Eldorado Gold Corporation (“Eldorado” or the
“Company”) provides detailed 2023 production and cost guidance and
five-year production outlook. All financial figures stated within
this release are in U.S. dollars unless otherwise stated.
2023 Guidance Highlights
- Gold production of
475,000 to 515,000 ounces.
- Average Cash operating
costs(1) of $760 to $860
per ounce sold.
- Average Total operating
costs(1) of $860 to $960
per ounce sold.
- Average All-in sustaining
costs(1)
(“AISC”) of $1,190 to $1,290 per ounce sold.
- Total Growth
Capital(1) of $394 to
$437 million, including $240 to $260 million towards the
advancement of the Skouries project.
- Total Sustaining
Capital(1) of $114 to
$139 million.
- Exploration
expenditures of $28 to $31 million, focused on resource
conversion drilling at Lamaque and Efemcukuru and resource growth
and discovery in Quebec, Turkiye and Greece. An additional $7 to
$10 million of non-sustaining exploration expenditures is included
in growth capital.
(1) These financial measures are non-IFRS
financial measures. Certain additional disclosures for non-IFRS
financial measures and ratios have been incorporated by reference,
and additional detail can be found at the end of this press release
and in the section 'Non-IFRS and Other Financial Measures and
Ratios’ of Eldorado’s December 31, 2021 MD&A.
Five-Year Outlook
- Skouries incorporated into the
five-year production guidance, with first production expected in
the second half of 2025.
- Gold production of 675,000 to
735,000 ounces by 2027, resulting in growth of 55% over the
five-year period, from 2022 production and a compound annual growth
rate of over 9%.
- Continued strong commitment to
exploration to unlock the outstanding potential of the Company’s
brownfields property portfolio and identifying and developing new
opportunities in Eldorado’s focus jurisdictions.
- Addition of critical mineral
production, primarily copper, is not currently reflected in the
five-year outlook.
“Eldorado is committed to growing a safe,
sustainable and high-quality gold business, creating value today
and for the future,” said George Burns, Eldorado’s President and
Chief Executive Officer. “2022 proved to be a pivotal year for
Eldorado. As we look forward to 2023 and beyond, we have taken a
disciplined approach to business planning and capital allocation
focused on investments that will generate strong returns and cash
flow from our portfolio of long-life assets.”
“The addition of Skouries to our five-year
production outlook provides significant near-term growth and
positions the Company to deliver strong operational and financial
performance. Additionally, Skouries is expected to produce on
average 67 million pounds of copper per year, contributing to the
supply chain of critical minerals in a socially and environmentally
responsible way, and reducing our overall cash cost profile with
the addition of material by-product credits,” added Burns.
The Company’s 2023 consolidated gold production
is forecast to be between 475,000 to 515,000 ounces at an average
cash operating cost(1) of $760 to $860 per ounce sold and an
average AISC(1) of $1,190 to $1,290 per ounce sold. The slight
decrease in 2023 production guidance, from the previously published
guidance range, is attributable to a modification to the production
plan and higher stope turnover at Lamaque, as well as an assumed
slower ramp-up at Kisladag with the addition of an agglomeration
drum in the first half of the year. The increase in per-ounce costs
relative to 2022 guidance is due to ongoing inflationary pressures,
primarily related to key consumables, such as cyanide, electricity,
diesel, explosives, and cement, as well as labour.
Similar to 2022, quarter-to-quarter gold
production in 2023 is expected to fluctuate during the year, with
higher production expected in the second half, accounting for the
full commissioning of the agglomeration drum at Kisladag expected
in the first half and reflecting some seasonality impacts at our
operating sites.
(1) Cash operating costs per ounce sold and AISC
per ounce sold are non-IFRS financial measures. Certain additional
disclosures for non-IFRS financial measures and ratios have been
incorporated by reference, and additional detail can be found at
the end of this press release and in the section ‘Non-IFRS and
Other Financial Measures and Ratios' of Eldorado’s December 31,
2021, MD&A.
