VANCOUVER, British Columbia, Feb. 20, 2020 (GLOBE NEWSWIRE) -- Eldorado Gold Corporation, (“Eldorado” or “the Company”) today reports the Company’s financial and operational results for the fourth quarter and year ended December 31, 2019. For further information please see the Company’s Consolidated Financial Statements and Management’s Discussion and Analysis filed on SEDAR at www.sedar.com under the Company’s profile.
Year-End Financial and Operating Results Overview
? 2019 Production on plan, highest total production in three years: Annual gold production of 395,331 ounces of gold (2018: 349,147 ounces), including pre-commercial production.
? Steady operating costs: Cash operating costs were $608 per ounce of gold sold for 2019 and All-in Sustaining Costs (AISC) were $1,034 per ounce of gold sold, compared to $625 per ounce of gold sold and $994 per ounce of gold sold for 2018.
? 2020 production guidance increased year-on-year: 2020 guidance is 520,000-550,000 ounces of gold, an increase over the 390,000-420,000 ounces of gold forecast for 2019.
? Kisladag mine life extended to 15 years: Results from the ongoing testwork indicate that extended leach cycles and the addition of a high pressure grinding roll circuit should increase the expected recovery at Kisladag to approximately 56%, resulting in the mine life at Kisladag now projected through 2034 at an average production of 160,000 ounces of gold per year. Further details on Kisladag are included in Eldorado’s February 20, 2020 press release.
? Successful first year of operations at Lamaque: Eldorado declared commercial production at Lamaque on March 31, 2019. Lamaque produced 113,940 ounces of gold (including pre-commercial production) in 2019. Recent drilling results at Triangle and Ormaque will be incorporated into the mine plan by the Company as it evaluates its next steps in expanding production at Lamaque.
? Refinancing completed: In June 2019 the Company completed its offering of $300 million aggregate principal amount of 9.5% senior second lien notes due 2024 (the "Notes") and its $450 million amended and restated senior secured credit facility (the "Facility"). Eldorado used the net proceeds from the sale of the Notes and $200 million in term loan proceeds drawn under the Facility, together with $100 million cash on hand, to redeem its outstanding $600 million 6.125% senior notes due December 2020.
? Permits for Skouries and Olympias received: Permits allow for, among other things, installation of electrical and mechanical equipment at Skouries and Olympias, the installation of the Skouries mill building, and consent from the Central Archaeological Council to relocate an ancient mining furnace from the Skouries open pit area.
? Significant increased cash flow provided from operations: Net cash provided by operating activities was $165.8 million in 2019 (2018: $67.5 million).
? Net earnings attributable to shareholders: 2019 net earnings attributable to shareholders of the Company were $80.6 million or $0.51 per share, mainly attributable to net impairment reversals of $96.9 million ($79.9 million net of deferred income tax) for Kisladag and Vila Nova. Net loss attributable to shareholders of the Company was $361.9 million or $2.28 loss per share in 2018, mainly attributable to impairment charges of $447.8 million ($328.4 million net of deferred income tax), of which $117.6 million ($94.1 million net of deferred income tax) related to Kisladag. Adjusted net earnings attributable to shareholders of the Company in 2019 was $5.6 million, or $0.04 per share (2018: Adjusted net loss attributed to shareholders of the Company of $28.6 million, or $0.17 loss per share).
? Increased EBITDA: EBITDA for the year was $311.3 million ($361.8 million loss in 2018) and adjusted EBITDA for the year was $235.6 million ($99.6 million in 2018). Adjustments in both years included, among other things, removal of the non-cash impact of impairments and impairment reversals.
? Liquidity strengthened: The Company finished the year with approximately $366 million of liquidity including $181 million in cash, cash equivalents and term deposits and approximately $185 million available under the remaining $250 million of the Facility, with $65 million of the capacity on the Facility allocated to secure certain reclamation obligations in connection with its operations.
Fourth Quarter 2019 Highlights
? Increased production: Eldorado produced 118,955 ounces of gold in Q4, the highest quarterly gold production in nearly four years.
? Operating costs decreasing: Q4 2019 cash operating costs of $621 per ounce sold and all-in sustaining costs of $1,110 per ounce sold were lower than Q4 2018 ($626 per ounce sold and $1,200 per ounce sold, respectively, for 2018).
