ELDORADO GOLD CORP /FI, 40-F filed on 3/29/2019
Annual Report (foreign private issuer)
v3.19.1
Document and Entity Information
12 Months Ended
Dec. 31, 2018
shares
Document - Document and Entity Information [Abstract]  
Document Type 40-F
Amendment Flag false
Document Period End Date Dec. 31, 2018
Document Fiscal Year Focus 2018
Document Fiscal Period Focus FY
Trading Symbol EGO
Entity Registrant Name ELDORADO GOLD CORP /FI
Entity Central Index Key 0000918608
Current Fiscal Year End Date --12-31
Entity Current Reporting Status Yes
Entity Emerging Growth Company false
Entity Common Stock, Shares Outstanding 158,801,722
v3.19.1
Consolidated Statements of Financial Position - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Current assets    
Cash and cash equivalents $ 286,312 $ 479,501
Term deposits 6,646 5,508
Restricted cash 296 310
Marketable securities 2,572 5,010
Accounts receivable and other 80,987 78,344
Inventories 137,885 168,844
Total current assets 514,698 737,517
Restricted cash 13,449 12,617
Other assets 10,592 10,285
Defined benefit pension plan 9,120 9,919
Property, plant and equipment 3,988,476 4,227,397
Goodwill 92,591 92,591
Total assets 4,628,926 5,090,326
Current liabilities    
Accounts payable and accrued liabilities 140,878 110,541
Current portion of asset retirement obligations 824 3,489
Current liabilities 141,702 114,030
Debt 595,977 593,783
Lease liability 6,538 110
Defined benefit pension plan 14,375 13,599
Asset retirement obligations 93,319 96,195
Deferred income tax liabilities 429,929 549,127
Total liabilities 1,281,840 1,366,844
Equity    
Share capital 3,007,924 3,007,924
Treasury stock (10,104) (11,056)
Contributed surplus 2,620,799 2,616,593
Accumulated other comprehensive loss (24,494) (21,350)
Deficit (2,310,453) (1,948,569)
Total equity attributable to shareholders of the Company 3,283,672 3,643,542
Attributable to non-controlling interests 63,414 79,940
Equity 3,347,086 3,723,482
Total liabilities and equity $ 4,628,926 $ 5,090,326
v3.19.1
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Revenue    
Metal sales $ 459,016 $ 391,406
Cost of sales    
Production costs 267,980 192,740
Inventory write-down 1,465 444
Depreciation and amortization 105,732 72,130
Cost of sales 375,177 265,314
Earnings from mine operations 83,839 126,092
Exploration and evaluation expenses 33,842 38,261
Mine standby costs 16,510 4,886
Other operating items 0 3,658
General and administrative expenses 46,806 54,574
Acquisition costs 0 4,270
Defined benefit pension plan expense 3,555 3,451
Share based payments 6,989 11,218
Impairment of property, plant, and equipment 447,808 0
Other write-down of assets 1,528 46,697
Foreign exchange loss (gain) 3,574 (2,382)
Loss from operations (476,773) (38,541)
Gain (loss) on disposal of assets 130 (462)
Gain on derivatives and other investments 665 27,425
Other income 16,151 17,575
Asset retirement obligation accretion (2,038) (2,006)
Interest and financing costs (4,264) (3,199)
Earnings (loss) from continuing operations before income tax (466,129) 792
Income tax expense (recovery) (86,498) 19,383
Loss from continuing operations (379,631) (18,591)
Loss from discontinued operations 0 (2,797)
Net loss for the year (379,631) (21,388)
Attributable to:    
Shareholders of the Company (361,884) (9,935)
Non-controlling interests (17,747) (11,453)
Net loss for the year (379,631) (21,388)
Net loss attributable to shareholders of the Company:    
Continuing operations (361,884) (7,138)
Discontinued operations 0 (2,797)
Shareholders of the Company $ (361,884) $ (9,935)
Weighted average number of shares outstanding    
Basic (in shares) 158,509 150,531
Diluted (in shares) 158,509 150,531
Net loss per share attributable to shareholders of the Company:    
Basic loss per share (USD per share) $ (2.28) $ (0.07)
Diluted loss per share (USD per share) (2.28) (0.07)
Net loss per share attributable to shareholders of the Company - continuing operations:    
Basic loss per share (USD per share) (2.28) (0.05)
Diluted loss per share (USD per share) $ (2.28) $ (0.05)
v3.19.1
Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Statement of comprehensive income [abstract]    
Loss for the year $ (379,631) $ (21,388)
Items that will not be reclassified to earnings or loss:    
Change in fair value of investments in equity securities (2,306) (160)
Actuarial losses on defined benefit pension plans (1,197) (3,121)
Income tax recovery on losses on defined benefit pension plans 359 0
Other comprehensive income that will not be reclassified to profit or loss, before tax (3,144) (3,281)
Items that may be reclassified subsequently to earnings or loss:    
Change in fair value of investments in equity securities 0 16,038
Income tax on change in fair value of investments in equity securities 0 (2,595)
Reclassification of the gain on equity securities on acquisition of Integra 0 (28,363)
Income tax on the gain on equity securities on acquisition of Integra 0 4,023
Income tax relating to components of other comprehensive income that will not be reclassified to profit or loss 0 (10,897)
Total other comprehensive loss for the year (3,144) (14,178)
Total comprehensive loss for the year (382,775) (35,566)
Attributable to:    
Shareholders of the Company (365,028) (24,113)
Non-controlling interests (17,747) (11,453)
Total comprehensive loss for the year $ (382,775) $ (35,566)
v3.19.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Operating activities    
Loss for the year from continuing operations $ (379,631) $ (18,591)
Items not affecting cash:    
Asset retirement obligation accretion 2,038 2,006
Depreciation and amortization 105,732 72,130
Unrealized foreign exchange gain 704 (471)
Deferred income tax recovery (118,839) (19,849)
Loss (gain) on disposal of assets (130) 462
Gain on derivatives and other investments (665) (27,425)
Impairment of property, plant, and equipment 447,808 0
Other write-down of assets 1,528 46,697
Share based payments 6,989 11,218
Defined benefit pension plan expense 3,555 3,451
Adjustments to reconcile profit (loss) other than changes in working capital 69,089 69,628
Property reclamation payments (5,536) (3,097)
Severance payments (2,299) 0
Changes in non-cash working capital 5,062 (35,755)
Net cash provided by operating activities of continuing operations 66,316 30,776
Net cash used by operating activities of discontinued operations 0 (2,797)
Investing activities    
Net cash paid on acquisition of subsidiary 0 (121,664)
Purchase of property, plant and equipment (274,070) (309,133)
Capitalised interest (36,750) (36,750)
Proceeds from the sale of property, plant and equipment 7,882 252
Proceeds on pre-commercial production sales 48,868 38,200
Value added taxes related to mineral property expenditures, net (1,261) 22,804
Investment in term deposits (1,138) (216)
Increase in restricted cash (928) (9,817)
Net cash used by investing activities of continuing operations (257,397) (416,324)
Financing activities    
Issuance of common shares for cash 0 586
Dividend paid to shareholders 0 (10,610)
Purchase of treasury stock (2,108) (5,301)
Net cash used by financing activities of continuing operations (2,108) (15,325)
Net decrease in cash and cash equivalents (193,189) (403,670)
Cash and cash equivalents - beginning of year 479,501 883,171
Cash and cash equivalents - end of year $ 286,312 $ 479,501
v3.19.1
Consolidated Statements of Changes in Equity - USD ($)
$ in Thousands
Total
Share capital [member]
Share capital [member]
Integra Gold Corp [member]
Treasury stock [member]
Contributed surplus [member]
Accumulated other comprehensive loss [member]
Deficit [member]
Equity attributable to owners of parent [member]
Non-controlling interests [member]
Balance beginning of year at Dec. 31, 2016   $ 2,819,101   $ (7,794) $ 2,606,567 $ (7,172) $ (1,928,024)   $ 88,786
Changes in equity [abstract]                  
Shares issued upon exercise of share options, for cash $ 586 586              
Transfer of contributed surplus on exercise of options   176              
Shares issued on acquisition of Integra Gold Corp.     $ 188,061            
Purchase of treasury stock       (5,301)          
Share based payments         12,241        
Shares redeemed upon exercise of restricted share units       2,039 (2,039)        
Transfer to share capital on exercise of options         (176)        
Other comprehensive loss for the year (14,178)         (14,178)      
Dividends paid             (10,610)    
Loss attributable to shareholders of the Company (9,935)           (9,935)    
Loss attributable to non-controlling interests (11,453)               (11,453)
Contributions from non-controlling interests                 2,607
Balance end of year at Dec. 31, 2017 3,723,482 3,007,924   (11,056) 2,616,593 (21,350) (1,948,569) $ 3,643,542 79,940
Changes in equity [abstract]                  
Shares issued upon exercise of share options, for cash   0              
Transfer of contributed surplus on exercise of options   0              
Shares issued on acquisition of Integra Gold Corp.     $ 0            
Purchase of treasury stock       (2,108)          
Share based payments         7,266        
Shares redeemed upon exercise of restricted share units       3,060 (3,060)        
Transfer to share capital on exercise of options         0        
Other comprehensive loss for the year (3,144)         (3,144)      
Dividends paid             0    
Loss attributable to shareholders of the Company (361,884)           (361,884)    
Loss attributable to non-controlling interests (17,747)               (17,747)
Contributions from non-controlling interests                 1,221
Balance end of year at Dec. 31, 2018 $ 3,347,086 $ 3,007,924   $ (10,104) $ 2,620,799 $ (24,494) $ (2,310,453) $ 3,283,672 $ 63,414
v3.19.1
General Information
12 Months Ended
Dec. 31, 2018
Corporate Information And Statement Of IFRS Compliance [Abstract]  
General Information
1. General Information
Eldorado Gold Corporation (individually or collectively with its subsidiaries, as applicable, “Eldorado” or the “Company”) is a gold mining, development, and exploration company. The Company has mining operations, ongoing development projects and exploration in Turkey, Canada, Greece, Brazil, Romania and Serbia. In July 2017, the Company acquired Integra Gold Corporation (“Integra”), a Canadian mining company with mineral assets in Quebec, Canada (note 6).
Eldorado is a public company listed on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange (“NYSE”) and is incorporated in the province of British Columbia, Canada.
The Company's head office, principal address and records are located at 550 Burrard Street, Suite 1188, Vancouver, British Columbia, Canada, V6C 2B5.

