Eldorado Gold Reports Q2 2019 Financial and Operational Results
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NEWS RELEASE
TSX: ELD NYSE: EGO August 1, 2019
Eldorado Gold Reports Q2 2019
Financial and Operational Results
VANCOUVER, BC - Eldorado Gold Corporation (“Eldorado” or “the Company”) today reports the Company’s financial
and operational results for the second quarter of 2019.
• Steady Q2 gold production and reiterating 2019 annual guidance: Gold production for the quarter totalled
91,803 ounces with 174,780 ounces produced year-to-date. Gold production included 33,140 ounces from
Lamaque in its first quarter of commercial operations, of which 5,057 ounces were produced from stockpiles mined
during the pre-commercial production period.
• Higher sales volumes in the quarter resulted in revenue of $173.7 million: Total gold sales for the second
quarter were 113,685 ounces with 156,759 ounces sold year-to-date. Second quarter sales do not include sales
of the remaining 11,705 ounces that were mined at Lamaque during the pre-commercial production period. Net
proceeds of $7.6 million were realized in the quarter from these pre-commercial production sales.
• Net earnings per share: Net earnings to shareholders in the quarter totalled $12.2 million, or $0.08 per share.
Adjusted net loss was $1.2 million, or $0.01 loss per share, after removing, among other things, the impact of one-
time asset sales.
• EBITDA: Higher sales volumes in the quarter resulted in earnings before interest, taxes and depreciation and
amortization ("EBITDA") of $74.5 million. Adjusted EBITDA of $66.8 million excludes the impact of one-time asset
sales but includes net proceeds from pre-commercial production at Lamaque.
• Refinancing completed: The Company completed its offering of $300 million aggregate principal amount of 9.5%
senior second lien notes due 2024 (the "Notes") and its $450 million amended and restated senior secured credit
facility (the "Facility"). Eldorado used the net proceeds from the sale of the Notes and $200 million in term loan
proceeds drawn under the Facility, together with $100 million cash on hand, to redeem its outstanding $600 million
6.125% senior notes due December 2020.
• Liquidity remains solid: The Company finished the quarter with approximately $300 million of available cash
including $119.9 million in cash, cash equivalents and term deposits and approximately $179 million available
under its $250 million line of credit, with $71 million of capacity on the line of credit allocated to secure certain
obligations in connection with its operations.
• All-in sustaining costs lower due to increased sales volumes: All-in sustaining costs were $917 per ounce of
gold sold in the quarter compared to $934 per ounce sold during the second quarter of 2018.
• Divestiture of non-core assets: The Company completed a sale of a net smelter royalty interest held on a property
in Turkey for consideration of $8.1 million, of which $5.0 million will be settled through the transfer of an exploration
license and the balance to be paid in cash. Subsequent to the quarter, the Company also executed a share purchase
agreement for the sale of its Vila Nova iron ore mine for consideration of $9 million in cash, subject to the purchaser
securing financing and other standard closing conditions.
Eldorado's President and CEO, George Burns, stated: "It was a steady operational quarter with production and costs
on plan. Two key milestones were achieved. We completed the debt refinancing, which de-risked our balance sheet,
and we had a fantastic first quarter of commercial production at Lamaque. We are encouraged by our initial discussions
with the Greek government. Realizing the potential of Eldorado’s investments in Greece offers significant value for our
investors, local communities and the Greek economy. We look forward to a strong second half of the year and are on
track to meet our consolidated annual guidance of 390,000-420,000 ounces of gold at all-in sustaining costs of
$900-1000 per ounce of gold sold."
