Exhibit 99.1
Condensed Consolidated Interim Financial Statements
March 31, 2022 and 2021
(Unaudited)
(Expressed in thousands of U.S. dollars)
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Financial Position
As at March 31, 2022 and December 31, 2021
(Unaudited – in thousands of U.S. dollars)
As at | Note | March 31, 2022 | December 31, 2021 | ||||||||||||||
ASSETS | |||||||||||||||||
Current assets | |||||||||||||||||
Cash and cash equivalents | $ | 374,677 | $ | 481,327 | |||||||||||||
Term deposits | 60,000 | — | |||||||||||||||
Accounts receivable and other | 5 | 61,031 | 68,745 | ||||||||||||||
Inventories | 6 | 185,707 | 178,163 | ||||||||||||||
681,415 | 728,235 | ||||||||||||||||
Restricted cash | 2,201 | 2,674 | |||||||||||||||
Other assets | 109,255 | 104,023 | |||||||||||||||
Property, plant and equipment | 3,625,931 | 4,003,211 | |||||||||||||||
Goodwill | 92,591 | 92,591 | |||||||||||||||
$ | 4,511,393 | $ | 4,930,734 | ||||||||||||||
LIABILITIES & EQUITY | |||||||||||||||||
Current liabilities | |||||||||||||||||
Accounts payable and accrued liabilities | $ | 178,017 | $ | 195,334 | |||||||||||||
Current portion of lease liabilities | 5,973 | 7,228 | |||||||||||||||
Current portion of asset retirement obligations | 4,088 | 4,088 | |||||||||||||||
188,078 | 206,650 | ||||||||||||||||
Debt | 7 | 482,770 | 489,763 | ||||||||||||||
Lease liabilities | 14,151 | 14,895 | |||||||||||||||
Employee benefit plan obligations | 9,011 | 8,942 | |||||||||||||||
Asset retirement obligations | 131,615 | 131,367 | |||||||||||||||
Deferred income tax liabilities | 428,907 | 439,195 | |||||||||||||||
1,254,532 | 1,290,812 | ||||||||||||||||
Equity | |||||||||||||||||
Share capital | 11 | 3,240,665 | 3,225,326 | ||||||||||||||
Treasury stock | (20,454) | (10,289) | |||||||||||||||
Contributed surplus | 2,610,136 | 2,615,459 | |||||||||||||||
Accumulated other comprehensive loss | (19,773) | (20,905) | |||||||||||||||
Deficit | (2,556,048) | (2,239,226) | |||||||||||||||
Total equity attributable to shareholders of the Company | 3,254,526 | 3,570,365 | |||||||||||||||
Attributable to non-controlling interests | 2,335 | 69,557 | |||||||||||||||
3,256,861 | 3,639,922 | ||||||||||||||||
$ | 4,511,393 | $ | 4,930,734 |
Approved on behalf of the Board of Directors
(signed) John Webster Director (signed) George Burns Director
Date of approval: April 28, 2022
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Operations
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars except share and per share amounts)
Note | Three months ended March 31, 2022 | Three months ended March 31, 2021 | |||||||||||||||
Revenue | |||||||||||||||||
Metal sales | 8 | $ | 194,672 | $ | 224,619 | ||||||||||||
Cost of sales | |||||||||||||||||
Production costs | 104,556 | 108,560 | |||||||||||||||
Depreciation and amortization | 50,635 | 52,486 | |||||||||||||||
155,191 | 161,046 | ||||||||||||||||
Earnings from mine operations | 39,481 | 63,573 | |||||||||||||||
Exploration and evaluation expenses | 5,861 | 4,008 | |||||||||||||||
Mine standby costs | 9 | 11,708 | 1,611 | ||||||||||||||
General and administrative expenses | 8,291 | 10,140 | |||||||||||||||
Employee benefit plan expense | 1,841 | 749 | |||||||||||||||
Share-based payments expense | 12 | 3,650 | 1,781 | ||||||||||||||
Impairment of property, plant, and equipment | 4 | 365,426 | — | ||||||||||||||
Write-down (recovery) of assets | 24,141 | (750) | |||||||||||||||
Foreign exchange gain | (2,720) | (6,080) | |||||||||||||||
(Loss) earnings from operations | (378,717) | 52,114 | |||||||||||||||
Other income | 10 | 1,743 | 1,299 | ||||||||||||||
Finance costs | 10 | (2,166) | (10,335) | ||||||||||||||
(Loss) earnings from continuing operations before income tax | (379,140) | 43,078 | |||||||||||||||
Income tax expense | 5,074 | 26,838 | |||||||||||||||
Net (loss) earnings from continuing operations | (384,214) | 16,240 | |||||||||||||||
Net loss from discontinued operations, net of tax | — | (2,394) | |||||||||||||||
Net (loss) earnings for the period | $ | (384,214) | $ | 13,846 | |||||||||||||
Attributable to: | |||||||||||||||||
Shareholders of the Company | (316,822) | 11,941 | |||||||||||||||
