Eldorado Gold Reports 2018 First Quarter Financial and Operating Results
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NEWS RELEASE
TSX: ELD NYSE: EGO April 26, 2018
Eldorado Gold Reports 2018 First Quarter Financial and Operating Results
VANCOUVER, BC – Eldorado Gold Corporation, (“Eldorado” or “the Company”) today reports the
Company’s financial and operational results for the first quarter ended March 31, 2018.
Highlights from the Quarter and Subsequent Period1
Hellas Gold S.A., Eldorado’s Greek subsidiary, received a positive ruling in the arbitration proceedings
with the Greek Government , and will continue t o seek a collaborative dialogue with the Greek
government.
Completed and filed technical reports for the Lamaque, Kisladag and Skouries projects. These
technical reports were prepared pursuant to Canadian Securities Administrators' National Instrument
43-101 - Standards of Disclosure for Mineral Projects (“NI-43-101”).
Installation of the additional filter press and paste plant completed at Olympias Phase II bringing the
plant up to its run rate production of 1,250 tonnes per day.
The Company held $459.7 million in cash, cash equivalents and term deposits, and $250.0 million in
undrawn lines of credit at the end of the quarter.
Profit attributable to shareholders of $8.7 million ($0.01 per share), compared to profit attributable
to shareholders of $6.8 million ($0.01 per share) in the first quarter 2017.
Gold production of 89,374 ounces, (including 2,740 ounces from Lamaque pre -commercial
production) (first quarter 2017: 75,172 ounces).
Gold revenues of $115.4 million (first quarter 2017: $90.5 million) on sales of 86,587 ounces at an
average realized gold price of $ 1,333 per ounce (first quarter 2017: 74,068 ounces at $1,222 per
ounce).
All-in sustaining cash costs averaged $878 per ounce (first quarter 2017: $791 per ounce).
Cash operating costs averaged $571 per ounce (first quarter 2017: $466 per ounce).
Cash generated from operating activities before changes in non -cash working capital was $37.9
million (first quarter 2017: $28.2 million).
“We had a very successful first quarter maintaining operational momentum and laying a clear path forward
for long-term growth,” said George Burns, Eldorado’s President and Chief Executive Officer. “The filing of
the technical reports was a crucial first step towards delivering on our prioritized development proje cts,
1 Throughout this press release we use cash operating cost per ounce, all-in sustaining cash cost per ounce, and cash flow from operating
activities before changes in non-cash working capital as additional measures of Company performance. These are non-IFRS measures. Please see
our MD&A for an explanation and discussion of these non-IFRS measures. All dollar amounts in US$, unless stated otherwise.
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Lamaque and the Kisladag mill. Given our current liquidity and anticipated capital deployment for 2018
and 2019, we have time to evaluate and implement an appropriate long -term financing plan to deliver
these investments.”
“Operationally, production was in-line with plans. We removed the tailings bottleneck at Olympias with
the installation of a second tailings filter press. We also made good progress at our Lamaque project,
including advancing refurbishment of the Sigma mill and continuing undergr ound development at the
Triangle deposit. At Kisladag, we are transitioning to right size the workforce to support leaching of the
pad inventory and mine pre-stripping as we advance permitting and complete a feasibility study to position
this asset for the next phase of growth.”
“We are now in the delivery phase of our new business plan. By focusing on the disciplined build of
Lamaque and the Kisladag Mill while maintaining a strong base of operations at Efemcukuru and Olympias
Phase II, I am confident w e will re -establish annual low cost production of 600,000 ounces by 2021.
Skouries remains a compelling project, providing additional long -term growth, but requires collaborative
government dialogue and a clear line of sight to cash flow in order for us to allocate further capital for
development. We remain focused on driving forward our industry -leading growth projects under a
disciplined capital allocation framework to create long-term value for all stakeholders.”
Summarized Quarterly Financial Results
($ millions unless otherwise noted) 3 months ended March 31
2018 2017
Revenues 131.9 111.9
Gold revenues 1 115.4 90.5
Gold sold (ounces) 86,587 74,068
Average realized gold price ($/ounce) 1,333 1,222
Cash operating costs – gold mines ($/ounce) 571 466
Total cash costs – gold mines ($/ounce) 598 483
All-in sustaining cash cost – gold mines ($/ounce) 878 791
Gross profit from gold mining operations 34.7 37.0
Cash flow from operating activities 2 37.9 28.2
Adjusted net earnings 14.0 8.0
Net profit 3, 4 8.7 6.8
Earnings per share – basic ($/share) 3 0.01 0.01
Earnings per share – diluted ($/share) 3 0.01 0.01
(1) Including market to market price adjustments on provisional sales.
(2) Before changes in non-cash working capital.
(3) Attributable to shareholders of the Company.
