Eldorado Gold Reports Results of Technical Studies
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NEWS RELEASE
TSX: ELD NYSE: EGO March 21, 2018
Eldorado Gold Reports Results of Technical Studies
VANCOUVER, BC – Eldorado Gold Corporation, (“Eldorado” or “the Company”) today announces the
release of three technical studies for Kisladag, Lamaque and Skouries. This release is supplemental to, and
should be read in conjunction with, the Company’s press release titled “Eldorado Gold Reports 2017 Year-
End and Fourth Quarter Financial and Operational Results ” to be released subsequently (the “Earnings
Release”). Highlights of the three studies are as follows.1
Kisladag Mine (Turkey) – Pre-Feasibility Study
Mill construction has been identified as the preferred solution to optimize project value.
The Company will proceed on a staged basis and commence permitting, detailed engineering and
limited early works immediately with permitting expected to be complete within 12 months.
The Kisladag Technical Study is expected to be filed on March 29, 2018 and a Feasibility Study is
expected to be complete in October 2018, after which a final investment decision on construction
of the mill will be made.
Subject to the final investment decision and required permitting, major construction of the mill is
expected to begin in early 2019 with commissioning beginning in late 2020.
Estimated project capital of $490 million (including $378 million for the mill, $1 12 million for
waste stripping, and $55 million in contingency), generates an estimated after-tax project NPV of
$434 million at a 5% discount rate, an IRR of 22.1%, and a payback period of 3.7 years.
Proven and Probable reserves of 3.1 million ounces at 0.82 g/t Au support a nine year mine life
with average annual production of 270,000 ounces of gold at an all in sustaining cost (“AISC”) of
$778 per ounce.
New pit design optimizes cash flow and return on invested capital, while additional Measured and
Indicated resources of 5.9 million ounces at 0.53 g/t Au provide further potential upside under a
larger pit scenario.
Lamaque Project (Canada) – Pre-Feasibility Study
Focus on the development of the Triangle deposit (one of the three currently identified deposits
at Lamaque) and refurbishment of the previously producing Sigma mill.
Maiden reserve at Triangle of approximately 893,000 ounces of gold at an average grade of
7.3 g/t supports an initial seven year mine plan to commence production with an average annual
production of 117,000 ounces of gold at AISC of $717 per ounce
The study shows steady ramp up to an annual production of 135,000 ounces, which the company
expects to sustain with further Resource to Reserve conversion.
Maiden reserve reflects a resource conversion of 84% from Measured and Indicated Resources
defined by drilling at C1, C2 and C4 zones on approximately 25 meter centers.
1 All economic analysis modeled on a constant gold price of $1,300/oz.
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Additional inferred resource of 1.3 million ounces of gold at 7.29 g/t Au, proximal to the existing
reserve, has not been included in the Pre-Feasibility Study and will be targeted with near term
conversion drilling to extend mine life.
Estimated capital cost of $122 million plus $57 million of pre-commercial production costs, offset
by $80 million in pre commercial gold sales, for a net start-up capital of $99 million.
Estimated after-tax project NPV of $ 205 million at a 5% discount rate, an IRR of 3 4.3%, and a
payback period of 3.7 years.
The Lamaque Technical Report for the Triangle deposit is expected to be filed on March 29, 2018,
with first production expected at the start of 2019.
Skouries Project (Greece) – Updated Technical Report
Updated Proven and Probable reserves of 3.8 million ounces of gold at 0.74 g/t Au and 1.7 billion
pounds of copper at 0.49% Cu, supporting a 23 year mine life at an average annual production of
140,000 ounces of gold and 67 million pounds of copper with production from both open-pit and
underground.
Estimated capital cost of $689.2 million (including $87 million in contingency) to fully develop
both the open pit and P hase I of the Skouries underground, generating 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.
The Skouries Updated Technical Report is expected to be filed on March 29, 2018. The updated
design reflects some of the best available control technology , a dramatically reduced
environmental footprint and utilizes filtered dry stack tailings.
