EX-99.1 2 ego_ex991.htm MATERIAL CHANGE REPORT ego_ex991
 
 
 
Exhibit 99.1
 
ELDORADO GOLD CORPORATION
 
FORM 51-102F3
 
MATERIAL CHANGE REPORT
 
 
Item 1.
Name and Address of Company
 
Eldorado Gold Corporation (“Eldorado” or the “Company”)
Suite 1188 – Bentall 5
550 Burrard Street
Vancouver, British Columbia V6C 2B5
 
Item 2.
Date of Material Change
 
July 30, 2020
 
Item 3.
News Release
 
The news release was disseminated by WEST, and filed on SEDAR, on July 30, 2020.
 
Item 4.
Summary of Material Change
 
The Company reported on its financial and operational results for the second quarter of 2020.
 
Item 5.
Full Description of Material Change
 
The Company reported on its financial and operational results for the second quarter of 2020.
 
●
Measures remain in place to manage the impact of the novel coronavirus ("COVID-19") pandemic: The Company's mines are fully operational and the global workforce has returned to normal levels. Preventing the spread of COVID-19, ensuring safe working environments across Eldorado's global sites and preparedness should an outbreak occur, remain priorities.
 
●
Stronger quarterly production and 2020 annual guidance maintained: Gold production totalled 137,782 ounces in Q2 2020, an increase of 50% from Q2 2019 production of 91,803 ounces, and a 19% increase over Q1 2020. Eldorado is maintaining its 2020 annual guidance of 520,000-550,000 ounces of gold at an all-in sustaining cost of $850-950 per ounce sold.
 
●
Significant increase in free cash flow: Free cash flow of $63.4 million in Q2 2020 increased significantly from $4.8 million in Q2 2019 and $7.2 million in Q1 2020 as a result of higher sales volume and a higher gold price.
 
●
Commenced construction of a three kilometre decline at Lamaque: The underground decline will connect the Sigma mill to the 405 metre level of the Triangle mine. Benefits of the decline include eliminating surface haulage of ore (approximately 26km round trip), reducing energy requirements for mine ventilation and providing access to reduce exploration costs. The decline is expected to be completed in the first half of 2022 at an estimated cost of $24 million.
 

1
 
 
 
●
All-in sustaining costs lower quarter-on-quarter: Q2 2020 all-in sustaining costs of $859 per ounce of gold sold in the quarter were lower than in Q2 2019 ($917 per ounce sold).
 
●
Continued strong financial liquidity: The Company currently has $440 million of cash, cash equivalents and term deposits and approximately $35 million available under the revolving credit facility, with $65 million of capacity on the facility allocated to secure certain reclamation obligations in connection with its operations.
 
●
Improved financial position and net leverage ratio: $33.3 million was repaid on the Company's term loan during the quarter. Continued strong EBITDA has improved the Company's net leverage ratio, lowering the interest rate on the term loan and amounts drawn under the revolving credit facility from LIBOR + 2.5% to LIBOR + 2.25% during the quarter. Additionally, we have issued a redemption notice to repay $58.6 million of principal in August 2020 under the equity clawback provision of our senior secured notes.
 
●
Net earnings and adjusted net earnings attributable to shareholders: Net earnings attributable to shareholders of the Company in Q2 2020 were $45.6 million or $0.27 per share (Q2 2019: net earnings attributable to shareholders of the Company of $12.2 million, or $0.08 per share). Adjusted net earnings attributable to shareholders of the Company in Q2 2020 were $43.8 million, or $0.26 per share (Q2 2019: adjusted net loss attributable to shareholders of the Company of $3.5 million, or $0.02 loss per share).
 
●
Increased EBITDA: Q2 2020 EBITDA was $131.8 million ($74.5 million in Q2 2019) and Q2 2020 adjusted EBITDA was $135.8 million ($66.8 million in Q2 2019). Adjustments included, among other things, share based compensation and losses on asset disposals.
 
