Eldorado Gold Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
July 26, 2024

There are 8 speakers on the call.

Operator

Thank you for standing by. This is the conference operator. Welcome to the Eldorado Gold Second Quarter 2024 Results Conference Call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions.

Operator

I would now like to turn the conference over to Lynette Gould, Vice President, Investor Relations, Communications and External Affairs. Please go ahead, Ms. Gould.

Speaker 1

Thank you, operator, and good morning, everyone. I'm excited to welcome you to our Q2 2024 results conference call. Before we begin, I would like to remind you that we will be making forward looking statements and referring to non IFRS measures during the call. Please refer to the cautionary statements included in the presentation and the disclosure on non IFRS measures and risk factors in our management's discussion and analysis. Joining me on the call today, we have George Burns, President and Chief Executive Officer Paul Furnihew, Executive Vice President and Chief Financial Officer Loew Smith, Executive Vice President, Development, Greece and Simon Hilly, Executive Vice President, Operations and Technical Services.

Speaker 1

Our news release yesterday details our Q2 2024 financial and operating results. This should be read in conjunction with our Q2 2024 financial statements and management's discussion and analysis, both of which are available on our website. They have both also both been filed on SEDAR Plus and EDGAR. All dollar figures discussed today are U. S.

Speaker 1

Dollars unless otherwise stated. We will be speaking to the slides that accompany this webcast, and you can download a copy of those slides from our website. After the prepared remarks, we will open the call for Q and A. At this time, we will invite analysts to queue for questions. 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 Q2 results and highlights. I will then pass the call over to Paul to go through our financial results and then to Lo and Simon to review our operational performance. We will then open the call to questions from our analysts.

Speaker 2

Turning to Slide 4. The 2nd quarter delivered safe gold production of 122,000 319 ounces, in line with our progress towards full production guidance. Production was in line with expectations as grades increased at Lamaque, Fincucuru, and Gisela. During the quarter, we did have a small impact to production as a result of a labor initiated work stoppages at Olympias totaling 17 days in the quarter during negotiations on a new collective bargaining agreement. Currently, we're in final stages of negotiating a mutually acceptable CBA with our unions.

Speaker 2

Looking ahead, we continue to expect increased production in the second half of the year, remaining on track with our guidance to produce between 505,005,000 ounces of gold in 2024. Total cash cost and all in sustaining costs were in line with our expectations at $9.40 per ounce sold and $13.31 per ounce sold respectively. Costs increased primarily as a result of higher royalties driven by higher gold prices in addition to higher labor and contractor costs and higher fuel prices during the quarter. As noted in Q1 and subsequently in the second quarter, continued higher gold prices during the quarter have led to increased royalty expenses in Greece and Turkey as the royalty structures are calculated on a sliding scale linked to the gold price. While we did see higher costs this quarter, they are in line with our 2024 guidance ranges.

Speaker 2

Paul will touch on our costs in more detail later in the call. Turning to Slide 5 in the Q2. Our lost time frequency rate decreased to 0.40 recorded incidents per 1,000,000 person hours worked compared to 1.32 in Q2 2023. Our commitment to create and maintain a safe and healthy work place is unchanged, and we recognize this is a continuous journey of improvement. Our health and safety focus in 2024 is based on preventing high potential incidents and further empowering our employees to promote a positive health and safety culture.

Speaker 2

In sustainability, I'd like to start by congratulating our teams in Turkey on the outstanding scores they received following their external verification against the Mining Association of Canada's towards sustainable mining protocols. DSM scoring is arranged from C through AAA with A indicating good practice and AAA indicating excellence and leadership. At Efemcukuru, the site received AAA scores in tailings, health and safety, biodiversity and indigenous and community relations. The site received A, AA and AAA scores across all other indicators. At Kisladag, the site received AAA scores in all safety and health protocol indicators and A, AAA and AAA scores across all other indicators.

