Eldorado Gold Reports Q3 2019 Financial and Operational Results
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NEWS RELEASE
TSX: ELD NYSE: EGO October 31, 2019
Eldorado Gold Reports Q3 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 third quarter of 2019.
• Extension of mine life at Kisladag supported by recent test results: Waste stripping to support a mine life
extension at Kisladag is underway. Recent test results confirm recoveries from leaching deeper material over 250
day cycles support an extension of mine life beyond the Company's current three year guidance. Testwork is still
ongoing and the Company expects to update long term guidance at Kisladag based on the results of this testwork,
which are expected to be available in Q1 2020.
• Permits for Skouries and Olympias received: Permits allow for, among other things, installation of electrical
and mechanical equipment at Skouries and Olympias. Subsequent to the quarter the Company also received
approval for the Skouries building permit, which will allow the Company to begin installation of the Skouries mill
building, and consent from the Central Archaeological Council to relocate an ancient mining furnace from the
Skouries open pit area, subject to Ministerial approval.
• Successful ramp up at Lamaque: Lamaque achieved commercial production in April 2019 and has had two
successful operating quarters. In September 2019, the Company announced that it is undertaking a Preliminary
Economic Assessment (“PEA”) to increase average annual production from approximately 130,000 ounces of gold
to approximately 170,000 ounces of gold.
• Increased Q3 gold production and reiterating 2019 annual guidance: Gold production for the quarter totalled
101,596 ounces with 276,376 ounces produced year-to-date. Quarterly production included 32,037 ounces from
Lamaque in its second quarter of commercial operations and was partially offset by a decrease in production at
Olympias as a result of reduced tonnage fed to the processing plant.
• Steady EBITDA: Higher sales volumes in the quarter resulted in earnings before interest, taxes and depreciation
and amortization ("EBITDA") of $73.2 million. Adjusted EBITDA of $75.9 million excludes the impact of non-cash
share-based compensation expense.
• Liquidity strengthened: The Company finished the quarter with approximately $322 million of liquidity including
$134.9 million in cash, cash equivalents and term deposits and approximately $187 million available under its $250
million revolving credit facility, with $63 million of capacity on the revolving credit facility allocated to secure certain
reclamation obligations in connection with its operations.
• Positive net earnings per share: Net earnings to shareholders in the quarter totalled $4.2 million, or $0.03 per
share. Adjusted net earnings were $7.5 million, or $0.05 per share, after adjusting for non-cash deferred tax expense
relating to foreign currency exchange rate fluctuations.
Eldorado's President and CEO, George Burns, stated: "We achieved several key milestones in the third quarter,
including an excellent quarter at Lamaque, positive net earnings and steady EBITDA. At Kisladag positive test results
have given us the confidence to begin waste stripping, which should extend the life of that asset. I’m very pleased with
progress we are making in Greece. We have received installation permits for Skouries and Olympias as well as consent
to move some historic mining workings from our Skouries site. We will continue to work with the government towards
a mutually acceptable path forward to build safe, modern, world-class operations in Greece, including approval to
implement dry stack tailings at Skouries. I look forward to working with the team on the exciting path we have in front
of us as we move into 2020."
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Consolidated Financial and Operational Highlights
3 months ended September 30, 9 months ended September 30,
2019 2018 2019 2018
Revenue (1) $172.3 $81.1 $426.0 $366.1
Gold revenue (1) $150.2 $76.0 $355.6 $312.8
Gold produced (oz) (2) 101,596 84,783 276,376 273,261
Gold sold (oz) (1) 99,241 64,589 256,000 245,400
Average realized gold price ($/oz sold) (5) $1,513 $1,177 $1,389 $1,274
Cash operating costs ($/oz sold) (3,5) 560 754 602 625
Total cash costs ($/oz sold) (3,5) 603 762 641 647
All-in sustaining costs ($/oz sold) (3,5) 1,031 1,112 998 944
Net earnings (loss) for the period (4) 4.2 (128.0) (10.6) (143.7)
Net earnings (loss) per share – basic ($/share) (4) 0.03 (0.81) (0.07) (0.91)
Adjusted net earnings (loss) (4,5) 7.5 (21.9) (14.7) (9.5)
Adjusted net earnings (loss) per share ($/share) (4,5) 0.05 (0.14) (0.09) (0.06)
Cash flow from operating activities before changes in working capital (5,6) 62.9 (1.7) 108.6 60.4
Cash, cash equivalents and term deposits $134.9 $385.0 $134.9 $385.0
(1) Excludes sales of inventory mined at Lamaque and Olympias (Q1 2018) during the pre-commercial production period.
(2) Includes pre-commercial production at Lamaque and Olympias (Q1 2018).
(3) By-product revenues are off-set against cash operating costs.
(4) Attributable to shareholders of the Company.
(5) These measures are non-IFRS measures. See the September 30, 2019 MD&A for explanations and discussion of these non-IFRS measures.
(6) 2018 amounts have been adjusted to reflect reclassifications in cash flow from operating activities in the current periods.