(4) 2017 net profit is from continued operations.
Review of Quarterly Financial Results
Profit attributable to shareholders of the Company was $8.7 million compared to $6.8 million from
continued operations for the first quarter of 2017. G ross profit from gold mining operations was $34.7
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million compared to $37.0 million for the first quarter of 2017. Higher sales volumes and prices were offset
by higher operating costs and depreciation, depletion and amortization (“DD&A”) expense. Higher s ales
volumes were driven by sales from the newly commissioned Olympias mine as well as higher sales at
Efemcukuru and Kisladag as compared to 2017.
Total cash costs per ounce increased year over year at both Efemcukuru and Kisladag with the increase at
Kisladag being driven by the decrease in leach pad ounces as a result of an adjustment made in October
2017 as well as higher cyanide and lime costs. Olympias total cash costs were $734 per ounce and trending
down over the quarter as issues encountered during commissioning in 2017 were resolved. DD&A expense
was higher due to the start of commercial production at Olympias as well as an increase at Kisladag related
to the leach pad adjustment. Stratoni gross profit fell $4.2 million year over year as a result of lower ore
throughput.
General and administrative expenses were $3.4 million lower year over year mainly due to lower employee
payroll costs. Share based compensation expense was $3.6 million lower due to a postponement of the
grant of options to employees as the Company was in blackout. Interest expense was $2.5 million higher
as the Company is no longer capitalizing bond interest related to Olympias now that it is in commercial
production.
Stratoni and Certej were impaired in previous years. Under IFRS any expenditures on these projects are
capitalized and subsequently written-off in the same period. The Company recorded $4.0 million in asset
write-downs related to these two projects.
Operations Review
TURKEY
Kışladağ
Production at Kisladag in the first quarter was 53,814 ounces of gold which was within guidance. This
was higher than the previous year (52,644 ounces in the first quarter 2017) as adjusted cyanide
concentrations coupled with increased irrigation volumes resulted in increased amounts of gold
extracted from the pad. Kisladag reported a reduction in ore tonnes to the leach pad in the quarter (2.8
million tonnes in the first quarter 2018 versus 3.2 million tonnes in the first quarter 2017), due to the
elimination of run of mine (“ROM”) ore. The average ore grade in the quarter was 1.14 grams per tonne
versus 1.13 grams per tonne in the first quarter 2017. Moving forward we expect gold production to
decrease as no new material will be placed on the pad over the remainder of 2018 while the Company
continues to evaluate feasibility of mill construction. Including the production reported in this quarter,
the Company expects to recover 160,000-180,000 ounces for 2018-2019 from continued leaching of
previously stacked ore.
Cash operating costs were within guidance at $576 per ounce ($446 per ounce in the first quarter 2017),
but were higher year over year, due to increased lime and cyanide costs as well as the impact on average
inventory unit carrying cost s of a 40,000 ounce negative adjustment to estimated recoverable ounces
remaining in the leach pad, which was recognized in October 2017.
Sustaining capital spending during the quarter of $7.5 million was related to waste stripping and site
construction projects.
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During the quarter, the Company filed a pre-feasibility study on the mill project at Kisladag . The report
outlined Proven and Probable reserves of 3.1 million contained ounces at 0.82 grams per tonne of gold to
support a nine year mine life with average annual production of 2 70,000 ounces of gold at an all -in
sustaining cost (“AISC”) of $778 per ounce. At an assumed gold price of $1,300 per ounce t he project is
expected to generate an estimated after-tax project net present value of $434 million at a 5% discount
rate, an internal rate of return of 22.1%, and a payback period of 3.7 years.
Efemçukuru
During the quarter, g old production at Efemcukuru of 22,855 ounces of gold (22,528 ounces in the first
quarter 2017) was higher year on year with slightly higher processed tonnage (124,300 tonnes in the first
quarter 2018 versus 115,800 tonnes in the first quarter 2017). Gold ounces sold were higher due to some
carry over of 2017 gold production sold in 2018. The average ore grade in the quarter was 6.47 grams per
tonne versus 6.77 grams per tonne in the first quarter 2017. Cash operating costs of $ 532 per ounce
increased slightly ($515 per ounce in the first quarter 2017).
Sustaining c apital spending in the quarter of $3.7 million included undergr ound development, mine
equipment overhauls, an upgrade to the water treatment plant and construction projects.
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
proceedings concluded on April 4, 2018 with a positive ruling for the Company. The Panel's ruling rejected
the Greek State's motion that the technical study for the Madem Lakkos metal lurgy plant for treating
Olympias and Skouries concentrates, as submitted by the Company's Greek subsidiary Hellas Gold
S.A. in December 2014, was in breach of the provisions of the Transfer Contract. The Company and Hellas
Gold are continuing to engage w ith the Greek government in order to find a mutually -agreeable path
forward with respect to its Kassandra investments.
