Eldorado Gold Corp Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Maybe my first question is on Skouries and the progress at Skouries. As you mentioned, underground development is now targeted for 500 to 600 meters previously, 2,200 meters. Fairly sizable gap, I would say. But as you said, George, it's not going to impact your Q3 '25 first production. But my question is, it's not going to impact the timing of first production, but could this impact the ramp-up and the speed of that ramp-up after first production? Is there a way for you to catch up on underground development?

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Yes. That's good to hear. Maybe that leads in well into my next question here. As you mentioned, total CapEx of this project is $920 million. You've spent slightly over $410 million so far with $770 million committed. So in terms of that $920 million versus the $411 million that's spent, the difference? Can we expect that to be spent in 2025? Or it sounds like maybe not, given that some of the underground might be pushed out a little bit in terms of development? I'm just wondering timing of the spend and if the $920 million is still a good number to use?

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Of course. Maybe one last question. George, as you mentioned, you've tightened your 2024 production guidance. If I take your tightened guidance, it implies that you'll be increasing in Q4 production by about more than 10% quarter-over-quarter. I think Simon kind of touched on it, but could you maybe again summarize which ones will be the drivers in terms of that potential higher production into Q4?

Question: Michael Parkin - National Bank Financial, Inc. - Analyst : On slide 14, you noticed you're doing some sub cell collection system, deep ripping procedures, new approach to the solution. I can't remember off the top of my head, but you guys use stackers for placing the agglomerated -- well, I guess it's a mix of agglomerated and non-agglomerated ore on the pad. So what caused you to add ripping on the new -- I assume it's on the new pad only. And did you do that on the old pad? And what's making you decide to do that, you're using like a grasshopper system, I would think you're not worried about compression? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 01, 2024 / 3:30PM, ELD.TO - Q3 2024 Eldorado Gold Corp Earnings Call

Question: Michael Parkin - National Bank Financial, Inc. - Analyst : And are you seeing any concerns around structural integrity. I remember when you were there a year ago, you had samples of the column test showing that the agglomeration really was stood well on a structural kind of integrity in terms of resistant compaction. Is that kind of proving up in the pad application versus the column test?

Question: Tanya Jakusconek - Scotiabank Global Banking and Markets - Analyst : Maybe, George, I just wanted to come back to the non-critical work that you've kind of deferred at Skouries. Can you just review with me what you deferred? So part of it is the underground development? What else has been deferred?

Question: Tanya Jakusconek - Scotiabank Global Banking and Markets - Analyst : Okay. So really, what I'm taking from you is that it's really the truck shop and sort of the office that you can operate from other areas. And just as an aside, what's taking so long for this archeological permit? Are there [some], I mean I remember the phase that like I think there was ways or something that we were reviewing with this permit from ways that was found for -- ?

Question: Tanya Jakusconek - Scotiabank Global Banking and Markets - Analyst : Okay. So yes, it was separate from that furnace of Alexander, The Great. Okay. Just wanted to come back to -- and I don't know who wants to take this question. Just on this inflation. You mentioned that you're seeing higher labor costs. So -- just wanted to review with you. I have in my notes REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 01, 2024 / 3:30PM, ELD.TO - Q3 2024 Eldorado Gold Corp Earnings Call here from previous calls that are about -- and maybe this is -- if someone can correct me if I'm wrong, I had about 30% of your cost is labor. That's yourself employed and then about 40% if I include the contractors. So I'm going to start first, is that a correct number that I have?

Question: Tanya Jakusconek - Scotiabank Global Banking and Markets - Analyst : Okay. So sorry, did I hear 47% or 27%?

Question: Tanya Jakusconek - Scotiabank Global Banking and Markets - Analyst : Okay. So 27% is all of your employees?

Question: Tanya Jakusconek - Scotiabank Global Banking and Markets - Analyst : Labor. And does that also include contractors? Or is that separate?

Question: Tanya Jakusconek - Scotiabank Global Banking and Markets - Analyst : And what would be the percentage that would be contractors? And the reason I'm asking, George, is I'm just trying to understand if you have different inflation in your own workforce at 27% and how is that different from the contractors. That's all I'm trying to get.

Question: Tanya Jakusconek - Scotiabank Global Banking and Markets - Analyst : And when you did your current agreement at Olympias, what sort of inflation rate did we see there for labor? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 01, 2024 / 3:30PM, ELD.TO - Q3 2024 Eldorado Gold Corp Earnings Call

Question: Tanya Jakusconek - Scotiabank Global Banking and Markets - Analyst : Yes, that's good to hear. Okay. And then the other thing that I wanted to make sure. I understood, there was such a big -- I think it was mentioned that $70 an ounce was the impact from increase in gold price in your royalties. I think it was this quarter. If I can remember correctly, and I just need to understand my sensitivity again. I think you did your budgets at $1,900. And I think for every $100 move, it was about $20 per ounce impact on your cost. Maybe I could just have that confirmed. And just so that I understand that when you go to give guidance next year, I can kind of understand what the gold price impact would be on your costs?

Question: Tanya Jakusconek - Scotiabank Global Banking and Markets - Analyst : Okay. Perfect. That's great sensitivity to have. And then finally, another number that would be very useful for us is how are you thinking -- and I appreciate all of your reserves are based on looking at cutoff grades, et cetera. So I'm thinking you're going to be reporting your reserves very shortly, usually in early December. So we're just like two months away -- oh, no, not even two months, one month a bit. Can we just maybe talk a little bit about how you're thinking about your reserve linear cutoff grades? And ultimately, I think I had a $1,400 gold price for your reserve. Maybe someone can share how you're thinking about that as we come to your reserve base?

Question: Tanya Jakusconek - Scotiabank Global Banking and Markets - Analyst : And when you say material change, I mean I'm assuming it's like less than 10%, would that be not material to you? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 01, 2024 / 3:30PM, ELD.TO - Q3 2024 Eldorado Gold Corp Earnings Call

Question: Lawson Winder - Bank of America Securities - Analyst : One thing I wanted to follow up on with respect to Tanya's questioning on labor inflation. It's just -- I might have missed it, but did you disclose what is the built-in annual increase in labor inflation with the new CDA? And if not, could you share that and whether there's any difference

Question: Lawson Winder - Bank of America Securities - Analyst : Yes, fantastic. And then just looking at and thinking about capital allocation, the gold price is not obviously significant. You guys are clearly benefiting from that despite the spending on Skouries. Is there any thought internally to potentially reinstating the dividend near term? Or is that a decision that just has to wait until the completion of construction that Skouries?

Question: Lawson Winder - Bank of America Securities - Analyst : Okay. And probably an obvious answer to my final question on capital allocation, but just as you look at potential options for growth, obviously, you have a lot in the portfolio. What about external options for growth? Does Eldorado what's your stance on M&A is really the question? I mean does Eldorado feel that you can be opportunistic. Should opportunities come along? Or is that something that's just off the table for now?