Consolidated Financial Statements
December 31, 2020 and 2019
(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 the Consolidated Financial Statements, which 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.
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,
2020, 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, 2020 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, 2020 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 25, 2021
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, 2020 and December 31, 2019, 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, 2020, 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, 2020 and 2019, and its financial performance and its
cash flows for each of the years in the two‑year period ended December 31, 2020, 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, 2020,
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 25, 2021 expressed an
unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
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 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 amount of the Olympias cash-generating unit
As discussed in Note 11 to the consolidated financial statements, the Company determined there were
indicators of impairment associated with the Olympias cash-generating unit (CGU). As discussed in note 3.7 to
the consolidated financial statements, when an indicator of impairment exists, the Company is required to
determine the recoverable amount of the CGU to determine whether an impairment should be recognized.
Based on the outcome of the impairment testing performed, the Company determined that there was no
impairment of the Olympias CGU as of December 31, 2020.
We identified the assessment of the recoverable amount of the Olympias CGU to be a critical audit matter. A
high degree of auditor judgment was required to evaluate the inputs used to estimate the recoverable amount.
Significant assumptions used in the determination of the recoverable amount included long-term metal prices,
future production levels including the amount of reserves, resources and exploration potential, operating and
capital costs, discount rates, and the fair value per ounce of mineral resources and exploration potential beyond
those used in the discounted cash flow model. Changes in any of these assumptions could have had a
significant effect on the determination of the estimated recoverable amount.
Eldorado Gold Corporation
Page 3
The following are the primary procedures we performed to address this critical audit matter. We evaluated the
design and tested the operating effectiveness of certain internal controls over the Company's process to
determine the recoverable amount of the CGU. This included controls over the Company’s development of the
significant assumptions used to estimate the recoverable amount of the Olympias CGU. We evaluated the
competence, experience and objectivity of the qualified persons responsible for the mineral reserves, resources
and exploration potential estimates, and the updated mine plan. We compared the amount of reserves and
resources in the valuation model to the mine plan and to the updated mineral reserves and resources estimates.
We compared the Company’s historical estimates of mineral reserves and resources, mine plan and operating
results to actual results to assess the accuracy of the Company’s forecasting process. We compared estimated
operating and capital costs in the valuation model to the mine plan and to historical expenditures. We involved
valuations professionals with specialized skills and knowledge, who assisted in (1) assessing the long-term
metal prices by comparing to third party data; and (2) evaluating the discount rates, and the fair value per ounce
of mineral resources and exploration potential beyond those used in the discounted cash flow model by
assessing the Company’s approach to determining these assumptions and comparing them to independent
sources and market data for comparable entities where available.
KPMG LLP (Signed)
Chartered Professional Accountants
We have served as the Company’s auditor since 2009.
Vancouver, Canada
February 25, 2021
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, 2020, 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, 2020,
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,
2020 and December 31, 2019, 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, 2020, and
the related notes (collectively, the consolidated financial statements), and our report dated February 25, 2021
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 25, 2021
Eldorado Gold Corporation
Consolidated Statements of Financial Position
As at December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars)
Note
December 31, 2020
December 31, 2019
ASSETS
Current assets
Cash and cash equivalents
Term deposits
Accounts receivable and other
Inventories
Current portion of employee benefit plan assets
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
17
32
9
17
11
12
$
14
$
15
16
32
15
17
16
19
20
$
$
$
$
451,962
59,034
73,216
176,271
5,749
—
766,232
2,097
39,562
—
3,998,493
92,591
4,898,975
179,372
11,297
66,667
4,701
—
262,037
434,465
14,659
21,974
106,677
402,713
1,242,525
3,144,644
(11,452)
2,638,008
(30,297)
(2,125,326)
3,615,577
40,873
3,656,450
4,898,975
$
177,742
3,275
79,138
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
Debt, Guarantees, Commitments and Contractual Obligations (Notes 15, 24)
Contingencies (Note 25), Subsequent events (Note 15(b), 34)
Approved on behalf of the Board of Directors
(signed) John Webster Director
(signed) George Burns Director
Date of approval: February 25, 2021
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, 2020 and December 31, 2019
(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
Reversal of impairment
Write-down of assets
Foreign exchange gain
Earnings from operations
Other (expense) income
Finance costs
Earnings before income tax
Income tax expense
Net earnings for the year
Attributable to:
Shareholders of the Company
Non-controlling interests
Net earnings for the year
Weighted average number of shares outstanding (thousands)
31
Basic
Diluted
Net earnings per share attributable to shareholders of the
Company:
Basic earnings per share
Diluted earnings per share
Note
Year ended
December 31, 2020
Year ended
December 31, 2019
28
$
1,026,685
$
617,823
29
30
17
21
11
11
18
18
19
10
445,183
246,651
691,834
334,851
12,693
15,675
28,561
2,849
10,692
—
38,660
(2,994)
228,715
(1,277)
(50,943)
176,495
79,134
97,361
$
104,541
(7,180)
97,361
$
171,047
175,231
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
0.61
0.60
$
$
0.51
0.50
$
$
$
$
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, 2020 and December 31, 2019
(In thousands of U.S. dollars)
Net earnings for the year
Other comprehensive income (loss):
Items that will not be reclassified to net earnings (loss):
Note
Year ended
December 31, 2020
Year ended
December 31, 2019
$
97,361
$
73,685
Change in fair value of investments in equity securities, net of tax
Actuarial losses on employee benefit plans
17
Income tax recovery on actuarial losses on employee benefit plans
1,546
(3,440)
563
(1,331)
Total comprehensive income for the year
$
96,030
$
Attributable to:
Shareholders of the Company
Non-controlling interests
103,210
(7,180)
$
96,030
$
1,256
(6,361)
633
(4,472)
69,213
76,114
(6,901)
69,213
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, 2020 and December 31, 2019
(In thousands of U.S. dollars)
Cash flows generated from (used in):
Operating activities
Net earnings for the year
Items not affecting cash:
Depreciation and amortization
Finance costs
Interest income
Unrealized foreign exchange gain
Income from royalty sale
Income tax expense
Net loss (gain) on disposal of assets
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 operating 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
Proceeds from the sale of marketable securities
Decrease (increase) in term deposits
Decrease in restricted cash
Net cash used in investing activities
Financing activities
Issuance of common shares for cash, net of issuance costs
Acquisition of non-controlling interest, without change in control
Contributions from non-controlling interests
Proceeds from borrowings
Repayment of borrowings
Loan financing costs
Principal portion of lease liabilities
Purchase of treasury stock
Net cash generated from (used in) financing activities
Net increase (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
Note
Year ended
December 31, 2020
Year ended
December 31, 2019
$
97,361
$
73,685
248,790
50,943
(2,056)
(2,999)
—
79,134
2,587
—
38,660
10,692
2,849
525,961
(2,301)
(2,633)
(87,872)
(44,373)
2,056
34,769
425,607
(190,908)
—
1,790
—
—
9,896
(15,468)
5,237
(55,759)
983
(244,229)
95,992
(7,500)
421
150,000
(132,714)
—
(9,807)
(3,550)
92,842
274,220
177,742
—
451,962
$
155,331
45,266
(2,760)
(790)
(8,075)
39,771
(656)
(96,914)
6,298
10,396
2,717
224,269
(2,807)
(2,587)
(36,242)
(35,479)
2,760
15,912
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
11
11
22
11
10
$
The accompanying notes are an integral part of these consolidated financial statements.
Note
Year ended
December 31, 2020
Year ended
December 31, 2019
$
3,054,563
$
3,007,924
Balance end of year
20
$
3,144,644
$
Eldorado Gold Corporation
Consolidated Statements of Changes in Equity
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars)
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
Treasury stock
Balance beginning of year
Purchase of treasury stock
Shares redeemed upon exercise of restricted share units
Balance end of year
21
Contributed surplus
Balance beginning of year
Share based payment arrangements
Shares redeemed upon exercise of restricted share units
Acquisition of non-controlling interest, without change in control
10
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 attributable to
shareholders of the Company
Balance end of year
Deficit
Balance beginning of year
Earnings 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
Acquisition of non-controlling interest, without change in control
10
Loss attributable to non-controlling interests
Contributions from non-controlling interests
Balance end of year
Total equity
$
$
$
$
$
$
$
$
$
$
$
$
3,559
1,267
85,255
(8,662) $
(3,550)
760
(11,452) $
265
103
46,271
3,054,563
(10,104)
—
1,442
(8,662)
2,627,441
$
2,620,799
8,422
(760)
4,172
(1,267)
8,187
(1,442)
—
(103)
2,638,008
$
2,627,441
(28,966) $
(24,494)
(1,331)
(30,297) $
(4,472)
(28,966)
(2,229,867) $
(2,310,453)
104,541
80,586
(2,125,326) $
(2,229,867)
3,615,577
$
3,414,509
59,304
$
(11,672)
(7,180)
421
40,873
3,656,450
$
$
63,414
—
(6,901)
2,791
59,304
3,473,813
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, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
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.
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.
The consolidated financial statements were approved by the Company's Board of Directors on February 25,
2021.
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.
(1)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
3. Significant accounting policies (continued)
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.
