Eldorado to hike gold production to over 500,000 ounces in 2020 Cecilia Jamasmie |
Kisladag is the largest gold mine in Turkey. (Image courtesy of Eldorado Gold.)
Shares in Canada’s Eldorado Gold (TSX:ELD)(NYSE:EGO) climbed on Friday after the miner said it is ready to grow its yearly output to more than 500,000 ounces next year, supported by the restart of its Kisladag gold mine in Turkey, and the soon-to-be coming online Lamaque project in Canada.
The Vancouver-based miner cancelled plans last month to build a $500-million processing mill at Kisladag, deciding to resume mining and heap leaching instead.
The resumption of mining and heap leaching at the Kisladag gold mine in Turkey should provide the opportunity to consider initial debt retirement later this year. The decision may not have been entirely voluntary, since Eldorado has almost $600 million in debt due in 2020. The company is building its first mine in Canada — the Lamaque project in Val d’Or, Quebec — and it had only about $287 million in cash on its balance sheet at the end December.
When it comes to output, however, Eldorado had a good year, generating 349,147 ounces of gold in 2018, which include 35,350 ounces of pre-commercial production from Lamaque. The figure is significantly higher than the previous year’s output of 292,971 ounces and its original 2018 guidance of 290,000 to 330,000 ounces.
For 2019, the gold company expects to produce between 390,000 and 420,000 ounces, it said while delivering its financial year-end results.
While Eldorado generated $459 million in revenue from its operations in 2018, it also registered impairments adjustments of almost $448 million related to Olympias, in Greece, and its Turkish mine, resulting in a net loss of $362 million, or $2.28 per share.
The adjusted net loss came to $26.3 million, compared with adjusted net earnings of $15.2 million in the previous year.
Looking ahead, chief executive officer George Burns said the restart of Kisladag and the kick off of commercial production at Lamaque, later this quarter, should allow Eldorado to generate significant free cash flow and provide it with the opportunity to consider debt retirement later this year.
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