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spk00: Thank you for standing by. This is the conference operator. Welcome to the Eldorado Gold Corporation Q4 and 2020 year-end financial and operational 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. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Jeff Wilhite, Interim Head of Investor Relations. Please go ahead.
spk01: Thank you, operator, and thanks, everyone, for taking the time to dial into our conference call today. On the line with me are George Burns, President and CEO, Phil Yee, Executive Vice President and CFO, Joe Dick, Executive Vice President and COO, Jason Cho, Executive Vice President and Chief Strategy Officer, and Peter Lewis, Vice President Exploration. Our release yesterday details our 2020 fourth quarter and year-end financial and operating results. This should be read in conjunction with our fourth quarter and year-end financial statements and management's discussion and analysis, both of which are available on our website. They've also been filed on CDAR and EDGAR. All dollar figures discussed today are US dollars unless otherwise stated. We will be speaking to the slides that accompany this webcast. You can download a copy of these slides from our website. Before we begin, I would like to remind you that any projections included in our discussion today are likely to involve risks, which are detailed in our 2019 AIF and in the cautionary note on slide one. I will now turn the call over to George.
spk11: Thanks, Jeff, and good morning, everyone. Here is the outline for today's call. I'll provide a brief overview of Q4 and 2020 before touching on some of the milestone developments that have taken place since the end of the year that have positively altered the outlook for Eldorado in this young year. Then I'll pass it to Phil to go through the financials. Joe will follow by reviewing operational performance. Then we'll open it up for questions. I'm very pleased with the strong operational and financial results in Q4 and over 2020. We delivered on many fronts, including maintaining and achieving our original 2020 guidance and achieving our highest quarterly production in nearly five years. Production totaled almost 529,000 ounces for the year amid an improving cost profile. We finished the year in a solid capital position with over $500 million in cash and equivalents, which increases our financial flexibility to fund our growth. And we did this all amid an historically challenging year. I'm extremely proud of our teams as they continue to show courage in the face of adversity while working together to deliver on our key catalyst and drive value for stakeholders. Speaking of catalysts, We have had a tremendous start to the year with the major milestone of signing the amended investment agreement in Greece, the pending acquisition of QMX in Quebec, and this week's announcement of a maiden resource at ORMAC that demonstrates our continued exploration success in the region. Our strategy of prudent reinvestment in high-quality opportunities within our portfolio continues to take shape. Chief among these is the advancing the world-class scurries project in Greece and our LAMOC operations in Quebec. I'll talk more on both of these in a moment. Over to slide four. Many of you have seen our early February news of signing an amended investment agreement in the Hellenic Republic. This is a huge achievement for us, as well as for the government, and is a testament to the dedication of all involved. The agreement delivers a commercial framework that sets the stage for a productive and mutually beneficial relationship with the government. It also provides a path to unlock transformational value from the Cassandra Mines as our development plan of these assets is part of the agreement. It was an honor to be able to attend the signing ceremony in person. alongside Christos Belascus, our VP and General Manager of Greece. Also present were the Minister of Energy and Environment, the Minister of Finance, and the Minister of Development and Investment. The attendance of the Canadian and U.S. ambassadors also added support for increased trade and investment between North America and Greece. Perhaps a bit of a refresher on the agreement itself. The modernized agreement amends the 18-year-old contract that was put in place by a previous owner under vastly different economic circumstances. At the time, the contract was a simple asset transfer agreement that reflected the distressed nature of the Cassandra Mines. This modernized agreement now reflects the use of updated technologies such as dry stack tailings and improved water management and the needs of an investment of this size. It also maximizes value for all stakeholders while bringing about significant economic and environmental improvements. It's a mutually beneficial agreement we can all be proud of. As you're aware, investor protection mechanisms and permitting assurances were important parts of our ongoing discussions with the Greek government. These are included in the agreement and are similar to clauses offered to other foreign direct investors. The agreement also outlines enhanced fiscal revenues for the Greek state, job creation, community development