Eldorado Gold Reports Q2 2020 Financial and Operational Results
1
NEWS RELEASE
TSX: ELD NYSE: EGO July 30, 2020
Eldorado Gold Reports Q2 2020
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 2020.
• Measures remain in place to manage the impact of the novel coronavirus ("COVID-19") pandemic: The
Company's mines are fully operational and the global workforce has returned to normal levels. Preventing the
spread of COVID-19, ensuring safe working environments across Eldorado's global sites, and preparedness should
an outbreak occur, remain priorities.
• Stronger quarterly production and 2020 annual guidance maintained: Gold production totalled 137,782 ounces
in Q2 2020, an increase of 50% from Q2 2019 production of 91,803 ounces, and a 19% increase over Q1 2020.
Eldorado is maintaining its 2020 annual guidance of 520,000-550,000 ounces of gold at an all-in sustaining cost
of $850-950 per ounce sold.
• Significant increase in free cash flow: Free cash flow of $63.4 million in Q2 2020 increased significantly from
$4.8 million in Q2 2019 and $7.2 million in Q1 2020 as a result of higher sales volume and a higher gold price.
• Commenced construction of a three kilometre decline at Lamaque: The underground decline will connect the
Sigma mill to the 405 metre level of the Triangle mine. Benefits of the decline include eliminating surface haulage
of ore (approximately 26km round trip), reducing energy requirements for mine ventilation and providing access
to reduce exploration costs. The decline is expected to be completed in the first half of 2022 at an estimated cost
of $24 million.
• All-in sustaining costs lower quarter-on-quarter: Q2 2020 all-in sustaining costs of $859 per ounce of gold sold
in the quarter were lower than in Q2 2019 ($917 per ounce sold).
• Continued strong financial liquidity: The Company currently has $440 million of cash, cash equivalents and
term deposits and approximately $35 million available under the revolving credit facility, with $65 million of capacity
on the facility allocated to secure certain reclamation obligations in connection with its operations.
• Improved financial position and net leverage ratio: $33.3 million was repaid on the Company's term loan during
the quarter. Continued strong EBITDA has improved the Company's net leverage ratio, lowering the interest rate
on the term loan and amounts drawn under the revolving credit facility from LIBOR + 2.5% to LIBOR + 2.25%
during the quarter. Additionally, we have issued a redemption notice to repay $58.6 million of principal in August
2020 under the equity clawback provision of our senior secured notes.
• Net earnings and adjusted net earnings attributable to shareholders: Net earnings attributable to shareholders
of the Company in Q2 2020 were $45.6 million or $0.27 per share (Q2 2019: net earnings attributable to shareholders
of the Company of $12.2 million, or $0.08 per share). Adjusted net earnings attributable to shareholders of the
Company in Q2 2020 were $43.8 million, or $0.26 per share (Q2 2019: adjusted net loss attributable to shareholders
of the Company of $3.5 million, or $0.02 loss per share).
• Increased EBITDA: Q2 2020 EBITDA was $131.8 million ($74.5 million in Q2 2019) and Q2 2020 adjusted EBITDA
was $135.8 million ($66.8 million in Q2 2019). Adjustments included, among other things, share based
compensation and losses on asset disposals.
“Our outstanding operational performance during the quarter positions us to continue to generate significant value for
our stakeholders. Even while managing COVID-19, we achieved strong quarterly production while seeing lower all-in
sustaining costs,” said George Burns, President and CEO.
2
“We are pleased to have made our first scheduled term loan repayment in June. Additionally, we have issued a
redemption notice to repay $59 million dollars of principal in August under the equity clawback provision of our senior
secured notes. We are committed to reducing our debt, while at the same time maintaining a strong liquidity position
as we continue to grow our business."
“Our teams continue to show agility in addressing COVID-19 and we have begun to integrate innovative new
technologies to protect our workforce. We are extremely pleased with first half corporate performance and see several
positive catalysts on the horizon, including further success in Turkey and continued growth in Greece and Quebec.”
“The addition of Ms. Judith Mosely as a director is highly complementary to the skills and experience of our existing
board members and we look forward to her added insights. This timing is consistent with our ongoing Board succession
plan.”
