Eldorado Announces Preliminary 2016 Operational Results and 2017 Guidance
Throughout this press release we use cash operating cost per ounce and all -in sustaining cost per ounce as additional measures of Company performance. These are
non IFRS measures. Please re fer to the non IFRS measurements in our Third Quarter 2016 MD&A for an explanation and discussion of these non IFRS measures. All
dollar amounts in US$ unless stated otherwise.
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NEWS RELEASE
TSX: ELD NYSE: EGO January 6, 2017
Eldorado Announces Preliminary 2016 Operational Results and 2017 Guidance
VANCOUVER, BC – Eldorado Gold Corporation, ( “Eldorado” or “the Company”) today announce s the
Company’s 201 6 operating results and preliminary cash costs, and provide s production and cash cost
guidance for 2017.
2016 Highlights
Gold production of 48 5,994 ounces (including production from discontinued Chinese operations and
tailings retreatment); slightly lower than the revised third quarter guidance of 495,000 ounces.
2016 cash operating costs averaged $578 per ounce; considerably lower than original 2016 guidance
of $585-620 per ounce.
All in sustaining costs expected to be approximately $ 915 per ounce; also considerably lower than
original 2016 guidance of all in sustaining costs of $940-980 per ounce.
Closed the year with total liquidity of approximately $1.1 billion, including $880 million in cash, cash
equivalents and term deposits, and $250 million in undrawn lines of credit.
Completed sale of Chinese assets, which included: White Mountain and Tanjianshan Mines and Eastern
Dragon Development Project to an affiliate of Yintai Resources Co. Ltd, and the Jinfeng Mine to a wholly-
owned subsidiary of China National Gold Group Corporation.
Olympias Phase II is set for commissioning in the first quarter 2017.
Construction at Skouries continues on track for 2019 start-up .
Continued improvement to the overall safety record with a reduction in the lost time injury rate for
the fifth consecutive year.
Announced the planned retirement of President and Chief Executive Officer Paul Wright and named
George Burns as his successor, in addition to changes to the Board of Directors.
“I am very pleased to report the close of a successful 2016 , a transitional year for Eldorado. With the sale
of the Chinese assets now complete, our development projects in Greece progressing on schedule, and a
capital plan that now reflects the lower gold price envi ronment, I am confident that the next three years
will be transformational for the Company .” said Paul Wright, President and Chief Executive Officer. “Our
teams continue to operate to the highest international safety standards, and I would like to take this
opportunity to thank them for their hard work and diligence in this core area.”
“In response to our current gold price outlook and our priority development projects in Greece, we have
decided to reconfigure the mine plan at Kışladağ, eliminating the remaining capital expenditure associated
with the expansion and greatly reducing sustaining capital requirements over the next five years. The
revised operating plan greatly enhances free cash flow from the operation in the near and medium-term
while maintaining long-term operating integrity.”
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2016 Operating Results Highlights (including discontinued operations)
Q4 2016 YE 2016
Total
Realized gold price ($/oz) 1,213 1,254
Gold sold (oz) 105,021 483,460
Gold produced (oz) 1,2 103,113 485,994
Cash operating cost ($/oz) 3,5 525 578
Total cash cost ($/oz) 4 549 620
Kisladag Mine
Gold sold (oz) 59,416 211,284
Gold produced (oz) 59,591 211,161
Tonnes to pad 3,918,426 16,566,763
Grade (g/t) 0.74 0.80
Cash operating cost ($/oz) 3,5 449 472
Total cash cost ($/oz) 4 457 486
Efemcukuru Mine
Gold sold (oz) 25,265 99,743
Gold produced (oz) 23,182 98,333
Tonnes milled 120,347 473,060
Grade (g/t) 6.62 7.21
Cash operating cost ($/oz) 3,5 505 512
Total cash cost ($/oz) 4 516 529
Jinfeng Mine 6
Gold sold (oz) - 66,902
Gold produced (oz) - 68,195
Tonnes milled - 766,697
Grade (g/t) - 3.32
Cash operating cost ($/oz) 3,5 - 705
Total cash cost ($/oz) 4 791
Tanjianshan Mine 7
Gold sold (oz) 10,912 49,266
Gold produced (oz) 10,912 49,266
Tonnes milled 121,237 869,964
Grade (g/t) 1.70 1.90
Cash operating cost ($/oz) 3,5 785 819
Total cash cost ($/oz) 4 892 970
White Mountain Mine7
Gold sold (oz) 9,428 56,265
Gold produced (oz) 9,428 56,265
Tonnes milled 95,278 717,145
Grade (g/t) 2.99 2.78
Cash operating cost ($/oz) 3,5 759 731
Total cash cost ($/oz) 4 813 773
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2016 Operating Results Highlights Continued
Q4 2016 YE 2016
Olympias Mine
Gold sold (oz) - -
Gold produced (oz) 2 - 2,774
Tonnes milled - 87,350
Grade (g/t) - 2.47
Cash operating cost ($/oz) 3,5 - -
Total cash cost ($/oz) 4 -
1 Gold production includes both continuing and discontinued operations.
2 Ounces produced include production from tailings retreatment at Olympias.
3 Cost figures calculated in accordance with the Gold Institute Standard.
4 Cash operating costs, plus royalties and the cost of off-site administration.
5 Cash operating costs and total cash costs are non-IFRS measures. Please see our Q3 MD&A for an explanation and discussion of these.
