Eldorado Gold Reports 2017 Year-End and Fourth Quarter Financial and Operational Results
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NEWS RELEASE
TSX: ELD NYSE: EGO March 21, 2018
Eldorado Gold Reports 2017 Year-End and Fourth Quarter
Financial and Operational Results
VANCOUVER, BC – Eldorado Gold Corporation, (“Eldorado” or “the Company”) today reports the
Company’s financial and operational results for the fourth quarter and year ended December 31, 2017.
For information relating to the year ahead and the highlights of the Kisladag, Lamaque and Skouries
Technical Reports, readers should refer to the Company’s press release titled “Eldorado Gold Reports
Results of Technical Studies”, also dated March 21, 2018 (the “Technical Studies Press Release”).
Financial and Operating Results Overview
Loss attributable to shareholders of $9.9 million ($0.01 per share), compared to loss attributable to
shareholders of $344.2 million ($0.48 per share) in 2016. Adjusted net earnings of $15.2 million ($0.02
per share) 1 compared to an adjusted net earnings of $47.4 million ($0.07 per share) in 2016.
Full year g old production of 292,971 ounces, including Olympias pre-commercial production and
7,061 ounces of gold produced from a bulk sample at our newly acquired Lamaque project in Quebec
(2016: 312,299 ounces from continuing operations).
Gross profit from gold mining operations of $121.2 million (2016: $158.7 million from continuing
operations).
Gold revenues of $333.3 million on sales of 264,080 ounces at an average realized gold price of
$1,262 per ounce.
All-in sustaining cash costs averaged $922 per ounce 1, slightly higher than guidance of $915 per
ounce.
Cash operating costs averaged $509 per ounce1; compared to revised 2017 guidance of $ 500 per
ounce.
The Company held $485 million in cash, cash equivalents and term deposits, and $250 million in
undrawn lines of credit at year end.
Completed acquisition of Integra Gold Corp. (“Integra”), for a total consideration of $357 million,
inclusive of Integra shares held by Eldorado. Commenced pre-feasibility work (including test mining),
and advanced construction of the Lamaque mine and refurbishment of the associated Sigma mill.
Hellas Gold S.A., Eldorado’s Greek subsidiary, entered into arbitration proceedings with the Greek
Government; the proceedings are expected to conclude by April 6, 2018.
1 Throughout this press release we use cash operating cost per ounce, total cash costs per ounce, all-in sustaining cost per ounce, gross profit
from gold mining operations, adjusted net earnings and cash flow from operating activities before changes in non -cash working capital as
additional measures of Company performance. These are non IFRS measures. Please see our MD&A for an explanation and discussion of these
non IFRS measures. All dollar amounts in US$, unless stated otherwise.
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In November, announced the intention to move the Skouries project into care and maintenance due
to continued permitting delays. Skouries is expected to be fully ramped down shortly.
Olympias Phase II commissioning was completed and commercial production was achieved on
December 31, 2017.
Continued exploration success at Lamaque (Canada), Bolcana (Romania), Efemcukuru (Turkey), and
Stratoni (Greece), with a total of 114,900 meters of drilling completed in 2017.
Continued improvement to the overall safety record with a reduction in the total recordable injury
frequency rate (for continuous operations) for the fourth consecutive year to 6.61 from 7.18 in 2016.
George Burns appointed President and CEO in April 2017.
Reconfigured the Board of Directors with retirements of Paul Wright and Jonathan Rubenstein and
the appointment of Dr. George Albino as the new Chair.
Reserves and Resources
The Company ended 2017 with proven and probable gold reserves of 392 million tonnes at 1.37 grams per
tonne gold containing 17.3 million ounces. A gold price of $1,200 per ounce was used in the reserve
estimates, the same as in 2016.
Million Ounces
Proven and probable in-situ gold ounces as of January 1, 2017 19,263
Mined ounces including mining depletion during 2017 -576
Net discovered ounces and converted resources during 2017 +948
Net decrease due to engineering and metallurgy -2,308
Proven and probable in-situ gold ounces as of December 31, 2017 17,327
The complete mineral reserve and mineral resource data can be found at the end of this news release and
includes the data for tonnes, grades and ounces.
The 10% overall reduction in reserve ounces was primarily attributable to the planned conversion of
Kisladag from a heap leach asset to a mill processing option, with resulting higher processing costs and
higher recoveries. While mineable reserves at Kisladag declined by 1.7 million ounces, incorporating
expected higher mill recoveries, the forecast recoverable ounces dropped by only 400,000 ounces. Lower
reserves at Olympias are the result of increases in forecast operating costs and mining dilution, both based
on actual data seen since start-up.
