VANCOUVER, British Columbia, Oct. 29, 2020 (GLOBE NEWSWIRE) — Eldorado Gold Corporation (“Eldorado” or “the Company”) today reports the Company’s financial and operational results for the third quarter of 2020.
- Steady quarterly production and 2020 annual guidance maintained: Gold production totalled 136,922 ounces in Q3 2020, an increase of 35% from production of 101,596 ounces in Q3 2019. The Company is maintaining its 2020 annual guidance of 520,000-550,000 ounces of gold at an all-in sustaining cost of $850-950 per ounce sold.
- Increased cash from operations and free cash flow: Net cash generated from operating activities of $165.4 million in Q3 2020 increased significantly from $51.2 million in Q3 2019 primarily as a result of higher sales volumes, a higher average realized gold price, and the timing of certain payments. Free cash flow of $117.2 million in Q3 2020 increased significantly from $16.7 million in Q3 2019 as a result of increased cash from operations, and was partly offset by higher capital expenditure, which is expected to continue into Q4 2020. Free cash flow year-to-date totalled $187.7 million.
- All-in sustaining costs remain steady: Q3 2020 all-in sustaining costs of $918 per ounce of gold sold were lower than in Q3 2019 ($1,031 per ounce sold) and were negatively impacted by an incremental 25% increase to 2020 gold royalty rates in Turkey, announced in September and retroactive to January 1, 2020.
- Continued strong financial liquidity: The Company currently has $504 million of cash, cash equivalents and term deposits and approximately $32 million available under its revolving credit facility. Additionally, we completed a redemption of $58.6 million of principal of our senior secured notes during the quarter and have issued a debt redemption notice to repay an additional $7.5 million of principal in December 2020 under the equity clawback provision of our senior secured notes.
- Net earnings and adjusted net earnings attributable to shareholders: The Company reported net earnings attributable to shareholders of the Company in Q3 2020 of $41.0 million or $0.24 per share (Q3 2019: $4.2 million, or $0.03 per share). Adjusted net earnings attributable to shareholders of the Company in Q3 2020 were $56.7 million, or $0.33 per share (Q3 2019: $7.6 million, or $0.05 per share).
- Increased EBITDA: The Company reported Q3 2020 EBITDA of $162.5 million ($73.2 million in Q3 2019) and Q3 2020 adjusted EBITDA of $163.9 million ($75.9 million in Q3 2019).
- Progress in Greece:
- Drilling permits received at Stratoni: The Greek Ministry of Environment granted the Company permits to conduct surface exploration drilling in the Stratoni area.
- Olympias permitted production limit increase: The Company renewed its operating permit for Olympias and, per the terms of the permit, allows for an annual production limit of 470,000 tonnes per year. The Company will continue to evaluate a possible further expansion at Olympias that would require a modification to the Olympias EIA.
- Archaeological relocation work underway: Relocation of an ancient mining furnace from the Skouries open pit area commenced in Q3 2020.
- Sale of non-core assets: The Company completed the sale of the Vila Nova mine in Brazil for total consideration of $10.0 million. The Company is evaluating strategic options for other non-core assets, including its Tocantinzinho Project in Brazil and Certej Project in Romania.
- Measures remain in place to manage the impact of the novel coronavirus (“COVID-19”) pandemic: The Company’s mines remain operational and isolated cases of COVID-19 have been successfully managed. Preventing the spread of COVID-19, ensuring safe working environments across Eldorado’s global sites, and preparedness should an outbreak occur, remain priorities.
“This quarter continues the positive results we have delivered over the last 18 months,” said George Burns, President and CEO. “We are driving significant value from our operations demonstrated by steady production and lower costs that are flowing through to our bottom line. This is the second consecutive quarter we have delivered across all key metrics, again generating significant free cash flow and adjusted net earnings. We remain committed to reducing our debt and decreased our senior secured notes by nearly $60 million in the quarter. I’m pleased to report that our balance sheet is in the strongest position it has been in several quarters and this positions us well as we look to develop the growth opportunities in our portfolio.”
