Q3 2019 Earnings Call
Thank you for standing by this is the conference operator, welcome to the Eldorado Gold Corp. third quarter. Two is 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.
Thank you you mean press Star then one on your telephone keypad should you need assistance during the conference call you may signal, an operator by pressing star Andrew.
I'd now like to turn the conference over to Mr., Peter Luggage manager Investor Relations. Please go ahead mr. like catch.
Thank you operator, and thank you, ladies and gentlemen are taking the time to die.
I'll into a conference call today.
With me in Vancouver. This morning, our George Burns, President and CEO , Philly Executive Vice President and CFO , Paul Skayman Executive Vice President and COO, and Jason Show Executive Vice President and Chief strategy Officer.
Our release yesterday details our 29.
<unk> third quarter financial and operating results there 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've also been filed on SEDAR and Edgar.
All dollar figures discussed today on U.S. dollars unless otherwise stated.
We will be speaking to the slides that accompany this webcast.
Yes, you can download a copy of these slides on 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 2018 AOCF and then the cautionary note on slide one I will now turn the call over to George.
Thanks, Peter and.
Good morning, everyone.
Here's the format for todays call I.
I will give an overview of the quarters highlights along with some comments then I'll pass it over to fill to go through the financials, then Paul will follow by reviewing operations.
Then we'll open it up for questions.
Over to Q3 highlights on the next 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.
Cash costs of 550 to $600 per ounce.
Revenues were up in Q3, driven by another great quarter at a mock increase production at both Kisladag and F M group and a higher gold price.
Our operating cash flow was almost three times higher than Q3 last.
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 we're recent test results the confirm recoveries from leaching deeper material over 250 days cycles supporting an extension of mine life beyond our current three year guidance.
As such we took the decision to begin waste stripping to support such an extension.
The.
Team began this work in October .
Test work is still ongoing 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 low Mark who had a second successful operating.
Quarter.
Resource expansion drilling in the lower triangle deposit continues to reinforce our belief that the deposit 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 PE.
Hey 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 permits for both Skouries and Olympias in September .
Subsequent to the quarter, we receive further permits and approvals for Skouries. These include the building permit for the Securities Mill and consent from the Central Archaeological Council to relocate antiquities from the open.
That 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.
To talk us.
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.
[noise] protections.
A modification to the technical study to move to dry stack tailings is underway.
This would be followed by the submission of an electrical 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 are continuing to explore funding options for our Greek projects.
Before I hand, it over to Phil.
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.
In the case of.
But.
We will use subtraction, only and then update the reserves and resources for this asset once the metallurgical test work has been completed.
Thats It for me over to you Phil.
Thanks, George Good morning, everyone.
I will start on slide five where we have an overview.
Sure of our financial results for Q3 2019.
During the quarter Eldorado generated 172.3 million in total metal 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 of 4.2 million or three cents per share for Q3 2019.
Adjusted earnings for the quarter amounted to 7.5 million or five cents per share. This is.
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 in EBITDA of 73.2 million and adjusted EBITDA of 75.9 million adjusted.
It excludes the impact of noncash share based compensation expense.
Some of the nonoperational items affecting net earnings include finance costs totaling 13.2 million in the quarter compared with point $8 million in Q3 2018, the significant increase in Q3 2019.
Was primarily a result of changes in the treatment of 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 serious are no longer capitalize in 2019.
I'm, just curious was transferred to care and maintenance at the end of 2018.
As I mentioned last quarter going forward, we expect our interest cost to 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.
The interest.
Opponent may vary slightly 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, reflecting a decrease from 4.5 million. In Q3 2018. This was the result of Kisladag transitioning back into.
In April 2019.
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.
Durations in Q3 2019, the income tax expense was impacted by a deferred tax liability, whereas both Q1 in Q2 were impacted by a deferred tax recovery.
As George mentioned, we had a second consecutive quarter of positive free cash flow generation, we finished the quarter with approximately 300.
Any 2 million of available liquidity.
This 134.9 million was in cash cash equivalents and turn deposits and approximate $187 million was available under our $250 million revolving credit facility, which remains undrawn.
63 million of this facility is allocated to secure.
And reclamation obligations.
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 of at quarterly and year to date operating results.
As George mentioned, we produced 101596 ounces of gold in the.
Our cash operating costs of $560 per ounce sold.