6 Figures shown for YE 2016 reflect the sale of Jinfeng on September 6, 2016.
7 Figures shown for Q4 and YE 2016 reflect the sale of Tanjianshan and White Mountain on November 22, 2016.
2017 Guidance
Expected gold production of 365 ,000-400,000 ounces, in addition to substantial by-product credits
from Olympias Phase II production.
2017 all-in sustaining cash costs expected to remain low at $845-875 per ounce; and cash operating
costs expected to decline significantly, averaging $485-535 per ounce.
Expected capital expenditures of $425 million; considerably lower than the September 2016 guidance.
Reductions were primarily at Skouries due to flexibility in the capital deployment timeline, along with
anticipated cost savings, and at Tocantinzinho in response to the current gold price environment and
permitting delays.
Mine/Project Production
(Au oz)
Cash Costs
($/oz)
Sustaining Capital
Expenditure ($M)
Kisladag 230,000 - 245,000 500-550 45
Efemcukuru 95,000 - 105,000 525-575 25
Olympias 40,000 - 50,0001 250-4502 30
Total 365,000-400,000 485-535 100
1 Includes pre-commercial production of ~10k oz.
2 Range due to variability of by-product credits; commercial ounces only.
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2017 Capital Expenditure
Principal assumptions used in the preparation of guidance for 2017 include:
Gold price: $1,150/oz Lead price: $2,250/t CAD vs USD 1.30 USD vs EUR 1.10
Silver price: $20/oz Zinc price: $2,500/t REAL vs USD 3.50 TRL vs USD 3.40
2017 Financial Outlook
The Company’s balance sheet remains one of the strongest in its peer group, with approximately $880
million in cash, cash equivalents and term deposits and $250 million in undrawn credit lines. Sustaining
capital for gold mining operations in 201 7 is e stimated to be approximately $100 million. Planned
expenditures for mining development total $315 million. Exploration expenditures in 2017 are budgeted at
$35 million (65% expensed and 35% capitalized), with a balanced focus on resource delineation and
brownfield drilling at existing operations, testing known structures, and project generation.
Depreciation, depletion and amortization expense is expected to be approximately $300 per ounce of gold
sold, subject to the Company completing its year end 201 6 reserve and resource calculation. General and
administrative expense is expected to be approximately $45 million.
Gold Operations Review and Future Outlook
TURKEY
Kisladag
In 2016 the original production budget for Kisladag was estimated between 225,000-240,000 ounces of gold
at cash costs of $550-600 per ounce. Total production of 211,161 ounces was due to slower than expected
leach rates from certain ore types mined earlier in the year. While gold production improved in the final
quarter to 59,416 ounces, inventory levels over the year increased by 37,000 ounces. A reduction of over
6,000 ounces occurred during the fourth quarter due to the installation of new leach trains. The average
ore grade placed on the leach pad during the year was 0.80 grams per tonne gold and the average cash
operating cost was $472 per ounce.
In 2017, Kisladag is expected to place 13.1 million tonnes of ore on the leach pad at a grade of 0. 94 grams
per tonne gold. It is anticipated that with a continued increase in gold grade to 0.94 grams per tonne, the
inventory levels are expected to remain constant year over year. Mining in the pit throughout 2017 will
return to areas with expected higher metallurgical recoveries. Projected cash costs of $500-550 per ounce
Development Capital ($M) Total Capital ($M)
Tocantinzinho 35 Total Development 315
Olympias 55 Total Capitalized Exploration 10
Skouries (170 – 200) 185 Total Sustaining 100
Stratoni 20 Total 425
Certej 20
Total 315
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are based on minimal tonnes of run of mine material being treated in 201 7, in combination with reduced
waste mining requirements under the new mine plan. Sustaining capital expenditures for the year are
estimated to be $45.0 million, similar to the 2016 actual spend of $41.5 million.
Due to its long-term outlook for gold, the Company has reconfigured the pit design and decided to
indefinitely defer the completion of the Kişladağ expansion; eliminating the considerable sustaining capital
that would have been required. Production is expected to average 285,000 ounces during 2018 and 2019.
Efemcukuru
During 2016 Efemcukuru met its original production guidance of 90,000-100,000 ounces of gold with cash
costs between $550 -600 per ounce, finish ing the year with 98,333 ounces of gold produced at cash
operating costs of $512 per ounce.