“Combined with steady gold production from our existing operations at Efemcukuru, Olympias, and the
Kisladag leach pad inventory, the Company has a solid production platform from a diverse asset base and
offers a strong near -term, growth profile. By moving the newly acquired Lamaque Project through
development and into production, along with the construction of a mill at Kisladag, we expect to restore
Eldorado’s annual gold production to over 600,000 ounces. Both Turkey and Canada offer clear visibility
on development and permitting timelines,” said George Burns, Eldorado’s President and Chief Executive
Officer. “ We have no immediate needs for financing and will continue to prioritize our project
development opportunities and prudently deploy our capital.”
Paul Skayman, Eldorado’s Chief Operating Officer said, “We are confident that we can deliver near term
growth on schedule and on budget. Underground development, c onstruction and permitting at
Lamaque’s Triangle deposit is well advanced and we are now expecting mill start up by the start of 2019.
Major construction and the bulk of capital deployment for the Kisladag mill will begin in early 2019, subject
to the Company making a positive final investment decision and after the permitting process and
Feasibility Study are complete. The Kisladag mill is expected to enter commissioning before the end of
2020.”
Kısladag Mine, Turkey
In the third quarter of 2017 , the Company announced that recent recoveries observed at Kisladag had
been lower t han the historic average. A significant amount of laboratory test work was undertaken to
investigate the cause of the issue and to outline a path forward. Testing undertaken since the third quarter
of 2017 included column tests, intermittent bottles rolls, large-scale column tests, high pressure grinding
roll (HPGR) test work, as well as mill optimization studies and required engineering. Based on the results
of this extensive test work, the recently completed technical study and the improved economics when
compared to continuing with heap leaching, the Company will proceed with the mill option on a staged
basis.
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The new pit design results in a nine year mine life with an estimated after-tax net present value of $434
million at a 5% discount rate and an internal rate of return of 22.1%. Compared to heap leaching t he
design provides for similar recovered ounces and preserves the same flexibility to consider a larger pit in
the future with expected additional economic upside at higher gold prices. Accordingly, it is expected that
permitting will also provide for the current mine life and preserve the ability to expand to a larger pit if
warranted.
The Pre -Feasibility Study reflects a standalone milling operation and does not include any revenue
associated with existing gold inventories. As the margin per ounce under a milling scenario is considerably
better than heap leaching, the Company has decided to defer ore mining until the mill feasibility is
complete and a final investment decision has been made. The Kisladag team will continue stripping waste
from the pit in preparation for ore mining to recommence and will continue to extract gold from existing
leach pad inventories. It is expected that Kisladag will produce 120,000-130,000 ounces of gold in 2018 at
a cash cost of $600 -$700 per ounce, including roughly $150 per ounce of non-cash inventory changes.
Production for 2019 is expected to be 40,000 -50,000 ounces at a cash cost of $1,100 -1,200 per ounce,
including roughly $650 per ounce of non -cash inventory changes. Methods to improve overall gold
recovery from ounces already on the leach pad and enhance production beyond current inventory will
also be evaluated.
The Company expects to file the Kisladag Technical Report compliant with National Instrument 43-101 –
Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators (“NI 43 -101”) on
March 29, 2018 and expects to complete a Feasibility Study in October 2018.
Supplementary information on Kisladag:
Though not included in the study, the contained value in the leach pad (ounces in inventory) will
continue to be extracted. Efforts to extract ounces of gold in excess of the current inventory will
be pursued through:
o Sonic drilling on the leach pad to better understand how the gold is distributed in the pad.
o Testing additional methods and technologies to potentially recover these ounces.
The mill will make use of the existing crushing circuit. The flow sheet for the mill will include
grinding and classification, leach, carbon in pulp (CIP) followed by cyanide detoxification and
tailings thickening for placement in a lined dry-stack storage facility.
Permitting will commence immediately and is anticipated to take approximately 12 months.
The plan is to move forward with obtaining vendor drawings of long lead equipment while
permitting is ongoing. Second hand equipment for the long lead items will also be considered.
The Company has over a decade of successful construction success at Kisladag and in Turkey ,
including multiple plant expansions and greenfield construction projects. This historical success
increases the reliability of assumed construction input costs including worker productivity, civil
works, concrete costs and procurement.
