Eldorado Announces Decision to Resume Mining and Heap Leaching at Kisladag; Provides Consolidated 2019-2021 Outlook
1
NEWS RELEASE
TSX: ELD NYSE: EGO January 30, 2019
Eldorado Announces Decision to Resume Mining and Heap Leaching at Kisladag;
Provides Consolidated 2019-2021 Outlook
VANCOUVER, BC – Eldorado Gold Corporation, ( “Eldorado” or “the Company”) announces that the
Company will resume mining, crushing, stacking and heap leaching at its Kisladag gold mine in Turkey .
Advancement of the previously announced mill project has been suspended. The Company is also providing
three year consolidated production guidance, along with detailed cost guidance for 2019.
Eldorado’s President and CEO, George Burns, stated: “The Company remains focused on shareholder value
in its capital allocation decisions, taking into account the interests and expectations of all stakeholders. The
decision to restart mining and heap leaching at Kisladag is supported by improved heap leach recoveries
and confirmed by a revised heap leaching plan developed in early 2019 . The revised heap leaching plan
results in favourable economics when compared to millin g, without the risks associated with the
construction and financing of a $500 million project.”
“At Lamaque, we are very pleased with the p erformance of our project team who delivered the first gold
pour from the Sigma Mill in less than 18 months since acquisition. The Company continues to anticipate
commercial gold production during the first quarter of 2019 and expects total output, includ ing pre -
commercial production, in excess of 100,000 ounces for 2019.”
“Beyond completing remaining construction at Lamaque, Eldorado has no major capital projects underway
and will remain focused on existing operations in order to realize the full potential from these assets. With
annual gold production growing to over 500,000 ounces in 2020, the Company expects to generate
significant free cash flow over the next three years and will consider debt retirement starting later this
year.”
Kisladag Update
On October 23, 2017 , the Company provided an update on Kisladag opera tions based on laboratory test
work undertaken during the third quarter, which indicated that lower recoveries were expected from the
zone of mineralization located around the base of the open pit where mining was underway . Based on
available information, in the first quarter 2018, the Company elected to suspend mining in order to evaluate
processing options. Following a year of engineering and testwork, in October 2018 the Company announced
that the Board of Directors had approved the advancement of a mill project. Subsequent to that
announcement, gold recovery from the leach pad increasingly exceeded expectations. The Company then
focused testwork and analysis on the viability of resuming mining and heap leaching at Kisladag.
In parallel to mill engineering and analysis, testwork to extract maximum value from material already placed
on the heap leach pad and the remaining reserves was ongoing throughout 2018. Approximately 900,000
tonnes of ore were placed on an inter-lift lined test pad in the first quarter of 2018. Late in the year, results
from this pad were showing recoveries of approximately 58% from an extended leach cycle approaching
250 days (compared to approximately 40% recoveries from the original 90 day column tests). In early 2019,
the Company analyzed the new data and develop ed revised heap leaching plans which show improved
2
economics for the heap leaching scenario. As a result, the Company has decided to resume mining and heap
leaching.
The benefits of resuming mining and heap leaching are expected to include:
Improved economics of heap leaching when compared to the mill project, demonstrates an increase in
production and free cash flow over the next three years and a significant reduction in capital
development costs;
The flexibility to consider debt retirement and address balance sheet leverage in 2019;
Lower construction risks;
Lower financing risks, as mining and heap leaching will not require external funding;
The potential for higher heap leach recoveries and the ability to extend heap leach mine life by
conducting further metallurgical tests on deeper material in the pit under a longer leach cycle for both
the three year guidance and beyond.
Mining is expected to recommence by the end of the first quarter. The three year guidance is based on
mining and stacking an initial 22 million tonnes of ore grading over 1.1 grams per tonne gold during the next
three years, as well as continuing to leach the material currently on the pad.
While the mill project has been suspended, the project remains viable in the short-term. The viability of
the mill project will continue to be assessed in light of the results from ongoing heap leach metallurgical
testwork on deeper material and in view of other investment opportunities within the portfolio.
