Q2 2024 Eldorado Gold Corp Earnings Call
? ? ? ? ? ? ? ? ?
[inaudible]
Operator: Thank you for standing by. This is the conference operator. Welcome to the Eldorado Gold Second Quarter 2024 Results Conference Call.
Conference Operator: Thank you for signing by. This is the conference operator. Welcome to the Eldorado Gold second quarter 2024 results conference call.
Operator: 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, then zero. I would now like to turn the conference over to Lynette Gould, Vice President, Investor Relations, Communications, and External Affairs. Please go ahead, Ms. Gould.
Speaker Change: As a reminder, all participants are in listen-only mode and the conference is being recorded.
Speaker Change: After the presentation, there will be an opportunity to ask questions.
Speaker Change: To join the question queue, you may press star, then 1 on your telephone keypad.
Speaker Change: Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Lynette Gould, Vice President, Investor Relations, Communications, and External Affairs. Please go ahead, Ms. Gould.
Lynette Gould: Thank you, Operator, and good morning, everyone. I'm excited to welcome you to our second quarter 2024 results conference call. Before we begin, I would like to remind you that we will be making forward-looking statements and referring to non-IFRS measures during the call. Please refer to the cautionary statements included in the presentation and the disclosure on non-IFRS measures and risk factors in our management's discussion and analysis. Joining me on the call today are George Burns, President and Chief Executive Officer; Paul Ferneyhough, Executive Vice President and Chief Financial Officer; Louw Smith, Executive Vice President, Development, Greece; and Simon Hille, Executive Vice President, Operations and Technical Services.
Lynette Gould: Thank you, Operator, and good morning, everyone. I'm excited to welcome you to our second quarter 2024 results conference call.
Lynette Gould: Before we begin, I would like to remind you that we will be making forward-looking statements
Lynette Gould: and referring to non-IFRS measures during the call. Please refer to the cautionary statements included in the presentation and the disclosure on non-IFRS measures and risk factors in our management's discussion and analysis.
Speaker Change: Joining me on the call today, we have George Burns, President and Chief Executive Officer, Paul Ferneyhough, Executive Vice President and Chief Financial Officer,
Speaker Change: [inaudible]
Speaker Change: Executive Vice President, Development, Greece.
Simon Oswald Hille: and Simon Hille, Executive Vice President, Operations and Technical Services.
Lynette Gould: Our news release yesterday details our second quarter 2024 financial and operating results. This should be read in conjunction with our second quarter 2024 financial statements and management's discussion and analysis, both of which are available on our website. They have also both been filed on CDAR Plus and EdCard. All dollar figures discussed today are U.S. dollars unless otherwise stated.
Speaker Change: Our news release yesterday details our second quarter 2024 financial and operating results. This should be read in conjunction with our second quarter 2024 financial statements and management's discussion and analysis, both of which are available on our website.
Speaker Change: They have also both been filed on CDAR Plus and EDCAR.
Speaker Change: All dollar figures discussed today are U.S. dollars unless otherwise stated. We will be speaking to the slides that accompany this webcast, and you can download a copy of those slides from our website. After the prepared remarks, we will open the call for Q&A.
Lynette Gould: We will be speaking from the slides that accompany this webcast, and you can download a copy of those slides from our website. After the prepared remarks, we will open the call for Q&A. At this time, we will invite analysts to queue for questions. I will now turn the call over to George.
Speaker Change: At this time, we will invite analysts to queue for questions. I will now turn the call over to George.
George Raymond Burns: Thanks Lynette and good morning everyone. Here is the outline for today's call. I'll provide a brief overview of Q2 results and highlights. I will then pass the call over to Paul to go through our financial results and then to Louw and Simon to review our operational performance. We will then open the call to questions from our analysts.
George Raymond Burns: Thanks Lynette and good morning everyone. Here is the outline for today's call. I'll provide a brief overview of Q2 results and highlights. I will then pass the call over to Paul to go through our financial results and then to Louw and Simon to review our operational performance.
George Raymond Burns: Turning the slide for the second quarter delivered safe gold production of 122,319 ounces, in line with our progress towards full production guidance. Production was in line with expectations as grades increased at Lamarck, Effingham, Choukourous, and Isidore. During the quarter, we did have a small impact on production as a result of the labor-initiated work stoppages at Olympias, totaling 17 days in the quarter during negotiations on a new collective bargaining agreement. Currently, we're in the final stages of negotiating a mutually acceptable CBA with our union.
George Raymond Burns: Looking ahead, we continue to expect increased production in the second half of the year, remaining on track with our guidance to produce between 505 and 555,000 ounces of gold in 2024. Total cash costs and all unsustaining costs were in line with our expectations at $940 per ounce sold and $1,331 per ounce sold, respectively. Costs increased primarily as a result of higher royalties driven by higher gold prices, in addition to higher labor and contractor costs and higher fuel prices during the quarter.
George Raymond Burns: As noted in Q1 and subsequently in the second quarter, continued higher gold prices during the quarter have led to increased royalty expenses in Greece and Turkey as the royalty structures are calculated on a sliding scale linked to the gold price. While we did see higher costs this quarter, they are in line with our 2024 guidance ranges. Paul will touch on our costs in more detail later in the call. Turning to slide five, in the second quarter, our lost time frequency rate decreased to 0.40 recorded incidents per million person hours worked compared to 1.32 in Q2 2023.
George Raymond Burns: We will then open the call to questions from our analysts.
Speaker Change: Turning the slide for the second quarter delivered safe gold production of 122,319 oz.
Speaker Change: and Align With Our Progress Towards Full Production Guidance.
Speaker Change: Production was in line with expectations as grades increased at Lamarck, Effingham, Choukourous, and Issaraq.
Speaker Change: During the quarter, we did have a small impact to production as a result of the labor-initiated work stoppages at Olympias, totaling 17 days in the quarter during negotiations on a new collective bargaining agreement.
Speaker Change: Currently, we're in final stages of negotiating a mutually acceptable CBA with our unions.
Speaker Change: Looking ahead, we continue to expect increased production in the second half of the year, remaining on track with our guidance to produce between 505 and 555,000 ounces of gold in 2024.
Speaker Change: Total cash costs and all unsustaining costs were in line with our expectations at $940 per ounce sold and $1,331 per ounce sold respectively.
Speaker Change: Costs increased primarily as a result of higher royalties driven by higher gold prices, in addition to higher labor and contractor costs and higher fuel prices during the quarter.
Speaker Change: As noted in Q1 and subsequently in the second quarter, continued higher gold prices during the quarter have led to increased royalty expenses in Greece and Turkey as the royalty structures are calculated on a sliding scale linked to the gold price.
Speaker Change: While we did see higher costs this quarter, they are in line with our 2020 Forward Guidance Ranges. Paul will touch on our costs in more detail later in the call.
Paul Ferneyhough: Turning to slide five in the second quarter.
Speaker Change: Our lost time frequency rate decreased to 0.40 recorded incidents per million person-hours work.
George Raymond Burns: Our commitment to creating and maintaining a safe and healthy workplace is unchanged, and we recognize this as a continuous journey of improvement. Our health and safety focus in 2024 is based on preventing high-potential incidents and further empowering our employees to promote a positive health and safety culture. Sustainability. I'd like to start by congratulating our teams in Turkey Egg on the outstanding scores they received following their external verification against the Mining Association of Canada's Towards Sustainable Mining Protocols.
