VANCOUVER, British Columbia, Oct. 31, 2024 (GLOBE NEWSWIRE) -- Eldorado Gold Corporation ("Eldorado” or "the Company”) today reports the Company's financial and operational results for the third quarter of 2024. For further information, please see the Company's Consolidated Financial Statements and Management's Discussion and Analysis ("MD&A") filed on SEDAR+ at www.sedarplus.com under the Company's profile.
Third Quarter 2024 Highlights
Operations
- Gold production: 125,195 ounces were produced in the quarter. Production increased 3% from Q3 2023, reflecting increased gold production of 13% at Olympias due to higher gold grades processed and 10% at Kisladag as a result of increased heap leach inventory drawdown.
- Gold sales: 123,828 ounces at an average realized gold price per ounce sold1 of $2,492. Gold sales increased 4% from Q3 2023 primarily as a result of increased production at Olympias and Kisladag.
- Production costs: $141.2 million in Q3 2024, compared to $115.5 million in Q3 2023. The increase was due primarily to higher sales volumes, as well as higher cash costs, the latter impacted by higher royalty expense due to higher gold sales and higher gold price, as well as increases in labour costs.
- Total cash costs1: $953 per ounce gold sold compared to $794 per ounce gold sold in Q3 2023, with the increases primarily due to higher royalties (driven by higher gold prices) and higher labour costs.
- All-in sustaining costs ("AISC")1: $1,335 per ounce sold compared to $1,177 per ounce sold in Q3 2023, with the increase due to higher total cash costs combined with higher sustaining capital.
- Total capital expenditures: $158.1 million, including $82.7 million of growth capital1 invested at Skouries, with activity focused on infrastructure construction. Growth capital at the operating mines totalled $39.0 million and was primarily related to Kisladag for continued waste stripping, construction of the North Heap Leach Pad and related infrastructure.
- Production and cost outlook: The Company is tightening its 2024 guidance for gold production, costs, depreciation and capital expenditure, reflecting updated full-year expectations given the operational and financial performance to date. Gold production is expected to be 505,000 to 530,000 ounces, from 505,000 to 555,000 ounces. Total cash costs per ounce sold is expected to be $910 to $940 per ounce sold, from $840 to $940 per ounce sold, primarily due to lower production and increased royalties in Greece and Turkiye related to higher gold price. AISC per ounce sold is expected to be $1,260 to $1,290 per ounce sold, from $1,190 to $1,290 per ounce sold, primarily due to higher total cash costs, partially offset by lower sustaining capital expenditure.
- Revenue: $331.8 million in Q3 2024, an increase of 36% from $244.8 million in Q3 2023, primarily due to the higher averaged realized gold price and higher sales volumes.
- Net cash generated from operating activities from continuing operations: $180.9 million compared to $108.1 million in Q3 2023, primarily due to higher revenue, partially offset by higher cash costs.
- Cash flow from operating activities before changes in working capital2: $166.5 million compared to $97.5 million in Q3 2023, primarily due to higher revenue, partially offset by higher cash costs.
- Cash, cash equivalents and term deposits: $676.6 million, as at September 30, 2024 as compared to $595.1 million as at June 30, 2024, with the cash increase attributable to strong operating cashflows combined with the planned Skouries Term Facility drawdown, partially offset by the significant investing activities, particularly at Skouries.
- Net earnings (loss) attributable to shareholders from continuing operations: $101.1 million, or $0.49 per share, compared to $6.6 million loss or $0.03 loss per share in Q3 2023, with the increase driven by higher revenue.
- Adjusted net earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA")2: $169.0 million compared to $108.7 million in Q3 2023, with the increase driven by higher revenue, partially offset by the adjustment of a gain on recognition of deferred consideration.