Production and Financial Guidance
Full year gold production of 390,000-420,000 ounces in 2019 (versus 349,147 ounces in 2018) is expected
from Kisladag, Lamaque, Efemcukuru, and Olympias, with higher consolidated production expected in the
second half of the year. The Company expects average cash operating costs to decline from $621 per ounce
of gold sold in 2018, to $550-600 per ounce of gold sold in 2019. The Company will focus on maximizing free
cash flow, including optimizing and improving unit costs and production at all assets and decreasing global
G&A expenses.
As mining and heap leaching at Kisladag ramp s up in 2019 , consolidated gold production is expected to
increase to 520,000-550,000 ounces of gold in 2020. Production is expected to decrease to 350,000-380,000
ounces of gold in 2021 . Guidance at Kisladag will be updated later in 2019 based on results of testwork
being completed on deeper material and prevailing economics around both heap leaching and the mill
project.
3
2019 – 2021 Gold Production and Consolidated Cost Guidance
Production (oz) 2018A 2019E 2020E 2021E
Kisladag 172,009 145,000 - 165,000 240,000 - 260,000 75,000 - 95,000
Lamaque 35,3501 100,000 - 110,0002 125,000 - 135,000 125,000 - 135,000
Efemcukuru 95,038 90,000 - 100,000 90,000 - 100,000 90,000 - 100,000
Olympias 46,750 50,000 - 55,000 55,000 - 65,000 55,000 - 65,000
Total 349,147 390,000 - 420,000 520,000 - 550,000 350,000 - 380,000
Consolidated Costs ($/oz sold) 2018A 2019E 2020E 2021E
Cash Operating Cost – C1 ($/oz sold) 621 550 - 600 500 - 600 600 - 700
Total Operating Cost – C2 ($/oz sold) 646 600 - 650 550 - 650 650 - 750
AISC ($/oz sold) 990 900 - 1,000 800 - 900 900 - 1,000
1 Pre-commercial production.
2 Includes ~10,000 ounces of pre-commercial production.
2019 Cost and Capital Expenditure Guidance
2018A 2019E 2018A 2019E
Kisladag Corporate ($ millions)
Cash Operating Cost – C1 ($/oz sold) 662 570 - 620 General and Administrative 47 302
Total Operating Cost – C2 ($/oz sold) 683 610 - 660 Exploration3 28 25 - 30
Non-cash Inventory Costs ($/oz sold) 308 n/a
Sustaining Capex ($ millions) 18 10 - 15 Growth Capital ($ millions)
Kisladag 20 0
Lamaque Olympias 24 10 - 15
Cash Operating Cost – C1 ($/oz sold) n/a 550 - 6001 Lamaque4 142 30 - 35
Total Operating Cost – C2 ($/oz sold) n/a 580 – 6301 Other Project Spending ($ millions)
Sustaining Capex ($ millions) n/a 35 - 45 Skouries 24 5 - 10
Stratoni 5 5 - 10
Efemcukuru Tocantinzinho 6 3 - 5
Cash Operating Cost – C1 ($/oz sold) 511 550 – 600 Certej 6 3 - 5
Total Operating Cost – C2 ($/oz sold) 540 600 - 650
Sustaining Capex ($ millions) 24 15 – 20
Olympias
Cash Operating Cost – C1 ($/oz sold) 730 550 - 650
Total Operating Cost – C2 ($/oz sold) 759 600 - 700
Sustaining Capital ($ millions) 12 20 - 25
1 Excludes 10,000 ounces of pre-commercial production.
2 Re-allocation of the Company’s general and administrative costs to better align with industry peer group practices, with the portion directly
supporting operations to be reported, going forward, as cash operating costs.
3 33% expensed and 67% capitalized.
4 Includes development costs and capitalized operating costs less proceeds from pre-commercial sales.
2019 Commodity and Currency
Price Assumptions
Gold ($/oz) $1,275
Silver ($/oz) $ 17
Lead ($/mt) $ 2,250
Zinc ($/mt) $ 2,500
C$/US$ 1.35:1
EURO$/US$ 1:1.20
US$/TRY 1:5.75
4
2019 Operational Outlook
TURKEY
Kisladag
For 2019, t he Company is forecasting production of 145,000-165,000 ounces of gold , including
approximately 70,000 ounces derived from ore previously placed on the leach pad. Approximately 9 million
tonnes of new ore at an average grade of 1.1 grams per tonne is planned to be placed on the pad in 2019.
