Q3 2020 Eldorado Gold Corp Earnings Call

October 30, 2020

Thank you for standing by this is the concept operator.

Welcome to the Eldorado Gold Corporation third quarter 2022 conference calls.

Minder, all participants are in listen only mode and the conference is being recorded.

After the presentation, there will be an opportunity to ask questions during.

During the question queue, you May press star one telephone pot shooting.

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 Peter Watch manager Investor Relations. Please go ahead mr. luggage.

Thank you operator, and thank you, ladies and gentlemen for taking the time to dial into our conference call today.

During the day or George Burns, President and CEO Phil.

<unk> Executive Vice President and CFO, Joe Dick Executive Vice President and COO, and Jason Show Executive Vice President and Chief strategy Officer.

Our release yesterday details, our Twentytwenty third quarter financial and operating results.

Should be read in conjunction with our third quarter financial statements and management's discussion and analysis.

Which are available on our website. They have also been filed on SEDAR and Edgar all dollar figures discussed today are in us dollars unless otherwise stated.

They'll 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 concluded.

Our discussion today are likely to involve risks, which are detailed in our 2019.

And in the cautionary note on slide one.

I will now turn the call over to George.

Thanks, Peter and good morning, everyone.

Before I get started I'd like to give you a brief update on the earthquake that hit Western Turkey, just a few hours ago.

[music].

Our operations are on impacted at this point and our employees at the sites are safe.

The early indications there has been some significant damage to buildings in the turkeys province of his marriage and so well continue to monitor the situation.

Here's the outline for todays call.

I will give an overview of Q3, along with some comments.

Then I'll pass it to fill to go through the financials Joe.

Joe will follow by reviewing operational performance and then we'll open it up for questions.

I'm excited to be reporting another outstanding quarter.

We delivered across all metrics, both operationally and financially.

Production increased by 35% year over year, and we had another significant quarter of free cash flow.

I'm also pleased to report, we completed 58.6 million in debt reduction announced in Q2.

Balance sheet is in great shape with over 500 million in cash and equivalents.

We continue to make progress in delivering value for our shareholders across our portfolio.

Joe will speak more to kiss, a dog, including H.P.G.R. and Lamar.

So I won't get into detail here, but.

What I want to highlight a few key developments in Greece during the quarter that demonstrate the progress of ongoing engagement with the government.

We see these incremental steps as positive indication that the sentiment in Greece is becoming more supportive of our projects.

At Skouries work advanced on relocation of an ancient mining from this from the open pit area as you can see in the picture.

We intend on moving this artifact to a prominent area near our site office, where it can be displayed for visitors to see.

This was a great reminder, that help can DKI isn't historic mining area that is supported mining activity all the way back to the era of Alexander the great.

Also during the quarter, we receive renewal of the operating permit for Olympias with an annual production limit raised to 470000 tons per year.

I'm also happy to report we received surface drilling permits at Stratoni in the quarter. These will allow us to complete step out drilling to potentially expand the mabus Petrus ore body.

Before I hand, it over to Philip perhaps a few words on how things are advancing injuries.

The transfer agreement negotiations are progressing.

And support from senior government officials was evident during the quarter with the minister of energy and environment visiting our Skouries site.

Greece continues to represent a fantastic growth opportunity for Eldorado and we believe it is not currently reflected in our valuation.

Skouries and Perama Hill, our world class assets that will add significant value for our investors local communities and the Greek state.

I'll stop there over to you felt.

Thank you George good morning, everyone.

Starting on slide four we provide an overview of Eldorado spit out results for the third quarter of 2020.

Once again, we had a very strong quarter.

We delivered on our key metrics and the headline is strong free cash flow generation.

117.2 million in the quarter.

A significant increase from 16.7 million in Q3 of 2019.

Year to date free cash flow totaled 187.7 million in the first nine months of 2020.

[laughter] Eldorado generated 287.6 million and total metal revenues in the quarter. This includes 264.3 million in gold revenue, an increase of 70%, 76% over the comparative quarter in 2019.

The increase was the result of higher gold sales volumes of 137007, no four ounces in Q3 2020 compared to 99241 ounces in the third quarter of the prior year.

The increase in revenue also reflected a higher average realized gold price of 1900.

And $19 an ounce in the third quarter of 2020 compared to 1500 $13 an ounce in the comparative quarter in 2019.

