Eldorado Gold Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
October 27, 2023

There are 9 speakers on the call.

Operator

Welcome to the Eldorado Gold Third Quarter 2023 Financial and after the presentation, there will be an opportunity to ask questions. OpEx. I would now like to turn the conference over to Lynette Gould, Vice President, Investor Relations. Please go ahead, Ms. Gold.

Speaker 1

Thank you, operator, and good morning, everyone. I'd like to welcome you to our Q3 2023 results conference call. Before we begin, I would like to remind you that we will be making forward looking statements Operating and Referring to non IFRS measures during the call. Please refer to the cautionary statements included in the presentation Operations and the disclosure on non IFRS measures in our management's discussion and analysis as well as the risk factors set out in our annual information form. Operations.

Speaker 1

Joining me on the call today, we have George Burns, President and Chief Executive Officer Phil Yee, Executive Vice President and Chief Financial Officer Joe Dicke, Executive Vice President and Chief Operating Officer and Simon Hilly, Senior Vice President, Technical Services and Operations. Our release yesterday details our Q3 2023 financial and operating results. This should be read in conjunction with our Q3 financial statements and management's discussion and analysis, both of which are available on our website. Operations. They have also both been filed on SEDAR Plus and EDGAR.

Speaker 1

All dollar figures discussed today are U. S. Dollars unless otherwise stated. Operations. We will be speaking to the slides that accompany this webcast, and you can download a copy of these slides from our website.

Speaker 1

Operator. After the prepared remarks, we will open the call for Q and A. At this time, we will invite analysts to queue for questions. Operations. I will now turn the call over to George.

Speaker 2

Thanks, Lynette, and good morning, everyone. Here is the outline for today's call. I'll provide a brief overview of Q3 results and highlights before passing it to Phil to go through the financials Operations and then Joe and Simon to review our operational performance. Then we will open the call to questions from our analysts. Operations.

Speaker 2

Turning to Slide 4, starting with production. Our performance continued to improve over the quarter with safe production of 100 Opportunity ounces of gold. At Olympias, the mine delivered its best quarter of the year OpEx. And the trend is positive with significant opportunity to make further improvements beyond where we are today. This is a site that is really seeing innovation and technology making a difference in productivity.

Speaker 2

In the past few months, we have energized the substation, Upgraded ventilation and added bulk emulsion blasting underground. All of this is converging to create a positive trajectory we are seeing increased tons with 3 cells under leach, which should positively impact gold production in the 4th quarter. Operations. The tons placed are record amounts compared to the past 6.5 years and a 19% increase relative to both the first OpEx in the 2nd quarters of 2023. At Lamaque, Q3 production increased over both Q1 and Q2.

Speaker 2

However, it was impacted by slower than expected development in the underground due to suspended shifts in the Q2 owing to the wildfires in the region. Operations. As a result, we saw a ripple effect with reduced mining phases available for ore production during the Q3, OpEx, which impacted our production relative to our expectations. This site has consistently met its performance expectations I anticipate that it will maintain the trend throughout the Q4 as they access higher grade stopes. Operations.

Speaker 2

As we head into the Q4, we are updating our guidance range to narrow the ranges reflecting our full year expectations given the operational and Financial performance to date, and we expect tightening gold production to between 475,000 lowered cash operating cost to be between $7.30 to $7.80 per ounce sold OpEx versus previous guidance of $760,000,000 to $860,000,000 Ops. Cost of between $119.0 $12.40 per ounce sold OpEx versus previous guidance of $119,000,000 to $12,90,000 Sustaining capital guidance remains unchanged at Optimization and Operating Costs,