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Consolidated Financial and Operational Highlights
3 months ended June 30, 6 months ended June 30,
2019 2018 2019 2018
Revenue (1,3) $173.7 $153.2 $253.7 $285.1
Gold revenue (1,3) $150.1 $121.3 $203.9 $236.8
Gold produced (oz) (2) 91,803 99,105 174,780 188,479
Gold sold (oz) (1,3) 113,685 94,224 156,759 180,811
Average realized gold price ($/oz sold) (6) $1,321 $1,287 $1,301 $1,310
Cash operating costs ($/oz sold) (4,6) 631 587 629 579
Total cash costs ($/oz sold) (4,6) 670 610 665 604
All-in sustaining costs ($/oz sold) (4,6) 917 934 977 887
Net earnings (loss) for the period (5) 12.2 (24.4) (14.8) (15.7)
Net earnings (loss) per share – basic ($/share) (5) 0.08 (0.15) (0.09) (0.10)
Adjusted net earnings (loss) (5,6) (1.2) (1.8) (19.2) 12.4
Adjusted net earnings (loss) per share ($/share) (5,6) (0.01) (0.01) (0.12) 0.08
Cash flow from operating activities before changes in working capital (6,7) 37.5 26.3 45.6 69.7
Cash, cash equivalents and term deposits $119.9 $429.8 $119.9 $429.8
(1) Revenue and ounces sold were impacted by delayed shipments at Efemcukuru in Q1 2019 that were completed in Q2 2019. This timing issue resulted
in lower ounces sold in Q1 2019 and higher ounces sold in Q2 2019. Q2 2019 sales also included approximately 8,000 ounces sold from Olympias that
were produced in 2018.
(2) Includes pre-commercial production at Lamaque and Olympias (Q1 2018).
(3) Excludes sales of inventory mined at Lamaque and Olympias (Q1 2018) during the pre-commercial production period.
(4) By-product revenues are off-set against cash operating costs.
(5) Attributable to shareholders of the Company.
(6) These measures are non-IFRS measures. See the June 30, 2019 MD&A for explanations and discussion of these non-IFRS measures.
(7) 2018 amounts have been adjusted to reflect reclassifications in cash flow from operating activities in the current periods.
Gold sales of 113,685 ounces increased from 94,224 ounces in the second quarter of 2018 primarily due to the sale
of 48,821 ounces from Efemcukuru, where concentrate shipments had been delayed in Q1 2019, and the sale of
24,330 ounces from Lamaque in its first quarter of commercial operations. These increases were partially offset by
decreased sales from Kisladag of 26,072 ounces owing to lower production due to the suspension of mining and
stacking of ore on the leach pad from April 2018 through March 2019.
Total revenues increased to $173.7 million from $153.2 million in the second quarter of 2018 as a result of higher sales
volumes and a higher average realized gold price of $1,321 per ounce in the second quarter of 2019 compared to
$1,287 per ounce in the second quarter of 2018.
An increase in average operating cash cost per ounce sold to $631 from $587 in the second quarter of 2018 reflected
lower production levels at Olympias combined with higher selling costs for Efemcukuru concentrate. Mine standby
costs of $3.5 million decreased from $4.3 million in the second quarter of 2018 due to the resumption of mining, crushing
and stacking activities at Kisladag in April 2019.
Net earnings attributable to shareholders of $12.2 million ($0.08 per share) improved from a net loss attributable to
shareholders in the second quarter of 2018 of $24.4 million ($0.15 loss per share). The increase was primarily a result
of higher sales volumes and lower income tax expense in the second quarter, partially offset by an increase in finance
costs reflecting interest no longer being capitalized following the commencement of commercial operations at Lamaque.
Net earnings also included an $11.7 million impairment reversal relating to Vila Nova.
Higher sales volumes in the quarter resulted in EBITDA of $74.5 million. Adjusted EBITDA of $66.8 million excludes
the impact of one-time asset sales but includes $7.6 million proceeds from pre-commercial production at Lamaque.
Adjusted net loss was $1.2 million ($0.01 loss per share) in the quarter, compared to adjusted net loss of $1.8 million
($0.01 loss per share) in Q2 2018. The adjusted net loss removes, among other things, an $8.1 million gain on the
sale of the net smelter royalty interest, the $11.7 million impairment reversal relating to Vila Nova and a $3.6 million
write-off of unamortized transaction costs relating to the debt that was redeemed in the quarter.