Speaker Change: compared to 1.32 in Q2 2023. Our commitment to create and maintain a safe and healthy workplace is unchanged, and we recognize this is a continuous journey of improvement.
Speaker Change: Our health and safety focus in 2024 is based on preventing high potential incidents and further empowering our employees to promote a positive health and safety culture.
Speaker Change: In sustainability, I'd like to start by congratulating our teams in Turkey Egg on the outstanding scores they received following their external verification against the Mining Association of Canada's Towards Sustainable Mining Protocols.
George Raymond Burns: PSM scoring is arranged from C through triple A, with A indicating good practice and triple A indicating excellence and leadership. At FM Chukaru, the site received AAA scores in tailings, health and safety, biodiversity, indigenous and community relations. The site received A, AA, and AAA scores across all other indicators. With KISS-A-DUG, the site received AAA scores in all safety and health protocol indicators and A, AA, and AAA scores across all other indicators. Notably, with the completion of the first round of TSM verifications, we now have AAA-scored tailings facilities across all of our operations.
Speaker Change: TSM scoring is arranged from C through triple A, with A indicating good practice and triple A indicating excellence and leadership.
Speaker Change: At FM Chukuru, the site received AAA scores in tailings, health and safety, biodiversity, and indigenous and community relations.
Speaker Change: The site received A, AA, and AAA scores across all other indicators.
Speaker Change: At Kiseledag, the site received AAA scores in all safety and health protocol indicators and A, AA, and AAA scores across all other indicators.
Speaker Change: Notably, with the completion of the first round of TSM verifications, we now have triple A score tailings facilities across all of our operations.
George Raymond Burns: I would also like to extend my congratulations to a number of our global teams that received awards during the quarter, including the silver award from the Hellenic Institute for Occupational Health and Safety and the Best Natural Resources deal at the 2023 EMEA Project Finance Awards. This was in recognition of our Scourge Project Financing Facility and a Bronze Award in the Gender and Inclusion category at the 2024 EBRD Sustainability Award. These awards recognize the outstanding achievements of EBRD's clients in promoting green economies and better environmental and social performance.
Speaker Change: I would also like to extend my congratulations to a number of our global teams that received awards during the quarter, including a silver award from the Hellenic Institute for Occupational Health and Safety,
Speaker Change: The Best Natural Resources deal at the 2023 EMEA Project Finance Awards. This was in recognition of our Scourge Project Financing Facility.
Speaker Change: and a Bronze Award in the Gender and Inclusion category at the 2024 EBRD Sustainability Awards.
Speaker Change: These awards recognize the outstanding achievements of EBRD's clients in promoting green economies and better environmental and social performance.
George Raymond Burns: We take great pride in our team's commendable success, and this is reflected in the awards received across health and safety, sustainability, and finance. I'll stop there and turn the call over to Paul for a review of our financial results. Thank you.
Speaker Change: We take great pride in our team's commendable success, and this is reflected in the awards received across health and safety, sustainability, and finance.
Speaker Change: I'll stop there and turn the call over to Paul for a review of our financial results.
Paul Ferneyhough: Slide 6 provides a summary of our second quarter results. Our operations delivered a steady second quarter, in line with expectations and guidance, and with continued high gold prices driving overall financial results. Looking to the full year, our annual guidance remains unchanged across all operational and financial metrics, with some upside possible in cash flow generation if gold prices remain at their current level. Eldorado reported net earnings attributable to shareholders from continuing operations of approximately $56 million, or $0.28 per share in the second quarter, positively impacted by higher revenue due to higher volumes sold and higher prices realized when compared to the second quarter of 2023.
Paul Ferneyhough: Thank you, George. Slide 6 provides a summary of our second quarter results. Our operations delivered a steady second quarter in line with expectations and guidance, and with continued high gold prices driving overall financial results.
Paul Ferneyhough: After adjusting for one-time non-recurring items, adjusted net earnings were $66.6 million, or $0.33 per share for the quarter. Adjusted net earnings in Q2 2024 will account for the reversal of two principal items. Firstly, a $1.9 million gain on foreign exchange due to the translation of Turkish deferred tax balances, net of inflation accounting impacts, and secondly, a $12 million unrealized loss on derivative instruments, including our gold zero cost policy. Our free cash flow in the quarter was negative $32 million and positive $33.9 million, excluding the capital investment in the Scurrius project.
Paul Ferneyhough: Looking to the full year, our annual guidance remains unchanged across all operational and financial metrics.
Paul Ferneyhough: with some upside possible in cash flow generation if gold prices remain at their current levels.
Paul Ferneyhough: Eldorado reported net earnings attributable to shareholders from continuing operations of approximately $56 million or $0.28 per share in the second quarter.
Paul Ferneyhough: Positively impacted by higher revenue due to higher volumes sold and higher prices realised when compared to the second quarter in 2023.
Paul Ferneyhough: After adjusting for one-time, non-recurring items, Adjusted Net Earnings were $66.6 million or $0.33 per share for the quarter. Adjusted Net Earnings in Q2 2024 accounted for the reversal of two principal items.
Paul Ferneyhough: Firstly, a $1.9 million gain on foreign exchange due to the translation of Turkish deferred tax balances' net of inflation accounting impacts.
Paul Ferneyhough: And secondly, a $12 million unrealized loss on derivative instruments, including our Gold Zero Cost Collars.
Paul Ferneyhough: Our free cash flow in the quarter was negative $32 million and positive $33.9 million excluding the capital investment in the Scurrius project.
Paul Ferneyhough: Cash flow generated by operating activities before changes in working capital in the quarter was around $132 million, compared to $82 million in the same quarter last year. As previously noted, the increase is principally related to higher sales volumes and realized gold prices. Second quarter total cash costs were $940 per ounce sold, and all-in sustaining costs were $1,331 per ounce sold. Our costs increased compared to Q2 2023 as a result of higher labor costs and consumables such as fuel driven by production volumes, as well as higher royalty expenses, primarily due to higher realized gold prices. The higher royalty expense in Q2 impacted ASIC by approximately $40 per hour.
Paul Ferneyhough: Cash flow generated by operating activities before changes in working capital in the quarter was around $132 million compared to $82 million in the same quarter last year.
Paul Ferneyhough: As previously noted, the increase is principally related to higher sales volumes and realised gold prices.
Paul Ferneyhough: Second quarter total cash costs were $940 per ounce sold and all in sustaining costs were $1,331 per ounce sold.
Paul Ferneyhough: Our costs increased compared to Q2 2023 as a result of higher labour costs and consumables such as fuel, driven by production volumes, as well as higher royalty expenses, primarily due to higher realised gold prices.
Paul Ferneyhough: The higher royalty expense in Q2 impacted ASIC by approximately $40 per ounce.
Paul Ferneyhough: In addition, increased sustaining capital investment contributed to higher ASICs for the quarter compared to the same period in the prior year. Capital expenditures on a cash basis were $133 million in the second quarter, including investment in growth projects at Kisledag, where we focused on plant waste stripping, the North Heap bleach pad, and related infrastructure. At SCURIES, we continue to advance major earthworks and infrastructure construction for the project and, as expected, have invested approximately $92 million in the project.
Paul Ferneyhough: In addition, increased sustaining capital investment contributed to higher ASIC for the quarter compared to the same period in the prior year.
Paul Ferneyhough: Capital expenditures on a cash basis were $133 million in the second quarter.
