ELDORADO GOLD CORP /FI, 40-F filed on 3/30/2020
Annual Report (foreign private issuer)
v3.20.1
Document and Entity Information
12 Months Ended
Dec. 31, 2019
shares
Document - Document and Entity Information [Abstract]  
Document Type 40-F
Amendment Flag false
Document Period End Date Dec. 31, 2019
Document Fiscal Year Focus 2019
Document Fiscal Period Focus FY
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 Common Stock, Shares Outstanding 164,963,324
Entity Emerging Growth Company false
v3.20.1
Consolidated Statements of Financial Position - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Current assets    
Cash and cash equivalents $ 177,742 $ 286,312
Term deposits 3,275 6,646
Restricted cash 20 296
Marketable securities 3,828 2,572
Accounts receivable and other 75,290 80,987
Inventories 163,234 137,885
Assets classified as part of disposal group held for sale 12,471 0
Total current assets 435,860 514,698
Restricted cash 3,080 13,449
Other assets 22,943 10,592
Employee benefit plan assets 6,244 9,120
Property, plant and equipment 4,088,202 3,988,476
Goodwill 92,591 92,591
Total assets 4,648,920 4,628,926
Current liabilities    
Accounts payable and accrued liabilities 139,104 137,900
Current portion of lease liabilities 9,913 2,978
Current portion of debt 66,667 0
Current portion of asset retirement obligations 1,782 824
Liabilities associated with assets held for sale 4,257 0
Current liabilities 221,723 141,702
Debt 413,065 595,977
Lease liabilities 15,143 6,538
Employee benefit plan obligations 18,224 14,375
Asset retirement obligations 94,235 93,319
Deferred income tax liabilities 412,717 429,929
Total liabilities 1,175,107 1,281,840
Equity    
Share capital 3,054,563 3,007,924
Treasury stock (8,662) (10,104)
Contributed surplus 2,627,441 2,620,799
Accumulated other comprehensive loss (28,966) (24,494)
Deficit (2,229,867) (2,310,453)
Total equity attributable to shareholders of the Company 3,414,509 3,283,672
Attributable to non-controlling interests 59,304 63,414
Total equity 3,473,813 3,347,086
Total liabilities and equity $ 4,648,920 $ 4,628,926
v3.20.1
Consolidated Income Statements - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Revenue    
Metal sales $ 617,823 $ 459,016
Cost of sales    
Production costs 334,839 269,445
Depreciation and amortization 153,118 105,732
Cost of sales 487,957 375,177
Earnings from mine operations 129,866 83,839
Exploration and evaluation expenses 14,643 33,842
Mine standby costs 17,334 16,510
General and administrative expenses 29,180 46,806
Employee benefit plan expense 2,717 3,555
Share-based payments expense 10,396 6,989
Impairment (reversal of impairment) (96,914) 447,808
Write-down of assets 6,298 1,528
Foreign exchange (gain) loss (625) 3,574
Earnings (loss) from operations 146,837 (476,773)
Other income 11,885 16,281
Finance costs (45,266) (5,637)
Earnings (loss) from operations before income tax 113,456 (466,129)
Income tax expense (recovery) 39,771 (86,498)
Net earnings (loss) for the year 73,685 (379,631)
Attributable to:    
Shareholders of the Company 80,586 (361,884)
Non-controlling interests (6,901) (17,747)
Net earnings (loss) for the year $ 73,685 $ (379,631)
Weighted average number of shares outstanding (thousands)    
Basic (in shares) 158,856 158,509
Diluted (in shares) 161,539 158,509
Net earnings (loss) per share attributable to shareholders of the Company:    
Basic loss per share (in dollars per share) $ 0.51 $ (2.28)
Diluted loss per share (in dollars per share) $ 0.50 $ (2.28)
v3.20.1
Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Statement of comprehensive income [abstract]    
Net earnings (loss) for the year $ 73,685 $ (379,631)
Other comprehensive income (loss):    
Change in fair value of investments in equity securities 1,256 (2,306)
Actuarial losses on employee benefit plans (6,361) (1,197)
Income tax recovery on actuarial losses on employee benefit plans 633 359
Other comprehensive income that will not be reclassified to profit or loss, before tax (4,472) (3,144)
Total comprehensive income (loss) for the year 69,213 (382,775)
Attributable to:    
Shareholders of the Company 76,114 (365,028)
Non-controlling interests (6,901) (17,747)
Total comprehensive loss for the year $ 69,213 $ (382,775)
v3.20.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Operating activities    
Net earnings (loss) for the year $ 73,685 $ (379,631)
Items not affecting cash:    
Depreciation and amortization 155,331 105,732
Finance costs 45,266 5,637
Interest income (2,760) (7,727)
Unrealized foreign exchange (gain) loss (790) 704
Income from royalty sale (8,075) 0
Income tax expense (recovery) 39,771 (86,498)
Impairment (reversal of impairment) (96,914) 447,808
Write-down of assets 6,298 1,528
Share based payments expense 10,396 6,989
Employment benefit plan expense 2,717 3,555
Adjustments to reconcile profit (loss) other than changes in working capital 224,925 98,097
Property reclamation payments (2,807) (5,536)
Employee benefit plan payments (2,587) (2,299)
Income taxes paid (36,242) (36,879)
Interest paid (35,479) 0
Interest received 2,760 7,727
Changes in non-cash working capital 15,256 6,428
Net cash generated from operating activities 165,826 67,538
Investing activities    
Purchase of property, plant and equipment (214,505) (231,674)
Capitalized interest paid (3,848) (36,750)
Proceeds from the sale of property, plant and equipment 6,605 7,882
Proceeds on pre-commercial production sales, net 12,159 6,472
Purchase of investment in associate (3,107) 0
Proceeds from sale of mining interest 1,397 0
Value added taxes related to mineral property expenditures, net (1,590) (1,261)
Decrease (increase) in term deposits 3,371 (1,138)
Decrease (increase) in restricted cash 10,644 (928)
Net cash used in investing activities (188,874) (257,397)
Financing activities    
Issuance of common shares for cash 40,066 0
Contributions from non-controlling interests 2,791 0
Proceeds from borrowings 494,000 0
Repayments from borrowings (600,000) 0
Loan financing costs (15,583) 0
Principal portion of lease liabilities (6,729) (1,222)
Purchase of treasury stock 0 (2,108)
Net cash used in financing activities (85,455) (3,330)
Net increase (decrease) in cash and cash equivalents (108,503) (193,189)
Cash and cash equivalents - beginning of year 286,312 479,501
Cash in disposal group held for sale (67) 0
Cash and cash equivalents - end of year $ 177,742 $ 286,312
v3.20.1
Consolidated Statements of Changes in Equity - USD ($)
$ in Thousands
Total
Share capital
Treasury stock
Contributed surplus
Accumulated other comprehensive loss
Deficit
Total equity attributable to shareholders of the Company
Non-controlling interests
Total equity   $ 3,007,924 $ (11,056) $ 2,616,593 $ (21,350) $ (1,948,569)   $ 79,940
Balance beginning of year at Dec. 31, 2017   3,007,924 (11,056) 2,616,593 (21,350) (1,948,569)   79,940
Shares issued upon exercise of share options, for cash   0            
Transfer of contributed surplus on exercise of options   0            
Shares issued to the public, net of share issuance costs   0            
Purchase of treasury stock     (2,108)          
Shares redeemed upon exercise of restricted share units     3,060 (3,060)        
Share based payment arrangements       7,266        
Transfer to share capital on exercise of options       0        
Other comprehensive loss for the year         (3,144)      
Earnings (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
Total equity 3,347,086 3,007,924 (10,104) 2,620,799 (24,494) (2,310,453) 3,283,672 63,414
Total equity 3,347,086 3,007,924 (10,104) 2,620,799 (24,494) (2,310,453) 3,283,672 63,414
Shares issued upon exercise of share options, for cash   265            
Transfer of contributed surplus on exercise of options   103            
Shares issued to the public, net of share issuance costs   46,271            
Purchase of treasury stock     0          
Shares redeemed upon exercise of restricted share units     1,442 (1,442)        
Share based payment arrangements       8,187        
Transfer to share capital on exercise of options       (103)        
Other comprehensive loss for the year         (4,472)      
Earnings (loss) attributable to shareholders of the Company 80,586         80,586    
Loss attributable to non-controlling interests (6,901)             (6,901)
Contributions from non-controlling interests               2,791
Balance end of year at Dec. 31, 2019 3,473,813 3,054,563 (8,662) 2,627,441 (28,966) (2,229,867) 3,414,509 59,304
Total equity 3,473,813 3,054,563 (8,662) 2,627,441 (28,966) (2,229,867) 3,414,509 59,304
Total equity $ 3,473,813 $ 3,054,563 $ (8,662) $ 2,627,441 $ (28,966) $ (2,229,867) $ 3,414,509 $ 59,304
v3.20.1
General Information
12 Months Ended
Dec. 31, 2019
Disclosure of General Information About Financial Statements [Abstract]  
General information
1. General Information
Eldorado Gold Corporation (individually or collectively with its subsidiaries, as applicable, “Eldorado” or the “Company”) is a gold and base metals mining, development, and exploration company. The Company has mining operations, ongoing development projects and exploration in Turkey, Canada, Greece, Romania and Brazil.
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.

