Eldorado Gold Reports 2017 Second Quarter Results
NEWS RELEASE
TSX: ELD NYSE: EGO July 27, 2017
Eldorado Gold Reports 2017 Second Quarter Results
VANCOUVER, BC – Eldorado Gold Corporation, (“Eldorado” or “the Company”) today reported the
Company’s financial and operational results for the second quarter ended June 30, 2017.
Second Quarter Financial and Operational Highlights
Profit of $11.2 million ($0.02 per share), compared to a loss of $329.9 million ($0.46 per share) in the
second quarter of 2016 (which included $339.0 million loss on re -measurement of Chinese assets) .
Adjusted net earnings of $6.3 million ($0.01 per share) compared to an adjusted net earnings of $11.7
million ($0.01 per share) in the second quarter of 2016.
Gold production of 63,692 ounces, (including pre-commercial production).
Gold revenues of $72.2 million on sales of 57,206 ounces of gold at an average realized gold price of
$1,262 per ounce.
All-in sustaining cash costs averaged $846 per ounce.
Cash operating costs averaged $484 per ounce; compared to 2017 guidance of $485-535 per ounce.
Total liquidity of approximately $1.0 billion, including $752.1 million in cash, cash equivalents and term
deposits, and $250 million in undrawn lines of credit at quarter end. Cash, cash equivalents and term
deposits after payment for the acquisition of Integra was $609.3 million.
Olympias Phase II commissioning continued and commercial production is now expected b y the end
of 2017.
Announced the definitive agreement with Integra Gold Corp. to acquire all of issued and outstanding
common shares, not already owned by the Company , by way of a plan of arrangement; transaction
closed post-quarter end.
Construction at Skouries continued, with production now targeted for 2020.
George Burns assumed the role of President & Chief Executive Officer on April 28, 2017.
“It was an eventful second quarter with site tours to Greece to demonstra te our continued progression of
development and news of the Integra acquisition,” said George Burns, Eldorado’s President and Chief
Executive Officer. “Commissioning at Olympias continues, although we now expect to declare commercial
production by the end of 2017. Skouries development is progressing as we continue to endeavour to work
with the Greek government to advance this key project. News of ounce recovery deferral at Kisladag was
unexpected, however the operations and engineering groups have implemen ted corrections to solution
chemistry that are expected to achieve normal recovery rates.”
“I am pleased that the Integra acquisition has closed. We proudly welcomed our new employees in Quebec
to our team earlier this month and we look forward to expand ing our production base within this highly
prospective region going forward.”
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Summarized Financial Results
Continuing Operations ($ millions except as noted)
3 months ended June 30, 6 months ended June 30,
2017 2016 2017 2016
Revenues 82.7 107.1 194.6 201.8
Gold revenues 72.2 98.3 162.7 188.8
Gold sold (ounces) 57,206 77,623 131,274 152,606
Average realized gold price ($/ounce) 1,262 1,267 1,240 1,237
Cash operating costs – gold mines ($/ounce) 484 490 474 504
Total cash costs – gold mines ($/ounce) 502 505 492 521
Gross profit from gold mining operations 28.1 41.4 65.1 73.5
Cash flow from operating activities 1 16.9 29.6 45.1 38.0
Including Discontinued Operations
3 months ended June 30, 6 months ended June 30,
2017 2016 2017 2016
Revenues 82.7 171.5 194.6 335.7
Gold revenues 72.2 162.7 162.7 322.6
Gold sold (ounces) 57,206 128,090 131,274 261,557
Average realized gold price ($/ounce) 1,262 1,270 1,240 1,233
Cash operating costs – gold mines ($/ounce) 484 607 474 605
Total cash costs – gold mines ($/ounce) 502 650 492 654
All-in sustaining cash cost – gold mines ($/ounce) 846 933 826 908
Gross profit from gold mining operations 28.1 55.5 65.1 96.6
Adjusted net earnings 6.3 11.7 16.7 11.0
Net profit (loss) 2 11.2 (329.9) 15.0 (332.3)
Earnings (loss) per share – basic ($/share) 2 0.02 (0.46) 0.02 (0.46)
Earnings (loss) per share – diluted ($/share) 2 0.02 (0.46) 0.02 (0.46)
(1) Before changes in non-cash working capital.