- Adjusted net earnings2: $71.0 million or $0.35 per share compared to $35.0 million or $0.17 per share in Q3 2023. Adjustments in Q3 2024 include a $33.1 million unrealized loss on derivative instruments, a $50.1 million gain on recognition of deferred consideration net of tax impacts related to commercial production being declared at the Tocantinzinho Mine, which was divested to G Mining Ventures in 2021, and a $15.3 million gain on foreign exchange due to the translation of deferred tax balances and Turkiye inflation accounting.
- Free cash flow2: Negative $4.8 million in Q3 2024 compared to negative $19.3 million in Q3 2023, with the increase in higher operating cash flow, primarily due to the higher average realized gold price and higher sales volumes, partially offset by continued investment at Skouries.
- Free cash flow excluding Skouries2: $98.3 million in Q3 2024 compared to $37.3 million in Q3 2023, with the increase driven by higher operating cash flow, primarily due to the higher average realized gold price and higher sales volumes.
- Project Facility: Drawdowns on the Skouries Term Facility during Q3 2024 totalled €83.7 million and year to date as at September 30, 2024 totalled €201.8 million.
"As gold prices reached record highs during the quarter we continued to realize margin expansion and strong cash flow generation across our operations,” said George Burns, President and Chief Executive Officer. "Free cash flow before Skouries investment totalled $98.3 million.”
"At Olympias, we successfully concluded the CBA negotiations and reached a mutually beneficial agreement with the union workforce in early August. This three-year agreement combined with increased productivity in our underground operations, and as contemplated in our guidance, supports the 650ktpa expansion, an increase from 500ktpa, positioning Olympias for long-term profitability over its current mine life of 15 years. In Canada, at Lamaque, progress continued on the Ormaque bulk sample. We have begun stockpiling material ahead of processing it through the mill in the fourth quarter and remain on track to declare an inaugural reserve later this year.”
"At Kisladag, we encountered a few operational challenges including lower tonnes stacked, slightly lower recovery and a longer leach cycle than planned. Throughout the quarter, we implemented a number of improvements to address these issues. This included improving the stacking sequence where we have started to see positive results. In addition, we have begun to see improved solution management through various innovative methods that are being deployed to help draw down the gold inventory.”
"Production reached 364,625 ounces in the first nine months of the year, an increase of 7% compared to 2023, and 12% compared to 2022, respectively. We are on track to meet our 2024 production and cost guidance. We have tightened the gold production range to between 505,000 to 530,000 ounces. As gold prices hit record highs in the third quarter, we continued to experience increased royalty costs, which has impacted our overall costs, and we expect full year all-in sustaining costs to be near the upper end of guidance of between $1,260 and $1,290 per ounce."
"Our transformational Skouries project continues to track on budget and on schedule with first production expected in the third quarter of 2025. Solid progress was made during the third quarter, with overall project completion currently at 79%. As anticipated, the contract was awarded for the steel and mechanical installations for the filter building during the quarter, which is part of the critical path. Thus far the construction workforce productivity is slightly beating our assumptions. With approximately 1,000 personnel working, we are making steady progress towards our year-end target of 1,300. Our focus once we have the additional personnel onsite will turn to integrating them at our assumed productivity levels to maintain the schedule and budget. We are managing this closely and taking proactive measures to mitigate potential challenges in a tight construction labour market. To view the progress see our Q3 2024 progress update video linked below."
Q3 2024 progress update video link: https://youtu.be/js0MxV8Dgdo
Skouries Highlights
Growth capital invested totalled $82.7 million in Q3 2024 and $227.1 million during the nine months ended September 30, 2024. At September 30, 2024, the growth capital invested towards the overall capital estimate of $920 million totalled $411.9 million.
In 2024, the expected capital spend has been lowered to between $350 and $380 million from the original guidance of $375 and $425 million. The lowered capital is not expected to impact first production as it is primarily related to rescheduled work that has been shifted to a later phase of the project that is not on the critical path, and reflects a slower than expected ramp-up of contractor mobilization during the first three quarters of 2024.
First production of the copper-gold concentrate is expected in Q3 2025, with expected 2025 gold production of 50,000 to 60,000 ounces and copper production of 15 to 20 million pounds. The project remains on track for commercial production at the end of 2025.
