Eldorado Gold (EGO) 28 Oct 222022 Q3 Earnings call transcript

Thank you for standing by. This is the conference operator. Welcome to the Eldorado Gold Third Quarter 2022 Financial and Operational Results Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Lisa Wilkinson, Vice President, Investor Relations. Ms. ahead, go Please Wilkinson.

and our everyone. call. third operator, welcome like you to quarter good you, I'd morning, to Thank results conference

the we as in statements in form. and like factors will would in Please non-IFRS refer risk measures begin, measures you cautionary call. well and Before we statements analysis our the the that on included during to the discussion be presentation out referring as our information and remind forward-looking as management's to well to the non-IFRS set making annual I disclosures

Joining the available President President Officer; Vice me on leadership senior the the and Executive call Phil for Financial today, also session. Q&A Executive of we Dick, and have team will Chief and George Executive Vice Burns, Joe Chief Operating Chief President Officer. be and Yee, members Officer; Other

discussion release and results details statements in with financial dollar been our Our third be SEDAR They dollars filed which have our stated. and figures also website. All operating management's analysis, XXXX quarter unless financial read our are This should are U.S. available today conjunction and otherwise on yesterday quarter discussed on EDGAR. both of third results. and

webcast. be the that will slides We accompany to this speaking

call to can analysts the queue You our we for Q&A. to for copy I will over slides open call George. invite website. these questions. prepared now from a download of After the we time, the turn remarks, At will will this

Lisa, and everyone. Thanks, morning, good

I'd strategic long-term questions kick that to helping focus operational and like Joe our to highlights Here's through our create by financials to Then passing we review off will Phil the open call overview our for it stakeholders. us go from a are brief of many areas QX outline today's highlighting before performance. value our results and provide for call. I'll the the to to analysts.

this which I our new demonstrate our month, We're Skouries end at a in resources growth the will Earlier with the an exploration of moment. is financing the operational released XXXX speak success. at for to also priority of top Ormaque, year, that by the Olympias. delivering we to on significant both potential increase Our guidance exploration focused existing and update operations and completing Efemçukuru through results

After production. production the been in improvements, able teams to improved a that quarter. challenging Moving our results report and site again our to deliver year, pleased start to to the have I'm third sequential

and which production Eldorado of in track We fourth see year operations will detail is expect continue to ounces guidance the the throughout call. the on to trends range. in of more the production remains XXX,XXX at low operating speak year later Joe full achieve quarter. improve in consolidated end the strong to our

Now touching on costs.

previous Year-to-date, experienced noted to increases and pressures the we key have Russia. sanctions in inflationary Türkiye, quarters, on commodities and consumables pressures in for As wider we continue supply face we inflationary and impacts similar market. imposed chain a issues the of to as cost of global result

will have key increases important that the the requirement. focus at Shifting speak representing the to lira, into construction a later full Canadian have path in In to is partially Turkish letter and by cost Eldorado. we local credit for a Phil entered Skouries mandate committee with remains of Greek the a costs announced weakening in we detail an of banks of development letter million Securing step euro this XX% The currencies dollar. Skouries. denominated from However, approved project the mandate for on facility September, finance more funding EURXXX the our financing project in been Skouries. total restart to offset call.

to into the expect negotiating documents see conditions. to to And Board bring remains full the driven and the several estimate final cost construction Skouries approval, advancing the on remain progress in and subject which of binding and restart making decision project capital financing approvals loan are year. We production, We to the $XXX definitive other facility project factors. the million end we commercial before of confident by key

most is activities. First, in this installed the processing equipment steel on project is or half major readiness the built already and and execution erection processing with the year Productivity critical purchased and of closure focused storage. path facilities,

escalation. be Second, related looking capital at to what half the labor, on impacted approximately remaining which the less is is by completed left to is project,

Third, largely the place. in highly team is capable execution

to Canada and investors communities, customers, of the XX turn stakeholders. closure we against are to in Phil and to our as of by are stop recognized relationships over are our Knights. of sustainability Corporate the is Corporate At approach in access finally, things Canada construction we capital evaluating local year's And ensure do Being I for as our discipline, consider pool commitments. testament year, our we cost we to a positioned for with well this Citizens well the to one end labor in sustainability would will exploration like review a a part sustainability results. Citizens our project we to constantly I'll Eldorado this execute phase. We area ready the everything from the with other progress XX in budget. Best Earlier to financial to ranked positioned was this amongst of in Best be capital making and there highlights. Eldorado, estimate Corporate on

