Eldorado Gold Announces Results of Skouries Project Feasibility Study; After-Tax NPV of US$1.3 Billion and IRR of 19%
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NEWS RELEASE
TSX: ELD NYSE: EGO December 15, 2021
Eldorado Gold Announces Results of Skouries Project Feasibility
Study; After-Tax NPV of US$1.3 Billion and IRR of 19%
VANCOUVER, BC – Eldorado Gold Corporation (“Eldorado”, the “Company” or “We”)
announces the completion of a Feasibility Study (“FS”) on the wholly-owned Skouries project,
located in northern Greece. As previously announced, the Company will host a conference call,
later today, on Wednesday, December 15, 2021, at 6:00 PM ET (3:00 PM PT). The call details
are at the end of this news release. All financial figures are in U.S. dollars unless otherwise stated.
Feasibility Study Highlights1
• Robust Economics:
o 19% after-tax Internal Rate of Return (“IRR”) and $1.3 billion after-tax Net Present
Value (“NPV”) (5%), based on long-term prices of $1,500 per ounce (“oz”) gold
and $3.85 per pound copper.
o IRR of 24% and NPV (5%) of $1.8 billion using approximate spot prices of $1,800
per oz gold and $4.25 per pound copper.
• 2.9 million ounce Life of Mine (“LOM”) gold production
o Average annual production of 140,000 oz of gold and 67 million pounds of copper
(approximately 312,000 oz gold equivalent) over a 20-year mine life.
o Average annual gold production of 182,000 oz in the first 5 years of production.
• Negative cash operating cost of $(368) per oz sold over the LOM.
• Negative All-In Sustaining Costs (“AISC”) of $(17) per oz sold over the LOM.
• Initial capital costs to complete the Skouries project of $845 million, an increase of 23%
over the March 2018 Pre-Feasibility Study1 (“PFS”), primarily related to increased input
prices, scope change related to water management and an enhanced execution plan.
(1) PFS filed as a technical report in March 2018 titled “Technical Report, Skouries Project, Greece” with an effective date of January
1, 2018.
“The completion of the Skouries FS is an important milestone for the Company. The results of the
study reflect the robust economics of this world-class asset that will support our growth strategy,”
said George Burns, Eldorado’s President and CEO. “Eldorado is looking forward to expanding
our production profile at the Kassandra Mines and developing this region as a cornerstone for the
Company.”
“The project has been significantly de-risked through the infrastructure built to date, the Amended
Investment Agreement ratified by the Greek government in March 2021, and today, the Feasibility
Study which reflects a more resilient project. Skouries remains a very attractive and executable
project that will have a lasting, positive impact, and create additional economic and social value
for our shareholders and all stakeholders.”
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“Completion of the Skouries Feasibility Study is a critical milestone and will allow the company
to advance financing alternatives for the project. Subject to financing and Board approval, target
re-start of construction at Skouries is mid-2022. With timely completion of construction in two
and a half years, Skouries would provide significant upside to our five-year production profile.”
Summary of Skouries Feasibility Study
Skouries Feasibility Summary
Metrics Units Results
Type of operation Open Pit & Underground
Life of Mine years 20
Total Ore Mined Mt 147
Contained Gold Mined Moz 3.6
Contained Copper Mined Blbs 1.6
Strip Ratio w:o 1.01
Throughput Mtpa 8
Head Grade – gold g/t Au 0.77
Head Grade – copper % 0.50
Recoveries – gold % 83
Recoveries – copper % 90
Gold Production
Total Production, LOM Moz 2.9
Annual Production, LOM oz 140,000
Annual Production, first 5 years oz 182,000
Copper Production
Total Production, LOM Mlbs 1,411
Annual Production, LOM Mlbs 67
Annual Production, first 5 years Mlbs 76
Per Unit Costs, LOM
Total Mining Costs $/t, processed 13
Processing $/t, processed 11
G&A $/t, processed 3
Total Operating Costs $/t, processed 27
Per Ounce Costs, LOM
Cash Operating Costs $/oz (368)
AISC $/oz (17)
Capital Costs
Initial Phase 1 Capital $M 845
Phase 2 Underground Capital $M 172
Sustaining Capital $M 850
NPV5%, after-tax $B 1.3
After-tax IRR % 19
Payback Period years <4
(1) These financial measures or ratios are non-IFRS financial measures or ratios. See the section 'Non-IFRS
Measures” below.
