Eldorado Gold Corporation, (“Eldorado” or the
“Company”) today provided detailed 2021 production and cost
guidance and an updated five-year production outlook.
Highlights
- Kisladag
high-pressure grinding roll (HPGR) commissioning in the third
quarter of 2021 and pre-stripping investments position the mine for
sustained free cash flow over a 15-year mine life.
- Increased
five-year production profile at Lamaque driven by increasing mining
rates and efficiencies from completion of Triangle decline in
2021.
- Column flotation
at Efemcukuru improves concentrate grade and enhances low costs and
operational consistency to drive sustained cash flow.
- Throughput
expansion and efficiency improvements at Olympias lead to new
growth phase over the five-year plan.
- Strong liquidity to drive further
debt reduction in 2021.
The Company’s 2021 gold production is forecast
to be between 430,000 and 460,000 ounces at all-in sustaining costs
(AISC) of $920 to $1,150 per ounce. Average 2021 cash operating
costs are forecast in the range of $590 to $640 per ounce of gold
sold. Quarter-to-quarter gold production in 2021 is expected to be
relatively consistent with higher anticipated gold grade at
Kisladag in the first half of the year expected to be offset by
lower head grade at Lamaque. In the second half of 2021, gold
production at Lamaque is expected to increase on higher grade while
production at Kisladag will be temporarily affected by the expected
third-quarter commissioning of the HPGR circuit.
“Eldorado’s strong five-year production profile
provides the growth and flexibility to reinvest in our portfolio of
mines and projects while also continuing to deleverage our balance
sheet,” said George Burns, Eldorado Gold’s President and Chief
Executive Officer. “In Greece, we continue to work productively
with the government on discussions and permitting to re-start
construction at Skouries; the completion of which will drive new
production growth beyond our current five-year plan.”
Five-Year Gold Production
Outlook
Production (oz) |
2021E |
2022E |
2023E |
2024E |
2025E |
Kisladag |
140,000 - 150,000 |
140,000 -150,000 |
165,000 -175,000 |
185,000 - 195,000 |
160,000 - 170,000 |
Lamaque |
140,000 - 150,000 |
165,000 - 175,000 |
180,000 - 190,000 |
160,000 - 170,000 |
185,000 - 195,000 |
Efemcukuru* |
90,000 - 95,000 |
80,000 - 85,000 |
80,000 - 85,000 |
75,000 - 80,000 |
75,000 - 80,000 |
Olympias |
55,000 - 65,000 |
55,000 - 60,000 |
65,000 - 70,000 |
80,000 - 90,000 |
90,000 - 100.000 |
Total |
430,000 - 460,000 |
430,000 - 460,000 |
480,000 - 510,000 |
500,000 - 530,000 |
510,000 - 540,000 |
* Forecast production at Efemcukuru has been adjusted for
reduced payable ounces following a change in structure of
concentrate sales contracts. Lower payability is offset by a
decrease in forecast production costs, due to the elimination of
treatment charges and other deductions.
2021 Cost and Capital Expenditure
Guidance
|
2021E |
|
|
2021E |
Consolidated Costs |
|
|
Olympias |
|
Cash Operating Cost – C1 ($/oz sold) |
590-640 |
|
Cash Operating Cost – C1 ($/oz sold) |
775-825 |
Total Operating Cost – C2 ($/oz sold) |
680-730 |
|
Total Operating Cost – C2 ($/oz sold) |
900-950 |
AISC ($/oz sold) |
920 -1,150 |
|
Sustaining Capex ($ millions) |
38 - 43 |
|
|
|
|
|
Kisladag |
|
|
Corporate ($ millions) |
|
Cash Operating Cost – C1 ($/oz sold) |
590-640 |
|
General and Administrative |
32 |
Total Operating Cost – C2 ($/oz sold) |
700-750 |
|
Exploration1 |
25 - 30 |
Sustaining Capex ($ millions) |
18 - 23 |
|
|
|
|
|
|
Growth Capital ($ millions) |
|
Lamaque |
|
|
Kisladag |
90 - 95 |
Cash Operating Cost – C1 ($/oz sold) |
560-610 |
|
Olympias |
10 - 15 |
Total Operating Cost – C2 ($/oz sold) |
580-630 |
|
Lamaque |
35 - 40 |
Sustaining Capex ($ millions) |
48-53 |
|
|
|
|
|
|
Other Project Spending ($ millions) |
|
Efemcukuru |
|
|
Skouries |
25 - 30 |
Cash Operating Cost – C1 ($/oz sold) |
550-600 |
|
Stratoni |
10 – 15 |
Total Operating Cost – C2 ($/oz sold) |
680-730 |
|
Perama Hill |
5 - 10 |
Sustaining Capex ($ millions) |
18 - 23 |
|
Tocantinzinho |
3 – 5 |
|
|
|
Certej |
3 – 5 |
1 55% expensed and 45% capitalized.
