Eldorado Gold Corp. [ELD-TSX; EGO-NYSE] on Friday released an update on the tax impacts in Turkey related to the weakening of the Turkish Lira. The update has been released ahead of Eldorado’s financial and operations results on July 27, 2023.
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.
In a press release Friday, the company said profits from mining operations in Turkey are taxed at an enacted rate of 20% and the resulting current tax expense may be increased or reduced by other items.
In the second quarter (2023), Eldorado said it expects the Turkish current income tax expense on mining profits to be higher by $5.5 million to $6.5 million. This increase is expected to be primarily related to the weakening of the lira in the quarter and the resulting generation of taxable unrealized foreign exchange gains, partly offset by reductions related to the investment tax credit relating to Kisladag and Efemcukuru.
On Friday, Eldorado shares edged up 0.84% or 11 cents to $13.22. The shares are currently trading in a 52-week range of $16.40 and $6.86.
Eldorado was in the news recently when it 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 pledged to 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.
The EBRD financing closed on June 14, 2023, the company said.
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.