? Kisladag impairment reversal: As a result of the mine life extension and continuation of heap leaching, a net impairment reversal of $85.2 million ($68.2 million, net of deferred income tax) was recorded in Q4 2019.
? Net earnings attributable to shareholders: Q4 2019 net earnings attributable to shareholders of the Company was $91.2 million or $0.57 per share, mainly attributable to a net impairment reversal of $85.2 million ($68.2 million net of deferred income tax) for Kisladag. Net loss attributable to shareholders of the Company in Q4 2018 was $218.2 million or $1.38 loss per share. Adjusted net earnings attributable to shareholders of the Company in Q4 2019 was $20.3 million, or $0.13 per share (Q4 2018: adjusted net loss attributable to shareholders of the Company of $18.9 million, or $0.11 loss per share).
? Increased EBITDA: Q4 2019 EBITDA was $158.7 million ($327.9 million loss in Q4 2018) and Q4 2019 adjusted EBITDA was $80.3 million ($9.0 million in Q4 2018). Adjustments in both years included, among other things, removal of the non-cash impact of impairments and impairment reversals.
? Updated reserves: As of September 30, 2019, total proven and probable reserves of 384 million tonnes at 1.32 grams per tonne gold containing 16.4 million ounces were reported.
Eldorado's President and CEO, George Burns, said: “2019 was a pivotal year for the Company, as we achieved multiple, significant milestones. Production in the year was strong as we delivered our highest annual production in three years - over 394,000 ounces of gold - while maintaining steady discipline with operating costs. Importantly, in 2020 we expect production to grow again to between 520,000 and 550,000 ounces of gold. We are very pleased to have positive momentum behind our production profile and expect that the resulting increased cash flow will allow the Company to both invest in its growth opportunities and pay down its debt.”
"Other milestones achieved in the year include successfully putting Lamaque into commercial operation, completing the refinancing of our balance sheet, and clarifying a strong path forward for Kisladag as a core, producing asset. We also received long-awaited permits at Olympias and Skouries, as we continue engaging with the Greek government to set a path forward for Skouries, a world-class project that stands to create jobs, tax and export revenues, and economic opportunities for local communities. Together and individually, these achievements represent significant catalysts for Eldorado’s long-term, sustainable growth.”
Consolidated Financial and Operational Highlights
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AND
Eldorado Announces 15 Year Mine Life at Kisladag; Provides 2020 Guidance and Long-term Outlook
Feb 20, 2020
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VANCOUVER, British Columbia, Feb. 20, 2020 (GLOBE NEWSWIRE) -- Eldorado Gold Corporation, (“Eldorado” or the “Company”) is pleased to announce a 15-year mine life at Kisladag based on the completed long-cycle heap leach testwork and the replacement of the tertiary crushing circuit with a high-pressure grinding roll (“HPGR”) circuit. A National Instrument 43-101 compliant technical report detailing the updates to the Kisladag project will be filed on SEDAR prior to the end of Q1 2020.
The Company is also providing detailed production guidance for 2020, along with a five-year outlook for the Company’s business.
“Kisladag has been the cornerstone asset of Eldorado for over a decade, producing over three million ounces of gold and generating significant value for all stakeholders during that period. Following the resumption of full operations last spring, and the significant work and testing undertaken by the Eldorado team over the past 18 months, we are pleased to announce a mine life extension at Kisladag that puts this asset back in the core of our portfolio”, said George Burns, President and CEO.
“Based on these positive developments, we are providing a five-year outlook for the business, which demonstrates a steady production profile that we expect will allow us to continue to de-lever the balance sheet and provide a solid foundation for future growth.”
Kisladag Update
Results of the testwork indicate that increased leach time at Kisladag, in conjunction with HPGR, increases heap leach life of mine recovery to approximately 56% and extends mine life through 2034. A new mineral reserve has been developed for Kisladag; highlights include:
?Updated Proven and Probable Mineral Reserves of 173.2 million tonnes of ore at 0.72 grams per tonne, containing 4.0 million ounces of gold (table shown at the end of the release).
?15 year mine life, with operations continuing through 2034.