v3.20.1
Basis of preparation
12 Months Ended
Dec. 31, 2019
Basis Of Preparation Of Financial Statements [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, except as described in note 5, 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 20, 2020.
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 judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 4.
v3.20.1
Significant accounting policies
12 Months Ended
Dec. 31, 2019
Disclosure of Significant Accounting Policies [Abstract]  
Significant accounting policies
3. Significant accounting policies
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.
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 recognized directly in the consolidated statement of operations.
3. Significant accounting policies (continued)
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 material subsidiaries of the Company as at December 31, 2019 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%
Olympias Mine Stratoni Mine
Skouries Project
Integra Gold Corporation
Canada
100%
Lamaque Mine
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 remeasurements 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.
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.
3. Significant accounting policies (continued)
At each statement of financial position 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 subsidiaries 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 recognized 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)
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.
3. Significant accounting policies (continued)
(iv)
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.
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 the cost of the component 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.
(v)
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 and the carrying value of the replaced asset or part of an asset is derecognized. 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.
(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 iintended use are complete. Interest is ceased to be capitalized during periods of prolonged suspension of construction or development. Borrowing costs are classified as cash outflows from operating activities on the statement of cash flows except for borrowing costs capitalized which are classified as investing activities.
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 Leases
A contract is or contains a lease when the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration.
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses, and is adjusted for certain remeasurements of the lease liability. The cost of the right-of-use asset includes the amount of the initial measurement of the lease liability, any lease payments made at or before the commencement date, less any lease incentives received, any initial direct costs; and if applicable, an estimate of costs to be incurred by the Company in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease. Right-of-use assets are presented in property, plant and equipment on the statement of financial position.
3. Significant accounting policies (continued)
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. The incremental borrowing rate reflects the rate of interest that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. The Company applies judgement to determine the lease term for some lease contracts which contain renewal options.
The Company does not recognize right-of-use assets and lease liabilities for leases of low-value assets, leases with lease terms that are less than 12 months and arrangements for the use of land that grant the Company the right to explore, develop, produce or otherwise use the mineral resource contained in that land. Lease payments associated with these arrangements are instead recognized as an expense over the term on either a straight-line basis, or another systematic basis if more representative of the pattern of benefit. The Company applies judgement in determining whether an arrangement grants the Company the right to explore, develop, produce or otherwise use the mineral resource contained in that land.
3.5 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 licences, 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 licences which are capitalized.
(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:
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;
determining the optimal methods of extraction and metallurgical and treatment processes;
studies related to surveying, transportation and infrastructure requirements;
permitting activities; and
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 that the technical feasibility and commercial viability of extraction of the mineral resource can be demonstrated 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.
3. Significant accounting policies (continued)
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. On such date, capitalized evaluation costs are assessed for impairment and reclassified to development costs.
(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 processing facilities. 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. The criteria considered include, but are not limited to, the following:
the level of capital expenditures compared to construction cost estimates;
the completion of a reasonable period of testing of mine plant and equipment;
the ability to produce minerals in saleable form (within specification); and
the ability to sustain ongoing production of minerals.
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 and the capitalized development costs will be assessed for impairment.
3.6 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. The impairment testing is performed annually or more frequently if events or changes in circumstances indicate that it may be impaired. Impairment losses on goodwill are not reversed.
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 reorganization, the goodwill is reallocated to the units affected.
3.7 Impairment of non-financial assets
Non-financial assets which include property, plant and equipment and goodwill 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, the Company determines the recoverable amount, and if applicable, recognizes an impairment loss.
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.
3. Significant accounting policies (continued)
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. An impairment charge is reversed through the consolidated statement of operations only to the extent of the asset’s or CGU’s carrying amount that would have been determined net of applicable depreciation, had no impairment loss been recognized.
3.8 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 categorized 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 (loss). There is no subsequent reclassification of fair value gains and losses to net earnings (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 provisions for credit losses.
3. Significant accounting policies (continued)
(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 (loss).
3.9 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. Derivatives embedded in financial liability contracts are recognized separately if they are not closely related to the host contract. Derivatives, including embedded derivatives from financial liability contracts, are recorded on the statement of financial position at fair value and the unrealized gains and losses are recognized in the consolidated statement of operations. 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 recognized immediately in the consolidated statement of operations.
(i) 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.
(ii) Cash flow hedge
The effective portions of changes in the fair values of derivatives that are designated and qualify as cash flow hedges are recognized in equity. The gain or loss relating to any ineffective portion is recognized 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 net earnings (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 recognized when the forecast transaction is ultimately recognized 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 (loss) 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. Significant accounting policies (continued)
3.10 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, 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. A write-down is recorded when the carrying value of inventory is higher than its net realizable value.
(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 realizable value and, where appropriate, less a provision for obsolescence. Costs include acquisition, freight and other directly attributable costs.
3.11 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 where the amount receivable is finalized on settlement date based on the underlying commodity price. Settlement receivables are classified as fair value through profit and loss and are recorded at each reporting period at fair value based on forward metal prices. Changes in fair value of settlements receivable are recorded in revenue.