Thank share. After you, Eldorado adjusted quarter of deferred attributable reported million loss X including was a impairment per Certej $X or the a an to everyone. net adjusting a morning, our shareholders financial of of summary George. quarter per of for onetime or net Good to results. $XX and loss related loss provides of million third third $X.XX project, items, quarter loss foreign share. translation tax expense exchange third Slide $X.XX nonrecurring

to by operations million, cash at were in sold were sold. at electricity electricity in third effective negative approximately in quarter by quarter due late and lower in in third Cost prices the commodities XX% in sustaining operating was per average and the in changes certain ounce Türkiye per driven rose primarily costs at Third reagents fuel subsidies, and prices flow price, of mostly XXXX. increases XXXX to market War. and in Electricity government gold for Kisladag. was ounce approximately Electricity rose mine the XX% represented growth investment costs QX and realized Skouries. at price average Free Greece, all-in and performance costs Despite primarily quarter. quarter and continued continued quarter $X,XXX Kisladag following significantly costs consumables, second direct compared operating and Russia-Ukraine Greece the standby Olympias $XXX cash the $XX capital

remain at tax increased electricity XXXX. to deferred available tax We tax Capital was to by Current expense was investment We tax as expenditures expense tax Deferred of driven QX in and XXXX in Income the volatile tax and lower QX expense current were of into in quarter, the comprised million third growth in Greece projects investment of when expense. XXXX euro. the $XX $XX and million in basis compared third QX expense XXXX. a $XX on credits million million in a result Skouries. lira Kisladag continued weakening prices the quarter including cash expect $XX the

we term $XXX end, quarter deposits At unrestricted million. equivalents had of X. Slide to cash, Turning cash and

annual as first interest an year from production, G months in a capital by of and spending, payments, of Mining. balance investment payments lower royalty cash nine cash the result impacted the was Our scheduled operations in lower generated

through operational focus to We flexibility the provides position a continue Joe it solid will that, go our on across to value highlights. maintaining With to to financial over I which business. turn unlock now

Thanks, Phil, and to health good morning. start like with the I'd update. safety and

part total a recordable Workplace X.XX very Mining Health engaged with our Safety was the Quebec workplace. our and harm of frequency to And on continue great quarter third injury this Lamaque improve Trophy. for Association that proud in year-over-year recently, of the We I'm as to of rate culture demonstrates members it X.XX. safety our commitment to the . operation recognized accomplishment an team zero focused building the Eldorado as from

quarter sold. XXX,XXX $XXX the of a operating cash results. gold We operating ounces our to produced of in ounce Moving per cost third with

a third over Türkiye. third operations X at production increased the quarter, Kisladag performance to per strong Tons Olympias. Kisladag, more ounces, increase, operating in in the which looks detail. expected is and quarter performance positively costs sold. in by operational Our were production on the Slide quarter second from increase XX,XXX in ounce $XXX quarter cash last to continued gold to and was impact XX% at Kisladag At improvements Starting driven compared our placed quarter. fourth the

North leach increase in be in Kisladag on investing materials we the handling heap project, which of us part to will that operational are to track allow is the system a quarter. throughput, fourth As higher-capacity

and consistency a treat the purchased improve drum of an quality, pad. permeability to agglomeration will We HPGR have on also finer product split the which

engineering commissioned average Reserve half gold incorporated now confident XXXX the that encouraging previously production is resource quarter are Kokarpinar costs line was Efemçukuru, progressing outside agglomeration with to XX,XXX we month, were of XXXX target drilling have gold We results Bati focused Resource $XXX and operating site systems. at highlight third the expectations. announced and this the will first Resource of into the at and And drilling Mineral throughput potential systems we sold. cash drum and and moving the growth the per well. vein production conversion Gold the be Earlier is Kestanebeleni Update. as Lamaque. untested vein grade At results at that in ounces Kokarpinar equipment has and West Efemçukuru in vein will ounce from our Mineral area on Efemçukuru on