opportunities, and various environmental benefits. Scurries and Olympias are world-class assets, and we believe it's important that all stakeholders benefit from their development. A bit more detail on the fiscal revenues for the Greek state. particularly the royalty increase of 10% for all metals contained in concentrate. To clarify, the current 2% royalty at $1,300 gold now becomes a 2.2% royalty. Over to the next slide that sets out the next steps in Greece and specifically at Scurries. As we've mentioned previously, the investment agreement now needs to be ratified by Parliament. We expect this to occur by the end of Q1 with a publication in the Government Gazette shortly thereafter. The arrows here show the stage gates to resume construction at scurries. It will be a busy year with the approval of the permit to use dry stack tailings expected in Q2 and commencement of pre-construction activities thereafter. We aim to complete a feasibility study in Q3 while concurrently evaluating funding alternatives. We expect a potential investment decision by year end, and thereafter look to restart construction in 2022. Back to this side of the Atlantic, I want to say a few words on key catalysts delivered this quarter in Quebec. First, the friendly acquisition of QMX strengthens Eldorado's position in the world-class Abitibi Greenstone District. by increasing our land holdings by approximately 550%. Scheduled to close early April, this would add a pipeline of organic exploration opportunities proximal to our existing infrastructure at Lamarck, including about 690,000 ounces of existing mineral inventory. On to the second catalyst. a recent announcement of the 803,000-ounce maiden inferred resource at Armagh. This early exploration success highlights the outstanding growth potential at Lamarck. The strike continuity, vein orientation, and dimensions of Armagh deposit exhibit important similarities to parts of the nearby historically mined Sigma deposit and mine tube. As you can see from the map here, It is ideally positioned along the ore haulage decline now under construction, connecting the Lamarck Triangle underground mine with the Sigma mill. We will be conducting an infill and expansion drilling throughout the course of the year as the deposit remains open in multiple directions. So very encouraging initial results. Taken together, These two catalysts underscore Eldorado's commitment to Quebec and Canada as a core jurisdiction in our portfolio. They also support our strategy in the region of developing a pipeline of additional ore sources within and proximal to the Lamarck Triangle mine, which could leverage existing infrastructure and optimize the Sigma mill, which has a permitted capacity of 5,000 tons per day. I'll stop there. Over to you, Phil.
spk13: Thank you, George. Good day, everyone. Before getting into our Q4 2020 performance, I would like to highlight the operational and financial turnaround for the company over the last year. Slide 8 exhibits the improved quarterly financial performance in 2020 with adjusted net earnings of $170.9 million and free cash flow generation of $236.2 million for the year. Over to our Q4 and full-year financial results on slide nine. Eldorado's strong finish in the fourth quarter caps a dramatic year-over-year improvement in virtually every key area of business in 2020. Gold production totaled 138,220 ounces in Q4 2020, a sizable increase compared to 118,955 ounces in Q4 2019. Annual production totaled 528,874 ounces in 2020, a 34% increase from 395,331 ounces in 2019. Despite impacts related to COVID during the year, annual guidance was maintained throughout the year and achieved. Compared to the prior quarter, Q4 saw increased gold production, partially offset by lower realized metal prices. El Dorado generated $278.5 million in total metal revenue in the quarter, compared to $191.9 million in Q4 2019. For the year, Eldorado's metal revenue exceeded $1 billion for the first time since 2014. Gold revenue in Q4 2020 totaled $253.7 million, an increase of 44% over Q4 2019. Gold revenue comprised over 91% of the total metal revenue in 2020, increasing 77% to $938.3 million versus $530.9 million in 2019. This increase resulted from higher gold sales volumes of 137,523 ounces sold in Q4 2020 compared to 118,902 ounces sold in the fourth quarter of 2019. The increase in revenue was also the result of a higher average realized gold price in Q4 2020 of $1,845 per ounce as compared to $1,475 per ounce in the comparative quarter in 2019. The company reported net earnings to shareholders in Q4 2020 of $22.8 million, or 13 cents, earnings per share. After adjusting for one-time non-recurring items, including a $40 million non-cash write-down related to capital works in progress and a $3.4 million VAT provision associated with the write-down, Adjusted net earnings for Q4 2020 increased to $58 million or $0.33 adjusted net earnings per share. This compared to $19.3 million or $0.12 adjusted net earnings per share in the same quarter one year ago. Full year 2020 adjusted net earnings also increased significantly compared to the prior year, totaling $170.9 million or $1 adjusted net earnings per share compared to $2.4 million or two cents adjusted