Speaker 2

Notably with the completion of the first round of TSM verifications, we now have AAA score tailings facilities across all of our operations. I would also like to extend my congratulations to a number of our global teams that received awards during the quarter, including a silver award from the Hellenic Institute for Occupational Health and Safety, the Finance Awards. This was in recognition of our Scurries project financing facility and a bronze award in the gender and inclusion category at the 2024 EBRD Sustainability Awards. These awards recognize the outstanding achievements of EBRD's clients in promoting green economies and better environmental and social performance. We take great pride in our team's commendable success and this is reflected in the awards received across health and safety, sustainability and finance.

Speaker 2

I'll stop there and turn the call over to Paul for a review of our financial results.

Speaker 3

Thank you, George. Slide 6 provides a summary of our 2nd quarter results. Our operations delivered a steady second quarter, in line with expectations and guidance and with continued high gold prices driving overall financial results. Looking to the full year, our annual guidance remains unchanged across all operational and financial metrics with some upside possible in cash flow generation if gold prices remain at their current levels. Eldorado reported net earnings attributable to shareholders from continuing operations of approximately $56,000,000 or $0.28 per share in the 2nd quarter, positively impacted by higher revenue due to higher volumes sold and higher prices realized when compared to the Q2 in 2023.

Speaker 3

After adjusting for onetime non recurring items, adjusted net earnings were $66,600,000 or $0.33 per share for the quarter. Adjusted net earnings in Q2 2024 accounted for the reversal of 2 principal items. Firstly, a $1,900,000 gain on foreign exchange due to the translation of Turkish deferred tax balances, net of inflation accounting impacts and secondly, a $12,000,000 unrealized loss on derivative instruments, including our gold 0 cost dollars. Our free cash flow in the quarter was negative $32,000,000 and positive $33,900,000 excluding the capital investment in the Skouries project. Cash flow generated by operating activities before changes in working capital in the quarter was around $132,000,000 compared to $82,000,000 in the same quarter last year.

Speaker 3

As previously noted, the increase is principally related to higher sales volumes and realized gold prices. 2nd quarter total cash costs were $9.40 per ounce sold and all in sustaining costs were $13.31 per ounce sold. Our costs increased compared to Q2 2023 as a result of higher labor costs and consumables such as fuel driven by production volumes as well as higher royalty expenses primarily due to higher realized gold prices. The higher royalty expense in Q2 impacted AISC by approximately $40 per ounce. In addition, increased sustaining capital investment contributed to higher AISC for the quarter compared to the same period in the prior year.

Speaker 3

Capital expenditures on a cash basis were $133,000,000 in the 2nd quarter, including investment in growth projects at Kisladag, where we focused on planned waste stripping, the North Heap Leach Pad and related infrastructure. At Skouries, we continue to advance major earthworks and infrastructure construction for the project and as expected invested approximately $92,000,000 in the period. We anticipate that we will restart investing our own equity in the project as early as the Q4 this year. Current tax expense of just over $20,000,000 for the 2nd quarter decreased from approximately $22,000,000 compared to the same period in 2023, primarily due to reduced Turkish taxes after accounting for increased investment tax credits and inflation accounting adjustments. Deferred tax sorry, deferred income tax decreased to a $1,000,000 expense in Q2 2024 from an expense of $17,000,000 in the comparable quarter in the prior year.

Speaker 3

In Q2 2024, deferred tax included a $4,400,000 expense for use of tax attributes in Canada, a $5,800,000 expense related to the weakening of the Turkish lira and the euro against the U. S. Dollar, partially offset by a $7,600,000 recovery from the application of Turkish inflation accounting. Turning to Slide 7, stability and status quo are the key themes. Our balance sheet continues to be well funded and able to support our growth strategy.