Cash costs are estimated to be $570-620 per ounce of gold sold. Ore placed on the pad in 2019 is expected
to contribute to production commencing in the second half of 2019 and into 2020.
Sustaining capital expenditures for 2019 are forecast to be approximately $10-15 million, spent primarily
on capitalized waste stripping, equipment overhauls, some refurbishment work on the primary crusher and
various small capital projects.
Efemcukuru
Efemcukuru remains a steady performer for the seventh consecutive year. In 2019, Efemcukuru is expected
to mine and process over 510,000 tonnes of ore at an average grade of 7.0 grams per tonne gold, producing
90,000-100,000 ounces of gold at operating costs of $550-600 per ounce of gold sold.
Sustaining capital expenditures for 201 9 are forecast to be approximately $15-20 million, spent primarily
on capitalized underground mine development, equipment purchase and rebuilds, and various small capital
projects including in-stream analysis, water management upgrades and a dry-stack tailings dam expansion.
CANADA
Lamaque
Eldorado acquired the Lamaque project in July 2017. In the 18 months following the acquisition, Eldorado
filed a prefeasibility study (PFS) (see March 21, 2018 release), drilled over 150,000 meters , completed
14,000 meters of underground development and largely completed refurbishment of the existing Sigma
Mill, which began commissioning in November 2018. A total of 42,411 ounces were produced from a series
of toll milling campaigns in 2017/2018, and in December 2018 the first gold was poured from ore processed
in the Sigma Mill.
In 2019, Lamaque is expected to declare commercial production during the first quarter and is planning to
mine and process over 500,000 tonnes of ore at an average grade of 7.0 grams per tonne gold. Production
is expected to be 100,000-110,000 ounces of gold (including pre-commercial production), at cash operating
costs of $550-600 per ounce of gold sold.
Excluding proceeds from gold sales, total 2018/2019 capital spending is forecast to come in roughly 10 -
15% over the PFS estimate. The increase relates primarily to the purchase of certain pieces of mobile
equipment as opposed to leasing, additional costs associated with underground development, further work
on the existing tailings dam to increase storage capacity, offset by the deferral of construction of the Sigma
paste plant.
Total capital expenditures for 2019 (excluding proceeds from pre-commercial gold sales) are forecast to be
below the PFS estimate at approximately $80-90 million, including $35-45 million of sustaining capital.
5
37,000 metres of exploration drilling are planned to further expand resources in the lower part of the
Triangle Deposit, focusing on the 500 metre vertical interval between the C5 and C9 zones, and to test
additional targets in the project area. Resource conversion drilling planned from underground platforms
(31,200 metres) will target Inferred Resources in the lower part of the C4 Zone and the C5 Zone. The
Company expects to further evaluate and optimize the mine plan as we progress resource conversion,
particularly in the C5 ore body.
The recent exploration success at Lamaque has provided the opportunity to review options for increasing
throughput at the Sigma Mill. The mill has a refurbished nameplate capacity of 2,200 tonnes per day and
the potential to expand to its former capacity of 5,000 tonnes per day with a purchase and installation of a
SAG mill. Based on planned drilling and the potential conversion of Inferred Resources in C4, C5 and C6 ,
the Company expects to explore options to increase mill feed.
GREECE
Olympias
In 2019, Olympias is expected to mine and process 430,000 tonnes of ore at an average grade of 7.8 grams
per tonne of gold, 92 grams per tonne of silver, 3% lead and 4% zinc. Production is expected to be 50,000-
55,000 ounces of gold, 850,000-900,000 ounces of silver, 8,750-9,250 tonnes of lead and 12,000-12,500
tonnes of zinc. Cash operating costs net of by-products are expected to be $550-650 per ounce of gold sold.