Consolidated Financial and Operational Highlights
 
 
 
3 months ended June 30,
 
 
6 months ended June 30,
 
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
Revenue (1)
 $255.9 
 $173.7 
 $460.6 
 $253.7 
Gold revenue (1)
 $232.9 
 $150.11
 $416.6 
 $204.6 
Gold produced (oz) (2)
  137,782 
  91,803 
  253,732 
  174,780 
Gold sold (oz) (1)
  134,960 
  113,685 
  251,179 
  156,759 
Average realized gold price ($/oz sold) (6)
 $1,726 
 $1,321 
 $1,658 
 $1,301 
Cash operating costs ($/oz sold) (3,7)
  550 
  631 
  586 
  629 
Total cash costs ($/oz sold) (3,7)
  616 
  670 
  644 
  665 
All-in sustaining costs ($/oz sold) (3,6)
  859 
  917 
  902 
  977 
Net earnings (loss) for the period (4)
  45.6 
  12.2 
  40.7 
  (14.8)
Net earnings (loss) per share – basic ($/share) (4)
  0.27 
  0.08 
  0.24 
  (0.09)
Adjusted net earnings (loss) (4,5,6,7)
  43.8 
  (3.5)
  56.3 
  (24.5)
Adjusted net earnings (loss) per share ($/share) (4,5,6,7)
  0.26 
  (0.02)
  0.34 
  (0.15)
Cash flow from operating activities before changes in working capital (6,7)
  99.0 
  38.5 
  168.5 
  46.6 
Free cash flow (6)
  63.4 
  4.8 
  70.5 
  (59.2)
Cash, cash equivalents and term deposits
 $440.3 
 $119.9 
 $440.3 
 $119.9 
 
(1)
Excludes sales of inventory mined at Lamaque during the pre-commercial production period (Q1 2019).
(2)
Includes pre-commercial production at Lamaque (Q1 2019).
(3)
By-product revenues are off-set against cash operating costs.
(4)
Attributable to shareholders of the Company.
(5)
See reconciliation of net earnings (loss) to adjusted net earnings (loss) in the section 'Non-IFRS Measures' in the June 30, 2020 MD&A.
(6)
These measures are non-IFRS measures. See the June 30, 2020 MD&A for explanations and discussion of these non-IFRS measures.
(7)
2019 amounts have been adjusted to conform with 2020 presentation. See the section 'Non-IFRS Measures' in the June 30, 2020 MD&A for detail.
 
 
2
 
 
 
Gold production of 137,782 ounces increased 50% from last year’s second quarter production of 91,803 ounces. Gold sales totalled 134,960 ounces in Q2 2020, an increase of 19% from 113,685 ounces sold in Q2 2019. The higher sales volume compared with the prior year reflected an increase of 33,845 ounces sold at Kisladag following the resumption of mining activities in April 2019, an increase of 7,634 ounces sold at Lamaque following its commencement of commercial operations in April 2019 and an increase of 2,925 ounces sold at Olympias as a result of increased production. Gold sales at Efemcukuru in Q2 2020 decreased by 23,129 ounces from the prior year as sales in Q2 2019 included shipments that had been delayed from Q1 2019.
 
Total revenue was $255.9 million in Q2 2020, an increase of 47% from $173.7 million in Q2 2019. The increase was due to increased sales volume combined with a higher average realized gold price.
 
Cash operating costs per ounce sold in Q2 2020 averaged $550, a decrease from $631 in Q2 2019. The improvement was primarily due to higher production at Kisladag with an increase in stacked ore on the heap leach pad, higher production and grade at Olympias and higher production at Efemcukuru. The improvement was also due to increased mining rates at Lamaque in Q2 2020 following approval to expand underground production. Cash operating costs also benefited from a weakening of the Turkish Lira in the first half of 2020.
 
We reported net earnings attributable to shareholders of $45.6 million ($0.27 per share) in Q2 2020, compared to net earnings of $12.2 million ($0.08 per share) in Q2 2019. The improvement reflects higher production and sales volumes, combined with a higher average realized gold price.
 
Adjusted net earnings were $43.8 million ($0.26 per share) in Q2 2020 compared to adjusted net loss of $3.5 million ($0.02 loss per share) in Q2 2019. Adjusted net earnings in Q2 2020 removes, among other things, the $5.7 million gain on the non-cash revaluation of the derivative related to redemption options in our debt and a $3.0 million loss on foreign exchange due to translation of deferred tax balances.
 