(2) Attributable to shareholders of the Company.
Review of Quarterly Financial Results
Profit attributable to shareholders of the Company for the second quarter of 2017 was $11.2 million, ($0.02
per share), compared to a loss of $329.9 million, ($0.46 per share) in the second quarter of 2016 (which
included $339.0 million loss on re-measurement of Chinese assets). Adjusted net earnings for the quarter
were $6.3 million ($0.01 per share) as compared to an adjusted net earnings of $11.7 million ($0.01 per
share) for the second quarter of 2016. The main difference between profit and adjusted net earnings in the
second quarter of 2017 was the fluctuation on foreign exchange translation of deferred income tax balances
in Turkey, Greece and Brazil.
Gold sales of 57,206 ounces and gross profit from continuing operations were lower year over year due to
lower production and sales at Kisladag and shipping delays at Efemcukuru. General and administrative
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expenses increased $0.8 million year over year due to reorganization costs in Vancouver and Greece.
Exploration expense increased $3.8 million including $1.6 million related to exploration activities at Stratoni.
Mine standby costs of $1.3 million were recorded in the second quarter of 2017 related to Vila Nova, Perama
Hill and Skouries underground development.
Second Quarter Review and 2017 Outlook
TURKEY
Kisladag
Kisladag reported gold production of 38,456 ounces for the quarter, down 23 % year over year. Reduced
solution grades resulted from continued slow leaching of higher pad stack heights and increased cyanide
requirements.
During the quarter, the placement of estimated recoverable gold on the leach pad proceeded as planned,
however, gold solution grade and consequently gold recovery from the leach pad lagged internal
expectations throughout the quarter. Recent laboratory results, where solution chemistry was adjusted,
have indicated normal recovery rates can still be expected. More time is now required to adjust the overall
pad solution chemistry and allow solution to flow through the leach pad. With the current stack height
being approximately 80 metres at the highest point, vertical flow rates are approximately one metre per
day.
Sustaining capital expenditures of $4.9 million included a $1.5 million reimbursement for the handing over
of the completed 154kV power transmission line to local authorities as part of the original development
agreement.
Efemcukuru
Gold production of 23,184 ounces for the quarter was in -line year over year. Total gold ounces sold of
18,754 were lower due to a religious holiday in Turkey. Cash operating costs of $525 per ounce were higher
year over year due to lower mined grades. Capital expenditu res of $5.6 million included underground
development, mine equipment overhauls and process and waste rock/tailings facilities construction
projects.
GREECE
Stratoni
Concentrate production of 10,157 tonnes for the second quarter was lower year over year due to a
reduction in ore tonnes processed and slightly lower mined grades (6.1% Pb, 9.4% Zn, 159 g/t Ag). The
expected reduced grade and tonnage performance reflects the continuing depletion of the current
mineable ore reserves remaining at the Mavres Petres mine.
Olympias
Olympias Phase II was substantially completed during the quarter. Wet commissioning of the plant began
in early May. The plant operated under commissioning control through the remainder of the month and
under operations control for trial production in June. Gold production of 2,052 ounces for the quarter is
considered pre-commercial. Commissioning is progressing well, with lead/silver, zinc and gold concentrates
being moved into market, however a bottleneck in the tailings filtrati on stage is limiting capacity to
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approximately 60% of design throughput. An engineering solution is being advanced and is expected to be
implemented during the third quarter. Commercial production is now expected by the end of the year.
Capital spending for the quarter at Olympias was $27.1 million, with the majority deployed for continued
underground development and rehabilitation in the Olympias underground, construction of the Phase II
plant and construction works in the Kokkinolakkas tailings management facility.
Due to this slower than expected start- up, 2017 guidance at Olympias has been reduced from 40,000 to
50,000 ounces to 20,000 to 30,000 ounces.