Speaker 3

We ended the quarter with total liquidity of $810,000,000 including $595,000,000 of cash and cash equivalents and $215,000,000 of available credit capacity. During the quarter, we extended and increased our senior secured credit facility by $100,000,000 This was done proactively, taking advantage of favorable market conditions and allowing us to update and renew our previous facility that was due to expire in 2025. Cash increased over the quarter as a result of positive cash flow from our mining operations, combined with drawdowns of the project finance facility for the Skouries development. We expect to build cash during the remainder of 2024 from cash flow at our operations as we benefit from strong gold prices. Additionally, we continue to focus on maintaining a solid financial position that provides flexibility to respond to opportunities and fund our growth strategy to unlock value across our global business.

Speaker 3

With that, I'll now turn the call over to Lo to go through the Greek asset highlights. Thanks, Paul, and good morning. Starting on Slide 8 at our Rescudios copper gold project.

Speaker 4

While Q1 was primarily focused on earthworks, Q2 saw construction work commence in multiple areas. Going forward in Q3 and Q4, underground mining, mechanical piping and instrumentation in the main plant will continue to ramp up in addition to the construction of the photoplant building. Overall progress is 76% when including the first phase of the construction and we remain on track for 1st production in Q3 2025 with commercial production expected at the end of 2025. Detailed engineering has advanced and is now at 72% complete and procurement is substantially completed. Work rigorously continues to ramp up on construction of major off work structures, including the haul roads, water management ponds, low grade stockpile, primary crusher, process facilities, filter plant facility and the integrated extractive waste Management Facility, the IEWMETH.

Speaker 4

Productivity Improvement Initiatives by the Earthworks Contractor, including adding a partial second shift has yielded significant improvements, including optimizing cycle times for the fleet as well as improved sequencing of material placement and quality control activities. On the critical path is the filter plant facility, which continues to advance. We expect to award the filter plant construction contract in the next few weeks. The filter press plates continue to be preassembled with 225 now completed out of a total of 5 88 and during Q2 the fabricated frames for those plates arrived on-site. Work in the mill flotation building is progressing well.

Speaker 4

Commissioning of all overhead cranes were completed during the Q2. Construction, lighting, scaffolding, steel and concrete work are all on track. In addition, off-site pipe spooling fabrication and contract immobilization continues on plan. Work is also progressing on the underground development to support test of mining in 2025. We awarded the 2nd contract in Q2, which includes the test of work as well as additional development and services work to support the development of the underground mine.

Speaker 4

The contractor mobilized to site and the first blast occurred on June 17. We have also completed the earthworks to allow access to the cofferdam site during the Q2 and construction has now commenced. In addition, the Loughgrade ore stockpile fill placement has also started. Moving on to Slide 9. During the Q2, the capital investment at Scurius was $92,000,000 almost double the first quarter spent.

Speaker 4

This brings our year to date spend at Squareus to $144,000,000 which is in line with our expectations as the spend is expected to ramp up significantly as mobilization and the site labor increases over the second half of the year. We remain on track to meet our guidance for investment in Scudios in 2024 of between $375,000,000 $425,000,000 At the end of Q2 2024, we had 8 41 personnel on-site and are still on track to ramp up to 1300 by the end of the year. The next few slides will slow the advancement of the work underway. Turning to Slide 10, on the left hand side is the primary crusher. As planned, the upper retaining walls are now completed and it is expected that the 1st pour for the concrete slab for the base of the crusher building will be bought in August.

Speaker 4

On the right hand side is the filter plant area where you can see 2 drills are actively working with

Speaker 2

the third

Speaker 4

one having recently arrived in July. The contract activity has increased significantly and 2 70 piles are now completed effectively finishing the piles required for the filter plant building. There are a total of 8 71 piles with the remainder to be completed for the ancillary buildings. In July 2024, preparation work for the concrete foundations on the filter plant have commenced with assembly of the building structure to commence in Q3 2024 following the award of the filter plant construction contract. The inset photo shows a closer up view of what will become the floor of the filter plant building once the concrete slab is poured.

Speaker 4

On the next two slides, you will see work has commenced on support infrastructure, including the process control room building, process plant substation, water pump station, line plant, air blowers building and flotation reagents plant areas. On Slide 11, these pictures are all on the west side of the main process plant building. On the left hand side, you can see the secondary substation. On the picture on the right hand side, at the top is the pump house and the bottom is the process plant control room, which when completed will be 4 levels high. On Slide 12, the photos show the east side of the main process plant building.

