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.
And as a reminder, all participants are in listen only mode and the conference is being recorded after the presentation, there will be and 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 to.
Conference over to Jeff Wilhoit interim head of Investor Relations. Please go ahead Mr. <unk>.
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.
It may be available for portions of the question and answer period and technical conditions warrant.
Also on the line for questions are adjacent Joe 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.
This 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.
We 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.
And 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 will 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 and go through the financials.
Bob will follow by reviewing operational performance.
And then we'll open it up for questions.
For those of you who joined US on last year's first quarter earnings. Paul you will 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 of renewed hope and optimism for the future.
On behalf of our management team and board of directors.
And then extend my deepest thanks, and appreciation to our employees and their families who tirelessly commit and per severe winter.
To ensure that Eldorado will emerge from this stronger and a more resilient company.
Turning to our results and the quarter I am very pleased with our solid start to 2021, both operationally and financially.
Since we last spoke two months ago, our sign them and invest in agreement governing the further development of securities on Olympias and slick, Tony collectively known as the Cassandra and mines with submitted and ratified by the Greek Parliament and has officially entered into Greek law and the publication and the government Gazette.
These are key milestones and unlocking the compelling value of our Greek assets.
We also reached important milestones and our Canadian operations is QM <unk> shareholders voted overwhelmingly in favor of the transaction with Eldorado that efficiently closed on April seven.
With the strategic land position now five five times bigger and 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 and this key jurisdiction.
I've mentioned, our success Derisking milestones and 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 and recently announced just yesterday.
We now have approval for the use of dry stack tailings at series.
<unk> EIA and 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 and environmental impact.
The updated feasibility study for series continues to advance towards completion, and 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 and EIA for the Cassandra reminds mirroring our development plans outlined and the investment agreement.
Following that we are pursuing a construction decision by year end and we will look to restart construction and 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.
El Dorado is an industry leader and using the best available technology.
We deploy dry stack tailings at the majority of our mines and pioneered the use of it and Turkey and Greece.
I am excited to now be able to implement this securities.
The bottom left picture here shows the processing facilities at <unk>.
At the top you will see the mill and the second and ponds and the middle <unk>.
The tailings filtration plant is a small building circle and yellow.
This is a bit misleading as the series filtration plant is one of the largest in the world and <unk>.
<unk> 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 advanced articulation of our new sustainability framework and launched our global sustainability integrated management system or <unk> for short.
These reflect our commitment to doing business, the right way and putting responsible practices at the core of all that we do.
Our sustainability framework is our foundation for how we approach responsible mining.
And articulated four key pillars that our commitments across the environment, social and governance indicators as detailed on the slide here.
And delivering on these and 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 <unk> that integrate sustainability.
Responsibility 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.
Towards sustainable mining and the World Gold Council responsible gold mining principles into Sims, so that and adhering to our own standards. We're also complying with these leading frameworks.
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.
Yes.
Thank you George.
Good day everyone.
And with slide eight.
Solid operational results and revenues in Q1, and 2021 were consistent with plan and expectations.
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 and adjusted EBITDA.
To $108 million compared to adjusted EBITDA of $90 million and 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 <unk> <unk> per share compared to a net loss of $4 9 million or <unk> <unk> loss per share and the first quarter of 2020.
After adjusting for onetime and nonrecurring items, including.
Including a $12 million.
Non cash 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 or 12 adjusted earnings per share.
Compared to $12 5 million on <unk> adjusted net earnings per share and the same quarter one year ago.
And as stated earlier adjusted earnings per share of <unk> 12 per share was lower than expectations due to higher current taxes, and a result of the weakening euro and higher depreciation and the quarter.
Tax expense totaled 28, 2 million and Q1 2021 compared to $21 4 million and Q1 2020.
Approximately $9 million of current tax expense and 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 seven <unk> to the U S. Dollar at the start of the year to $8 two four 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 with the recently announced temporary increase and our corporate tax rate and Turkey.