This was a decrease from $754 per ounce sold in Q3, 20, Iterating and is primarily due to the resumption of mining operations it could should.
Partially offset by higher cash operating costs at olympias and differentiated crude.
All in sustaining cost per ounce sold averaged $1031 in Q3 2019 compared to $1112 increased rate 2018.
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 $998 per ounce.
This is in line with our expectations.
I would reiterate the management expects to be in line with a 29, taking 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 it.
At Lamar to increase production to approximately 170000 ounces per year.
This study will look at three disk.
Great projects.
The 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, we will complain to pay.
So fast that will outline the optimal plan for Lamar, including timelines.
If the studies support further development construction on the Ram could beginning late 2020 .
At Kisladag, we announced that the positive test results. We have received confirm an extension of mine life beyond the current three guidance.
The size of the payout will be determined early next year, when we update our mine plan with the ultimate paid late to recovery.
As George mentioned earlier, we've begun waste stripping at Kisladag and expect to spend approximately $4 million this year.
We are confident though that any stripping completed in the short term will be with any of.
The current pit scenarios that we currently contemplating.
Overall MPS on slide.
Idle MPS production and associated costs for the quarter will once again below expectations.
Our focus remains on improving underground operations.
Amount of underground development and the amount.
First of all boat 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 most types and increased production.
Approximately half of the development done in Q3 occurred in September demonstrating our.
Racing rights of development.
Our October development was 60% higher than the Q3 monthly average.
It's a similar story on Backfilling.
By our rights and now on target and pipeline utilization and availability are increasing.
For whole to surface was over 31000 tons for.
I would 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 through 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 are 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.
Okay.
Certainly sir.
We will now begin the question answer session to join the question Q You May Press Star then one and your telephone keypad, you will hear until one acknowledging request if you're using a speakerphone. Please.
Pick up your handset before passing any key.
And the draw your question. Please press Star then too.
We will cost for a moment is college trying to Q.
The first question comes from Cosmos Chiu T. IBCP. Please go ahead.
Thank you George fill Paul and then Jason.
Maybe my first question is on just so Doug I know you're still doing some ongoing test work on it but just wondering time I'm wondering if you could share with us any kind of the potential recovery however, the longer leach cycle.
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 on recovery numbers I think it's fair to say, we're not going to say the numbers that we were was 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 and where we're trying to get as many as many days into those as we can and continuing to see recovery as you'd expect so.
We'll have to wait until the first quarter.
To get to get final numbers there.
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And on a longer leach cycle here you start stocking once again, thank you Mr. Doug 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 work student numbers, you need a fairly robust Q4 to get to 2019 guidance Im just wondering if you factored in any kind of.
The improvement in recovery or is it grade.
A little bit abide Kosmos as you can appreciate as we get more material on delay just under.
Engaged in with a longer late cycle, we do expect.
For 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 is still sort of coming up. So that's why we've been pointing to us slow.
Reduction in the.
First half an a stronger second half site. So yes, 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.
You know ways to try to improve the operation here, but is there a point in time or some kind of scenario whereby.
You might come to realize Asian that olympias just might not make.
Money isn't profitable.
Current spot prices and as you said you have a lot to growth opportunities coming from the Mac coming from Kisladag in terms of allocation of capital is there a point in time, where you might start getting some of the capital that you have earmark for olympias.
To 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 Pauls stated underground development available faces underground and backfill, which also.
Has implications in in available faces so.
As you know as we ramp up tonnage on olympias. It is dramatically impacts operating results and Thats been our challenge to date, we see it. So 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 that are going to solve that improving.
In terms of capital allocation, you know, 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, we'll we'll it will wind up against the other capital allocation growth opportunities within the company.
Out Olympias, we have the ability for very nominal.
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.
I'd say keep watching this quarter over quarter, we're expecting to see significant improvements.
For sure.
And maybe 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 so many issues you've had with a paste backfill is that is that still an issue in terms of how your blending the ore from Houston West.
I think I'd say caused most of it that's improved.
Over the last while I mean, obviously as you can appreciate weighted with.
Got enough development, having enough headings makes that a bigger issue.
But but we're getting on top of that now and and actually simplifying that blending on site to give that if the mine as a bit more bit more sort of for a Ron in terms of production.
Sorry, sorry, pretty happy with where that sitting now.
For sure.