Five-Year Gold Production
Outlook
Production (oz) |
2023E |
2024E |
2025E(1) |
2026E |
2027E |
Kisladag |
160,000 -170,000 |
195,000 -205,000 |
180,000 - 190,000 |
150,000 - 160,000 |
165,000 - 175,000 |
Lamaque |
170,000 - 180,000 |
180,000 - 190,000 |
175,000 - 185,000 |
180,000 - 200,000 |
180,000 - 200,000 |
Efemcukuru |
80,000 - 90,000 |
75,000 - 85,000 |
75,000 - 85,000 |
75,000 - 85,000 |
60,000 - 70,000 |
Olympias |
60,000 - 75,000 |
65,000 - 75,000 |
75,000 - 85,000 |
80,000 - 90,000 |
75,000 - 85,000 |
Skouries |
- |
- |
80,000 - 90,000(2) |
145,000 - 155,000 |
195,000 - 205,000 |
Total(3) |
475,000 - 515,000 |
515,000 - 555,000 |
585,000 - 635,000 |
630,000 - 690,000 |
675,000 - 735,000 |
(1) Includes expected
pre-commercial production from Skouries. (2) First
production at Skouries is expected in H2 2025, followed by a
ramp-up and commercial production by the end of
2025.(3) Figures may not down add due to
rounding.
2023
Cost(1) and
Capital Expenditure Guidance
|
2023E |
|
|
2023E |
Consolidated Costs |
|
|
Corporate ($ millions) |
|
Cash Operating Cost – C1 ($/oz sold) |
760 – 860 |
|
General and Administrative |
35 – 38 |
Total Cash Cost – C2 ($/oz sold) |
860 – 960 |
|
Exploration & Evaluation(2,3) |
28 – 31 |
AISC ($/oz sold) |
1,190 – 1,290 |
|
Depreciation |
265 – 275 |
|
|
|
|
|
Kisladag |
|
|
Growth Capital ($ millions) |
|
Cash Operating Cost – C1 ($/oz sold) |
750 – 850 |
|
Kisladag |
110 – 120 |
Total Cash Cost – C2 ($/oz sold) |
850 – 950 |
|
Lamaque |
37 – 42 |
Sustaining Capex ($ millions) |
14 – 19 |
|
Efemcukuru |
4 – 8 |
|
|
|
Olympias |
3 – 7 |
Lamaque |
|
|
Skouries |
240 – 260 |
Cash Operating Cost – C1 ($/oz sold) |
670 – 770 |
|
|
|
Total Cash Cost – C2 ($/oz sold) |
700 – 800 |
|
|
|
Sustaining Capex ($ millions) |
60 – 70 |
|
|
|
|
|
|
|
|
Efemcukuru |
|
|
|
|
Cash Operating Cost – C1 ($/oz sold) |
790 – 890 |
|
|
|
Total Cash Cost – C2 ($/oz sold) |
920 – 1,020 |
|
|
|
Sustaining Capex ($ millions) |
10 – 15 |
|
|
|
|
|
|
|
|
Olympias |
|
|
|
|
Cash Operating Cost – C1 ($/oz sold) |
980 – 1,080 |
|
|
|
Total Cash Cost – C2 ($/oz sold) |
1,130 – 1,230 |
|
|
|
Sustaining Capex ($ millions) |
30 – 35 |
|
|
|
(1) These financial measures
are non-IFRS financial measures. Certain additional disclosures for
non-IFRS financial measures and ratios have been incorporated by
reference and additional detail can be found at the end of this
press release and in the section ‘Non-IFRS and Other Financial
Measures and Ratios’ of Eldorado’s December 31, 2021
MD&A.(2) 74% expensed and 26% capitalized.
(3) Assumes the expected sale of Certej in H1
2023.TURKIYE
At Kisladag and Efemcukuru, labour costs
increased in 2023 related to commitments under our collective
bargaining agreement which included an annual adjustment to labour
rates in line with the annual consumer inflation rate. To support
our workforce with the rising costs of food and electricity,
approximately half of the adjustment was provided in mid-2022 with
the remaining provided in January 2023. Labour costs are
denominated in local currency and as the weakening of the Turkish
Lira against the U.S. dollar has slowed in recent months, cost
increases are not being offset by currency movements at
present.
Kisladag
In 2023, Kisladag is expected to mine and place
on leach approximately 12.5 to 13.0 million tonnes of ore at an
average gold grade of 0.70 to 0.75 grams per tonne. With the
commissioning of the enhanced metallurgical process circuit,
including the High-Pressure Grinding Roll, additional conveyors,
and the agglomeration drum, average recoveries in 2023 are expected
to increase. In addition to increased mining and processing costs
as a result of higher throughput and lower grades, cash operating
costs per ounce in 2023 also reflect increases in labour rates,
utility costs, and consumable costs relative to 2022.