v3.19.1
Basis of preparation
12 Months Ended
Dec. 31, 2018
Corporate Information And Statement Of IFRS Compliance [Abstract]  
Basis of preparation
2. Basis of preparation
These consolidated financial statements, including comparatives, have been prepared in compliance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The significant accounting policies applied in these consolidated financial statements are presented in note 3 and have been applied consistently to all years presented, unless otherwise noted.
Certain prior period balances have been reclassified to conform to current period presentation.
The consolidated financial statements were approved by the Company's Board of Directors on February 21, 2019.
The consolidated financial statements have been prepared on a historical cost basis except for certain financial assets and liabilities which are measured at fair value.
The preparation of the consolidated financial statements in compliance with IFRS requires management to make certain critical accounting estimates. It also requires management to exercise judgment in the process of applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 4.
v3.19.1
Significant accounting policies
12 Months Ended
Dec. 31, 2018
Corporate Information And Statement Of IFRS Compliance [Abstract]  
Significant accounting policies
3. Significant accounting policies
Except as disclosed in note 5, the principal accounting policies are set out below and have been applied consistently to all years presented in these consolidated financial statements, and have been applied consistently by all Eldorado subsidiaries.
3.1 Basis of presentation and principles of consolidation
(i)
Subsidiaries and business combinations
Subsidiaries are those entities controlled by Eldorado. Control exists when Eldorado is exposed to, or has rights, to variable returns from the subsidiary and has the ability to affect those returns through its power over the subsidiary. Power is defined as existing rights that give the Company the ability to direct the relevant activities of the subsidiary. In assessing control, potential voting rights that currently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. All intercompany transactions, balances, income and expenses are eliminated in full upon consolidation.
The acquisition method of accounting is used to account for business acquisitions. The cost of an acquisition is measured at the fair value of the assets acquired, equity instruments issued and liabilities incurred or assumed at the date of exchange.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest.
3. Significant accounting policies (continued)
The excess of the cost of acquisition over the fair value of Eldorado’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets acquired, the difference, or gain, is recognised directly in the consolidated statement of operations.
Transaction costs, other than those associated with the issue of debt or equity securities, which the Company incurs in connection with a business combination, are expensed as incurred.
The subsidiaries of the Company as at December 31, 2018 are described below:
Subsidiary
Location
Ownership
interest
Operations and
development projects
owned
 
 
 
 
Tüprag Metal Madencilik Sanayi ve Ticaret AS ("Tüprag")
Turkey
100%
Kişladağ Mine
Efemçukuru Mine
Hellas Gold SA ("Hellas")
Greece
95%
Stratoni Mine
Olympias Mine
Skouries Project
Integra Gold Corporation
Canada
100%
Lamaque Project
Thracean Gold Mining SA
Greece
100%
Perama Hill Project
Thrace Minerals SA
Greece
100%
Sapes Project
Unamgen Mineração e Metalurgia SA
Brazil
100%
Vila Nova Iron Ore Mine
Brazauro Recursos Minerais SA ("Brazauro")
Brazil
100%
Tocantinzinho Project
Deva Gold SA ("Deva")
Romania
80.5%
Certej Project

(ii) Discontinued operations
A discontinued operation is a component of the Company’s business that represents a separate major line of business or geographical area of operations that has been disposed of, has been abandoned or meets the criteria to be classified as held for sale.
Discontinued operations are presented in the consolidated statement of operations as a separate line.
(iii) Assets held for sale
Assets and businesses classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Impairment losses on initial classification as held for sale and gains or losses on subsequent re-measurements are included in the consolidated statement of operations. No depreciation is charged on assets and businesses classified as held for sale.
Assets and businesses are classified as held for sale if their carrying amount will be recovered or settled principally through a sale transaction rather than through continuing use. The asset or business must be available for immediate sale and the sale must be highly probable within one year.
(iv)  Investments in associates
Associates are those entities where Eldorado has the ability to exercise significant influence, but not control, over the financial and operating policies of those entities. Significant influence is presumed to exist when the Company holds between 20 and 50 percent of the voting power of another entity.
Associates are accounted for using the equity method (equity accounted investees) and are recognized initially at cost. The consolidated financial statements include Eldorado’s share of the income and expenses and equity movements of equity accounted investees, after adjustments to align the accounting policies with those of Eldorado, from the date that significant influence commences until the date that significant influence ceases.



3. Significant accounting policies (continued)
When the Company’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Company has an obligation to make, or has made, payments on behalf of the investee.
At each balance sheet date, each investment in associates is assessed for indicators of impairment.
(v)  Transactions with non-controlling interests
For purchases from non-controlling interests, the difference between any consideration paid and the relevant share of the carrying value of net assets of the subsidiary acquired is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
Eldorado treats transactions in the ordinary course of business with non-controlling interests as transactions with third parties.
(vi) Transactions eliminated on consolidation
Intra-company and intercompany balances and transactions, and any unrealized income and expenses arising from all such transactions, are eliminated in preparing the consolidated financial statements.
3.2 Foreign currency translation
(i)
Functional and presentation currency
Items included in the financial statements of each of Eldorado’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in U.S. dollars, which is the Company’s functional and presentation currency, as well as the functional currency of all significant subsidiaries.
(ii)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at that date. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the consolidated statement of operations.
3.3 Property, plant and equipment
(i)    Cost and valuation
Property, plant and equipment are carried at cost less accumulated depreciation and any impairment in value. When an asset is disposed of, it is derecognized and the difference between its carrying value and net sales proceeds is recognized as a gain or loss in the consolidated statement of operations.
(ii)    Property, plant and equipment
Property, plant and equipment includes expenditures incurred on properties under development, significant payments related to the acquisition of land, mineral rights and property, plant and equipment which are recorded at cost on initial acquisition. Cost includes the purchase price and the directly attributable costs of acquisition or construction required to bring an asset to the location and condition necessary for the asset to be capable of operating in the manner intended by management, including capitalized borrowing costs for qualifying assets.
(iii)
Depreciation
Mine development costs, property, plant and equipment and other mining assets whose estimated useful life is the same as the remaining life of the mine are depreciated, depleted and amortized over a mine’s estimated life using the units-of-production method calculated based on proven and probable reserves.

3. Significant accounting policies (continued)
Capitalized development costs related to a multi-pit operation are amortized on a pit-by-pit basis over the pit’s estimated life using the units-of-production method calculated based on proven and probable reserves related to each pit.
Property, plant and equipment and other assets whose estimated useful lives are less than the remaining life of the mine are depreciated on a straight-line basis over the estimated useful lives of the assets.
Where components of an asset have a different useful life and cost that is significant to the total cost of the asset, depreciation is calculated on each separate component.
Depreciation methods, useful lives and residual values are reviewed at the end of each year and adjusted if appropriate.
(iv)
Subsequent costs
Expenditure on major maintenance or repairs includes the cost of replacement parts of assets and overhaul costs. Where an asset or part of an asset is replaced and it is probable that further future economic benefit will flow to the Company, the expenditure is capitalized. Similarly, overhaul costs associated with major maintenance are capitalized when it is probable that future economic benefit will flow to the Company and any remaining costs of previous overhauls relating to the same asset are derecognized. All other expenditures are expensed as incurred.
(v)
Deferred stripping costs
Stripping costs incurred during the production phase of a mine are considered production costs and included in the cost of inventory produced during the period in which the stripping costs are incurred, unless the stripping activity can be shown to provide access to additional mineral reserves, in which case the stripping costs are capitalized. Stripping costs incurred to prepare the ore body for extraction are capitalized as mine development costs (pre-stripping). Capitalized stripping costs are amortized on a unit-of-production basis over the proven and probable reserves to which they relate.
(vi)
Borrowing costs
Borrowing costs are expensed as incurred except where they are attributable to the financing of construction or development of qualifying assets requiring a substantial period of time to prepare for their intended future use. Interest is capitalized up to the date when substantially all the activities necessary to prepare the asset for its intended use are complete. Interest is ceased to be capitalized during periods of prolonged suspension of construction or development.
Investment income arising on the temporary investment of proceeds from borrowings is offset against borrowing costs being capitalized.
(vii)
Mine standby costs and restructuring costs
Mine standby costs and costs related to restructuring a mining operation are charged directly to expense in the period incurred. Mine standby costs include labour, maintenance and mine support costs incurred during temporary shutdowns of a mine or a development project.
3.4 Exploration, evaluation and development expenditures
(i)
Exploration
Exploration expenditures reflect the costs related to the initial search for mineral deposits with economic potential or obtaining more information about existing mineral deposits. Exploration expenditures typically include costs associated with the acquisition of mineral licenses, prospecting, sampling, mapping, diamond drilling and other work involved in searching for mineral deposits. All expenditures relating to exploration activities are expensed as incurred except for the costs associated with the acquisition of mineral licenses which are capitalized.