The company reported net earnings to shareholders in the third quarter, a 41 million or 24 cents earnings per share.

After adjustments to remove foreign exchange losses finance costs related to the redemption of senior notes and the gain on the sale of Villanova into quarter. Adjusted net earnings for the third quarter amounted to 56.7 million or 33 cents earnings per share.

This was a significant improvement over both the third quarter of 2019, which reported adjusted net earnings of $7.6 million or five cents earnings per share.

And the second quarter of 2020, which reported adjusted net earnings of 43.8 million or 26 cents earnings per share.

The increased adjusted net earnings and net earnings per share in Q3, 2020 reflect higher gold prices and higher gold sales relative to previous quarters.

EBITDA for the quarter was 162.5 million.

After removing certain noncash items adjusted EBITDA amounted to 163.9 million. This.

This was a material increase over EBITDA of 73.2 million and adjusted EBITDA of 75.9 million in the third quarter of 2019.

Depreciation and amortization charges increased to 65.5 million in the third quarter of 2020.

An increase from 40 million in the in the comparative quarter in 2019, reflecting higher production and higher sales volumes.

A significant portion of our property plan equipment depreciates over the mine life of our producing assets on a on a unit of production basis.

Calculated based on mineral reserves this results in higher depreciation higher depreciation charges as production increases.

Finance costs were 19.9 million in the third quarter of 2020 compared to 13.2 million for the comparative quarter in 2019. The increase was due to the premium paid on the partial redemption of our senior secured notes combined with deferred transaction costs.

Income tax for Q3, 2020 amounted to 38.7 million for the quarter compared to $15.9 million in the comparative period of 2019.

The increase was primarily the result of significantly higher net income before taxes in Q3 of 2020.

As a result of higher sales and a higher gold price.

We finished the quarter with $504 million in cash cash equivalents and turn deposits and approximately 32 million available under the revolving credit facility.

Our liquidity remains very strong and provides optionality to support development of growth opportunities in our portfolio.

El Dorado continues to reduce debt and completed the 58.6 million equity claw back redemption on the senior notes in August senior.

Senior notes outstanding are now at 241.4 million as of September Thirtyth.

And we'll be reduced a further 7.5 million in December.

Net debt is at 0.15 times EBITDA at the at the end of Q3 2020.

This is a significant reduction from net debt at 2.2 times EBITDA at the end of Q3 2019 and reflects a much stronger balance sheet compared to year ago. The company also expects to be in a net cash position by the end of the year as we continue to generate strong cash flow and reduce debt.

We also expect Q4 free cash flow generation to be impacted by the timing of capital spending as we look to complete our capital projects for the year.

Moving on to slide five.

Eldorado continues it continues to show solid improving performance quarter over quarter and continued delivery of strong financial results. These graphs demonstrate the impressive turnaround in financial performance over the past 18 months.

Adjusted EBITDA and adjusted earnings have increased significantly significantly in each of the past two quarters and cash generated from operating activities and free cash flow have established significant highs of 165.4 million and 117.2 million respectively. In Q3 of 2020.

Overall at the end of Q3 2020, the company's balance sheet is solid with a strong cash position.

Reduction as a demonstrated priority.

Free cash flow generation is sustained and the company is reporting higher earnings.

I'll conclude on that positive note and we'll now turn it over to Joe to go through the operational highlights.

Thanks, Phil and good morning, everyone.

Q3, consistent with Q2 from an operational standpoint, as well as with our expectation.

[noise], we produced 136922 ounces of gold in the quarter and cash operating costs.

$37 per ounce sold and all in sustaining cost of 900.

An $18 per ounce so it's.

It's worth noting that in the mock had a record quarter as the ramp development reached the top of the higher grade C zone.

Looking forward, we are maintaining our 2020 guidance, but expect to be at the lower end of the production range a significant accomplishment given the 2020 operating environment.

We continue to operate efficiently.

Rick Health and safety protocols and tracking systems in place in order to manage the risk for COVID-19.

We have activated our cobot protocols at site, including the management positive case at Olympias in September. These protocols worked as expected and were able to resume minimal.

Short order.

Im proud of the agility of our teams as they continue to effectively adapt as we form.

Operating.

Here on slide seven.

We have some further color on developments at our operations during the quarter.

