Eldorado Announces Preliminary 2017 Operational Results and Partial 2018 Guidance
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NEWS RELEASE
TSX: ELD NYSE: EGO January 16, 2018
Eldorado Announces Preliminary 2017 Operational Results
and Partial 2018 Guidance
VANCOUVER, BC – Eldorado Gold Corporation, ( “Eldorado” or “the Company”) today announce s the
Company’s 2017 operating results and preliminary cash costs, and provides partial production and cash cost
guidance for 2018.
2017 Overview
Gold production of 285,919 ounces (including pre commercial production from Olympias); vs revised
guidance of 28 0,000-310,000 ounces (including a Q4 revision at Kisladag). In addition, the Company
produced 7,061 ounces of gold in the fourth quarter from a bulk sample at its newly acquired Lamaque
project in Quebec.
Cash operating costs averaged $509 per ounce, in-line with revised third quarter guidance of $500 per
ounce.
All in sustaining costs expected to be approximately $900 per ounce, in-line with revised third quarter
guidance of $900 per ounce.
Closed the year with total liquidity of approximately $730 million, including $480 million in cash, cash
equivalents and term deposits, and $250 million in undrawn lines of credit.
Completed acquisition of Integra Gold Corp . (“Integra”), commenced pre-feasibility work (including
test mining), and advanced construction of the Lamaque mine and refurbishment of the associated
Sigma mill.
Olympias Phase II completed commissioning and achieved commercial production on December 31.
Announced in November intention to move the Skouries project into care and maintenance due to
continued permitting delays. Skouries is expected to bgrae fully ramped down in Q1 2018.
Hellas Gold S.A., Eldorado’s Greek subsidiary, entered into arbitration proceedings with the Greek
Government and the proceedings are expected to conclude on April 6, 2018.
Continued exploration success at Lamaque (Canada), Bolcana (Romania), Efemcukuru (Turkey), and
Stratoni (Greece).
Continued improvement to the overall safety record with a reduction in the total recordable injury
frequency rate for the third consecutive year.
George Burns appointed President and CEO in April.
Reconfigured the Board of Directors with retirements of Paul Wright and Jonathan Rubenstein and the
appointment of Dr. George Albino as the new Chair.
“2017 was a year that w as overshadowed by political headwinds in Greece and technical challenges at
Kisladag,” said George Burns, President and Chief Executive Officer. “With that said, I am very proud of how
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our team handled the opportunities and challenges of 2017 . We completed the Integra acquisition,
succeeded in declaring commercial production at Olympias Phase II at year -end and commenced the
immense amount of technical work at our key Kisladag, Skouries and Lamaque assets. ”
“2018 is already proving to be a busy year , full of catalysts, with development underway at Lamaque and
new or updated technical studies for Lamaque, Skouries and Kisladag. All three studies are expected to be
completed by the end of the first quarter, which will then drive the plan for the remainder of the year. Our
overarching goal for 2018 and beyond is to move Eldorado back into a growth phase and create value for
all our stakeholders.”
2017 Operating Results
Q4 2017 YE 2017
Total
Realized gold price ($/oz) 1,281 1,263
Gold sold (oz) 67,367 264,080
Gold produced (oz) 1 84,063 292,980
Cash operating cost ($/oz) 2, 4 577 509
Total cash cost ($/oz) 3, 4 596 532
Kisladag Mine
Gold sold (oz) 44,317 171,505
Gold produced (oz) 44,356 171,358
Tonnes to pad 3,332,990 13,061,861
Grade (g/t) 1.02 1.03
Cash operating cost ($/oz) 2, 4 604 500
Total cash cost ($/oz) 3, 4 626 522
Efemcukuru Mine
Gold sold (oz) 23,050 92,575
Gold produced (oz) 25,472 96,089
Tonnes milled 119,135 481,649
Grade (g/t) 7.46 7.01
Cash operating cost ($/oz) 2, 4 525 524
Total cash cost ($/oz) 3, 4 539 551
Olympias Mine
Gold produced (oz) 1 7,174 18,472
Lamaque Mine
Gold produced (oz) 1 7,061 7,061
1 Ounces produced include pre-commercial production at Olympias and Lamaque.
2 Cost figures calculated in accordance with the Gold Institute Standard.
3 Cash operating costs, plus royalties and the cost of off-site administration.
4 Cash operating costs and total cash costs are non-IFRS measures. Please see our Q3 MD&A for an explanation and discussion of these.
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2018 Partial Operating and Financial Guidance
The Company is providing partial operating and financial guidance for 2018 at this time as the technical
teams continue to work on the required metallurgical testwork on the Kisladag orebody. The Company
expects to be able to deliver guidance for the full year at the end of the first quarter when a sufficient
amount of metallurgical testwork is completed and the technical study is complete.
