FORM 6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

For the month of July, 2017
 
Commission File Number   001-31522

Eldorado Gold Corporation
 (Translation of registrant's name into English)	

1188-550 Burrard Street
Bentall 5
Vancouver, B.C.
Canada  V6C 2B5
 (Address of principal executive offices)	

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F....[    ]..... Form 40-F...[. X .]...
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
 
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes  [    ]  No [ X ]
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________

Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: July 28, 2017	ELDORADO GOLD CORPORATION

/s/ Karen Aram

Karen Aram, Corporate Secretary	

 

Exhibits

99.1   Unaudited Condensed Consolidated Financial Statements for the Second Quarter - June 30, 2017
99.2    Management Discussion and Analysis for the Second Quarter - June 30, 2017
99.3    Form 52-109F2 Certification of Interim Filings - CEO
99.4    Form 52-109F2 Certification of Interim Filings - CFO

			

 

 
 
June 30, 2017           Unaudited Condensed Consolidated Financial Statements

  

 

 Suite 1188, 550 Burrard Street
 Vancouver, British Columbia
 V6C 2B5
 
 Phone: (604) 687-4018
 Fax: (604) 687-4026

 	 	 	
Eldorado Gold Corporation
Unaudited Condensed Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars)

 	 	 	 	Note	June 30, 2017	December 31, 2016	 	
							 	
 	 	 	 	 	$	$	 	
ASSETS	 	 	 	 	
Current assets	 	 	 	 	
Cash and cash equivalents	 	483,342	883,171	 	
Term deposits	 	268,771	5,292	 	
Restricted cash	 	260	240	 	
Marketable securities  	 	46,882	28,327	 	
Accounts receivable and other	 	60,277	54,315	 	
Inventories	 	148,111	120,830	 	
 	 	1,007,643	1,092,175	 	
Other assets	 	23,261	48,297	 	
Defined benefit pension plan	 	12,913	11,620	 	
Property, plant and equipment	 	3,747,076	3,645,827	 	
 	 	4,790,893	4,797,919	 	
LIABILITIES & EQUITY	 	 	 	 	
Current liabilities	 	 	 	 	
Accounts payable and accrued liabilities	 	77,435	90,705	 	
Current portion of asset retirement obligation	 	3,560	-	 	
 	 	80,995	90,705	 	
Debt	5	592,686	591,589	 	
Defined benefit pension plan	 	11,655	10,882	 	
Asset retirement obligations	 	82,004	89,778	 	
Deferred income tax liabilities	 	433,620	443,501	 	
 	 	1,200,960	1,226,455	 	
Equity	 	 	 	 	
Share capital	 	2,819,863	2,819,101	 	
Treasury stock	 	(11,056)	(7,794)	 	
Contributed surplus	 	2,611,660	2,606,567	 	
Accumulated other comprehensive income (loss)	 	9,118	(7,172)	 	
Deficit	 	(1,923,585)	(1,928,024)	 	
Total equity attributable to shareholders of the Company	 	3,506,000	3,482,678	 	
Attributable to non-controlling interests	 	83,933	88,786	 	
 	 	3,589,933	3,571,464	 	
 	 	4,790,893	4,797,919	 	

Approved on behalf of the Board of Directors
 
        (Signed) John Webster      Director                    (Signed) George Burns          Director

 

 
 
The accompanying notes are an integral part of these consolidated financial statements.

 	 	 	

Eldorado Gold Corporation
Unaudited Condensed Consolidated Income Statements
(Expressed in thousands of U.S. dollars except per share amounts)

 	 	 	 	 	Three months ended	 	Six months ended	
 	 	June 30,	 	June 30,	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	Note	2017	2016	 	2017	2016	
 	 	 	 	 	$	$	 	$	$	
Revenue	 	 	 	 	 	 	
  Metal sales	 	82,736	107,063	 	194,616	201,755	
 	 	 	 	 	 	 	 	 	 	
Cost of sales	 	 	 	 	 	 	
  Production costs	 	39,433	48,927	 	90,121	94,134	
  Inventory write-down (reversal)	 	-	(1,048)	 	-	298	
  Depreciation and amortization	 	15,556	17,551	 	33,620	36,519	
 	 	54,989	65,430	 	123,741	130,951	
Gross profit	 	27,747	41,633	 	70,875	70,804	
 	 	 	 	 	 	 	 	 	 	
Exploration expenses	 	7,124	3,314	 	12,371	5,275	
Mine standby costs	 	1,301	5,819	 	2,332	15,377	
Other operating items	 	 	1,525	-	 	3,658	-	
General and administrative expenses	 	11,498	10,688	 	23,112	20,155	
Defined benefit pension plan expense	 	782	297	 	1,612	580	
Share based payments	7	1,990	2,699	 	7,118	6,400	
Write-down of assets	 	2,177	478	 	3,231	478	
Foreign exchange loss (gain)	 	(749)	287	 	(661)	(3,153)	
Operating profit	 	2,099	18,051	 	18,102	25,692	
 	 	 	 	 	 	 	
Loss (gain) on disposal of assets	 	(40)	(93)	 	267	196	
Loss (gain) on marketable securities and other investments	 	(743)	565	 	(778)	4,881	
Other expense (income)	 	(2,211)	(1,372)	 	(4,560)	323	
Asset retirement obligation accretion	 	523	449	 	1,047	898	
Interest and financing costs (income)	 	(61)	4,082	 	1,050	9,778	
 	 	 	 	 	 	 	
Profit from continuing operations before income tax	 	4,631	14,420	 	21,076	9,616	
Income tax expense (recovery)	 	(2,693)	5,720	 	8,083	10,515	
Profit (loss) from continuing operations	 	7,324	8,700	 	12,993	(899)	
Profit (loss) from discontinued operations	4	203	(339,438)	 	(2,797)	(333,732)	
Profit (loss) for the period	 	7,527	(330,738)	 	10,196	(334,631)	
 	 	 	 	 	 	 	 	 	 	
Attributable to:	 	 	 	 	 	 	
Shareholders of the Company	 	11,215	(329,864)	 	15,049	(332,342)	
Non-controlling interests	 	(3,688)	(874)	 	(4,853)	(2,289)	
Profit (loss) for the period	 	7,527	(330,738)	 	10,196	(334,631)	
 	 	 	 	 	 	 	 	 	 	
Profit (loss) attributable to shareholders of the Company	 	 	 	 	 	 	
Continuing operations	 	11,012	9,331	 	17,846	903	
Discontinued operations	 	203	(339,195)	 	(2,797)	(333,245)	
 	 	11,215	(329,864)	 	15,049	(332,342)	
 	 	 	 	 	 	 	 	 	 	
Weighted average number of shares outstanding (thousands)	 	 	 	 	 	 	
Basic	 	 	 	 	716,824	716,587	 	716,713	716,587	
Diluted	 	 	 	 	717,479	716,591	 	717,380	716,590	
 	 	 	 	 	 	 	 	 	 	
Profit (loss) per share attributable to shareholders	 	 	 	 	 	 	
of the Company:	 	 	 	 	 	 	 	 	
Basic profit (loss) per share	 	0.02	(0.46)	 	0.02	(0.46)	
Diluted profit (loss) per share	 	0.02	(0.46)	 	0.02	(0.46)	
 	 	 	 	 	 	 	 	 	 	
Profit per share attributable to shareholders	 	 	 	 	 	 	
of the Company - continuing operations:	 	 	 	 	 	 	
Basic profit per share	 	0.02	0.01	 	0.02	0.00	
Diluted profit per share	 	0.02	0.01	 	0.02	0.00	
 
The accompanying notes are an integral part of these consolidated financial statements.

 	 	 	

Eldorado Gold Corporation
Unaudited Condensed Consolidated Statements of Comprehensive Income
(Expressed in thousands of U.S. dollars)

 	 	Three months ended	 	Six months ended	
 	 	June 30,	 	June 30,	
 	 	2017	2016	 	2017	2016	
 	 	$	$	 	$	$	
 	 	 	 	 	 	 	
Profit (loss) for the period	 	7,527	(330,738)	 	10,196	(334,631)	
Other comprehensive income (loss):	 	 	 	 	 	 	
Change in fair value of available-for-sale financial assets	1,690	14,545	 	18,554	24,234	
Income tax on change in fair value of available-for-sale financial assets	 	(451)	(3,140)	 	(2,595)	(3,140)	
Transfer of realized loss on disposal of available-for-sale financial assets	 	-	565	 	-	4,901	
Actuarial gains (losses) on defined benefit pension plans, net of tax	 	226	-	 	331	(122)	
Total other comprehensive income for the period	 	1,465	11,970	 	16,290	25,873	
Total comprehensive income (loss) for the period	 	8,992	(318,768)	 	26,486	(308,758)	
 	 	 	 	 	 	 	
Attributable to:	 	 	 	 	 	 	
Shareholders of the Company	 	12,680	(317,894)	 	31,339	(306,469)	
Non-controlling interests	 	(3,688)	(874)	 	(4,853)	(2,289)	
 	 	8,992	(318,768)	 	26,486	(308,758)	

 
 
The accompanying notes are an integral part of these consolidated financial statements.