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, 2020 are described below:
Subsidiary
Location
Ownership
interest
Operations and
development projects
owned
Tüprag Metal Madencilik Sanayi ve Ticaret AS ("Tüprag")
Turkey
100%
Kişladağ Mine
Efemçukuru Mine
Hellas Gold SA ("Hellas") (1)
Greece
100%
Olympias Mine
Eldorado Gold (Québec) Inc. (formerly Integra Gold
Corporation)
Canada
100%
Stratoni Mine
Skouries Project
Lamaque Mine
Thracean Gold Mining SA
Thrace Minerals SA
Brazauro Recursos Minerais SA ("Brazauro")
Deva Gold SA ("Deva")
Greece
Greece
Brazil
Romania
100%
100%
100%
80.5%
Perama Hill Project
Sapes Project
Tocantinzinho Project
Certej Project
(1) On May 11, 2020, the Company acquired the remaining 5% non-controlling interest in Hellas Gold SA (Note 10).
(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.
(2)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
3. Significant accounting policies (continued)
(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.
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.
(3)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
3. Significant accounting policies (continued)
(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).
(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.
Capitalized stripping costs are amortized on a unit-of-production basis over the proven and probable reserves
to which they relate.
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
intended 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 specific to qualifying
assets is offset against borrowing costs being capitalized.
(4)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
3. Significant accounting policies (continued)
(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.
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 at inception 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 in property, plant and equipment.
(5)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
3. Significant accounting policies (continued)
(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, pre-feasibility 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.
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.
(6)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
3. Significant accounting policies (continued)
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 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.
Value in use is determined as the present value of the estimated future cash flows expected to arise from the
continued use of the asset in its present form and its eventual disposal. Value in use is determined by applying
assumptions specific to the Company’s continued use of the asset and does not take into account assumptions
of significant future enhancements of an asset’s performance or capacity to which the Company is not
committed.
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. 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.
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.
(7)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
3. Significant accounting policies (continued)
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.
(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 12-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).
(8)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
3. Significant accounting policies (continued)
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 recognizing 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.
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, 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.
(9)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
3. Significant accounting policies (continued)
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, short term bank deposits and other short-term highly liquid
investments with maturities at the date of acquisition of 90 days or less. Cash and cash equivalents are
classified as financial assets which are initially measured at fair value and subsequently measured at
amortized cost.
3.13 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.
3.14 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 prepayment for liquidity services and amortized over the period the loan
facility to which it relates is available to the Company.
(10)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
3. Significant accounting policies (continued)
3.15 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.
3.16 Employee benefits
(i) Defined benefit plans
The Company has defined benefit plans, where 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.
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.
(11)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
3. Significant accounting policies (continued)
(iii) Termination benefits
Termination benefits are recognized when there is a demonstrable commitment 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.
3.17 Share-based payment arrangements
Share-based payment arrangements related to stock option awards, deferred share units, equity settled
restricted share units and performance share units are measured at fair value. Compensation expense for all
stock options awarded to employees is measured 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 measured based on the quoted market value of the shares. For equity settled
performance share units with market based vesting conditions, compensation expense is measured based on
the fair value of the share units on the date of grant which is based on the expected future forward price of the
Company's shares and an index consisting of global gold-based securities. Deferred share units are liability
awards settled in cash and measured at the quoted market price at the grant date and the corresponding
liability is adjusted for changes in fair value at each subsequent reporting date until the awards are settled.
The fair value of the options, restricted share units, performance share units and deferred 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.
3.18 Provisions
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 the corresponding cost included in the asset to which the obligation relates. At
each reporting date the asset retirement obligation is remeasured to reflect changes in discount rates, and the
timing or amount of the costs to be incurred.
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 asset retirement obligation and related assets. Such
changes result in changes in future depreciation and financial charges.
(12)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
3. Significant accounting policies (continued)
Other 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.
3.19 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.
3.20 Revenue recognition
Revenue is generated from the production and sale of doré, bullion and metals in concentrate. 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 doré, 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 metal's 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
settlement 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 operating 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.
(13)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
3. Significant accounting policies (continued)
3.21 Finance income and expenses
Finance income includes 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.
Finance expenses include borrowing costs, 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. Judgements and estimation uncertainty
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 discount rates, future
production levels including amount of recoverable reserves, resources and exploration potential, operating and
capital costs, long-term metal prices, and estimates of the fair value of mineral properties beyond proven and
probable reserves.
Changes in any of the assumptions or estimates used in determining the recoverable amount could result in
additional impairment or reversal of impairment recognized.
(14)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
4. Judgements and estimation uncertainty (continued)
(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 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, 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.
(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 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 expected 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.
(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 items of property, plant and equipment
can result in a change to future depreciation expense.
(v) Current and deferred taxes
Judgements and estimates of recoverability are required in assessing whether deferred tax assets recognized
on the consolidated statement of financial position are recoverable which is 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, which requires judgement.
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.
(15)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
4. Judgements and estimation uncertainty (continued)
The Company operates in multiple tax jurisdictions and judgement is required in the application of income tax
legislation in these jurisdictions. 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.
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 involves 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, 2020:
(a) Interest rate benchmark reform - Phase 1
In September 2019, the IASB 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 the discontinuance of the
interbank offered rates. The first phase amendment is focused on the impact to hedge accounting
requirements. Adoption of the first phase amendment had no material impact on the consolidated financial
statements.
(b) Conceptual framework for financial reporting
In March 2018, the IASB revised the Conceptual Framework for financial reporting. 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. Adoption of this standard had no material impact on the consolidated financial statements.
(16)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
5. Adoption of new accounting standards (continued)
(c) Definition of a business
In October 2018, the IASB amended IFRS 3 Business Combinations to clarify the definition of a business,
which is effective January 1, 2020. The amendment provides additional guidance on the definition of a
business in determining whether a transaction results in an asset or business acquisition. The amendment
includes an optional concentration test to permit a simplified assessment of whether an acquired set of
activities and assets is not a business. If the concentration test is not met, or if an entity elects not to apply
the test, then an assessment of the elements of a business is performed to determine whether the
transaction results in an asset or business acquisition. Adoption of this standard had no material impact on
the consolidated financial statements.
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.
(a) Property, plant and equipment - proceeds before intended use
On May 14, 2020, the IASB published a narrow scope amendment to IAS 16 Property, Plant and Equipment
- Proceeds before Intended Use. The amendment prohibits deducting from the cost of property, plant and
equipment amounts received from selling items produced while preparing the asset for its intended use.
Instead, amounts received will be recognized as sales proceeds and related cost in profit or loss. The
effective date is for annual periods beginning on or after January 1, 2022. The amendment must be applied
retrospectively, but only to items of property, plant and equipment that are brought to the location and
condition necessary for them to be capable of operating in the manner intended by management on or after
the beginning of the earliest period presented in the financial statements in which the amendments are first
applied. The Company will adopt this narrow scope amendment on the date it becomes effective and does
not expect a revision to comparative financial information in its consolidated financial statements as a result
of adoption.
(b) Interest rate benchmark reform - Phase 2
In August 2020, the IASB published the Interest Rate Benchmark Reform - Phase 2, which amends IFRS 9
Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial
Instruments: Disclosure, IFRS 4 Insurance Contracts, and IFRS 16 Leases. The Phase 2 amendments
address issues that may affect financial reporting related to financial instruments and hedge accounting
resulting from the reform of an interest rate benchmark. The amendments are effective for annual periods
beginning on or after January 1, 2021. The Company is assessing the effect of amendments related to the
interest rate benchmark reform on its consolidated financial statements including the impact, if any, on
amounts drawn on the Company's third amended and restated credit agreement (as defined below) which
bear interest based on London Inter-Bank Offered Rate ("LIBOR"). The Company does not expect a
material impact on its consolidated financial statements from the adoption of this amendment.
(c) Classification of liabilities as current or non-current
In January 2020, the IASB published narrow scope amendments to IAS 1 Presentation of financial
statements. The narrow scope amendment clarifies that liabilities are classified as either current or non-
current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by
the expectations of the entity or events after the reporting date. The amendments are effective for annual
periods beginning on or after January 1, 2023, and applied retrospectively. The Company will adopt the
narrow scope amendments on the date it becomes effective and is currently evaluating the impact of the
amendments on its consolidated financial statements.
(17)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
6. Cash and cash equivalents
Cash
Short-term bank deposits
7. Accounts receivable and other
December 31, 2020
December 31, 2019
$
$
371,057
$
80,905
451,962
$
173,801
3,941
177,742
December 31, 2020
December 31, 2019
Trade receivables
Value added tax and other taxes recoverable
$
Other receivables and advances
Prepaid expenses and deposits
Marketable securities
$
35,649
12,171
5,843
19,359
194
$
73,216
$
35,107
17,658
10,756
11,789
3,828
79,138
8. Inventories
Ore stockpiles
In-process inventory and finished goods
Materials and supplies
December 31, 2020
December 31, 2019
$
$
6,327
$
81,120
88,824
176,271
$
3,859
81,282
78,093
163,234
In 2020, inventories of $367,310 (2019 – $296,218) were recognized as an expense during the year and
included in cost of sales.
