Q3 2019 Earnings Call
Thank you for standing by this.
The conference operator, welcome to the Eldorado Gold Corp. third quarter. Two in 2019 results Conference call. As a reminder, all participants are in listen only mode and the conference being recorded.
After the presentation, there will be an opportunity to ask questions. He joined the question Q You May Press Star then one on your telephone.
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Now, let's turn the conference over to Mr., Peter Luggage manager Investor Relations. Please go ahead mr. like.
Thank you operator, and thank you, ladies and gentlemen are taking the time to dial into our conference call today.
With me in Vancouver. This morning, our George Burns, President and CEO feel <unk> executive Vice President and CFO .
Paul Skayman Executive Vice President and COO adjacent show Executive Vice President and Chief strategy Officer.
Our release yesterday details, our 2019 third quarter financial and operating results.
They should be read in conjunction with our third quarter financial statements and management's discussion and analysis.
Both of which are available on our website. They have also been filed on SEDAR and Edgar.
All dollar figures discussed today or in U.S. dollars unless otherwise stated.
We will be speaking to the slides that accompany this webcast you can download a copy of the slides on our website.
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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 2018 eight yeah and then the cautionary note on slide one.
Now I'll turn the call over to George.
Thanks, Peter and good morning, everyone.
Here's the format for todays call.
I'll give an overview of the quarters highlights along with some comments that I'll pass it over to fill to go through the financials and Paul will follow by reviewing operations.
Then we'll open it up for questions.
Over the Q3 highlights on the next <unk>.
Slide.
It was a solid quarter overall, both operationally and financially.
Consolidated gold production and cost came in on plan and we reiterate our 2019 night guidance of 390 to 420000 ounces of gold Cas cost. So 550 this.
$600 Browns.
Revenues were up in Q3, driven by another great quarter at a mock increased production at both Kisladag and ask them to group and a higher gold price.
Our operating cash flow was almost three times higher than Q3 last year and I'm pleased to report.
A second consecutive quarter of free cash flow, resulting from higher sales volumes.
This quarter I guess, what I saw the benefit of ore stacked earlier this year with production beginning to increase after ongoing longer lead cycles.
Also positive.
Our recent test results the confirm recoveries from leaching deeper material over 250 day cycles supporting an extension of mine life beyond our current three your guidance.
As such we took the decision to begin waste stripping to support such an extension.
The team began this work in.
To over.
Test work is still I'm going to determine the ultimate heap Leach recovery and the extent of the mine life extension.
We expect to announce this in Q1 2020.
It was a busy summer at Lamar.
The second successful operating quarter.
Right.
Source expansion drilling in the lower triangle deposit continues to reinforce our belief that a pause it could be larger than what we currently have and our resource model.
We hosted an analyst tour of lock in September and announced we are undertaking a P.A. to increase.
Average annual gold production from approximately 130000 ounces to 170000 ounces.
We expect to release this during Q4.
In Greece advances on the permitting front was a highlight this quarter.
We received the long outstanding installation.
That's for both Skouries and Olympias in September .
Subsequent to the quarter, we received further permits and approvals for Skouries. These include the building permit for the Skouries mill and consent from the Central Archaeological Council to relocate antiquities from the open pit area.
We.
Still require ministerial approval to finalize this.
Here's a bit more detail on engagement with the Greek government during the quarter and next steps.
We've had several positive meetings with all levels of the government, including two meetings with Prime Minister Mitsotakis.
We're very encouraged by the outcomes of our discussions today that is receipt of the outstanding permits and we will continue to work together to drive the projects forward.
The focus of discussion remains on dry stack tailings permit and establishing necessary investor protections.
Modification to the technical study to move to dry stack tailings is underway.
This wouldn't be followed by the submission of an electro mechanical permit application for the tailings filtration plant.
We expect this process to be completed later next year.
In parallel to this.
We have restarted desktop work on our Perama Hill project, which has been on hold since 2014.
A review is underway to update permitting and relevant legislative changes.
We will then established a revised path forward, including engagement with the local community.
Lastly, we.