 	 	 	

Eldorado Gold Corporation
Unaudited Condensed Consolidated Statements of Cash Flows
(Expressed in thousands of U.S. dollars)

 	 	 	Three months ended	 	Six months ended	
 	 	 	June 30,	 	June 30,	
 	 	 	 	 	 	 	 	
 	 	Note	2017	2016	 	2017	2016	
 	 	 	 $	 $	 	 $	 $	
 	 	 	 	 	 	 	 	
Cash flows generated from (used in):	 	 	 	 	 	 	 	
Operating activities	 	 	 	 	 	 	 	
Profit (loss) for the period from continuing operations	 	 	7,324	8,700	 	12,993	(899)	
Items not affecting cash:	 	 	 	 	 	 	 	
Asset retirement obligation accretion	 	 	523	449	 	1,047	898	
Depreciation and amortization	 	 	15,556	17,551	 	33,620	36,519	
Unrealized foreign exchange loss (gain)	 	 	(304)	3,068	 	(378)	2,422	
Deferred income tax recovery	 	 	(9,847)	(3,328)	 	(12,559)	(12,562)	
Loss (gain) on disposal of assets	 	 	(40)	(93)	 	267	196	
Write-down of assets	 	 	2,177	478	 	3,231	478	
Loss (gain) on marketable securities and other investments	 	 	(743)	565	 	(778)	4,881	
Share based payments	 	 	1,990	2,699	 	7,118	6,400	
Defined benefit pension plan expense	 	 	782	297	 	1,612	580	
 	 	 	17,418	30,386	 	46,173	38,913	
Property reclamation payments	 	 	(496)	(814)	 	(1,087)	(894)	
Changes in non-cash working capital	 	9	(44,632)	(39,251)	 	(25,023)	(59,624)	
Net cash provided (used) by operating activities of continuing operations	(27,710)	(9,679)	 	20,063	(21,605)	
Net cash provided by operating activities of discontinued operations	 	 	-	12,165	 	-	26,533	
 	 	 	 	 	 	 	 	
Investing activities	 	 	 	 	 	 	 	
Purchase of property, plant and equipment	 	 	(75,047)	(61,568)	 	(148,884)	(120,888)	
Proceeds from the sale of property, plant and equipment	 	82	373	 	83	757	
Proceeds on pre-production sales and tailings retreatment	 	 	1,092	-	 	1,092	3,878	
Purchase of marketable securities	 	 	-	(692)	 	-	(2,526)	
Proceeds from the sale of marketable securities	 	 	-	378	 	-	3,665	
Value added taxes related to mineral property expenditures, net	 	 	(7,240)	-	 	16,345	-	
Investment in term deposits	 	 	(37,513)	(22)	 	(263,479)	(935)	
Decrease (increase) in restricted cash	 	 	(9,720)	7	 	(9,724)	(6)	
Net cash used by investing activities of continuing operations	 	 	(128,346)	(61,524)	 	(404,567)	(116,055)	
Net cash used by investing activities of discontinued operations	 	 	-	(4,431)	 	-	(9,573)	
 	 	 	 	 	 	 	 	
Financing activities	 	 	 	 	 	 	 	
Issuance of common shares for cash	 	 	32	-	 	586	-	
Dividend paid to shareholders	 	 	-	-	 	(10,610)	-	
Purchase of treasury stock	 	 	(3,252)	-	 	(5,301)	-	
Long-term and bank debt proceeds	 	 	-	30,000	 	-	30,000	
Net cash provided (used) by financing activities of continuing operations	(3,220)	30,000	 	(15,325)	30,000	
 	 	 	 	 	 	 	 	
Decrease in cash and cash equivalents	 	 	(159,276)	(33,469)	 	(399,829)	(90,700)	
Cash and cash equivalents - beginning of period	 	 	642,618	230,958	 	883,171	288,189	
Cash and cash equivalents - end of period	 	 	483,342	197,489	 	483,342	197,489	
Less cash and cash equivalents held for sale - end of period	 	 	-	(71,837)	 	-	(71,837)	
Cash and cash equivalents excluding held for sale - end of period	 	 	483,342	125,652	 	483,342	125,652	

 

The accompanying notes are an integral part of these consolidated financial statements.

 	 	 	

Eldorado Gold Corporation
Unaudited Condensed Consolidated Statements of Changes in Equity
(Expressed in thousands of U.S. dollars)

 	 	Three months ended	 	Six months ended	
 	 	June 30,	 	June 30,	
 	 	 	 	 	 	 	
 	 	2017	2016	 	2017	2016	
 	 	 $	 $	 	 $	 $	
 	 	 	 	 	 	 	
Share capital	 	 	 	 	 	 	
Balance beginning of period	 	2,819,821	5,319,101	 	2,819,101	5,319,101	
Shares issued upon exercise of share options, for cash	 	32	-	 	586	-	
Transfer of contributed surplus on exercise of options	 	10	-	 	176	-	
Capital reduction	 	-	(2,500,000)	 	-	(2,500,000)	
Balance end of period	 	2,819,863	2,819,101	 	2,819,863	2,819,101	
 	 	 	 	 	 	 	
Treasury stock	 	 	 	 	 	 	
Balance beginning of period	 	(8,000)	(8,015)	 	(7,794)	(10,211)	
Purchase of treasury stock	 	(3,252)	-	 	(5,301)	-	
Shares redeemed upon exercise of restricted share units	 	196	-	 	2,039	2,196	
Balance end of period	 	(11,056)	(8,015)	 	(11,056)	(8,015)	
 	 	 	 	 	 	 	
Contributed surplus	 	 	 	 	 	 	
Balance beginning of period	 	2,609,055	46,758	 	2,606,567	47,236	
Share based payments	 	2,811	2,369	 	7,308	5,503	
Shares redeemed upon exercise of restricted share units	 	(196)	-	 	(2,039)	(2,196)	
Recognition of other non-current liability and related costs	 	-	-	 	-	(1,416)	
Reversal of other current liability and related costs	 	-	52,900	 	-	52,900	
Transfer to share capital on exercise of options	 	(10)	-	 	(176)	-	
Capital reduction	 	-	2,500,000	 	 	2,500,000	
Balance end of period	 	2,611,660	2,602,027	 	2,611,660	2,602,027	
 	 	 	 	 	 	 	
Accumulated other comprehensive loss	 	 	 	 	 	 	
Balance beginning of period	 	7,653	(6,669)	 	(7,172)	(20,572)	
Other comprehensive income for the period	 	1,465	11,970	 	16,290	25,873	
Balance end of period	 	9,118	5,301	 	9,118	5,301	
 	 	 	 	 	 	 	
Deficit	 	 	 	 	 	 	
Balance beginning of period	 	(1,934,800)	(1,586,351)	 	(1,928,024)	(1,583,873)	
Dividends paid	 	-	-	 	(10,610)	-	
Profit (loss) attributable to shareholders of the Company	 	11,215	(329,864)	 	15,049	(332,342)	
Balance end of period	 	(1,923,585)	(1,916,215)	 	(1,923,585)	(1,916,215)	
Total equity attributable to shareholders of the Company	 	3,506,000	3,502,199	 	3,506,000	3,502,199	
 	 	 	 	 	 	 	
Non-controlling interests	 	 	 	 	 	 	
Balance beginning of period	 	87,621	168,340	 	88,786	169,755	
Loss attributable to non-controlling interests	 	(3,688)	(874)	 	(4,853)	(2,289)	
Balance end of period	 	83,933	167,466	 	83,933	167,466	
 	 	 	 	 	 	 	
Total equity	 	3,589,933	3,669,665	 	3,589,933	3,669,665	

The accompanying notes are an integral part of these consolidated financial statements.

 	 	 	

Eldorado Gold Corporation
Notes to the unaudited condensed consolidated financial statements
(Expressed in thousands of U.S. dollars, unless otherwise stated)

1.		General Information	
Eldorado Gold Corporation (“Eldorado” or the “Company”) is a gold exploration, development and mining company. The Company has operations and ongoing exploration and development projects in Turkey, Greece, Brazil, Canada and Romania. The Company disposed of its China operations (“China Business”) in 2016. Details of the sale are included in note 4. In May 2017, the Company announced its intent to acquired Integra Gold Corporation (“Integra”), a Canadian company with mineral assets in Quebec, Canada. The acquisition was finalized on July 10, 2017 (note 11).
Eldorado is a public company which is listed on the Toronto Stock Exchange and New York Stock Exchange and is incorporated and domiciled in Canada.

