Q1 2021 Eldorado Gold Corp Earnings Call
Thank you for standing by this is the conference operator.
Welcome to the Eldorado Gold Corp, Q1, 2021 financial and operational results Conference call.
As a reminder, all participants are in listen only mode and the conference is being recorded after the presentation. There will be an opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad should you need assistance during the conference call you may signal, an operator by pressing star and zero I would now like to turn.
The conference over to Jeff Wilhoit interim head of Investor Relations. Please go ahead Mr overnight.
Thank you Carl and thanks, everyone for taking the time to dial into our conference call today.
On the line with me are George Burns, President and CEO.
Bill <unk> executive Vice President and CFO, and Brookdale Senior Vice President projects and transformation.
Brookdale will present operations today as Joe <expletive> is joining the call from a location that may experience connectivity issues.
He may be available for portions of the question and answer period S technical conditions warrant.
Also on the line for questions are adjacent Cho Executive Vice President and Chief Strategy Officer, and Peter Lewis Vice President exploration.
Our release yesterday details, our 2021 first quarter financial and operating results.
It should be read in conjunction with our first 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 are U S dollars unless otherwise stated.
We will be speaking to the slides that accompany this webcast.
You can download a copy of these slides from our website.
Before we begin I would like to remind you that any projections included in our discussion today are likely to involve risks, which are detailed in our 2020 Aif and in the cautionary note on slide two titled forward looking statements.
I'll now turn the call over to George.
Thanks, Jeff and good day, everyone.
Here's the outline for today's call.
I'll provide a brief overview of Q1 results and highlights before passing it to Phil to go through the financials.
<unk> will follow by reviewing operational performance.
Then we'll open it up for questions.
For those of you who joined US on last year's first quarter earnings call, you'll remember a very different tone as we discussed and evaluated the challenges of COVID-19 imposed on our business.
While we continue to contemplate the impact of the pandemic has had on all of us.
There is also a sense a renewed hope and optimism for the future.
On behalf of our management team and board of directors.
Again extend my deepest thanks, and appreciation to our employees and their families who tirelessly commit and persevere.
To ensure that Eldorado will emerge from this stronger and a more resilient company.
Turning to our results in the quarter I'm very pleased with our solid start to 2021, both operationally and financially.
Since we last spoke two months ago or sign the net investing agreement governing the further development of Scurries Olympia since for Tony collectively known as a Cassandra mines with submitted and ratified by the Greek Parliament and has officially entered into Greek law through the publication in the government Gazette.
These are key milestones in unlocking the compelling value of our Greek assets.
We also reached important milestones on our Canadian operations is QM ex shareholders voted overwhelmingly in favor of the transaction with Eldorado that officially closed on April seven.
With the strategic land position now five five times bigger newly.
On newly discovered 800000 ounce gold resource at a remark and a host of high potential exploration targets. Our Quebec team is now focused on continued growth in this key jurisdictions.
I've mentioned, our success Derisking milestones in Greece achieved during the first quarter and I'll spend a moment on timing of future milestones specifically at the <unk> gold copper project.
I am very pleased with the latest milestone in Greece that we announced just yesterday.
We now have approval for the use of dry stack tailings at Scurries.
This EIA a modification will reduce the environmental footprint of tailings facility by 50% will create a more efficient safe and streamlined operating mine.
This was a tremendous piece of work by our teams and regulators and evidences our mutual desire to design series with the lowest possible environmental impact.
The updated feasibility study for series continues to advance towards completion in the third quarter, which will accelerate the process of finalizing the funding and financing for this world class project.
In parallel we are also getting ready to submit an EIA for the Cassandra reminds marrying our development plans outlined in the investment agreement.
Following that we are pursuing a construction decision by year end and we'll look to restart construction in early 2022.
With timely completion of the construction in two and a half years low cost production from <unk> represents significant upside to our current five year production profile.
Just a bit more color on dry stack tailings.
Eldorado as an industry leader in using this best available technology.
We deploy dry stack tailings at the majority of our mines and pioneered the use of it in Turkey and Greece.
I'm excited to now be able to implement this expertise.
The bottom left picture here's shows the processing facilities that scurried.
At the top you will see the mill and the second in ponds in the metal the tailings filtration plant is a small building circled in yellow.
This is a bit misleading as discouraged filtration plant is one of the largest in the world the size of the soccer field and is shown in more detail on the bottom right.