Speaker 3

we expect to continue to

Speaker 2

grow our capital for the year has been reduced to 280,000,000 to 305,000,000 Operating income from $394,000,000 to $437,000,000 primarily driven by lower than expected growth capital spend at Skouries. Operations Capital is expected to be between $160,000,000 to $170,000,000 versus previous guidance of $240,000,000 to 260,000,000 The reduction at Skouries is driven by a change in timing to award several contracts OpEx in order to optimize project execution, shifting of certain preproduction expenditures from 2023 OpEx to 2024 without impact to work progress or completion schedule transitioning engineering work into Greece Operations and updated execution approach to major IRF works while maintaining construction schedule flexibility. In addition, The closing of the project financing in April, which was slightly delayed from our initial expectation, meant a slower ramp up than what was expected in awarding the contracts. This lower than expected OpEx spend in growth capital at Skouries in 2023 is not impacting overall project plan, including cost and schedule, Operations and we remain comfortable we are on track for 1st gold in mid-twenty 25. We are also We're pleased to issue our 2022 climate change and greenhouse gas emissions report in August, which provides a measurable progress towards our GHT Mitigation Target and Enhancing Climate Resilience.

Speaker 2

This report builds on our first Optimization. The report was published in 2021 and focuses on our progress implementing the climate change strategy. Operations. The report included our GHG emissions target achievement pathway in which we seek to mitigate our Scope 1 and Scope 2 emissions OpEx from operating mines by 30% on a 2020 baseline by 20,200 and 30. Our GHG emissions target achievement pathway comprises 4 levers: operational efficiencies and continuous improvement Operations, Processes and Energy Generation, Grid Decarbonization Operations and mine shutdown and operational changes.

Speaker 2

These opportunities will help mitigate our emissions, and Operations. We are committed to continuing to assess opportunities to improve our emissions related impacts and enhance the resilience of our business OpEx in response to climate change. In addition, we are committed to further investigating how we will incorporate Skouries' operational emissions The highlight as we entered the 4th quarter has been a well attended investor and analyst mine tour that we hosted at all 4 of our European assets, Operations, Olympias, Kisladag and Efemcukuru. Some of you on the call today were able to get a firsthand feel for how things are going on the ground, which OpEx provided a sense of confidence in terms of the abilities of each site team. Each of you that participated was able to see firsthand Our productivity improvements are making a meaningful impact across the sites and in addition the opportunities that still lie ahead for us.

Speaker 2

Operations. Additionally, you're able to see directly our sustainable mining practices that we feel are best in class. Operations. I think everyone that attended the tour was impressed with our site teams and the significant achievements that we have made across Operations business. We plan in the future to host more investor and analyst tours as we continue to deliver our growth and value creation

Speaker 4

Thank you, George. Good morning, everyone. Slide 5 provides a summary of our 3rd quarter results. Eldorado reported a net loss attributable to shareholders from continuing operations of $6,600,000 OpEx or $0.03 loss per share in the 3rd quarter, directly impacted by the previously disclosed 5% retroactive corporate Tax Rate Increase in Turkey A effective July 2023. After adjusting for one time non recurring items, Operating and Operating expenses.

Speaker 4

Adjusted net earnings were $35,000,000 or $0.17 per share for the quarter. These one time non recurring items included Operations and a one time out of period current tax expense of $8,200,000 both the result of the retroactive corporate tax rate increase mentioned earlier. Operations. In addition, a non cash loss of $15,200,000 on foreign exchange translation of deferred tax balances related to the weakening of the lira and the euro and partially offset by a non cash unrealized gain Free cash flow in the quarter was negative $19,300,000 Excluding capital investment in the Scurries project, Free cash flow generation in the quarter was positive $30,000,000 Cash flow generated by operating activities before changes in working capital OpEx totaled $97,500,000 compared to the Q2 of 2023 of $82,400,000 3rd quarter cash operating costs averaged $6.98 per ounce sold and all in sustaining costs operating expenses averaged $77 per ounce sold. Our costs decreased during the quarter as we continue to see lower than expected fuel and electricity prices.

Speaker 4

This was partially offset by higher royalty expenses as a result of the higher realized gold price during the quarter. All in sustaining costs per ounce sold in the Q3 were in line with expectations. With stronger gold production expected in the 4th quarter, Operations. We expect to see decreasing unit costs and as George mentioned, we have updated our cost guidance ranges. Capital expenditures were $91,100,000 in the 3rd quarter, which included investment in growth projects at Kisladag and at Skirios, Operations where we continue to advance procurement and the project.