We're continuing to explore funding options for our Greek projects.
Before I hand, it over to fill a quick word on resources and reserves.
We expect to publish our updated statement before the year end.
So look for that in the coming months.
And the case of Kisladag, we will use.
Subtraction, only and then update the reserves and resources for this asset once the metallurgical test work has been completed.
That's it for me over to you Phil.
Thanks, George Good morning, everyone.
I will start on slide five where we have an overview of our financial results.
For Q3 2019.
During the quarter Eldorado generated 172 point threemillion until the middle revenue, which included 150.2 million in gold sales.
Revenues were higher than the comparative period in 2018.
Due to a higher gold sales volume and a higher average realized gold price.
In Q3, 2019, the rising gold price and the increase in production translated into net earnings to shareholders, a 4.2 million or three cents per share for Q3 2019.
Adjusted earnings for the quarter amounted to 70.5 million or five cents per share. This is after adjusting for.
Among other items, the 3.4 million of deferred tax expense related to foreign currency exchange rate fluctuations.
The strong sales in Q3, 2019 resulted an EBITDA of 73.2 million and adjusted EBITDA of 75.9 million adjusted EBITDA excludes again.
Packed a noncash share based compensation expense.
Some of the nonoperational items affecting that earnings include finance costs totaling 13.2 million in the quarter compared to the point 8 million in Q3 2018. The significant increase in Q3 2019 was primarily a result.
Out of changes in the treatment up interest costs between the two periods.
Interest costs related to Lamar are no longer capitalized after Q1 of 2019 falling commencement of commercial operations interest charges related to ski areas are no longer capitalize in 2019 after scurry us was transferred to.
Karen maintenance at the end of 2018.
As I mentioned last quarter going forward, we expect our interest cost would be in the ballpark of approximately $12 million per quarter. This includes interest on debt fees related to the credit facility and amortization of transaction costs.
Interest component may vary slightly.
At least from quarter to quarter as a portion of the debt is now at a variable at variable rates.
Mine standby costs of 2.5 million were incurred during the quarter.
Second a decrease from 4.5 million in Q3 2018. This was the result of Kisladag transitioning back into operation in April 2000.
18.
Income tax expense totaled 15.9 million for Q3 2019 and included current income taxes of 10.1 million.
Primarily relating to operations in Turkey.
And deferred taxes, a 5.8 million, primarily due to timing differences and foreign currency exchange fluctuations in Q.
Three 2019, the income tax expense was impacted by a deferred tax liability, whereas both Q1 in Q2 were impacted by deferred tax recovery.
As George mentioned, we had a second consecutive quarter of positive free cash flow generation. We finished the quarter with approximately 322 million of available liquidity.
Study.
This 134.9 million wasn't cash cash equivalents and turn deposits and approximate hundred 87 million was available under our $250 million revolving credit facility, which remains undrawn.
63 million of this facility is allocated to secure certain reclamation.
Yes.
I will now I'll turn it over to Paul for a recap of operations.
Thanks, Bill good morning, everyone.
On slide six as a quick summary about quarterly and year to date operating results.
As George mentioned, we produced 101596 ounces of gold in the quarter a cash operating.
Cost of $560 per ounce sold.
This was a decrease from $754 per ounce sold in Q3, 20, <unk> and it's primarily due to the resumption of mining operations that kisha dot, partially offset by higher cash operating costs at olympias and different to correct.
All in sustaining.
Cost per ounce sold averaged $1031 in Q3, 29, tayne compared to $1112 increase rate 20, I'd say.
The decrease was the result of lower cash operating costs, partially offset by higher sustaining capital expenditures in the quarter compared to the prior year.
Production year to date has been 276376 ounces at a cash cost of $602 per ounce and it all in sustaining cost of $990 per ounce.
This is inline with our expectations.
I would reiterate the management expects to be in line with a 29 take consolidated.
Guidance, and we pointed to expected stronger production in the back half of the year a number of times.
Looking at slide seven now.
We announced earlier this year that we're working on a P.I. I look back to increase production to approximately 170000 ounces per year.