3.12 Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held with banks and other short-term highly liquid investments with maturities at the date of acquisition of three months or less.
3.13 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.
3.14 Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Trade payables are recognized initially at fair value and subsequently measured at amortized cost.
3. Significant accounting policies (continued)
3.15 Debt and borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost, calculated using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized 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 recognized 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 at which time, these transaction costs are included in the carrying value of the amount drawn on the facility and amortized using the effective interest rate method. 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 capitalized as a pre-payment for liquidity services and amortized over the period the loan facility to which it relates is available to the Company.
3.16 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.
Deferred income tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. 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 or on temporary differences relating to the investment in subsidiaries to the extent that they will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realized 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.
3.17 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 statement of financial position date less the fair value of plan assets.
The Company obtains actuarial valuations for defined benefit plans for each statement of financial position 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.
3. Significant accounting policies (continued)
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 consolidated statement of operations.
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.
3.18 Share-based payment arrangements
The Company applies the fair value method of accounting for all stock option awards, deferred share units 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 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 with market based vesting conditions, compensation expense is recognized based on the fair value of the share units on the date of grant which is based on the forward price of the Company's shares and an index consisting of global gold-based securities.
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 and the corresponding liability is marked to market at each subsequent reporting date.
3.19 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.
Asset retirement obligations
A provision is made for mine restoration and rehabilitation when an obligation is incurred. The provision is recognized as a liability with a corresponding asset recognized in relation to the mine site. At each reporting date the asset retirement obligation is remeasured in line with changes in discount rates, and timing or amount of the costs to be incurred.
3. Significant accounting policies (continued)
The provision recognized 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 asset retirement obligations. 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 activities.
These uncertainties may result in future actual expenditure differing from the amounts currently provided. The provision recognized 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 recognized 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.
3.20 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 measured based on the consideration specified in the contract with the customer. The Company recognizes revenue when it transfers control of the product to the customer, and has a present right to payment for the product.
(i) Metals in concentrate
Control over metals in concentrates is transferred to the customer and revenue is recognized when the product is considered to be physically delivered to the customer under the terms of the customer contract. This is typically when the concentrate has been placed on board a vessel for shipment, or delivered to a location specified by the customer.
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 shortly after or on the passage of control of the product to the customer and the Company receives 90 - 95% of the provisional invoice at that time. 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 Company sells doré directly to refiners, or, refiners may receive doré from the Company to refine the materials on the Company’s behalf and arrange for sale of the refined metal.
In the Turkey segment, 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. 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.
In the Canada segment, doré and refined metals are sold at spot prices with sales proceeds collected within several days of the sales transaction. Control is typically transferred to the customer and revenue recognized upon delivery to a location specified by the customer.
3.21 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 the consolidated statement of operations, using the effective interest method.
3. Significant accounting policies (continued)
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 the consolidated statement of operations using the effective interest method, except for those amounts capitalized as part of the cost of qualifying property, plant and equipment.
3.22 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 share options, restricted share units and performance share units granted to employees.
v3.20.1
Critical accounting estimates and judgements
12 Months Ended
Dec. 31, 2019
Disclosure of changes in accounting estimates [abstract]  
Critical accounting estimates and judgements
4. Critical accounting estimates and judgements
The preparation of consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, 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.
Significant areas requiring the use of management assumptions, estimates and judgements include the valuation of property, plant and equipment and goodwill, estimated recoverable reserves and resources, inventory, current and deferred taxes, asset retirement obligations, 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 judgements, estimates and assumptions.
(i)
Valuation of property, plant and equipment and goodwill
Property, plant and equipment and goodwill are tested for impairment when events or changes in circumstances suggest that the carrying amount may not be fully recoverable. Goodwill is tested at least annually.
Calculating the recoverable amount, including estimated FVLCD of CGUs for property, plant and equipment and goodwill, 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, discount rates and estimates of the fair value of the exploration potential of mineral properties ("value beyond proven and probable").
Changes in any of the assumptions or estimates used in determining the recoverable amount could result in additional impairment or reversal of impairment recognized.
(ii) 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 asset retirement obligation.
4. Critical accounting estimates and judgements (continued)
(iii) Inventory
The Company considers ore stacked on its leach pads and in process at its mines as work-in-process inventory and includes them in production costs based on ounces of gold or tonnes of concentrate 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 leach pads;
the amount of gold and other metals in the processing 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, 2019, the cost of inventory was below its net realizable value.
(iv) Asset retirement obligation
The asset retirement obligation provision represents management's best estimate of the present value of future cash outflows required to settle the liability which reflect estimates of future costs, inflation, requirements of the relevant legal and regulatory frameworks and the timing of restoration and rehabilitation activities. Estimated future cash outflows are discounted using a risk-free rate based on U.S. Treasury bond rates. Changes to asset retirement obligation estimates are recorded with a corresponding change to the related item of property, plant and equipment. Adjustments to the carrying amounts of related item of property, plant and equipment can result in a change to future depreciation expense.
(v) 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.
Judgement is also required in the application of income tax legislation. These estimates and judgements are subject to risk and uncertainty and could result in an adjustment to current and deferred tax provisions and a corresponding increase or decrease to earnings or loss for the period.
(vi) 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 judgement that impacts when capitalization of development costs ceases and recognition of revenues and depreciation of the mining property commences and is charged to the consolidated statement of operations.