In addition to strengthening our business in Q1 I am pleased to report that Eldorado made significant progress on key sustainability initiatives during the quarter.
Notably, we advance articulation of our new sustainability framework and launched our global sustainability integrated management system per cent for short.
These reflect our commitment to doing business the right way with putting responsible practices at the core of all that we do.
Our sustainability framework is our foundation for how we approach responsible mining.
It articulates four key pillars that our commitments across environment, social and governance indicators as detailed on the slide here.
In delivering on these we believe we will continue to be a preferred partner for host communities and countries and have access to capital to be able to grow our business for the benefit of all stakeholders.
Also in Q1, we rolled out Sam's that integrate sustainability responsibility.
Ability and accountability across all of Eldorado core business functions at all levels of the organization.
This management system is a set of performance standards by which we will be able to better measure and track our ESG performance.
We have integrated other responsible mining framework such as the mining association of Canada's towards sustainable mining and the World Gold Council responsible gold mining principles into Sims, so that in adhering to our own standards. We're also complying with these leading free.
<unk>.
In short the core objectives of Sims, our regulatory compliance compliance with voluntary commitments responsible risk management and continuous improvement.
With that I'll turn things over to Phil for a review of first quarter financials.
Yeah.
Thank you George.
Good day everyone.
We're doing with slide eight.
Solid operational results in revenues in Q1, 2021.
Were consistent with plan and expectations in.
And production is in line with our 2021 annual guidance.
But adjusted earnings per share was lower than expected due to increased taxes, resulting from the weakening Turkish lira during the quarter.
And higher depreciation.
Turning to a brief review of the numbers strong operating results and our realized gold price of $723 per ounce in the first quarter.
Led to a 20% increase in adjusted EBITDA.
$208 million compared to adjusted EBITDA of $90 million in the first quarter of 2020.
The realized gold price reflects negative provisional pricing adjustments related to concentrate sales from the previous quarter.
The company reported net earnings to shareholders in Q1, 2021 of $8 3 million or five cents per share compared to a net loss of $4 9 million or three cents loss per share in the first quarter of 2020.
After adjusting for onetime and nonrecurring items, including.
Including a 12 million dollar noncash loss on foreign exchange translation of deferred tax balances related primarily to the Turkish lira.
Adjusted net earnings for Q1, 2021 increased to $21 million were 12 <unk> adjusted earnings per share.
Compared to $12 5 million or <unk> <unk> adjusted net earnings per share in the same quarter one year ago.
As stated earlier adjusted earnings per share of <unk> 12 per share was lower than expectations due to higher current taxes, a result of the weakening lira and higher depreciation in the quarter.
Tax expense totaled $28 2 million in Q1, 2021 compared to $21 4 million in Q1 2020.
Approximately 9 million of current tax expense in the quarter related to taxable unrealized foreign exchange gains.
These gains were primarily due to the significant weakening of the Turkish lira during the quarter.
Which went from 7.4 for Lear 80 to the U S. Dollar at the start of the year to 8.24 at the end of Q1.
This weakening lira increased the value of our U S dollar denominated cash.
In local currency terms.
Leading to a taxable foreign exchange gain.
Another development related related to tax was the recently announced temporary increase in our corporate tax rate in Turkey.
Whereby the current effective tax rate of 20% will increase to 25 per cent for 2021.
And then decreased to 23% for 2022.
The rate is then expected to return to 20% for 'twenty 'twenty three onwards.
This increase will be retroactive to January one 2021.
But has not been reflected on our Q1 interim financial results due to the timing of the announcement.
The increased tax rate, including the retroactive adjustment for Q1 will be reflected in our Q2 results.
Depreciation expense totaled $56 3 million in Q1, 2021 compared to $52 4 million in Q1 of 2020.
The increase was primarily a result of higher tonnes mined in the quarter as compared to Q1 of last year.
The lower average grade of Kiss a day in the quarter contributed increased depreciation on a per ounce sold basis as compared to Q1 2020.
This increase was partially offset by lower depreciation, resulting from a change in estimate.
Whereby a portion of inferred mineral resources are now included in the depreciation calculation commencing at the start of 2021.
The impact of this change primarily is at la Mark and better reflects the pattern in which the future economic benefits of assets are expected to be consumed.
I am pleased to report continued increased financial strength and liquidity as shown on slide nine.
At quarter end, we had unrestricted cash and cash equivalents and term deposits of $533 8 million.