Olympias
In the first quarter 2018, Olympias produced 9,965 ounces of gold at cash operating costs of $699 per
ounce of gold, costs were higher than guidance. Olympias began plant commissioning during the second
quarter of 2017 and declared commercial production at the end of 2017. The plant was restricted to two-
thirds of design throughput due to tailings filtration capacity constraints. This resulted in lower tonnage
processed for much of the first quarter and higher per ounce costs.
During the quarter, the second filter press was successfully installed and commissioned, which will allow
the plant to reach its design throughput of 1,250 tonnes per day. Due to timing of concentrate shipments,
gold sales for the quarter totaled 5,748 ounces of commercial production (versus 9,965 produced) and
cash operating costs are calculated based on these ounces only. We expect costs to come down as mill
throughput increases.
Capital expenditures of $11. 7 million includ ed $2.6 million of s ustaining capital on underground
development, mine equipment overhauls and waste rock/tailings facilities construction projects . The
remaining $9.1 million was related to mine construction costs including the completion of the paste plant
and installation of the new tailings filter press as well as capitalized operating costs related to the
concentrate attributable to the pre-commercial period of production.
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Stratoni
Concentrate production at Stratoni was lower year on year (8,565 tonnes in 2018 vs 11,599 tonnes in
2017). This was due to decreased mill throughput (38,000 thousand tonnes in the first quarter 2018 vs
44,600 thousand tonnes in the first quarter 2017), lower zinc grades (8.8% in the first quarter 2018 versus
10.5% in the first quarter 2017) and lower lead grades (5.4% in the first quarter 2018 versus 5.6% in the
first quarter 2017). The expected reduced grade and tonnage reflects the continued depletion of the
current mineable ore reserves remaining at the Mavres Petres ore body. Development during the quarter
provided access to the lower sections of the mine for exploration drilling which continues to identify
additional resources. These have the potential to extend the mine’s life while allowing production rates
to return to the historic levels of approximately 225,000 tonnes per annum.
Average realized price2 for concentrate increased year on year ($1,423 per tonne in the first quarter 2018
versus $1,197 per tonne in the first quarter 2017) due to an increase in both lead and zinc prices. Total
cash operating costs increased over the comparative quarter ($1,277 per tonne in the first quarter 2018
vs $811 per tonne in the first quarter 2017) due to reduced tonnes sold.
Sustaining capital spending in the quarter of $1.6 million related to underground development.
Development Projects and Exploration
GREECE
Skouries
Works completed during the quarter included ongoing bank stabilization, essential water ditches and
storage ponds, primary drainage network, finalization of all site -built tanks, in addition to equipment
erection (mills – liners, lube oil system, power) steelwork modifications and reinforced concrete works
which are required for the ongoing maintenance regime and the long term storage of equipment.
Total capital expenditure for the quarter was $8.0 million , in line with current guidance. The Company
announced its intention to move the project into care and maintenance in November 2017 until which
time it receives approval of all permits required to complete construction . T he transition to care and
maintenance has been delayed by bad weather at site and is expected to be complete by the end of Q2.
Ongoing care and maintenance costs are estimated to be $3-5 million per year for 2019 and beyond.
During the quarter, the Company filed an updated technical report on the Skouries project. The report
included Proven and Probable reserves of 3.8 million ounces of gold at 0.74 grams per tonne Au and 1.7
billion pounds of copper at 0.49% Cu, supporting a 23 year mine life at an average annual production rate
of 140,000 ounces of gold and 67 million pounds of copper with production from both the open-pit and
underground mines. At an assumed gold price of $1,300 per ounce the project is expected to generate an
estimated after-tax project NPV $925 million at a 5% discount rate, an IRR of 21.2%, and a payback period
of 3.4 years.
Perama Hill
Perama Hill remains on care and maintenance pending receipt of the necessary permits.
2 Average realized price includes mark to market adjustments.
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CANADA
Lamaque
The mining lease for the Triangle deposit was approved during the quarter. This represents a major project
milestone and enables Lamaque to enter the production phase. A total of 1,643 metres of underground
development were completed at Triangle during the quarter. The ramp up of refurbishment work on the
Sigma mill continued with the mobilization of key contractors to site. Key activities at the Sigma mill
focused on the inspection and refurbishment of electrical equipment and motors.
During the quarter, test mining extracted approximately 20,000 tonnes of ore with an average head grade
of 6.3 grams per tonne gold, with approximately 6,000 tonnes processed at a nea rby custom milling
facility. Results from the custom m illing have confirmed our metallurgical assumptions for future mill
performance. A total of 2,740 ounces of gold were produced during the quarter, primarily from material
mined during the fourth quarter of 2017.