Skouries
Work continued in the second quarter with the onset of better weather conditions. Building erection work
commenced with key covered storage in place by quarter end. Tree clearing in the tailings dam area began
along with continued construction of the access road through the base of the dam, as well as enabling works
that are key for the start of the tailings embankment construction. Earthworks also continued on the tailings
thickener foundations and the stockpile dome embankments, with both close to final grade by quarter end.
Total capital expenditure for the quarter was $18.6 million. Capital expenditure continues to lag behind
expectations and it is now estimated that $80-$90 million will be spent in 2017 compared to the originally
estimated $170-$200 million. Delays in capital expenditure are attributable to the slower start to the year
in combination with ongoing delays in the granting of required permits by the Greek government to enable
ramp-up in construction activities. Production is now targeted for 2020.
Perama Hill
The project remains on care and maintenance pending receipt of the Environmental Impact Study permit.
BRAZIL
Tocantinzinho
The installation licence for the site was issued by the Para State Government during the quarter, however
the road and power line licence applications are still under review. Basic engineering is largely complete for
the process plant and detailed infrastructure engineering was completed during the second quarter. Work
continued on the detailed design required for tailings and solution pond permit applications and all permit
approvals are expected during the first quarter of 2018.
A total of $2.5 million was spent during the quarter.
ROMANIA
Certej
Engineering and design work continued in order to support the permitting of the oxidative process, tailings
and waste management facilities. Optimization studies were completed on the metallurgical
process. Tailings and waste management studies continued with a selection of an optimum tailings pond
and waste dump location from a short list of suitable locations. Permitting level designs will be completed
based on the selected option. Engineering and permitting for offsite infrastructure continued with work
progressing on the main power line, mine access road, water tanks and water supply pipeline.
A total of $4.2 million was spent during the quarter.
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Integra Acquisition
During the quarter, the Company announced that it had entered into a definitive agreement with Integra
Gold Corp. to acquire all of the issued and outstanding shares that the Company did not already own by
way of a plan of arrangement. (“Arrangement”). Pur suant to the Arrangement, Integra shareholders
collectively received, for all the issued common shares of Integra that Eldorado did not already own,
approximately CAD$129 million cash and 77 million common shares of Eldorado (representing
approximately 10% of the total issued common shares of Eldorado, post-completion of the Arrangement).
Total consideration was approximately $360 million, inclusive of Integra shares held by Eldorado. The
Arrangement was successfully completed on July 10, 2017.
Project Overview
The principal asset is the Lamaque project near Val-d’Or, Quebec. A Preliminary Economic Assessment (PEA)
was completed in February 2017 that envisioned a high -grade underground operation producing 123,000
ounces of gold per year for over 10 years at all-in sustaining costs of US$634 per ounce. Lamaque hosts a
NI 43-101 Indicated Resource of 5.1 million tonnes at a grade of 9.13 grams per tonne gold and an Inferred
Resource of 3.5 million tonnes at a grade of 7.94 grams per tonne gold (at a 5.0 gram per tonne gold cut -
off). The Company is currently in the process of advancing underground ramp development to facilitate
underground exploration and collection of a bulk sample by year end. To date, the underground ramp has
progressed over 1,135 metres and the bulk sample has been initiated with over 5,107 tonnes collected to
date.
Exploration
The Company will continue to expand exploration of the Lamaque project area, building on the experience
and knowledge of the Quebec team gained from the discovery and exploration of the Triangle
deposit. Drilling planned for the second half of 2017 includes testing of new exploration targets in the
project area , step-out drilling on recent high -grade drill intercepts not yet correlated with known
mineralized structures, and additional drilling at the Triangle d eposit on extensions of the C5 and C7
mineralized zones. Additional project upside is being outlined through ongoing property-scale targeting
studies that integrates the extensive historical exploration and mining data for the project area with new
geophysical survey data and our enhanced understanding of controls on gold mineralization.