Speaker 4

Income tax expense of $52,000,000 increased in the quarter Operations compared to Q3 2022, primarily a result of the retroactive 5% Turkish tax rate increase as previously noted. OpEx. Deferred tax expense increased to $31,000,000 in Q3 2023, also an increase from Q3 2022 deferred tax expense of $12,000,000 These increases in Q3 2023 current OpEx and deferred tax expense over the comparative prior year period were due to the tricky A corporate tax rate increase previously mentioned. Operations. Turning to Slide 6.

Speaker 4

At quarter end, we had unrestricted cash and cash equivalents of $476,600,000 With production expected to continue to improve over the Q4, we expect to see our cash from continuing our cash from operations improving further. With the closing of the Scurries project financing in April, availability under Eldorado's $250,000,000 revolving credit facility was reduced as Eldorado's funding commitment for the Scurries project is fully backstopped by a letter of credit under that revolving credit facility. The availability under the facility as of September 30 was $116,000,000 We continue to focus on maintaining a solid financial position, Operational, which provides flexibility to unlock value across our global business. With that, I will now turn it over to Joe to go through the operational highlights.

Speaker 5

Thanks, Phil, and good morning. Starting on Slide 7. At Scoria's construction activity in Q3 continued to ramp up with overall project progress at 34% and when incorporating all prior work, OpEx. Progress stands at 65% complete. Mobilization continued for major earthworks for Construction all roads needed to undertake all other major earthworks and is progressing well with work on several fronts underway.

Speaker 5

Operations. During the quarter, the contractors for the earthworks and pilings for the primary crusher were mobilized and commenced work. Operations. General Works continued to focus on-site preparation, relocation of temporary facilities, recommissioning of the non contact water reinjection well system Operations and the haulage of aggregates for construction purposes. The first phase of underground development continues to advance OpEx.

Speaker 5

The West decline and lateral development for the test stopes to validate the underground assumptions prior to first production from the underground. Operational Work Access will commence at the end of 2024 with expected completion by mid-twenty 25. With year to date spending at Scurius at $101,300,000 we expect to ramp up our commitments during the 4th quarter Operations and are comfortable achieving our updated guidance range of $160,000,000 to $170,000,000 OpEx. As of September 30, detailed engineering is 56% complete Procurement is 73% complete. We continue to focus on completing key contracts with evaluations ongoing OpEx and award the remaining key contracts by the end of 2023, which include the filter plant, including the earthworks pilings and Foundation to support the filters open pit pre stripping and construction of the ore stockpile, water management ponds and the integrated extractive waste management facility dam embankment, structural concrete for the primary crusher and associated process facilities OpEx expected at the end of 2025.

Speaker 5

Turning to Slide 8. In the Q3, we recorded 0 lost time injuries. Operating loss time injury frequency rate for the 1st 9 months of the year was 0.74%, a 49% decrease from the same period OpEx in 2022. We continue to take proactive steps to improve workplace safety and to ensure a safe working environment for our employees and Our Contractors. On our operating results, we produced 121,030 ounces of gold in the 3rd quarter with a cash operating cost of $6.98 per ounce sold, a solid quarter which positions us to remain on track to meet our guidance.

Speaker 5

I'll pass it over to Simon to review the Q3 performance and operations in Turkiye and Canada.

Speaker 6

Thanks, Joe. Starting in Turkey on Slide 9, at Kishida 3rd quarter production was 37,000 Operating Costs and Cash Operating Costs of $6.22 per ounce sold, which OpEx, which represents a 17% reduction in cash costs and similar production compared to Q3 2022. Operations production during the Q3 was driven by the successful commissioning of the agglomeration drum that was added to the crushing circuit in the 2nd quarter Operations and tonnes placed on the heap leach pad have continued to increase. The largest surface area of the newly commissioned Northeast Leach Pad has enabled the full capacity of the 54 inches stacking equipment to increase tonnes placed Operations and increase the irrigation flow rates. Production is expected to increase over the course of the Q4 as we realize full effectiveness Operating Materials Handling Equipment.

