities, and the public.
 The Board requires that there are long-term goals and strategic planning
processes in place, to which the Board brings objectivity and judgment.
 The Board is responsible for approval of the corporate strategy and for
monitoring the Company's processes.   The Board of Directors is
responsible for succession planning for the Board and for the CEO.  The
complete Terms of Reference for our Board of Directors are attached as Schedule
"B" to this Information Circular and can be found on our website www.eldoradogold.com
or by contacting our Corporate Secretary.  These Terms of Reference include
the Mandate of the Board of Directors.

Position Descriptions

The Board hasdeveloped Terms of Reference for Directors.  Such Terms of Reference
are reviewed annually for compliance with corporate governance regulations and
guidelines of the securities regulators and stock exchanges in the jurisdictions
where the Company is listed. The Terms of Reference for Directors delineate the
roles and responsibilities of the Chair of the Board and of the Chair of each
Committee.   The Terms of Reference were last approved by the Board of
Directors on February 2, 2006 and are attached to this Information Circular
 The position description for the CEO has been developed and approved by
the Board of Directors and is renewed annually by the Compensation Committee as
part of the CEO's evaluation process.

Orientation and Continuing
Education

The Board has a
formal process for the orientation of new Independent Directors regarding the
role of the board, its Committees and its Directors and the nature of operations
of the business.   Each newly elected Independent Director is provided
with one-on-one orientation by each of the senior executive officers and
departmental heads and receives a Director's binder that includes information
pertinent to his/her role as a Director of the Company.  In addition,
monthly management reports, presentations by the President & CEO at
regularly scheduled Board Meetings, annually scheduled presentations by our
international senior management and relevant site visits to our development
projects and operations provide our Directors with updated information on the
Company's activities.

Information is
available to the Board concerning continuing education for its Directors.
  The President & CEO reports to the Board on an informal and
formal basis regularly.  Departmental managers who can provide insight
because of personal involvement, and/or certain of our advisors and consultants
are invited to attend meetings of the Board on a regular basis to relay
information pertinent to our business activities.

Ethical Business Conduct



Eldorado Gold
Corporation and its subsidiaries and affiliates are committed to the highest
standards of legal and ethical business conduct.  This Code of Business
Conduct and Ethics (the "Code"), adopted on October 27, 2004 by the Board of
Directors summarizes the legal, ethical and regulatory standards that we follow
and is a reminder to our directors, officers and employees ("Representatives"),
of the seriousness of that commitment.  Compliance with this Code and high
standards of business conduct is mandatory for every Representative.  The
Board does not monitor compliance with the Code, but rather relies on the
oversight of the Company's Internal Controls to monitor compliance
with the Code.

The Code is
available on our website www.eldoradogold.comand
on SEDAR at www.sedar.com under the Company's
name.  In addition, a copy of the Code can be obtained from our Corporate
Secretary by request in writing to Suite 1188 - 550 Burrard Street, Vancouver,
British Columbia, V6C 2B5 or e-mail dawnm@eldoradogold.com.
 The Code is posted in each of our offices and operations and all
Representatives are required to both acknowledge their understanding of the
terms of the Code and to attest to their compliance with those terms on an
annual basis.  The acknowledgement and agreement to the Code forms part of
the Company's employment agreements.



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19



Pursuant to the
Code we have adopted a "Whistle Blower" policy whereby Representatives can
report suspected illegal or unusual behaviour by other Representatives.
 Representatives are able to report in confidence any known or suspected
violations of laws, governmental regulations or this Code to the Chair of our
Audit Committee.  Additionally, Representatives may contact the Chair of
our Audit Committee or our Corporate Secretary with a question or concern about
this Code or a business practice.  Any questions or violation reports will
be addressed immediately and seriously, and can be made anonymously.  The
contact details where Representatives can report suspected violations and
guidelines are listed in the attachment to the Code.

We will not allow
any retaliation against a Representative who acts in good faith in reporting any
violation.

The Chair of our Audit Committee or our
Corporate Secretary will investigate any reported violations and will determine
an appropriate response, including corrective action and preventative measures
when required.  All reports will be treated confidentially to every extent
possible.

The Board takes
appropriate measures to exercise independent judgment in considering
transactions and agreements in respect of which a director or executive officer
may have a material interest.  Where appropriate, directors absent
themselves from portions of Board or Committee Meetings to allow independent
discussion of points in issue.

Each Director is
responsible for understanding the roles and responsibilities of the Board as a
whole and of a Director as mandated in the respective Terms of Reference for
each and in our Code.  In this manner the Board encourages and promotes a
culture of ethical business conduct.



The Board has in place a policy whereby
individual directors are able to engage any outside advisors at the Company's
expense that he/she may determine is necessary in order to assist in fulfilling
its responsibilities.  The engagement and payment by the Company for the
services of an outside advisor are subject to approval by the Chairman of the
Audit Committee or the Chairman of the CGNC.

Nomination of
Directors

The Independent
Directors are responsible for the identification and nomination of new
candidates for the Board.  The Directors annually participate in
discussions designed to identify skill sets and individuals that would enhance
the proficiency of the Board In 2005, we formed the CGNC that consists of three
Independent Directors who are responsible for the nominating process.
 Terms of Reference for the CGNC have been written in accordance with
corporate governance regulations and guidelines of the securities regulators and
stock exchanges in the jurisdictions where the Company has its securities listed
and are attached as Schedule "A" hereto and can be found on our website at
www.eldoradogold.com.  The Terms of Reference establish the process of
identifying, recruiting, nominating and appointing directors.  In addition,
all incumbent directors complete an annual questionnaire that is designed to
assess the Board as a whole and to provide a opportunity for discussion on the
structure and composition of the Board.

Assessments

Annually the
CGNC distributes a directors' questionnaire ("Directors' Questionnaire")
to be completed by all Directors of the Company.  The Directors
Questionnaire is designed to assist the Board in assessing the Directors, the
Board and its Committees to determine the effectiveness of the Board as a whole.
 The results of the Directors Questionnaire are tabulated and
recommendations for the coming year are made to the Board based on the results
of the responses.

Board Committees

The Board has
established three committees of directors, being the Compensation Committee, the
Audit Committee and the CGNC.  Each of the Committees is composed entirely
of Independent Directors.Terms of Reference for the
Committees are attached to this Information Circular as Schedule A.

Compensation Committee

As noted above,
the Compensation Committee is currently composed of three Independent Directors.
  Mr. Wayne Lentonis the Chair of the Committee.  Messrs.
Auston and Gilmore served as members of the Committee from 2005-2006.



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20



The Compensation
Committee develops, reviews and monitors director and executive compensation and
policies.  Terms of Reference for the Compensation Committee address the
description of responsibilities, powers and operations of the Compensation
Committee and are attached as Schedule "A" hereto and are available on our
website www.eldoradogold.com or by
contacting our Corporate Secretary.  The Compensation
Committee met 6 times in 2005 with all Members of the Committee in attendance at
each meeting.

The Compensation
Committee annually reviews the composition of the compensation packages and
determines the adequacy of the compensation packages for senior executives of
the Company.  The Compensation Committee is also responsible for the review
of the Directors cash and equity compensation and makes recommendations to the
Board of Directors in such regard.  The Compensation Committee makes its
recommendations to the Board based upon the review of independent compensation
surveys including the Coopers Consulting 2005 Mining Salary Survey Corporate
Report - Canada, the Western Compensation & Benefits 2005 National
Executive Compensation Survey, the Patrick O'Callaghan and Associates and Korn
 Ferry International Report on Corporate Board Governance and Director
Compensation - a Review of 2005 together with  publicly available
information on the types of compensation paid to senior executives and Directors
within our peer group.  In 2005 the Compensation Committee did not engage
an independent consultant.

Audit Committee

The Audit
Committee is currently composed of four Independent Directors.  Robert
Gilmore is the Chair of the Committee and Messrs. Ross, Morris and Shumka served
as members from 2005-2006.  Each of the members of the Committee is
financially literate (For particulars on the experience and education of the
members of our Audit Committee please refer to pages 5 & 6 of this
Information Circular.)  The Audit Committee met 5 times in 2005.  All
members were in attendance at each of the Audit Committee Meetings.

The Audit
Committee is responsible for the oversight of financial reporting, internal
controls and certain public disclosure documents.  The Audit Committee also
recommends the appointment of our external auditors, reviews the annual audit
plan and auditor compensation, reviews hiring policies regarding former staff
and auditors.   In 2005 the Audit Committee approved non-audit
services provided by the Company's external auditors PricewaterhouseCoopers
LLP ("PWC").   In October 2005 the Audit Committee determined that
beginning in 2006, all future non-audit services be performed by audit firms
and/or consultants other than PWC.

See "Audit
Committee" in our annual information form and Schedule A in this Information
Circular Terms of Reference - Audit Committee, for particulars regarding our
Audit Committee's charter and the Audit Committee's pre-approval policies
and procedures for non-audit consultant services and the service fees paid to
our Auditor as well as other related matters.   The Terms of Reference
are also available on our website www.eldoradogold.com
or by contact our Corporate Secretary.

Corporate
Governance & Nominating Committee



The CGNC was formed in 2005 to oversee and
monitor the Company's corporate governance policies and practices, to
identify, propose and nominate candidates for election as directors and to
recommend a slate of nominees for election at the Company's annual
shareholders meeting on behalf of the Board and to report on the CGNC's
activities on a regular and timely basis to the Board.   The Chair of
the CGNC is Mr. Ross Cory and Messrs. Auston and Morris served as members from
2005-2006.  The Terms of Reference for the CGNC are attached as Schedule A
 to this Information Circular.  The CGCN was formed in the fourth
quarter of 2005 and therefore met informally on several occasions.  In 2005
the CGNC met one time as a formal meeting constituted for the purpose of the
business of the CGNC.

Other Matters

Environmental

In 2005, the
Board, as whole, held the responsibility for overseeing and approval of
recommendations for actions, development programs and procedures to monitor that
the Company's environmental, health and safety practices were adhered to and
achieved, and, if necessary, to propose changes in the Company's practices
from time to time as may be warranted to keep pace with environmental, health
and safety regulations, trends or developments in the mining industry and in the
jurisdictions in which we operate.  The Board reviews Environmental, Health
& Safety Reports quarterly at regularly scheduled Board meetings.



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21



APPOINTMENT
OF AUDITORS

In
accordance with the recommendation of the Audit Committee, the Board recommends
that at the Annual Meeting the Shareholders vote for the reappointment of
PricewatehrouseCoopers LLP ("PWC") as the Company's auditors to hold
office until the next annual general meeting of Shareholders and that the
Shareholders authorize the Board to fix the remuneration of the auditors. PWC
were first appointed as our auditors in 1992 and have since then served as our
auditors.

Fees for
audit-related and non-audit services paid to PWC in 2005 are as follows:

Total
Audit Fees

$345,086

Audit
Related Services

$133,192

Taxation
Services                 
$21,809





In 2005 the
Audit Committee resolved that, beginning in 2006, the Company engage another
service provider for all non-audit related services, and that PWC be engaged
only for audit and audit-related services.



AMENDMENT OF
SHAREHOLDERS RIGHTS PLAN

At the Meeting,
Shareholders will be asked to consider and, if considered appropriate, pass an
ordinary resolution approving an amended and restated shareholder rights plan
(the "Amended and Restated Rights Plan") between the Company and
Computershare Investor Services Inc. to be dated as of May 4, 2006.

The Company
originally entered into a shareholders rights plan agreement on November 14,
1996 (the "Rights Plan").  The Rights Plan (the "Amended Rights Plan")
was subsequently amended and reconfirmed at the Shareholders meeting held on May
29, 2002.   Once reconfirmed, the Amended Rights Plan was to remain in
effect until the expiration of the Plan on November 19, 2006, unless
terminated earlier. We wish to amend and restate the Amended Rights Plan to
address current trends and make other changes as described below, including the
adoption of a new termination date.

The key
amendments proposed to be made to the Amended Rights Plan are as follows:

- the
    termination date of the Amended Rights Plan will be extended to the earlier
    of (a) the time of termination of the Company's 2012 annual meeting; and
    (b) December 31, 2012, subject to the reconfirmation of the Amended and
    Restated Rights Plan within 3 years of obtaining shareholder approval of the
    Amended and Restated Rights Plan;
- the
    definition of "Exercise Price"  under the Amended Rights Plan,
    which is based on a set price, will be replaced in the Amended and Restated
    Rights Plan with a price that will be based on a multiple of two times the
    current market price of the Common Shares rather than a set price;
- certain
    permitted lock up agreements will be exempted from the terms of the Amended
    and Restated Rights Plan;
- the
    minimum take over bid period in the definition of "Permitted Bid" in the
    Amended Rights Plan will be reduced from 75 days to 60 days in the Amended
    and Restated Rights Plan;
- the
    exchange option provision, which permits the Board to issue securities or
    other assets in respect of a right at any time after a flip-in event has
    occurred, without seeking the approval of holders of shares or rights,
    currently in the Amended Rights Plan, has been removed from the Amended and
    Restated Rights Plan; and
- the
    Board currently has broad discretion in the Amended Rights Plan to redeem
    all of the outstanding Rights at a price of $0.0001 per Right at any time
    prior to the Amended Rights Plan being triggered as a result of a flip-in
    event; under the Amended and Restated Rights Plan, the Board will need to
    obtain the prior approval of Shareholders (or holders of Rights, if
    applicable).



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22



The complete
text of the Amended and Restated Rights Plan is set out in Schedule D
hereto and the foregoing description of the key changes is qualified in its
entity by reference to the complete text contained therein.

Pursuant to
Section 6.4(b) of the Amended Rights Plan, amendments to the Amended Rights Plan
require approval by a majority of the votes cast by Independent Shareholders, as
defined in the Amended Rights Plan, present or represented at and entitled to be
voted at a meeting of the holders of Common Shares.  The term "Independent
Shareholders" is defined to exclude, among others, prospective acquirors
(holds or exercises control of 20% or more of the outstanding voting shares of
the Company) and plans for the benefit of employees of the Company.

The Amended and
Restated Rights Plan is subject to TSX approval.  The TSX also requires
that the Amended and Restated Rights Plan be approved by the majority of the
votes cast by the Shareholders at the meeting and by the Shareholders other than
any Shareholder that, directly or indirectly, on its own or in concert with
others, holds or exercises control over more than 20% of the outstanding voting
shares of the Company, if any; and any of their associates, affiliates and
insiders.

To the Company's
knowledge, as of the date hereof, all of the Shareholders are Independent.

The Board of
Directors has determined that the Amended and Restated Rights Plan is in the
best interests of the Company and its Shareholders and unanimously recommends
that Shareholders vote in favour of approving theAmended
and Restated Rights Plan. The Company has been advised that the directors and
senior officers of the Company intend to vote all Common Shares held by them in
favour of the Rights Plan Amendment Resolution (as defined below).  If the
Amended and Restated Rights Plan is not approved by the Shareholders, the
Amended Rights Plan will continue to remain in effect until November 19, 2006,
unless terminated earlier.

The
Shareholders and Independent Shareholders are being asked to consider and vote
upon a resolution to approve the Amended and Restated Rights Plan as follows:

"BE
IT RESOLVED, as an ordinary resolution of the shareholders of Eldorado Gold
Corporation (the "Company"), that:

1.

The
amended and restated shareholder rights plan agreement (the "Agreement")
between the Company and Computershare Investor Services Inc. to be dated as of
May 4, 2006, as set out in Schedule D hereto, be and is hereby approved with an
effective date of May 4, 2006.

2.

Any
one or more directors or officers of the Company be and are hereby authorized
and directed, for and on behalf of the Company, to take all necessary steps and
proceedings, and to execute and deliver or file the Agreement, and any all other
agreements, documents and instruments and to do all such other acts and things
as are required or as may be necessary to give full effect to or carry out the
provisions of the above resolution."

(the
"Rights Plan Amendment Resolution")

Passage of
the Rights Plan Amendment Resolution will require approval by a majority of the
votes cast on the matter at the Meetingby
the Independent Shareholders and the Shareholders.  Unless otherwise
instructed the Management Nominees named in the enclosed form of Proxy will vote
"FOR" the Rights Plan Amendment Resolution.

The following
description of the characteristics and terms of the Amended and Restated Rights
Plan generally is qualified in its entirety by reference to the complete text of
the Amended and Restated Rights Plan which accompanies this Information Circular
as Schedule D. All capitalized terms used in the following description but not
otherwise defined herein are defined in the Amended and Restated Rights Plan.



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23



Background to the Amended and
Restated Rights Plan

The Amended and
Restated Rights Plan was designed to protect Shareholders from unfair, abusive
or coercive take-over strategies, including the acquisition of control of the
Company by a bidder in a transaction or series of transactions that may not
treat all Shareholders equally or fairly nor afford all Shareholders an equal
opportunity to share in the premium paid upon an acquisition of control.
 It was also designed to provide the Board of Directors with sufficient
time, in the event of a public take-over bid or tender offer for the Common
Shares, to pursue alternatives which could enhance shareholder value.
 These alternatives could involve the review of other take-over bids or
offers from other interested parties to provide Shareholders desiring to sell
their Common Shares with the best opportunity to realize the maximum sale price
for their Common Shares.  In addition, with sufficient time, the Board of
Directors would be able to explore and, if feasible, advance alternatives to
maximize share value through possible corporate reorganizations or
restructuring.  The need for time is paramount if there is to be any real
ability on the part of the directors to consider these alternatives.

The Amended and
Restated Rights Plan is not intended to prevent a take-over or deter fair offers
for securities of the Company but rather to facilitate the maximization of
shareholder value should anyone seek to acquire control.  Furthermore, it
was designed to encourage anyone seeking to acquire control of the Company to
make an offer that represents fair value to all holders of all Common Shares and
to provide a framework within which Shareholders can make a fully informed
decision regarding any such offer, within a reasonable time frame, having regard
for the possibility that alternatives could be forthcoming which may enhance
shareholder value.

Approval of the
Amended and Restated Rights Plan is not sought in response to or in anticipation
of any pending or threatened take-over bid or offer for the Common Shares of the
Company. Other than as disclosed in this Information Circular, the Board of
Directors does not have any current intention of implementing any other proposal
having an anti take-over effect.

Potential Advantages of the
Amended and Restated Rights Plan

The Board of
Directors believes that the Amended and Restated Rights Plan will encourage
persons seeking to acquire control of the Company to do so by means of a public
take-over bid or offer available to all Shareholders, on an equal basis,
regardless of the size of their holdings.

In addition, the
Board of Directors believes that under the current rules relating to take-over
bids and tender offers in Canada there may not be sufficient time for the
directors to explore and develop alternatives for the Shareholders such as
possible higher offers or corporate reorganizations or restructurings that could
maximize shareholder value.  Under current rules, a take-over bid must
remain open in Canada for a minimum of 35 days.  Accordingly, the directors
believe the Amended and Restated Rights Plan continues to be an appropriate
mechanism through which they will be able to discharge their responsibility to
assist Shareholders in responding to take-over bids or tender offers.

The Board of
Directors continues to believe that the Amended and Restated Rights Plan will
not adversely limit the opportunity for Shareholders to dispose of their Common
Shares through a take-over bid or tender offer which provides fair value to all
Shareholders.  The directors will continue to be bound to consider fully
and fairly any bona fide take-over bid or offer for Common Shares of the Company
and to discharge that responsibility with a view to the best interests of the
Shareholders.

Potential Disadvantages of
the Amended and Restated Rights Plan

Because the
Amended and Restated Rights Plan may increase the price to be paid by an
acquiror to obtain control of the Company and may discourage certain
transactions, adoption of the Amended and Restated Rights Plan may reduce the
likelihood of a take-over bid being made for the outstanding Common Shares.
 Accordingly, the Amended and Restated Rights Plan may deter some take-over
bids that Shareholders might wish to receive.

Summary of the Amended and
Restated Rights Plan Characteristics

The Amended and
Restated Rights Plan has a Permitted Bid feature that allows a take-over bid to
proceed in the face of the Amended and Restated Rights Plan provided it meets
certain minimum standards of fairness and disclosure, even if the Board of
Directors does not support the bid.  The Amended and Restated Rights Plan
does not require a special Shareholders' meeting to be called to approve a
Permitted Bid.