In 2017, Efemcukuru is expected to mine and process over 450,000 tonnes of ore at an average grade of 7.3
grams per tonne gold, producing between 95,000-105,000 ounces of gold, at operating costs between $525-
575 per ounce . Sustaining capital expenditures for 201 7 are approximately $ 25.0 million (2016: $23.3
million), spent primarily on underground mine development , waste handling and tailings facilities
construction.
GREECE
Olympias
Olympias Phase II continues as per schedule, with commissioning of the process plant expected in the first
quarter 2017. Total capital spending for 2017 of $85.0 million includes completion of the Phase II plant,
general sustaining capital expenditures, and capital associated with advancement to Phase III including the
continued construction of the Kokkinolakas tailings facility along with underground development and water
management.
Skouries
Capital expenditures at Skouries for 2017 are expected to be between $170.0 and $200.0 million, lower
than September 2016 guidance mainly due to the flexibility in the capital plan in combination w ith cost
initiatives that are underway. Funds will be used to continue the construction of the process plant and the
integrated waste management facility. Development of the decline is continuing, which will allow for
extraction of material from the underground soon after the open pit start- up – currently scheduled for
2019.
Stratoni
During 2017, Stratoni is expected to process 200,000 tonnes of ore at grades of 6. 0% lead, 9.7% zinc and
155 grams per tonne silver. Capital costs for the year are expected to total $20.0 million, which includes
underground equipment rebuilds and replacement, and underground development.
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ROMANIA
Certej
The Company’s plans for Certej are progressing on schedule. The Company will spend approximately $20.0
million in capital during 2017 with a focus on continuing infrastructure projects, advancing permitting and
support engineering as defined in the 2015 Fe asibility Study. Permitting required includes an amendment
to the EIA to allow for improvements to the metallurgical process; converting the current Albion process to
pressure oxidation.
BRAZIL
Tocantinzinho
Consideration of a decision to commence construction at Tocantinzinho has been deferred until all permits
are in place, and in the context of gold price outlook at that time and the progress of other priority
development projects in the Company. Compared to previous September 2016 guidance of $95.0 to $105.0
million in capital expenditures for 2017, the Company now expects to spend $35.0 million in capital during
2017. The focus will be primarily on completing construction of the access road to site, permitting, basic
engineering and general site costs.
2016 Fourth Quarter and Year End Financials Announcement
The 2016 Fourth Quarter and Year End Financials will be released after the market closes on February 23,
2017. A conference call to discuss the details will be held by senior management on February 24, 2017 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
Conference Call Details Replay (available until March 10, 2017)
Date: Friday February 24, 2016 Toronto: 416 849 0833
Time: 8:30 am PT (11:30 am ET) Toll Free: 855 859 2056
Dial in: 647 427 7450 Pass code: 4916 2097
Toll free: 888 231 8191
Certain of the statements made herein may contain 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, but not always, forward- looking statements and forward-
looking information can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “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 herein include, but are
not limited, to statements or information with respect to the Company’s Preliminary 2016 Operational Results and 2017 Guidance.
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 the ability to acquire Shares in the market through the NCIB and in
compliance with regulatory requirements, the political and economic environment that we operate in, the future price of commodities, anticipated
costs and expenses and the impact of the disposition on the Company’s business. Although our management believes that the ass umptions made
and the expectations represented by such statements or information are reasonable, there can be no assurance that the forward-looking statements
or information will prove to be accurate. 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: the ability to acquire shares through the NCIB; politic al, economic,
environmental and permitting risks, regulatory restrictions, gold price volatility, discrepancies between actual and estimated production, estimated
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mineral reserves and resources and metallurgical recoveries; mining operational and development risks, litigation risks, regulatory restrictions,
including environmental and permitting regulatory restrictions and liabilities, internal and external approval risks, risks of sovereign investment, and
impact of the completion of the sale of our interests in the Jinfeng, Tanjianshan and White Mountain Mines and the Eastern Dragon Development
Project on the Company; assumptions about the completion of post-closing conditions of the China National Gold and Yintai Transactions, including
liability and timing of meeting the closing conditions; changes in the use of proceeds; currency fluctuations; speculative nature of gold exploration,
global economic climate; dilution, share price volatility; competition, loss of key employees, additional funding requirement s, and defective title to
mineral claims or property, as well as those factors discussed in the sections entitled “Forward- Looking Statements” and "Risk Factors" in the
Company's Annual Information Form & Form 40-F dated March 30, 2016.
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.
All forward looking statements and information contained in this News Release are qualified by this cautionary statement.
About Eldorado Gold
Eldorado is a leading low cost gold producer with mining, development and exploration operations in
Turkey, Greece, Romania, Serbia and Brazil. The Company’s success to date is based on a low cost strategy,
a highly skilled and dedicated workforce, safe and responsible operations, 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).
Contact
Krista Muhr
Vice President Investor Relations and Corporate Communications
Eldorado Gold Corporation
604.601.6701 or 1.888.353.8166