Non-controlling interests | (67,392) | 1,905 | |||||||||||||||
Net (loss) earnings for the period | $ | (384,214) | $ | 13,846 | |||||||||||||
(Loss) earnings attributable to shareholders of the Company: | |||||||||||||||||
Continuing operations | (316,822) | 14,335 | |||||||||||||||
Discontinued operations | — | (2,394) | |||||||||||||||
$ | (316,822) | $ | 11,941 | ||||||||||||||
Weighted average number of shares outstanding (thousands) | |||||||||||||||||
Basic | 182,362 | 174,534 | |||||||||||||||
Diluted | 182,362 | 177,234 | |||||||||||||||
Net (loss) earnings per share attributable to shareholders of the Company: | |||||||||||||||||
Basic (loss) earnings per share | $ | (1.74) | $ | 0.07 | |||||||||||||
Diluted (loss) earnings per share | $ | (1.74) | $ | 0.07 | |||||||||||||
Net (loss) earnings per share attributable to shareholders of the Company - Continuing operations | |||||||||||||||||
Basic (loss) earnings per share | $ | (1.74) | $ | 0.08 | |||||||||||||
Diluted (loss) earnings per share | $ | (1.74) | $ | 0.08 | |||||||||||||
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars)
Three months ended March 31, 2022 | Three months ended March 31, 2021 | ||||||||||||||||
Net (loss) earnings for the period | $ | (384,214) | $ | 13,846 | |||||||||||||
Other comprehensive (loss) income: | |||||||||||||||||
Items that will not be reclassified to earnings or loss: | |||||||||||||||||
Change in fair value of investments in marketable securities, net of tax | 2,049 | (125) | |||||||||||||||
Actuarial losses on employee benefit plans, net of tax | (917) | (34) | |||||||||||||||
Total other comprehensive earnings (loss) for the period | 1,132 | (159) | |||||||||||||||
Total comprehensive (loss) income for the period | $ | (383,082) | $ | 13,687 | |||||||||||||
Attributable to: | |||||||||||||||||
Shareholders of the Company | (315,690) | 11,782 | |||||||||||||||
Non-controlling interests | (67,392) | 1,905 | |||||||||||||||
$ | (383,082) | $ | 13,687 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Cash Flows
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars)
Note | Three months ended March 31, 2022 | Three months ended March 31, 2021 | |||||||||||||||
Cash flows generated from (used in): | |||||||||||||||||
Operating activities | |||||||||||||||||
Net (loss) earnings for the period from continuing operations | $ | (384,214) | $ | 16,240 | |||||||||||||
Adjustments for: | |||||||||||||||||
Depreciation and amortization | 51,226 | 53,063 | |||||||||||||||
Finance costs | 2,166 | 10,338 | |||||||||||||||
Interest income | (475) | (302) | |||||||||||||||
Unrealized foreign exchange gain | (484) | (2,364) | |||||||||||||||
Income tax expense | 5,074 | 26,838 | |||||||||||||||
(Gain) loss on disposal of assets | (582) | 324 | |||||||||||||||
Impairment of property, plant, and equipment | 365,426 | — | |||||||||||||||
Write-down (recovery) of assets | 24,141 | (750) | |||||||||||||||
Share-based payments expense | 12 | 3,650 | 1,781 | ||||||||||||||
Employee benefit plan expense | 1,841 | 749 | |||||||||||||||
67,769 | 105,917 | ||||||||||||||||
Property reclamation payments | (312) | (335) | |||||||||||||||
Employee benefit plan payments | (2,250) | (232) | |||||||||||||||
Income taxes paid | (15,939) | (24,496) | |||||||||||||||
Interest received | 475 | 302 | |||||||||||||||
Changes in non-cash working capital | 13 | (14,499) | 17,970 | ||||||||||||||
Net cash generated from operating activities of continuing operations | 35,244 | 99,126 | |||||||||||||||
Net cash used in operating activities of discontinued operations | — | (6,051) | |||||||||||||||
Investing activities | |||||||||||||||||
Purchase of property, plant and equipment | (51,996) | (63,991) | |||||||||||||||
Proceeds from the sale of property, plant and equipment | 1,076 | 792 | |||||||||||||||
Value added taxes related to mineral property expenditures, net | (11,133) | (2,568) | |||||||||||||||
(Increase) decrease in term deposits | (60,000) | 56,130 | |||||||||||||||
Increase in restricted cash | — | (73) | |||||||||||||||
Net cash used in investing activities of continuing operations | (122,053) | (9,710) | |||||||||||||||