This study will look at three.
Great projects.
On a decline from the Sigma mill to the triangle deposit.
Two upgrades to the Sigma mill and three the pipeline to provide a long term tiling solution.
Before we commit meaningful capital do any of these discrete projects will complain to pay.
So fast that will outline the optimal planful them not including timelines.
If the Saudis support further development construction on the ramp could beginning late 2020 .
I guess, Saddam we announced that the positive test results. We've received confirming extension of mine life beyond the current three a guidance.
The size of the payout will be determined early next year, when we update our mine plan with the ultimate paid lights recovery.
As George mentioned earlier, we've begun waste stripping at Kisladag and expect to spend approximately $4 million this year.
We are confident that any stripping completed in the short term will be with any of.
The current pit scenarios that we currently contemplating.
I read it will MPS on slide I.
Idled MPS production and associated costs for the quotable once again below expectations.
Our focus remains on improving underground operations.
Amounts of underground development and the amount.
First of all bought to surface of the K metrics.
The underground contractor has made good progress on development.
As more development made as a completed we'll be able to access more stipe, sending Christ production.
Approximately half of the development done in Q3 occurred in September demonstrating our.
Fracing rights of development.
Our October development was 60% higher than the Q3 monthly average.
It's a similar story on Backfilling.
Well right. So now on target pipeline utilization and availability are increasing.
All to surface was over 31000 tons.
I'll tell you about which is 40% higher than the Q3 monthly average of 22000 tons.
We expect to say similar levels in November before this drops off for the Christmas period.
While we still have a ways to go at Olympias, we are making progress.
And with that I'll turn it over to George for closing remarks.
Thanks, Paul.
Overall, it was a solid quarter, particularly a kiss FM chew crew and Lamar.
We remain committed to paying down our debt while remaining disciplined in our capital allocation as we look to generate value from our growth projects.
This includes a potential.
And that Lamarck mine life extension at Kisladag and transformational investments in Greece.
As we said before we're committed to building safe modern and World class operations in Greece.
This includes implementing best available technologies, such as dry stack tailings at Skouries and Perama Hill.
Thank you everyone I will now.
Turn it over to the operator for questions.
Certainly sir.
We will now begin the question answer session. The joined the question Q You May Press Star then one on your telephone keypad, you will hear its own acknowledging your request if you're using a speakerphone. Please pick.
Pick up your handset before passing any key.
I would draw your question. Please press Star then too.
We will Pos very moment this call is trying to Q.
The first question comes from Cosmos Chiu T.I.B.C. Please go ahead.
Thank you George Phil Paul and then Jason.
Maybe my first question is on Kisladag I know, you're still doing some ongoing test work on it but just wondering time I wonder if you could share with us any kind of the potential recovery however, the longer leach cycle.
You know from that perspective can we actually get back to some of the recoveries levels that you realize.
Previous to.
The issues you had in 2017.
Hey, Cosmos its Paul.
Obviously still still working on a on recovery numbers I think it's fair to say, we're not going to say the numbers that we were saying prior to that to the issues, but obviously a fair bit better than what.
We've we've been guiding to with the with the 22 million tons. As you can appreciate we've got a lot of a lot of columns underway on where we're trying to get as many as many days into those as we can and continuing to say recovery as you'd expect side.
We'll have to wait until they are the first quarter.
Got to get final numbers there.
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And on a longer leach cycle here you start stocking once again it just a dog in Q2.
You know could we see somebody improving recoveries come through in Q4, you think in 2019.
I asked that question as well just given that.
If I worked through the numbers you need a fairly robust Q4 to get to 2019 guidance I'm. Just wondering if you factored in any kind to.
The improvement and recovery or is it grade.
A little bit about Kosmos as you can appreciate as we get more material on the late can underwrite a.
Engaged in with a longer late cycle, we do expect.
All gold recoveries.
The stuff that we put on very early in the areas now is now pretty well later this stuff that's going on now is still it's still sort of coming up so that's why we invade pointing to a.
Slow a production in the.