Planned 2023 sustaining capital of $14 to $19
million is primarily related to equipment overhauls and processing
improvements. Planned 2023 growth capital of $110 to $120 million
includes the continuation of the waste stripping campaign, the
expansion of the North Leach Pad, North adsorption-desorption and
recovery plant construction, agglomeration, and onsite building
relocation efforts for pit expansion.
Efemcukuru
In 2023, Efemcukuru is expected to mine and
process approximately 530,000 to 550,000 tonnes of ore at an
average gold grade of 5.50 to 6.00 grams per tonne. Cash operating
costs per ounce in 2023 reflect increases in labour rates, utility
costs, and consumable costs. Planned sustaining capital
expenditures for 2023 of $10 to $15 million include underground
development and equipment overhauls. Planned growth capital for
2023 of $7 to $10 million includes non-sustaining exploration
expenditures for resource conversion drilling at Kokarpinar South
and mine development. Exploration in 2023 also includes resource
development drilling at the Kokarpinar, Bati, and West vein
systems, and initial testing of several early-stage targets within
the property boundary.
CANADA
Lamaque
In 2023, Lamaque is expected to mine and process
approximately 860,000 to 870,000 tonnes of ore at an average gold
grade of 6.25 to 6.75 grams per tonne. Cash operating costs per
ounce of $670 to $770 in 2023 reflect increased mining and
processing costs due to mine sequence optimization for Lower
Triangle, cost inflation, and a competitive labour landscape.
Sustaining capital expenditures for 2023 are
expected to be approximately $60 to $70 million, which includes
significant underground mine development and resource conversion
drilling at Triangle. Expected growth capital for 2023 of $37 to
$42 million includes non-sustaining exploration expenditures for
resource conversion and resource expansion drilling at the Ormaque
and Parallel deposits, tailings management, and electric
underground trucks.
Expensed exploration programs in 2023 will focus
on early-stage targets at Sigma-Lamaque, continued exploration
drilling on the Bourlamaque property, and other early-stage
targets.
GREECE
Olympias
In 2023, Olympias is expected to mine
approximately 460,000 to 490,000 tonnes of ore at an average grade
of 7.50 to 8.50 grams per tonne of gold, 140 to 150 grams per tonne
of silver, 4.0 to 4.5% lead and 4.0 to 4.5% zinc. Payable
production is expected to be 60,000 to 75,000 ounces of gold, 1.7
to 1.9 million ounces of silver, 15,000 to 18,000 tonnes of lead
metal and 13,000 to 16,000 tonnes of zinc metal. Cash operating
costs per ounce in 2023 are expected to be lower year-over-year due
to increased production and throughput and higher by-product
credits for silver, lead and zinc production.
Planned 2023 sustaining capital expenditures of
$30 to $35 million include underground mine development,
improvement projects, and continued work on the second phase of the
Kokkinolakas tailings management facility construction. Key
initiatives include converting to bulk emulsion explosives for
blasting, and surface fan installation aimed to debottleneck
ventilation. Planned 2023 growth capital of $3 to $7 million,
includes mine development and underground improvement projects.
Skouries
Project spending at Skouries in 2023 is expected
to be focused on finalizing detailed engineering, which is 42%
complete and forecasted to be 70-75% complete for full construction
mobilization in the second half of 2023, the release of remaining
procurement packages, and ongoing community engagement. Procurement
of fixed plant and tagged items is currently 10% complete and
expected to be approximately 90% complete by year-end. The
remaining purchasing efforts, beyond 2023, are related to mining
equipment and some minor construction purchases. The Company has an
approximate $30 million credit for early-works activities in 2022,
and the next $120 million of project expenditures will be funded by
drawdowns on the previously announced €680 million project
financing facility, (the “Facility”) for the development of
Skouries. Drawdown on the Facility is subject to customary closing
conditions. The Company expects such conditions to be satisfied and
the initial drawdown to occur in the first quarter of 2023. The
Company expects Skouries to be funded from the Facility and by
Hellas Gold Single Member S.A. on an 80:20 basis by the second half
of 2023.
As discussed in further detail in the news
release dated December 15, 2022, Eldorado remains confident in the
three-year construction and commissioning schedule and capital cost
estimate, with first production expected in the second half of
2025, commercial production at the end of 2025, and the first full
year of production in 2026. Capital spending during this period is
expected to be relatively balanced, albeit higher in 2024 and 2023,
as the first half of 2023 includes the mobilization period.