net earnings per share in 2019. The increased net earnings and adjusted net earnings reflect higher gold prices and higher gold sales in 2020 relative to the previous year. EBITDA totaled 95.1 million in Q4 2020, an increase to 144.2 million in adjusted EBITDA for the quarter after adjusting for, among other things, the previously mentioned $40 million one-time non-cash write-down related to capital works in progress. In comparison, Q4 2019 EBITDA totaled $158.7 million, and after adjusting for a reversal of impairment in 2019, adjusted EBITDA was $80.3 million for Q4 2019. For the full year, adjusted EBITDA totaled $534 million for 2020, a significant increase from $235.6 million for 2019. We also saw increased capital spend in the fourth quarter as efforts were made to advance projects. El Dorado is entering a growth phase and capital will be higher in 2021 as we position our producing assets for future production and growth. At KISSEDAG, we are in year two of a multi-year pre-stripping phase that will position a mine for a sustained period of enhanced free cash flow over an increased mine life. In addition, completion of the high-pressure grinding rule circuit at the end of Q3 and the north leach pad expansion at the end of the year will substantially bring to a close the project process capital associated with a successful mine life extension we announced in early 2020. At Lamarck, the capital is focused on underground development as we continue to grow the relatively new mine and the underground decline connecting the triangle deposit directly to the Cigna mill is expected to be completed by the end of the year. Olympias will similarly see higher capital in 2021 focused on increased underground development and improvements to position the mine for greater productivity and efficiencies. Depreciation and amortization total 70.4 million in Q4 2020 versus 52 million in Q4 2019. Reflecting the higher production in the quarter, as a significant portion of our property plant and equipment depreciates over mine life on a unit of production basis calculated based on mineral reserves. We believe that continued exploration success of the sort that George mentioned at the outset should continue to add meaningfully to mine life and to the overall production profile at our operating mines. There were no significant changes in finance costs in Q4 2020. For the year, finance costs increased to $50.9 million, from 45.3 million in 2019, primarily due to 6.3 million of premiums paid upon the early redemption of 66.1 million of the 300 million senior secured notes during 2020. Q4 2020 reported a 4.6 million tax recovery compared to a 9.8 million tax expense in Q4 2019. Q4 2020 tax reflected the receipt of a $21.7 million investment tax credit in Turkey related to the Kisadek heat bleach project, including, among other things, the installation of the HPGR. The investment tax credit received reduces the effect of tax rate in Turkey in Q4 2020. I am pleased to report that we entered 2020 in a net cash position. We finished the quarter with $511 million in cash, cash equivalents and term deposits, and approximately $29 million available under the revolving credit facility. Perhaps most importantly, Q4 2020 free cash flow totaled $48.4 million, significantly higher than the $5.5 million for Q4 2019. This was lower than the previous quarters due to a lower effective goal price in the quarter and the timing of capital spend. As previously mentioned, this brought our total free cash flow generation to $236.2 million for the year. Subsequent to the end of the year, we have also added to our overall liquidity position. Our revolving credit facility had $70.8 million in credit allocated to cover non-financial letters of credit that were issued to secure certain obligations in connection with our operations. In February 2021, an amendment was completed such that the non-financial letters of credit no longer reduce credit availability under the revolving credit facility. and $100 million in undrawn credit is now available to the company. A prepayment of $11.1 million of principal on the term loan was made in conjunction with this amendment. In addition to this liquidity boost, El Dorado also continued to reduce debt with an additional $7.5 million payment in December, reducing the balance of the senior notes outstanding to $233.9 million as of the end of the year. In addition, the scheduled principal payment of $33.3 million was completed in December, reducing the term loan balance to $133.4 million at the end of the year. Net leverage is at 0.04 times EBITDA at the end of Q4 2020. This is a significant reduction from net leverage at 1.25 times EBITDA at the end of Q4 2019 and reflects a much stronger balance sheet compared to a year ago. As George discussed earlier, entering 2021 with this increased level of financial strength, increased liquidity and improved credit profile provides added flexibility to take advantage of the many compelling opportunities before us. Against the backdrop of our recent positive news in Greece and in Quebec, we enter 2021 a significantly stronger, more financially flexible company. With that, I will now turn it over to Joe to go through the operational highlights.