Note: Skouries 2021 Feasibility Study assumes a gold price of $1,500/oz, copper price of $3.85/lb, $US/Euro
exchange rate of 1.13 for 2022, 1.15 for 2023, 1.18 for 2024, 1.2 thereafter
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The technical report for the Skouries FS will be filed on SEDAR and EDGAR in accordance with
the requirements under National Instrument 43-101 – Standards of Disclosure for Mineral Projects
(NI 43-101).
Skouries Project Overview
The Skouries project, is part of the Kassandra Mines Complex, and located within the Halkidiki
Peninsula of Northern Greece. It is a gold-copper porphyry deposit designed to be mined using a
combination of conventional open pit and underground mining techniques. The total life of mine
is 20 years consisting of two phases. Phase 1 is a combined open pit and underground mine
operating over approximately 9 years. Phase 2 consists of mining solely from the underground
mine for a further 11 years. The mineral process facility will produce a gold-copper concentrate.
The Skouries asset was acquired through the acquisition of European Goldfields in 2012 when
the project was in feasibility stage and construction commenced in 2013. Construction was halted
and the project was placed on care and maintenance in November 2017. Negotiations for the
Amended Investment Agreement between Eldorado and the Hellenic Republic commenced
following a change in the government. The Amended Investment Agreement was signed on
February 5, 2021, and ratified in March 2021.
Initial and Sustaining Capital
The Phase 1 capital cost to complete the Skouries project is estimated to be $845 million with the
breakdown provided in the table below.
Phase 1 Capital Cost Estimate
Capital Cost Item $M
Mine 191
Process plant and infrastructure 270
IWMF and Water Management 119
Total Direct Capital Costs 580
Indirect costs 47
EPCM (or other) costs 75
Owner’s costs 62
Contingency 81
Total Capital Cost - Phase 1 845
The Phase 1 capital cost estimate of $845 million is a 23% increase from the $689 million estimate
in the PFS. The four key areas that account for the increase are as follows:
1. Execution Model: The project execution approach has been updated to reflect an
Engineering, Procurement and Construction Management (“EPCM”) delivery model with
a Tier 1 partner for timely delivery of the project. An EPCM approach allows for a reduction
in interfaces and allows the Company to focus on operational readiness, training,
governance, and working with our stakeholders . It also includes an additional factor to
account for cost escalation during the execution period. This increased capital cost by $53
million, or approximately 8%.
2. Input Costs: The FS has been updated to reflect current commodity prices, including steel,
copper, cement and labour , increasing the capital cost estimate by $51 million, or
approximately 7%.
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3. Scope Enhancement:
• Water Management: To increase mine resiliency for changes in return periods and
intensity of precipitation events, Eldorado modified the design of the water
management infrastructure. This includes a larger contact water management
pond, an increase to the capacity of the water treatment plant, an increase in the
number of water re-injection wells, and an updated spillway design. This will better
position Skouries to handle major weather events throughout the mine life.
• Underground deferral: A portion of the underground mine was deferred to reduce
risk in execution and operational readiness. Execution risk is reduced by focusing
on the critical areas to achieve first gold. Operational readiness risk is reduced by
focusing efforts on commissioning and training to commence operations. The
underground activity is confined to a test stoping program and core infrastructure.
This will allow project delivery to focus on the open pit and then transition to the
underground, significantly reducing parallel activities.
• These scope enhancements, all of which have been incorporated, increased the
capital cost estimate by $33 million, or approximately 5%.
