VANCOUVER Oct 30, 2015 (Thomson StreetEvents) -- Edited Transcript of Eldorado Gold Corp earnings conference call or presentation Friday, October 30, 2015 at 1:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Paul Wright Eldorado Gold Corporation - CEO * Norm Pitcher Eldorado Gold Corporation - President * Fabi Chubbs Eldorado Gold Corporation - CFO * Paul Skayman Eldorado Gold Corporation - COO ================================================================================ Conference Call Participants ================================================================================ * John Bridges JPMorgan - Analyst * Cosmos Chiu CIBC World Markets - Analyst * Kerry Smith Haywood Securities - Analyst * Dan Rollins RBC Capital Markets - Analyst * Anita Soni Credit Suisse - Analyst * Botir Sharipov HSBC Securities - Analyst * Andrew Kaip BMO Capital Markets - Analyst * Tanya Jakusconek Scotia Capital - Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good morning. My name is Sharon and I will be your conference operator today. At this time, I would like to welcome everyone to the Eldorado Gold Corporation third quarter results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. (Operator instructions.) Mr. Paul Wright, you may begin your conference. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [2] -------------------------------------------------------------------------------- Thank you, operator. And good morning and thank you all for joining us today, and welcome to our third quarter financial and operating results call. Our team today is rather spread out, as we have just finished up our quarterly Board meetings and a Board tour of our operations and development projects in Turkey and Greece. In Athens right now, I have myself, obviously, Fabiana Chubbs, Chief Financial Officer, Paul Skayman, Chief Operating Officer. In London, we have Norm Pitcher, our President, and in Vancouver we have Krista Muhr, our Vice President of Investor Relations. As always, we have provided detailed financial and operational information in the press release from a few hours ago. Before I begin, I need to remind you that any projections and objectives included in our discussion today are likely to involve risks, which are detailed in our 2015 AIF and in the forward-looking statement disclaimer at the end of yesterday's news release. We will follow the usual format, with myself providing some general comments on the Company's business and our results. Norm will then provide some operational detail, followed by a brief walkthrough of financial statements led by Fabi, and then we'll open up for questions. Going straight to the third quarter performance, we are very pleased to report strong operational results, as all of the mines have delivered again another strong quarter for the Company. Gold production totaled 183,226 ounces. Average cash costs were $552.00 per ounce, and all-in sustaining costs averaged $835.00 per ounce. This strong operational performance is resulting in a further improvement in guidance update for the full year 2015, with a total production target now of 710,000 ounces with an average cash cost of $565.00 per ounce, and all-in sustaining costs reduced to $875.00 per ounce. I am happy to say that the production number is higher than our original guidance numbers at the start of the year, and the average cash costs and all-in sustaining costs are much lower than we had originally estimated. That said, forecasted sustaining capital remains unchanged at a $110 million for 2015. There will be a deferred spend for the new project development capital, now forecast at approximately $225 million for the year versus the original budget of $345 million at the beginning of 2015. The deferrals are primarily related to project development at both Olympias and Skouries, where we have seen delays, initially in the early part of the year due to weather, and more recently due to the temporary suspension of activities. This latter suspension occurred during the third quarter and was a result of a decision by the Greek Ministry of Energy and Reconstruction temporarily suspending the previously approved technical studies for our Kassandra projects. Based on the injunction against the enforcement of the Ministry's decision by the Greek Supreme Court, development activities resumed at Skouries and Olympias and mining operations resumed at Stratoni. We are very pleased to have been able to bring back over 2,000 employees and contractors to work in a timely manner. Our local community and union support remain strong, and we are confident the Council of State will again rule in our favor on the final ruling in regards to the action of the Ministry. I would like to emphasize that we remain committed to the projects and all of our various stakeholders involved. We do anticipate continued positive dialogue with the Greek government. With regards to capital spend and timeline, we will be able to provide a formal update early in the new year, as our teams are now busily finalizing budgets for Board approval at year-end. Despite ongoing capital spend on our growth projects, our balance sheet remains very strong, with total liquidity of approximately $764 million, including $389 million in cash and cash equivalents and $375 million in undrawn lines of credit. I will let Norm and Fabi dive into the operations and exploration and the financials in more detail. But, before I do, I would like to extend my sincere appreciation to Norm Pitcher, our President, as he's announced his plans to retire from the Company effective December 31st, 2015. I cannot thank Norm enough for his enormous contribution to Eldorado and to our successes over the last 15 years. He has been an integral part of our small team. And I can speak for the Company here in saying that we are all going to miss not only working with him, but his sense of humor