Eldorado Gold Corporation |
(Translation of registrant’s name into English) |
1188-550 Burrard Street, Bentall 5 Vancouver, B.C. Canada V6C 2B5 |
(Address of principal executive offices) |
Form 20-F | ¨ | Form 40-F | þ |
Eldorado Gold Reports Q3 2019 Financial and Operational Results |
ELDORADO GOLD CORPORATION | |
(Registrant) |
Date: October 31, 2019 | /s/ Karen Aram Karen Aram Corporate Secretary |
NEWS RELEASE | |
TSX: ELD NYSE: EGO | October 31, 2019 |
• | Extension of mine life at Kisladag supported by recent test results: Waste stripping to support a mine life extension at Kisladag is underway. Recent test results confirm recoveries from leaching deeper material over 250 day cycles support an extension of mine life beyond the Company's current three year guidance. Testwork is still ongoing and the Company expects to update long term guidance at Kisladag based on the results of this testwork, which are expected to be available in Q1 2020. |
• | Permits for Skouries and Olympias received: Permits allow for, among other things, installation of electrical and mechanical equipment at Skouries and Olympias. Subsequent to the quarter the Company also received approval for the Skouries building permit, which will allow the Company to begin installation of the Skouries mill building, and consent from the Central Archaeological Council to relocate an ancient mining furnace from the Skouries open pit area, subject to Ministerial approval. |
• | Successful ramp up at Lamaque: Lamaque achieved commercial production in April 2019 and has had two successful operating quarters. In September 2019, the Company announced that it is undertaking a Preliminary Economic Assessment (“PEA”) to increase average annual production from approximately 130,000 ounces of gold to approximately 170,000 ounces of gold. |
• | Increased Q3 gold production and reiterating 2019 annual guidance: Gold production for the quarter totalled 101,596 ounces with 276,376 ounces produced year-to-date. Quarterly production included 32,037 ounces from Lamaque in its second quarter of commercial operations and was partially offset by a decrease in production at Olympias as a result of reduced tonnage fed to the processing plant. |
• | Steady EBITDA: Higher sales volumes in the quarter resulted in earnings before interest, taxes and depreciation and amortization ("EBITDA") of $73.2 million. Adjusted EBITDA of $75.9 million excludes the impact of non-cash share-based compensation expense. |
• | Liquidity strengthened: The Company finished the quarter with approximately $322 million of liquidity including $134.9 million in cash, cash equivalents and term deposits and approximately $187 million available under its $250 million revolving credit facility, with $63 million of capacity on the revolving credit facility allocated to secure certain reclamation obligations in connection with its operations. |
• | Positive net earnings per share: Net earnings to shareholders in the quarter totalled $4.2 million, or $0.03 per share. Adjusted net earnings were $7.5 million, or $0.05 per share, after adjusting for non-cash deferred tax expense relating to foreign currency exchange rate fluctuations. |
1 |
3 months ended September 30, | 9 months ended September 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Revenue (1) | $172.3 | $81.1 | $426.0 | $366.1 | ||||||||
Gold revenue (1) | $150.2 | $76.0 | $355.6 | $312.8 | ||||||||
