Eldorado Gold(EGO) - 2023 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a net loss attributable to shareholders from continuing operations of $6.6 million or $0.03 loss per share in Q3 2023, impacted by a retroactive 5% corporate tax rate increase in Turkiye [59] - Adjusted net earnings were $35 million or $0.17 per share for the quarter, after accounting for one-time nonrecurring items [59] - Cash operating costs averaged $698 per ounce sold, with all-in sustaining costs averaging $1,177 per ounce sold, reflecting a decrease due to lower fuel and electricity prices [34][61] - Free cash flow in the quarter was negative $19.3 million, but positive $30 million when excluding capital investment in the Skouries project [60] Business Line Data and Key Metrics Changes - At Kisladag, Q3 production was 37,219 ounces with cash operating costs of $622 per ounce sold, a 17% reduction in cash costs compared to Q3 2022 [2] - At Lamaque, Q3 production was 43,821 ounces at cash operating costs of $624 per ounce sold, impacted by slower underground development due to wildfires [71] - At Olympias, Q3 production was 18,848 ounces with cash operating costs of $885 per ounce sold, showing improved productivity efficiencies [45] - At Efemcukuru, Q3 production was 21,142 ounces at cash operating costs of $817 per ounce sold, with expectations for a modest increase in Q4 production [42] Market Data and Key Metrics Changes - The company updated its full-year guidance, tightening gold production expectations to between 475,000 and 495,000 ounces, and lowering cash operating costs to between $730 and $780 per ounce sold [27] - The availability under the revolving credit facility was reduced to $116 million as of September 30, 2023, reflecting the funding commitment for the Skouries project [36] Company Strategy and Development Direction - The company is focused on completing key contracts and advancing growth projects, particularly at Skouries, which is on track for first gold production in mid-2025 [28][66] - The transition of engineering work to Greece is expected to optimize project execution and reduce costs [55][79] - The company is committed to improving emissions-related impacts and enhancing resilience in response to climate change [29][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational improvements and the ability to meet production guidance, citing infrastructure investments as a game changer [84] - The company anticipates continued improvement in underground operations and productivity, particularly at Olympias and Kisladag [85][88] - Management noted that external market factors have contributed to volatility but emphasized that internal operational controls are improving the overall position [15][84] Other Important Information - The company hosted a successful investor and analyst mine tour, showcasing productivity improvements and future opportunities across its European assets [30] - The Skouries project is advancing well, with construction activity at 34% completion and expected to ramp up further [64] Q&A Session Summary Question: How does the change in CapEx for Skouries affect the delivery schedule? - Management indicated that the reduction in CapEx is primarily a shift in timing and does not impact the overall schedule, with confidence in meeting the commissioning timeline for mid-2025 [48][77] Question: Will transitioning engineering work to Greece result in permanent cost savings? - Management confirmed that moving engineering work to Greece has improved cost structures and efficiency, with no risks to the project schedule [79][90] Question: What is the status of long lead items for Skouries? - All long lead items are ordered, with no concerns regarding schedule delays, and the last major piece of equipment, the filters, is on track for site assembly [121] Question: How are the electric trucks performing at Lamaque? - The electric trucks are expected to enhance productivity significantly, with a quick battery change time of about two minutes, improving operational efficiency [125]