3. Significant accounting policies (continued)
(ii)
Evaluation
Evaluation expenditures reflect costs incurred at projects related to establishing the technical and commercial viability of mineral deposits identified through exploration or acquired through a business combination or asset acquisition.
Evaluation expenditures include the cost of:
a)
establishing the volume and grade of deposits through drilling of core samples, trenching and sampling activities for an ore body that is classified as either a mineral resource or a proven and probable reserve;
b)
determining the optimal methods of extraction and metallurgical and treatment processes;
c)
studies related to surveying, transportation and infrastructure requirements;
d)
permitting activities; and
e)
economic evaluations to determine whether development of the mineralized material is commercially viable, including scoping, prefeasibility and final feasibility studies.
Evaluation expenditures are capitalized if management determines that there is evidence to support probability of generating positive economic returns in the future. A mineral resource is considered to have economic potential when it is expected the technical feasibility and commercial viability of extraction of the mineral resource is demonstrable considering long-term metal prices. Therefore, prior to capitalizing such costs, management determines that the following conditions have been met:
There is a probable future benefit that will contribute to future cash inflows;
The Company can obtain the benefit and control access to it; and
The transaction or event giving rise to the benefit has already occurred.
The evaluation phase is complete once technical feasibility of the extraction of the mineral deposit has been determined through preparation of a reserve and resource statement, including a mining plan as well as receipt of required permits and approval of the Board of Directors to proceed with development of the mine.
(iii)
Development
Development expenditures are those that are incurred during the phase of preparing a mineral deposit for extraction and processing. These include pre-stripping costs and underground development costs to gain access to the ore that is suitable for sustaining commercial mining, preparing land, construction of plant, equipment and buildings and costs of commissioning the mine and mill. It also includes proceeds received from pre-commercial production.
Expenditures incurred on development projects continue to be capitalized until the mine and mill move into the production stage. The Company assesses each mine construction project to determine when a mine moves into the production stage. The criteria used to assess the start date are determined based on the nature of each mine construction project, such as the complexity of a plant or its location. Various relevant criteria are considered to assess when the mine is substantially complete and ready for its intended use and moved into the production stage. Some of the criteria considered would include, but are not limited to, the following:
(1)
the level of capital expenditures compared to construction cost estimates;
(2)
the completion of a reasonable period of testing of mine plant and equipment;
(3)
the ability to produce minerals in saleable form (within specification); and
(4)
the ability to sustain ongoing production of minerals.
Alternatively, if the factors that impact the technical feasibility and commercial viability of a project change and no longer support the probability of generating positive economic returns in the future, expenditures will no longer be capitalized.

3. Significant accounting policies (continued)
3.5 Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Company’s share of the net assets of the acquired business at the date of acquisition. When the excess is negative (negative goodwill), it is recognized immediately in income. Goodwill on acquisition of subsidiaries and businesses is shown separately as goodwill in the consolidated financial statements. Goodwill on acquisition of associates is included in investments in significantly influenced companies and tested for impairment as part of the overall investment.
Goodwill is carried at cost less accumulated impairment losses and tested annually for impairment. Impairment losses on goodwill are not reversed. The impairment testing is performed annually or more frequently if events or changes in circumstances indicate that it may be impaired.
Goodwill is allocated to cash-generating units (“CGUs") for the purpose of impairment testing. The allocation is made to those CGUs or groups of CGUs that are expected to benefit from the business combination in which the goodwill arose. If the composition of one or more CGUs to which goodwill has been allocated changes due to a re-organization, the goodwill is re-allocated to the units affected.
The gain or loss on disposal of an entity includes the carrying amount of goodwill relating to the entity sold.
3.6 Impairment of non-financial assets
Other long-lived assets are reviewed each reporting period for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If such indicators exist, an impairment test is performed.
An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost of disposal ("FVLCD") and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows or CGUs.
Value in use is determined as the present value of the future cash flows expected to be derived from an asset or CGU based on the detailed mine and/or production plans. The estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
FVLCD is the amount obtainable from the sale of an asset or CGU in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal. For mining assets, FVLCD is often estimated using a discounted cash flow approach because a fair value is not readily available from an active market or binding sale agreement. Estimated future cash flows are calculated using estimated future prices, mineral reserves and resources, operating and capital costs. All assumptions used are those that an independent market participant would consider appropriate.
Non-financial assets other than goodwill impaired in prior periods are reviewed for possible reversal of the impairment when events or changes in circumstances indicate that an item of mineral property and equipment or CGU is no longer impaired.
3. Significant accounting policies (continued)
3.7 Financial assets
(i)
Classification and measurement
The Company classifies its financial assets in the following categories: at fair value through profit or loss (“FVTPL”), at fair value through other comprehensive income (“FVTOCI”) or at amortized cost. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
The classification of investments in debt instruments is driven by the business model for managing the financial assets and their contractual cash flow characteristics. Investments in debt instruments are measured at amortized cost if the business model is to hold the instrument for collection of contractual cash flows and those cash flows are solely principal and interest. If the business model is not to hold the debt instrument, it is classified as FVTPL. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payments of principal and interest.
Equity instruments that are held for trading (including all equity derivative instruments) are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as FVTOCI.
(a) Financial assets at FVTPL
Financial assets carried as FVTPL are initially recorded at fair value with all transaction costs expensed in the consolidated statement of operations. Realized and unrealized gains and losses arising from changes in the fair value of the financial asset held at FVTPL are included in the consolidated statement of operations in the period in which they arise. Derivatives are also categorised as FVTPL unless they are designated as hedges.
(b) Financial assets at FVTOCI
Investments in equity instruments as FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income. There is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
(c) Financial assets at amortized cost
Financial assets at amortized cost are initially recognized at fair value and subsequently carried at amortized cost less any impairment.
(ii)
Impairment of financial assets
The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk on the financial asset has not increased significantly since initial recognition, the loss allowance is measured for the financial asset at an amount equal to twelve month expected credit losses. For trade receivables the Company applies the simplified approach to providing for expected credit losses, which allows the use of a lifetime expected loss provision.
Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was recognized.
(iii) Derecognition of financial assets
Financial assets are derecognized when they mature or are sold, and substantially all the risks and rewards of ownership have been transferred. Gains and losses on derecognition of financial assets classified as FVTPL or amortized cost are recognized in the consolidated statement of operations. Gains or losses on financial assets classified as FVTOCI remain within accumulated other comprehensive income.
3. Significant accounting policies (continued)
3.8 Derivative financial instruments and hedging activities
Derivatives are recognized initially at fair value on the date a derivative contract is entered into. Subsequent to initial recognition, derivatives are remeasured at their fair value. The method of recognising any resulting gain or loss depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged.
Changes in the fair value of any derivative instruments that do not qualify for hedge accounting are recognised immediately in the consolidated statement of operations.
(a) Fair value hedge
Changes in the fair values of derivatives that are designated and qualify as fair value hedges are recorded in the consolidated statement of operations, together with any changes in the fair values of the hedged assets or liabilities that are attributable to the hedged risk.
(b) Cash-flow hedge
The effective portions of changes in the fair values of derivatives that are designated and qualify as cash-flow hedges are recognised in equity. The gain or loss relating to any ineffective portion is recognised immediately in the consolidated statement of operations.
Amounts accumulated in the hedge reserve are recycled in the consolidated statement of operations in the periods when the hedged items will affect profit or loss (for instance when the forecast sale that is hedged takes place). If a forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory) or a liability, the gains and losses previously deferred in the hedge reserve are included in the initial measurement of the cost of the asset or liability.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in the hedge reserve at that time remains in the reserve and is recognised when the forecast transaction is ultimately recognised in the consolidated statement of operations. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in other comprehensive income is immediately transferred to the consolidated statement of operations.
The Company has not designated any derivative contracts as hedges and therefore has not applied hedge accounting in these consolidated financial statements.
3.9 Inventories
Inventories are valued at the lower of cost and net realizable value. Costs incurred in bringing each product to its present location and condition are accounted for as follows:
i)
Product inventory consists of stockpiled ore, ore on leach pads, crushed ore, in-circuit material at properties with milling or processing operations, gold concentrate, other metal concentrate, iron ore stockpile awaiting shipment, doré awaiting refinement and unsold bullion. Product inventory costs consist of direct production costs including mining, crushing and processing; site administration costs; and allocated indirect costs, including depreciation and amortization of mineral property, plant and equipment.
Inventory costs are charged to production costs on the basis of quantity of metal sold. At operations where the ore extracted contains significant amounts of metals other than gold, primarily silver, copper, lead and zinc, cost is allocated between the joint products. The Company regularly evaluates and refines estimates used in determining the costs charged to production costs and costs absorbed into inventory carrying values based upon actual gold recoveries and operating plans.
Net realizable value is the estimated selling price, less the estimated costs of completion and selling expenses.
ii)
Materials and supplies inventory consists of consumables used in operations, such as fuel, chemicals, reagents and spare parts, which are valued at the lower of average cost and net realisable value and, where appropriate, less a provision for obsolescence. Costs include acquisition, freight and other directly attributable costs.
3. Significant accounting policies (continued)
3.10 Trade receivables
Trade receivables are amounts due from customers for the sale of bullion and metals in concentrate in the ordinary course of business.
Trade receivables are recognized initially at fair value and subsequently at amortized cost using the effective interest rate method. Trade receivables are recorded net of lifetime expected credit losses.
Settlement receivables arise from the sale of metals in concentrate. Settlement receivables are classified as fair value through profit and loss and are recorded at fair value at each reporting period. Changes in fair value of settlements receivable are recorded in revenue.
3.11 Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid investments with maturities at the date of acquisition of three months or less. Bank overdrafts are shown within borrowings in current liabilities on the consolidated statement of financial position.
3.12 Share capital
Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effects. Common shares held by the Company are classified as treasury stock and recorded as a reduction of shareholders’ equity.
3.13 Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
3.14 Debt and borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost, calculated using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the consolidated statement of operations over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities and other borrowings are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility and other borrowings will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility and borrowings will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the loan to which it relates.
3.15 Current and deferred income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognized in the consolidated statement of operations except to the extent that it relates to items recognized either in other comprehensive income or directly in equity, in which case it is recognized in other comprehensive income or in equity, respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings. The tax rate used is the rate that is substantively enacted.