Speaker 4

You can can see where the reagents mixing building compressors, air blowers and lime building will be. We will continue to provide progress updates as we advance towards the 1st production in the Q3 of 2025. Moving to Olympias on Slide 13. 2nd quarter gold production was 13,541 ounces and total cash costs were $12.31 per ounce sold. Production was impacted by 17 days of labor initiated work stoppages, primarily in June as we negotiated the new CBA agreement.

Speaker 4

Total cash costs were positively impacted by the productivity efficiencies from the recent transformation initiatives as well as slightly lower unit costs of certain consumables including electricity. We also benefited from lower transport costs as a result of improved shipment logistics. For 2024, production guidance at Olympias is between 75,000 to 85,000 ounces of gold. Production in the second half of the year is expected to increase over the first half of the year as a result of expected increase in ore mines and process. As George mentioned at the beginning of the call, we are in the final stages of the CBA negotiations.

Speaker 4

I'll stop there and hand over to Simon to discuss the Turkey and Canadian operations.

Speaker 5

Thanks, Lloyd. Starting in Turkey on Slide 14. At Kishida, 2nd quarter production was 38,990 ounces with total cash costs of $9.41 per ounce sold. Production was in line with our expectations as grades increased during the quarter as we saw higher tonnes placed on the pad. Total cash costs were impacted by increased royalties.

Speaker 5

To further advance our understanding and unlock opportunities within our wall body, we currently have a geometallurgical test work program underway. This program is evaluating the effects of ore type variability on the life of mine resource in order to refine the crushing agglomeration and heap leach circuits with an expectation of completing a study in 2025. The study will focus on optimal moisture, reagent addition, particle size and implementation incremental debottlenecking of crushing plant to maximize value at Kichida. Optimization of drum and bell deglomeration continues within the circuit to ensure product consistency and operability. For 2024, production guidance at Kishida is between 180,000 190 5,000 ounces of gold.

Speaker 5

Production is expected to increase in the second half as compared to the first half of the year as we expect to achieve higher stacking rates. At SM2 Crew on Slide 15, 2nd quarter gold bull production was 22,397 ounces at a total cash cost of $10.87 per ounce sold. Gold production throughput and average gold grade at FN2 Crew were in line with the plan for the quarter. For 2024, production guidance at FN2 Karru is between 70,000,85,000 ounces of gold. Production in the second half of the year is expected to be relatively consistent with the first half of the year.

Speaker 5

And now moving to the Lamaque complex on Slide 16. Lamaque delivered a strong second quarter of 47,391 ounces at total cash cost of $7.59 per ounce sold. Production was positively impacted by higher grades during the quarter, which were in line with expectations. The total cash cost increases were affected by higher sales volumes and the remaining increases were due to additional costs incurred in labor, contractors and equipment rentals. The team is focused on increasing productivity with an aim on ramping up development and mucking rates in the Triangle and Olmec deposits during the second half of the year.

Speaker 5

The Olmec deposit remains on track to take a bulk sample, complete a pre feasibility study and announce the inaugural reserves by the end of 2024. We have advanced development to 190 meters at the end of June and planned monthly advance ramping to 120 meters moving forward. For 2024, production guidance at Lamaque is between 175,000 190,000 ounces of gold. Production in the remainder of the year is expected to be stronger than the first half of the year as grades are expected to increase. I'll stop there and hand back to George for his closing remarks.

Speaker 2

Thanks, team. It's an exciting time at Eldorado. We are now just over a year away from bringing Skouries, our transformational copper gold project online, and it is rewarding to see the continued progress as we advance towards First Gold. We expect Skouries to be a powerful catalyst to drive shareholder returns as we continue to deliver construction progress over the next year and production in Q3 2025. In addition, across our global operations, our teams continue to focus on continuous improvement projects with the objective to deliver safe, profitable ounces.