Paul Ferneyhough: including investment in growth projects at Kisledag where we focused on plant waste stripping, the North Heap bleach pad and related infrastructure.
Paul Ferneyhough: At SCURIES, we continue to advance major earthworks and infrastructure construction for the project, and as expected, invested approximately $92 million in the period.
Paul Ferneyhough: We anticipate that we will restart investing our own equity in the project as early as the fourth quarter this year. Current tax expense of just over $20 million for the second quarter decreased from approximately $22 million compared to the same period in 2023, primarily due to reduced Turkish taxes after accounting for increased investment tax credits and inflation accounting adjustments. Deferred income tax decreased to a $1 million expense in Q2 2024 from an expense of $17 million in the comparable quarter in the prior year.
Paul Ferneyhough: We anticipate that we will restart investing our own equity in the project as early as the fourth quarter this year.
Paul Ferneyhough: Current tax expense of just over $20 million for the second quarter decreased from approximately $22 million compared to the same period in 2023.
Paul Ferneyhough: Primarily due to reduced Turkish taxes after accounting for increased investment tax credits.
Paul Ferneyhough: and Inflation Accounting Adjustments.
Paul Ferneyhough: Deferred income tax decreased to a $1 million expense in Q2 2024 from an expense of $17 million in the comparable quarter in the prior year.
Paul Ferneyhough: In Q2 2024, deferred tax included a $4.4 million expense for the use of tax attributes in Canada, $5.8 million expense related to the weakening of the Turkish Lira and the Euro against the US dollar, partially offset by a $7.6 million recovery from the impact of Turkish inflation.
Paul Ferneyhough: In Q2 2024, deferred tax included a $4.4 million expense for use of tax attributes in Canada, a $5.8 million expense related to the weakening of the Turkish Lira and the Euro against the U.S. dollar,
Paul Ferneyhough: Partially offset by a $7.6 million recovery from the application of Turkish Inflation Accounting.
Paul Ferneyhough: Turning to slide seven, stability and the status quo are key. Our balance sheet continues to be well funded and able to support our growth strategy. We ended the quarter with total liquidity of $810 million, including $595 million of cash and cash equivalents and $215 million of available credit capacity. During the quarter, we extended and increased our Senior Secured Credit Facility by $100 million. This was done proactively, taking advantage of favorable market conditions and allowing us to update and renew our previous facility that was due to expire in 2025.
Paul Ferneyhough: Turning to slide 7, Stability and Status Quo are the key themes.
Paul Ferneyhough: Our balance sheet continues to be well funded and able to support our growth strategy.
Paul Ferneyhough: We ended the quarter with total liquidity of $810 million, including $595 million of cash and cash equivalents, and $215 million of available credit capacity.
Paul Ferneyhough: During the quarter, we extended and increased our Senior Secured Credit Facility by $100 million. This was done proactively, taking advantage of favourable market conditions and allowing us to update and renew our previous facility that was due to expire in 2025.
Paul Ferneyhough: Cash increased over the quarter as a result of positive cash flow from our mining operations, combined with drawdowns of the project finance facility for the Scurrius development. We expect to build cash during the remainder of 2024 from cash flow at our operations as we benefit from strong gold prices. Additionally, we continue to focus on maintaining a solid financial position that provides flexibility to respond to opportunities and fund our growth strategy to unlock value across our global operations. With that, I'll now turn the call over to Louw to go through the Greek asset highlights. Thanks, Paul, and good morning.
Paul Ferneyhough: Cash increased over the quarter as a result of positive cash flow from our mining operations combined with drawdowns of the project finance facility for the Scurrius development.
Paul Ferneyhough: We expect to build cash during the remainder of 2024 from cash flow at our operations as we benefit from strong gold prices.
Paul Ferneyhough: Additionally, we continue to focus on maintaining a solid financial position that provides flexibility to respond to opportunities and fund our growth strategy to unlock value across our global business.
Paul Ferneyhough: With that, I'll now turn the call over to Louw to go through the Greek asset highlights.
Louw Smith: Starting on slide 8 at our Scurrius Copper-Gold project. While Q1 was primarily focused on earthworks, Q2 saw construction work commence in multiple areas. Going forward in Q3 and Q4, underground mining, mechanical, piping, and instrumentation in the main plant will continue to ramp up, leading to the construction of the Fulton plant building. Overall progress is 76% when including the first phase of the construction, and we remain on track for first production in Q3 2025 with commercial production expected at the end of 2025.
Louw: Thanks Paul and good morning. Starting on slide 8 at our Ascudius Copper Gold project.
Louw: While Q1 was primarily focused on earthworks, Q2 saw construction work commence in multiple areas.
Louw: Going forward in Q3 and Q4, underground mining, mechanical piping and instrumentation in the main plant will continue to ramp up. In addition,
Louw: to the construction of the Fulton Pound building.
Louw: Overall progress is 76% when including the first phase of the construction, and we remain on track for first production in Q3 2025, with commercial production expected at the end of 2025.
Louw Smith: Detailed engineering has advanced and is now at 72% complete, and procurement is substantially completed. Work rigorously continues to ramp up on construction of major earthwork structures, including the haul roads, water management ponds, low-grade stockpile, primary crusher, process facilities, filter plant facility, and the integrated extractive waste management facility, the IEWM.
Louw: Detailed engineering has advanced and is now at 72% complete and procurement is substantially completed.
Louw: Work rigorously continues to ramp up on construction of major earthwork structures.
Louw: including the all roads, water management ponds, low-grade stockpile, primary crusher, process facilities, filter plant facility and the integrated extractive waste.
Louw Smith: Productivity improvement initiatives by the Earthworks contractor, including adding a partial second shift, have yielded significant improvements, including optimizing cycle times for the fleet as well as improved sequencing of material placement and quality control activities. On the critical path is the filter plant facility, which continues to advance. We expect to award the filter plant construction contract in the next few weeks. The filter press plates continue to be pre-assembled, with 225 now completed out of a total of 588, and during Q2, the fabricated frames for those plates arrived on site. Work in the Mull flotation building is progressing well, and commissioning of all overhead cranes was completed during the second quarter.
Louw: Management Facility, the IEWMF.
Louw: Productivity Improvement Initiatives by the Earthworks Contractor
Louw: including adding a partial second shift has yielded significant improvements including optimizing cycle times for the fleet as well as improved sequencing of material placement and quality control activities.
Louw: On the critical path is the filter plant facility which continues to advance. We expect to award the filter plant construction contract in the next few weeks.
Louw: The filter press plates continue to be pre-assembled with 225 now completed out of a total of 588 and during Q2 the fabricated frames for those plates arrived on site.
Louw: Work in the Mull flotation building is progressing well.
Louw: Commissioning of all overhead cranes was completed during the second quarter.
Louw Smith: Construction, lighting, scaffolding, steel, and concrete work are all on track. In addition, off-site pipe spooling fabrication and contractor mobilization continue on schedule. Work is also progressing on the underground development to support the test of mining in 2025. We awarded the second contract in Q2, which includes the tester work as well as additional development and services work to support the development of the underground mine. The contractor mobilized to the site, and the first blast occurred on June 17th.
Louw: Construction, lighting, scaffolding, steel and concrete work are all on track. In addition, off-site pipe spooling fabrication and contractor mobilization continues on plan.
Louw: Work is also progressing on the underground development to support test-stove mining in 2025. We awarded the second contract in Q2, which includes the test-stove work as well as additional development and services work to support the development of the underground mine.