Whereby the current and effective tax rate of 20% will increase to 25% for 2021.
And then decreased to 23% for 2022.
The rate is then expected to return to 20% for 2023 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 and Q1 2021 compared to $52 4 million and Q1 of 2020.
The increase was primarily a result of higher tons mined and the quarter as compared to Q1 of last year.
The lower average create a kiss a day in the quarter contributed increased depreciation on a per ounce sold basis as compared to Q1 and 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 low Mark and better reflects the pattern and which the future economic benefits of assets are expected to be consumed.
I am pleased to report continued increased financial strength and liquidity and as shown on slide nine.
At quarter, and 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, and 2021 free cash flow totaled $24 6 million <unk>.
Significantly higher than the $7 2 million generated in Q1 and 2020.
Looking to the balance of this year, our free cash flow generation and future quarters will be deployed increasingly towards those capital investments essential to our continued growth.
With that I'll now turn it over to <unk> 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 and sorry.
We produced 111742 ounces of gold and the quarter at cash operating cost of $641 per ounce sold and all in sustaining costs of $986 per ounce sold our cornerstone and <unk> mine deserve special recognition for its 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 at cash operating cost of $492 per ounce.
The team and their proactively manage through a minor geotechnical issue and the pit highwall that deferred access to higher planned grades and the resulting lower average grade and the first quarter was partially offset by outperformance on tonnes mine and place.
And has since resumed and the affected area and the high wall issue has been resolved.
Stability at <unk> is very good.
On the processing side, two new CIC trends 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 and remains on track for scheduled completion in mid May which is expected to drive improved gold recoveries and 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 HP GR building has been erected and partially crowded and preparation for equipment delivery, which is our on road.
Commissioning manager is 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 and an effort to bring forward value forward and kitchen Linda.
Over to <unk>, 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 and the quality of our gold concentrate.
Turning to our Canadian operations first quarter tons and grade at low Mark came in as expected per.
First quarter gold production totaled $28 835 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 client distance of three three kilometers.
We remain on track to connect the two drives by the end of this year.
Completion of the decline is expected to reduce operating costs of surface college costs are eliminated.
And the current ramp up on underground ROIC is replaced with straight line haulage to the Sigma mill.
Ed or Marc 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.
And once completed the underground decline will enable the team to drift over to deposits and gain additional information to integrate this promising new discovery and future mining Barnes.
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 and Greece from employee education and training to physical plant and business systems upgrades.
<unk> continues to advance we will ensure that a dose here, while adopting best practices and a culture of success before the first shovels are and the ground.
Implementing this scheduled scale of change and an existing operations like olympias is challenging, but the long term benefits and productivity efficiency and safety will result, and a stronger operations with greatly enhanced economic opportunities.
Touching briefly on our two key growth projects and Greece. The project management contract for serious 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 parameter Hill and updated 43, one on one study remains on schedule for completion this year.
We also continue to see great exploration potential and 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 Brock.
Whether it's derisking, the Greek assets exciting capital investments underway it gets it.
And we're 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 joining.
He joined the question queue. You May Press Star then one on your telephone keypad and you will hear with total acknowledging your request.
And if youre using a speakerphone please pick up your handset before pressing any key to withdraw your question. Please press Star then two.
From a path for a moment as Colin and China.
The first question comes from Cosmos <unk> from CIBC. Please go ahead.
Great, Thanks, George Phil and Brock.
And I would just maybe a few questions from me here first off Ken.
And we have maybe a discussion on taxes.
Fully without giving everyone a huge headache here.
But Phil and I'll as you said.
Earnings were lower than and the numbers on the strength.
And given taxes and also depreciation but on taxes.
Late that taxes were about 71% of earnings.
And the quarter, which is really high even if I back out and some other onetime items and still 41%.
Given the continuing volatility and the Turkish lira could you give us a bit more guidance in terms of.
How we should model and look at.
Taxes for the remainder of 2021.
Okay.
Sure. Thanks Cosmos.