Maybe one last question for me if I can on taxes here.
Phil 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 was.
Deferred tax so 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.
Tax expenses you from from.
Income tax perspective.
Turkey is our most profitable operation at this point in the average tax rate is about 22% on a corporate tax perspective.
Yeah.
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 are pretty stable going forward. It's the fluctuations in foreign exchange that that have an impact that is 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 Stephen Butler of GMP Securities. Please go ahead.
Thanks, operator, and thanks Cosmos.
Guys said.
A question for you on serious when would you expect.
Submit your Securitas application permit for the dry stack 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 their certainty and other permits services just.
Because we.
At the site almost two years ago Jorgen, you that 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.
Longer to 2000 and than expected.
Yes, 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.
Yes, 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 our engineering permitting teams are are are 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's some lomak, which you know the opposite of Olympias I suppose the implied the unit cost of the operation were better than expected.
For us in new delivered really good cash costs, there so what's been the pleasant.
So as had been underground productivity mining.
We are you seeing some of the perks of the ramp up in terms of unit costs there.
Well I think it's across the board I mean, one of the first things I'd point to as a recovery is as you know weve.
In our PFS, we had 95%.
With that we're 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 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're doing the infill drilling on the bottom and see foresee five and we actually have one drill underground now drilling cseven.
And all that ties into the PE and the expansion opportunities. 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 so available move his team in how they're performing I guess the other one.
No the middle done 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, Mike talk a lot easier okay. Thanks, guys.
Thank you.
The next question comes from Kerry Smith of Haywood Securities. Please go ahead.
Thanks, operator, good morning.
Good morning.
Yes, George or maybe Paul for the wind stripping at Kisladag.
You are suggesting that.
Stripping that you've got plan well.
The pit limit said, even the smallest.
Turning to ultimate could that you could envision there can you change would you share with us what a mine life with different even that small pit.
I'd prefer not to carry as you're going to break.
We still we're still doing we're still doing soda recovery numbers I think you should take confidence, though that the fact that way committing capital to stripping.
Within any of those scenarios indicates it's kind of a it's going to be around.
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 your understanding George that you would need to re file the I ask that you filed back in 20, I think it was made even 2012 and.
Would the engineering studies that Uri that you're updating now will those be required as part of that that need filing.
So carry the EPA has been the 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 in the other thing given that 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 or 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.
The reengaging with communities.
Pricing prior.
The 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 times past.
Okay and is there George is there any.
Sorry of opposition to that project currently.
Era.
Hi.
We have we I would describe and Carrie everywhere around the world.
There are people that are concerned about mining projects and so we have lows in Greece.
And around the Perama.
And so we'll be engaging with with 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, its and oxide ore body simple mill projects it's high.
And it's in an area of Greece that needs development and and economic input. So we think we have the right ingredients Erin 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 lists with the government will be able to find a path forward to.
To begin construction.
Okay, and when would you sort of expecting you wouldnt be filing or re filing this amended.
Is that.
Something that would happen in maybe the back half of 2020 then.
Yes, I would I would describe.
The 20 is.
We'll be unfolding the permit process 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 during next year.
Okay. Okay.
Okay. That's helpful thanking everybody.
Thank you Gary.
The next question comes from Mike Parkin of National Bank. Please go ahead.
Thanks, guys for taking my questions.
Most of them on been answered just had one follow up on Kisladag give 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 I'm just wondering.
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 of pre stripping annex 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.
Thats 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.
The next question comes from Tanya Jack is Cohen of Scotiabank. Please go ahead.
Great Good morning, everybody.
And maybe Paul Jeff starting off back to Olympia, It sounds as though I'm getting that development rate app.
And then Youve guided that November line is gonna be guide and then down again for December .
You are indicating to us that Q4, we're expecting.
A similar.
Corner 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.
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 those sort of Q3 months and we're looking to to put some of those together now side. So I think where 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.
Thats going to be at that level that we need still applies to feed the now is that towards the end of 2020 . Our 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 soda.
Last quarter, 29 team will be pretty well priced and.
And getting a lot closer does sort of nine flight for 2020 .
Okay, Great that's very helpful on that one.
And maybe just continuing on the technical side, just wanted to come back to 10-K isladag.
Just I.
Remember from Merrill Lynch, let Matt.
At the mine tore we talked a little bit about capital allocation and we talked about.