First half an a stronger second half site. So yeah, I think way so as we keep saying we were maintaining guidance and obviously K to that is is a good order out of Canada.
For sure.
Maybe switching gears a little bit here at Olympias you know.
It certainly wasn't wasn't.
The best quarter you've had.
I appreciate all the different.
Oh ways to try to improve the operation here, but is there a point in time or some kind of scenario whereby.
Mike come to realize nation that.
NPS just might not make money isn't profitable.
Current.
Spot prices and as you said you have a lot a growth opportunities coming from the Mac coming from kids to Doug you know in terms of allocation of capital is there a point in time, where you might start idle getting some of the capital that you have your mark for Olympias.
Somewhere else or is it more complicated.
Given the overall picture increase.
So I'll take the first crack of that Cosmos.
Thanks to begin with we're still very confident in Olympia seeing a high value project for us.
The ore body is performing well and it's a long life assets the.
The mill has performed well this year.
We're consistently seeing recoveries in concentrate quality as expected our challenges. This year is really around the underground in this pulse stated underground development available faces underground and and backfill which also.
Has implications in and available faces so.
As you know as we ramp up tonnage on olympias. It is dramatically impacts operating results and that's been our challenge to date, we see it. So it's it's a mining issue it's not it's not a processing issue, it's not an ore body.
Issue and we see the underlying factors that are going to solve that improving.
In terms of capital allocation, Yeah, we're pretty disciplined and how we.
We look at capital and for Olympias I would tell you we're focused on getting that mine.
Up to.
Throughput through the plant and producing good operating results and and when we achieve that and I believe that will happen next year.
Then will well it will wind up against the other capital allocation growth opportunities within the company.
Out Olympias, we have the ability for very nominal capital.
All to be able to increase throughput and again due to the variable fixed cost. It can have a 50% increase in throughput and nearly double free cash flow generation from this asset. So we believe this is going to be a long term great asset for us for now its head down execution get the underground productivity.
Inefficiencies up and.
Say keep watching this quarter over quarter, we're expecting to see significant improvements.
For sure.
And maybe you know in a bit more detail I think olympias late last year. There were some issues in terms of the mixed of ore coming from east and west.
Given some of the issues you've had with a paste backfill that is that still an issue in terms of how your blending the ore from east and west.
I think I'd say because most of it that's improved.
Over the last while I mean, obviously as you can appreciate with with no.
Got enough development, having enough headings makes that a big or Richard but but we're getting on top of that now and and actually simplifying that blending onsite to give that if the mine as a bit more they bought sort afraid Ron in terms of production.
Sorry, sorry, pretty happy with where that's sitting now.
For sure.
Maybe one last question for me if I can on taxes here.
Phil I'll certainly taxes in Q3 as a percentage was higher than what I had expected and I think what the street I had expected as well I. Appreciate some of the comments around it I think deferred tax expense previously it was a.
Deferred tax recovery, but what should we do can you give us some guidance in terms of what we should model for Q4 and.
Maybe for the full year and next year and any guidance would be would be helpful.
Hi.
Hi Cosmos.
I mean I think.
I mean the.
Tax expenses, you from a from a income tax perspective.
Turkey is our most profitable operation at this point and the average tax rate is about 22% on a corporate tax perspective.
The income tax expense is.
Impacted as well by fluctuations in foreign exchange.
That's that's a bit hard to predict at times.
But I think most of it.
And there is also in Lamar Theres Theres, Quebec mining duties.
That's about $1 million per quarter.
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So I think those are probably more stable.
The Turkish tax rate the Quebec.
Mining duties are pretty pretty stable going forward. It's the fluctuations of foreign exchange that that have an impact that is of a little bit harder to predict.
Okay, great. Thanks, again, George Phil Paul.
And Jason those other questions I have ever go weekend. Thanks does most of us.
The next question comes from Steven Butler of GMP Securities. Please go ahead.
Thanks, operator, and thanks Cosmos.
Guys said.
A question for you on Scariest when do would you expect to.
Submit your Securitas application permit for the dry stack that George.
Well, we're busy with that now we believe that'll happen early in the new year.