3. Significant accounting policies (continued)
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred income tax is not recorded if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
3.16 Employee benefits
(i)
Defined benefit plans
Certain employees have entitlements under Company pension plans which are defined benefit pension plans. For defined benefit plans, the level of benefit provided is based on the length of service and earnings of the person entitled.
The cost of the defined benefit plan is determined using the projected unit credit method. The related pension liability recognized in the consolidated statement of financial position is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets.
The Company obtains actuarial valuations for defined benefit plans for each balance sheet date. Actuarial assumptions used in the determination of defined benefit pension plan liabilities are based on best estimates, including rate of salary escalation and expected retirement dates of employees. The discount rate is based on high quality bond yields. The assumption used to determine the interest income on plan assets is equal to the discount rate.
Actuarial gains and losses are recognized in full in the period in which they occur in other comprehensive income without recycling to the consolidated statement of operations in subsequent periods. Current service cost, the vested element of any past service cost, the interest income on plan assets and the interest arising on the pension liability are included in the same line items in the consolidated statement of operations or other comprehensive income as the related compensation cost.
Past service costs are recognized immediately to the extent the benefits are vested, and otherwise are amortized on a straight-line basis over the average period until the benefits become vested.
(ii)
Defined contribution plans
The Company’s contributions to defined contribution plans are charged to the consolidated statement of operations in the period to which the contributions relate.
(iii)
Termination benefits
Eldorado recognizes termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal, or providing benefits as a result of an offer made to encourage voluntary termination. Benefits falling due more than twelve months after the end of the reporting period are discounted to their present value.
(iv)
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.


3. Significant accounting policies (continued)
3.17 Share-based payment transactions
The Company applies the fair value method of accounting for all stock option awards and equity settled restricted share units and performance share units. Under this method the Company recognizes a compensation expense for all stock options awarded to employees, based on the fair value of the options on the date of grant which is determined by using the Black-Scholes option pricing model. For equity settled restricted share units, compensation expense is recognized based on the quoted market value of the shares. For equity settled performance share units, compensation expense is recognized based on the fair value of the shares on the date of grant which is determined by a valuator.
The fair value of the options, restricted share units and performance share units are expensed over the vesting period of the awards with a corresponding increase in equity. No expense is recognized for awards that do not ultimately vest. Deferred share units are liability awards settled in cash accounted for at the quoted market price at the grant date with the corresponding liability is marked to market at each subsequent reporting date.
3.18 Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. They are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
Rehabilitation and restoration
A provision is made for mine rehabilitation and restoration when an obligation is incurred. The provision is recognised as a liability with a corresponding asset recognised in relation to the mine site. At each reporting date the rehabilitation liability is re-measured in line with changes in discount rates, and timing or amount of the costs to be incurred. The rehabilitation liability is classified as an ‘Asset retirement obligation’ on the consolidated statement of financial position.
The provision recognised represents management’s best estimate of the present value of the future costs required. Significant estimates and assumptions are made in determining the amount of restoration and rehabilitation provisions. Those estimates and assumptions deal with uncertainties such as: requirements of the relevant legal and regulatory frameworks, the magnitude of necessary remediation activities and the timing, extent and costs of required restoration and rehabilitation activity.
These uncertainties may result in future actual expenditure differing from the amounts currently provided. The provision recognised is periodically reviewed and updated based on the facts and circumstances available at the time. Changes to the estimated future costs for operating sites are recognised in the consolidated statement of financial position by adjusting both the restoration and rehabilitation asset and provision. Such changes give rise to a change in future depreciation and financial charges.
3.19 Revenue recognition
Revenue is generated from the sale of bullion and metals in concentrate. The Company produces doré, gold concentrate and other metal concentrates. The Company’s performance obligations relate primarily to the delivery of these products to customers, with each shipment representing a separate performance obligation.
Revenue from the sale of bullion and metals in concentrates is recognized at the point the customer obtains control of the product. Control is transferred when title has passed to the purchaser, the product is physically delivered to the customer, the customer controls the risks and rewards of ownership and the Company has a present right to payment for the product.




3. Significant accounting policies (continued)
(i) Metals in concentrate
Control over metals in concentrates is transferred to the customer and revenue is recognized upon the placing of the material on board the vessel for shipment which is when the product is considered to be physically delivered to the customer under the terms of the customer contract.
Metals in concentrate are sold under pricing arrangements where final prices are determined by market prices subsequent to the date of sale (the “quotational period”). Revenue from concentrate sales is recorded based on the estimated amounts to be received, based on the respective metals forward price at the expected settlement date. Adjustments are made to settlements receivable in subsequent periods based on fluctuations in the forward prices until the date of final metal pricing. These subsequent changes in the fair value of the settlements receivable are recorded in revenue separate from revenue from contracts with customers.
Provisional invoices for metals in concentrate sales are typically issued for 80 - 90% of the estimated total value shortly after or on the passage of control of the product to the customer. Additional invoices are issued as final product weights and assays are determined over the quotational period. Provisionally invoiced amounts are generally collected promptly.
(ii) Metals in doré
The refiners who receive doré from the Company, refine the materials on the Company’s behalf and arrange for sale of the refined metal on the Precious Metal Market of the Borsa Istanbul, formerly “Istanbul Gold Exchange”. Control over the refined gold or silver produced from doré is transferred to the customer and revenue recognized upon delivery to the customer’s bullion account on the Precious Metal Market of the Borsa Istanbul.
Refined metals are sold at spot prices on the Precious Metal Market of the Borsa Istanbul. Sales proceeds are collected within several days of the completion of the sale transaction.
3.20 Finance income and expenses
Finance income comprises interest income on funds invested (including financial assets carried at FVTPL) and changes in the fair value of financial assets at FVTPL. Interest income is recognized as it accrues in profit or loss, using the effective interest method.
Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, changes in the fair value of financial assets at fair value through profit or loss and impairment losses recognized on financial assets. All borrowing costs are recognized in profit or loss using the effective interest method, except for those amounts capitalized as part of the cost of qualifying property, plant and equipment.
3.21 Earnings (loss) per share
The Company presents basic and diluted earnings per share (“EPS”) data for its common shares. Basic EPS is calculated by dividing the earnings or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted EPS is determined by adjusting the earnings or loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares, which comprise warrants and share options granted to employees.
v3.19.1
Critical accounting estimates and judgements
12 Months Ended
Dec. 31, 2018
Corporate Information And Statement Of IFRS Compliance [Abstract]  
Critical accounting estimates and judgements
4. Critical accounting estimates and judgments
The preparation of consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed at each period end. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