4. Critical accounting estimates and judgements (continued)
On March 31, 2019, the Company declared commercial production at the Lamaque mine, having reached certain milestones. Commercial production represents the point at which the group of assets were able to operate as intended by management. Upon declaring commercial production, Lamaque recognizes all revenue and costs in the consolidated statement of operations. Prior to March 31, 2019, costs incurred for construction, development and commissioning of the mine, net of pre-commercial sales, were recognized within mineral property in property, plant and equipment.
(vii) 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 U.S. 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.
v3.20.1
Adoption of new accounting standards
12 Months Ended
Dec. 31, 2019
Disclosure of Significant Accounting Policies [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, 2019:
(i) IFRS 16 ‘Leases’
IFRS 16 introduces a single accounting model for lessees. The Company, as lessee, is 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 Company was permitted to elect to not apply IFRS 16 to leases with a term of less than 12 months, which election is made by the underlying class of assets to which the right-of-use asset relates, or leases where the underlying asset is of low value, which election is made on an asset by asset basis. The accounting treatment for lessors remains largely the same as under IAS 17 'Leases'.
The Company adopted this standard from January 1, 2019 using the modified retrospective approach. Accordingly, the comparative information presented for 2018 has not been restated.
Previously, the Company determined at contract inception whether an arrangement was or contained a lease under IFRIC 4, ‘Determining Whether an Arrangement contains a Lease’. On adoption of IFRS 16, the Company now assesses whether a contract is or contains a lease based on whether the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. On transition to IFRS 16, the Company elected to apply the practical expedient permitted by the standard to grandfather the assessment of which transactions are leases. IFRS 16 was applied only to contracts that were previously identified as leases. Contracts that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed using the definition of a lease under IFRS 16. Therefore, the definition of a lease under IFRS 16 has been applied only to contracts entered into or changed on or after January 1, 2019.
The Company leases various assets including equipment, offices and properties that had previously been classified as operating leases under IAS 17. On adoption of IFRS 16, liabilities for these leases were measured at the present value of the remaining lease payments, discounted using the Company’s incremental borrowing rate as of January 1, 2019. The weighted average incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 13.1%. The Company elected to measure the right-of-use assets for these leases at amounts equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments recognized in the statement of financial position on December 31, 2018.
On initial adoption, the Company used the following practical expedients as permitted by the standard when applying IFRS 16 to leases previously classified as operating leases under IAS 17.
Applied the exemption not to recognize right-of-use assets and liabilities for leases with low value.
Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term remaining.
5. Adoption of new accounting standards (continued)
Applied a single discount rate to a portfolio of leases with reasonably similar characteristics (such as leases in a similar economic environment including the countries in which the right-of-use asset is located).
Excluded initial direct costs from measuring the right-of-use asset at the date of initial application.
Used hindsight, such as in determining the lease term if the contract contains options to extend or terminate the lease.
The Company also leases various equipment that had previously been classified as finance leases under IAS 17. For these finance leases, the carrying amount of the right-of-use asset and the lease liability at January 1, 2019 were determined at the carrying amount of the lease asset and lease liability under IAS 17 immediately before that date.
The impact on transition is summarized below.
 
