Eldorado defers Turkey, Brazil project development on lower price outlook
Eldorado has reconfigured the pit design at the Kişladağ mine, in Turkey
Photo by Eldorado Gold
VANCOUVER (miningweekly.com) – Canadian multinational miner Eldorado Gold has pulled the plug on two of its development projects in Turkey and Brazil, citing a lower long-term price outlook.
The TSX- and NYSE-listed miner has assumed a more bearish outlook for the gold price to $1 150/oz, from $1 300/oz in September.
This has prompted Eldorado to reconfigure the pit design at the Kişladağ mine, in Turkey, and to indefinitely defer the completion of the mine’s expansion, freeing substantial sustaining capital that would otherwise have been required. Kişladağ output is expected to average 285 000 oz during 2018 and 2019, Eldorado advised.
At 211 161 oz for the year, the Kişladağ mine missed 2016 guidance by 13 839 oz, owing to slower than expected leach rates from certain ore types mined earlier in the year.
Meanwhile, Eldorado also announced that it will defer taking a construction decision at Tocantinzinho, in Bazil, until all permits are in place and with an improved gold price outlook. The company cut the development budget to $35-million in 2017, down from $95-million to $105-million earmarked previously.
Eldorado, which has operations in Serbia, Romania and Brazil, is otherwise on track to start commissioning of the Greece-based Olympias Phase II this quarter and construction at Skouries continuing on track for a 2019 start-up.
In total, Eldorado produced 485 994 oz of gold in 2016 (including production from discontinued Chinese operations and tailings retreatment); slightly lower than the revised third quarter guidance of 495 000 oz.
2016 cash operating costs averaged $578/oz, markedly lower than the original 2016 guidance of $585/oz to $620/oz. All-in sustaining costs are expected to be about $915/oz – also considerably lower than original guidance of between$940/oz and $980/oz.
Eldorado closed the year with total liquidity of about $1.1-billion, including $880-million in cash, cash equivalents and term deposits, and $250-million in undrawn lines of credit, a healthy balance sheet in a lower-price environment.
Eldorado last month announced the planned retirement of president and CEO Paul Wright in April, tapping current Goldcorp executive VP and COO George Burns to succeed him.
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