4. Critical accounting estimates and judgments (continued)
Significant areas requiring the use of management assumptions, estimates and judgments include determining leach pad inventory, impairment of non-current assets, estimated recoverable reserves and resources, current and deferred taxes, business combinations, commencement of commercial production and functional currency.
Actual results could differ from these estimates. Outlined below are some of the areas which require management to make significant judgments, estimates and assumptions.
Leach pad inventory
The Company considers ore stacked on its leach pads and in process at its mines as work-in-process inventory and records their value in earnings, and includes them in the cost of sales based on ounces of gold sold, using the following assumptions in its estimates:
the amount of gold and other metals estimated to be in the ore stacked on the leach pads;
the amount of gold and other metals expected to be recovered from the stacks;
the amount of gold and other metals in the mill circuits;
the amount of gold and other metals in concentrates; and
the gold and other metal prices expect to be realized when sold.
If these estimates or assumptions are inaccurate, the Company could be required to write down the value it has recorded on its work-in-process inventories, which would reduce earnings and working capital. At December 31, 2018, the cost of inventory was below its net realizable value.
Impairment of non-current assets
Non-current assets are tested for impairment when events or changes in circumstances suggest that the carrying amount may not be fully recoverable. We conduct an annual test for impairment of goodwill in the fourth quarter of each fiscal year and at any other time of the year if an indicator of impairment is identified.
Calculating the estimated FVLCD of CGUs for non-current asset impairment tests and CGUs or groups of CGUs for goodwill impairment tests requires management to make estimates and assumptions with respect to future production levels, operating and capital costs in the Company's life-of-mine (“LOM”) plans, long-term metal prices, foreign exchange rates and discount rates. Changes in any of the assumptions or estimates used in determining the fair values could impact the impairment analysis.
Estimated recoverable reserves and resources
Mineral reserve and resource estimates are based on various assumptions relating to operating matters, including, with respect to production costs, mining and processing recoveries, cut-off grades, as well as assumptions relating to long-term commodity prices and, in some cases, exchange rates, inflation rates and capital costs. Cost estimates are based on feasibility study estimates or operating history. Estimates are prepared by appropriately qualified persons, but will be impacted by forecasted commodity prices, inflation rates, exchange rates, capital and production costs and recoveries amongst other factors. Estimated recoverable reserves and resources are used to determine the depreciation of property, plant and equipment at operating mine sites, in accounting for deferred stripping costs, in performing impairment testing and for forecasting the timing of the payment of decommissioning and restoration costs. Therefore, changes in the assumptions used could impact the carrying value of assets, depreciation and impairment charges recorded in the consolidated statement of operations and the carrying value of the decommissioning and restoration provision.



4. Critical accounting estimates and judgments (continued)
Current and deferred taxes
The Company calculates current and deferred tax provisions for each of the jurisdictions in which it operates. Actual amounts of income tax expense are not final until tax returns are filed and accepted by the relevant authorities. This occurs subsequent to the issuance of the consolidated financial statements. Therefore, earnings in subsequent periods will be affected by the amount that estimates differ from the final tax returns.
Estimates of recoverability are required in assessing whether deferred tax assets and deferred tax liabilities are recognized on the consolidated statement of financial position. The Company also evaluates the recoverability of deferred tax assets based on an assessment of the ability to use the underlying future tax deductions before they expire against future taxable income. Deferred tax liabilities arising from temporary differences on investments in subsidiaries, joint ventures and associates are recognized unless the reversal of the temporary differences is not expected to occur in the foreseeable future and can be controlled.
Assumptions about the generation of future taxable earnings and repatriation of retained earnings depend on management’s estimates of future production and sales volumes, commodity prices, reserves, operating costs, decommissioning and restoration costs, capital expenditures, dividends and other capital management transactions.
Judgment is also required in the application of income tax legislation. These estimates and judgments are subject to risk and uncertainty and could result in an adjustment to current and deferred tax provisions and a corresponding credit or debit to earnings or loss for the period.
Business combinations
Determination of whether a set of assets acquired and liabilities assumed constitute the acquisition of a business or asset may require the Company to make certain judgements as to whether or not the assets acquired and liabilities assumed include the inputs, processes and outputs necessary to constitute a business as defined in IFRS 3 - Business Combinations. If an acquired set of assets and liabilities includes goodwill, the set is presumed to be a business. Based on an assessment of the relevant facts and circumstances, the Company concluded that the acquisitions of Integra (note 6) met the criteria of a business combination.
Business combinations require estimates to be made at the date of acquisition in relation to determining asset and liability fair values and the allocation of the purchase consideration over the fair value of the assets and liabilities. In respect of mining company acquisitions purchase consideration is typically allocated to the mineral reserves and resources being acquired. The estimate of reserves and resources is subject to assumptions relating to life of the mine and may change when new information becomes available. Changes in reserves and resources as a result of factors such as production costs, recovery rates, grade or reserves or commodity prices could impact depreciation rates, asset carrying values and environmental and restoration provisions. Changes in assumptions over long-term commodity prices, market demand and supply, and economic and regulatory climates could also impact the carrying value of assets, including goodwill.
Commencement of commercial production
Until a mining property is declared as being in the commercial production stage, all costs related to its development are capitalized. The determination of the date on which a mine enters the commercial production stage is a matter of judgment that impacts when capitalization of development costs ceases and recognition of revenues and depreciation of the mining property commences and is charged to profit or loss.
Functional currency
The functional currency for each of the Company’s subsidiaries is the currency of the primary economic environment in which the entity operates. The Company has determined the functional currency of each entity is the US dollar. Determination of functional currency may involve certain judgements to determine the primary economic environment and the Company reconsiders the functional currency of its entities if there is a change in events and conditions which determined the primary economic environment.
v3.19.1
Adoption of new accounting standards
12 Months Ended
Dec. 31, 2018
Corporate Information And Statement Of IFRS Compliance [Abstract]  
Adoption of new accounting standards
5. Adoption of new accounting standards
The following standards and amendments to existing standards have been adopted by the Company commencing January 1, 2018:
IFRS 9 ‘Financial Instruments’ – This standard was published in July 2014 and replaces the existing guidance in IAS 39, ‘Financial Instruments: Recognition and Measurement’. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and new general hedge accounting requirements. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward in IFRS 9, so the Company's accounting policy with respect to financial liabilities is substantially unchanged. The Company has changed its accounting policy with respect to the clarification of financial assets that were recognized at the date of transition, January 1, 2018. The new policy is included in note 3, section 3.7. The change did not impact the presentation or carrying value of any financial assets on the transition date.
As part of the implementation of this standard, the Company completed an assessment of its financial instruments as at January 1, 2018 in compliance with IFRS 9. The following table shows the original classification under IAS 39 and the new classification under IFRS 9:

Original classification New classification IAS 39
New classification IFRS 9



Financial assets


Cash and cash equivalents
Amortized cost
Amortized cost
Term deposit
Amortized cost
Amortized cost
Restricted cash
Amortized cost
Amortized cost
Trade receivables
Amortized cost
Amortized cost
Settlement receivables
Embedded derivative separately identified as FVTPL
FVTPL
Marketable securities
Available-for-sale
FVTOCI
Derivatives
FVTPL
FVTPL



Financial liabilities


Accounts payable and accrued liabilities
Amortized cost
Amortized cost
Debt
Amortized cost
Amortized cost

Upon adoption of IFRS 9, the Company made an irrevocable election to classify marketable securities as FVTOCI since they are not held for trading and are held for strategic reasons.
IFRS 15 ‘Revenue from Contracts with Customers’ – This standard introduces a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. The Company's revenue recognition policy under the previous standard recognized revenue when persuasive evidence of an arrangement existed, the bullion, doré, metal concentrates and iron ore had been shipped, title had passed to the purchaser, the price was fixed or determinable, and collection was reasonably assured. The Company has adopted this standard with a modified retrospective approach and has changed its accounting policy for revenue recognition. The new policy is included in note 3, section 3.19. There was no adjustment to prior periods as a result of the implementation of this standard. The Company has provided additional disclosures required by this standard in note 28 of these audited consolidated financial statements.



