Eldorado Reports 2015 Year-End and Fourth Quarter Financial and Operational Results

In the annual review of  Eldorado Gold, ( read the full review here) there is a detailed report on the progress of the company’s investments in Greece , as follows :

 GREECE

In order to complete the construction and development of its Kassandra mining projects in Halkidiki, northern Greece, Hellas Gold, a subsidiary of Eldorado, requires the approval of various routine permits and licenses from a number of government agencies, predominantly under the direction of the Ministry of Environment and Energy (the “Ministry”).

Hellas Gold received approval for its Environmental Impact Study in 2011. Since 2012, the Ministry and other agencies have not entirely fulfilled their permitting and licensing obligations primarily as a result of the lobbying efforts by anti-development interest groups. While Hellas Gold is presently unable to complete its full development plans in Halkidiki as a result of the actions and/or inactions of the Ministry and other agencies regarding the timely issuance of routine permits and licenses, the Company remains committed over the long-term to the projects and its numerous stakeholders within the country.

Olympias

The Olympias plant treated 589,675 tonnes of tailings at a grade of 1.99 grams per tonne during 2015. A total of 16,396 ounces of gold were produced during the year. The Olympias plant ceased treating tailings during the first quarter of 2016.

On March 22, 2016, the Company was granted the required installation permit to begin the next phase (“Phase II”) of Olympias.  During 2015 basic engineering for Phase II was completed, and full implementation began with detailed engineering and procurement of long lead items was well advanced by year end. Underground mine development and refurbishment continued at Olympias during 2015, with underground ore production for Phase II projected to begin before the end of 2016. During 2015, 659 meters of underground access were rehabilitated and 1,901 meters of new development were completed. In addition, approximately 330 meters were advanced on the main Stratoni-Olympias decline, bringing total decline advance project-to-date to 1,950 meters. Capital costs incurred in 2015 were $97 million, consisting of $72 million in construction capital and $25 million in capitalized cost for tailings retreatment.

Skouries

Engineering design work for the processing plant and surface facilities progressed during 2015, with engineering at over 93% complete by year end. During the year a substantial amount of the equipment and various steel structures required to complete construction of the plant and facilities were delivered to the Skouries site, with over 80% of the procurement scope completed by the end of the year. Work continued on construction of the process plant and road access was completed to the base of the tailings dam.

Work on the development of the Skouries underground mine design was advanced during 2015 from scoping level through prefeasibility level. The underground mine design is expected to be completed in 2016. The mine is projected to produce 4.5 million tonnes per year using shaft and ramp access with sub level open stoping along vertical development intervals of 60 meters. The open pit is expected to be used for disposal of mill tailings during the life of the underground operation. The open pit is projected to operate for a period of 8 years to be followed by 22 years of underground mining. During 2015 a total of $112.9 million was spent at Skouries, excluding capitalized exploration and capitalized interest.

On January 11, 2016, the Company announced that construction and development activities at the Skouries project were being suspended due to delays in the issuance of routine permits and licenses by the Greek permitting authorities. Environmental protection works and care and maintenance activities continued to be performed in order to safeguard the environment and the assets of the Company at site at a cost of approximately $1.0 million per month.

Stratoni

Stratoni produced 31% less concentrate than in 2014 mainly due to lower mine output. Mine output was impacted by fewer available underground production faces as well as an extended mine shutdown related to Kassandra mines’ permitting issues. Stratoni reported a loss from mining operations of $12.5 million (2014: gross profit $0.6 million). The loss included a write down of inventory to net realizable value of $3.3 million. In addition to the shortfall in production, the profitability of mining operations was impacted by weak lead and zinc prices. Capital expenditures for the year included upgrades to health, safety and environmental equipment, and upgrades to the water treatment plant.

In 2016, the Company expects to process 220,000 tonnes of ore at grades of 6.2% lead, 10.0% zinc and 163 grams per tonne silver.  Sustaining capital for the year is expected to be $10.0 million.

The Mavres Petres Mine currently has a mine life of approximately three years based on the known proven and probable reserves.  Geological potential exists to expand resources at Mavres Petres and extend mine life, however, in order to delineate additional resources, a mining development and drilling campaign would be required at an estimated cost of $25 million over the next three years, assuming timely issuance of any permits that may be required.

