Eldorado Gold reports declining reserve base

Eldorado Gold (TSX: ELD; Nasdaq: ELD) has reported a 7% year-on-year drop in the reserve base underpinning its four operating mines in Turkey, Greece and Canada to 7.4 million oz. gold, following a 6% drop last year, the company announced after market close on Monday.

Eldorado reported fewer reserves at each of its operating mines, with a 9% dip in grade at the Lamaque mine in Quebec to 6.6 grams gold per tonne, and a 7% reduction at Efemcukuru in Turkey to 5.3 grams per tonne.

The company has maintained a reserve price assumption of US$1,300 per oz. but is using higher cut-off grades at Lamaque, Efemcukuru, and Olympias, likely reflecting higher cost assumptions, according to Canaccord Genuity Capital Markets mining analyst Carey MacRury.

Overall, resource ounces at Eldorado’s operating mines dipped by 3% to 24.5 million oz.

Including the company’s development and exploration assets, the global reserve base fell 4%, net of the sale of the Certej mine, in Romania, to 12.3 million oz. as of Sept. 30 compared with 12.9 million oz. a year ago.

Eldorado attributes the slight change in reserves to converting resources to reserves in the Kokarpinar zone at Efemcukuru and infill drilling in the Upper Triangle zone at Lamaque. These gains were offset mainly by adjustments in cut-off value, metal prices, and mine plan optimization at Olympias in Greece, notes Canaccord’s MacRury in a note to clients.

Eldorado also reported a 2% year-on-year drop in the global measured and indicated resource categories to 19.2 million oz. net of the Certej divestment, which the company attributes to decreases at Kisladag, Lamaque, and Olympias.

Notably, Efemcukuru’s global resource is down 12%, to 2.04 million oz. from 2.32 million oz. in 2021. Only Lamaque showed a 3% increase in its total resource base.

At Lamaque, the inferred resource increased by more than 20% due to geological model updates. At Ormaque, the inferred resource increased slightly to reflect the new technical study released in February.

Eldorado shares last traded in Toronto at $8.07 per share, down about 10% over the 12 months, ranging between $5.06 and $12.49. It has a market cap of $1.5 billion.