December 31, 2018

 
IFRS 16 Adjustment

 
January 1, 2019

 
 
 
 
 
 
Lease assets presented in property, plant and equipment
$
11,345

 
$
9,379

 
$
20,724

Lease liabilities – current
2,978

 
2,658

 
5,636

Lease liabilities – non-current
6,538

 
6,168

 
12,706

Accounts receivable and other
80,987

 
(553
)
 
80,434



On adoption of IFRS 16, the Company excluded certain arrangements which management concluded were not within the scope of IFRS 16 because they are arrangements for the use of land that grant the Company the right to explore, develop, produce or otherwise use the mineral resource contained in that land. A reconciliation of lease commitments previously reported and the amount of the lease liability recognized is as follows:
 
January 1, 2019

 
 
Operating lease commitments at December 31, 2018
$
64,690

Exclusion of arrangements to explore for or use minerals
(53,186
)
Leases with low value at January 1, 2019
(1,677
)
Leases with less than 12 months of remaining lease term at January 1, 2019
(866
)
Arrangements reassessed as leases
3,120

Effect of discounting using the incremental borrowing rate at January 1, 2019
(3,255
)
Lease liabilities recognized as IFRS 16 adjustment at January 1, 2019
$
8,826



(ii) 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. At January 1, 2019, the Company adopted this standard and there was no material impact on its consolidated financial statements.
(iii) New IFRS Pronouncements
Below are new standards, amendments to standards and interpretations that have been issued and are not yet effective. The Company plans to apply the new standards or interpretations in the annual period for which they are effective.
5. Adoption of new accounting standards (continued)
Interest Rate Benchmark Reform
In September 2019, IASB has issued first phase amendments IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Hedging and IFRS 7 Financial Instrument Disclosures to address the financial reporting impact of the reform on interest rate benchmarks, such as interbank offered rates (IBOR). The first phase amendments is effective beginning January 1, 2020 and is focused on the impact to hedge accounting requirements. The Company does not expect a material impact on its consolidation financial statements from phase one of the amendments. The Company will continue to assess the effect of the second phase amendments related to the interest rate benchmark reform on its financial statements.
Conceptual Framework for Financial Reporting
In March 2018, the IASB revised the Conceptual Framework for financial reporting and is effective January 1, 2020. The Conceptual Framework sets out fundamental concepts for financial reporting and guides companies in developing accounting policies when no IFRS standard exists. The Conceptual Framework sets out the objective of general purpose financial reporting; the qualitative characteristics of useful financial information; a description of the reporting entity; definitions of an asset, a liability, equity, income and expenses and guidance on recognition and de-recognition criteria; measurement bases and guidance on when to use them; concepts and guidance on presentation and disclosure; and concepts relating to capital and capital maintenance. The Company is assessing the impact of the revised Conceptual Framework on its financial statements.
v3.20.1
Cash and cash equivalents
12 Months Ended
Dec. 31, 2019
Cash and cash equivalents [abstract]  
Cash and cash equivalents
6. Cash and cash equivalents
 
December 31, 2019

 
December 31, 2018

 
 
 
 
Cash
$
173,801

 
$
200,644

Short-term bank deposits
3,941

 
85,668

 
$
177,742

 
$
286,312

v3.20.1
Restricted cash
12 Months Ended
Dec. 31, 2019
Statement of cash flows [abstract]  
Restricted cash
7. Restricted cash
 
December 31, 2019

 
December 31, 2018

Current:
 
 
 
Restricted cash deposits - Greece
$
20

 
$
296

 
$
20

 
$
296

Non-current:
 
 
 
Restricted cash related to Letter of Guarantee - Greece
$

 
$
10,670

Environmental guarantee deposits and other
3,080

 
2,779

 
$
3,080

 
$
13,449



Non-financial letters of credit to secure obligations in connection with the Company's operations as required by the Ministry of Environment and Energy and Climate Change ("MEECC") in Greece reduce the amount available under the senior secured revolving credit facility by corresponding amounts. Concurrent with the establishment of the senior secured credit facility in 2019, $10.7 million of restricted cash was released, which was previously held to secure these letters of credit.
v3.20.1
Accounts receivable and other
12 Months Ended
Dec. 31, 2019
Trade and other receivables [abstract]  
Accounts receivable and other
8. Accounts receivable and other
 
December 31, 2019

 
December 31, 2018

 
 
 
 
Trade receivables
$
35,107

 
$
22,072

Value added tax and other taxes recoverable
17,658

 
34,791

Other receivables and advances
10,736

 
8,378

Prepaid expenses and deposits
11,789

 
15,746

 
$
75,290

 
$
80,987

v3.20.1
Inventories
12 Months Ended
Dec. 31, 2019
Classes of current inventories [abstract]  
Inventories
9. Inventories
 
December 31, 2019

 
December 31, 2018

 
 
 
 
Ore stockpiles
$
3,859

 
$
1,620

In-process inventory and finished goods
81,282

 
59,974

Materials and supplies
78,093

 
76,291

 
$
163,234

 
$
137,885



The cost of materials and supplies consumed during the year and included in production costs amounted to $321,138 (2018$259,813).
Charges of $632 and $1,894 were recognized in production costs and depreciation, respectively, during the year ended December 31, 2019 to reduce the cost of gold, lead and zinc concentrate inventory at Olympias and Stratoni to net realizable value (December 31, 2018 - $1,465 recognized in production costs).
v3.20.1
Other assets
12 Months Ended
Dec. 31, 2019
Miscellaneous non-current assets [abstract]  
Other assets
10. Other assets
 
December 31, 2019

 
December 31, 2018

 
 
 
 
Long-term value added tax and other taxes recoverable
$
13,749

 
$
6,668

Prepaid forestry fees
3,222

 
3,175

Prepaid loan costs (note 16(b))
2,865

 
749

Other assets
3,107

 

 
$
22,943

 
$
10,592

v3.20.1
Non-controlling interests
12 Months Ended
Dec. 31, 2019
Disclosure of subsidiaries [abstract]  
Non-controlling interests
11. 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, 2019
Hellas

 
Deva

NCI percentage
5
%
 
19.5
%
 
 
 
 
Current assets
$
67,902

 
$
1,867

Non-current assets
1,858,544

 
415,149

Current liabilities
(1,050,952
)
 
(312
)
Non-current liabilities
(405,318
)
 
(294,493
)
Net assets
$
470,176

 
$
122,211

 
 
 
 
Carrying amount of NCI
$
13,362

 
$
42,903

 
 
 
 
Cash flows (used in) generated from operating activities
$
(215
)
 
$
(4,856
)
Cash flows used in investing activities
(45,216
)
 
(15
)
Cash flows generated from (used in) financing activities
50,026

 
4,803

Net increase (decrease) in cash and cash equivalents
$
4,595

 
$
(68
)
 
 
 
 
Revenue
$
140,156

 
$

Net loss and comprehensive loss
(107,758
)
 
(6,494
)
Net loss allocated to NCI
(5,388
)
 
(1,266
)
Dividends paid to NCI

 

 
 
 
 
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
(191,936
)
 
(536
)
Non-current liabilities
(1,181,693
)
 
(289,134
)
Net assets
$
551,631

 
$
126,837

 
 
 
 
Carrying amount of NCI
$
17,619

 
$
44,169

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

 
15,218

Net increase (decrease) in cash and cash equivalents
$
(12,921
)
 
$
(1,896
)
 
 
 
 
Revenue
$
110,488

 
$

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

 



Net loss allocated to NCI in the consolidated statement of operations includes $247 related to non-material subsidiaries (2018$84). The carrying value of the NCI related to non-material subsidiaries is $3,039 (2018$1,626).
v3.20.1
Property, plant and equipment
12 Months Ended
Dec. 31, 2019
Disclosure of detailed information about property, plant and equipment [abstract]  
Property, plant and equipment
12. Property, plant and equipment
 
Land and buildings

Plant and equipment

Capital works in progress

Mineral properties

Capitalized Evaluation

Total

Cost
 
 
 
 
 
 
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

193,550

6,202

327,313

Proceeds on pre-commercial production sales, net

(2,906
)

(3,566
)

(6,472
)
Commercial production transfers (1)
387

458,976

53,858

(506,206
)