Table 1: Skouries Project - Project Expenditures (January 1, 2023 to September 30, 2024)
Millions of US$ | As of September 30, 2024 |
Total capital estimate | $920 |
Expenditures incurred since project restart | 412 |
Remaining spend | 508 |
Committed expenditures - including expenditures incurred | 788 |
Uncommitted expenditures | 132 |
Overall construction progress is 79% when including the first phase of construction.
Work continues to advance on the filtered tailings building which is on the critical path. In September, the first contract for the filtered tailings building was awarded for the structure and mechanical installations. For efficiency, the contract was split into two components:
1) | filtered tailings building structure and mechanical installations, and | |
2) | piping, electrical and instrumentation. | |
Primary Crusher Building
Progress continued to advance on the foundation construction of the primary crusher with retaining walls and stabilized excavations nearing completion. Construction of the crusher building structure will commence in November.
Process plant
Work in the process plant continues to progress. Re-lining of the flotation tanks was completed as planned and structural and mechanical work is in progress. Off-site pipe spool fabrication continues and delivery of high-density polyethylene piping to site has commenced. Scaffolding is advancing to support electrical cable tray and piping installations and the contractor continues to ramp up to support increasing levels of activity. Work has also commenced on support infrastructure including the process control room building, process plant sub-station, water pump station, lime plant, air blowers building, compressor building and flotation reagent areas.
Thickeners
Construction of the three thickeners progressed on plan during the quarter. Major concrete pours are complete for the foundations of the first two thickeners. Support columns are complete on the first thickener and over 50% complete for the second thickener. Construction of the third thickener will start in Q4 2024 following completion of the first thickener.
Integrative Extractive Waste Management Facility (the "IEWMF")
During Q3 2024, construction continued to progress at the coffer dam site with excavation of the spillway and foundation preparation. By the end of 2024, the Company expects to have completed the first of two water management ponds, coffer dam and significantly advanced the earthworks. Work continues to progress with foundation preparation for the KL Embankment (tailings embankment) and the fill placement for water management pond 2 has advanced on plan for completion at year end. Excavations for water management pond 1 continue and development of the low-grade ore stockpile advanced with foundation preparation, drain construction and fill placement.
Underground Development
Progress has been made on the underground with expansion of the underground services for water management, ventilation and electrical distribution. Approximately 70% of the equipment and operator licenses have been received to date and development mining is ramping up. Access to the test stopes is advancing at the upper level as planned and the priority for the balance of the year is to advance the main decline and gain access to the bottom elevations of the test stopes. The schedule to receive all licenses and permits was later than planned and while the contractor is ramping up, it has delayed the completion of the expected 2,200 metres of underground development for 2024. The underground development for 2024 is now expected to be between 500 and 600 metres. While the metres are not on track with guidance the underground is not on the critical path for first production, in addition, this does not impact the overall timing for the two test stopes which are expected to be completed in Q3 2025.
Engineering, Procurement and Operational Readiness
Engineering
As engineering works are now at 78% and are nearing substantial completion, the focus has been on finalizing engineering to support the construction schedule. The release of structural steel for fabrication is nearing completion and steel deliveries have commenced to site to support steel construction in the process plant and filtered tailings building.
Procurement
At the end of Q3 2024, procurement is substantially complete, with all long-lead items procured and the focus on managing fabrication and deliveries.
Operational Readiness
A key focus of the operational readiness team is to establish a strong, risk-based operational readiness plan. Key departmental plans have been developed, an overarching governance framework established, and weekly leadership forums and monthly steering committee reviews established. Specialized support has been engaged to focus on processing operationalization, and readiness support. Further work is ongoing to establish detailed readiness plans for support and shared services. Priority focus areas have been identified and resource allocation adjusted accordingly.
