Consolidated Financial Statements
December 31, 2019 and 2018
(Expressed in thousands of U.S. dollars)
Management’s Responsibility for Financial Reporting
The management of Eldorado Gold Corporation is responsible for the integrity and fair presentation of the financial
information contained in this Annual Report. Where appropriate, the financial information, including Consolidated
Financial Statements, reflects amounts based on management’s best estimates and judgements. The Consolidated
Financial Statements have been prepared in accordance with International Financial Reporting Standards as issued
by the International Accounting Standards Board. Financial information presented elsewhere in the Annual Report
is consistent with that disclosed in the Consolidated Financial Statements.
Management is responsible for establishing and maintaining adequate internal control over financial reporting.
Management has established and maintains a system of internal accounting control designed to provide reasonable
assurance that assets are safeguarded from loss or unauthorized use, financial information is reliable and accurate
and transactions are properly recorded and executed in accordance with management’s authorization. This system
includes established policies and procedures, the selection and training of qualified personnel and an organization
providing for appropriate delegation of authority and segregation of responsibilities. Any system of internal control
over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to financial statement preparation
and presentation.
Management has a process in place to evaluate internal control over financial reporting based on the criteria
established by the Committee of Sponsoring Organizations of the Treadway Commission (2013) in Internal Control
- Integrated Framework. Based on this assessment, management determined that as of December 31, 2019, the
Company’s internal control over financial reporting was effective and provided reasonable assurance of the reliability
of our financial reporting and preparation of the Consolidated Financial Statements.
KPMG LLP, an independent registered public accounting firm, appointed by the shareholders, has audited the
Company’s Consolidated Financial Statements as of and for the year ended December 31, 2019 in accordance
with the standards of the Public Company Accounting Oversight Board (United States) and has expressed their
opinion in their report titled “Report of Independent Registered Public Accounting Firm”. The effectiveness of the
Company’s internal control over financial reporting as of December 31, 2019 has also been audited by KPMG LLP,
and their opinion is included in their report titled “Report of Independent Registered Public Accounting Firm”.
(Signed) George Burns
(Signed) Philip Yee
George Burns
President & Chief Executive Officer
Philip Yee
Chief Financial Officer
February 20, 2020
Vancouver, British Columbia, Canada
KPMG LLP
Chartered Professional
Accountants
PO Box 10426 777 Dunsmuir Street
Vancouver BC V7Y 1K3
Canada
Telephone
Fax
Internet
(604) 691-3000
(604) 691-3031
www.kpmg.ca
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of Eldorado Gold Corporation
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Eldorado Gold Corporation
(the Company) as of December 31, 2019 and December 31, 2018, the related consolidated statements of
operations, comprehensive income (loss), cash flows, and changes in equity for each of the years in the two-year
period ended December 31, 2019, and the related notes (collectively, the consolidated financial statements). In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
the Company as of December 31, 2019 and 2018, and its financial performance and its cash flows for each of the
years in the two year period ended December 31, 2019, in conformity with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on
criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission”, and our report dated February 20, 2020 expressed an unqualified
opinion on the effectiveness of the Company’s internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 5 to the consolidated financial statements, the Company has changed its accounting policy
for leases as of January 1, 2019 due to the adoption of IFRS 16, Leases.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting
firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required
to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. KPMG Canada provides services to KPMG LLP.
Eldorado Gold Corporation
Page 2
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are
free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess
the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating
the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for
our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the Audit Committee and that: (1)
relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Assessment of the recoverable amounts of the Kisladag and Olympias cash generating units
As discussed in Notes 3.7 and 12 to the consolidated financial statements, the Company determined there were
indicators of potential reversal of impairment associated with the Kisladag cash generating unit (CGU) and indicators
of potential impairment associated with the Olympias CGU. When an indicator of impairment or reversal of
impairment exists, the Company is required to determine the recoverable amount of the CGU to determine whether
an impairment or reversal of impairment should be recognized. Based on the outcome of the impairment and
reversal of impairment testing performed, the Company recorded a reversal of impairment of property, plant and
equipment of $100.5 million related to the Kisladag CGU as of December 31, 2019 and determined that there was
no impairment of the Olympias CGU as of December 31, 2019.
We identified the assessment of the recoverable amounts for each of the Kisladag and Olympias CGUs to be a
critical audit matter because the inputs used to estimate the recoverable amounts were challenging to audit.
Significant assumptions used in the determination of the recoverable amounts included long-term metal prices,
production levels, operating and capital costs, tax costs, discount rates, the conversion factors of resources and
exploration potential to proven and probable reserves and the fair value per contained ounce of resources and
exploration potential beyond proven and probable reserves.
Eldorado Gold Corporation
Page 3
The primary procedures we performed to address this critical audit matter included the following. We tested certain
internal controls over the Company’s determination of the significant assumptions noted above used to estimate
the recoverable amount of the respective CGUs. We evaluated the competence, experience and objectivity of the
qualified persons responsible for the mineral reserves and resources estimates, the determination of the conversion
factors of resources and exploration potential to proven and probable reserves, and the updated mine plans. We
compared the projected production information in the valuation models to the respective mine plans and to the
updated mineral reserves and resources estimates. We compared the Company’s historical estimates of mineral
reserves and resources, mine plans and operating results to actual results to assess the Company’s historical
forecasts. We compared projected metal prices used in the valuation models to consensus forecasts. We also
compared projected operating and capital costs in the valuation models to the mine plans and to historical
expenditures. We involved a valuations professional with specialized skills and knowledge, who assisted in
assessing the projected metal prices, discount rates, and the fair value per contained ounce of resources and
exploration potential beyond proven and probable reserves used in the valuation models by evaluating the
Company’s approach to determining these amounts and comparing them to independent market data where
available. We also involved a tax professional with specialized skills and knowledge, who assisted in evaluating
the projected amount and timing of potential tax payments included in the valuation models by considering the tax
attributes and rates in each jurisdiction being tested.
KPMG LLP (Signed)
Chartered Professional Accountants
We have served as the Company’s auditor since 2009.
Vancouver, Canada
February 20, 2020
KPMG LLP
Chartered Professional Accountants
PO Box 10426 777 Dunsmuir Street
Vancouver BC V7Y 1K3
Canada
\
Telephone
Fax
Internet
(604) 691-3000
(604) 691-3031
www.kpmg.ca
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of Eldorado Gold Corporation
Opinion on Internal Control over Financial Reporting
We have audited Eldorado Gold Corporation’s (the Company) internal control over financial reporting as of
December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained,
in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria
established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated statements of financial position of the Company as of December 31, 2019 and
December 31, 2018, the related consolidated statements of operations, comprehensive income (loss), cash flows,
and changes in equity for each of the years in the two-year period ended December 31, 2019, and the related
notes (collectively, the consolidated financial statements), and our report dated February 20, 2020 expressed an
unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting, included in “Management’s
Discussion and Analysis - Internal Controls over Financial Reporting”. Our responsibility is to express an opinion
on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. KPMG Canada provides services to KPMG LLP.
Eldorado Gold Corporation
Page 2
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audit also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
KPMG LLP (Signed)
Chartered Professional Accountants
Vancouver, Canada
February 20, 2020
Eldorado Gold Corporation
Consolidated Statements of Financial Position
As at December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars)
Note
December 31, 2019
December 31, 2018
ASSETS
Current assets
Cash and cash equivalents
Term deposits
Restricted cash
Marketable securities
Accounts receivable and other
Inventories
Assets held for sale
Restricted cash
Other assets
Employee benefit plan assets
Property, plant and equipment
Goodwill
LIABILITIES & EQUITY
Current liabilities
Accounts payable and accrued liabilities
Current portion of lease liabilities
Current portion of debt
Current portion of asset retirement obligations
Liabilities associated with assets held for sale
Debt
Lease liabilities
Employee benefit plan obligations
Asset retirement obligations
Deferred income tax liabilities
Equity
Share capital
Treasury stock
Contributed surplus
Accumulated other comprehensive loss
Deficit
Total equity attributable to shareholders of the Company
Attributable to non-controlling interests
6
7
8
9
32
7
10
18
12
13
15
16
17
32
16
18
17
20
21
$
$
$
$
177,742
3,275
20
3,828
75,290
163,234
12,471
435,860
3,080
22,943
6,244
4,088,202
92,591
4,648,920
139,104
9,913
66,667
1,782
4,257
221,723
413,065
15,143
18,224
94,235
412,717
1,175,107
3,054,563
(8,662)
2,627,441
(28,966)
(2,229,867)
3,414,509
59,304
3,473,813
4,648,920
$
$
$
$
286,312
6,646
296
2,572
80,987
137,885
—
514,698
13,449
10,592
9,120
3,988,476
92,591
4,628,926
137,900
2,978
—
824
—
141,702
595,977
6,538
14,375
93,319
429,929
1,281,840
3,007,924
(10,104)
2,620,799
(24,494)
(2,310,453)
3,283,672
63,414
3,347,086
4,628,926
Debt, Guarantees, Commitments and Contractual Obligations (Notes 16, 25)
Contingencies (Note 26)
Approved on behalf of the Board of Directors
(signed) John Webster Director
(signed) George Burns Director
Date of approval: February 20, 2020
The accompanying notes are an integral part of these consolidated financial statements.
Eldorado Gold Corporation
Consolidated Statements of Operations
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars except share and per share amounts)
Revenue
Metal sales
Cost of sales
Production costs
Depreciation and amortization
Earnings from mine operations
Exploration and evaluation expenses
Mine standby costs
General and administrative expenses
Employee benefit plan expense
Share-based payments expense
Impairment (reversal of impairment)
Write-down of assets
Foreign exchange (gain) loss
Earnings (loss) from operations
Other income
Finance costs
Earnings (loss) from operations before income tax
Income tax expense (recovery)
Net earnings (loss) for the year
Attributable to:
Shareholders of the Company
Non-controlling interests
Net earnings (loss) for the year
30
18
22
12
19
19
20
Weighted average number of shares outstanding (thousands)
31
Basic
Diluted
Net earnings (loss) per share attributable to shareholders of
the Company:
Basic earnings (loss) per share
Diluted earnings (loss) per share
Note
Year ended
December 31, 2019
Year ended
December 31, 2018
29
$
617,823
$
459,016
334,839
153,118
487,957
129,866
14,643
17,334
29,180
2,717
10,396
(96,914)
6,298
(625)
146,837
11,885
(45,266)
113,456
39,771
73,685
$
80,586
(6,901)
73,685
$
158,856
161,539
269,445
105,732
375,177
83,839
33,842
16,510
46,806
3,555
6,989
447,808
1,528
3,574
(476,773)
16,281
(5,637)
(466,129)
(86,498)
(379,631)
(361,884)
(17,747)
(379,631)
158,509
158,509
0.51
0.50
$
$
(2.28)
(2.28)
$
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
Eldorado Gold Corporation
Consolidated Statements of Comprehensive Income (Loss)
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars)
Net earnings (loss) for the year
Other comprehensive income (loss):
Items that will not be reclassified to earnings (loss):
Change in fair value of investments in equity securities
Actuarial losses on employee benefit plans
18
Income tax recovery on actuarial losses on employee benefit
plans
Total comprehensive income (loss) for the year
Attributable to:
Shareholders of the Company
Non-controlling interests
Note
Year ended
December 31, 2019
Year ended
December 31, 2018
$
73,685
$
(379,631)
1,256
(6,361)
633
(4,472)
(2,306)
(1,197)
359
(3,144)
$
$
69,213
$
(382,775)
76,114
(6,901)
69,213
$
(365,028)
(17,747)
(382,775)
The accompanying notes are an integral part of these consolidated financial statements.
Eldorado Gold Corporation
Consolidated Statements of Cash Flows
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars)
Cash flows generated from (used in):
Operating activities
Net earnings (loss) for the year
Items not affecting cash:
Depreciation and amortization
Finance costs
Interest income
Unrealized foreign exchange (gain) loss
Income from royalty sale
Income tax expense (recovery)
Impairment (reversal of impairment)
Write-down of assets
Share based payments expense
Employment benefit plan expense
Property reclamation payments
Employee benefit plan payments
Income taxes paid
Interest paid
Interest received
Changes in non-cash working capital
Net cash generated from operating activities
Investing activities
Purchase of property, plant and equipment
Capitalized interest paid
Proceeds from the sale of property, plant and equipment
Proceeds on pre-commercial production sales, net
Purchase of investment in associate
Proceeds from sale of mining interest
Value added taxes related to mineral property expenditures, net
Decrease (increase) in term deposits
Decrease (increase) in restricted cash
Net cash used in investing activities
Financing activities
Issuance of common shares for cash
Contributions from non-controlling interests
Proceeds from borrowings
Repayments from borrowings
Loan financing costs
Principal portion of lease liabilities
Purchase of treasury stock
Net cash used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents - beginning of year
Cash in disposal group held for sale
Cash and cash equivalents - end of year
Supplementary cash flow information (Note 23)
Note
Year ended
December 31, 2019
Year ended
December 31, 2018
$
73,685
$
(379,631)
155,331
45,266
(2,760)
(790)
(8,075)
39,771
(96,914)
6,298
10,396
2,717
224,925
(2,807)
(2,587)
(36,242)
(35,479)
2,760
15,256
165,826
(214,505)
(3,848)
6,605
12,159
(3,107)
1,397
(1,590)
3,371
10,644
(188,874)
40,066
2,791
494,000
(600,000)
(15,583)
(6,729)
—
(85,455)
(108,503)
286,312
(67)
177,742
$
105,732
5,637
(7,727)
704
—
(86,498)
447,808
1,528
6,989
3,555
98,097
(5,536)
(2,299)
(36,879)
—
7,727
6,428
67,538
(231,674)
(36,750)
7,882
6,472
—
—
(1,261)
(1,138)
(928)
(257,397)
—
—
—
—
—
(1,222)
(2,108)
(3,330)
(193,189)
479,501
—
286,312
12
23
12
$
The accompanying notes are an integral part of these consolidated financial statements.
Eldorado Gold Corporation
Consolidated Statements of Changes in Equity
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars)
Note
Year ended
December 31, 2019
Year ended
December 31, 2018
Share capital
Balance beginning of year
Shares issued upon exercise of share options, for cash
Transfer of contributed surplus on exercise of options
Shares issued to the public, net of share issuance costs
Balance end of year
21
Treasury stock
Balance beginning of year
Purchase of treasury stock
Shares redeemed upon exercise of restricted share units
Balance end of year
Contributed surplus
Balance beginning of year
Share based payment arrangements
Shares redeemed upon exercise of restricted share units
Transfer to share capital on exercise of options
Balance end of year
Accumulated other comprehensive loss
Balance beginning of year
Other comprehensive loss for the year
Balance end of year
Deficit
Balance beginning of year
Earnings (loss) attributable to shareholders of the Company
Balance end of year
Total equity attributable to shareholders of the Company
Non-controlling interests
Balance beginning of year
Loss attributable to non-controlling interests
Contributions from non-controlling interests
Balance end of year
Total equity
$
$
$
$
$
$
$
$
$
$
$
$
$
$
3,007,924
$
3,007,924
265
103
46,271
—
—
—
3,054,563
$
3,007,924
(10,104)
$
—
1,442
(8,662)
$
(11,056)
(2,108)
3,060
(10,104)
2,620,799
$
2,616,593
8,187
(1,442)
(103)
7,266
(3,060)
—
2,627,441
$
2,620,799
(24,494)
(4,472)
(28,966)
(2,310,453)
80,586
(2,229,867)
3,414,509
$
$
$
$
$
63,414
$
(6,901)
2,791
59,304
3,473,813
$
$
(21,350)
(3,144)
(24,494)
(1,948,569)
(361,884)
(2,310,453)
3,283,672
79,940
(17,747)
1,221
63,414
3,347,086
The accompanying notes are an integral part of these consolidated financial statements.
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
1. General Information
Eldorado Gold Corporation (individually or collectively with its subsidiaries, as applicable, “Eldorado” or the
“Company”) is a gold and base metals mining, development, and exploration company. The Company has mining
operations, ongoing development projects and exploration in Turkey, Canada, Greece, Romania and Brazil.
Eldorado is a public company listed on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange
(“NYSE”) and is incorporated in the province of British Columbia, Canada.
The Company's head office, principal address and records are located at 550 Burrard Street, Suite 1188,
Vancouver, British Columbia, Canada, V6C 2B5.
2. Basis of preparation
These consolidated financial statements, including comparatives, have been prepared in compliance with
International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board
(“IASB”). The significant accounting policies applied in these consolidated financial statements are presented in
note 3 and, except as described in note 5, have been applied consistently to all years presented, unless otherwise
noted.
Certain prior period balances have been reclassified to conform to current period presentation.
The consolidated financial statements were approved by the Company's Board of Directors on February 20, 2020.