During the year ended December 31, 2020, charges of $2,122 and $206 were recognized in production costs
and depreciation, respectively, to reduce the cost of lead and zinc concentrate inventory at Stratoni to net
realizable value. During the year ended December 31, 2019, charges of $632 and $1,894 were recognized in
production costs and depreciation, respectively, to reduce the cost of lead, zinc and gold concentrate inventory
at Olympias and Stratoni to net realizable value.
9. Other assets
December 31, 2020
December 31, 2019
Long-term value added tax and other taxes recoverable
Prepaid forestry fees
Prepaid loan costs (Note 15(b))
Other assets
$
$
$
32,148
2,655
2,191
2,568
39,562
$
13,749
3,222
2,865
3,107
22,943
(18)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
10. Non-controlling interests
On May 11, 2020, the Company purchased the remaining 5% interest in Hellas, a subsidiary of the Company,
for cash consideration of $7,500. Hellas operates the Olympias and Stratoni mines and holds the Skouries
project. Additional consideration may become payable under certain circumstances but is not expected to be
material. As Hellas was controlled by the Company prior to the acquisition, $4,172 was recorded in contributed
surplus representing the difference between the cash consideration and the carrying value of the non-
controlling interest at the date of purchase.
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. As the Company
purchased the remaining 5% interest in Hellas, the carrying value is nil at December 31, 2020. The non-
controlling interest portion of the income statement and statement of cash flow amounts for Hellas prior to the
acquisition in 2020 are presented in the table below.
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 generated from (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
December 31, 2020
December 31, 2019
Hellas
0% (1)
Deva
19.5%
Hellas
5%
Deva
19.5%
—
—
—
—
—
$
$
3,178
412,251
(235)
(322,454)
92,740
$
$
67,902
1,858,544
(1,050,952)
(405,318)
470,176
$
$
1,867
415,149
(312)
(294,493)
122,211
—
$
37,520
$
13,362
$
42,903
(6,535) $
(3,750) $
(215) $
(4,856)
(16,708)
10
(45,216)
(15)
18,927
4,754
50,026
4,803
(4,316) $
1,014
$
4,595
$
(68)
$
65,781
(33,824)
(1,691)
—
$
$
—
(27,604)
(5,383)
—
140,156
(107,758)
(5,388)
—
—
(6,494)
(1,266)
—
$
$
$
$
$
$
(1) The Company purchased the remaining 5% non-controlling interest in Hellas on May 11, 2020.
Net loss allocated to NCI in the consolidated statement of operations includes $106 related to non-material
subsidiaries (2019 – $247). The carrying value of the NCI related to non-material subsidiaries is $3,353 (2019
– $3,039).
(19)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
11. Property, plant and equipment
Cost
Balance at January 1, 2019
Additions/transfers (1)
IFRS 16 transition adjustment
Proceeds on pre-commercial production
sales, net
Commercial production transfers
(Impairment) reversal
Write-down of assets
Other movements/transfers
Transfer to assets held for sale
(Note 32)
Disposals
Balance at December 31, 2019
Additions/transfers (1)
Write-down of assets
Other movements/transfers
Disposals
Balance at December 31, 2020
Accumulated depreciation
Balance at January 1, 2019
Depreciation for the year
Impairment reversal
Other movements
Disposals
Balance at December 31, 2019
Depreciation for the year
Other movements
Disposals
Balance at December 31, 2020
Carrying amounts
At January 1, 2019
At December 31, 2019
Balance at December 31, 2020
Land and
buildings
Plant and
equipment
Capital
works in
progress
Mineral
properties
Capitalized
Evaluation
Total
$ 192,244 $ 2,112,033 $ 109,361 $ 4,169,157 $
17,379
7,555
—
27,070
—
—
(1,715)
85,929
1,734
19,735
90
68,794
—
—
92,791
11,690
(1,979)
33,335
—
—
(15,268)
—
(30,103)
(12,159)
(119,861)
—
—
(505)
—
(22)
(11,690)
(4,455)
—
(737)
—
(2,421)
$ 242,511 $ 2,319,388 $ 83,078 $ 4,103,005 $
$ 14,737 $
82,285 $ 61,135 $
55,971 $
—
1,841
(402)
—
22,371
(10,297)
(40,030)
(20,594)
(76)
—
(2,217)
—
$ 258,687 $ 2,413,747 $ 83,513 $ 4,156,759 $
93,459 $ 6,676,254
195,230
9,379
3,393
—
—
—
—
(16)
(129)
(12,159)
—
(3,578)
(1,995)
883
—
—
(11,690)
(7,635)
96,707 $ 6,844,689
2,115 $ 216,243
(40,030)
1,373
(10,877)
98,692 $ 7,011,398
—
(28)
(102)
$ (47,974) $ (1,008,763) $
(10,605)
—
(206)
7
(107,654)
90,825
(1,049)
2,058
$ (58,778) $ (1,024,583) $
$ (13,898) $
(125)
54
(159,759) $
(1,985)
3,880
$ (72,747) $ (1,182,447) $
— $ (1,631,041) $
—
—
—
—
— $ (1,673,126) $
(51,965)
9,667
213
—
(84,947) $
— $
—
—
— $ (1,757,711) $
247
115
— $ (2,687,778)
(170,224)
—
100,492
—
(1,042)
—
2,065
—
— $ (2,756,487)
(258,604)
— $
(1,863)
—
—
4,049
— $ (3,012,905)
$ 144,270 $ 1,103,270 $ 109,361 $ 2,538,116 $
$ 183,733 $ 1,294,805 $ 83,078 $ 2,429,879 $
$ 185,940 $ 1,231,300 $ 83,513 $ 2,399,048 $
93,459 $ 3,988,476
96,707 $ 4,088,202
98,692 $ 3,998,493
(1) There were no amounts included in property, plant and equipment that relate to capitalized interest during the year ended December
31, 2020 (2019 - $3,848 capitalized).
(20)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
11. Property, plant and equipment (continued)
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.
(i) Olympias
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. Based on its assessment, the Company determined that no impairment loss or reversal of
impairment for the Olympias CGU was required.
In December 2020, as a result of more stable production volumes at the Olympias mine which provided a more
reliable basis to estimate future results, the Company updated its unit cost estimates and mining assumptions
used for estimating reserves, including increased mining dilution and decreased mining recovery. These
factors resulted in an increase in cut-off values and led to a 23% decrease in proven and probable reserves,
which the Company considered to indicate a potential impairment for Olympias. Using a FVLCD approach, the
Company assessed the recoverable amount of the Olympias CGU as at December 31, 2020. Based on its
assessment, the Company determined that no impairment loss or reversal of impairment for the Olympias
CGU was required.
The significant assumptions used for determining the recoverable amount of the Olympias CGU are reflected
in the table below. Management used judgement in determining estimates and assumptions with respect to
discount rates, future production levels including amount of recoverable reserves, resources and exploration
potential, operating and capital costs, long-term metal prices and estimates of the fair value of mineral
properties beyond proven and probable reserves. Metal pricing assumptions were based on consensus
forecast pricing and discount rates were based on a weighted average cost of capital, adjusted for country and
other risks specific to the CGU. Changes in any of the assumptions or estimates used in determining the fair
values could impact the impairment analysis.
Gold price ($/oz)
Silver price ($/oz)
Lead price ($/t)
Zinc price ($/t)
Discount rate
2020
$1,850 - $1,550
$25 - $21
$2,000 - $1,975
$2,575 - $2,400
6.0% - 6.5%
2019
$1,400
$18
$2,100
$2,400
6.0%
In advance of signing an amended investment agreement with the Hellenic Republic in early 2021, the
Company determined that certain of its capital works in progress at Olympias would no longer be required and
will not be completed. Accordingly, capitalized costs of $40,030 were recorded as a write-down of assets as at
December 31, 2020.
(21)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
11. Property, plant and equipment (continued)
(ii) Kişladağ
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 was developed
utilizing the leach pad for the life of the Kişladağ mine and no longer required the construction of a mill. As a
result, the Company recorded an impairment reversal to the Kişladağ 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 Kişladağ 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 original September 30, 2018 impairment not
been recognized. There was an additional impairment loss recorded of $15,269 ($11,910, net of deferred tax)
to write-off capitalized costs relating to the mill construction project.
12. Goodwill
As of December 31, 2020 all goodwill relates to the Lamaque CGU. Goodwill is tested for impairment annually
on December 31 and when circumstances indicate that the carrying value may not be recoverable. Impairment
is determined for goodwill by assessing the recoverable amount of the CGU. The recoverable amount of the
Lamaque CGU is based on the net present value of future cash flows expected to be derived from the CGU.
The recoverable amount used by the Company represents the CGU’s FVLCD, a Level 3 fair value
measurement, as it was determined to be higher than value in use.
The significant assumptions used for determining the recoverable amount of goodwill in the Lamaque CGU are
reflected in the table below. Management used judgement in determining estimates and assumptions with
respect to discount rates, future production levels including amounts of recoverable reserves, resources and
exploration potential, operating and capital costs, long-term metal prices and estimates of the fair value of
mineral properties beyond proven and probable reserves. Metal pricing assumptions were based on
consensus forecast pricing, and the discount rates were based on a weighted average cost of capital, adjusted
for country risk and other risks specific to the CGU. Cash flows were projected through to 2030. Changes in
any of the assumptions or estimates used in determining the fair values could impact the recoverable amount
of goodwill analysis.
