Eldorado Gold Corporation, (“Eldorado” or the “Company”) is pleased
to announce a 15-year mine life at Kisladag based on the completed
long-cycle heap leach testwork and the replacement of the tertiary
crushing circuit with a high-pressure grinding roll (“HPGR”)
circuit. A National Instrument 43-101 compliant technical report
detailing the updates to the Kisladag project will be filed on
SEDAR prior to the end of Q1 2020.
The Company is also providing detailed
production guidance for 2020, along with a five-year outlook for
the Company’s business.
“Kisladag has been the cornerstone asset of
Eldorado for over a decade, producing over three million ounces of
gold and generating significant value for all stakeholders during
that period. Following the resumption of full operations last
spring, and the significant work and testing undertaken by the
Eldorado team over the past 18 months, we are pleased to announce a
mine life extension at Kisladag that puts this asset back in the
core of our portfolio”, said George Burns, President and CEO.
“Based on these positive developments, we are
providing a five-year outlook for the business, which demonstrates
a steady production profile that we expect will allow us to
continue to de-lever the balance sheet and provide a solid
foundation for future growth.”
Kisladag Update
Results of the testwork indicate that increased
leach time at Kisladag, in conjunction with HPGR, increases heap
leach life of mine recovery to approximately 56% and extends mine
life through 2034. A new mineral reserve has been developed for
Kisladag; highlights include:
- Updated Proven and Probable Mineral Reserves of 173.2 million
tonnes of ore at 0.72 grams per tonne, containing 4.0 million
ounces of gold (table shown at the end of the release).
- 15 year mine life, with operations continuing through
2034.
- Average annual production of approximately 160,000 ounces per
year at an average cash cost of $675 – 725 per ounce of gold sold
and an average all-in sustaining costs (“AISC”) of $800 – 850 per
ounce of gold sold.
- The project self-funds all development capital for waste
stripping and the HPGR circuit. The cost for the HPGR circuit
(approximately $35 million) is spread over 2020 and 2021, while the
cost of capitalized waste stripping (approximately $260 million) is
spread over the life of the project, with heavier stripping in the
first several years.
- The Company believes there is potential for further increases
in recovery with optimization of the HPGR circuit, which could lead
to higher gold production.
- An average strip ratio over the remaining life of the mine of
1.1 to 1.
Five-Year Outlook
The Company is providing detailed 2020
production and cost guidance as well as a five-year production
outlook. Detailed tables are shown at the end of this
release. The Company continues to remain focused on:
- Operating all our assets in a safe and responsible manner.
- Transforming Olympias into a stable and profitable mine through
productivity, efficiency and cost reduction improvements as well as
an expansion of mill capacity.
- Optimizing production at Lamaque in an efficient manner. The
five-year outlook includes an increase in annual production to
approximately 150,000 ounces.
- Reducing debt and maintaining gross debt to EBITDA below
2.0x.
- Prudently developing our suite of high-quality development
projects.
For 2020, the Company is forecasting a third
consecutive year of increasing gold production. 2020 gold
production guidance is 520,000-550,000 ounces of gold (versus
395,331 ounces produced in 2019). The Company expects average
cash operating costs to decline from $608 per ounce of gold sold in
2019, to $550-600 per ounce of gold sold in 2020. AISC for
2020 is forecast to be $850-$950 per ounce of gold sold, compared
to $1,033 per ounce of gold sold in 2019.
With the extension of Kisladag’s mine life and
continued operations at Lamaque, Efemcukuru and Olympias, Eldorado
is forecasting five-year production from its four current
operations to average over 450,000 ounces of gold per year. In
addition to the updated Kisladag technical report, the Company is
in the process of updating technical reports for Olympias and
Efemcukuru, which will be published by the end of Q1 2020. These
reports, whose effective dates will be December 31, 2019, will
provide a timely update to the current Technical Reports
by describing each asset's operations and long term production
profile. In the case of Efemcukuru, this will result in a
slight, non-material change to the existing mineral resources and
reserves.
The Company remains on track to repay the $200
million Term Loan owing on its Senior Secured Credit Facility over
the next three years. Eldorado will also look to reduce its cost of
capital as market conditions allow.
Eldorado has several high quality development
projects, which it will consider advancing in a prudent fashion.