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24



Upon a person or
related group making a Take-over Bid, or acquiring Beneficial Ownership of 20%
or more of the outstanding Common Shares, other than through certain
"Permitted Bid Acquisitions" (as discussed below) including a
Permitted Bid or Competing Permitted Bid, or on terms otherwise approved by the
Board of Directors, the Rights entitle their holders (other than the acquiror)
to acquire Common Shares at a 50% discount from the then prevailing market
price, with the result that the acquiror may suffer substantial dilution of its
interest in the Company.

The dilutive
effects of the Rights are not triggered by a Permitted Bid or Competing
Permitted Bid, which are each a Take-over Bid made to all Shareholders by
take-over bid circular prepared in compliance with applicable laws and certain
additional conditions (as set forth below).  The "permitted bid"
concept, which is found in most of the shareholder rights plans adopted in
Canada, is intended to permit Shareholders to review and decide upon a take-over
bid for themselves, while establishing a minimum standard of fairness and giving
Shareholders and the Board of Directors sufficient time to evaluate the
Permitted Bid or Competing Permitting Bid.

The Amended and
Restated Rights Plan does not require that a special meeting of Shareholders be
called to approve a Permitted Bid or Competing Permitted Bid.  Instead,
Shareholders who favour the bid indicate their approval simply by tendering
their Common Shares to it.  If Shareholders independent of the bidder
tender shares representing more than 50% of the Common Shares then outstanding
by the end of the minimum initial tender period of 60 days, the bid must be
extended for a further period of 10 days to allow initially non-tendering
Shareholders to tender their Common Shares to the bid if they so choose.
 The initial tender of Common Shares by a Shareholder pursuant to a
Permitted Bid acts as a surrogate for the costly and rather cumbersome process
of requiring a Shareholder vote at a special Shareholders' meeting.  As
with a Shareholder vote, there is no coercion to tender during the initial
60-day period as the bid, by definition, must be open for acceptance for at
least 10 days after expiry of the initial tender period.  Of course, the
Board of Directors may call a Shareholders' meeting at any time should it
believe that a meeting would be beneficial to the Shareholders.

The Amended and
Restated Rights Plan does not in any way detract from or lessen the duty of the
Board of Directors to act honestly and in good faith in the best interests of
the Company and to consider an offer in accordance with that duty.  It is
not the intention of the Board of Directors to secure the continuance of
existing directors or officers in office to avoid an acquisition of control of
the Company in a transaction that is fair and in the best interests of the
Company and its Shareholders, or to avoid the fiduciary duties of the Board of
Directors or of any director.  The proxy mechanism of the CBCA is not
affected by the Amended and Restated Rights Plan, and a shareholder may use
his/her statutory rights to promote a change in the management or direction of
the Company, including the right of Shareholders holding not less than 5% of the
outstanding Common Shares to requisition the Board of Directors to call a
meeting of Shareholders.

Consistent with
the Board's responsibility to negotiate in the best interests of the Company
and in that regard provide the opportunity for any prospective acquiror to
negotiate in good faith with the Board of Directors, until the occurrence of a
Flip-in Event, the Board of Directors may determine to waive the application of
the provisions of the Amended and Restated Rights Plan to any transaction that
would otherwise be subject to those provisions, but if they do, they must waive
the application of the Amended and Restated Rights Plan to any other Take-over
Bid occurring within 60 days of such waiver.



If a bidder does not wish to make a
Permitted Bid or Competing Permitted Bid, he can negotiate with and seek prior
approval of the Board of Directors to make an offer on terms which the Board of
Directors considers fair to all Shareholders.  In such circumstances, the
Board of Directors may waive the application of the Amended and Restated Rights
Plan and allow the offer to proceed without dilution to the bidder.

INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

Other
than as set forth in this Information Circular, none of our directors or senior
officers, nor any person who has held such a position since the beginning of our
last completed financial year, nor any proposed nominees for election as a
Director of the Company, nor any of their respective associates or affiliates,
has any substantial or material interest, direct or indirect, by way of
beneficial ownership of securities or otherwise, in any matter to be acted upon
at the Meeting other than the election of directors and the appointment of
auditors.



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25



INTEREST
OF INSIDERS IN MATERIAL TRANSACTIONS

We
are not aware of any material interest, direct or indirect, of any Shareholder
who holds more than 10% of the voting rights attached to the Common Shares, any
proposed nominee for election as a director, any director or officer of the
Company or subsidiary of the Company or any Shareholder who holds more than 10%
of the voting rights attached to the Common Shares of the Company or any
associate or affiliate of any of the foregoing, in any transaction which has
been entered into since the commencement of our most recent completed financial
year or in any proposed transaction which, in either case, has materially
affected or will materially affect us or any of our subsidiaries.

SHAREHOLDERS
PROPOSALS

Pursuant
to Section 137 of the CBCA, any notice of a Shareholder proposal intended to be
raised at next year's annual meeting of Shareholders of the Company must be
submitted to the Company at its registered office, to the attention of the
Secretary, on or before December 29, 2006, to be considered for inclusion in the
management proxy circular for the annual meeting of the Shareholders next year.

It is our
position that Shareholder proposals need be recognized only if made in
accordance with the foregoing procedure and the provisions of the CBCA.

ADDITIONAL
INFORMATION

Additional
information relating to us is available at www.sedar.com under our name.
 Financial information is provided in our comparative financial statements
and MD&A for our most recently completed financial year.  Copies of our
financial statements and Management Discussion & Analysis can be obtained
from our Corporate Secretary by contacting the Corporate Secretary in writing at
Suite 1188 - 550 Burrard Street, Vancouver, British Columbia V6C 2B5 or by
e-mail at dawnm@eldoradogold.com.  Copies of such documents will be
provided to Shareholders free of charge.

OTHER
MATTERS

The
Management knows of no other matters to come before the Meeting of Shareholders
other than those referred to in the Notice of Meeting.   However, if
any other matters which are not known to the Management shall properly come
before the said Meeting, the form of proxy given pursuant to the solicitation by
Management will be voted on such matters in accordance with the best judgment of
the persons voting the proxy.

APPROVAL

The
contents and sending of this Information Circular have been approved by our
directors.

BY ORDER OF THE BOARD OF
DIRECTORS



"Paul N. Wright"

Paul N. Wright
President & Chief Executive Officer









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SCHEDULE
A



ELDORADO
GOLD CORPORATION

(the
"Company")



AUDIT
COMMITTEE



Terms
of Reference

PURPOSE

The
purpose of the Audit Committee (the "Committee") is to oversee that
Management of the Company (the "Management") has in place an effective
system of internal financial controls for reviewing and reporting on the Company's
financial statements; to monitor the independence and performance of the Company's
external auditor (the "Auditor"); to oversee the integrity of the Company's
financial disclosure and reporting and to monitor Management's compliance with
legal and regulatory requirements; and to report on the Committee's activities
on a regular and timely basis to the Board of Directors (the "Board").

CONSTITUTION
AND MEMBERSHIP

1.

The
Board will appoint Directors to form the Committee annually at the Board of
Directors Meeting following the Annual Shareholders Meeting.

2.

The
Board has determined that the Committee will be comprised of at least three
Directors (the "Member" or "Members"), all of whom will meet the "independence
and financial literacy" qualifications and one Member shall meet the
definition of a "financial expert" as defined by the United States
Securities & Exchange Commission as attached as Appendix A to these Terms of
Reference.

2.

The
Board may remove or replace a Member at any time.  A Member will serve on
the Committee until the termination of the appointment or until a successor is
appointed.



3.

The
Board will appoint the Chairman of the Committee.  The Corporate Secretary
of the Company will keep minutes of each meeting.



4.

The
Committee or a Committee Member is able to engage any outside advisors at the
Company's expense that it determines is necessary in order to assist in
fulfilling the its responsibilities.  The engagement and payment by the
Company for the services of an outside advisor is subject to approval by the
Chairman of the Audit Committee or the Chairman of the Corporate Governance
Committee.



---

-
2 -

MEETINGS

1.

Meetings
of the Committee will be held at the request of a Member of the Committee, the
Chief Executive Officer, the Corporate Secretary or the Auditor of the Company
at such times and places as may be determine, but in any event at least to
review the Company's quarterly and annual financial disclosure. Twenty-four
(24) hours advance notice of each meeting given orally, by telephone, or in
writing delivered by facsimile or electronic mail together with an agenda will
be given to each Member unless all Members are present and waive notice,and any
absent waive notice in writing.

2.

A
majority of members of the Committee will constitute a quorum.  Decisions
of the Committee will be by an affirmative vote of the majority of those Members
voting at a meeting (attendance is as defined by the Company's Articles).
  Powers of the Committee may also be exercised by resolution in
writing signed by all the Members of the Committee.

3.

The
Committee will have access to the External Auditor and Management of the
Company, exclusive of each other, for purposes of performing its duties.
 The Committee will meet with the External Auditor independent of
Management at least once a year.

4.

The
External Auditor will be notified of meetings of the Committee and will attend
if requested to do so by a Member or by Management.

RESPONSIBILITIES

The
Committee will have the following duties and responsibilities:



1.

Review
with the External Auditor and with the Management of the Company prior to the
recommendation of the approval of the consolidated financial statements of the
Company by the Board:

a)

the
audited annual and unaudited quarterly financial statements including the notes
thereto;

b)

the
appropriateness of the Management Discussion and Analysis of operations
contained in the audited annual and unaudited quarterly report and its
consistency with the financial statements;

c)

any
report or opinion proposed to be rendered in connection with the financial
statements, including independent expert reports;

d)

any
significant transactions which are not a normal part of the Company's
business;

e)

the
nature and substance of significant accruals, reserves and other estimates;



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-
3 -





f)

issues
regarding accounting and auditing principles and practices as well as the
adequacy of internal controls;

g)

all
significant adjustments proposed by Management or by the Auditor;

h)

the
specifics of any unrecorded audit adjustments;

i)

if
applicable, any impairment provisions based on ceiling test calculations; and

j)

review
management's quarterly and annual earnings release

k)

review
in collaboration with Members of the Board proficient in the technical aspects
of preparing a reserve and resource calculation the mineral reserve calculation
procedure and the credentials of the qualified person.

2.

Review
and approve the audit and review and pre-approve non-audit services, except
those non-audit services permitted by the regulators, and related fees and
expenses and determine the independence of the External Auditor.

3.

Establish
guidelines for the retention of the External Auditor for any non-audit service.

4.

Recommend
to the Board the appointment of the External Auditor to be proposed at the
annual shareholders' meeting and the compensation of the External Auditor.
 The External Auditor is ultimately accountable to the Board of Directors
and the Audit Committee as representatives of the shareholders.

5.

Review
and assess internal controls and procedures with the External Auditor, the
External Auditor's perception of the Company's financial and accounting
personnel, any material recommendations which the Auditor may have, the
cooperation which the Auditor received during the course of its review and the
adequacy of their access to records, data and other requested information.

6.

Oversee
the work of the External Auditor.

7.

Review
hiring policies regarding former employees of the External Auditor.



8.

Review
with Management the Company's major financial risk exposures and the steps
Management has taken to monitor and control such exposures.



9.

Establish
a complaint process  "whistle-blowing" procedures.  Establish
procedures for the receipt, retention, and treatment of any complaints regarding
accounting, internal accounting controls, or auditing matters.  Establish
procedures for employees confidential, anonymous submissions in accordance with
the Company's "Whistle Blower Policy".

10.

Advise
the Board with respect to the Company's policies and procedures regarding
compliance with new developments in generally accepted accounting principles,
laws and regulations and their impact on the consolidated financial statements
of the Company.

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-
4 -



11.

Review
with Management and the External Auditor, the Company's internal accounting
and financial systems and controls to satisfy itself that the Company maintains:

a)

the
necessary books, records and accounts in reasonable detail to accurately and
fairly reflect the Company's transactions;

b)

effective
internal control systems; and

c)

adequate
processes for assessing the risk of material misstatement of the financial
statements and for detecting control weaknesses or fraud.

12.

Review
the External Auditor's Management Letter and the External Auditor's Report.
 Such Report to be directed to the Committee.

13.

Review
the External Auditor's Report on Internal Controls and report all deficiencies
 and remedial actions to the Board.

14.

Direct
and supervise the investigation into any matter brought to its attention within
the scope of its duties.

15.

Perform
such other duties as may be assigned to it by the Board of Directors from time
to time or as may be required by applicable regulatory authorities or
legislation.

16.

Review
and reassess the adequacy of this Charter annually and recommend any proposed
changes to the Board for approval.

17.

Assess
the Committee's performance of the duties specified in this charter and report
its finding to the Board of Directors.

Approved
at a meeting of the Board of Directors held February 2, 2006









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-
5 -





COMPENSATION
COMMITTEE



Terms
of Reference



PURPOSE

The
purpose of the Compensation Committee (the "Committee") is to review human
resource and compensation policies and best practices for recommendation to the
Board of Directors; and to report on the Committee's activities on a regular
and timely basis to the Board of Directors.

CONSTITUTION
AND MEMBERSHIP

1.

The
Board of Directors appoints Directors to form a Compensation Committee
 annually at the organizational meeting of the Board of Directors
immediately following the Annual Shareholders Meeting.

2.

The
Committee is comprised of three Directors ("Member" or "Members").
 The Board may remove or replace a Member at any time.  A Member will
serve on the Committee until the termination of the appointment or until a
successor is appointed.

3.

All
of the Members of the Committee are Independent Directors, in accordance with
proposed Multilateral Policy 58-201



4.

The
Board appoints the Chairman of the Committee ("Committee Chair").  The
Corporate Secretary of the Company will maintain the record book of the
Committee.

5.

The
Committee or a Committee Member is able to engage any outside advisors at the
Company's expense that it determines is necessary in order to assist in
fulfilling its responsibilities.  The engagement and payment by the Company
for the services of an outside advisor is subject to approval by the Chairman of
the Audit Committee or the Chairman of the Corporate Governance  Committee
of the Company.

MEETINGS

1.

Meetings
of the Committee will be held at such times and places as the Committee Chair or
the Corporate Secretary may determine, but in any event at least two times per
year.  Twenty-four (24) hours advance notice of each meeting given orally,
by telephone, or in writing delivered by facsimile or electronic mail together
with an agenda will be given to each Member unless all Members are present and
waive notice, and if those absent waive notice in writing.

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-
6 -



2.

A
majority of Members of the Committee will constitute a quorum.  Decisions
of the Committee will be by an affirmative vote of the majority.
  Powers of the Committee may also be exercised by resolution in
writing signed by all the members of the Committee.

RESPONSIBILITIES

The
Committee will have the following duties and responsibilities:



1.

Review
and advise on the Company's domestic and international compensation policies
and practices.



2.

Review,
on an annual basis, Management's proposals regarding overall employee
compensation.



3.

Prepare
a report, on an annual basis, on the Company's compensation practices for
inclusion in the Company's Information Circular.



4.

Review,
on an annual basis, the compensation of the Chief Executive Officer of the
Company for approval by the Board of Directors.



5.

Review,
on an annual basis, the Chief Executive Officer's recommendations for the
Senior Executives' compensation, for approval by the Board of Directors.

6.

Review
on an annual basis, Management's proposals pertaining to overall employee
compensation.

7.

Review
and approve, on an annual basis, the Chief Executive Officer's and the Senior
Executives' performance objectives.

8.

Assess
and report to the Board of Directors on the performance of the Chief Executive
Officer for the prior year.

9.

Ensure
compensation policies for the Chief Executive Officer and the Senior Executives:

a)

properly
reflect their respective duties and responsibilities;

b)

is
designed to be competitive in attracting, retaining and appropriately motivating
senior management personnel of high quality;

c)

are
considered against market compensation data for similar roles and levels of
responsibility within the Company's industry peer group to ensure the Company
offers a competitive compensation package that appropriately rewards
accomplishment and results through an overall remuneration package;

---

-7 -

d)

aligns
the interests of the Chief Executive Officer and the Senior Executives with the
shareholders to maximize shareholder value; and

e)

are
based on established corporate and individual performance objectives.

10.

Review
recommendations for Company's stock option plans and amendments thereto for
approval by the Board of Directors, the regulatory agencies and the shareholders
as required by securities regulations and guidelines.



11.

Review
and approve the Chief Executive Officer's recommendations for stock option
grants to employees, consultants and advisors of the Company and its
subsidiaries and affiliates on behalf of the Board of Directors.



12.

Review
the Chief Executive Officer's recommendations for stock option grants to
Officers and Directors of the Company for approval by the Board of Directors.



13.

Recommend
stock option grants to the Chief Executive Officer for approval by the Board of
Directors.



14.

Review
and make recommendations on performance objectives and award levels for
participants in the Company's Short Term Incentive Plan (the "STIP") for
approval by the Board of Directors.



15.

Review
Management's recommendations for awards measured against objectives determined
at the beginning of each year of the STIP for approval by the Board of
Directors.



16.

Ensure
compensation policies for the Independent Directors, the Non-Executive Chairman
of the Board compare favorably with the Company's peer group companies and
make recommendations to the Compensation Committee for amendments to the
Directors Compensation policy when warranted to ensure that compensation:

a)

properly
reflect the respective duties and responsibilities of Independent Board
Directors;

b)

is
designed to be competitive in attracting, retaining and appropriately motivating
Directors of the highest quality;

c)

is
competitive and appropriately rewards the Company's Independent Directors as an
overall remuneration package;

d)

aligns
the interests of the Independent Directors with the shareholders to maximize
shareholder value; and



17.

Review
executive and director compensation disclosure before being published to the
public.



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- 8 -







18.

Direct
and oversee the investigation into any matter brought to its attention within
the scope of its duties.

19.

Perform
such other duties as may be assigned to it by the Board of Directors from time
to time or as may be required by applicable regulatory authorities or
legislation.

20.

Review
and reassess the adequacy of these Terms of Reference annually and recommend any
proposed changes to the Corporate Governance/Nominating Committee for approval
and recommendation to the Board of Directors.

21.

Assess
the Committee's performance of the duties specified in this Terms of Reference
and report its findings to the Board of Directors annually.







Approved
by the Board of Directors, February 2, 2006

















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-
9 -







CORPORATE
GOVERNANCE AND NOMINATING COMMITTEE



Terms
of Reference

PURPOSE

The
purpose of the Corporate Governance and Nominating Committee (the " Committee")
is to oversee and monitor the Company's corporate governance policies and
practices, to identify, propose and nominate candidates for election as
directors and to recommend a slate of nominees for election at the Company's
annual general meeting on behalf of the Board of Directors (the "Board") and
to report on the Committee's activities on a regular and timely basis to the
Board.



CONSTITUTION
AND MEMBERSHIP

1.

The
Board of Directors appoints Directors to form the Committee annually at the
organizational meeting of the Board immediately following the Annual
Shareholders Meeting.

2.

The
Committee is comprised of at least three Independent Directors ("Member" or
"Members").  The Board may remove or replace a Member at any time.
 A Member will serve on the Committee until the termination of the
appointment or until a successor is appointed.

3.

All
of the Members of the Committee are Independent Directors, in accordance with
proposed Multilateral Policy 58-201.



4.

The
Board appoints the Chairman of the Committee ("Committee Chair").  The
Corporate Secretary of the Company will maintain the record book of the
Committee.

5.

The
Committee or a Committee Member is able to engage an outside advisor at the
Company's expense in order to assist in fulfilling the Committee's
responsibilities.  The engagement and payment by the Company for the
services of an outside advisor is subject to approval by the Chairman of the
Audit Committee or the Chairman of the Committee.



6.

The
Committee or a Committee Member is able to engage any outside advisors at the
Company's expense that it determines is necessary in order to assist in
fulfilling its responsibilities.  The engagement and payment by the Company
for the services of an outside advisor is subject to the approval of the Audit
Committee or the Chairman of the Audit Committee.

MEETINGS

1.

Meetings
of the Committee will be held at such times and places as the Committee Chair or
the Corporate Secretary may determine, but in any event at least once per year
in January for the purpose of providing a slate of candidates for nomination to
the Board.  Twenty-four (24) hours advance notice of each meeting given
orally, by telephone, or in writing delivered by facsimile or electronic mail
together with an agenda will be given to each Member unless all Members present
waive notice, and if those absent waive notice in writing.



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-
10 -



A
majority of Members of the Committee will constitute a quorum.  Decisions
of the Committee will be by an affirmative vote of the majority.
  Powers of the Committee may also be exercised by resolution in
writing signed by all the members of the Committee.



RESPONSIBILITIES

The
Committee will have the following duties and responsibilities:



1.

Review
on a regular basis the Company's corporate governance policies and practices
generally and make recommendations to the Board of Directors as appropriate.