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Gold Operations
3 months ended June 30, 6 months ended June 30,
2019 2018 2019 2018
Total
Ounces produced (1) 91,803 99,105 174,780 188,479
Ounces sold (2, 4) 113,685 94,224 156,759 180,811
Cash operating costs ($/oz sold) (5) $631 $587 $629 $579
All-in sustaining costs ($/oz sold) (5) $917 $934 $977 $887
Sustaining capex (5) $15.6 $13.8 $26.4 $24.9
Kisladag
Ounces produced (3) 26,072 55,930 53,319 109,744
Ounces sold 26,072 55,631 53,327 109,470
Cash operating costs ($/oz sold) (5) $381 $664 $471 $621
All-in sustaining costs ($/oz sold) (5) $471 $808 $590 $762
Sustaining capex (5) $1.1 $5.5 $4.2 $10.3
Efemcukuru
Ounces produced 25,667 24,146 51,791 47,001
Ounces sold (4) 48,821 23,853 54,639 50,853
Cash operating costs ($/oz sold) (5) $593 $515 $598 $524
All-in sustaining costs ($/oz sold) (5) $774 $832 $840 $781
Sustaining capex (5) $5.4 $5.8 $9.0 $9.5
Olympias
Ounces produced (1) 6,924 15,895 16,852 25,860
Ounces sold (2) 14,462 14,740 24,463 20,488
Cash operating costs ($/oz sold) (5) $1,402 $412 $1,156 $493
All-in sustaining costs ($/oz sold) (5) $1,731 $715 $1,553 $897
Sustaining capex (5) $3.8 $2.5 $7.9 $5.1
Lamaque
Ounces produced (1) 33,140 3,134 52,818 5,874
Ounces sold (2) 24,330 n/a 24,330 n/a
Cash operating costs ($/oz sold) (5) $517 n/a $517 n/a
All-in sustaining costs ($/oz sold) (5) $814 n/a $814 n/a
Sustaining capex (5) $5.3 n/a $5.3 n/a
(1) Includes pre-commercial production at Lamaque and at Olympias (Q1 2018).
(2) Excludes sales of inventory produced at Lamaque and Olympias (Q1 2018) during the pre-commercial production period. In the three and six months
ended June 30, 2019, 11,705 ounces and 27,627 ounces, respectively, were sold from inventory produced during the pre-commercial production period.
(3) Kisladag resumed mining, crushing and placing ore on the heap leach pad on April 1, 2019. This activity had been suspended since April 2018.
(4) Efemcukuru ounces sold were impacted by delayed shipments in Q1 2019 that were completed in Q2 2019. This timing issue resulted in lower ounces
sold in Q1 2019 and higher ounces sold in Q2 2019.
(5) These measures are non-IFRS measures. See the June 30, 2019 MD&A for explanations and discussion of these non-IFRS measures.
Gold production of 91,803 ounces was below last year’s second quarter production of 99,105 ounces primarily due to
the suspension of new ore placement on the Kisladag heap leach pad from April 2018 through March 2019. Production
also decreased as a result of reduced tonnage fed to the processing plant at Olympias due to limited headings
underground resulting from slower than anticipated capital development and a backlog of stopes to be filled. These
decreases were partially offset by 33,140 ounces produced at Lamaque in its first quarter of commercial operations.
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Conference Call
A conference call to discuss the details of the Company’s Q2 2019 results will be held by senior management on Friday,
August 2, 2019 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 and via this link: http://services.choruscall.ca/links/eldoradogold20190802.html.
Conference Call Details Replay (available until Sept. 6, 2019)
Date: August 2, 2019 Vancouver: +1 604 638 9010
Time: 8:30 am PT (11:30 am ET) Toll Free: 1 800 319 6413
Dial in: +1 604 638 5340 Pass code: 3288
Toll free: 1 800 319 4610
About Eldorado Gold
Eldorado is a gold and base metals producer with mining, development and exploration operations in Turkey, Canada,
Greece, Romania, Serbia, and Brazil. The Company has a highly skilled and dedicated workforce, safe and responsible
operations, a portfolio of high-quality assets, and long-term partnerships with local communities. Eldorado's common
shares trade on the Toronto Stock Exchange (TSX: ELD) and the New York Stock Exchange (NYSE: EGO).
