NOTICE TO READERS This notice accompanies, and should be read in conjunction with, the news release for Eldorado
NOTICE TO READERS
This notice accompanies, and should be read in conjunction with, the news release for Eldorado
Gold Corporation filed October 25, 2018 (Eldorado Gold Reports 2018 Third Quarter Financial
and Operating Results Including Positive Decision to Advance Kisladag Mill ) via SEDAR with
Canadian securities regulatory authorities under SEDAR Project Number 02834016. As the
result of a typographical error, the news release has now been amended.
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NEWS RELEASE
TSX: ELD NYSE: EGO October 25, 2018
Eldorado Gold Reports 2018 Third Quarter Financial and Operating Results
Including Positive Decision to Advance Kisladag Mill
VANCOUVER, BC – Eldorado Gold Corporation, (“Eldorado” or “the Company”) today reports the
Company’s financial and operational results for the third quarter ended September 30, 2018.
Highlights from the Quarter and Subsequent Period1
• Board approval to advance the Mill Project at Kisladag: The feasibility study was completed and on
October 25th the Board of Directors approved advancement of the mill project.
Highlights of the project include:
o Estimated capital investment of $520 million (including $384 million for the mill, $ 75 million
for pre-stripping, and $61 million in contingency and growth allowance).
o Estimated after-tax project net present value ( NPV) of $ 392 million at a 5% discount rate,
after-tax internal rate of return ( IRR) of 20.4% and pay back period of 3.9 years, all at an
assumed gold price of $1,300.
o Proven and Probable reserves materially the same as outlined in the National Instrument 43-
101 (“NI 43-101”) Pre-Feasibility Study filed in March 2018, of 3.0 million ounces at 0. 81 g/t
Au, accounting for depletion over the first four months of 2018, support a nine year mine life
with average annual production of 270,000 ounces of gold at an all in sustaining cost ("AISC")
of $793 per ounce.
• Production ahead of plan and 2018 guidance revised higher: Quarterly gold production of 84,783
ounces, including 13,430 ounces from Lamaque pre-commercial production (Q3 2017: 70,053).
o 2018 guidance further increased to 345,000-350,000 ounces. C ash operating cost s are
forecast at $600-650 per ounce sold.
o Guidance for Kisladag increased to 160,000-170,000 ounces, at a cash operating cost of $650
- 700 per ounce sold, including $300 per ounce sold of non-cash inventory changes.
o Guidance for Olympias reduced to 45,000 -50,000 ounces, at a cash operating cost of $ 600 -
700 per ounce sold.
• Steady revenues from continuing operations: Total revenue from continuing operations during the
third quarter was $81.1 million (Q3 2017: $95.4 million). Gold revenue from continuing operations was
$76.0 million (Q3 2017: $84.4 million) on sales of 64,589 ounces of gold at an average realized gold
price of $1,177 per ounce (Q3 2017: 65,439 ounces at $1,290 per ounce).
1 Throughout this press release we use cash operating cost per ounce, all-in sustaining cash cost per ounce, earnings from gold mining
operations, adjusted net earnings, average realized price per ounce sold, earnings before interest, taxes and depreciation and amortization from
continuing operations, adjusted earnings before interest, taxes and depreciation and amortization from continuing operations, working capital,
non-cash operating costs, non-cash operating costs per ounce and cash flow from operations before changes in non-cash working capital as
additional measures of Company performance. These are non-IFRS measures. Please see the September 30, 2018 MD&A for explanations and
discussion of these non-IFRS measures. All dollar amounts in US$, unless stated otherwise .
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• Continued strong financial liquidity : At quarter -end, the Company reported total liquidity of $635
million, consisting of $385 million in cash, cash equivalents and term deposits, and $250 million in
undrawn lines of credit.
• Positive quarterly cash flow: Net cash provided by operating activities of continuing operations was
$23.2 million in the third quarter of 2018 (Q3 2017: $7.0 million net cash used by operating activities
of continuing operations).
• Key permitting milestones achieved: The Certificate of Authorization (“CofA”) for the operation of the
Sigma Mill at Lamaque was received during the quarter.
• Updated asset profile: As a result of the completion of the feasibility study and the Board approval to
advance the Kisladag Mill Project, a review of the useful life of the Kisladag heap leach assets resulted
in an impairment charge of $117.6 million ($94.1 m illion net of deferred income tax recovery)
recognized during the third quarter.
• Net Loss attributable to shareholders: In the third quarter of 2018 , net loss attributable to
shareholders of the Company from continuing operations was $128.0 million ($0.16 per share)
compared to a loss attributable to shareholders of the Company from continuing operations of $4.2
million ($0.01 per share) in the third quarte r of 2017. Adjusted net loss in the third quarter of 2018
was $21.9 million, or ( $0.03 per share) (Q3 2017: Adjusted net earnings of $1.3 million, or $0.00 per
share), primarily as result of excluding the impact of the Kisladag heap leach asset impairment noted
above, in addition to other non -cash charges related to unrealized losses on deferred tax assets as a
result of continuing currency devaluation in Turkey.