Net cash used in investing activities of discontinued operations | — | (507) | |||||||||||||||
Financing activities | |||||||||||||||||
Issuance of common shares, net of issuance costs | 13,118 | 11,834 | |||||||||||||||
Contributions from non-controlling interests | 170 | 324 | |||||||||||||||
Repayments of borrowings | — | (11,100) | |||||||||||||||
Interest paid | (16,888) | (2,205) | |||||||||||||||
Principal portion of lease liabilities | (2,272) | (2,758) | |||||||||||||||
Purchase of treasury stock | (13,969) | — | |||||||||||||||
Net cash used in financing activities of continuing operations | (19,841) | (3,905) | |||||||||||||||
Net cash used in financing activities of discontinued operations | — | (12) | |||||||||||||||
Net (decrease) increase in cash and cash equivalents | (106,650) | 78,941 | |||||||||||||||
Cash and cash equivalents - beginning of period | 481,327 | 451,962 | |||||||||||||||
Cash and cash equivalents - end of period | $ | 374,677 | $ | 530,903 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Eldorado Gold Corporation
Condensed Consolidated Interim Statements of Changes in Equity
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars)
Note | Three months ended March 31, 2022 | Three months ended March 31, 2021 | |||||||||||||||
Share capital | |||||||||||||||||
Balance beginning of period | $ | 3,225,326 | $ | 3,144,644 | |||||||||||||
Shares issued upon exercise of share options | 3,872 | 717 | |||||||||||||||
Shares issued upon exercise of performance share units | 2,256 | — | |||||||||||||||
Transfer of contributed surplus on exercise of options | 1,563 | 285 | |||||||||||||||
Shares issued to the public, net of share issuance costs | 7,648 | 11,471 | |||||||||||||||
Balance end of period | 11 | $ | 3,240,665 | $ | 3,157,117 | ||||||||||||
Treasury stock | |||||||||||||||||
Balance beginning of period | $ | (10,289) | $ | (11,452) | |||||||||||||
Purchase of treasury stock | (13,969) | — | |||||||||||||||
Shares redeemed upon exercise of restricted share units | 3,804 | 573 | |||||||||||||||
Balance end of period | $ | (20,454) | $ | (10,879) | |||||||||||||
Contributed surplus | |||||||||||||||||
Balance beginning of period | $ | 2,615,459 | $ | 2,638,008 | |||||||||||||
Share-based payments arrangements | 2,300 | 1,917 | |||||||||||||||
Shares redeemed upon exercise of restricted share units | (3,804) | (573) | |||||||||||||||
Shares redeemed upon exercise of performance share units | (2,256) | — | |||||||||||||||
Transfer to share capital on exercise of options | (1,563) | (285) | |||||||||||||||
Balance end of period | $ | 2,610,136 | $ | 2,639,067 | |||||||||||||
Accumulated other comprehensive loss | |||||||||||||||||
Balance beginning of period | $ | (20,905) | $ | (21,822) | |||||||||||||
Other comprehensive earnings (loss) for the period attributable to shareholders of the Company | 1,132 | (159) | |||||||||||||||
Balance end of period | $ | (19,773) | $ | (21,981) | |||||||||||||
Deficit | |||||||||||||||||
Balance beginning of period | $ | (2,239,226) | $ | (2,103,206) | |||||||||||||
Net (loss) earnings attributable to shareholders of the Company | (316,822) | 11,941 | |||||||||||||||
Balance end of period | $ | (2,556,048) | $ | (2,091,265) | |||||||||||||
Total equity attributable to shareholders of the Company | $ | 3,254,526 | $ | 3,672,059 | |||||||||||||
Non-controlling interests | |||||||||||||||||
Balance beginning of period | $ | 69,557 | $ | 40,873 | |||||||||||||
(Loss) earnings attributable to non-controlling interests | (67,392) | 1,905 | |||||||||||||||
Contributions from non-controlling interests | 170 | 324 | |||||||||||||||
Balance end of period | $ | 2,335 | $ | 43,102 | |||||||||||||
Total equity | $ | 3,256,861 | $ | 3,715,161 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
Eldorado Gold Corporation
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars, unless otherwise stated)
1. General Information
Eldorado Gold Corporation (individually or collectively with its subsidiaries, as applicable, “Eldorado” or the “Company”) is a gold and base metals mining, development, and exploration company. The Company has mining operations, ongoing development projects and exploration in Turkey, Canada, Greece, and Romania.