These projects have the potential to increase the Company’s
production profile and cash flow. Skouries and Perama Hill,
both in Greece, are currently on care and maintenance. The
Company is working with the Greek government to advance these
projects into construction. At Lamaque, the recent discovery
of the Ormaque zone offers further upside potential, particularly
given its proximity to the proposed decline from Triangle to the
Sigma Mill. The Company has planned additional drilling at Ormaque
in 2020 and will continue to study the long-term potential at this
project.
Five-Year Operational
Outlook
TURKEY
Kisladag
For 2020, approximately 12 million tonnes of new
ore at an average grade of 1.0 grams per tonne is expected to be
placed on the leach pad at Kisladag. Production is forecast to be
240,000-260,000 ounces of gold. Cash operating costs are estimated
to be $450-550 per ounce of gold sold. Gold produced in 2020
is expected to come from ore stacked in 2019 as well as ore stacked
in 2020, consistent with the longer leach cycle.
Sustaining capital expenditures for 2020 are
forecast to be approximately $25-30 million, spent primarily on
inter-lift liner, mobile equipment rebuilds and process
infrastructure.
Growth capital of $70-80 million includes waste
stripping, engineering and costs associated with the HPGR
circuit.
As part of the increase to the mine life at
Kisladag, waste stripping (capitalized and operating) is required
and is expected to total approximately 193 million tonnes (LOM
strip ratio of 1.1 to 1). Waste stripping is underway and is
forecast to continue over the life of mine, the bulk of which will
be completed from 2020-2025.
Efemcukuru
In 2020, Efemcukuru is expected to mine and
process over 510,000 tonnes of ore at an average grade of 6.9 grams
per tonne gold, producing 90,000-100,000 ounces of gold at cash
operating costs of $650-700 per ounce of gold sold. Operating
costs are forecast to be inline with 2019 actual operating
costs.
The global market for concentrate has tightened
recently, which has led to an increase in treatment charges.
Efemcukuru is installing two flotation columns in 2020, which are
expected to be operational by H2 2020. Concentrate grade and
quality is expected to increase once these columns are operational,
which is expected to decrease total concentrate treatment
charges.
Sustaining capital expenditures for 2020 are
forecast to be approximately $15-20 million, spent primarily on
capitalized underground mine development, equipment rebuilds,
column flotation and resource expansion drilling.
CANADA
Lamaque
In 2020, Lamaque is expected to mine and process
over 615,000 tonnes of ore at an average grade of 7.0 grams per
tonne gold. Production is expected to be 125,000-135,000
ounces of gold at cash operating costs of $575-625 per ounce of
gold sold.
Sustaining capital expenditures for 2020 are
forecast to be approximately $35-40 million, spent primarily on
capitalized underground mine development and mine and process
facilities.
Growth capital of $5-10 million includes
equipment purchases and construction of a larger dome stockpile to
replace the existing ore bins to support ramp-up of production.
Exploration drilling of nearly 50,000 metres is
planned. This includes 29,000 metres of resource expansion
drilling in the lower Triangle Deposit, 10,000 metres further
exploration drilling at the new Ormaque zone and 10,000 metres
testing other targets on the Lamaque property.
The recent exploration success at the Triangle
deposit has provided the opportunity to review options for
increasing throughput at the Sigma Mill, which has a current
capacity of 2,200 tonnes per day. The Company is in the process of
permitting Triangle beyond the current permit limit of 1,800 tonnes
per day. Once permits are received, production at Triangle is
expected to increase to 2,200 tonnes per day and gold production is
expected to increase to approximately 150,000 ounces per year by
2022.
The Company continues to evaluate other growth
options to optimize Lamaque, including the underground decline from
the Triangle deposit to the Sigma Mill and options which would take
advantage of this infrastructure, including development of the
recently discovered Ormaque zone.
GREECE
Olympias
In 2020, Olympias is expected to mine 415,000
tonnes of ore at an average grade of 7.4 grams per tonne of gold,
104 grams per tonne of silver, 3% lead and 4% zinc. Payable
production is expected to be 50,000-60,000 ounces of gold,
950,000-1,000,000 ounces of silver, 9,500-10,000 tonnes of lead
metal and 12,000-12,500 tonnes of zinc metal. Cash operating
costs, net of by-products, are expected to be $800-900 per ounce of
gold sold.