Gold Operations
 
 
 
3 months ended June 30,
 
 
6 months ended June 30,
 
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 Ounces produced (1)
  137,782 
  91,803 
  253,732 
  174,780 
Ounces sold (2, 4)
  134,960 
  113,685 
  251,179 
  156,759 
Cash operating costs ($/oz sold) (4,5)
 $550 
 $631 
 $586 
 $629 
All-in sustaining costs ($/oz sold) (4,5)
 $859 
 $917 
 $902 
 $977 
Sustaining capex (5)
 $21.9 
 $15.6 
 $41.3 
 $26.4 
Kisladag
    
    
    
    
Ounces produced (3)
  59,890 
  26,072 
  110,066 
  53,319 
Ounces sold
  59,917 
  26,072 
  111,517 
  53,327 
Cash operating costs ($/oz sold) (5)
 $465 
 $381 
 $459 
 $471 
All-in sustaining costs ($/oz sold) (5)
 $631 
 $471 
 $606 
 $590 
Sustaining capex (5)
 $5.4 
 $1.1 
 $8.4 
 $4.2 
Lamaque
    
    
    
    
Ounces produced (1)
  33,095 
  33,140 
  60,448 
  52,818 
Ounces sold (2)
  31,964 
  24,330 
  58,692 
  24,330 
Cash operating costs ($/oz sold) (5)
 $480 
 $517 
 $553 
 $517 
All-in sustaining costs ($/oz sold) (5)
 $796 
 $814 
 $908 
 $814 
Sustaining capex (5)
 $8.0 
 $5.3 
 $16.3 
 $5.3 
Efemcukuru
    
    
    
    
Ounces produced
  26,876 
  25,667 
  50,115 
  51,791 
Ounces sold (4)
  25,692 
  48,821 
  48,913 
  54,639 
Cash operating costs ($/oz sold) (4,5)
 $534 
 $593 
 $586 
 $598 
All-in sustaining costs ($/oz sold) (4,5)
 $807 
 $774 
 $835 
 $840 
Sustaining capex (5)
 $3.6 
 $5.4 
 $6.7 
 $9.0 
Olympias
    
    
    
    
Ounces produced
  17,921 
  6,924 
  33,103 
  16,852 
Ounces sold
  17,387 
  14,462 
  32,057 
  24,463 
Cash operating costs ($/oz sold) (5)
 $993 
 $1,402 
 $1,086 
 $1,156 
All-in sustaining costs ($/oz sold) (5)
 $1,377 
 $1,731 
 $1,500 
 $1,553 
Sustaining capex (5)
 $4.9 
 $3.8 
 $9.9 
 $7.9 
 
(1)
Includes pre-commercial production at Lamaque (Q1 2019).
(2)
Excludes sales of inventory produced at Lamaque during the pre-commercial production period (Q1 2019).
(3)
Kisladag resumed mining, crushing and placing ore on the heap leach pad on April 1, 2019. This activity had been suspended since April 2018.
(4)
Efemcukuru ounces sold and unit costs were impacted by delayed shipments in Q1 2019 that were completed in Q2 2019.
(5)
These measures are non-IFRS measures. See the June 30, 2020 MD&A for explanations and discussion of these non-IFRS measures.
 
Corporate
 
On July 30, 2020, the Company issued a redemption notice for the senior secured notes and intends to redeem $59 million of the principal amount of the senior secured notes in August 2020 using proceeds from the ATM Program. The redemption price is 109.5% of the aggregate principal amount repaid, plus accrued and unpaid interest.
 
The Company announced the appointment of Ms. Judith Mosely to the Board of Directors, effective September 1, 2020. Ms. Mosely has over 20 years of experience in the mining and metals banking sector.
 