The flotation columns, one installed at Duke.

And commissioning is underway.

As a reminder, this increase the quality of our book concentrates reducing shifting costs we.

We expect to begin realizing value during Q4 as commissioning.

And circuit optimization begins.

Mhm underground development has reached the top C zone.

Great. So that as you can see from the picture is larger than C and C.

We'll take our first stope from C in the fourth quarter.

This production comes a bit when we planned and is helping close the production care gap created by the mandatory provincial cobot suspension.

During Q2.

Our underground crews are currently advancing the decline from triangle towards the Sigma mill, we have completed 200 meters to the end of September.

Additionally, the contractor has mobilized and completed the necessary prep work at surface and started advancing consumer mill.

The triangle deposit as of this week.

[noise] overdue olympias.

Where we recently renewed our operating profit, allowing production levels up to 470000 tons per annum.

Underground development, along with continued operational efficiency improvements remain focused settlement.

We continue to ramp up the mine.

Before we move over to Kisladag I'd like to mention that we are in the process of updating our technical report Perama Hill.

And have them off the engineering work will complete this year.

I'll be available to assist you.

Work the updated capital this through our investment framework in concert with the 2021.

Process.

I'd just add production was consistent with Q2.

No worries continued to be as expected.

Our solution volumes and AD inventories remain higher than anticipated.

Good where we are.

What we are doing I, just would add I'll give a.

A quick recap of 2020 to date.

Q1, we experienced higher than normal precipitation impacting it.

On the pad.

During Q2, we began to recover the place tons deficit, we lost the bid round on pad maintenance and operation due to reduced staffing, resulting from our early stage bid actions.

During Q2, two weeks ago, the tons placed gap and started to return to normal pad operations.

We also began to advance the word we had planned as we.

Up to the New mine plan early this year.

[noise] provided a bit of background on line three projects that we have underway.

A new process Tom Stuart.

So were more pregnant solution, eliminating the need to reach circulation re circulate solutions.

As has been the standard.

Sure.

The project will be completed by year end.

Yes.

Installation on going for two additional CST, increasing our solution capacity processing capacity.

By 40%.

This project will be completed during Q1 2021.

We're also replacing the car in cold regeneration kiln.

We increased.

And as a result, our activated carbon capacity.

Project is scheduled for completion during Q2 2021.

I mean, all these projects complements the HPG our project, which is scheduled to come online in Q3 of 2021.

Before I wrap up I would also like to add that our ongoing composite sampling.

Contest.

Okay.

Our recovery.

As for our mine plan with that I will turn it over to George for closing remarks.

Thanks, Joe.

Before wrapping up I want to thank Mike price, who stepped down from our board of directors at the end of September.

Mike served on the board for 10 years, and we wish him well in his future endeavors.

As a reminder, we welcome Judas, mostly to our board effective September.

You disappointment transgender parity to our board and exceeds our goal of having 30% representation of women by 2022.

I'm also very pleased to add that Lisa or has been promoted to executive Vice President people and external affairs. This is a testament to the great work that Lisa has done and strengthening our corporate culture people practices over the past two years.

In conclusion I want to emphasize the continued positive results, we again delivered this quarter.

The groundwork laid throughout 2019 continues to pay off and as reflected in the upward trajectory of our share price, which.

Which we expect to continue as we unlock value in our Greek assets.

Our solid operating performance combined with a balance sheet that supports near term growth and our energy and drive to execute positions us well for sustained value creation.

When combined with record gold prices and several potential catalysts in Greece and come back.

Eldorado offers a compelling value proposition.

Thank you everyone I'll now turn it over to the operator for questions.

Thank you and.

We'll now begin the question and answer session.

A question.

All right.

Pat.

Hello.

Okay.

If you are using a speakerphone please pick up your handset.

Given the guidance question.

Two.

Hello.

Callers join the queue.

Our next question comes from Mike Parkin.

Please go ahead.

Hi, guys. Thanks for taking my questions.

Congrats on a good quarter.

First on reserves and resources, we should be getting that update in a couple of weeks correct.

Yeah, we do our reserve and resource update in the fourth quarter and last year, we put it out in November expect to do it again this year.

On that is.

Is there anything you can share with us like a Max out was even having some really good exploration success.