spk08: Thanks, Phil, and good morning, everyone. Amid an unprecedented operating environment over the last year, I'm very pleased that our minds achieved 2020 production and cost guidance. It's important to point out that our guidance remained unchanged throughout 2020, even as global commercial activity slowed to a crawl last spring as the extent of the pandemic became more fully known. We produced 138,220 ounces of gold in the quarter at cash operating costs of $536 per ounce sold and all-in sustaining costs of $959 per ounce sold. I am proud of our team's accomplishments across our mines and projects. The team at Lamarck deserves particular recognition for outperforming against plan in what was essentially a 49-week year due to government-mandated shutdowns. of operations in Quebec last spring. Reviewing the five-year outlook we released on January 14th, the midpoint of our new production guidance for 2021 increased by 10,000 ounces compared to the guidance we issued a year ago, due primarily to higher production expectations at Le Mans as mining continues in C4. Looking over the five-year guidance horizon, a substantial period of outperformance at Le coupled with an improved operating outlook at Kisladad, has enhanced our overall five-year production profile compared to a year ago. Scourius, Paramahill, and Ormac represent potential upside. Turning to current operations, Kisladad ended the year better positioned to deliver on our planned project work going forward. The team on site has progressed on a number of critical initiatives, including the completion of the process pond that will allow us to store more pregnant solution. The installation of two additional CIC trains is on track for the end of the current quarter, which is expected to increase our solution processing capacity from 3,250 to 3,750 cubic meters per hour. The installation of a new carbon column regeneration kiln is on track for scheduled completion during second quarter of 2021. HPGR commissioning remains on track for the third quarter, and we expect to have indicative recovery information by year end. Phase one of the north heat bleach pad expansion, pictured here in gray on the slide, is expected to be ready for stacking by year end. We are also progressing well on our multi-year pre-stripping campaign, which is back on track after the COVID slowdown. Kisladat is expected to mine and place under leach in excess of 11 million tons in 2021 at an average gold grade of 0.69 grams per ton. The flotation columns installed at FM2 crew have been successfully commissioned and are now online. This will have a positive effect in 2021 and beyond on the quality of our gold concentrate and the transportation savings related to reduced ton shift. I am pleased to report that this project was completed on schedule and on budget. In 2021, FMTUCR is expected to mine and process almost 520,000 tons of ore at an average gold grade of 6.6 grams per ton. FMTUCR continues to be a steady and safe performer with stable production and over three years without a lost time incident. We also continue to have success through the drill bit that may allow for meaningful mine life extension through resource conversion at Cocarpinar. At Lamarck, underground mining in the C4 zone began in earnest in the fourth quarter, and our results there to date have been better than expected with positive grade reconciliation on the first two stopes taken. We expect to average approximately 2,000 tons per day at Lamarck during 2021. at an average gold grade of 6.6 grams per ton. Our underground crews and contractors are now advancing the decline from both ends between Triangle and the Sigma mill on schedule. As of February 24th, we have completed 1140 meters of advance, and we expect to be in the proximity of ORMAC during September on the way to connection of the decline by year end. Completion of the decline is expected to reduce operating costs as surface haulage costs are eliminated and the current triangle haulage ramp is replaced with straight line haulage to the Sigma mill with reduced emissions, providing an important environmental benefit as well. Our focus in 2021 is continuing the work to optimize the Lamac operation. During 2020, we advanced the technical work for further mill expansion, paste backfill, tailings alternatives, and decline materials handling. We have also had success debottlenecking the mill to 2,200 tons per day and look to improve upon that work in the year ahead. During 2021, we will combine that technical work with our exploration program to better incorporate the regional potential and move our plans forward in a disciplined manner. Truly exciting times at Lamarck. Over to Olympias. I am pleased to report that the mine met its full year production plan in 2020. Mine is expected to reach 443,000 tons in 2021 at average grades of 7.3 grams per ton gold, 104 grams per ton silver, 3% lead, and 4% zinc. Underground development, along with continued operational efficiency improvements, remain the focus at Olympias as we continue to ramp up the mine. We expect to see declining cash operating costs as a result. As elsewhere throughout the portfolio, there is compelling opportunity for improvement, and we look forward to sharing our progress with you in the year ahead. With that, I'll turn it over to George for closing remarks.
spk11: Thanks, Joe. Before wrapping up, I'd like to again recognize the contributions of George Albino, who stepped down as our chair of the board at the beginning of this year and welcome Steve Reed to the role. George remains on the board of directors. I'd also like to mention the following new appointments to our leadership team. We have a lot of project work ahead of us, and I'm excited to leverage the skill set of these individuals to deliver our growth plans. Simon Hilly joined Eldorado as vice president technical services in November 2020. He is responsible for technical projects, and fostering innovation throughout the company. Sylvain Lehoux was promoted to Vice President and General Manager of Quebec in early December. He will continue to oversee all mine operations in Quebec while also taking on increased responsibilities as an ambassador for El Dorado in the region. Brock Gill will join as Senior Vice President, Projects and Transformation in March. Previously with BHP, Brock will oversee development engineering activities, project delivery of major capital projects, and transformation through business improvement initiatives at Eldorado. With several key catalysts already delivered or underway in this year, 2021 is shaping up to be a pivotal year for Eldorado. We expect this positive momentum to continue as we deliver on our guidance and growth plans. Our focus in 2021 is unlocking the compelling value with scurries and throughout our portfolio while continuing to put safety, sustainability, and good governance at the core of our business. I'm excited for the dynamic year ahead and look forward to updating the market with all of our exciting progress. Thank you, everyone. We'll now turn it over to the operator for questions.
