Eldorado Gold Corp. [ELD-TSX; EGO-NYSE] reported its financial and operational results for the second quarter of 2020. While measures remain in place to manage the impact of COVID-19 pandemic, the company’s mines are fully operational and the global workforce has returned to normal levels.
Stronger quarterly production and 2020 annual guidance were maintained. Â Gold production totalled 137,782 ounces in Q2 2020, an increase of 50% from Q2 2019 production of 91,803 ounces, and a 19% increase over Q1 2020. Eldorado is maintaining its 2020 annual guidance of 520,000-550,000 ounces of gold at an all-in sustaining cost of $850-950 per ounce sold.
Free cash flow of $63.4-million in Q2 2020 increased significantly from $4.8-million in Q2 2019 and $7.2-million in Q1 2020 as a result of higher sales volume and a higher gold price.
Construction began for a 3-km decline at Lamaque, Quebec. The underground decline will connect the Sigma mill to the 405-metre level of the Triangle Mine. Benefits of the decline include eliminating surface haulage of ore (approximately 26km round trip), reducing energy requirements for mine ventilation and providing access to reduce exploration costs. The decline is expected to be completed in the first half of 2022 at an estimated cost of $24-million.
All-in sustaining costs lower quarter-on-quarter: Q2 2020 all-in sustaining costs of $859 per ounce of gold sold in the quarter were lower than in Q2 2019 ($917 per ounce sold).
Eldorado currently has $440-million in cash, cash equivalents and term deposits and approximately $35-million available under the revolving credit facility, with $65-million of capacity on the facility allocated to secure certain reclamation obligations in connection with its operations.
A total of $33.3-million was repaid on the company’s term loan during the quarter. Continued strong EBITDA has improved its net leverage ratio, lowering the interest rate on the term loan and amounts drawn under the revolving credit facility from LIBOR + 2.5% to LIBOR + 2.25% during the quarter. A redemption notice was issued to repay $58.6-million of principal in August 2020 under the equity clawback provision of our senior secured notes.
Net earnings attributable to Eldorado shareholders in Q2 2020 were $45.6-million or $0.27 per share (Q2 2019: net earnings attributable to shareholders of $12.2-million, or $0.08 per share). Adjusted net earnings attributable to Eldorado shareholders in Q2 2020 were $43.8-million, or $0.26 per share (Q2 2019: adjusted net loss attributable to Eldorado shareholders of $3.5-million, or $0.02 loss per share).
â€œOur outstanding operational performance during the quarter positions us to continue to generate significant value for our stakeholders. Even while managing COVID-19, we achieved strong quarterly production while seeing lower all-in sustaining costs,â€ said George Burns, President and CEO.
On July 31, shares of Eldorado gained $0.82 to $16.89 on a volume of 1,857,000 shares traded.