Contacts
Investor Relations
Peter Lekich, Manager Investor Relations
604.687.4018 or 1.888.353.8166 [email protected]
Media
Louise Burgess, Director Communications & Government Relations
604.687.4018 or 1.888.353.8166 [email protected]
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Non-IFRS Measures
Certain non-IFRS measures are included in this press release, including average realized gold price per ounce sold, cash operating costs and cash
operating costs per ounce sold, total cash costs and total cash costs per ounce sold, all-in sustaining costs ("AISC") and AISC per ounce sold,
adjusted net earnings/(loss), adjusted net earnings/(loss) per share, working capital, cash flow from operations before changes in non-cash working
capital and sustaining capital. Please see the June 30, 2019 MD&A for explanations and discussion of these non-IFRS measures. The Company
believes that these measures, in addition to conventional measures prepared in accordance with International Financial Reporting Standards
(“IFRS”), provide investors an improved ability to evaluate the underlying performance of the Company. The non-IFRS measures are intended to
provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance
with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers.
Cautionary Note about Forward-looking Statements and Information
Certain of the statements made and information provided in this press release are forward-looking statements or information within the meaning of
the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Often, these forward-looking statements
and forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", “continue”, “projected”,
"scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or the negatives thereof or variations of such words and phrases or
statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements or information contained in this release include, but are not limited to, statements or information with respect to: our
guidance and outlook, including expected production, cost guidance and recoveries of gold, planned capital and exploration expenditures; our
expectation as to our future financial and operating performance, expected metallurgical recoveries, gold price and global concentrate outlook; and
our strategy, plans and goals, including our proposed exploration, development, construction, permitting and operating plans and priorities and
related timelines and schedules and results of litigation and arbitration proceedings.
Forward-looking statements and forward-looking information by their nature are based on assumptions and involve known and unknown risks,
market 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; the global concentrate market; 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 information 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 prove incorrect, actual
results may vary materially from those described in forward-looking statements or information. These risks, uncertainties and other factors include,
among others, the following: results of further testwork, recoveries of gold and other metals; geopolitical and economic climate (global and local),
risks related to mineral tenure and permits; gold and other commodity price volatility; continued softening of the global concentrate market; risks
regarding potential and pending litigation and arbitration proceedings relating to the Company’s, business, properties and operations; expected
impact on reserves and the carrying value; the updating of the reserve and resource models and life of mine plans; mining operational and development
risk; financing risks, foreign country operational risks; risks of sovereign investment; regulatory risks and liabilities including, environmental regulatory
restrictions and liability; discrepancies between actual and estimated production, mineral reserves and resources and metallurgical testing and
recoveries; additional funding requirements; currency fluctuations; 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 properties, as well as
those risk factors discussed in the sections titled “Forward-Looking Statements” and "Risk factors in our business" in the Company's most recent
Annual Information 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 understanding 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 should not place undue reliance on the forward-looking statements or
information contained herein. Except as required by law, we do not expect to update forward-looking statements and information continually as
conditions change.
Financial Information and condensed statements contained herein or attached hereto may not be suitable for readers that are unfamiliar with the
Company and is not a substitute for reading the Company’s 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.
Except as otherwise noted, scientific and technical information contained in this press release was reviewed and approved by Paul Skayman,
FAusIMM, Chief Operating Officer for Eldorado Gold Corporation, and a "qualified person" under NI 43-101.
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Financial Position
(Unaudited – in thousands of U.S. dollars)
Please see the Condensed Consolidated Interim Financial Statements dated June 30, 2019 for notes to the accounts.