• The Company is transitioning its reporting of Reserves and Resources from the first quarter of each
year to the fourth quarter of each year. Reserves and Resources for 2018 will be reported by December
2018.
“We are pleased with this quarter’s results and with the operational and financial progress Eldorado Gold
has achieved in the first nine months of the year,” said George Burns, Eldorado’s President and Chief
Executive Officer. “As a result of the focus and effort of our team, we are increasing our production
guidance for the second time this year. With a robust balance sheet, significant operating cash flow, and
a commitment to disciplined capital allocation, combined with G&A reductions and operational excellence,
we are well positioned to advance our development projects in order to achieve annual gold production
of 600,000 ounces per year in 2021.”
“For the third quarter, gold production was ahead of plan driven by production from the Kisladag leach
pad and strong pre-commercial production from Lamaque. From a development standpoint, we are very
pleased with the progress at Lamaque. We have begun commissioning of the crushing circuit and wet
commissioning of the Sigma Mill and are on track to complete construction on schedule and on budget,
with commercial production expected in early 2019.”
“The completion of the f easibility study for the Kisladag Mill and the subsequent Board decision to
continue to advance the project were key milestones for Eldorado this quarter. I am extremely proud of
the work our team has undertaken to optimize the future of Kisladag, demonstrating our d isciplined
approach of allocating capital, as we transition away from heap leaching to deliver quality growth through
the advancement of the mill project. Our focus going forward will be on delivering this project on time and
on budget, as we are doing at Lamaque.”
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Summarized Quarterly Financial Results
3 months ended
September 30, 9 months ended September 30,
2018 2017 2018 2017
Revenues $81.1 $95.4 $366.1 $290.0
Gold revenues (1) $76.0 $84.4 $312.8 $247.1
Gold sold (ounces) 64,589 65,439 245,400 196,713
Average realized gold price ($/ounce sold) 1,177 1,290 1,274 1,256
Cash operating costs – gold mines ($/ounce sold) 754 508 625 485
All-in sustaining cash cost – gold mines ($/ounce sold) 1,112 925 944 859
Net earnings from mining operations $4.7 $30.4 73.1 101.3
Impairment loss on property, plant and equipment, net of
tax
(94.1) 0.0 (94.1) 0.0
Net earnings (loss) attributable to shareholders of the
Company (2,3)
($128.0) ($4.2) ($143.7) $10.9
Adjusted net earnings (loss) attributable to shareholders of
the Company
($21.9) $1.3 ($9.5) $15.6
Cash flow provided (used) by operating activities of
continuing operations
$23.2 ($7.0) $71.6 $15.9
Earnings (loss) per share attributable to shareholders of
the Company – basic ($/share)
(0.16) (0.01) (0.18) 0.01
Earnings per share attributable to shareholders of the
Company – diluted ($/share)
(0.16) (0.01) (0.18) 0.01
(1) Including market to market price adjustments on provisional sales.
(2) 2017 net earnings is from continued operations.
(3) Including non-cash charges.
Review of Quarterly Financial Results
Gold sales of 64,589 ounces during the quarter were in line with last year’s third quarter as lower sales
from Kisladag were partially offset by sales at Olympias in 2018. Total metal sales revenues were $81.1
million in the third quarter of 2018 compared to $95.4 million in the third quarter of 2017, as a result of
marginally lower sales volumes together with a lower average realized gold price of $1,177 per ounce
compared to $1,290 per ounce for the third quarter of 2017.
Lower gold revenues for the quarter together with higher production costs and depreciation, depletion
and amortization (“DDA”) expense resulted in earnings from mine operations decreasing year over year.
Production costs in the third quarter of 2018 were $10.2 million higher year over year. This was driven
primarily by $21.1 million in non -cash charges related to the leach pad inventory draw -down at Kisladag
due to lower ounces, together with Olympias starting production at the beginning of 2018 and partially
offset by lower production costs at both Efemcukuru and Stratoni.
Kisladag leach pad inventory was adjusted upwards by approximately 76,000 ounces of gold during the
quarter to reflect an increase i n recoverable ounces on the pad. The costs associated with the inventory
will now be spread across the remaining heap leach expected ounces. Future quarters are expected to be
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impacted by non-cash charges as the Kisladag leach pad inventory draw-down continues. DDA costs in the
quarter were marginally higher year over year due to the start -up of Olympias as well as an increase at
Kisladag resulting from leach pad draw-down.