Eldorado is a public company listed on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange (“NYSE”) and is incorporated under the Canada Business Corporations Act.
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
(a) Statement of compliance
These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34 ‘Interim Financial Reporting’. They do not include all of the information and footnotes required by International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board for full annual financial statements and should be read in conjunction with the Company’s annual audited consolidated financial statements as at and for the year ended December 31, 2021.
Except as described in Note 3, the same accounting policies were used in the preparation of these unaudited condensed consolidated interim financial statements as for the most recent audited annual consolidated financial statements and reflect all the adjustments necessary for fair presentation in accordance with IFRS for the interim periods presented.
These unaudited condensed consolidated interim financial statements were authorized for issue by the Company’s Board of Directors on April 28, 2022.
(b) Critical accounting estimates and judgements
The preparation of these unaudited condensed consolidated interim 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 and liabilities, income and expense. Actual results may differ from these estimates.
Significant judgements made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty are the same as those that applied to the annual audited consolidated financial statements as at and for the year ended December 31, 2021.
3. Significant accounting policies
Adoption of new accounting standards
A number of new standards and amendments to standards are effective for annual periods beginning on or after January 1, 2022 and earlier application is permitted; however, the Company has not early adopted and continues to evaluate the impact of the forthcoming or amended standards in preparing these condensed consolidated interim financial statements.
(1)
Eldorado Gold Corporation
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars, unless otherwise stated)
4. Impairment of Certej project
The Company recorded an impairment of the Certej project, a non-core gold asset in the Romania segment of $365,426 ($345,386 net of deferred tax) at March 31, 2022. The impairment was recorded as a result of a plan to consider selling Certej and recognizes mineral properties and capitalized evaluation at their estimated fair value. The non-recurring fair value measurement of $52,000 has been categorized as a Level 3 fair value based on the expected consideration of a sale, less estimated costs of disposal.
5. Accounts receivable and other
March 31, 2022 | December 31, 2021 | ||||||||||
Trade receivables | $ | 30,719 | $ | 23,020 | |||||||
Value added tax and other taxes recoverable | 9,673 | 17,782 | |||||||||
Other receivables and advances | 7,181 | 9,946 | |||||||||
Prepaid expenses and deposits | 13,263 | 17,834 | |||||||||
Investment in marketable securities | 195 | 163 | |||||||||
$ | 61,031 | $ | 68,745 |
6. Inventories
March 31, 2022 | December 31, 2021 | ||||||||||
Ore stockpiles | $ | 9,369 | $ | 10,097 | |||||||
In-process inventory and finished goods | 62,722 | 63,513 | |||||||||
Materials and supplies | 113,616 | 104,553 | |||||||||
$ | 185,707 | $ | 178,163 |
Charges of $388 and $992 were recognized in production costs and depreciation, respectively, in the three months ended March 31, 2022 to reduce the cost of gold concentrate inventory at Olympias to net realizable value (three months ended March 31, 2021 – $570 and $51 recognized in production costs and depreciation relating to zinc concentrate inventory at Stratoni).
