Q3 2021 Financial and Operational Results VANCOUVER, British Columbia, Oct. 28, 2021 (GLOBE NEWSWIRE) -- Eldorado Gold Corporation (“Eldorado” or “the Company”) today reports the Company’s financial and operational results for the third quarter of 2021.
- Quarterly production exceeds expectations; increasing full year 2021 annual guidance: Gold production totalled 125,459 ounces in Q3 2021, a decrease of 8% from Q3 2020 production of 136,922 ounces driven by a planned shift to lower-grade ore at Kisladag. Gold production in the quarter increased 8% over Q2 2021. As a result of strong production in the first nine months of 2021, primarily due to operational improvements at Kisladag, Eldorado is increasing its 2021 annual production guidance by approximately 6% to 460,000-480,000 ounces of gold.
- Free cash flow(4): Free cash flow from continuing operations of $29.7 million in Q3 2021 decreased from free cash flow from continuing operations of $114.7 million in Q3 2020(2,3) primarily as a result of planned lower production, lower gold prices and planned increased growth and sustaining capital spending. An increase from negative free cash flow of $23.7 million in Q2 2021(2,3) was primarily due to free cash flow being negatively impacted in the second quarter by the timing of tax and annual royalty payments. We expect free cash flow generation to continue in Q4 2021.
- All-in sustaining costs(4): Q3 2021 all-in sustaining costs of $1,133 per ounce of gold sold in the quarter increased from Q3 2020 ($918 per ounce sold) as a result of planned lower production in the quarter, higher cash operating costs per ounce and increased sustaining capital expenditure. All-in sustaining costs per ounce of gold sold increased in the quarter from Q2 2021 ($1,074 per ounce sold) as a result of increased sustaining capital expenditure. We are maintaining our 2021 annual guidance with all-in-sustaining costs of $920 - $1,150 per ounce sold.
- Net earnings and adjusted net earnings attributable to shareholders(4): Net earnings from continuing operations attributable to shareholders of the Company in Q3 2021 were $8.5 million, or $0.05 per share (Q3 2020: net earnings of $46.0 million or $0.26 per share, Q2 2021: net earnings of $31.0 million or $0.17 per share)(1,3). Adjusted net earnings attributable to shareholders of the Company from continuing operations in Q3 2021 were $39.9 million, or $0.22 per share (Q3 2020: adjusted net earnings of $63.6 million or $0.37 earnings per share, Q2 2021: adjusted net earnings of $29.1 million or $0.16 per share)(1,3). Material adjustments in Q3 2021 included $31.1 million of finance costs relating to the Company's debt refinancing in the quarter.
- EBITDA: Q3 2021 EBITDA from continuing operations was $106.6 million (Q3 2020: $161.0 million, Q2 2021:$106.9 million)(3) and Q3 2021 adjusted EBITDA from continuing operations(4) was $108.1 million (Q3 2020: $164.5 million, Q2 2021: $101.7 million)(3).
- Capital spending: Capital expenditures totalled $64.4 million in Q3 2021 (Q3 2020: $50.4 million, Q2 2021: $71.6 million)(3), reflecting a planned increase and following reduced spending in the prior year due to the novel coronavirus ("COVID-19") pandemic. Capital allocation is following a rigorous process to ensure discipline and control at all operations.
- At Kisladag, $17.7 million investment in the quarter related to waste stripping, construction of the north leach pad to support the mine life extension and installation of a high-pressure grinding roll ("HPGR") circuit, which is expected to improve heap leach recovery with commissioning now in progress and expected to complete in November 2021.
- At Lamaque, $10.1 million investment in the quarter related primarily to the decline connecting the Triangle underground mine with the Sigma mill, which is expected to reduce operating costs, reduce greenhouse gas emissions, and provide access for underground drill platforms for Ormaque, Plug 4, and other exploration targets in the prospective corridor. Investment in the quarter also included raising the embankment at the Sigma tailing storage facility.
- Financial position: As at September 30, 2021, the Company had $439.3 million of cash and cash equivalents and $250 million undrawn and available under its revolving credit facility.
- Refinancing completed: In August 2021, the Company completed its offering of $500 million aggregate principal amount of 6.25% senior unsecured notes due 2029 (the "senior notes") and on October 15, 2021 entered into a $250 million amended and restated senior secured credit facility ("Fourth ARCA"). Eldorado used, in part, the net proceeds from the offering of the senior notes to redeem the outstanding $234 million 9.5% senior secured second lien notes due June 2024, and to repay all amounts outstanding under its prior term loan and revolving credit facility. The issuance of the senior notes and entering into of the Fourth ARCA provides Eldorado greater financial flexibility to pursue a broader range of financing alternatives for the development of the Kassandra assets in Greece.
- Sale of Tocantinzinho Project: On October 27, 2021, the Company completed a sale of the Tocantinzinho Project, a non-core gold asset. Eldorado received $20 million in cash consideration and 46,926,372 common shares of G Mining Ventures Corp ('GMIN'). Deferred cash consideration of $60 million is payable on the first anniversary of commercial production of the Project, with an option to defer 50% of the consideration at a cost of $5 million. The project has been presented as a discontinued operation following the sale and a net loss of $60.8 million reflects a reduction of fair value to the amount of upfront cash and share consideration, less estimated costs of disposal.
- Suspension of Mining at Stratoni: On October 15, 2021, we announced that operations at Stratoni will be suspended in Q4 2021. The mine will be placed on care and maintenance while exploration drilling continues with the goal of expanding reserves and resources. We will evaluate resuming operations subject to exploration success and positive results of further technical and economic review.
- Measures remain in place to manage the impact of the COVID-19 pandemic: The Company's mines remain fully 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.
| (1) | 2020 and YTD 2021 amounts have been recast to correct an immaterial error related to an understatement of the net book value of certain of our property, plant and equipment as a result of errors in the amounts recorded for depreciation. See Note 2(c) of our Unaudited Condensed Consolidated Interim Financial Statements. |
| (2) | 2020 and YTD 2021 amounts have been restated for a voluntary change in accounting policy to classify cash paid for interest on the statement of cash flows as a financing, rather than an operating activity. See Note 3(c) of our Unaudited Condensed Consolidated Interim Financial Statements. |
| (3) | From Q3 2021, the Brazil Segment is presented as a discontinued operation. See Note 5 of our Unaudited Condensed Consolidated Interim Financial Statements. Amounts presented are from continuing operations only. |
| (4) | These financial measures or ratios are non-IFRS financial measures or ratios. See the section 'Non-IFRS Measures' for explanations and discussion of these non-IFRS financial measures or ratios in the September 30, 2021 MD&A. |
“In the third quarter of 2021, the Company recorded strong, safe operational performance led by higher production at Kisladag, resulting in a solid quarter of cash flow generation,” said George Burns, President and CEO. “To reflect the strong production in the first nine months of the year, we increased our 2021 production guidance by approximately 6% to 460,000 to 480,000 ounces. Our organic growth projects at existing operations remain on track with the Kisladag HPGR and Lamaque decline projects expected to be completed in the fourth quarter, allowing us to realize the benefits of these projects early next year."
"We continue to move forward with de-risking the Skouries project. We refinanced our senior notes at 6.25% and executed a $250 million amended and restated senior secured credit facility. We have structured both the senior notes and the credit facility to provide Eldorado greater financial flexibility to pursue a broader range of funding alternatives for the development of the Kassandra assets in Greece."
"With operational results outperforming our expectation in the first three quarters of 2021, our financing position remaining solid, and numerous upcoming catalysts expected in the fourth quarter, Eldorado remains well-positioned to provide additional growth and value creation in the future."
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