Gold price ($/oz)
Discount rate
2020
$1,850 - $1,550
5%
2019
$1,400
5%
The estimated recoverable amount of the Lamaque CGU including goodwill exceeded its carrying amount as
at December 31, 2020 by approximately $269,000. Impairment would result from a decrease in the long-term
gold price of $325 per ounce, or an increase in operating expenditures by 25%.
(22)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
13. 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
Opening balance at January 1, 2019
$
—
$
11,345
$
Right-of-use
Land and
buildings
Right-of-use
Plant and
equipment
Initial adoption of IFRS 16
Additions
Disposals
Balance at December 31, 2019
Additions
Disposals
Balance at December 31, 2020
Accumulated Depreciation
Opening balance at January 1, 2019
Depreciation for the year
Disposals
Balance at December 31, 2019
Depreciation for the year
Disposals
Balance at December 31, 2020
Right-of-use assets, net carrying amount at
December 31, 2019
Right-of-use assets, net carrying amount
at December 31, 2020
$
$
$
$
$
$
7,555
552
—
8,107
6,922
(474)
$
1,824
13,463
(232)
26,400
4,372
(931)
$
14,555
$
29,841
$
—
$
—
$
(1,184)
—
(4,705)
151
(1,184) $
(4,554) $
(1,200)
81
(5,926)
206
Total
11,345
9,379
14,015
(232)
34,507
11,294
(1,405)
44,396
—
(5,889)
151
(5,738)
(7,126)
287
(2,303) $
(10,274) $
(12,577)
6,923
21,846
12,252
$
19,567
$
28,769
31,819
Interest expense on lease liabilities is disclosed in Note 18(b) and the cash payments for the principal portion
of lease liabilities is presented on the Consolidated Statement of Cash Flow. The Company's future obligations
related to lease liabilities is disclosed in Note 24.
14. Accounts payable and accrued liabilities
Trade payables
Taxes payable
Accrued expenses
December 31, 2020
December 31, 2019
$
$
65,060
10,997
103,315
179,372
$
$
67,107
13,205
58,792
139,104
(23)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
15. Debt
December 31, 2020
December 31, 2019
Senior secured notes due 2024, net of unamortized discount
and transaction costs of $8,680 (2019 - $13,806)(Note 15 (a)) $
Term loan, net of unamortized transaction costs of $1,491
(2019 - $2,239) (Note 15 (b))
Revolving credit facility (Note 15 (b))
Redemption option derivative asset (Note 15 (a))
Total debt
Less: Current portion
Non-current portion
$
$
226,647
$
287,568
131,842
150,000
(7,357)
501,132
$
66,667
434,465
$
197,761
—
(5,597)
479,732
66,667
413,065
Reconciliation of debt arising from financing activities:
2020
Senior notes
due 2024 and
term loan
2020
Revolving
credit facility
2019
Senior notes
due 2024 and
term loan
2019
Senior notes
due 2020
Balance beginning of year
$
479,732 $
—
$
— $
595,977
Financing cash flows related to debt:
Redemption of Senior notes due 2024
Scheduled repayment of term loan
Proceeds from revolving credit facility
Repayment of Senior notes due 2020
Proceeds from Senior secured notes
due 2024, net of discount
Proceeds from term loan
Loan financing costs
(66,047)
(66,667)
—
—
—
—
—
—
—
150,000
—
—
—
—
—
—
—
—
—
—
—
(600,000)
294,000
200,000
(15,583)
—
—
—
Total financing cash flows related to debt
(132,714)
150,000
478,417
(600,000)
$
347,018 $
150,000
$
478,417 $
(4,023)
Non-cash changes recorded in debt:
Amortization of discount and transaction
costs of Senior notes due 2024 due to
early 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
Amortization of deferred costs for Senior
notes due 2020, and deferred costs
expensed upon note redemption
2,286
3,588
(1,760)
—
—
—
—
—
—
—
—
2,206
(4,224)
3,333
—
Balance end of year
$
351,132 $
150,000
$
479,732 $
—
—
—
—
4,023
—
(24)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
15. Debt (continued)
(a) Senior Secured Second Lien Notes due 2024
On June 5, 2019, the Company completed an offering of $300,000 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 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 ("Equity Redemption Option").
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 above constitute an embedded derivative asset, which is recognized separately at fair
value and is classified as fair value through profit and loss. The increase in fair value for the year ended
December 31, 2020 is $1,760 (2019 - $4,224).
On August 31, 2020, the Company paid $65,530 to redeem $58,574 of senior secured notes pursuant to the
equity redemption option, including a $5,565 redemption premium and $1,391 of interest accrued to the date of
redemption. On December 1, 2020, the Company paid $8,183 to redeem $7,473 of senior secured notes
pursuant to the equity redemption option, including a $710 redemption premium. As a result of the
redemptions, $2,286 of unamortized discount and deferred transaction costs were recognized as finance costs
together with the $6,275 redemption premiums.
The senior secured notes are secured on a second lien basis by a general security agreement with the
Company’s real property in Canada and shares of SG Resources B.V., Tüprag Metal, Eldorado Gold (Greece)
BV, Eldorado Gold (Québec) Inc., all wholly owned subsidiaries of the Company. During the year ended
December 31, 2020, the Company paid $1,344 to Tüprag, a subsidiary, relating to guarantee fees.
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,
2020.
The fair market value of the senior secured notes as at December 31, 2020 is $260,500 (2019 - $324,000).
(25)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
15. Debt (continued)
(b) Senior Secured Credit Facility
In May 2019, the Company executed a $450,000 amended and restated senior secured credit facility (“the
third amended and restated credit agreement” or “TARCA”) which consists of the following:
i) A $200,000 non-revolving term loan ("Term loan") with six equal semi-annual payments commencing
June 30, 2020.
ii) A $250,000 revolving credit facility with a maturity date of June 5, 2023.
On March 30, 2020, the Company drew $150,000 under the revolving credit facility as a proactive measure in
light of the uncertainty surrounding the novel coronavirus ("COVID-19") pandemic. The Company has no
immediate need for the funds and this amount remains outstanding at December 31, 2020 (2019 - nil). At
December 31, 2020, the $150,000 credit facility draw is classified as non-current according to its contractual
maturity.
In 2020, the Company made two scheduled payments of $33,333 each in June and December relating to the
$200,000 Term loan.
As at December 31, 2020, the Company has outstanding non-financial (Greece) and Financial (Canada) letters
of credit of EUR 57,600 and CAD $400, respectively and totaling $70,800 (2019 - EUR 57,600 and CDN $400,
totaling $64,500). The letters of credit were issued to secure certain obligations in connection with the
Company's operations (Note 16) and reduce availability under the revolving credit facility by corresponding
amounts. In February 2021, the TARCA was amended such that the non-financial letters of credit no longer
reduce credit availability under the revolving credit facility. A repayment of $11,100 of principal on the Term loan
was made in conjunction with this amendment.
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, 2020.
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. As at December 31, 2020, the Company’s current interest
charges and fees are as follows: LIBOR plus margin of 2.25% on the term loan and any amounts drawn from
the revolving credit facility; two thirds the applicable margin (1.50%) on non-financial letters of credit plus
0.37%, and 2.25% on financial letters of credit plus 0.37%, secured by the revolving credit facility, and
0.5625% 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,
Eldorado Gold (Québec) Inc., all wholly owned subsidiaries of the Company.
Fees relating to the revolving credit facility have been recorded in other assets at the time of establishment and
are being amortized over the term of the TARCA. As at December 31, 2020, the prepaid loan cost was $2,191
(2019 – $2,865).
(26)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
16. Asset retirement obligations
Turkey
Canada
Greece
Romania
Brazil (1)
Total
At January 1, 2020
$
39,196 $
12,638 $
42,650 $
1,533 $
— $
96,017
Accretion during the year
Revisions to estimate
Settlements
Disposal
753
5,539
(672)
—
243
863
80
—
—
10,056
(1,629)
—
34
94
—
—
52
—
—
(52)
1,945
15,769
(2,301)
(52)
At December 31, 2020
$
44,816 $
12,961 $
51,940 $
1,661 $
— $ 111,378
Less: Current portion
Long term portion
—
—
(4,701)
—
—
(4,701)
$
44,816 $
12,961 $
47,239 $
1,661 $
— $ 106,677
Estimated undiscounted amount
$
56,752 $
14,218 $
65,564 $
2,153 $
— $ 138,687
(1) The asset retirement obligation related to the Vila Nova mine was included in liabilities associated with assets held for sale at
December 31, 2019 and disposed of in 2020 (Note 32)
Turkey
Canada
Greece
Romania
Brazil
Total
At January 1, 2019
$
36,479 $
12,215 $
40,069 $
1,364 $
4,016 $
94,143
Accretion during the year
Revisions to estimate
Settlements
Reclassified to liabilities associated
with assets held for sale
981
2,330
(594)
316
107
1,090
3,704
—
(2,213)
39
130
—
106
—
—
2,532
6,271
(2,807)
—
—
—
—
(4,122)
(4,122)
At December 31, 2019
$
39,196 $
12,638 $
42,650 $
1,533 $
— $
96,017
Less: Current portion
Long term portion
Estimated undiscounted amount
$
$
—
—
(1,782)
—
—
(1,782)
39,196 $
12,638 $
40,868 $
1,533 $
— $
94,235
48,064 $
14,998 $
56,467 $
2,287 $
4,416 $ 126,232
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 net increase in the estimate of
the obligation in 2020 was mainly due to an update of estimated closure costs at Olympias, Stratoni and
Kişladağ, together with lower discount rates.