2.

Monitor
the Company's Risk Management program.

3.

Establish
the size and composition of the Board and qualification criteria for Board
members reflecting an appropriate mix of expertise, skills, attributes and
personal and professional backgrounds for service as an Independent Director of
the Company.



4.

Recommend
a slate of nominee Directors to be elected at the Annual Shareholders Meeting
who meet the established criteria and who have sufficient time available to
devote to the affairs of the Company.



5.

Identify
Directors for the position of Non-Executive Chairman of the Board.



6.

Establish
criteria for membership to the Board Committees and identify and recommend
Independent Directors to serve as members on and Chairman of each Committee.









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-
11 -





7.

Perform
an annual review of incumbent directors' performance and attendance at Board
and Committee meetings in connection with the Corporate Governance Committee's
consideration of Directors to be slated for election at the Company's annual
meeting.  The review shall seek to identify specific areas, if any, in need
of improvement or strengthening and shall culminate in a discussion by the full
Board of the results and any actions to be taken.  The review and
evaluation will include, among other things, an assessment of:



a)

the
Board's composition and independence;



b)

the
Board's access to and review of information from management and the quality of
such information;



c)

the
Board's responsiveness to shareholder concerns



8.

Develop
a process to determine when a conflict of interest issues exists and review any
conflict of interest issues affecting a Director.

9.

Establish
policy on rotating Committee assignments.



10.

Work
with Management in the continued development of an orientation program for new
Directors, which shall be designed to both familiarize new Directors with the
full scope of the Company's businesses and key challenges and to assist new
Directors in developing and maintaining skills necessary or appropriate for the
performance of their responsibilities.



11.

Work
with Management in developing and implementing appropriate continuing education
programs for the Directors.



12.

Review
and assess annually the adequacy of the Board Committees' Terms of Reference,
the Terms of Reference for a Director and for the Board of Directors and make
recommendations of such to the Board.



13.

Annually
conduct a self-assessment of the Committee's performance for discussions.
 The review and discussion shall seek to identify specific areas, if any,
in need of improvement or strengthening.



14.

Perform
any other activities consistent with these Terms of Reference, the Company's
by-laws, governance legislation, guidelines and practices as the Committee or
the Board deems necessary or appropriate.





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-
12 -









15.

Report
at regularly scheduled Board Meetings on matters coming before the Committee.







Approved
by the Board of Directors, February 2, 2006









---



SCHEDULE
B

ELDORADO
GOLD CORPORATION

BOARD
OF DIRECTORS



Terms
of Reference



I.

ROLE
AND RESPONSIBILITIES



A.

The
principal role of the Board of Directors ("Board") is stewardship of the
Company, with its fundamental objective being the creation of shareholder value,
including the protection and enhancement of the value of its assets.  The
stewardship responsibility means that the Board oversees the conduct of the
business and supervises Management, which is responsible for the day-to-day
conduct of the business.  The Board shall assess, and ensure systems are in
place to manage the risks of the Company's business with the objective of
safeguarding the Company's assets.  In its supervisory role, the Board
sets the attitude and disposition of the Company towards ethics, risk
management, compliance with applicable laws and regulatory policies,
environmental, safety and health policies, financial practices, disclosure and
reporting.  In addition to its primary accountability to shareholders, the
Board is also accountable to government authorities and other stakeholders, such
as employees, contractors, communities, and the public.



B.

The
principal responsibilities of the Board required to ensure the overall
stewardship of the Company are as follows:



(i)

the
Board shall review and monitor the Company's long-term goals and the strategic
planning process on a regular and timely basis.  The Chief Executive
Officer ("CEO"), with the involvement of the Board, shall establish
long-term goals for the Company.  The CEO formulates the Company's
strategy, policies and proposed actions and presents them to the Board for
approval.  The Board brings objectivity and judgement to this process.
 The Board is responsible for the approval of the strategy and for
monitoring the process;



(ii)

the
Board shall have an understanding of the principal risks associated with the
Company's business, and reviews and monitors the systems in place to manage
those risks effectively.  The risks span the Company's entire business to
include environmental, operating, political, financial, geological, and legal
and regulatory risks;



(iii)

the
Board shall evaluate the processes in place to enable it to supervise and
measure Management's, and in particular the CEO's, performance in carrying
out the Company's stated objectives.  These processes should include
appropriate training, development and succession of Management;





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-
2 -









(iv)

the
Board shall review and monitor the internal controls and management information
systems in place to monitor the Company's operations. The Board shall review
and monitor the Company's compliance with applicable laws, regulations and
policies pertaining to the Company in all applicable jurisdictions; and



(v)

Those
Members of the Board proficient in the technical aspects of preparing a reserve
and resource calculation shall review and collaborate with the Audit Committee
regarding the preparation and calculation procedure of the reserve and resource
calculation and the credentials of the qualified person responsible for the
preparation of the reserve and resource statement and report the results of
their collaboration back to the Board as a whole.



(vi)

the
Board shall review and monitor the Company's communication program that
facilitates effective communication with its stakeholders.



C.

The
Board is responsible for acting in accordance with its obligations contained in
the Canada Business Corporations Act, the Company's Articles and
By-laws and any other relevant legislation and regulations and each Director
shall:



(i)

act
honestly in good faith with a view to the best interests of the Company;



(ii)

exercise
the care, diligence and skill that a reasonably prudent person would exercise in
comparable circumstances;



(iii)

exercise
independent judgement; and



(iv)

disclose
any conflict of interest on any issue brought before the Board and refrain from
participating in the Board discussion and voting on the matter.



D.

The
Board has the authority to establish a Committee or Committees and appoint
Directors to be members of these Committees.  With certain exceptions, the
Board may delegate its powers to such Committees.  The matters to be
delegated to Committees of the Board and the constitution of such Committees
shall be reviewed annually or more frequently, as circumstances require.
 From time to time the Board may create a Special Committee to examine
specific issues on behalf of the Board.



There
are three Committees of the Board, namely, the Audit Committee, the Compensation
Committee and the Corporate Governance and Nominating Committee. The Board has
approved Terms of Reference for each of these Committees setting out its duties,
responsibilities, organization, and administrative procedures. These Terms of
Reference are reviewed and approved annually.



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-
3 -









II.

COMPOSITION
AND PROCEDURE



A.

The
Board shall be constituted with a majority of individuals who qualify as
Independent Directors.  An Independent Director is a Director who is
independent of Management and is free from any interest and any business or
other relationship which could, or could reasonably be perceived to, interfere
materially with the Director's ability to act with a view to the best
interests of the Company, other than interests and relationships arising from
shareholding.  A related Director is a Director who is not an Independent
Director.  If the Company has a significant shareholder, in addition to a
majority of independent Directors, the Board shall include a number of Directors
who do not have interests in or relationships with either the Company or the
significant shareholder and which fairly reflects the investment in the Company
by shareholders other than the significant shareholder.  A significant
shareholder is a shareholder with the ability to exercise a majority of the
votes for the election of the Board.



B.

The
Board shall encourage the CEO to bring into Board meetings, managers who can
provide additional insight into the items being discussed because of personal
involvement in those areas, and/or are employees who have the potential to take
on greater responsibilities within the Company and whom the CEO believes should
be given more exposure to the Board.



C.

The
Board shall ensure appropriate orientation and continuing education of
directors.  Management reports and presentations and relevant site visits
to its operations provide Directors with updated information on the Company.
 New directors receive a Board Manual containing relevant management
information, historical public information and the Terms of Reference for the
Board of Directors, a Director and the Committees of the Board.



D.

The
Independent Members of the Board will meet after each regularly scheduled
meeting of the Board, or when it is deemed necessary by the Chairman of the
Board, without any member of the Company's Management present for the purposes
of evaluating Management and discussing such other matters as may be
appropriate.  The Independent Directors will appoint a Member to act as
Secretary of the 'In Camera' Meetings.  Minutes generated from the
meetings of the Independent Directors will be maintained by the Chairman.
 Any business items arising from the meetings will be brought to the
attention of the Corporate Secretary and be added to the Agenda of the next
regularly scheduled Board Meeting.



E.

An
individual Director may engage any outside advisors at the expense of the
Company that the Director deems necessary in fulfilling the Director's
responsibilities in appropriate circumstance.  The appointment of such
outside advisors will be subject to the approval of the Chairman of the Audit
Committee

Approved
by the Board of Directors, February 2, 2006



---





SCHEDULE
C

ELDORADO
GOLD CORPORATION

DIRECTOR

Terms
of Reference

I.

PURPOSE



As
a member of the Board, each Director shall:



A.

fulfil
the legal requirements and obligations of a Director, which means that he or she
must have a comprehensive understanding of the statutory and fiduciary roles of
a Director;



B.

represent
the interests of all shareholders in the governance of the Company and ensure
that the best interests of the Company are paramount; and



C.

participate
in the review and approval of corporate policies and strategy and monitor their
implementation.

II.

DUTIES
AND RESPONSIBILITIES



A.

Board
Activity



As
a member of the Board, each Director shall:



(i)

exercise
good judgement;



(ii)

act
with integrity;



(ii)

use
his/her abilities, experience and influence constructively;



(iii)

be
available to Management and the Board as a resource;



(iv)

respect
confidentiality;



(v)

advise
the Chief Executive Officer ("CEO") and/or Chairman of the Board of
Directors ("Chair") in advance of a meeting of the Board when proposing to
introduce significant and/or previously unknown information of a material nature
at a Board meeting;



(vi)

understand
the difference between governing and managing, and not encroach on Management's
responsibilities;





---







(vii)

disclose
any conflict of interest on any issue brought before the Board and refrain from
participating in the Board discussion and voting on the matter;



(viii)

when
appropriate, communicate with the Chair, President  & CEO and/or other
Officers of the Company;



(ix)

demonstrate
a willingness and availability for one-on-one consultation with the CEO;



(x)

evaluate
the CEO's and the Company's performance;



(xi)

assist
in maximizing shareholder value;



(xii)

be
a positive force with a demonstrated interest in the long-term success of

the
Company; and



(xiii)

exercise
independent judgement, regardless of the existence of the relationships or
interests which could interfere with the exercise of independent judgement.



B.

Preparation
and Attendance



To
enhance the effectiveness of Board and Committee meetings, each Director shall:



(i)

prepare
for Board and Committee meetings by reading reports and background materials
prepared for each meeting;



(ii)

maintain
an excellent Board and Committee meeting attendance record; and



(iii)

ensure
that he or she has the necessary information to make informed

decisions.



C.

Communication



Communication
is fundamental to Board effectiveness; therefore, each Director shall:



(i)

participate
fully and frankly in the deliberations and discussions of the Board;



(ii)

encourage
free and open discussion of the affairs of the Company by the Board and its
members;







---





(iv)

ask
probing questions focused on strategy, policy, and the Company's business
plan; and



(iv)

question
officers in an appropriate manner and at appropriate times on the implementation
of the Company's strategy and business plan and the results obtained.



D.

Committee
Work



To
ensure that Board Committees are effective and productive, each Director shall:



(i)

participate
on Committees and become knowledgeable about the purposes and goals of all the
Committees of the Board; and



(ii)

understand
the process of Committee work and Management's role in supporting the work of
the Board's Committees.





E.

Business,
Company and Industry Knowledge



Recognizing
that only well-informed Board members can make appropriate decisions, each
Director shall:



(i)

be
knowledgeable about the Company's operations, activities, and industry;



(ii)

understand
the role of the Company within the community;



(iii)

understand
the regulatory, legislative, business, social and political environments within
which the Company operates;



(iv)

become
acquainted with the key senior management personnel of the Company; and



(v)

be
knowledgeable about the Company's business sites and visit them when
appropriate.







Approved
by the Board of Directors on February 2, 2006



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SCHEDULE
D









SHAREHOLDER
RIGHTS PLAN







ELDORADO
GOLD CORPORATION
("Eldorado")







Dated
as of November 14, 1996
as amended and restated
as of May 4, 2006















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TABLE
OF CONTENTS



Page





ARTICLE
1

INTERPRETATION

3

1.1

Definitions

3

1.2

Currency

18

1.3

Headings
and References

18

1.4

Calculation
of Number and Percentage of Beneficial Ownership of

Outstanding
Voting
Shares                                                                               
18

1.5

Acting
Jointly or in Concert

19

1.6

Generally
Accepted Accounting Principles

19

ARTICLE
2

THE
RIGHTS

19

2.1

Legend
on Common Share Certificates

19

2.2

Initial
Exercise Price: Exercise of Rights; Detachment of Rights

20

2.3

Adjustments
to Exercise Price; Number of Rights

23

2.4

Date
on Which Exercise is Effective

28

2.5

Execution,
Authentication, Delivery and Dating of Rights Certificates

28

2.6

Registration,
Transfer and Exchange

29

2.7

Mutilated,
Destroyed, Lost and Stolen Rights Certificates

30

2.8

Persons
Deemed Owners

31

2.9

Delivery
and Cancellation of Certificates

31

2.10

Agreement
of Rights Holders

31

2.11

Rights
Certificate holder Not Deemed a Shareholder

32

ARTICLE
3

ADJUSTMENTS
TO THE RIGHTS

32

3.1

Flip-in
Event

32

ARTICLE
4

THE
RIGHTS AGENT

34

4.1

General

34

4.2

Merger
or Amalgamation or Change of Name of Rights Agent

35

4.3

Duties
of Rights Agent

35

4.4

Change
of Rights Agent

37

ARTICLE
5

MISCELLANEOUS

38

5.1

Redemption
and Waiver

38

5.2

Expiration

39

5.3

Issue
of New Rights Certificates

39

5.4

Supplements
and Amendments

40

5.5

Fractional
Rights and Fractional Common Shares

41

5.6

Rights
of Action

42

5.7

Regulatory
Approvals

42

5.8

Declaration
as to Non-Canadian holders

42

5.9

Notices

42

5.10

Costs
of Enforcement

44

5.11

Successors

44











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TABLE
OF CONTENTS

(continued)

Page







5.12

Benefits
of this Agreement

44

5.13

Governing
Law

44

5.14

Severability

44

5.15

Effective
Date

44

5.16

Reconfirmation

44

5.17

Determinations
and Actions by the Board of Directors

45

5.18

Counterparts

45









































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| | -ii- | 



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SHAREHOLDER
RIGHTS PLAN AGREEMENT

THIS
SHAREHOLDER RIGHTS PLAN AGREEMENT is made as of November 14, 1996, as amended
and restated as of May 4, 2006.

BETWEEN:

ELDORADO
GOLD CORPORATION, a corporation amalgamated under the laws of Canada and
having its registered office at Suite 1920, 1055 West Hastings Street,
Vancouver, British Columbia, V6E 2E9

(the
"Corporation")

OF
THE FIRST PART

AND:

COMPUTERSHARE
INVESTOR SERVICES INC., a company under the laws of Canada and having an
office at 510 Burrard Street, Vancouver, British Columbia, V6C 3B9

(the
"Rights Agent")

OF
THE SECOND PART

WHEREAS:

A.

HRC
Development Corporation ("HRC") and Eldorado Gold Corporation, as
constituted prior to its amalgamation with HRC, ("Old Eldorado") entered
into an arrangement agreement made as of October 11, 1996 pursuant to which Old
Eldorado and HRC agreed to propose to their respective shareholders an
arrangement under Section 192 of the Canada Business Corporations Act;
subsequently, Old Eldorado and HRC amalgamated effective November 19, 1996.

B.

The
Board of Directors of both Old Eldorado and HRC determined that it was in the
best interests of the corporation resulting from the amalgamation of Old
Eldorado and HRC pursuant to the terms of the plan of arrangement to adopt a
shareholder rights plan to ensure, to the extent possible, that all shareholders
of the Corporation would be treated fairly in connection with any take-over bid
for the Corporation.

C.

In
order to implement the adoption of a shareholder rights plan as established by
this Agreement, the Board of Directors of the Corporation authorized, inter
alia, on the Effective Date (as defined below):





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2 -



(1)

the
issuance of one right (a "Right") in respect of each Common Share in the
capital of the Corporation outstanding as of 11:01 a.m. (Vancouver time) on the
Effective Date (the "Record Time"); and

(2)

the
issuance of one Right in respect of each Common Share issued after the Record
Time and prior to the earlier of the Separation Time and the Expiration Time.

D.

Each
Right entitles the holder thereof, after the Separation Time, to purchase
securities of the Corporation pursuant to the terms and subject to the
conditions set forth in this Agreement.

E.

Old
Eldorado and HRC appointed the Computershare Trust Company of Canada (formerly
Montreal Trust Company of Canada ("Computershare") to act on behalf of the
Corporation and the holders of Rights.  The Corporation wishes to replace
Computershare with its affiliate, the Rights Agent and the Rights Agent is
willing to act in connection with the issuance, transfer, exchange and
replacement of Rights Certificates, the exercise of Rights and other matters
referred to in this Agreement.

F.

The
Corporation's shareholder rights plan was initially put in place for a period
of ten years from the Effective Date, subject to it being reconfirmed by
shareholders of the Corporation after a period of five years.  The
shareholders of the Corporation approved an amendment to the Corporation's
shareholder rights plan and reconfirmed it at a shareholder meeting held on May
29, 2002.

G.

The
Corporation wishes to amend and restate the Corporation's Shareholder Rights
Plan in order to update it to include certain provisions that reflect trends in
current shareholder rights plans and to make certain other changes, and in
particular wishes to extend the termination of the Shareholder Rights Plan for a
period of six years from the date of the approval of the amended and restated
shareholder rights plan by shareholders of the Corporation, subject to it being
reconfirmed by shareholders after a period of three years from the date of the
approval.

NOW
THEREFORE, in consideration of the premises and respective agreements set forth
herein, the parties hereto agree as follows:

ARTICLE
1
INTERPRETATION

1.1

Definitions.
 In this Agreement, the following words and terms will, unless the context
otherwise requires, have the following meanings:

(a)

"Acquiring
Person" means any Person who is (as of May 4, 2006) or subsequently becomes
the Beneficial Owner of 20% or more of the outstanding Voting Shares, provided
that the term "Acquiring Person" will not include:

(i)

the
Corporation or any Subsidiary of the Corporation,

(ii)

any
Person who becomes the Beneficial Owner of 20% or more of the outstanding Voting
Shares as a result of one or any combination of:

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3 -



(A)

a
Voting Share Reduction;

(B)

Permitted
Bid Acquisitions;

(C)

an
Exempt Acquisition; or

(D)

a
Pro Rata Acquisition,

provided
that if a Person becomes the Beneficial Owner of 20% or more of the outstanding
Voting Shares by reason of one or any combination of a Voting Share Reduction,
Permitted Bid Acquisitions, an Exempt Acquisition or a Pro Rata Acquisition and
thereafter such Person becomes the Beneficial Owner of an additional 1% or more
of the outstanding Voting Shares (other than pursuant to a Voting Share
Reduction, Permitted Bid Acquisitions, an Exempt Acquisition, a Pro Rata
Acquisition, then as of the date that such Person becomes the Beneficial Owner
of such additional Voting Shares, such Person will become an "Acquiring Person";

(iii)

for
a period of ten days after the Disqualification Date (as defined below), any
person who becomes the Beneficial Owner of 20% or more of the outstanding Voting
Shares as a result of such Person becoming disqualified from relying on Section
1.1(f)(iv)(D) solely because such Person has made or proposes to make a tender
or exchange offer or Take-over Bid in respect of securities of the Corporation
alone or by acting jointly or in concert with any other Person.  For the
purposes of this definition, "Disqualification Date" means the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to section 101 of the Securities Act
(Ontario) or section 111 of the Securities Act (British Columbia)) by such
Person or the Corporation of the intent to commence such a tender or exchange
offer or Takeover Bid being herein referred to as the "Disqualification Date";

(iv)

an
underwriter or member of a banking or selling group that becomes the Beneficial
Owner of 20% or more of the outstanding Voting Shares as a result of an
acquisition from the Corporation in connection with a distribution of securities
by way of a prospectus or private placement; or

(v)

a
Person (a "Grandfathered Person") who was the Beneficial Owner of 20% or
more of the outstanding Voting Shares determined as at May 4, 2006,
provided that this exception will not be, and will cease to be, applicable to a
Grandfathered Person in the event that such Grandfathered Person becomes the
Beneficial Owner of any additional Voting Shares that increases its Beneficial
Ownership of Voting Shares by more than 1% of the number of Voting Shares then
outstanding, other than through a Voting Share Reduction, a Permitted Bid
Acquisition, an Exempt Acquisition or a Pro Rata Acquisition and provided that a
Person shall cease to be a Grandfathered Person in the event that such Person
ceases to Beneficially Own 20% or more of the outstanding Voting Shares at any
time after May 4, 2006;

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-
4 -



(b)

"Affiliate"
means, when used to indicate a relationship with a specified Person, a Person
that, directly, or indirectly through one or more intermediaries or otherwise,
controls, or is controlled by, or is under common control with, such specified
Person.