Perama Hill

Project engineering was completed during the year on Perama Hill and the project was placed on care and maintenance pending receipt of the Environmental Impact Assessment approval. In 2015, a total of $1.0 million was spent on the Perama Hill project.

source: eldoradogold.com.,  ellinikoschrysos.gr

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THE INVESTMENT THAT GEOPOLITICALLY UPGRADES THRACE

 

The Perama Project will be, as of today, one of the most important investments in the area of Thrace, in the NE boarder of Greece with positive contribution to the economy and the quality of life in the area’s residents, while ensuring the strictest environmental and social responsibility operational standards. The company “Thracean Gold Mining S.A” is an investment entity of the Perama Project in Thrace, with an investment capital of 150 million Euro while, throughout the next decade, another 190 million will be invested as well. The direct job positions amount to 200, and indirect employment amounts to 800 additional job positions. The income from Project Perama is estimated to 600 million Euro. In addition, it is noted that the taxes (40%) from the Project’s operation are estimated to be 260 million and are a reasonably significant contribution of the Project to the national economy (the calculations were made with the price of gold at 1400 per ounce). It is also important to note that about 70% of the capital investment and 100% of the operation’s cost are projected to remain in Greece and especially in the Area of Thrace in the form of salaries, services, supplies, engineering work, transportations, energy etc. Project Perama, according to the study social analysis of cost-benefit that was carried by the National Technical University of Athens (2003 prof. K. Panagopoulos, D. Kaliampakos), is considered socially beneficial in financial terms. In the analysis, environmental matters were taken into consideration. The two financial figures IRR (Internal rate of return), and NPV (Net Present Value), which were measured on a social basis, appear positive in all valuation scenarios.

The Perama oxide gold deposit is a typical of low sulfidation, being hosted in sedimentary deposits of Eocene to Oligocene age, located in the Northeastern Greece, in the border between the Rodopi and Evros Prefectures. The gold mineralization has been fed into the system by structurally controlled feeders inside andesitic volcanic breccia and disseminated into overlying porous sandstone units. Eighty percent (80%) of the gold is hosted by sandstones and the rest is associated with andesitic breccia and conglomerates. The Perama deposit is free of As (arsenic), Pb (lead) or other heavy metals.

The project is located in an uninhabitable area of low agricultural and forestry productive value in Evros prefecture in Thrace. The project is 5 km away from the sea, 28 km from the port of Alexandroupoli, 15 km from Makri, 7 km from Mesti and 500m from the village Perama. The intervention area of the project is 742 acres in total. Its design is in complete agreement with the instructions of the European Union about the Best Available techniques and Mine Disposal which are based on the principle of “zero denial” towards the environment (solid waste disposition filter cake, dust elimination, water recycling), and of course, Greek Legislation.

The operation involves an open pit mining of the ore and waste, (“waste” is the low grade barren rock surrounding the ore that is uneconomic to process), hauling the ore to the run of mine, ROM, pad to be stockpiled. The ore is then crushed in a closed system with a wet scrubbing system to collect the dust, the crushed ore is stored in a bin, which is then fed to a milling section where the ore is ground up to 80% passing 100 micron in water. The ground ore is then leached with a dilute cyanide solution in the leach tanks where the gold is recovered. After the cyanidation process, the cyanide is destroyed using the INCO S02/air cyanide destruction process, the tailings are then dewatered as they pass through filter press units and the dry stack (filter cake) is deposited into the Mine Waste Management Facility, MWMF, for storage.

The Project’s implementation timetable consists of 3 stages. Stage one is construction of the project which will last 18 months. Stage 2, the duration of whose duration is estimated at 8 years, includes the process of exploiting the gold-bearing ore with cut and cover method, and the “collection” of valuable metals (gold and silver) with hydrometallurgical method in presence of active carbon. The operation specifications of the project which are defined by the legislation ensure complete elimination of dust with maceration on the excavation spots and transportation of the ore.

In the next stage, the ore will be processed in a solution of sodium cyanide which has the ability to separate gold and silver from the rest of the ore. At this point the gold-bearing solution goes to the electroplating recovery circuit for the production of a gold and silver alloy (Doré).

The remaining material goes through a process of eliminating the cyanide, and with the aid of the INTCOM method, the final cyan content becomes less than 1 ppm., which is ls less than one gram per ton (10 times less than what European legislation determines). The clean now material goes through filter press, is compressed, dehydrated and what remains is a liquidless solid waste with 15% humidity, liquid cake! Water from the filter press is recycled and goes back to the production process achieving great savings in water consumption since 93% of the demanded quantity comes from recycling. Filter cake, will be transported to the weatherproof storage space. In the project’s previous design, there used to be a tailings pond that would occupy almost double the space than what the current does. The company’s commitment is highlighted, that no cubic of water that is used for irrigation or water supply of the villages or the area will be used.

The third and final life stage of the project will last 1.5 year and includes the secure closure of the mine as well as the environmental recovery of the areas of activity with disassembly of the gold processing plant and all the assisting facilities and parallel vegetation of the area by endemic kinds of flora. The final form of the recovery plan will be decided with the local authorities, however, tree planting of a large area is definite. For that purpose, nursery garden is already being constructed in Perama, in cooperation with the Democritus University of Thrace, from which, a large amount of black pine trees and other area species will be reproduced.

THRACEAN STRUGGLE, John Nikitas, 25/04/2015

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