Shares in Canada’s Eldorado Gold (TSX:ELD)(NYSE:EGO) jumped 12.6% in pre-market trading in New York on Thursday on the news that it will resume mining and heap leaching at its Kışladağ gold mine in Turkey.
The Vancouver-based miner noted it would halt a previously announced $520 million-project to build a mill on site. The facility would have made Kışladağ a nine-year, 270,000-ounce-per-annum mine.
Ore extraction at the gold operation is expected to resume by the end of April, with production forecast to reach between 145,000 and 165,000 ounces this year. The figure represents nearly 40% of the company’s total full-year guidance of 390,000-420,000 ounces.
The decision to resume mining and heap leaching at Kışladağ, said the company, follows improved heap leach recoveries and a revised heap leaching plan, resulting in “favourable economics when compared to milling without the risks associated with the construction and financing of a $500 million project.”
As operations ramp up in 2019, the miner foresees consolidated gold production climbing to 520,000-550,000 ounces in 2020 before dropping to 350,000-380,000 ounces the following year.
Last week, Eldorado announced it was getting closer to opening its first mine in Canada, the Lamaque project in Val d’Or, Quebec, which it grabbed in 2017 through the acquisition of Integra Gold.
“Beyond completing remaining construction at Lamaque, Eldorado has no major capital projects under way and will remain focused on existing operations in order to realize the full potential from these assets,” president and chief executive officer George Burns said in the statement.
Lamaque, which gives Eldorado an operating asset in its home country, will be an underground gold mine with an annual average output of 117,000 ounces of the precious metal at all-in sustaining costs of $717 per ounce over seven years.