Speaker 6

In addition, we expect to continue to draw down inventory buildup OpEx in Q2 as a result of the substantial rainfall that resulted in diluted LEAP Solution. On Slide 10 at Ethn Touker, 3rd quarter gold production was 21,142 ounces At cash operating cost of $8.17 per ounce sold. Gold production throughput operating cash flow and average gold grade at FM2 Crew were in line with plan for the quarter. Development towards the Kokarpinar area is on track OpEx and is expected to continue to extend mine life. For 2023, at Efemcukuru, we expect to see a modest increase Q4 production over the Q3.

Speaker 6

Additionally, during the quarter, the FN2 crude mine was successfully certified OpEx. ISO 5,001 Energy Management Standard. And now moving to Lamaque on Slide 11. OpEx. 3rd quarter gold production was 43,821 ounces at cash operating cost of $6.24 per ounce sold.

Speaker 6

Operations was impacted by slower than expected development in the underground as a result of suspended shifts in the 2nd quarter OpEx due to the wildfires in the region, which led to reduced mining phases for oil production in the 3rd quarter. The Q4 is expected to be stronger with development into high grade stopes and continued stable processing rates. Additionally, we remain on track to complete our 2023 infield drilling program targeting the upper 2 thirds of the Ormak deposit. Operations. Our plan is to take a bulk sample and announce Womack inaugural reserve during the second half of twenty twenty four.

Speaker 6

Operations. I'll hand the call back to Joe to review the Q3 results at Olympias.

Speaker 5

Thanks, Simon. Moving to Olympias on Slide 12. 3rd quarter gold production was 18,848 ounces and cash operating costs were $8.85 per ounce sold. Mined and processed tons were up from prior quarter and at record levels for Olympias. Cash costs improved primarily due to productivity efficiencies resulting from recent transformation initiatives OpEx as well as slightly lower unit costs for certain consumables, including electricity.

Speaker 5

During Q2 and early Q3, we completed a number of milestones that have resulted in our ability to increase underground development and production from the Flat Zone. Operations. These milestones include transitioning to mechanical loading of drilled rounds with a bulk emulsion agent, OP. Substation, which enabled the ventilation system startup. With access into the flat zone, we expect to improve not only our gold production, OpEx, but also our byproduct metal production, which we expect to result in higher byproduct credits and in turn lower operating costs going forward.

Speaker 5

Gold production is expected to be steady over the Q4 as the productivity initiatives continue to safely deliver increased tonnage Operations and increased byproduct metals, reducing our overall cash costs. I'll stop there and turn it back to George for closing remarks.

Speaker 2

Thanks, Gene. Our operating business delivered a strong quarter generating improved free cash flow OpEx excluding capital expenditures on the Skouries project. We also delivered some fantastic improvements in our business. Both Olympias and Kisladag reached major turning point with the completion of key infrastructure investments. Operations.

Speaker 2

Both sides are now beginning to reap the benefits from these investments. At Lamaque, we're well positioned OpEx for the Armak deposit and that we've got the exploration drift and infill drilling program moving to completion this year that sets us up Operations for the bulk sample collection next year, which then sets us up to have our first reserve on our mock OpEx. This site has continuously delivered or exceeded expectations and they're set up to deliver a strong 4th quarter. At FM Chukuru, we're also advancing our exploration and infill drilling programs Operations to support mine life extension. And at Skouries, we are just 6 months past finalization of the project financing OpEx and the project is advancing nicely towards the start of commissioning in mid-twenty 25 to deliver commercial production OpEx on budget and on schedule by the end of 2025.

Speaker 2

We are on track to deliver our growth strategy to deliver industry leading returns over the next couple of years. It's an exciting time to be at Eldorado. Thank you for your time. I will now turn it over to the operator for questions from our analysts.

Operator

Operations. Our first question comes from Cosmos Chiu of CIBC. Please go ahead.