Consolidated Financial and Operational Highlights
3 months ended June 30, 6 months ended June 30,
2020 2019 2020 2019
Revenue (1) $255.9 $173.7 $460.6 $253.7
Gold revenue (1) $232.9 $150.1 $416.6 $204.6
Gold produced (oz) (2) 137,782 91,803 253,732 174,780
Gold sold (oz) (1) 134,960 113,685 251,179 156,759
Average realized gold price ($/oz sold) (6) $1,726 $1,321 $1,658 $1,301
Cash operating costs ($/oz sold) (3,7) 550 631 586 629
Total cash costs ($/oz sold) (3,7) 616 670 644 665
All-in sustaining costs ($/oz sold) (3,6) 859 917 902 977
Net earnings (loss) for the period (4) 45.6 12.2 40.7 (14.8)
Net earnings (loss) per share – basic ($/share) (4) 0.27 0.08 0.24 (0.09)
Adjusted net earnings (loss) (4,5,6,7) 43.8 (3.5) 56.3 (24.5)
Adjusted net earnings (loss) per share ($/share) (4,5,6,7) 0.26 (0.02) 0.34 (0.15)
Cash flow from operating activities before changes in working capital (6,7) 99.0 38.5 168.5 46.6
Free cash flow (6) 63.4 4.8 70.5 (59.2)
Cash, cash equivalents and term deposits $440.3 $119.9 $440.3 $119.9
(1) Excludes sales of inventory mined at Lamaque during the pre-commercial production period (Q1 2019).
(2) Includes pre-commercial production at Lamaque (Q1 2019).
(3) By-product revenues are off-set against cash operating costs.
(4) Attributable to shareholders of the Company.
(5) See reconciliation of net earnings (loss) to adjusted net earnings (loss) in the section 'Non-IFRS Measures' in the June 30, 2020 MD&A.
(6) These measures are non-IFRS measures. See the June 30, 2020 MD&A for explanations and discussion of these non-IFRS measures.
(7) 2019 amounts have been adjusted to conform with 2020 presentation. See the section 'Non-IFRS Measures' in the June 30, 2020 MD&A for detail.
Gold production of 137,782 ounces increased 50% from last year’s second quarter production of 91,803 ounces. Gold
sales totalled 134,960 ounces in Q2 2020, an increase of 19% from 113,685 ounces sold in Q2 2019. The higher sales
volume compared with the prior year reflected an increase of 33,845 ounces sold at Kisladag following the resumption
of mining activities in April 2019, an increase of 7,634 ounces sold at Lamaque following its commencement of
commercial operations in April 2019 and an increase of 2,925 ounces sold at Olympias as a result of increased
production. Gold sales at Efemcukuru in Q2 2020 decreased by 23,129 ounces from the prior year as sales in Q2 2019
included shipments that had been delayed from Q1 2019.
Total revenue was $255.9 million in Q2 2020, an increase of 47% from $173.7 million in Q2 2019. The increase was
due to increased sales volume combined with a higher average realized gold price.
Cash operating costs per ounce sold in Q2 2020 averaged $550, a decrease from $631 in Q2 2019. The improvement
was primarily due to higher production at Kisladag with an increase in stacked ore on the heap leach pad, higher
production and grade at Olympias and higher production at Efemcukuru. The improvement was also due to increased
3
mining rates at Lamaque in Q2 2020 following approval to expand underground production. Cash operating costs also
benefited from a weakening of the Turkish Lira in the first half of 2020.
We reported net earnings attributable to shareholders of $45.6 million ($0.27 per share) in Q2 2020, compared to net
earnings of $12.2 million ($0.08 per share) in Q2 2019. The improvement reflects higher production and sales volumes,
combined with a higher average realized gold price.
Adjusted net earnings were $43.8 million ($0.26 per share) in Q2 2020 compared to adjusted net loss of $3.5 million
($0.02 loss per share) in Q2 2019. Adjusted net earnings in Q2 2020 removes, among other things, the $5.7 million
gain on the non-cash revaluation of the derivative related to redemption options in our debt and a $3.0 million loss on
foreign exchange due to translation of deferred tax balances.