4. Foreign Exchange: In the four years since the PFS was published, strengthening of the
Euro to the US dollar has increased the capital cost estimate increased by $19 million, or
approximately 3%.
In addition to the Phase 1 capital costs of $845 million, future capital requirements, include $172
million relating to Phase 2 underground material handling systems, to be spent between years 4-
10 of the operation. Additional sustaining capital is estimated to be $850 million over the LOM, or
$43 million on average per year.
De-risking the Skouries Project
The project has been de-risked several ways. In addition to the execution and ratification of the
Amended Investment Agreement with the Greek state and the completion of the Skouries FS,
there is also prior completion of infrastructure and construction at the project site. Prior to entering
care & maintenance in 2017, construction at the Skouries project was approximately 50%
complete. Completed works include a major mill mechanical equipment set, stripping of the open
pit, large amounts of civil works and tagged items being managed with a vendor-approved
preservation plan. The project has also successfully removed and relocated archeological
antiquities from ancient mining activities on the Skouries site.
Skouries Project Cash Flows
A table providing the deterministic life of mine average production and cash flow forecast is
included at the end of the news release.
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Project Sensitivities
At base case prices and a 5% discount rate, the after-tax NPV and IRR are most sensitive to
metal prices and least sensitive to capital costs. Changes to gold and copper prices have a similar
impact on the project’s financial outcomes.
Sensitivity Table – Gold and Copper Price
Gold Price
($/oz)
Copper Price
($/lb)
After-Tax NPV
($B)
After-Tax IRR
(%)
$1,300 $3.25 0.7 13
$1,500 (base case) $3.85 1.3 19
$1,800 (spot) $4.25 1.8 24
Below is a table summarizing key value driver sensitivities of capital expenditures (“Capex”) and
operational expenditures (“Opex”).
Sensitivity Table – Capex
Capital Cost After-Tax NPV
($B)
After-Tax IRR
(%)
-15% 1.4 23
$845 M (base case) 1.3 19
+15% 1.1 16
Sensitivity Table – Opex
Operating Cost $/t After-Tax NPV
($B)
After-Tax IRR
(%)
-15% 1.5 21
27.0 (base case) 1.3 19
+15% 1.0 17
Reserves and Resources Description
The Skouries project is a gold-copper porphyry deposit with mineralization in stockwork veins,
veinlets and disseminated styles. The deposit has been drilled to a depth of 920 meters from
surface and the ore body is open at depth. In addition to the knowledge obtained from our existing
operations in the Kassandra complex, the extensive detailed drilling of the deposit and associated
testwork provides high confidence in the quality and composition of the ore body.
Skouries Mineral Reserves and Resources, as of September 30, 2021
Category Resource
(t x 1000)
Grade Au
(g/t)
Grade Cu
(g/t)
Contained Au
(oz x 1000)
Contained
Cu
(t x 1000)
Total Reserves
Proven 73,101 0.87 0.52 2,053 381
Probable 74,015 0.66 0.48 1,576 359
Proven and Probable 147,116 0.77 0.50 3,630 740
Total Resources
Measured 90,714 0.85 0.51 2,479 466
Indicated 149,260 0.53 0.44 2,551 652
Measured and Indicated 239,974 0.65 0.47 5,030 1,118
Inferred 67,657 0.37 0.40 814 267
Notes on Mineral Resources and Reserves:
1. Mineral resources and mineral reserves are as of September 30, 2021
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2. The mineral resources and mineral reserves were classified using logic consistent with the CIM Definition Standards for Mineral
Resources & Mineral Reserves (2014) incorporated, by reference into NI 43-101.
3. Mineral reserves are included in the mineral resources.
4. The mineral resources and mineral reserves are disclosed on a total project basis.
5. Mineral Resource Reporting and demonstration of Reasonable Prospects for Eventual Economic Extraction: The mineral
resources used a long term look gold metal price of $1,800/oz for the determination of resource cut -off grades or values. This
guided executi on of the next step where constraining surfaces or volumes were created to control resource reporting.