Global market conditions for gold pyrite con centrate softened in late 2018 , resulting in the C ompany
budgeting lower payabilities for material sold in 2019.
Sustaining capital expenditures are expected to be $20-25 million on underground capitalized development,
an infill diamond drill program, raise bore installations, mobile machinery, equipment rebuilds and process
plant upgrades.
Development capital expenditures are expected to be $10-15 million, including a pump station installation
underground along with various infrastructure upgrades associated with completing Phase II as well as
ongoing engineering associated with Phase III.
Going forward, the Company expects the variability in ore blending to stabilize at Olympias . The paste
backfill plant has been operating efficiently and is allowing for consistent backfilling of mined voids. Mining
performance is expected to improve as a result of an enhanced ore deposit model based on infill dri lling
completed in 2018. Cost reduction initiatives in both the mining operations and the process plant are
ongoing with high-cost consumables and operational inefficiencies being initially targeted.
As part of the Company’s 2018 financial year-end, the valuation assumptions for Olympias are under review
and there is a likelihood that an impairment charge will be recorded.
Skouries
Ongoing care and maintenance costs are estimated to be $5-10 million per year for 2019, including $2-4
million of direct site costs and its portion of country overhead costs.
Stratoni
For 2019, Stratoni is expected to process 210,000 tonnes of ore at grades of 6% lead, 9% zinc and 165 grams
per tonne silver. Sustaining capital expenditures at Stratoni are expected to be $5-10 million including mine
6
mobile equipment purchases and overhauls , mine facility upgrades and upgrades to some of the process
facilities.
Through additional investment in the exploration program at Stratoni for 2019, the Company expects to
continue to extend mine life. An additional 10,000 metres of resource expansion drilling is planned for the
year.
ROMANIA
The Company expects to spend approximately $3-5 million at Certej during 2019 with t he focus on
continuing to optimize engineering along with modest site enabling works for the main electric power and
water lines to the site. An economic assessment for the nearby Bolcana project is underway, and will
determine next steps for advancing the project.
In January 2019, the Company received notice that the Urban Zonal Permit (PUZ), originally issued in 2010
for the Certej project in Romania, was suspended. The Company will appeal after the reasoning behind the
ruling has been received, which can take up to a month. This suspension is not expected to have a significant
impact on development at Certej.
BRAZIL
Work is underway to update the 43-101 compliant PFS for the Tocantinzinho project. The PFS is expected
to be completed in the first half of 2019. Development capital s pending in 2019 is expected to be $3-5
million.
Conference Call to Discuss Path Forward
Senior management will host a conference call to review the information contained in this release on
Thursday, January 31st, 2019 at 7:00 AM PT (10:00 AM ET). The call and associated slides will be webcast
and can be accessed at Eldorado Gold’s website: www.eldoradogold.com and via
http://services.choruscall.ca/links/eldoradogold20190131.html
Conference Call Details Replay (available until February 21st, 2019)
Date: January 31, 2019 Vancouver: 1-604-638-9010
Time: 7:00 am PT (10:00 am ET) Toll Free: 1-800-319-6413
Dial in: 1-604-638-5340 Pass code: 2931
Toll free: 1-800-319-4610
About Eldorado Gold
Eldorado is a gold and base metals producer with mining, development and exploration operations in
Turkey, Canada, Greece, Romania, Serbia, and Brazil. The Company has a highly skilled and dedicated
workforce, safe and responsible operations, a portfolio of high -quality assets, and long-term partnerships
with local communities. Eldorado's common shares trade on the Toronto Stock Exchange (TSX: E LD) and
the New York Stock Exchange (NYSE: EGO).