(2)
Eldorado Gold Corporation
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars, unless otherwise stated)
7. Debt
March 31, 2022 | December 31, 2021 | ||||||||||
Senior notes due 2029, net of unamortized transaction fees of $6,611 (2021 - $6,783) and initial redemption option of $4,533 | $ | 497,922 | $ | 497,868 | |||||||
Redemption option derivative asset | (15,152) | (8,105) | |||||||||
$ | 482,770 | $ | 489,763 | ||||||||
Senior Notes due 2029
On August 26, 2021, the Company completed an offering of $500 million senior unsecured notes with a coupon rate of 6.25% due September 1, 2029 (the “senior notes”). The senior notes pay interest semi-annually on March 1 and September 1, which began on March 1, 2022.
The senior notes are guaranteed by Eldorado Gold (Netherlands) B.V., SG Resources B.V., Tüprag Metal Madencilik Sanayi ve Ticaret AS, and Eldorado Gold (Quebec) Inc., all wholly-owned subsidiaries of the Company.
The senior notes contain certain redemption features that 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 three months ended March 31, 2022 is $7,047, which is recognized in finance costs.
The senior notes contain covenants that restrict, among other things, distributions in certain circumstances and sales of certain material assets, in each case, subject to certain conditions. The Company is in compliance with these covenants at March 31, 2022.
The fair market value of the senior notes as at March 31, 2022 is $504,310.
(3)
Eldorado Gold Corporation
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars, unless otherwise stated)
8. Revenue
For the three months ended March 31, 2022, revenue from contracts with customers by product and segment was as follows:
Turkey | Canada | Greece | Total | |||||||||||
Gold revenue - doré | $ | 55,868 | $ | 64,597 | $ | — | $ | 120,465 | ||||||
Gold revenue - concentrate | 39,788 | — | 13,736 | 53,524 | ||||||||||
Silver revenue - doré | 744 | 342 | — | 1,086 | ||||||||||
Silver revenue - concentrate | 916 | — | 4,703 | 5,619 | ||||||||||
Lead concentrate | — | — | 3,737 | 3,737 | ||||||||||
Zinc concentrate | — | — | 8,308 | 8,308 | ||||||||||
Revenue from contracts with customers | $ | 97,316 | $ | 64,939 | $ | 30,484 | $ | 192,739 | ||||||
Gain on revaluation of derivatives in trade receivables - gold | 625 | — | 1,188 | 1,813 | ||||||||||
Gain on revaluation of derivatives in trade receivables - other metals | — | — | 120 | 120 | ||||||||||
$ | 97,941 | $ | 64,939 | $ | 31,792 | $ | 194,672 |
For the three months ended March 31, 2021, revenue from contracts with customers by product and segment was as follows:
Turkey | Canada | Greece | Total | |||||||||||
Gold revenue - doré | $ | 84,952 | $ | 51,582 | $ | — | $ | 136,534 | ||||||
Gold revenue - concentrate | 40,631 | — | 21,455 | 62,086 | ||||||||||
Silver revenue - doré | 758 | 376 | — | 1,134 | ||||||||||
Silver revenue - concentrate | 1,133 | — | 9,880 | 11,013 | ||||||||||
Lead concentrate | — | — | 9,252 | 9,252 | ||||||||||
Zinc concentrate | — | — | 8,375 | 8,375 | ||||||||||
Revenue from contracts with customers | $ | 127,474 | $ | 51,958 | $ | 48,962 | $ | 228,394 | ||||||
Loss on revaluation of derivatives in trade receivables - gold | (1,916) | — | (1,030) | (2,946) | ||||||||||
Loss on revaluation of derivatives in trade receivables - other metals | — | — | (829) | (829) | ||||||||||
$ | 125,558 | $ | 51,958 | $ | 47,103 | $ | 224,619 |
9. Mine standby costs
Three months ended March 31, 2022 | Three months ended March 31, 2021 | ||||||||||
Stratoni | $ | 9,449 | $ | — | |||||||
Skouries | 1,539 | 1,278 | |||||||||
Other mine standby costs | 720 | 333 | |||||||||
$ | 11,708 | $ | 1,611 |
(4)
Eldorado Gold Corporation
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars, unless otherwise stated)
10. Other income and finance costs
(a) Other income | Three months ended March 31, 2022 | Three months ended March 31, 2021 | |||||||||