Underground resources were constrained by 3D volumes whose design was guided by the reporting cut -off grade or value,
contiguous areas of mineralization and mineability. Only material internal to these volumes were eligible for reporting. The
Skouries project, with both open pit and underground resources have the open pit resources constrained by the permit and
underground resources constrained by a reporting shape.
6. Long-term metal price assumptions: Gold price: $1,300/oz, silver price: $17.00/oz, copper price: $2.75/lb, lead price: $2,000/t,
zinc price: $2,300/t.
7. Reserve cut-off grades at Skouries: $10.60/t NSR (open pit), $33.33/t NSR (underground). Resource cut-off grades at Skouries:
0.30 g/t Au equivalent grade (open pit), 0.70 g/t Au equivalent grade (underground).
8. Qualified Persons: John Battista, MAusIMM., of Mining Plus is responsible for Skouries (open pit) mineral reserves; Colm Keogh,
P.Eng., Man ager, Operations Support for the Company, is responsible for Skouries (underground) mineral reserves; Sean
McKinley, P.Geo., Manager, Mine Geology & Reconciliation for the Company, is responsible for the Skouries mineral resources.
Project Scope
The project scope comprises an open pit and underground mining operation, a processing facility,
utilities, water management, and tailings facility.
Mining Operations: Open pit mining will be done by conventional truck-shovel operation. The
mining sequence will consist of drilling, blasting, loading and hauling of ore and waste materials
for processing and waste disposal. Direct feed ore from the open pit will be hauled to the Skouries
processing plant by the fleet of 90t trucks. During Phase 1, approximately 8 million tonnes of low-
grade ore will be hauled to the low-grade ore stockpile where it is planned to be processed during
Phase 2 of the project.
Underground ore will be recovered by conventional sublevel open stoping with paste tailings
backfill. Underground ore production during pit operations will attain 2.5 million tonnes per annum
(Phase 1) and will subsequently be expanded to 6.5 million tonnes per annum following pit
depletion. Phase 2 will introduce an automated material handling system to include underground
crushing and shaft hoisting necessary to achieve the higher volume.
Processing: The Skouries process plant flowsheet consists of a primary crusher, SAG mill, pebble
crusher and ball mill to achieve a primary grind size of 120 microns. The feed will be run through
a rougher and scavenger flotation circuit where the flotation product will produce concentrate with
a grade of approximately 30 g/t gold and 26% copper. Overall recoveries are expected to be 83%
gold and 90% copper.
Tailings: Skouries will use dry stack tailings impoundment, the most sustainable method used to
store filtered tailings. Dry stack tailings reduce the risk of a tailings dam failure and requires a
significantly reduced footprint . This method enables maximum recovery of process water for
reuse.
Water Management: The Skouries Water Management Plan is compliant with Greek and EU
legislation and is based on current view environmental modeling, with higher storm intensity and
higher return event frequency than prior versions. The water management system will include a
large contact pond, a high -capacity water treatment plant and enhanced water re -injection well
capacities.
Permitting: Approval was granted in April 2021 by the Greek Ministry of Energy and Environment
for a modification to the Kassandra Mines Environmental Impact Assessment (“EIA”) to allow for
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the use of dry stack tailings disposal at the Skouries project. A copy of the news release can be
accessed at the following link. The Company plans to submit a modification to the Kassandra
Mines EIA by the end of 2021 that will cover the expansion of the Olympias processing facility
and the Stratoni port modernization. Approval of this modification is expected in 2022.
Emissions: The Skouries operating scope considers underground mine electrification to the fullest
extent practical and full project deployment of technology to improve efficiency and decrease
energy intensity. Eldorado will continue with energy and greenhouse gas studies to demonstrate
alignment with the Greek State and the European Union in their efforts to continue to reduce the
carbon intensity of the Greek electrical grid.