(c)

"Agreement"
means this shareholder rights plan agreement dated as of November 14, 1996
between Old Eldorado, HRC and Computershare, as amended by the Corporation and
Computershare on June 14, 2002, as amended and restated between the Corporation
and the Rights Agent as of May 4, 2006, as may be amended, modified,
supplemented or restated from time to time.

(d)

"annual
cash dividend" means cash dividends paid at regular intervals in any financial
year of the Corporation to the extent that such cash dividends do not exceed, in
the aggregate, the greatest of:

(i)

200%
of the aggregate amount of cash dividends declared payable by the Corporation on
its Common Shares in its immediately preceding financial year;

(ii)

300%
of the arithmetic average of the aggregate amount of cash dividends declared
payable by the Corporation on its Common Shares in its three immediately
preceding financial years; and

(iii)

100%
of the aggregate consolidated net income of the Corporation, before
extraordinary items, for its immediately preceding financial year.

(e)

"Associate"
means, when used to indicate a relationship with a specified Person:

(i)

a
partner, other than a limited partner, of that Person;

(ii)

a
trust or estate in which that Person has a substantial beneficial interest or
for which that Person serves as trustee or in a similar capacity;

(iii)

an
issuer in respect of which that Person beneficially owns or controls, directly
or indirectly, voting securities carrying more than 10% of the voting rights
attached to all outstanding voting securities of the issuer; or

(iv)

a
relative, including the spouse, of that Person or a relative of that Person's
spouse, if the relative has the same home as that Person.

(f)

"Beneficial
Owner": a Person shall be deemed the "Beneficial Owner", and to have "Beneficial
Ownership" of, and to "Beneficially Own", any securities:

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-
5 -



(i)

as
to which such Person or any of such Person's Affiliates is the direct or
indirect owner at law or in equity and for the purposes of this Clause 1.1(f)(i)
a Person shall be deemed to be an owner at law or in equity of all securities:

(A)

owned
by a partnership of which the Person is a partner;

(B)

owned
by a trust in which the Person has a beneficial interest and which is acting
jointly or in concert with that Person or in which the Person has a beneficial
interest of 50% or more;

(C)

owned
jointly or in common with others; and

(D)

of
which the Person may be deemed to be the beneficial owner (whether or not of
record) pursuant to the provisions of the Canada Business Corporations Act
or the Securities Act (Ontario), including section 90 thereof, or
pursuant to Rule 13d-3 or 13d-5 under the 1934 Exchange Act(or pursuant
to any comparable or successor laws, regulations or rules, pursuant to the
provisions of the Canada Business Corporations Act or the Securities
Act (Ontario) or pursuant to Rule 13d-3 or 13d-5 as in effect on the date of
this Agreement);

(ii)

as
to which such Person or any of such Person's Affiliates or Associates has,
directly or indirectly:

(A)

the
right to acquire (whether such right is exercisable immediately or after the
lapse or passage of time and whether or not on condition or the happening of any
contingency or otherwise) pursuant to any agreement, arrangement, pledge or
understanding, whether or not in writing (other than (x) customary agreements
with and between underwriters and/or banking group members and/or selling group
members with respect to a bona fide public offering of securities (y) pledges of
securities in the ordinary course of business that meet all the conditions
specified in Rule 13d-3(d)(3) under the 1934 Exchange Act(except for the
condition in Rule 13d-3(d)(3)(ii)) and (z) pledge agreements with a registered
securities dealer relating to the extension of credit for purchases of
securities on margin in the ordinary course of the dealer's business), or upon
the exercise of any conversion right, exchange right, share purchase right
(other than the Rights), warrant or option, or otherwise; or

(B)

the
right to vote such securities (whether such right is exercisable immediately or
after the lapse or passage of time and whether or not on condition or the
happening of any contingency or otherwise) pursuant to any agreement,
arrangement, pledge (other than (x) pledges of securities in the ordinary course
of business that meet all the conditions specified in Rule 13d-3(d)(3) under the
1934 Exchange Act(except for the condition in Rule 13d-3(d)(3)(ii)) and
(y) pledge agreements with a registered securities dealer relating to the
extension of credit for purchases of securities on margin in the ordinary course
of the dealer's business) or understanding (whether or not in writing) or
otherwise;

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6 -



(iii)

which
are Beneficially Owned within the meaning of Clauses 1.1(f)(i) or (ii) by any
other Person with which such Person or any of such Person's Affiliates has any
agreement, arrangement or understanding, whether or not in writing (other than
(x) customary agreements with and between underwriters and/or banking group
members and/or selling group members with respect to a bona fide public offering
of securities, (y) pledges of securities in the ordinary course of business that
meet all the conditions specified in Rule 13d-3(d)(3) under the 1934 Exchange
Act(except for the condition in Rule 13d-3(d)(3)(ii)) and (z) pledge
agreements with a registered securities dealer relating to the extension of
credit for purchases of securities on margin in the ordinary course of the
dealer's business) with respect to or for the purpose of acquiring, holding,
voting or disposing of any Voting Shares of any class;

(iv)

which
are directly or indirectly owned at law or in equity by an Associate of such
Person; and

(v)

which
is Beneficially Owned within the meaning of Clause 1.1(f)(i), (ii), (iii)
or (iv) of this definition by any other Person with which, and in respect of
which security, such Person is acting jointly or in concert;

provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
have "Beneficial Ownership" of, or to "Beneficially Own", any security:

(A)

where
such security has been deposited or tendered pursuant to any Take-Over Bid made
by such Person, made by any of such Person's Affiliates or Associates or made
by any other Person referred to in Clause 1.1(f)(iii), until such deposited or
tendered security has been taken up or paid for, whichever shall first occur;

(B)

where
such Person, any of such Person's Affiliates or Associates or any other Person
referred to in Clause 1.1(f)(iii), has or shares the power to vote or direct the
voting of such security pursuant to a revocable proxy given in response to a
public proxy solicitation or where such Person has an agreement, arrangement or
understanding with respect to a shareholder proposal or proposals or a matter or
matters to come before a meeting of shareholders, including the election of
directors;

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(C)

where
such Person, any of such Person's Affiliates or Associates or any other Person
referred to in Clause 1.1(f)(iii), has or shares the power to vote or direct the
voting of such security in connection with or in order to participate in a
public proxy solicitation or where such Person has an agreement, arrangement or
understanding with respect to a shareholder proposal or proposals or a matter or
matters to come before a meeting of shareholders, including the election of
directors;

(D)

where
such Person, any of such Person's Affiliates or Associates or any other Person
referred to in Clause 1.1(f)(iii), holds or exercises voting or dispositive
power over such security provided that:

(1)

the
ordinary business of any such Person (the "Investment Manager") includes the
management of investment funds for others (which others, for greater certainty,
may include or be limited to one or more employee benefit plans or pension
plans) and such voting or dispositive power over such security is held by the
Investment Manager in the ordinary course of such business in the performance of
such Investment Manager's duties for the account of any other Person (a "Client");

(2)

such
Person (the "Trust Company") is licensed to carry on the business of a trust
company under the laws of Canada or any province thereof and, as such, acts as
trustee or administrator or in a similar capacity in relation to the estates of
deceased or incompetent Persons (each an "Estate Account") or in relation to
other accounts (each an "Other Account") and holds such voting or
dispositive power over such security in the ordinary course of such duties for
the estate of any such deceased or incompetent Person or for such other
accounts;

(3)

such
Person is established by statute for purposes that include, and a substantial
portion of the ordinary business or activity of such Person (the "Statutory
Body") is, the management of investment funds for employee benefit plans,
pension plans, insurance plans or various public bodies;

(4)

such
Person (the "Administrator") is the administrator or trustee of one or more
pension funds or plans registered under the laws of Canada or any Province
thereof or the laws of the United States of America or any State thereof; or

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(5)

the
ordinary business of such person includes acting as an agent of the Crown in the
management of public assets (the "Crown Agent"),

provided,
in any of the above cases, that the Investment Manager, the Trust Company, the
Statutory Body, the Administrator or the Crown Agent, as the case may be, is not
then making or proposing to make a Take-Over Bid, other than an Offer to Acquire
Voting Shares or other securities by means of a distribution by the Corporation
or by means of ordinary market transactions (including prearranged trades)
executed through the facilities of a stock exchange or organized
over-the-counter market, alone or by acting jointly or in concert with any other
Person;

(E)

where
such Person is a Client of the same Investment Manager as another Person on
whose account the Investment Manager holds or exercises voting or dispositive
power over such security, or by reason of such Person being an Estate Account or
an Other Account of the same Trust Company as another Person on whose account
the Trust Company holds or exercises voting or dispositive power over such
security; or

(F)

where
such security has been agreed to be deposited or tendered pursuant to a
Permitted Lock-up Agreement, or is otherwise deposited or tendered, pursuant to
a Take-Over Bid made by such Person or by any of such Person's Affiliates or
Associates until the earliest of such tendered security being accepted
unconditionally for payment or exchange or being taken up and paid for.

(g)

"Board
of Directors" means the board of directors from time to time of the
Corporation or any duly constituted and empowered committee thereof.

(h)

"Business
Day" means any day other than a Saturday, Sunday or a day on which banking
institutions in Vancouver are authorized or obligated by law to close.

(i)

"Canada
Business Corporations Act" means the Canada Business Corporations Act,
R.S.C. 1985, c. C-44, as amended, and the regulations thereunder, as now in
effect or as the same may from time to time be amended, re-enacted or replaced.

(j)

"Canadian
Dollar Equivalent" means, for any amount which is expressed in United States
dollars on any date, the Canadian dollar equivalent of such amount determined by
reference to the U.S.-Canadian Exchange Rate on such date.

(k)

"Canadian-U.S.
Exchange Rate" means, on any date, the inverse of the U.S.-Canadian Exchange
Rate.

(l)

"close
of business" means, on any given date, the time on such date (or, if such date
is not a Business Day, the time on the next succeeding Business Day) at which
the principal transfer office in Vancouver, British Columbia of the transfer
agent for the Common Shares of the Corporation (or, after the Separation Time,
the principal transfer office in Vancouver of the Rights Agent) is closed to the
public.

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(m)

"Common
Shares" means the common shares in the capital of the Corporation as
constituted at the Record Time, as such shares may be subdivided, consolidated,
reclassified or otherwise changed from time to time.

(n)

"Competing
Permitted Bid" means a Take-Over Bid made while another Permitted Bid is in
existence and that satisfies all of the provisions of a Permitted Bid except
that the condition set forth in Section 1.1(jj)(ii) may provide that the Voting
Shares that are the subject of the Take-Over Bid may be taken up or paid for on
a date which is not earlier than the later of 35 days after the date of the
Take-Over Bid or the earliest date on which Voting Shares may be taken up or
paid for under any other Permitted Bid that is in existence for the Voting
Shares.

(o)

"controlled"
a corporation shall be deemed to be "controlled" by another person or two or
more persons if:

(i)

securities
entitled to vote in the election of directors carrying more than 50% of the
votes for the election of directors are held, directly or indirectly, by or for
the benefit of the other Person or Persons; and

(ii)

the
votes carried by such securities are entitled, if exercised, to elect a majority
of the board of directors of such corporation.

(p)

"Co-Rights
Agents" has the meaning ascribed thereto in Subsection 4.1(a).

(q)

"Corporation"
means Eldorado Gold Corporation.

(r)

"Disposition
Date" has the meaning ascribed thereto in Subsection 5.1(h).

(s)

"Dividend
Reinvestment Acquisition" shall mean an acquisition of Voting Shares pursuant
to a Dividend Reinvestment Plan.

(t)

"Dividend
Reinvestment Plan" means a regular dividend reinvestment or other plan of the
Corporation made available by the Corporation to holders of its securities where
such plan permits the holder to direct that some or all of:

(i)

dividends
paid in respect of Common Shares;

(ii)

proceeds
of redemption of shares of the Corporation;

(iii)

interest
paid on evidence of indebtedness of the Corporation; or

(iv)

optional
cash payments;



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-
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be applied to the purchase from the Corporation of Common Shares.

(u)

"Effective
Date" means November 19, 1996.

(v)

"Election
to Exercise" means an election to exercise substantially in the form attached
to the Rights Certificate.

(w)

"Exchange
Act of 1934" means the Securities Exchange Act of 1934 (United States of
America), as amended, and the rules and regulations thereunder, as now in effect
or as the same may from time to time be amended, re-enacted or repealed.

(x)

"Exempt
Acquisition" means a share acquisition in respect of which the Board of
Directors has waived the application of Section 3.1 pursuant to the provisions
of Sections 5.1(a) or 5.1(h).

(y)

"Exercise
Price" means, as of any date, the price at which a holder of a Right may
purchase the securities issuable upon exercise of one whole Right in accordance
with the terms hereof and, subject to adjustment thereof in accordance with the
terms hereof, the Exercise Price shall be:

(i)

until
the Separation Time, an amount equal to two times the Market Price, from time to
time, per Common Share; and

(ii)

from
and after the Separation Time, an amount equal to two times the Market Price, as
at the Separation Time, per Common Share.

(z)

"Expansion
Factor" shall have the meaning ascribed thereto in Section 2.3(a).

(aa)

"Expiration
Time" means the close of business on that date which is the earlier of the
date of termination of this Agreement pursuant to Section 5.15 or Section 5.16;

(bb)

"Flip-in
Event" means a transaction or event in or pursuant to which a Person becomes
an Acquiring Person.

(cc)

"holder"
shall have the meaning ascribed thereto in Section 2.8.

(dd)

"Independent
Shareholders" means holders of outstanding Voting Shares, other than:

(i)

any
Acquiring Person;

(ii)

any
Offeror;

(iii)

any
Affiliate or Associate of any Acquiring Person or Offeror;

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(iv)

any
Person acting jointly or in concert with any Acquiring Person or Offeror, or
with any Affiliate or Associate of any Acquiring Person or Offeror; and

(v)

any
employee benefit plan, deferred profit-sharing plan, stock participation plan
and any other similar plan or trust for the benefit of employees of the
Corporation unless the beneficiaries of the plan or trust direct the manner in
which the Voting Shares are to be voted or directed whether the Voting Shares
are to be tendered to a Take-Over Bid.

(ee)

"Market
Price" per share of any securities on any date means the average daily closing
price per share of such securities on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding such date provided,
however, that if an event of a type analogous to any of the events described in
Section 2.3 hereof shall have caused the closing prices used to determine the
Market Price on any Trading Day not to be fully comparable with the closing
price on such date (or, if such date is not a Trading Day, on the immediately
preceding Trading Day), each such closing price so used shall be appropriately
adjusted in a manner analogous to the applicable adjustment provided for in
Section 2.3 hereof in order to make it fully comparable with the closing price
on such date or, if such date is not a Trading Day, on the immediately preceding
Trading Day. The closing price per share of any securities on any date shall be:

(i)

the
closing board lot sale price or, in case no sale takes place on such date, the
average of the closing bid and asked prices per security, as reported by the
principal Canadian stock exchange (as determined by the Board of Directors) on
which such securities are listed and posted for trading;

(ii)

if
for any reason none of such prices is available on such day or the securities
are not listed or posted for trading on a Canadian stock exchange, the last sale
price or, in case no such sale takes place on such date, the average of the
closing bid and asked prices for each of such securities as reported by the
principal United Stated securities exchange (as determined by the Board of
Directors) on which such securities are listed or admitted to trading;

(iii)

if
for any reason none of such prices is available on such date or the securities
are not listed or admitted to trading on a Canadian stock exchange or a national
United States securities exchange, the last sale price or, in case no sale takes
place on such date, the average of the high bid and low ask prices for each of
such securities in the over the counter market, as quoted by any reporting
system then in use (as determined by the Board of Directors); or

(iv)

if
for any reason none of such prices is available on such date or the securities
are not listed or admitted to trading on a Canadian stock exchange or a national
United States securities exchange or quoted by any such reporting system, the
average of the closing bid and ask prices as furnished by a professional
marketmaker making a market in the securities selected by the Board of
Directors;

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provided,
however, that if for any reason none of such prices is available on such day,
the closing price per share of such securities on such a date means the fair
value per share of such securities on such date as determined by the Board of
Directors, after consultation with a nationally recognized investment dealer or
investment banker with respect to the fair value per share of such securities.
The market price shall be expressed in Canadian dollars and, if initially
determined in respect of any date following part of the 20 consecutive trading
day period in question in United States dollars, such amount shall be translated
into Canadian dollars at such date at the Canadian Dollar Equivalent thereof.

Notwithstanding
the foregoing, where the Board of Directors is satisfied that the Market Price
of securities as determined herein was affected by an anticipated or actual
Take-Over Bid or by improper manipulation, the Board of Directors may, acting in
good faith, determine the Market Price of securities, such determination to be
based on a finding as to the price at which a holder of securities of that class
could reasonably have expected to dispose of his securities immediately prior to
the relevant date excluding any change in price reasonably attributable to the
anticipated or actual Take-Over Bid or to the improper manipulation.

(ff)

"Nominee"
has the meaning ascribed thereto in Subsection 2.2(c).

(gg)

"Offer
to Acquire" includes:

(i)

an
offer to purchase or a solicitation of an offer to sell Voting Shares; and

(ii)

an
acceptance of an offer to sell Voting Shares, whether or not such offer to sell
has been solicited;

or
any combination thereof, and the Person accepting an offer to sell shall be
deemed to be making an Offer to Acquire to the Person that made the offer to
sell.

(hh)

"Offeror"
means a Person who has announced an intention to make, or who has made, a
Take-Over Bid.

(ii)

"Offeror's
Securities" means the aggregate of all Voting Shares Beneficially Owned by the
Offeror on the date of an Offer to Acquire.

(jj)

"Permitted
Bid" means a Take-Over Bid made by an Offeror by way of a take-over bid
circular which also complies with the following additional provisions:

(i)

the
Take-Over Bid is made for all outstanding Voting Shares and to all holders of
Voting Shares as registered on the books of the Corporation, other than the
Offeror (including any Common Shares issued following the date of the Take-Over
Bid pursuant to the conversion of convertible securities). The Take-Over Bid
shall expressly state that Common Shares issued on the exercise of convertible
securities shall, subject to compliance with the procedures applicable,
generally, to the tendering of Voting Shares under the Take-Over Bid, be
eligible to be tendered under the Take-Over Bid;

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(ii)

the
Take-Over Bid contains, and the take-up and payment for securities tendered or
deposited is subject to, an irrevocable and unqualified provision that no Voting
Shares will be taken up or paid for pursuant to the Take-Over Bid prior to the
close of business on the date which is not less than 60 days following the date
of the Take-Over Bid and only if at such date more than 50% of the Voting Shares
held by Independent Shareholders shall have been deposited or tendered pursuant
to the Take-Over Bid and not withdrawn;

(iii)

the
Take-Over Bid contains an irrevocable and unqualified provision that Voting
Shares may be deposited pursuant to such Take-Over Bid at any time during the
period of time described in Section 1.1(jj)(ii) and that any Voting Shares
deposited pursuant to the Take-Over Bid may be withdrawn until taken up and paid
for; and

(iv)

the
Take-Over Bid contains an irrevocable and unqualified provision that in the
event that the deposit condition set forth in Section 1.1(jj)(ii) is satisfied
the Offeror will make a public announcement of that fact and the Take-Over Bid
will remain open for deposits and tenders of Voting Shares for not less than ten
Business Days from the date of such public announcement.

(kk)

"Permitted
Bid Acquisition" means an acquisition of Voting Shares made pursuant to a
Permitted Bid or a Competing Permitted Bid.

