Eldorado Gold Corporation (TSX: ELD) (NYSE: EGO) reports the Company’s financial and operational results for the third quarter of 2023. For further information, please see the Company’s Consolidated Financial Statements and Management’s Discussion and Analysis filed on SEDAR+ at www.sedarplus.com under the Company’s profile.

Third Quarter 2023 Highlights

Operations

• Gold production: 121,030 ounces, compared to 118,791 ounces in Q3 2022, a 2% increase from Q3 2022 as a result of the enhanced materials handling circuit at Kisladag, productivity initiatives and associated improvements at Olympias, slightly offset by slower than expected development at Lamaque due to suspended shifts in Q2 2023 as a result of the wildfires in the region.
• Gold sales: 119,200 ounces at an average realized gold price per ounce sold¹ of $1,879, compared to 118,388 ounces at an average realized gold price per ounce sold of $1,688 in Q3 2022.
• Production costs: $115.9 million, compared to $123.5 million in Q3 2022. The decrease was primarily due to lower transport and refining charges and a reduction in unit costs of key consumables such as electricity and diesel in Turkiye.
• Cash operating costs¹: $698 per ounce gold sold, compared to $803 per ounce gold sold in Q3 2022. Cash operating costs decreased from Q3 2022 primarily a result of higher ounces sold, as well as lower treatment and refining costs due to lower zinc sales, and lower VAT on concentrate sales in gold treatment costs.
• All-in sustaining costs (“AISC”)¹: $1,177 per ounce sold, compared to $1,259 per ounce sold in Q3 2022, the decrease was due to lower cash operating cost per ounce sold, partially offset by higher royalty expense.
• Total capital expenditures: $91.1 million, including $27.3 million of growth capital¹ invested at Skouries, with continued focus on construction, engineering and procurement. Further, underground development continued to progress on the west decline and it is on plan to reach the targeted development meters for 2023. Growth capital invested at the operating mines totalled $29.1 million and was primarily related to Kisladag waste stripping to support mine life extension and construction of the first phase of the North Heap Leach Pad. Sustaining capital¹ totalled $31.8 million, including $18.0 million at Lamaque for underground development, equipment rebuilds, and the expansion of the tailing management facility.
• Production, cost, and capital expenditure outlook: The Company is updating its 2023 annual gold production guidance, cost guidance, and capital expenditure guidance to narrow the ranges, reflecting updated full-year expectations given the operational and financial performance to date.
  • Gold production is expected to be 475,000 to 495,000 ounces of gold, from 475,000 to 515,000
  • Cash operating costs per ounce sold range lowered to $730 to $780, from $760 to $860, primarily due lower unit costs for fuel and power, and a weaker Lira and Canadian dollar.
  • Total operating costs per ounce sold range lowered to $830 to $880 per ounce sold, from $860 to $960, primarily due to lower operating costs.
  • AISC per ounce sold is expected to be $1,190 to $1,240 per ounce sold, from $1,190 to $1,290.
  • Growth Capital Investment in 2023 lowered to $280 to $305 million, from $394 to $437 million, including:
    • Lowering Skouries Growth Capital Investment to $160 to $170 million from $240 to $260 million, as described below within Skouries section.
    • Lowering other Growth Capital Investment to $120 to $135 million from $154 to $177 million, primarily driven by deferral of projects to 2024 at Lamaque and Kisladag.