Resource continue June year current to X/X meters of $XXX July development production processed and to XXX next progress Ormaque deposit. Ormaque COVID to in will plan which East exploration gold confirmed remainder through stopes absenteeism the In at upper the was XXXX of Third middle to levels. Production and early XXXX several that deposit the Update. of in this included before per October, from of XX,XXX the August Reserve high-grade to normal year Ormaque and drift released Mineral Results lower conversion include was the be the quarter step-out ounces of Resource to results, sold. to drilling Mineral and least and the exploration high-grade expected of we up the below XXXX, the were of into in veins operating cash drilling continued returning incorporated is of drilling related extensions our will started early conversion resource. Underground meters well. targeting of ounce drilling costs XX,XXX slightly tonnes due

costs and electricity, higher and by higher Finally, gold other third VAT production consumables per charges, Olympias import to operating silver let's metal XX,XXX and was move ounce related Greece. and cash $X,XXX increases were offset fuel sold. partially on Cost from sales. grade to ounces At were quarter revenue base gold

steady were and with months expansion improvements quarter will investment. during grade ongoing and and During stop I'll an six the there the closing Olympias next earn over remarks. turn to production quarter, being and modifications initiatives better approved Olympias back currently George position to for it through implemented EIA along the

Thanks, team.

growth execute turn questions This to Thank and operator I our strategic XXXX operational Looking year. on our analysts. the forward from financing top year, now is guidance, time. to and project our it will of will stakeholders. construction making for the of the delivering for by decision for Skouries to maximize end priorities focus you signing value position remainder our us your well the loan the full on over documents the the and Skouries strategy

[Operator Cosmos CIBC. first with comes Instructions] The question from Chiu

quarter-over-quarter you looks increase year. Could with increase off end a XX% George, my start of mentioned QX? I'll your you're like still about QX us need guidance lower Maybe correct, Joe. as lower targeting that end of maybe in the the a get you the now, drive you you've for that it that mathematics mentioned, If operations guidance. to share guidance. and to is will with long Phil and in it George,

Sure. the Cosmos. question, Thanks for

to on right. in hit quarter yes, XXX,XXX To of that you're quarter. that need the ounces. fourth We around the system, Kisladag. sequential year the are quarter-over-quarter pad. expect fourth been quarter. today, our mentioned one, grasshopper in consistent the we've to Throughout call rates the agglomerate we end a this than So, our will drive to of deliver higher bottom larger improvement. capable our delivering guidance, ounce We've seen What year, up conveyors a XXX,XXX number third Joe conveyance be deployed tonnage and ability And stronger increases using production conveyors. deliver strong which had to we've production, We've higher ramping as

So be going a driver. big Kisladag to tonnage is

in we'll and what in had we significant QX, in both leach also good play We it's really placed we a QX. given placements QX, operation, what grades. fairly tonnes produce a role heap And in

So for in we're again, increase positioned the Kisladag driver, also for definitely stopes key well production. fourth fourth Lamaque, quarter. is high-grade the expected a for quarter,

a see to that quarter progress And Lamaque. at to we expect on out and mine good and delivers steady expect that making I operation. in, So Efemçukuru quarter that strong our are transitioning on again. Olympias quarter then happen transforming

fourth a good So we’re there quarter well. expecting as

George. Great. that, Maybe two on follow-ups

As you how Quebec. been COVID-related we're also of absenteeism mentioned, that's once a MD&A the in there's resolved. a a QX. I bit is it was higher in you again. don't but mentioned some is now Columbia? guess I there since Lamaque, expecting mine Ontario, COVID In know surge in QX, British in the But in today,

in have And concerned you happening you are, are if of what about at all So plans in absenteeism COVID-related you QX? kind contingency that place? do again,

globe, our QX, bit of did QX, impact our has but this COVID in business. material a no the impacted including bump were Definitely, a Yes. we at significantly. definitely around We an In issue operations. see been on year

with sure have to if reduce to you we're don't fourth Joe, add I to protocols a We well anything have know continue I quarter. to stop be ready that. transmission, to strong think to and our try positioned but

labor in quarter. much, say contractors fourth engaged in George. additional we in have too would Lamaque, as particular, I necessary for Not support

a So that situation. in coped necessary may become

some then place MD&A Great. debottlenecking And in is agglomeration need in Kisladag, that you how of the you is going? question. you're And was also That's How place? that agglomeration place agglomeration in those in and XXXX higher-capacity mentioned circuit. do mobile Again, conveyors good MD&A, you XXXX. last going? debottleneck in that hear, jobs in getting one the to late fully the To circuit, Joe. some mentioned there some in that as

that Yes. and thing good Maybe the year leach, key start to is learned just heap Kisladag permeability key. that the a on that the to we is the I'll off really agglomeration permeability one through is this pad, get say

a it's during good cycle. matter a fines And to up hold agglomerate build so of together leaching and the that can stick getting the

to year. in to point, the informed continue job full to we'll that's good I very this unfold. on market and and operation, tell expected effective be an with quality capital the And as a drum be you, able that stream doing agglomeration understand expected the result I'd product were higher portion putting even But agglomerate results off next we the that the be the required. allows the to product, at to seeing commissioned as And in the the get Kisladag a belt tonnage first run half drum. to we're and so this think larger that us reach we're effectively then are trajectory those next keep the to But that recoveries recipes take HPGR of agglomeration of year, And the by at higher conveyors through investment. that in Having a the able rates. fines of think just agglomerate we're going we're capital in Again, of we investment. potential we'll