Lamaque Project, Canada
The focus at Lamaque since the acquisition in July 2017 has been on infill drilling the upper portion of the
Triangle deposit (one of three currently identified deposits on the property) to quantify and declare a
maiden reserve. In 2018, the Company plans 9,000 metres of underground resource conversion drilling
at Triangle targeting inferred resources in the C2 zone, along with 34,000 metres of surface exploration
drilling that will test deeper “C” zones at Triangle and numerous other targets on the property .
Exploration success would offer potentially significant upside, given the Sigma mill nameplate capacity of
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2,200 tpd and the opportunity for low cost plant expansion to 5,000 tpd with the re-addition of a SAG mill
(which was part of the original plant design and sold by a previous owner).
The Lamaque Pre-Feasibility Study of the Triangle deposit and the Sigma mill refurbishment , compliant
with NI 43-101 is expected to be filed on March 29, 2018.
Additional items of note in the report include:
The Company received the Certificate of Authorization, closure plan and the mining lease for the
Triangle deposit in the first quarter 2018. The only outstanding permit is for ore processing at the
Sigma mill, which is expected to be received during the third quarter 2018.
The Company is evaluating an option to build an underground ramp to haul ore from Triangle to
the Sigma mill, while passing through the Plug 4 and Parallel ore zones. The underground ramp is
expected to reduce ore transport costs, improve access, and could serve as an excellent
exploration drill platform for the Plug 4 and Parallel deposits as well as new targets along its route.
Skouries Project, Greece
The updated technical report outlines a redesigned project, which optimizes project economics and
incorporates some of the best available environmental and operational standards and technologies.
Additional items of note in the updated report include:
Approximately two years remain ing to comp lete construction and commissioning following
receipt of all necessary permits and a Company decision to proceed (see discussion of ongoing
arbitration in the Earnings Release).
Capital costs in the revised design reflect earlier development of the underg round, increased
water management infrastructure, changes in foreign exchange and an increased estimate of the
cost for the tailings filter plant.
Dry stacked tailings handling would be expected to decrease the project footprint by
approximately 180 hectares or 40%, reduce overall operating risk and improve economics by
increasing the amount of material that can be mined in the underground during the early years
of operation.
The project offers a positive benefit to the Greek economy during the 20 plus years of operations,
including the creation of approximately 1,000 direct jobs in the construction phase, an average of
700 direct jobs per year and over $750 million in direct taxes and royalties over the life of the
mine (at current metal prices).
An updated technical study on Skouries, compliant with NI 43 -101, is expected to be filed on March 29,
2018.
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Appendix: Project Economics and Key Parameters
Kisladag Mill Pre-Feasibility Economics and Key Parameters
Milling Capacity (Mtpa) 13 Mtpa
Mine Life (years) 9 years
Average Annual Gold Production (oz) 270,000 oz
Average Cash Costs ($/oz) $666/oz
Average AISC ($/oz) $778/oz
Average Recovery Rate (%) 80.1%
Average Gold Grade (g/t) 0.81 g/t Au
Strip Ratio (w:o) 1.3
Initial Capital (US$ millions) $490M ($378M Construction, $112M Pre-Production Waste & Ore)
Sustaining Capital (US$ millions) $213 M (including $103M Capitalized Waste)
Gold Price ($/oz) $1,300/oz
NPV-5% (after tax, US$ millions) $434M
IRR (after tax) 22.1%
Payback Period (years) 3.7 years
Lamaque Pre-Feasibility Economics and Key Parameters
Milling Capacity (Ktpa) 800 Ktpa capacity, 600 Ktpa processed
Initial Mine Life (years) 7 years
Average Annual Gold Production (oz) 117,000 oz
Peak Gold Production (oz) 135,000 oz
Average Cash Costs ($/oz) $516/oz
Average AISC ($/oz) $717/oz
Average Recovery Rate (%) 94.5%
Average Gold Grade (g/t) 7.3 g/t Au
Estimated Capital Expenditure (US$ millions)
Initial Capital Costs (to commercial production) $122M
Pre-commercial Production Costs $57M
Proceeds from Pre-Commercial Gold Sales ($80M)
Sustaining Capital $162M
Gold Price ($/oz) $1,300/oz
NPV-5% (after tax, US$ millions) $205
IRR (after tax) 34.3%
Payback Period (years) 3.7 years
Skouries Updated Technical Report Key Parameters
Tonnes Milled (Mt) 156.7 Mt
Mine Life (years) 23 years
Average Annual Gold Production (oz) 140,000 oz
Average Annual Copper Production (Mlbs) 66.9 Mlbs
Average Total Cash Cost ($/oz) $(70)/oz
Average AISC ($/oz) $215/oz
Gold Recovery 82.5%
Copper Recovery 88.2%
Au Grade (g/t) 0.74 g/t Au
Cu Grade (%) 0.49% Cu