 
3
 
 
 
Non-IFRS Measures
 
Certain non-IFRS measures are included in this report, including average realized gold price per ounce sold, cash operating costs and cash operating costs per ounce sold, total cash costs and total cash costs per ounce sold, all-in sustaining costs ("AISC") and AISC per ounce sold, adjusted net earnings/(loss), adjusted net earnings/(loss) per share, working capital, cash flow from operations before changes in non-cash working capital, earnings before interest, taxes and depreciation and amortization ("EBITDA") and adjusted earnings before interest, taxes and depreciation and amortization ("Adjusted EBITDA"), free cash flow and sustaining capital. Please see the June 30, 2020 MD&A for explanations and discussion of these non-IFRS measures. The Company believes that these measures, in addition to conventional measures prepared in accordance with International Financial Reporting Standards (“IFRS”), provide investors an improved ability to evaluate the underlying performance of the Company. The non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers.
 
Cautionary Note about Forward-looking Statements and Information
 
Certain of the statements made and information provided in this report are forward-looking statements or information within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Often, these forward-looking statements and forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", “continue”, “projected”, "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.
 
Forward-looking statements or information contained in this report include, but are not limited to, statements or information with respect to: the duration, extent and other implications of COVID-19 and any restrictions and suspensions with respect to our operations, our guidance and outlook, including expected production, cost guidance and recoveries of gold, construction of the decline at Lamaque, including expected timing and cost, and realization of the associated benefits, planned capital and exploration expenditures; redemption of high-yield bonds by the Company, our expectation as to our future financial and operating performance, expected metallurgical recoveries, gold price outlook and the global concentrate market; and our strategy, plans and goals, including our proposed exploration, development, construction, permitting and operating plans and priorities and related timelines and schedules and results of litigation and arbitration proceedings.
 
Forward-looking statements and forward-looking information by their nature are based on assumptions and involve known and unknown risks, market uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information.
 
We have made certain assumptions about the forward-looking statements and information, including assumptions about how the world-wide economic and social impact of COVID-19 is managed and the duration and extent of the COVID-19 pandemic, timing and cost of construction of the decline at Lamaque, and any associated benefits; our ability to complete the redemption of the Company’s high yield bonds; geopolitical, economic, permitting and legal climate that we operate in; the future price of gold and other commodities; the global concentrate market; exchange rates; anticipated costs and expenses; production, mineral reserves and resources and metallurgical recoveries, the impact of acquisitions, dispositions, suspensions or delays on our business and the ability to achieve our goals. In particular, except where otherwise stated, we have assumed a continuation of existing business operations on substantially the same basis as exists at the time of this report.
 
Even though our management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that the forward-looking statement or information will prove to be accurate. Many assumptions may be difficult to predict and are beyond our control.
 
Furthermore, should one or more of the risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. These risks, uncertainties and other factors include, among others, the following: global outbreaks of infectious diseases, including COVID-19, timing and cost of construction of the decline at Lamaque, and any associated benefits, ability to complete the redemption of the Company’s high yield bonds; results of further testwork, recoveries of gold and other metals; geopolitical and economic climate (global and local), risks related to mineral tenure and permits; gold and other commodity price volatility; continued softening of the global concentrate market; risks regarding potential and pending litigation and arbitration proceedings relating to the Company’s, business, properties and operations; expected impact on reserves and the carrying value; the updating of the reserve and resource models and life of mine plans; mining operational and development risk; financing risks, foreign country operational risks; risks of sovereign investment; regulatory risks and liabilities including, environmental regulatory restrictions and liability; discrepancies between actual and estimated production, mineral reserves and resources and metallurgical testing and recoveries; additional funding requirements; currency fluctuations; community and non-governmental organization actions; speculative nature of gold exploration; dilution; share price volatility and the price of the common shares of the Company; competition; loss of key employees; and defective title to mineral claims or properties, as well as those risk factors discussed in the sections titled “Forward-Looking Statements” and "Risk factors in our business" in the Company's most recent Annual Information Form & Form 40-F. The reader is directed to carefully review the detailed risk discussion in our most recent Annual Information Form filed on SEDAR and EDGAR under our Company name, which discussion is incorporated by reference in this report, for a fuller understanding of the risks and uncertainties that affect the Company’s business and operations.
 
Forward-looking statements and information is designed to help you understand management’s current views of our near and longer term prospects, and it may not be appropriate for other purposes.
 
There can be no assurance that forward-looking statements or information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, you should not place undue reliance on the forward-looking statements or information contained herein. Except as required by law, we do not expect to update forward-looking statements and information continually as conditions change.
 