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.
The current tax rate, it's about 36%.
And Thats.
And that includes.
Like in Turkey that includes the corporate tab.
Tax.
Which for Q1 was at 20% the retroactive portion of that and are reflecting the increased to 25 has not been booked yet because of the timing of the announcements so that'll that'll be picked up in Q2.
The other part of the taxes and Turkey is tied to <unk>.
Foreign exchange tax.
And it reflects.
It's a quarter to quarter adjustment.
So and the Turkish lira weakens.
Compared to the U S dollar.
There is and the additional tax.
And thats imposed when a Turkish lira strengthens versus U S dollar that taxes and credited back.
So and Q1, there was a significant weakening weakening of the Turkish lira.
Higher than eight.
And that resulted in the higher tax and that was unique to Q1.
In Q2.
And the forecast for the Turkish Lira is Florida Theres still.
I think concerns with with some of the economic policies and and.
And actions that are being taken with the with the Turkish Central Bank and.
The forecast is still for the lira to remain around eight.
The on being.
So even if it dropped to eight there would be there would be a slight credit back in Q2, if it drops below eight the credit would be higher so that's kind of fluctuating impact.
And again, it's dependent on on what's happening in Turkey, and the other part of the tax.
The current tax is really the Quebec mining duties and.
And that's just the provincial provincial mining duties the federal tax piece is offset by loss carryforwards and.
And Quebec, so the largest component is Turkey.
And.
Like I said that.
The one factor that.
And we know for sure is that the corporate tax rate has gone from 20% to 25% that will be reflected in Q2 and the foreign exchange will depend on the fluctuation on delivery.
Okay, great. Thanks, Paul.
Not sure I have my Q2 tax estimate will be any more accurate.
So we will give it a try.
Maybe switching gears to Greece.
First of all congratulations on getting the investment agreement ratified and also getting the dry stack tailings approved and.
And on that George and team as you mentioned, we're now working on and updated technical report.
The last technical report was completed in March 2018, and give us some of the input costs have increased steel prices and and other prices as well.
Im not sure how much you can share with us at this point and time.
But could.
Could you give us a bit more color in terms of net all 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 and Germany up Joe could jump in so I mean, thanks for the congratulations it was fantastic first quarter for us getting the agreement hammered out and Atlanta.
And that agreement sort of a state of the art agreement that puts protections in place for El Dorado, but also for the government and with the.
Mutually beneficial agreement and 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 approval and a benefit to everybody and 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've got to recognize that <unk> have 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.
There's still a lot to be done on our remaining capital at $700 million.
And when you look at that though we've got the dry stack filter plant to per.
<unk> and construct.
We've got the primary crusher to construct so in terms of the dry stack facilities, we got to procure the equipment and the building and and 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 and the plant are on the ground.
And so there's a lot of things to be done and we got the starter dam that will and.
And basically it's a rock down that will ensure the dry stack filter tailings.
And 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 test stoping and order to have the underground ready for commercial production. So yes, I mean, there obviously is going to be some escalation on some of the materials, we have yet to procure.
We think were and are really good position and really push productivity and efficiencies on construction.
And in the and I'm not expecting any material change in estimate it's really about <unk>.
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.
Stay tuned we're all going to have the answers to this as we get that study completed in Q3 and will be and a lot better position to finalize and financing.
Great.
And yes.
And it seems like ages ago, now, but I remember being on site.
Three or four years ago, now and yes, you are right a lot of infrastructure was already in place.
Curious and maybe.
And maybe just a quick follow up and my last question here.
Financing and all you gave us some goalposts during the prepared remarks, you talked about feasibility study coming out and tier three or updated technical report on Q3, and then it will potentially starting.
Construction on continuing construction.
Earlier on in 2022, so in between.
We expect.
You kind of bringing in a financing partner and it all you've talked about potentially a joint venture partnership on the past due and 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, we and our strategy for the year is to get the technical study completed in Q3 and that kind of positions us best to be able to finalize the financing and <unk>.