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2017 Annual Financial Results
($ million unless otherwise noted)
2017 Q1 Q2 Q3 Q4 2017
Revenues 111.9 82.7 95.4 101.4 391.4
Gold revenues 90.5 72.2 84.4 86.2 333.3
Gold sold (ounces) 74,068 57,206 65,439 67,367 264,080
Average realized gold price ($/ounce) 1,222 1,262 1,290 1,280 1,262
Cash operating costs ($/ounce) 466 484 508 577 509
All-in sustaining cash cost ($/ounce) 791 846 925 1,104 922
Gross profit from gold mining operations 37.0 28.1 30.1 26.0 121.2
Adjusted net earnings (loss) 8.0 6.3 1.3 (0.4) 15.2
Net profit (loss) 1 3.8 11.2 (4.2) (20.7) (9.9)
Earnings (loss) per share – basic ($/share) 1 0.01 0.02 (0.01) (0.03) (0.01)
Earnings (loss) per share – diluted ($/share) 1 0.01 0.02 (0.01) (0.03) (0.01)
Cash flow from operating activities 2 28.2 16.9 16.3 5.1 66.5
(1) Attributable to shareholders of the Company
(2) Before changes in non-cash working capital
Review of Annual Financial Results
For the 12 months ended December 31, 2017 , the loss attributable to shareholders of the Company was
$9.9 million, (or $0.01 per share), compared to a loss of $344.2 million, or $0.48 per share in 2016. Financial
results in 2017 were impacted by lower gross profit from gold mining operations, higher exploration and
general and administrative costs, as well as write-downs of assets, partly offset by a gain on marketable
securities related to the Integra acquisition. The loss in 2016 was mainly due to the $351.2 million loss
recorded on the sale of the Company’s Chinese assets.
Adjusted net earnings for the year were $15.2 million ($0.02 per share) compared to $47.4 million ($0.07
per share) for 2016. Gross profit from gold mining operations was $37.1 million , lower year over year,
mainly due to lower sales at the Turkish mines. General and administrative expenses were $16. 7 million,
higher year over year , due to higher legal and reorganization costs. Exploration expenses were $ 19.5,
million higher due to an increase in exploration activities worldwide. Offsetting these cost increases was a
decrease in mine standby costs of $11.3 million as well as $17.6 million in other income mainly related to
interest on cash investments and a reversal of liabilities related to Integra flow through shares. Foreign
exchange gain was $2.4 million as compared with a loss of $2.7 million in 20 16, as the US dollar
strengthened against other currencies in 2017.
Review of Fourth Quarter Results
Loss attributable to shareholders of the Company for the fourth quarter was $ 20.7 million ($0.03 per
share) as compared to a loss for the quarter ended December 31, 2016 of $32.5 million ($0.05 per share).
Adjusted losses were $0.4 million as compared to fourth quarter 2016 adjusted earnings of $2.9 million.
The main factors that impacted adjusted earnings for the fourth quarter year over year were lower sales
volumes partly offset by higher gold prices.
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Operations Review
TURKEY
Kışladağ
Production at Kisladag in 2017 was 17 1,358 ounces of gold , which was lower than the previous year
(211,161 ounces in 2016). Cash costs were $500 per ounce ($474 per ounce in 2016). Kisladag reported a
reduction in ore tonnes to the leach pad year over year (13.1 million tonnes in 2017 versus 16.6 million
tonnes in 2016), with no lower grade run of mine ore being placed on the pad in 2017. The average ore
grade in 2017 was 1.03 grams per tonne versus 0.80 grams per tonne in 2016. Gold production, sales and
revenue were down year over year due to lower grade solution from the leach pad , as a result of a
combination of lower recovery material being placed on the pad later in the year and slower leach kinetics
being exhibited earlier in the year. Cash costs during the year were negatively affected by a write down of
40,000 in ventory ounces effective October 1 st. Capital expenditures were $27.9 million, and included
capitalized waste stripping, leach pad construction, equipment overhauls and various process
improvements.
During the third quarter, a significant amount of laboratory test work was undertaken, as the monthly
composite samples from material placed on the pad were indicating lower gold recoveries in the 35-40%
range. Throughout the remainder of the year, the Company continued to investigate alternative treatment
methods, which included studies on finer particle breakage, either through milling or hig h pressure
grinding roll crushers.
A National Instrument 43 -101 - Standards of Disclosure of Mineral Projects of the Canadian Securities
Administrators (“NI 43-101”) compliant pre-feasibility study outlining the planned path forward at Kisladag
is expected be filed by the Company on March 29, 2018, the results of which are highlighted in the
Technical Studies Press Release dated March 21, 2018. This new study indicates that the construction of a
conventional carbon in pulp mill at Kisladag is technically and economically feasible and supports a 3.1
million ounce reserve with expected metallurgical recoveries of approximately 80%, to produce an average
of 270,000 ounces of gold per year over nine years.