Kisladag
In 2021, Kisladag is expected to mine and place
on leach over 11 million tonnes of ore at an average grade of 0.69
grams per tonne. Subsequent to the commissioning of the HPGR
circuit in the third quarter, recoveries are expected to improve
substantially in the second half of 2021 with average recoveries at
approximately 50% for the year.
Forecast 2021 sustaining capital of $18 to $23
million is primarily for work related to the cover liner, ADR
columns and equipment overhauls. Growth capital of $90 to $95
million is expected to consist primarily of the HPGR project, waste
stripping and construction of the North Leach Pad. A portion of the
expenditure on the HPGR project has shifted from 2020 to 2021;
however, the HPGR circuit is expected to be fully operational on
schedule by the end of the third quarter. Phase 1 of the North
Leach Pad facility is expected to be ready for stacking by the end
of the third quarter.
Efemcukuru
In 2021, Efemcukuru is expected to mine and
process almost 520,000 tonnes of ore at an average gold grade of
6.6 grams per tonne. Cash operating costs per ounce in 2021 are
expected to increase due to fewer payable gold ounces sold,
partially offset by the weakening of the Turkish Lira. Forecast
total cash costs and AISC have increased due primarily to higher
gold royalty rates consistent with higher gold prices. Expected
sustaining capital expenditures for 2021 include drilling related
to KPR resource conversion as well as 2020 carry-over capital
expenditures.
Lamaque
In 2021, Lamaque is expected to mine and process
over 750,000 tonnes of ore at an average gold grade of 6.6 grams
per tonne. 2021 cash operating costs per ounce of $560 to $610
reflect mining at increasing depth, which is expected to be
partially offset by increased mining rates.
Sustaining capital expenditures for 2021 are
forecast to be approximately $48 to $53 million, to be allocated
primarily on capitalized underground mine development and
infrastructure as vertical access to the Triangle deposit continues
for infill drilling and future production. Growth capital projects
in 2021 include continued work on the Triangle decline as well as
additional mining equipment purchases and modest mill upgrades
toward achieving 2,200 tonne-per-day capacity. Engineering studies
and initial preparation for tailings placement are also included.
This work will continue over the outlook period.
The five-year outlook for Lamaque reflects an
increase in mining rates to 2,500 tonnes per day, achieved
primarily through accelerating underground development. The Company
continues to evaluate expansion of the Sigma mill to accommodate
higher mining rates at Triangle as well as potential mill feed from
satellite deposits. However, until such time as a mill investment
decision has been made and construction completed, any excess
production above 2,200 tonnes per day is assumed to be toll milled
at a neighboring facility.
Olympias
In 2021, Olympias is expected to mine over
443,000 tonnes of ore at an average grade of 7.3 grams per tonne of
gold, 104 grams per tonne of silver, 3% lead and 4% zinc. Forecast
2021 ore processed includes processing of old tailings. Payable
production is expected to be 55,000 to 65,000 ounces of gold, 1.1
million to 1.2 million ounces of silver, 11,000 to 11,500 tonnes of
lead metal and 11,500 to 12,000 tonnes of zinc metal. Improving
production rates and efficiency improvements are beginning to drive
a moderating cash operating cost profile. Cash operating costs, net
of by-products, are expected to decrease to $775 to $825 per ounce
of gold sold.
Forecast 2021 sustaining capital expenditures of
$38 to $43 million include underground mine development and the
second phase of tailings management facility construction. Growth
capital expenditures at Olympias of $10 to $15 million include
process plant expansion and contractor development to support
planned ramp-up to 650k tonnes per year.
2021 Commodity and Currency Price
Assumptions
|
Gold ($/oz) |
$1,750 |
Silver ($/oz) |
$25 |
Lead ($/mt) |
$1,950 |
Zinc ($/mt) |
$2,400 |
C$/US$ |
1.3:1 |
EURO$/US$ |
1:1.20 |
US$/TRY |
7.7:1 |
Strengthening our Team
Eldorado also announced today the appointments
of Brock Gill and Simon Hille as well as the promotion of Sylvain
Lehoux to the role of Vice President & General Manager,
Québec.
Brock Gill will join the Company as Senior Vice
President, Projects & Transformation in March.
Brock will oversee development engineering activities, project
delivery of major capital projects, and transformation through
business improvement initiatives. He previously held the role of
Vice President, Projects with BHP where he was responsible for
leading the multi-billion-dollar Jansen Potash Project and other
key development projects.
Simon Hille joined Eldorado in November, 2020 as
Vice President, Technical Services. He is responsible for technical
projects and fostering innovation throughout the Company.
