VANCOUVER, British Columbia, July 28, 2022 (GLOBE NEWSWIRE) -- Eldorado Gold Corporation (“Eldorado” or “the Company”) today reports the Company’s financial and operational results for the second quarter of 2022. For further information, please see the Company’s Consolidated Financial Statements and Management’s Discussion and Analysis ("MD&A") filed on SEDAR at www.sedar.com under the Company’s profile.
Second Quarter 2022 Highlights
Gold production: 113,462 ounces, an increase of 22% from Q1 2022 production, driven by strong production and mine development at Lamaque.
Gold sales: 107,631 ounces at an average realized gold price per ounce sold1 of $1,849.
Production costs: $109.3 million.
Cash operating costs 1 : $789 per ounce sold. Costs were primarily driven by lower gold production and an increase in the price of certain commodities and consumables required for safe operations, however the price increases were partly offset by the weakening of local currencies in which costs are incurred, particularly the Turkish Lira and Euro.
All-in sustaining costs ("AISC") 1 : $1,270 per ounce sold, driven by higher cash operating costs per ounce sold and sustaining capital expenditures.
Total capital expenditures: $83.2 million, including $32.3 million of sustaining capital1, primarily focused on underground development and construction at Lamaque. Growth capital1 of $26.4 million focused on waste stripping at Kisladag and construction of the first phase of the North leach pad to support the mine life extension. $9.1 million of capital expenditures spent at Skouries include advancing site access, completing building enclosures, and geotechnical and drilling activities.
Skouries growth capital: As a bridge to the completion of a financing package, an additional $30 to $40 million of growth capital will be allocated to the project. Total growth capital at Skouries is now expected to be $60 to $80 million in 2022.
2022 outlook: We expect production to be second-half weighted and maintain our 2022 production guidance of 460,000 to 490,000 ounces and are tracking toward the lower end of the range as a result of production challenges in Q1 2022. We are updating our 2022 guidance for consolidated cash operating costs1 to $700 to $750 per ounce sold, total cash costs1 to $790 to $840 per ounce sold and AISC1 to $1,180 to $1,280 per ounce sold.
Cash flow from operating activities before changes in working capital 1 : $48.3 million.
Cash, cash equivalents and term deposits: $370.0 million, as at June 30, 2022.
Earnings before interest, taxes, depreciation and amortization ("EBITDA"): $89.1 million.
Adjusted EBITDA 1 : $87.6 million.
Net loss: $22.7 million, or a loss of $0.12 per share.
Adjusted net earnings2 : $13.8 million net earnings, or $0.08 earnings per share. Adjusted net earnings removed a $23.3 million loss on foreign exchange due to translation of deferred tax balances, and a $14.4 million loss on the non-cash revaluation of the derivative related to redemption options in our debt.
Free cash flow2 : Negative $62.8 million, primarily due to lower gold production and sales, annual royalty payments and mine standby costs.
“We had a steady operational quarter, driven by solid production and higher grades at Lamaque and consistent operations at Efemcukuru," said George Burns, Eldorado's President and Chief Executive Officer. "Olympias saw meaningful improvements in the second quarter. At Kisladag, the team focused on increasing the tonnes placed on the pad, which sets up strong third quarter production. We remain confident in our ability to deliver consolidated production guidance of 460,000 to 490,000 ounces and expect to end the year in the lower end of the range," added Burns. "In addition, we revised our 2022 consolidated cost guidance to reflect lower than expected gold production in the first half of the year, continued inflationary pressures, and additional costs associated with the VAT import charge on Olympias gold concentrate shipments into China."
"Considerable progress was made at Skouries during the quarter, with activity focused on execution readiness and critical path activities in engineering, procurement and siteenabling works. We look forward to updating the market as we continue to work towards financing and Board approval for the restart of construction at Skouries," continued Burns.
"Additionally, during the quarter we published our 10th annual Sustainability Report. I'm proud of the global team for the progress we've made on our goals and initiatives. Specifically, we have exceeded gender parity on our Board, and demonstrated leadership in regard to local employment and procurement."