Full year gold production of 160,000-190,000 ounces is expected from Olympias Phase II, Efemcukuru,
and pre-commercial production at Lamaque, in addition to base metal sales and by-product credits from
Stratoni and Olympias Phase II production respectively.
2018 Full Year Production (excluding Kisladag)
Mine/Project Production
(Au oz)
Cash Costs
($/oz)
Sustaining Capital
Expenditure ($M)
Efemcukuru 90,000-100,000 530-570 20
Olympias 55,000-65,000 550-650 1 15
Lamaque 15,000-25,000 2 n/a n/a
Stratoni n/a n/a 8
Total 160,000-190,000 43
Q1 2018 Kisladag Production
Mine/Project Production
(Au oz)
Cash Costs
($/oz)
Sustaining Capital
Expenditure ($M)
Kisladag 40,000-50,000 550-650 11
1 Range reflects expected variability of by-product credits.
2 Pre-commercial production from toll milling reflects a portion of the 40,000 oz to be extracted during 2018.
2018 Capital Expenditure
1 Includes $20 million of capitalized mine operating costs.
Principal assumptions used in the preparation of guidance for 2018 include:
Gold price: $1,250/oz Lead price: $2,400/t CAD vs USD 1.30 USD vs EUR 1.20
Silver price: $17/oz Zinc price: $2,750/t REAL vs USD 3.40 TRL vs USD 3.80
Development Capital ($M) Total Capital ($M)
Lamaque 1201 Total Development 191
Tocantinzinho 8 Total Capitalized Exploration 15
Olympias 30 Total Sustaining (inc. Q1 Kisladag) 54
Skouries 20 Total 260
Stratoni 4
Certej 9
Total 191
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The Company has approximately $480 million in cash, cash equivalents and term deposits and $250 million
in undrawn credit lines. The Company continues to review all general and administrative , capital and
discretionary spending. Excluding Kisladag Q1 sustaining capital of $11 million, sustaining capital for mining
operations in 2018 is estimated to be approximately $43 million, or $35 million for gold mining operations.
Also excluding Kisladag, planned expenditures for mining development are expected to total $191 million,
with the bulk of this anticipated to be spent in the development of the recently acquired Lamaque
development project in Quebec . Exploration expenditures in 201 8 are budgeted at $25 million (40%
expensed and 60% capitalized), with a balanced focus on resource delineation and br ownfield drilling at
existing operations, and project generation within our regions of operation.
General and administrative expense for the year is expected to be approximately $45 million.
2017 Gold Operations Review and 2018 Outlook
TURKEY
Kisladag
In 2017 the revised production guidance for Kisladag was between 170,000-180,000 ounces of gold at cash
costs of $500-550 per ounce. Total production of 171,358 ounces was due to lower than expected recovery
rates and slower leaching from sections of the leach pad . While gold production improved in the final
quarter to just over 44,000 ounces, inventory levels over the year increased by approximately 50,000
ounces. The average ore grade placed on the leach pad during the year was 1.03 grams per tonne gold and
the average cash operating cost was $500 per ounce.
In the first quarter of 2018, Kisladag is expected to place 3.1 million tonnes of ore on the leach pad at a
grade of 1.25 grams per tonne gold , producing 40,000 -50,000 ounces of gold at cash operating costs of
$550-650 per ounce. Sustaining capital expenditure for the first quarter is expected to be $11 million. The
Company is continuing to evaluate all options at Kisladag and expects to release the results of the technical
study by the end of the first quarter. At that time, guidance will be provided for the remainder of 2018 for
Kisladag.
Efemcukuru
During 2017, Efemcukuru met production guidance of 95,000-105,000 ounces of gold at cash costs of $525-
575 per ounce, finishing the year with just over 96,000 ounces of gold produced at cash operating costs of
$524 per ounce.
In 2018, Efemcukuru is expected to mine and process over 480,000 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 $530-570 per ounce.
Sustaining capital expenditures for 201 8 are forecast to be approximately $20 million, spent primarily on
underground mine development, equipment purchase and rebuilds, and various small capital projects.
GREECE
On September 14, 2017, Hellas Gold received formal notice from the Greek Ministry of Finance and Ministry
of the Environment and Energy initiating Greek domestic arbitration proceedings. The arbitration notice
alleged that the Technical Study for the Madem Lakkos Metallurgical Plant for treating Olympias and
Skouries concentrates in the Stratoni Valley, submitted in December 2014, is deficient and thereby is in
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violation of the Transfer Contract and the environmental terms of the project. The arbitration proceedings
are expected to conclude on April 6, 2018 and the Company is confident that the Technical Study is robust
and consistent with the Transfer Contract, the Business Plan and the approved environmental terms of the
project.