?Average annual production of approximately 160,000 ounces per year at an average cash cost of $675 – 725 per ounce of gold sold and an average all-in sustaining costs (“AISC”) of $800 – 850 per ounce of gold sold.
?The project self-funds all development capital for waste stripping and the HPGR circuit. The cost for the HPGR circuit (approximately $35 million) is spread over 2020 and 2021, while the cost of capitalized waste stripping (approximately $260 million) is spread over the life of the project, with heavier stripping in the first several years.
?The Company believes there is potential for further increases in recovery with optimization of the HPGR circuit, which could lead to higher gold production.
?An average strip ratio over the remaining life of the mine of 1.1 to 1.
Five-Year Outlook
The Company is providing detailed 2020 production and cost guidance as well as a five-year production outlook. Detailed tables are shown at the end of this release. The Company continues to remain focused on:
?Operating all our assets in a safe and responsible manner.
?Transforming Olympias into a stable and profitable mine through productivity, efficiency and cost reduction improvements as well as an expansion of mill capacity.
?Optimizing production at Lamaque in an efficient manner. The five-year outlook includes an increase in annual production to approximately 150,000 ounces.
?Reducing debt and maintaining gross debt to EBITDA below 2.0x.
?Prudently developing our suite of high-quality development projects.
For 2020, the Company is forecasting a third consecutive year of increasing gold production. 2020 gold production guidance is 520,000-550,000 ounces of gold (versus 395,331 ounces produced in 2019). The Company expects average cash operating costs to decline from $608 per ounce of gold sold in 2019, to $550-600 per ounce of gold sold in 2020. AISC for 2020 is forecast to be $850-$950 per ounce of gold sold, compared to $1,033 per ounce of gold sold in 2019.
With the extension of Kisladag’s mine life and continued operations at Lamaque, Efemcukuru and Olympias, Eldorado is forecasting five-year production from its four current operations to average over 450,000 ounces of gold per year. In addition to the updated Kisladag technical report, the Company is in the process of updating technical reports for Olympias and Efemcukuru, which will be published by the end of Q1 2020. These reports, whose effective dates will be December 31, 2019, will provide a timely update to the current Technical Reports by describing each asset's operations and long term production profile. In the case of Efemcukuru, this will result in a slight, non-material change to the existing mineral resources and reserves.
The Company remains on track to repay the $200 million Term Loan owing on its Senior Secured Credit Facility over the next three years. Eldorado will also look to reduce its cost of capital as market conditions allow.
Eldorado has several high quality development projects, which it will consider advancing in a prudent fashion. These projects have the potential to increase the Company’s production profile and cash flow. Skouries and Perama Hill, both in Greece, are currently on care and maintenance. The Company is working with the Greek government to advance these projects into construction. At Lamaque, the recent discovery of the Ormaque zone offers further upside potential, particularly given its proximity to the proposed decline from Triangle to the Sigma Mill. The Company has planned additional drilling at Ormaque in 2020 and will continue to study the long-term potential at this project.
Five-Year Operational Outlook
TURKEY
Kisladag
For 2020, approximately 12 million tonnes of new ore at an average grade of 1.0 grams per tonne is expected to be placed on the leach pad at Kisladag. Production is forecast to be 240,000-260,000 ounces of gold. Cash operating costs are estimated to be $450-550 per ounce of gold sold. Gold produced in 2020 is expected to come from ore stacked in 2019 as well as ore stacked in 2020, consistent with the longer leach cycle.
Sustaining capital expenditures for 2020 are forecast to be approximately $25-30 million, spent primarily on inter-lift liner, mobile equipment rebuilds and process infrastructure.
Growth capital of $70-80 million includes waste stripping, engineering and costs associated with the HPGR circuit.
As part of the increase to the mine life at Kisladag, waste stripping (capitalized and operating) is required and is expected to total approximately 193 million tonnes (LOM strip ratio of 1.1 to 1). Waste stripping is underway and is forecast to continue over the life of mine, the bulk of which will be completed from 2020-2025.
Efemcukuru
In 2020, Efemcukuru is expected to mine and process over 510,000 tonnes of ore at an average grade of 6.9 grams per tonne gold, producing 90,000-100,000 ounces of gold at cash operating costs of $650-700 per ounce of gold sold. Operating costs are forecast to be inline with 2019 actual operating costs.