Global market conditions for base metal
concentrates tightened in the second half of 2019 and are
expected to remain soft for 2020. This has led to an increase in
treatment charges for the lead/silver and zinc concentrates
produced at Olympias and an increase to cash operating costs of
approximately $150 per ounce of gold.
Sustaining capital expenditures are expected to
be $30-35 million on underground development, an infill diamond
drill program, mobile machinery and equipment rebuilds. In
addition, 8,000 metres of drilling are planned to test new
exploration targets in the mine area.
Growth capital is expected to be $10-15 million
for 2020, including underground maintenance facilities, underground
development relating to supporting increased mine production, and
work on an expanded substation.
The first two years of operations at Olympias
have been challenging. Low rates of underground development and
backfilling led to lower than forecast production and higher than
forecast costs per ounce. A contractor was engaged in mid-2019 to
focus on underground development and improvements have been made to
the paste backfill system. Production rates have increased
quarter over quarter and progress is expected to continue over the
course of 2020 and into 2021.
The five-year outlook provided assumes that the
Company proceeds with an expansion of Olympias to 650,000 tonnes
per year. Further details of this expansion will be provided in the
upcoming Olympias technical report.
Skouries
Costs for 2020 are forecast to be $15-20
million, including costs associated with maintaining the site as
well as erecting the mill building, placing concrete, engineering,
and permitting costs associated with dry-stack tailings.
Skouries will remain on care and maintenance
until the Company has reached an agreement with the Greek
government to establish the necessary investment framework.
Stratoni
For 2020, Stratoni is expected to process
230,000 tonnes of ore at grades of 6% lead, 8% zinc and 157 grams
per tonne silver. Capital expenditures at Stratoni are expected to
be $5-10 million including mine mobile equipment purchases and
overhauls, mine facility upgrades and upgrades to some of the
process facilities.
10,000 m of resource expansion drilling is planned for the
year.
Five-Year Gold Production Outlook
February 2020 Outlook
Production (oz) |
2020E |
2021E |
2022E |
2023E |
2024E |
Kisladag |
240,000 - 260,000 |
140,000 - 150,000 |
140,000 - 150,000 |
165,000 - 175,000 |
170,000 - 180,000 |
Lamaque |
125,000 - 135,000 |
130,000 - 140,000 |
140,000 - 150,000 |
145,000 - 155,000 |
145,000 - 155,000 |
Efemcukuru |
90,000 - 100,000 |
90,000 - 100,000 |
85,000 - 95,000 |
85,000 - 95,000 |
85,000 - 95,000 |
Olympias |
50,000 - 60,000 |
55,000 - 65,000 |
60,000 - 70,000 |
75,000 - 85,000 |
75,000 - 85,000 |
Total |
520,000 - 550,000 |
420,000 - 450,000 |
430,000 - 460,000 |
480,000 - 510,000 |
485,000 - 515,000 |
January 2019 Outlook
Production (oz) |
2020E |
2021E |
|
|
|
Kisladag |
240,000 - 260,000 |
75,000 - 95,000 |
|
|
|
Lamaque |
125,000 - 135,000 |
125,000 - 135,000 |
|
|
|
Efemcukuru |
90,000 - 100,000 |
90,000 - 100,000 |
|
|
|
Olympias |
55,000 - 65,000 |
55,000 - 65,000 |
|
|
|
Total |
520,000 - 550,000 |
350,000 - 380,000 |
|
|
|
2020 Cost and Capital Expenditure Guidance
|
2019A |
2020E |
|
|
2019A |
2020E |
Consolidated Costs |
|
|
|
Olympias |
|
|
Cash Operating Cost – C1 ($/oz sold) |
608 |
550 - 600 |
|
Cash Operating Cost – C1 ($/oz sold) |
1,286 |
800 - 900 |
Total Operating Cost – C2 ($/oz sold) |
645 |
600 - 650 |
|
Total Operating Cost – C2 ($/oz sold) |
1,337 |
850 - 950 |
AISC ($/oz sold) |
1,034 |
850 - 950 |
|
Sustaining Capital ($ millions) |
20.1 |
30 - 35 |
|
|
|
|
|
|
|
Kisladag |
|
|
|
Corporate ($ millions) |
|
|
Cash Operating Cost – C1 ($/oz sold) |
435 |
450 - 500 |
|
General and Administrative |
29.2 |
30 |
Total Operating Cost – C2 ($/oz sold) |
469 |
490 - 530 |
|
Exploration1 |
21.9 |
20 - 25 |
Sustaining Capex ($ millions) |
14.7 |
25 - 30 |
|
|
|
|
|
|
|
|
Growth Capital ($ millions) |
|
|
Lamaque |
|
|
|
Kisladag |
12.5 |
70-80 |
Cash Operating Cost – C1 ($/oz sold) |
556 |
575 - 625 |
|
Olympias |
6.1 |
10 - 15 |