(ll)

"Permitted
Lock-Up Agreement" means an agreement (the "Lock-Up Agreement") between a
Person and one or more holders of Voting Shares (each a "Locked-Up Person")
(the terms of which are publicly disclosed and a copy of which is made available
to the public (including the Corporation) not later than the date the Lock-Up
Bid (as defined below) is publicly announced or, if the Lock-Up Bid has been
made prior to the date on which such Lock-Up Agreement is entered into, not
later than the date of such Lock-Up Agreement (or, if such date is not a
Business Day, on the Business Day next following such date)), pursuant to which
such Locked-Up Person agrees to deposit or tender Voting Shares held by such
holder to a Take-Over Bid (the "Lock-Up Bid") made or to be made by such
Person, any of such Person's Affiliates or Associates or any other Person with
which, and in respect of which security, such Person is acting jointly or in
concert; providedthat:

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(i)

the
Lock-Up Agreement permits such Locked-Up Person to terminate its obligation to
deposit or tender to or not to withdraw Voting Shares from the Lock-Up Bid in
order to deposit or tender such securities to another Take-Over Bid or support
another transaction where:

(A)

the
price or value per Voting Share offered under such other Take-Over Bid or
transaction exceeds the price or value per Voting Share offered under the
Lock-Up Bid;

(B)

the
price or value per Voting Share offered under such other Take-Over Bid or
transaction exceeds by as much as or more than a specified amount (the "Specified
Amount") the price or value per Voting Share offered under the Lock-Up Bid, providedthat such Specified Amount is not greater than 7% of the price or value per
Voting Share offered under the Lock-Up Bid; or

(C)

the
number of Voting Shares to be purchased under such other Take-Over Bid or
transaction exceeds by as much as or more than a specified number (the "Specified
Number") the number of Voting Shares that the Offeror has offered to purchase
under the Lock-Up Bid at a price or value per Voting Share that is not less than
the price or value per Voting Share offered under the Lock-Up Bid, provided that
the Specified Number is not greater than 7% of the number of Voting Shares
offered under the Lock-Up Bid;

and
for greater certainty, such Lock-Up Agreement may contain a right of first
refusal or require a period of delay to give the Offeror under the Lock-Up Bid
an opportunity to match the higher price, value or number in such other
Take-Over Bid or transaction, or other similar limitation on a Locked-Up Person's
right to withdraw Voting Shares from the Lock-Up Agreement, so long as the
limitation does not preclude the exercise by the Locked-Up Person of the right
to withdraw Voting Shares in sufficient time to deposit or tender to the other
Take-Over Bid or support the other transaction; and

(ii)

no
"break-up" fees, "top-up" fees, penalties, expenses or other amounts
that exceed in the aggregate the greater of:

(A)

the
cash equivalent of 2.5% of the price or value payable under the Lock-Up Bid to a
Locked-Up Person; and

(B)

50%
of the amount by which the price or value payable under another Take-Over Bid or
other transaction to a Locked-Up Person exceeds the price or value of the
consideration that such Locked-Up Person would have received under the Lock-Up
Bid,

shall
be payable by a Locked-Up Person pursuant to the Lock-Up Agreement in the event
that the Locked-Up Bid is not successfully concluded or if any Locked-Up Person
fails to deposit or tender Voting Shares to the Lock-Up Bid or withdraws Voting
Shares previously deposited or tendered thereto in order to deposit or tender to
another Take-Over Bid or support another transaction.

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(mm)

"Person"
includes any individual, firm, partnership, syndicate, association, trust,
trustee, executor, administrator, legal personal representative, government,
governmental body or authority, corporation or other incorporated or
unincorporated organization.

(nn)

"Pro-Rata
Acquisition" means an acquisition by a Person of Voting Shares pursuant to:

(i)

a
Dividend Reinvestment Acquisition;

(ii)

a
stock dividend, stock split or other event in respect of securities of the
Corporation pursuant to which such Person becomes a Beneficial Owner of Voting
Shares on the same pro-rata basis as all other holders of securities;

(iii)

the
exercise by the Person of only those rights to purchase Voting Shares
distributed to that Person in the course of a distribution to all holders of
securities of the Corporation pursuant to a bona fide rights offering or
pursuant to a prospectus; or

(iv)

a
distribution to the public of Voting Shares, or securities convertible into or
exchangeable for Voting Shares (and the conversion or exchange of such
convertible or exchangeable securities), made pursuant to a prospectus or by way
of a private placement, provided that the Person does not thereby acquire a
greater percentage of such Voting Shares, or securities convertible into or
exchangeable for Voting Shares, so offered than the Person's percentage of
Voting Shares Beneficially Owned immediately prior to such acquisition.

(oo)

"Record
Time" means 11:01 a.m. (Vancouver time) on the Effective Date.

(pp)

"Redemption
Price" has the meaning ascribed thereto in Section 5.1(b).

(qq)

'Right"
means a right to purchase Common Shares on and subject to the terms and
conditions of this Agreement.

(rr)

"Rights
Agent" means Computershare Investor Services Inc. and any successor rights
agent hereunder.

(ss)

"Rights
Certificate" means a certificate representing Rights in substantially the form
of Schedule A attached hereto.

(tt)

"Rights
Register" shall have the meaning ascribed thereto in Section 2.6(a).

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(uu)

"Securities
Act of 1933" means the Securities Act of 1933 (United States of America), as
amended, and the rules and regulations thereunder, as now in effect or as the
same may from time to time be amended, re-enacted or replaced.

(vv)

"Securities
Act (Ontario)" means the Securities Act, R.S.O. 1990, c.S.5, as amended, and
the regulations thereunder, as now in effect or as the same may from time to
time be amended, re-enacted or replaced.

(ww)

"Separation
Time" means the close of business on the tenth Business Day after the earlier
of:

(i)

the
Share Acquisition Date, or such earlier or later time as may be determined by
the Board of Directors; and

(ii)

the
date of the commencement of or first public announcement of the intent of any
Person (other than the Corporation or any Subsidiary of the Corporation) to
commence a Take-Over Bid (other than a Permitted Bid or a Competing Permitted
Bid so long as such Takeover Bid continues to satisfy the requirements of the
Permitted Bid or Competing Permitted Bid), or such earlier or later time as may
be determined by the Board of Directors, provided that, if any Take-Over Bid
referred to in this clause (ii) expires, is cancelled, terminated or otherwise
withdrawn prior to the Separation Time, such Take-Over Bid shall be deemed, for
the purposes of this definition, never to have been made.

(xx)

"Share
Acquisition Date" means the first date of a public announcement (which, for
purposes of this definition, shall include, without limitation, a report filed
pursuant to Section 101 of the Securities Act (Ontario)) by the
Corporation or an Acquiring Person that a Person has become an Acquiring Person.

(yy)

"Subsidiary":
a corporation shall be deemed to be a subsidiary of another corporation if:

(i)

it
is controlled by:

(A)

that
other; or

(B)

that
other and one or more corporations, each of which is controlled by that other;
or

(C)

two
or more corporations, each of which is controlled by that other; or

(ii)

it
is a Subsidiary of a corporation that is that other's Subsidiary.

(zz)

"Take-Over
Bid" means an Offer to Acquire Voting Shares, or securities convertible into
Voting Shares if, assuming that the Voting Shares or convertible securities
subject to the Offer to Acquire are acquired and are Beneficially Owned at the
date of such Offer to Acquire by the Person making such Offer to Acquire, such
Voting Shares (including Voting Shares that may be acquired upon conversion of
securities, convertible into Voting Shares) together with the Offeror's
Securities, constitute in the aggregate 20% or more of the outstanding Voting
Shares at the date of the Offer to Acquire provided that such an Offer to
Acquire shall not be a Take-Over Bid where it is made by a person referred to in
subsections 1.1(a)(i) to and including 1.1(a)(v).

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(aaa)

"Trading
Day" means, when used with respect to any securities, a day on which the
principal Canadian stock exchange on which such securities are listed or
admitted to trading is open for the transaction of business or, if the
securities are not listed or admitted to trading on any Canadian stock exchange,
a Business Day.

(bbb)

"U.S.-Canadian
Exchange Rate" means, on any date:

(i)

if
on such date the Bank of Canada sets an average noon spot rate of exchange for
the conversion of one United States dollar into Canadian dollars, such rate; and

(ii)

in
any other case, the rate for such date for the conversion of one United States
dollar into Canadian dollars calculated in the manner determined by the Board of
Directors from time to time.

(ccc)

"U.S.
Dollar Equivalent" means, for any amount which is expressed in Canadian
dollars on any date, the United States dollar equivalent of such amount
determined by reference to the Canadian-U.S. Exchange Rate on such date.

(ddd)

"Voting
Shares" means the Common Shares and any other shares of the Corporation
entitled to vote generally and at all times for the election of directors of the
Corporation.

(eee)

"Voting
Share Reduction" means an acquisition or redemption by the Corporation of
outstanding Voting Shares which, by reducing the number of Voting Shares
outstanding, increases the percentage of Voting Shares Beneficially Owned by a
Person to 20% or more of the Voting Shares then outstanding.

1.2

Currency.
 All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada, unless otherwise specified.

1.3

Headings
and References.  The headings of the articles, sections and subsections
of this Agreement and the table of contents are inserted for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement. All references to articles, sections, subsections and paragraphs are
to articles, sections, subsections and paragraphs of this Agreement. The words
"hereto", "herein", "hereof", "hereunder", "this Agreement",
"the Rights Agreement" and similar expressions refer to this Agreement
including the schedule attached hereto as a whole, as the same may be amended,
modified or supplemented at any time or from time to time.

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1.4

Calculation
of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares.
 For purposes of this Agreement, the percentage of Voting Shares of any
class Beneficially Owned by any Person, will be and be deemed to be the product
(expressed as a percentage) determined by the formula:

100
x A/B

where:

A
=

the
number of votes for the election of all directors generally attaching to the
Voting Shares of the particular class Beneficially Owned by such Person; and

B
=

the
number of votes for the election of all directors generally attaching to all
outstanding Voting Shares of the particular class.

Where
any Person is deemed to Beneficially Own unissued Voting Shares such Voting
Shares will be deemed to be outstanding for the purpose of calculating the
percentage of Voting Shares of the particular class Beneficially Owned by such
Person.

1.5

Acting
Jointly or in Concert.  For the purposes of this Agreement, a Person is
acting jointly or in concert with every other Person who is a party to any
agreement, commitment or understanding, whether formal or informal and whether
or not in writing, with the first mentioned Person to acquire or Offer to
Acquire Voting Shares (other than customary agreements with and between
underwriters and/or members of banking groups and/or selling group members with
respect to a distribution of securities pursuant to a prospectus or by way of a
private placement and other than pursuant to pledges of securities in the
ordinary course of business).

1.6

Generally
Accepted Accounting Principles.  Wherever in this Agreement reference
is made to generally accepted accounting principles, such reference shall be
deemed to be the recommendations at the relevant time of the Canadian Institute
of Chartered Accountants, or any successor institute, applicable on a
consolidated basis (unless otherwise specifically provided herein to be
applicable on an unconsolidated basis) as of the date on which a calculation is
made or required to be made in accordance with generally accepted accounting
principles. Where the character or amount of any asset or liability or item of
revenue or expense is required to be determined, or any consolidation or other
accounting computation is required to be made for the purpose of this Agreement
or any document, such determination or calculation shall, to the extent
applicable and except as otherwise specified herein or as otherwise agreed in
writing by the parties, be made in accordance with generally accepted accounting
principles applied on a consistent basis.

ARTICLE
2
THE RIGHTS

2.1

Legend
on Common Share Certificates.  Certificates representing Common Shares
which are issued after May 4, 2006 but prior to the earlier of the Separation
Time and the Expiration Time, will also evidence one Right for each Common Share
represented thereby and shall have impressed, printed or written thereon or
otherwise affixed thereto the following legend:

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"Until
the Separation Time (as such term is defined in the Shareholder Rights Plan
Agreement referred to below), this certificate also evidences and entitles the
holder hereof to certain rights as set forth in the shareholder rights plan
agreement (the "Shareholder Rights Plan Agreement") dated as of November 14,
1996 as amended and restated as of May 4, 2006 between Eldorado Gold Corporation
(the "Corporation") and Computershare Investor Services Inc., as Rights
Agent, as may be amended, modified, supplemented or restated from time to time,
the terms of which are hereby incorporated herein by reference and a copy of
which is on file and may be inspected during normal business hours at the
principal executive office of the Corporation. Under certain circumstances as
set forth in the Shareholder Rights Plan Agreement, such Rights may be amended,
redeemed, may expire, may lapse, may become void (if, in certain circumstances,
they are "Beneficially Owned" by a person who is or becomes an "Acquiring
Person", as such terms are defined in the Shareholder Rights Plan Agreement,
or a transferee thereof) or may be evidenced by separate certificates and may no
longer be evidenced by this certificate. The Corporation will mail or arrange
for the mailing of a copy of the Shareholder Rights Plan Agreement to the holder
of this certificate without charge as soon as practicable after the receipt of a
written request therefor."

Certificates
representing Common Shares that are issued and outstanding at the Record Time
will also evidence one Right for each one Common Share evidenced thereby,
notwithstanding the absence of the foregoing legend, until the close of business
on the earlier of the Separation Time and the Expiration Time.
 Certificates representing Common Shares that are issued and outstanding
prior to May 5, 2006 shall be deemed to bear the above legend (which legend
shall replace any existing legend on such certificates) until the close of
business on the earlier of the Separation Time and the Expiration Time and the
holders of such certificates shall have the right to exchange their certificates
for replacement certificates bearing the above legend.

2.2

Initial
Exercise Price: Exercise of Rights; Detachment of Rights.

(a)

Exercise
Terms: Subject to adjustment as herein set forth, each Right will entitle
the holder thereof, from and after the Separation Time and prior to the
Expiration Time, to purchase one Common Share for the Exercise Price (and the
Exercise Price and number of Common Shares are subject to adjustment as set
forth below). Notwithstanding any other provision of this Agreement, any Rights
held by the Corporation or any of its Subsidiaries will be void.

(b)

No
Exercise Prior to Separation Time:  Until the Separation Time:

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-
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(i)

the
Rights will not be exercisable and no Right may be exercised; and

(ii)

each
Right shall be evidenced by the certificate for the associated Common Share
registered in the name of the holder thereof (which certificate shall also be
deemed to represent a Rights Certificate) and shall be transferable only
together with, and shall be transferred by a transfer of, such associated Common
Share.

(c)

Exercise
After Separation Time:  From and after the Separation Time and prior to
the Expiration Time:

(i)

the
Rights are exercisable; and

(ii)

the
registration and transfer of Rights will be separate from and independent of
Common Shares.

Promptly
following the Separation Time, the Corporation will prepare and the Rights Agent
will mail to each holder of record of Common Shares as of the Separation Time
(other than an Acquiring Person and, in respect of any Rights Beneficially Owned
by such Acquiring Person which are not held of record by such Acquiring Person,
the holder of such Rights (a "Nominee")) at such holder's address as shown
by the records of the Corporation (the Corporation hereby agreeing to furnish
copies of such records to the Rights Agent for this purpose):

(iii)

a
Rights Certificate appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Corporation may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as made be required to
comply with any law, rule or regulation or with any rule or regulation or any
self-regulatory organization, stock exchange or "system" on which the Rights
may from time to time be listed or traded, or to conform to usage; and

(iv)

a
disclosure statement describing the Rights;

provided
that a Nominee shall be sent the materials provided for in (iii) and (iv) in
respect of all Common Shares of the Corporation held of record by it which are
not Beneficially Owned by an Acquiring Person.

(d)

Manner
of Exercise:  Rights may be exercised, in whole or in part, on any
Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent:

(i)

the
Rights Certificate evidencing such Right;

(ii)

an
election to exercise such Rights (an "Election to Exercise") substantially
in the form attached to the Rights Certificate appropriately completed and
executed by the holder or his executors or administrators or other personal
representatives or his or their legal attorney duly appointed by instrument in
writing in form and executed in a manner satisfactory to the Rights Agent; and

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(iii)

payment
by certified cheque, banker's draft or money order payable to the order of the
Corporation (or by such other method of payment as may be acceptable to the
Corporation), of a sum equal to the Exercise Price multiplied by the number of
Rights being exercised and a sum sufficient to cover any transfer tax or charge
which may be payable in respect of any transfer involved and the transfer or
delivery of Rights Certificates or the issuance or delivery of certificates of
Common Shares in a name other than that of the holder of the Rights being
exercised.

(e)

Issue
of Common Shares: Upon receipt of a Rights Certificate, together with a
completed Election to Exercise executed in accordance with Subsection
2.2(d)(ii), which does not indicate that such Right is null and void as provided
by Subsection 3.1(b), and payment as set forth in Section 2.2(d)(iii), the
Rights Agent (unless otherwise instructed by the Corporation in the event that
the Corporation is of the opinion that the Rights cannot be exercised in
accordance with this Agreement) will thereupon promptly:

(i)

requisition
from the transfer agent certificates representing the number of Common Shares to
be purchased (the Corporation hereby irrevocably authorizing its transfer agent
to comply with all such requisitions);

(ii)

when
appropriate, requisition from the Corporation the amount of cash to be paid in
lieu of issuing fractional Common Shares;

(iii)

after
receipt of the Certificates referred to in Section 2.2(e)(i), deliver the same
to or upon the order of the registered holder of such Rights Certificates,
registered in such name or names as may be designated by such holder; and

(iv)

when
appropriate, after receipt, deliver the cash referred to in clause 2.2(e)(ii) to
or to the order of the registered holder of such Rights Certificate.

(f)

Partial
Exercise: In case the holder of any Rights shall exercise less than all of
the Rights evidenced by the Rights Certificate of such holder, a new Rights
Certificate evidencing the Rights remaining unexercised (subject to the
provisions of Subsection 5.5(a)) will be issued by the Rights Agent to such
holder or to such holder's authorized assigns.

(g)

Covenants:
The Corporation covenants and agrees to:

(i)

take
all such action as may be necessary on its part and within its powers to ensure
that all Common Shares delivered upon exercise of Rights shall, at the time of
delivery of the certificates evidencing such Common Shares (subject to payment
of the Exercise Price), be validly authorized, executed, issued and delivered
and be fully paid and non-assessable;

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(ii)

take
all such action as may be necessary and within its power to comply with any
applicable requirements of the Canada Business Corporations Act, the Securities
Act (Ontario), and the securities laws or comparable legislation of each of
the other provinces and territories of Canada, and any other applicable law,
rule or regulation thereof, in connection with the issue and delivery of the
Rights Certificates and the issuance of the Common Shares upon exercise of
Rights;

(iii)

use
reasonable efforts to cause all Common Shares issued upon exercise of Rights to
be listed upon the stock exchanges upon which the Common Shares were traded
immediately prior to the Share Acquisition Date;

(iv)

cause
to be reserved and kept available out of the authorized and unissued Common
Shares, the number of Common Shares that, as provided in this Agreement, will
from time to time be sufficient to permit the exercise in full of all
outstanding Rights;

(v)

pay
when due and payable, if applicable, any and all federal, provincial and
municipal transfer taxes and charges (not including any income or capital taxes
of the holder or exercising holder or any liability of the Corporation to
withhold tax) which may be payable in respect of the original issuance or
delivery of the Rights Certificates, or certificates for the Common Shares to be
issued upon exercise of any Rights, provided that the Corporation shall not be
required to pay any transfer tax or charge which may be payable in respect of
any transfer involved in the transfer or delivery of Rights Certificates or the
issuance or delivery of certificates for Common Shares in a name other than that
of the holder of the Rights being transferred or exercised; and

(vi)

after
the Separation Time, except as permitted by Section 5.1, not take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.

(h)

Authorized
Capital: If the number of Common Shares which are not issued or reserved for
issue is insufficient to permit the exercise in full of the Rights in accordance
with this Section 2.2, then each Right, when such Right is aggregated with a
sufficient number of Rights to acquire a whole number of Common Shares, will
entitle the holder thereof, after the Separation Time, to purchase that number
of Common Shares at the Exercise Price per Common Share equal to the quotient
determined by dividing the difference between the number of authorized Common
Shares and the number of Common Shares then issued or allotted or reserved for
issuance by the Corporation, by the number of Rights then outstanding.

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2.3

Adjustments
to Exercise Price; Number of Rights.  The Exercise Price, the number
and kind of securities subject to purchase upon exercise of each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 2.3.

