Canada’s Eldorado Gold (TSX: ELD) (NYSE: EGO) has reported an increase of 22% in cash operating costs for the three months to June 30 compared to the same period last year, and expects a 9% jump in costs per ounce sold, which has prompted the miner to revise its consolidated cost guidance for the year.
The company now expects operating costs to reach between $700 and $750 per ounce sold, while total cash costs were placed at the $790 to $840 range per ounce sold. All-in sustaining costs (AISC) in turn, are expected to be between $1,180 and $1,280 per ounce sold.
The Vancouver-based miner attributed the ballooning figures mainly to lower than expected gold production in the first half of the year, continued inflationary pressures, and additional costs associated with the import charges on Olympias gold concentrate shipments into China.
Over the past few days, major miners including Newmont, BHP and Rio Tinto have also flagged the effects of inflationary pressures and labour crunch on their results, adding they expect these markets conditions to continue into 2023.
Gold miners have been particularly hit by a drop in bullion prices, which just had their worst quarter since early 2021. Gold fell nearly 7% in the three months ended June, as a firm dollar and aggressive rate hikes eroded the appeal of the non-yielding asset.
Eldorado also kept its 2022 production forecast unchanged at 460,000 to 490,000 ounces, though it expects to end the year in the lower end of the range.
It produced 113,462 ounces of gold in the second quarter of the year, an increase of 22% from Q1 output, driven by strong production and mine development at Lamaque underground mine in Quebec, Canada.
Chief executive officer George Burns highlighted progress made at the company’s Skouries gold-copper mine in northern Greece, which has been halted since 2017.
The asset’s development in has been hindered in the past by both government delays in issuing permits and community opposition over the possible environmental impacts of gold mining in a densely forested area.
Greece and Eldorado, the country’s biggest foreign investor, inked a new investment contract in early 2021, allowing the company to move forward with Skouries.
The agreement also paved the way for the reception of the miner’s long-awaited permit for the use of dry stack tailings disposal at the project.
Eldorado has since focused on resuming construction at Skouries, which has reserves of 3.7 million ounces of gold and 1.7 billion pounds of copper.
“Considerable progress was made at Skouries during the quarter, with activity focused on execution readiness and critical path activities in engineering, procurement and site enabling works,” Burns said.
The miner is aiming to resume construction at the project in the second half of the year, as it continues to work on a financing package.