Total Operating Cost – C2 ($/oz sold) |
579 |
600 - 650 |
|
Lamaque |
31.5 |
5 - 10 |
Sustaining Capex ($ millions) |
38.2 |
35 - 40 |
|
|
|
|
|
|
|
|
Other Project Spending ($ millions) |
|
|
Efemcukuru |
|
|
|
Skouries |
7.9 |
15 - 20 |
Cash Operating Cost – C1 ($/oz sold) |
599 |
650 - 700 |
|
Stratoni |
9.3 |
5 - 10 |
Total Operating Cost – C2 ($/oz sold) |
644 |
700 - 750 |
|
Tocantinzinho |
3.5 |
3 - 5 |
Sustaining Capex ($ millions) |
24.5 |
15 - 20 |
|
Certej |
4.9 |
3 - 5 |
1 67% expensed and 33% capitalized.
2020 Commodity and Currency Price Assumptions |
Gold ($/oz) |
$1,400 |
Silver ($/oz) |
$18 |
Lead ($/mt) |
$2,100 |
Zinc ($/mt) |
$2,400 |
C$/US$ |
1.3:1 |
EURO$/US$ |
1:1.15 |
US$/TRY |
6.2:1 |
Kisladag Minerals Reserves (effective
January 17, 2020)
Reserve Classification |
Ore(t x 1,000) |
Grade Au(g/t) |
Contained Au(oz x 1,000 ) |
Proven |
164,531 |
0.73 |
3,851 |
Probable |
8,644 |
0.57 |
159 |
Proven & Probable |
173,175 |
0.72 |
4,010 |
Notes:CIM Definition Standards (2014) were used
for reporting the Mineral Reserves. Mineral Reserves are
estimated based on the following assumptions: metal prices of
$1,250/oz Au; cut-off of 0.19 g/t recoverable Au (equivalent to a
NSR cut-off of $7.29/t); recovery is variable throughout the block
model with average life of mine metallurgical recovery being 56%
for all ore; and no dilution and mining recovery of 100% (both
already accounted for in the resource block model). The
Mineral Reserve is derived from the Measured and Indicated Mineral
Resources. The block model supporting these resources has not
changed since March 2018 (other than depletion). The Mineral
Reserve estimation is constrained by the December 31, 2019 topo
surface.
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 RelationsPeter Lekich,
Manager Investor Relations604.687.4018 or
1.888.353.8166 peter.lekich@eldoradogold.com
MediaLouise Burgess, Director
Communications & Government Relations604.687.4018 or
1.888.353.8166 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 of gold, including increased heap leach recoveries
through increased leach time in conjunction with a high pressure
grinding roll at Kisladag, favourable economics for our heap
leaching plan and the ability to extend mine life at our projects,
including at Kisladag, improved production at Olympias, completion
and results of the PEA at Lamaque and expanded production,
completion of construction at Skouries, expectations regarding
repayment of outstanding debt, planned capital and exploration
expenditures; our expectation as to our future financial and
operating performance, expected metallurgical recoveries, improved
concentrate grade and quality, gold price outlook and the global
concentrate market; and 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 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 and
expenses; 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,
the following: results of further testwork, 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; continued softening of the global
concentrate market; risks regarding potential and pending
litigation and arbitration proceedings relating to the Company’s,
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 the
common shares of the Company; 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 and other
regulatory filings filed on SEDAR 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.
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.
Financial Information and condensed statements
contained herein or attached hereto may not be suitable for readers
that are unfamiliar with the Company and is not a substitute for
reading the Company’s financial statements and related MD&A
available on our website and on SEDAR under our Company name. The
reader is directed to carefully review such document for a full
understanding of the financial information summarized herein.
Except as otherwise noted, scientific and
technical information contained in this press release was reviewed
and approved by Paul Skayman, FAusIMM, Special Advisor to the Chief
Operating Officer, a "qualified person" under NI 43-101.
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