The global market for concentrate has tightened recently, which has led to an increase in treatment charges. Efemcukuru is installing two flotation columns in 2020, which are expected to be operational by H2 2020. Concentrate grade and quality is expected to increase once these columns are operational, which is expected to decrease total concentrate treatment charges.
Sustaining capital expenditures for 2020 are forecast to be approximately $15-20 million, spent primarily on capitalized underground mine development, equipment rebuilds, column flotation and resource expansion drilling.
CANADA
Lamaque
In 2020, Lamaque is expected to mine and process over 615,000 tonnes of ore at an average grade of 7.0 grams per tonne gold. Production is expected to be 125,000-135,000 ounces of gold at cash operating costs of $575-625 per ounce of gold sold.
Sustaining capital expenditures for 2020 are forecast to be approximately $35-40 million, spent primarily on capitalized underground mine development and mine and process facilities.
Growth capital of $5-10 million includes equipment purchases and construction of a larger dome stockpile to replace the existing ore bins to support ramp-up of production.
Exploration drilling of nearly 50,000 metres is planned. This includes 29,000 metres of resource expansion drilling in the lower Triangle Deposit, 10,000 metres further exploration drilling at the new Ormaque zone and 10,000 metres testing other targets on the Lamaque property.
The recent exploration success at the Triangle deposit has provided the opportunity to review options for increasing throughput at the Sigma Mill, which has a current capacity of 2,200 tonnes per day. The Company is in the process of permitting Triangle beyond the current permit limit of 1,800 tonnes per day. Once permits are received, production at Triangle is expected to increase to 2,200 tonnes per day and gold production is expected to increase to approximately 150,000 ounces per year by 2022.
The Company continues to evaluate other growth options to optimize Lamaque, including the underground decline from the Triangle deposit to the Sigma Mill and options which would take advantage of this infrastructure, including development of the recently discovered Ormaque zone.
GREECE
Olympias
In 2020, Olympias is expected to mine 415,000 tonnes of ore at an average grade of 7.4 grams per tonne of gold, 104 grams per tonne of silver, 3% lead and 4% zinc. Payable production is expected to be 50,000-60,000 ounces of gold, 950,000-1,000,000 ounces of silver, 9,500-10,000 tonnes of lead metal and 12,000-12,500 tonnes of zinc metal. Cash operating costs, net of by-products, are expected to be $800-900 per ounce of gold sold.
Global market conditions for base metal concentrates tightened in the second half of 2019 and are expected to remain soft for 2020. This has led to an increase in treatment charges for the lead/silver and zinc concentrates produced at Olympias and an increase to cash operating costs of approximately $150 per ounce of gold.
Sustaining capital expenditures are expected to be $30-35 million on underground development, an infill diamond drill program, mobile machinery and equipment rebuilds. In addition, 8,000 metres of drilling are planned to test new exploration targets in the mine area.
Growth capital is expected to be $10-15 million for 2020, including underground maintenance facilities, underground development relating to supporting increased mine production, and work on an expanded substation.
The first two years of operations at Olympias have been challenging. Low rates of underground development and backfilling led to lower than forecast production and higher than forecast costs per ounce. A contractor was engaged in mid-2019 to focus on underground development and improvements have been made to the paste backfill system. Production rates have increased quarter over quarter and progress is expected to continue over the course of 2020 and into 2021.
The five-year outlook provided assumes that the Company proceeds with an expansion of Olympias to 650,000 tonnes per year. Further details of this expansion will be provided in the upcoming Olympias technical report.
Skouries
Costs for 2020 are forecast to be $15-20 million, including costs associated with maintaining the site as well as erecting the mill building, placing concrete, engineering, and permitting costs associated with dry-stack tailings.
Skouries will remain on care and maintenance until the Company has reached an agreement with the Greek government to establish the necessary investment framework.
Stratoni
For 2020, Stratoni is expected to process 230,000 tonnes of ore at grades of 6% lead, 8% zinc and 157 grams per tonne silver. Capital expenditures at Stratoni are expected to be $5-10 million including mine mobile equipment purchases and overhauls, mine facility upgrades and upgrades to some of the process facilities.
10,000 m of resource expansion drilling is planned for the year.
Five-Year Gold Production Outlook
February 2020 Outlook
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