Speaker 3

Great. Thanks, George, Bill, Joe, Simon and Annette. Maybe my first question is on Sirius. I guess, Some are wondering how a change in CapEx, at least for 2023, doesn't impact the delivery schedule. I guess my question is, is this just really a shift in timing?

Speaker 3

On the top end, you're lowering 2023 CapEx as Sirius by $90,000,000 I'm sure you're going through the budgeting process right now, George and Phil. Is that going to show up in 2024?

Speaker 2

Cosmos, thanks for the question. Yes, I mean for Scurry's, I'd say a couple of key things I'd point out. Number 1, you have to remember that prior to starting work this year, we have roughly said the project was half built. So The group that went and visited the site could see we have a tremendous amount of infrastructure already on the project site. OpEx.

Speaker 2

And then the other high level thing I'd say is, remember, we just completed project financing in the 2nd quarter. We're on a steep ramp up curve. We have a lot of people on-site doing construction now, but that's going to accelerate over the next number of months as we get a few of these major contracts. So yes, the capital spends down a bit. Some of it's actually optimization where we're pushing some cost off without any impact to Schedule and some of it is just simply a little bit light on a few of these contracts, none of which is affecting the critical path for the project.

Speaker 2

So Overall, we remain confident that we'll get this thing into commissioning mid-twenty 25 commercial production by the end of the year. Obviously, with a bit lower spend this year, it's going to be a heavier lift next year. But again, when we look at Critical Path, we're not concerned about the Schedule or overall capital cost. And Joe, I don't know if you have a few comments you might want to add to that.

Speaker 5

Thanks, George. Hi, Cosmos. George, I would say that as we some of that confidence comes from Right from the beginning, flexibility that we built into the construction schedule. So we remain continuing to project On a single ship, 6 day a week construction schedule. So certainly, we have flexibility And how to deploy resources over the remaining project time.

Speaker 5

And I also say that Kind of concurrent with George's comments that some of the optimization that we have done in Well, in this early award stage, I think is pretty beneficial to overall project costs. And We're comfortable with that trade off in time versus money in the near term here. And as George said, we're still Confident or remain confident on being able to deliver scourges in 2025.

Speaker 3

Perfect. And then, Operations. George and Joe, as you mentioned in your press release, you mentioned a few items that contributed to the decrease in CapEx for the year. Part of it is transitioning engineering work to Greece. Would that result in a permanent Cost Savings or could you give us a bit more detail on what that entails?

Speaker 6

Go ahead,

Speaker 5

Joe. Cosmos, this is Joe. Yes, that's kind of what was being reflected there. As we move the engineering The offshore engineering from Vancouver to Greece, we see a better cost structure for engineering, But also there was a bit of time in making that transition. So improved cost and for a period as that was Transitioning and ramping up a bit slower delivery, but everything is on track now and working well.

Speaker 5

So Pretty pleased with that.

Speaker 3

Great. And then going back to Q2, you have mentioned at that time that Several contracts we're going to get awarded in Q3 likely. It sounds like it didn't happen, but that's okay. But you also mentioned that The FS estimate will be updated to the project control budget with some kind of update expected by the end of Q3. We're past Q3 now, but again, should we be expecting some kind of update?

Speaker 3

Should we be looking out for some kind of update? And If that's the case, maybe when?

Speaker 5

Where we sit today, this is Joe. I think it's for the Go ahead, George.

Speaker 2

Go ahead, Joe.

Speaker 5

Cosmos, where we sit today is that We did an update based on completion of award of contracts. And when that work is Completed, we'll update should we see any type of material information that needs to be passed along. So that's where we sit today is we're not updating based on the commitment schedule. OpEx. And as that completes through the end of the year, we'll update based on any material changes that we may see.

Speaker 5

And if not, then I think we'll Hold where we're at.

Speaker 2

Cosmos, let me just add a few comments to that. So OpEx. I just want to make it clear, when we said that in Q2, we're not signaling that we expect anything to come out of that necessarily. It's just It's an important milestone in the work. It will give us some updated information.