Financial

• Revenue: $245.3 million in Q3 2023, an increase of 13% from $217.7 million in Q3 2022, primarily due to higher sales volumes at a higher realized gold price.
• Net cash generated from operating activities from continuing operations: $108.1 million compared to $52.7 million in Q3 2022, primarily as a result of higher revenue and lower production costs.
• Cash flow from operating activities before changes in working capital²: $97.5 million in Q3 2023, compared to $55.8 million in Q3 2022, primarily driven by higher revenue and lower production costs.
• Cash and cash equivalents: $476.6 million, as at September 30, 2023. Cash increased by $20.4 million from June 30, 2023, primarily as a result of cash flow generated from our operations.
• Net earnings (loss): Net loss of $6.6 million, or $0.03 loss per share, compared to net loss of $28.4 million or $0.15 loss per share in Q3 2022. The decrease in net loss was driven by higher operating income on stronger gold sales combined with gains on derivative instruments, partially offset by higher income tax expense.
• Adjusted net earnings before interest, taxes, depreciation and amortization²: $108.7 million, compared to $74.2 million in Q3 2022. The increase was primarily driven by higher revenue and lower production costs.
• Adjusted net earnings (loss)²: $35.0 million or $0.17 earnings per share, compared to net loss of $10.0 million or $0.05 loss per share in Q3 2022. Adjusted net earnings in Q3 2023 added back, among other things, a non-cash loss of $15.2 million on foreign exchange translation of deferred tax balances and removed a non-cash unrealized $6.0 million gain on derivative instruments, primarily on gold collars. Additionally, a one-time deferred tax expense adjustment related to a retroactive income tax rate increase from 20% to 25% in Turkiye of $22.6 million and a one-time out-of-period current tax expense adjustment from the same tax rate increase of $8.2 million (related to Q1 and Q2 2023) were adjusted from Q3 2023 net earnings.
• Free cash flow²: Negative $19.3 million compared to negative $25.7 million in Q3 2022. Free cash flow excluding Skouries was $30.0 million compared to negative $16.5 million in Q3 2022, with the increase this quarter primarily due to higher revenue, lower production costs, lower tax installments and temporary working capital movements, partially offset by an increase in investing activities.
• Project Facility Drawdowns: Drawdowns on the Skouries Term Facility year to date as at September 30, 2023 totalled €106.5 million.

Skouries Highlights

Growth capital invested of $27.3 million in Q3 2023, and $101.3 million year-to-date in 2023. Eldorado is reducing the growth capital investment guidance for Skouries to $160 to $170 million in 2023. The reduced spend in 2023 is not expected to impact the project plan, including cost and schedule, with critical path on track. The reduction is driven by:

• A plan change in awarding several contracts in order to optimize project execution;
• Shifting certain pre-production expenditures from 2023 to 2024 without impact to schedule or progress;
• Transitioning engineering work to Greece; and
• Updated execution approach to major earthworks while maintaining construction schedule flexibility.

Activity in the third quarter focused on construction ramp-up, and completing engineering and procurement. Underground development continued to advance the west decline and it is on plan to reach the targeted development meters for 2023, while major earthworks initiatives include haul road construction to build earthworks structures as well as civil works related to the crushing facility. The project cost and schedule are on track with commissioning in mid-2025 and commercial production at the end of 2025. Upcoming milestones in 2023 include the mobilization of major construction contracts for concrete, process plant piping and electrical works, in addition to finalizing the awards of the remaining major procurement and contract packages to 90% completion and advancing detailed engineering to 90% completion.

Power service installation advanced with the installation of the new substations and distribution to the underground network. Power service upgrades are scheduled for completion in the fourth quarter. Work continues to advance on the water management systems as expected. Mobilization continued related to the first major earthwork initiative for construction haul roads to build earthworks structures. Upcoming milestones for the remainder of 2023 include completing the awards of the remaining major procurement and contract packages, while maintaining flexibility in the construction schedule.

As at September 30, 2023:

• Overall project progress was 34%; on track to be 48% complete by year-end;
• Detailed engineering was 56% complete and procurement was 73% complete, with both on track to be 90% complete by year-end;
• Mobilization continued for major earthworks for construction haul roads to support construction of earthworks structures;
• Mobilized contractor and commenced work on the primary crusher earthworks and pilings;
• Progress advanced on the foundation construction of the primary crusher; and
• Project remains on track for commissioning in mid-2025 and commercial production at the end of 2025.