Success can you just give us a bit of a recap you're you know you're doing Smith go work on some of the deeper lenses. So we should expect you know more than reserve replacement I think is a fair assumption to assume that the Mac for Ah This uptake.

Yeah, Let me talk specifically Weve had a good year of exploration really two focal points infill drilling to convert inferred resource to reserves in the top five veins the deposit so expecting some good results there and as you stated expecting to replace reserves and growth.

Some.

And then in the deeper part of triangle.

Continuing to drill to expand those inferred resources and and again expecting to have some good results in our in our release next month.

Oh, what about or Mac is there I guess, it's a bit early.

Discovery holes are encouraging but are you looking to get into a better position the drill it off with.

The ramp that you're putting in or are you doing you're looking to do.

Yeah, our target like.

A bigger resorts from surface drilling.

So this year our focus has been on our mock has been to continue drilling from surface to either.

Turning to the full potential of that new discovery and so we've had success.

And we'll be updating the market with with drill results in the fourth quarter and our geologists and engineers continue to assess that new discovery in and we'll look to update the market in that regard as well.

Okay, and then switching over to <unk>.

Right.

Hi, I was just going to add to your point about the decline.

I mean, one of the side benefits of the decline is the ability to drill.

Some of the satellite deposits outside the triangle and definitely our Mark is well positioned for drilling once that declines in the position where weve got drill stations.

Super.

Switching over to the the noncore asset sales.

Great update there on Villanova being sold you mentioned that.

Others, Yes, some form of process, taking place Atoka answer Ted can you give us a bit of color there is that right.

Are you getting inbound interests more.

More just initiating the process with advisors.

Testing the waters for interests any color would be appreciated.

Sure, Mike, It's Jason and so.

What we're doing is evaluating.

As as probably the way to characterize it like.

Valuating strategic alternatives as it relates to those assets and what we're seeing obviously as a more supportive and constructive environment for for gold.

And market just generally speaking so.

So it's just an initiation of evaluating the different alternatives for parties, Ed and bulk answer Tesh is probably the way I'd characterize it.

Okay.

All right Super.

That's it for me thanks, guys.

Thanks, Mike.

[laughter].

The next question comes from Jeff.

Our next question.

Thanks.

Hi, Good morning, everyone can you hear me.

Yes.

Morning.

I have a bit of that.

Always quality that is a bit low on for me. So I may have missed some of the information that you mentioned, but I wanted to just circle back on a couple of technical things. The first one is just on the reserve is then.

That Mike was talking about in terms of that upside, let Matt do.

Do we how do we see Kisladag and just the rest of the assets looking because we were impacted with covanta over them in terms of you know people on site and stuff for drilling.

Well in terms of cost at a there's been no drilling at Kisladag, we've we've drilled that deposit out at least the open pit potential the deposit. So there is no no drill result, as always we'll be updating engineering analysis, metallurgical work and and and checking the optimism.

Question on the pit so that that's underway.

FM to crew you know we've been fairly successful at extending mine life through.

Reis inferred resource conversion, so thats continuing to be a focus.

So there will be an update there.

In Greece, we've got multi decade mine life and those assets. So nothing significant there with us with the exception of Mabus Petrus there we've done some drilling from underground.

That helps us.

Design in the surface drilling that we're.

We're embarking on as we speak so.

I'd say the highlight definitely will be a mock again, we're we've got great potential to extend mine life, there and it's a significant part of our our exploration budget.

And then an update on this that as well.

Just to make sure will you be using the same reserve and resource pricing as you use last year.

Yeah were isn't 1300 dollar gold price.

So my remaining conserve.

Our reserves yet.

And if I could ask ask Joe just omni.

Kisladag and let Mac.

Secondly, just on Kisladag and I know you talked a little bit about it I had to ask.

Already this year with my phone.

I just wanted to understand the.

Have more then you know you have more Golden solution. Then you expected my understanding is that you really January didnt have time to profit or on the pad.

There you put it in and sorry in Q1, you put it in on the pad in Q2.

And so are you, saying that just Q2 and Q3, which is 60 days of leaching guess wasn't enough to it to get it out and we're expecting a big bump up in Q4 for production.

Well I think you've got.

Generally correct. So in Q1 it was the other heavy rains that kept us from.

Backing.