and his love of Jeopardy. I will resume the role of President and CEO, and plan on sticking around for a while as there are many things that we need to get accomplished. And I am looking forward to this, to work continued with the team that we have here in Eldorado. With that, I'll hand over to Norm and Fabi. Over to you, Norm. -------------------------------------------------------------------------------- Norm Pitcher, Eldorado Gold Corporation - President [3] -------------------------------------------------------------------------------- Thanks, Paul. Good morning, everyone. Hopefully not a dry eye in the house after that, those kind words, Paul. Anyway, on to the operations. In Turkey, both Kisladag and Efemcukuru performed well during the quarter, both from a gold production and cost side, especially Efemcukuru with cash costs of $472.00 per ounce. In China, pretty normal quarter for Tanjianshan, not much to report there. Jinfeng production was where it should be for the quarter. The sales were about 5,800 ounces low as the refinery had an issue with transportation of our dore at month's end. At White Mountain, grade was a little bit lower during the quarter, which affected gold production and cost. However, we expect that to pick up in Q4 and remain on track to meet guidance for the year. On the development side, development activities continued during the quarter, including modifications to the crushing circuit at Kisladag and engineering design work on the Phase IV expansion. In Greece, work suspension aside, underground development and refurbishment at Olympias continued, along with retreatment of about 120,000 tonnes of tailings. We also progressed on Olympias' Phase II, including geotechnical design and procurement of flotation cells and a ball mill. At Skouries, prior to the suspension we were making good progress on the earthworks with some improved weather, and in the plant site. We were also able to get into the ravine bed of the first tailings dam area to begin work on the lower dam infrastructure. At both Certej and Tocantinzinho, we continued with optimization studies during the quarter. And at Eastern Dragon, as we discussed in the last conference call, we needed to redo a geologic report that is part of the mining license application. Approval of that report has taken longer than anticipated, so we know expect to submit the mining license application in November. On the exploration side, a fairly busy quarter for exploration. We had some good underground results from Stratoni, in the press release, before the suspension happened; also some decent results from our Magura project in Romania, which is a combination of epithermal veins and stockwork zones. And in China, we continue to get good results from the northern deeps zone at White Mountain. With that, I will turn it over to Fabi. -------------------------------------------------------------------------------- Fabi Chubbs, Eldorado Gold Corporation - CFO [4] -------------------------------------------------------------------------------- Thank you, Norm, and good morning, everyone. I will go through the financial statements, highlighting changes in significant accounts. Commencing with the balance sheet, we ended the quarter was cash, cash equivalents, and term deposit balance of $389 million compared to $501 million at the end of the 2014. The change in cash balance is mainly the result of cash generation from operations net of usage of cash for dividend payments, capital program, and debt repayment. In July of this year, the government of Greece enacted legislation in Greece in corporate income tax rate from 26% to 29%. This is effective for fiscal year 2015, which resulted in an increase in the deferred tax liability with a non-cash charge to income tax expense of $63.5 million. Moving on to the income statement, we reported a loss attributable to shareholders of the Company of $96.1 million, or a $0.13 loss per share, for the quarter compared with a net profit of $19.8 million, or $0.03 per share, in the third quarter of 2014. Excluding non-cash charges to income tax expense of $84.4 million, we reported adjusted loss for the quarter of $4 million, or $0.01 per share, compared with adjusted net profit of $36.1 million, or $0.05 per share, in the third quarter of 2014. Gold sales volumes and realized prices for the third quarter fell year-over-year, which impacted gold revenues and gross profit from gold mining operations. Temporary suspension of operations and development activities at our projects in Greece resulted in mine standby costs of $6.3 million for the five week period that the activities were suspended. A significant portion of these costs related to payment of 50% salary to those employees suspended. On the statement of cash flows, during the quarter we generated cash flow from operating activities before changes in non-working capital of $43 million compared to $79 million in the third quarter of 2014. The main uses of cash relate to our capital program, $93 million; debt repayment, $8 million; and dividend payment, $5 million. Those are my comments on the financial statements. I will return the call back to Paul. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [5] -------------------------------------------------------------------------------- Thanks, Fabi. Thanks, Norm. Operator, we'll open up for questions, please. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator instructions.) John Bridges, JPMorgan. -------------------------------------------------------------------------------- John Bridges, JPMorgan - Analyst [2] -------------------------------------------------------------------------------- Yes, I'd like to echo your compliments to Norm on his service and performance and your performance this quarter, and also congratulate you on biting the bullet with C suite pay. I was just wondering, though, how long do you plan to be CEO and President? I'm just thinking that, given all the work you do with the relationships, that then -- is this perhaps a little bit too much? -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [3] -------------------------------------------------------------------------------- But, where else, John, could you have this much fun, eh? (Laughter.) No, no. Look, I think we've grown as an organization, and Norm has played a huge role in growing the organization. And the depth that we have, frankly, has allowed us to continue and I think, despite our difficulties, succeed on multiple fronts. I think we have a clear view of what's ahead of us, and I relish the opportunity to play a role, a continued role in helping to bring these mines to fruition. So, I wouldn't be doing it, John, if I didn't want to. -------------------------------------------------------------------------------- John Bridges, JPMorgan - Analyst [4] -------------------------------------------------------------------------------- Okay. Well, best of luck and congratulations. And we look forward to hearing what's going on in Greece. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [5] -------------------------------------------------------------------------------- Well, you're welcome. Thanks again, John. -------------------------------------------------------------------------------- Norm Pitcher, Eldorado Gold Corporation - President [6] -------------------------------------------------------------------------------- Yes. Thanks, John. -------------------------------------------------------------------------------- Operator [7] -------------------------------------------------------------------------------- Cosmos Chiu, CIBC. -------------------------------------------------------------------------------- Cosmos Chiu, CIBC World Markets - Analyst [8] -------------------------------------------------------------------------------- Good morning, Paul and team, and congrats on a good quarter. And Norm, we'll miss you. Come back often if you can. -------------------------------------------------------------------------------- Norm Pitcher, Eldorado Gold Corporation - President [9] -------------------------------------------------------------------------------- Thanks, Cosmo. -------------------------------------------------------------------------------- Cosmos Chiu, CIBC World Markets - Analyst [10] -------------------------------------------------------------------------------- And then, maybe first off in Greece, could you remind us again the expected timeline in terms of start of production at Skouries and Olympias Phase II? I only ask -- I'm trying to see if there is any potential changes, given some of the challenges that you have had in terms of Greece so far in 2015, just the political situation. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [11] -------------------------------------------------------------------------------- Look, I think Paul can speak more accurately to our anticipated startup with Olympias Phase II. Skouries is a little bit harder. And to be frank, Cosmos, I'd rather we sort of wait until we get a better read at the end of the year as to when we're going to get started on -- I mean, we have obviously seen some delays. We've pushed out to our startup now I think the better part of three months. But, we'll be in a better position to sort of refine that at year-end or when we come out with our guidance at the beginning of the year. But, Paul, if you want to comment on Olympias Phase II? -------------------------------------------------------------------------------- Paul Skayman, Eldorado Gold Corporation - COO [12] -------------------------------------------------------------------------------- At Olympias Phase II, we're making good progress in terms of -- Norm touched on procurement, design, etc. The engineering is progressing well. We're looking at hopefully producing some material out of that project at the end of 2016 now. So, it's sort of -- we're still refining the schedule, but that's the expectation at this stage. -------------------------------------------------------------------------------- Cosmos Chiu, CIBC World Markets - Analyst [13] -------------------------------------------------------------------------------- For Olympias Phase II? -------------------------------------------------------------------------------- Paul Skayman, Eldorado Gold Corporation - COO [14] -------------------------------------------------------------------------------- That's correct, yes. -------------------------------------------------------------------------------- Cosmos Chiu, CIBC World Markets - Analyst [15] -------------------------------------------------------------------------------- Okay. And then, on that as well, as you mentioned, Paul, earlier that what you've received right now is an interim injunction from the courts, when would you expect the final decision to come around? -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [16] -------------------------------------------------------------------------------- No, I mean, that's very difficult, because as you appreciate --. -------------------------------------------------------------------------------- Cosmos Chiu, CIBC World Markets - Analyst [17] -------------------------------------------------------------------------------- Yes, that's true. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [18] -------------------------------------------------------------------------------- There isn't transparency in the court decision. I mean, I think -- look, I think there's a recognition here that this action has a detrimental effect on the society and on the business. And we've seen, obviously, a judiciary that's been responsible, I think, in terms of taking these cases and responding to them in a timely manner. I guess it's our fondest wish that we will see the decision here before the end of the year so that we can again have further clarity and give you further clarity in terms of our expectations on timeline to complete the project. We clearly are of the view, I think for sound reasons, that the decision will be in our favor. But, we need to see that behind us. -------------------------------------------------------------------------------- Cosmos Chiu, CIBC World Markets - Analyst [19] -------------------------------------------------------------------------------- Yes, of course. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [20] -------------------------------------------------------------------------------- Now, that's a -- I know it's a wooly answer, but we just -- the nature of the beast is we can't predict when the courts will rule. -------------------------------------------------------------------------------- Cosmos Chiu, CIBC World Markets - Analyst [21] -------------------------------------------------------------------------------- Yes, I fully understand. And then, in terms of development CapEx, Paul, you've lowered that number, as you mentioned, to $225 million now for the full year 2015. If I've worked out my math correctly, it looks like you're expecting to spend about $100 million in Q4. Am I correct? And I guess that's still double what you've spent in Q3 and also double what you've spent in Q2, maybe if you can give us a bit more color on that in terms of where that spending is going to be. It sounds like it could be in Olympias Phase II and certainly some work done at Skouries as well. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [22] -------------------------------------------------------------------------------- Well, certainly we're ramping up at Skouries here. I mean, after the suspension, we came back with a vengeance, so to speak, in terms of getting people back to work. And Paul, I don't know if you want to give a --. -------------------------------------------------------------------------------- Paul Skayman, Eldorado Gold Corporation - COO [23] -------------------------------------------------------------------------------- Well, yes, I mean, and there is some purchasing happening at Olympias. I mean, we've done -- continued to develop the underground at Olympias during the year, but now we start to see Phase II starting to kick in with more gusto, if you like. So, spending and engineering, etc., on Phase II will be a good part of that, I guess. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [24] -------------------------------------------------------------------------------- And certainly, visiting as we did yesterday with the Boards the Skouries project, I mean, the procurement exercise is in full steam. And we have a number of lay-down yards outside of the project site which are quickly filling up with gear and equipment and structural steel. So, if that amount of gear is flowing into site, then I suspect we're going to be paying some bills here shortly as well. -------------------------------------------------------------------------------- Cosmos Chiu, CIBC World Markets - Analyst [25] -------------------------------------------------------------------------------- Yes. And maybe one last question from me in terms of Stratoni. Could you maybe give us a bit more detail in terms of the amended deal with Silver Wheaton? It looks like -- is it a one-time payment that you could be receiving in 2020 depending on how much has been spent on exploration between now and then? And it looks like it's -- they can actually end up paying for a big portion of the exploration budget, correct? -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [26] -------------------------------------------------------------------------------- Well, look, it's not so much a one-time payment. It's a sort of a series of top up payments linked to our completion of exploration meters. I mean, clearly we have, I think for good reason, and our exploration people I think will endorse this, confidence that there are -- frankly that there's more resources to be found. What we needed was the financial incentive to put money into the ground in development, to hanging wall drive and exploration drilling to give ourselves the opportunity to develop that. And the previous agreement, shall we say, was -- we weren't necessarily getting our fair share of the potential reward. So, in conjunction with Silver Wheaton, we were able to, I suppose, divvy up the pie in a more fair manner, shall we say, going forward, which provides the opportunity, obviously, for Silver Wheaton to hopefully realize the benefit for more ounces and gives us the incentive to take on the financial risk of going looking for them. But, it is as described in the press release. There's a top up payment of $2.50 as we -- from the first step up, and then it carries on ultimately up to a $7.00 top up as we get above 30,000 meters drilled. And this -- I think we have a five year period of time in which to complete this size of program, which I don't think will be problematic for us. And certainly, if you take a look at some of the drill results that we include in the press release, they would probably support that there's a decent target there to drill for. -------------------------------------------------------------------------------- Cosmos Chiu, CIBC World Markets - Analyst [27] -------------------------------------------------------------------------------- Yes, for sure. It looks good to me. Thanks. That's all I have. Congrats again. Thanks, guys. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [28] -------------------------------------------------------------------------------- Thanks, Cosmos. -------------------------------------------------------------------------------- Operator [29] -------------------------------------------------------------------------------- Kerry Smith, Haywood. -------------------------------------------------------------------------------- Kerry Smith, Haywood Securities - Analyst [30] -------------------------------------------------------------------------------- Thanks, operator. Paul, can you give any sort of update, or maybe Paul Skayman, just on what you think the CapEx will be now for Olympias Phase II now that you kind of have a better handle on the timing? -------------------------------------------------------------------------------- Paul Skayman, Eldorado Gold Corporation - COO [31] -------------------------------------------------------------------------------- I guess I'd like to just get a little more comfort with the numbers. We're still in that process. We'll be giving you more guidance at the end of the year, Kerry, as far as to --. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [32] -------------------------------------------------------------------------------- Yes. I don't think, Kerry, it's going to be much different from what we've provided previously. I mean, it's --. -------------------------------------------------------------------------------- Kerry Smith, Haywood Securities - Analyst [33] -------------------------------------------------------------------------------- Okay. And then, I guess will you give the updated guidance on the CapEx for Skouries at the same time in the new year? Is that the plan? -------------------------------------------------------------------------------- Paul Skayman, Eldorado Gold Corporation - COO [34] -------------------------------------------------------------------------------- That's the plan, yes. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [35] -------------------------------------------------------------------------------- Absolutely, yes. Yes. -------------------------------------------------------------------------------- Kerry Smith, Haywood Securities - Analyst [36] -------------------------------------------------------------------------------- Okay. And Paul, I don't know if you've got an update on the discussions and the deliberations that the Board's been having on the -- whether there'd be a Hong Kong listing or some way to try and monetize the Chinese assets. Is there any update there? -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [37] -------------------------------------------------------------------------------- No. Look, no, we're still at it. And as we've said, we expect to be able to provide clarity by the end of the year. And we're very cognizant that we're two days away from the beginning of November. -------------------------------------------------------------------------------- Kerry Smith, Haywood Securities - Analyst [38] -------------------------------------------------------------------------------- Okay. But, you'll have an update by year-end then, it sounds like. Okay. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [39] -------------------------------------------------------------------------------- We expect so. -------------------------------------------------------------------------------- Kerry Smith, Haywood Securities - Analyst [40] -------------------------------------------------------------------------------- And then, just on the operating side, and maybe Norm can answer it, with your guidance for the year and the nine month actual production, are you actually expecting a significant drop in production in Q4, which would be implied by the guidance less the nine month actuals, or is it just a very conservative number? -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [41] -------------------------------------------------------------------------------- Well, Kerry, I guess you finally can get guidance for the quarter, can't you? (Laughter.) -------------------------------------------------------------------------------- Kerry Smith, Haywood Securities - Analyst [42] -------------------------------------------------------------------------------- Okay. I'll take that as the contributor (multiple speakers). -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [43] -------------------------------------------------------------------------------- No, look, as you've heard us say multiple times, we don't give guidance for quarters. We give guidance for the year. This year we're doing a little bit better on all fronts, on costs, on production, and all-in sustaining costs. And if the arithmetic shows you with a quarter that's the weakest quarter of the year, I guess that's what the arithmetic shows. And that's (multiple speakers). -------------------------------------------------------------------------------- Kerry Smith, Haywood Securities - Analyst [44] -------------------------------------------------------------------------------- Right, right, right. But, I guess what I was getting at, Paul, was you're not -- are you expecting Q4 generally at the operations to be sort of in line with Q3 or actually weaker? -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [45] -------------------------------------------------------------------------------- We're expecting it to be in line with our guidance, Kerry. You have our actuals --. -------------------------------------------------------------------------------- Kerry Smith, Haywood Securities - Analyst [46] -------------------------------------------------------------------------------- Okay. Thank you. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [47] -------------------------------------------------------------------------------- You have our actuals at the end of the third quarter. You have our guidance to year-end. -------------------------------------------------------------------------------- Kerry Smith, Haywood Securities - Analyst [48] -------------------------------------------------------------------------------- Okay. Thanks very much. -------------------------------------------------------------------------------- Operator [49] -------------------------------------------------------------------------------- Dan Rollins, RBC Capital Markets. -------------------------------------------------------------------------------- Dan Rollins, RBC Capital Markets - Analyst [50] -------------------------------------------------------------------------------- Thanks very much, and congrats on a solid quarter, team. I was wondering if you'd just maybe touch base on Kisladag, if there has been a change to the mine plan through the year, just given that you're tracking extremely well with the full year guidance of 230,000 to 245,000, almost already at 217,000, or is there something else that's happened in the ore body where you've found more ore? What's driving that really strong performance? -------------------------------------------------------------------------------- Paul Skayman, Eldorado Gold Corporation - COO [51] -------------------------------------------------------------------------------- I guess the big thing, Dan, is we've been more successful in extracting ounces out of inventory on the heap than we anticipated. I think when we sat down at the beginning of the year, we sort of expected about a 20,000 to 25,000 ounce drawdown, and we've gone pretty close to doubling that. Now, I don't think we're going to continue to draw that down. I think we're sort of approaching sort of base levels now, but that's really been the driver. And we do expect Kisladag to beat that initial guidance over the full year. But, it's mainly been inventory rather than a significant change in the mine plan or sort of going elsewhere. -------------------------------------------------------------------------------- Dan Rollins, RBC Capital Markets - Analyst [52] -------------------------------------------------------------------------------- Okay. That is perfect. And then, just with respect to the silver streaming agreement, is it on the existing land package or does the top up push it onto a greater land package? -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [53] -------------------------------------------------------------------------------- No, it's the existing land package. There's been no change on the boundaries. -------------------------------------------------------------------------------- Dan Rollins, RBC Capital Markets - Analyst [54] -------------------------------------------------------------------------------- Okay, perfect. That's all I have, and congrats on a good quarter. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [55] -------------------------------------------------------------------------------- Thank you. -------------------------------------------------------------------------------- Paul Skayman, Eldorado Gold Corporation - COO [56] -------------------------------------------------------------------------------- Thanks. -------------------------------------------------------------------------------- Operator [57] -------------------------------------------------------------------------------- Anita Soni, Credit Suisse. -------------------------------------------------------------------------------- Anita Soni, Credit Suisse - Analyst [58] -------------------------------------------------------------------------------- All my questions have been asked and answered, and so I would just like to say congrats on a good question. And Norm, we'll miss you. -------------------------------------------------------------------------------- Norm Pitcher, Eldorado Gold Corporation - President [59] -------------------------------------------------------------------------------- Thanks, Anita. -------------------------------------------------------------------------------- Operator [60] -------------------------------------------------------------------------------- (Operator instructions.) Botir Sharipov, HSBC. -------------------------------------------------------------------------------- Botir Sharipov, HSBC Securities - Analyst [61] -------------------------------------------------------------------------------- Hi, everyone. Thank you for taking my questions; a couple from me, I guess. On Eastern Dragon, can you please maybe provide an update on the timing of the forestry permit there and if you're still planning to start up in the first half of 2016? -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [62] -------------------------------------------------------------------------------- Norm, would you mind jumping on this one? -------------------------------------------------------------------------------- Norm Pitcher, Eldorado Gold Corporation - President [63] -------------------------------------------------------------------------------- Yes. No, that's fine. That's fine. Really, I mean, forestry permits come after mining rights, right? And as I mentioned, we're behind on -- we are behind now on applying for our mining license because this geologic rehabilitation report has taken longer to get through the approval process. There's been no issue with it. It's -- the report's fine. It'll be approved, it's just taken longer. So, I mean, then we're sort of looking at mining license. And then, once that is done, a couple months probably for that, and then you're into applying for forestry. So, you're into the first quarter next year for that. And it's going to depend on how long forestry approval takes. So, first half, yes, I mean, might be towards the end of it. Let us get through -- let us get the mining license applied. As soon as we do, we can get into Ministry of Land and Resources and start seeing how much we could push them to get that approved in a fairly short timeframe. -------------------------------------------------------------------------------- Botir Sharipov, HSBC Securities - Analyst [64] -------------------------------------------------------------------------------- Okay, thanks. And I guess shifting to Tocantinzinho there, can you maybe speak about some of the opportunities that you see there? Obviously Brazil and reais is the biggest one, but do you generally expect an improvement in economics there, given that gold prices are lower but the real is about 30% weaker from your feasibility study assumptions? -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [65] -------------------------------------------------------------------------------- Look, we certainly expect to see reductions in operating costs and capital costs. What that will mean, given the offset to the reduction in gold price, we don't know yet. I mean, we're working now -- or at least our engineering group are working to have by early December an updated technical view of the project. And we'll be reviewing that internally with the Board in December and then subsequently obviously releasing that to the market. But, certainly there are some very encouraging signs as it relates to capital and operating costs reflecting what you've described, and not just simply the real, but of course energy costs and well as just the market for skills and labor in Brazil. And, I mean, it was an overheated market for a number of years. And to a degree, the feasibility study or the technical study that we commented on a number of months ago didn't necessarily -- well, certainly didn't reflect the conditions that we're experiencing now and are likely to experience in the near future. So, we're looking forward to seeing what the new look is. -------------------------------------------------------------------------------- Botir Sharipov, HSBC Securities - Analyst [66] -------------------------------------------------------------------------------- And you said -- I guess a quick follow up on that. How does this asset I guess fit into your overall strategy? Do you plan on holding on to the asset or maybe monetizing it at some point? -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [67] -------------------------------------------------------------------------------- Well, let's get the study done and let's have a look at what the numbers imply, first of all. But, I would say at this point it's probably a keeper. -------------------------------------------------------------------------------- Botir Sharipov, HSBC Securities - Analyst [68] -------------------------------------------------------------------------------- Okay. Thank you so much. -------------------------------------------------------------------------------- Operator [69] -------------------------------------------------------------------------------- Andrew Kaip, BMO. -------------------------------------------------------------------------------- Andrew Kaip, BMO Capital Markets - Analyst [70] -------------------------------------------------------------------------------- Hi, Paul. Just a follow up on -- regarding the discussions in Greece. Earlier on in the fall you had indicated that you were looking for a more constructive relationship with the government. And I'm just wondering whether you're -- with resuming production activities and construction activities in Greece, I'm wondering if you're beginning to see that change of tone of discussion with the government that you've been looking for. I'm wondering if you can provide some insight in that regard. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [71] -------------------------------------------------------------------------------- I would say we're feeling more positive based on the engagement we're seeing from the government. And this is a government that's obviously gone through a few iterations and is evolving itself as, shall we say, a party and a government. And we're inextricably linked to that maturing process, I guess is the best way of describing it. -------------------------------------------------------------------------------- Andrew Kaip, BMO Capital Markets - Analyst [72] -------------------------------------------------------------------------------- All right. Thanks. That was really the one question I had to ask. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [73] -------------------------------------------------------------------------------- Okay. Thanks, Andrew. -------------------------------------------------------------------------------- Operator [74] -------------------------------------------------------------------------------- (Operator instructions.) Tanya Jakusconek, Scotiabank. -------------------------------------------------------------------------------- Tanya Jakusconek, Scotia Capital - Analyst [75] -------------------------------------------------------------------------------- Yes, good morning, everybody. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [76] -------------------------------------------------------------------------------- Morning, Tanya. -------------------------------------------------------------------------------- Tanya Jakusconek, Scotia Capital - Analyst [77] -------------------------------------------------------------------------------- Hey, congrats on the quarter. And Norm, I'm going to miss you, so stay in touch. -------------------------------------------------------------------------------- Norm Pitcher, Eldorado Gold Corporation - President [78] -------------------------------------------------------------------------------- Tanya, I feel honored that you've gotten on the call. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [79] -------------------------------------------------------------------------------- Yes. (Laughter.) -------------------------------------------------------------------------------- Tanya Jakusconek, Scotia Capital - Analyst [80] -------------------------------------------------------------------------------- Who's going to be my shopping partner in (multiple speakers)? -------------------------------------------------------------------------------- Norm Pitcher, Eldorado Gold Corporation - President [81] -------------------------------------------------------------------------------- I really do. -------------------------------------------------------------------------------- Tanya Jakusconek, Scotia Capital - Analyst [82] -------------------------------------------------------------------------------- So, I can't let you leave, Norm, without answering a question. And it's got to do with the reserves and resources, just as we're coming to year-end, maybe just sort of how you're looking at your exploration program and how that fits in in terms of reserve replacement this year. Do we think we'll replace what we've produced? -------------------------------------------------------------------------------- Norm Pitcher, Eldorado Gold Corporation - President [83] -------------------------------------------------------------------------------- Probably too early to say. I mean, we're just -- yes, we're right in the middle of that right now, as you can imagine. Yes, I wouldn't want to really give a comment on that at this point. -------------------------------------------------------------------------------- Tanya Jakusconek, Scotia Capital - Analyst [84] -------------------------------------------------------------------------------- Okay. And resource category, that's too early also? -------------------------------------------------------------------------------- Norm Pitcher, Eldorado Gold Corporation - President [85] -------------------------------------------------------------------------------- Yes. Yes. No, we're still calculating. -------------------------------------------------------------------------------- Tanya Jakusconek, Scotia Capital - Analyst [86] -------------------------------------------------------------------------------- Okay. -------------------------------------------------------------------------------- Norm Pitcher, Eldorado Gold Corporation - President [87] -------------------------------------------------------------------------------- We're still calculating. We're still getting data, right? I mean, we're still drilling the deeps at White Mountain. We're still drilling at QLT and Tanjianshan, yes. -------------------------------------------------------------------------------- Tanya Jakusconek, Scotia Capital - Analyst [88] -------------------------------------------------------------------------------- Okay. All right. Well, I'll let you pass on that one then, Norm. Maybe one for --. -------------------------------------------------------------------------------- Norm Pitcher, Eldorado Gold Corporation - President [89] -------------------------------------------------------------------------------- Wonderful. -------------------------------------------------------------------------------- Tanya Jakusconek, Scotia Capital - Analyst [90] -------------------------------------------------------------------------------- Yes, you got off easy. Maybe one for Fabi. Fabi, in Q3, can you give us an idea of what currency and fuel helped the cost structure versus the guidance for the quarter, or your actual guidance? -------------------------------------------------------------------------------- Fabi Chubbs, Eldorado Gold Corporation - CFO [91] -------------------------------------------------------------------------------- Well, basically currency for us, the movement, it depends. Let me look at the number. Usually you're looking at a change in the Turkish lira will give us around $0.28 per ounce. And that's a 10% change in the Turkish lira. That's all going to be in your cash cost -- $28.00, sorry. On the RMB, you're looking more at $23.00. So, if you do an average of $25.00 per ounce for each 10% movement, that will get you there. -------------------------------------------------------------------------------- Tanya Jakusconek, Scotia Capital - Analyst [92] -------------------------------------------------------------------------------- Okay. It's been helpful. -------------------------------------------------------------------------------- Fabi Chubbs, Eldorado Gold Corporation - CFO [93] -------------------------------------------------------------------------------- And I don't remember -- okay. -------------------------------------------------------------------------------- Tanya Jakusconek, Scotia Capital - Analyst [94] -------------------------------------------------------------------------------- Yes. No, no, I can do that. It was just more to just keep -- assure that these are intact. Well, thanks a lot, everyone. And again, Norm, keep in touch. -------------------------------------------------------------------------------- Norm Pitcher, Eldorado Gold Corporation - President [95] -------------------------------------------------------------------------------- I sure will. -------------------------------------------------------------------------------- Operator [96] -------------------------------------------------------------------------------- (Operator instructions.) We do not have any questions at this time. I turn the call over to the presenters. -------------------------------------------------------------------------------- Paul Wright, Eldorado Gold Corporation - CEO [97] -------------------------------------------------------------------------------- All right. Well, thank you, operator, and thank you, all who have participated and listened in on the call. All the very best. Enjoy the rest of the day. Thank you. -------------------------------------------------------------------------------- Operator [98] -------------------------------------------------------------------------------- This concludes today's conference call. You may now disconnect.
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