Corporate

• Sustainability: In August 2023, the Company published its 2022 Climate Change Report, introducing Eldorado’s GHG Emissions Target Achievement Pathway.
• Appointed Senior Vice President, Finance: In September 2023, Ryan Swedburg was appointed as Senior Vice President, Finance.

“Operationally during the third quarter we continued to make progress across our sites,” said George Burns, Eldorado Gold’s President and CEO. “At Olympias, the productivity initiatives that were completed in early July drove a solid quarter and we expect to continue to see further improvements over the coming quarters as those initiatives continue to deliver on their full potential. At Kisladag, the materials handling circuit continues to perform well and we have seen record tonnes placed. In addition, with the new North Heap Leach Pad now under leach, we expect to see increased production over the coming quarters. We are fine tuning the circuit with a focus to potentially increasing recoveries. These initiatives across the sites support our strong outlook for growing production, declining costs and increasing cash flow.”

“In sustainability, Eldorado issued its 2022 Climate Change and GHG Emissions Report which provides our measurable progress toward our GHG mitigation target and enhancing climate resilience. This report built on our first Climate Change Report that was published in 2021 and focuses on our progress implementing our Climate Change Strategy, including our GHG Emissions Target Achievement Pathway, in which we seek to mitigate our Scope 1 and 2 emissions from operating mines by 30% on a 2020 baseline by 2030.”

Consolidated Financial and Operational Highlights

(1)   Attributable to shareholders of the Company.
(2)   These financial measures or ratios are non-IFRS financial measures or ratios. See the section ‘Non-IFRS and Other Financial Measures and Ratios’ of our MD&A for explanations and discussions of these non-IFRS financial measures or ratios.
(3)   Revenues from silver, lead and zinc sales are off-set against cash operating costs.
(4)   Amounts presented for 2023 and 2022 are from continuing operations only and exclude the Romania segment. See Note 4 of our condensed consolidated interim financial statements for the three and nine months ended September 30, 2023.

Total revenue was $245.3 million in Q3 2023, an increase of 13% from $217.7 million in Q3 2022 and an increase of 7% from $229.4 million earned in Q2 2023, both primarily due to higher ounces sold. Total revenue was $704.5 million in the nine months ended September 30, 2023, an increase from $625.8 million in the nine months ended September 30, 2022. The increases in both three and nine-month periods were primarily due to higher sales volumes, and higher average realized gold price.

Production costs decreased to $115.9 million in Q3 2023 from $123.5 million in Q3 2022 primarily due to reductions in unit costs of key consumables such as electricity in Turkiye and Greece, and fuel in Turkiye and Canada. Additionally, transport costs at Olympias were lower as a result of improved shipment logistics. Production costs increased to $344.2 million in the nine months ended September 30, 2023 from $337.4 million in the nine months ended September 30, 2022 primarily due to higher royalty expense and increased sales volumes.

Production costs include royalty expense which increased to $11.5 million in Q3 2023 from $10.6 million in Q3 2022 and increased to $35.3 million in the nine months ended September 30, 2023 from $30.4 million in the nine months ended September 30, 2022. In Turkiye, royalties are paid on revenue less certain costs associated with ore haulage, mineral processing and related depreciation and are calculated on the basis of a sliding scale according to the average London Metal Exchange gold price during the calendar year. In Greece, royalties are paid on revenue and calculated on a sliding scale tied to international gold and base metal prices and the EUR/USD exchange rate.

Cash operating costs³ averaged $698 per ounce sold in Q3 2023, a decrease from $803 in Q3 2022, primarily as a result of higher ounces sold, lower unit costs of key consumables, lower transport costs and lower VAT on concentrate sales in gold treatment costs, which are included in cash operating costs. Cash operating costs per ounce sold averaged $754 in the nine months ended September 30, 2023, a decrease from $807 in the nine months ended September 30, 2022, primarily due to an increase in volume sold.