Everything to plan on pad, we began to close that gap in in Q2, and then kind of got there in Q3, but were complicated a bit in Q2 with.

Cool bid and lower man hours, so we got a bit behind on on patent maintenance ripping schedule emitter change outs all of that so we as we're kitchen.

That.

We will be looking to get a little bit higher so solution flow rate during Q4.

Looking to get more meters under irrigation, but.

But.

You expect us to be relatively consistent with.

Last couple of quarters.

Okay. So and so that's why we're going to be towards the lower end of the guidance has really because of kisladag.

That's that's correct, Okay, and then if we can move to let Mac.

You talked a a and in your release about the mineral and some of it.

Applications, you're having there with that equipment can you walk us through what exactly is happening now.

So we have the mineral equipment.

Yes so.

And we have been.

Monitoring data or working to get it into a pretty.

Productive mode over most of.

Towards the tail end of Q2 and into Q3.

Yeah, and I would say that the the results or mixed we're finding that the method.

The method shows promise.

And we're working through issues in kind of getting the equipment adapted to Lamar.

Okay.

Probably our biggest focus is determining how.

Im going to how much inventory.

Is adaptable to the to the method and just to determine how much continued energy we wish to put in.

So so we're still in process.

And when you say the equipment to get adapted to let Mac what exactly.

What's the adult patients what seems to be this year.

It's not exactly.

Well I think.

As we put the equipment into the mine.

The.

Better.

Yes.

[music].

Mucking device, so that's given us a little bit of a little bit.

I'm trying to make sure that we keep.

Availability up around.

Equipment.

Just generally kind of commissioning and working.

What is really.

Pilot.

R&D so we've.

We've made progress there, but we did achieve.

Hey look there.

No.

Foretells.

You know consistent production levels, but we are making progress.

Okay, I guess, we'll continue to monitor it quarter over quarter.

And then maybe if I could.

Large kind of circle back with you on Gleason Congrats on the progress being made there you mentioned the minister of mines and environment with all the kids to Scorcese.

Are there plans for the person to go to Perama Hill, and Olympias or is that it are they doing due diligence on these assets I'm just trying to understand.

How the site visit so they just part of the plan of moving this into the framework just trying to understand what Inc.

I'll, let progressing now.

Sure I mean, the reason for the ministerial visit to the Skouries is that's really we believe the first catalyst in the pipeline.

For a couple of reasons its a.

Good.

On our schedule or anticipated schedule Skouries we.

We believe will be delivered faster than let's see us.

Perama.

Okay.

So is it safe to assume they're going asset by asset and that's it so where we stand score even now is working on the framework that once we get that.

Second and third the site visit another is that a good way to think about it.

Yes, I mean, essentially I'd say, the permitting requirements and timelines are driving.

The fact, the minister went to Skouries first though.

For Skouries.

We have an EA that needs to be modified to deal with dry stack tailings that as you know is.

A massive improvement in risk mitigation. It's also.

Reduces the footprint of the site increases water recycle. So it's a it's it's a really good improvement to the design of the operation. So it's it's a simpler permitting process to get that modified.

In the case of Olympias, we plan to expand the throughput through that plant by about 50%.

And as such will you moving more out of the underground more ways.

We'll be processing more.

We will increase our rates of disposal in our state of the art coconut milk has.

Lying tailings disposal facility and so all that requires the appropriate regulatory reviews in terms of impacts on on air noise water.

And and our designs are silent again this is a dry stack cemented paste backfill disposal system.

And the the filter dry stack tailings is going into a state of the art line facility. So I'm very confident we will get the permit but it takes time to work through that process and that process will require public consultation at olympias, because there are environmental impacts it.

Have to be considered.

And then Perama, we don't currently have any so we're in the process of re optimizing the project with with current European in Greek regulatory requirements and so that that.

We'll need to go through public consultation and it's a bit further behind Skouries and probably olympias. So the reason for the attention of the Skouries from the Minnesota Minister is that that one is likely going to move faster and we were happy to have the minister at sites and and again, we're making progress.

And I remain confident that we're going to deliver value in these these assets and I think that positions Eldorado very well against our peers.

No I appreciate I Didnt appreciate charge that the Olympics, but I just thought it would be an amendment to the apparent permit to increase your throughput I didn't realize that with the amendment came public consultation.