Gain (loss) on disposal of assets | $ | 582 | $ | (324) | |||||||
Interest and other income | 1,161 | 1,623 | |||||||||
$ | 1,743 | $ | 1,299 |
(b) Finance costs | Three months ended March 31, 2022 | Three months ended March 31, 2021 | |||||||||
Interest cost on senior notes due 2029 | $ | 7,726 | $ | — | |||||||
Interest cost on senior secured notes due 2024 | — | 6,195 | |||||||||
Interest cost on term loan | — | 960 | |||||||||
Other interest and financing costs | 927 | 2,155 | |||||||||
(Gain) loss on redemption option derivative (Note 7) | (7,047) | 675 | |||||||||
Asset retirement obligation accretion | 560 | 350 | |||||||||
$ | 2,166 | $ | 10,335 |
11. Share capital and (loss) earnings per share
(a) Share capital
2022 | 2021 | ||||||||||||||||||||||
Voting common shares | Number of Shares | Total | Number of Shares | Total | |||||||||||||||||||
Balance at January 1, | 182,673,118 | $ | 3,225,326 | 174,931,381 | $ | 3,144,644 | |||||||||||||||||
Shares issued upon exercise of share options | 758,778 | 3,872 | 142,046 | 717 | |||||||||||||||||||
Shares issued on redemption of performance share units | 528,166 | 2,256 | — | — | |||||||||||||||||||
Estimated fair value of share options exercised transferred from contributed surplus | — | 1,563 | — | 285 | |||||||||||||||||||
Flow-through and other shares issued, net of issuance costs and premium | 831,466 | 7,648 | 1,100,000 | 11,471 | |||||||||||||||||||
Balance at March 31, | 184,791,528 | $ | 3,240,665 | 176,173,427 | $ | 3,157,117 |
On March 14, 2022, the Company completed a private placement of 442,700 common shares at a price of CDN $18.07 per share for proceeds of CDN $8,000 ($6,378), which will be used to fund continued exploration. On the same date, the Company also completed a private placement of 251,800 common shares at a price of CDN $15.88 per share for proceeds of CDN $4,000 ($3,189), which will be used to fund the Triangle deposit ramp development. The shares will qualify as flow-through shares for Canadian tax purposes and were issued at a premium of CDN $4.19 and CDN $2.00 per share respectively to the closing market price of the Company’s common shares at the date of issue. The premium of $1,880 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.
(5)
Eldorado Gold Corporation
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars, unless otherwise stated)
11. Share capital and (loss) earnings per share (continued)
In March 2022, the warrantholders of Eldorado Gold (Quebec) Inc. (formerly QMX Gold Corporation) exercised 1,250,000 warrants that were issued and outstanding prior to the closing of the arrangement between the Company and QMX Gold Corporation on April 7, 2021, which resulted in the Company issuing 19,037 common shares in April 2022 in relation to this exercise. The remaining 500,000 warrants outstanding of Eldorado Gold (Quebec) Inc. expired during the quarter.
(b) Earnings per share
The weighted average number of common shares for the purposes of diluted (loss) earnings per share reconciles to the weighted average number of common shares used in the calculation of basic (loss) earnings per share as follows:
Three months ended March 31, 2022 | Three months ended March 31, 2021 | ||||||||||
Weighted average number of common shares used in the calculation of basic (loss) earnings per share | 182,361,647 | 174,533,634 | |||||||||
Dilutive impact of share options | 908,069 | 1,359,660 | |||||||||
Dilutive impact of restricted share units and restricted share units with performance criteria | 526,844 | 437,309 | |||||||||
Dilutive impact of performance share units | 167,121 | 903,333 | |||||||||
Weighted average number of common shares used in the calculation of diluted (loss) earnings per share | 183,963,681 | 177,233,936 |
As the three months ended March 31, 2022 was in a net loss position, the effect of all share instruments were anti-dilutive.