AISC per ounce sold³ averaged $1,177 in Q3 2023, a decrease from $1,259 in Q3 2022, due to lower cash operating cost per ounce sold, partially offset by higher royalty expense. AISC per ounce sold averaged $1,225 in the nine months ended September 30, 2023, a decrease from $1,289 in the nine months ended September 30, 2022, primarily reflecting the decrease in cash operating costs per ounce sold and lower sustaining capital expenditures, partially offset by higher royalty expense.

We reported a net loss attributable to shareholders from continuing operations of $6.6 million ($0.03 loss per share) in Q3 2023 compared to a net loss of $28.4 million ($0.15 loss per share) in Q3 2022 and net earnings of $14.4 million ($0.07 earnings per share) in the nine months ended September 30, 2023 compared to net loss of $91.1 million ($0.50 loss per share) in the nine months ended September 30, 2022. The decrease in net loss this quarter, compared to Q3 2022, was driven by higher operating income on stronger gold sales and higher gold price combined with unrealized gains on derivative instruments, partially offset by higher income tax expense. The higher net earnings in the nine months ended September 30, 2023, compared to the prior year, was primarily due to higher operating income from the increase in gold sales, higher gold price, lower mine standby costs and write-down of assets, and unrealized gains on derivatives, partially offset by higher income tax expense.

Adjusted net earnings³ was $35.0 million ($0.17 earnings per share) in Q3 2023 compared to an adjusted net loss of $10.0 million ($0.05 loss per share) in Q3 2022. Adjusted net earnings in Q3 2023 added back a non-cash loss of $15.2 million on foreign exchange translation of deferred tax balances and removed a non-cash unrealized gain of $6.0 million on derivative instruments, primarily on the gold collars. Additionally, a one-time deferred tax expense adjustment related to a retroactive income tax rate increase from 20% to 25% in Turkiye of $22.6 million and a one-time out-of-period current tax expense adjustment from the same tax rate increase of $8.2 million (related to Q1 and Q2 2023) were adjusted from Q3 2023 net earnings. Adjusted net earnings in Q3 2022 added back an $18.4 million loss on foreign exchange translation of deferred tax balances.

Quarterly Operations Update

(1)   Revenues from silver, lead and zinc sales are off-set against cash operating costs.
(2)   These financial measures or ratios are non-IFRS financial measures or ratios. See the section ‘Non-IFRS and Other Financial Measures and Ratios’ of our MD&A for explanations and discussions of these non-IFRS financial measures or ratios.

Kisladag

Kisladag produced 37,219 ounces of gold in Q3 2023, comparable to 37,741 ounces produced in Q3 2022. Production in the quarter benefited from successful commissioning of the new North Heap Leach Pad along with continual optimization of fine ore agglomeration and continued usage of larger capacity conveyors which have increased stacking efficiency. NHLP gold recovery and adsorption is in line with expectations and we are drawing down the excess solution and gold inventory caused by the unusually high precipitation event during Q2, with the drawdown to continue through Q4 this year. Additionally, average grade was higher, from 0.72 grams per tonne in Q3 2022 to 0.85 grams per tonne in Q3 2023.

Revenue increased to $75.2 million in Q3 2023 from $65.7 million in Q3 2022, reflecting higher sales in the quarter, and an increase in the average realized gold price.

Production costs decreased to $28.6 million in Q3 2023 from $32.7 million in Q3 2022 primarily due to decreases in unit costs of fuel and electricity in Turkiye as cost pressures of the energy crisis in Europe ease. These impacts were partially offset by higher tonnes processed and gold sold. As a result, cash operating costs per ounce decreased to $622 in Q3 2023 from $752 in Q3 2022.

AISC per ounce sold decreased to $884 in Q3 2023 from $993 in Q3 2022, primarily due to the decrease in cash operating costs per ounce sold.

Sustaining capital expenditures of $5.5 million in Q3 2023 and $10.5 million in the nine months ended September 30, 2023 primarily included equipment rebuilds and mine equipment purchases. Growth capital investments of $18.6 million and $55.9 million in the three and nine months ended September 30, 2023 included waste stripping to support the mine life extension and construction of the first phase of the NHLP, which was commissioned in July 2023.