Speaker 2

So in the feasibility study, we obviously made assumptions on productivity, Number of employees required to do each piece of work. And so once we get a contract negotiated, we've got improved information. And so we'll digest that. We're not expecting anything to change, but if it does, that will be a time to bring the market up to speed. So And I would remind you again that it was roughly half built when we started.

Speaker 2

We have the confidence and all that work that was done. It was built into the feasibility study And we've done quite a bit of work beginning last year, including putting up the building around the mill facility, the cranes and the work that you saw on-site that we've completed this year. So we've got a lot of confidence in our estimate. We have a lot of confidence in the work we've done. We don't have any critical equipment that we have any concern about.

Speaker 2

I mean, the filters was really the last Operations. Major piece of equipment that we needed to acquire and the filters essentially are manufactured. Opter. So we're already working on plans to put those filters together on-site. That risk is essentially eliminated now.

Speaker 2

So We remain confident. And again, those things we pointed to in Q2 are going to be additional data, additional information, A little later than planned just due to these contracts slipping a little bit, but again not affecting schedule. And maybe one last comment. Operations. On the Civil Works, we had originally contemplated that as 4 individual contracts and we took time to digest all the bids that came Operations Management put a lot of work into optimizing that piece of work and in fact have landed with 1 contractor Operations.

Speaker 2

And we're seeing synergies out of that work. It's a contractor we've got familiarity with as they've done work on the Kokanalikis dam OpEx for the last couple of years. So we're taking our time to make sure we got the right partner and the optimized execution strategy and so far Operations. Things have gone very well for us. So I wouldn't be concerned about a little bit of slippage in the spend or getting these contracts.

Speaker 2

It's actually So far turned to be positive to take our time and get the best possible contract to ensure the best possible outcome on this project.

Speaker 3

That's great to hear, George. Maybe one last question, switching gears a little bit to Olympias. Very good quarter in Q3. And so, I guess going back, there has been a bit of not volatility, but a bit of difference in the quarters. Q1 was good, Q2 was not as good, Q3 now is good once again.

Speaker 3

Could we expect more stability going forward now that You've implemented, say, bulk emotion, you've implemented or the ventilation is now in place. Is the current level what we can continue to expect in terms of production? Costs were fairly good as well, dollars 13.90 an ounce in Q3. Is that a good level of cost or can we expect even better?

Speaker 2

Cosmos, maybe I'll answer it, just some of the high level Operations on Olympias results and Joe can speak to the operational. So I mean Operations. For Olympias, number 1, I would say the infrastructure improvements we have put in place are a game changer for us. But Operations Some of the volatility on Olympias has to do with external markets. We got hit with that payability issue a year ago.

Speaker 2

We've been clawing some of that back OpEx by finding other customers where we avoid the VAT. And even within China now, Operations. We have YVAT at times in that some of the contractors pay for it in order to get that concentrate. So we've got clawed back some of that. Zinc metal price is down quite a bit and that's had a material impact on the byproduct credit value that we get.

Speaker 2

And then overall, we were late getting that infrastructure that was completed in Q2. We had planned on getting that up in Q1. Operations. So that had a cascading impact on the quarter. So I would say at a high level, some of these external factors just add volatility to Olympias.

Speaker 2

And I think you'll see some of that continue. But overall, what we're doing on the ground with the things we have control, We're much better positioned now. And Joe, you can add anything you want to that.

Speaker 5

I think you covered it pretty well, George, Cosmos, the only thing that I would add is that as we go into 2020 complete 2023 2024, We anticipate continued improvement in our underground operations and we're running into a point where Mine and mill are pretty evenly matched. So there will be kind of a period going forward where A bit of work will be required in the mail to take advantage of additional production from underground. So we'll Keep you apprised of that as we move along, but likely to see a bit of melty bottlenecking in 2024.

Speaker 3

Great. Thanks, George and team for answering all my questions. Congrats once again on a very solid Q3 and have a good weekend. Operations.