Louw: The contractor mobilized to site and the first blast occurred on June 17th.
Louw Smith: We have also completed the earthworks to allow access to the cofferdam site during the second quarter, and construction is now commencing. In addition, the Loganite ore stockpile fill placement has also started. Moving on to slide nine.
Louw: We have also completed the earthworks to allow access to the cofferdam site during the second quarter and construction has now commenced.
Louw: In addition, the Loganite ore stockpile fill placement has also started.
Louw Smith: During the second quarter, the capital investment at Scurrius was $92 million, almost double the first quarter's spent. This brings our year-to-date spend at Scudios to $144 million, which is in line with our expectations as the spend is expected to ramp up. As significantly as mobilization and site labor increase over the second half of the year, we remain on track to meet our guidance for investment in Scurrius in 2024 of between $375 and $425 million.
Louw: Moving on to slide nine.
Louw: During the second quarter, the capital investment at Scurrius was $92 million, almost double the first quarter spent.
Louw: This brings our year-to-date spend at Scudios to $144 million, which is in line with our expectations as the spend is expected to ramp up.
Louw: Significantly, as mobilisation in the site labour increases over the second half of the year. We remain on track to meet our guidance for investment in Scudius in 2024 of between $375 and $425 million.
Louw Smith: At the end of Q2 2024, we had 841 personnel on site and are still on track to ramp up to 1,300 by the end of the year. The next few slides will show the progress of the work underway. Turning to slide 10.
Louw: At the end of Q2 2024, we had 841 personnel on site and are still on track to ramp up to 1,300 by the end of the year.
Louw: The next few slides will show the advancement of the work underway.
Louw Smith: On the left-hand side is the primary crusher. As planned, the upper retaining walls are now completed, and it is expected that the first pour for the concrete slab for the base of the crusher building will be poured in August. On the right-hand side is the filter plant area where you can see two drills are actively working, with a third one having recently arrived in July. The contractor's productivity has increased significantly, and 270 piles are now completed, effectively finishing the piles required for the photo plant building. There are a total of 871 piles, with a reminder to be completed for the ancillary building.
Louw: Turning to slide 10.
Louw: On the left hand side is the primary crusher.
Louw: As planned, the upper retaining walls are now completed and it is expected that the first pour for the concrete slab for the base of the crusher building will be carried out.
Speaker Change: will be bought in August . On the right-hand side is the filter plant area where you can see two drills are actively working, but the third one...
Speaker Change: having recently arrived in July .
Speaker Change: The contractor's productivity has increased significantly and 270 piles are now completed, effectively finishing the piles required for the photo plant building.
Speaker Change: There are a total of 871 piles with a reminder to be completed for the ancillary buildings.
Louw Smith: In July 2024, preparation work for the concrete foundations on the filter plant commenced, with assembly of the building structure to commence in Q3 2024 following the award of the filter plant construction contract. The inset photo shows a closer view of what will become the floor of the filter plant building once the concrete slab is poured. On the next two slides, you will see workers beginning work on support infrastructure including the process control room building, process plant substation, water pump station, lime plant, air blowers building, and flotation reagents plant areas.
Speaker Change: In July 2024, preparation work for the concrete foundations on the filter plant have commenced with assembly of the building structure to commence in Q3 2024 following the award of the filter plant construction contract.
Speaker Change: The inset photo shows a closer up view of what will become the floor of the filter plant building once the concrete slab is poured.
Speaker Change: On the next two slides you will see work has commenced on support infrastructure including the process control room building, process plant, substation, water pump station, lime plant, air blowers building and flotation reagents plant areas.
Louw Smith: On slide 11, these pictures are all on the west side of the main process plant building. On the left hand side, you can see the secondary substation. On the picture on the right hand side, at the top is the pump house, and the bottom is the process plant control room, which when completed will be four levels high. On slide 12, these photos show the east side of the main process plant building.
Speaker Change: On slide 11, these pictures are all on the west side of the main process plant building. On the left hand side you can see the secondary substation.
Speaker Change: On the picture on the right hand side, at the top is the pump house and the bottom is the process plant control room, which when completed will be four levels high.
Speaker Change: On slide 12, the photo shows the east side of the main process plant building. You can see where the reagents, mixing building, compressors, air blowers and lime building will be.
Louw Smith: You can see where the reagents, mixing building, compressors, air blowers, and lime building will be. We will continue to provide progress updates as we advance towards the first production in the third quarter of 2025. Moving to Olympias on slide 13.
Speaker Change: We will continue to provide progress updates as we advance towards the first production in the third quarter of 2025.
Louw Smith: Second quarter gold production was 13,541 ounces, and total cash costs were $1,231 per ounce sold. Production was impacted by 17 days of labor-initiated work stoppages, primarily in June as we negotiated the new CBA agreement. Total cash costs were positively impacted by the productivity efficiencies from the recent transformation initiatives, as well as slightly lower unit costs of certain consumables, including electricity. We also benefited from lower transport costs as a result of improved shipment logistics.
Speaker Change: Moving to Olympias on slide 13.
Speaker Change: Second quarter gold production was 13,541 ounces and total cash costs were $1,231 pounds sold.
Speaker Change: Production was impacted by 17 days of labour-initiated work stoppages, primarily in June as we negotiated the new CBA agreement.
Speaker Change: Total cash costs were positively impacted by the productivity efficiencies from the region transformation initiatives, as well as slightly lower unit costs of certain consumables, including electricity.
Speaker Change: We also benefited from lower transport costs as a result of improved shipment logistics.
Louw Smith: For 2024, production guidance at Olympias is between 75,000 to 85,000 ounces of gold. Production in the second half of the year is expected to increase over the first half of the year as a result of an expected increase in ore mines and processing. As George mentioned at the beginning of the call, we are in the final stages of the CBA negotiation. I'll stop there and hand it over to Simon to discuss.
Speaker Change: For 2024, production guidance at Olympias is between 75,000 to 85,000 ounces of gold.
Speaker Change: Production in the second half of the year is expected to increase over the first half of the year as a result of expected increase in ore mined and processed.
Speaker Change: As George mentioned at the beginning of the call, we are in the final stages of the CBA negotiations.
Speaker Change: I'll stop there and hand over to Simon to discuss the Turkish and Canadian operations.
Simon Oswald Hille: Starting in Turkey A on slide 14. At Kishida, the second quarter production was 38,990 ounces. Total cash costs of $941 per ounce sold. Production was in line with our expectations as grades increased during the quarter as we saw higher tonnes placed on the pad. Total cash costs were impacted by the increased role. To further advance our understanding and unlock opportunities within our world body, we currently have a geometalogical test work program underway. This program is evaluating the effects of watertight variability on the life of mine resources in order to refine the crushing, agglomeration, and heap leach circuit, with an expectation of completing a study in 2025. The study will focus on optimal moisture, reagent addition, particle size, and implementation. Input Increment Tool
Simon: Thanks Louw. Starting in Turkey A on slide 14. At Kishidar, second quarter production was 38,990 ounces with total cash costs of $941 per ounce sold.
Simon: Production was in line with our expectations as grades increased during the quarter as we saw higher tonnes placed on the pad.
Simon: Total cash costs were impacted by increased royalties.
Speaker Change: To further advance our understanding and unlock opportunities within our war body, we currently have a geometalogical test wet program underway.