2.		Basis of preparation	

	a)	Statement of compliance	
These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 ‘Interim Financial Reporting’. They do not include all of the information and footnotes required by the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board for full annual financial statements and should be read in conjunction with the Company’s annual financial statements for the year ended December 31, 2016.
The same accounting policies are used in the preparation of these unaudited condensed consolidated interim financial statements as for the most recent audited annual financial statements and reflect all the adjustments necessary for fair presentation in accordance with IFRS for the interim periods presented.
These unaudited condensed consolidated interim financial statements were authorized for issue by the Company’s Board of Directors on July 27, 2017.

	b)	Judgement and estimates	
The preparation of these unaudited condensed consolidated interim 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 and liabilities, income and expense. Actual results may differ from these estimates.
The significant judgements made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended December 31, 2016.

3.		Adoption of new accounting standards and upcoming changes	
The following standards have been published and are mandatory for Eldorado’s annual accounting periods no earlier than January 1, 2018:

	·	IFRS 2 ‘Share-Based Payments’ – In June 2016, the IASB issued final amendments to this standard. IFRS 2 clarifies the classification and measurement of share-based payment transactions. These amendments deal with variations in the final settlement arrangements including: (a) accounting for cash-settled share-based payment transactions that include a performance condition, (b) classification of share-based payment transactions with net settlement features, and (c) accounting for modifications of share-based payment transactions from cash-settled to equity. IFRS 2 is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted. The Company is currently evaluating the extent of the impact of the adoption of this standard. A detailed review will be completed during the second half of 2017. The Company does not currently expect the impact of these changes to be material.	

 	 	(  1  )	

 	 	 	

Eldorado Gold Corporation
Notes to the unaudited condensed consolidated financial statements
(Expressed in thousands of U.S. dollars, unless otherwise stated)

3.		Adoption of new accounting standards and upcoming changes (continued)	

	·	IFRS 9 ‘Financial Instruments’ – This standard was published in July 2014 and replaces the existing guidance in IAS 39, ‘ Financial Instruments: Recognition and Measurement’ . IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements.	
It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted. The Company expects the classification of its financial assets and liabilities to remain consistent under the new standard, with the possible exception of equity securities. Under the new standard, equity investments that move through other comprehensive income can be recorded directly into its profit and loss results or continue recording against other comprehensive income with no profit and loss effect on sale. If the Company does not make an election, changes in fair value of the equity securities will be recognized in profit and loss results. The company does not expect to apply hedge accounting to hedge components of its non-financial items. A detailed review will be completed during the second half of 2017.

	·	IFRS 15 ‘Revenue from Contracts with Customers’ – This standard contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized. This standard is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted. The Company is currently evaluating the extent of the impact of the adoption of this standard, primarily analyzing its doré and concentrate sale agreements. The new standard is not expected to significantly affect the gross amount of revenue recognized by the Company but the timing of recognition might differ. This will be closely tied to the timing of transfer of control to customers. A detailed review of contracts is underway and it is expected to be completed during the second half of 2017.	

	·	IFRS 16 ‘ Leases ’ – This standard was published in January 2016 and replaces the existing guidance in IAS 17, ‘ Leases ’. IFRS 16 introduces a single accounting model for lessees and for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee will be required to recognize a right-of-use asset, representing its right to use the underlying asset, and a lease liability, representing its obligation to make lease payments. The accounting treatment for lessors will remain largely the same as under IAS 17. IFRS 16 is effective for annual reporting periods beginning on or after January 1, 2019, with early adoption permitted. The Company is currently evaluating all operating leases as it is expected that, under this standard, the present value of most lease commitments will be shown as a liability on the balance sheet together with an asset representing the right of use, including those classified as operating leases under the existing standard. This implies higher amount of depreciation expense and interest on lease liabilities that will be recorded in the Company’s profit and loss results. Additionally, a corresponding reduction in general and administrative costs and/or production costs is expected.	
There are other new standards, amendments to standards and interpretations that have been published and are not yet effective. The Company believes they will have no material impact to its consolidated financial statements.

 	 	(  2  )	

 	 	 	

Eldorado Gold Corporation
Notes to the unaudited condensed consolidated financial statements
(Expressed in thousands of U.S. dollars, unless otherwise stated)

4.		Sale of China Business	
On April 26, 2016, the Company announced that it had reached an agreement to sell its 82 percent interest in Jinfeng to a wholly-owned subsidiary of China National Gold Group (“CNG”) for $300 million in cash, subject to certain closing adjustments. The sale was completed on September 6, 2016. In addition to the sale of Jinfeng, on May 16, 2016 Eldorado announced it had reached an agreement to sell its respective interest in White Mountain, Tanjianshan and Eastern Dragon to an affiliate of Yintai Resources Co. Ltd. (“Yintai”) for $600 million in cash, subject to certain closing adjustments. The sale was completed on November 22, 2016.

		The Company concluded that during the second quarter of 2016, the assets and liabilities of the China Business met the criteria for classification as held for sale as settlement was expected within twelve months. Accordingly, an initial post-tax loss of $339 million was recognized in the second quarter of 2016 on re-measurement to fair value less costs of disposal of our China Business. For the year ended December 31, 2016, a net loss on sale of assets held for sale of $351.0 million was realized in net loss from discontinued operations as a result of completing both sale transactions.	
During the six months ended June 30, 2017, the Company recorded an expense of $2.8 million for working capital adjustments related to the Yintai sale based on the agreement that was reached with Yintai during the period. This amount was paid to Yintai in the month of June and is included as discontinued operations in the Consolidated Income Statements.

		The China Business net earnings to date of disposition were included in the Company's consolidated results for the year ended December 31, 2016. These results have been presented as discontinued operations within the Consolidated Income Statements and the Consolidated Statements of Cash Flows. The profit (loss) from discontinued operations for the three and six months ended June 30, 2016 is as follows:	

 	 	 	 	Three months ended	 	Six months ended	
 	June 30,	 	 	June 30,	
 	 	 	 	 	 	 	 	
 	 	 	 	2016	 	 	2016	
 	 	 	 	$	 	 	$	
Revenue	64,476	 	 	133,916	
Production costs	44,170	 	 	91,911	
Depreciation and amortization	6,305	 	 	18,996	
Gross profit	14,001	 	 	23,009	
Exploration expenses	364	 	 	645	
General and administrative expenses	10,499	 	 	12,603	
Foreign exchange loss	448	 	 	720	
Operating profit	2,690	 	 	9,041	
Interest and financing costs	131	 	 	146	
Asset retirement obligation accretion	116	 	 	232	
Other expense	92	 	 	68	
Profit from discontinued operations before income tax	2,351	 	 	8,595	
Income tax expense	2,771	 	 	3,309	
Profit (loss) from discontinued operations	(420)	 	 	5,286	
Loss on re-measurement to fair value less costs to sell	339,018	 	 	339,018	
Net loss from discontinued operations	(339,438)	 	 	(333,732)	

 	 	(  3  )	

 	 	 	

Eldorado Gold Corporation
Notes to the unaudited condensed consolidated financial statements
(Expressed in thousands of U.S. dollars, unless otherwise stated)

5.		Debt	
Senior notes
On December 10, 2012, the Company completed an offering of $600.0 million senior notes (“the notes”) at par value, with a coupon rate of 6.125% due December 15, 2020. The notes pay interest semi-annually on June 15 and December 15. Net deferred financing costs of $7,314 have been included as an offset in the balance of the notes in the financial statements and are being amortized over the term of the notes.
The fair market value of the notes as at June 30, 2017 is $614.8 million.
 
6.		Share capital	
Eldorado’s authorized share capital consists of an unlimited number of voting common shares without par value and an unlimited number of non-voting common shares without par value. At June 30, 2017 there were 716,829,782 (December 31, 2016 – 716,587,134) voting common shares and no non-voting common shares (December 31, 2016 – nil) outstanding. On July 10, 2017, 77 million shares were issued in connection with the Integra acquisition (note 11).
 