(a)

Share
Reorganization: If the Corporation shall at any time after the date of this
Agreement:

(i)

declare
or pay a dividend on Common Shares payable in Common Shares (or other securities
exchangeable for or convertible into or giving a right to acquire Common Shares
or other securities of the Corporation) other than pursuant to any optional
stock dividend program;

(ii)

subdivide
or change the then outstanding Common Shares into a greater number of Common
Shares;

(iii)

consolidate
or change the then outstanding Common Shares into a smaller number of Common
Shares; or

(iv)

issue
any Common Shares (or other securities exchangeable for or convertible into or
giving a right to acquire Common Shares or other securities of the Corporation)
in respect of, in lieu of or in exchange for existing Common Shares except as
otherwise provided in this Section 2.3,

the
Exercise Price and the number of Rights outstanding, or, if the payment or
effective date therefor shall occur after the Separation Time, the securities
purchasable upon exercise of Rights shall be adjusted as of the payment or
effective date in the manner set forth below.

If
the Exercise Price and number of Rights outstanding are to be adjusted:

(i)

the
Exercise Price in effect after such adjustment will be equal to the Exercise
Price in effect immediately prior to such adjustment divided by the number of
Common Shares (or other capital stock) (the "Expansion Factor") that a
holder of one Common Share immediately prior to such dividend, subdivision,
change, consolidation or issuance would hold thereafter as a result thereof; and

(ii)

each
Right held prior to such adjustment will become that number of Rights equal to
the Expansion Factor,

and
the adjusted number of Rights will be deemed to be distributed among the Common
Shares with respect to which the original Rights were associated (if they remain
outstanding) and the shares issued in respect of such dividend, subdivision,
change, consolidation or issuance, so that each such Common Share (or other
capital stock) will have exactly one Right associated with it in effect
following the payment or effective date of the event referred to in Clause
2.3(a)(i), (ii), (iii) or (iv), as the case may be.

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For
greater certainty, if the securities purchasable upon exercise of Rights are to
be adjusted, the securities purchasable upon exercise of each Right after such
adjustment will be the securities that a holder of the securities purchasable
upon exercise of one Right immediately prior to such dividend, subdivision,
change, consolidation or issuance would hold thereafter as a result of such
dividend, subdivision, change, consolidation or issuance.

If,
after the Record Time and prior to the Expiration Time, the Corporation shall
issue any shares of capital stock other than Common Shares in a transaction of a
type described in Clause 2.3(a)(i) or (iv), shares of such capital stock shall
be treated herein as nearly equivalent to Common Shares as may be practicable
and appropriate under the circumstances and the Corporation and the Rights Agent
agree to amend this Agreement in order to effect such treatment.

In
the event the Corporation shall at any time after the Record Time and prior to
the Separation Time issue any Common Shares otherwise than in a transaction
referred to in this Subsection 2.3(a), each such Common Share so issued shall
automatically have one new Right associated with it, which Right shall be
evidenced by the certificate representing such associated Common Share.

(b)

Rights
Offering: If the Corporation shall at any time after the Record Time and
prior to the Separation Time fix a record date for the issuance of rights,
options or warrants to all holders of Common Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or
purchase Common Shares (or securities convertible into or exchangeable for or
carrying a right to purchase Common Shares) at a price per Common Share (or, if
a security convertible into or exchangeable for or carrying a right to purchase
or subscribe for Common Shares having a conversion, exchange or exercise price,
including the price required to be paid to purchase such convertible or
exchangeable security or right per share) less than the Market Price per Common
Share on such record date, the Exercise Price to be in effect after such record
date shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction:

(i)

the
numerator of which shall be the number of Common Shares outstanding on such
record date, plus the number of Common Shares that the aggregate offering price
of the total number of Common Shares so to be offered (and/or the aggregate
initial conversion, exchange or exercise price of the convertible or
exchangeable securities or rights so to be offered, including the price required
to be paid to purchase such convertible or exchangeable securities or rights)
would purchase at such Market Price per Common Share; and

(ii)

the
denominator of which shall be the number of Common Shares outstanding on such
record date, plus the number of additional Common Shares to be offered for
subscription or purchase (or into which the convertible or exchangeable
securities or rights so to be offered are initially convertible, exchangeable or
exercisable).

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In
case such subscription price may be paid by delivery of consideration, part or
all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of Rights. Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such rights, options or warrants are not so issued, or if issued, are
not exercised prior to the expiration thereof, the Exercise Price shall be
readjusted to the Exercise Price which would then be in effect if such record
date had not been fixed, or to the Exercise Price which would be in effect based
upon the number of Common Shares (or securities convertible into, or
exchangeable or exercisable for Common Shares) actually issued upon the exercise
of such rights, options or warrants, as the case may be.

For
purposes of this Agreement, the granting of the right to purchase Common Shares
(whether from treasury or otherwise) pursuant to the Dividend Reinvestment Plan
or any employee benefit stock option or similar plans shall be deemed not to
constitute an issue of rights, options or warrants by the Corporation; provided,
however, that, in all such cases, the right to purchase Common Shares is at a
price per share of not less than 95% of the current Market Price per share
(determined as provided in such plans) of the Common Shares.

(c)

Special
Distribution: If the Corporation shall at any time after the Record Time and
prior to the Separation Time fix a record date for the making of a distribution
to all holders of Common Shares (including any such distribution made in
connection with a merger or amalgamation) of evidences of indebtedness, cash
(other than an annual cash dividend or a dividend paid in Common Shares, but
including any dividend payable in securities other than Common Shares), assets
or rights, options or warrants (excluding those referred to in Subsection
2.3(b)), the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction:

(i)

the
numerator of which shall be the Market Price per Common Share on such record
date, less the fair market value (as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of
Rights), on a per share basis, of the portion of the cash, assets, evidences of
indebtedness, rights, options or warrants so to be distributed; and

(ii)

the
denominator of which shall be such Market Price per Common Share.

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Such
adjustments shall be made successively whenever such a record date is fixed, and
in the event that such a distribution is not so made, the Exercise Price shall
be adjusted to be the Exercise Price which would have been in effect if such
record date had not been fixed.

(d)

Minimum
Adjustments: Notwithstanding anything herein to the contrary, no adjustment
in the Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least one per cent in the Exercise Price; provided,
however, that any adjustments which by reason of this Subsection 2.3(d) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under Section 2.3 shall be made to the
nearest cent or to the nearest ten-thousandth of a share. Notwithstanding the
first sentence of this Subsection 2.3(d), any adjustment required by Section 2.3
shall be made no later than the earlier of:

(i)

three
years from the date of the transaction which gives rise to such adjustment; or

(ii)

the
Expiration Date.

(e)

Discretionary
Adjustment: If the Corporation shall at any time after the Record Time and
prior to the Separation Time:

(i)

issue
any shares of capital stock (other than Common Shares), or rights, options or
warrants to subscribe for or purchase any such capital stock, or securities
convertible into or exchangeable for any such capital stock, in a transaction
referred to in Clause 2.3(a)(i) or (iv), if the Board of Directors acting in
good faith determines that the adjustments contemplated by Subsections 2.3(a),
(b) and (c) in connection with such transaction will not appropriately protect
the interests of the holders of Rights, the Board of Directors may determine
what other adjustments to the Exercise Price, number of Rights and/or securities
purchasable upon exercise of Rights would be appropriate and, notwithstanding
Subsections 2.3(a), (b) and (c), such adjustments, rather than the adjustments
contemplated by Subsections 2.3(a), (b) and (c), shall be made. The Corporation
and the Rights Agent shall have authority without the approval of the holders of
the Common Shares or the holders of Rights to amend this Agreement as
appropriate to provide for such adjustments; or

(ii)

completes
a transaction referred to in Subsections 2.3(a), (b) or (c) and if the Board of
Directors acting in good faith determines that an adjustment to the Exercise
Price contemplated by such provisions in connection with such a transaction is
unnecessary due to the fact that the Exercise Price is based on a Market Price
that reflects the completion of such a transaction, then the Board of Directors
may determine that such an adjustment to the Exercise Price will not apply.

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(f)

Benefit
of Adjustments: Each Right originally issued by the Corporation subsequent
to any adjustment made to the Exercise Price hereunder shall evidence the right
to purchase, at the adjusted Exercise Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of a Right immediately
prior to such issue, all subject to further adjustment as provided herein.

(g)

No
Change of Certificates: Irrespective of any adjustment or change in the
Exercise Price or the number of Common Shares issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Exercise Price per Common Share and the number of Common Shares
which were expressed in the initial Rights Certificates issued hereunder.

(h)

Timing
of Issuance: In any case in which this Section 2.3 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Corporation may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of Common Shares and other securities of the Corporation, if any,
issuable upon such exercise over and above the number of Common Shares and other
securities of the Corporation, if any, issuable upon such exercise on the basis
of the Exercise Price in effect prior to such adjustment;

(i)

Adjustments
Regarding Tax: Notwithstanding anything contained in this Section 2.3 to the
contrary, the Corporation shall be entitled to make such reductions in the
Exercise Price, in addition to those adjustments expressly required by this
Section 2.3, as and to the extent that in their good faith judgment the Board of
Directors shall determine to be advisable, in order that any:

(i)

consolidation
or subdivision of Common Shares;

(ii)

issuance
(wholly or in part for cash) of Common Shares or securities that by their terms
are convertible into or exchangeable for Common Shares;

(iii)

stock
dividends; or

(iv)

issuance
of rights, options or warrants referred to in this Section 2.3,

hereafter
made by the Corporation to holders of its Common Shares, shall not be taxable to
such shareholders.

2.4

Date
on Which Exercise is Effective.  Each Person in whose name any
certificate for Common Shares or other securities, if applicable, is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares or other securities, if applicable,
represented thereon, and such certificate shall be dated the date upon which the
Rights Certificate evidencing such Rights was duly surrendered in accordance
with Subsection 2.2(d) (together with a duly completed Election to Exercise) and
payment of the Exercise Price for such Rights (and any applicable transfer taxes
and other governmental charges payable by the exercising holder hereunder) was
made; provided, however, that if the date of such surrender and payment is a
date upon which the transfer books of the Common Shares of the Corporation are
closed, such Person shall be deemed to have become the holder of record of such
Common Shares on, and such certificate shall be dated, the next succeeding
Business Day on which the transfer books of the Common Shares are open.

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2.5

Execution,
Authentication, Delivery and Dating of Rights Certificates.

(a)

Execution:
The Rights Certificates shall be executed on behalf of the Corporation, under
its corporate seal reproduced thereon, by any one of its Chairman, President,
Chief Executive Officer or a Vice-President or Secretary. The signature of any
of these officers on the Rights Certificates may be manual or facsimile.

(b)

Valid
Signatures: Rights Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Corporation shall
bind the Corporation, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature and delivery of such
Rights Certificates.

(c)

Delivery:
Promptly after the Corporation learns of the Separation Time, the Corporation
shall notify the Rights Agent of such Separation Time and shall deliver Rights
Certificates executed by the Corporation to the Rights Agent for
countersignature, and the Rights Agent shall countersign (manually or by
facsimile signature in a manner satisfactory to the Corporation) and send such
Rights Certificates to the holders of the Rights pursuant to Subsection 2.2(c)
hereof. No Rights Certificate shall be valid for any purpose until countersigned
by the Rights Agent in the manner described above.

(d)

Date:
 Each Rights Certificate shall be dated the date of countersignature
thereof.

2.6

Registration,
Transfer and Exchange.

(a)

Maintaining
of Register: The Corporation shall cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may
prescribe, the Corporation shall provide for the registration and transfer of
Rights. The Rights Agent is hereby appointed registrar for the Rights ("Rights
Registrar") for the purpose of maintaining the Rights Register for the
Corporation and registering Rights and transfers of Rights as herein provided
and the Rights Agent hereby accepts such appointment. If the Rights Agent shall
cease to be the Rights Registrar, the Rights Agent shall have the right to
examine such register at all reasonable times. After the Separation Time and
prior to the Expiration Time, upon surrender for registration of transfer or
exchange of any Rights Certificate, and subject to the provisions of Subsection
2.6(c) below, the Corporation shall execute, and the Rights Agent shall
countersign and deliver, in the name of the holder or the designated transferee
or transferees, as required pursuant to the holder's instructions, one or more
new Rights Certificates evidencing the same aggregate number of Rights as did
the Rights Certificate so surrendered.

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(b)

Effect
of Transfer or Exchange: All Rights issued upon any registration of a
transfer or exchange of Rights Certificates shall be valid obligations of the
Corporation, and such Rights shall be entitled to the same benefits under this
Agreement as the Rights surrendered upon such registration of transfer or
exchange.

(c)

Transfer
or Exchange of Rights: Every Rights certificate surrendered for registration
of transfer or exchange shall have the form of assignment thereon completed and
executed, or be accompanied by a written instrument of transfer in form
satisfactory to the Corporation or the Rights Agent, as the case may be,
executed by the holder thereof or the attorney of such holder duly authorized in
writing. As a condition to the issue of any new Rights Certificate under this
Section 2.6, the Corporation may require the payment of an amount sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and other expenses, including the reasonable fees and expenses of its
Rights Agent, connected therewith.

(d)

No
Transfer or Exchange After Termination: The Corporation shall not be
required to register the transfer or exchange of any Rights after the Rights
have been terminated hereunder.

2.7

Mutilated,
Destroyed, Lost and Stolen Rights Certificates.

(a)

Mutilation:
If there shall be delivered to the Corporation and the Rights Agent prior to the
Expiration Time, evidence to their satisfaction of the mutilation or defacing of
any Rights Certificate, the Corporation shall execute and the Rights Agent shall
countersign and deliver a new Rights Certificate upon surrender and cancellation
of the mutilated or defaced Rights Certificate.

(b)

Destruction,
Loss: If there shall be delivered to the Corporation and the Rights Agent
prior to the Expiration Time:

(i)

evidence
to their satisfaction of the destruction, loss or theft of any Rights
Certificate; and

(ii)

such
security or indemnity as may be required by them to save each of them and their
respective agents harmless, then, in the absence of notice to the Corporation or
the Rights Agent that such Rights Certificate has been acquired by a bona fide
purchaser, the Corporation shall execute and the Rights Agent shall countersign
and deliver, in lieu of any such destroyed, lost or stolen Rights Certificate, a
new Rights Certificate evidencing the same number of Rights as did the Rights
Certificate so destroyed, lost or stolen.

(c)

Taxes:
As a condition to the issue of any new Rights Certificate under this Section
2.7, the Corporation may require the payment of an amount sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses, including the reasonable fees and expenses of the Rights
Agent, connected therewith.

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(d)

Original
Obligation: Every new Rights Certificate issued pursuant to this Section 2.7
in lieu of any mutilated, destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the Corporation,
whether or not the mutilated, destroyed, lost or stolen Rights Certificate shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Agreement equally and proportionately with any and all other Rights
issued hereunder.

2.8

Persons
Deemed Owners.  The Corporation, the Rights Agent and any agent of the
Corporation or the Rights Agent may deem and treat the person in whose name such
Rights Certificate (or, prior to the Separation Time, the associated Common
Share certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever. As used in this Agreement, unless
the context otherwise requires, the term "holder" of any Right shall mean
the registered holder of such Right (or, prior to the Separation Time of the
associated Common Share).

2.9

Delivery
and Cancellation of Certificates.  All Rights Certificates surrendered
upon exercise or for redemption, registration of transfer or exchange shall, if
surrendered to any person other than the Rights Agent, be delivered to the
Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent.
The Corporation may at any time deliver to the Rights Agent for cancellation any
Rights Certificates previously countersigned and delivered hereunder which the
Corporation may have acquired in any manner whatsoever, and all Rights
Certificates so delivered shall be promptly cancelled by the Rights Agent. No
Rights Certificates shall be countersigned in lieu of or in exchange for any
Rights Certificates cancelled as provided in this Section 2.9, except as
expressly permitted by this Agreement. The Rights Agent shall destroy all
cancelled Rights Certificates and deliver a certificate of destruction to the
Corporation.

2.10

Agreement
of Rights Holders.  Every holder of Rights by accepting the same
consents and agrees with the Corporation and the Rights Agent and with every
other holder of Rights that:

(a)

such
holder is bound by and subject to the provisions of this Agreement, as amended
from time to time in accordance with the terms hereof, in respect of all Rights
held;

(b)

prior
to the Separation Time, each Right shall be transferable only together with, and
shall be transferred by a transfer of, the associated Common Share certificate
representing such Right;

(c)

after
the Separation Time, the Rights Certificates shall be transferable only on the
Rights Register as provided herein;

(d)

prior
to due presentment of a Rights Certificate (or, prior to the Separation Time,
the certificate evidencing the associated Common Shares) for registration of
transfer, the Corporation, the Rights Agent and any agent of the Corporation or
the Rights Agent may deem and treat the Person in whose name the Rights
Certificate (or, prior to the Separation Time, the certificate evidencing the
associated Common Shares) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on such Rights Certificate or the certificate evidencing the associated Common
Shares made by anyone other than the Corporation or the Rights Agent) for all
purposes whatsoever, and neither the Corporation nor the Rights Agent shall be
affected by any notice to the contrary;

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(e)

such
holder has waived all rights to receive any fractional Right or any fractional
Common Share or other securities upon exercise of a Right (except as provided
herein); and

(f)

subject
to the provisions of Section 5.4, without the approval of any holder of Rights
or Voting Shares and upon the sole authority of the Board of Directors, acting
in good faith, this Agreement may be supplemented or amended from time to time
to cure any ambiguity or to correct or supplement any provision contained herein
which may be inconsistent with the intent of this Agreement or is otherwise
defective, as provided herein.

2.11

Rights
Certificate holder Not Deemed a Shareholder.  No holder, as such, of
any Rights or Rights Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose whatsoever the holder of any Common Share or any other
share or security of the Corporation which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed or deemed or confer upon the holder of
any Right or Rights Certificate, as such, any right, title, benefit or privilege
of a holder of Common Shares or any other shares or securities of the
Corporation or any right to vote at any meeting of shareholders of the
Corporation whether for the election of directors or otherwise or upon any
matter submitted to the holders of Common Shares or any other shares of the
Corporation at any meeting thereof, or to give or withhold consent to any action
of the Corporation, or to receive notice of any meeting or other action
affecting any holder of Common Shares or any other shares of the Corporation
except as expressly provided herein, or to receive dividends, distributions or
subscription rights, or otherwise, until the Rights or Rights evidenced by the
Rights Certificates shall have been duly exercised in accordance with the terms
and the provisions hereof.

ARTICLE
3
ADJUSTMENTS TO THE RIGHTS

3.1

Flip-in
Event.

(a)

Flip-In:
Subject to the provisions of Sections 3.2 and Section 5.1, if prior to the
Expiration Time a Flip-in Event shall occur, each Right shall constitute,
effective at the close of business on the tenth Trading Day after the Share
Acquisition Date, the right to purchase from the Corporation, upon exercise
thereof in accordance with the terms hereof, that number of Common Shares as
have an aggregate Market Price on the date of consummation or occurrence of such
Flip-in Event equal to twice the Exercise Price for an amount in cash equal to
the Exercise Price (such right to be appropriately adjusted in a manner
analogous to the applicable adjustment provided for in Section 2.3 hereof in the
event that, after such date of consummation or occurrence, an event of a type
analogous to any of the events described in Section 2.3 hereof shall have
occurred).

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(b)

Certain
Rights Void: Notwithstanding anything in this Agreement to the contrary,
upon the occurrence of any Flip-in Event, any Rights that are or were
Beneficially Owned on or after the earlier of the Separation Time and the Share
Acquisition Date by:

(i)

an
Acquiring Person or any Affiliate or Associate of an Acquiring Person or any
Person acting jointly or in concert with an Acquiring Person or any Affiliate or
Associate of an Acquiring Person; or

(ii)

a
transferee of Rights, directly or indirectly, of an Acquiring Person (or any
Affiliate or Associate of an Acquiring Person or any Person acting jointly or in
concert with an Acquiring Person or an Affiliate or Associate of an Acquiring
Person), where such transferee becomes a transferee concurrently with or
subsequent to the Acquiring Person becoming such in a transfer that the Board of
Directors has determined is part of a plan, arrangement or scheme of an
Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any
person acting jointly or in concert with an Acquiring Person or any Affiliate or
Associate of an Acquiring Person), that has the purpose or effect of avoiding
Section 3.1(b)(i),

shall
become null and void without any further action and any holder of such Rights,
including transferees, shall thereafter have no right to exercise such Rights
under any provision of this Agreement and further shall thereafter not have any
other rights whatsoever with respect to such Rights, whether under any provision
of this Agreement or otherwise.