Led dag intends to being a priority for that and.
Pending on what systemic how 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 are.
We're continuing to do work on the on the HPG aren't at something where we'll be discussing.
As with as we sort of putting budgets et cetera together.
But 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 HP GR, 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 10 in terms of.
Outlook.
As Paul stating there is some benefits from HPG, our will continue to study it perhaps becomes a project that we invest in but it's not something.
Being contemplated in the current work we're doing this 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 color to anywhere 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 at pre.
Like they did their waste stripping increased 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.
Meaning 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 you can.
Yes, just scale from that dependent on on.
How good the recoveries and up and how big that pit is it will be scalable around that.
That 100 million.
Depending on the mine life.
Okay. I mean, the pre strip is something that is quite substantial in terms of capital outlay that would have to be done.
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.
Aerial requires a higher strip ratio than the shallow so.
It's hard to give you a number because right now we 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.
Mine life.
Engine, the closer to 100 and.
The lesser the mine life extension, you know, it's closer to so the zero number so.
I really can't help you.
Beyond that until we get the numbers finished.
And is looking that if you now the Lomak. If you were to make that decision to go ahead.
Ed and pending on the.
What you decide to do most of this annually starting 2020 under 2021 into 2022.
Yes for so the Prefeasibility study and Lamar we expect to have done in the second half of next year.
If that support of we're looking to.
Two.
Potentially began 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 would be the conveyor and crusher infrastructure and in parallel work on the mill to support the higher throughput.
In the pace plants, the third stage of the expansion and Thats 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 we'd be spread algar. Unlike me about four years or so.
Yep.
And maybe even a bit longer for the pace.
Okay.
That's helpful. And then just maybe George just lastly on.
Conversation with the great government you've talked about.
Some of the technical staff that thing going on.
With the two meetings, we've had with that Prime Minister and erratic meetings that you 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 grab that.
What about.
Some of the other things that you're looking at to get a security tail died 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 three government are keenly interested in.
In getting foreign direct investment into the country.
They are publicly supportive of Skouries that were focused heavily on.
And we have the right environment to to land on a mutually beneficial agreement that can allow this this investment to restart.
Obviously.
Belief, 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 in 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 the underground portion backfill the pit.
We've shrunk the footprint of the property so environmentally we've 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.
We'll get this completed Jack 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 and 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 Kilo, 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 it.
My question.
But I'm just wondering assuming.
I would 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.
Proves permit.
Hey quickly once implemented dry stack tailings I get that.
Put that put in.
How long would 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.
So.
We've got about two years worth of construction once we.
Restart.
In the Prefeasibility study that that was out in early 2018 had us about 670 million $80 million as I recall in remaining capital so.
We are going to put the bill Miller building up and for the concrete.
We're committed to that is about 5 million over the next couple of months.
So your short just shy of 700 million in two years of construction Mike.
Okay.
Look forward to the mine opening and about two and 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 Matt fields.
We found that shelf registration recently purchased for any color on what that was four and maybe secondly.
Any thought to taking.
Vantage and 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.
Term loan amortization, you have coming up.
Thanks.
Yes, it's Jason here just to just a quick summary, the use approach.
Seeds as described in the prospectuses is in 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 fee.
With a current share price I suppose that that was the part of the purpose and filing 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, Hi, guys. Just a question I don't know that I've seen it updating 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 fourk.
Banks, where that might come out.
Yes, I mean, we're sticking with our guidance for the year, which is 80 to 105 million in sustaining capex.
And then is the growth capex number different than the 45 guidance.
No it's still stands.
Yes, Frank its Phil here most of that growth Capex was tied to Lamar completion of them off and getting into commercial production and that was completed at the end of Q1.
But I guess as I look at the.
The cash flow statement I see some something like 149.
Million.
Year to date and the math would take you to somewhere in maybe the 160 area could capex being low.
The 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 will will be within guidance and 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.
Thanks.
And then how much has that been year to date.
Great commercial dollars.
Precommercial proceeds over 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, you are $33 million of loan or more by the end of this year.
Kind of the plan there this sort of comes out of the cash balance.
How do you guys kind of thinking about dealing with that that first tranche of kind of amortization come up in the term loan.
Yes, Frank its Jason 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.
That would be the primary source of funding for that.
Okay.
Thank you have good weekend.
Thanks Frank.
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.
Yes.