Capital spending in the quarter totaled $18.9 million.
During the quarter, Eldorado released the results of the Lamaque pre-feasibility study, which focused on
the development of the Triangle deposit (one of three currently identified deposits at Lamaque) and the
refurbishment of the previously pro ducing Sigma mill. The study also included the release of maiden
reserves at Triangle of approximately 893,000 contained ounces of gold at an average grade of 7.3 grams
per tonne. This supports an initial seven year mine plan with an average annual production rate of 117,000
ounces of gold at AISC of $717 per ounce. At an assumed gold price of $1,300 per ounce t he project is
expected to generate an estimated after-tax project NPV of $205 million at a 5% discount rate, an IRR of
34.3%, and a payback period of 3.7 years. The Company is carrying out an aggressive program of infill and
extension drilling with the goal of converting resource to Proven and Probable reserves as well as locating
additional resources at Triangle and other known mineralized zones and new targets.
BRAZIL
Tocantinzinho
The mining concession application is under review by the federal branch of the Mines Ministry and
approval is expected this year. Work completed in the first quarter include d a review of capital costs,
detailed engineering of the tailings ponds and a consolidated geotechnical study.
Spending in the quarter totaled $1.7 million.
ROMANIA
Certej
During the quarter work at Certej continued to focus on tailings impoundment and waste rock storage
engineering and studies required for the permitting process. Work also continued on the evaluation of the
limestone quarry and facilities required for the pressure oxidation process as well as providing engineering
support for the permitting effort. Offsite infrastructure construction work continued including water tank
installation, water supply pipeline installation and power line construction.
Spending in the quarter totaled $2.2 million.
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Exploration
A total of $6.9 million was spent on exploration programs during the quarter. Exploration drilling totaled
21,240 meters and was conducted at projects in Quebec, Greece and Turkey.
At the Lamaque project in Quebec, five drill rigs were active at the Triangle deposit and several nearby
target areas, completing 17,700 metres of drilling. Drilling at Triangle tested the continuity and extent of
high-grade mineralization at levels beneath the C4 and C5 zones. Results were positive, with numerous
intersections of shear -hosted mineralization similar to those at upper levels of the de posit, as well as
secondary splay zones and associated extension vein systems. The current program at Triangle is designed
to include at least 19,000 metres of drilling and testing the deposit to depths of approximately 2,000
metres. Drilling during the quarter also tested targets at the Gabbro, Southwest, Sigma East and Triangle
East areas.
In Greece, underground development continued at the Stratoni mine on the hangingwall exploration
crosscut. A total of 2,350 metres of resource expansion drilling were completed with three drill rigs active
during the quarter targeting the western and downdip extensions of the Mavres Petres orebody. At
Olympias, exploration drilling commenced late in the quarter testing previously unexplored areas
immediately east of the East Zone orebody.
In central Turkey, the initial drilling program at the 60% owned Bambal Tepe exploration joint venture
began in March. This 2,000 metre program will test the downdip extent of outcropping gold-mineralized
zones focused along schist-marble contacts, as well as a strong chargeability anomaly in the same region.
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2018 Outlook and First Quarter Results
In 2018, Eldorado expects to produce 290,000-330,000 ounces of gold, including pre-commercial ounces
from Lamaque. Cash operating costs are forecasted to be $580-630 per ounce.
($ millions unless otherwise noted) Q1 2018 Actuals 2018 Outlook (full year)
Operations
Total
Ounces produced 86,634 290,000 – 330,000
Cash operating costs ($/ounce) 571 580 - 630
Sustaining capex 15.41 62.0
Kisladag
Ounces produced 53,814 120,000 – 130,000
Cash operating costs ($/ounce) 576 600 – 700
Sustaining capex 7.5 22.0
Efemcukuru
Ounces produced 22,855 90,000 – 100,000
Cash operating costs ($/ounce) 532 530 – 570
Sustaining capex 3.7 20.0
Olympias
Ounces produced 9,965 55,000 – 65,000
Cash operating costs ($/ounce) 699 550 – 650
Sustaining capex 2.6 20.0
Lamaque
Ounces produced 2,7402 25,000 – 35,0002
Cash operating costs ($/ounce) n/a n/a
Sustaining capex n/a n/a
Corporate
General and administrative 8.2 45
Development capex
Kisladag 0.0 31.0
Olympias 9.13 28.0
Lamaque 18.9 100.0
Skouries 8.0 20.0
Stratoni 0.0 8.0
Tocantinzinho 1.7 8.0
Certej 2.2 7.0
Exploration expenditure 6.94 25
(1) Including $1.6 million in sustaining capital at Stratoni.
(2) Pre-commercial production.
(3) Includes capitalized selling expenses.
(4) Includes 2.4 million of expensed exploration and land purchases.