(27)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
16. Asset retirement obligations (continued)
The provision is calculated as the present value of estimated future net cash outflows based on the following
key assumptions:
At December 31, 2020
Inflation rate
Discount rate
At December 31, 2019
Inflation rate
Discount rate
Turkey
Canada
Greece
Romania
Brazil
%
0.7 to 1.5
0.7 to 1.5
1.8
1.9
%
0.9
0.9
1.8
1.9
%
0.4 to 1.7
0.4 to 1.7
1.7 to 1.9
1.7 to 2.3
%
1.5
1.5
1.9
2.3
%
—
—
1.6
1.6
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 estimated
U.S inflation rates.
In relation to the asset retirement obligations in Greece, the Company has the following:
a) A €50,000 Letter of Guarantee to the Ministry of Environment and Energy and Climate Change ("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 187 basis points.
b) A €7,500 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 187 basis points.
c) Restricted cash of $2,060 (2019 - $3,080) relates to an environmental guarantee deposit posted as security
for rehabilitation works in relation to the Lamaque mine.
17. 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, 2020
December 31, 2019
$
$
$
$
3,036
$
(187)
2,849
$
2,778
(61)
2,717
(3,440) $
(6,361)
(29,639) $
(26,199)
(28)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
17. Employee benefit plans (continued)
Defined Benefit Plans
The Company operated a registered pension plan (“the Pension Plan”) and operates a Supplemental Pension
Plan (“the SERP”), which are defined benefit pension plans in Canada. The SERP is a Retirement
Compensation Arrangement (“RCA”), which is 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 were 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 for the SERP to determine the pension obligation and assets for accounting purposes was December 31,
2020.
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.
No contributions were made to the Pension Plan and the SERP during 2020 (2019 – nil). Cash payments and
transfers totaling $18,224 were made directly to beneficiaries during the year (2019 – $26,771) from Pension
Plan and SERP assets. For the year 2021, no contributions are expected to be made to the SERP.
On December 13, 2019, the Company resolved to wind-up the Pension Plan and the SERP. During September
2020, the Pension Plan was settled through the purchase of an annuity on behalf of the members. Accordingly,
the plan assets and liabilities were re-measured on September 30, 2020, and a gain on settlement of $5 has
been recognized in other income.
The SERP’s defined benefit obligation has been measured as at December 31, 2020 based on the face value
of the actual residual lump sum payments expected to be paid to members. The plan settlement has been
measured based on market conditions as at December 31, 2020.
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, 2020 is $339 (2019 –
$404). The amount of contributions to the defined contribution plan for the year ended December 31, 2020 is
$344 (2019 – $718).
(29)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
17. Employee benefit plans (continued)
The amounts recognized in the consolidated statement of financial position for all pension plans are
determined as follows:
December 31, 2020
December 31, 2019
Employee
benefit
plans
SERP
Total
Employee
benefit
plans
SERP
Total
Present value of obligations
$
(21,974) $
(2,721) $ (24,695) $
(20,182) $ (18,366) $ (38,548)
Fair value of plan assets
—
8,470
8,470
1,958 24,610 26,568
Asset (liability) on statement of
financial position
$
(21,974) $ 5,749 $ (16,225) $
(18,224) $ 6,244 $ (11,980)
The movement in the present value of the employee benefit obligations over the years is as follows:
Balance at January 1,
Current service cost
Past service cost
Interest cost
Actuarial gain (loss)
2020
2019
Employee
benefit
plans
SERP
Total
Employee
benefit
plans
SERP
Total
$
(20,182) $ (18,366) $ (38,548) $
(16,239) $ (37,075) $ (53,314)
(2,446)
—
—
—
(2,446)
(2,181)
(172)
(2,353)
—
—
(97)
(97)
(639)
(547)
(1,186)
(669)
(1,447)
(2,116)
(2,664)
548
(2,116)
(3,097)
(4,781)
(7,878)
Assets distributed on settlement
3,146 14,945 18,091
— 24,430 24,430
Benefit payments
Exchange gain (loss)
Balance at December 31,
1,172
(361)
180
519
1,352
158
1,576
2,189
3,765
428
(1,413)
(985)
$
(21,974) $
(2,721) $ (24,695) $
(20,182) $ (18,366) $ (38,548)
The movement in the fair value of plan assets over the years is as follows:
2020
2019
Employee
benefit
plans
SERP
Total
Employee
benefit
plans
SERP
Total
At January 1,
$
1,958 $ 24,610 $ 26,568
$
1,864 $ 46,195 $ 48,059
Interest income on plan assets
Actuarial gain (loss)
42
59
736
778
(1,383)
(1,324)
Contributions by employer
1,281
—
1,281
72
82
—
1,809
1,435
—
1,881
1,517
—
Assets distributed on settlement
(3,141)
(14,945)
(18,086)
—
(24,430)
(24,430)
Benefit payments
Exchange gain (loss)
(138)
(61)
(180)
(368)
(318)
(429)
(152)
(2,189)
(2,341)
92
1,790
1,882
At December 31,
$
— $ 8,470 $ 8,470
$
1,958 $ 24,610 $ 26,568
(30)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
17. Employee benefit plans (continued)
The amounts recognized in the consolidated statements of operations are as follows:
Current service cost
Interest cost
Past service cost
Loss on settlement
2020
2019
Employee
benefit
plans
SERP
Total
Employee
benefit
plans
SERP
Total
$
2,446 $
— $ 2,446
$
2,181 $
172 $ 2,353
639
547
1,186
669
1,447
2,116
—
(5)
—
—
—
(5)
—
—
97
32
97
32
Expected return on plan assets
(44)
(734)
(778)
(72)
(1,809)
(1,881)
Employee benefit plans expense
(recovery)
$
3,036 $
(187) $ 2,849
$
2,778 $
(61) $ 2,717
The actual return on plan assets was a loss of $546 (2019 – gain of $3,439).
The principal actuarial assumptions used were as follows:
2020
2019
Employee benefit plans
SERP
Employee benefit plans
SERP
Greece Turkey Canada
Canada Greece Turkey Canada
Canada
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
%
%
%
—
—
3.1
0.9
0.4
1.7
13.0
12.8
8.5
3.1
—
—
%
3.1
3.1
3.1
—
%
%
%
—
—
3.9
1.7
0.9
2.7
15.0
13.0
8.2
3.9
3.1
2.0
%
3.9
3.9
3.1
2.0
—
—
—
—
—
—
0.6
years
0.6
years
The assets of the employee benefit plan are nil following the purchase of an annuity on behalf of the members
of the Pension Plan. The assets held in the SERP account are held in cash with a major custodian and are
invested only in conformity with the investment requirements of applicable pension laws.
(31)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
17. Employee benefit plans (continued)
The following table summarizes the defined benefit plans’ weighted average asset allocation percentages by
asset category:
December 31, 2020
December 31, 2019
Investment funds
Money market
Canadian fixed income
Canadian equities
US equities
International equities
Other (1)
Employee
benefit plans (2)
SERP
Employee
benefit plans
—
—
—
—
—
—
—
80 %
— %
— %
— %
— %
20 %
100 %
2 %
98 %
—
—
—
—
100 %
SERP
7 %
— %
— %
— %
— %
93 %
100 %
(1) Assets held by the Canada Revenue Agency in the refundable tax account
(2) The Pension Plan was settled in September 2020
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 $1,583
Increase by $1,544
Increase by $1,497
Decrease by $1,558
18. Other (expense) income and finance costs
(a) Other (expense) income
December 31, 2020
December 31, 2019
Interest income and other income (expense)
Gain on disposition of Vila Nova (Note 32)
Gain (loss) on disposal of assets
Income from royalty sale
$
$
$
1,310
2,451
(5,038)
—
(1,277) $
3,154
—
656
8,075
11,885
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 license to the Company in October 2019.
(32)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
18. Other (expense) income and finance costs (continued)
(b) Finance costs
December 31, 2020
December 31, 2019
Interest on the senior secured notes
$
29,486
$
Interest on the term loan
Interest on the redeemed 2012 notes
Other interest and financing costs
Senior secured notes redemption premium
Amortization of discount and transaction costs of senior
secured notes due to early redemption
Write-off of unamortized transaction costs
of 2012 notes and ARCA (Note 15(b))
Redemption option derivative gain (Note 15(a))
Interest expense on lease liabilities
Asset retirement obligation accretion
Total finance costs
Less: Capitalized interest
6,380
—
4,397
6,275
2,286
—
(1,760)
1,934
1,945
$
$
50,943
$
—
50,943
$
18,087
6,611
17,525
3,196
—
—
3,559
(4,224)
1,828
2,532
49,114
3,848
45,266
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.