Speaker 2

Thanks, Cosmos.

Speaker 5

Thanks, Cosmos.

Operator

Our next question comes from Carey MacRury of Canaccord Genuity. Please go ahead.

Speaker 7

Hey, good morning guys. Just wondering about Kisladag, 3,600,000 tonnes is a huge uptick Obviously, the North Heap Leach pad is open and you've got the bigger gear in there. Just wondering how we should think about that rates on a go forward basis?

Speaker 6

Go ahead, Simon. Hi, Carey. Thanks for the question.

Speaker 3

Yes, I

Speaker 6

think the that rate is what we are planning moving forward. That's OpEx. What we've been sort of alluding to with the bigger materials handling equipment that we have now available. The only caveat to that would OpEx. The summer months are our best stacking and availability months just due to weather effects.

Speaker 6

Typically, we do see a small impact from the colder months, which we really factor into our plan for Q1. But beyond that, We expect to be at those type of rights for majority of the year.

Speaker 2

And I might just supplement that. I mean, if you kind of look backwards OpEx over the Kisladag Life. It was a pretty consistent performer with a number of expansions over time. And really what happened OpEx. Beginning of last year, we started agglomerating the ore on the conveyor belts OpEx.

Speaker 2

And that causes some pretty big challenges, particularly last winter. And essentially, it was because we were adding Operations. Essentially cement to the conveyors to do binding of the fines to support the high pressure grinding roll And that caused plugging and clogging of the transfer points between conveyors. So I mean our production dropped off as a result of that challenge. And going forward, but we will see some seasonal impacts.

Speaker 2

Whenever we get a lot of rain or particularly in the winter, it's tougher to get OpEx. The same tonnage as you do when you got blue sky and great weather. So the run rate we you saw in Q3, I think, is a good assumption going forward. We'll obviously be trying to push the open pit and the circuit for more tons, but I'd say the bigger opportunity and upside is OpEx. Actually in the agglomeration and how fine we crushed the ore, how much gold we expose and how effectively we can rinse That's going to be our focus going forward.

Speaker 2

That's probably our opportunity going forward as well.

Speaker 7

Great. That's good color. And maybe just a follow-up on Kisladag. Obviously, the operation is still working through the rain event from May, June. I'm just wondering how you're seeing production sort of heading into Q4 here.

Speaker 7

Are you starting to see an uptick in that sort of that impact wear off?

Speaker 6

Thanks, Kerry. Yes, we are seeing Now that was sort of beyond the Q2, Q3 sort of challenges As you're able to see when we're in the field, things are sort of lining out fairly nicely, irrigation rate and flows Are up where we expect them to be. And now we're working hard to draw down on that inventory created OpEx period.

Speaker 7

Okay, great. That's it for me. Thanks guys.

Operator

Operations. Our next question comes from Kerry Smith of Haywood Securities. Please go ahead.

Speaker 8

Thanks, operator. Joe, for Scurry's getting the detailed engineering done is Pretty critical to keeping the timetable. Is there any risk that transferring that engineering group from Vancouver So Greece is going to cause any kind of delays or are you pretty confident that that shouldn't be the case?

Speaker 5

Thanks, Gary. We're pretty confident that should not be the case and we're working in good cooperation with Fluor in oversight of that engineering. So essentially, we're still running the engineering schedule in concert with them, but we're doing it from site rather than a far. So in a lot of ways, It helps us in order to be kind of get time zones and other things out of that. And we paid Real close attention to critical path engineering and around filters and other things so that we Don't put schedule at risk over engineering and we've had good agreement with all of our vendors on production of vendor Operations and such.

Speaker 5

So we're feeling pretty good about it as a benefit in shortening timelines for turnaround on key information and the like OpEx? With the whole team consolidated in Greece now.

Speaker 2

Terry, I'd say there's one additional benefit Operations to moving some of this engineering in country early and that is you always have to run the filter of Taking those engineering drawings and data and localizing it to regulations. And so by doing that at an earlier phase, We eliminate some duplicate work and it's a bit more efficient and we've got confidence in the capability of these firms within Greece to be able To do this work. So I think there's some net benefits here and we haven't really put any risk to the project from that decision.