Olympias
On December 31, 2017, the Company achieved commercial production at Olympias Phase II . Over the
month of December the mine satisfied our internal requirements regarding throughput and achieved
mining grades and metallurgical performance. We are still working to improve dilution at the mine,
flotation selectivity in the processing plant, and are working on the tailings handling system.
The Company is constructing a paste plant and installing an additional tailings filter press to provide
maximum flexibility on paste and tailings h andling to eliminate future bottleneck s. Th e filter press is
expected to be commissioned during the first quarter 2018 and the paste plant is expected to be
commissioned during the second quarter 2018. The start of the construction of the paste plant was delayed
due to the permit from the Greek Government not being issued until September 2017.
In 2018, Olympias is expected to mine and process 390,000 tonnes of ore at an average grade of 8.4 grams
per tonne, producing 55,000-65,000 ounces of gold, at operating costs of $550-650 per ounce. For 2018,
sustaining capital expenditure is expected to be $15 million and development capital expenditure is
expected to be $30 million.
Skouries
Project development was slowed considerably in 2017 due to continued permitting delays throughout the
year. The Company announced its intention to move the project into care and maintenance in November
2017 and expects to be fully ramped down in Q1 2018 . Some final earthworks are currently being carried
out after some storm damage occurred during Q4 which increased the work required in the tailings area.
Development capital expenditure at Skouries for 2018 is expected to be $ 20 million as the project fully
transitions to care and maintenance. Ongoing care and maintenance costs are estimated to be $3-5 million
per year once fully ramped down.
Stratoni
During 2017, Stratoni processed 153,000 tonnes of ore at grades of 6.0% lead, 9.5% zinc and 159 grams per
tonne silver, compared to original guidance of 200,000 tonnes of ore at grades of 6.0% lead, 9.7% zinc and
155 grams per tonne silver. Production was lower due to slower development of the deepest drive which
limited access to some ore.
For 2018, Stratoni is expected to process 160,000 tonnes of ore at grades 7.2 % lead, 8.7 % zinc and 175
grams per tonne sil ver. Sustaining capital expenditure at S tratoni is expected to be $ 8 million and
development capital expenditure is expected to be $4 million for the year.
CANADA
Lamaque
During 2017 the Company completed the Integra acquisition and began work at its 100% wholly -owned
Lamaque project. In addition to the ongoing resource upgrade and resource expansion drilling, t he
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Lamaque pre-feasibility study continued on schedule and is expected to be complete with maiden reserves
by the end of the first quarter 2018.
During 2017 test mining extracted 47,750 tonnes of ore with an average head grade of 8.6 g/t gold, with
approximately 35,400 tonnes processed at a nearby custom mil ling facility. Results from the first two
batches (32,000 tonnes) indicate that gold grade was in line with expectations and recoveries were slightly
higher than anticipated at an average 95.4% for the toll treatment.
Capital expenditures at Lamaque in 2018 are forecast to be $120 million, including $20 million of capitalized
mine operating costs. The Company expects to extract roughly 200 ,000 tonnes of ore grading 7.29 grams
per tonne gold, containing approximately 40,000 ounces and anticipates toll milling a portion of the ore and
producing 15,000 to 25,000 ounces.
Commercial production remains forecast for 2019 and is expected to be confirmed with the release of the
pre-feasibility study.
ROMANIA
Certej
The Company expects to spend approximately $9 million in development capital during 2018 with the focus
on continuing infrastructure projects and advancing permitting and support engineering, as defined in the
2015 Feasibility Study.
BRAZIL
Tocantinzinho
A construction decision at Tocantinzinho has been deferred until all permits are in place and a development
project review completed. Development capital spending in 2018 is expected to be $8 million.
2017 Exploration Review
Highlights of the Company’s exploration program in 2017 included:
Lamaque resource upgrade and resource expansion drilling: Over 31,000 metres of drilling at the
Triangle deposit were completed since the July acquisition of Integra. Drilling has confirmed the quality
of the current resource and highlights the upside potential of the Lamaque project, including high-grade
intercepts from new zones at Triangle.
Completion of the year -one drilling program at Bolcana, Romania: Results of over 23,000 metres at
our new Bolcana porphyry project confirm the size and potential of the system.
Resource conversion drilling at Efem cukuru: Infill drilling of inferred resources in the Kestane Beleni
vein continued to intersect ore grades and widths, while exploration drilling at the nearby Kokarpinar
vein has identified a new high-grade shoot.
Exploration development and underground r esource expansion drilling at the Stratoni
Mine: Development of the hangingwall exploration drift continue d through the year , allowing
completion of over 5,900 metres of underground exploration drilling that demonstrated continuity of
the Mavres Petres orebody into previously untested areas.