Gold sales of 99,241 ounces increased from 64,589 ounces in the third quarter of 2018 primarily due to the sale of
31,122 ounces from Lamaque in its second quarter of commercial operations.
Total revenues increased to $172.3 million from $81.1 million in the third quarter of 2018 as a result of higher sales
volumes and a higher average realized gold price of $1,513 per ounce in the third quarter of 2019 compared to $1,177
per ounce in the third quarter of 2018.
Cash operating costs per ounce sold decreased to $560 from $754 in the third quarter of 2018, primarily due to the
ramp-up of mining, crushing and placement of ore on the Kisladag heap leach pad beginning in April 2019, and the
partial allocation of processing costs to gold inventory in the heap leach pad. This was partially offset by higher cash
operating costs per ounce sold at Olympias as a result of lower production levels and at Efemcukuru as a result of
increased transportation costs.
Net earnings attributable to shareholders of $4.2 million ($0.03 per share) improved from a net loss attributable to
shareholders in the third quarter of 2018 of $128.0 million ($0.81 loss per share). The improvement was primarily a
result of higher sales volumes in the third quarter and an impairment charge in the third quarter of 2018 of $117.6
million ($94.1 million net of deferred income tax recovery) relating to the Kisladag heap leach pad.
Higher sales volumes in the quarter resulted in EBITDA of $73.2 million. Adjusted EBITDA of $75.9 million excludes
the impact of share based payments.
Adjusted net earnings were $7.5 million ($0.05 per share) in the quarter, compared to adjusted net loss of $21.9 million
($0.14 loss per share) in the third quarter of 2018. Adjusted net earnings in the third quarter of 2019 removes, among
other things, $3.4 million of deferred tax expense relating to foreign currency exchange rate fluctuations. Adjusted net
loss in the third quarter of 2018 primarily removes the $117.6 million impairment charge ($94.1 million net of deferred
income tax recovery) relating to the Kisladag heap leach operations.
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Gold Operations
3 months ended September 30, 9 months ended September 30,
2019 2018 2019 2018
Total
Ounces produced (1) 101,596 84,783 276,376 273,261
Ounces sold (2) 99,241 64,589 256,000 245,400
Cash operating costs ($/oz sold) (4) $560 $754 $602 $625
All-in sustaining costs ($/oz sold) (4) $1,031 $1,112 $998 $944
Sustaining capex (4) $30.0 $12.1 $56.3 $37.2
Kisladag
Ounces produced (3) 35,885 34,070 89,204 143,814
Ounces sold 35,881 34,069 89,208 143,539
Cash operating costs ($/oz sold) (4) $399 $890 $442 $685
All-in sustaining costs ($/oz sold) (4) $566 $1,010 $580 $821
Sustaining capex (4) $3.9 $3.3 $8.0 $13.6
Lamaque
Ounces produced (1) 32,037 13,430 84,855 19,304
Ounces sold (2) 31,122 n/a 55,452 n/a
Cash operating costs ($/oz sold) (4) $480 n/a $496 n/a
All-in sustaining costs ($/oz sold) (4) $1,089 n/a $968 n/a
Sustaining capex (4) $15.9 n/a $21.2 n/a
Efemcukuru
Ounces produced 25,733 24,493 77,524 71,494
Ounces sold 25,583 23,104 80,222 73,957
Cash operating costs ($/oz sold) (4) $591 $456 $596 $503
All-in sustaining costs ($/oz sold) (4) $900 $766 $859 $769
Sustaining capex (4) $5.2 $5.7 $14.2 $15.3
Olympias
Ounces produced 7,941 12,790 24,793 38,649
Ounces sold 6,655 7,416 31,118 27,904
Cash operating costs ($/ounce) $1,678 $1,058 $1,268 $643
All in sustaining costs ($/ounce) $2,598 $1,688 $1,776 $1,107
Sustaining capex $4.9 $3.1 $12.9 $8.3
(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 nine months ended
September 30, 2019, 27,627 ounces 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) These measures are non-IFRS measures. See the September 30, 2019 MD&A for explanations and discussion of these non-IFRS measures.
Gold production of 101,596 ounces increased from 84,783 ounces in the third quarter of 2018 primarily due to 32,037
ounces produced at Lamaque in its second quarter of commercial operations. This was partially offset by a decrease
in production at Olympias as a result of reduced tonnage fed to the processing plant.
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Conference Call
A conference call to discuss the details of the Company’s Q3 2019 results will be held by senior management on Friday,
November 1, 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/eldoradogold20191101.html.
Conference Call Details Replay (available until Dec. 6, 2019)
Date: November 1, 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 Access code: 3612
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, earnings before interest, taxes and depreciation and amortization ("EBITDA") and adjusted earnings before interest, taxes and depreciation
and amortization ("Adjusted EBITDA") and sustaining capital. Please see the September 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, favourable economics for our heap leaching plan and
the ability to extend mine life at our projects, including at Kisladag through further metallurgical tests on deeper material, completion and results of
waste stripping at Kisladag, improved production at Olympias, completion and results of construction and the PEA at Lamaque, completion of
construction at Skouries, planned capital and exploration expenditures; 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 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 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 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 September 30, 2019 for notes to the accounts.