19. Income taxes
Total income tax expense consists of:
Current tax expense
Deferred tax recovery
December 31, 2020
December 31, 2019
$
$
88,575
$
(9,441)
79,134
$
56,350
(16,579)
39,771
(33)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
19. Income taxes (continued)
Total income tax expense attributable to each geographical jurisdiction for the Company is as follows:
Turkey
Canada
Greece
Romania
Brazil
Other jurisdictions
2020
$
65,815
$
23,122
(8,763)
(6,081)
5,041
—
$
79,134
$
The key factors affecting income tax expense for the years are as follows:
Earnings from continuing operations before income tax
$
176,495
$
Canadian statutory tax rate
27%
Tax expense on net earnings at Canadian statutory tax rate
$
47,654
$
2020
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
Turkish investment tax credits
Québec mineral tax
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
(20,875)
—
(21,669)
10,712
25,598
7,400
22,798
8,705
(1,189)
$
79,134
$
2019
57,518
(2,727)
(14,306)
(1,110)
249
147
39,771
2019
113,456
27%
30,633
(24,608)
(7,243)
—
63
16,231
13,514
13,382
(5,278)
3,077
39,771
(34)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
19. Income taxes (continued)
The change in the Company’s net deferred tax position was as follows:
Net deferred income tax liability
Balance at January 1,
$
412,717
$
Deferred income tax recovery in the statement of operations
Deferred tax recovery in the consolidated statement of OCI
(9,441)
(563)
Balance at December 31,
$
402,713
$
429,929
(16,579)
(633)
412,717
2020
2019
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
Recovery
2020
2019
2020
2019
2020
2019
Property, plant and equipment
$
— $
— $ 458,622 $ 498,384 $
(39,762) $
14,823
Loss carryforwards
Liabilities
Future withholding taxes
Other items
33,587
42,079
35,794
31,793
—
—
—
7,680
6,234
—
2,545
8,492
1,697
(4,834)
(1,927)
—
6,234
(20,000)
15,930
24,346
15,488
10,006
13,898
(4,641)
Balance at December 31,
$
85,311 $
98,218 $ 488,024 $ 510,935 $
(9,441) $
(16,579)
Unrecognized deferred tax assets
Tax losses
Other deductible temporary differences
Unrecognized tax losses
$
$
2020
181,667
$
39,394
221,061
$
2019
169,498
30,242
199,740
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. Cumulative losses with a deferred tax benefit of $181,667 (2019 –
$169,498) have not been recognized. The gross amount of tax losses for which no deferred tax asset was
recognized expire as follows:
2020
Expiry date
2019
Expiry date
Canadian net operating loss carryforwards
Canadian capital losses
$
Greek net operating loss carryforwards
Brazilian net operating loss carryforwards
512,102
65,836
140,196
2,421
2025-2040 $
none
2021-2025
none
487,229
63,483
98,395
31,128
2025-2039
none
2020-2024
none
(35)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
19. Income taxes (continued)
Deductible temporary differences
At December 31, 2020 the Company had deductible temporary differences for which deferred tax assets of
$39,394 (2019 – $30,242) 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, 2020, these earnings amount to $927,295 (2019 – $788,917).
Substantially all of these earnings would be subject to withholding taxes if they were remitted by the foreign
subsidiaries.
Other factors affecting taxation
During 2020 the Turkish Lira weakened, resulting in a deferred income tax expense during the year of $12,609
(2019 – $8,099) due to the decrease in the value of the future tax deductions associated with the Turkish
operations. The Company expects that any 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.
20. Share capital
Eldorado’s authorized share capital consists of an unlimited number of voting common shares without par
value.
On September 26, 2019, the Company established an at-the-market equity program (the "ATM Program")
which allowed the Company to issue up to $125,000 of common shares from treasury from time to time at
prevailing market prices. As at December 31, 2020, 14,458,000 common shares have been issued since the
establishment of the ATM Program for total net proceeds of $121,540, including 8,353,042 common shares
issued during the year ended December 31, 2020.
On June 25, 2020, the Company completed a private placement of 384,616 common shares at a price of CDN
$13.00 per share. The aggregate gross proceeds of CDN $5,000 ($3,664), will be used to fund the initial stage
of the Lamaque decline project. The shares will qualify as flow-through shares for Canadian tax purposes and
were issued at a premium of CDN $0.45 per share to the closing market price of the Company’s common
shares at the date of issue. The premium of $127 was recognized in accounts payable and accrued liabilities
and will be recognized in other income once required expenditures are incurred and related tax benefits are
renounced.
On September 30, 2020, the Company completed private placements of 435,324 common shares at a price of
CDN $16.08 per share for proceeds of CDN $7,000; and 176,160 common shares at a price of CDN $17.03 for
proceeds of CDN $3,000. The proceeds of CDN $7,000 ($5,248), will be used to continue to fund the Lamaque
decline project. The proceeds of CDN $3,000 ($2,249) will be used to fund continued exploration at the
Ormaque zone. The shares will qualify as flow-through shares for Canadian tax purposes and were issued at a
premium of CDN $2.03 and CDN $2.98, respectively, per share to the closing market price of the Company’s
common shares at the date of issue. The combined premium of $1,056 was recognized in accounts payable
and accrued liabilities and will be recognized in other income once required expenditures are incurred and
related tax benefits are renounced.
(36)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
20. Share capital (continued)
Voting common shares
Balance at January 1,
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
Flow-through shares issued, net of costs and
premium
Balance at December 31,
2020
2019
Number of
Shares
Total
164,963,324 $ 3,054,563
Number of
Shares
Total
158,801,722 $ 3,007,924
618,915
3,559
56,644
265
—
8,353,042
—
1,267
76,957
(1,570)
—
6,104,958
—
103
48,041
(1,770)
996,100
9,868
174,931,381 $ 3,144,644
—
—
164,963,324 $ 3,054,563
21. Share-based payment arrangements
Share-based payments expense consists of:
December 31, 2020
December 31, 2019
Share options
$
3,347
$
Restricted share units with no performance criteria
Restricted share units with performance criteria
Deferred units
Performance share units
1,305
2,556
2,270
1,214
3,128
1,600
1,195
2,209
2,264
$
10,692
$
10,396
i)
Share option plans
The Company's incentive stock option plan (the "Plan") consists of options ("Options") which are subject to a 5-
year maximum term and payable in shares of the Company when vested and exercised. Options vest at the
discretion of the board of directors of the Company (the "Board") at the time an Option is granted. Options
generally vest in three equal and separate tranches with the first 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.
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
At December 31,
2020
Weighted
average exercise
price Cdn$
$14.08
Number of
options
5,714,491
12.72
1,156,744
7.75
33.40
12.53
$11.56
(618,915)
(813,933)
(345,999)
5,092,388
2019
Weighted
average exercise
price Cdn$
$22.56
5.98
6.20
38.96
21.48
$14.08
Number of
options
5,591,228
2,387,256
(56,644)
(697,322)
(1,510,027)
5,714,491
(37)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
21. Share-based payment arrangements (continued)
As at December 31, 2020, a total of 3,898,038 options (2019 – 3,748,454) were available to grant under the
Plan. As at December 31, 2020, 2,416,611 share purchase options (December 31, 2019 – 2,670,039) with a
weighted average exercise price of CDN $14.45 (2019 – CDN $21.87) had vested and were exercisable.
The weighted average market share price at the date of exercise for share options exercised in 2020 was CDN
$14.47 (2019 – CDN $10.43).
During the year ended December 31, 2020, 1,156,744 (2019 – 2,387,256) share options were granted. The
weighted average fair value per stock option granted was CDN $4.12 (2019 – CDN $2.19).
Options outstanding are as follows:
December 31, 2020
Total options outstanding
December 31, 2020
Exercisable options
Range of
exercise
price
Cdn$
Shares
$5.00 to $5.99
1,715,345
$6.00 to $6.99
$10.00 to $10.99
$11.00 to $11.99
$12.00 to $12.99
$13.00 to $13.99
$16.00 to $16.99
$21.00 to $21.99
$22.00 to $22.99
$23.00 to $23.99
$29.00 to $29.99
543,509
152,941
189,812
860,643
68,649
783,341
20,000
603,766
151,933
2,449
5,092,388
Weighted
average
remaining
contractual
life (years)
Weighted
average
exercise
price
Cdn$
Weighted
average
exercise
price
Cdn$
$5.68
6.20
—
—
—
—
16.10
21.15
22.00
23.18
29.55
Shares
562,607
292,515
—
—
—
—
783,341
20,000
603,766
151,933
2,449
$5.68
6.20
10.40
11.56
12.90
13.50
16.10
21.15
22.00
23.18
29.55
$11.56
2,416,611
$14.45
3.2
2.3
3.9
4.5
4.2
4.3
0.1
0.8
1.1
1.2
0.4
2.5
The assumptions used to estimate the fair value of options granted during the years ended December 31,
2020 and December 31, 2019 are in the table below. Volatility was determined based on the historical volatility
over the estimated lives of the options.