7,015

Other movements/transfers
(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

 
 
 
 
 
 
 
Additions/transfers
$
17,379

$
85,929

$
19,735

$
68,794

$
3,393

$
195,230

IFRS 16 transition adjustment
7,555

1,734

90



9,379

Proceeds on pre-commercial production sales, net



(12,159
)

(12,159
)
Commercial production transfers (2)
27,070

92,791


(119,861
)


(Impairment) reversal (note 32)

11,690

(15,268
)


(3,578
)
Write-down of assets

(1,979
)


(16
)
(1,995
)
Other movements/transfers
(1,715
)
33,335

(30,103
)
(505
)
(129
)
883

Transfer to assets held for sale

(11,690
)



(11,690
)
Disposals
(22
)
(4,455
)
(737
)
(2,421
)

(7,635
)
Balance at December 31, 2019
$
242,511

$
2,319,388

$
87,811

$
4,103,005

$
96,707

$
6,849,422

 
 
 
 
 
 
 
Accumulated depreciation
 
 
 
 
 
 
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
)
Commercial production transfers (1)

(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
)
 
 
 
 
 
 
 
Depreciation for the year
$
(10,605
)
$
(107,654
)
$

$
(51,965
)
$

$
(170,224
)
Impairment reversal

90,825


9,667


100,492

Other movements
(206
)
(1,049
)

213


(1,042
)
Disposals
7

2,058




2,065

Balance at December 31, 2019
$
(58,778
)
$
(1,024,583
)
$
(4,733
)
$
(1,673,126
)
$

$
(2,761,220
)
 
 
 
 
 
 
 
Carrying amounts
 
 
 
 
 
 
At January 1, 2018
$
142,497

$
745,590

$
52,088

$
3,200,191

$
87,031

$
4,227,397

At December 31, 2018
144,270

1,103,270

109,361

2,538,116

93,459

3,988,476

Balance at December 31, 2019
$
183,733

$
1,294,805

$
83,078

$
2,429,879

$
96,707

$
4,088,202




(1)
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 operations.
(2)
Effective March 31, 2019, $119,861 of costs were transferred at Lamaque from mineral properties and leases to relevant categories of property, plant and equipment upon commencement of commercial operations.

12. Property, plant and equipment (continued)
The amount of capitalized interest during the year ended December 31, 2019 included in property, plant and equipment was $3,848 (2018$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 net present value of future cash flows expected to be derived from the CGUs. The recoverable amount used by the Company represents each CGU’s FVLCD, a Level 3 fair value measurement, as it was determined to be higher than value in use.
Determining the estimated fair values of each CGU requires management to use judgement 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 cost 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.
(i) Kisladag
During the quarter ended September 30, 2018, the Company completed a feasibility study for a new mill at Kisladag which showed a transition in the mine plan, shortening the estimated useful life of the leach pad to 2020. Kisladag updated their production plan for the leach pad with additional drill data and as a result, the Company assessed the recoverable amounts of leach pad costs and related plant and equipment for the Kisladag leach pad assets as at September 30, 2018 using a value-in-use approach. 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). Management determined that no further impairment or indicators of reversal of impairment were identified for the Kisladag CGU as at December 31, 2018.
During the quarter ended December 31, 2019, the Company completed testwork assessing metallurgical recoveries of deeper material from the pit over an extended leach cycle. A new production plan has been developed which utilizes the leach pad for the life of the Kisladag mine and no longer requires the construction of a mill. As a result, the Company recorded an impairment reversal to the Kisladag leach pad costs and related plant and equipment of $100,492 ($80,143, net of deferred tax) as at December 31, 2019. The resulting carrying value of the Kisladag leach pad costs and related plant and equipment represents the carrying value of these assets, net of depreciation, that would have been determined had the September 30, 2018 impairment not been recognized. There was an additional impairment recorded of $15,269 ($11,910, net of deferred tax) to write-off capitalized costs relating to the mill construction project.
As a result of the updated production plan and the decision to not advance with construction of a mill, the Company assessed the recoverable amounts of the Kisladag CGU as at December 31, 2019 using a FVLCD approach. The estimated recoverable amount of the Kisladag CGU exceeded its carrying amount as at December 31, 2019.
The key assumptions used for assessing the recoverable amount are reflected in the table below. Management used judgement 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 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 cost of capital, adjusted for country risk.




12. Property, plant and equipment (continued)
 
2019

2018

Gold price ($/oz)

$1,400


$1,250

Silver price ($/oz)

$18


$17

Discount rate
5.0
%
6.5
%
Average factor to convert contained mineral resource ounces outside of reserves to ounces used in value beyond proven and probable calculations
69
%
32
%
Fair value per contained ounce of resources and exploration potential beyond proven and probable reserves

$110


$50


(ii) Olympias
As at December 31, 2018, Management determined that continued jurisdictional risk with obtaining permits in Greece and the softening global market for the sale of concentrate indicated a potential impairment for Olympias. Using a FVLCD approach, the Company assessed the recoverable amount of the Olympias CGU as at December 31, 2018 and recorded an impairment charge to the Olympias CGU of $330,238 ($247,679, net of deferred tax).
As at December 31, 2019, Management determined that weaker-than-expected production at Olympias during 2019 and rising market rates for concentrate treatment charges indicated a potential impairment for Olympias. Using a FVLCD approach, the Company assessed the recoverable amount of the Olympias CGU at December 31, 2019. The estimated recoverable amount of the Olympias CGU exceeded its carrying amount as at December 31, 2019.
The key assumptions used for assessing the recoverable amount are reflected in the table below. Management used judgement 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 cost of capital, adjusted for country risk.
 