Financial Information and condensed statements contained herein or attached hereto may not be suitable for readers that are unfamiliar with the Company and is not a substitute for reading the Company’s financial statements and related MD&A available on our website and on SEDAR and EDGAR under our Company name. The reader is directed to carefully review such document for a full understanding of the financial information summarized herein.
 
Except as otherwise noted, scientific and technical information contained in this report was reviewed and approved by Paul Skayman, FAusIMM, Special Advisor to the Chief Operating Officer for Eldorado Gold Corporation, and a "qualified person" under NI 43-101.
 
 
4
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Financial Position
(Unaudited – in thousands of U.S. dollars)
 
 
 
As at
 
Note
 
 
June 30,
2020  
 
 
  December 31, 2019  
 
ASSETS
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
 $435,469 
 $177,742 
Term deposits
 
  4,836 
  3,275 
Marketable securities
 
  4,654 
  3,828 
Accounts receivable and other
4
  86,351 
  75,310 
Inventories
5
  162,785 
  163,234 
Current portion of employee benefit plan assets
       
  6,025 
  — 
Assets held for sale
       
  11,929 
  12,471 
 
       
  712,049 
  435,860 
Restricted cash
       
  1,983 
  3,080 
Other assets
       
  30,647 
  22,943 
Employee benefit plan assets
       
  — 
  6,244 
Property, plant and equipment
       
  4,044,955 
  4,088,202 
Goodwill
       
  92,591 
  92,591 
 
       
 $4,882,225 
 $4,648,920 
LIABILITIES & EQUITY
       
    
    
Current liabilities
       
    
    
Accounts payable and accrued liabilities
       
 $144,629 
 $139,104 
Current portion of capital lease liabilities
       
  10,342 
  9,913 
Current portion of debt
6
  216,667 
  66,667 
Current portion of asset retirement obligations
       
  1,783 
  1,782 
Current portion of employee benefit plan obligations
       
  1,133 
  — 
Liabilities associated with assets held for sale
       
  4,229 
  4,257 
 
       
  378,783 
  221,723 
Debt
6
  380,423 
  413,065 
Lease liabilities
       
  11,399 
  15,143 
Employee benefit plan obligations
       
  17,464 
  18,224 
Asset retirement obligations
       
  94,174 
  94,235 
Deferred income tax liabilities
       
  413,339 
  412,717 
 
       
  1,295,582 
  1,175,107 
Equity
       
    
    
Share capital
10
  3,135,955 
  3,054,563 
Treasury stock
       
  (11,587)
  (8,662)
Contributed surplus
       
  2,634,246 
  2,627,441 
Accumulated other comprehensive loss
       
  (28,266)
  (28,966)
Deficit
       
  (2,189,129)
  (2,229,867)
Total equity attributable to shareholders of the Company
       
  3,541,219 
  3,414,509 
Attributable to non-controlling interests
11
  45,424 
  59,304 
 
       
  3,586,643 
  3,473,813 
 
       
 $4,882,225 
 $$4,648,920 
 
Please see the Condensed Consolidated Interim Financial Statements dated June 30, 2020 for notes to the accounts. 
 
 
5
 
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Operations
For the three and six months ended June 30, 2020 and 2019
(Unaudited – in thousands of U.S. dollars except share and per share amounts)
 
 
 
 
 
 
 
        Three months ended  June 30,
 
 
         Six months ended June 30,
 
 
 
Note
 
 
 2020
 
 
 2019
 
 
 2020
 
 
 2019
 
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Metal sales
7
 $255,917 
 $173,678 
 $460,572 
 $253,702 
 
       
    
    
    
    
Cost of sales
       
    
    
    
    
  Production costs
       
  109,477 
  100,896 
  210,839 
  152,817 
  Depreciation and amortization
       
  58,328 
  41,188 
  110,691 
  61,130 
 
       
  167,805 
  142,084 
  321,530 
  213,947 
 
       
    
    
    
    
Earnings from mine operations
       
  88,112 
  31,594 
  139,042 
  39,755 
 
       
    
    
    