Production is expected to increase over the course of the fourth quarter as we realize full effectiveness from the upgraded materials handling equipment. Our optimization efforts are expected to drive increased stacking rates. In addition, we expect to recover the ounces that were delayed as a result of the extraordinary rainfall in May and early June.

Lamaque

Lamaque produced 43,821 ounces of gold in Q3 2023, an increase of 3% from 42,454 ounces in Q3 2022. The increase was primarily due to higher ore throughput, partially offset by lower gold grade compared to Q3 2022. Mining disruption caused by the forest fires earlier in the year led to reduced mining faces available for ore production in Q3. Despite this, tonnes processed were 7% higher in Q3 2023 as compared to Q3 2022, which had been affected by COVID-19 related absenteeism in 2022. Average grade decreased to 7.04 grams per tonne in Q3 2023 from 7.28 grams per tonne in Q3 2022.

Revenue increased to $79.1 million in Q3 2023 from $73.1 million in Q3 2022 primarily due to higher average realized gold price, partially offset by lower ounces sold.

Production costs decreased to $26.9 million in Q3 2023 from $28.8 million in Q3 2022, primarily due to lower volume sold in the quarter and lower unit costs of fuel. Cash operating costs per ounce sold decreased to $624 in Q3 2023 from $650 in Q3 2022 as a result of cost savings from a weaker Canadian dollar as compared to the prior year.

AISC per ounce sold decreased to $1,099 in Q3 2023 from $1,106 in Q3 2022 primarily due to lower cash operating cost per ounce, partially offset by lower volume of gold sold.

Sustaining capital expenditures of $18.0 million in Q3 2023 and $52.0 million in the nine months ended September 30, 2023 primarily included underground development, equipment rebuilds, and expansion of the tailings management facility. Growth capital investment of $8.5 million in Q3 2023 and $16.1 million in the nine months ended September 30, 2023 were primarily related to resource conversion drilling at Ormaque and spending on other exploration projects.

The fourth quarter is expected to be stronger as we push development into higher grade stopes.

Efemcukuru

Efemcukuru produced 21,142 payable ounces of gold in Q3 2023, a 6% decrease from 22,473 payable ounces in Q3 2022. The decrease was primarily due to lower grade as planned, a decrease to 5.46 grams per tonne in Q3 2023 from 5.74 grams per tonne in Q3 2022, and slightly lower tonnes milled, which was a result of slightly lower tonnes mined in the quarter.

Revenue increased to $39.1 million in Q3 2023 from $34.3 million in Q3 2022. Lower payable ounces sold was offset by a higher average realized gold price recorded during Q3 2023.

Production costs increased to $20.6 million in Q3 2023 from $17.7 million in Q3 2022 primarily due to a higher proportion of ore production relative to development tonnage and higher royalty expense due to higher average realized gold prices, partially offset by lower unit costs. This resulted in an increase in cash operating costs per ounce sold to $817 in Q3 2023 from $709 in Q3 2022.

AISC per ounce sold increased to $1,205 in Q3 2023 from $1,039 in Q3 2022. The increase was primarily due to the increase in cash operating costs per ounce sold and was partly offset by lower sustaining capital expenditure.

Sustaining capital expenditures of $3.7 million in Q3 2023 and $9.6 million in the nine months ended September 30, 2023 were primarily underground development and equipment rebuilds. Growth capital investment of $1.1 million in Q3 2023 and $4.5 million in the nine months ended September 30, 2023 primarily included capital development and resource conversion drilling.

Production for the fourth quarter is expected to increase slightly over the third quarter as processing rates increase.