7.		Share-based payments	
(a)   Share option plans
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

 	2017	
	Weighted average exercise price Cdn$	Number of
options	
At January 1,	7.55	28,896,035	
Granted	4.43	5,804,535	
Exercised	3.22	(242,648)	
Forfeited	14.00	(4,278,762)	
At June 30,	6.07	30,179,160	
 
At June 30, 2017, 18,872,222 share options (June 30, 2016 – 19,698,340) with a weighted average exercise price of Cdn$7.39 (June 30, 2016 – Cdn$9.67) had vested and were exercisable.
Share based compensation expense related to share options for the quarter ended June 30, 2017 was $1,636 (YTD - $4,264).
(b)   Restricted share unit plan
A total of 936,832 restricted share units (“RSUs”) at a grant-date fair value of Cdn$4.49 per unit were granted during the six-month period ended June 30, 2017 under the Company’s RSU plan.
The fair value of each RSU issued is determined as the closing share price at grant date. The current maximum number of common shares authorized for issue under the RSU plan is 5,000,000.
A summary of the status of the RSU plan and changes during the quarter ended June 30, 2017 is as follows:

 	Total RSUs	
Balance at December 31, 2016	1,240,174	
RSUs Granted	936,832	
Redeemed	(349,842)	
Forfeited	(121,068)	
Balance at June 30, 2017	1,706,096	

 	 	(  4  )	

 	 	 	

Eldorado Gold Corporation
Notes to the unaudited condensed consolidated financial statements
(Expressed in thousands of U.S. dollars, unless otherwise stated)

7.		Share-based payments (continued)	
As at June 30, 2017, 1,706,096 common shares purchased by the Company remain held in trust in connection with this plan. At the end of the period, 596,780 restricted share units are fully vested and exercisable. These shares purchased and held in trust have been included in treasury stock in the balance sheet.
Restricted share units expense for the quarter ended June 30, 2017 was $464 (YTD - $1,730).
(c) Deferred units plan
 
At June 30, 2017, 596,836 deferred units (“DUs”) were outstanding with a value of $1,545, which is included in accounts payable and accrued liabilities.
Deferred units compensation income was $821 for the quarter ended June 30, 2017 (YTD - $190).
(d) Performance share units plan
A total of 569,719 performance share units (“PSUs”) were granted during the six-month period ended June 30, 2017 under the Company’s PSU plan. The PSUs vest on the third anniversary of the grant date, subject to achievement of pre-determined performance criteria. When fully vested, the number of PSUs redeemed will range from 0% to 200% of the target award, subject to the performance of the share price over the 3 year period. The current maximum number of common shares authorized for issuance from treasury under the PSU plan is 3,130,000.
Compensation expense related to PSUs for the period ended June 30, 2017 was $711 (YTD - $1,314).
 
8.		Fair value of financial instruments	
Fair values are determined directly by reference to published price quotations in an active market, when available, or by using a valuation technique that uses inputs observed from relevant markets.
The three levels of the fair value hierarchy are described below:

	·	Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.	

	·	Level 2 – Inputs that are observable, either directly or indirectly, but do not qualify as Level 1 inputs (i.e. quoted prices for similar assets or liabilities).	

	·	Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity).	
The assets and liabilities measured at fair value as at June 30, 2017 are marketable securities and derivatives related to the Company’s metal hedge positions on zinc and iron ore. The Company’s derivative asset of $778, which is considered level 2, is included in Other assets in our Consolidated Balance Sheet. The gain on derivatives for the quarter ended June 30, 2017 was $743 (YTD - $778 ) and is presented in Loss (gain) on marketable securities and other investments in our Consolidated Income Statement.
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the group is the current bid price. These instruments are included in Level 1. Instruments included in Level 1 comprise primarily publicly-traded equity investments classified as available-for-sale securities.
With the exception of the fair market value of the Company’s senior notes (note 5), which are included in level 2, all carrying amounts of financial instruments approximate their fair value.

 	 	(  5  )	

 	 	 	

Eldorado Gold Corporation
Notes to the unaudited condensed consolidated financial statements
(Expressed in thousands of U.S. dollars, unless otherwise stated)

9.		Supplementary cash flow information	

 	Three months ended
June 30,	 	Six months ended
June 30,	
 	2017
$	2016
$	 	2017
$	2016
$	
Changes in non-cash working capital	 	 	 	 	 	
Accounts receivable and other	(4,590)	(8,385)	 	10,333	(9,777)	
Inventories	(15,114)	(9,743)	 	(18,910)	(17,963)	
Accounts payable and accrued liabilities	(24,928)	(21,123)	 	(16,446)	(31,884)	
Total	(44,632)	(39,251)	 	(25,023)	(59,624)	
 	 	 	 	 	 	
Supplementary cash flow information	 	 	 	 	 	
Income taxes paid	10,097	16,217	 	26,338	30,458	
Interest paid	16,844	16,844	 	16,844	16,844	

 	 	 	 	 	 	 	 	 	 	 	
 
10.		Segmented information	
Identification of reportable segments
The Company has identified its operating segments based on the internal reports that are reviewed and used by the chief executive officer and the executive management (the chief operating decision makers or CODM) in assessing performance and in determining the allocation of resources.
The CODM considers the business from both a geographic and product perspective and assesses the performance of the operating segments based on measures of profit and loss as well as assets and liabilities. These measures include gross profit (loss), expenditures on exploration, property, plant and equipment and non-current assets, as well as total debt. As at June 30, 2017, Eldorado had five reportable segments based on the geographical location of mining and exploration and development activities.

		10.1 Geographical segments	
Geographically, the operating segments are identified by country and by operating mine or mine under construction. The Turkey reporting segment includes the Kişladağ and the Efemçukuru mines and exploration activities in Turkey. The Brazil reporting segment includes the Vila Nova mine, Tocantinzinho project and exploration activities in Brazil. The Greece reporting segment includes the Stratoni and Olympias mines; the Skouries, Perama Hill and Sapes projects and exploration activities in Greece. The Romania reporting segment includes the Certej project and exploration activities in Romania. Other reporting segment includes operations of Eldorado’s corporate office and exploration activities in other countries.
Financial information about each of these operating segments is reported to the CODM on at least a monthly basis. The mines in each of the different segments share similar economic characteristics and have been aggregated accordingly.

 	 	(  6  )	

 	 	 	

Eldorado Gold Corporation
Notes to the unaudited condensed consolidated financial statements
(Expressed in thousands of U.S. dollars, unless otherwise stated)

10.		Segmented information (continued)	

For the three months ended June 30, 2017	Turkey	Brazil	Greece	Romania	Other	Total	
  	$	$	$	$	$	$	
Information about profit and loss	 	 	 	 	 	 	
Metal sales from external customers	73,449	(279)	9,566	-	-	82,736	
Production costs	30,003	697	8,733	-	-	39,433	
Depreciation	15,432	-	80	-	44	15,556	
Gross profit (loss)	28,014	(976)	753	-	(44)	27,747	
 	 	 	 	 	 	 	
Other material items of income and expense	 	 	 	 	 	 	
Write-down of assets	456	-	1,721	-	-	2,177	
Exploration expenses	341	736	2,094	2,009	1,944	7,124	
Income tax expense (recovery)	2,595	815	(2,740)	(2,912)	(451)	(2,693)	
 	 	 	 	 	 	 	
Additions to property, plant and	 	 	 	 	 	 	
equipment during the period	12,338	2,463	55,280	4,700	300	75,081	

 

For the three months ended June 30, 2016	Turkey	Brazil	Greece	Romania	Other	Total	
  	$	$	$	$	$	$	
Information about profit and loss	 	 	 	 	 	 	
Metal sales from external customers	99,321	-	7,742	-	-	107,063	
Production costs	40,231	-	8,696	-	-	48,927	
Inventory write-down (reversal)	-	-	(1,048)	-	-	(1,048)	
Depreciation	17,797	(461)	146	-	69	17,551	
Gross profit (loss)	41,293	461	(52)	-	(69)	41,633	
 	 	 	 	 	 	 	
Other material items of income and expense	 	 	 	 	 	 	
Write-down of assets	478	-	-	-	-	478	
Exploration expenses	398	572	184	133	2,027	3,314	
Income tax expense (recovery)	12,123	(2,161)	(1,037)	(64)	(3,141)	5,720	
 	 	 	 	 	 	 	
Additions to property, plant and	 	 	 	 	 	 	
equipment during the period	14,456	1,165	41,960	4,039	6	61,626	

 

 	 	(  7  )	

 	 	 	

Eldorado Gold Corporation
Notes to the unaudited condensed consolidated financial statements
(Expressed in thousands of U.S. dollars, unless otherwise stated)

10.		Segmented information (continued)	

For the six months ended June 30, 2017	Turkey	Brazil	Greece	Romania	Other	Total	
 	$	$	$	$	$	$	
Information about profit and loss	 	 	 	 	 	 	
Metal sales from external customers	165,039	2,250	27,327	-	-	194,616	
Production costs	66,852	2,008	21,261	-	-	90,121	
Depreciation	33,251	-	208	-	161	33,620	
Gross profit (loss)	64,936	242	5,858	-	(161)	70,875	
 	 	 	 	 	 	 	