The consolidated financial statements have been prepared on a historical cost basis except for certain financial
assets and liabilities which are measured at fair value.
The preparation of the consolidated financial statements in compliance with IFRS requires management to make
certain critical accounting estimates. It also requires management to exercise judgement in the process of applying
the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the consolidated financial statements are disclosed in note
4.
3. Significant accounting policies
3.1 Basis of presentation and principles of consolidation
(i) Subsidiaries and business combinations
Subsidiaries are those entities controlled by Eldorado. Control exists when Eldorado is exposed to, or has rights,
to variable returns from the subsidiary and has the ability to affect those returns through its power over the
subsidiary. Power is defined as existing rights that give the Company the ability to direct the relevant activities of
the subsidiary. In assessing control, potential voting rights that currently are exercisable are taken into account.
The financial statements of subsidiaries are included in the consolidated financial statements from the date that
control commences until the date that control ceases. All intercompany transactions, balances, income and
expenses are eliminated in full upon consolidation.
The acquisition method of accounting is used to account for business acquisitions. The cost of an acquisition is
measured at the fair value of the assets acquired, equity instruments issued and liabilities incurred or assumed
at the date of exchange.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling
interest.
The excess of the cost of acquisition over the fair value of Eldorado’s share of the identifiable net assets acquired
is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets acquired, the difference,
or gain, is recognized directly in the consolidated statement of operations.
(1)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
3. Significant accounting policies (continued)
Transaction costs, other than those associated with the issue of debt or equity securities, which the Company
incurs in connection with a business combination, are expensed as incurred.
The material subsidiaries of the Company as at December 31, 2019 are described below:
Subsidiary
Location
Ownership
interest
Operations and
development projects
owned
Tüprag Metal Madencilik Sanayi ve Ticaret AS ("Tüprag")
Turkey
100%
Hellas Gold SA ("Hellas")
Greece
95%
Integra Gold Corporation
Thracean Gold Mining SA
Thrace Minerals SA
Unamgen Mineração e Metalurgia SA
Brazauro Recursos Minerais SA ("Brazauro")
Deva Gold SA ("Deva")
Canada
Greece
Greece
Brazil
Brazil
Romania
100%
100%
100%
100%
100%
80.5%
Efemçukuru Mine
Olympias Mine
Stratoni Mine
Skouries Project
Lamaque Mine
Perama Hill Project
Sapes Project
Vila Nova Iron Ore Mine
Tocantinzinho Project
Certej Project
(ii) Discontinued operations
A discontinued operation is a component of the Company’s business that represents a separate major line of
business or geographical area of operations that has been disposed of, has been abandoned or meets the criteria
to be classified as held for sale.
Discontinued operations are presented in the consolidated statement of operations as a separate line.
(iii) Assets held for sale
Assets and businesses classified as held for sale are measured at the lower of carrying amount and fair value
less costs to sell. Impairment losses on initial classification as held for sale and gains or losses on subsequent
remeasurements are included in the consolidated statement of operations. No depreciation is charged on assets
and businesses classified as held for sale.
Assets and businesses are classified as held for sale if their carrying amount will be recovered or settled principally
through a sale transaction rather than through continuing use. The asset or business must be available for
immediate sale and the sale must be highly probable within one year.
(iv) Investments in associates
Associates are those entities where Eldorado has the ability to exercise significant influence, but not control, over
the financial and operating policies of those entities. Significant influence is presumed to exist when the Company
holds between 20 and 50 percent of the voting power of another entity.
Associates are accounted for using the equity method (equity accounted investees) and are recognized initially
at cost. The consolidated financial statements include Eldorado’s share of the income and expenses and equity
movements of equity accounted investees, after adjustments to align the accounting policies with those of
Eldorado, from the date that significant influence commences until the date that significant influence ceases.
When the Company’s share of losses exceeds its interest in an equity accounted investee, the carrying amount
of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is
discontinued except to the extent that the Company has an obligation to make, or has made, payments on behalf
of the investee.
(2)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
3. Significant accounting policies (continued)
At each statement of financial position date, each investment in associates is assessed for indicators of impairment.
(v) Transactions with non-controlling interests
For purchases from non-controlling interests, the difference between any consideration paid and the relevant
share of the carrying value of net assets of the subsidiary acquired is recorded in equity. Gains or losses on
disposals to non-controlling interests are also recorded in equity.
Eldorado treats transactions in the ordinary course of business with non-controlling interests as transactions with
third parties.
(vi) Transactions eliminated on consolidation
Intra-company and intercompany balances and transactions, and any unrealized income and expenses arising
from all such transactions, are eliminated in preparing the consolidated financial statements.
3.2 Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of Eldorado’s subsidiaries are measured using the currency of
the primary economic environment in which the entity operates (the functional currency). The consolidated financial
statements are presented in U.S. dollars, which is the Company’s functional and presentation currency, as well
as the functional currency of all significant subsidiaries.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting
date are translated to the functional currency at the exchange rate at that date. Foreign exchange gains and
losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities
denominated in foreign currencies, are recognized in the consolidated statement of operations.
3.3 Property, plant and equipment
(i) Cost and valuation
Property, plant and equipment are carried at cost less accumulated depreciation and any impairment in value.
When an asset is disposed of, it is derecognized and the difference between its carrying value and net sales
proceeds is recognized as a gain or loss in the consolidated statement of operations.
(ii) Property, plant and equipment
Property, plant and equipment includes expenditures incurred on properties under development, significant
payments related to the acquisition of land, mineral rights and property, plant and equipment which are recorded
at cost on initial acquisition. Cost includes the purchase price and the directly attributable costs of acquisition or
construction required to bring an asset to the location and condition necessary for the asset to be capable of
operating in the manner intended by management, including capitalized borrowing costs for qualifying assets.
(iii) Deferred stripping costs
Stripping costs incurred during the production phase of a mine are considered production costs and included in
the cost of inventory produced during the period in which the stripping costs are incurred, unless the stripping
activity can be shown to provide access to additional mineral reserves, in which case the stripping costs are
capitalized. Stripping costs incurred to prepare the ore body for extraction are capitalized as mine development
costs (pre-stripping). Capitalized stripping costs are amortized on a unit-of-production basis over the proven and
probable reserves to which they relate.
(3)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
3. Significant accounting policies (continued)
(iv) Depreciation
Mine development costs, property, plant and equipment and other mining assets whose estimated useful life is
the same as the remaining life of the mine are depreciated, depleted and amortized over a mine’s estimated life
using the units-of-production method calculated based on proven and probable reserves.
Capitalized development costs related to a multi-pit operation are amortized on a pit-by-pit basis over the pit’s
estimated life using the units-of-production method calculated based on proven and probable reserves related to
each pit.
Property, plant and equipment and other assets whose estimated useful lives are less than the remaining life of
the mine are depreciated on a straight-line basis over the estimated useful lives of the assets.
Where components of an asset have a different useful life and the cost of the component is significant to the total
cost of the asset, depreciation is calculated on each separate component.
Depreciation methods, useful lives and residual values are reviewed at the end of each year and adjusted if
appropriate.
(v) Subsequent costs
Expenditure on major maintenance or repairs includes the cost of replacement parts of assets and overhaul costs.
Where an asset or part of an asset is replaced and it is probable that further future economic benefit will flow to
the Company, the expenditure is capitalized and the carrying value of the replaced asset or part of an asset is
derecognized. Similarly, overhaul costs associated with major maintenance are capitalized when it is probable
that future economic benefit will flow to the Company and any remaining costs of previous overhauls relating to
the same asset are derecognized. All other expenditures are expensed as incurred.
(vi) Borrowing costs
Borrowing costs are expensed as incurred except where they are attributable to the financing of construction or
development of qualifying assets requiring a substantial period of time to prepare for their intended future use.
Interest is capitalized up to the date when substantially all the activities necessary to prepare the asset for its
iintended use are complete. Interest is ceased to be capitalized during periods of prolonged suspension of
construction or development. Borrowing costs are classified as cash outflows from operating activities on the
statement of cash flows except for borrowing costs capitalized which are classified as investing activities.
Investment income arising on the temporary investment of proceeds from borrowings is offset against borrowing
costs being capitalized.
(vii) Mine standby costs and restructuring costs
Mine standby costs and costs related to restructuring a mining operation are charged directly to expense in the
period incurred. Mine standby costs include labour, maintenance and mine support costs incurred during temporary
shutdowns of a mine or a development project.
3.4 Leases
A contract is or contains a lease when the contract conveys a right to control the use of an identified asset for a
period of time in exchange for consideration.
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-
of-use asset is initially measured at cost, and subsequently at cost less any accumulated depreciation and
impairment losses, and is adjusted for certain remeasurements of the lease liability. The cost of the right-of-use
asset includes the amount of the initial measurement of the lease liability, any lease payments made at or before
the commencement date, less any lease incentives received, any initial direct costs; and if applicable, an estimate
of costs to be incurred by the Company in dismantling and removing the underlying asset, restoring the site on
which it is located or restoring the underlying asset to the condition required by the terms and conditions of the
lease. Right-of-use assets are presented in property, plant and equipment on the statement of financial position.
(4)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
3. Significant accounting policies (continued)
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Company’s incremental borrowing rate. The incremental borrowing rate reflects the rate of interest
that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar
economic environment with similar terms and conditions.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease
payments made. It is remeasured when there is a change in future lease payments arising from a change in an
index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee,
or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain
to be exercised or a termination option is reasonably certain not to be exercised. The Company applies judgement
to determine the lease term for some lease contracts which contain renewal options.
The Company does not recognize right-of-use assets and lease liabilities for leases of low-value assets, leases
with lease terms that are less than 12 months and arrangements for the use of land that grant the Company the
right to explore, develop, produce or otherwise use the mineral resource contained in that land. Lease payments
associated with these arrangements are instead recognized as an expense over the term on either a straight-line
basis, or another systematic basis if more representative of the pattern of benefit. The Company applies judgement
in determining whether an arrangement grants the Company the right to explore, develop, produce or otherwise
use the mineral resource contained in that land.
3.5 Exploration, evaluation and development expenditures
(i) Exploration
Exploration expenditures reflect the costs related to the initial search for mineral deposits with economic potential
or obtaining more information about existing mineral deposits. Exploration expenditures typically include costs
associated with the acquisition of mineral licences, prospecting, sampling, mapping, diamond drilling and other
work involved in searching for mineral deposits. All expenditures relating to exploration activities are expensed
as incurred except for the costs associated with the acquisition of mineral licences which are capitalized.
(ii) Evaluation
Evaluation expenditures reflect costs incurred at projects related to establishing the technical and commercial
viability of mineral deposits identified through exploration or acquired through a business combination or asset
acquisition.
Evaluation expenditures include the cost of:
establishing the volume and grade of deposits through drilling of core samples, trenching and sampling activities
for an ore body that is classified as either a mineral resource or a proven and probable reserve;
determining the optimal methods of extraction and metallurgical and treatment processes;
studies related to surveying, transportation and infrastructure requirements;
permitting activities; and
economic evaluations to determine whether development of the mineralized material is commercially viable,
including scoping, prefeasibility and final feasibility studies.
Evaluation expenditures are capitalized if management determines that there is evidence to support probability
of generating positive economic returns in the future. A mineral resource is considered to have economic potential
when it is expected that the technical feasibility and commercial viability of extraction of the mineral resource can
be demonstrated considering long-term metal prices. Therefore, prior to capitalizing such costs, management
determines that the following conditions have been met:
There is a probable future benefit that will contribute to future cash inflows;
The Company can obtain the benefit and control access to it; and
The transaction or event giving rise to the benefit has already occurred.
(5)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
3. Significant accounting policies (continued)
The evaluation phase is complete once technical feasibility of the extraction of the mineral deposit has been
determined through preparation of a reserve and resource statement, including a mining plan as well as receipt
of required permits and approval of the Board of Directors to proceed with development of the mine. On such
date, capitalized evaluation costs are assessed for impairment and reclassified to development costs.
(iii) Development
Development expenditures are those that are incurred during the phase of preparing a mineral deposit for extraction
and processing. These include pre-stripping costs and underground development costs to gain access to the ore
that is suitable for sustaining commercial mining, preparing land, construction of plant, equipment and buildings
and costs of commissioning the mine and processing facilities. It also includes proceeds received from pre-
commercial production.
Expenditures incurred on development projects continue to be capitalized until the mine and mill move into the
production stage. The Company assesses each mine construction project to determine when a mine moves into
the production stage. The criteria used to assess the start date are determined based on the nature of each mine
construction project, such as the complexity of a plant or its location. Various relevant criteria are considered to
assess when the mine is substantially complete and ready for its intended use and moved into the production
stage. The criteria considered include, but are not limited to, the following:
the level of capital expenditures compared to construction cost estimates;
the completion of a reasonable period of testing of mine plant and equipment;
the ability to produce minerals in saleable form (within specification); and
the ability to sustain ongoing production of minerals.
If the factors that impact the technical feasibility and commercial viability of a project change and no longer support
the probability of generating positive economic returns in the future, expenditures will no longer be capitalized
and the capitalized development costs will be assessed for impairment.
3.6 Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Company’s share of the net
assets of the acquired business at the date of acquisition. When the excess is negative (negative goodwill), it is
recognized immediately in income. Goodwill on acquisition of subsidiaries and businesses is shown separately
as goodwill in the consolidated financial statements. Goodwill on acquisition of associates is included in
investments in significantly influenced companies and tested for impairment as part of the overall investment.
Goodwill is carried at cost less accumulated impairment losses and tested annually for impairment. The impairment
testing is performed annually or more frequently if events or changes in circumstances indicate that it may be
impaired. Impairment losses on goodwill are not reversed.
Goodwill is allocated to cash-generating units (“CGUs") for the purpose of impairment testing. The allocation is
made to those CGUs or groups of CGUs that are expected to benefit from the business combination in which the
goodwill arose. If the composition of one or more CGUs to which goodwill has been allocated changes due to a
reorganization, the goodwill is reallocated to the units affected.
3.7 Impairment of non-financial assets
Non-financial assets which include property, plant and equipment and goodwill are reviewed each reporting period
for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. If such indicators exist, the Company determines the recoverable amount, and if applicable,
recognizes an impairment loss.
An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less cost of disposal ("FVLCD") and value
in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows or CGUs.
(6)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
3. Significant accounting policies (continued)
Value in use is determined as the present value of the future cash flows expected to be derived from an asset or
CGU based on the detailed mine and/or production plans. The estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset.
FVLCD is the amount obtainable from the sale of an asset or CGU in an arm’s length transaction between
knowledgeable, willing parties, less the costs of disposal. For mining assets, FVLCD is often estimated using a
discounted cash flow approach because a fair value is not readily available from an active market or binding sale
agreement. Estimated future cash flows are calculated using estimated future prices, mineral reserves and
resources, operating and capital costs. All assumptions used are those that an independent market participant
would consider appropriate.
Non-financial assets other than goodwill impaired in prior periods are reviewed for possible reversal of the
impairment when events or changes in circumstances indicate that an item of mineral property and equipment
or CGU is no longer impaired. An impairment charge is reversed through the consolidated statement of operations
only to the extent of the asset’s or CGU’s carrying amount that would have been determined net of applicable
depreciation, had no impairment loss been recognized.
3.8 Financial assets
(i) Classification and measurement
The Company classifies its financial assets in the following categories: at fair value through profit or loss (“FVTPL”),
at fair value through other comprehensive income (“FVTOCI”) or at amortized cost. The classification depends
on the purpose for which the financial assets were acquired. Management determines the classification of its
financial assets at initial recognition.
The classification of investments in debt instruments is driven by the business model for managing the financial
assets and their contractual cash flow characteristics. Investments in debt instruments are measured at amortized
cost if the business model is to hold the instrument for collection of contractual cash flows and those cash flows
are solely principal and interest. If the business model is not to hold the debt instrument, it is classified as FVTPL.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash
flows are solely payments of principal and interest.
Equity instruments that are held for trading (including all equity derivative instruments) are classified as FVTPL.
For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an
instrument-by-instrument basis) to designate them as FVTOCI.
(a) Financial assets at FVTPL
Financial assets carried as FVTPL are initially recorded at fair value with all transaction costs expensed in the
consolidated statement of operations. Realized and unrealized gains and losses arising from changes in the fair
value of the financial asset held at FVTPL are included in the consolidated statement of operations in the period
in which they arise. Derivatives are also categorized as FVTPL unless they are designated as hedges.
(b) Financial assets at FVTOCI
Investments in equity instruments as FVTOCI are initially recognized at fair value plus transaction costs.
Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized
in other comprehensive income (loss). There is no subsequent reclassification of fair value gains and losses to
net earnings (loss) following the derecognition of the investment.
(c) Financial assets at amortized cost
Financial assets at amortized cost are initially recognized at fair value and subsequently carried at amortized cost
less any provisions for credit losses.