So it's upside about the beyond me, we originally for what's expected. -- what it's

feed now, right a larger the Maybe belt Of This are seven improved that's week Joe. helps upgrade, bit. place. new end them in of us the a in but conveyor and really handling to to now. is it stacker the materials does just first We and now, up QX. add of agglomeration support We're had little the at seven commissioning bit November. of four as grasshoppers with That throughput, the over we're horizontal

be lower a due one That's taxes. to came terms maybe for think continue complications part, taxes. of everything estimates. us and loss. financial to of recorded was The I there just side. Taxes, adjustments foreign It's that $XX QX challenging. is Anything go in out I adjustments you terms in off aware expected, million with some deferred million you that last into getting when to consensus these of of? going in I think through anything think, QX? in hear. with in exchange than there's we terms what taxes the Is Great. I earnings $XX had that and always been earnings write-downs else. that that's question good Because help you on And should can side lot of of -- a quickly the it are know But the

Yes. It's issue I'll an your quarter, comment definitely in let and the third on Phil questions.

Hi, Cosmos. Yes.

your question think I very valid. is

by had in our the our impacted lower was And by by dropping -- FX, on your of sorry, our income the earnings as example, was as share Our really have to higher the taxes be, an that comment the impacted we tax, the performance a effect deferred QX, in mainly gold QX of was in in depreciation. quarter on we it QX, didn't timing and to you as credit compared the slight also impacted year. taxes or concentrate it sales well our which we QX price QX. It per gold results investment out. were much last [XXXX] a And terms But in for had expected tax same price we was in was as as -- to financial of did impact. pointed had where effect compared reason an offset to difference --

mining Turkey our expense. affects only income current that So and tax pay in on tax We the Quebec earnings duties. in

lira, the tax the the the Canadian of as out impact adjusted the is impacted as but side, euro, of weakening weaker currency it's EPS. well On by the really FX, both deferred weakening dollar tax deferred

know So your helps I of you in if terms that don't modeling.

depreciation depreciation, quarter the per increase per a ton tonne as in is Cosmos one unit of on I And the in of -- over mined in calculated mined. basis increase more has really in resulted basis we -- a slight the of depreciation. think on production terms just comment

with The Instructions] from comes Mike Financial. [Operator next Bank question National Parkin

and looking what XXXX up that? Olympias, Specifically basis, it's a that quarterly on at And refining to was of If Olympias on average or refining driving the ease kind reported into at compare remain costs, What's you XXXX that for of both costs elevated? off I'm XXX%. Efemçukuru. if I expect to QX, do

that? you want to take do Phil,

So in it's really costs, to terms concentrate of the sales. our tied refining

additional been away portion VAT. that the order this the our the really is that. of still sale on concentrate year in progressing for to the to has divert sales reason of strategy Chinese concentrate by as We're increase Our the bypass I from But the think impacted are much smelters Chinese VAT. contracts

same Efemçukuru as And that's the for well?

No, affect VAT. not it's not -- by Olympias. that it's is Efemçukuru's impacted doesn't -- only Chinese the concentrate

million noticing just similar of Well, of was sitting was like pretty you got million at I million, X.X in QX. but kind Okay. all XXXX it's delta were a QX, and was actually X.X it an low, year-to-date. X.X XXX% around then in average QX of

So driving what's that one?