Gold produced (oz) (2) | 101,596 | 84,783 | 276,376 | 273,261 | ||||||||
Gold sold (oz) (1) | 99,241 | 64,589 | 256,000 | 245,400 | ||||||||
Average realized gold price ($/oz sold) (5) | $1,513 | $1,177 | $1,389 | $1,274 | ||||||||
Cash operating costs ($/oz sold) (3,5) | 560 | 754 | 602 | 625 | ||||||||
Total cash costs ($/oz sold) (3,5) | 603 | 762 | 641 | 647 | ||||||||
All-in sustaining costs ($/oz sold) (3,5) | 1,031 | 1,112 | 998 | 944 | ||||||||
Net earnings (loss) for the period (4) | 4.2 | (128.0 | ) | (10.6 | ) | (143.7 | ) | |||||
Net earnings (loss) per share – basic ($/share) (4) | 0.03 | (0.81 | ) | (0.07 | ) | (0.91 | ) | |||||
Adjusted net earnings (loss) (4,5) | 7.5 | (21.9 | ) | (14.7 | ) | (9.5 | ) | |||||
Adjusted net earnings (loss) per share ($/share) (4,5) | 0.05 | (0.14 | ) | (0.09 | ) | (0.06 | ) | |||||
Cash flow from operating activities before changes in working capital (5,6) | 62.9 | (1.7 | ) | 108.6 | 60.4 | |||||||
Cash, cash equivalents and term deposits | $134.9 | $385.0 | $134.9 | $385.0 |
(1) | Excludes sales of inventory mined at Lamaque and Olympias (Q1 2018) during the pre-commercial production period. |
(2) | Includes pre-commercial production at Lamaque and Olympias (Q1 2018). |
(3) | By-product revenues are off-set against cash operating costs. |
(4) | Attributable to shareholders of the Company. |
(5) | These measures are non-IFRS measures. See the September 30, 2019 MD&A for explanations and discussion of these non-IFRS measures. |
(6) | 2018 amounts have been adjusted to reflect reclassifications in cash flow from operating activities in the current periods. |
2 |
3 months ended September 30, | 9 months ended September 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Total | ||||||||||||
Ounces produced (1) | 101,596 | 84,783 | 276,376 | 273,261 | ||||||||
Ounces sold (2) | 99,241 | 64,589 | 256,000 | 245,400 | ||||||||
Cash operating costs ($/oz sold) (4) | $560 | $754 | $602 | $625 | ||||||||
All-in sustaining costs ($/oz sold) (4) | $1,031 | $1,112 | $998 | $944 | ||||||||
Sustaining capex (4) | $30.0 | $12.1 | $56.3 | $37.2 | ||||||||
Kisladag | ||||||||||||
Ounces produced (3) | 35,885 | 34,070 | 89,204 | 143,814 | ||||||||
Ounces sold | 35,881 | 34,069 | 89,208 | 143,539 | ||||||||
Cash operating costs ($/oz sold) (4) | $399 | $890 | $442 | $685 | ||||||||
All-in sustaining costs ($/oz sold) (4) | $566 | $1,010 | $580 | $821 | ||||||||
Sustaining capex (4) | $3.9 | $3.3 | $8.0 | $13.6 | ||||||||
Lamaque | ||||||||||||
Ounces produced (1) | 32,037 | 13,430 | 84,855 | 19,304 | ||||||||
Ounces sold (2) | 31,122 | n/a | 55,452 | n/a | ||||||||
Cash operating costs ($/oz sold) (4) | $480 | n/a | $496 | n/a | ||||||||
All-in sustaining costs ($/oz sold) (4) | $1,089 | n/a | $968 | n/a | ||||||||
Sustaining capex (4) | $15.9 | n/a | $21.2 | n/a | ||||||||
Efemcukuru | ||||||||||||
Ounces produced | 25,733 | 24,493 | 77,524 | 71,494 | ||||||||
Ounces sold | 25,583 | 23,104 | 80,222 | 73,957 | ||||||||
Cash operating costs ($/oz sold) (4) | $591 | $456 | $596 | $503 | ||||||||
All-in sustaining costs ($/oz sold) (4) | $900 | $766 | $859 | $769 | ||||||||
Sustaining capex (4) | $5.2 | $5.7 | $14.2 | $15.3 | ||||||||
Olympias | ||||||||||||
Ounces produced | 7,941 | 12,790 | 24,793 | 38,649 | ||||||||
Ounces sold | 6,655 | 7,416 | 31,118 | 27,904 | ||||||||
Cash operating costs ($/ounce) | $1,678 | $1,058 | $1,268 | $643 | ||||||||