    
Exploration and evaluation expenses
       
  2,333 
  2,529 
  5,560 
  7,894 
Mine standby costs
8
  5,029 
  3,450 
  9,059 
  11,443 
General and administrative expenses
       
  6,157 
  8,084 
  14,444 
  15,256 
Employee benefit plan expense
       
  766 
  510 
  1,457 
  1,109 
Share-based payments expense
12
  2,863 
  2,498 
  4,658 
  5,400 
Reversal of impairment
       
  — 
  (11,690) 
  — 
  (11,690)
Write-down (reversal) of assets
       
  (295) 
  410 
  (92)
  427 
Foreign exchange loss (gain)
       
  (1,238) 
  480 
  (2,000)
  235 
Earnings from operations
       
  72,497 
  25,323 
  105,956 
  9,681 
 
       
    
    
    
    
Other income
9
  1,356 
  8,655 
  36 
  10,288 
Finance costs
9
  (6,480) 
  (16,786) 
  (22,687)
  (24,117)
Earnings (loss) from operations before income tax
       
  67,373 
  17,192 
  83,305 
  (4,148)
 
       
    
    
    
    
Income tax expense
       
  23,671 
  8,010 
  45,076 
  14,042 
Net earnings (loss) for the period
       
 $43,702 
 $9,182 
 $38,229 
 $(18,190)
 
       
    
    
    
    
Attributable to:
       
    
    
    
    
Shareholders of the Company
       
  45,618 
  12,151 
  40,738 
  (14,814)
Non-controlling interests
       
  (1,916) 
  (2,969) 
  (2,509) 
  (3,376)
Net earnings (loss) for the period
       
 $43,702 
 $9,182 
 $38,229 
 $(18,190)
 
       
    
    
    
    
Weighted average number of shares outstanding (thousands)
       
    
    
    
    
Basic
       
  169,867 
  158,372 
  167,524 
  158,345 
Diluted
       
  173,787 
  161,276 
  171,342 
  158,345 
 
       
    
    
    
    
Net earnings (loss) per share attributable to shareholders of the Company:
       
    
    
    
    
Basic earnings (loss) per share
       
 $0.27 
 $0.08 
 $0.24 
 $(0.09)
Diluted earnings (loss) per share
       
 $0.26 
 $0.08 
 $0.24 
 $(0.09)
 
Please see the Condensed Consolidated Interim Financial Statements dated June 30, 2020 for notes to the accounts. 
 
 
6
 
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Comprehensive Income (Loss) 
For the three and six months ended June 30, 2020 and 2019
(Unaudited – in thousands of U.S. dollars)
 
 
 
 
Three months ended June 30,
 
 
Six months ended June 30,
 
 
 
 2020
 
 
 2019
 
 
 2020
 
 
 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings (loss) for the period
 $43,702 
 $9,182 
 $38,229 
 $(18,190) 
Other comprehensive (loss) income:
    
    
    
    
Items that will not be reclassified to earnings or loss:
    
    
    
    
Change in fair value of investments in equity securities, net of tax
  1,766 
  1,016 
  898 
  1,163 
Actuarial gains (losses) on employee benefit plans, net of tax
  30 
  (63) 
  (198) 
  (409) 
Total other comprehensive income for the period
  1,796 
  953 
  700 
  754 
Total comprehensive income (loss) for the period
 $45,498 
 $10,135 
 $38,929 
 $(17,436) 
 
    
    
    
    
Attributable to:
    
    
    
    
Shareholders of the Company
  47,414 
  13,104 
  41,438 
  (14,060) 
Non-controlling interests
  (1,916)
  (2,969) 
  (2,509) 
  (3,376) 
 
 $45,498 
 $10,135 
 $38,929 
 $(17,436) 
 
Please see the Condensed Consolidated Interim Financial Statements dated June 30, 2020 for notes to the accounts. 
 