Speaker Change: This program is evaluating the effects of all-type variability on the lifeline resource in order to refine the crushing, agglomeration and heap-leach circuits.
Speaker Change: with an expectation of completing a study in 2025.
Speaker Change: The study will focus on optimal moisture, reagent addition, particle size,
Speaker Change: and implementation, incremental de-bottlenecking of crossing plant to maximise value at Kishida.
Simon Oswald Hille: T Baronek, of Crossing Plant, to maximize value at Kishida. Optimization of drum and bell agglomeration continues within the circuit to ensure product consistency and operability. For 2024, production guidance at Kishida is between $180,000 and $250,000 and 195,000 ounces of gold. Production is expected to increase in the second half as compared to the first half of the year as we expect to achieve higher stacking rates. At FM2 crew on flight 15, second quarter gold production was 22,397 ounces at a total cash cost of $1,087.
Speaker Change: Optimisation of drum and bell agglomeration continues.
Speaker Change: within the circuit to ensure product consistency and operability.
Speaker Change: For 2024, production guidance at Kishidat is between $180,000 and $250,000.
Speaker Change: and 195,000 ounces of gold.
Speaker Change: Production is expected to increase in the second half as compared to the first half of the year as we expect to achieve higher stacking rates.
Speaker Change: At FM2 crew on flight 15, second quarter gold production was 22,397 ounces at a total cash cost of $1,087 per ounce sold.
Simon Oswald Hille: Gold production throughput and average gold graded FN2 crew were in line with the plan for the quarter. For 2024, production guidance at FN2Crew is between 75,000 and 85,000 ounces of gold. Production in the second half of the year is expected to be relatively consistent with the first half of the year.
Speaker Change: Gold production, throughput and average gold graded FM2 crew were in line with the plan for the quarter.
Speaker Change: For 2024, production guidance at FN2Crew is between 75,000 and 85,000 ounces of gold. Production in the second half of the year is expected to be relatively consistent with the first half of the year.
Simon Oswald Hille: LaMarche delivered a strong second quarter of 47,391 ounces at total cash costs of $759 per ounce sold. Production was positively impacted by higher grades during the quarter, which were in line with expectations. Total Cash Costs were affected by higher sales volumes, and the remaining increases were due to additional costs incurred in labor, contractors, and equipment rental.
Speaker Change: And now moving to the LAMACC complex on slide 16.
Speaker Change: LAMAC delivered a strong second quarter of 47,391 ounces at total cash costs of $759 per ounce sold.
Speaker Change: Production was positively impacted by higher grades during the quarter which were in line with expectations.
Speaker Change: The total cash costs increases.
Speaker Change: were affected by higher sales volumes.
Speaker Change: and the remaining increases were due to additional costs incurred in labour, contractors and equipment rentals.
Simon Oswald Hille: The team is focused on increasing productivity, with the name on, with an aim of ramping up development and mucking rates in the Triangle and All-Map and deposits during the second half. The OMAC deposit remains on track to take a bulk sample, complete a pre-feasibility study, and announce the inaugural reserves by the end of 2024. We have advanced development to 190 metres at the end of June and plan monthly advance ramping to 120 metres moving forward, for 2024 production guidance at Lamarckies between 175,000 and 190,000 ounces of gold. Production in the remainder of the year is expected to be stronger than
Speaker Change: The team is focused on increasing productivity.
Speaker Change: with an aim on ramping up development and mucking rates in the Triangle and Allmac.
Speaker Change: have deposits during the second half of the year.
Speaker Change: The ALMAC deposit remains on track to take a bulk sample, complete a pre-feasibility study and announce the inaugural reserves by the end of 2024.
Speaker Change: We have advanced development to 190m at the end of June and plan monthly advance ramping to 120m moving forward.
Adler Mackey: For 2024 production guidance, Adler Mackey is between $175,000 and $190,000 ounces of gold.
Adler Mackey: Production in the remainder of the year is expected to be stronger than the first half of the year as grades are expected to increase. I'll stop there and hand back to George for his closing remarks.
George Raymond Burns: It's an exciting time at Eldorado. We are now just over a year away from bringing Scurries, our transformational copper and gold project, online, and it is rewarding to see the continued progress as we advance towards first gold. We expect Scurries to be a powerful catalyst to drive shareholder returns as we continue to deliver construction progress over the next year and production in Q3 2025. In addition, across our global operations, our teams continue to focus on continuous improvement projects with the objective to deliver safe, profitable outcomes. I couldn't be more proud of this team.
George Raymond Burns: Thanks, team.
George Raymond Burns: It's an exciting time at Eldorado. We are now just over a year away from bringing Scurries, our transformational copper gold project, online, and it is rewarding to see the continued progress as we advance towards first gold.
George Raymond Burns: We expect SCURIES to be a powerful catalyst to drive shareholder returns as we continue to deliver construction progress over the next year and production in Q3 2025.
George Raymond Burns: In addition, across our global operations, our teams continue to focus on continuous improvement projects with the objective to deliver safe, profitable ounces. I couldn't be more proud of this team.
George Raymond Burns: We also delivered another consistent quarter, which positions us well to achieve our production and cost guidance for 2024. In addition, due to record high gold prices, we've benefited significantly from margin expansion. Additionally, the jurisdictions in which we operate have also benefited from higher royalties and increased tax payments as a result of the higher gold prices. By maintaining a discipline focused on cost and capital allocation, coupled with higher gold prices, we continue to realize margin expansions resulting in continued growth in our free cash flow from operations.
George Raymond Burns: We also delivered another consistent quarter which positions us well to achieve our production and cost guidance for 2024. In addition, the record high gold prices, we've benefited significantly from margin expansion.
George Raymond Burns: Additionally, the jurisdictions in which we operate have also benefited with higher royalties and increased tax payments as a result of the higher gold price.
George Raymond Burns: By maintaining a discipline focused on cost and capital allocation, coupled with higher gold prices, we continue to realize margin expansions resulting in continued growth in our free cash flow from operations.
George Raymond Burns: This positions us well to further build on our already strong cash balance and continue to create value for our stakeholders. Thank you for your time. I will now turn it over to the operator for questions from our analysts.
George Raymond Burns: This positions us well to further build on our already strong cash balance to continue to create value for our stakeholders. Thank you for your time. I will now turn it over to the operator for questions from our analysts.
Operator: Thank you. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. And the first question comes from Mike Parkin with National Bank. Please go ahead.
Speaker Change: Thank you. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request.
Speaker Change: If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two.
Speaker Change: The first question comes from Mike Parkin with National Bank. Please go ahead.
Mike Parkin: Hi guys, congrats on the good quarter, starting with Kishla Daig. The CapEx trend that we're, you know, seeing, I guess it would be fair to assume that growth capital will be in and around how you've kind of trending in the last 12 months on a go forward basis, or are you still running at modestly elevated capital? Like when I look back a year or two ago, it was generally growth around 20-ish million. It's been more of a mid to high 20s, 32 in Q2. How should we think about that kind of going forward? Well, I mean,
Mike Parkin: Hi guys, congrats on the good quarter.
Kishla Daig: Starting with Kishla Daig.
Kishla Daig: Bye-bye.
Speaker Change: The CapEx trend that we're, you know, seeing, I guess we could, is it still fair to assume that growth capital
Speaker Change: will be in and around.
Speaker Change: How you're kind of trending.
Speaker Change: in the last 12 months on a go-forward basis, or...
Speaker Change: Are you still running at modestly elevated capital, like when I look back a year or two ago?