All in sustaining costs ($/ounce) | $2,598 | $1,688 | $1,776 | $1,107 | ||||||||
Sustaining capex | $4.9 | $3.1 | $12.9 | $8.3 |
(2) | Excludes sales of inventory produced at Lamaque and Olympias (Q1 2018) during the pre-commercial production period. In the nine months ended September 30, 2019, 27,627 ounces were sold from inventory produced during the pre-commercial production period. |
(3) | Kisladag resumed mining, crushing and placing ore on the heap leach pad on April 1, 2019. This activity had been suspended since April 2018. |
(4) | These measures are non-IFRS measures. See the September 30, 2019 MD&A for explanations and discussion of these non-IFRS measures. |
3 |
Conference Call Details | Replay (available until Dec. 6, 2019) | |||
Date: | November 1, 2019 | Vancouver: | +1 604 638 9010 | |
Time: | 8:30 am PT (11:30 am ET) | Toll Free: | 1 800 319 6413 | |
Dial in: | +1 604 638 5340 | Access code: | 3612 | |
Toll free: | 1 800 319 4610 |
4 |
5 |
As at | Note | September 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | 129,978 | $ | 286,312 | |||||
Term deposits | 4,889 | 6,646 | |||||||
Restricted cash | 20 | 296 | |||||||
Marketable securities | 3,357 | 2,572 | |||||||
Accounts receivable and other | 4 | 77,616 | 80,987 | ||||||
Inventories | 5 | 151,459 | 137,885 | ||||||
Assets held for sale | 14 | 12,591 | — | ||||||
379,910 | 514,698 | ||||||||
Restricted cash | 3,234 | 13,449 | |||||||
Other assets | 15,418 | 10,592 | |||||||
Defined benefit pension plan | 9,467 | 9,120 | |||||||
Property, plant and equipment | 3,997,067 | 3,988,476 | |||||||
Goodwill | 92,591 | 92,591 | |||||||
$ | 4,497,687 | $ | 4,628,926 | ||||||
LIABILITIES & EQUITY | |||||||||
Current liabilities | |||||||||
Accounts payable and accrued liabilities | $ | 121,284 | $ | 137,900 | |||||
Current portion of lease liabilities | 8,420 | 2,978 | |||||||
Current portion of debt | 6 | 33,333 | — | ||||||
Current portion of asset retirement obligations | 824 | 824 | |||||||
Liabilities associated with assets held for sale | 14 | 4,207 | — | ||||||
168,068 | 141,702 | ||||||||
Debt | 6 | 449,755 | 595,977 | ||||||
Lease liabilities | 18,529 | 6,538 | |||||||
Defined benefit pension plan | 14,884 | 14,375 | |||||||
Asset retirement obligations | 88,568 | 93,319 | |||||||
Deferred income tax liabilities | 419,205 | 429,929 | |||||||
1,159,009 | 1,281,840 | ||||||||
Equity | |||||||||
Share capital | 3,008,172 | 3,007,924 | |||||||
Treasury stock | (8,737 | ) | (10,104 | ) | |||||
Contributed surplus | 2,625,457 | 2,620,799 | |||||||
Accumulated other comprehensive loss | (24,296 | ) | (24,494 | ) | |||||
Deficit | (2,321,034 | ) | (2,310,453 | ) | |||||
Total equity attributable to shareholders of the Company | 3,279,562 | 3,283,672 | |||||||
Attributable to non-controlling interests | 59,116 | 63,414 | |||||||
3,338,678 | 3,347,086 | ||||||||
$ | 4,497,687 | $ | 4,628,926 |
Please see the Condensed Consolidated Interim Financial Statements dated September 30, 2019 for notes to the accounts. | ||
6 |
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
Note | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue | ||||||||||||||||
Metal sales | 7 | $ | 172,256 | $ | 81,070 | $ | 425,958 | $ | 366,146 | |||||||
Cost of sales | ||||||||||||||||
Production costs | 84,813 | 56,066 | 237,630 | 209,145 | ||||||||||||
Depreciation and amortization | 40,017 | 20,257 | 101,147 | 83,927 | ||||||||||||