Speaker 2

I couldn't be more proud of this team. We also delivered another consistent quarter, which positions us well to achieve our production and cost guidance for 2024. In addition, the record high gold prices, we've benefited significantly from margin expansion. Additionally, the jurisdictions in which we operate have also benefited with higher royalties and increased tax payments as a result of the higher gold price. By maintaining a disciplined focus on cost and capital allocation, coupled with higher gold prices, we continue to realize margin expansions resulting in continued growth in our free cash flow from operations.

Speaker 2

This positions us well to further build on our already strong cash balance to continue to create value for our stakeholders. Thank you for your time. I will now turn it over to the operator for questions from our analysts.

Operator

Thank The first question comes from Mike Parkin with National Bank. Please go ahead.

Speaker 6

Hi, guys. Congrats on the good quarter. Just starting with Kisladag, the CapEx trend that we're seeing, I guess, we could is it still fair to assume that growth capital will be in and around how you're kind of trending in the last 12 months on a go forward basis? Or are you still running at modestly elevated capital? Like when I look back a year or 2 ago, it was generally growth around 20 ish million.

Speaker 6

It's been more kind of mid to high 20s, 32 in Q2. How should we think about that kind of going forward?

Speaker 2

Well, I mean, at a high level, Mike, I would say, we've gone through most of the growth capital involved with HPGR, North Leach pad and agglomeration. This year, we're completing construction on the ADR plant. So you remember, we put the absorption part of the plant in last year. That's where we pulled a solution, the gold out of solution on the carbon. During the past year, we've been using the South Leak pad to strip the gold off that carbon and the poor gold.

Speaker 2

So anyway, we're advancing now to add the absorption and recovery plant to the North Leach plant pad. So it's not a lot of capital for that piece, but it's the last piece of that expansion we're reaching. I mean the rest of our growth capital primarily is around stripping and that will continue for the next 6 years or so, to which point there will be a big drop off in stripping requirements for the remaining life of mine and inflection point in free cash flow.

Speaker 6

Okay. And on production, are you getting all the production from the new pad now or is it still a blend? And if it is, can you give us an idea of like what percentage is coming from the new pad versus the old pad?

Speaker 5

Thanks, Mike. It's Simon. We through the course of 2024 and 2025 are still utilizing both the South and the Northeast Leach Pad. As you know, we have a long leach cycle at Kisladag. So we need to ensure we have sufficient lead space to allow for that lead cycle to run towards full cycle.

Speaker 5

The percentage, we'd have to get back to you on the exact numbers, but we would see North heap leach pad being more dominant moving forward in 2025s and beyond that.

Speaker 3

Thanks.

Speaker 6

Obviously, it's a heap leach, so like analysis of recovery rates is a little tricky. And then your long leach curve, as you pointed out, adds to that complexity. But if I look at like a trailing 12 months and I look back to like you added in the HPGRs, the agglomeration tie in about a year ago. On the numbers you've been kind of posting, it does kind of bounce around a bit based off grade and ounces stacked and everything. But it did seem like you were kind of in the mid to high 50s, some quarters even 60, but now you're kind of shifting down kind of sub-fifty.

Speaker 6

Is that what's kind of spurring this review in optimization? You talked about exceeding your budget on the site tour last fall. And just kind of wondering what your thoughts are like. I know the technical report had yet 56%. Are you still seeing that as ultimately achievable?

Speaker 6

Or do you feel like there's maybe a need for additional tweaks beyond what that technical report called for?

Speaker 2

Thanks for the question, Mike. Maybe I'll frame it at a high level and Simon can add some color. So when you go back to the original studies, we had 6 different rock types that we looked at recoveries and impact of the EGR investment and then later the agglomeration. And those recoveries are variable. They run from low-50s to low-60s.

