On Aug. 22, Eldorado Gold Corp (EGO, Financial) announced new exploration projects in Romania, Serbia and Brazil, where it has identified high-grade gold deposits.
Bolcana Porphyry Copper-Gold System in Romania:
EGO is granted with the Troita - Pitigus exploration license covering the Bolcana project (the large Bolcana porphyry copper-gold system in Romania) for a period of five years, renewable for an additional three years. Within the first year, Eldorado is obligated to complete a work program comprising target delineation work and 24,000 metres of drilling.
The project provides a new opportunity in the highly prospective Apuseni mining district in Romania, in the Golden Quadrilateral mining region and previous exploration work (2002 - 2004) conducted by European Goldfields highlights high copper and gold grades.
Borborema and Nazareno, Brazil:
On July 26, Eldorado signed definitive agreements with Votorantim Metais granting Eldorado the option to acquire ownership in the Borborema and Nazareno license areas, located in Pernambuco and Minas Gerais states respectively.
In particular, Eldorado has alternatively 2 options to earn 51% of the project:
- by spending a minimum of $2 million in the first year and $1 million in every subsequent year on exploration, generating a NI 43-101 compliant resource of at least 500,000 ounces of gold
- by spending a total of $10 million over five years.
If Eldorado produces a feasibility study within ten years of signing the agreement, it can increase its ownership to 70%.
The Nazareno project consists of 382 square kilometres adjacent to the prolific Quadrilatero Ferrifero (QF) and is known for its past producing high-grade gold deposits.
The Borborema project covers 3,400 square kilometres in Pernambuco state in northeast Brazil. The project encompasses drill targets defined by high-grade rock samples, untested soil and stream sediment anomalies.
KMC Project, Serbia:
Eldorado signed agreements in October 2015 with Euromax Resources Ltd. (EOX, Financial) and Ridge Minerals DOO providing a one-year option to acquire 100% of the Karavansalija Mineralized Centre (KMC) project in southeast Serbia, where Eldorado has identified high grade epithermal gold mineralization.
It is important to note that it is difficult to predict how much production EGO can add from these exploration projects and when the first commercialization will start.
Declining gold production is a concern for investors of EGO after that the company decided to sell its Chinese assets composed by Jinfeng, White Mountain and Tanjianshan mines, as well as the Eastern Dragon project, whichis expected to close in the third and fourth quarter of 2016.
The miner forecasts to produce between 565,000 and 630,000 ounces of gold in 2016 at cash operating costs and AISC, respectively, of $585 - $620 per ounce and $940 - $980 per ounce.
After the sale of its Chinese assets, the annual gold production may decline of between 240,000 and 270,000 ounces.
In Turkey, where the Parliament announced the State of Emergency after the attempted military coup in mid-July, EGO has two operating gold mines (Kisladag with 102,300 ounces of gold produced in the first half of 2016 at cash operating costs of approximately $508 per ounce and Efemcukuru with 50,922 ounces of gold produced in the first half of 2016 at cash operating costs of approximately $492 per ounce) and the majority of its production outside Greece, where development continues on schedule and initial production is expected in the first quarter of 2017.
Disclosure: I have no positions in Eldorado Gold Corporation.
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