Okay and is the reason why that maybe couldn't have occurred by now or did you need theres certainty and other permit service it just a.
Because we.
At this site almost two years ago Jorgen you the dry stack was a way to go but.
Yes, you are just a process that had to follow.
On that and as to why it's taken a.
Longer to 2000, and then not expected.
Yeah, I mean, as you know, Steve we had done a updated technical.
Study in the first quarter of 2018 signaling our desire to to move towards dry stack tailings.
And unfortunately, we didnt get any constructive response from the government until just recently.
And then obviously with this government, we sit down in and what the regulatory process.
I understand from their perspective, what do we need to include in the modification file and so that that's what's been happening is working through the regulatory requirements.
We have those are engineering permitting teams are are for working to make the necessary adjustments to meet the.
Needs and as I said, we expect to file that early in the new year. Okay. And then last question. There is some lavaca, which you know the opposite of Olympias I suppose the implied a unit cost of the operation were better than expected.
For us and new delivered really good cash costs, there so what's been the pleasant surprise.
Has it been underground productivity mining, a where are you seeing some of the perks of of the ramp up in terms of unit cost there.
Well I think it's across the board I mean, one of the first things I'd point to his recovery is as you know weve.
In our PFS, we had 95%.
There were beating that by a few points so the mills doing a great job.
Underground.
We're moving the tons.
The lower grades in the stopes or reconciling well.
Dilutions as expected and and we've got a fantastic workforce there that are.
Knocking out of the park Dan.
They out so it's I think across the board were just hitting on all cylinders, there and I think the most exciting thing.
You have at low Mark is that the exploration potential is enormous.
We are doing the infill drilling on the bottom of C. C. Five and we actually have one drill underground now drilling cseven.
And all that ties into the PE and expansion opportunity so.
We're really pleased with.
Lamar Bakken and I'd say, it's unfolding as we expected when we acquired the asset we're we're very pleased with.
With silver able to move his team and how they're performing I guess the other one.
No the mill.
I mean, it was the refurbishment there was probably a little bit of risk today, but it started up in Enron. According to plan. It's delivered good performance in terms of recovery and availabilities.
Yes makes a lot holidays, yeah, okay. Thanks, guys.
Thank you.
The next question comes from Kerry Smith of Haywood Securities. Please go ahead.
Thanks.
Good morning.
Good morning.
Yes, George or maybe Paul for the waste stripping at Kisladag.
You are suggesting that.
Stripping that you've got plan is well.
The pit limit so even the smallest.
Part of ultimate pit that you could envision there can you change would you share with us what they mine life with different even that small pit.
I'd prefer not to carry out as you can.
It was still a we're still doing we're still doing sort of recovery numbers I think you should take confidence, though that the fact that way committing capital to stripping within any of this scenarios indicates it's kind of a it's kind of a.
A reasonable amount more than the three years, we're talking to.
At the moment, you just going after wide a little bit longer before we can share that with you.
Okay. Okay, that's fine.
On Perama now that you start to do some work there is no your understanding George that you would need to re file the I ask that you filed back in 20, I think it was maybe even 2012 and.
Would the engineering studies that Uri that you're updating now will those be required as part of that that we filing.
So carry the EPA has been.
Kind of on hold and Dorman since 2014.
And so there's been some minor legislative changes in the.
Ooh in Greece that.
We're making some adjustments to the EPA.
And the other thing given the amount of time, that's passed we want to reengage with not only the local community that we've been close to during this period, but but also.
Regionally in the.
And.
Update everybody in terms of the project.
The benefits all the environmental and social.
Controls and benefits of go with it so I guess, what I would say is we don't expect any significant changes to the a but we are going to refresh it and we will.
Reengaging with communities.
Pricing prior.
Considering moving forward that project obviously.
In our industry, we need strong local support believe we'll have it but we will reengage just given the time its past.
Okay and is there George is there any.
Sorry of opposition to that project currently.
Era.
Yes.
We have way I would describe in carry everywhere around the world.
There are people that are concerned about mining projects and so we have lows in Greece.