5. Adoption of new accounting standards (continued)
IFRS 2 ‘Share-Based Payments’ In June 2016, the IASB issued final amendments to this standard and clarified the classification and measurement of share-based payment transactions. These amendments deal with variations in the final settlement arrangements including:
(a) accounting for cash-settled share-based payment transactions that include a performance condition,
(b) classification of share-based payment transactions with net settlement features; and
(c) accounting for modifications of share-based payment transactions from cash-settled to equity.
At January 1, 2018, the Company adopted this standard and there was no impact on the consolidated financial statements for the year ended December 31, 2018.
The following standard and interpretation will be adopted by the Company in the annual accounting periods beginning January 1, 2019:
IFRS 16 ‘Leases’ – This standard was published in January 2016 and replaces the existing guidance in IAS 17, ‘Leases’. IFRS 16 introduces a single accounting model for lessees and for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee will be required to recognize a right-of-use asset, representing its right to use the underlying asset, and a lease liability, representing its obligation to make lease payments. The accounting treatment for lessors will remain largely the same as under IAS 17.
The Company will adopt this standard effective January 1, 2019. Under this standard, the present value of lease commitments will be shown as a liability on the balance sheet together with an asset representing the right of use, including those leases classified as operating leases under the current standard IAS 17. This implies higher amounts of depreciation expense and interest expense on lease liabilities will be recorded in the Company’s consolidated net earnings or loss in 2019 and future years. Additionally, a corresponding reduction in G&A costs and/or production costs is expected.
The Company is in the process of completing its review and analysis of IFRS 16 and will apply IFRS 16 using the cumulative catch-up approach where the additional right-of-use assets and lease liabilities will be recorded from that date forward and will not require restatement of prior years comparative information.
The Company will provide the quantitative impact of adopting IFRS 16 in its Q1, 2019 unaudited condensed consolidated interim financial statements.
IFRIC 23 'Uncertainty over Income Tax Treatments' – This interpretation sets out how to determine the accounting tax position when there is uncertainty over income tax treatments. The Interpretation requires an entity to determine whether uncertain tax positions are assessed separately or as a group; and assess whether it is probable that a tax authority will accept an uncertain tax treatment used, or proposed to be used, by an entity in its income tax filings. If yes, the entity should determine its accounting tax position consistently with the tax treatment used or planned to be used in its income tax filings. If no, the entity should reflect the effect of uncertainty in determining its accounting tax position. The Interpretation is effective January 1, 2019. Entities can apply the interpretation with either full retrospective application or modified retrospective application without restatement of comparatives retrospectively or prospectively. The Company does not expect the application of the Interpretation will have a significant impact on the Company’s consolidated financial statements.
There are other new standards, amendments to standards and interpretations that have been published and are not yet effective. The Company believes they will have no material impact on its consolidated financial statements.
v3.19.1
Acquisition of Integra
12 Months Ended
Dec. 31, 2018
Disclosure of detailed information about business combination [abstract]  
Acquisition of Integra
6. Acquisition of Integra
On July 10, 2017, the Company acquired all of the remaining issued and outstanding common shares of Integra, by way of a plan of arrangement (the “Arrangement”). Pursuant to the Arrangement, Eldorado issued 15,436,179 common shares with a fair value of $188,061 and paid $99,823 in cash to the former Integra shareholders. Integra is a resource company engaged in the exploration of mineral properties with the primary focus on the Lamaque gold project located in Val-d’Or, Quebec.
As part of the consideration, the Company included advances to Integra for $27,046 and the fair value of the existing available-for-sale Integra investment that it previously owned for $41,968. The Company recognized a gain on marketable securities for $28,363 and taxes of $4,023, as a reversal of the unrealized gain and taxes included in other comprehensive income at the date of acquisition related to this previously owned investment.
The fair value of the common shares issued as part of the consideration paid for Integra was based on the closing share price on July 7, 2017 on the TSX of C$15.70 per share. The foreign exchange rate used at time of acquisition was CDN$1 = US$0.776.
Goodwill of $92,591 resulting from the acquisition arises mainly on the recognition of deferred income tax liabilities and represents, among other things, the exploration potential within the assets acquired and future variability in the price of minerals. None of the goodwill is deductible for tax purposes.
The allocation of the purchase price is as follows:
15,436,179 common shares of shares of Eldorado at C$15.70/share (*)
 
$
188,061

Cash consideration including advances
 
126,869

Fair value of existing Integra investment by Eldorado
 
41,968

Total Consideration
 
$
356,898

 
 
 
Net assets acquired:
 
 
 
 
 
Cash and cash equivalents
 
$
5,205

Marketable securities
 
2,857

Accounts receivable and other
 
5,920

Inventories
 
2,471

Other assets
 
3,495

Property, plant and equipment
 
393,647

Goodwill
 
92,591

Accounts payable and accrued liabilities
 
(8,028
)
Flow-through share premium liability
 
(4,722
)
Other liabilities
 
(9,635
)
Deferred income taxes
 
(126,903
)
 
 
$
356,898


* common shares and price per share shown as post-share consolidation amounts. Please refer to Note 20.
The purchase price allocation was finalized at June 30, 2018. There were no changes from the preliminary allocation as reported in the Company’s annual consolidated financial statements for the year ended December 31, 2017.
v3.19.1
Cash and cash equivalents
12 Months Ended
Dec. 31, 2018
Cash and cash equivalents [abstract]  
Cash and cash equivalents
7. Cash and cash equivalents
 
December 31, 2018

 
December 31, 2017

 
 
 
 
Cash at bank and on hand
$
200,644

 
$
293,437

Short-term bank deposits
85,668

 
186,064

 
$
286,312

 
$
479,501

v3.19.1
Restricted cash
12 Months Ended
Dec. 31, 2018
Restricted Cash [Abstract]  
Restricted cash
8. Restricted cash
 
December 31, 2018

 
December 31, 2017

Current:
 
 
 
Restricted cash deposits - Greece
$
296

 
$
310

 
296

 
310

Non-current:
 
 
 
Restricted credit card deposits
58

 
43

Restricted cash related to Letter of Guarantee - Greece
10,670

 
9,743

Environmental guarantee deposits
2,721

 
2,831

 
$
13,449

 
$
12,617



Restricted cash is held on account with a financial institution in Canada to support a Letter of Guarantee issued in Canada and counter-guaranteed by the financial institution's Athens branch. The Letter of Guarantee was issued pursuant to the request from the Ministry of Environment and Energy in Greece to support the operation and restoration of the Kokkinolakkas Tailings Management Facility. The funds are invested at prevailing bank rates and interest is accrued monthly. Interest is paid directly to the account with the total balance being recorded as restricted cash. The account allows for any excess, above the notional principal of the Letter of Guarantee, to be remitted back to the Company.
v3.19.1
Accounts receivable and other
12 Months Ended
Dec. 31, 2018
Trade and other current receivables [abstract]  
Accounts receivable and other
9. Accounts receivable and other
 
December 31, 2018

 
December 31, 2017

 
 
 
 
Trade receivables
$
22,072

 
$
7,746

Value added tax and other taxes recoverable
34,791

 
44,717

Other receivables and advances
8,378

 
7,134

Prepaid expenses and deposits
15,746

 
18,747

 
$
80,987

 
$
78,344

v3.19.1
Inventories
12 Months Ended
Dec. 31, 2018
Classes of current inventories [abstract]  
Inventories
10. Inventories
 
December 31, 2018

 
December 31, 2017

 
 
 
 
Ore stockpiles
$
1,620

 
$
3,297

In-process inventory and finished goods
59,974

 
96,651

Materials and supplies
76,291

 
68,896

 
$
137,885

 
$
168,844



The cost of materials and supplies consumed during the year and included in production costs amounted to $87,269 (2017$120,422).
Inventory write downs related to zinc inventory of $269 (2017$444) and to pyrite inventory of $1,196 (2017 – $nil) were recognized during the year. As at December 31, 2018, all inventories are held at cost.
v3.19.1
Other assets
12 Months Ended
Dec. 31, 2018
Miscellaneous non-current assets [abstract]  
Other assets
11. Other assets
 
December 31, 2018

 
December 31, 2017

 
 
 
 
Prepaid loan costs (note 16(a))
$
749

 
$
1,272

Prepaid forestry fees
3,175

 
3,628

Long-term value added tax and other taxes recoverable
6,668

 
5,385

 
$
10,592

 
$
10,285

v3.19.1
Non-controlling interests
12 Months Ended
Dec. 31, 2018
Disclosure of subsidiaries [abstract]  
Non-controlling interests
12. Non-controlling interests
The following table summarizes the information relating to each of the Company’s subsidiaries that has material non-controlling interests (“NCI”). The amounts disclosed for each subsidiary are based on those included in the consolidated financial statements before inter-company eliminations.
December 31, 2018
Hellas

 
Deva

NCI percentage
5%

 
19.5%

 
 
 
 
Current assets
$
78,308

 
$
2,177

Non-current assets
1,846,952

 
414,330

Current liabilities
(1,212,864
)
 
(246,089
)
Non-current liabilities
(160,765
)
 
(43,581
)
Net assets
551,631

 
126,837

Carrying amount of NCI
$
17,619

 
$
44,169

 
 
 
 
Revenue
110,487

 

Net loss
(298,272
)
 
(14,100
)
Total comprehensive loss
(298,272
)
 
(14,100
)
Loss allocated to NCI
(14,913
)
 
(2,750
)
Dividends paid to NCI

 

 
 
 
 
Cash flows from operating activities
(66,135
)
 
(16,695
)
Cash flows from investing activities
(80,306
)
 
(419
)
Cash flows from financing activities
133,520

 
15,218

Net decrease in cash and cash equivalents
$
(12,921
)
 
$
(1,896
)
 
 
 
 
December 31, 2017
Hellas

 
Deva

NCI percentage
5%

 
19.5%

 
 
 
 
Current assets
$
72,454

 
$
4,958

Non-current assets
2,143,089

 
413,989

Current liabilities
(1,113,471
)
 
(234,386
)
Non-current liabilities
(291,447
)
 
(43,623
)
Net assets
810,625

 
140,938

Carrying amount of NCI
$
31,732

 
$
46,919

 
 
 
 
Revenue
51,152

 

Net loss
(62,365
)
 
(42,632
)
Total comprehensive loss
(62,365
)
 
(42,632
)
Loss allocated to NCI
(3,118
)
 
(8,314
)
Dividends paid to NCI

 

 
 
 
 
Cash flows from operating activities
(9,253
)
 
(51,328
)
Cash flows from investing activities
(181,116
)
 
(2,007
)
Cash flows from financing activities
172,431

 
53,007

Net decrease in cash and cash equivalents
$
(17,938
)
 
$
(328
)