-- contracts costs it's that and be and the negotiated Mike, together. were suspect are In could costs concentrate were for basically past, restructuring but would separate blended was the -- that's this, That for refining the sales can the But I the there the to shipping of set way sales. I the confirm XXXX, up. due from they

high basically I let level detail. impact. tied look So a it That's bit little to payability to more answer. that in will you think, into get me But and is further the my,

That Okay. good... sounds

is George. This

to that with is are costs our customers. I up thing add of electricity would one that Just most

for higher on there to concentrates they're electricity are costs the through So buying? they're passing

The Tanya Scotiabank. next Jakusconek from question with comes

that over been competitors I've your have. inflationary days on last -- company to comment That's labor are and/or relief have Or several seeing. Are of cetera. pressures pressures. you the transportation, that few what first in consumables, calls various and I can back been two hearing wanted I circle seeing yourself? question. you in my on on are Just inflationary just et of some you seeing portions

our basis my Tanya. consumables costs look and our at are some mean, perspective, a electricity, U.S. Thanks, from you higher sites, Yes, I if across freight. dollar

others probably in costs. And energy some given more an And bit still on higher crisis, that's a due gas being sheltered we're more than pretty with impacted energy in is there driven that, off and say that, Europe. much we're on Turkey electricity I'd area dollar. of volatility Greece where most U.S. that of those the our we are of unfolding see and natural the to costs going mean being the forward prices still stronger I beyond

next dollar that. probably to real being yes, inputs. year, I we're I'd new our works just to Europe energy Phil concern a balance looking And of the forward so going is a U.S. basis, cushioned how from crisis energy And guess is during say, on add while and unfolds

Thanks, Hi, Tanya. George. Sure.

-- electricity volatile. effective fairly So In providing saw we the to QX in I from of the XX% are been the notable to of in despite different Greece, it's they're the went been lower in But in And most beginning you of QX. each was would it government price last down has in Gap] a what the and did what back if inflationary probably place. QX electricity say the from go QX, year. QX and is effect in XX% of about the Greece, the And the up quarter, impact in [Audio in go that subsidies price is that cost Turkey impact subsidy since the the program jurisdiction.

costs. Turkey, that been XX% point prices electricity out down. So would prices of at volatile. our consolidated it's at is they But about I Kisladag, operating electricity But for Efemçukuru somewhat up. went Eldorado overall In went

the subsidies, QX, we on Like said, not the QX, think end and impact volatile. it month into we're So and one in I is seeing but is seeing it's don't that we're only electricity terms it's information decline. -- in -- I the only start to overall, have gross Greece all October, right of the now in we're of of yet price what the we're

reduction -- in diesel. Kisladag, it's item to operating prices XX% at really cost QX and an is X% the only of The total from is diesel impacts QX. about other we Kisladag, see but Diesel did

relief in you that explosives Are cyanide and about containers else with price, seeing lower the that any any be anything what relief to? And also seeing at you are you lower. point consumables? must with must fuel Freight would Okay. in be all? Like others

Yes.

reagents main increase, X% QX. about other? of QX that is from the heap with was saw leach impact In the and -- terms We sorry, of a at project. slight the And to again Kisladag what

Okay.

relief seeing is what cyanide not saying? you're So in you're any

Not yet.

Not yet. right. Explosive, All freight?

In terms of our was any of -- of point. not the experiencing earlier, increased suppliers no, we're and this terms -- in the the that seeing are electricity But costs relief made like comment some at well. inputs as

of kind through. being that's So passed

Okay. -- are for for, these? what your -- on I and are do parties project, waiting second are non-definitive side agreements, announced walk just just -- we to surprised agreement. curious you these was And for? close then as what a agreements. making my and are other question with What that the just of agreements what through looking the I'm you was are exactly off with they waiting signing is to it these on what just us your like definitive Can bit

we're wondering place. just get waiting for I'm to So agreements in what these definitive

Tanya. take Sure, that. I'll

So begin we're banks is where I'd familiar who with Greek that negotiating with documents aren't definitive that mining.

hammered that, say a And on so on it nonbinding more coming then how was speed the and Essentially, proceed. was mining. we with legal prior to really were ensuring would project good the it's out I was allow And us to agreement the between of there when we lot most advisers a documents, educating third-party sign that documents out us there, From with to their that going out the understanding and financing. flushed up then hammering document was them to the than and the announced. it we done definitive execute intention and banks that all

call and financial for lawyers would documents. required are this And so those where discussions course language I the our experts out hammering normal final

before collaborative we're the and the -- good that can we year the finished team we'll done and of you, by and get accomplish get of And year. end feeling So atmosphere amongst to tell want our end banks goal. there's parties this I going both the to remain the confident that good a

everything diligence, So any due done? just due to else, finalized, legal left been documents has be diligence other technical

That's correct.

questions that This session have conference the is today. concludes and for all time this today's question-and-answer we the And call.

You may have Thank disconnect participating, you day. lines. pleasant and for a your