And around the prime or.
And so we'll be engaging with what those.
Those parties to try to inform them better and get the true facts. This is a pretty pretty simple project here, we're going to deploy dry stack tailings, it's a and oxide ore body simple mill projects it's high.
And it's an area of Greece that needs development and and economic input. So we think we have the right ingredients here and and so I would say, it's it's the normal environment that any mining project deals with and we have what I would consider pretty strong support from the local communities and.
And believe Lewis with the government will be able to find a path forward to.
To begin construction.
Okay, and when would you sort of expect that you would be filing or re filing this amended.
Is that.
Certainly that would happen and maybe the back half of 2020 then.
Yeah, I would I would describe 20.
The 20 is.
We'll be unfolding the permit process and and the consultation process with communities and it's really hard for me to predict the schedule around that other than I expect to see significant progress down that path.
The next year.
Okay. Okay.
Okay. That's helpful. Thank you everybody.
Thank you Gary.
Our next question comes from Mike Parkin of National Bank. Please go ahead.
Thanks, guys for taking my questions.
Most of them on the answer to this type one follow up on Kisladag, if a sense on the stripping of the waste would that be.
Broken into growth and sustaining or just growth just sustaining how do you guys. How should we kind of think about not being model just wondering.
Of on the potential impact of all in sustaining cost profile for the asset.
Hi, Mike It's Phil here, So I think.
At this point.
As we begin the process pre stripping and extending the life of mine.
Would fit into the category of non sustaining.
And I think as we get we get further in and start start realizing production.
That's when the mix would change.
But I think at this point at the start its non sustaining.
Okay. That's good thanks, very much guys Im good weekend.
Thanks, Thanks, My Thanks, Mike.
Our next question comes from Tanya Jakusconek of Scotia Bank. Please go ahead.
Great Good morning, everybody.
Maybe Paul Jeff Thats, starting off back to Olympia, It sounds as though I'm getting that development rate app.
Nine you guided that November line is gonna be guide and then down again fact December .
You are indicating to us that Q4, we're expecting.
A similar.
Quarter operationally to Q3.
Our Atlanta.
No I think I think we're looking we're looking to be a fair bit better in in Q4, I mean, obviously, we're not we're not where we wanted to be yet on time, yet, but we are saying I think I think you know as we pointed out.
Tiago is a fair bit better than than than any of the sort of Q3 months and we're looking to the put some of those together now side. So I think wed we're expecting a better Q4, and then obviously looking forward to a much stronger 2020 .
When do you think cup Paul that the development.
It's going to be at that level that we need scale. Pleistocene can now is that towards the end of 2020 or mid next year just to get a sense. When do we think we'll be at steady state.
No I think I think it'll be it'll be early 2020 I think at a solid sort of.
Last quarter 29, same will will be pretty well priced and.
And getting a lot lot close it as sort of nine flight to put 2020 .
Okay, Great that's very helpful on that one.
Maybe just continuing on the technical side, just wanted to come back to 10-K isladag.
Just I.
Remember from our Atlanta, or the Mac I at the mine tore we talked a little bit about capital allocation and we talked about kisladag in terms of being a priority for that and.
Pending on what seven cap rates come out.
You are looking at potentially in the HPG our has has anything.
Changed right now in terms of your view of whether you need in HPG I.
We're continuing to do work on the on the hedge pretty geography, it summing way we'll be discussing.
As with as we sort of putting budgets et cetera together.
For early next year at the moment, where it's.
The recoveries et cetera are predicated on on US a standard crotch as we've been doing previously so I'm decided at this point, we are seeing some improvement with HPG. Our it's it really needs a tradeoff analysis as to whether that.
Justifies.
The extra required capital et cetera.
I'd like to supplement that I think tenure in terms of.
Outlook.
As Paul stating there is some benefits from HPG. Our will continue the study it perhaps becomes a project that we invest in but it's not something thats.
Being contemplated in the current work we're doing to set up reserves in Q1. So don't expect to see HPG are in in the reserve announcement that will happen in early Q1, but perhaps it is an opportunity to compete for capital amongst the rest of our growth projects later in.