We also had $99 6 million undrawn and available under our revolving credit facility.
Eldorado is on a net cash position as at March 31, 2021, and lowered our net leverage ratio to effectively zero compared to 0.89 times at the end of the first quarter of 2020, reflecting continued reduction of debt.
Our Q1 2021 free cash flow totaled $24 6 million significantly higher than the $7 2 million generated in Q1 2020 <unk>.
Looking to the balance of this year, our free cash flow generation and future quarters will be deployed increasingly towards those capital investments is central to our continued growth.
With that I'll now turn it over to Brooks to go through the operational highlights.
Thanks, Phil and good day, everyone, starting with slide 10, our positive first quarter operating performance set the tone from what I believe will be a strong year for Eldorado.
I've been impressed by the pace energy and agility of our teams at site.
We produced 111742 ounces of gold in the quarter at cash operating cost of $641 per ounce sold and all in sustaining costs of $986 per ounce sold our cornerstone Kissler dock mine deserve special recognition for a strong finish to the quarter, but all of our operations.
Net head on the continued challenges brought about by the pandemic and its impact on the ongoing global operating environment.
Staying with cash with our first quarter gold production totaled 46172 ounces on.
Our cash operating costs of $492 per ounce.
The team there proactively managed through a minor geotechnical issue in the pit highwall that deferred access to higher planned grades the resulting lower average grade in the first quarter was partially offset by outperformance on tonnes mined and place.
Mining has since resumed in the affected area and the high wall issue has been resolved.
Bench to stability at Kissler Dol is very good.
On the processing side, two new CIC trains were successfully brought online during the quarter, which has increased our solution processing capacity going forward from 3250 to 3750 cubic meters per hour.
The installation of a new carbon column regeneration kiln remains on track for scheduled completion in mid May which is expected to drive improved gold recoveries in the circuit.
The commissioning of the high pressure grinding roll circuit remains on track for the third quarter as you can see from the picture here. The H P. G are building has been erected and partially crowded in preparation for equipment delivery, which is our on road.
Mentioning managers now on site.
We are also progressing well on our multiyear pre stripping campaign and studies are ongoing to assess the potential for accelerating this work in an effort to bring forward value forward at case Linda.
Over to F. M. Two group, where first quarter gold production totaled 23298 ounces at cash operating cost of $525 per ounce.
The recently installed flotation columns continue to operate well as we also evaluate optimum ranges.
This will result in significant improvements in the quality of our gold concentrate.
Turning to our Canadian operations first quarter tons and grade at La Mark came in as expected.
First quarter gold production totaled 28835 ounces at cash operating cost of $759 per ounce.
The underground decline between triangle on a single mill has reached the approximate midway point of total plant distance of 3.3 kilometers.
And on track to connect the two drives by the end of this year.
Completion of the decline is expected to reduce operating costs of surfers college costs are eliminated and the current ramp up on underground route is replaced with straight line haulage to the Sigma mill.
At Orbach early results of infill drilling on this 800000 ounce maiden Gold reserve has been positive preliminary mine planning studies are underway to assess the initial scope of this resource within the <unk> operation.
Once completed the underground decline will enable the team to drift over to deposit and gain additional information to integrate this promising new discovery and future mine plans.
Over degrees at Olympias first quarter gold production totaled 13437 ounces at cash operating cost of $1145 per ounce.
We recently initiated leadership training surrounding our overall group transformation plans. This is a wide ranging sustained effort that touches every part of our business in Greece from employee education and training to physical plant and business systems upgrades.
Curious continues to advance we will ensure that a dose share while adopting best practices and a culture of success before the first shovels are in the ground.
Implementing this scheduled scale of change on an existing operations, Mike Olympias is challenging but the long term benefits in productivity efficiency and safety will result in a stronger operation with greatly enhanced economic opportunities.
Touching briefly on our two key growth projects in Greece. The project management contract for Sirius has been awarded and pre construction work is proceeding including structural cladding for the mill as well as continued preservation activities.
Completion of the feasibility study is expected late in the third quarter.
At Paramo Hill, an updated 43, one on one study remains on schedule for completion this year.
We also continue to see great exploration potential on the Thrace region supporting opportunities for growth in and around parameter Hill.
With that I will turn it back to George for closing remarks.
Thanks, Brad.
Whether it's derisking, the Greek assets exciting capital investments underway. It gets at all for optimizing our high potential Canadian operations.
Eldorado remains well positioned for success.