Updated Technical Study & Resource
The current PEA, based on the Triangle Resource from November 2016, does not incorporate the latest
Triangle Resource (March 2017) or the 110,000 plus metres of additional drilling that supported the March
2017 resource model. This and ongoing drilling has shown increased overall confidence in the Triangle
Resource and a positive trend of better grades and thicknesses, particularly in the shallower portions of the
deposit. A technical study is currently underway which will include not only the data supporting the March
2017 model but also information from a further 60,000 metres of drilling. The study will optimize the PEA
for capital and operating costs to a pre -feasibility level of confidence and is expected to confirm maiden
reserves for Triangle deposit in the first quarter of 2018.
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Exploration Review
During the second quarter the Company completed 21,650 metres of exploration drilling at the Company’s
exploration projects and mines. Exploration expenditures for the quarter totaled $8.6 million.
Turkey
At Efemcukuru, the 2017 program includes delineat ion drilling on the Kestane Beleni vein, drill- testing
exploration targets within the central parts of the Kokarpinar vein system and identifying and testing new
targets outside of these two main vein systems. Delineation drilling of 5,564 metres was completed during
the second quarter at Kestane Beleni on I nferred Resource zones in the south and middle ore shoots and
Kestane Beleni northwest areas, for a 2017 drilling total of 8,173 metres. The results are positive, with
numerous intercepts yielding higher gold grades than previously modelled.
At Kokarpinar, the first three drillholes of the 2017 program were completed. All intersected thick vein
intervals at shallow levels with textural and mineralogical characteristics similar to high -grade veins at
Kestane Beleni and from other parts of the Kokarpinar vein. Assay results are pending.
Exploration elsewhere in Turkey included reconnaissance programs in the western part of the country,
evaluating the potential for epithermal and porphyry systems associated with Tertiary volcanic centers.
Romania
In the Certej di strict, exploration during the quarter focused on the Bolcana and Sacaramb projects. At
Bolcana, 9,295 metres were drilled in six drillholes, bringing the 2017 drilling total to 13,394 metres. Many
of these holes were collared on the margins of the porphyry system and oriented such that they tested the
porphyry system at depth. Initial results confirm that strong mineralization in the system continues to
depth and that the deposit footprint extends further to the west than was previously assumed.
Six drill rigs are currently active at the project, testing the continuity of these zones at shallower levels of
the system. A total of 22,000 metres of drilling is planned for the Bolcana project in 2017.
Serbia
Exploration during the quarter focused on th e KMC project, where 7,393 metres of diamond drilling were
completed at the Shanac, Copper Canyon, and Gradina prospects. At Shanac, seven drillholes tested the
extent of the gold-rich magnetite skarn defined in the 2016 drilling program, intersecting similar grades and
thicknesses to those previously encountered. Drilling is now testing extensions to high -grade zones at
Copper Canyon and Gradina, as well as new targets on the property.
Greece
At the Stratoni mine, nine underground drillholes were comple ted during the second quarter testing the
lower portion of the Mavres Petres orebody. These drillholes include both delineation holes designed to
convert existing Inferred Resources and down -dip stepouts designed to identify new resources. Most
delineation drillholes have intersected ore thicknesses greater than those predicted by the resource model,
while the stepout holes have demonstrated downdip continuity of the orebody.
The first two drillholes of the 2017 program at the early-stage Tsikara porphyry prospect were completed,
testing soil geochemical and geophysical anomalies associated with breccia and intrusive contact zones.
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Only weakly mineralized zones have been intersected and an additional four drillholes on other nearby
targets remain in the planned program.
2017 Outlook
In 2017 Eldorado expects to produce 290,000 – 340,000 ounces of gold, including pre -commercial ounces
from Olympias Phase II. Cash costs are forecasted at $500 per ounce, with all -in sustaining cash costs
expected to be approximately $900 per ounce.
In early June, the Greek Ministry of Environment and Energy (“the Ministry”) issued a press release
indicating it had requested the Greek Council of State to take preparatory steps to initiate arbitration
proceedings with the Company, however provided no specific or additional details. The Company has not
yet received arbitration notice, but if initiated the arbitration process could take a minimum of four months.