The year.
Later next year.
Okay.
And then we also talked I think I'd like to when we were at the mine site about the waste stripping that is required at Kisladag and I remember a number of between 50 and 100 million or 150 million there about four absolutely.
Like the waste stripping and pre strength is that still something that is valid.
Well for the mill scenario, we had about 100 million dedicated to capital for that project. So.
I mean that just gives you an idea we had roughly a nine year mine life under the mill.
Aereo roughly a 100 million in pre stripping to support that sort of a mine life.
So I think again.
Just scale from that dependent on on.
How good the recoveries and up and how big that pit is it'll be scalable around that.
At 100 million.
Depending on the mine life.
Okay, but I mean, the pre strip is something that is quite substantial in terms of capital outlay that would have to be down.
Yeah, I mean again it depends on the mine life. If you go from a three to five to seven to 10 year mine life.
The deeper.
You will require a higher strip ratio than the shallow so.
It's hard to give you a number of because right now we definitively don't know the ultimate recovery or the size of that pit but.
I'd say at this point, it's going to be less than 100 million in the bigger the.
My life.
Second the closer to 100 and the the lesser or the mine life extension you know it's closer to so the zero number so.
I really can't help yet.
On that until we get the numbers finished okay and just looking that if you know the lomak. If you want to make that decision to go ahead.
Ed and pending on the now what you decide to do most of the standard started 2020 under 2021 into 2022.
Yeah for so the Prefeasibility study unlock we expect to have done in the second half of next year.
If that support of we're looking to.
Two.
Potentially begin the ramp development in late 2020, so that'd be the the only thing possible next year in terms of expenditures beyond obviously, the the engineering work on the PFS.
And then it's a three stage projects. So you put the decline in.
First that would continue into 2021.
On the declines completed it wouldn't be the conveyor and crusher infrastructure and parallel work on the mill to support the higher throughput.
And the pace plants, the third stage of the expansion and that's couple of years down the road at least.
But we want to make sure in the PFS, we have a full life of mine scenario for tailings and and that's why it's in there.
Okay, so it'd be spread over I like me about four years or south.
Yep.
And maybe even a bit longer for the pace.
Okay.
That's helpful. And then just maybe George just lastly on on that.
Conversation with again, great government you've talked about.
I think technical stuff that's been going on.
With the two meetings, we've had with that Prime Minister and you're right in meetings that you've had where are we on the foreign direct investor protection.
We've talked about the permits that you know you're looking to wrap up.
What about.
Some of the other things that you're looking at to get a security to start investing in country.
So I don't want to get into any of the details obviously, but I'd just tell you at a high level.
Prime Minister Miss Mitsotakis, and the government are keenly interested in.
In getting foreign direct investment into the country.
They're publicly supportive of Skouries that were focused heavily on.
And we have the right environment to to land on a mutually beneficial agreement that it can allow this.
Investment to restart.
Obviously.
Finally, we've got some time to to get that completed as we work through the dry stack tailings permitting.
But I tell you it's very favorable were I think we're both aligned that this is a.
Good project and it's environmentally.
Extremely well done.
The.
Life of mine for this project the the pit finishes and a decade, we run the underground for for two and a half decades and the the dry stack tailings from.
Our ground portion backfill the pit.
We've shrunk the footprint of the properties, so environmentally weve I think upgraded the project.
And this really.
They see the value and all that and we're aligned to getting this done, but I really can't get into any details around the negotiations other than to tell you.
I'm very optimistic well.
Well get this completed.
I guess more than anything I, just wanted to understand whether you've actually gotten too.
Escaping the foreign direct Investor protection or has it been mainly focused on getting the paramount.
I'd just tell you we're advancing on both fronts.
Okay, Alright, great. Thank you very much.
Thank you.
Once again.
Again, if you have a question. Please press Star then one now.
The next question comes from Mike shallow and then of Bank of America. Please go ahead.
Oh, Hi, George.
Just following up what Tanya was on Skouries, I guess, you kind of kind of answered as.