2019

2018

Gold price ($/oz)

$1,400

$1,275 - 1,300

Silver price ($/oz)

$18

$17 - 18

Lead price ($/t)

$2,100

$2,200 - 2,300

Zinc price ($/t)

$2,400

$2,800 - 2,900

Discount rate
6.0
%
7.0
%
Average factor to convert contained mineral resource ounces outside of reserves to ounces used in value beyond proven and probable calculations
27
%
27
%
Fair value per contained ounce of resources and exploration potential beyond proven and probable reserves
$130
$100

The Olympias CGU remains sensitive to price changes of both gold and base metals. For the Olympias CGU, variables that would lead to an impairment include:
A decrease in gold price of $100/oz.
An increase in the discount rate of 1%
An increase in operating costs of 10% or capital costs of 20%
Given the sensitivity of the estimated recoverable amount to a range of input factors and lack of indicators of reversal, no previous impairment charges recorded for the Olympias CGU have been reversed as at December 31, 2019.
v3.20.1
Goodwill
12 Months Ended
Dec. 31, 2019
Changes in goodwill [abstract]  
Goodwill
13. Goodwill
As a result of the purchase price allocation for the Integra acquisition, the Company recognized goodwill of $92,591 in 2017. As of December 31, 2019 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 recognized. 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 judgement 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 ore 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 cost 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.
 
2019

2018

 
 
 
Gold price ($/oz)
1,400

$1,275-1,300
Discount rate
5
%
5
%
Average factor to convert contained mineral resource ounces outside of reserves to ounces used in value beyond proven and probable calculations
30
%
21
%
Fair value per contained ounce of resources and exploration potential beyond proven and probable reserves
200

140



The estimated recoverable amount of the Lamaque CGU including goodwill exceeded its carrying amount as at December 31, 2019 by approximately $25 million. Impairment would result from a decrease in the gold price of $100 per ounce, or an increase in either operating or capital expenditures by 10%.
v3.20.1
Leases and right-of-use assets
12 Months Ended
Dec. 31, 2019
Disclosure of Leases [Abstract]  
Leases and right-of-use assets
14. Leases and right-of-use assets
As a lessee, the Company leases various assets including mobile mine equipment, office and properties. These right-of-use assets are presented as property, plant and equipment.
 
Right-of-use
Land and buildings

 
Right-of-use
Plant and equipment and Capital works in progress

 
Total

 
 
 
 
 
 
Cost
 
 
 
 
 
Balance at December 31, 2018
$

 
$
11,345

 
$
11,345

Initial adoption of IFRS 16
7,555

 
1,824

 
9,379

Additions
552

 
13,463

 
14,015

Disposals

 
(232
)
 
(232
)
Balance at December 31, 2019
$
8,107

 
$
26,400

 
$
34,507

 
 
 
 
 
 
Accumulated Depreciation
 
 
 
 
 
Balance at December 31, 2018
$

 
$

 
$

Depreciation for the year
(1,184
)
 
(4,705
)
 
(5,889
)
Disposals

 
151

 
151

Balance at December 31, 2019
$
(1,184
)
 
$
(4,554
)
 
$
(5,738
)
 
 
 
 
 
 
Right-of-use assets, net carrying amount
$
6,923

 
$
21,846

 
$
28,769



Interest expense on lease liabilities is disclosed in Note 19(b) and the cash payments for principal portion of lease liabilities is presented on the Consolidated Statement of Cash Flow.
v3.20.1
Accounts payable and accrued liabilities
12 Months Ended
Dec. 31, 2019
Trade and other current payables [abstract]  
Accounts payable and accrued liabilities
15. Accounts payable and accrued liabilities
 
December 31, 2019

 
December 31, 2018

 
 
 
 
Trade payables
$
67,107

 
$
38,969

Taxes payable
13,205

 
201

Accrued expenses
58,792

 
98,730

 
$
139,104

 
$
137,900

v3.20.1
Debt
12 Months Ended
Dec. 31, 2019
Borrowings, by type [abstract]  
Debt
16. Debt
 
December 31, 2019

 
December 31, 2018

Senior secured notes due 2024, net of unamortized discount and transaction costs of $13,806 (Note 16 (a))
$
287,568

 
$

Term loan, net of unamortized transaction costs of $2,239 (Note 16 (b))
197,761

 

Redemption option derivative asset (Note 16 (a))
(5,597
)
 

Senior notes due 2020, net of unamortized discount and transaction costs of $4,023 (Note 16(c))

 
595,977
Total debt
$
479,732

 
$
595,977

Less: Current portion
66,667
 

Long-term portion
$
413,065

 
$
595,977



Reconciliation of debt arising from financing activities:
 
Senior notes due 2024 and term loan

 
Senior notes due 2020

Debt balance at January 1, 2019
$

 
$
595,977

Financing cash flows related to debt:
 
 
 
Repayment of Senior notes due 2020

 
(600,000
)
Proceeds from Senior secured notes due 2024, net of discount
294,000

 

Proceeds from term loan
200,000

 

Loan financing costs
(15,583
)
 

Total financing cash flows related to debt
478,417

 
(600,000
)
 
$
478,417

 
$
(4,023
)
 
 
 
 
Non-cash changes recorded in debt:
 
 
 
Amortization of deferred costs for Senior notes due 2020, and deferred costs expensed upon note redemption

 
4,023

Amortization of financing fees and discount relating to Senior notes due 2024 and Term loan
2,206

 

Change in fair value of redemption option derivative asset relating to Senior secured notes due 2024
(4,224
)
 

Prepaid credit facility financing costs
3,333

 