(7)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
3. Significant accounting policies (continued)
(ii)
Impairment of financial assets
The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at
amortized cost. At each reporting date, the loss allowance for the financial asset is measured at an amount equal
to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial
recognition. If at the reporting date, the credit risk on the financial asset has not increased significantly since initial
recognition, the loss allowance is measured for the financial asset at an amount equal to twelve month expected
credit losses. For trade receivables the Company applies the simplified approach to providing for expected credit
losses, which allows the use of a lifetime expected loss provision.
Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount
of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was
recognized.
(iii) Derecognition of financial assets
Financial assets are derecognized when they mature or are sold, and substantially all the risks and rewards of
ownership have been transferred. Gains and losses on derecognition of financial assets classified as FVTPL or
amortized cost are recognized in the consolidated statement of operations. Gains or losses on financial assets
classified as FVTOCI remain within accumulated other comprehensive income (loss).
3.9 Derivative financial instruments and hedging activities
Derivatives are recognized initially at fair value on the date a derivative contract is entered into. Subsequent to
initial recognition, derivatives are remeasured at their fair value. Derivatives embedded in financial liability contracts
are recognized separately if they are not closely related to the host contract. Derivatives, including embedded
derivatives from financial liability contracts, are recorded on the statement of financial position at fair value and
the unrealized gains and losses are recognized in the consolidated statement of operations. The method of
recognising any resulting gain or loss depends on whether the derivative is designated as a hedging instrument
and, if so, the nature of the item being hedged.
Changes in the fair value of any derivative instruments that do not qualify for hedge accounting are recognized
immediately in the consolidated statement of operations.
(i) Fair value hedge
Changes in the fair values of derivatives that are designated and qualify as fair value hedges are recorded in the
consolidated statement of operations, together with any changes in the fair values of the hedged assets or liabilities
that are attributable to the hedged risk.
(ii) Cash flow hedge
The effective portions of changes in the fair values of derivatives that are designated and qualify as cash flow
hedges are recognized in equity. The gain or loss relating to any ineffective portion is recognized immediately in
the consolidated statement of operations.
Amounts accumulated in the hedge reserve are recycled in the consolidated statement of operations in the periods
when the hedged items will affect net earnings (loss) (for instance when the forecast sale that is hedged takes
place). If a forecast transaction that is hedged results in the recognition of a non-financial asset (for example,
inventory) or a liability, the gains and losses previously deferred in the hedge reserve are included in the initial
measurement of the cost of the asset or liability.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting,
any cumulative gain or loss existing in the hedge reserve at that time remains in the reserve and is recognized
when the forecast transaction is ultimately recognized in the consolidated statement of operations. When a forecast
transaction is no longer expected to occur, the cumulative gain or loss that was reported in other comprehensive
income (loss) is immediately transferred to the consolidated statement of operations.
The Company has not designated any derivative contracts as hedges and therefore has not applied hedge
accounting in these consolidated financial statements.
(8)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
3. Significant accounting policies (continued)
3.10 Inventories
Inventories are valued at the lower of cost and net realizable value. Costs incurred in bringing each product to its
present location and condition are accounted for as follows:
(i) Product inventory consists of stockpiled ore, ore on leach pads, crushed ore, in-circuit material at properties
with milling or processing operations, gold concentrate, other metal concentrate, iron ore stockpile awaiting
shipment, doré awaiting refinement and unsold bullion. Product inventory costs consist of direct production
costs including mining, crushing and processing; site administration costs; and allocated indirect costs,
including depreciation and amortization of mineral property, plant and equipment.
Inventory costs are charged to production costs on the basis of quantity of metal sold. At operations where
the ore extracted contains significant amounts of metals other than gold, primarily silver, lead and zinc, cost
is allocated between the joint products. The Company regularly evaluates and refines estimates used in
determining the costs charged to production costs and costs absorbed into inventory carrying values based
upon actual gold recoveries and operating plans.
Net realizable value is the estimated selling price, less the estimated costs of completion and selling expenses.
A write-down is recorded when the carrying value of inventory is higher than its net realizable value.
(ii) Materials and supplies inventory consists of consumables used in operations, such as fuel, chemicals,
reagents and spare parts, which are valued at the lower of average cost and net realizable value and, where
appropriate, less a provision for obsolescence. Costs include acquisition, freight and other directly attributable
costs.
3.11 Trade receivables
Trade receivables are amounts due from customers for the sale of bullion and metals in concentrate in the ordinary
course of business.
Trade receivables are recognized initially at fair value and subsequently at amortized cost using the effective
interest rate method. Trade receivables are recorded net of lifetime expected credit losses.
Settlement receivables arise from the sale of metals in concentrate where the amount receivable is finalized on
settlement date based on the underlying commodity price. Settlement receivables are classified as fair value
through profit and loss and are recorded at each reporting period at fair value based on forward metal prices.
Changes in fair value of settlements receivable are recorded in revenue.
3.12 Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held with banks and other short-term highly liquid
investments with maturities at the date of acquisition of three months or less.
3.13 Share capital
Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares
and share options are recognized as a deduction from equity, net of any tax effects. Common shares held by the
Company are classified as treasury stock and recorded as a reduction of shareholders’ equity.
3.14 Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from suppliers.
Trade payables are recognized initially at fair value and subsequently measured at amortized cost.
(9)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
3. Significant accounting policies (continued)
3.15 Debt and borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently
carried at amortized cost, calculated using the effective interest method. Any difference between the proceeds
(net of transaction costs) and the redemption value is recognized in the consolidated statement of operations
over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities and other borrowings are recognized as transaction costs of the
loan to the extent that it is probable that some or all of the facility and other borrowings will be drawn down. In
this case, the fee is deferred until the draw-down occurs at which time, these transaction costs are included in
the carrying value of the amount drawn on the facility and amortized using the effective interest rate method. To
the extent there is no evidence that it is probable that some or all of the facility and borrowings will be drawn
down, the fee is capitalized as a pre-payment for liquidity services and amortized over the period the loan facility
to which it relates is available to the Company.
3.16 Current and deferred income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognized in the consolidated
statement of operations except to the extent that it relates to items recognized either in other comprehensive
income or directly in equity, in which case it is recognized in other comprehensive income or in equity, respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Taxes on income
in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.
The tax rate used is the rate that is substantively enacted.
Deferred income tax is recognized on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. Deferred income tax is not recorded if it arises
from initial recognition of an asset or liability in a transaction other than a business combination that at the time
of the transaction affects neither accounting nor taxable profit or loss or on temporary differences relating to the
investment in subsidiaries to the extent that they will not reverse in the foreseeable future. Deferred income tax
is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of
financial position date and are expected to apply when the related deferred income tax asset is realized or the
deferred income tax liability is settled.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against
which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the related tax benefit will be realized.
3.17 Employee benefits
(i) Defined benefit plans
Certain employees have entitlements under Company pension plans which are defined benefit pension plans.
For defined benefit plans, the level of benefit provided is based on the length of service and earnings of the person
entitled.
The cost of the defined benefit plan is determined using the projected unit credit method. The related pension
liability recognized in the consolidated statement of financial position is the present value of the defined benefit
obligation at the statement of financial position date less the fair value of plan assets.
The Company obtains actuarial valuations for defined benefit plans for each statement of financial position date.
Actuarial assumptions used in the determination of defined benefit pension plan liabilities are based on best
estimates, including rate of salary escalation and expected retirement dates of employees. The discount rate is
based on high quality bond yields. The assumption used to determine the interest income on plan assets is equal
to the discount rate.
(10)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
3. Significant accounting policies (continued)
Actuarial gains and losses are recognized in full in the period in which they occur in other comprehensive income
without recycling to the consolidated statement of operations in subsequent periods. Current service cost, the
vested element of any past service cost, the interest income on plan assets and the interest arising on the pension
liability are included in the consolidated statement of operations.
Past service costs are recognized immediately to the extent the benefits are vested, and otherwise are amortized
on a straight-line basis over the average period until the benefits become vested.
(ii) Defined contribution plans
The Company’s contributions to defined contribution plans are charged to the consolidated statement of operations
in the period to which the contributions relate.
(iii) Termination benefits
Eldorado recognizes termination benefits when it is demonstrably committed to either terminating the employment
of current employees according to a detailed formal plan without possibility of withdrawal, or providing benefits
as a result of an offer made to encourage voluntary termination. Benefits falling due more than twelve months
after the end of the reporting period are discounted to their present value.
(iv) Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or
profit-sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result
of past service provided by the employee and the obligation can be estimated reliably.
3.18 Share-based payment arrangements
The Company applies the fair value method of accounting for all stock option awards, deferred share units and
equity settled restricted share units and performance share units. Under this method the Company recognizes a
compensation expense for all stock options awarded to employees, based on the fair value of the options on the
date of grant which is determined using the Black-Scholes option pricing model. For equity settled restricted share
units, compensation expense is recognized based on the quoted market value of the shares. For equity settled
performance share units with market based vesting conditions, compensation expense is recognized based on
the fair value of the share units on the date of grant which is based on the forward price of the Company's shares
and an index consisting of global gold-based securities.
The fair value of the options, restricted share units and performance share units are expensed over the vesting
period of the awards with a corresponding increase in equity. No expense is recognized for awards that do not
ultimately vest. Deferred share units are liability awards settled in cash accounted for at the quoted market price
at the grant date and the corresponding liability is marked to market at each subsequent reporting date.
3.19 Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. They are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability.
Asset retirement obligations
A provision is made for mine restoration and rehabilitation when an obligation is incurred. The provision is
recognized as a liability with a corresponding asset recognized in relation to the mine site. At each reporting date
the asset retirement obligation is remeasured in line with changes in discount rates, and timing or amount of the
costs to be incurred.
(11)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
3. Significant accounting policies (continued)
The provision recognized represents management’s best estimate of the present value of the future costs required.
Significant estimates and assumptions are made in determining the amount of asset retirement obligations. Those
estimates and assumptions deal with uncertainties such as: requirements of the relevant legal and regulatory
frameworks, the magnitude of necessary remediation activities and the timing, extent and costs of required
restoration and rehabilitation activities.
These uncertainties may result in future actual expenditure differing from the amounts currently provided. The
provision recognized is periodically reviewed and updated based on the facts and circumstances available at the
time. Changes to the estimated future costs for operating sites are recognized in the consolidated statement of
financial position by adjusting both the restoration and rehabilitation asset and provision. Such changes give rise
to a change in future depreciation and financial charges.
3.20 Revenue recognition
Revenue is generated from the sale of bullion and metals in concentrate. The Company produces doré, gold
concentrate and other metal concentrates. The Company’s performance obligations relate primarily to the delivery
of these products to customers, with each shipment representing a separate performance obligation.
Revenue from the sale of bullion and metals in concentrates is measured based on the consideration specified
in the contract with the customer. The Company recognizes revenue when it transfers control of the product to
the customer, and has a present right to payment for the product.
(i) Metals in concentrate
Control over metals in concentrates is transferred to the customer and revenue is recognized when the product
is considered to be physically delivered to the customer under the terms of the customer contract. This is typically
when the concentrate has been placed on board a vessel for shipment, or delivered to a location specified by the
customer.
Metals in concentrate are sold under pricing arrangements where final prices are determined by market prices
subsequent to the date of sale (the “quotational period”). Revenue from concentrate sales is recorded based on
the estimated amounts to be received, based on the respective metals forward price at the expected settlement
date. Adjustments are made to settlements receivable in subsequent periods based on fluctuations in the forward
prices until the date of final metal pricing. These subsequent changes in the fair value of the settlements receivable
are recorded in revenue separate from revenue from contracts with customers.
Provisional invoices for metals in concentrate sales are typically issued shortly after or on the passage of control
of the product to the customer and the Company receives 90 - 95% of the provisional invoice at that time. Additional
invoices are issued as final product weights and assays are determined over the quotational period. Provisionally
invoiced amounts are generally collected promptly.
(ii) Metals in doré
The Company sells doré directly to refiners, or, refiners may receive doré from the Company to refine the
materials on the Company’s behalf and arrange for sale of the refined metal.
In the Turkey segment, refined metals are sold at spot prices on the Precious Metal Market of the Borsa Istanbul.
Sales proceeds are collected within several days of the completion of the sale transaction. Control over the
refined gold or silver produced from doré is transferred to the customer and revenue recognized upon delivery
to the customer’s bullion account on the Precious Metal Market of the Borsa Istanbul.
In the Canada segment, doré and refined metals are sold at spot prices with sales proceeds collected within
several days of the sales transaction. Control is typically transferred to the customer and revenue recognized
upon delivery to a location specified by the customer.
3.21 Finance income and expenses
Finance income comprises interest income on funds invested (including financial assets carried at FVTPL) and
changes in the fair value of financial assets at FVTPL. Interest income is recognized as it accrues in the consolidated
statement of operations, using the effective interest method.
(12)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
3. Significant accounting policies (continued)
Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, changes
in the fair value of financial assets at fair value through profit or loss and impairment losses recognized on financial
assets. All borrowing costs are recognized in the consolidated statement of operations using the effective interest
method, except for those amounts capitalized as part of the cost of qualifying property, plant and equipment.
3.22 Earnings (loss) per share
The Company presents basic and diluted earnings per share (“EPS”) data for its common shares. Basic EPS is
calculated by dividing the earnings or loss attributable to common shareholders of the Company by the weighted
average number of common shares outstanding during the period. Diluted EPS is determined by adjusting the
earnings or loss attributable to common shareholders and the weighted average number of common shares
outstanding for the effects of all dilutive potential common shares, which comprise share options, restricted share
units and performance share units granted to employees.
4. Critical accounting estimates and judgements
The preparation of consolidated financial statements in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed at each period end. Revisions to accounting estimates are
recognized in the period in which the estimates are revised and in any future periods affected.
Significant areas requiring the use of management assumptions, estimates and judgements include the valuation
of property, plant and equipment and goodwill, estimated recoverable reserves and resources, inventory, current
and deferred taxes, asset retirement obligations, commencement of commercial production and functional
currency.
Actual results could differ from these estimates. Outlined below are some of the areas which require management
to make significant judgements, estimates and assumptions.
(i) Valuation of property, plant and equipment and goodwill
Property, plant and equipment and goodwill are tested for impairment when events or changes in circumstances
suggest that the carrying amount may not be fully recoverable. Goodwill is tested at least annually.
Calculating the recoverable amount, including estimated FVLCD of CGUs for property, plant and equipment and
goodwill, requires management to make estimates and assumptions with respect to future production levels,
operating and capital costs in the Company's life-of-mine (“LOM”) plans, long-term metal prices, foreign exchange
rates, discount rates and estimates of the fair value of the exploration potential of mineral properties ("value
beyond proven and probable").
Changes in any of the assumptions or estimates used in determining the recoverable amount could result in
additional impairment or reversal of impairment recognized.
(ii) Estimated recoverable reserves and resources
Mineral reserve and resource estimates are based on various assumptions relating to operating matters, including,
with respect to production costs, mining and processing recoveries, cut-off grades, as well as assumptions relating
to long-term commodity prices and, in some cases, exchange rates, inflation rates and capital costs. Cost estimates
are based on feasibility study estimates or operating history. Estimates are prepared by appropriately qualified
persons, but will be impacted by forecasted commodity prices, inflation rates, exchange rates, capital and
production costs and recoveries amongst other factors. Estimated recoverable reserves and resources are used
to determine the depreciation of property, plant and equipment at operating mine sites, in accounting for deferred
stripping costs, in performing impairment testing and for forecasting the timing of the payment of decommissioning
and restoration costs. Therefore, changes in the assumptions used could impact the carrying value of assets,
depreciation and impairment charges recorded in the consolidated statement of operations and the carrying value
of the asset retirement obligation.
(13)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
4. Critical accounting estimates and judgements (continued)
(iii) Inventory
The Company considers ore stacked on its leach pads and in process at its mines as work-in-process inventory
and includes them in production costs based on ounces of gold or tonnes of concentrate sold, using the following
assumptions in its estimates:
the amount of gold and other metals estimated to be in the ore stacked on the leach pads;
the amount of gold and other metals expected to be recovered from the leach pads;
the amount of gold and other metals in the processing circuits;
the amount of gold and other metals in concentrates; and
the gold and other metal prices expect to be realized when sold.
If these estimates or assumptions are inaccurate, the Company could be required to write down the value it has
recorded on its work-in-process inventories, which would reduce earnings and working capital. At December 31,
2019, the cost of inventory was below its net realizable value.
(iv) Asset retirement obligation
The asset retirement obligation provision represents management's best estimate of the present value of future
cash outflows required to settle the liability which reflect estimates of future costs, inflation, requirements of the
relevant legal and regulatory frameworks and the timing of restoration and rehabilitation activities. Estimated
future cash outflows are discounted using a risk-free rate based on U.S. Treasury bond rates. Changes to asset
retirement obligation estimates are recorded with a corresponding change to the related item of property, plant
and equipment. Adjustments to the carrying amounts of related item of property, plant and equipment can result
in a change to future depreciation expense.
