Eldorado Gold closes US$500 million note offering

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Eldorado Gold Corp. [ELD-TSX; EGO-NYSE] said Thursday it has closed a US$500 million note offering that will be used to lower its cost of debt and pursue a broader range of funding alternatives for developing assets in Greece.

The note offering consists of 6.250% senior notes due 2029 and will be used to redeem the company’s outstanding US$234 million 9.500% senior secured notes, which are due in June, 2024.

Proceeds will also be used to repay all amounts outstanding as well as fees and expenses related to an existing term loan facility, an existing revolving credit facility, and for general corporate purposes.

Eldorado Gold shares were virtually unchanged on the news, rising 0.18% or $0.02 to $10.64 on volume of 128,790. The shares are trading in a 52-week range of $18.90 and $10.25.

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 is also working to advance the Skouries copper-gold project in Greece.

Situated in the Halkidiki Peninsula in the Serbo-Macedonian ore belt, Skouries is expected to produce 140,000 ounces of gold and 67 million pounds of copper annually during an estimated lifespan of 23 years. Skouries is located on a concession that also contains the Olympias Mine.

Skouries is designed as a two-phase mining operation that will produce a clean gold-copper concentrate. Phase one will consist of an open pit mine and underground mine that will operate for 10 years. Phase 2 consists of mining from underground for a further 13 years.

The company is currently in the midst of updating the feasibility study at Skouries (updating the capital cost estimate). The last capital cost estimate was $700 million. Management has indicated that higher fuel, steel and copper prices will likely have an impact on capital costs even though the asset is half built.

The remaining capital cost spend is for pre-stripping the open pit, underground development, building the tailings dam, purchase and construction of a dry stack tailings facility and primary crusher.

The feasibility study is expected in the fourth quarter of 2021, with a financing package likely finalized in the first quarter of 2022.

Eldorado recently acquired an 11.5% stake in Probe Metals Inc. [PRB-TSXV, PROBF-OTCQB] by picking up 15.04 million Probe shares for $1.575 each in a transaction worth $23.7 million.

Eldorado acquired the shares as Probe works to complete a preliminary economic assessment at its 100%-owned Val d’Or East Pascalis project in Val d’Or, Quebec.

The Val d’Or East project is a district-scale land package, comprising 435 square kilometres and represents one of the largest land holdings in the Val-d’Or mining camp. The property is host to three past producing mines (Beliveau, Bussiere, and Monique) and falls along four regional mine trends, including 14 kilometres of strike length along the prolific Cadillac Break.

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