As outlined in the Technical Studies Press Release, 2018 production at Kisladag is forecast to be 120,000-
130,000 ounces of gold from the leach pad at a cash cost of $600-700 per ounce including roughly $150
per ounce of non-cash inventory changes.
Efemçukuru
Gold production at Efemcukuru of 96,080 ounces was reasonably consistent year over year with slightly
higher processed tonnage (481,600 tonnes in 2017 versus 476,500 tonnes in 2016 ) and improved
recoveries (94.8% in 2017 versus 92.2% in 2016) somewhat offsetting the lower head grade (7.01 grams
per tonne in 2017 versus 7.40 grams per tonne in 2016). Cash operating costs of $524 per ounce increased
slightly ($514 per ounce in 2016), mainly due to the lower head grade. Capital spending of $28.9 million
included costs related to capitalized underground development and various process improvements.
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 2018 are forecast to be approximately $20 million, spent
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primarily on underground mine development, equipment purchase and rebuilds and various small capital
projects.
Exploration drilling of 20,000 metres during 2017 included resource conversion drilling on the Kestane
Beleni vein and resource expansion drilling on the nearby Kokarpinar vein system. The resource
conversion drilling targeted inferred resources downdip from the current production levels in the South
Ore Shoot, in the transition zone between South and Middle Ore Shoots and at the Kestane Beleni
Northwest zone , while resource expansion drilling at Kokarpinar tested the northern part of the vein
system. 10,000 meters of exploration drilling in 2018 will continue to further test both vein systems.
GREECE
Stratoni
Concentrate tonnes produced at Stratoni were lower year over year due to decreased mill throughput and
lower lead grades (5.8% in 2017 versus 6.1% in 2016) and zinc grades (9.4% in 2017 versus 10.2% in 2016).
Decreased mill throughput (150,700 tonnes in 2017 vs 185,000 tonnes in 2016) was a result of limit ed
reserves and slower than expected underground development to access the new areas. Average realized
price for concentrate increased year over year ($1,227 per tonne in 2017 versus $953 per tonne in 2016)
due to an increase in both lead and zinc prices. Gross profit from mining operations was similar year on
year due to lower throughput and higher payabilities offsetting each other. Concentrate tonnes sold were
similar year over year due to inventory remaining at the end of 2016 sold in 2017.
Major expenditures (capitalized and expensed) of $12.8 million included underground mine development
related to resource evaluation activities as well as to access new ore. This included development of the
hangingwall exploration drift, from which 6,000 metres of resource expansion drilling were completed,
confirming the downdip continuity of the orebody from the current resource . The exploration
development and drilling programs will continue through 2018, with 10,000 metres of drilling scheduled
to continue testing downdip and along-strike extensions of the orebody.
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 silver. Sustaining capital expenditure at Stratoni is expected to be $8 mil lion and
development capital expenditure is expected to be $8 million for the year.
BRAZIL
Vila Nova
Vila Nova remained on care and maintenance during 2017. Two shipments were completed in the first and
second quarters of 2017, selling 44,734 tonnes of lump iron ore and 46,488 dry metric tonnes of sinter
fines taking advantage of a short period of higher prices or iron ore.
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Development Projects and Exploration
GREECE
On September 14, 2017, Hellas Gold received formal notice from the Greek Ministry of Finance and the
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 (known as Olympias Phase III), submitted in December
2014, is deficient and thereby is in violation of the Transfer Contract and the environmental terms of the
project. The arbitration proceedings are expected to conclude by April 6, 2018 . While arbitration
proceedings are inherently uncertain, 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
In 2017, Olympias had pre-commercial production of 18,472 ounces of gold. On December 31, 2017, the
Company achieved commercial production at Olympias Phase II. As a reminder, there is a minimum one
month lag between production and sale of concentrate, which affects revenue timing and overall cash
operating costs.
As previously announced, in order to provide maximum operational flexibility for mine backfilling and
tailings handling, the Company is constructing a new paste backfill plant (part of the original Phase II scope)
and installing an additional tailings filter . The filter press is currently being commissioned and the paste
plant is expected to be commissioned during the second quarter 2018.
In 2018, Olympias is expected to mine and process 390,000 tonnes of ore at an average grade of 7.5 grams
per tonne, producing 55,000-65,000 ounces of payable gold at operating costs of $550-650 per ounce.