Olympias

Olympias produced 18,848 ounces of gold in Q3 2023, a 17% increase from 16,123 ounces in Q3 2022 and was driven by record high mill throughput that was achieved this quarter and the productivity benefits of transformation initiatives that were completed in early July as we continue to ramp up productivity. This was partially offset by lower average gold grade due to changes in stope sequencing in the quarter. Q3 2023 production of by-product metals increased as compared to both Q2 2023 and Q3 2022 across silver, lead, and zinc as a result of higher average grades in the Flats Zone as planned in both the three and nine months ended periods as well as overall higher throughput.

In line with our 2023 guidance, key transformation initiatives are on-going as the mine continues to ramp up productivity. Bulk emulsion blasting was commissioned in June, and we are continuing to ramp up and optimize this initiative through ongoing training and equipment optimization. The Flats Zone is ramping up in ore production while we continue to develop and open up additional access to the ore body.

Revenue increased to $51.9 million in Q3 2023 from $44.6 million in Q3 2022 primarily as a result of higher gold sales and higher average realized gold price. Sales of silver and lead were also higher in Q3 2023 due to higher production in the quarter and successful timing of shipments at quarter end.

Production costs decreased to $39.8 million in Q3 2023 from $44.3 million in Q3 2022 despite increased volumes of throughput and gold, silver, and lead sales, primarily due to productivity efficiencies resulting from recent transformation initiatives, as well as slightly lower unit costs of certain consumables, including electricity. Production costs also benefited from lower transport costs as a result of improved shipment logistics. This resulted in cash operating costs per ounce sold decreasing to $885 in Q3 2023 from $1,466 in Q3 2022, combined with the impacts of lower treatment and refining costs and higher gold ounces sold. Furthermore, some sales were not subject to the 13% VAT paid on sales exports to China, further lowering cash operating costs per ounce sold.

AISC per ounce sold decreased to $1,319 in Q3 2023 from $2,070 in Q3 2022 primarily due lower sustaining capital expenditures and lower direct operating costs per ounce sold.

Sustaining capital expenditures of $4.7 million in Q3 2023 and $11.8 million in the nine months ended September 30, 2023 primarily included underground development and expansion of tailings facilities. Growth capital investment of $0.9 million in Q3 2023 and $4.4 million in the nine months ended September 30, 2023 were primarily related to underground development.

Gold production is expected to be steady over the fourth quarter as the productivity initiatives continue to deliver increased tonnage and higher grades.

Development Project

Skouries

The Skouries project, part of the Kassandra Mines Complex, is located within the Halkidiki Peninsula of Northern Greece and is a high-grade gold-copper asset. In December 2021, we published the results of the Skouries Project Feasibility Study with a 23-year mine life and expected average annual production of 140,000 ounces of gold and 67 million pounds of copper. The project is expected to provide an after-tax IRR of 19% and an NPV (5%) of $1.3 billion⁴ with capital costs to complete the project estimated at $845 million.

Capital investment in Q3 2023 totalled $27.3 million, and $101.3 million year-to-date in 2023, with activity focused on construction ramp-up, and completing engineering and procurement. Underground development continued to advance the west decline and it is on plan to reach the targeted development meters for 2023, while major earthworks initiatives include haul road construction to build earthworks structures as well as civil works related to the crushing facility. The project cost and schedule are on track with commissioning in mid-2025 and commercial production at the end of 2025. Upcoming milestones in 2023 include the mobilization of major construction contracts for concrete, process plant piping and electrical works, in addition to finalizing the awards of the remaining major procurement and contract packages to 90% completion and advancing detailed engineering to 90% completion.

For further information on the Company’s operating results for the third quarter of 2023, please see the Company’s MD&A filed on SEDAR+ at www.sedarplus.com under the Company’s profile.

About Eldorado

Eldorado is a gold and base metals producer with mining, development and exploration operations in Turkiye, Canada, Greece and Romania. The Company has a highly skilled and dedicated workforce, safe and responsible operations, a portfolio of high-quality assets, and long-term partnerships with local communities. Eldorado’s common shares trade on the Toronto Stock Exchange and the New York Stock Exchange.