Debt balance at December 31, 2019
$
479,732

 
$



(a) Senior Secured Second Lien Notes due 2024
On June 5, 2019, the Company completed an offering of $300 million senior secured second lien notes (the "senior secured notes”) at 98% of par value, with a coupon rate of 9.5% due June 1, 2024. The senior secured notes pay interest semi-annually on June 1 and December 1, beginning December 1, 2019. The Company received $287.1 million from the offering, which is net of the original issue discount of $6,000, commission payment and certain transaction costs paid to or on behalf of the lenders totaling $6,903. The debt is also presented net of transaction costs of $2,681 incurred directly by the Company in conjunction with the offering. The original discount, commission payment and transaction costs will be amortized over the term of the senior secured notes and included as finance costs. Net proceeds from the senior secured notes were used to redeem in part the Company’s outstanding $600 million 6.125% senior notes due December 15, 2020.
16. Debt (continued)
The senior secured notes are secured on a second lien basis by a general security agreement from the Company by the Company’s real property in Canada and shares of SG Resources B.V., Tüprag Metal, Eldorado Gold (Greece) BV, Integra Gold Corp. and Integra Gold (Québec) Inc., all wholly owned subsidiaries of the Company.
The senior secured notes are redeemable by the Company in whole or in part, for cash:
i)
At any time prior to December 1, 2021 at a redemption price equal to the sum of 100% of the aggregate principal amount of the senior secured notes, plus accrued and unpaid interest, and plus a premium equal to (a) the greater of 1% of the principal amount of the senior secured notes to be redeemed and (b) the difference between (i) the outstanding principal amount of the senior secured notes to be redeemed and (ii) the present value of the redemption price of the senior secured notes on December 1, 2021 plus the remaining interest to December 1, 2021 discounted at the treasury yield plus 50 basis points.
ii)
At any time prior to December 1, 2021 up to 35% of the original principal amount of the senior secured notes with the net cash proceeds of one or more equity offerings at a redemption price equal to 109.5% of the aggregate principal amount of the senior secured notes redeemed, plus accrued and unpaid interest.
iii)
On and after the dates provided below, at the redemption prices, expressed as a percentage of the principal amount of the notes to be redeemed, set forth below, plus accrued and unpaid interest on the senior secured notes:
December 1, 2021                       107.125%
December 1, 2022 and thereafter       100.000%
The redemption features described above constitute an embedded derivative which was separately recognized at its fair value of $1,373 on initial recognition of the senior secured notes and recorded in other assets. The embedded derivative is classified as fair value through profit and loss. The change in fair value as at December 31, 2019 is $4,224.
The senior secured notes contain covenants that restrict, among other things, the ability of the Company to incur certain capital expenditures, distributions in certain circumstances and sales of material assets, in each case, subject to certain conditions. The Company is in compliance with these covenants at December 31, 2019.
The fair market value of the senior secured notes as at December 31, 2019 is $324 million.
(b) Senior Secured Credit Facility
In November 2012, the Company entered into a $375 million revolving credit facility with a syndicate of banks. The 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.
In May 2019, the Company executed a $450 million amended and restated senior secured credit facility (“the third amended and restated credit agreement” or “TARCA”), replacing the ARCA. The TARCA consists of the following:
i)
A $200 million non-revolving term loan ("Term loan") with six equal semi-annual payments commencing June 30, 2020. The term loan was used to redeem in part the Company’s outstanding $600 million 6.125% senior notes due December 2020.
ii)
A $250 million revolving credit facility with a maturity date of June 5, 2023.
As at December 31, 2019, the Company has outstanding EUR 57.6 million and CAD $0.4 million ($64.5 million) in non-financial letters of credit. The non-financial letters of credit were issued to secure certain obligations in connection with the Company's operations and reduce availability under the revolving credit facility by corresponding amounts. Concurrent to the establishment of the facility, $10.7 million of restricted cash was released that had previously been held to secure letters of credit.
16. Debt (continued)
The TARCA contains covenants that restrict, among other things, the ability of the Company to incur additional unsecured indebtedness except in compliance with certain conditions, incur certain lease obligations, make distributions in certain circumstances, sell material assets or carry on a business other than one related to mining. Significant financial covenants include a minimum Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) to interest ratio and a maximum debt net of unrestricted cash ("net debt") to EBITDA ratio ("net leverage ratio"). The Company is in compliance with its covenants at December 31, 2019. 
Both the term loan and revolving credit facility bear interest at LIBOR plus a margin of 2.25% – 3.25%, dependent on a net leverage ratio pricing grid. The Company’s current interest charges and fees are as follows: LIBOR plus margin of 2.75% on the term loan and any amounts drawn from the revolving credit facility; two thirds the applicable margin (1.8333%) on non-financial letters of credit secured by the revolving credit facility and 0.6875% standby fees on the available and undrawn portion of the revolving credit facility.
The TARCA is secured on a first lien basis by a general security agreement from the Company, the Company's real property in Canada and shares of SG Resources B.V., Tüprag Metal, Eldorado Gold (Greece) BV, Integra Gold Corp. and Integra Gold (Québec) Inc., all wholly owned subsidiaries of the Company.
The term loan is presented net of transaction costs of $2,666 incurred in conjunction with the amendment. The transaction costs will be amortized over the term of the term loan and included in finance costs.
Fees of $3,333 relating to the undrawn revolving credit facility have been recorded in other assets and will be amortized over the term of the TARCA. As at December 31, 2019, the prepaid loan cost was $2,865 (December 31, 2018 – $749).
Unamortized deferred financing costs of $524 relating to the ARCA were expensed as interest and financing costs on the amendment date (note 19(b)).
No amounts were drawn down under the revolving credit facility in 2019 and as at December 31, 2019, the balance is nil.
(c) Senior Notes
On December 10, 2012, the Company completed an offering of $600 million senior notes (“the 2012 notes”) at par value, with a coupon rate of 6.125% due December 15, 2020. The 2012 notes paid interest semi-annually on June 15 and December 15.
The 2012 notes were redeemed in whole for cash by the Company on June 12, 2019 using proceeds from the senior secured notes and the TARCA term loan, together with cash on hand. $18,069 of accrued interest was also paid upon redemption. $3,035 of unamortized deferred financing costs relating to the 2012 notes were expensed as interest and financing costs upon redemption (note 19(b)).
v3.20.1
Asset retirement obligations
12 Months Ended
Dec. 31, 2019
Disclosure of Asset Retirement Obligations [abstract]  
Asset retirement obligations
17. Asset retirement obligations
 
Turkey

Canada

Greece

Romania

Brazil

Total

 
 
 
 
 
 
 
At January 1, 2019
$
36,479

$
12,215

$
40,069

$
1,364

$
4,016

$
94,143

Accretion during the year
981

316

1,090

39

106

2,532

Revisions to estimate
2,330

107

3,704

130


6,271

Settlements
(594
)

(2,213
)


(2,807
)
Reclassified to liabilities associated with assets held for sale




(4,122
)
(4,122
)
At December 31, 2019
39,196

12,638

42,650

1,533


96,017

Less: Current portion


(1,782
)


(1,782
)
Long term portion
$
39,196

$
12,638

$
40,868

$
1,533

$

$
94,235

 
 
 
 
 
 
 
Estimated undiscounted amount
$
48,064

$
14,998

$
56,467

$
2,287

$
4,416

$
126,232


 
Turkey

Canada

Greece

Romania

Brazil