Eldorado to invest $520 million in mill at its Turkish mine

The mill to be built at Kışladağ (pictured here) will make it a nine-year, 270,000-ounce-per-annum mine. (Image courtesy of Eldorado Gold.)

Canada’s Eldorado Gold (TSX:ELD)(NYSE:EGO) is strengthening its footprint outside Greece, where it has faced ongoing hurdles to advance two major gold projects, by investing $520 million in a mill at its Kışladağ gold mine in Turkey.

The project would make of Kışladağ a nine-year, 270,000-ounce-per-annum mine. Currently, it’s a heap leach operation, but Eldorado ran into major recovery trouble last year and will now “reboot” it with a mill in late 2020, with production expected in the first half of 2021.

The Vancouver-based company also said it is getting closer to open its first mine in Canada, the Lamaque project in Val d’Or, Quebec, which the miner grabbed after acquiring Integra Gold last year. It noted it received a certificate of authorization for the operation of the Sigma Mill at the site during the quarter.

The Kışladağ mine is a heap leach operation, but Eldorado ran into major recovery trouble last year and will now “reboot” it with a mill in late 2020.

Lamaque, which gives Eldorado an operating asset in its home country, will be an underground gold mine with an annual output of 123,000 ounces of the precious metal at all-in sustaining costs of $634 per ounce over 10 years. Production is scheduled to begin in early 2019.

In Greece, where earlier this week an anarchist group attacked the Canadian embassy for supporting Eldorado’s mining plans in the country, the company is still trying to engage the government in “constructive dialogue” about its investments, it said.

Last month, the miner announced it would be seeking €750 million (about $850m) from the government in compensation for the financial impact of delays in the issuance of permits for its Skouries project, including damages for out of pocket costs and loss of profits.

This is not the first time the company has tried pressing Greece to act in its favour. Eldorado took a tough stand with Greece last November, freezing investment and halting operations in Skouries. It said at the time it would re-assess the decision only after receiving all required permits, coupled with a “supportive government open to discussions” regarding the use and implementation of best available technologies at the project.

The miner also initiated legal actions against the government in order to enforce and protect its rights in Greece. The measures include three lawsuits against Minister Stathakis for failing to issue routine installation permits, which Eldorado said caused unjustifiable delays to the development of Skouries.

Q3 results snapshot

The company reported Thursday a loss of $128 million in its third quarter. It said it had a loss of 16 cents per share. Adjusted for non-recurring costs, the figure came to 3 cents per share.

Revenue in the three months to Sept. 30 stood at $81.1 million, an almost 15 percent drop when compared to the third quarter last year.

Gold production in the period increased to 84,783 ounces from 70,053 in the same period last year and included 13,430 ounces from Lamaque pre-commercial production.

The company’s shares remained mostly flat after the announcement. They closed Thursday at C$1.04 in Toronto and 82 cents in New York, where a year ago, they were trading at $1.30.