Net earnings or loss allocated to NCI in the consolidated statement of operations includes $84 related to non-material subsidiaries (2017 – $21, including NCI in discontinued operations). The carrying value of the NCI related to non-material subsidiaries is $1,626 (2017$1,289).
v3.19.1
Property, plant and equipment
12 Months Ended
Dec. 31, 2018
Disclosure of detailed information about property, plant and equipment [abstract]  
Property, plant and equipment
13. Property, plant and equipment
 
Land and buildings

Plant and equipment

Capital works in progress

Mineral properties and leases

Capitalized Evaluation

Total

Cost
 
 
 
 
 
 
Balance at January 1, 2017
$
164,540

$
1,416,948

$
141,922

$
3,877,473

$
77,495

$
5,678,378

Additions/transfers
12,322

115,684

(42,933
)
254,481

9,536

349,090

Acquisition of Integra (note 6)
4,820

3,646


385,181


393,647

Proceeds on pre-commercial production sales



(38,200
)

(38,200
)
Other movements
4,251

(2,325
)
(12,336
)
7,832


(2,578
)
Disposals
(10
)
(2,313
)
(29,832
)
(1,168
)

(33,323
)
Balance at December 31, 2017
$
185,923

$
1,531,640

$
56,821

$
4,485,599

$
87,031

$
6,347,014

 
 
 
 
 
 
 
Balance at January 1, 2018
$
185,923

$
1,531,640

$
56,821

$
4,485,599

$
87,031

$
6,347,014

Additions/transfers
6,203

119,712

1,646

229,673

6,202

363,436

Proceeds on pre-commercial production sales

(9,179
)

(39,689
)

(48,868
)
Olympias commercial production transfers (*)
387

465,249

53,858

(506,206
)

13,288

Other movements
(240
)
13,011

1,769

(200
)
226

14,566

Disposals
(29
)
(8,400
)

(20
)

(8,449
)
Balance at December 31, 2018
$
192,244

$
2,112,033

$
114,094

$
4,169,157

$
93,459

$
6,680,987

 
 
 
 
 
 
 
Depreciation and impairment
 
 
 
 
 
 
Balance at January 1, 2017
$
(38,635
)
$
(706,641
)
$
(4,733
)
$
(1,282,542
)
$

$
(2,032,551
)
Depreciation for the year
(4,245
)
(79,044
)

(2,948
)

(86,237
)
Other movements
(546
)
(2,048
)

80


(2,514
)
Disposals

1,683


2


1,685

Balance at December 31, 2017
$
(43,426
)
$
(786,050
)
$
(4,733
)
$
(1,285,408
)
$

$
(2,119,617
)
 
 
 
 
 
 
 
Balance at January 1, 2018
$
(43,426
)
$
(786,050
)
$
(4,733
)
$
(1,285,408
)
$

$
(2,119,617
)
Depreciation for the year
(3,125
)
(88,649
)

(3,774
)

(95,548
)
Olympias commercial production transfers (*)

(13,288
)



(13,288
)
Other movements
(1,060
)
(15,485
)

(346
)

(16,891
)
Impairment
(363
)
(105,932
)

(341,513
)

(447,808
)
Disposals

641




641

Balance at December 31, 2018
$
(47,974
)
$
(1,008,763
)
$
(4,733
)
$
(1,631,041
)
$

$
(2,692,511
)
 
 
 
 
 
 
 
Carrying amounts
 
 
 
 
 
 
At January 1, 2017
$
125,905

$
710,307

$
137,189

$
2,594,931

$
77,495

$
3,645,827

At December 31, 2017
142,497

745,590

52,088

3,200,191

87,031

4,227,397

Balance at December 31, 2018
$
144,270

$
1,103,270

$
109,361

$
2,538,116

$
93,459

$
3,988,476


* Effective January 1, 2018, $506,206 of costs were transferred at Olympias from mineral properties and leases to relevant categories of property, plant and equipment upon commencement of commercial production.
13. Property, plant and equipment (continued)
The amount of capitalized interest during the year ended December 31, 2018 included in property, plant and equipment was $36,750 (2017$36,750).
In accordance with the Company’s accounting policies each CGU is assessed for indicators of impairment, from both external and internal sources, at the end of each reporting period. If such indicators of impairment exist for any CGUs, those CGUs are tested for impairment. The recoverable amounts of the Company’s CGUs are based primarily on the future after-tax cash flows expected to be derived from the Company’s mining properties and represent each CGU’s FVLCD, a Level 3 fair value measurement.
Determining the estimated fair values of each CGU requires Management to use judgment in determining estimates and assumptions with respect to discount rates, exchange rates, future production levels including amount of recoverable reserves, resources and exploration potential, recovery rates and concentrate grades, mining methods, operating and capital costs, long-term metal prices and income taxes. Metal pricing assumptions were based on long-term consensus forecast pricing, and the discount rates were based on the Company’s internal weighted average costs of capital, adjusted for country risk. Changes in any of the assumptions or estimates used in determining the fair values could impact the impairment analysis.
Kisladag
During the quarter ended September 30, 2018, the Company completed a feasibility study of a new mill at Kisladag and the decision to proceed with the new mill was approved by the Board of Directors on October 25, 2018. The feasibility study shows a transition in the mine plan which shortens the estimated useful life of the leach pad to 2020. Kisladag updated their production plan for the leach pad with additional drill data.
As a result of the shortened estimated life of the leach pad and the new production plan, the Company assessed the recoverable amounts of leach pad costs and related plant and equipment for the Kisladag leach pad assets at September 30, 2018 using a value-in-use approach. The projected cash flows used in impairment testing are significantly affected by changes in assumptions for the amount of recoverable ounces, metal prices, and production costs estimates. The Company's impairment testing incorporated the following key assumptions:
Gold price ($/oz)

$1,250

Silver price ($/oz)

$17

Discount rate
6.5
%

As at September 30, 2018, the Company recorded an impairment charge to Kisladag leach pad costs and related plant and equipment of $117,570 ($94,056, net of deferred tax). As at December 31, 2018, Management determined that no further impairment or reversal of impairment was identified for the Kisladag CGU (note 32).
13. Property, plant and equipment (continued)
Olympias
As at December 31, 2018, Management determined that continued jurisdictional risk with obtaining permits in Greece, together with the softening global market for the sale of concentrate, represented an indicator of potential impairment for Olympias. No other indicators of impairment for other CGUs were identified.
The key assumptions used for assessing the recoverable amount of the Olympias carrying values as at December 31, 2018 are as follows:
Gold price ($/oz)
$1,275 - $1,300

Silver price ($/oz)
$17 - $18

Lead price ($/t)
$2,200 - $2,300

Zinc price ($/t)
$2,800 - $2,900

Discount rate
7
%

At December 31, 2018, the Company recorded an impairment charge to the Olympias CGU of $330,238 ($247,679, net of deferred tax).
v3.19.1
Goodwill
12 Months Ended
Dec. 31, 2018
Changes in goodwill [abstract]  
Goodwill
14. Goodwill
As a result of the purchase price allocation for the Integra acquisition, the Company recognized goodwill of $92,591 in 2017 (note 6). As of December 31, 2018 all goodwill relates to Integra's Lamaque CGU.
Impairment tests for goodwill
Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may not be recoverable. Impairment is determined for goodwill by assessing the recoverable amount of each CGU or group of CGUs to which the goodwill relates. Where the recoverable amount of the CGU is less than its carrying amount including goodwill, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.
The key assumptions used for assessing the recoverable amount of goodwill in the Lamaque CGU are reflected in the table below. Management used judgment in determining estimates and assumptions with respect to discount rates, exchange rates, future production level including amount of recoverable reserves, resources and exploration potential, recovery rates and concentrate grades, mining methods, operating and capital costs, long-term metal prices and income taxes. Metal pricing assumptions were based on long-term consensus forecast pricing, and the discount rates were based on the Company's internal weighted average costs of capital, adjusted for country risk. Changes in any of the assumptions or estimates used in determining the fair values could impact the recoverable amount of goodwill analysis.
 