Oh, I didn't realize that and maybe just frame how are we progressing on the financial aspects of the framework.

And over progressing well there I'd say the.

We lost some momentum like during during the call. The crisis, so both El Dorado and the Greek state did what we needed that we focused on safety and health of our people and.

And so we didnt have a lot of progress in discussions, but but thats changed I mean, both the government and Eldorado are committed to negotiating a fair deal to get these investments.

In a production and deliver value for.

For the for the Greek state for the local communities and for Eldorado and our shareholders and I'd say the most important factor for Eldorado in these discussions is that we have a bankable deal.

Thanks, Andy I'll start soon.

We've had a piece and confident that we'll deliver that.

And you feel you've moved up in priority.

In their roster in terms of their priorities.

Well I mean, you know prime Minister Mitsotakis in his campaign side.

Cited the Eldorado investments is one of the top two priorities for Greece, and so we remain at the top of that list and and again I'm confident we will be successful.

Okay. Thank you so much.

Thank you.

The next question comes from Kerry Kerry.

Pardon me Macquarie Canaccord Genuity.

Hi, Good morning, maybe just another question on Greece, I mean, presumably you get the Green light. There can you just talk a little bit about your thinking on how the project moves forward from here.

That's correct specifically.

Sure I mean the I.

I believe there's there's really three catalyst.

That we need to deliver an order for the executive in the board to.

To approve restart of Skouries construction.

The first is the this bankable agreement that we're negotiating.

The second is the modification for dry stack tailings.

And both of those are advancing well.

When we have both of those in hand that sets up well.

The financing will need to put in place to to move forward with the construction.

So once we have those then then we're in a position as an executive team and our board to approve restart a construction just a reminder.

We spent nearly half a billion in construction.

The operations roughly 50% constructed.

We have about 700 million in capital remaining.

A lot of work to be done on the underground in terms of development and test stoping.

The tailings.

Area will have a an erosion control down downstream and that needs to be constructed.

The primary crusher needs to be constructed the main body of the plant this pretty well in place so theres lots of piping and electrical work.

And we think it's about a two two and a half year construction period.

So again.

My view is these catalysts are moving wall.

We'll be in a position next year to restart construction is my belief.

And maybe just two more questions is the plan still that bring in a partner at Skouries or would you go it alone and then secondly.

How is the relationship with the community level.

So on the first question our primary strategy still remains to enter into a joint venture structure likely at the Helos level.

We think we think that is the.

The optimum solution, but to be candid. Once these catalysts are delivered flavor will be able to further the discussions with the current interested parties.

I think there's enough well I don't think there has been increased interest in the opportunity with the uptick in gold price and as you know as we are moving forward with with the opportunity in Greece. So we'll be looking at every alternative but at this point management and the board. Thank you.

Joint venture structure is as likely preferred outcome.

On the second question the local communities.

I think there is a perception the wrong perception that we don't have strong community support.

The villages around our operations unhealthy DKI.

Our historic mining communities and we have strong support out of those villages like everywhere around the world. There are individuals and groups that that are concerned about the impacts from mining.

I firmly believe being a veteran in this industry for for multi decades that that our operation designs in Greece are best in class.

We're deploying dry stack tailings, we've got monitoring systems that are publicly.

Mailable 24 seven.

We're very transparent in how we operate and we're meeting all regulatory requirements in Europe in Greece. So.

We've got strong local support and and.

Confident that we're going to get the permits we need and the agreement we need to be able to move forward.

Great. That's helpful. Thank you.

The next question comes from Cosmos Chiu with.

Please.

Hi, Thanks, Thanks, George fill Joe and Jason.

Yes, maybe my first question is on Turkey here.

Clearly the Turkish lira has been depreciating.

I guess from that perspective, as we've talked about in your Mdna. It's actually all been positive in terms of the cost impact your cost has come down from U.S.D.

However, I guess my question is number one how much of your costs in Turkey or didn't actually denominated in the lira and number two you know any comments on how you concern of any kind of risk that could be brought about by the depreciating Turkish lira.

So George all maybe answer is a high level and Phil can supplement.

So I mean for sure we've seen a positive impact on our cost given.

The impact of the lira exchange rate.

I would say to be fair, though historically when this has happened in the past and I expect it will happen again this time as inflation kicks in to.

To your question roughly half of our cost our Turkish.