Our balance sheet continues to emerge as a major strength, which will enable us to maximize this potential and surface value for our shareholders and our stakeholders, where we operate.
Thank you everyone I will now turn it over to the operator for questions.
Thank you.
We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you'll hear it so on acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing on the key to withdraw your question. Please press Star then two.
Ross for a moment as callers join the queue.
The first question comes from Cosmos <unk> from CIBC. Please go ahead.
Great, Thanks, George Phil and Brock.
Hello, just maybe a few questions from me here first off can we have a maybe a discussion on on taxes, hopefully without giving everyone a huge headache here.
But hill at all as you said.
Earnings were lower than the numbers on the street, just given taxes on also depreciation but on taxes I calculate that taxes were about 71 per cent of earnings.
In the quarter, which is really high even if I back out on some other one time items are still 41%.
I guess, you know given the continuing volatility in the Turkish lira could you give us a bit more guidance in terms of.
How we should model and look at our tax.
Taxes for the remainder of 2021.
Okay.
Sure. Thanks Cosmos.
Hi, good morning.
Yeah. Good question I mean, the the taxes.
The effective tax rate you outlined is accurate, but that includes cash and noncash.
Types of adjustments. So if you look at the you know the.
The current tax rate.
It's about 36%.
And that's.
That includes the line.
Like in Turkey that includes the corporate.
On a tax.
Which for Q1 was at 20% that later on.
The retroactive portion of that reflecting the increased to 25 has not been booked yet because of the timing of the announcement, so that'll that'll be picked up in Q2.
The other part of the taxes in Turkey is tied to a foreign exchange tax and.
And it reflects.
It's a quarter to quarter adjustment.
When the Turkish lira weakens.
Impaired to the U S dollar.
There is on the additional tax that's.
Thats impose when a Turkish lira strengthens versus U S dollar that taxes and credited back.
So you know in Q1, there was a significant weakening weakening of the Turkish lira.
Here than eight.
And that resulted in the higher tax and that was unique to Q1.
In Q2.
The forecast for the Turkish Lira is Florida Theres still.
I think concerns with with some of the economic policies and.
And actions that are being taken with the with the Turkish Central Bank in.
The forecast is still for the lira to remain around eight.
For the volume being up.
So even if it drops to eight there would be a there would be a slight credit back in Q2. It drops below eight the credit would be higher so that's kind of a fluctuating impact.
And again, it's dependent on on on what's happening in Turkey, and the other part of the tax on the current taxes really the Quebec mining duties.
That's just the provincial provincial mining duties the federal tax piece is offset by loss carryforwards in in.
In Quebec, So the largest component is is Turkey.
And like.
Like I said that the one factor that that we know for sure is that the corporate tax rate has gone from 20% to 25% that will be affecting Q2, and the foreign exchange on will depend on the fluctuation on the liver.
Okay, great. Thanks, Paul I'm not sure I have my Q2 tax estimate will be any more accurate.
But we'll give it a try.
Maybe switching gears to our Greece, you know first of all congratulations on getting the investment agreement ratified and also getting new dry stack tailings approved.
And on that George you know and team as you mentioned, we're now working on an updated technical report.
Clearly the last technical report was completed in March 2018, and get on some of the input costs have increased steel prices and in other places as well.
Not sure how much you can share with us at this point in time.
But you know could you give us a bit more color in terms of potential changes and how we should look at capex on this project.
On a go forward basis.
It's George I'll, maybe take a kick at it in hydro on the up Joe could jump in so I mean, thanks for the congratulations it was fantastic first quarter for us getting the agreement hammered out.
That agreement sort of a state of the art agreement that puts protections in place for Eldorado, but also for the government. It was a mutually beneficial agreement in and in spite of COVID-19, we're able to able to hammer that out over the last year plus and then it was great news yesterday to get the permit approved for <unk> dry stack that's a.
Massive proven in a benefit to everybody in and attribute to our company's commitment to ESG.
On the technical report that as the next major milestone for Us and I'll just give you a general characterization. So you got to recognize that that series is half built.
The main infrastructure for the plant is in place so the grinding section foundations flotation cells most of the tanks.
There is a lot already on the ground.
Obviously, there's still a lot to be done on our remaining capital at $700 million.
When you look at that though.
We've got the dry stack filter plant to purchase and construct.
We've got the primary crusher to construct so in terms of the dry stack facilities, we got to procure the equipment in the building and in steel for that so there will be some escalation on the cost associated with that over the last couple of years, but predominantly the rest of the things we need in the plant are on the ground.
