Eldorado Gold unveils EBRD financing, bought deal
Eldorado Gold Corp. [ELD-TSX; EGO-NYSE] has announced details of a $81.5 million strategic investment by the European Bank of Reconstruction and Development (EBRD) as well as a $135 million bought deal financing.
Under a private placement agreement, EBRD will subscribe for 6.3 million shares at $13 each, with proceeds earmarked for the Skouries gold-copper project in northern Greece. The private placement amount will be credited against Eldorado’s 20% equity funding commitment as per the terms of a project financing facility that closed on April 5, 2023.
Meanwhile, the company said a group of underwriters have agreed to buy 10.4 million common shares at the same price as the EBRD private placement on a bought deal basis.
The underwriters have been granted an over-allotment option to purchase up to an additional 1.56 million common shares, a move that could increase the proceeds of the offering to $155 million. That option is available at any time for up to 30 days after the offering closes.
Proceeds will be used to fund growth initiatives across the global portfolio, including some not currently contemplated within the company’s five-year plan.
“We are pleased to be announcing a strategic equity investment from the EBRD and we view its investment as an endorsement of the Skouries project and Eldorado’s commitment to the highest environmental and social standards across our portfolio,’’ said Eldorado President and CEO George Burns.
“The EBRD’s equity investment, coupled with the Greek lenders in our recently closed project finance facility, provides strategic partners as we advance Skouries towards commercial production,’’ Burns said.
Financing details were announced after the close of trading on May 30, 2023, when Eldorado shares closed at $13.97. The shares are currently trading in a 52-week range of $16.40 and $6.86.
The bought deal offering is expected to close on June 7, 2023, about a week before the scheduled closing of the private placement financing.
Based in Vancouver, Eldorado is a mid-tier gold and base metals producer with an international portfolio that includes mining, development and exploration projects in Turkey, Canada, Greece, Romania, and Brazil. Key operations include the Kisladag and Efemcukuru mines in Turkey, the Olympias Mine in Greece, and the Lamaque Mine in Quebec.
The company has said it is on track to produce between 475,000 and 515,000 ounces of gold this year.
A feasibility study released in December 2021, pegged the initial capital costs to complete Skouries at $845 million, an increase of 23% over forecasts contained in a March, 2018 pre-feasibility study.
The feasibility study envisages life of mine production of 2.9 million ounces of gold, including average annual production of 140,000 ounces of gold and 67 million pounds of copper (approximately 312,000 ounces of gold equivalent) over a 20-year life span.
The Skouries project is part of the Kassandra Mine Complex, and located within the Halkidiki Peninsula in northern Greece. It is a gold-copper porphyry deposit designed to be mined using a combination of open pit and underground mining techniques.