spk00: Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question is from Cosmos Chu from CIBC. Please go ahead.
spk02: Hi. Thanks, George, Phil, Joe, and team. Thanks for the conference call. Great to see the revised agreement in Greece and also the resource update at ORMAC. Maybe my first question is on ORMAC. Could you remind me what kind of drill spacing you needed to get ORMAC into inferred? And then eventually, what kind of drill spacing would you need to get it into MNI and then eventually into reserves?
spk09: Thanks, Cosmos. It's Peter here. I'll answer that question. Given that this is a blind deposit that we can't directly observe at surface, we were fairly aggressive in our initial drill spacing before we were comfortable going to inferred. The inferred resource that we announced is based on an average drill spacing of the mineralized lenses. It's around 70, 80 meters through most of the deposit. And it's a bit tighter in areas where we wanted some additional confidence. In addition to that, we trimmed the mineralized shapes so that we don't include anything that's more than 50 meters from a drill intercept. So we were pretty conservative on our approach at the inferred level. In terms of next steps and converting to indicated resources. We're still working on that. And the program that we're initiating right now actually is to go back into the inferred, tighten up the drill spacing, and just give us a little bit more, basically verify the geological model that the inferred resource is based on. And then in addition to that, With our haulage decline, we'll actually have direct underground exposure, the upper part of ORMAC, probably early 2022, possibly even late 2021. And that, in addition, will help us define our strategy going forward. So we haven't defined the drill spacing for conversion yet. We need that additional information before we're comfortable doing it. And then, of course, that would be true for defining reserves as well.
spk02: Great. Thanks, Peter. And to follow up, I guess, you know, looking at the geometry of ORMAC here, you know, it looks to be a fairly flat-lying structure. I seem to remember previously you had, you know, explored Minrail as a potential method of mining it. It didn't really work out. I think there were some technical challenges. You know, since then, have you, you know, given it some more thought in terms of how you might tackle and mine this deposit?
spk08: Cosmos, this is Joe. We're in early days of that, you know, and we'll need a bit more information, but we've looked at it in a more of a conventional drift and fill or a or room and pillar. And so at this point, you know, it's too flat for Minrail. And, you know, so I just say at this time, you know, it's hard to determine, but as we get a little more understanding of great continuity and that kind of thing will begin method selection. But those are two things that we've done the preliminaries on.
spk02: Great. And then, you know, talking about the decline here, as you mentioned, you know, it's going to get fairly close to ORMAC by Q3 2021. Do you anticipate doing any kind of work, any kind of development on it at this point in time? Or is it, you know, still too early?
spk08: Well, we'll get a bit more information before we make that decision from the current drill program, and we'll get an engineer started on potential options, and we'll make that decision as soon as practical. But it's a bit early just yet, Cosmos.
spk02: And then, Joe, could you remind me what the potential capacity of this decline is?
spk08: In what respect? In haulage capacity?
spk02: Yeah, haulage capacity.
spk08: I'd have difficulty giving you that right now. I think we're well in excess of 3,000, 3,500 tons per day, perhaps a bit more than that. But right now, depending on what we ultimately do, I think that capacity still remains to be determined.
spk02: Okay. And then maybe one last question here, just wrapping it all together. George, as you mentioned, LAMAC, Previously, there is capacity potential to get it up to 5,000 tons per day. You know, given what you have today at ORMAC, given that, you know, on top of ORMAC, there's actually a lot of inferred ounces, you know, at this point in time, do you think there's enough to potentially support, you know, 5,000 tons per day? Or do you really have to see what you have at QMX and wait for that to close and then kind of see more regional basis what you have?
spk11: Thanks, Cosmos. Well, it's completely dependent on our exploration success, and you can see we've got a number of targets at Lamarck, and with QMX potentially closing at the end of the quarter, it's just going to open up the field for Peter and our team at Lamarck to find additional feed for that plant. We don't currently have that in front of us, but, you know, when you contemplate the current expiration targets and the direction we're headed to expand those, you know, over the longer haul, I'm confident we're going to be pushing that throughput level up. It's just right now we're not far enough advanced to be able to identify exactly where it's going to come from.
spk02: Great. And those are all the questions I have. Looking forward to the rest of 2021, and have a good weekend.
spk11: Thanks.
spk00: The next question is from Fahad Tariq from Credit Suisse. Please go ahead.
spk05: Hi, thanks for taking my question. Maybe first for Phil. In the quarter in Q4, can you talk about... It looks like cash taxes were quite a bit higher in the quarter. Is there anything of note there?
