Eldorado Gold, a Canadian-based precious metals miner, and producer with development and exploration operations in Türkiye, Canada, and Greece, recently secured a C$81.5 million investment from the European Bank for Reconstruction and Development (EBRD). Eldorado Gold will use the funds to further develop and expand its Skouries project in northern Greece.
The strategic investment agreement will become effective as a private placement, allowing EBRD to subscribe to 6,269,231 shares in Eldorado Gold at the fair price of C$13 per share. Along with these terms, the investment will also credit against Eldorado’s commitment of 20% equity funding on its Skouries project following the financing terms from last month’s closing on April 5, 2023.
To make matters more exciting, Eldorado Gold also entered an agreement with BMO Capital Markets, a financial services provider, and National Bank Financial, an investment and wealth advisor, to buy into 10.4 million common shares of the company following the same price as what EBRD will pay (C$13.00 per common share). The deal went through on behalf of underwriters offering gross proceeds of C$135 million.
The company also granted the underwriters an option to purchase an additional over-allotment of shares after closing if they choose to do so. Within 30 days of closing, the underwriters have the option to purchase up to 1.56 million additional shares following the same terms previously disclosed. If they exercise this option in its entirety, the gross proceeds could reach C$155 million.
Eldorado plans to use these proceeds to fund its global growth portfolio. The company currently has projects in growth and exploration stages across numerous continents. With these funds, Eldorado can execute its five-year plan while maintaining general corporate finance requirements.
Eldorado Gold’s passion for growth is nothing new. Just a few weeks ago, the company released its quarterly output figures for Q1 2023, showing staggering results compared to last year. In Q1 2023, Eldorado produced 112,533 ounces of gold, reflecting a 21% increase from the same quarter last year.
The company sold 109,817 ounces at a realized price of $1,932 per ounce last quarter, showing a 16% year-on-year increase. Eldorado reduced its all-in-sustaining costs from $1,346 per ounce in Q1 2022 to $1,184 in Q1 2023, allowing the company to yield an astounding cash flow figure of $94.5 million, 91% above last year’s number.
“We are maintaining our 2023 annual guidance of 475,000 – 515,000 ounces of gold,” Eldorado explained in the release. “First quarter production was in-line with our 2023 annual guidance, and higher production is expected in the second half of the year.”
With the additional funding for the Skouries project, the company expects to see skyrocketing results as it progresses through the remaining quarters of 2023.
“On April 5, 2023, we announced the closing of the Skouries project financing facility. This strategic facility funds 80% of the remaining capital required to complete construction of this transformational asset. Once in production, Skouries is expected to produce, on average, 140,000 ounces of gold and 67 million pounds of copper annually, delivering a meaningful impact on Eldorado’s consolidated production profile and decreasing average AISC and operating costs on a per ounce basis,” George Burns, Eldorado’s CEO and president, explained in the Q1 2023 press release prior to securing the investment.
“Skouries, once in production, alongside Eldorado’s existing operating portfolio, is expected to generate strong cash flow, further strengthening our financial position, and will help establish an exciting future for growth and value creation for our stakeholders, including contributing to the global supply of critical minerals,” Burns continued.
Now that Eldorado Gold secured the funds necessary to continue developing Skouries, the company can fulfill its outlined plan from April.
“We are pleased to be announcing a strategic equity investment from the EBRD, and we view its investment as an endorsement of the Skouries project and Eldorado’s commitment to the highest environmental and social standards across our portfolio,” Burns explained. “The EBRD’s equity investment, coupled with the Greek lenders in our recently closed project finance facility, provides strategic partners as we advance Skouries towards commercial production.”
“With a number of exciting development opportunities that are not currently included within our five-year plan, this additional funding provides us financial flexibility to advance these projects,” Burns continued.
As gold demand continues pushing prices to record levels, it only makes sense that mining and investment companies alike want to capitalize on the rising need for safe-haven assets. We can likely expect more exciting quarterly reports and investment opportunities from similar companies coming soon.