12. Share-based payment arrangements
Share-based payments expense consists of:
Three months ended March 31, 2022 | Three months ended March 31, 2021 | ||||||||||
Share options | $ | 1,040 | $ | 753 | |||||||
Restricted shares with no performance criteria | 420 | 235 | |||||||||
Restricted shares with performance criteria | 499 | 645 | |||||||||
Performance shares | 341 | 284 | |||||||||
Deferred units | 1,350 | (136) | |||||||||
$ | 3,650 | $ | 1,781 |
(6)
Eldorado Gold Corporation
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars, unless otherwise stated)
13. Supplementary cash flow information
Three months ended March 31, 2022 | Three months ended March 31, 2021 | ||||||||||
Changes in non-cash working capital: | |||||||||||
Accounts receivable and other | $ | 16,936 | $ | 15,906 | |||||||
Inventories | (10,744) | 1,733 | |||||||||
Accounts payable and accrued liabilities | (20,691) | 331 | |||||||||
$ | (14,499) | $ | 17,970 |
14. Commitments and Contractual Obligations
Significant changes to the Company’s commitments and contractual obligations as at March 31, 2022, include:
Within 1 year | 2 years | 3 years | 4 years | 5 years | Over 5 years | Total | |||||||||||||||||
Purchase obligations and other commitments | $ | 35,711 | $ | 1,612 | $ | — | $ | — | $ | — | $ | — | $ | 37,323 | |||||||||
$ | 35,711 | $ | 1,612 | $ | — | $ | — | $ | — | $ | — | $ | 37,323 |
Purchase obligations relate primarily to operating costs at all mines and capital projects at Kişladağ.
(7)
Eldorado Gold Corporation
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars, unless otherwise stated)
15. Financial instruments by category
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 March 31, 2022 include marketable securities of $56,190 (December 31, 2021 – $53,352), comprised of publicly-traded equity investments classified as fair value through other comprehensive income, and investments in debt securities of $6,134 (December 31, 2021 – $6,660), comprised of publicly-traded debt securities classified as fair value through other comprehensive income. At March 31, 2022, assets measured at fair value also include settlement receivables of $23,782 (December 31, 2021 – $28,523) 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 $15,152 (December 31, 2021 – $8,105), related to the redemption options associated with the senior secured notes classified as fair value through profit and loss, and term deposits of $60,000 (December 31, 2021 – $nil), comprised of a Turkish Lira deposit protected against the weakening of the Turkish Lira against the U.S. dollar and measured at fair value through profit and loss. Changes in the fair value of settlement receivables are recorded in revenue, changes in the fair value of the redemption option derivative asset are recorded in finance costs and there were no changes in the fair value of the term deposits in the three months ended March 31, 2022. Valuation of the contingent consideration on the May 2020 acquisition of interest in Hellas Gold 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 March 31, 2022.
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 and investments in debt securities are included in Level 1. Instruments included in Level 2 comprise settlement receivables, the redemption option derivative asset, term deposit and the fair market value of the Company’s senior secured notes (Note 7). 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; the fair value of term deposits is based on an observable foreign exchange rate; and the fair value of the Company’s senior notes is based on observable prices in inactive markets. The fair value measurement of contingent consideration related to the acquisition of the minority interest in Hellas Gold is categorized as a Level 3 fair value. For all other financial instruments, carrying amounts approximate fair value.
(8)
Eldorado Gold Corporation
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars, unless otherwise stated)
16. Financial risk management
Eldorado’s activities expose it to a variety of financial risks. Significant changes to the Company’s financial risks arising from financial instruments and overall risk management program as at March 31, 2022 are outlined below.
Credit risk
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. The Company also monitors the credit ratings of all financial institutions in which it holds cash and investments. At March 31, 2022, term deposits of $60,000 are held in a Turkish banking institution with lower credit ratings as compared to other financial institutions at which the Company holds cash and investments. This, combined with recent downgrades in Turkey’s sovereign credit rating, expose the Company to greater credit risk.
17. 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 March 31, 2022, Eldorado had five 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 Olympias mine, the Skouries, Perama Hill and Sapes projects and exploration activities in Greece. The Greece segment also includes the Stratoni mine which is transferring to care and maintenance during 2022. The Romania reporting segment includes the Certej project and exploration activities in Romania. 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 the Turkey reporting segments share similar economic characteristics and have been aggregated accordingly.