(c)

Compliance
with Laws: From and after the Separation Time, the Corporation shall do all
acts and things as shall be necessary and within its power to ensure compliance
with the provisions of this Section 3.1, including without limitation, all such
acts and things that may be required to satisfy the requirements of the Securities
Act (Ontario) and the securities laws or comparable legislation of each of
the Provinces of Canada in respect of the issue of Common Shares on the exercise
of Rights in accordance with this Agreement.

(d)

Legend:
Any Rights Certificate that represents Rights Beneficially Owned by a Person
described in either Section 3.1(b)(i) or (ii) or transferred to any Nominee of
any such Person, and any Rights Certificate issued upon the transfer, exchange
or replacement of any other Rights Certificate referred to in this sentence
shall contain and be deemed to contain the following legend:

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"The
Rights represented by this Rights Certificate were issued to a Person who was an
Acquiring Person or an Affiliate or an Associate of an Acquiring Person (as such
terms are defined in the Shareholder Rights Plan Agreement) or a Person who was
acting jointly or in concert with an Acquiring Person or an Affiliate or
Associate of an Acquiring Person. This Rights Certificate and the Rights
represented hereby shall become void in the circumstances specified in
Subsection 3.1(b) of the Shareholder Rights Plan Agreement."

provided,
however, that the Rights Agent shall not be under any responsibility to
ascertain the existence of facts that would require the imposition of such
legend but shall be required to impose such legend only if instructed to do so
by the Corporation or if a holder fails to certify upon transfer or exchange in
the space provided on the Rights Certificate that such holder is not a Person
described in such legend.

ARTICLE
4
THE RIGHTS AGENT

4.1

General.

(a)

Appointment
of Rights Agent: The Corporation hereby appoints the Rights Agent to act as
agent for the Corporation and the holders of Rights in accordance with the terms
and conditions hereof and the Rights Agent hereby accepts such appointment. The
Corporation may from time to time appoint one or more Co-Rights Agents ("Co-Rights
Agents") as it may deem necessary or desirable. In such event, the respective
duties of the Rights Agent and any Co-Rights Agent shall be as the Corporation
may determine. The Corporation agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time on
demand of the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Corporation also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability or expense, incurred without negligence, bad faith or wilful
misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and performance of this
Agreement, including the costs and expenses of defending against any claim of
liability, which right to indemnification shall survive the termination of this
Agreement.

(b)

Protection
of Rights Agent: The Rights Agent shall be protected from, and shall incur
no liability for or in respect of, any action taken, suffered or omitted by it
in connection with its performance of this Agreement in reliance upon any
certificate for Common Shares, or any Rights Certificate, certificate for other
securities of the Corporation, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.

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4.2

Merger
or Amalgamation or Change of Name of Rights Agent.

(a)

Merger:
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or amalgamated with or into, or any corporation succeeding to the
shareholder services business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 4.4 hereof. In case
at the time such successor Rights Agent succeeds to the agency created by this
Agreement any of the Rights Certificates have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so countersigned,
and in case at that time any of the Rights Certificates have not been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent, and in all such cases such Rights Certificates
shall have the full force and effect provided in the Rights Certificates and in
this Agreement.

(b)

Change
of Name: In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned, and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.

4.3

Duties
of Rights Agent.  The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Corporation and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:

(a)

Legal
Counsel: The Rights Agent may consult with legal counsel (who may be legal
counsel for the Corporation), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted to be taken by it in good faith and in accordance with such opinion.

(b)

Satisfactory
Proof: Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter be proved
or established by the Corporation prior to taking or suffering any action or
omitting to take any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by a person
believed by the Rights Agent to be the Chairman, the President, the Chief
Executive Officer or any Vice-President and by the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Corporation and delivered to the Rights Agent and such certificate shall be
full authorization to the Rights Agent for any action taken, omitted or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.

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(c)

Bad
Faith: The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or wilful misconduct.

(d)

Recitals:
The Rights Agent shall not be liable for or by reason of any of the statements
of fact or recitals contained in this Agreement or in the certificates
representing Common Shares or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all such
statements and recitals are and will be deemed to have been made only by the
Corporation.

(e)

No
Responsibility: The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the authorization, execution and delivery hereof by the Rights Agent) or
in respect of the validity or execution of any certificate representing Common
Shares or Rights Certificate (except its countersignature thereof), nor will it
be responsible for any breach by the Corporation of any covenant or condition
contained in this Agreement or in any Rights Certificate, any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 2.11 or Subsection 3.2(b) hereof) or any adjustment required under the
provisions of Section 2.3 hereof or for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights after receipt of
the certificate contemplated by Section 2.3 hereof describing any such
adjustment) nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any Common
Shares to be issued pursuant to this Agreement or any Rights or as to whether
any Common Shares shall, when issued, be duly and validly authorized, executed,
issued and delivered and be fully paid and non-assessable.

(f)

Performance
By Corporation: The Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.

(g)

Persons
To Give Instructions: The Rights Agent is hereby authorized to rely upon and
directed to accept instructions with respect to the performance of its duties
hereunder from any person believed by the Rights Agent to be the Chairman, the
President, the Chief Executive Officer, any Vice-President, the Secretary, any
Assistant Secretary, the Chief Financial Officer, the Treasurer or any Assistant
Treasurer of the Corporation and to apply to such persons for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken, omitted or suffered by it in good faith in accordance with the
instructions of any such person.

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(h)

Ability
To Deal: The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in Common Shares, Rights or other
securities of the Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with or lend
money to the Corporation or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Corporation or for any other
legal entity.

(i)

No
Liability: The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Corporation resulting from any such act, omission,
default, neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.

4.4

Change
of Rights Agent.  The Rights Agent may resign and be discharged from
its duties under this Agreement upon 90 days' notice (or such lesser notice as
is acceptable to the Corporation) in writing delivered or mailed to the
Corporation and to the transfer agent of Common Shares by first class or
registered mail. The Corporation may remove the Rights Agent upon 60 days'
notice in writing, mailed or delivered to the Rights Agent and to the transfer
agent of Common Shares by first class or registered mail. If the Rights Agent
should resign or be removed or otherwise become incapable of acting, the
Corporation shall appoint a successor to the Rights Agent. If the Corporation
fails to make such appointment within a period of 60 days after such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit the Rights Certificate of such holder for
inspection by the Corporation), then the holder of any Rights may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; provided that the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Corporation shall file notice thereof in
writing with the predecessor Rights Agent and the transfer agent of the Common
Shares, and mail a notice thereof in writing to the holders of the Rights.
Failure to give any notice provided for in this Section 4.4, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.

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ARTICLE
5
MISCELLANEOUS

5.1

Redemption
and Waiver.

(a)

The
Board of Directors acting in good faith may, until the occurrence of a Flip-in
Event, upon prior written notice delivered to the Rights Agent, determine to
waive the application of Section 3.1 to such particular Flip-in Event (which for
greater certainty shall not include the circumstances described in Subsection
5.1(h)); provided that if the Board of Directors waives the application of
Section 3.1 to a particular Flip-in Event pursuant to this Subsection 5.1(a),
the Board of Directors shall be deemed to have waived the application of Section
3.1 to any other Flip-in Event which may arise in respect of any Take-Over Bid
then in effect or made prior to the public announcement of the completion or
termination of the transaction in respect of which the Board of Directors waived
the application of Section 3.1.

(b)

With
the prior consent of the holders of Voting Shares prior to the Separation Time
or Rights after the Separation Time obtained in accordance with Subsection
5.4(b) or (c), as applicable, the Board of Directors may, at any time prior to
the provisions of Section 3.1 becoming applicable as a result of the occurrence
of a Flip-in Event, elect to redeem all but not less than all of the outstanding
Rights at a redemption price of $0.0001 per Right appropriately adjusted in a
manner analogous to the applicable adjustment provided for in Section 2.3 if an
event of the type analogous to any of the events described in Section 2.3 shall
have occurred (such redemption price being herein referred to as the "Redemption
Price"). The redemption of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such conditions as the Board of
Directors may establish.

(c)

In
the event that prior to the occurrence of a Flip-in Event a Person acquires,
pursuant to a Permitted Bid or a Competing Permitted Bid, not less than 90% of
the outstanding Common Shares other than Common Shares Beneficially Owned at the
date of the Permitted Bid or the Competing Permitted Bid by such Person, then
the Board of Directors of the Corporation shall immediately upon the
consummation of such acquisition without further formality be deemed to have
elected to redeem the Rights at the Redemption Price.

(d)

Where
a Take-Over Bid that is not a Permitted Bid Acquisition is withdrawn or
otherwise terminated after the Separation Time has occurred and prior to the
occurrence of a Flip-in Event, the Board of Directors may elect to redeem all
the outstanding Rights at the Redemption Price.

(e)

If
the Board of Directors is deemed under Subsection 5.1(c) to have elected, or
elects under either of Subsection 5.1(b) or (d), to redeem the Rights, the right
to exercise the Rights will thereupon, without further action and without
notice, terminate and the only right thereafter of the holders of Rights shall
be to receive the Redemption Price.

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(f)

Within
10 days after the Board of Directors is deemed under Subsection 5.1(c) to have
elected, or elects under Subsection 5.1(b) or (d), to redeem the Rights, the
Corporation shall give notice of redemption to the holders of the then
outstanding Rights by mailing such notice to each such holder at his last
address as it appears upon the registry books of the Rights Agent or, prior to
the Separation Time, on the registry books of the transfer agent for the Voting
Shares. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made.

(g)

Upon
the Rights being redeemed pursuant to Subsection 5.1(d), all the provisions of
this Agreement shall continue to apply as if the Separation Time had not
occurred and Rights Certificates representing the number of Rights held by each
holder of record of Common Shares as of the Separation Time had not been mailed
to each such holder and for all purposes of this Agreement the Separation Time
shall be deemed not to have occurred.

(h)

The
Board of Directors may waive the application of Section 3.1 in respect of the
occurrence of any Flip-in Event if the Board of Directors has determined within
ten Trading Days following a Share Acquisition Date that a Person became an
Acquiring Person by inadvertence and without any intention to become, or
knowledge that it would become, an Acquiring Person under this Agreement and, in
the event that such a waiver is granted by the Board of Directors, such Share
Acquisition Date shall be deemed not to have occurred. Any such waiver pursuant
to this Subsection 5.1(h) must be on the condition that such Person, within 14
days after the foregoing determination by the Board of Directors or such earlier
or later date as the Board of Directors may determine (the "Disposition Date"),
has reduced its Beneficial Ownership of Voting Shares such that the Person is no
longer an Acquiring Person. If the Person remains an Acquiring Person at the
close of business on the Disposition Date, the Disposition Date shall be deemed
to be the date of occurrence of a further Share Acquisition Date and Section 3.1
shall apply thereto.

5.2

Expiration.
 No Person shall have any rights pursuant to this Agreement or any Right
after the Expiration Time, except as provided in Section 4.1 hereof.

5.3

Issue
of New Rights Certificates.  Notwithstanding any of the provisions of
this Agreement or of the Rights to the contrary, the Corporation may, at its
option, issue new Rights Certificates evidencing Rights in such form as may be
approved by the Board of Directors to reflect any adjustment or change in the
number or kind of securities purchasable upon exercise of Rights made in
accordance with the provisions of this Agreement.

5.4

Supplements
and Amendments.

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-
39 -



(a)

The
Corporation may make amendments to this Agreement to correct any clerical or
typographical error or which are required to maintain the validity of this
Agreement as a result of any change in any applicable legislation or regulations
thereunder.  Notwithstanding anything in this Section 5.4 to the contrary,
no such amendment shall be made to the provisions of Article 4 except with the
written concurrence of the Rights Agent to such amendment.

(b)

Subject
to Section 5.4(a), the Corporation may, with the prior consent of the holders of
Voting Shares obtained as set forth below, at any time prior to the Separation
Time, amend, restate, vary or rescind any of the provisions of this Agreement
and the Rights (whether or not such action would materially adversely affect the
interests of the holders of Rights generally). Such consent shall be deemed to
have been given if the action requiring such approval is authorized by the
affirmative vote of a majority of the votes cast by Independent Shareholders
present or represented at and entitled to be voted at a meeting of the holders
of Voting Shares duly called and held in compliance with applicable laws and the
articles and by-laws of the Corporation.

(c)

The
Corporation may, with the prior consent of the holders of Rights, at any time on
or after the Share Acquisition Date, vary or delete any of the provisions of
this Agreement and the Rights (whether or not such action would materially
adversely affect the interests of the holders of Rights generally), provided
that no such amendment, variation or deletion shall be made to the provisions of
Article 4 except with the written concurrence of the Rights Agent thereto. Such
consent shall be deemed to have been given if such amendment, variation or
deletion is authorized by the affirmative votes of the holders of Rights present
or represented at and entitled to be voted at a meeting of the holders and
representing 50% plus one of the votes cast in respect thereof.

(d)

Any
approval of the holders of Rights shall be deemed to have been given if the
action requiring such approval is authorized by the affirmative votes of the
holders of Rights present or represented at and entitled to be voted at a
meeting of the holders of Rights and representing a majority of the votes cast
in respect thereof. For the purposes hereof, each outstanding Right (other than
Rights which are void pursuant to the provisions hereof) shall be entitled to
one vote, and the procedures for the calling, holding and conduct of the meeting
shall be those, as nearly as may be, which are provided in the Corporation's
by-laws and the Canada Business Corporations Act with respect to meetings
of shareholders of the Corporation.

(e)

Any
amendments made by the Corporation to this Agreement pursuant to Subsection
5.4(a) which are required to maintain the validity of this Agreement as a result
of any change in any applicable legislation or regulation thereunder shall:

(i)

if
made before the Separation Time, be submitted to the shareholders of the
Corporation at the next meeting of shareholders and the shareholders may, by the
majority referred to in Subsection 5.4(b), confirm or reject such amendment;

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40 -



(ii)

if
made after the Separation Time, be submitted to the holders of Rights at a
meeting to be called for on a date not later than immediately following the next
meeting of shareholders of the Corporation and the holders of Rights may, by
resolution passed by the majority referred to in Subsection 5.4(c), confirm or
reject such amendment.

Any
such amendment shall be effective from the date of the resolution of the Board
of Directors adopting such amendment, until it is confirmed or rejected or until
it ceases to be effective (as described in the next sentence) and, where such
amendment is confirmed, it continues in effect in the form so confirmed. If such
amendment is rejected by the shareholders or the holders of Rights or is not
submitted to the shareholders or holders of Rights as required, then such
amendment shall cease to be effective from and after the termination of the
meeting at which it was rejected or to which it should have been but was not
submitted or from and after the date of the meeting of holders of Rights that
should have been but was not held, and no subsequent resolution of the Board of
Directors to amend this Agreement to substantially the same effect shall be
effective until confirmed by the shareholders or holders of Rights as the case
may be.

5.5

Fractional
Rights and Fractional Common Shares.

(a)

No
Fractional Rights: The Corporation shall not be required to issue fractions
of Rights or to distribute Right Certificates which evidence fractional Rights.
After the Separation Time, in lieu of issuing fractional Rights the Corporation
shall pay to the holders of record of the Right Certificates, at the time such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the Market Price of one whole Right that the fraction of a
Right that would otherwise be issuable is of one whole Right.

(b)

No
Fractional Common Shares: The Corporation shall not be required to issue
fractions of Common Shares upon exercise of the Rights or to distribute
certificates which evidence fractional Common Shares. In lieu of issuing
fractional Common Shares, the Corporation shall pay to the holders of record of
Right Certificates at the time such Rights are exercised as herein provided, an
amount in cash equal to the same fraction of the Market Price of one Common
Share that the fraction of a Common Share that would otherwise be issuable upon
the exercise of such Right is of a whole Common Share.

5.6

Rights
of Action.  Subject to the terms of this Agreement, rights of action in
respect of this Agreement, other than rights of action vested solely in the
Rights Agent, are vested in the respective holders of the Rights, and any holder
of any Rights, without the consent of the Rights Agent or of the holder of any
other Rights may, on such holder's own behalf and for such holder's own
benefit and the benefit of other holders of Rights, enforce, and may institute
and maintain any suit, action or proceeding against the Corporation to enforce,
or otherwise act in respect of, such holder's right to exercise the Rights of
such holder in the manner provided in the Rights Certificate of such holder and
in this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and shall be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.

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5.7

Regulatory
Approvals.  Any obligation of the Corporation or action or event
contemplated by this Agreement shall be subject to the receipt of any requisite
approval or consent from any governmental or regulatory authority, and without
limiting the generality of the foregoing, necessary approvals of the Toronto
Stock Exchange and other exchanges will be obtained, such as to the issuance of
Common Shares upon the exercise of Rights under Section 2.2(d).

5.8

Declaration
as to Non-Canadian holders.  If in the opinion of the Board of
Directors (who may rely upon the advice of counsel) any action or event
contemplated by this Agreement would require compliance by the Corporation with
the securities laws or comparable legislation of a jurisdiction outside Canada,
the Board of Directors acting in good faith shall take such actions as it may
deem appropriate to ensure such compliance. In no event shall the Corporation or
the Rights Agent be required to issue or deliver Rights, or securities issuable
on exercise of Rights to Persons who are citizens, residents or nationals of any
jurisdiction other than Canada, in which such issue or delivery would be
unlawful without registration of the relevant Persons or securities for such
purposes.

5.9

Notices.

(a)

Notices
or demands authorized or required by this Agreement to be given or made by the
Rights Agent or by the holder of any Rights to or on the Corporation shall be
sufficiently given or made if delivered, sent by registered or certified mail,
postage prepaid (until another address is filed in writing with the Rights
Agent), or sent by facsimile or other form of recorded electronic communication,
charges prepaid and confirmed in writing, as follows:

Eldorado
Gold Corporation
1188 - 550 Burrard Street
Bentall 5
Vancouver, B.C.
V6C 2B5

Attention:
Corporate Secretary
Telecopy No.: (604) 687-4026

With
a copy to:

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42 -



Fasken
Martineau DuMoulin LLP
Barristers and Solicitors
Suite 2100, 1075 West Georgia Street
Vancouver, B.C.
V6E 3G2

Attention:
Josh Lewis
Telecopy No.: (604) 631-3232

(b)

Notices
or demands authorized or required by this Agreement to be given or made by the
Corporation or by the holder of any Rights to or on the Rights Agent shall be
sufficiently given or made if delivered, sent by registered or certified mail,
postage prepaid (until another address is filed in writing with the
Corporation), or sent by facsimile or other form of recorded electronic
communication, charges prepaid and confirmed in writing, as follows:

Computershare
Investor Services Inc.
4th Floor, 510 Burrard Street
Vancouver, B.C.
V6C 3B9

Attention:
General Manager, Client Services
Telecopy No.: (604) 661-9401

(c)

Notices
or demands authorized or required by this Agreement to be given or made by the
Corporation or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first class mail, postage
prepaid, addressed to such holder as it appears upon the register of the Rights
Agent or, prior to the Separation Time, on the register of the Corporation for
its Common Shares. Any notice which is mailed or sent in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.

(d)

Any
notice given or made in accordance with this Section 5.9 shall be deemed to have
been given and to have been received on the day of delivery, if so delivered, on
the third Business Day (excluding each day during which there exists any general
interruption of postal service due to strike, lockout or other cause) following
the mailing thereof, if so mailed, and on the day of telegraphing, telecopying
or sending of the same by other means of recorded electronic communication
(provided such sending is during the normal business hours of the addressee on a
Business Day and if not, on the first Business Day thereafter). Each of the
Corporation and the Rights Agent may from time to time change its address for
notice to the other given in the manner aforesaid.

5.10

Costs
of Enforcement.  The Corporation agrees that if the Corporation or any
other Person the securities of which are purchasable upon exercise of Rights
fails to fulfil any of its obligations pursuant to this Agreement, then the
Corporation or such Person shall reimburse the holder of any Rights for the
costs and expenses (including legal fees) incurred by such holder in actions to
enforce his rights pursuant to any Rights or this Agreement.

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5.11

Successors.
 All of the covenants and provisions of this Agreement by or for the
benefit of the Corporation or the Rights Agent shall bind their respective
successors and assigns and shall enure to the benefit of their respective
successors and permitted assigns hereunder.

5.12

Benefits
of this Agreement.  Nothing in this Agreement shall be construed to
give to any Person other than the Corporation, the Rights Agent and the holders
of Rights any legal or equitable right, remedy or claim under this Agreement and
this Agreement shall be for the sole and exclusive benefit of the Corporation,
the Rights Agent and the holders of Rights.