My question.
I don't just wondering assuming.
Sounds like permits and approvals are raining down in Greece. These days after a long period of drought.
Sorry for the metaphor, but.
Just wondering what.
Sounds like you could get the Skouries.
Approvals permit.
Very quickly once implemented dry stack tailwinds I get that.
What I put in.
Hello, I take two to build Skouries I think there's still a 500 million left to build it just wondering I guess I'm looking the next step.
Thanks.
Yeah. So.
We've got about two years worth of construction once we.
Restart.
And the Prefeasibility study that was out the in early 2018 had us about 670 million $80 million as I recall in remaining capital so.
We are going to put the bill mill building up and for the concrete.
We're committed to that is about 5 million over the next couple of months.
So you're sure just shy of 700 million in two years of construction Mike.
Okay.
Look forward to the mine opening and about two half years.
We do too.
Thanks.
Thank you.
The next question comes from Matt Fields of Bank of America. Please go ahead.
Hi, guys Mckesson here on for a fields.
He felt that shelf registration recently or just slip or any color on what that was four and maybe secondly.
Any thought to taking.
Vantage of the recent bounce in stock price to issue some opportunistic equity like your some of your peers have done.
Maybe you could get ahead of some of the mandatory.
In terms of amortization you have coming up.
Thanks.
Yes, it's Jason here, just a just a quick summary, the use approach.
Seeds as described in the prospectuses isn't part to fund some of the internal projects that that the company has has has currently have.
The other thing that was mentioned was possible use of proceeds with respect to potential debt pay down as well so with regard to the last question, you're asking there on potential issuance with with the.
With the current share prices I suppose that that was the part of the purpose and filing the the shelf and and potentially proceeding with the ATM.
Okay, great. Thank you.
The next question comes from from Frank Duplak.
Potential financial please go ahead.
Yes, Hey, guys. Just a question I don't know that I've seen it updated and maybe I missed it.
Have you guys talked about full year kind of Capex for 2019.
Sorry, I hadn't earlier number that you guys have come up pretty close to.
Through three quarters, just curious as you think about kind of fourq.
Beck's where that might come out.
Yeah, I mean, we're sticking with our guidance for the year, which is 80 to 105 million in sustaining capex.
And that is the gross capex number different than the 45 guidance.
No. It's it's still stands and.
Yes, Frank it's still here most of that growth Capex was tied to Lamar completion of a lot and getting into commercial production and that was completed at the end of Q1.
I guess as I look at the.
The cash flow statement, I see some or something like 149.
Million.
Year to date and the math would take you to someone maybe the 160 area could capex being loaded only 10 to 12 million in the fourth quarter.
Okay.
Okay.
I think at this point Frank I think you know as we said we believe both will be within guidance and I.
I don't like I think the sustaining Capex will continue in Q4, but there will be very limited growth capex other than the pre stripping that was announced.
That was the additional amount.
That was around 3.8 million that was that was approved for pre stripping starting at Kisladag.
Maybe part of this.
Is.
We talked numbers were netting out the pre commercial production from luck. So you maybe gross versus net.
Okay.
And then how much has that been year to date.
Pre commercial dollars.
Pre commercial proceeds that we are netted against capital is but just over 12 million.
Year to date.
Okay.
Okay got it and then and then just on.
I think.
The prior caller touched on it I mean, your 33 million of loan a more by the end of this year.
Got it is the plan there this sort of comes out of the cash balance.
How do you guys kind of think about dealing with that that first tranche of a kind of amortization coming up in the term loan.
Yes, Frank its Jason the the first the first payment on the terminal and starts in June of next year.
So the expectation is between CAD cash on balance sheet at that time combined with internally generated cash I would that would be the the primary source of funding for that.
Okay, great. Thank you have good weekend.
Thanks, Frank it's right.
This concludes the question answer session I would now like to turn the conference back over to Mr., George Burns for any closing remarks.
Okay.
Thanks, everybody for joining us today look forward to giving us another good update here in a in a couple of months. Thanks, everyone.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.