Other material items of income and expense	 	 	 	 	 	 	
Write-down  of assets	693	-	2,538	-	-	3,231	
Exploration costs	678	1,967	3,581	3,773	2,372	12,371	
Income tax expense (recovery)	17,152	(251)	(2,674)	(3,549)	(2,595)	8,083	
 	 	 	 	 	 	 	
Additions to property, plant and	 	 	 	 	 	 	
equipment during the period	22,352	4,418	115,690	6,960	422	149,842	
 	 	 	 	 	 	 	
Information about assets and liabilities	 	 	 	 	 	 	
Property, plant and equipment (*)	866,919	191,017	2,267,889	420,798	453	3,747,076	
 	 	 	 	 	 	 	
Debt	-	-	-	-	592,686	592,686	

 

For the six months ended June 30, 2016	Turkey	Brazil	Greece	Romania	Other	Total	
 	$	$	$	$	$	$	
Information about profit and loss	 	 	 	 	 	 	
Metal sales from external customers	190,541	-	11,214	-	-	201,755	
Production costs	81,206	-	12,928	-	-	94,134	
Inventory write-down	-	-	298	-	-	298	
Depreciation	36,041	-	340	-	138	36,519	
Gross profit (loss)	73,294	-	(2,352)	-	(138)	70,804	
 	 	 	 	 	 	 	
Other material items of income and expense	 	 	 	 	 	 	
Write down of assets	478	-	-	-	-	478	
Exploration costs	757	904	832	341	2,441	5,275	
Income tax expense (recovery)	16,990	(3,825)	1,061	(633)	(3,078)	10,515	
 	 	 	 	 	 	 	
Additions to property, plant and	 	 	 	 	 	 	
equipment during the period	28,577	2,039	85,016	6,436	14	122,082	

 

For the year ended December 31, 2016	Turkey	Brazil	Greece	Romania	Other	Total	
 	$	$	$	$	$	$	
 	 	 	 	 	 	 	
Information about assets and liabilities	 	 	 	 	 	 	
Property, plant and equipment (*)	885,629	186,606	2,157,822	413,949	1,821	3,645,827	
 	 	 	 	 	 	 	
Debt	-	-	-	-	591,589	591,589	
 
* Net of revenues from sale of pre-production and tailings retreatment

 	 	(  8  )	

 	 	 	

Eldorado Gold Corporation
Notes to the unaudited condensed consolidated financial statements
(Expressed in thousands of U.S. dollars, unless otherwise stated)

 
10.		Segmented information (continued)	
The Turkey segment derives its revenues from sales of gold. The Brazil segment derives its revenue from sales of iron ore. The Greece segment derives its revenue from sales of zinc, lead and silver concentrates.

		10.2 Seasonality/cyclicality of operations	

		Management does not consider operations to be of a significant seasonal or cyclical nature.	

11.		Events occurring after the reporting date	

		On May 15, 2017, the Company announced that it had entered into a definitive agreement with Integra, pursuant to which Eldorado agreed to acquire all of the issued and outstanding common shares of Integra that it does not currently own, by way of a plan of arrangement (the “Arrangement”). The acquisition was finalized on July 10, 2017.	

		The number of shares issued by Eldorado under the Arrangement was approximately 77 million. The amount of cash paid by Eldorado under the Arrangement was approximately C$129 million. Total consideration was approximately $360 million, inclusive of Integra shares held by Eldorado.	

 	 	(  9  )	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	

Throughout this Management’s Discussion and Analysis (“MD&A”), Eldorado , we, us, our and the Company mean Eldorado Gold Corporation. This quarter means the second quarter of 2017. All dollar amounts are in United States dollars unless stated otherwise.
 
The information in this MD&A is as of July 27, 2017. You should also read our audited consolidated financial statements for the year ended December 31, 2016 prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and the unaudited condensed consolidated financial statements for the three and six-month periods ended June 30, 2017 prepared in accordance with International Accounting Standard (IAS) 34 – “Interim Financial Reporting”. We file our financial statements and MD&A with appropriate regulatory authorities in Canada and the United States. You can find more information about Eldorado, including our Annual Information Form (“AIF”), on SEDAR at www.sedar.com.
 
About Eldorado
 
Based in Vancouver, Canada, Eldorado owns and operates mines around the world. Its activities involve all facets of the mining industry including exploration, evaluation and development, production, and reclamation.
 
Operating gold mines:
	·	Kisladag, in Turkey (100%)	
	·	Efemcukuru, in Turkey (100%)	
 
Gold projects:
	·	Olympias, in Greece (95%)	
	·	Skouries, in Greece (95%)	
	·	Perama Hill, in Greece (100%)	
	·	Certej, in Romania (81%)	
	·	Tocantinzinho, in Brazil (100%)	
	·	Lamaque, in Canada (100%, effective July 10, 2017)	
 
Other mines:
	·	Stratoni – Lead and Zinc Concentrates, in Greece (95%)	
	·	Vila Nova – Iron Ore, in Brazil (100%)	
 
Eldorado is listed on the following exchanges:
	·	Toronto Stock Exchange (“TSX”) under the symbol ELD	
	·	New York Stock Exchange (“NYSE”) under the symbol EGO	

 	 	1 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	

Second Quarter Summary Results
 
Select Consolidated Financial Information and Corporate Developments
 
	·	Completed the acquisition of Integra Gold Corporation (“Integra”) on July 10, 2017, pursuant to the plan of arrangement originally announced on May 15, 2017. The total consideration was approximately $360 million, inclusive of Integra shares held by Eldorado.	

	·	Profit attributable to shareholders of the Company was $11.2 million ($0.02 per share) in the second quarter of 2017, compared to a loss attributable to shareholders of the Company of $329.9 million ($0.46 per share) in the second quarter of 2016 (which included $339.0 million loss on re-measurement of Chinese assets).	

	·	Gold revenues from continuing operations in the second quarter of 2017 were $72.2 million (2016: $98.3 million) on sales of 57,206 ounces of gold at an average realized gold price of $1,262 per ounce (2016: 77,623 ounces at $1,267 per ounce).	

	·	At quarter-end the Company reported liquidity of $1,002.1 million, including $752.1 million in cash, cash equivalents and term deposits, and $250.0 million in undrawn lines of credit. Cash, cash equivalents and terms deposits after payment for the acquisition of Integra was $609.3 million.	
 
Select Performance Measures (1)
 
	·	Gold production of 63,692 ounces, including Olympias pre-commercial production (2016: 73,330 ounces from continuing operations; 124,110 ounces including discontinued operations).	

	·	Cash operating costs averaged $484 per ounce (2016: $490 per ounce from continuing operations; $607 per ounce including discontinued operations).	

	·	All-in sustaining cash costs averaged $846 per ounce (2016: $933 per ounce including discontinued operations).	

	·	Gross profit from gold mining operations of $28.1 million (2016: $41.4 million from continuing operations; $55.5 million including discontinued operations).	

	·	Adjusted net earnings of $6.3 million ($0.01 per share) compared to an adjusted net earnings of $11.7 million ($0.01 per share) in 2016.	

	·	Cash generated from operating activities before changes in non-cash working capital was $16.9 million (2016: $29.6 million from continuing operations).	

	(1)	Throughout this MD&A we use cash operating cost per ounce, total cash costs per ounce, all-in sustaining cash cost per ounce, gross profit from gold mining operations, adjusted net earnings, and cash flow from operating activities before changes in non-cash working capital as additional measures of Company performance. These are non-IFRS measures. Please see page 8 for an explanation and discussion of these non-IFRS measures.	

 	 	2 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	

Summarized Financial Results
Continuing Operations

 	3 months ended June 30,	6 months ended June 30,	
 	2017	2016	2017	2016	
Revenues	82.7	107.1	194.6	201.8	
Gold revenues	72.2	98.3	162.7	188.8	
Gold sold (ounces)	57,206	77,623	131,274	152,606	
Average realized gold price ($/ounce)	1,262	1,267	1,240	1,237	
Cash operating costs – gold mines ($/ounce)	484	490	474	504	
Total cash costs – gold mines ($/ounce)	502	505	492	521	
Gross profit from gold mining operations	28.1	41.4	65.1	73.5	
Cash flow from operating activities 1	16.9	29.6	45.1	38.0	
 
Including Discontinued Operations

 	3 months ended June 30,	6 months ended June 30,	
 	2017	2016	2017	2016	
Revenues	82.7	171.5	194.6	335.7	
Gold revenues	72.2	162.7	162.7	322.6	
Gold sold (ounces)	57,206	128,090	131,274	261,557	
Average realized gold price ($/ounce)	1,262	1,270	1,240	1,233	
Cash operating costs – gold mines ($/ounce)	484	607	474	605	
Total cash costs – gold mines ($/ounce)	502	650	492	654	
All-in sustaining cash cost – gold mines ($/ounce)	846	933	826	908	
Gross profit from gold mining operations	28.1	55.5	65.1	96.6	
Adjusted net earnings	6.3	11.7	16.7	11.0	
Net profit (loss) 2	11.2	(329.9)	15.0	(332.3)	
Earnings (loss) per share – basic ($/share) 2	0.02	(0.46)	0.02	(0.46)	
Earnings (loss) per share – diluted ($/share) 2	0.02	(0.46)	0.02	(0.46)	
	(1)	Before changes in non-cash working capital.	
	(2)	Attributable to shareholders of the Company.	