Speaker 2

And so part of the recoveries is just a matter of which ore types are we processing. And then beyond that, how fine we crush it, how well we agglomerate it also has implications on recovery for every one of those rock types. So it's a pretty complex geometallurgical situation. We've got quite a bit of data now since we started up the circuit. And so we're just leveraging off that information to say, all right, what can we do to further improve the circuit?

Speaker 2

So we'll be looking at debottlenecking the plant. We'll be looking at additional conglomeration impacts on recovery and maybe even debottlenecking the entire plant. So we're taking now that the circuit is up and running, we got lots of data, we're going to take a wholesome full look at how the circuit is performing and what the opportunities are to make further improvement to NAV for Kisladag. So I mean, high level, we're comfortable with that 56%, but we're going to do steady work and we're going to look to see where we have opportunities to improve.

Speaker 6

Okay. Thanks. And then switching over to Olympias, one last question. You kind of started off the call there that the labor agreement is still work in progress. Have you had any operational disruptions in July?

Speaker 6

Or do is there any indications that you might still see some daily kind of disruptions while you finalize that? And do you have a sense of the I know it's kind of a tough question to ask you, but do you have a sense of like maybe when you'll be able to have like a signed agreement with them? And is that a 3 year contract, 2 year contract, 5 year contract? What's the term on it?

Speaker 4

Yes, Mike, it's Sloane here. Thank you for the question. No further interruptions in the month of July. In terms of concluding the discussions, we are looking at doing that over the next 2 weeks. And yes, So we're approaching the end of very much approaching the end of these discussions.

Speaker 6

Okay. And just the term of the contract?

Speaker 4

It will

Speaker 3

be a 3 year contract. Great.

Speaker 6

Thanks. That's it for me guys.

Speaker 5

Mike, just before you go, those percentages stacked or planned for 2024, roughly around 66% on the Southeast Leach Pad for this year and obviously 33% for the Northeast Leach Pad. That will probably migrate to high numbers on the North in 2025.

Operator

The next question comes from Tanya Jakusconek with Scotiabank. Please go ahead.

Speaker 7

Great. Good morning, everyone. Thank you so much for taking my questions. Maybe just a follow-up just on the Olympias contract, just for ourselves without getting into the nitty gritty, but can we just assume in terms of wage increases to be in line with what has been sort of the inflation rate in the global mining sector of about 5% for labor? And we're just trying to benchmark ourselves here.

Speaker 2

Yes, Tanya, I don't want to get into the specifics, but I'd tell you there'll be no surprises are expected on the cost side. And it's we negotiated contract that's a win win for the workforce and the company. So there's productivity initiatives that we're focused on. And obviously, the unions are looking to have wage increases. So no surprises expected.

Speaker 2

We're expecting this to be overall good news for both parties.

Speaker 7

Okay. Thank you for that, George. And then just on the stories on the contracts left to be awarded, it's really only the filter plant contract that needs to be put in place, which you said is coming in the next couple of weeks? And is that really it? We've got all the contracts we need.

Speaker 7

We've got the underground. Well, hopefully, this filter tailings contract in place. So we have everything we need and then just sort of getting the got all the items on-site that we need and it's just getting the labor aspect of getting that into place and training. Is that how I should think? I mean it sounds very high level.

Speaker 7

Obviously, you got to continue building, but I'm just trying to understand from a higher level that we have the critical items.

Speaker 2

Yes. I'd love to tell you, every contract has been signed other than the filter plant. But really, it's all the material contracts. There are smaller contracts for ancillary buildings and so forth like a G and A building, mine administrative building. Some of those aren't finalized, but they're not on the critical path and not going to impact production and we're on track with those types of contracts.

Speaker 2

But in terms of the material contracts required to get us into start up in Q3, it is just this last filter plant facility. And as Lo said, we're a couple of weeks from having that finalized and we're not late in finalizing that contract and that we're still working on the piling, the concrete foundation and at which point then we can put up the building, so on track.

Speaker 7

Okay, perfect. And then just coming back to this labor agreement. And George, I know when we were on-site, we talked about getting the mine, the employees or the labor portion stories up to that 4th greater than that. But anyway, getting the labor aspect in place. And I know we had talked about maybe potentially moving some from your Olympias operation.