(v) Current and deferred taxes
The Company calculates current and deferred tax provisions for each of the jurisdictions in which it operates.
Actual amounts of income tax expense are not final until tax returns are filed and accepted by the relevant
authorities. This occurs subsequent to the issuance of the consolidated financial statements. Therefore, earnings
in subsequent periods will be affected by the amount that estimates differ from the final tax returns.
Estimates of recoverability are required in assessing whether deferred tax assets and deferred tax liabilities are
recognized on the consolidated statement of financial position. The Company also evaluates the recoverability
of deferred tax assets based on an assessment of the ability to use the underlying future tax deductions before
they expire against future taxable income. Deferred tax liabilities arising from temporary differences on investments
in subsidiaries, joint ventures and associates are recognized unless the reversal of the temporary differences is
not expected to occur in the foreseeable future and can be controlled.
Assumptions about the generation of future taxable earnings and repatriation of retained earnings depend on
management’s estimates of future production and sales volumes, commodity prices, reserves, operating costs,
decommissioning and restoration costs, capital expenditures, dividends and other capital management
transactions.
Judgement is also required in the application of income tax legislation. These estimates and judgements are
subject to risk and uncertainty and could result in an adjustment to current and deferred tax provisions and a
corresponding increase or decrease to earnings or loss for the period.
(vi) Commencement of commercial production
Until a mining property is declared as being in the commercial production stage, all costs related to its development
are capitalized. The determination of the date on which a mine enters the commercial production stage is a matter
of judgement that impacts when capitalization of development costs ceases and recognition of revenues and
depreciation of the mining property commences and is charged to the consolidated statement of operations.
(14)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
4. Critical accounting estimates and judgements (continued)
On March 31, 2019, the Company declared commercial production at the Lamaque mine, having reached certain
milestones. Commercial production represents the point at which the group of assets were able to operate as
intended by management. Upon declaring commercial production, Lamaque recognizes all revenue and costs in
the consolidated statement of operations. Prior to March 31, 2019, costs incurred for construction, development
and commissioning of the mine, net of pre-commercial sales, were recognized within mineral property in property,
plant and equipment.
(vii) Functional currency
The functional currency for each of the Company’s subsidiaries is the currency of the primary economic
environment in which the entity operates. The Company has determined the functional currency of each entity is
the U.S. dollar. Determination of functional currency may involve certain judgements to determine the primary
economic environment and the Company reconsiders the functional currency of its entities if there is a change
in events and conditions which determined the primary economic environment.
5. Adoption of new accounting standards
The following standards and amendments to existing standards have been adopted by the Company commencing
January 1, 2019:
(i) IFRS 16 ‘Leases’
IFRS 16 introduces a single accounting model for lessees. The Company, as lessee, is required to recognize a
right-of-use asset, representing its right to use the underlying asset, and a lease liability, representing its obligation
to make lease payments. The Company was permitted to elect to not apply IFRS 16 to leases with a term of less
than 12 months, which election is made by the underlying class of assets to which the right-of-use asset relates,
or leases where the underlying asset is of low value, which election is made on an asset by asset basis. The
accounting treatment for lessors remains largely the same as under IAS 17 'Leases'.
The Company adopted this standard from January 1, 2019 using the modified retrospective approach. Accordingly,
the comparative information presented for 2018 has not been restated.
Previously, the Company determined at contract inception whether an arrangement was or contained a lease
under IFRIC 4, ‘Determining Whether an Arrangement contains a Lease’. On adoption of IFRS 16, the Company
now assesses whether a contract is or contains a lease based on whether the contract conveys a right to control
the use of an identified asset for a period of time in exchange for consideration. On transition to IFRS 16, the
Company elected to apply the practical expedient permitted by the standard to grandfather the assessment of
which transactions are leases. IFRS 16 was applied only to contracts that were previously identified as leases.
Contracts that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed using the definition
of a lease under IFRS 16. Therefore, the definition of a lease under IFRS 16 has been applied only to contracts
entered into or changed on or after January 1, 2019.
The Company leases various assets including equipment, offices and properties that had previously been classified
as operating leases under IAS 17. On adoption of IFRS 16, liabilities for these leases were measured at the
present value of the remaining lease payments, discounted using the Company’s incremental borrowing rate as
of January 1, 2019. The weighted average incremental borrowing rate applied to the lease liabilities on January
1, 2019 was 13.1%. The Company elected to measure the right-of-use assets for these leases at amounts equal
to the lease liability, adjusted by the amount of any prepaid or accrued lease payments recognized in the statement
of financial position on December 31, 2018.
On initial adoption, the Company used the following practical expedients as permitted by the standard when
applying IFRS 16 to leases previously classified as operating leases under IAS 17.
Applied the exemption not to recognize right-of-use assets and liabilities for leases with low value.
Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months
of lease term remaining.
(15)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
5. Adoption of new accounting standards (continued)
Applied a single discount rate to a portfolio of leases with reasonably similar characteristics (such as leases
in a similar economic environment including the countries in which the right-of-use asset is located).
Excluded initial direct costs from measuring the right-of-use asset at the date of initial application.
Used hindsight, such as in determining the lease term if the contract contains options to extend or terminate
the lease.
The Company also leases various equipment that had previously been classified as finance leases under IAS
17. For these finance leases, the carrying amount of the right-of-use asset and the lease liability at January 1,
2019 were determined at the carrying amount of the lease asset and lease liability under IAS 17 immediately
before that date.
The impact on transition is summarized below.
December 31, 2018
IFRS 16 Adjustment
January 1, 2019
Lease assets presented in property,
plant and equipment
$
Lease liabilities – current
Lease liabilities – non-current
Accounts receivable and other
11,345
$
2,978
6,538
80,987
$
9,379
2,658
6,168
(553)
20,724
5,636
12,706
80,434
On adoption of IFRS 16, the Company excluded certain arrangements which management concluded were not
within the scope of IFRS 16 because they are arrangements for the use of land that grant the Company the right
to explore, develop, produce or otherwise use the mineral resource contained in that land. A reconciliation of lease
commitments previously reported and the amount of the lease liability recognized is as follows:
Operating lease commitments at December 31, 2018
Exclusion of arrangements to explore for or use minerals
Leases with low value at January 1, 2019
Leases with less than 12 months of remaining lease term at January 1, 2019
Arrangements reassessed as leases
Effect of discounting using the incremental borrowing rate at January 1, 2019
Lease liabilities recognized as IFRS 16 adjustment at January 1, 2019
January 1, 2019
64,690
(53,186)
(1,677)
(866)
3,120
(3,255)
8,826
$
$
(ii) IFRIC 23 'Uncertainty over Income Tax Treatments'
This interpretation sets out how to determine the accounting tax position when there is uncertainty over income
tax treatments. At January 1, 2019, the Company adopted this standard and there was no material impact on
its consolidated financial statements.
(iii) New IFRS Pronouncements
Below are new standards, amendments to standards and interpretations that have been issued and are not yet
effective. The Company plans to apply the new standards or interpretations in the annual period for which they
are effective.
(16)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
5. Adoption of new accounting standards (continued)
Interest Rate Benchmark Reform
In September 2019, IASB has issued first phase amendments IFRS 9 Financial Instruments, IAS 39 Financial
Instruments: Recognition and Hedging and IFRS 7 Financial Instrument Disclosures to address the financial
reporting impact of the reform on interest rate benchmarks, such as interbank offered rates (IBOR). The first
phase amendments is effective beginning January 1, 2020 and is focused on the impact to hedge accounting
requirements. The Company does not expect a material impact on its consolidation financial statements from
phase one of the amendments. The Company will continue to assess the effect of the second phase amendments
related to the interest rate benchmark reform on its financial statements.
Conceptual Framework for Financial Reporting
In March 2018, the IASB revised the Conceptual Framework for financial reporting and is effective January 1,
2020. The Conceptual Framework sets out fundamental concepts for financial reporting and guides companies
in developing accounting policies when no IFRS standard exists. The Conceptual Framework sets out the objective
of general purpose financial reporting; the qualitative characteristics of useful financial information; a description
of the reporting entity; definitions of an asset, a liability, equity, income and expenses and guidance on recognition
and de-recognition criteria; measurement bases and guidance on when to use them; concepts and guidance on
presentation and disclosure; and concepts relating to capital and capital maintenance. The Company is assessing
the impact of the revised Conceptual Framework on its financial statements.
6. Cash and cash equivalents
Cash
Short-term bank deposits
7. Restricted cash
Current:
Restricted cash deposits - Greece
Non-current:
Restricted cash related to Letter of Guarantee - Greece
Environmental guarantee deposits and other
December 31, 2019
December 31, 2018
$
$
173,801
3,941
177,742
$
$
200,644
85,668
286,312
December 31, 2019
December 31, 2018
$
$
$
$
20
20
$
$
— $
3,080
3,080
$
296
296
10,670
2,779
13,449
Non-financial letters of credit to secure obligations in connection with the Company's operations as required by
the Ministry of Environment and Energy and Climate Change ("MEECC") in Greece reduce the amount available
under the senior secured revolving credit facility by corresponding amounts. Concurrent with the establishment
of the senior secured credit facility in 2019, $10.7 million of restricted cash was released, which was previously
held to secure these letters of credit.
(17)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
8. Accounts receivable and other
Trade receivables
Value added tax and other taxes recoverable
Other receivables and advances
Prepaid expenses and deposits
9. Inventories
Ore stockpiles
In-process inventory and finished goods
Materials and supplies
December 31, 2019
December 31, 2018
$
$
35,107
17,658
10,736
11,789
75,290
$
$
22,072
34,791
8,378
15,746
80,987
December 31, 2019
December 31, 2018
$
$
3,859
$
81,282
78,093
163,234
$
1,620
59,974
76,291
137,885
The cost of materials and supplies consumed during the year and included in production costs amounted to
$321,138 (2018 – $259,813).
Charges of $632 and $1,894 were recognized in production costs and depreciation, respectively, during the year
ended December 31, 2019 to reduce the cost of gold, lead and zinc concentrate inventory at Olympias and Stratoni
to net realizable value (December 31, 2018 - $1,465 recognized in production costs).
10. Other assets
Long-term value added tax and other taxes recoverable
Prepaid forestry fees
Prepaid loan costs (note 16(b))
Other assets
December 31, 2019
December 31, 2018
$
$
13,749
$
3,222
2,865
3,107
22,943
$
6,668
3,175
749
—
10,592
(18)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
11. Non-controlling interests
The following table summarizes the information relating to each of the Company’s subsidiaries that has material
non-controlling interests (“NCI”). The amounts disclosed for each subsidiary are based on those included in the
consolidated financial statements before inter-company eliminations.
December 31, 2019
NCI percentage
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Carrying amount of NCI
Cash flows (used in) generated from operating activities
Cash flows used in investing activities
Cash flows generated from (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Revenue
Net loss and comprehensive loss
Net loss allocated to NCI
Dividends paid to NCI
December 31, 2018
NCI percentage
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Carrying amount of NCI
Cash flows used in operating activities
Cash flows used in investing activities
Cash flows generated from financing activities
Net increase (decrease) in cash and cash equivalents
Revenue
Net loss and comprehensive loss
Net loss allocated to NCI
Dividends paid to NCI
$
$
$
$
$
$
$
$
$
$
$
$
Hellas
5%
67,902
1,858,544
(1,050,952)
(405,318)
470,176
13,362
(215)
(45,216)
50,026
4,595
140,156
(107,758)
(5,388)
—
Hellas
5%
78,308
1,846,952
(191,936)
(1,181,693)
551,631
17,619
(66,135)
(80,306)
133,520
(12,921)
110,488
(298,272)
(14,913)
—
$
$
$
$
$
$
$
$
$
$
$
$
Deva
19.5%
1,867
415,149
(312)
(294,493)
122,211
42,903
(4,856)
(15)
4,803
(68)
—
(6,494)
(1,266)
—
Deva
19.5%
2,177
414,330
(536)
(289,134)
126,837
44,169
(16,695)
(419)
15,218
(1,896)
—
(14,100)
(2,750)
—
Net loss allocated to NCI in the consolidated statement of operations includes $247 related to non-material
subsidiaries (2018 – $84). The carrying value of the NCI related to non-material subsidiaries is $3,039 (2018 –
$1,626).
(19)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
12. Property, plant and equipment
Land and
buildings
Plant and
equipment
Capital
works in
progress
Mineral
properties
Capitalized
Evaluation
Total
Cost
Balance at January 1, 2018
Additions/transfers
Proceeds on pre-commercial
production sales, net
Commercial production transfers (1)
Other movements/transfers
Disposals
Balance at December 31, 2018
Additions/transfers
IFRS 16 transition adjustment
Proceeds on pre-commercial
production sales, net
Commercial production transfers (2)
(Impairment) reversal (note 32)
Write-down of assets
Other movements/transfers
Transfer to assets held for sale
Disposals
Balance at December 31, 2019
Accumulated depreciation
Balance at January 1, 2018
Depreciation for the year
Commercial production transfers (1)
Other movements
Impairment
Disposals
Balance at December 31, 2018
Depreciation for the year
Impairment reversal
Other movements
Disposals
Balance at December 31, 2019
$
$
$
185,923 $ 1,531,640 $
56,821 $ 4,485,599 $
6,203
119,712
1,646
193,550
—
387
(240)
(29)
(2,906)
458,976
13,011
(8,400)
—
53,858
1,769
—
(3,566)
(506,206)
(200)
(20)
192,244 $ 2,112,033 $ 114,094 $ 4,169,157 $
87,031 $ 6,347,014
327,313
6,202
—
—
226
—
(6,472)
7,015
14,566
(8,449)
93,459 $ 6,680,987
17,379 $
7,555
85,929 $
1,734
19,735 $
90
68,794 $
—
3,393 $
—
195,230
9,379
—
27,070
—
—
(1,715)
—
(22)
—
92,791
11,690
(1,979)
33,335
(11,690)
(4,455)
—
—
(15,268)
—
(30,103)
—
(737)
(12,159)
(119,861)
—
—
(505)
—
(2,421)
$
242,511 $ 2,319,388 $
87,811 $ 4,103,005 $
—
—
—
(16)
(129)
—
—
(12,159)
—
(3,578)
(1,995)
883
(11,690)
(7,635)
96,707 $ 6,849,422
$
$
$
(43,426) $
(3,125)
—
(1,060)
(363)
—
(786,050) $
(88,649)
(13,288)
(15,485)
(105,932)
641
(4,733) $ (1,285,408) $
—
—
—
—
—
(3,774)
—
(346)
(341,513)
—
(47,974) $ (1,008,763) $
(4,733) $ (1,631,041) $
(10,605) $
—
(206)
7
(107,654) $
90,825
(1,049)
2,058
— $
—
—
—
(51,965) $
9,667
213
—
$
(58,778) $ (1,024,583) $
(4,733) $ (1,673,126) $
— $ (2,119,617)
(95,548)
—
(13,288)
—
(16,891)
—
(447,808)
—
—
641
— $ (2,692,511)
— $ (170,224)
100,492
—
(1,042)
—
—
2,065
— $ (2,761,220)
Carrying amounts
At January 1, 2018
At December 31, 2018
Balance at December 31, 2019
$
$
745,590 $
142,497 $
144,270
183,733 $ 1,294,805 $
1,103,270
52,088 $ 3,200,191 $
109,361
2,538,116
83,078 $ 2,429,879 $
87,031 $ 4,227,397
93,459
3,988,476
96,707 $ 4,088,202
(1) Effective January 1, 2018, $506,206 of costs were transferred at Olympias from mineral properties and leases to relevant categories
of property, plant and equipment upon commencement of commercial operations.
(2) Effective March 31, 2019, $119,861 of costs were transferred at Lamaque from mineral properties and leases to relevant categories
of property, plant and equipment upon commencement of commercial operations.
(20)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
12. Property, plant and equipment (continued)
The amount of capitalized interest during the year ended December 31, 2019 included in property, plant and
equipment was $3,848 (2018 – $36,750).
In accordance with the Company’s accounting policies each CGU is assessed for indicators of impairment, from
both external and internal sources, at the end of each reporting period. If such indicators of impairment exist for
any CGUs, those CGUs are tested for impairment. The recoverable amounts of the Company’s CGUs are based
primarily on the net present value of future cash flows expected to be derived from the CGUs. The recoverable
amount used by the Company represents each CGU’s FVLCD, a Level 3 fair value measurement, as it was
determined to be higher than value in use.