Social Inclusion and Local Empowerment
The Skouries project will have a significant positive impact on the local economy. The operational
readiness and training plans included in the Skouries FS will ensure local hiring preference. Over
the life of the Kassandra Mines, $80 million will be committed to Corporate Social Responsibility
programs, including community, cultural, social, environmental and charitable purposes. In
addition, Eldorado will provide re-skilling and upskilling training for employees regularly through
the development of an innovative Technical Training Center.
Skouries Feasibility Study Conference Call Details
Eldorado will host a conference call to discuss the Skouries FS later today, on Wednesday,
December 15, 2021, at 6:00 PM ET (3:00 PM PT).
The call will be webcast and can be accessed at Eldorado Gold's website:
www.eldoradogold.com, or via: https://services.choruscall.ca/links/eldoradogold20211215.html
Conference Call Details Replay (available until January 19, 2022)
Date: December 15, 2021 Vancouver: +1 604 638 9010
Time: 6:00 PM ET (3:00 PM PT) Toll Free: 1 800 319 6413
Dial in: +1 604 638 5340 Access code: 8125
Toll free: 1 800 319 4610
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Skouries Project Cash Flows
(1) EUR/USD exchange rate of 1.13 in 2022, 1.15 in 2023, 1.18 in 2024, and 1.20 thereafter.
LOM Year -3 Year -2 Year -1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20
Ore Production tonnes x 1000 147,175 0 0 950 8,000 8,079 8,007 8,023 8,018 7,988 8,005 7,997 8,000 8,000 8,000 8,000 8,000 7,099 6,491 6,503 6,496 6,496 5,909 3,115
Gold Oz x 1000 2,949 0 0 8 177 185 213 199 137 128 121 184 208 156 146 155 148 143 142 133 133 106 81 47
Copper lbs x 106 1,411 0 0 2 64 80 86 82 66 66 61 83 90 72 73 75 75 71 72 71 72 64 54 32
Gold Price US$/oz 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Copper Priced US $/lbs 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85 3.85
Currency (1) EUR/USD 1.20 1.13 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Gold Revenue US$M 4,412 0 0 0 265 277 319 299 206 192 181 275 312 234 220 233 221 214 213 200 200 159 121 71
Copper Revenue US$M 5,426 0 0 0 246 307 333 317 252 255 237 318 348 276 283 288 290 273 277 273 276 248 208 122
TTRC + Royalties US$M (586) 0 0 0 (28) (34) (37) (35) (27) (27) (25) (35) (38) (30) (30) (31) (31) (29) (30) (29) (29) (26) (21) (12)
Net Revenue US$M 9,252 0 0 0 483 550 615 581 431 420 392 558 621 480 472 490 480 458 461 444 447 381 308 180
Opex US$M (3,940) 0 0 0 (136) (185) (208) (206) (204) (189) (183) (186) (205) (225) (230) (228) (212) (201) (202) (202) (203) (203) (193) (139)
Proceeds from pre-commerical production US$M 7 0 0 7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Capital – growth Phase 1 US$M (845) (168) (452) (225) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Capital – growth Phase 2 US$M (172) 0 0 0 0 0 0 (23) (22) (47) (41) (34) (3) (1) 0 0 0 0 0 0 0 0 0 0
Capital - sustaining US$M (850) 0 0 0 (138) (130) (28) (22) (40) (45) (57) (69) (73) (34) (31) (23) (21) (34) (29) (21) (15) (13) (9) (17)
Taxes US$M (669) 0 0 0 (52) (54) (61) (54) (20) (20) (14) (48) (56) (20) (16) (20) (21) (18) (62) (42) (44) (29) (16) (0)
Unlevered free cash flow US$M 2,783 (168) (452) (219) 157 181 318 276 144 119 97 221 284 200 195 219 226 204 168 179 184 137 91 24
EBITDA US$M 5,313 0 0 0 347 365 407 375 228 231 209 372 417 255 242 262 268 256 258 242 244 178 115 42
EBITDA margin % 55% 0% 0% 0% 72% 66% 66% 64% 53% 55% 53% 67% 67% 53% 51% 53% 56% 56% 56% 54% 55% 47% 37% 23%