Nominated and largely Thats labor labor in our workforce and contractors.

And so.

Ill.

We will see an inflationary impact on our cost that will erode at least some of that Turkish benefits. So moving forward you can't bake in the benefits that we will see an impact and inflationary impact on our cost structure.

So anything you'd add to that sure George Hi, Cosmos.

So.

I think overall to answer your question, where we're well aware of the.

The escalating headlines in Turkey.

And the.

The currency risk they just went through a bit of a currency crisis.

Depleting their currency reserves.

From a from an Eldorado perspective, I mean, we've we've we're taking appropriate measures to ensure that.

Currencies are.

Not.

Significantly at risk in terms of being in country, we we manage our funds.

Good day to day.

And any funds that we deem to be surplus.

Not required for payroll are paying taxes or operating costs any surplus funds, we we move those funds off shore.

And so I think from that perspective.

That's.

I think thats pretty consistent with other companies that are operating in Turkey, as well, we keeping in regular communication.

And we we talk about the any developments that are happening within country, but I think at this point.

Just from talking to.

The teams that are on the ground in Turkey.

Those those.

Yep appear at this point to be to be adequate.

We do have in terms of managing our turns requirements.

We do have two different.

Two different operations in one traditionally provides pros.

Proceeds sales proceeds in lira and one traditionally provide sale proceeds in us dollars. So we can.

We can effectively manage the balance.

And that that definitely.

We don't have to do any unnecessary currency transactions.

So I think from that perspective, I think we're in a pretty good spot.

Of course.

And then as a follow up then.

With the HPG Kisladag.

You know I guess number one how are you managing that currency is there any kind of currency risk or is it all in U.S.D. and then number two as you talked about I think Joe I got you and you said you know it's scheduled to be completed sometimes Q3 2021 have you factored any allowances.

Look over 19 as you have seen any have you seen any delays in terms of you know potential delays based on KOVA 19, and any risk in terms of delivery on the HPG.

So maybe I can address the currency risk question first and then Joe can can talk look HPG are so in terms of the the.

Cost of the equipment and so forth if the contracts are U.S.D., we do have sufficient U.S.C.

Within a within our holdings.

And as I mentioned earlier, Kosmos, we do have lira generated as well so we can manage that.

Quite effectively so theres really not not much currency risk when it comes to the project.

Joe.

Cosmos.

Hi, Joe.

How you doing.

We are still on schedule for equipment.

Liberty It was targeted at about 11, which that's still remains the schedule. We did have we did have some issues early.

Early on true engineering, and information back and forth between.

We're in the us.

Largely in that.

We are still scheduling to get concrete again this year.

So I think we're sitting reasonably reasonably good.

We don't have we havent put a lot of contingency in schedule for coal.

Co bid.

Although.

A bit and so we're attempting to manage schedule on.

Going basis, as we look forward to.

Quarterly chunks based on what's going on.

So that risk is there, but it's pretty hard to quantify it it's a moving target and we've kind of kept ourselves from adding a bunch of contingency pushed project alone per schedule and.

Deal with the adjustments as necessary we are.

In constant communication with we're on delivery.

And.

Actually look to get a representative into Amsterdam facility to see projects progress for sale.

Oh for sure.

Maybe one last question on landmark here.

No of course, good to see that you now have received the permit for 26 50 tons per day, that's been a while back.

My question is on throughput here, if I divide your.

Quarterly tonnage at all by the 90 days are plus or minus I get to about 1921 tons per day can you remind me in terms of you know your throughput.

How are you expecting it to ramp up to 26, 50, and when is that going to happen.

You know we're still.

In the.

[laughter].

Business planning process, but generally we're a couple of years.

Internationally.

2022, early 2023, where were hitting 25 range roughly.

Okay. So is it is it kind of like a straight line or is it more slowly going to stick around the 2000 tonne per day level for now and then there's a quantum leap how should we how should we model.

It's a bit of a ramp up so you know it's.

Pretty close to straight line.

Got it cool.

Thanks, everyone.

Sorry.

Excuse me that the well.

Thanks, those are all the questions I have anyway, so thanks, George and team and have a good weekend.

Thanks Cosmos.

The next question comes from Kerry Smith.

Sure.

Thanks, operator, good morning, everybody.

I don't maybe Joe or or.

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