 
7
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Cash Flows
For the three and six months ended June 30, 2020 and 2019
(Unaudited – in thousands of U.S. dollars)
 
 
 
 
 
 
 
Three months ended June 30,   
 
 
Six months ended June 30,
 
 
 
Note
 
 
 2020
 
 
 2019
 
 
 2020
 
 
 2019
 
Cash flows generated from (used in):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating activities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings (loss) for the period
 
 
 
 $43,702 
 $9,182 
 $38,229 
 $(18,190)
Items not affecting cash:
 
 
 
    
    
    
    
Depreciation and amortization
 
 
 
  58,883 
  41,188 
  111,810 
  61,130 
Finance costs
 
 
 
  6,498 
  16,786 
  22,722 
  24,117 
Interest income
 
 
 
  (894)
  (939)
  (1,283)
  (2,154)
Unrealized foreign exchange gain
 
 
 
  (512)
  (178)
  (3,050)
  (351)
Income tax expense
 
  23,671 
  8,010 
  45,076 
  14,042 
Loss on disposal of assets
 
  96 
  951 
  2,550 
  1,013 
Write-down (reversal) of assets
 
  (295)
  410 
  (92)
  427 
Share-based payments expense
12
  2,863 
  2,498 
  4,658 
  5,400 
Employee benefit plan expense
       
  766 
  510 
  1,457 
  1,109 
Income from royalty sale
       
  — 
  (8,075)
  — 
  (8,075)
Reversal of impairment
       
  — 
  (11,690)
  — 
  (11,690)
 
       
  134,778 
  58,653 
  222,077 
  66,778 
Property reclamation payments
       
  (474)
  (896)
  (1,000)
  (1,796)
Employee benefit plan payments
       
  (435)
  (1,349)
  (671)
  (1,349)
Income taxes paid
       
  (18,128)
  (4,010)
  (32,847)
  (4,010)
Interest paid
       
  (17,588)
  (14,886)
  (20,358)
  (15,136)
Interest received
       
  894 
  939 
  1,283 
  2,154 
Changes in non-cash working capital
13
  583 
  12,572 
  (15,587)
  3,754 
Net cash generated from operating activities
       
  99,630 
  51,023 
  152,897 
  50,395 
 
       
    
    
    
    
Investing activities
       
    
    
    
    
Purchase of property, plant and equipment
       
  (37,126)
  (48,020)
  (77,608)
  (113,940)
Proceeds from the sale of property, plant and equipment
       
  683 
  3,392 
  705 
  3,772 
Value added taxes related to mineral property expenditures, net
       
  168 
  (5,348)
  (5,483)
  (7,719)
Decrease (increase) in term deposits
       
  49,964 
  1,897 
  (1,561)
  1,871 
Decrease (increase) in restricted cash
       
  (77)
  10,640 
  1,097 
  10,194 
Capitalized interest
       
  — 
  (3,848)
  — 
  (3,848)
Proceeds on pre-commercial production sales, net
       
  — 
  7,606 
  — 
  12,159 
Net cash generated from (used in) investing activities
       
  13,612 
  (33,681)
  (82,850)
  (97,511)
 
       
    
    
    
    
Financing activities
       
    
    
    
    
Cash received for issuance of shares
       
  60,243 
  18 
  87,079 
  18 
Acquisition of non-controlling interest
11
  (7,500)
  — 
  (7,500)
  — 
Contributions from non-controlling interests
       
  301 
  — 
  301 
  — 
Proceeds from borrowings
6
  — 
  494,000 
  150,000 
  494,000 
Repayment of borrowings
6
  (33,333)
  (600,000)
  (33,333)
  (600,000)
Loan financing costs
       
  — 
  (14,995)
  — 
  (14,995)
Principal portion of lease liabilities
       
  (2,499)
  (1,312)
  (5,033)
  (2,386)
Purchase of treasury stock
       
  (3,679)
  — 
  (3,679)
  — 
Net cash generated from (used in) financing activities
       
  13,533 
  (122,289)
  187,835 
  (123,363)
 
       
    
    
    
    
Net increase (decrease) in cash and cash equivalents
       
  126,775 
  (104,947)
  257,882 
  (170,479)
Cash and cash equivalents - beginning of period
       
  308,780 
  220,780 
  177,742 
  286,312 
Cash in disposal group held for sale
       
  (86)
  (724)
  (155)
  (724)
Cash and cash equivalents - end of period
       
 $435,469 
 $115,109 
 $435,469 
 $115,109 
 
Please see the Condensed Consolidated Interim Financial Statements dated June 30, 2020 for notes to the accounts. 
 
