TSX: ELD NYSE: EGO
VANCOUVER, Jan. 6, 2017 /PRNewswire/ - Eldorado Gold
Corporation, ("Eldorado" or "the Company") today announces the
Company's 2016 operating results and preliminary cash costs, and
provides production and cash cost guidance for 2017.
2016 Highlights
- Gold production of 485,994 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
environment, 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."
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 refer 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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2016 Operating
Results Highlights (including discontinued
operations)
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Q4
2016
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YE
2016
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Total
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Realized gold price
($/oz)
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1,213
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1,254
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Gold sold
(oz)
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105,021
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483,460
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Gold produced (oz)
1,2
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103,113
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485,994
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Cash operating cost
($/oz) 3,5
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525
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578
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Total cash cost
($/oz) 4
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549
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620
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Kisladag
Mine
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Gold sold
(oz)
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59,416
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211,284
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Gold produced
(oz)
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59,591
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211,161
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Tonnes to
pad
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3,918,426
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16,566,763
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Grade
(g/t)
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0.74
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0.80
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Cash operating cost
($/oz) 3,5
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449
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472
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Total cash cost
($/oz) 4
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457
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486
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Efemcukuru
Mine
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Gold sold
(oz)
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25,265
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99,743
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Gold produced
(oz)
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23,182
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98,333
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Tonnes
milled
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120,347
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473,060
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Grade
(g/t)
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6.62
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7.21
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Cash operating cost
($/oz) 3,5
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505
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512
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Total cash cost
($/oz) 4
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516
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529
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Jinfeng Mine
6
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Gold sold
(oz)
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-
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66,902
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Gold produced
(oz)
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-
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68,195
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Tonnes
milled
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-
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766,697
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Grade
(g/t)
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-
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3.32
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Cash operating cost
($/oz) 3,5
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-
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705
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Total cash cost
($/oz) 4
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791
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Tanjianshan
Mine 7
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Gold sold
(oz)
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10,912
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49,266
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Gold produced
(oz)
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10,912
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49,266
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Tonnes
milled
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121,237
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869,964
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Grade
(g/t)
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1.70
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1.90
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Cash operating cost
($/oz) 3,5
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785
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819
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Total cash cost
($/oz) 4
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892
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970
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White Mountain
Mine7
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Gold sold
(oz)
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9,428
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56,265
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Gold produced
(oz)
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9,428
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56,265
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Tonnes
milled
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95,278
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717,145
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Grade
(g/t)
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2.99
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2.78
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Cash operating cost
($/oz) 3,5
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759
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731
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Total cash cost
($/oz) 4
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813
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773
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Olympias
Mine
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Gold sold
(oz)
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-
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-
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Gold produced (oz)
2
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-
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2,774
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Tonnes
milled
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-
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87,350
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Grade
(g/t)
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-
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2.47
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Cash operating cost
($/oz) 3,5
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-
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-
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Total cash cost
($/oz) 4
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-
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1
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Gold production
includes both continuing and discontinued operations.
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2
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Ounces produced
include production from tailings retreatment at
Olympias.
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3
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Cost figures
calculated in accordance with the Gold Institute
Standard.
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4
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Cash operating costs,
plus royalties and the cost of off-site administration.
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5
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Cash operating costs
and total cash costs are non-IFRS measures. Please see our Q3
MD&A for an explanation and discussion of
these.
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Figures shown for YE
2016 reflect the sale of Jinfeng on September 6, 2016.
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7
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Figures shown for Q4
and YE 2016 reflect the sale of Tanjianshan and White Mountain on
November 22, 2016.
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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 $425 million; considerably lower than the
September 2016 guidance. Reductions
were primarily at Skouries due to flexibility in the capital
deployment timeline, along with anticipated cost savings, and at
Tocantinzinho in response to the current gold price environment and
permitting delays.
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Mine/Project
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Production
(Au oz)
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Cash Costs
($/oz)
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Sustaining
Capital
Expenditure ($M)
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Kisladag
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230,000 -
245,000
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500-550
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45
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Efemcukuru
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95,000 -
105,000
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525-575
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25
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Olympias
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40,000 -
50,0001
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250-4502
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30
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Total
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365,000-400,000
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485-535
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100
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1
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Includes
pre-commercial production of ~10k oz.
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2
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Range due to
variability of by-product credits; commercial ounces
only.
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2017 Capital Expenditure
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Development
Capital
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($M)
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Total
Capital
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($M)
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Tocantinzinho
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35
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Total
Development
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315
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Olympias
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55
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Total Capitalized
Exploration
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10
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Skouries
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(170 – 200)
185
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Total
Sustaining
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100
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Stratoni
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20
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Total
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425
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Certej
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20
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Total
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315
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Principal assumptions used in the preparation of guidance for
2017 include:
Gold price:
$1,150/oz
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Lead price:
$2,250/t
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CAD vs USD
1.30
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USD vs EUR
1.10
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Silver
price: $20/oz
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Zinc price:
$2,500/t
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REAL vs USD
3.50
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TRL vs USD
3.40
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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 2017
is estimated 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 2016
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 are based on minimal tonnes of
run of mine material being treated in 2017, 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, finishing 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 2017 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
with 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.
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 Feasibility 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
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Replay (available
until March 10, 2017)
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Date:
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Friday February 24,
2016
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Toronto:
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416 849
0833
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Time:
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8:30 am PT (11:30 am
ET)
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Toll Free:
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855 859
2056
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Dial
in:
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647 427
7450
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Pass code:
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4916 2097
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Toll
free:
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888 231
8191
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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
assumptions 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;
political, economic, environmental and permitting risks, regulatory
restrictions, gold price volatility, discrepancies between actual
and estimated production, estimated 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
requirements, 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).
SOURCE Eldorado Gold Corporation