So there's a lot of things to be done we got the the starter dam that will.
Basically it's a rock dam that will ensure the dry stack filter tailings.
In perpetuity.
Control for any kind of erosion, we've got the open pit pre stripped so we're ready to deliver ore to the plant once once everything else is ready, but theres a lot of work to do on the underground right now the decline is at the top of the underground section of the ore body, but theres a lot of lateral development vertical development tests.
Doping in order to have the underground ready for commercial production. So yeah. I mean, there obviously is going to be some escalation on some of the materials. We have yet to procure we think we're in a really good position to really push productivity inefficiencies on construction.
And in the end I'm not expecting any material change in estimate it's really about.
Getting giving giving us the assurance and putting us in the best position possible to negotiate the financing terms.
We need in order to get the construction started so stay tuned but you know we're all going to have the answers to this as we get that study completed in Q3, and we'll be in a lot better positioned to finalize financing.
Right.
And yeah. It seemed like it seems like ages ago, now, but I remember it being on site.
Three or four years ago, now and yes, you are right a lot of infrastructure was already in place.
S curious and maybe just a quick follow up and my last question here.
Is that a financing at all you gave us some goalposts during the prepared remarks, you talked about feasibility study coming out in cash.
Your three or updated technical report on Q3, and then potentially starting construction.
Construction on continuing construction on.
At all earlier on in 2022, so in between you know should we expect.
You kind of bringing in a financing partner and get all you've talked about potentially a joint venture partnership on the past do you need that in place before starting construction is that sort of the timeline that we should be looking at.
Well I'll just answer at a high level, let me, let Jason jump in to provide some additional comments. So yes, I mean on our strategy for the year is to get the the technical study completed in Q3 and that kind of positions us best to be able to finalize the financing and <unk>.
<unk> venture is one of the primary things we continue to be focused on for a multitude of reasons.
One is to provide capital to is to bring another important voice to the investment.
As these are multi decade high quality assets that you know.
Over time, we will have many governments come and go so there's a lot of factors that will be used in our decision, making and maybe I'll, let Jason jump in here with a few comments.
Yeah. Thanks, George So so cosmos consistently George already said.
Timing with respect to the updated feasibility study.
Any updated EIA are kind of critical pieces to ensure that we land on on more optimal terms with respect to funding.
And you know.
As you've seen it from the budgets there is.
Capital being allocated to to early stage works and I would suggest that we probably would continue to do that but as it relates to making material commitments without a funding partner without funding properly in place I'd, probably is not likely to happen. So the idea is to progress through the balance of this year and as George had mentioned is true.
To land on something later this year early next.
Great. Thanks, a lot goes the other questions I have and I have a have a good weekend.
Thanks Cosmos.
The next question comes from Kerry Smith from Haywood Securities. Please go ahead.
Thanks, operator, George weighted timing for the update on <unk> or score Cassandra I guess for the whole Cassandra operation.
All right.
And does.
Does that share does that need to be does that he needs to be approved before you could start construction on screws on screen covered off on with the existing EIA with the amendment for the dry stack tailings.
Hi, Kerry thanks for those questions. So I mean, the amended EIA that we're actively working on with government.
Primarily for Olympias on stroke, Tony So we have what we need to be able to proceed with series from a permitting perspective.
But for Olympias as you know our plan is to continue to ramp up infrastructure and.
And development in the underground mine to be able to support higher production rates and thats that that is really going to.
Make olympias.
Our solid asset for us by ramping up the underground production.
Our fixed costs remained fixed and our variable cost will drop dramatically and that will provide some significant margin so productivity and efficiency improvements are a key but so is getting this permits submitted and approved that will enable us to increase throughput and value and so that's a key part.
This new permit.
Second piece as you know, we produce concentrates and we ship those concentrates.
And our current methodologies pretty high cost by doing some additional upgrades to the stroke Tony part we accomplished a couple of things one we can ship more of the concentrate out bulk that improves safety issues related to concentrate movement.
We'll be putting environmental improvements into these upgrades and modernizing this for Tony facility, and we will be lowering our operating costs by having lower cost transport. So.
I mean to answer your question. It's a work in progress we're expecting to be able to file that permit later this year.
And because it <unk>.
Unlike the series modification, where it was purely environmental benefits. There wasn't there was absolutely no additional environmental risk it was reducing footprint increasing water recycle all very positive things.