Determining the estimated fair values of each CGU requires management to use judgement in determining
estimates and assumptions with respect to discount rates, exchange rates, future production levels including
amount of recoverable reserves, resources and exploration potential, recovery rates and concentrate grades,
mining methods, operating and capital costs, long-term metal prices and income taxes. Metal pricing assumptions
were based on long-term consensus forecast pricing, and the discount rates were based on the Company’s
internal weighted average cost of capital, adjusted for country risk. Changes in any of the assumptions or estimates
used in determining the fair values could impact the impairment analysis.
(i) Kisladag
During the quarter ended September 30, 2018, the Company completed a feasibility study for a new mill at
Kisladag which showed a transition in the mine plan, shortening the estimated useful life of the leach pad to
2020. Kisladag updated their production plan for the leach pad with additional drill data and as a result, the
Company assessed the recoverable amounts of leach pad costs and related plant and equipment for the Kisladag
leach pad assets as at September 30, 2018 using a value-in-use approach. As at September 30, 2018, the
Company recorded an impairment charge to Kisladag leach pad costs and related plant and equipment of
$117,570 ($94,056, net of deferred tax). Management determined that no further impairment or indicators of
reversal of impairment were identified for the Kisladag CGU as at December 31, 2018.
During the quarter ended December 31, 2019, the Company completed testwork assessing metallurgical
recoveries of deeper material from the pit over an extended leach cycle. A new production plan has been
developed which utilizes the leach pad for the life of the Kisladag mine and no longer requires the construction
of a mill. As a result, the Company recorded an impairment reversal to the Kisladag leach pad costs and related
plant and equipment of $100,492 ($80,143, net of deferred tax) as at December 31, 2019. The resulting carrying
value of the Kisladag leach pad costs and related plant and equipment represents the carrying value of these
assets, net of depreciation, that would have been determined had the September 30, 2018 impairment not been
recognized. There was an additional impairment recorded of $15,269 ($11,910, net of deferred tax) to write-off
capitalized costs relating to the mill construction project.
As a result of the updated production plan and the decision to not advance with construction of a mill, the Company
assessed the recoverable amounts of the Kisladag CGU as at December 31, 2019 using a FVLCD approach.
The estimated recoverable amount of the Kisladag CGU exceeded its carrying amount as at December 31, 2019.
The key assumptions used for assessing the recoverable amount are reflected in the table below. Management
used judgement in determining estimates and assumptions with respect to discount rates, exchange rates, future
production levels including amount of recoverable reserves, resources and exploration potential, recovery rates
and grades, mining methods, operating and capital costs, long-term metal prices and income taxes. Metal pricing
assumptions were based on long-term consensus forecast pricing, and the discount rates were based on the
Company's internal weighted average cost of capital, adjusted for country risk.
(21)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
12. Property, plant and equipment (continued)
Gold price ($/oz)
Silver price ($/oz)
Discount rate
Average factor to convert contained mineral resource ounces outside of
reserves to ounces used in value beyond proven and probable calculations
Fair value per contained ounce of resources and exploration potential
beyond proven and probable reserves
2019
$1,400
$18
5.0%
69%
$110
2018
$1,250
$17
6.5%
32%
$50
(ii) Olympias
As at December 31, 2018, Management determined that continued jurisdictional risk with obtaining permits in
Greece and the softening global market for the sale of concentrate indicated a potential impairment for Olympias.
Using a FVLCD approach, the Company assessed the recoverable amount of the Olympias CGU as at December
31, 2018 and recorded an impairment charge to the Olympias CGU of $330,238 ($247,679, net of deferred tax).
As at December 31, 2019, Management determined that weaker-than-expected production at Olympias during
2019 and rising market rates for concentrate treatment charges indicated a potential impairment for Olympias.
Using a FVLCD approach, the Company assessed the recoverable amount of the Olympias CGU at December 31,
2019. The estimated recoverable amount of the Olympias CGU exceeded its carrying amount as at December
31, 2019.
The key assumptions used for assessing the recoverable amount are reflected in the table below. Management
used judgement in determining estimates and assumptions with respect to discount rates, exchange rates, future
production levels including amount of recoverable reserves, resources and exploration potential, recovery rates
and concentrate grades, mining methods, operating and capital costs, long-term metal prices and income taxes.
Metal pricing assumptions were based on long-term consensus forecast pricing, and the discount rates were
based on the Company's internal weighted average cost of capital, adjusted for country risk.
Gold price ($/oz)
Silver price ($/oz)
Lead price ($/t)
Zinc price ($/t)
Discount rate
Average factor to convert contained mineral resource ounces outside of
reserves to ounces used in value beyond proven and probable calculations
Fair value per contained ounce of resources and exploration potential
beyond proven and probable reserves
2019
2018
$1,400
$1,275 - 1,300
$18
$2,100
$2,400
6.0%
27%
$130
$17 - 18
$2,200 - 2,300
$2,800 - 2,900
7.0%
27%
$100
The Olympias CGU remains sensitive to price changes of both gold and base metals. For the Olympias CGU,
variables that would lead to an impairment include:
• A decrease in gold price of $100/oz.
• An increase in the discount rate of 1%
• An increase in operating costs of 10% or capital costs of 20%
Given the sensitivity of the estimated recoverable amount to a range of input factors and lack of indicators of
reversal, no previous impairment charges recorded for the Olympias CGU have been reversed as at
December 31, 2019.
(22)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
13. Goodwill
As a result of the purchase price allocation for the Integra acquisition, the Company recognized goodwill of $92,591
in 2017. As of December 31, 2019 all goodwill relates to Integra's Lamaque CGU.
Impairment tests for goodwill
Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may not be
recoverable. Impairment is determined for goodwill by assessing the recoverable amount of each CGU or group
of CGUs to which the goodwill relates. Where the recoverable amount of the CGU is less than its carrying amount
including goodwill, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed
in future periods.
The key assumptions used for assessing the recoverable amount of goodwill in the Lamaque CGU are reflected
in the table below. Management used judgement in determining estimates and assumptions with respect to
discount rates, exchange rates, future production levels including amount of recoverable reserves, resources and
exploration potential, recovery rates and ore grades, mining methods, operating and capital costs, long-term metal
prices and income taxes. Metal pricing assumptions were based on long-term consensus forecast pricing, and
the discount rates were based on the Company's internal weighted average cost of capital, adjusted for country
risk. Changes in any of the assumptions or estimates used in determining the fair values could impact the
recoverable amount of goodwill analysis.
Gold price ($/oz)
Discount rate
Average factor to convert contained mineral resource ounces outside of
reserves to ounces used in value beyond proven and probable
calculations
Fair value per contained ounce of resources and exploration potential
beyond proven and probable reserves
2019
2018
$1,400
$1,275-1,300
5%
30%
$200
5%
21%
$140
The estimated recoverable amount of the Lamaque CGU including goodwill exceeded its carrying amount as at
December 31, 2019 by approximately $25 million. Impairment would result from a decrease in the gold price of
$100 per ounce, or an increase in either operating or capital expenditures by 10%.
(23)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
14. Leases and right-of-use assets
As a lessee, the Company leases various assets including mobile mine equipment, office and properties. These
right-of-use assets are presented as property, plant and equipment.
Cost
Balance at December 31, 2018
Initial adoption of IFRS 16
Additions
Disposals
Balance at December 31, 2019
Accumulated Depreciation
Balance at December 31, 2018
Depreciation for the year
Disposals
Balance at December 31, 2019
$
$
$
$
Right-of-use assets, net carrying amount $
Right-of-use
Land and
buildings
Right-of-use
Plant and
equipment and
Capital works in
progress
— $
7,555
552
—
8,107
$
11,345
1,824
13,463
(232)
26,400
$
$
— $
— $
(1,184)
—
(1,184)
6,923
$
$
(4,705)
151
(4,554)
21,846
$
$
Total
11,345
9,379
14,015
(232)
34,507
—
(5,889)
151
(5,738)
28,769
Interest expense on lease liabilities is disclosed in Note 19(b) and the cash payments for principal portion of
lease liabilities is presented on the Consolidated Statement of Cash Flow.
15. Accounts payable and accrued liabilities
Trade payables
Taxes payable
Accrued expenses
December 31, 2019
December 31, 2018
$
$
67,107
13,205
58,792
139,104
$
$
38,969
201
98,730
137,900
(24)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
16. Debt
December 31, 2019
December 31, 2018
Senior secured notes due 2024, net of unamortized discount
and transaction costs of $13,806 (Note 16 (a))
$
Term loan, net of unamortized transaction costs of $2,239
(Note 16 (b))
Redemption option derivative asset (Note 16 (a))
Senior notes due 2020, net of unamortized discount and
transaction costs of $4,023 (Note 16(c))
Total debt
Less: Current portion
Long-term portion
$
$
287,568
$
197,761
(5,597)
—
479,732
66,667
413,065
$
$
—
—
—
595,977
595,977
—
595,977
Reconciliation of debt arising from financing activities:
Debt balance at January 1, 2019
Financing cash flows related to debt:
Repayment of Senior notes due 2020
Proceeds from Senior secured notes due 2024, net of
discount
Proceeds from term loan
Loan financing costs
Total financing cash flows related to debt
Non-cash changes recorded in debt:
Amortization of deferred costs for Senior notes due 2020,
and deferred costs expensed upon note redemption
Amortization of financing fees and discount relating to
Senior notes due 2024 and Term loan
Change in fair value of redemption option derivative asset
relating to Senior secured notes due 2024
Prepaid credit facility financing costs
Debt balance at December 31, 2019
Senior notes due
2024 and term loan
$
— $
Senior notes
due 2020
595,977
—
(600,000)
294,000
200,000
(15,583)
478,417
$
478,417
$
—
2,206
(4,224)
3,333
$
479,732
$
—
—
—
(600,000)
(4,023)
4,023
—
—
—
—
(a) Senior Secured Second Lien Notes due 2024
On June 5, 2019, the Company completed an offering of $300 million senior secured second lien notes (the "senior
secured notes”) at 98% of par value, with a coupon rate of 9.5% due June 1, 2024. The senior secured notes pay
interest semi-annually on June 1 and December 1, beginning December 1, 2019. The Company received $287.1
million from the offering, which is net of the original issue discount of $6,000, commission payment and certain
transaction costs paid to or on behalf of the lenders totaling $6,903. The debt is also presented net of transaction
costs of $2,681 incurred directly by the Company in conjunction with the offering. The original discount, commission
payment and transaction costs will be amortized over the term of the senior secured notes and included as finance
costs. Net proceeds from the senior secured notes were used to redeem in part the Company’s outstanding $600
million 6.125% senior notes due December 15, 2020.
(25)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
16. Debt (continued)
The senior secured notes are secured on a second lien basis by a general security agreement from the Company
by the Company’s real property in Canada and shares of SG Resources B.V., Tüprag Metal, Eldorado Gold
(Greece) BV, Integra Gold Corp. and Integra Gold (Québec) Inc., all wholly owned subsidiaries of the Company.
The senior secured notes are redeemable by the Company in whole or in part, for cash:
i)
At any time prior to December 1, 2021 at a redemption price equal to the sum of 100% of the aggregate
principal amount of the senior secured notes, plus accrued and unpaid interest, and plus a premium
equal to (a) the greater of 1% of the principal amount of the senior secured notes to be redeemed and
(b) the difference between (i) the outstanding principal amount of the senior secured notes to be redeemed
and (ii) the present value of the redemption price of the senior secured notes on December 1, 2021 plus
the remaining interest to December 1, 2021 discounted at the treasury yield plus 50 basis points.
ii) At any time prior to December 1, 2021 up to 35% of the original principal amount of the senior secured
notes with the net cash proceeds of one or more equity offerings at a redemption price equal to 109.5%
of the aggregate principal amount of the senior secured notes redeemed, plus accrued and unpaid
interest.
iii) On and after the dates provided below, at the redemption prices, expressed as a percentage of the
principal amount of the notes to be redeemed, set forth below, plus accrued and unpaid interest on the
senior secured notes:
December 1, 2021
107.125%
December 1, 2022 and thereafter
100.000%
The redemption features described above constitute an embedded derivative which was separately recognized
at its fair value of $1,373 on initial recognition of the senior secured notes and recorded in other assets. The
embedded derivative is classified as fair value through profit and loss. The change in fair value as at December
31, 2019 is $4,224.
The senior secured notes contain covenants that restrict, among other things, the ability of the Company to incur
certain capital expenditures, distributions in certain circumstances and sales of material assets, in each case,
subject to certain conditions. The Company is in compliance with these covenants at December 31, 2019.
The fair market value of the senior secured notes as at December 31, 2019 is $324 million.
(b) Senior Secured Credit Facility
In November 2012, the Company entered into a $375 million revolving credit facility with a syndicate of banks.
The credit facility was amended and restated in June 2016 (the "amended and restated credit agreement” or
“ARCA”) and reduced to an available credit of $250 million with the option to increase by an additional $100 million
through an accordion feature.
In May 2019, the Company executed a $450 million amended and restated senior secured credit facility (“the
third amended and restated credit agreement” or “TARCA”), replacing the ARCA. The TARCA consists of the
following:
i) A $200 million non-revolving term loan ("Term loan") with six equal semi-annual payments commencing
June 30, 2020. The term loan was used to redeem in part the Company’s outstanding $600 million
6.125% senior notes due December 2020.
ii) A $250 million revolving credit facility with a maturity date of June 5, 2023.
As at December 31, 2019, the Company has outstanding EUR 57.6 million and CAD $0.4 million ($64.5 million)
in non-financial letters of credit. The non-financial letters of credit were issued to secure certain obligations in
connection with the Company's operations and reduce availability under the revolving credit facility by
corresponding amounts. Concurrent to the establishment of the facility, $10.7 million of restricted cash was
released that had previously been held to secure letters of credit.
(26)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
16. Debt (continued)
The TARCA contains covenants that restrict, among other things, the ability of the Company to incur additional
unsecured indebtedness except in compliance with certain conditions, incur certain lease obligations, make
distributions in certain circumstances, sell material assets or carry on a business other than one related to mining.
Significant financial covenants include a minimum Earnings before Interest, Taxes, Depreciation and Amortization
(“EBITDA”) to interest ratio and a maximum debt net of unrestricted cash ("net debt") to EBITDA ratio ("net
leverage ratio"). The Company is in compliance with its covenants at December 31, 2019.
Both the term loan and revolving credit facility bear interest at LIBOR plus a margin of 2.25% – 3.25%, dependent
on a net leverage ratio pricing grid. The Company’s current interest charges and fees are as follows: LIBOR plus
margin of 2.75% on the term loan and any amounts drawn from the revolving credit facility; two thirds the applicable
margin (1.8333%) on non-financial letters of credit secured by the revolving credit facility and 0.6875% standby
fees on the available and undrawn portion of the revolving credit facility.
The TARCA is secured on a first lien basis by a general security agreement from the Company, the Company's
real property in Canada and shares of SG Resources B.V., Tüprag Metal, Eldorado Gold (Greece) BV, Integra
Gold Corp. and Integra Gold (Québec) Inc., all wholly owned subsidiaries of the Company.
The term loan is presented net of transaction costs of $2,666 incurred in conjunction with the amendment. The
transaction costs will be amortized over the term of the term loan and included in finance costs.
Fees of $3,333 relating to the undrawn revolving credit facility have been recorded in other assets and will be
amortized over the term of the TARCA. As at December 31, 2019, the prepaid loan cost was $2,865 (December 31,
2018 – $749).
Unamortized deferred financing costs of $524 relating to the ARCA were expensed as interest and financing costs
on the amendment date (note 19(b)).
No amounts were drawn down under the revolving credit facility in 2019 and as at December 31, 2019, the balance
is nil.
(c) Senior Notes
On December 10, 2012, the Company completed an offering of $600 million senior notes (“the 2012 notes”) at
par value, with a coupon rate of 6.125% due December 15, 2020. The 2012 notes paid interest semi-annually on
June 15 and December 15.
The 2012 notes were redeemed in whole for cash by the Company on June 12, 2019 using proceeds from the
senior secured notes and the TARCA term loan, together with cash on hand. $18,069 of accrued interest was
also paid upon redemption. $3,035 of unamortized deferred financing costs relating to the 2012 notes were
expensed as interest and financing costs upon redemption (note 19(b)).