Gold Operations
3 months ended June 30, 6 months ended June 30,
2020 2019 2020 2019
Total
Ounces produced (1) 137,782 91,803 253,732 174,780
Ounces sold (2, 4) 134,960 113,685 251,179 156,759
Cash operating costs ($/oz sold) (4,5) $550 $631 $586 $629
All-in sustaining costs ($/oz sold) (4,5) $859 $917 $902 $977
Sustaining capex (5) $21.9 $15.6 $41.3 $26.4
Kisladag
Ounces produced (3) 59,890 26,072 110,066 53,319
Ounces sold 59,917 26,072 111,517 53,327
Cash operating costs ($/oz sold) (5) $465 $381 $459 $471
All-in sustaining costs ($/oz sold) (5) $631 $471 $606 $590
Sustaining capex (5) $5.4 $1.1 $8.4 $4.2
Lamaque
Ounces produced (1) 33,095 33,140 60,448 52,818
Ounces sold (2) 31,964 24,330 58,692 24,330
Cash operating costs ($/oz sold) (5) $480 $517 $553 $517
All-in sustaining costs ($/oz sold) (5) $796 $814 $908 $814
Sustaining capex (5) $8.0 $5.3 $16.3 $5.3
Efemcukuru
Ounces produced 26,876 25,667 50,115 51,791
Ounces sold (4) 25,692 48,821 48,913 54,639
Cash operating costs ($/oz sold) (4,5) $534 $593 $586 $598
All-in sustaining costs ($/oz sold) (4,5) $807 $774 $835 $840
Sustaining capex (5) $3.6 $5.4 $6.7 $9.0
Olympias
Ounces produced 17,921 6,924 33,103 16,852
Ounces sold 17,387 14,462 32,057 24,463
Cash operating costs ($/oz sold) (5) $993 $1,402 $1,086 $1,156
All-in sustaining costs ($/oz sold) (5) $1,377 $1,731 $1,500 $1,553
Sustaining capex (5) $4.9 $3.8 $9.9 $7.9
(1) Includes pre-commercial production at Lamaque (Q1 2019).
(2) Excludes sales of inventory produced at Lamaque during the pre-commercial production period (Q1 2019).
(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 and unit costs were impacted by delayed shipments in Q1 2019 that were completed in Q2 2019.
(5) These measures are non-IFRS measures. See the June 30, 2020 MD&A for explanations and discussion of these non-IFRS measures.
4
Corporate
On July 30, 2020, the Company issued a redemption notice for the senior secured notes and intends to redeem $59
million of the principal amount of the senior secured notes in August 2020 using proceeds from the ATM Program. The
redemption price is 109.5% of the aggregate principal amount repaid, plus accrued and unpaid interest.
We are pleased to announce the appointment of Ms. Judith Mosely to the Board of Directors, effective September 1,
2020. Ms. Mosely has over 20 years of experience in the mining and metals banking sector.
Conference Call
A conference call to discuss the details of the Company’s Q2 2020 results will be held by senior management on Friday,
July 31, 2020 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/eldoradogold20200731.html.
Conference Call Details Replay (available until Sept. 4, 2020)
Date: July 31, 2020 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: 4874
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 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).
Contact
Investor Relations
Peter Lekich, Manager Investor Relations
604.687.4018 or 1.888.353.8166 [email protected]
Media
Louise Burgess, Director Communications & Government Relations
604.601.6679 or 1.888.363.8166 [email protected]
5
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, earnings before interest, taxes and depreciation and amortization ("EBITDA") and adjusted earnings before interest, taxes and depreciation
and amortization ("Adjusted EBITDA"), free cash flow and sustaining capital. Please see the June 30, 2020 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: the
duration, extent and other implications of COVID-19 and any restrictions and suspensions with respect to our operations, our guidance and outlook,
including expected production, cost guidance and recoveries of gold, construction of the decline at Lamaque, including expected timing and cost,
and realization of the associated benefits, planned capital and exploration expenditures; redemption of high-yield bonds by the Company, our
expectation as to our future financial and operating performance, expected metallurgical recoveries, gold price outlook and the global concentrate
market; 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 how the world-wide economic
and social impact of COVID-19 is managed and the duration and extent of the COVID-19 pandemic, timing and cost of construction of the decline
at Lamaque, and any associated benefits; our ability to complete the redemption of the Company’s high yield bonds; 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: global outbreaks of infectious diseases, including COVID-19, timing and cost of construction of the decline at Lamaque,
and any associated benefits, ability to complete the redemption of the Company’s high yield bonds; 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 and the price of the common shares
of the Company; 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 and EDGAR
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 and
EDGAR 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, Special Advisor to the 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, 2020 for notes to the accounts.