Risk-free interest rate (range) (%)
Expected volatility (range) (%)
Expected life (range) (years)
Expected dividends (Cdn$)
2020
0.25 – 0.95
63 – 70
1.96 – 3.96
—
2019
1.34 – 1.80
59 – 63
1.98 – 3.98
—
(38)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
21. Share-based payment arrangements (continued)
(ii) Restricted share units plan
The Company has a restricted share unit plan (“RSU” plan) whereby restricted share units ("RSUs") may be
granted to senior management of the Company. Such RSUs may be redeemed by the holder in shares or
cash, with cash redemptions subject to the approval of the Board. The current maximum number of common
shares authorized for issue under the RSU plan is 5,000,000. During the year ended December 31, 2020, the
Company purchased 385,000 shares on the open market for $3,550. As at December 31, 2020, 564,586
common shares purchased by the Company remain held in trust in connection with this plan 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 149,552 RSUs with no performance criteria at an average grant-date fair value of CDN $12.90 per
unit were granted during the year ended December 31, 2020 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, 2020 and December 31, 2019 is as follows:
At January 1,
Granted
Redeemed
Forfeited
At December 31,
2020
536,330
149,552
(190,963)
(16,852)
478,067
2019
333,119
391,092
(137,594)
(50,287)
536,330
As at December 31, 2020, 44,748 restricted share units are fully vested and exercisable (2019 – 29,111).
b. RSU with performance criteria
RSUs with performance criteria vest on the third anniversary of the grant date, subject to achievement of pre-
determined market-based 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 three-year period.
A total of 299,112 RSUs with performance criteria were granted during the year ended December 31, 2020 with
a fair value of CDN $24.94 per unit. The fair value of each RSU with market-based performance criteria issued
is determined based on fair value of the share units on the date of grant which is based on a valuation model
which uses the expected future forward price of the Company's shares and an index consisting of global gold-
based securities.
(39)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
21. Share-based payment arrangements (continued)
A summary of the status of the RSUs with performance criteria and changes during the year ended
December 31, 2020 and December 31, 2019 is as follows:
At January 1,
Granted
Forfeited
At December 31,
(iii) Deferred units plan
2020
457,498
299,112
(66,643)
689,967
2019
152,927
412,473
(107,902)
457,498
The Company has an independent directors deferred unit plan (“DU Plan”) under which deferred units ("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”). The participant receives a cash payment equal to the market value of
such DUs as of the Redemption Date.
At December 31, 2020, 289,360 DUs were outstanding (2019 – 362,433) with a fair value of $3,834 (2019 –
$2,911), which is included in accounts payable and accrued liabilities. The fair value was determined based on
the closing share price at December 31, 2020.
(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.
There were no PSUs were granted during the year ended December 31, 2020 under the PSU Plan
(December 31, 2019 – 264,083). The current maximum number of common shares authorized for issuance
from treasury under the PSU Plan is 100,395. 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 expected future forward price of the
Company's shares and an index consisting of global gold securities.
Movements in the PSUs during the year ended December 31, 2020 and December 31, 2019 are as follows:
At January 1,
Granted
Expired
Forfeited
At December 31,
2020
610,885
—
(85,280)
—
525,605
2019
484,899
264,083
(129,109)
(8,988)
610,885
(40)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
22. Supplementary cash flow information
Changes in non-cash working capital:
December 31, 2020
December 31, 2019
Accounts receivable and other
Inventories
Accounts payable and accrued liabilities
$
$
(5,408) $
(3,209)
43,386
34,769
$
6,685
(16,410)
25,637
15,912
23. Financial risk management
23.1 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, 2020 and 2019, as listed below. The tables do not include amounts denominated in
U.S. dollars.
Cash and cash equivalents
Marketable securities
Accounts receivable and other
Accounts payable and accrued liabilities
Other non-current liabilities
Net balance
December 31, 2020
Canadian
dollar
$
Euro
€
Turkish lira
TRY
147,877
252
13,154
(66,387)
7,186
—
3,675
—
36,982
52,354
(41,299)
(418,674)
(72)
(14,219)
(31,043)
94,824
(11,350)
(393,688)
Equivalent in U.S. dollars
$
74,459 $
(13,909) $
(53,632)
Other foreign currency exposure is equivalent to $6,420 U.S. dollars.
(41)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
23. Financial risk management (continued)
Cash and cash equivalents
Marketable securities
Accounts receivable and other
Accounts payable and accrued liabilities
Other non-current liabilities
Net balance
December 31, 2019
Canadian
dollar
$
10,204
4,971
13,010
(59,583)
(1,520)
(32,918)
Euro
€
Turkish lira
TRY
10,692
—
8,631
9,930
—
8,923
(47,361)
(109,765)
(11,497)
(39,535)
—
(90,912)
Equivalent in U.S. dollars
$
(25,259) $
(44,213) $
(14,801)
Other foreign currency exposure is equivalent to $2,947 U.S. dollars.
Based on the balances as at December 31, 2020, a 1% increase or decrease in the U.S. dollar exchange rate
against all of the other currencies on that date would have resulted in an increase or decrease of
approximately $296 (2019 – $805) 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.
The commodity price risk associated with financial instruments relates primarily with the fair value changes
caused by final settlement pricing adjustments to trade receivables.
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.
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, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
23. 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. In March
2020, the Company additionally drew $150,000 under the revolving credit facility as a proactive measure in
light of the uncertainty surrounding the COVID-19 pandemic. Borrowings under the revolving credit facility are
also at variable rates of interest based on LIBOR. Borrowings at variable rates of interest expose the Company
to interest rate risk. At December 31, 2020, $133,333 is outstanding under the term loan and $150,000 is
outstanding under the revolving credit facility. A 1% change in the variable interest rate would result in a $2,873
change 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 $583,455 is the maximum
amount exposed to credit risk at December 31, 2020.
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, 2020, 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.
In March 2020, the Company drew $150,000 under the revolving credit facility and continues to hold these
funds as a proactive measure in light of the uncertainty surrounding the COVID-19 pandemic. The Company
has no immediate need for the funds. Management cannot accurately predict the impact COVID-19 will have
on the Company’s operations, the fair value of the Company's assets, its ability to obtain financing, third
parties’ ability to meet their obligations with the Company and the length of travel and quarantine restrictions
imposed by governments of the countries in which the Company operates.
(43)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
23. Financial risk management (continued)
The Company raised net proceeds of $121,540 under its ATM Program from September 2019 to September
2020. In 2020, the Company made scheduled payments of $66,667 on the $200,000 term loan. On August 31,
2020 and December 1, 2020, the Company made voluntary redemption payments of $58,574 and $7,473,
respectively, on the $300,000 senior secured notes. Management continues to monitor the Company’s
capabilities to meet ongoing debt and other commitments, including reviewing its operating costs and capital
budget to reduce expenditures if required.
Contractual maturities relating to debt and other obligations are included in Note 24. All other financial liabilities
are due within one year.
23.2 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.
24. Commitments and Contractual Obligations
The Company’s commitments and contractual obligations at December 31, 2020, include:
Debt (1)
Purchase obligations
Leases
Mineral properties
Asset retirement
obligations
2021
2022
2023
2024
2025 and later
Total
$
66,667 $
66,667 $ 150,000 $ 233,953 $
— $
517,287
56,903
13,274
4,658
2,967
6,277
4,467
239
2,822
4,636
239
2,298
4,636
239
11,415
12,265
60,587
36,086
30,662
4,701
4,292
3,301
420
125,973
138,687
$ 146,203 $
84,670 $ 160,998 $ 241,546 $
149,892 $
783,309
(1) Does not include interest on debt.
Debt obligations represent required repayments of principal for the senior secured notes and term loan. Debt
obligations also include the March 30, 2020 draw of $150,000 under the revolving credit facility that has been
presented in the table above as repayable on June 5, 2023, based on the contractual maturity date of the
revolving credit facility.
Purchase obligations relate primarily to operating costs at all mines and capital projects at Kişladağ. 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, 2020, Hellas Gold had entered into off-take agreements pursuant to which Hellas Gold
agreed to sell a total of 28,000 dry metric tonnes of zinc concentrate, 4,500 dry metric tonnes of lead/silver
concentrate, and 150,000 dry metric tonnes of gold concentrate, through the year ending December 31, 2021.
(44)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
24. Commitments and Contractual Obligations (continued)
As at December 31, 2020, Tüprag Metal Madencilik Sanayi Ve Ticaret A.S. (“Tüprag”) had entered into off-take
agreements pursuant to which Tüprag agreed to sell a total of 58,500 dry metric tonnes of gold concentrate
through the year ending December 31, 2021.
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 $57,500 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. 30,000 meters of expansion drilling was
reached during the second quarter of 2020 and in accordance with the terms of the agreement, the fixed price
has been adjusted by an additional $2.00 per ounce. Accordingly, the fixed price from August 3, 2020 is equal
to $11.43 per ounce.
Based on current Turkish legislation, the Company pays annual royalties to the Government of Turkey on
revenue less certain costs associated with ore haulage, mineral processing and related depreciation. Royalties
are calculated on the basis of a sliding scale according to the average London Metal Exchange gold price
during the calendar year. Based on current Greek legislation, the Company pays royalties on revenue that are
calculated on a sliding scale tied to international gold and base metal prices and the USD:EUR exchange rate.
25. 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, 2020, 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, 2020.
26. 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 in the table below. In 2020, the salaries and other short-term employee benefits
paid or payable to key management are $6,364 (2019 - $5,779), which is included in total employee benefits of
$30,728 (2019 - $29,202) recognized in general and administrative expenses, employee benefit plan expenses
and share-based compensation expenses in the statement of operations.