Review of Quarterly Financial Results
Profit attributable to shareholders of the Company for this quarter was $11.2 million, (or $0.02 per share), compared to a loss of $329.9 million, (or $0.46 per share) in the second quarter of 2016 (which included $339.0 million loss on re-measurement of Chinese assets). Adjusted net earnings for the quarter were $6.3 million ($0.01 per share) as compared to an adjusted net earnings of $11.7 million ($0.01 per share) for the second quarter of 2016. The main difference between profit and adjusted earnings in the second quarter of 2017 was the fluctuation on foreign exchange translation of deferred income tax balances in Turkey, Greece and Brazil (see page 11 for a reconciliation of profit to adjusted earnings).
Gold sales of 57,206 ounces and gross profit from continuing operations were lower year over year due to lower production and sales at Kisladag and shipping delays at Efemcukuru. General and administrative expenses increased $0.8 million year over year due to reorganization costs in Vancouver and Greece. Exploration expense increased $3.8 million including $1.6 million related to exploration activities at Stratoni. Mine standby costs of $1.3 million were recorded in the second quarter of 2017 related to Vila Nova, Perama Hill and Skouries underground development (2016: $5.8 million mainly related to the temporary suspension of Skouries development from January through May).

 	 	3 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	

The quarterly effective tax rate of negative 58% was lower than an expected rate of approximately 20% to 30% mainly due to favourable foreign exchange effects which were somewhat offset by withholding tax accruals in Turkey.
 
Acquisition of Integra
On May 15, 2017, the Company announced that it had entered into a definitive agreement with Integra Gold Corporation, pursuant to which Eldorado agreed to acquire all of the issued and outstanding common shares of Integra that it does not currently own, by way of a plan of arrangement (“Arrangement”). Pursuant to the Arrangement, Integra shareholders collectively received, for all the issued common shares of Integra that Eldorado did not already own, approximately CAD$129 million cash and 77 million common shares of Eldorado (representing approximately 10% of the total issued common shares of Eldorado, post-completion of the Arrangement). Total consideration was approximately $360 million, inclusive of Integra shares held by Eldorado. The Arrangement was successfully completed on July 10, 2017.
 
2017 Outlook
In 2017 Eldorado expects to produce 290,000 – 340,000 ounces of gold, including pre-commercial ounces from Olympias Phase II. Cash costs are forecasted at $500 per ounce, with all-in sustaining cash costs expected to be approximately $900 per ounce.
In early June, the Greek Ministry of Environment and Energy (the “Ministry”) issued a press release indicating it requested the Greek Council of State to take preparatory steps to initiate arbitration proceedings with the Company, however provided no specific or additional details. The Company has not yet received arbitration notice, but if initiated could take a minimum of four months. Meanwhile, permits applied for remain unissued and the 2017 guidance on Skouries capital spending and start-up has been revised accordingly. The Company continues to evaluate all capital spending and development timelines at its projects in Greece.
As at June 30, 2017, the Company’s balance sheet remains strong with $752 million in cash, cash equivalents and term deposits and $250 million in undrawn credit lines. Cash, cash equivalents and terms deposits after payment for the acquisition of Integra was $609.3 million. Sustaining capital for our Turkish gold mining operations in 2017 remains at approximately $70 million. Based on current plans, expenditures for project development are being revised downwards to $225 million. Exploration expenditures guidance for 2017 remains at $35 million, with a balanced focus on resource delineation and brownfield drilling at existing operations, advancing early-stage projects, and project generation. 

 	 	4 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	

Operations Update
Gold Operations
 
 	3 months ended June 30,	6 months ended June 30,	
Continuing Operations:	2017	2016	2017	2016	
Kisladag	 	 	 	 	
Ounces produced	38,456	49,924	91,100	102,300	
Cash operating costs ($/ounce)	464	479	454	508	
Total cash cost ($/ounce)	478	497	470	525	
Sustaining capex	4.9	6.2	10.0	13.2	
Efemcukuru	 	 	 	 	
Ounces produced	23,184	23,406	45,712	50,922	
Cash operating costs ($/ounce)	525	509	519	495	
Total cash cost ($/ounce)	552	521	541	512	
Sustaining capex	5.6	7.2	9.5	12.0	
Olympias	 	 	 	 	
Ounces produced (1)	2,052	0	2,052	2,774	
Sustaining capex	n/a	n/a	n/a	n/a	
Total	 	 	 	 	
Ounces produced	63,692	73,330	138,864	155,996	
Cash operating costs ($/ounce)	484	490	474	504	
Total cash cost ($/ounce)	502	505	492	521	
Sustaining capex	10.5	13.4	19.4	25.2	
	(1)	Includes pre-commercial production in 2017 and production from tailings retreatment in 2016.	
 
Kisladag
 
Operating Data	3 months ended June 30,	6 months ended June 30,	
 	2017	2016	2017	2016	
Tonnes placed on pad	3,288,604	4,256,279	6,516,010	8,303,175	
Average treated head grade (g/t Au)	0.82	0.81	0.97	0.77	
Gold (ounces)	 	 	 	 	
-           Produced	38,456	49,924	91,100	102,300	
-           Sold	38,452	49,942	91,235	102,621	
Cash operating costs ($/ounce)	464	479	454	508	
Total cash costs ($/ounce)	478	497	470	525	
Financial Data	 	 	 	 	
Gold revenues	$48.5	$63.0	$112.9	$125.5	
Depreciation and depletion	$7.7	$9.0	$17.1	$20.6	
Gross profit from mining operations	$22.4	$29.2	$52.9	$51.0	
Sustaining capital expenditures	$4.9	$6.2	$10.0	$13.2	
 
Kisladag reported gold production of 38,456 ounces for the quarter, down 23% year-on-year. Reduced solution grades resulted from continued slow leaching of higher pad stack heights and increased cyanide requirements. During the quarter, the placement of estimated recoverable gold on the leach pad proceeded as planned, however, gold solution grade and consequently gold recovery from the leach pad lagged internal expectations throughout the quarter.

 	 	5 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	
 	 	
Recent laboratory tests, where solution chemistry was adjusted, have indicated normal recovery rates. More time is now required to adjust the overall pad solution chemistry and allow solution to flow through the leach pad. With the current stack height being approximately 80 metres at the highest point, vertical flow rates are approximately one metre per day. Sustaining capital expenditures include waste stripping construction.
 
Efemcukuru
 
Operating Data	3 months ended June 30,	6 months ended June 30,	
 	2017	2016	2017	2016	
Tonnes milled	124,961	120,044	240,755	236,531	
Average treated head grade (g/t Au)	6.64	6.95	6.70	7.45	
Average recovery rate (to concentrate)	86.9%	92.6%	88.1%	94.3%	
Gold (ounces)	 	 	 	 	
-           Produced	23,184	23,406	45,712	50,922	
-           Sold	18,754	27,681	40,039	49,985	
Cash operating costs ($/ounce)	525	509	519	495	
Total cash costs ($/ounce)	552	521	541	512	
Financial Data	 	 	 	 	
Gold revenues	$23.7	$35.4	$49.8	$63.3	
Depreciation and depletion	$7.7	$8.7	$16.0	$15.2	
Gross profit from mining operations	$5.6	$12.2	$12.2	$22.5	
Sustaining capital expenditures	$5.6	$7.2	$9.5	$12.0	
 
Gold production of 23,184 ounces for the quarter was in-line year-on-year. Total gold ounces sold were lower due to shipping delays due to a Turkish religious holiday. Cash operating costs of $525 per ounce were higher year-on-year due to lower mined grade. Capital expenditures included underground development, mine equipment overhauls, and process and waste rock/tailings facilities construction projects.
 