Additionally, based on the “Technical Report,
Skouries Project, Greece” prepared for Eldorado with an effective
date of January 22, 2022, annual copper production over the life of
mine at Skouries is expected to be approximately 67 million pounds
per year, which is not currently incorporated in the Company’s
five-year outlook.
Perama Hill
Spending at Perama Hill during the year is
forecast to be less than $1 million, attributed to mine stand-by
costs.
2023 Commodity and Currency Price
Assumptions
Gold ($/oz) |
$ 1,700 |
Silver ($/oz) |
$22 |
Lead ($/mt) |
$2,100 |
Zinc ($/mt) |
$3,100 |
USD : CDN |
1 : 1.30 |
EURO : USD |
1 : 0.92 |
USD: TRY |
1 : 21.0 |
Qualified Person
Except as otherwise noted, Simon Hille, FAusIMM,
Senior Vice President, Technical Services & Operations, is the
Qualified Person under NI 43-101 responsible for preparing and
supervising the preparation of the scientific or technical
information contained in this press release and verifying the
technical data disclosed in this document relating to our operating
mines and development projects. Jessy Thelland, géo (OGQ No. 758),
a member in good standing of the Ordre des Géologues du Québec, is
the qualified person as defined in NI 43-101 responsible for, and
has verified and approved, the scientific and technical disclosure
contained in this press release for the Quebec projects.
About Eldorado Gold
Eldorado is a gold and base metals producer with
mining, development and exploration operations in Turkiye, Canada
and Greece. 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 RelationsLisa
Wilkinson, VP, Investor Relations604.757 2237 or 1.888.353.8166
lisa.wilkinson@eldoradogold.com
Media
Louise McMahon, Director Communications &
Public Affairs604.616 2296 or 1.888.353.8166
louise.mcmahon@eldoradogold.com
Non-IFRS and Other Financial Measures and
Ratios
Certain non-IFRS financial measures and ratios
are included in this press release, including 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, sustaining and growth capital.
Please see the December 31, 2021 MD&A
for explanations and discussion of these non-IFRS and other
financial measures and ratios. The Company believes that these
measures and ratios, in addition to conventional measures and
ratios 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
and other financial measures and ratios are intended to provide
additional information and should not be considered in isolation or
as a substitute for measures or ratios of performance prepared in
accordance with IFRS. These measures and ratios do not have any
standardized meaning prescribed under IFRS, and therefore may not
be comparable to other issuers. Certain additional disclosures for
these and other financial measures and ratios have been
incorporated by reference and can be found in the section 'Non-IFRS
and Other Financial Measures and Ratios' in the December 31, 2021
MD&A available on SEDAR at www.sedar.com and on the Company's
website under the 'Investors' section.
The most directly comparable IFRS financial
measures and results from the year ended December 31, 2021 are
below.
Non-IFRS Measure |
Most Directly Comparable IFRS Measure |
2021 |
Cash operating costs (C1) |
Production costs |
$449.7 M |
Total cash costs (C2) |
AISC |
Average realized gold price per ounce sold |
Revenue |
$940.9 M |
EBITDA |
Earnings (loss) from continuing operations before income tax |
$151.1 M |
Adjusted EBITDA |
Adjusted net earnings/(loss) |
Net earnings (loss) attributable to shareholders of the Company
from continuing operations |
$10.8 M |
Adjusted net earnings/(loss) per share |
Cash flow from operations before changes in non-cash working
capital |
Net cash generated from operating activities of continuing
operations |
$365.9 M |
Free cash flow |
Sustaining capital expenditures |
Additions to property, plant and equipment during the period |
$292.8 M |
Growth capital expenditures |
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 “anticipates”, “believes”, “budgets”, “continue”,
“commitment”, “confident”, “estimates”, “expects”, “forecasts”,
“guidance”, “intends”, “outlook”, “plans”, “potential”,
“projected”, “prospective”, or “schedule” or the negatives thereof
or variations of such words and phrases or statements that certain
actions, events or results “can”, “could”, “likely”, “may”,
“might”, “will” or “would” be taken, occur or be achieved.