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As at Note September 30, 2019 December 31, 2018
ASSETS
Current assets
Cash and cash equivalents $ 129,978 $ 286,312
Term deposits 4,889 6,646
Restricted cash 20 296
Marketable securities 3,357 2,572
Accounts receivable and other 4 77,616 80,987
Inventories 5 151,459 137,885
Assets held for sale 14 12,591 —
379,910 514,698
Restricted cash 3,234 13,449
Other assets 15,418 10,592
Defined benefit pension plan 9,467 9,120
Property, plant and equipment 3,997,067 3,988,476
Goodwill 92,591 92,591
$ 4,497,687 $ 4,628,926
LIABILITIES & EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 121,284 $ 137,900
Current portion of lease liabilities 8,420 2,978
Current portion of debt 6 33,333 —
Current portion of asset retirement obligations 824 824
Liabilities associated with assets held for sale 14 4,207 —
168,068 141,702
Debt 6 449,755 595,977
Lease liabilities 18,529 6,538
Defined benefit pension plan 14,884 14,375
Asset retirement obligations 88,568 93,319
Deferred income tax liabilities 419,205 429,929
1,159,009 1,281,840
Equity
Share capital 3,008,172 3,007,924
Treasury stock (8,737) (10,104)
Contributed surplus 2,625,457 2,620,799
Accumulated other comprehensive loss (24,296) (24,494)
Deficit (2,321,034) (2,310,453)
Total equity attributable to shareholders of the Company 3,279,562 3,283,672
Attributable to non-controlling interests 59,116 63,414
3,338,678 3,347,086
$ 4,497,687 $ 4,628,926
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Operations
For the three and nine months ended September 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 September 30, 2019 for notes to the accounts.
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Three months ended Nine months ended
September 30, September 30,
Note 2019 2018 2019 2018
Revenue
Metal sales 7 $ 172,256 $ 81,070 $ 425,958 $ 366,146
Cost of sales
Production costs 84,813 56,066 237,630 209,145
Depreciation and amortization 40,017 20,257 101,147 83,927
124,830 76,323 338,777 293,072
Earnings from mine operations 47,426 4,747 87,181 73,074
Exploration and evaluation expense 2,774 8,014 10,668 26,668
Mine standby costs 2,529 4,460 13,972 11,470
General and administrative expense 7,431 10,896 22,687 33,127
Defined benefit pension plan expense 458 201 1,567 2,331
Share based payments 10 2,727 1,580 8,127 5,742
Impairment (reversal of impairment) 14,15 — 117,570 (11,690) 117,570
(Write-up) write-down of assets (414) 536 13 1,386
Foreign exchange loss (gain) 643 (3,034) 878 374
Earnings (loss) from operations 31,278 (135,476) 40,959 (125,594)
Other income 8(a) 871 6,284 11,159 13,878
Finance costs 8(b) (13,170) (839) (37,287) (8,113)
Earnings (loss) from operations before income tax 18,979 (130,031) 14,831 (119,829)
Income tax expense 15,888 661 29,930 29,324
Net earnings (loss) for the period $ 3,091 $ (130,692) $ (15,099) $ (149,153)
Attributable to:
Shareholders of the Company 4,233 (128,045) (10,581) (143,718)
Non-controlling interests (1,142) (2,647) (4,518) (5,435)
Net earnings (loss) for the period $ 3,091 $ (130,692) $ (15,099) $ (149,153)
Weighted average number of shares outstanding
(thousands)
Basic 158,462 158,294 158,409 158,434
Diluted 161,735 158,294 158,409 158,434
Net earnings (loss) per share attributable to
shareholders of the Company:
Basic earnings (loss) per share $ 0.03 $ (0.81) $ (0.07) $ (0.91)
Diluted earnings (loss) per share $ 0.03 $ (0.81) $ (0.07) $ (0.91)
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
For the three and nine months ended September 30, 2019 and 2018
(Unaudited – in thousands of U.S. dollars)
Please see the Condensed Consolidated Interim Financial Statements dated September 30, 2019 for notes to the accounts.
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Three months ended Nine months ended
September 30, September 30,
Note 2019 2018 2019 2018
Net earnings (loss) for the period $ 3,091 $ (130,692) $ (15,099) $ (149,153)
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 (378) (875) 785 (2,034)
Actuarial (loss) gain on defined benefit pension plan,
net of tax (178) (200) (587) 450
Total other comprehensive income (loss) for the period (556) (1,075) 198 (1,584)
Total comprehensive income (loss) for the period $ 2,535 $ (131,767) $ (14,901) $ (150,737)
Attributable to:
Shareholders of the Company 3,677 (129,120) (10,383) (145,302)
Non-controlling interests (1,142) (2,647) (4,518) (5,435)
$ 2,535 $ (131,767) $ (14,901) $ (150,737)