Stratoni
 
Operating Data	3 months ended June 30,	6 months ended June 30,	
 	2017	2016	2017	2016	
Tonnes ore processed (dry)	41,848	51,770	86,475	82,470	
Pb grade	6.1%	6.40%	5.8%	6.40%	
Zn grade	9.4%	9.68%	10.0%	9.43%	
Tonnes of concentrate produced	10,157	13,257	21,756	20,740	
Tonnes of concentrate sold	8,351	10,252	23,186	14,860	
Average realized concentrate price ($/tonne)	1,146 1	755 1	1,179 1	755 1	
Cash Costs ($/tonne of concentrate sold)	1,012	843	884	858	
Financial Data	 	 	 	 	
Concentrate revenues	$9.6	$7.7	$27.3	$11.2	
Depreciation and depletion	$0.0	$0.0	$0.0	$0.0	
Gross profit (loss) from mining operations	$0.9	 ($1.0)	$6.0	 ($1.7)	
Sustaining capital expenditures	$0.3	$0.9	$0.3	$2.0	
 
1 Average realized price includes mark to market adjustments.

 	 	6 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	

Concentrate production for the quarter was lower year-on-year due to a reduction in ore tonnes processed and slightly lower mined grades. The expected reduced grade and tonnage performance reflects the continuing depletion of the current mineable ore reserves remaining at the Mavres Petres mine.
 
Vila Nova
The Vila Nova mine and plant remained on care and maintenance during the quarter. During the quarter a total of 44,824 tonnes were sold from iron ore stockpiles.

Development Projects
 
Olympias
Olympias Phase II was substantially completed during the quarter. Wet commissioning of the plant began in early May. The plant operated under commissioning control through the remainder of the month and under operations control for trial production in June. Gold production of 2,052 ounces for the quarter is considered pre-commercial. Commissioning is progressing well with lead/silver, zinc and gold concentrates being moved into market, however a bottleneck in the tailings filtration stage is limiting capacity to approximately 60% of design throughput. An engineering solution is being advanced and is expected to be implemented during the third quarter. Commercial production is now expected by the end of the year.
 
Capital spending for the quarter at Olympias was $27.1 million, with the majority deployed for continued underground development and rehabilitation in the Olympias underground, construction of the Phase II plant, and construction works in the Kokkinolakkas tailings management facility.
 
Due to this slower than expected start-up, 2017 guidance at Olympias has been reduced to 20,000 to 30,000 ounces from 40,000 to 50,000 ounces.
 
Skouries
Work continued in the quarter with the onset of better weather conditions. Building erection work commenced with key covered storage in place by quarter end. Tree clearing in the tailings dam area began along with continued construction of the access road through the base of the dam, as well as enabling works that are key for the start of the tailings embankment construction. Earthworks also continued on the tailings thickener foundations and the stockpile dome embankments, with both close to final grade by quarter end.  
 
Total capital expenditure for the quarter was $18.6 million. Capital expenditure continues to lag behind plans and it is now estimated that $80-90 million will be spent in 2017 compared to the original guidance of $170–$200 million. Delays in capital expenditure are attributable to the slower start to the year in combination with ongoing delays in the granting required permits by the Greek government to enable required ramp-up in construction activities. Production is now targeted for 2020.
 
Tocantinzinho
The installation licence for the site was issued by the Para State Government during the quarter, however the road and power line licence applications are still under review. Basic engineering is largely complete for the process plant and detailed infrastructure engineering was completed during the quarter. Work continued on the detailed design required for tailings and solution pond permit applications and all permit approvals are expected during the first quarter of 2018. A total of $2.5 million was spent during the quarter. 

 	 	7 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	

Certej
Engineering and design work continued in order to support the permitting of the oxidative process, tailings and waste management facilities.  Optimization studies were completed on the metallurgical process. Tailings and waste management studies continued with a selection of an optimum tailings pond and waste dump location from a short list of suitable locations.
 
Permitting level designs will be completed based on the selected option.  Engineering and permitting for offsite infrastructure continued with work progressing on the main power line, mine access road, water tanks and water supply pipeline. A total of $4.2 million was spent during the quarter.
 
Perama Hill
The project remains on care and maintenance pending receipt of the Environmental Impact Study permit.

Exploration
 
During the quarter the Company completed 21,650 metres of exploration drilling at the Company’s exploration projects and mines. Exploration expenditures for the quarter totalled $8.6 million.
 
Turkey
Exploration in Turkey included reconnaissance programs in the western part of the country, evaluating the potential for epithermal and porphyry systems associated with Tertiary volcanic centers. Drilling at the Efemcukuru mine targeted extensions to the Kokarpinar and Kestane Beleni veins.
 
Romania
Fieldwork in Romania during the quarter focused on drilling at the Bolcana and Sacaramb projects. Initial results confirm that strong mineralization in the Bolcana system continues to depth and extends further to the west than was previously recognized.
 
Serbia
Exploration during the quarter focused on the KMC project. Drilling is now testing extensions to high-grade zones at Copper Canyon and Gradina, as well as new targets on the property.
 
Greece
In Greece, exploration activities focused on the Stratoni corridor, and included drilling the down-dip portion of the Mavres Petres orebody and designed to convert existing inferred resources and identify new resources.

Non-IFRS Measures
 
Throughout this document we have provided measures prepared in accordance with IFRS, as well as some non-IFRS performance measures as additional information for investors who also use them to evaluate our performance. Since there is no standard method for calculating non-IFRS measures, they are not a reliable way to compare us against other companies. Non-IFRS measures should be used with other performance measures prepared in accordance with IFRS. We have defined our non-IFRS measures below and reconciled them with the IFRS measures we report.

 	 	8 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	

Cash Operating Cost, Total Cash Cost
The table below reconciles cash operating cost and total cash cost to operating costs. We calculate costs according to the Gold Institute Standard.

Reconciliation of cash operating costs to production costs for continuing operations	 	 	 	 	
 	 Q2 2017	Q2 2016	YTD 2017	YTD 2016	
Production costs (from consolidated income statement)	39.4	48.9	90.1	94.1	
Vila Nova and Stratoni production costs	9.4	8.7	23.2	12.9	
Production costs – excluding Vila Nova and Stratoni	30.0	40.2	66.9	81.2	
By-product credits and other adjustments	(1.3)  	(1.0)  	(2.3)   	(1.7)  	
Total cash cost	28.7  	39.2  	64.6   	79.5  	
Royalty expense and production taxes	(1.0)  	(1.2)  	(2.4)   	(2.6)  	
Cash operating cost	27.7  	38.0  	62.2   	76.9  	
Gold ounces sold	57,206  	77,623  	131,274   	152,606  	
Total cash cost per ounce sold	502  	505  	492   	521  	
Cash operating cost per ounce sold	484  	490  	474  	504  	

Reconciliation of cash operating costs to production costs (including discontinued operations for 2016)	 	 	 	 	
 	 Q2 2017	Q2 2016	YTD 2017	YTD 2016	
Production costs – excluding Vila Nova and Stratoni	30.0	40.2	66.9	81.2	
Production costs – discontinued operations	0.0	44.2	0.0	91.9	
Production costs – including discontinued operations	30.0	84.4	66.9	173.1	
By-product credits and other adjustments	(1.3)  	(1.1)   	(2.3)  	(1.9)   	
Total cash cost – including discontinued operations	28.7  	83.3   	64.6  	171.2   	
Royalty expense and production taxes	(1.0)  	(5.6)   	(2.4)  	(13.0)   	
Cash operating cost – including discontinued operations	27.7  	77.7   	62.2  	158.2   	
Gold ounces sold – including discontinued operations	57,206  	128,090   	131,274  	261,557   	
Total cash cost per ounce sold – including discontinued operations	502  	650   	492  	654   	
Cash operating cost per ounce sold – including discontinued operations	484  	607  	474  	605  	

All-in Sustaining Cash Cost
All-in sustaining costs are calculated by taking total cash costs and adding sustaining capital expenditures, corporate administrative expenses, exploration and evaluation costs, and reclamation cost accretion. Sustaining capital expenditures are defined as those expenditures which do not increase annual gold ounce production at a mine site, and exclude all expenditures at the Company’s projects. Certain other cash expenditures, including tax payments, dividends and financing costs are also not included. The Company believes that this measure represents the total costs of producing gold from current operations, and provides the Company and other stakeholders of the company with additional information of the Company’s operational performance and ability to generate cash flows. The Company reports this measure on a gold ounces sold basis.