Meanwhile, permits applied for remain unissued and the 2017 guidance on Skouries capital spending and
start-up has been revised accordingly. The Company continues to evaluate all capital spending and
development timelines at its projects in Greece.
As at June 30, 2017, the Company’s balance sheet remains strong, with $752 million in cash, cash
equivalents and term deposits and $250 million in undrawn credit lines. Cash, cash equivalents and term
deposits after payment for the acquisition of Integra was $609.3 million. Sustaining capital for gold mining
operations in 2017 is estimated to be approximately $70 million. Based on current plans, expenditures for
project development are being revised downwards to $ 225 million. Exploration expenditure guidance for
2017 remains at $35 million, with a balanced focus on resource delineation and brownfield drilling at
existing operations, advancing early-stage projects and project generation.
Corporate
After the Annual General Meeting on April 27, 2017. Mr. George Burns succeeded Mr. Paul Wright as the
Company’s President and Chief Executive Officer. Mr. Burns also joined Eldorado’s Board of Directors.
Dividend
In line with terms and Conditions of the Company’s Dividend Policy, where no dividend is paid on a realized
gold price under $1,250 for gold sold in the prior six months, the Company will suspend the cash payment
of its semi-annual dividend effective the third quarter of 2017. The realized price by the Company on gold
sold during the first half of 2017 was $1,240.
Conference Call
A conference call to discuss the details of the Company’s 2017 Second Quarter Results will be held by senior
management on July 28, 2017 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 August 14, 2017)
Date: Friday, July 28, 2017 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: 4708 3663
Toll free: 888 231 8191
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About Eldorado Gold
Eldorado is a leading intermediate gold producer with mining, development and exploration operations in
Turkey, Greece, Romania, Serbia, Canada and Brazil. The Company’s success to date is based on a highly
skilled and dedicated workforce, safe and responsible operations, a portfolio of high -quality assets, and
long-term partnerships with the communities where it operates. Eldorado’s common shares trade on the
Toronto Stock Exchange (TSX: ELD) and the New York Stock Exchange (NYSE: EGO).
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", "ex pects", "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 2017 Second Quarter Financial
and Operational Results, including statements or information with respect to: our guidance and outlook, including expected production, projected
cash cost, planned capital and exploration expenditures for 2017; our expectation as to our future financial and operating pe rformance, including
future cash flow, estimated cash costs, expected metallurgical recoveries, gold price outlook; and our strategy, plans and go als, including our
proposed exploration, development, construction, permitting 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.
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, suspensions 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 information are
reasonable, there can be no assurance that the forward- looking statement or i nformation 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, uncertainties or other factors materialize, or should underlying assumptions pr ove 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), risks related to mineral tenure and permits; gold and other metal
price volatility; mining operational and development risk; foreign country operational risks; risks of sovereign investment; regulatory environment
and restrictions, including environmental regulatory restrictions and liability; discrepancies between actual and estimated production, mineral
reserves and resources and metallurgical recoveries; risks related to impact of the sale of our Chinese assets and the acquis ition of Integra on the
Company’s operations; risks related to impact of the integration of Integra; additional funding requirements; currency fluctuations; litigation r isks;
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 Inform ation 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 reference in this release, for a fuller un derstanding 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 anticipated in such statements. Accordingly, you sho uld 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.
Financial Information and condensed statements contained herein or attached hereto may not be suitable for r eaders that are unfamiliar with the
Company and is not a substitute for reading the full quarterly financial statements and related MD&A available on our website and on SEDAR under
our Company name. The reader is directed to carefully review such document for a full understanding of the financial information summarized
herein.
Jacques Simoneau, P. Geo., Exploration Manager and François Chabot, P. Eng., Director of Operations & Engineering at the Lamaque Project, are
Qualified Persons for the purposes of National Instrument 43 -101 - Standards of Disclosure for Mineral Projects of the Canadian Securities
Administrators. Mr. Simoneau is responsible for the exploration activities on the project while Mr. Chabot is responsible for the engineering and
operation activities. Both have reviewed and approved the scientific and technical information in this news release relating to the Lamaque Project.
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