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As at Note June 30, 2019 December 31, 2018
ASSETS
Current assets
Cash and cash equivalents $ 115,109 $ 286,312
Term deposits 4,775 6,646
Restricted cash 294 296
Marketable securities 3,735 2,572
Accounts receivable and other 82,458 80,987
Inventories 4 132,318 137,885
338,689 514,698
Assets held for sale 13 13,370 —
352,059 514,698
Restricted cash 3,261 13,449
Other assets 20,311 10,592
Defined benefit pension plan 9,556 9,120
Property, plant and equipment 3,999,345 3,988,476
Goodwill 92,591 92,591
$ 4,477,123 $ 4,628,926
LIABILITIES & EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 113,005 $ 137,900
Current portion of lease liabilities 8,802 2,978
Current portion of debt 5(a) 33,333 —
Current portion of asset retirement obligations 824 824
155,964 141,702
Liabilities associated with assets held for sale 13 4,370 —
160,334 141,702
Debt 5 449,128 595,977
Lease liabilities 16,759 6,538
Defined benefit pension plan 14,856 14,375
Asset retirement obligations 88,721 93,319
Deferred income tax liabilities 413,421 429,929
1,143,219 1,281,840
Equity
Share capital 3,007,944 3,007,924
Treasury stock (8,813) (10,104)
Contributed surplus 2,623,523 2,620,799
Accumulated other comprehensive loss (23,740) (24,494)
Deficit (2,325,267) (2,310,453)
Total equity attributable to shareholders of the Company 3,273,647 3,283,672
Attributable to non-controlling interests 60,257 63,414
3,333,904 3,347,086
$ 4,477,123 $ 4,628,926
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Operations
For the three and six months ended June 30, 2019 and 2018
(Unaudited – in thousands of U.S. dollars except share and per share amounts)
Please see the Condensed Consolidated Interim Financial Statements dated June 30, 2019 for notes to the accounts.
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Three months ended Six months ended
June 30, June 30,
Note 2019 2018 2019 2018
Revenue
Metal sales 6 $ 173,678 $ 153,171 $ 253,702 $ 285,076
Cost of sales
Production costs 100,896 85,844 152,817 153,079
Depreciation and amortization 41,188 34,482 61,130 63,670
142,084 120,326 213,947 216,749
Earnings from mine operations 31,594 32,845 39,755 68,327
Exploration and evaluation expense 2,529 6,849 7,894 10,997
Mine standby costs 3,450 4,304 11,443 7,010
General and administrative expense 8,084 14,006 15,256 22,231
Defined benefit pension plan expense 510 1,047 1,109 2,130
Share based payments 9 2,498 2,844 5,400 4,162
Reversal of impairment 13 (11,690) — (11,690) —
Write-down of assets 410 4,483 427 8,507
Foreign exchange loss 480 2,266 235 3,408
Earnings (loss) from operations 25,323 (2,954) 9,681 9,882
Other income 7(a) 8,655 3,623 10,288 7,594
Finance costs 7(b) (16,786) (3,200) (24,117) (7,274)
Earnings (loss) from operations before income tax 17,192 (2,531) (4,148) 10,202
Income tax expense 8,010 21,579 14,042 28,663
Net earnings (loss) for the period $ 9,182 $ (24,110) $ (18,190) $ (18,461)
Attributable to:
Shareholders of the Company 12,151 (24,391) (14,814) (15,673)
Non-controlling interests (2,969) 281 (3,376) (2,788)
Net earnings (loss) for the period $ 9,182 $ (24,110) $ (18,190) $ (18,461)
Weighted average number of shares outstanding
(thousands)
Basic 158,372 158,552 158,345 158,506
Diluted 158,372 158,552 158,345 158,506
Net earnings (loss) per share attributable to
shareholders of the Company:
Basic earnings (loss) per share $ 0.08 $ (0.15) $ (0.09) $ (0.10)
Diluted earnings (loss) per share $ 0.08 $ (0.15) $ (0.09) $ (0.10)
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
For the three and six months ended June 30, 2019 and 2018
(Unaudited – in thousands of U.S. dollars)
Please see the Condensed Consolidated Interim Financial Statements dated June 30, 2019 for notes to the accounts.
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Three months ended Six months ended
June 30, June 30,
Note 2019 2018 2019 2018
Net earnings (loss) for the period $ 9,182 $ (24,110) $ (18,190) $ (18,461)
Other comprehensive income (loss):
Items that will not be reclassified to earnings or loss:
Change in fair value of investments in equity securities,
net of tax 1,016 (420) 1,163 (1,159)
Actuarial (loss) gain on defined benefit pension plan,
net of tax (63) 641 (409) 650
Total other comprehensive income (loss) for the period 953 221 754 (509)
Total comprehensive income (loss) for the period $ 10,135 $ (23,889) $ (17,436) $ (18,970)
Attributable to:
Shareholders of the Company 13,104 (24,170) (14,060) (16,182)
Non-controlling interests (2,969) 281 (3,376) (2,788)
$ 10,135 $ (23,889) $ (17,436) $ (18,970)