(27)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
17. Asset retirement obligations
At January 1, 2019
Accretion during the year
Revisions to estimate
Settlements
Reclassified to liabilities associated
with assets held for sale
At December 31, 2019
Less: Current portion
Long term portion
Estimated undiscounted amount
At January 1, 2018
Accretion during the year
Revisions to estimate
Settlements
At December 31, 2018
Less: Current portion
Long term portion
Estimated undiscounted amount
$
$
$
$
$
$
Turkey
Canada
Greece
Romania
Brazil
Total
36,479 $
981
2,330
(594)
—
39,196
—
39,196 $
12,215 $
316
107
—
—
12,638
—
12,638 $
40,069 $
1,090
3,704
(2,213)
—
42,650
(1,782)
40,868 $
1,364 $
39
130
—
—
1,533
—
1,533 $
4,016 $
106
—
—
(4,122)
—
—
— $
94,143
2,532
6,271
(2,807)
(4,122)
96,017
(1,782)
94,235
48,064 $
14,998 $
56,467 $
2,287 $
4,416 $ 126,232
Turkey
Canada
Greece
Romania
Brazil
Total
37,321 $
896
(1,117)
(621)
36,479
—
36,479 $
9,453 $
—
2,762
—
12,215
—
12,215 $
47,461 $
1,035
(3,512)
(4,915)
40,069
(824)
39,245 $
1,405 $
36
(77)
—
1,364
—
1,364 $
4,044 $
71
(99)
—
4,016
—
4,016 $
99,684
2,038
(2,043)
(5,536)
94,143
(824)
93,319
48,454 $
14,989 $
65,274 $
2,335 $
4,121 $ 135,173
The Company’s asset retirement obligations relate to the restoration and rehabilitation of the Company’s mining
operations and projects under development. The expected timing of cash flows in respect of the provision is based
on the estimated life of the various mining operations. The increase in the estimate of the obligation in 2019 was
mainly due to an update of estimated closure costs at Stratoni, together with lower discount rates.
The provision is calculated as the present value of estimated future net cash outflows based on the following key
assumptions:
At December 31, 2019
Inflation rate
Discount rate
At December 31, 2018
Inflation rate
Discount rate
Turkey
%
Canada
%
Greece
%
Romania
%
1.8
1.9
1.8
1.9
1.7 to 1.9
1.7 to 2.3
1.9
2.3
Brazil
%
1.6
1.6
2.2 to 2.3
2.7
2.2 to 2.3
2.7
2.2 to 2.3
2.5 to 2.9
2.2 to 2.3
2.9
2.2 to 2.3
2.6
(28)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
17. Asset retirement obligations (continued)
The discount rate is a risk-free rate based on U.S. Treasury bond rates with maturities commensurate with site
mine lives. U.S. Treasury bond rates have been used for all of the mine sites as the liabilities are denominated
in U.S. dollars and the majority of the expenditures are expected to be incurred in U.S. dollars. Similarly, the
inflation rates used in determining the present value of the future net cash outflows are based on U.S inflation
rates.
In relation to the asset retirement obligations in Greece, the Company has the following:
a) A €50.0 million Letter of Guarantee to the MEECC as security for the due and proper performance of rehabilitation
works committed in relation to the mining and metallurgical facilities of the Kassandra Mines (Olympias, Stratoni
and Skouries) and the removal, cleaning and rehabilitation of the old Olympias tailings. This Letter of Guarantee
is renewed annually, expires on July 26, 2026 and has an annual fee of 222 basis points.
b) A €7.5 million Letter of Guarantee to the MEECC for the due and proper performance of the Kokkinolakkas
Tailings Management Facility, committed in connection with the Environmental Impact Assessment approved for
the Kassandra Mines (Olympias, Stratoni and Skouries). The Letter of Guarantee is renewed annually and expires
on July 26, 2026. The Letter of Guarantee has an annual fee of 222 basis points.
18. Employee benefit plans
Employee benefit plan expense:
Employee Benefit Plan
Supplemental Pension Plan
Actuarial losses recognized in the statement of other
comprehensive income (loss) in the period, before tax
Cumulative actuarial losses recognized in the statement of
other comprehensive income (loss), before tax
December 31, 2019
December 31, 2018
$
$
$
$
2,778
(61)
2,717
$
$
3,463
92
3,555
(6,361)
$
(1,197)
(26,199)
$
(19,838)
Defined benefit plans
The Company operates defined benefit pension plans in Canada including a registered pension plan (“the Pension
Plan”) and a Supplemental Pension Plan (“the SERP”). During 2012, the SERP was converted into a Retirement
Compensation Arrangement (“RCA”), a trust account. As it is a trust account, the assets in the account are
protected from the Company’s creditors. The RCA requires the Company to remit 50% of any contributions and
any realized investment gains to the Receiver General of Canada as refundable tax.
These plans, which are only available to certain qualifying employees, provide benefits based on an employee’s
years of service and final average earnings at retirement. Annual contributions related to these plans are actuarially
determined and are made at or in excess of minimum requirements prescribed by legislation.
Eldorado’s plans have actuarial valuations performed for funding purposes. The last actuarial valuations for funding
purposes performed for the Pension Plan and the SERP are as of January 1, 2017. The measurement date to
determine the pension obligation and assets for accounting purposes was December 31, 2019.
The SERP is designed to provide supplementary pension benefits to qualifying employees affected by the
maximum pension limits under the Income Tax Act pursuant to the registered Pension Plan. Further, the Company
is not required to pre-fund any benefit obligation under the SERP.
(29)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
18. Employee benefit plans (continued)
No contributions were made to the Pension Plan and the SERP during 2019 (2018 – $nil). Cash payments totalling
$26,771 were made directly to beneficiaries during the year (2018 – $4,182) from pension plan assets. For the
year 2020, no contributions are expected to be made to the Pension Plan and the SERP.
On December 13, 2019, the Company resolved to wind-up the Pension Plan and the SERP.
The wind-up of the Pension Plan is expected to be completed during 2020 and is subject to approval by the
Canada Revenue Agency. Any gain or loss on settlement will be recognized in 2020.
The SERP’s defined benefit obligation has been measured as at December 31, 2019 based on the face value of
the actual residual lump sum payments expected to be paid to members in 2020. The plan settlement has been
measured based on market conditions as at November 30, 2019.
Subsidiaries employee benefit plans
According to the Greek and Turkish labour laws, employees are entitled to compensation in case of dismissal or
retirement, the amount of which varies depending on salary, years of service and the manner of termination
(dismissal or retirement). Employees who resign or are dismissed with cause are not entitled to compensation.
The Company considers this a defined benefit obligation. Amounts relating to these employee benefit plans have
been included in the tables in this note under “Employee Benefit Plan” when applicable.
Defined Contribution Plans
The Company operates a defined contribution plan which is only available to certain qualifying employees. The
amount of defined contribution pension plan expense for the year ended December 31, 2019 is $404 (2018 –
$193). The amount of contributions to the defined contribution plan for the year ended December 31, 2019 is
$718 (2018- $nil).
The amounts recognized in the consolidated statement of financial position for all pension plans are determined
as follows:
December 31, 2019
December 31, 2018
Employee
benefit
plans
SERP
Total
Employee
benefit
plans
SERP
Total
Present value of obligations
$
(20,182) $ (18,366) $ (38,548)
$
(16,239) $ (37,075) $ (53,314)
Fair value of plan assets
1,958
24,610
26,568
1,864
46,195
48,059
Asset (liability) on statement of
financial position
$
(18,224) $
6,244 $ (11,980)
$
(14,375) $
9,120 $
(5,255)
(30)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
18. Employee benefit plans (continued)
The movement in the present value of the employee benefit obligations over the years is as follows:
2019
2018
Employee
benefit
plans
SERP
Total
Employee
benefit
plans
SERP
Total
Balance at January 1,
$
(16,239) $ (37,075) $ (53,314)
$
(16,028) $ (43,956) $ (59,984)
Current service cost
Past service cost
Interest cost
Actuarial gain (loss)
Assets distributed on settlement
Benefit payments
Exchange gain (loss)
(2,181)
—
(669)
(3,097)
(172)
(97)
(1,447)
(4,781)
(2,353)
(97)
(2,116)
(7,878)
—
24,430
24,430
1,576
428
2,189
(1,413)
3,765
(985)
(2,935)
—
(269)
(146)
(3,204)
(146)
(601)
(1,403)
(2,004)
(1,209)
2,512
1,303
—
1,066
3,468
—
2,829
3,358
—
3,895
6,826
Balance at December 31,
$
(20,182) $ (18,366) $ (38,548)
$
(16,239) $ (37,075) $ (53,314)
The movement in the fair value of plan assets over the years is as follows:
2019
2018
Employee
benefit
plans
SERP
Total
Employee
benefit
plans
SERP
Total
At January 1,
$
1,864 $ 46,195 $ 48,059
$
2,429 $ 53,875 $ 56,304
Interest income on plan assets
Actuarial gain (loss)
72
82
1,809
1,435
1,881
1,517
Assets distributed on settlement
— (24,430)
(24,430)
Benefit payments
Exchange gain (loss)
(152)
(2,189)
(2,341)
92
1,790
1,882
73
(64)
—
(399)
(175)
1,726
1,799
(2,436)
(2,500)
—
(2,828)
(4,142)
—
(3,227)
(4,317)
At December 31,
$
1,958 $ 24,610 $ 26,568
$
1,864 $ 46,195 $ 48,059
The amounts recognized in the consolidated statements of operations are as follows:
2019
2018
Employee
benefit
plans
SERP
Total
Employee
benefit
plans
SERP
Total
$
2,181 $
172 $
2,353
$
2,935 $
269 $
3,204
669
1,447
2,116
601
1,404
2,005
—
—
97
32
97
32
—
—
146
—
146
—
Current service cost
Interest cost
Past service cost
Loss on settlement
Expected return on plan assets
(72)
(1,809)
(1,881)
(73)
(1,727)
(1,800)
Employee benefit plans expense
(recovery)
$
2,778 $
(61) $
2,717
$
3,463 $
92 $
3,555
(31)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
18. Employee benefit plans (continued)
The actual return on plan assets was a gain of $3,439 (2018 – loss of $685).
The principal actuarial assumptions used were as follows:
2019
2018
Employee benefit plans
SERP
Employee benefit plans
SERP
Greece Turkey Canada
Canada
Greece Turkey Canada
Canada
%
—
1.7
0.9
2.7
%
—
15.0
13.0
8.2
%
3.9
3.9
3.1
2.0
%
3.9
3.9
3.1
2.0
%
—
1.7
1.7
2.8
%
—
11.0
15.0
9.0
%
3.4
3.4
3.9
2.0
%
3.4
3.4
3.9
2.0
—
—
0.6
years
0.6
years
—
—
1.6
years
1.6
years
Expected return on plan assets
Discount rate - beginning of
year
Discount rate - end of year
Rate of salary escalation
Average remaining service
period of active employees
expected to receive benefits
Plan Assets
The assets of the employee benefit plan and the amounts deposited in the SERP account are managed by a
major investment management company and are invested only in conformity with the investment requirements
of applicable pension laws.
The following table summarizes the defined benefit plans’ weighted average asset allocation percentages by
asset category:
Investment funds
Money market
Canadian fixed income
Canadian equities
US equities
International equities
Other (1)
December 31, 2019
December 31, 2018
Employee
benefit plans
SERP
Employee
benefit plans
2%
98%
—
—
—
—
100%
7%
—%
—%
—%
—%
93%
100%
2%
98%
—
—
—
—
100%
SERP
1%
6%
22%
10%
12%
49%
100%
(1) Assets held by the Canada Revenue Agency in the refundable tax account
The sensitivity of the overall pension obligation to changes in the weighted principal assumptions is:
Discount rate
Salary escalation rate
Change in assumption
Impact on overall obligation
Increase by 0.5%
Decrease by 0.5%
Increase by 0.5%
Decrease by 0.5%
Decrease by $1,270
Increase by $1,422
Increase by $1,199
Decrease by $1,080
(32)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
19. Other income & finance costs
(a) Other income
December 31, 2019
December 31, 2018
Gain on disposal of assets
Interest and other income
Income from royalty sale
$
$
656
$
3,154
8,075
11,885
$
130
16,151
—
16,281
In June 2019, the Company recognized other income of $8,075 from the sale of a 2.5% net smelter return royalty
interest ("NSR") on a property in Turkey. The NSR had a carrying value of nil. Consideration for the sale was
$8,075, of which $3,075 was received in cash and $5,000 was settled through the transfer of a mineral property
licence to the Company in October 2019.
(b) Finance costs
December 31, 2019
December 31, 2018
Asset retirement obligation accretion
Interest on the senior secured notes
Interest on the term loan
Interest on the 2012 notes
Write-off of unamortized transaction costs
of 2012 notes and ARCA (note 16(b))
Interest expense on lease liabilities
Other interest and financing costs
Redemption option derivative gain (note 16(a))
Total finance costs
Less: Capitalized interest
$
2,532
$
18,087
6,611
17,525
3,559
1,828
3,196
(4,224)
49,114
3,848
45,266
$
$
$
$
2,038
—
—
36,750
—
407
3,192
—
42,387
36,750
5,637
During the three months ended March 31, 2019, the Company capitalized $3,848 of interest relating to the 2012
notes in property, plant and equipment at the Lamaque mine while this operation was in the pre-commercial
production phase. No interest was capitalized subsequent to March 31, 2019 following the declaration of
commercial production at Lamaque mine (Note 4(vi)). No interest on the 2012 notes was capitalized at Skouries
in the year ended December 31, 2019 following this operation's transition to care and maintenance. For the year
ended December 31, 2018, the Company capitalized $36,750 of interest at Skouries and Lamaque.
(33)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
20. Income taxes
Total income tax expense (recovery) consists of:
Current tax expense
Deferred tax recovery
December 31, 2019
December 31, 2018
$
$
56,350
(16,579)
39,771
$
$
32,341
(118,839)
(86,498)
Total income tax expense (recovery) attributable to each geographical jurisdiction for the Company is as follows:
Turkey
Greece
Canada
Romania
Brazil
Other jurisdictions
2019
57,518
(14,306)
(2,727)
(1,110)
249
147
39,771
$
$
The key factors affecting income tax expense (recovery) for the years are as follows:
Earnings (loss) from continuing operations before income tax
Canadian statutory tax rate
Tax expense (recovery) on net earnings (loss) at Canadian statutory
tax rate
Items that cause an increase (decrease) in income tax expense:
Foreign income subject to different income tax rates than Canada
Reduction in Greek income tax rate
Non-tax effected operating losses
Non-deductible expenses and other items
Foreign exchange and other translation adjustments
Future and current withholding tax on foreign income dividends
Other
Income tax expense (recovery)
$
$
$
2019
113,456
27%
30,633
(24,608)
(7,243)
16,231
13,514
13,382
(5,278)
3,140
39,771
$
$
$
$
$
2018
45,238
(129,213)
(3,415)
(2,716)
3,608
—
(86,498)
2018
(466,129)
27%
(125,855)
(17,498)
(24,968)
12,716
14,923
36,837
20,000
(2,653)
(86,498)
(34)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
20. Income taxes (continued)
The change in the Company’s net deferred tax position was as follows:
Net deferred income tax (asset) liability
Balance at January 1,
Deferred income tax recovery in the statement of operations
Deferred tax recovery in consolidated statement of OCI
Balance at December 31,
2019
2018
$
$
429,929
(16,579)
(633)
412,717
$
$
549,127
(118,839)
(359)
429,929
The composition of the Company’s net deferred income tax assets and liabilities and deferred tax expense
(recovery) is as follows:
Type of temporary difference
Deferred tax assets
Deferred tax liabilities
Expense (recovery)
2019
2018
2019
2018
2019
2018
Property, plant and equipment
$
— $
— $ 498,384 $ 483,561 $
14,823 $ (108,501)
Loss carryforwards
Liabilities
Future withholding taxes
Other items
42,079
31,793
—
24,346
Balance at December 31,
$
98,218 $
Unrecognized deferred tax assets
Tax losses
Other deductible temporary differences
37,245
27,321
—
2,545
—
—
—
—
19,477
84,043 $ 510,935 $ 513,972 $
10,411
20,000
10,006
(4,834)
(1,927)
(5,788)
(2,631)
(20,000)
20,000
(4,641)
(21,919)
(16,579) $ (118,839)
2019
169,498
30,242
199,740
$
$
2018
160,052
25,242
185,294
$
$
Unrecognized tax losses
At December 31, 2019 the Company had losses with a tax benefit of $169,498 (2018 – $160,052) which are not
recognized as deferred tax assets. The Company recognizes the benefit of tax losses only to the extent of
anticipated future taxable income that can be reduced by the tax losses.
(35)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
20. Income taxes (continued)
The gross amount of the tax losses for which a tax benefit has not been recorded expire in future years as follows:
Expiry date
Canada
Brazil
Greece
Total
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
No Expiry
Capital losses with no expiry
Tax effect of total losses not recognized
Deductible temporary differences
$
$
$
$
— $
—
—
—
—
7,894
14,966
10,638
25,971
23,444
7,282
45,351
74,855
64,883
58,689
55,266
50,503
38,978
7,999
510
—
487,229 $
— $
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
31,128
31,128 $
24,745 $
10,253
7,856
17,347
38,194
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
98,395 $
24,745
10,253
7,856
17,347
38,194
7,894
14,966
10,638
25,971
23,444
7,282
45,351
74,855
64,883
58,689
55,266
50,503
38,978
7,999
510
31,128
616,752
63,483 $
— $
— $
63,483
140,087 $
5,797 $
23,614 $
169,498
At December 31, 2019 the Company had deductible temporary differences for which deferred tax assets of $30,242
(2018 – $25,242) have not been recognized because it is not probable that future taxable profits will be available
against which the Company can utilize the benefits. The vast majority of these temporary benefits have no expiry
date.