(9)
Eldorado Gold Corporation
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars, unless otherwise stated)
17. Segment information (continued)
For the three months ended March 31, 2022 | Turkey | Canada | Greece | Romania | Other | Total | ||||||||||||||
Earnings and loss information | ||||||||||||||||||||
Revenue | $ | 97,941 | $ | 64,939 | $ | 31,792 | $ | — | $ | — | $ | 194,672 | ||||||||
Production costs | 47,054 | 27,212 | 30,290 | — | — | 104,556 | ||||||||||||||
Depreciation and amortization | 23,373 | 16,106 | 11,156 | — | — | 50,635 | ||||||||||||||
Earnings (loss) from mine operations | $ | 27,514 | $ | 21,621 | $ | (9,654) | $ | — | $ | — | $ | 39,481 | ||||||||
Other significant items of income and expense | ||||||||||||||||||||
Impairment of property, plant and equipment | $ | — | $ | — | $ | — | $ | 365,426 | $ | — | $ | 365,426 | ||||||||
Write-down of assets | 24,111 | — | 30 | — | — | 24,141 | ||||||||||||||
Exploration and evaluation expenses | 689 | 3,651 | 162 | 875 | 484 | 5,861 | ||||||||||||||
Income tax expense (recovery) | 12,115 | 8,724 | 4,677 | (20,039) | (403) | 5,074 | ||||||||||||||
Capital expenditure information | ||||||||||||||||||||
Additions to property, plant and equipment during the period * | $ | 27,212 | $ | 18,166 | $ | 14,729 | $ | 33 | $ | 629 | $ | 60,769 | ||||||||
Information about assets and liabilities | ||||||||||||||||||||
Property, plant and equipment | $ | 825,207 | $ | 705,183 | $ | 2,021,642 | $ | 57,945 | $ | 15,954 | $ | 3,625,931 | ||||||||
Goodwill | — | 92,591 | — | — | — | 92,591 | ||||||||||||||
$ | 825,207 | $ | 797,774 | $ | 2,021,642 | $ | 57,945 | $ | 15,954 | $ | 3,718,522 | |||||||||
Debt | $ | — | $ | — | $ | — | $ | — | $ | 482,770 | $ | 482,770 |
* Presented on an accrual basis, excludes asset retirement adjustments.
(10)
Eldorado Gold Corporation
Notes to the Condensed Consolidated Interim Financial Statements
For the three months ended March 31, 2022 and 2021
(Unaudited – in thousands of U.S. dollars, unless otherwise stated)
17. Segment information (continued)
For the three months ended March 31, 2021 | Turkey | Canada | Greece | Romania | Brazil** | Other | Total | ||||||||||||||||
Earnings and loss information | |||||||||||||||||||||||
Revenue | $ | 125,558 | $ | 51,958 | $ | 47,103 | $ | — | $ | — | $ | — | $ | 224,619 | |||||||||
Production costs | 40,912 | 22,983 | 44,665 | — | — | — | 108,560 | ||||||||||||||||
Depreciation and amortization | 22,412 | 16,564 | 13,510 | — | — | — | 52,486 | ||||||||||||||||
Earnings (loss) from mine operations | $ | 62,234 | $ | 12,411 | $ | (11,072) | $ | — | $ | — | $ | — | $ | 63,573 | |||||||||
Other significant items of income and expense | |||||||||||||||||||||||
Write-down (recovery) of assets | $ | (750) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (750) | |||||||||
Exploration and evaluation expenses | 821 | 1,483 | 137 | 996 | — | 571 | 4,008 | ||||||||||||||||
Income tax expense (recovery) | 23,863 | 4,712 | (8,154) | 6,417 | — | — | 26,838 | ||||||||||||||||
Loss from discontinued operations, net of tax attributable to shareholders of the Company | — | — | — | — | (2,394) | — | (2,394) | ||||||||||||||||
Capital expenditure information | |||||||||||||||||||||||
Additions to property, plant and equipment during the period* | $ | 31,021 | $ | 17,444 | $ | 10,611 | $ | — | $ | — | $ | 333 | $ | 59,409 | |||||||||
* Presented on an accrual basis, excludes asset retirement adjustments.
**The Brazil reporting segment included the Tocantinzinho project and exploration activities up until the sale of Tocantinzinho in October 2021.
For the year ended December 31, 2021 | Turkey | Canada | Greece | Romania | Brazil | Other | Total | ||||||||||||||||
Information about assets and liabilities | |||||||||||||||||||||||
Property, plant and equipment | $ | 841,000 | $ | 704,663 | $ | 2,018,440 | $ | 423,503 | $ | — | $ | 15,605 | $ | 4,003,211 | |||||||||
Goodwill | — | 92,591 | — | — | — | — | 92,591 | ||||||||||||||||
$ | 841,000 | $ | 797,254 | $ | 2,018,440 | $ | 423,503 | $ | — | $ | 15,605 | $ | 4,095,802 | ||||||||||
Debt | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 489,763 | $ | 489,763 |
(11)