124,830 | 76,323 | 338,777 | 293,072 | |||||||||||||
Earnings from mine operations | 47,426 | 4,747 | 87,181 | 73,074 | ||||||||||||
Exploration and evaluation expense | 2,774 | 8,014 | 10,668 | 26,668 | ||||||||||||
Mine standby costs | 2,529 | 4,460 | 13,972 | 11,470 | ||||||||||||
General and administrative expense | 7,431 | 10,896 | 22,687 | 33,127 | ||||||||||||
Defined benefit pension plan expense | 458 | 201 | 1,567 | 2,331 | ||||||||||||
Share based payments | 10 | 2,727 | 1,580 | 8,127 | 5,742 | |||||||||||
Impairment (reversal of impairment) | 14,15 | — | 117,570 | (11,690 | ) | 117,570 | ||||||||||
(Write-up) write-down of assets | (414 | ) | 536 | 13 | 1,386 | |||||||||||
Foreign exchange loss (gain) | 643 | (3,034 | ) | 878 | 374 | |||||||||||
Earnings (loss) from operations | 31,278 | (135,476 | ) | 40,959 | (125,594 | ) | ||||||||||
Other income | 8(a) | 871 | 6,284 | 11,159 | 13,878 | |||||||||||
Finance costs | 8(b) | (13,170 | ) | (839 | ) | (37,287 | ) | (8,113 | ) | |||||||
Earnings (loss) from operations before income tax | 18,979 | (130,031 | ) | 14,831 | (119,829 | ) | ||||||||||
Income tax expense | 15,888 | 661 | 29,930 | 29,324 | ||||||||||||
Net earnings (loss) for the period | $ | 3,091 | $ | (130,692 | ) | $ | (15,099 | ) | $ | (149,153 | ) | |||||
Attributable to: | ||||||||||||||||
Shareholders of the Company | 4,233 | (128,045 | ) | (10,581 | ) | (143,718 | ) | |||||||||
Non-controlling interests | (1,142 | ) | (2,647 | ) | (4,518 | ) | (5,435 | ) | ||||||||
Net earnings (loss) for the period | $ | 3,091 | $ | (130,692 | ) | $ | (15,099 | ) | $ | (149,153 | ) | |||||
Weighted average number of shares outstanding (thousands) | ||||||||||||||||
Basic | 158,462 | 158,294 | 158,409 | 158,434 | ||||||||||||
Diluted | 161,735 | 158,294 | 158,409 | 158,434 | ||||||||||||
Net earnings (loss) per share attributable to shareholders of the Company: | ||||||||||||||||
Basic earnings (loss) per share | $ | 0.03 | $ | (0.81 | ) | $ | (0.07 | ) | $ | (0.91 | ) | |||||
Diluted earnings (loss) per share | $ | 0.03 | $ | (0.81 | ) | $ | (0.07 | ) | $ | (0.91 | ) |
Please see the Condensed Consolidated Interim Financial Statements dated September 30, 2019 for notes to the accounts. | ||
7 |
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
Note | 2019 | 2018 | 2019 | 2018 | |||||||||||||
Net earnings (loss) for the period | $ | 3,091 | $ | (130,692 | ) | $ | (15,099 | ) | $ | (149,153 | ) | ||||||
Other comprehensive income (loss): | |||||||||||||||||
Items that will not be reclassified to earnings or loss: | |||||||||||||||||
Change in fair value of investments in equity securities, net of tax | (378 | ) | (875 | ) | 785 | (2,034 | ) | ||||||||||
Actuarial (loss) gain on defined benefit pension plan, net of tax | (178 | ) | (200 | ) | (587 | ) | 450 | ||||||||||
Total other comprehensive income (loss) for the period | (556 | ) | (1,075 | ) | 198 | (1,584 | ) | ||||||||||
Total comprehensive income (loss) for the period | $ | 2,535 | $ | (131,767 | ) | $ | (14,901 | ) | $ | (150,737 | ) | ||||||
Attributable to: | |||||||||||||||||
Shareholders of the Company | 3,677 | (129,120 | ) | (10,383 | ) | (145,302 | ) | ||||||||||
Non-controlling interests | (1,142 | ) | (2,647 | ) | (4,518 | ) | (5,435 | ) | |||||||||
$ | 2,535 | $ | (131,767 | ) | $ | (14,901 | ) | $ | (150,737 | ) |