Forward-looking statements or information
contained in this press release include, but are not limited to,
statements or information with respect to: our guidance and
outlook, including expected production, cost and capital
expenditure guidance, AISC and cash operating cost guidance,
expected future amount mined and processed, mining rate, recoveries
and grade, and five year production outlook; expected impacts on
cash operating costs and expected use of sustaining capital at
Kisladag, Efemcukuru, Lamaque, and Olympias; expected improvements
at Kisladag; expected exploration program at Efemcukuru and
Lamaque; expected improvements at Olympias; expected project
spending and construction at Skouries; commodity and currency price
assumptions; planned capital projects, including timing; growth
capital projects at its properties, including anticipated timing
and benefits; the duration, extent and other implications of
production challenges and cost increases, including those in
respect of COVID-19, the Russia-Ukraine war and restrictions and
suspensions with respect to the Company’s operations; the timing of
resource conversion drilling; our expectations regarding the timing
and quantity of annual gold production; the sale of the Certej
project; the total funding requirements for Skouries, including the
sources thereof; the drawdown of the proceeds of the Facility,
including the timing thereof; the Company’s ability to fund the
remaining 20% funding commitment for Skouries; non-IFRS financial
measures and ratios; risk factors affecting our business; our
expectations as to our future financial and operating performance,
including future cash flow, estimated cash costs, expected
metallurgical recoveries and 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. 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: production and cost expectations; the total funding required
to complete Skouries; our ability to meet our timing objectives for
first drawdown of the Facility; our ability to execute our plans
relating to Skouries, including the timing thereof; our ability to
obtain all required approvals and permits; cost estimates in
respect of Skouries; no changes in input costs, exchange rates,
development and gold; the geopolitical, economic, permitting and
legal climate that we operate in, including at Skouries; how the
worldwide economic and social impact of COVID-19 is managed and the
duration and extent of the COVID-19 pandemic; timing, cost and
results of our construction, improvements and exploration; the
future price of gold and other commodities; the global concentrate
market; exchange rates; anticipated values, costs, expenses and
working capital requirements; production and metallurgical
recoveries; mineral reserves and resources; and the impact of
acquisitions, dispositions, suspensions or delays on our business
and the ability to achieve our goals. In addition, 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 press 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: the outcome of planned technical studies, production
and exploration, development, optimization and expansion plans at
the Company’s projects; possible variations in ore grade or
recovery rates; changes in mineral resources and mineral reserves;
costs and timing of the development of new deposits; success of
exploration activities; increases in financing costs or adverse
changes to the Facility; failure or delays to receive necessary
approvals or otherwise satisfy the conditions to the drawdown of
the Facility; the proceeds of the Facility not being available to
the Company or Hellas Gold Single Member S.A.; ability to execute
on plans relating to Skouries, including the timing thereof,
ability to achieve the social impacts and benefits contemplated;
ability to meet production, expenditure and cost guidance; risks
relating to the ongoing COVID-19 pandemic and any future pandemic,
epidemic, endemic or similar public health threats; timing and cost
of construction, and the associated benefits; ability to achieve
expected benefits from improvements, recoveries of gold and other
metals; risks relating to our operations being located in foreign
jurisdictions; community relations and social license; climate
change; liquidity and financing risks; development risks;
indebtedness, including current and future operating restrictions,
implications of a change of control, ability to meet debt service
obligations, the implications of defaulting on obligations and
change in credit ratings; environmental matters; waste disposal;
the global economic environment; government regulation; reliance on
a limited number of smelters and off-takers; commodity price risk;
mineral tenure; permits; risks relating to environmental
sustainability and governance practices and performance;
non-governmental organizations; corruption, bribery and sanctions;
litigation and contracts; information technology systems;
estimation of mineral reserves and mineral resources; production
and processing estimates; credit risk; actions of activist
shareholders; price volatility, volume fluctuations and dilution
risk in respect of our shares; reliance on infrastructure,
commodities and consumables; currency risk; inflation risk;
interest rate risk; tax matters; dividends; financial reporting,
including relating to the carrying value of our assets and changes
in reporting standards; labour, including relating to
employee/union relations, employee misconduct, key personnel,
skilled workforce, expatriates and contractors; reclamation and
long-term obligations; regulated substances; necessary equipment;
co-ownership of our properties; acquisitions, including integration
risks, and dispositions; the unavailability of insurance; conflicts
of interest; compliance with privacy legislation; reputational
issues; competition, as well as those risk factors discussed in the
sections titled “Forward-looking information and risks” and “Risk
factors in our business” in our 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
& Form 40-F 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
our business and operations.
The inclusion of 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 United
States.
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