Consolidated Financial and Operational Highlights
| 3 months ended September 30, | 9 months ended September 30, | |||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||
| Revenue (1) | $ | 287.6 | $ | 172.3 | $ | 748.2 | $ | 426.0 | ||||||
| Gold revenue (1) | $ | 264.3 | $ | 150.2 | $ | 684.7 | $ | 355.6 | ||||||
| Gold produced (oz) (2) | 136,922 | 101,596 | 390,654 | 276,376 | ||||||||||
| Gold sold (oz) (1) | 137,704 | 99,241 | 388,883 | 256,000 | ||||||||||
| Average realized gold price ($/oz sold) (6) | $ | 1,919 | $ | 1,513 | $ | 1,761 | $ | 1,389 | ||||||
| Cash operating costs ($/oz sold) (3,6) | 537 | 560 | 568 | 602 | ||||||||||
| Total cash costs ($/oz sold) (3,6) | 664 | 603 | 651 | 641 | ||||||||||
| All-in sustaining costs ($/oz sold) (3,6) | 918 | 1,031 | 908 | 998 | ||||||||||
| Net earnings (loss) for the period (4) | 41.0 | 4.2 | 81.7 | (10.6 | ) | |||||||||
| Net earnings (loss) per share – basic ($/share) (4) | 0.24 | 0.03 | 0.48 | (0.07 | ) | |||||||||
| Adjusted net earnings (loss) (4,5,6,7) | 56.7 | 7.6 | 113.0 | (16.9 | ) | |||||||||
| Adjusted net earnings (loss) per share ($/share) (4,5,6,7) | 0.33 | 0.05 | 0.67 | (0.11 | ) | |||||||||
| Cash flow from operating activities before changes in working capital (6,7) | 125.1 | 63.0 | 293.6 | 109.6 | ||||||||||
| Free cash flow (6) | 117.2 | 16.7 | 187.7 | (42.5 | ) | |||||||||
| Cash, cash equivalents and term deposits | $ | 504.4 | $ | 134.9 | $ | 504.4 | $ | 134.9 |
| (1) | Excludes sales of inventory mined at Lamaque during the pre-commercial production period (Q1 2019). |
| (2) | Includes pre-commercial production at Lamaque (Q1 2019). |
| (3) | By-product revenues are off-set against cash operating costs. |
| (4) | Attributable to shareholders of the Company. |
| (5) | See reconciliation of net earnings (loss) to adjusted net earnings (loss) in the section ‘Non-IFRS Measures’ in the September 30, 2020 MD&A. |
| (6) | These measures are non-IFRS measures. See the September 30, 2020 MD&A for explanations and discussion of these non-IFRS measures. |
| (7) | 2019 amounts have been adjusted to conform with 2020 presentation. See the section ‘Non-IFRS Measures’ in the September 30, 2020 MD&A for detail. |
Gold production of 136,922 ounces increased 35% from last year’s third quarter production of 101,596 ounces. Gold sales totalled 137,704 ounces in Q3 2020, an increase of 39% from 99,241 ounces sold in Q3 2019. The higher sales volume compared with the prior year reflected an increase of 23,690 ounces sold at Kisladag due to increased tonnes of stacked ore, an increase of 7,465 ounces sold at Lamaque due to increased tonnes processed and an increase of 8,420 ounces sold at Olympias as a result of increased production. Gold sales at Efemcukuru in Q3 2020 decreased slightly by 1,112 ounces from the prior year due to a decrease in grade, combined with lower tonnes processed in the quarter.
otal revenue was $287.60 million in Q3 2020, an increase of 67% from $172.3 million in Q3 2019. The increase was due to increased sales volume combined with a higher average realized gold price.
Cash operating costs per ounce sold in Q3 2020 averaged $537, a decrease from $560 in Q3 2019. The improvement was primarily due to higher production at Kisladag with an increase in stacked ore on the heap leach pad, higher production and grade at Olympias and increased mining rates at Lamaque following the receipt of authorization in March 2020 to increase mine production. Cash operating costs per ounce sold also benefited from a weakening of the Turkish Lira throughout 2020.