Eldorado Gold swings to profit, maintains guidance

31st July 2020 By: Marleny Arnoldi - Creamer Media Online Writer

Canadian miner Eldorado Gold has advised that all its mines are fully operational, with safe working practices in place, and has maintained its guidance for the year at between 520 000 oz and 550 000 oz.

The company produced 137 782 oz of gold in the second quarter, which was a 50% increase on the 91 803 oz produced in the second quarter of last year, and a 19% increase compared with the first quarter of this year.

Eldorado generated free cash flow of $63-million in the quarter under review, which is significantly higher than the $4.8-million cash flow generated in the second quarter of last year, owing to higher sales volume and a higher gold price.

All-in sustaining costs were lower year-on-year at $859/oz in the quarter under review, compared with $917/oz in the second quarter of last year.

Eldorado reported adjusted earnings attributable to shareholders in the second quarter of $43.8-million, or $0.26 apiece, compared with a net loss attributable to shareholders of $3.5-million, or $0.02 apiece, reported in the second quarter of last year.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) were $131-million in the quarter under review, compared with $74.5-million in the prior comparable quarter.

Adjusted Ebitda in the second quarter was $135-million, compared with $66.8-million in the prior comparable quarter. Adjustments included share-based compensation and losses on asset disposals.

Meanwhile, during the second quarter the company started construction of a 3 km decline at the Lamaque project, in Quebec. The underground decline will connect the Sigma mill to the 405 m level of the Triangle mine.

The decline will eliminate surface ore haulage, reduce energy requirements for mine ventilation and enable reduced exploration costs.

The company expects the $24-million decline to be completed in the first half of 2022.

Eldorado currently has $440-million of cash, cash equivalents and term deposits available, as well as $35-million in a revolving credit facility.

The company repaid $33-million of its debt in the quarter under review.

Eldorado president and CEO George Burns comments that the company’s outstanding operational performance during the quarter has positioned it to continue generating significant value for shareholders, even while managing Covid-19, including by strong quarterly production and lower AISC.

The company has mining and exploration operations in Turkey, Greece, Canada, Romania and Brazil.