Consolidated Financial and Operational Highlights
3 months ended June 30, 6 months ended June 30,
Continuing operations (5) 2022 2021 2022 2021
Revenue $ 213.4 $ 233.2 $ 408.1 $ 457.8
Gold produced (oz) 113,462 116,066 206,671 227,808
Gold sold (oz) 107,631 114,140 202,103 227,734
Average realized gold price ($/oz sold) (2) $ 1,849 $ 1,840 $ 1,868 $ 1,786
Production costs 109.3 112.8 213.9 221.4
Cash operating costs ($/oz sold) (2,3) 789 645 810 643
Total cash costs ($/oz sold) (2,3) 879 746 908 716
All-in sustaining costs ($/oz sold) (2,3) 1,270 1,074 1,306 1,030
Net (loss) earnings for the period (1) (22.7 ) 31.0 (339.5 ) 45.4
Net (loss) earnings per share – basic ($/share) (1) (0.12 ) 0.17 (1.85 ) 0.25
Adjusted net earnings (loss) (1,2) 13.8 29.1 (5.1 ) 54.3
Adjusted net earnings (loss) per share ($/share) (1,2) 0.08 0.16 (0.03 ) 0.30
Net cash generated from operating activities (4) 26.9 49.0 62.2 148.1
Cash flow from operating activities before changes in working capital (2,4) 48.3 75.9 98.1 157.0
Free cash flow (2,4) (62.8 ) (23.7 ) (89.6 ) 9.7
Cash, cash equivalents and term deposits $ 370.0 $ 410.7 $ 370.0 $ 410.7
(1) Attributable to shareholders of the Company.
(2) These financial measures or ratios are non-IFRS financial measures or ratios. See the section 'Non-IFRS and Other Financial Measures and Ratios' in the Company's MD&A for explanations and discussion of these non-IFRS financial measures and ratios.
(3) Revenues from silver, lead and zinc sales are off-set against cash operating costs.
(4) 2021 amounts have been restated for a voluntary change in accounting policy to classify cash paid for interest on the statement of cash flows as a financing, rather than an operating activity.
(5) Amounts presented are from continuing operations only. The Brazil segment is presented as a discontinued operation in 2021. See Note 17 of our condensed consolidated interim financial statements for the three and six months ended June 30, 2022.
Total revenue was $213.4 million in Q2 2022, a decrease of 8% from $233.2 million in Q2 2021 and an increase of 10% from $194.7 million in Q1 2022. Total revenue was $408.1 million in the six months ended June 30, 2022, a decrease from $457.8 million in the six months ended June 30, 2021. The decreases in both three and six-month periods were due to lower sales volumes and were partially offset by higher average metal prices.
Production costs decreased to $109.3 million in Q2 2022 from $112.8 million in Q2 2021 and to $213.9 million in the six months ended June 30, 2022 from $221.4 million in the six months ended June 30, 2021. Decreases in both periods were primarily due to the suspension of operations at Stratoni at the end of 2021. Production costs at Stratoni totalled $13.7 million in Q2 2021 and $29.0 million in the six months ended June 30, 2021. These decreases were partly offset by increases in certain production costs in Q2 2022 as a result of supply concerns caused by financial and trade sanctions against Russia, and ongoing supply chain challenges due to COVID-19. Cost increases primarily impacted electricity at operations in Greece and Turkiye, and fuel and reagents at Kisladag.
Cash operating costs in Q2 2022 averaged $789 per ounce sold, an increase from $645 in Q2 2021, and cash operating costs per ounce sold averaged $810 in the six months ended June 30, 2022, an increase from $643 in the six months ended June 30, 2021. Increases in both three and six-month periods were primarily due to lower production, lower silver and base metal sales which reduce cash operating costs as by-product credits, and lower-grade ore mined and processed at Kisladag, resulting in fewer ounces produced and sold.
AISC per ounce sold averaged $1,270 in Q2 2022, an increase from $1,074 in Q2 2021, and AISC per ounce sold averaged $1,306 in the six months ended June 30, 2022, an increase from $1,030 in the six months ended June 30, 2021. Increases in both three and six-month periods primarily reflect the increases in cash operating costs per ounce sold, combined with higher sustaining capital expenditures.
We reported net loss attributable to shareholders from continuing operations of $22.7 million ($0.12 loss per share) in Q2 2022 compared to net earnings of $31.0 million ($0.17 per share) in Q2 2021 and net loss of $339.5 million ($1.85 loss per share) in the six months ended June 30, 2022 compared to net earnings of $45.4 million ($0.25 per share) in the six months ended June 30, 2021. The net loss in the six months ended June 30, 2022 was primarily due to the impairment of the Certej project, a non-core gold asset, the write-down of decommissioned equipment at Kisladag, lower sales volumes, higher mine standby costs and higher income tax expense.
Adjusted net earnings were $13.8 million ($0.08 per share) in Q2 2022 compared to $29.1 million ($0.16 per share) in Q2 2021. Adjusted net earnings in Q2 2022 removed a $23.3 million loss on foreign exchange due to translation of deferred tax balances, a $14.4 million loss on the non-cash revaluation of the derivative related to redemption options in our debt and included a $1.2 million partial reversal of Stratoni equipment write-downs.
Quarterly Operations Update
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