6
As at Note June 30, 2020 December 31, 2019
ASSETS
Current assets
Cash and cash equivalents $ 435,469 $ 177,742
Term deposits 4,836 3,275
Marketable securities 4,654 3,828
Accounts receivable and other 4 86,351 75,310
Inventories 5 162,785 163,234
Current portion of employee benefit plan assets 6,025 —
Assets held for sale 11,929 12,471
712,049 435,860
Restricted cash 1,983 3,080
Other assets 30,647 22,943
Employee benefit plan assets — 6,244
Property, plant and equipment 4,044,955 4,088,202
Goodwill 92,591 92,591
$ 4,882,225 $ 4,648,920
LIABILITIES & EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 144,629 $ 139,104
Current portion of capital lease liabilities 10,342 9,913
Current portion of debt 6 216,667 66,667
Current portion of asset retirement obligations 1,783 1,782
Current portion of employee benefit plan obligations 1,133 —
Liabilities associated with assets held for sale 4,229 4,257
378,783 221,723
Debt 6 380,423 413,065
Lease liabilities 11,399 15,143
Employee benefit plan obligations 17,464 18,224
Asset retirement obligations 94,174 94,235
Deferred income tax liabilities 413,339 412,717
1,295,582 1,175,107
Equity
Share capital 10 3,135,955 3,054,563
Treasury stock (11,587) (8,662)
Contributed surplus 2,634,246 2,627,441
Accumulated other comprehensive loss (28,266) (28,966)
Deficit (2,189,129) (2,229,867)
Total equity attributable to shareholders of the Company 3,541,219 3,414,509
Attributable to non-controlling interests 11 45,424 59,304
3,586,643 3,473,813
$ 4,882,225 $ 4,648,920
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Operations
For the three and six months ended June 30, 2020 and 2019
(Unaudited – in thousands of U.S. dollars except share and per share amounts)
Please see the Condensed Consolidated Interim Financial Statements dated June 30, 2020 for notes to the accounts.
7
Three months ended Six months ended
June 30, June 30,
Note 2020 2019 2020 2019
Revenue
Metal sales 7 $ 255,917 $ 173,678 $ 460,572 $ 253,702
Cost of sales
Production costs 109,477 100,896 210,839 152,817
Depreciation and amortization 58,328 41,188 110,691 61,130
167,805 142,084 321,530 213,947
Earnings from mine operations 88,112 31,594 139,042 39,755
Exploration and evaluation expenses 2,333 2,529 5,560 7,894
Mine standby costs 8 5,029 3,450 9,059 11,443
General and administrative expenses 6,157 8,084 14,444 15,256
Employee benefit plan expense 766 510 1,457 1,109
Share-based payments expense 12 2,863 2,498 4,658 5,400
Reversal of impairment — (11,690) — (11,690)
Write-down (reversal) of assets (295) 410 (92) 427
Foreign exchange loss (gain) (1,238) 480 (2,000) 235
Earnings from operations 72,497 25,323 105,956 9,681
Other income 9 1,356 8,655 36 10,288
Finance costs 9 (6,480) (16,786) (22,687) (24,117)
Earnings (loss) from operations before income tax 67,373 17,192 83,305 (4,148)
Income tax expense 23,671 8,010 45,076 14,042
Net earnings (loss) for the period $ 43,702 $ 9,182 $ 38,229 $ (18,190)
Attributable to:
Shareholders of the Company 45,618 12,151 40,738 (14,814)
Non-controlling interests (1,916) (2,969) (2,509) (3,376)
Net earnings (loss) for the period $ 43,702 $ 9,182 $ 38,229 $ (18,190)
Weighted average number of shares outstanding (thousands)
Basic 169,867 158,372 167,524 158,345
Diluted 173,787 161,276 171,342 158,345
Net earnings (loss) per share attributable to shareholders
of the Company:
Basic earnings (loss) per share $ 0.27 $ 0.08 $ 0.24 $ (0.09)
Diluted earnings (loss) per share $ 0.26 $ 0.08 $ 0.24 $ (0.09)
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
For the three and six months ended June 30, 2020 and 2019
(Unaudited – in thousands of U.S. dollars)
Please see the Condensed Consolidated Interim Financial Statements dated June 30, 2020 for notes to the accounts.
8
Three months ended Six months ended
June 30, June 30,
2020 2019 2020 2019
Net earnings (loss) for the period $ 43,702 $ 9,182 $ 38,229 $ (18,190)
Other comprehensive (loss) income:
Items that will not be reclassified to earnings or loss:
Change in fair value of investments in equity securities, net
of tax 1,766 1,016 898 1,163
Actuarial gains (losses) on employee benefit plans, net of
tax 30 (63) (198) (409)
Total other comprehensive income for the period 1,796 953 700 754
Total comprehensive income (loss) for the period $ 45,498 $ 10,135 $ 38,929 $ (17,436)
Attributable to:
Shareholders of the Company 47,414 13,104 41,438 (14,060)
Non-controlling interests (1,916) (2,969) (2,509) (3,376)
$ 45,498 $ 10,135 $ 38,929 $ (17,436)