In the case of expanding Olympias, we're obviously moving more tons out of the underground more tonnes through the plant more tailings to be dewatered and dry stacked and all of that has to be properly engineered and assess from an environmental impact perspective, and again, we're using best available technologies for this.
Well, we got to go through the regulatory procedures and approvals. So expect to file later this year and expect to have on approval sometime next year.
Theres really no urgency on Olympias, because you know as you see on our five year guidance that contemplates. This expansion of Olympias, it's kind of a steady ramp up over time and so we've got the existing capacity for the early stage ramp up we simply need this permit to be able to deliver the overall five year plan and then obviously.
We see the sooner the better on stir Tony the quicker, we can lower our margins on concentrate handling and shipment the better but you know we're working our way through that regulatory process.
You can see from what we've accomplished in the last two years, we've got a very supportive government. That's looking to do the right things as we are protect the environment create jobs and wealth for everybody and so we're feeling pretty optimistic mystic about this and we will keep you updated.
Okay, great. Thanks for that and then just secondly on travel.
If you get the fourth you want on one out in Q2 is is that report required for the <unk>.
<unk> submission or from the Iab submitted before that comes out.
Well I mean, the 43 one on one is simply just updating all of our technical information and keeping ourselves from the market of private praised of that opportunity.
In terms of progressing parameters theres still a lot to be done we've got we've got the strategic EIA to be completed.
When that's pulled together then there'll be a lot of stakeholder engagement with the communities.
And with government and so there's a lot of work to be done to ensure everybody understands the benefits the environmental protection that's being embedded in this updated study and then they get the acceptance of the communities and the government through permitting to to be able to proceed. So I mean, all on all theres a lot to be done.
This year and next to get parameter positioned to be our our next construction opportunity and we'll keep you updated as that unfolds.
So what would the rough timing be that George to file this strategic EIA and then secondly.
Secondly to get it approved do you have a sense for that.
I mean I'd just add this is early enough stage I'd just tell you we expect to submit this year.
And I would expect to see an approval next year.
Okay. Okay. That's helpful.
Maybe just a question for Phil on this chart.
This tax increase going from 20% to 25% and then.
Their attention to ratchet it back from 20% by 2023.
Right.
Is that to happen in net never seen.
Why are you very rarely see a government raise taxes on that lower them. Obviously it can happen, but are you fairly confident that that would be the case.
Okay.
Okay.
Yeah, Hi, Gerry good morning.
Yes.
The tax increase.
Yeah.
It was announced in April 16th So that's like two weeks ago.
On a fairly recent development.
And it's really.
On the tax increase is affecting everybody.
Unique to the mining sector.
And I think it's you know it's viewed as the governments.
Our response to some of the current economic challenges that are that are that are being faced in country.
So I suspect at this point.
Since they put it out and it's been official that is the general plan.
To raise it to 25, and then slowly reduce it over the next.
In the next couple of years.
And I think it's really going to depend on how successful they see that.
A mitigating their current economic challenges.
So.
Whether whether it will change your non carry remains to be seen but that's what's been that's what's been enacted in and communicated to you know to everybody to to the market. So you know I suspect that at this point, that's what they're comfortable with.
Right, Okay, Okay, and then just one line.
I might just jump in there for a second so I mean, obviously, it's impossible for us to know and predict what the government will do I mean, I think they are giving us their intentions in for an hour or so.
Assuming thats the case, but just to give you. An example, we had that in.
In Greece, we had taxes at 24 increased to 29% and then reduced back to 24, so it does happen.
I think overall long term trend in government taxes, typically go up not down, but we have seen net.
Right, Okay, and just one last question on the operations for kitchen bag.
The Q1 grade was lower from <unk> comments, it sounded like that was due to a wall failure, which limited access to higher grade portion.
Your guidance for the year I think his 0.77 grams overall in New York six nine grams in Q1 is the grain.
They're still going to average on 77, four pardon me point.
70 from for the year or what do you think youll be last night because of this issue in Q1.
Yes, I mean, we're expecting growth for the year to be.
As expected, it's just from a sequencing perspective Q1 was it was expected to be stronger as you said, we had a minor highwall failure from a safety perspective and limited access on on the ramp going into the bottom once that stabilized and was cleaned up or back in the bottom now.
And so it's just a shifting of grade in the year. The one thing I'd point to from a positive perspective carriers. If you look at Q1, the throughput was up.