Speaker 8

Okay. And are all the long lead items now ordered? I assume they are and some are delivered to site or What is the status of other long lead items?

Speaker 5

Kerry, this is Joe. So there are no long lead items remaining on Critical Path. I mean, we're just cleaning up Bulk items for procurement. Last major piece of equipment I think mentioned earlier was the filters and the filters Are packaged and in shipment and receipts are started for site assembly, but it will be All of that will be on-site end of 'twenty four, early 'twenty five. So No concerns on schedule and at this due to equipment.

Speaker 5

And all of the work on existing equipment that was installed and review has also been completed And any kind of requirements for modifications, other things due to standby time have been accounted for as well. OpEx. So feeling really good about lead times.

Speaker 8

Okay. And just maybe one last question on Screwys. Are you seeing any issues in terms of Hiring, steel trades and labors as you ramp up to the 900 people on-site by the end of the year. OpEx. And second part to that is, are the productivities that you're seeing so far from the contractors sort of at or better than what you'd budgeted?

Speaker 5

So to take the first part of the question, as availability to workforce, There have been no issues to date for contractors managing to mobilize and bring skilled workers on-site. So Pleased with that. And as far as productivities on there's not a lot of data points out there, but the work OpEx. Last year around the mill building cladding cranes and the rest of it was At expectation or kind of at feasibility levels and the work ongoing to date has been similar. But I think that remains a watch point for us going forward.

Speaker 5

But so far, OpEx. Carrie, we're pretty pleased with productivities and how they match up with feasibility.

Speaker 8

Okay. And just on Tichaudeg, maybe Simon can answer. Are the OpEx. Through the agglomerating material kind of tracking with what you expected or better or how are they tracking?

Speaker 6

Thanks, Kerry. Yes, so far, we're still pretty comfortable with the recoveries tracking as OpEx. When we initiated the HPGR investment

Speaker 3

and OpEx.

Speaker 6

And really the agglomeration drum is a supplement to that to help us improve our Handling and Permanently on the pads and so far.

Speaker 8

Okay. And then just one last question, if I could. How are the 2 electric trucks operating at Lamaque? I know you brought those two

Speaker 6

So we purchased 2, that's correct. We only have received 1 so far. And right now, that OpEx. Has been used pretty extensively to train and test the workforce while we're preparing Implementation in the underground activities. So We expect to see the 2nd PV in the Q1 of 2024.

Speaker 6

So that's the sort of plan right now. And so we'll be rolling the first one into service through this quarter. Operations and then the second one as it comes on to site in Q1 of 2024.

Speaker 2

Carrie, one of the things that I heard last week that was pretty cool, so I haven't been there to see the truck that just arrived yet. But It's about 2 minutes to change the battery, which is to me pretty amazing. You can one of the big issues for us is Operations. You got to have an efficient truck where you're not stop charging and so we got spare batteries, but it takes 2 minutes basically to OpEx. Take a battery off and then get the other battery on to keep the truck moving.

Speaker 2

So they've come a long ways with Operations. We can't wait to get the thing underground and see what it can do for us on productivity. They are faster. That's obviously a big win. And the ventilation impacts are pretty enormous for us.

Speaker 2

Operations. We don't need air to deal with diesel emissions with these trucks. So it's going to be awesome, I think.

Speaker 8

And I guess the battery packs has to be changed with equipment? Or can it be changed by a mechanic or an electrician? Like, are they heavy?

Speaker 6

So there's an inbuilt battery changing unit. So essentially, part of the design of the truck is to actually have removal system installed on the truck. So it's powered to lift off and Drop down and then pick up a secondary battery, all without the need of a third party to Put it together. So the truck driver can do that without leaving the truck.

Speaker 8

Okay. Okay, great.

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Earnings Conference Call
Eldorado Gold Q3 2023
00:00 / 00:00