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Corporate
Board and Senior Management Changes
During 2017, the following changes were made to the Board of Directors and to Senior Management:
Dr. George Albino appointed as Chair, effective January 1, 2018
George Burns appointed as President and CEO, and elected to the Board of Directors
Paul Wright and Jonathan Rubenstein resigned as directors
Reduction in the Board size to eight directors (from 10) as well as reduced individual director and
overall Board compensation
Jason Cho promoted to Executive Vice President, Strategy and Corporate Development
Subsequent to year-end, and following the Company’s announcement of December 27, 2017, further
Committee changes include:
Compensation Committee
Steve Reid appointed as Chair to replace Jonathan Rubenstein
Dr. George Albino to replace Robert Gilmore
Sustainability Committee
Michael Price appointed as Chair to replace Steve Reid
Robert Gilmore to replace Dr. George Albino
No changes were made to the composition of the Audit Committee or the Corporate Governance and
Nominating Committee.
Dividend
Pending the results of the technical reports and potential subsequent capital requirements, t he Company
is suspending cash payment of its semi-annual dividend payment effective the first quarter of 2018.
2017 Fourth Quarter and Year End Financials Announcement
The 2017 Fourth Quarter and Year End Financial Statements will be released after the market closes on
March 21, 2018. A conference call to discuss the details will be held by senior management on March 22,
2018 at 8:30 AM PT (11:30 AM ET). The call will be webcast and can be accessed at Eldorado Gold’s website:
www.eldoradogold.com
Conference Call Details Replay (available until April 6, 2018)
Date: March 22, 2018 Toronto: 416 849 0833
Time: 8:30 am PT (11:30 am ET) Toll Free: 855 859 2056
Dial in: 647 427 7450 Pass code: 506 9276
Toll free: 888 231 8191
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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. Often, 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 the Company’s preliminary 2017 operational
results and 2018 guidance, including statements or information with respect to: our preliminary operating results and cash costs; our guidance
and outlook, including expected production, projected cash cost, and planned capital and exploration expenditures for 2018; our expectation as
to future financial and operating performance, including future cash flow, cash costs, mineral reserve targets, expected metallurgical recoveries
and gold price outlook; and our strategy, plans and goals, including our proposed exploration, development, construction and operating plans and
priorities, and related timelines.
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.
Furthermore, should one or more of the risks, uncertainties 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: geopolitical and economic climate (global and local), mineral tenure and permits; gold and other metal
price volatility; mining operations and development; foreign country operations; sovereign investment; regulatory environment and restrictions,
including environmental regulatory restrictions and liability; discrepancies between actual and estimated production, mineral reserves and
resources and metallurgical testing and recoveries; the sale of our Chinese assets on the Company's operations; the acquisition of Integra Gold
Corp.; additional funding requirements; currency fluctuations; litigation and arbitration risks; climate change; 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 property, as well as those factors discussed in the sections entitled "Forward-Looking Statements" and "Risk factors in our
business" in the Company's most recent Annual Information Form and 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, for a fuller understanding of the risks and
uncertainties that affect the Company's business and operations.
Even though our management believes that the assumptions made and the expectations represented by such statements or information 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.
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 anticipated 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 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.
Except as otherwise noted, scientific and technical information contained in this press release was reviewed and approved by Paul Skayman,
FAusIMM, Chief Operating Officer for Eldorado Gold Corporation, and a "qualified person" as defined by Canadian Securities Administrators'
National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101").
Dr. Peter Lewis P.Geo., Eldorado’s Vice President, Exploration, is the qualified person as defined by NI 43-101 for the disclosure of technical
information in this press release. Eldorado operates its exploration programs according to industry best practices and employs rigorous quality
assurance and quality control procedures. All results presented are based on half-core samples of diamond drill core analyzed at accredited
laboratories. Drill core from the Bolcana and Stratoni projects was prepared and analyzed at ALS Minerals laboratories in Rosia Montana,
Romania and Loughrea, Ireland. Drillcore from the Lamaque project was prepared and analyzed at Bourlamaque Laboratories in Val d’Or,
Quebec. All Au assays are based on fire assay analysis of a 30 gm charge followed by an atomic adsorption finish. Samples with Au grades above
5.0 g/t at the Lamaque project and 10.0 g/t at other projects were re-assayed and completed with a gravimetric finish. Cu grades at Bolcana are
based on four acid digestion and an ICP-MS finish, and grades over 0.4% Cu were reassayed with four-acid digestion and an ICP-AES finish.
Certified standard reference materials, field duplicate and blank samples were inserted regularly and were closely monitored to ensure the quality
of the data.
Cautionary Note to US Investors Concerning Estimates of Measured, Indicated and Inferred Resources
The terms “mineral resource”, “measured mineral resource”, “indicated mineral resource”, “inferred mineral resource” used herein are Canadian
mining terms used 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 and Metallurgy and Petroleum (the “CIM”) Standards on Mineral Resources and Mineral
Reserves, adopted by the CIM Council, as may be amended from time to time. These definitions differ from the definitions in the United States