Total Development Capex ($M) $689.2 M
Total Sustaining Capex ($M) $758.0 M
Gold Price ($/oz) $1,300/oz
Copper Price Assumption Used in Financial Analysis ($/lb) $2.75
NPV-5% (after tax, millions) $925 M
IRR (after tax) 21.2%
Payback Period (years) 3.4 years
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About Eldorado Gold
Eldorado is a leading intermediate gold producer with mining, development and exploration operations
in Turkey, Greece, Romania, Serbia, Canada and Brazil. The Company's success to date is based on a
highly skilled and dedicated workforce, safe and responsible operations, a portfolio of high-quality
assets, and long-term partnerships with the communities where it operates. Eldorado's common shares
trade on the Toronto Stock Exchange (TSX: ELD) and the New York Stock Exchange (NYSE: EGO).
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. Of ten, 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, projected cash cost, planned capital and exploration expenditures fo r 2018; our
expectation as to our futu re financial and operating performance, including future cash flow, estimated cash costs, expected metallurgical
recoveries, gold price outlook; and our strategy, plans and goals, including our proposed exploration, development, construction, permitting and
operating plans and priorities, 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 ,
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; 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.
Even though our mana gement 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: geopolitical and economic climate (global and local), risks related to mineral tenure and permits; gold and
other commodity price volatility; recoveries of gold and other metals; results of test work; revised guidance; 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 model s and life of mine plans; mining operational and development risk; foreign country
operational risks; risks of sovereign investment; regulatory risks and liabilities including, regulatory en vironment and restrictions, and
environmental regulatory restrictions and liability; discrepancies between actual and estimated production, mineral reserves and resources and
metallurgical testing and recoveries; risks related to the impact of the sale of our Chinese assets and the acquisition and integration of Integra on
the Company’s operations;; 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 and you are referred to the full discussion of the Company's business contained in the Company's reports filed with the
securities regulatory authorities in Canada and the U.S.
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 43-101I.
Mineral resources which are not mineral reserves do not have demonstrated economic viability. With respect to “indicated mineral resource”
and “inferred mineral resource”, there is a great amount of uncertainty as to their existence and a great uncertainty as to their economic and
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legal feasibility. It cannot be assumed that all or any part of a “measured mineral resource”, “indicated mineral resource” or “inferred mineral
resource” will ever be upgraded to a higher category.
Cautionary Note to US Investors Concerning Estimates of Measured, Indicated and Inferred Resources
The terms “mineral resource”, “measured mineral resource”, “indicated mineral resource”, “inferred mineral resource” used herein are Canadian
mining terms used in accordance with NI 43-101 under the guidelines set out in the Canadian Institute of Mining an d Metallurgy and Petroleum
(the “CIM”) Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as may be amended from time to t ime. These
definitions differ from the definitions in the United States Securities & Exchange Commission (“SEC”) Industry Guide 7. In the United States, a
mineral reserve is defined as a part of a mineral deposit which could be economically and legally extracted or produced at th e time the mineral
reserve determination is made.
While the terms “mineral resource”, “measured mineral resource,” “indicated mineral resource”, and “inferred mineral resource” are recognized
and required by Canadian regulations, they are not defined terms under standards in the United States and normally are not permitted to be used
in reports and registration statements filed with the SEC. As such, information contained herein concerning descriptions of m ineralization and
resources under Canadian standards may not be comparable to similar information made public by U.S. companies in SEC filings.
Accordingly, information herein containing descriptions of our mineral deposits may not be comparable to similar information made public by US
companies subject to the reporting and disclosure requirements under US federal securities laws and the rules and regulations thereunder.
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]