spk12: Well, the cash... Hi, Fahad. The cash taxes are really tied to...
spk13: to Turkey and to, you know, the federal tax in Turkey and the Quebec mining duties at Le Mans. And in Turkey, in Q4, you know, the taxes were offset by the receipt of a, you know, almost, I think it was $27.1 million in investment tax credit. So that offset the cash taxes. And also there was an adjustment from a foreign exchange tax as well that we got a refund. So that reduced the effective tax rate in Turkey. Related to Lamarck, it's all tied to the Quebec mining duties. And because of the higher production in Q4, our Quebec mining duties increased in Q4. Got it.
spk05: Okay, that's clear. And then just on the investment agreement in Greece, is there any risk that it does not pass the parliamentary ratification? Is that something we should even be thinking about at this stage?
spk11: I would say no. We've been working really hard with the Greek government on putting together this mutually beneficial agreement. And as I stated, three key ministers signed the agreement with us. New Democracy has a majority in Parliament. They wouldn't have signed the agreement if their party wasn't intent on passing the agreement into law, so I have very high confidence that's going to happen shortly.
spk05: Okay, great. And then just the last question kind of related to that. I know you said previously that you're looking for a funding partner for scurries, but with an improving balance sheet, it is
spk11: possible that you could do the project alone maybe give us your latest thoughts on how you're thinking about you know moving forward with the project well for sure our balance sheet's much better positioned we've made tremendous progress over the last year and a half in that vein and and from our perspective it puts us in more of a driver's seat to come up with an optimum financing for scurries our strategy still remains to look at to put in place a joint venture partnership And partly for funding, partly to have another voice to have influence over the multi-decade life of these assets. So at the end of the day, it's going to be a balance between the various options we have from a joint venture perspective, as well as other funding alternatives that we continue to evaluate. And it'll boil down to certainty of getting the return on investment, de-risking the project however we can, and at the same time, getting the best returns for Eldorado shareholders. So it's tough for us at this point to be pretty clear about where we will land on that. And from my perspective, the catalyst that we've outlined, which is ratification, approval of dry stack permitting, and advancing the engineering to a feasibility level by Q3, All that's going to underpin certainty on the investment and position Phil and Jason to optimize the financing strategy for it. So in summary, I tell you, we're in a better position from a flexibility perspective, but we're pursuing all alternatives.
spk05: Okay, got it. That's it for me. Thank you. Thank you.
spk00: The next question is from Carrie Smith from Haywood Securities. Please go ahead.
spk03: Thank you. Phil, for the 25% royalty increase in Turkey, was that all cash settled? Because it was retroactive to January 1 of last year. Was that all cash settled in Q4 then?
spk13: Hi, Kerry. That was all cash settled in Q3 because it was announced in Q3. And it was retroactive to the start of the year. So you would have seen a higher royalty impact for the full year come through our Q3 numbers. And Q4 would just reflect
spk03: the incremental amount for q4 okay gotcha okay and can you just for my just to make sure i've got the right numbers what is the actual royalty now and is it is it a sliding scale world can you just remind me what the rate is and how it works it's a sliding scale um i'm just do we have the actual i don't have the actual scale in front of me carrie but it is a sliding scale okay okay well maybe you can just i can get it later offline then okay And if the decline at LMAAC is completed by the end, how much equipping is there to do and other work to do before that decline would actually be functional and be able to move mock-up to the plant?
spk08: Can you repeat that, Kerry? I missed the end of the question. This is Joe.
spk03: Hi, Joe. I was just wondering if you finish the decline by the end of the year, is it at that point in time, is it fully ready to go and ready to be utilized for muck haulage or is there incremental work to be done? And if so, when would it be ready for ore transport?
spk08: Okay. There will be a little bit of incremental work to be completed. I think we could use it, but, you know, we make connection by year end, and then we, you know, we work out the road surfaces and all of that prior to utilization. But it's not a very long time period. You know, a month, six weeks post-connection, we're ready to haul.
spk03: Okay. Okay. And, George, perhaps could you just remind me again your rough estimate as to what it would cost for capital to expand the Sigma mill up to, say, 4,000 or 5,000 tons a day, let's say 5,000 tons a day?