Speaker Change: It was generally growth around 20-ish million.
Speaker Change: It's been more kind of mid to high 20s, 32 and Q2. How should we think about that kind of going forward?
George Raymond Burns: Well, I mean, at a high level, Mike, I would say we went through most of the growth capital involved with the HPGR or bleach pad and agglomeration. This year, we're completing construction on the ADR plant.
Speaker Change: Well, I mean, at a high level, Mike, I would say we've gone through most of the growth capital involved with the HPGR, North Leach Pad, and agglomeration.
Speaker Change: This year we're completing construction on the ADR plant, so you remember we put the absorption part of the plant in last year, that's where we pulled the solution, the gold out of the solution on the carbon.
George Raymond Burns: So you remember, we put the absorption part of the plant in last year; that's where we pull the solution, the gold out of solution on the carbon. During the past year, we've been using the South Leach pad to strip, to go lock up that carbon and the poor gold. So, anyway, we're advancing now to add the absorption and recovery plant to the North Leach pad. So, it's not a lot of capital for that piece, but it's the last piece of that expansion we're reaching.
Speaker Change: During the past year, we've been using the SoftLeaf pad.
Speaker Change: to strip, to go lock that carbon, and to pour gold.
Speaker Change: Anyway, we're advancing now to add the desorption and recovery plant to the North Leach pad. So it's not a lot of capital for that piece, but it's the last piece of that expansion we're reaching.
George Raymond Burns: I mean, the rest of our growth capital primarily is around stripping, and that will continue for the next six years or so, at which point there will be a big drop off in stripping requirements for the remaining life of the mine and an inflection point in free capital.
Speaker Change: I mean the rest of our growth capital primarily is around stripping and that will continue for the next six years or so.
Speaker Change: At which point there will be a big drop-off in stripping requirements for the remaining life of mine and an inflection point in free cash flow.
George Raymond Burns: And on production, are you getting all the production from the new pad now, or is it still a blend? And if it is, yeah, but can you give us an idea of what percentage is coming from the new pad versus the old pad?
Speaker Change: Okay.
Speaker Change: And on production, are you getting all the production from the new pad now, or is it still a blend, and if it is, can you give us an idea of what percentage is coming from the new pad versus the old pad?
Simon Oswald Hille: Thanks Mark and Simon. We are still using both the South and the North Heat Bleach Pad through the course of 2024 and 2025. As you know, we have a long leach cycle at Kishida, so we need to ensure we have sufficient leach space to allow for that leach cycle to run to its full. The percentage, we'd have to get back to you on the exact numbers, but we would see the predominance of heat leach pads be more dominant moving forward in 2025 and beyond that.
Speaker Change: Thanks, Mark and Simon.
Speaker Change: We, through the course of 2024 and 2025, are still utilising both the South and the North Heat Bleach Pad.
Speaker Change: As you know, we have a long leach cycle back to Sudar, so we need to ensure we have sufficient leach space to allow for that leach cycle to run to its full cycle.
Speaker Change: [inaudible]
Speaker Change: The percentage, we'd have to get back to you on the exact numbers, but we would see predominant north heatbleach pad be more dominant moving forward in 2025 and beyond that.
Mike Parkin: Um, obviously, it's a deep leach, so analysis of recovery rates is a little tricky. And then your long leach curve, as you pointed out, adds to that complexity. But if I look at like a trailing 12 months, and I look back to when you added in the HPGRs, the agglomeration tie in about a year ago, on the numbers you've been kind of posting, it does kind of bounce around a bit based on grade and ounces stacked and everything.
Speaker Change: Thanks.
Speaker Change: Obviously it's a heap leach, so like analysis of recovery rates is a little tricky, and then your long leach curve, as you pointed out, adds to that complexity.
Speaker Change: But if I look at, like, a trailing 12-month...
Speaker Change: And I look back to like, you know, you added in the HPGRs, the agglomeration tie-in about a year ago.
Mike Parkin: But it did seem like you were kind of in the mid to high 50s, some quarters, even 60. But now you're kind of shifting down, you know, kind of sub-50. Is that what's kind of spurring this [inaudible] may be a need for additional tweaks beyond what that technical report called for.
Speaker Change: on the numbers you've been kind of posting, it does kind of bounce around a bit based off grade and ounces stacked and everything. But it did seem like you were kind of in the mid to high 50s, some quarters even 60, but now you're kind of shifting down
Speaker Change: You know kind of sub 50 is that what's kind of spurring this
Speaker Change: Review and Optimization. We talked about...
Speaker Change: You know, exceeding your budget on the site tour last fall.
Speaker Change: and just kind of wondering, you know, what's your thoughts are like, I know the technical report had you at 56%. Are you still seeing that as ultimately achievable? Or do you feel like there's
Speaker Change: There may be a need for additional tweaks beyond what that technical report called for.
George Raymond Burns: Thanks for the question, Mike. Maybe I'll frame it at a high level, and Simon can add some color. So when you go back to the original studies, we had six different rock types that we looked at recoveries and impact of the PGR investment, and then later the agglomeration, and those recoveries are variable. They run from the low 50s to the low 60s.
Speaker Change: Thanks for the question, Mike. Maybe I'll frame it at a high level and Simon can add some color.
Simon: So, when you go back to the original studies, we had six different rock types that we...
Simon: looked at.
Simon: recoveries and impact of the HPGR investment and then later the agglomeration. And those recoveries are variable. They run from low 50s to low 60s.
George Raymond Burns: And so part of the recoveries is just a matter of which ore types we are processing. And then beyond that, you know, how fine we crush it, how well we agglomerate it, also has implications on recovery for every one of those rock types. So it's a pretty complex geometallurgical situation.
Simon: And so part of the recoveries is just a matter of which R-types are we processing.
Simon: And then beyond that, you know, how fine we crush it, how well we agglomerate it also has implications on recovery for every one of those rock types. So it's a pretty complex...
George Raymond Burns: We've got quite a bit of data now since we started up the circuit, and so we're just leveraging that information to say, all right. What can we do to further improve the circuit? So, you know, we'll be looking at debottling the plant. We'll be looking at additional evaporation impacts on recovery and maybe even de-bottling the entire plant. So we're getting all of the circuits up and running. We've got lots of data.
Simon: Geometallurgical situation. We've got quite a bit of data now since we started up the circuit and so we're just leveraging off that information to say all right.
Simon: What can we do to further improve the circuit? So, you know, we'll be looking at debottling the plant. We'll be looking at additional conglomeration impacts on recovery.
Simon: and maybe even debotlecking the entire plant. So we're taking, now that the circuit's up and running, we've got lots of data, we're going to take a wholesome, full look at
George Raymond Burns: We're going to take a wholesome, full look at how the circuit is performing and what the opportunities are to make further improvement to NAV for Kisadat. So I mean, at a high level, we're comfortable with that 56%, but we're going to do study work, and we're going to look to see where we have opportunities to improve.
Simon: How the circuit's performing and what the opportunities are to make further improvement to NAV for Kisadat.
Simon: So, I mean, high level, we're comfortable with that 56%, but we're going to do study work and we're going to look to see where we have opportunities to improve.
Mike Parkin: And then switching over to Olympias, one last question. Yeah, you kind of started off the call there, but the labor agreement still work in progress. Have you had any? Operational Disruptions in July, or do you, is there any indications that you might still see some daily kind of disruptions while you finalize that, and do you have a sense of potential, I know it's kind of a tough question to ask you, but do you have a sense of like maybe when you'll be able to have like a signed agreement with them, and is that a three year contract, two year contract, five year contract, what's the term on it?