And venture as 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 investments.
As these are multi decade high quality assets.
Over time, we'll have many governments come and go so there's a lot of factors that will be used in and our decision, making and maybe I'll, let Jason jump in here with a few comments.
Yeah, Thanks, George so on.
And so cosmos.
George.
<unk> 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.
And as you've seen it from the budgets there is.
Capital being allocated.
Too 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 and without funding properly and 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 try to land on something later this year early on.
Next.
Yes.
Great. Thanks, a lot goes the other questions I have and have a good weekend.
Thanks Cosmos.
The next question comes from Kerry Smith from Haywood Securities. Please go ahead.
Thanks, operator towards weighted timing for the update on <unk>.
And for SCOR, Cassandra I guess for the whole Cassandra operation.
And.
Does that share does that need to be.
And that needs to be approved before you could start construction screws on screen covered off on with the existing EIA with the amendment for the dry stack sales.
Hi, Kerry thanks for those questions. So the amended EIA that we're actively working on with government is primarily for olympias and strict 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 development and the underground mine to be able to support higher production rates and thats that is really going to.
Make olympias.
And 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 of this new permit.
And piece as you know, we produce concentrates and we ship those concentrates and.
And our current methodologies pretty high cost by doing some additional upgrades to the strict Tony part we accomplish 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 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 and be able to file that permit later this year.
And because it unlike the series modification, where it was purely environmental benefits. There wasn't there was absolutely no additional environmental risk and was reducing footprint and.
Increasing water recycle all very positive things.
And 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.
And while 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.
There's really no urgency on olympias because.
As you see and our five year guidance that contemplates this expansion of Olympias, it's kind of a steady ramp up over time and so.
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 the sooner the better on for Tony the quicker, we can lower our margins on concentrate handling and shipment the better, but we're working our way through that regulatory process and.
You can see from what we've accomplished and 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 DRAM aisle with few if you get the 42, one and one out in Q2 is that report required for the <unk>.
Value.
<unk> already submitted before that comes out.
Well I mean the.
43, 101 is simply just updating all of our technical information and keeping.
Ourselves and 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.
And Thats pulled together and 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.
Environmental protection, that's being embedded in this updated study and.
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 there's a lot to be done over this year and next to get parameter and positioned to be our our next construction opportunity and.
And we will keep you updated as that unfolds.
And so what would the rough timing and George to file and <unk>.
Strategic EIA and then.
Secondly to get it approved do you have a sense for that.
I mean, it's early enough stage I'd just tell you we expect to submit this year.
And I would expect to see and approval next year.
Okay. Okay. That's helpful.
And maybe just a question for Phil on this chart.
And this tax increase going from 20% to 25% and then.
Barrett attention to ratchet it back and 20% by 2023.
Is that to happen and net never seen.
And why are you very rarely see a government raised taxes on debt and lower them. Obviously it can happen, but are you fairly confident that that would be the case.
Okay.
Okay.
Yeah, Hi, Kerry and good morning.
Yes.
The tax increase.
And.
It was announced in April 2016, so thats like two weeks ago.
On a fairly recent development.
And it's really.
And the tax increase is affecting everybody.
Unique to the mining sector.
And I think it's it's viewed as the governments.
In 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 and slowly reduce it over the next and.
The next couple of years and I.
I think it's really going to depend on how successful they see that.
In terms of mitigating their current economic challenges.
And so.
Good day.
Whether it will change and non carry remains to be seen but thats whats been that's what's been enacted and and and communicated to you know to everybody to to the market. So I suspect that at this point, that's what they're comfortable with.
Alright, Okay. Okay, and then just one last one.
And I might just jump in there for a SEC and 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 their intentions and for now.
And we're assuming that's the case, but just to give you. An example, we had that.
And Greece, we had taxes and 24 increased to 29% and then reduced back to 'twenty four so it does happen and.
And I think overall long term trend and government taxes typically go up not down, but we have seen that.