 
8
 
 
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Changes in Equity
For the three and six months ended June 30, 2020 and 2019
(Unaudited – in thousands of U.S. dollars)
 
 
 
Three months ended June 30,
 
 
 Six months ended June 30,
 
 
 
 2020
 
 
 2019
 
 
 2020
 
 
 2019
 
Share capital
 
 
 
 
 
 
 
 
 
 
 
 
Balance beginning of period
 $3,075,100 
 $3,007,924 
 $3,054,563 
 $3,007,924 
Shares issued upon exercise of share options, for cash
  1,392 
  18 
  1,816 
  18 
Transfer of contributed surplus on exercise of options
  560 
  2 
  730 
  2 
Shares issued to the public, net of share issuance costs
  58,903 
  — 
  78,846 
  — 
Balance end of period
 $3,135,955 
  3,007,944 
 $3,135,955 
 $3,007,944 
 
    
    
    
    
Treasury stock
    
    
    
    
Balance beginning of period
 $(8,314)
 $(9,269)
 $(8,662)
 $(10,104)
Purchase of treasury stock (Note 12(b))
  (3,679)
  — 
  (3,679)
  — 
Shares redeemed upon exercise of restricted share units
  406 
  456 
  754 
  1,291 
Balance end of period
 $(11,587)
 $(8,813)
 $(11,587)
 $(8,813)
 
    
    
    
    
Contributed surplus
    
    
    
    
Balance beginning of period
 $2,628,820 
 $2,621,866 
 $2,627,441 
 $2,620,799 
Share based payments
  2,221 
  2,115 
  4,118 
  4,017 
Acquisition of non-controlling interest (Note 11)
  4,171 
  — 
  4,171 
  — 
Shares redeemed upon exercise of restricted share units
  (406)
  (456)
  (754)
  (1,291)
Transfer to share capital on exercise of options
  (560)
  (2)
  (730)
  (2)
Balance end of period
 $2,634,246 
 $2,623,523 
 $2,634,246 
 $2,623,523 
 
    
    
    
    
Accumulated other comprehensive loss
    
    
    
    
Balance beginning of period
 $(30,062)
 $(24,693)
 $(28,966)
 $(24,494)
Other comprehensive income for the period
  1,796 
  953 
  700 
  754 
Balance end of period
 $(28,266)
 $(23,740)
 $(28,266)
 $(23,740)
 
    
    
    
    
Deficit
    
    
    
    
Balance beginning of period
 $(2,234,747)
 $(2,337,418)
 $(2,229,867)
 $(2,310,453)
Net earnings (loss) attributable to shareholders of the Company
  45,618 
  12,151 
  40,738 
  (14,814)
Balance end of period
 $(2,189,129)
 $(2,325,267)
 $(2,189,129)
 $(2,325,267)
Total equity attributable to shareholders of the Company
 $3,541,219 
 $3,273,647 
 $3,541,219 
 $3,273,647 
 
    
    
    
    
Non-controlling interests
    
    
    
    
Balance beginning of period
 $58,711 
 $63,007 
 $59,304 
 $63,414 
Net loss attributable to non-controlling interests
  (1,916)
  (2,969)
  (2,509)
  (3,376)
Acquisition of non-controlling interest (Note 11)
  (11,672)
  — 
  (11,672)
  — 
Contributions from non-controlling interests
  301 
  219 
  301 
  219 
Balance end of period
 $45,424 
 $60,257 
 $45,424 
 $60,257 
Total equity
 $3,586,643 
 $3,333,904 
 $3,586,643 
 $3,333,904 
 
Please see the Condensed Consolidated Interim Financial Statements dated June 30, 2020 for notes to the accounts. 
 
 
9
 

Item 6.
Reliance on 7.1(2) of National Instrument 51-102
 
Not applicable.
 
Item 7.
Omitted Information
 
Not applicable.
 
Item 8.
Executive Officer
 
 
Name of Executive Officer:
Timothy Garvin
 
Executive Vice President and General Counsel
Telephone number:
(604) 601 6692
 
Item 9.
Date of Report
 
August 6, 2020
 
 
 
10