Simon: Okay, thanks.
Speaker Change: And then switching over to Olympias, one last question. You know, you kind of started off the call there, but the labor agreement is still a work in progress. Have you had any...
Speaker Change: Operational disruptions in July , or is there any indication that you might still see some
Speaker Change: Daily kind of disruptions while you finalize that and do you have a sense of Potential, I know it's kind of a tough question to ask you, but do you have a sense of like maybe when
Speaker Change: You'll be able to have like a signed agreement with them. And is that a three-year contract, two-year contract, five-year contract? What's the term on it?
George Raymond Burns: Thank you for the question. No further interruptions in the month of July. In terms of concluding... The discussions, we're looking at doing that over the next... Yeah, so we're approaching the end of, very much approaching the end of these discussions.
Speaker Change: Michael, thank you for the question. No further interruptions in the month of July . In terms of concluding
Speaker Change: Yeah, so we're approaching the end of, very much approaching the end of these discussions.
Mike Parkin: Okay, and just the term of the contract?
George Raymond Burns: It will be a... a three-year contract.
Speaker Change: Okay, and just the term of the contract?
Speaker Change: It will be...
Mike Parkin: Thanks, that's it for me guys. Mike, just before you go.
Speaker Change: A three-year contract.
George Raymond Burns: Mike, just before you go, those percentages stacked, all planned for 2024, roughly around that will probably migrate to higher numbers in the north in 2020.
Speaker Change: Thanks, that's it for me guys.
Speaker Change: Mike, just before you go, those percentages stacked or planned for 2024, roughly around 66% on the South East Bleach Pad for this year and obviously 33% for the North East Bleach Pad.
Speaker Change: That will probably migrate to higher numbers on the north in 2025.
Operator: The next question comes from Tanya Jakusconek with Scotiabank. Please go ahead.
Speaker Change: The next question comes from Tanya Jakusconek with Scotiabank. Please go ahead.
Tanya M. Jakusconek: Great. Good morning, everyone. Thank you so much for taking my question. Maybe just to follow up just on the Olympia contract, just for ourselves without getting into the nitty gritty, but can we just assume, you know, in terms of wage increases to be in line with what has been, you know, sort of the inflation rate in the global mining sector, about 5% for labor, and we're just trying to benchmark ourselves here.
Tanya Jakuskanek: Great, good morning, everyone. Thank you so much for taking my questions. Maybe just to follow up just on the Olympia contract, just for ourselves without getting into the nitty gritty, but can we just assume, you know, in terms of,
Speaker Change: you know, wage increases to be in line with what have been, you know, sort of the inflation rate in the global mining sector, about 5% for labor.
George Raymond Burns: Yeah, Tanya, I don't want to get into the specifics, but I tell you, there'll be no surprises on the cost side. And it's, you know, we negotiated a contract that's a win-win for the workforce and the company. So there are productivity initiatives that we're focused on. And obviously, the union's looking to have wage increases. So no surprises expected. We're expecting this to be overall good news for both parties.
Speaker Change: and we're just trying to benchmark ourselves here.
Speaker Change: Yeah, Tanya, I don't want to get into the specifics, but I tell you there'll be no surprises are expected on the cost side and it's...
Speaker Change: We negotiated a contract that's a win-win for the workforce and the company. So there's productivity initiatives that we're focused on.
Speaker Change: and obviously the unions looking to to have wage increases so
Speaker Change: No surprises expected.
Speaker Change: We're expecting this to be overall good news for both parties.
George Raymond Burns: It's really only the filter plant contract that needs to be put in place, which you said is coming in the next couple of weeks. And is that really it?
Tanya Jakuskanek: Okay, thank you for that, George. And then just on the scores on the contracts left to be awarded, it's really only the.
Speaker Change: Filter plant contract that needs to be put in place which you said is coming in the next couple of weeks And is that really it? We've got all the contracts we need. We've got the underground. We're hopefully this
George Raymond Burns: We've got all the contracts we need. We've got the underground, and hopefully, this filter tailing contract in place. Do we have everything we need? And then just sort of getting all the items on site that we need, and it's just the labor aspect of getting that into place and training. Is that how I should think? I mean, it sounds very, very high level. Obviously, you've got to continue building, but I'm just trying to understand from a higher level that we have the critical items. Yeah, I'd love to tell you every contract.
Speaker Change: Filter tailing, you know, contract in place, do we have everything we need, and then just sort of getting the, got all the items on site that we need, and it's just getting the labor aspect of getting that into place and training.
Speaker Change: Is that how I should think? I mean, it sounds very, very high level. Obviously, you got to continue building, but I'm just trying to understand from a higher level that we have the critical items.
George Raymond Burns: Yeah, I'd love to tell you that every contract's been signed other than the filter plant. But really, it's all the material contracts. There are smaller contracts for ancillary buildings and so forth, like a GNA building and a mine administration building. Some of those aren't finalized, but they're not on the critical path and are not going to impact production. And we're on track with those types of contracts. But in terms of the material contracts required to get us into startup in two, three, it is just this last filter plant facility. And as Louw said, we're a couple of weeks from having that finalized, and we're not laying in... finalizing that contract, and we're still working on the pilings, the concrete foundation.
Speaker Change: Yeah, I'd love to tell you every contract's been signed other than the filter plant, but really it's all the material contracts.
Speaker Change: There are smaller contracts for ancillary buildings and so forth like at GNA.
Speaker Change: Building a mine administrative building.
Speaker Change: Some of those aren't finalized, but they're not on the critical path and not going to impact production, and we're on track with those types of contracts, but...
Speaker Change: In terms of the material contracts required to get us into start-up in Q3, it is just this last filter plant facility and as Louw said, we're a couple of weeks from having that finalized and we're not laying in...
Louw: Finalizing that contract and that we're still working on Piling the concrete foundation and at which point then we can put up the building so on track
George Raymond Burns: Okay, perfect. And then just coming back to this labor agreement, and George, I know when we were on site, we talked about, you know, getting the, you know, the mind, the employees or the labor portion, stories up to that, well, I know we had talked about maybe potentially moving some from your Olympias operation, so anything in this new contract that's going to preclude that from happening, or is there anything that's being put in place to allow for that, just try and understand on this labor side.
Speaker Change: Okay, perfect. And then just coming back to this labor agreement, and George, I know when we were on site, we talked about, you know, getting the, you know, the mind, the employees or the labor portion, that story is up to that fourth, well,
George Raymond Burns: greater than that. But anyway, getting the labor aspect in place. And I know we had talked about maybe potentially moving
George Raymond Burns: Some from your Olympia operation. So anything in the in this new contract that's gonna, you know Preclude that from happening or is there anything that's being put in place to allow for that? Trying to understand on this labor side
George Raymond Burns: Yeah, well, first of all, on the management side, we have moved some of our leadership team from Olympias over to Scurries and, as a result, been able to promote and In terms of mining, you know, we're in the contract phase, and both open pit and underground are being driven by contractors. On the plant facility, we've got the operational leadership team in place, we're working now on the second level doing recruiting in Greece, and we're preparing the training facility, or not the facility, but the training program for the hourly workforce.