Please see the Condensed Consolidated Interim Financial Statements dated September 30, 2019 for notes to the accounts. | ||
8 |
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
Note | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash flows generated from (used in): | ||||||||||||||||
Operating activities | ||||||||||||||||
Net earnings (loss) for the period | $ | 3,091 | $ | (130,692 | ) | $ | (15,099 | ) | $ | (149,153 | ) | |||||
Items not affecting cash: | ||||||||||||||||
Depreciation and amortization | 41,759 | 19,828 | 102,889 | 83,498 | ||||||||||||
Finance costs | 8(b) | 13,170 | 839 | 37,287 | 8,113 | |||||||||||
Unrealized foreign exchange (gain) loss | (555 | ) | (144 | ) | (906 | ) | 274 | |||||||||
Income from royalty sale | 8(a) | — | — | (8,075 | ) | — | ||||||||||
Income tax expense | 15,888 | 661 | 29,930 | 29,324 | ||||||||||||
Impairment (reversal) of impairment | 14,15 | — | 117,570 | (11,690 | ) | 117,570 | ||||||||||
(Write-up) write-down of assets | (414 | ) | 536 | 13 | 1,386 | |||||||||||
Gain on derivatives and other investments | 8(a) | — | (2,326 | ) | — | (4,520 | ) | |||||||||
Share based payments | 10 | 2,727 | 1,580 | 8,127 | 5,742 | |||||||||||
Defined benefit pension plan expense | 458 | 201 | 1,567 | 2,331 | ||||||||||||
76,124 | 8,053 | 144,043 | 94,565 | |||||||||||||
Property reclamation payments | (759 | ) | (801 | ) | (2,555 | ) | (3,200 | ) | ||||||||
Severance and pension payments | (332 | ) | (49 | ) | (1,681 | ) | (2,299 | ) | ||||||||
Income taxes paid | (8,593 | ) | (8,860 | ) | (12,603 | ) | (24,461 | ) | ||||||||
Interest paid | (3,505 | ) | — | (18,641 | ) | (4,203 | ) | |||||||||
Changes in non-cash working capital | 11 | (11,728 | ) | 15,638 | (6,961 | ) | 2,200 | |||||||||
Net cash generated from operating activities | 51,207 | 13,981 | 101,602 | 62,602 | ||||||||||||
Investing activities | ||||||||||||||||
Purchase of property, plant and equipment | (34,760 | ) | (56,203 | ) | (148,700 | ) | (160,491 | ) | ||||||||
Capitalized interest paid | — | — | (3,848 | ) | (14,172 | ) | ||||||||||
Proceeds from the sale of property, plant and equipment | 108 | 68 | 3,880 | 7,880 | ||||||||||||
Proceeds on pre-commercial production sales, net | — | (3,894 | ) | 12,159 | 1,308 | |||||||||||
Value added taxes related to mineral property expenditures, net | 104 | 1,858 | (7,615 | ) | 6,660 | |||||||||||
(Investment in) redemption of term deposits | (114 | ) | (5 | ) | 1,757 | (1,123 | ) | |||||||||
Decrease (increase) in restricted cash | 6(b) | 297 | (30 | ) | 10,491 | (898 | ) | |||||||||
Net cash used in investing activities | (34,365 | ) | (58,206 | ) | (131,876 | ) | (160,836 | ) | ||||||||
Financing activities | ||||||||||||||||
Issuance of common shares for cash | 161 | — | 179 | — | ||||||||||||
Contributions from non-controlling interests | 220 | — | 220 | — | ||||||||||||
Proceeds from borrowings | — | — | 494,000 | — | ||||||||||||
Repayment of borrowings | 6(c) | — | — | (600,000 | ) | — | ||||||||||
Loan financing costs | (428 | ) | — | (15,423 | ) | — | ||||||||||
Principal elements of lease payments | (2,387 | ) | (601 | ) | (4,773 | ) | (815 | ) | ||||||||
Purchase of treasury stock | — | — | — | (2,108 | ) | |||||||||||
Net cash used in financing activities | (2,434 | ) | (601 | ) | (125,797 | ) | (2,923 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | 14,408 | (44,826 | ) | (156,071 | ) | (101,157 | ) | |||||||||