5.13

Governing
Law.  This Agreement and each Right issued hereunder shall be deemed to
be a contract made under the laws of British Columbia and for all purposes shall
be governed by and construed in accordance with such laws.

5.14

Severability.
 If any term or provision hereof or the application thereof in any
circumstance shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision in circumstances other than
those as to which it is held invalid or unenforceable.

5.15

Effective
Date.  This Agreement, as amended and restated, is effective in
accordance with its terms from May 4, 2006.  Subject to reconfirmation
pursuant to Section 5.16, this Agreement and any then outstanding Rights shall
terminate and be of no further force and effect from the earlier of (a) the time
of termination of the Corporation's 2012 annual meeting of holders; and (b)
December 31, 2012.

5.16

Reconfirmation.
 The Corporation shall request the reconfirmation of this Agreement at a
meeting of holders of Voting Shares to be held no later than the date on which
the annual meeting of holders of Voting Shares to be held in the year 2009
terminates.  If the Agreement is not reconfirmed at such meeting by a
majority of the votes cast by holders of Voting Shares who vote in respect of
the reconfirmation of this Agreement, this Agreement and all outstanding Rights
shall terminate and be void and of no further force and effect on and from the
close of business on that date which is the earlier of the date of termination
of the meeting called to consider the reconfirmation of this Agreement under
this Section and the date of termination of the annual meeting of holders of
Voting Shares to be held in the year 2009; provided, that termination shall not
occur if a Flip-in Event has occurred (other than a Flip-in Event which has been
waived pursuant to Section 5.1(a) or (h) hereof) prior to the date upon which
this Agreement would otherwise terminate pursuant to this Section 5.16.

5.17

Determinations
and Actions by the Board of Directors.  The Board of Directors of the
Corporation shall have the exclusive power and authority to administer and amend
this Agreement and to exercise all rights and powers specifically granted to the
Board of Directors or the Corporation, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (a) interpret the provisions of this Agreement and (b) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to terminate or redeem or not to terminate
or redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of the balance of
this sentence, all omissions with respect to the foregoing) which are done or
made by the Board of Directors shall be final, conclusive and binding on the
Corporation, the Rights Agent, the holders of Rights and all other parties and
shall not subject the Board of Directors to any liability to the holders of
Rights.

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-
44 -



5.18

Counterparts.
 This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute one and the same instrument.

IN
WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed.



| |  |                                 |        | 
| |  | ------------------------------- | ------ | 
| |  | ELDORADO GOLD
      CORPORATION
| |  |                                 | Per:   | 
| |  |                                 | Name:  | 
| |  |                                 | Title: | 



| |  |                                            |        | 
| |  | ------------------------------------------ | ------ | 
| |  | COMPUTERSHARE
      INVESTOR SERVICES INC.
| |  |                                            | Per:   | 
| |  |                                            | Name:  | 
| |  |                                            | Title: | 











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- 45 -



SCHEDULE
A TO THE SHAREHOLDER RIGHTS PLAN AGREEMENT DATED AS OF NOVEMBER 14, 1996, AS
AMENDED AND RESTATED AS OF MAY 4, 2006 BETWEEN ELDORADO GOLD CORPORATION AND
COMPUTERSHARE INVESTOR SERVICES INC.

[Form
of Rights Certificate]

Certificate
No.

___________

____________
Rights

THE
RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION OF ELDORADO GOLD CORPORATION, ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR CERTAIN
TRANSFEREES THEREOF ARE VOID.

Rights
Certificate

This
certifies that ______________________, or registered assigns, is the holder of
record of the number of Rights set forth above, each one of which entitles the
holder of record thereof, subject to the terms, provisions and conditions of the
Shareholder Rights Plan Agreement (the "Shareholder Rights Agreement"),
dated as of November 14, 1996 as amended and restated as of May 4, 2006 between
Eldorado Gold Corporation (the "Corporation"), a corporation amalgamated
under the Canada Business Corporations Act, and Computershare Investor
Services Inc., as Rights Agent, as may be amended, modified, supplemented or
restated from time to time, to purchase from the Corporation at any time after
the Separation Time and prior to the Expiration Time (as such terms are defined
in the Shareholder Rights Agreement), one common share of the Corporation (a "Common
Share") (subject to adjustment as provided in the Shareholder Rights
Agreement) at the Exercise Price referred to below upon presentation and
surrender of this Rights Certificate with a completed and executed Form of
Election to Exercise at the principal office of the Rights Agent in Vancouver,
Canada.  The Exercise Price shall initially be an amount equal to two times
the Market Price (as defined in the Shareholder Rights Agreement) and shall be
subject to adjustment in certain events.

This
Rights Certificate is subject to all of the terms, provisions and conditions of
the Shareholder Rights Agreement which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Rights Agent, the
Corporation and the holders of the Rights Certificates.  In the event that
there are any inconsistencies between the terms of this Rights Certificate and
the terms of the Shareholder Rights Agreement, the terms of the Shareholder
Rights Agreement shall govern.  A copy of the Shareholder Rights Agreement
is on file at the principal executive office of the Corporation and is available
upon written request.

This
Rights Certificate, with or without other Rights Certificates, upon surrender at
the offices of the Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of like tenor and date
evidencing the aggregate number of Rights equal to the aggregate number of
Rights evidenced by the Rights Certificate or Rights Certificates so
surrendered. If this Rights Certificate shall be exercised in part, the holder
of record shall be entitled to receive, upon surrender hereof, another Rights
Certificate or Rights Certificates for the number of whole Rights not exercised.

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-
46 -



Subject
to the provision of the Shareholder Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Corporation at a redemption price of
$0.000l per Right, subject to adjustment in certain events, under certain
circumstances at the option of the Corporation.

Subject
to the provisions of the Shareholder Rights Agreement, the Rights evidenced by
this Certificate may be terminated or amended by the Corporation at its option
without the consent of holders of Rights.

No
fractional Common Shares will be issued upon the exercise of any Right or Rights
evidenced hereby nor will Rights Certificates be issued for less than one whole
Right. After the Separation Time, in lieu of issuing fractional Rights a cash
payment will be made as provided in the Shareholder Rights Agreement.

No
holder of this Rights Certificate, as such, shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of Common Shares or of any
other securities which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Shareholder Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to shareholders of the Corporation at any
meeting, to give or withhold consent to any corporate action, to receive notice
of meetings or other actions affecting shareholders of the Corporation (except
as provided in the Shareholder Rights Agreement), to receive dividends or
subscription rights or otherwise, until the Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Shareholder Rights
Agreement.

This
Rights Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Rights Agent.

WITNESS
the facsimile signature of the proper officers of the Corporation.

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| |  |                                 |        | 
| |  | ------------------------------- | ------ | 
| |  | ELDORADO GOLD
      CORPORATION
| |  |                                 | Per:   | 
| |  |                                 | Name:  | 
| |  |                                 | Title: | 

Countersigned:

|                                           | 
|------------------------------------------ | 
|COMPUTERSHARE
      INVESTOR SERVICES INC.
|Per:                                       | 
|Name:                                      | 
|Title:                                     | 















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- 48 -



[Form
of Reverse Side of Rights Certificate]

FORM
OF ASSIGNMENT

(To
be executed by the holder of record if such
holder desires to transfer the Rights.)

FOR
VALUE RECEIVED _____________________________________________ hereby sells,
assigns and transfers unto
________________________________________________________

______________________________________________________________________________

(Please
print name and address of transferee)

this
Rights Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ______________________________ as
attorney, to transfer the within Rights Certificate on the books of the
Corporation with full power of substitution.

Dated:
_____________________

Signature
Guaranteed:

__________________________________________________

Signature

(Signature
must correspond to name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.)

Signatures
must be guaranteed by a member firm of a recognized stock exchange in Canada or
a Canadian chartered bank or trust company.

CERTIFICATION
(To be completed if true)

The
undersigned hereby represents, warrants and certifies, for the benefit of all
holders of Rights and Common Shares, that the Rights evidenced by this Rights
Certificate are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any Person acting jointly or in concert with an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Shareholder Rights Plan Agreement).

Signature
Guaranteed:

__________________________________________________

Signature



---

-
49 -

NOTICE

In
the event the certification set forth above is not completed in connection with
a purported assignment, the Corporation will deem the Beneficial Owner of the
Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or any Person acting jointly or in
concert with an Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as defined in the Shareholder Rights Plan Agreement) and accordingly
will deem the Rights evidenced by this Rights Certificate to be void and not
transferable or exercisable.



FORM
OF ELECTION TO EXERCISE

(To
be executed if the holder desires to exercise the Rights Certificate)

TO:

________________

The
undersigned hereby irrevocably elects to exercise ___________________ whole
Rights represented by the attached Rights Certificate to purchase the Common
Shares issuable upon the exercise of such Rights and requests that certificates
for such Common Shares be issued in the name of:



Address:





Social
Insurance or Other Taxpayer Identification Number:
______________________________

If
such number of Rights shall not be all the whole Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such whole Rights shall
be registered in the name of and delivered to:



Address:





Social
Insurance or Other Taxpayer Identification Number:
______________________________

Dated:
_____________________

---

-
50 -



Signature
Guaranteed:

__________________________________________________

Signature

(Signature
must correspond to name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.)

Signatures
must be guaranteed by a member firm of a recognized stock exchange in Canada or
a Canadian chartered bank or trust company.

CERTIFICATION

(To
be completed if true)

The
undersigned hereby represents, warrants and certifies for the benefit of all
holders of Rights and Common Shares, that the Rights evidenced by this Right
Certificate are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any Person acting jointly or in concert with an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Shareholder Rights Agreement).

Signature
Guaranteed:

__________________________________________________

Signature

NOTICE

In
the event the certification set forth above is not completed in connection with
a purported assignment, the Corporation will deem the Beneficial Owner of the
Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or any Person acting jointly or in
concert with an Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as defined in the Shareholder Rights Agreement) and accordingly will
deem the Rights evidenced by this Rights Certificate to be void and not
transferable or exercisable.











---



Eldorado
Gold





















Security
        
        Holder
        Account Number






Form
of Proxy - Annual General  Meeting to be held on May 4, 2006



This
Form of Proxy is solicited by and on behalf of Management.



Notes to
proxy

1.
  Every holder has the right to appoint some other person of their
choice, who need not be a holder, to attend and act on their behalf at the
meeting. If you wish to appoint a person other than the persons whose names are
printed herein, please insert the name of your chosen proxyholder in the space
provided (see reverse).

2.
  If the securities are registered in the name of more than one owner
(for example, joint ownership, trustees, executors, etc.), then all those
registered should sign this proxy. If you are voting on behalf of a corporation
or another individual you may be required to provide documentation evidencing
your power to sign this proxy with signing capacity stated.

3.
  This proxy should be signed in the exact manner as the name appears
on the proxy.

4.
  If this proxy is not dated, it will be deemed to bear the date on
which it is mailed by Management to the holder.

5.
  The securities represented by this proxy will be voted as directed
by the holder, however, if such a direction is not made in respect of any
matter, this proxy will be voted as recommended

by
Management.

6.
  The securities represented by this proxy will be voted or withheld
from voting, in accordance with the instructions of the holder, on any ballot
that may be called for and, if the holder has specified a choice with respect to
any matter to be acted on, the securities will be voted accordingly.

7.
  This proxy confers discretionary authority in respect of amendments
to matters identified in the notice of meeting or other matters that may
properly come before the meeting.

8.  
This proxy should be read in conjunction with the accompanying documentation
provided by Management.



Proxies
submitted must be received by 3:00 pm, Pacific Time, on May 2, 2006





VOTE USING
THE TELEPHONE OR INTERNET 24 HOURS A DAY 7 DAYS A WEEK!





1-866-732-VOTE (8683) Toll Free



If you vote
by telephone or the Internet, DO NOT mail back this proxy.



Voting
by mailmay be the only method for securities held in the name of a
corporation or securities being voted on behalf of another individual.

Voting
by mail or by Internetare the only methods by which a holder may appoint a
person as proxyholder other than the Management nominees named on the reverse of
this proxy. Instead of mailing this proxy, you may choose one of the two voting
methods outlined above to vote this proxy.



To
vote by telephone or the Internet, you will need to provide your CONTROL NUMBER,
HOLDER ACCOUNT NUMBER and ACCESS NUMBER listed below.



CONTROL
NUMBER
                                       HOLDER
ACCOUNT NUMBER
                                            ACCESS
NUMBER



---



Appointment
        of Proxyholder
        The
        undersigned shareholder of Eldorado Gold Corporation (the
        "Company") hereby appoints:   Paul N. Wright,
        President and Chief Executive Officer of the Company, or failing this
        person, Earl W. Price, Chief Financial Officer of the Company.
      OR
      Print
        the name of the person you are appointing if this person is someone
        other than the Management Nominees listed herein.




as
my/our proxyholder with full power of substitution and to vote in accordance
with the following direction (or if no directions have been given, as the
proxyholder sees fit) and all other matters that may properly come before the
Annual General Meeting of Eldorado Gold Corporation to be held at The Teminal
City Club, 837 West Hastings Street, Vancouver, British Columbia on May 4, 2006
at 3:00 PM (Pacific Time) and at any adjournment thereof.



VOTING
RECOMMENDATIONS ARE INDICATED BY HIGHLIGHTED
TEXT  OVER THE BOXES.



|For |  | Withhold
|--- |  | --------
|    |  |         

1. Fix Number
of Directors

To
fix the number of Directors at seven (7).



2.
Election of Directors



For
      
      Withhold
      
      
      
      For
      
      Withhold
      
      
      
      For
      
      Withhold
      
      
      
      For
      
      Withhold01.
        John
      
      
      
      
      
      02.
        K. Ross Cory
      
      
      
      
      
      03. Robert
      
      
      
      
      
      04.
        Wayne05. Hugh Morris
      
      
      
      
      
      06. Donald Shumka
      
      
      
      
      
      07. Paul3.
        Appointment of Auditors
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      For
      
      Withhold4.
        Fix Auditors' Remuneration
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      For
      
      WithholdAuthorize
        the Directors to fix the remuneration to be to paid to the auditors of
        the Company.5.
        Pass Ordinary Resolution
      
      
      
      
      
      
      
      
      
      
      
      
      
      For
      
      WithholdTo consider and if
        thought appropriate, to pass an Ordinary Resolution approving the
        adoption of amendments to the Shareholder Rights Plan.6.
        Transact Other Business
      
      
      
      
      
      
      
      
      
      
      
      
      
      For
      
      WithholdTo
        transact such other business as may properly come before the meeting or
        any adjournment or adjournments therof.






Authorized
        Signature(s) - This section must be completed for your instructions to
        be executed.
      Signature(s)I/We
        authorize you to act in accordance with my/our instructions set out
        above. I/We hereby revoke any proxy previously given with respect to the
        Meeting. If no voting instructions are indicated above, this Proxy
        will be voted as recommended by Management.
      
      MM 
        / DD /  YY






|Interim
      Financial Statements                                                                                                                 |  | Annual Report
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------
|Mark
      this box if you would like to receive interim financial statements and
      accompanying Management's Discussion and Analysis by mail. |  |              



|If
      you are not mailing back your proxy, you may register online to receive
      the above financial report(s) by mail at www.computershare.com/mailinglist.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------

















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EXHIBIT 99.1



CERTIFICATE OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



---

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Eldorado Gold Corporation (the Company) on Form 40-F for the period ended December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Paul N. Wright, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



March 23, 2006

Paul N. Wright

Paul N. Wright

Chief Executive Officer



A signed original of this written statement required by Section 906 has been provided to Eldorado Gold Corporation and will be retained by Eldorado Gold Corporation and furnished to the Securities and Exchange Commission or its staff upon request.



---



EXHIBIT 99.2

CERTIFICATE OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



---

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Annual Report of Eldorado Gold Corporation (the Company) on Form 40-F for the period ended December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Earl W. Price, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



March 23, 2006

Earl W. Price

Earl W. Price

Chief Financial Officer



A signed original of this written statement required by Section 906 has been provided to Eldorado Gold Corporation and will be retained by Eldorado Gold Corporation and furnished to the Securities and Exchange Commission or its staff upon request.





---





EXHIBIT 99.3

CERTIFICATE OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002





---





CERTIFICATIONS PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Paul N. Wright, certify that:

I have reviewed this annual report on Form 40-F of Eldorado Gold Corporation;

1.

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

2.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this annual report;

3.

The issuers other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the issuer and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the issuers disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the issuers internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuers internal control over financial reporting; and

5.

The issuers other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuers auditors and the audit committee of the issuers board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuers ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuers internal control over financial reporting.



|                     |  |     |  |                                                         
|-------------------- |  | --- |  | --------------------------------------------------------
|                     |  |     |  |                                                         
|Date: March 23, 2006 |  | By: |  | Paul N. Wright

Paul N. Wright
Chief Executive Officer





---





EXHIBIT 99.4

CERTIFICATE OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002





---





CERTIFICATIONS PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Earl W. Price, certify that:

I have reviewed this annual report on Form 40-F of Eldorado Gold Corporation;

1.

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

2.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this annual report;

3.

The issuers other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the issuer and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the issuers disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the issuers internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuers internal control over financial reporting; and

5.

The issuers other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuers auditors and the audit committee of the issuers board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuers ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuers internal control over financial reporting.



|                     |  |     |  |                                                       
|-------------------- |  | --- |  | ------------------------------------------------------
|                     |  |     |  |                                                       
|Date: March 23, 2006 |  | By: |  | Earl W. Price

Earl W. Price
Chief Financial Officer









---





EXHIBIT 99.5

CONSENT OF PRICEWATERHOUSECOOPERS LLP







---







CONSENT OF INDEPENDENT ACCOUNTANTS











We hereby consent to the incorporation by reference in this Annual Report on Form 40-F of Eldorado Gold Corporation of our report dated March 3, 2006 relating to the consolidated financial statements for the years ended December 31, 2005 and 2004, which appears in the Annual Report.



PricewaterhouseCoopers LLP





Chartered Accountants

Vancouver, BC, Canada

March 3, 2006







---





EXHIBIT 99.6

CONSENT OF SERGIO MARTINS, M.Sc.









---





CONSENT OF

Sergio Martins, MSc

Director of Exploration& Geology

Sao Bento Mineracao S.A.





To the Board of Directors of Eldorado Gold Corporation



I consent to the incorporation by reference in this annual report on Form 40-F of March 23, 2006

for the year ended December 31, 2005, of the description of the reports which were prepared under my direct supervision, the description of certain mineral reserves of the São Bento Mine as at December 31, 2005; the information that forms the summary of the reports and of certain mineral resource estimates and other information pertaining to the Sao Bento Mine and to the use of my name in this annual report as a named expert.





Dated as of the 23rd day of March, 2006





Sergio Martins



Sergio Martins

Director Exploration& Geology

Sao Bento Mineracao, S.A.









---









EXHIBIT
99.7

CONSENT OF
GARY GIROUX, B.A. Sc. (Geo. Eng.)









---









EXHIBIT
99.8

CONSENT OF
WATTS GRIFFS & McOUAT







---









EXHIBIT
99.9

CONSENT OF NORMAN S. PITCHER, P.Geo.







---





CONSENT OF

Norman S. Pitcher, P.Geo.

Chief Operating Officer

Eldorado Gold Corporation





To the Board of Directors of Eldorado Gold Corporation



I consent to the incorporation by reference in this annual report on Form 40-F of March 23, 2006

for the year ended December 31, 2005, of the description of the reports which were prepared under my direct supervision, the description of certain mineral reserves of the São Bento Mine as at December 31, 2005; the information that forms the summary of the reports and of certain mineral resource estimates and other information pertaining to the Sao Bento Mine and to the use of my name in this annual report as a named expert.





Dated as of the 23rd day of March, 2006





Norman Pitcher



Norman S. Pitcher

Chief Operating Officer

Eldorado Gold Corporation









---





EXHIBIT
99.10

CONSENT OF
JOHN EDWARD HEARNE, B. Sc. (Min) Maus1MM









---







EXHIBIT
99.11

CONSENT OF
HARRY WARRIES, M. Sc.









---









EXHIBIT
99.12

CONSENT OF STEPHEN JURAS, P.Geo.









---









EXHIBIT
99.13

CONSENT OF MICON INTERNATIONAL











---





EXHIBIT
99.14

CONSENT OF
HATCH & ASSOCIATES







---





EXHIBIT
99.15

CONSENT OF RSG GLOBAL