Sustaining capital expenditure is expected to be $ 20 million and development capital expenditure is
expected to be $28 million and will include completion of the paste plant, installation of a second tailings
filter, work on the Kokkinolakas tailings management facility and further drilling. The Olympias mine also
produces significant amounts of lead -silver and zinc concentrates and, depending on metal prices, the
Company may take advantage of the flexibility inherent in this polymetallic orebody in order to optimize
cash flow.
In 2018, the exploration drilling program at Olympias is expected to be 7,000 meters and will be focused
on the eastern zone.
Skouries
Capital expenditure at Skouries in 2017 totalled $ 73.2 million. Project development was slowed
considerably in the second half of 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
the ramp-down to care and maintenance is expected to be complete shortly.
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.
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An updated NI 43-101 compliant technical report is expected to be filed by the Company for the Skouries
project on March 29, 2018, the results of which are highlighted in the Technical Studies Press Release.
Economic highlights of the study include an after tax IRR of 21.2% and an NPV (5%) of $925 million, using
the Company’s assumed long term met al prices of $1,300 per ounce of gold and $2.75 per pound of
copper.
Perama Hill
Perama Hill remains on care and maintenance pending receipt of the necessary permits.
CANADA
Lamaque
During 2017, the Company completed the Integra acquisition and began work at its 100% wholly -owned
Lamaque project. 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 milling facility. Results
from the first two batches (32,000 tonnes) with an average grade of 7.35 g/t, which was in line with
expectations and recoveries were slightly higher than anticipated at an average 95.4% for the toll
treatment. In 2017 the company spent $35.8 million in development capital at Lamaque.
Capital expenditures at Lamaque to reach commercial production are $122 million plus $57 million of pre-
commercial production costs, offset by $80 million in pre commercial gold sales, for a net start-up capital
of $99 million. The Company expects to extract roughly 200,000 tonnes of ore grading 8.03 grams per
tonne gold, containing approximately 40,000 ounces and anticipates toll milling a portion of the ore and
producing 25,000 to 35,000 ounces.
Since the July 2017 acquisition, over 44,000 metres of resource conversion and resource expansion drilling
have been completed and an additional 34,000 metres of exploration drilling is planned for 2018.
An NI 43-101 compliant technical report with respect to Lamaque is expected to be filed by the Company
on March 29, 2018, the results of which are highlighted in the Technical Studies Press Release. A maiden
Reserve of 893,000 ounces was declared for the Triangle Zone, within Measured and Indicated Resources
of 1.3 million ounces with a further 1.3 million ounces of Inferred Resources. The technical report outlines
an initial seven year mine life with production averaging 117,000 ounces per year. Exploration for 2018 is
budgeted at $7 million.
BRAZIL
Tocantinzinho
A total of $9.9 million was spent on the project in 2017 on detailed engineering for the tailings dam, CIP tails pond,
waste rock dump, basic engineering design, land agreement, administration and others. The installation licences for
the project site (min e, process plant and infrastructure), for the tailings structures and for the project power line
were received in 2017. The mining concession application is under review by the federal branch of the Mines Ministry
and the approval is expected in the second quarter of 2018.
Work planned for 2018 is limited to permitting support, site maintenance and security, finalizing land agreements
for the site and power line and environmental compensation programs. Consideration of a construction decision at
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Tocantinzinho has been deferred until the mining concession is in place and a development project review is
completed. Capital spending in 2018 is expected to be $8 million.
ROMANIA
Certej
During 2017 , a total of $15.4 million (capitalized and expensed) was spent on Certej, mainly on
geotechnical and metallurgical testing, site preparation and engineering studies. During 2018, the
Company expects to spend approximately $7 million at Certej, with a focus on continuing off site
infrastructure projects and advancing permitting.
Bolcana
The Bolcana project is a large copper gold porphyry system located approxim ately six kilometres west of
the Company’s Certej epithermal gold-silver development project in Romania. The 2017 explorat ion
program at Bolcana totalled over 23,000 metres of drilling in 25 holes and tested an area measuring 1,200
metres by 900 metres, locally to a depth of more than 1,200 metres.
A further 20,000 metres of drilling is planned for 2018, which will complete drill hole coverage over the
porphyry system to a 150 metre drill hole spacing.
2018 Outlook
In 2018 Eldorado expects to produce 290,000-330,000 ounces of gold, including pre -commercial ounces
from Lamaque. Cash costs are forecasted at $580-630 per ounce.
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 Board 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
Ross Cory retired from the Board effective April 27, 2017 as he did not stand for re-election at the
Annual General Meeting
Jason Cho promoted to Executive Vice President, Strategy and Corporate Development
The following changes were made to the Board Committees:
Compensation Committee
Steve Reid appointed as Chair to replace Jonathan Rubenstein
Dr. George Albino replaced Robert Gilmore