With the completion of the mill feasibility study at Kisladag and Board approval to advance the project a
review of the useful lives of the Kisladag heap leach assets resulted in an impairment charge of $117.6
million ($94.1 million net of deferred income tax recovery) being recognized during the quarter. As a result,
net loss attributable to shareholders of the Company for this quarter was $128.0 million, or ($0.16) per
share, compared to a net loss of $4.2 million, or ($0.01) per share in the third quarter of 2017. Adjusted
net loss for the quarter was $21.9 million, or ($0.03) per share, compared to adjusted net earnings of $1.3
million, or $0.00 per share for the third quarter of 2017 ( see the MD&A dated September 30, 2018 for a
reconciliation of net earnings (loss) to adjusted net earnings (loss)).
General and administrative expenses decreased $1.9 million year over year due to one time costs in 2017
associated with the acquisition of Integra. Mine standby costs of $4.5 million w ere recorded in the third
quarter of 2018 related to Kisladag, Vila Nova, Perama Hill and Skouries (Q3 2017: $1.3 million).
In the third quarter, further weakening of the Turkish and Brazilian currencies in relation to the U.S. dollar
had a negative impac t on deferred income tax expenses, which were partially offset by the deferred
income tax recovery related to the impairment of assets in Turkey. Total deferred income tax recovery for
the quarter was $11.6 million. Quarterly income tax expense/recovery wi ll continue to be sensitive to
currency volatility in Turkey and Brazil.
Review of Quarterly Operational Results
Gold production of 84,807 ounces was up 21% year on year (Q3 2017: 70,053) due to commercial
production at Olympias and pre -commercial production from Lamaque. Production at Efemcukuru
remained in line with the comparative quarter in 2017.
Production at Kisladag for the quarter was 34,070 ounces, marginally lower than the third quarter of 2017
(35,902 ounces) , with no additional ore being placed on the pad since April 2018 . The better than
forecasted production at Kisladag is largely due to increased cyanide concentrations boosting leach
kinetics and targeted irrigation of leach pad as a result of ongoing sonic drilling , as well as side slope
leaching.
After a strong first half of 2018, the Olympias plant encountered lead recovery challenges during the
quarter. This was primarily due to permit delays impacting the construction and commissioning of the
paste plant, which led to a backlog of voids that required filling in the West zone, slowing production from
this area of the mine. Production was increased in the East zone, but material from this area has proven
to be challenging in terms of lead circuit performance. These challenges include lower lead recovery and
a higher concentration of deleterious material in the lead concentrate, which necessitated a change in the
sales process. At quarter end, there was a built up stockpile of lead concentrate at the port and on vessels.
In addition to these issues , lower zinc and lead prices compared to previous quarters led to lower by -
product revenues and higher cash operating and AISC costs.
Gold recovery and gold grades in concentrate at Olympias were broadly in line with expec tations, with
gold feed grades dropping slightly below expectations during the quarter, but still ahead of expectations
year to date. However, with the issues in the lead production, some of the lead was reporting to the gold
concentrate, causing issues in the sale of that concentrate. At quarter end , Olympias had approximately
9,500 ounces of payable gold unsold in inventory.
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At quarter end, backfilling of voids was improving and the ratio of West to East zone ore had been restored.
We are also temporarily slowing down plant throughput to allow for an ore stockpile to be created on
surface to help with blending. Metallurgical consultants have also been engaged to assist with
performance of the plant when treating the East zone. The Company is also explo ring blending lead
concentrates from Olympias with Stratoni to decrease the concentration of deleterious material.
For further information on the Company’s operating results for the third quarter of 2018, please see the
Company’s Management’s Discussion and Analysis filed on SEDAR at www.sedar.com under the
Company’s profile.
Permitting and Development Updates
Kisladag Mill
Following the completion of the Kisladag Mill Project f easibility study the Board approved the
advancement of the project on October 25th . The project is expected to begin commissioning activities in
late 2020, with production expected in the first half of 2021.
Highlights of the feasibility study are shown below, compared to the NI 43-101 Pre-Feasibility Study filed
in March 2018, which remains the Company’s current technical report for the purposes of NI 43 -101.The
results of the feasibility study in terms of capital and operating costs are close to those outlined in the Pre-
Feasibility Report. Mine plan, reserves, operational strategy, geology, metallurgy and other operating
parameters all remained materially unchanged from the Pre-Feasibility Report.
Other work during the quarter included the selection of vendors for long-lead items with the award of an
early engineering contract to the selected tailings filter vendor. It is expected that contracts for other long-
lead items such as the mills will be finalized, and awarded for purchase, before year-end.
Capital costs increased compared to the Pre-Feasibility Report primarily due to increased costs in the
tailings management facility and in tailings filtration. Operating costs increased slightly compared to the
Pre-Feasibility Report mainly due to increased cost of electric power.