Temporary differences associated with investments in subsidiaries
The Company has not recognized deferred tax liabilities in respect of historical unremitted earnings of foreign
subsidiaries for which we are able to control the timing of the remittance and are considered reinvested for the
foreseeable future. At December 31, 2019, these earnings amount to $788,917 (2018 – $546,403). Substantially
all of these earnings would be subject to withholding taxes if they were remitted by the foreign subsidiaries.
Other factors affecting taxation
During 2019 the Turkish Lira weakened, resulting in a deferred income tax expense during the year of $8,099
(2018 – $24,595) due to the decrease in the value of the future tax deductions associated with the Turkish
operations. The Company expects that in the future significant foreign exchange movements in the Turkish Lira,
Euro or Brazilian Real in relation to the U.S. dollar could cause significant volatility in the deferred income tax
expense or recovery.
(36)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
21. Share capital
Eldorado’s authorized share capital consists of an unlimited number of voting common shares without par value
and an unlimited number of non-voting common shares without par value. At December 31, 2019 there were no
non-voting common shares outstanding (December 31, 2018 – nil).
On September 26, 2019, the Company established an at-the-market equity program (the "ATM Program") which
allows the Company to issue up to $125 million of common shares from treasury from time to time at prevailing
market prices. The volume and timing of distributions under the ATM Program, if any, will be determined at the
Company's sole discretion, subject to applicable regulatory limitations. The ATM Program will be effective until
September 26, 2021. As at December 31, 2019, 6,104,958 common shares were issued under the ATM Program.
Voting common shares
As at December 31, 2018 and 2017
Shares issued upon exercise of share options, for cash
Estimated fair value of share options exercised transferred
from contributed surplus
Shares issued to the public
Share issuance cost
As at December 31, 2019
Number of Shares
158,801,722
$
Total
3,007,924
56,644
—
6,104,958
—
265
103
48,041
(1,770)
164,963,324
$
3,054,563
22. Share-based payment arrangements
Share-based payments expense consists of:
Share options
Restricted share units with no performance criteria
Restricted share units with performance criteria
Deferred units
Performance share units
December 31, 2019
December 31, 2018
$
$
$
3,128
1,600
1,195
2,209
2,264
10,396
$
3,392
1,425
175
(277)
2,274
6,989
(i) Share option plans
Previously, the Company had two share option plans (the “Plans”) approved, as amended and restated, by the
shareholders from time to time. On June 21, 2018, shareholders approved the combination of the two previous
stock option plans into the Incentive Stock Option Plan (the "Plan") effective as of June 21, 2018 under which
share purchase options (“Options”) can be granted to officers, employees and consultants.
The Plan consists of options which are subject to a 5-year maximum term and payable in shares of the Company
when vested and exercised. The Plan prohibits the re-pricing of Options without shareholder approval. Options
vest at the discretion of the Board of Directors at the time an Option is granted. Options generally vest in three
equal and separate tranches with vesting commencing one year after the date of grant and the second and third
tranches vesting on the second and third anniversary of the grant date.
As at December 31, 2019, a total of 3,748,454 options (2018 – 3,928,361) were available to grant under the Plan.
(37)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
22. Share-based payment arrangements (continued)
Movements in the number of share options outstanding and their related weighted average exercise prices are
as follows:
At January 1,
Granted
Exercised
Expired
Forfeited
2019
2018
Weighted
average
exercise price
Cdn$
$22.56
5.98
6.20
38.96
21.48
Number of
options
5,591,228
2,387,256
(56,644)
(697,322)
(1,510,027)
Weighted
average
exercise price
Cdn$
$30.18
6.20
—
51.46
26.99
Number of
options
5,944,510
1,078,797
—
(870,904)
(561,175)
At December 31,
$14.08
5,714,491
$22.56
5,591,228
The weighted average market share price at the date of exercise for share options exercised in 2019 was Cdn
$10.43 (2018 - no options exercised).
Options outstanding are as follows:
December 31, 2019
Total options outstanding
December 31, 2019
Exercisable options
Weighted
average
remaining
contractual
life
(years)
Weighted
average
exercise
price
Cdn$
Range of
exercise
price
Cdn$
$5.00 to $5.99
$6.00 to $6.99
$10.00 to $10.99
$16.00 to $16.99
$21.00 to $21.99
$22.00 to $22.99
$23.00 to $23.99
$29.00 to $29.99
$33.00 to $33.99
$35.00 to $35.99
Shares
2,097,795
818,003
152,941
986,984
20,000
668,396
151,933
2,449
795,990
20,000
5,714,491
4.2
3.3
4.9
1.1
1.8
2.1
2.2
1.4
0.1
—
2.6
Weighted
average
exercise
price
Cdn$
—
6.20
—
16.10
21.15
22.00
23.18
29.55
33.35
35.40
Shares
—
250,703
—
986,984
13,333
499,293
101,287
2,449
795,990
20,000
$5.68
6.20
10.40
16.10
21.15
22.00
23.18
29.55
33.35
35.40
$14.08
2,670,039
$21.87
(38)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
22. Share-based payment arrangements (continued)
The assumptions used to estimate the fair value of options granted during the years ended December 31, 2019
and 2018 were:
Risk-free interest rate (range) (%)
Expected volatility (range) (%)
Expected life (range) (years)
Expected dividends (Cdn$)
2019
1.34 – 1.80
59 – 63
1.98 – 3.98
—
2018
1.80 – 2.20
58 – 64
1.79 – 3.79
—
The weighted average fair value per stock option granted was Cdn$2.19 (2018 – Cdn$2.32). Volatility was
determined based on the historical volatility over the estimated lives of the options.
(ii) Restricted share units plan
The Company has a Restricted Share Unit plan (“RSU” plan) whereby restricted share units may be granted to
senior management of the Company. The current maximum number of common shares authorized for issue under
the RSU plan is 5,000,000. As at December 31, 2019, 370,549 common shares purchased by the Company
remain held in trust in connection with this plan (2018 – 508,127) and have been included in treasury stock within
equity on the consolidated statement of financial position.
Currently, the Company has two types of RSUs:
a. RSU with no performance criteria
These RSUs are exercisable into one common share once vested, for no additional consideration. They vest as
follows: one third on the first anniversary of the grant date, one third on the second anniversary of the grant date
and one third on the third anniversary of the grant date. RSUs with no performance criteria terminate on the third
anniversary of the grant date. All vested RSUs which have not been redeemed by the date of termination are
automatically redeemed. Such RSUs may be redeemed by the holder in shares or cash, with cash redemptions
subject to the approval of the Board.
A total of 391,092 RSUs with no performance criteria at an average grant-date fair value of Cdn$5.68 per unit
were granted during the year ended December 31, 2019 under the Company’s RSU plan. The fair value of each
RSU issued is determined based on the quoted market value of the Company's shares on date of grant.
A summary of the status of the RSUs with no performance criteria and changes during the year ended
December 31, 2019 is as follows:
At January 1,
Granted
Redeemed
Forfeited
At December 31,
2019
333,119
391,092
(137,594)
(50,287)
536,330
2018
341,198
214,859
(181,491)
(41,447)
333,119
As at December 31, 2019, 29,111 restricted share units are fully vested and exercisable (2018 – 29,371).
(39)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
22. Share-based payment arrangements (continued)
b. RSU with performance criteria
RSUs with performance criteria vest on the third anniversary of the grant date, subject to achievement of pre-
determined performance criteria. When fully vested, the number of RSUs redeemed will range from 0% to 200%
of the target award, subject to the performance of the share price over the 3 year period.
A total of 412,473 RSUs with performance criteria were granted during the year ended December 31, 2019 under
the Company’s RSU plan. The fair value of each RSU with performance criteria issued is determined based on
fair value of the share units on the date of grant which is based on the forward price of the Company's shares
and an index consisting of global gold-based securities.
A summary of the status of the RSUs with performance criteria and changes during the year ended December 31,
2019 is as follows:
At January 1,
Granted
Forfeited
At December 31,
(iii) Deferred units plan
2019
152,927
412,473
(107,902)
457,498
2018
—
167,976
(15,049)
152,927
The Company has an Independent Directors Deferred Unit plan (“DU Plan”) under which DU’s are granted by the
Board from time to time to independent directors (“the Participants”). DUs may be redeemed only on retirement
of the independent director from the Board (the “Termination Date”) by providing the redemption notice
(“Redemption Notice”) to the Company specifying the redemption date which shall be no later than December 15
of the first calendar year commencing after the calendar year in which the Termination Date occurred (the
“Redemption Date”). Fifteen (15) trading days after the Redemption Date but no later than December 31 of the
first calendar year commencing after the calendar year in which the Termination Date occurred, the Participant
shall have the right to receive, and shall receive, with respect to all DUs held at the Redemption Date a cash
payment equal to the market value of such DUs as of the Redemption Date.
At December 31, 2019, 362,433 DUs were outstanding (2018 – 234,125) with a fair value of $2,911 (2018 – $686),
which is included in accounts payable and accrued liabilities. The fair value of each deferred unit issued is
determined as the closing share price of the Company's common shares on the grant date and at each reporting
date.
(iv) Performance share units plan
The Company has a Performance Share Unit plan (the “PSU” Plan) whereby PSUs may be granted to senior
management of the Company at the discretion of the Board of Directors. Under the plan, PSUs cliff vest on the
third anniversary of the grant date (the “Redemption Date”) and are subject to terms and conditions including the
achievement of predetermined performance criteria (the “Performance Criteria”). When fully vested the number
of PSUs redeemed will range from 0% to 200% of the target award, subject to the achievement of the Performance
Criteria. Once vested, at the option of the Company, PSU’s are redeemable as a cash payment equal to the
market value of the vested PSUs as of the Redemption Date, common shares of the Company equal to the number
of vested PSUs, or a combination of cash and shares equal to the market value of the vested PSUs, for no
additional consideration from the PSU holder and to be redeemed as soon as practicable after the Redemption
Date.
A total of 264,083 PSUs were granted during the year ended December 31, 2019 under the PSU Plan (2018 –
261,523). The current maximum number of common shares authorized for issuance from treasury under the PSU
Plan is 626,000. The fair value of each PSU issued is determined based on fair value of the share units on the
date of grant which is based on the forward price of the Company's shares and an index consisting of global gold
securities.
(40)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
22. Share-based payment arrangements (continued)
Movements in the PSUs during the year ended December 31, 2019 are as follows:
At January 1,
Granted
Expired
Forfeited
At December 31,
2019
484,899
264,083
(129,109)
(8,988)
610,885
2018
381,293
261,522
(118,605)
(39,311)
484,899
23. Supplementary cash flow information
Changes in non-cash working capital:
December 31, 2019
December 31, 2018
Accounts receivable and other
Inventories
Accounts payable and accrued liabilities
$
$
6,029
$
(16,410)
25,637
15,256
$
(1,471)
20,775
(12,876)
6,428
24. Financial risk management
24.1 Financial risk factors
Eldorado’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest
rate risk and price risk), credit risk and liquidity risk. Eldorado’s overall risk management program focuses on the
unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial
performance.
(i) Market risk
a. Foreign exchange risk
The Company operates principally in Turkey, Canada, Greece, Romania and Brazil, and is therefore exposed to
foreign exchange risk arising from transactions denominated in foreign currencies. Foreign exchange risk arises
when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not
the entity’s functional currency.
Eldorado’s cash and cash equivalents, accounts receivable, marketable securities, accounts payable and accrued
liabilities and other non-current liabilities are denominated in several currencies, and are therefore subject to
fluctuation against the U.S. dollar.
The tables below summarize Eldorado’s exposure to the various currencies denominated in the foreign currency
at December 31, 2019 and 2018, as listed below. The tables do not include amounts denominated in U.S. dollars.
(41)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
24. Financial risk management (continued)
2019
Canadian
dollar
Australian
dollar
Euro
Turkish
lira
Chinese
renminbi
Romanian
lei
British
pound
Brazilian
real
Barbados
bajan
(Amounts in thousands)
$
$
TRY
¥
lei
£
R$
$
Cash and cash equivalents
Marketable securities
10,204
4,971
Accounts receivable and other
13,010
435
10,692
9,930
—
3
—
—
8,631
8,923
Accounts payable and accrued
liabilities
Other non-current liabilities
(59,583)
(1,520)
(8)
(47,361) (109,765)
— (11,497)
—
Net balance
(32,918)
430
(39,535)
(90,912)
60
—
—
—
—
60
1,599
371
1,101
—
2,767
(1,421)
—
—
—
—
—
—
6,356
(1,639)
—
2,945
371
5,818
16
—
—
—
—
16
Equivalent in U.S. dollars
$ (25,259) $
302 $(44,213) $ (14,801) $
9 $
690 $
491 $
1,447 $
8
2018
Canadian
dollar
Australian
dollar
Euro
Turkish
lira
Chinese
renminbi
Romanian
lei
British
pound
Brazilian
real
Serbian
dinar
(Amounts in thousands)
$
$
TRY
¥
lei
£
R$
din
Cash and cash equivalents
Marketable securities
19,030
3,509
Accounts receivable and other
23,672
433
6,861
2,664
—
3
—
—
15,552
54,772
Accounts payable and accrued
liabilities
Other non-current liabilities
Net balance
(102,027)
(7)
(34,488)
(44,516)
(10,064)
(65,880)
— (9,191)
(15,877)
429
(21,266)
(2,957)
72
—
—
—
—
72
1,904
923
4,539
8,848
—
4,487
(2,286)
—
—
—
—
—
—
—
9,970
8,386
(2,941)
(1,004)
—
—
4,105
923
11,568
16,230
Equivalent in U.S. dollars
$ (48,292) $
302 $(24,334) $
(562) $
11 $
1,010 $ 1,180 $
2,982 $
157
Based on the balances as at December 31, 2019, a 1% increase/decrease in the U.S. dollar exchange rate against
all of the other currencies on that date would have resulted in a increase/decrease of approximately $805 (2018
– $675) in earnings (loss) before taxes. There would be no effect on other comprehensive income.
Cash flows from operations are exposed to foreign exchange risk, as commodity sales are set in U.S. dollars and
a certain amount of operating expenses are in the currency of the country in which mining operations take place.
b. Metal price and global market risk
The Company is subject to price risk for fluctuations in the market price of gold and the global concentrate market.
Gold and other metals prices are affected by numerous factors beyond the Company’s control, including central
bank sales, demand for concentrate, producer hedging activities, the relative exchange rate of the U.S. dollar
with other major currencies, global and regional demand and political and economic conditions.
Worldwide gold and other metals production levels also affect their prices, and the price of these metals is
occasionally subject to rapid short-term changes due to speculative activities. From time to time, the Company
may use commodity price contracts to manage its exposure to fluctuations in the price of gold and other metals,
but has elected not to at this time.
Other price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market
prices. This includes equity price risk, whereby the Company’s investments in marketable securities are subject
to market price fluctuation.
(42)
€
€
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
24. Financial risk management (continued)
c.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to
changes in market interest rates. Current financial assets and financial liabilities are generally not exposed to
interest rate risk because of their short-term nature. The Company's outstanding debt is in the form of senior
secured notes with a fixed interest rate of 9.5% and a term loan with a variable rate based on LIBOR. Borrowings
under the Company’s revolving credit facility, if drawn, are also at variable rates of interest. Borrowings at variable
rates of interest expose the Company to interest rate risk. At December 31, 2019, $200,000 is outstanding under
the term loan. A 1% increase in the variable interest rate would result in a $2,000 decrease in net earnings on an
annualized basis.
(ii) Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other
party to incur a financial loss. Financial instruments that potentially subject the Company to credit risk consist of
cash and cash equivalents, restricted cash, term deposits and accounts receivable.
The Company manages credit risk by entering into business arrangements with high credit-quality counterparties,
limiting the amount of exposure to each counterparty and monitoring the financial condition of counterparties. In
accordance with the Company's short-term investment policy, term deposits and short term investments are held
with high credit quality financial institutions as determined by rating agencies. The Company invests its cash and
cash equivalents in major financial institutions and in government issuances, according to the Company's short-
term investment policy. The Company monitors the credit ratings of all financial institutions in which it holds cash
and investments. The carrying value of $251,135 is the maximum amount exposed to credit risk at December 31,
2019.
Payment for metal sales is normally in advance or within fifteen days of shipment depending on the buyer. While
the historical level of customer defaults is negligible, which has reduced the credit risk associated with trade
receivables at December 31, 2019, there is no guarantee that buyers, including under exclusive sales
arrangements, will not default on its commitments, which may have an adverse impact on the Company's financial
performance.