spk11: Yeah, I mean, we've been in public with about $15 million, and that capital level envisions putting in a Sag mill, which was in the circuit originally but was sold by a predecessor company. So it's, I mean... physically what has to happen we need additional grinding capacity and we'd have to upgrade the remaining leach tanks and and you know we we're doing further engineering on that and looking at incremental analysis and depending on how our exploration success unfolds you know we'll make we'll make the appropriate decision for the next level of expansion okay
spk03: Okay, so 50 million. And based on what you see today at ORMAC with those flat line, you've got, I think it's 18 separate lenses there. Would that geometric configuration support, say, 1,500 tons a day? Would that be a reasonable expectation for the kind of tons that you may be able to pull from that operation?
spk08: Kerry, this is Joe. I'll answer. You know, based on current knowledge and you know, the inferred resource and the very preliminary work that we have done, we're more in that 700, 800 tons per day sustained. However, you know, given the step-out capacity, we don't see that as unrealistic based on how exploration proceeds.
spk03: Okay. Okay, that's helpful. Thank you, Joe. And just... just for my interest sakes, what was the $40 million that you had spent at Olympus? What was that for that you canceled?
spk13: Gary, it's Bill here. So you're referring to the write-down. That was part of the original agreement and plan that was in place that was related to the tunnel that was being developed.
spk11: Maybe I can jump in. In the original business plan that's, I think it's like more than 10 years old now, the idea was to run Olympias for a phase and then to build a new flotation circuit in the next valley. And so this decline would have been put in place to deliver the ore from the underground Olympias into the next valley into what was perceived to be the Madame Lacoste flotation facility. And that plant was going to be, as I recall, around 900,000 ton capacity. So with our new business plan, our public disclosure, the plan is to expand the Olympias plant and then run that plant through the life of mine. So it has better return on investment, which is good for El Dorado and our investors. It also maximizes value to the Greek state. So, Kerry, essentially by getting the agreement signed, that tunnel longer has a potential future use, and as a result was written down.
spk03: Gotcha. Okay. Okay. That's helpful. And I guess, Phil, just last question for me. The realized price was $30 an ounce below the L&D average. I guess that was just timing of sales, was it?
spk11: That's one of the opportunities and challenges of having concentrate in the portfolio is You know, depending on the timing of the shipments and, you know, from the time we market shipped until when we get the final closing from the smelter, the process is that you see ups and downs, and this quarter happened to be a down in comparative price to the quarter.
spk03: Right, right. Okay, that's great. That's all my questions. Thanks very much.
spk11: Thank you, Kerry.
spk00: The next question is from Josh Wolfson from RBC Capital Markets. Please go ahead.
spk04: Thanks. As it relates to the funding aspect for scurries, what I recall historically is the streaming option had been a low priority. But just kind of looking again at where the commodity prices are and understanding there's a large base metals component, Is there any sort of higher consideration for that option now versus the past?
spk10: Yeah. Hi, Josh. It's Jason. I'd say streaming has a place in terms of how we're looking at all the alternatives related to funding scurries. I think we're trying to keep an open mind to it and understanding that relative cost of capital on precious maybe versus base metal streaming may have its advantages as well. But sort of answer to your question, yes, we'd be keeping an open mind generally to funding alternatives, including streaming.
spk04: Great. Thank you. And then I may have missed this earlier. There's a number of questions on our Mac. It sounds like In terms of timelines for when that oil will be able to be mined and incorporated in the plan, with the decline, I guess, meeting that by the third quarter, what sort of timeframe could you look at for that?
spk08: It's a bit preliminary to put a timeframe on it. I think we have to first complete the exploration program in place now, gain access to the ore body to reach out and touch it, understand that it's what we think it is. And all the while, while we're doing that, working on extraction options, So, you know, I hate to put a timeframe on it, but it's, you know, a year later, perhaps, somewhere in that general range, but I think it's too preliminary just yet.
spk09: Yeah, Josh, it's Peter, if I can jump in quickly. Just in terms of our plans, you know, we are going to be hitting ORMAC pretty hard. We're quite excited about the potential there, but we are still at the resource definition and expansion stage, and We're not even to the point yet where we can plan our resource conversion program in detail. So the emphasis over the next six months is going to be to get a better sense for the overall resource potential there and what that conversion program looks like. So that would be the next news from us is once we have a better understanding of that. Yeah, I just supplement all that.
spk11: This is George. I just supplement all that. As Joe said, we'll be able to touch the deposit and break some rock, and that's going to give us a lot of information. Peter outlined for a portion of the deposit, we're going to do some more detailed drilling. That'll give us another indication. And after touching it and seeing it, they'll be able to nail down the appropriate drill spacing. And depending on that, that will impact how long it will take to get the confidence we need to put it into production. So it's still fairly early days to put to put a definitive timeline on it. But it took us a year from discovery to this inferred resource. And I remain optimistic with the capability of our team that it won't take that long. This looks pretty good to us.