Prior to joining Eldorado, Simon was with Newmont (Goldcorp), as
Group Executive, Technical Engineering and Global Projects. Ahead
of the Newmont merger, Simon was Vice-President, Global Innovation,
Metallurgy and Processing at Goldcorp. He also held progressively
senior leadership roles in metallurgy and process development with
Barrick Gold and Newcrest Mining. Simon has over 30 years of
experience in gold and base metals specializing in leading
high-performance, cross-functional technical and operational teams
to maximize value from complex ore bodies.
Sylvain Lehoux was promoted to the role of Vice
President & General Manager, Québec in early December 2020. He
will continue to oversee all mine site operations in Québec while
also taking on increased responsibilities as an ambassador for
Eldorado in the region. Sylvain joined Eldorado in June 2017 as
General Manager of the Company’s Lamaque mine. Prior to that, he
was General Manager of the Westwood Mine with IAMGOLD Corporation
and held the role of Vice President Operations with Alexis
Minerals.
About Eldorado Gold
Eldorado is a gold and base metals producer with
mining, development and exploration operations in Turkey, Canada,
Greece, Romania, and Brazil. 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 RelationsJeff Wilhoit,
Interim Head of Investor Relations604.376.1548 or
1.888.353.8166 jeff.wilhoit@eldoradogold.com
MediaLouise Burgess, Director
Communications & Government Relations604.616.2296 or
1.888.363.8166 louise.burgess@eldoradogold.com
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 "plans", "expects", "is expected", "budget", “continue”,
“projected”, "scheduled", "estimates", "forecasts", "intends",
"anticipates", or "believes" or the negatives thereof or variations
of such words and phrases or statements that certain actions,
events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved.Forward-looking statements or
information contained in this release include, but are not limited
to, statements or information with respect to: our guidance and
outlook, including expected production, cost guidance and
recoveries and grade, and and five year production outlook;
Kisladag grade improvement in 2021 and HPGR commissioning and
investments, including costs and timing; improvements at Olympias;
planned capital projects, including timing; any debt reduction;
expected mining volume, grade and recoveries; forecasted cash costs
and AISC; growth capital projects at its properties, including
anticipated timing and benefits; commodity and currency price
assumptions; duration, extent and other implications of COVID-19
and any restrictions and suspensions with respect to our
operations; our expectations regarding the timing and quantity
annual gold production; our expectation as to our future financial
and operating performance, including expectations around generating
free cash flow; working capital requirements; debt repayment
obligations; use of proceeds from financing activities; expected
metallurgical recoveries and improved concentrate grade and
quality; gold price outlook and the global concentrate market;
redemption of senior secured notes; risk factors affecting our
business; our strategy, plans and goals, including our proposed
exploration, development, construction, permitting and operating
plans and priorities and related timelines; and schedules and
results of litigation and arbitration proceedings.
Forward-looking statements and forward-looking
information by their nature are based on assumptions and involve
known and unknown risks, market 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 guidance, how the world-wide economic
and social impact of COVID-19 is managed and the duration and
extent of the COVID-19 pandemic; timing and cost of construction;
the geopolitical, economic, permitting and legal climate that we
operate in; the future price of gold and other commodities; the
global concentrate market; exchange rates; anticipated costs,
expenses and working capital requirements; production, mineral
reserves and resources and metallurgical recoveries; the impact of
acquisitions, dispositions, suspensions or delays on our business;
and the ability to achieve our goals. . In particular, 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 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:
ability to meet production and cost guidance, global outbreaks of
infectious diseases, including COVID-19; timing and cost of
construction, and the associated benefits; recoveries of gold and
other metals; geopolitical and economic climate (global and local),
risks related to mineral tenure and permits; gold and other
commodity price volatility; information technology systems risks;
continued softening of the global concentrate market; risks
regarding potential and pending litigation and arbitration
proceedings relating to our business, properties and operations;
expected impact on reserves and the carrying value; the updating of
the reserve and resource models and life of mine plans; mining
operational and development risk; financing risks; foreign country
operational risks; risks of sovereign investment; regulatory risks
and liabilities including environmental regulatory restrictions and
liability; discrepancies between actual and estimated production;
mineral reserves and resources and metallurgical testing and
recoveries; additional funding requirements; currency fluctuations;
community and non-governmental organization actions; speculative
nature of gold exploration; dilution; share price volatility and
the price of our common shares; competition; loss of key employees;
and defective title to mineral claims or properties, as well as
those risk factors discussed in the sections titled
“Forward-Looking Statements” and "Risk factors in our business" in
the Company's most recent Annual Information Form & Form 40-F.
The reader is directed to carefully review the detailed risk
discussion in our most recent Annual Information Form filed on
SEDAR 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 the
Company’s 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.
Except as otherwise noted, scientific and
technical information contained in this press release was reviewed
and approved by Simon Hille, FAusIMM and VP Technical Services for
the Company, and a "qualified person" under NI 43-101.
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