Speaker 7

So anything in this new contract that's going to preclude that from happening? Or is there anything that's being put in place to allow for that? Just trying to understand on this labor side.

Speaker 2

Yes. Well, I mean, first of all, on the management side, we have moved some of our leadership team from Olympias over to Scurries and as a result been able to promote and move people around within the Olympias workforce. In terms of mining, we're in contract phase and both open pit and underground are being driven by contractors. On the plant facility, we've got the operational leadership team in place. We're working now on the 2nd level doing recruiting in Greece and we're preparing the training facility or not the facility, but the training program for the hourly workforce.

Speaker 2

So that will ramp up in the second half of the year and accelerate in the first half of next year. So we're on track with all of that. There's no implications coming out of the negotiations on the Skouries build and still feeling comfortable on the labor side for operations.

Speaker 7

All right. That's good to hear. And then just my final question is just more a modeling question, so maybe someone can help me out on here. Just on the depreciation, it looks like you're running well below. I annualize that you're well below the guidance level you've given us.

Speaker 7

So maybe someone can just help me understand why this depreciation, I. E. Not being an accountant here, but should we be thinking of lowering? Are you thinking of it coming in lower than what your guidance is? Or is depreciation really going to ramp up in the second half of the year?

Speaker 3

Tanya, it's Paul. I think there's three things that you just need to bear in mind. The first one is, back at Q1, we had that small one off adjustment that brought down the basically first half depreciation. The second piece that I would say is we did have some additional reserves that we booked at the beginning of the year, which weren't built into the rates that we used for our guidance. So that moved down the unit rates a little bit.

Speaker 3

And then the final thing I'd say is, just remember, we're back half weighted, 45%, 55% on production. And so we will see depreciation tick up approximately 20% higher just because of the production in the second half combined with the unit rates. And so, yes, we're lower, but I would guide you towards the low end of the guidance at this point.

Speaker 7

Okay. Just wanted to check because it was quite low. And then just on that 45, 55, and I hate, but as we have to sit here forecasting quarterly, I'm just trying to understand whether we should be thinking a quarter on quarter improvement or should we be thinking that Q3 is going to be the same as Q4. Part of it is grade related, part of it is Kisladag on the leach time. So I'm just trying to understand, should I be thinking that Pizlodag should have a stronger Q4 and then Lamaque and Olympias even great for Q3 and Q4?

Speaker 7

Just trying to understand how that 55 gets split in Q3 and Q4?

Speaker 2

I mean, just talking to consolidated guidance, stronger second half. We expect Q3 and Q4 both to be strong. And I think my 7 years at Eldorado, the 4th quarter has been the strongest quarter every year and expect that to be the case again this year. So a ramp up quarter over quarter and 10% higher production in the second half, a bit higher in Q4.

Speaker 7

Okay. That's helpful. Thank you so much for helping me on that. Appreciate it. And if I could get one in for Simon just at the end on that because the study, if I could.

Speaker 7

We talked about the debottlenecking of looking at the mill itself, maybe the agglomeration what more can be done there. Is the aim at the end of this obviously to improve the NPV, but is there just coming through it from an increase in throughput at the mill plus an increase in recovery? I'm just trying to understand what your end goal hopefully what you're targeting to see improvement in what area both to help MPV. I just didn't know if there's one focus or several focus.

Speaker 5

Thanks, Tanya. Yes, I think you hit on the major topics there being that we're evaluating as you know, we still have a long mine life at Tishadar. We are moving into Phase 5 and Phase 6. So we're just reassessing the geometallurgical performance as it relates to the plant and assessing the full plant capabilities to maximize capital invested so that we can set the circuit up for that. And that's the purpose of the study so that we can evaluate those aspects that you've mentioned.

Speaker 7

Okay. Thank you. I'll leave it to someone else to ask questions. Thank you so much for taking my questions.

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