Speaker Change: Yeah, well, I mean, first of all, on the management side, we have moved some of our leadership team from Olympia over to Scurries, and as a result, been able to promote and, and, uh,
George Raymond Burns: You know, move people around within the Olympia's workforce.
Speaker Change: In terms of finding, you know, we're in contract phase and both open pit and underground are being driven by contractors.
Speaker Change: on the plant facility.
Speaker Change: Thank you.
Speaker Change: We've got the operational leadership team in place. We're working now on the second level doing recruiting in Greece and we're preparing the training facility, or not the facility, but the training program for the hourly workforce. So that'll ramp up in the second half of the year.
George Raymond Burns: So that will ramp up in the second half of the year and accelerate in the first half of next year. So we're on track with all of that, there are no implications coming out of the negotiations on the Scourge Build. Yeah, mostly uncomfortable on the labor side for operations.
Speaker Change: and Accelerate in the first half of next year. So we're on track with all of that. There's no implications coming out of the negotiations on the Scourge Build and, you know, feeling comfortable on the labor side for operations.
George Raymond Burns: All right, that's good to hear. And then just my final question, and it's just more a modeling question. So maybe someone can help me out on this one. Just on depreciation, it looks like you're running well below.
Speaker Change: All right, that's good to hear. And then just my final question, and it's just more a modeling question, so maybe someone can help me out on here. Just on the depreciation, it looks like you're running well below.
Speaker Change: I realize that you're well below the guidance level you've given us so maybe someone can just help me understand why this depreciation, i.e. not being an accountant here, should we be thinking of, you know, lowering, are you thinking of it coming in lower than what your guidance is or is depreciation really going to ramp up in the second half of the year?
Paul Ferneyhough: Tanya, it's Paul. I think there are three things that you just need to bear in mind. The first one is back in Q1, we had that small one-off adjustment that brought down basically the first half depreciation. The second piece that I would say is we did have some additional reserves that we booked at the beginning of the year, which weren't built into the rates that we used for our guidance. So that moved down the unit rates a little bit.
Speaker Change: Thanks.
Speaker Change: Tanya, it's Paul. I think there's three things that you just need to bear in mind.
Speaker Change: The first one is...
Speaker Change: Back at Q1 we had that small one-off adjustment that brought down basically the first half depreciation.
Speaker Change: The second piece that I would say is, we did have some additional reserves that we booked at the beginning of the year which weren't built into the rates that we used for our guidance, so that moved down the unit rates a little bit. And then the final thing I'd say is, just remember, we're back half-weighted.
Paul Ferneyhough: And then the final thing I'd say is, just remember, we're back half-weighted, 45%, 55% on production. So we will see depreciation tick up approximately 20% higher just because of the production in the second half, combined with the unit rates. And so, yes, we're lower, but I would guide you towards the low end of the guidance system.
Speaker Change: 45%, 55% on production, so we will see depreciation tick up approximately 20% higher just because of the production in the second half, combined with the unit rates. And so, yes.
Speaker Change: We're lower, but I would guide you towards the low end of the guidance at this point.
George Raymond Burns: Okay, just wanted to check because it was quite low. And then just on that 45-55, and I hate forecasting quarterly, but as we have to sit here forecasting quarterly, I'm just trying to understand whether we should be thinking about a quarter-on-quarter improvement, or should we be thinking that Q3 is going to be the same as Q4. Part of it is grade-related, part of it is Kisledag on the leach time. So I'm just trying to understand if I should be thinking that Kisledag should have a stronger Q4 and then Lemaque and Olympia even grade for Q3 and Q4, just trying to understand how that 55 gets split between Q3 and Q4.
Speaker Change: Okay, just wanted to check because it was quite low.
Speaker Change: And then just on that $45.55, and I hate, you know, as we have to sit here forecasting quarterly.
Speaker Change: I'm just trying to understand whether we should be thinking a quarter-on-quarter improvement.
Speaker Change: or should we be thinking that Q3 is going to be the same as Q4? Part of it is grade-related, part of it is Kisledag on the leach time, so I'm just trying to understand, should I be thinking that...
Speaker Change: Kilvidaq should have a stronger Q4 and then Lemaque and Olympia even grades for Q3 and Q4. Just trying to understand how that 55 gets split in Q3 and Q4.
George Raymond Burns: Let me just talk about consolidated guidance, a stronger second half; we expect Q3 and Q4 both to be strong, and I think, in my seven years at Eldorado, the fourth quarter has been the strongest quarter every year and expect that to be the case again this year, so a ramp-up quarter over quarter. 10% higher production in the second half, a bit higher in King Fork.
Speaker Change: Let me just talk in a consolidated guidance in a stronger second half we expect Q3 and Q4 both to be strong and
Speaker Change: I think my seven years at Eldorado, the fourth quarter has been the strongest quarter.
Speaker Change: Every year and expect that to be the case again this year, so yeah, a ramp up quarter over quarter and, you know, 10% higher production in the second half, a bit higher in Q4.
Speaker Change: Okay, that's helpful. Thank you so much for helping me on that.
Tanya M. Jakusconek: get one in for Simon just at the end on that, because I studied, if I could, you know, we talked about the debottlenecking of looking at the mill itself, maybe the agglomeration, what more can be done there? Is the aim at the end of this obviously to improve the MTV, but is it just coming through it from an increase in throughput at the mill plus an increase in recovery? I'm just trying to understand what your end goals are, hopefully, what you know, you're targeting to see improvement in what areas or to help MTV. I just didn't know if there was one. Goldcrest, or several other folks.
Speaker Change: Appreciate it and and if I could get one in for Simon just at the end on that case that I studied
Speaker Change: If I could.
Simon: You know, we talked about the deep bottlenecking of looking at the mill itself.
Simon: maybe the agglomeration, what more can be done there? Is the aim at the end of this obviously to improve the MPV, but is there just...
Speaker Change: Coming through it from an increase in throughput at the mill, plus an increase in recovery. I'm just trying to understand what your end goals, hopefully, you know, you're targeting to see improvement in what area. Also help MPV, I just didn't know if there's one.
Speaker Change: focus or several focus.
Simon Oswald Hille: Thanks Tanya. Yeah, I think you hit on the major topics there being that we're evaluating, you know, as you know, we still have a long mine life at Kishida. We are moving into phase five and phase six. So, we're just reassessing. The Geo-Metallurgical Performance as it relates to the plant and assessing the full plant capabilities to maximize capital invested so that we can set the circuit up for that, and that's the purpose.
Speaker Change: Thanks Tanya. Yeah, I think you hit on the major topics there being that we're evaluating, you know, as you know we still have a long mine life at Kishida. We are moving into phase
Speaker Change: Phase 5 and Phase 6, so we're just re-assessing
Speaker Change: The geometological performance as it relates to the plant and assessing the full plant capabilities to maximise capital invested so that we can...
Tanya M. Jakusconek: Okay, thank you. I'll leave it to someone else to ask questions. Thank you so much for taking my question. Thank you, Tanya.
Speaker Change: Okay, thank you. I'll leave it to someone else to ask questions. Thank you so much for taking my questions.
Operator: Once again, if you have a question, please press star then 1. Since there are no more questions in the queue, 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.
unknown: ?? ?? ?? ?? ?? ?? ??
Tanya Jakuskanek: Thank you, Tanya.
Speaker Change: Once again, if you have a question, please press star then 1.
Speaker Change: Since there are no more questions in the queue, 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.
Speaker Change: ? ? ? ? ? ? ? ? ?