spk09: Yeah. And one final comment is the bulk of the resource has been defined. It's relatively shallow. It's within the upper 400 meters. So we have the option of doing the delineation drilling, the conversion drilling from surface. or from underground once we get access there. So it's something we can advance quite rapidly.
spk04: Got it. And then one last question, which I'm sure you're not going to like because it's on timelines again, but as it relates to the updated PEA for LMAAC, you know, is there any sort of idea when we could see that and obviously incorporating ORMAC and maybe to simplify this, is that something that we would expect in 2021 or is this going to be still a ways off?
spk08: The preliminary view is toward the end of the year. And, you know, I think as we learn more, we're certainly going to want to be as inclusive as we can with that PEA. So
spk06: know we'll update on a quarterly basis but but our present thinking is at or near year end okay that's great thank you very much the next question is from mike parkin from national bank please go ahead hi guys thanks for taking my questions uh most of them answered but in terms of um or mac is there What's the timeline in terms of metallurgical work on that, or do you feel confident that the existing milling setup is suitable for it?
spk09: I'll start. I'll just comment on the geological aspect of it. And just in terms of mineralogy, it's very similar to what we already have at Triangle, so we don't foresee any significant metallurgical issues. In terms of more detailed test work, just to confirm that, that's not currently scheduled. And certainly once we get access underground, we'll have the opportunity to do a more comprehensive program as well.
spk11: And I think the other thing that gives us confidence is that these flat-lying veins were very similar to ore that was mined at Mine 2 and part of the Sigma. So between the historical mining of similar flat-lying veins and the geology that Peter described, we have pretty high confidence this is going to be very similar metallurgy to what we've seen in the camp.
spk06: Okay, that's it from me, guys.
spk11: Thanks, Mike.
spk00: The next question is from Mike Jelonen of Bank of America. Please go ahead.
spk14: Hey, George and Phil. I just had a bigger picture question. Gold, $17.25, down $45 today. Probably a question to get next week at some dealer's conference I've heard about. Just wondering, capital allocation, I got you guys now went to negative free cash flow this year. Maybe Phil's numbers disagree with mine, but... When you start, if gold stays down, are you going to push out projects or slow down spending or anything like that? Or you're just happy to follow the plan you have now? If gold price stayed depressed. Thanks.
spk11: So maybe I'll just start out and then Phil can follow up. So I'd say the answer is no. I mean, our growth focused on high quality, high return investment opportunities. So even at vastly lower metal prices, these projects make sense. And from my perspective, particularly when you look at scurries, it's going to change the baseline of our company. Our ASIC is going to drop dramatically. Scurries can be a cash flow generating machine at current spot prices, but even at depressed metal prices, it's a fantastic asset. You know, I can't see, in my view, of any downside potential in metal prices that our growth opportunities wouldn't make sense. And obviously, all those comments are tied to successful financing that we'll have clarity around before the end of the year and maybe fill on the cash flow question. Yeah, hi, Mike.
spk13: So, you know, we prepared our budget, you know, with a 1750 gold price, and we're expecting to generate... pause the free cash flow in 2021. It's not going to be at the level that we've reported for 2020 because our capital has increased, as I outlined earlier. But obviously, there's priorities. We are in growth mode, and it's important for the company to continue to grow our assets and generate value. If gold was to take a significant nosedive, obviously, there's other things that we'd have to you know, we'd have to reconsider. But I think, you know, given where market forecast consensus are, you know, it looks to remain in this area, in this range at this point. And where it is right now, like I said, we're, you know, we still expect to be in a good financial position.
spk14: Okay. Yeah, Mike. Sorry, George.
spk11: Yeah, I was just going to add on that, you know, Obviously, the drop yesterday and today is not great news, but I think when you look at the impacts that COVID's had across the planet and all the challenges that countries are going to be dealing with to get economies back in track, in our way of thinking, we're going to be seeing a pretty solid gold price, and there'll be volatility around it, but our outlook remains positive.
spk14: Okay, thanks for that, and if I... I'll see you next week at the Diplomat Hotel. I'll buy you a beer in the lobby bar. Thanks.
spk11: Thanks, Mike. Thanks, Mike.
spk00: This concludes the question and answer session. I would like to turn the conference back over to Mr. George Burns for any closing remarks.
spk11: Well, thanks, everybody, for dialing in. The last two years at Eldorado have been pretty darn successful in terms of return revenue. to our shareholders. I think this will be another breakout year for us. We're excited about the opportunities in front of us and look forward to keeping you updated. Thank you.
spk00: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.
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