Pretty significantly and that counteracted in and helped with the lower grade in terms of our internal quarterly expectations, but from my perspective, that's an opportunity that will continue to focus on if we could.
If we can maintain and increase in throughput.
It's going to create more ounces and thats going to shorten the mine lives slightly but create more value. So we're looking at continuous improvement everywhere. The team. There was successful at having a really solid quarter on throughput and you know we're not changing our guidance on this I'm just pointing out.
That was a great result for the quarter and it's something we're going to try to repeat and if we're successful on that there could be some upside at kiss the dog on the year in the future.
Right. Okay. Okay. That's great. That's helpful. Thank you very much.
The next question comes from Mike Parkin from National Bank Financial. Please go ahead.
Hey, guys.
Congrats on that development series that's encouraging.
What parameters I just wanted to confirm that is paramus got the same it's included under the same EIA that day.
Cassandra mindset or is it separate.
No its a separate asset.
And we're working on a separate EIA to support that project.
Okay.
And does the March 2018 fees for Scurry does that include.
The economic benefits of what you are proposing to do at the stir Tony Court in terms of transportation costs or is that an upside scenario that we would be seeing with this updated feeds coming in Q3.
Joe or brought you can jump in there.
And as of.
2018, the port changes were.
Slightly less than we're anticipating now so there should be or is potentially some upside in this.
This technical report.
Okay.
All my other questions were answered so thanks very much growth.
Thanks, Mike.
The next question comes from Tanya <unk> from Scotiabank. Please go ahead.
Good morning, everyone and congrats again on getting that tailings permit force Glorious second net.
If I could ask a lot of my questions have been asked already but I'm too outstanding maybe just for Phil I mean, we were off on a GAAP depreciation forecast for the quarter can you just provide us some guidance on what to expect for this year.
Hi, Tanya.
Sure. So you know our depreciation.
Particularly.
At La Mark.
<unk> was tracking higher on a per ounce basis than some of our other.
Assets.
So we.
We've been introduced a change in estimate and given the low Mark is a relatively new mine and it's growing.
So we've added.
A portion of the inferred so that's going on that's going to reduce.
On the depreciation charge.
Going forward, especially for the Mark.
And I think that's probably the one the one key item I think.
Maybe the other.
Maybe point us to our depreciation is based on on mines tonne tonnes mined.
Thanks on models, perhaps maybe maybe basing depreciation on on ounces on ounces produced.
And we did see a bit of a SKU this quarter in Q1, it yesterday because the.
The tonnage the tonnage mine went up.
And the higher tons on a lower grade led to the higher depreciation per ounce in Q1.
So those are I think two factors that need to be considered in.
In.
Aligning depreciation models going forward.
Okay.
Maybe from a bigger share license up on like you know in on 150 to 200 million would we be in the ballpark there.
Just trying to find the number that's in our in our budget.
Don't have that handy at this point in terms of total dollar amounts.
But we are tracking.
I think we are tracking.
Consistent with.
Based on those.
Adjustments.
Okay.
Okay, perhaps on get back to you.
Okay.
Well, let me gentlemen.
On the technical side, just trying to understand because you know what.
Like in various jurisdictions in the world.
What's sort of inflationary pressure are you seeing if any through your cost structure beside steel, which we appreciate and steel are you seeing anything on labor.
Seeing anything on cyanide tires freight.
What are you seeing.
Yeah, we're not seeing anything abnormal and I think thats.
<unk> been a bit of surprised with all the COVID-19 issues, but.
We're obviously seeing inflationary impacts in Turkey with the.
On the U S to lira ratio, but on.
The other hand, although the inflation's up in the country the exchange rate counteract that and we've seen that over the 20 years, we've been in Turkey. Other inflationary periods of calm in the FX kind of washes it out so.
Although it's been a horrible tough year on the on the planet.
We haven't seen any unusual moves inflationary wise so far.
Even on your labor George.
Well like I said it in our labor.
We have as inflation goes up in Turkey in R.
Our labor costs get ratcheted up with that but because of.
The FX than that generally gets washed out so again, yes.
Wages go up with inflation, each year, but theres nothing yeah.
Nothing abnormal happening in terms of labor inflation either.
Okay alright. Thank you so much for the color.
On the floor.
Thank you.
Thank you.
Thank you.
This concludes the question and answer session and today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.
Okay.
[music].
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Sure.
Yeah.
Okay.