Eldorado Gold unveils $675 million financing, shares up

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Eldorado Gold Corp. [ELD-TSX; EGO-NYSE] has entered into a mandate letter with Greek banks for a credit committee approved $675 million project financing facility for the development of the Skouries project in Greece.

Eldorado shares advanced on the news, rising 7.7% or 56 cents to $7.78 on volume of 323,440. The shares are currently trading in a 52-week range of $15.73 and $6.86.

The estimated capital cost to complete the project is expected to be $845 million, leaving a funding gap of $170 million if the financing is approved. The mandate letter remains subject to negotiation of definitive binding loan documentation and to other approvals and conditions, including board approval and confirmation of the availability of funds for a low interest portion of the facility.

A final decision to re-start construction is still subject to board approval, which is expected in the second half of 2022.

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.

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 has been working to update the feasibility study at Skouries as well as cost estimates. An earlier capital cost estimate was $700 million. But 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.

Eldorado recently 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.

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