 
2018
 
 
 
Gold price ($/oz)
 
$1,275 - $1,300

Discount rate
 
5
%
Conversion factor of resources and exploration potential to proven and probable reserves
 
21
%
Fair value per ounce of resources and exploration potential beyond proven and probable reserves
 

$140



The estimated recoverable amount of the Lamaque CGU including goodwill exceeded its carrying amount by approximately $115.6 million. A change in the gold price to $1,200 per ounce would result in an impairment.
v3.19.1
Accounts payable and accrued liabilities
12 Months Ended
Dec. 31, 2018
Trade and other current payables [abstract]  
Accounts payable and accrued liabilities
15. Accounts payable and accrued liabilities
 
December 31, 2018

 
December 31, 2017

 
 
 
 
Trade payables
$
38,969

 
$
60,081

Taxes payable
201

 
213

Accrued expenses
101,708

 
50,247

 
$
140,878

 
$
110,541

v3.19.1
Debt
12 Months Ended
Dec. 31, 2018
Borrowings [abstract]  
Debt
16. Debt
(a) Revolving credit facility
In November 2012, the Company entered into a $375 million revolving credit facility with a syndicate of banks. This credit facility was amended and restated in June 2016 (“the amended and restated credit agreement” or “ARCA”) and reduced to an available credit of $250 million with the option to increase by an additional $100 million through an accordion feature. The maturity date is June 13, 2020. The ARCA is secured by the shares of SG Resources and Tuprag, wholly owned subsidiaries of the Company.
The ARCA contains covenants that restrict, among other things, the ability of the Company to incur aggregate unsecured indebtedness exceeding $850 million, incur secured indebtedness exceeding $200 million and permitted unsecured indebtedness exceeding $150 million. The ARCA also contains restrictions for making distributions in certain circumstances, selling material assets and conducting business other than that which relates to the mining industry. Significant financial covenants include a maximum Net Debt to Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) of 3.5:1 and a minimum EBITDA to Interest of 3:1. The Company is in compliance with these covenants as at December 31, 2018.
Loan interest on the revolving credit facility is variable dependent on a Net Leverage ratio pricing grid. The Company’s current net leverage ratio is approximately 2.26:1. At this ratio, interest charges and fees are as follows: LIBOR plus margin of 2.625% and undrawn standby fee of 0.725%. Fees of $2,031 were paid on the amendment dated June 2016. This amount has been deferred as pre-payment for liquidity services and is being amortized to financing costs over the term of the credit facility. As at December 31, 2018, the prepaid loan cost on the consolidated statement of financial position was $749 (2017 - $1,272).
No amounts were drawn down under the ARCA in 2018 and as at December 31, the balance is $nil (2017 – $nil).
(b) Senior notes
On December 10, 2012, the Company completed an offering of $600.0 million senior notes (“the notes”) at par value, with a coupon rate of 6.125% due December 15, 2020. The notes pay interest semi-annually on June 15 and December 15. The Company received proceeds of $589.5 million from the offering, which is net of the commission payment. The notes are redeemable by the Company in whole or in part, for cash:
The fair market value of the notes as at December 31, 2018 is $550 million.
Net deferred financing costs of $4,023 (2017 – $6,217) have been included as an offset in the balance of the notes in the consolidated financial statements and are being amortized over the term of the notes. The debt balance as at December 31, 2018 was $595,977 (2017 – $593,783).
v3.19.1
Asset retirement obligations
12 Months Ended
Dec. 31, 2018
Disclosure of asset retirement obligations [abstract]  
Asset retirement obligations
 
Turkey

Canada

Greece

Romania

Brazil

Total

 
 
 
 
 
 
 
At January 1, 2018
$
37,321

$
9,453

$
47,461

$
1,405

$
4,044

$
99,684

Accretion during the year
896


1,035

36

71

2,038

Revisions to estimate
(1,117
)
2,762

(3,512
)
(77
)
(99
)
(2,043
)
Settlements
(621
)

(4,915
)


(5,536
)
At December 31, 2018
36,479

12,215

40,069

1,364

4,016

94,143

Less: Current portion


(824
)


(824
)
Long term portion
36,479

12,215

39,245

1,364

4,016

93,319

Estimated undiscounted amount
$
48,454

$
14,989

$
65,274

$
2,335

$
4,121

$
135,173


 
Turkey

Canada

Greece

Romania

Brazil

Total

 
 
 
 
 
 
 
At January 1, 2017
$
36,196

$

$
48,131

$
1,359

$
4,092

$
89,778

Acquired during the year

9,453




9,453

Accretion during the year
913


1,025

36

32

2,006

Revisions to estimate
502


1,112

10

(80
)
1,544

Settlements
(290
)

(2,807
)


(3,097
)
At December 31, 2017
37,321

9,453

47,461

1,405

4,044

99,684

Less: Current portion


(3,489
)


(3,489
)
Long term portion
37,321

9,453

43,972

1,405

4,044

96,195

Estimated undiscounted amount
$
49,257

$
12,286

$
71,591

$
2,340

$
4,117

$
139,591



The Company’s asset retirement obligations relate to the restoration and rehabilitation of the Company’s mining operations and projects under development. The expected timing of the cash flows in respect of the provision is based on the estimated life of the various mining operations. The reduction in the estimate of the obligation in 2018 was mainly due to reclamation work performed during the year at Olympias.
The provision is calculated as the present value of estimated future net cash outflows based on the following key assumptions:
 
Turkey
Canada
Greece
Romania
Brazil

 
%
%
%
%
%

At December 31, 2017
 
 
 
 
 
Inflation rate
 2.0 to 2.2
 2.0 to 2.2
 2.0 to 2.2
 2.0 to 2.2
 2.0 to 2.2

Discount rate
 2.3 to 2.5
 2.3 to 2.5
 1.5 to 3.0
2.7
1.8

 
 
 
 
 
 
At December 31, 2018
 
 
 
 
 
Inflation rate
 2.2 to 2.3
 2.2 to 2.3
 2.2 to 2.3
 2.2 to 2.3
 2.2 to 2.3

Discount rate
2.7
2.7
 2.5 to 2.9
2.9
2.6



The discount rate is a risk-free rate based on U.S. Treasury bond rates with maturities commensurate with site mine lives. U.S. Treasury bond rates have been used for all of the mine sites as the liabilities are denominated in U.S. dollars and the majority of the expenditures are expected to be incurred in U.S. dollars. Similarly, the inflation rates used in determining the present value of the future net cash outflows are based on U.S inflation rates.

17. Asset retirement obligations (continued)
In relation to the asset retirement obligations in Greece, the Company has the following:
a) a €50.0 million Letter of Guarantee to the Greece Ministry of Environment, Energy and Climate Change ("MEECC") as security for the due and proper performance of rehabilitation works committed in relation to the mining and metallurgical facilities of the Kassandra Mines (Stratoni, Olympias and Skouries) and the removal, cleaning and rehabilitation of the old Olympias tailings. This Letter of Guarantee is renewed annually, expires on July 26, 2026 and has an annual fee of 57 basis points.
b) a €7.5 million Letter of Guarantee to the MEECC for the due and proper performance of the Kokkinolakkas Tailings Management Facility, committed in connection with the Environmental Impact Assessment approved for the Kassandra Mines (Stratoni, Olympias and Skouries). The Letter of Guarantee is renewed annually and expires on July 26, 2026. The Letter of Guarantee has an annual fee of 45 basis points.
v3.19.1
Defined benefit plans
12 Months Ended
Dec. 31, 2018
Disclosure of defined benefit plans [abstract]  
Defined benefit plans
18. Defined benefit plans
 
December 31, 2018

 
December 31, 2017

Income statement charge for:
 
 
 
Pension plan
$
3,463

 
$
2,841

Supplemental Pension Plan
92

 
610

 
$
3,555

 
$
3,451

 
 
 
 
Actuarial losses recognised in the statement of other
 
 
 
comprehensive income in the period (before tax)
$
(1,197
)
 
$
(3,121
)
 
 
 
 
Cumulative actuarial losses recognised in the statement of
 
 
 
other comprehensive income (before tax)
$
(19,838
)
 
$
(18,641
)


The Company operates defined benefit pension plans in Canada including a registered pension plan (“the Pension Plan”) and a supplemental pension plan (“the SERP”). During the second quarter of 2012, the SERP was converted into a Retirement Compensation Arrangement (“RCA”), a trust account. As it is a trust account, the assets in the account are protected from the Company’s creditors. The RCA requires the Company to remit 50% of any contributions and any realized investment gains to the Receiver General of Canada as refundable tax.
These plans, which are only available to certain qualifying employees, provide benefits based on an employee’s years of service and final average earnings at retirement. Annual contributions related to these plans are actuarially determined and are made at or in excess of minimum requirements prescribed by legislation.
Eldorado’s plans have actuarial valuations performed for funding purposes. The last actuarial valuations for funding purposes performed for the Pension Plan and the SERP are as of January 1, 2017 and the next valuations will be prepared in accordance with the funding policy as of January 1, 2019. The measurement date to determine the pension obligation and assets for accounting purposes was December 31, 2018.
The SERP is designed to provide supplementary pension benefits to qualifying employees affected by the maximum pension limits under the Income Tax Act pursuant to the registered Pension Plan. Further, the Company is not required to pre-fund any benefit obligation under the SERP.


18. Defined benefit plans (continued)
Total cash payments
No contributions were required to the Pension Plan and the SERP during 2018 (2017 – $1,415). Cash payments totalling $4,182 were made directly to beneficiaries during the year (2017 – $1,542). For the year 2019, the expected amount of contributions to the Pension Plan is $31. No contributions are expected to the SERP.
Subsidiaries pension plan
According to the Greek and Turkish labour laws, employees are entitled to compensation in case of dismissal or retirement, the amount of which varies depending on salary, years of service and the manner of termination (dismissal or retirement). Employees who resign or are dismissed with cause are not entitled to compensation. The Company considers this a defined benefit obligation. Amounts relating to these pension plans have been included in the tables in this note under “Pension Plan” when applicable.
The amounts recognised in the consolidated statement of financial position for all pension plans are determined as follows:
 
December 31, 2018
 
December 31, 2017
 
Pension Plan

SERP

Total

 
Pension Plan

SERP

Total

 
 
 
 
 
 
 
 
Present value of obligations
$
(16,239
)
$
(37,075
)
$
(53,314
)
 
$
(16,028
)
$
(43,956
)
$