The development of the Management Operating System (MOS) is currently focused on providing frontline supervisor and worker practices and procedures to the open pit operations team. These practices and procedures are established to ensure adherence to standards as well as establishing best practices and overall transparency across planning, execution, reporting and remediation to the frontline team. Several workshops were held with the heads of functions and initial departmental workflows were established.
The training department's short-term priority was developing a training plan for the open pit excavation activities in line with the recently adopted competency-based framework. The competency-based framework identifies specific competencies per role and then assesses the employee's performance against specific performance criteria on knowledge, skills and attitude. This competency-based framework will ensure improved individual performance compared to the previous time in role-based competency framework only. Training material as well as training providers are in place and four (4) CAT 6020B hydraulic excavator operators commenced training during October 2024. This program will be expanded with the arrival of additional mining equipment in H1 2025. The Mavres Petres main training building structural upgrade has been completed and the focus for the coming quarter will be to equip practical training workbenches for basic skills training and assessment as well as for refresher training.
Operations
The operations team completed their labour strategy and associated organizational designs. Recruitment is underway at local and national levels. Several local and national job fairs are planned for Q4 2024 to attract as many as possible potential employees.
The CAT 6020B hydraulic excavator was assembled during the quarter and training of operators commenced in October 2024. Most of the remaining open pit mining fleet will arrive during H1 2025. The first operational plan was prepared that combines the completion of construction pre-stripping and the start of open pit mining in H1 2025. A similar plan is being prepared for the underground mine and the expectation is that both the surface and underground mining will be operationalized during Q4 2024.
Other operational, commercial and administrative departments made progress in recruiting their leadership and supervision employees and setting up operating and commercial processes.
Workforce
In addition to the Operational Readiness team, as at September 30, 2024, there were approximately 1,000 personnel working. Thus far the construction workforce productivity is slightly ahead of our assumptions. We are making steady progress towards our year-end target of 1,300 workers on site. Our focus once we have the additional personnel onsite will turn to integrating them at our assumed productivity levels to maintain the schedule and budget. We are managing this closely and taking proactive measures to mitigate potential challenges in a tight construction labour market.
Skouries key milestones in 2024, which include:
Area of Focus | Key Milestone | Status |
Procurement and Engineering |
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Process Plant |
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Filtered Tailings Facility |
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Integrated Extractive Waste Management Facility ("IEWMF") |
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Underground |
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3 months ended September 30, | 9 months ended September 30, | ||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||
Revenue | $331.8 | $244.8 | $886.9 | $701.6 | |||||||||
Gold produced (oz) | 125,195 | 121,030 | 364,625 | 341,973 | |||||||||
Gold sold (oz) | 123,828 | 119,200 | 361,062 | 339,151 | |||||||||
Average realized gold price ($/oz sold) (2) | $2,492 | $1,879 | $2,309 | $1,920 | |||||||||
Production costs | 141.2 | 115.5 | 392.0 | 341.3 | |||||||||
Total cash costs ($/oz sold) (2,3) | 953 | 794 | 939 | 858 | |||||||||
All-in sustaining costs ($/oz sold) (2,3) | 1,335 | 1,177 | 1,310 | 1,225 | |||||||||
Net earnings (loss) for the period (1) | 95.0 | (8.0 | ) | 184.1 | 12.2 | ||||||||
Net earnings (loss) per share - basic ($/share) (1) | 0.46 | (0.04 | ) | 0.90 | 0.06 | ||||||||
Net earnings (loss) per share - diluted ($/share) (1) | 0.46 | (0.04 | ) | 0.90 | 0.06 | ||||||||
Net earnings (loss) for the period continuing operations (1,4) | 101.1 | (6.6 | ) | 192.7 | 14.4 | ||||||||
Net earnings (loss) per share continuing operations - basic ($/share)(1,4) | 0.49 | (0.03 | ) | 0.95 | 0.07 | ||||||||
Net earnings (loss) per share continuing operations - diluted ($/share)(1,4) | 0.49 | (0.03 | ) | 0.94 | 0.07 | ||||||||
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