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Kisladag Mill Feasibility Study Summary
October 2018
Feasibility Study
March 2018
Pre-Feasibility Report
Mill capacity 13.0 Mtpa 13.0 Mtpa
Grade 0.81g/t 0.81g/t
Recovery rate 80.1% 80.1%
Annual gold production 270,000 oz 270,000 oz
Mill operating life 9 years 9 years
Strip ratio 1.3 1.3
Total cash costs $692/oz $666/oz
AISC $793/oz $778/oz
Development capital $520 M $490 M
Mill cost $384 M $323 M
Waste and ore mining $75 M $112 M
Contingency $61 M $55 M
Sustaining capital $188 M $213 M
NPV-5%1 $392 M $434 M
IRR1 20.4% 22.1%
Payback1 3.9 years 3.7 years
1 After tax, based on $1,300/oz Au.
Sensitivities for the NPV and IRR of the mill project are shown below:
Project
Sensitivities Gold Price Capex Opex
$1,200/oz $1,400/oz +10% -10% +5% -5%
NPV-5% $238 M $534 M $344 M $440 M $338 M $439 M
IRR 14.8% 25.7% 17.6% 23.8% 18.5% 22.2%
Lamaque
During the quarter, Lamaque received the Certificate of Authorization permit for operation of the Sigma
Mill. Underground development continues to ramp up and remains slightly ahead of plan, with over 2,100
meters completed at Triangle during the quarter.
Key activities at the Sigma mill focused on the refurbishment and replacement of the electrical and piping
works, installation of the refurbished mill motors, equipment installation and construction of the reagent
buildings. A key milestone was achieved with the commencement of the pre- commissioning of the
crushing circuit and wet commissioning of the main plant. It is expected that the full commissioning will
commence in late November.
Favorable weather allowed for the advancement of Phase 1 of the Tailings Management Facility (“TMF”)
ahead of schedule. Phase 1 will provide sufficient storage for the first year of operation. The Certificate of
Authorization for operations of the tailing facility was also received during the quarter which permits the
deposition of tailings in the TMF.
Lamaque remains on track to reach commercial production in early 2019.
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Greece
The Company continues to attempt to engage the Greek government in constructive dialogue relating to
its investments in Greece, including the Skouries project. During the quarter , the Company filed an
application for payment with the Greek government requesting payment of approximately €750 million
for damages suffered by the Company arising from delays in the issuance of permits for the Skouries
project. The Company continues to evaluate its legal options in this regard.
For further information on the Company’s development and permitting updat es for the third quarter of
2018, please see the Company’s Management’s Discussion and Analysis filed on SEDAR at www.sedar.com
under the Company’s profile.
Guidance
2018 Revised Outlook
Our operations continue to perform well, and full year production guidance has been further increased
to 345,000-350,000 ounces of gold. Cash operating costs are forecasted at $600-650 per ounce sold. This
is an increase from previous guidance of 330,000-340,000 ounces of gold, and initial guidance of 290,000
– 330,000 ounces of gold, and cash operating costs of $580-630 per ounce sold, primarily due to expected
higher production at Kisladag, partially offset by a guidance reduction at Olympias. Details of the Kisladag
guidance updates are outlined below:
Kisladag
October 2018 Revised Guidance July 2018 Revised Guidance
Production (oz) Cash Cost ($/oz sold) Production (oz) Cash Cost ($/oz sold)
2018 160,000-170,000
$650-700
(including ~$300/oz
sold of non-cash
costs)
140,000-150,000
$700-800
(including ~$350/oz
sold of non-cash
costs)
2019 50,000-60,000
$900-1,000
(including ~$170/oz
sold of non-cash
costs)1
40,000-50,000
$900-1,000
(including ~$300/oz
sold of non-cash
costs)
2020 20,000-40,000
$900-1,000
(including ~$100/oz
sold of non-cash
costs)1
20,000-25,000 $600-700
1 Cash operating cost guidance has increased for Kisladag due to increased cyanide usage estimates.
2018 guidance for Olympias has been revised to 45,000-50,000 ounces of gold at a cash operating cost of
$600-700 per ounce sold, down from original guidance of 55,000-65,000 ounces at a cash operating cost
of $550-650 per ounce sold.
In light of this increased consolidated guidance, together with higher than expected inventory draw-down
during the quarter, the Company has also increased Kisladag’s estimated recoverable leach pad inventory
by approximately 76,000 ounces of gold. This change in estimate for the heap leach inventory will be
accounted for prospectively as a new accounting estimate in accordance with IAS 8 commencing October
1, 2018. The costs associated with this inventory are allocated to each ounce produced and are highlighted
in the above table as non-cash costs.