(iii) Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet commitments associated
with financial instruments. The Company manages liquidity by spreading the maturity dates of investments over
time, managing its capital expenditures and operational cash flows, and by maintaining adequate lines of credit.
Management uses a rigorous planning, budgeting and forecasting process to help determine the funds the
Company will need to support ongoing operations and development plans. Contractual maturities relating to debt
and other obligations are included in note 25. All other financial liabilities are due within one year.
24.2 Capital risk management
Eldorado’s objective is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the Company's mining projects. Capital consists of all of the components
of equity which includes share capital from ordinary shares, contributed surplus, accumulated other comprehensive
income (loss), deficit and non-controlling interests.
Eldorado monitors capital on the basis of the debt to capital ratio and net debt to EBITDA. The debt to capital
ratio is calculated as debt, including current and non-current debt, divided by capital plus debt. The net debt to
EBITDA ratio is calculated as debt, including current and non-current debt, less cash, cash equivalents and term
deposits, divided by earnings before interest costs, taxes, depreciation and amortization.
(43)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
25. Commitments and Contractual Obligations
The Company’s commitments and contractual obligations at December 31, 2019, include:
Debt(1)
Purchase obligations
Leases
Mineral properties
Asset retirement
obligations
2020
2021
2022
2023
2024 and later
Total
$
66,667 $
66,667 $
31,883
10,673
5,387
431
10,075
5,433
66,666 $
421
4,677
5,443
— $
300,000 $
500,000
137
1,944
5,443
137
2,310
18,599
33,009
29,679
40,305
1,783
6,113
$ 116,393 $
88,719 $
4,319
81,526 $
59
101,626
7,583 $
422,672 $
113,900
716,893
(1) Does not include interest on debt.
Debt obligations represent required repayments of principal for the senior secured notes and term loan. Purchase
obligations relate primarily to mine development expenditures at Olympias and mine operating costs at Kisladag.
Upon adoption of IFRS 16, leases for various assets including equipment, offices and properties that had previously
been classified as operating or financing leases under IAS 17 have been combined into a single classification
line above. Mineral properties refer to arrangements for the use of land that grant the Company the right to explore,
develop, produce or otherwise use the mineral resources contained in that land. The table does not include interest
on debt.
As at December 31, 2019, Hellas Gold had entered into off-take agreements pursuant to which Hellas Gold agreed
to sell a total of 17,000 dry metric tonnes of zinc concentrate, 2,750 dry metric tonnes of lead/silver concentrate,
and 96,000 dry metric tonnes of gold concentrate, during the year ended December 31, 2020.
As at December 31, 2019, Tuprag Metal Madencilik Sanayi Ve Ticaret A.S. (“Tuprag”) had entered into off-take
agreements pursuant to which Tuprag agreed to sell a total of 61,000 dry metric tonnes of gold concentrate through
the year ending December 31, 2020.
In April 2007, Hellas Gold agreed to sell to Silver Wheaton (Caymans) Ltd., a subsidiary of Wheaton Precious
Metals (“Wheaton Precious Metals”) all of the payable silver contained in lead concentrate produced within an
area of approximately seven square kilometers around Stratoni. The sale was made in consideration of a
prepayment to Hellas Gold of $57.5 million in cash, plus a fixed price per ounce of payable silver to be delivered
based on the lesser of $3.90 and the prevailing market price per ounce, adjusted higher by 1% every year. The
agreement was amended in October 2015 to provide for increases in the fixed price paid by Wheaton Precious
Metals upon completion of certain expansion drilling milestones. 20,000 meters of expansion drilling was reached
during the second quarter of 2019 and in accordance with the terms of the agreement, the fixed price has been
adjusted by an additional $2.50 per ounce. Accordingly, the fixed price as of July 1, 2019 is equal to $9.27 per
ounce.
(44)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
26. Contingencies
Due to the size, complexity and nature of the Company’s operations, various legal, tax, environmental and
regulatory matters are outstanding from time to time. By their nature, contingencies will only be resolved when
one or more future events occur or fail to occur. While the outcomes of these matters are uncertain, based upon
the information currently available, the Company does not believe that these matters in aggregate will have a
material adverse effect on its consolidated financial position, cash flows or results of operations. In the event that
management’s estimate of the future resolution of these matters changes, the Company will recognize the effects
of these changes in its consolidated financial statements in the appropriate period relative to when such changes
occur. As at December 31, 2019, the amount of ultimate liability with respect to these actions will not, in the opinion
of management, materially affect Eldorado’s consolidated financial position, results of operations or cash flows.
Accordingly, no amounts have been accrued as at December 31, 2019.
27. Related party transactions
Key management includes directors (executive and non-executive), officers and senior management. The
compensation paid or payable to key management for employee services, including amortization of share based
payments, is shown below:
Salaries and other short-term employee benefits
Employee benefit plan
Share based payments
Termination benefits
$
$
2019
5,779
$
301
8,643
900
15,623
$
2018
6,191
268
4,906
1,762
13,127
(45)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
28. Financial instruments by category
Fair value
The following table provides the carrying value and the fair value of financial instruments at December 31, 2019
and December 31, 2018:
Financial Assets
Fair value through OCI
Marketable securities
Fair value through profit and loss
Settlement receivables
Redemption option derivative asset
Amortized cost
Cash and cash equivalents
Term deposit
Restricted cash
Other receivables and deposits
Other assets
Financial Liabilities at amortized cost
Accounts payable and accrued liabilities
December 31, 2019
December 31, 2018
Carrying
amount
Fair value
Carrying
amount
Fair value
$
3,828 $
3,828 $
2,572 $
2,572
34,461
5,597
34,461
5,597
5,243
—
5,243
—
177,742
177,742
286,312
286,312
3,275
3,100
23,171
9,386
3,275
3,100
23,171
9,386
6,646
13,745
40,574
3,924
$
139,104 $
139,104 $
140,878 $
6,646
13,745
40,574
3,924
140,878
549,606
Debt, excluding derivative asset
485,329
524,132
595,977
Fair values are determined directly by reference to published price quotations in an active market, when available,
or by using a valuation technique that uses inputs observed from relevant markets.
The three levels of the fair value hierarchy are described below:
•
•
•
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical,
unrestricted assets or liabilities.
Level 2 – Inputs that are observable, either directly or indirectly, but do not qualify as Level 1 inputs (i.e.,
quoted prices for similar assets or liabilities).
Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value
measurement and unobservable (i.e., supported by little or no market activity).
Assets measured at fair value as at December 31, 2019 include marketable securities of $3,828 (December 31,
2018 – $2,572), comprised of publicly-traded equity investments classified as fair value through other
comprehensive income, settlement receivables of $34,461 (December 31, 2018 - $5,243) arising from provisional
pricing in contracts for the sale of metals in concentrate classified as fair value through profit and loss, and a
derivative asset of $5,597 related to redemption options associated with the senior secured notes classified as
fair value through profit and loss. Changes in the fair value of settlement receivables are recorded in revenue and
changes in the fair value of the redemption option derivative asset are recorded in finance costs. No liabilities are
measured at fair value on a recurring basis as at December 31, 2019.
(46)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
28. Financial instruments by category (continued)
The fair value of financial instruments traded in active markets is based on quoted market prices at date of the
statement of financial position. A market is regarded as active if quoted prices are readily and regularly available
from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent
actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for
financial assets held by the group is the current bid price. The Company's marketable securities are included in
Level 1. Instruments included in Level 2 comprise settlement receivables, the redemption option derivative asset
and the fair market value of the Company's senior secured notes (note 16a). The fair value of settlement receivables
is determined based on forward metal prices for the quotational period; the fair value of the Company's redemption
option derivative asset is based on models using observable interest rate inputs and the fair value of the Company's
senior secured notes in note 16 is based on observable prices in inactive markets. The fair value of the term loan
is $200 million based on current market rates of interest and the Company's credit risk premium and represents
a Level 2 fair value measurement. For all other financial instruments, carrying amounts approximate fair value.
29. Revenue
For the year ended December 31, 2019, revenue from contracts with customers by product and segment was as
follows:
Gold revenue - doré
Gold revenue - concentrate
Silver revenue - doré
Silver revenue - concentrate
Lead concentrate
Zinc concentrate
Turkey
Greece
Canada
Total
$
196,590
$
— $
124,760
$
321,350
149,841
1,191
2,793
—
—
57,419
—
14,795
24,943
43,067
—
522
—
—
—
207,260
1,713
17,588
24,943
43,067
Revenue from contracts with customers
$
350,415
$
140,224
$
125,282
$
615,921
Gain (loss) on revaluation of derivatives in
trade receivables
1,970
(68)
—
1,902
$
352,385
$
140,156
$
125,282
$
617,823
For the year ended December 31, 2018, revenue from contracts with customers by product and segment was as
follows:
Gold revenue - doré
Gold revenue - concentrate
Silver revenue - doré
Silver revenue - concentrate
Lead concentrate
Zinc concentrate
Revenue from contracts with customers
Gain on revaluation of derivatives in trade receivables
Turkey
Greece
$
220,382
$
— $
123,960
1,245
2,941
—
—
$
$
348,528
—
348,528
$
$
41,611
—
7,296
21,625
39,564
110,096
392
110,488
$
$
Total
220,382
165,571
1,245
10,237
21,625
39,564
458,624
392
459,016
(47)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
30. Production costs
Labour
Fuel
Reagents
Electricity
Mining contractors
Operating and maintenance supplies and services
Site general and administrative costs
Royalties, production taxes and selling expenses
2019
$
100,908
$
12,931
29,871
16,330
30,162
89,828
42,919
11,890
2018
70,336
16,454
49,222
13,864
14,782
62,544
33,614
8,629
$
334,839
$
269,445
31. Earnings per share
The weighted average number of ordinary shares for the purposes of diluted earnings per share reconciles to the
weighted average number of ordinary shares used in the calculation of basic earnings per share as follows:
Weighted average number of ordinary shares used in the
calculation of basic earnings per share
Dilutive impact of share options
Dilutive impact of restricted share units
Dilutive impact of performance share units and restricted
share units with performance criteria
2019
2018
158,856
—
526
2,157
158,509
—
—
—
Weighted average number of ordinary shares used in the
calculation of diluted earnings per share
161,539
158,509
(48)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
32. Disposal group held for sale
In June 2019, management committed to a plan to sell its Vila Nova iron ore mine in Brazil, which was placed on
care and maintenance in late 2014 pending a recovery in iron ore prices. Accordingly, the mine is presented as
a disposal group held for sale.
Efforts to sell the disposal group are underway and a sale is expected within the next twelve months. As at
December 31, 2019, the disposal group was stated at fair value less costs to sell and comprised the following
assets and liabilities.
Cash
Accounts receivable and other
Property, plant and equipment and iron ore inventory
Assets held for sale
Accounts payable and accrued liabilities
Asset retirement obligations
Liabilities associated with assets held for sale
December 31, 2019
$
$
$
$
67
714
11,690
12,471
24
4,233
4,257
Impairment charges of $34,443 were applied to Vila Nova property, plant and equipment and iron ore inventory
in 2015, reducing the carrying value to $nil. As a result of the plan to sell Vila Nova, the Company recorded an
impairment reversal of $11,690 in June 2019 to record the property, plant and equipment and iron ore inventory
at its estimated fair value of $9,000. At December 31, 2019, the fair value of the disposal group was reduced to
$8,214, corresponding to a decrease in working capital. The fair value measurement for the disposal group has
been categorized as a Level 3 fair value based on the expected consideration of a sale.
33. Segment information
Identification of reportable segments
The Company has identified its operating segments based on the internal reports that are reviewed and used by
the chief executive officer and the executive management (the chief operating decision makers or "CODM") in
assessing performance and in determining the allocation of resources.
The CODM consider the business from both a geographic and product perspective and assess the performance
of the operating segments based on measures of profit and loss as well as assets and liabilities. These measures
include earnings from mine operations, expenditures on exploration, property, plant and equipment and non-
current assets, as well as total debt. As at December 31, 2019, Eldorado had six reportable segments based on
the geographical location of mining and exploration and development activities.
Geographical segments
Geographically, the operating segments are identified by country and by operating mine. The Turkey reporting
segment includes the Ki
lada and the Efemçukuru mines and exploration activities in Turkey. The Canada
reporting segment includes the Lamaque mine and exploration activities in Canada. The Greece reporting segment
includes the Olympias and Stratoni mines, the Skouries, Perama Hill and Sapes projects and exploration activities
in Greece. The Romania reporting segment includes the Certej project and exploration activities in Romania. The
Brazil reporting segment includes the Vila Nova mine, Tocantinzinho project and exploration activities in Brazil.
Other reporting segment includes operations of Eldorado’s corporate office and exploration activities in other
countries.
(49)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
33. Segment information (continued)
Financial information about each of these operating segments is reported to the CODM on a monthly basis. The
mines in each of the different reporting segments share similar economic characteristics and have been aggregated
accordingly.
2019
Turkey Canada
Greece Romania
Brazil
Other
Total
Earnings and loss information
Revenue
Production costs
$ 352,385 $ 125,282 $ 140,156 $
— $
— $
— $
617,823
Depreciation and amortization
63,949
47,659
41,510
137,080
50,733
147,026
—
—
—
—
—
—
334,839
153,118
Earnings (loss) from mine
operations
Other significant items of income
and expense
$ 151,356 $ 26,890 $
(48,380) $
— $
— $
— $
129,866
Reversal of impairment (note 12)
$ (85,224) $
Write-down of assets
105
— $
—
Exploration and evaluation expenses
2,593
1,905
6,177
3,223
16
4,887
Income tax expense (recovery)
57,518
(2,727)
(14,305)
(1,110)
—
381
249
—
1,654
146
6,298
14,643
39,771
— $
— $ (11,690) $
— $
(96,914)
Capital expenditure information
Additions to property, plant and
equipment during the period (*)
$ 62,887 $ 75,328 $
39,349 $
24 $
3,476 $
39 $
181,103
Capitalized interest
—
3,848
—
—
—
—
3,848
Information about assets and
liabilities
Property, plant and equipment
$ 791,354 $ 606,274 $ 2,067,719 $ 415,150 $ 204,419 $
3,286 $ 4,088,202
Goodwill
— 92,591
—
—
—
—
92,591
$ 791,354 $ 698,865 $ 2,067,719 $ 415,150 $ 204,419 $
3,286 $ 4,180,793
Debt, including current portion
$
— $
— $
— $
— $
— $ 479,732 $
479,732
* Presented on an accrual basis, net of pre-commercial production proceeds and excludes asset retirement adjustments.
(50)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2019 and December 31, 2018
(In thousands of U.S. dollars, unless otherwise stated)
33. Segment information (continued)
2018
Turkey Canada
Greece Romania
Brazil
Other
Total
Earnings and loss information
Revenue
Production costs
Depreciation and amortization
Earnings (loss) from mine
operations
Other significant items of income
and expense
Impairment loss on property, plant
and equipment
$ 348,528 $
— $ 110,488 $
— $
— $
— $
459,016
174,081
75,854
—
—
95,364
29,424
—
—
—
—
—
454
269,445
105,732
$ 98,593 $
— $
(14,300) $
— $
— $
(454) $
83,839
$ 117,570 $
— $ 330,238 $
— $
— $
— $
447,808
Exploration and evaluation expenses
840
103
15,947
13,499
Income tax expense (recovery)
45,238
(3,415)
(129,213)
(2,716)
1,728
3,608
1,725
33,842
—
(86,498)
Capital expenditure information
Additions to property, plant and
equipment during the period (*)
$ 68,737 $ 189,867 $
61,716 $
419 $
6,612 $
802 $
328,153
Capitalized interest
— 13,160
23,590
—
—
—
36,750
Information about assets and
liabilities
Property, plant and equipment
$ 721,449 $ 582,895 $ 2,063,798 $ 416,197 $ 203,075 $
1,062 $ 3,988,476
Goodwill
Debt
— 92,591
—
—
—
—
92,591
$ 721,449 $ 675,486 $ 2,063,798 $ 416,197 $ 203,075 $
1,062 $ 4,081,067
$
— $
— $
— $
— $
— $ 595,977 $
595,977
* Presented on an accrual basis, net of pre-commercial production proceeds and excludes asset retirement adjustments.
The Turkey segment derives its revenues from sales of gold and silver. The Greece segment derives its revenue
from sales of gold, silver, zinc and lead concentrates. The Canadian segment derives its revenue from sales of
gold and silver. For the year ended December 31, 2019, revenue from two customers of the Company’s Turkey
segment represents approximately $280,092 of the Company’s total revenue. Revenue from one customer of the
Company’s Canadian segment represents approximately $122,160 of the Company’s total revenue.
(51)