Alright, Okay and.
Just one last question on the operations for kitchen a day.
The Q1 grade was lower from.
And <unk> comments it sounded like that was due to a wall failure, which limited access to higher grade portion.
Your guidance per year, I think is second half from Graham's overall and you were six to nine grams in Q1 is the grade.
And it's still going to average on 77, four pardon me and <unk>.
700 average for the year or what do you think youll be less than that because of this issue in Q1.
Yes, I mean, we're expecting for the year to be.
As expected and it's just from a sequencing perspective Q1 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 and once that stabilized and was cleaned up we're back in the bottom now and.
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 and the throughput was up.
Pretty significantly and Thats counteracted and 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.
If we can maintain and increase in throughput.
And that's going to create more ounces and thats going to shorten the mine life 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 we're not changing our guidance on this I'm just pointing out.
That was a great results for the quarter and it's something we're going to try to repeat and if we're successful on that and that could be some upside at <unk> on the year and 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 to see what parameter and I just wanted to confirm that is paramus got the same it's included under the same EIA that day.
And the 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 <unk> Court in terms of transportation costs or is that an upside scenario that we would be seeing with just updated feeds coming in Q3.
Joe or broth, you can jump in there.
And as of two.
2018, the port changes were.
Slightly less than we're anticipating now so there should be or potentially some up.
Upside and this.
This technical report.
Okay.
And my other question's for answered so thanks very much growth.
Thanks, Mike.
The next question comes from Tanya and Jakob <unk> from Scotiabank. Please go ahead.
Good morning, everyone and congrats again on getting that tailings permit price.
Good night.
And if I could ask and a lot of my questions have been asked already but I'm too outstanding maybe just for Phil I mean, we were.
We're off on our depreciation forecast for the quarter can you just provide us some guidance on what to expect for this year.
Hi, Tanya.
Sure so our depreciation.
And particularly.
Mark.
And was tracking higher on a per ounce basis than some of our other.
Assets.
So.
We have been introduced a change in estimate and given the low mark as a relative to 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.
And the depreciation charge.
Going forward, especially for the Mark.
And I think that's probably the one the one key item I think maybe.
Maybe the other.
Maybe point us to our depreciation is based on on mines tonne tonnes mined.
And.
I think some modest perhaps maybe maybe basing depreciation on ounces and ounces produced.
And we did see a bit of a SKU this quarter and Q1 it gives today because the.
The tonnage the tonnage mine went up.
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And the higher tons and the lower grade led to the higher depreciation per ounce in Q1.
So those are I think two factors that need to be considered in and.
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Aligning and depreciation models going forward.
And.
Okay, and just kind of thanks, and maybe from a bigger share license staff from like 150 to 200 million with maybe in the ballpark there.
Just trying to find the number that's in our and our budget.
And you 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.
For auto and get back to you.
Thank you.
And gentlemen.
And I will just start on the technical side, just trying to understand because work and various jurisdictions and the world.
And what sort of inflationary pressures are you seeing if any through the euro cost structure, and <unk> seal, which we appreciate and and CLO, you're seeing anything and labor are you seeing anything and fine.
Pieris freight.
What are you seeing.
Yes.
Not seeing anything abnormal and I think thats.
And we'll benefit a surprise with all the COVID-19 issues, but.
We're obviously seeing inflationary impacts and Turkey with.
And the U S to layer a ratio but.
On the other hand, although the inflation's up and the country the exchange rate counteract that and we've seen that over the 20 years and we've been in Turkey and other.
And are inflationary periods have come and the FX kind of washes it out so.
Although it's been a horrible tough year on the on.
On the planet.
We haven't seen any unusual moves and inflationary wise so far.
And then your labor George.
Well like I said and our labor.
We have as inflation goes up and Turkey and R.
Our labor costs get ratchet, it up with that but because of the.
The FX and that generally gets washed out so again and.
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.
And let Paul Thanks.
And then 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].
Yes.
Yeah.