Salaries and other short-term employee benefits
Employee benefit plan
Share based payments
Termination benefits
$
$
2020
6,364
$
337
8,468
—
2019
5,779
301
8,643
900
15,169
$
15,623
(45)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
27. Financial instruments by category
Fair value
The following table provides the carrying value and the fair value of financial instruments at December 31,
2020 and December 31, 2019:
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
December 31, 2020
Carrying
amount
Fair value
December 31, 2019
Carrying
amount
Fair value
$
194 $
194 $
3,828 $
3,828
31,898
7,357
31,898
7,357
34,461
5,597
34,461
5,597
451,962
451,962
177,742
177,742
59,034
2,097
28,953
9,511
59,034
2,097
28,953
9,511
3,275
3,080
23,171
9,386
3,275
3,080
23,171
9,386
Accounts payable and accrued liabilities
$
179,372 $
179,372 $
139,104 $
139,104
Debt, excluding derivative asset
508,489
543,833
485,329
524,132
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, 2020 include marketable securities of $194 (2019 –
$3,828), comprised of publicly-traded equity investments classified as fair value through other comprehensive
income, settlement receivables of $31,898 (2019 - $34,361) 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 $7,357
(December 31, 2019 – $5,597), related to the 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. Valuation of the contingent consideration on the acquisition of interest in Hellas is measured at fair
value, with any changes in fair value recorded in profit or loss. No other liabilities are measured at fair value on
a recurring basis as at December 31, 2020.
(46)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
27. Financial instruments by category (continued)
The fair value of financial instruments traded in active markets is based on quoted market prices at the 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
15a). 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 is based on
observable prices in inactive markets. The fair value of the term loan of $133,333 and the fair value of the
revolving credit facility approximates the carrying value both based on current market rates of interest and the
Company's credit risk premium, and represent Level 2 fair value measurements. The fair value measurement
of contingent consideration related to the acquisition of the minority interest in Hellas Gold (Note 10) is
categorized as a Level 3 fair value. For all other financial instruments, carrying amounts approximate fair value.
(47)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
28. Revenue
For the year ended December 31, 2020, 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 (loss) on revaluation of derivatives in
trade receivables
Turkey
Canada
Greece
Total
$
403,823
$
256,069
$
—
$
659,892
181,727
2,194
3,981
—
—
—
1,198
—
—
—
100,928
282,655
—
24,029
18,285
36,993
3,392
28,010
18,285
36,993
$
591,725
$
257,267
$
180,235
$ 1,029,227
(3,537)
—
995
(2,542)
$
588,188
$
257,267
$
181,230
$ 1,026,685
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
Revenue from contracts with customers
Gain (loss) on revaluation of derivatives in
trade receivables
Turkey
Canada
Greece
Total
$
196,590
$
124,760
$
—
$
321,350
149,841
1,191
2,793
—
—
—
522
—
—
—
57,419
207,260
—
14,795
24,943
43,067
1,713
17,588
24,943
43,067
$
350,415
$
125,282
$
140,224
$
615,921
1,970
—
(68)
1,902
$
352,385
$
125,282
$
140,156
$
617,823
29. 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
December 31, 2020
December 31, 2019
$
116,653
$
100,908
16,464
53,399
17,904
38,240
78,062
46,588
77,873
12,931
29,871
16,330
30,162
63,097
42,919
38,621
$
445,183
$
334,839
(48)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
30. Mine standby costs
Lamaque
Skouries
Vila Nova
Other mine standby costs
December 31, 2020
December 31, 2019
$
$
3,086
8,890
746
2,953
15,675
$
$
—
7,911
2,115
7,308
17,334
In accordance with the Québec government-mandated restrictions to address the COVID-19 pandemic in the
province, operations were temporarily suspended at Lamaque on March 25, 2020. Operations restarted on
April 15, 2020.
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
December 31, 2020
December 31, 2019
171,047,400
158,855,924
1,369,750
433,838
—
526,058
2,379,892
2,156,654
Weighted average number of ordinary shares used in the
calculation of diluted earnings per share
175,230,880
161,538,636
For the year ended December 31, 2020, 2,680,593 options (2019 - 5,714,491) were excluded from the dilutive
weighted-average number of ordinary shares calculation because their effect would have been anti-dilutive.
(49)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
32. Sale of Vila Nova
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 was
presented as a disposal group held for sale.
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
In September 2020, the Company sold Vila Nova for proceeds of $10,000. As at the date of sale, Vila Nova
assets held for sale were $11,800 and liabilities associated with assets held for sale were $4,251, resulting in a
gain on disposition of $2,451 recorded in other income.
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, 2020, 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 Kişladağ and the Efemçukuru mines and exploration activities in Turkey. The Canada
reporting segment includes the Lamaque operations and exploration activities in Canada. The Greece
reporting segment includes the Stratoni and Olympias 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 Tocantinzinho project and
exploration activities. The Brazil segment also includes Vila Nova up until the sale of the Vila Nova iron ore
mine in September 2020. Other reporting segment includes operations of Eldorado’s corporate offices.
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.
(50)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
33. Segment information (continued)
As at and for the year ended
December 31, 2020
Earnings and loss information
Revenue
Production costs
Turkey Canada
Greece Romania
Brazil
Other
Total
$ 588,188 $ 257,267 $ 181,230 $
— $
— $
— $ 1,026,685
Depreciation and amortization
111,403 83,968
51,280
201,895 78,309
164,979
—
—
—
—
—
—
445,183
246,651
Earnings (loss) from mine
operations
Other significant items of income
and expense
Write-down (reversal) of assets
(Note 11)
$ 274,890 $ 94,990 $
(35,029) $
— $
— $
— $ 334,851
$
209 $
— $
40,030 $
(1,579) $
— $
— $
38,660
Exploration and evaluation expenses
2,192
2,978
592
4,987
199
1,745
12,693
Income tax expense (recovery)
65,815 23,122
(8,763)
(6,081)
5,041
—
79,134
Capital expenditure information
Additions to property, plant and
equipment during the period (*)
Information about assets and
liabilities
$ 88,894 $ 59,832 $
42,638 $
6 $ 2,050 $ 7,054 $ 200,474
Property, plant and equipment
$ 762,162 $ 579,399 $ 2,027,612 $ 414,118 $ 205,432 $ 9,770 $ 3,998,493
Goodwill
— 92,591
—
—
—
—
92,591
$ 762,162 $ 671,990 $ 2,027,612 $ 414,118 $ 205,432 $ 9,770 $ 4,091,084
Debt, including current portion
$
— $
— $
— $
— $
— $ 501,132 $ 501,132
* Presented on an accrual basis, excludes asset retirement adjustments.
(51)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
33. Segment information (continued)
As at and for the year ended
December 31, 2019
Earnings and loss information
Revenue
Production costs
Turkey Canada
Greece Romania
Brazil
Other
Total
$ 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 11)
$ (85,224) $
Write-down of assets
105
— $
—
— $
— $ (11,690) $
— $
(96,914)
6,177
16
—
—
6,298
Exploration and evaluation expenses
2,593
1,905
3,223
4,887
381
1,654
14,643
Income tax expense (recovery)
57,518
(2,727)
(14,305)
(1,110)
249
146
39,771
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
Debt
— 92,591
—
—
—
—
92,591
$ 791,354 $ 698,865 $ 2,067,719 $ 415,150 $ 204,419 $ 3,286 $ 4,180,793
$
— $
— $
— $
— $
— $ 479,732 $ 479,732
* Presented on an accrual basis; net of pre-commercial production proceeds and excludes asset retirement adjustments and right-of-use
assets of $9,379 recognized upon the adoption of IFRS 16 on January 1, 2019.
The Turkey segment derives its revenues from sales of gold and silver. The Greece segment derives its
revenue from sales of gold, zinc and lead-silver concentrates. The Canadian segment derives its revenue from
sales of gold and silver. For the year ended December 31, 2020, revenue from two customers of the
Company’s Turkey segment represents approximately $368,459 (2019 - $280,092) of the Company’s total
revenue. Revenue from one customer of the Company’s Canadian segment represents approximately
$255,558 (2019 - $122,160) of the Company’s total revenue.
(52)
Eldorado Gold Corporation
Notes to the Consolidated Financial Statements
For the years ended December 31, 2020 and December 31, 2019
(In thousands of U.S. dollars, unless otherwise stated except share and per share amounts)
34. Events occurring after the reporting date
On January 21, 2021, the Company entered into a definitive arrangement agreement (“Agreement”) with QMX
Gold Corporation (“QMX”) pursuant to which it will acquire all of the outstanding common shares of QMX not
already held by the Company. QMX has interests in mineral properties in the Canadian province of Québec in
proximity to the Company’s Lamaque operations and the Company currently owns 68,125,000 shares of QMX,
or approximately 17% of QMX shares outstanding. Under the terms of the arrangement agreement, each
shareholder will receive, for each QMX share held, (i) CDN $0.075 in cash and (ii) 0.01523 of an Eldorado
common share. Total consideration is expected to be approximately CDN $132,000 (USD $103,676), of which
approximately CDN $29,840 (USD $23,440) will be paid in cash. Completion of the acquisition of QMX is
subject to receipt of QMX shareholder, court and regulatory approvals, and other customary closing conditions.
(53)