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Eldorado changing gears to restore annual gold output to over 600,000 ounces

Eldorado Gold Corp. filed updated technical studies for its Skouries, Lamaque, and Kisladag gold projects as it looks to "restore" its annual gold production to over 600,000 ounces, compared to 292,980 ounces in 2017.

The company said March 21 that utilizing filtered dry stack tailings at the Skouries project in Greece would decrease its footprint by about 180 hectares, or 40%.

The study pegged a posttax net present value, or NPV, discounted at 5%, of US$925 million, a 21.2% internal rate of return, or IRR, and a 3.4-year payback period.

The capital cost is estimated at US$689.2 million, including a US$87 million contingency, to develop the open pit and first phase of the under operation. The capital cost includes an improvement in the water management infrastructure as well as the tailings filter plant.

Project construction will start after the receipt of necessary permits and is expected to take about two years.

Skouries is expected to annually produce an average of 140,000 ounces of gold and 66.9 million pounds of copper over its 23-year life. The average all-in sustaining costs, or AISC, are expected at US$215 per ounce.

The new study includes updated proven and probable reserves of 3.8 million ounces of gold and 1.7 billion pounds of copper.

Eldorado put the Skouries project on care and maintenance in November 2017, citing permitting delays for the flotation plant and the relocation of antiquities at the Skouries site, among other issues. The company also initiated legal proceedings against Greece to enforce and protect its legal rights.

Meanwhile, a prefeasibility study for the Lamaque project in Quebec and refurbishment of the Sigma mill in Canada estimated a posttax NPV, discounted at 5%, of US$205 million, a 34.3% IRR, and a 3.7-year payback period.

A preliminary economic assessment at Lamaque, completed by previous owner Integra Gold Corp., pegged a posttax net present value, discounted at 5%, of C$362.5 million with a 43% internal rate of return and a 4.2-year payback period.

The net start-up capital cost is estimated at US$99 million, including capital cost of US$122 million and pre-commercial production costs of US$57million, which will be offset by US$80 million in pre-commercial gold sales.

Development will target the Triangle deposit, where a maiden reserve of 893,000 ounces will support an initial seven-year mine plan. Average annual production is estimated at 117,000 ounces of gold at AISC of US$717 per ounce.

An outstanding permit for ore processing at the Sigma mill is expected in the third quarter this year with the mill start-up estimated by the start of 2019.

A prefeasibility study at the operational Kisladag mine in Turkey identified construction of mill as the preferred solution to optimize project value, estimated at a cost of US$490 million.

The study estimated a posttax NPV, discounted at 5%, of US$434 million, a 22.1% IRR, and a 3.7-year payback period.

Over its nine-year mine life, Kisladag will have average annual production of 270,000 ounces of gold at AISC of US$778 per ounce, based on proven and probable reserves of 3.1 million ounces at 0.82 g/t of gold.

Kisladag is estimated to produce between 120,000 ounces and 130,000 ounces of gold in 2018 at a cash cost of US$600 to US$700 per ounce.

A feasibility study at Kisladag is expected in October, and construction is expected to start in early 2019, with commissioning starting late 2020, the company said.

Eldorado narrowed its net loss attributable to shareholders in the fourth quarter of 2017 to US$20.7 million, or 3 US cents per share, from a year-ago net loss of US$32.5 million, or 5 cents per share.