7
Contacts
Investor Relations
Peter Lekich, Manager Investor Relations
604.687.4018 or 1.888.353.8166 [email protected]
Media
Louise Burgess, Director Communications & Government Relations
604.687.4018 or 1.888.353.8166 [email protected]
Cautionary Note about Forward-looking Statements and Information
Certain of the statements made and information provided in this press release are forward -looking statements or information within the meaning
of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Of ten, these forward -looking
statements and forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", “continue”,
“projected”, "scheduled", "estimates", "forecasts", "intends", "anticipates", or " believes" or the negatives thereof or variations of such words and
phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements or information contained in this release include, but are not limited to, statements or information with respect to: our
guidance and outlook, including expected production, cost guidance and recoveries of gold, including higher heap leach recove ries at Kisladag,
favourable economics for our heap leaching plan and the ability to extend heap leach mine life at Kisladag through further metallurgical tes ts on
deeper material, planned capital and exploration expenditures; our expectation as to our future financial and operating perfo rmance, including
expectations around generating significant free cash flow and debt retirement, expected metallurgical recoveries, gold price outlook; and our
strategy, plans and goals, including our proposed exploration, development, construction, permitting and operating plans and priorities and related
timelines and schedules.
Forward-looking statements and forward -looking information by their nature are based on assumptions and involve known and unknown risks,
uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from
any future results, performance or achievements expressed or implied by such forward-looking statements or information.
We have made certain assumptions about the forward-looking statements and information, including assumptions about the geopolitical, economic,
permitting and legal climate that we operate in; the future price of gold and other commodities; exchange rates; anticipated costs and expenses;
production, mineral reserves and resources and metallurgical recoveries, the impact of acquisitions, dispositions, suspension s or delays on our
business and the ability to achieve our goals. In particular, except where otherwise stated, we have assumed a continuation of existing business
operations on substantially the same basis as exists at the time of this release.
Even though our management believes that the assumptions made and the expectations represented by such statements or informat ion are
reasonable, there can be no assurance that the forward -looking statement or information will prove to be accurate. Many assumptions may be
difficult to predict and are beyond our control.
Furthermore, should one or more of the risks, uncertaintie s or other factors materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those described in forward-looking statements or information. These risks, uncertainties and other factors include,
among others, the following: results of further testwork, recoveries of gold and other metals; geopolitical and economic climate (global and lo cal),
risks related to mineral tenure and permits; gold and other commodity price volatility; risks regarding potential and pending litigation and arbitration
proceedings relating to the Company’s, business, properties and operations; expected impact on reserves and the carrying value; the updating of the
reserve and resource models and life of mine plans; mining operational and development risk; financing risks, foreign country operational risks; risks
of sovereign investment; regulatory risks and liabilities including, regulatory environment and restrictions, and environmental regulatory restrictions
and liability; discrepancies bet ween actual and estimated production, mineral reserves and resources and metallurgical testing and recoveries;
additional funding requirements; currency fluctuations; community and non -governmental organization actions; speculative nature of gold
exploration; dilution; share price volatility; competition; loss of key employees; and defective title to mineral claims or properties , as well as those
risk factors discussed in the sections titled “Forward-Looking Statements” and "Risk factors in our business" in the Company's most recent Annual
Information Form & Form 40 -F. The reader is directed to carefully review the detailed risk discussion in our most recent Annual Information Form
filed on SEDAR under our Company name, which discussion is incorporated by r eference in this release, for a fuller understanding of the risks and
uncertainties that affect the Company’s business and operations.
Forward-looking statements and information is designed to help you understand management’s current views of our near and longer term prospects,
and it may not be appropriate for other purposes.
There can be no assurance that forward-looking statements or information will prove to be accurate, as actual results and future events could differ
materially from those anticipate d in such statements. Accordingly, you should not place undue reliance on the forward -looking statements or
information contained herein. Except as required by law, we do not expect to update forward -looking statements and information continually as
conditions change.
Financial Information and condensed statements contained herein or attached hereto may not be suitable for readers that are u nfamiliar with the
Company and is not a substitute for reading the Company’s financial statements and related MD&A available on our website and on SEDAR under
8
our Company name. The reader is directed to carefully review such documents for a full understanding of the financial inform ation summarized
herein.
Except as otherwise noted, scientific and technical informati on contained in this press release was reviewed and approved by Paul Skayman,
FAusIMM, Chief Operating Officer for Eldorado Gold Corporation, and a "qualified person" under NI 43-101.