Cash and cash equivalents - beginning of period | 115,833 | 423,170 | 286,312 | 479,501 | ||||||||||||
130,241 | 378,344 | 130,241 | 378,344 | |||||||||||||
Cash in disposal group held for sale | 14 | (263 | ) | — | (263 | ) | — | |||||||||
Cash and cash equivalents - end of period | $ | 129,978 | $ | 378,344 | $ | 129,978 | $ | 378,344 |
Please see the Condensed Consolidated Interim Financial Statements dated September 30, 2019 for notes to the accounts. | ||
9 |
Three months ended | Nine months ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
Note | 2019 | 2018 | 2019 | 2018 | |||||||||||||
Share capital | |||||||||||||||||
Balance beginning of period | $ | 3,007,944 | $ | 3,007,924 | $ | 3,007,924 | $ | 3,007,924 | |||||||||
Shares issued upon exercise of share options, for cash | 161 | — | 179 | — | |||||||||||||
Transfer of contributed surplus on exercise of options | 67 | — | 69 | — | |||||||||||||
Balance end of period | $ | 3,008,172 | $ | 3,007,924 | $ | 3,008,172 | $ | 3,007,924 | |||||||||
Treasury stock | |||||||||||||||||
Balance beginning of period | $ | (8,813 | ) | $ | (10,104 | ) | $ | (10,104 | ) | $ | (11,056 | ) | |||||
Purchase of treasury stock | — | — | — | (2,108 | ) | ||||||||||||
Shares redeemed upon exercise of restricted share units | 76 | — | 1,367 | 3,060 | |||||||||||||
Balance end of period | $ | (8,737 | ) | $ | (10,104 | ) | $ | (8,737 | ) | $ | (10,104 | ) | |||||
Contributed surplus | |||||||||||||||||
Balance beginning of period | $ | 2,623,523 | $ | 2,617,108 | $ | 2,620,799 | $ | 2,616,593 | |||||||||
Share based payments | 2,077 | 1,861 | 6,094 | 5,436 | |||||||||||||
Shares redeemed upon exercise of restricted share units | (76 | ) | — | (1,367 | ) | (3,060 | ) | ||||||||||
Transfer to share capital on exercise of options | (67 | ) | — | (69 | ) | — | |||||||||||
Balance end of period | $ | 2,625,457 | $ | 2,618,969 | $ | 2,625,457 | $ | 2,618,969 | |||||||||
Accumulated other comprehensive loss | |||||||||||||||||
Balance beginning of period | $ | (23,740 | ) | $ | (21,859 | ) | $ | (24,494 | ) | $ | (21,350 | ) | |||||
Other comprehensive (loss) income for the period | (556 | ) | (1,075 | ) | 198 | (1,584 | ) | ||||||||||
Balance end of period | $ | (24,296 | ) | $ | (22,934 | ) | $ | (24,296 | ) | $ | (22,934 | ) | |||||
Deficit | |||||||||||||||||
Balance beginning of period | $ | (2,325,267 | ) | $ | (1,964,242 | ) | $ | (2,310,453 | ) | $ | (1,948,569 | ) | |||||
Net earnings (loss) attributable to shareholders of the Company | 4,233 | (128,045 | ) | (10,581 | ) | (143,718 | ) | ||||||||||
Balance end of period | $ | (2,321,034 | ) | $ | (2,092,287 | ) | $ | (2,321,034 | ) | $ | (2,092,287 | ) | |||||
Total equity attributable to shareholders of the Company | $ | 3,279,562 | $ | 3,501,568 | $ | 3,279,562 | $ | 3,501,568 | |||||||||
Non-controlling interests | |||||||||||||||||
Balance beginning of period | $ | 60,257 | $ | 78,153 | $ | 63,414 | $ | 79,940 | |||||||||
Net loss attributable to non-controlling interests | (1,142 | ) | (2,647 | ) | (4,518 | ) | (5,435 | ) | |||||||||
Contributions from non-controlling interests | 1 | 220 | 220 | 1,221 | |||||||||||||
Balance end of period | $ | 59,116 | $ | 75,726 | $ | 59,116 | $ | 75,726 | |||||||||
Total equity | $ | 3,338,678 | $ | 3,577,294 | $ | 3,338,678 | $ | 3,577,294 |
Please see the Condensed Consolidated Interim Financial Statements dated September 30, 2019 for notes to the accounts. | ||
10 |