 	 	9 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	

 
Calculation of all-in sustaining cash costs                           (including discontinued operations in 2016)	 	 	 	 	
 	Q2  2017	Q2 2016	YTD  2017	YTD 2016	
Total cash cost – including discontinued operations	28.7	83.3	64.6	171.2	
Sustaining capital spending at operating gold mines	10.5	16.7	19.4	32.9	
Exploration spending at operating gold mines	0.2	1.5	0.3	2.6	
General and administrative expenses (1)	9.0	18.0	24.1	30.8	
All-in sustaining cash costs – including discontinued operations	48.4	119.5	108.4	237.5	
Gold ounces sold – including discontinued operations	57,206	128,090	131,274	261,557	
All-in sustaining cash cost per ounce sold – including discontinued operations	846	933	826	908	
	(1)	Excludes G&A expenses related to business development activities and projects. Includes share based payments expense and defined benefit pension plan expense as well as asset retirement obligation accretion expense.	

Cash Flow from Operations before Changes in Non-cash Working Capital
We use cash flow from operations (or operating activities) before changes in non-cash working capital to supplement our consolidated financial statements, and calculate it by not including the period to period movement of non-cash working capital items, like accounts receivable, advances and deposits, inventory, accounts payable and accrued liabilities. We believe this provides an alternative indication of our cash flow from operations and may be meaningful to investors in evaluating our past performance or future prospects. It is not meant to be a substitute for cash flow from operations (or operating activities), which we calculate according to IFRS.
 
Adjusted Net Earnings
The Company has included non-IFRS performance measures, adjusted net earnings and adjusted net earnings per share , throughout this document. Adjusted net earnings excludes gains/losses and other costs incurred for acquisitions and disposals of mining interests, impairment charges, unrealized and non-cash realized gains/losses of financial instruments and foreign exchange impacts on deferred income tax. The Company also excludes net earnings and losses of certain associates that the Company does not view as part of the core mining operations. The Company excludes these items from net earnings to provide a measure which allows the Company and investors to evaluate the results of the underlying core operations of the Company and its ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

 

 	 	10 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	

The following table provides a reconciliation of adjusted net earnings to the consolidated financial statements for the years ended December 31:
 
Reconciliation of adjusted net earnings to consolidated net earnings (loss)
 	Q2 2017	Q2 2016	YTD 2017	YTD 2016	
Net (loss) earnings attributable to shareholders	11.2	(329.9)	15.0	(332.3)	
Loss on disposal of assets	0.0	0.0	0.2	0.2	
Loss on disposition of subsidiary	(0.2)	0.0	2.8	0.0	
Losses (gains) on available-for-sale securities	0.0	0.6	0.0	4.9	
Unrealized losses (gains) on foreign exchange translation of deferred income tax balances	(5.6)	1.5	(1.1)	(2.7)	
Deferred tax recovery from gain in Other Comprehensive Income	(0.5)	(3.1)	(2.6)	(3.1)	
Transaction costs	0.0	4.0	0.0	4.4	
Inventory write-down	0.0	0.0	0.0	0.0	
Write-down of assets	1.4	(0.4)	2.4	0.6	
Post-tax loss on re-measurement to fair value less costs to sell	0.0	339.0	0.0	339.0	
Total adjusted net earnings	6.3	11.7	16.7	11.0	
Weighted average shares outstanding	716,824	716,587	716,713	716,587	
Adjusted net earnings ($/share)	0.01	0.01	0.02	0.01	
 
Gross Profit from Gold Mining Operations
Gross profit from gold mining operations represents gross revenues from gold mining operations less production costs and depreciation, depletion and amortization related to those operations.
 
Quarterly Results
 
Millions (except per share amounts)
 	2017	2017	2016	2016	2016	2016	2015	2015	
 	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	
Total revenues	$82.7	$111.9	$140.6	$174.0	$171.5	$164.1	$199.3	$211.5	
Profit (loss) (1)	$11.2	$3.8	($32.5)	$20.7	($329.9)	($2.5)	($1,238.0 )	($96.1)	
Earnings (loss) per share (1)	 	 	 	 	 	 	 	 	
- basic	$0.02	$0.01	($0.05)	$0.03	($0.46)	($0.00)	($1.73)	($0.13)	
- diluted	$0.02	$0.01	($0.05)	$0.03	($0.46)	($0.00)	($1.73)	($0.13)	
 	 	 	 	 	 	 	 	 	 	
(1)  Attributable to shareholders of the Company
 
The second quarter of 2016 was affected by the re-measurement of the Company’s Chinese assets while the quarterly profit for the fourth quarter of 2015 was affected by impairments of goodwill and property, plant and equipment related to Skouries, Stratoni and Tanjianshan.
 
Financial Condition & Liquidity
 
Operating Activities
Net cash used by operating activities was $27.7 million (2016: cash provided $2.5 million, including discontinued operations). Operating activities before changes in non-cash working capital from continuing operations generated $16.9 million in cash in the second quarter of 2017 compared to $29.6 million in 2016.

 	 	11 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	
 	 	
Investing Activities
The Company invested $ 75.1 million in capital expenditures this quarter. Evaluation and development expenditures, including capitalized drilling programs, totalled $54.6 million while sustaining capital spending at our producing mines totalled $10.8 million. A total of $9.2 million in bond interest was also charged to capital projects. The remaining $0.5 million related to fixed assets for our corporate offices in Canada, Brazil, Turkey, Greece, and Romania.
 
Financing Activities
In line with terms and Conditions of the Company’s Dividend Policy, where no dividend is paid on a realized gold price under $1,250 for gold sold in the prior six months, the Company will suspend the cash payment of its semi-annual dividend effective the third quarter of 2017. The realized price by the Company on gold sold during the first half of 2017 was $1,240.

Capital Resources
 
 	June 30, 2017	December 31. 2016	
Cash, cash equivalents and term deposits	752.1	888.5	
Working capital	926.6	1,001.5	
Restricted collateralized accounts	0.3	0.2	
Debt – current and long-term	592.7	591.6	
 
Management believes that the working capital at June 30, 2017, together with future cash flows from operations and, where appropriate, selected financing sources, including available credit lines, are sufficient to support our planned and foreseeable commitments, and dividends, if declared, in 2017 and beyond.
 
Contractual Obligations
 
As at June 30, 2017

 	 	Within 1 year	 	2 to 3 years	 	4 to 5 years	 	Over 5 years	 	 	Total	
Debt	 	-	 	-	 	600.0	 	-	 	 	600.0	
Capital leases	 	0.4	 	0.2	 	-	 	-	 	 	0.6	
Operating leases	 	7.4	 	20.1	 	59.5	 	4.0	 	 	91.0	
Purchase obligations	 	48.9	 	1.2	 	0.1	 	-	 	 	50.2	
Totals	 	56.7	 	21.5	 	659.6	 	4.0	 	 	741.8	
 
Purchase obligations relate primarily to mine development expenditures in Greece and mine operating costs in Turkey. The table does not include interest on debt.
 
As at June 30, 2017, Hellas Gold had entered into off-take agreements pursuant to which Hellas Gold agreed to sell a total of 45,800 dry metric tonnes of zinc concentrates, 11,200 dry metric tonnes of lead/silver concentrates, and 95,000 dry metric tonnes of gold concentrate, including the 18,000 dmt that remained to be delivered in 2016 that have been deferred to 2017, through the financial year ending December 31, 2017.

 	 	12 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	

In April 2007, Hellas Gold agreed to sell to Silver Wheaton (Caymans) Ltd. (“Silver Wheaton”) all of the payable silver contained in lead concentrate produced within an area of approximately seven square kilometres around Stratoni. The sale was made in consideration of a prepayment to Hellas Gold of $57.5 million in cash, plus a fixed price per ounce of payable silver to be delivered of the lesser of $3.90 and the prevailing market price per ounce, adjusted higher every April by 1%.  For the period April 2017 through to March 2018, this amount is equal to $4.22 per ounce.
 
In May 2013, the Company, in connection with Hellas Gold, entered into a Letter of Guarantee in favor of the Greek Ministry of Environment, Energy and Climate Change, in the amount of EUR 50.0 million, as security for the due and proper performance of rehabilitation works committed in connection with the Environmental Impact Assessment approved for the Kassandra Mines (Stratoni, Olympias and Skouries). The Letter of Guarantee is renewed annually and expires on July 26, 2026. The Letter of Guarantee has an annual fee of 57 basis points.
 
In June 2017, the Company, in connection with Hellas Gold, entered into a Letter of Guarantee in favor of the Greek Ministry of Environment and Energy, in the amount of EUR 7.5 million, as security for the due and proper performance of the Kokinolakas Tailings Management Facility, committed in connection with the Environmental Impact Assessment approved for the Kassandra Mines (Stratoni, Olympias and Skouries). The Letter of Guarantee is renewed annually and expires on July 26, 2026. The Letter of Guarantee has an annual fee of 45 basis points.
 
As at June 30, 2017, Tuprag Metal Madencilik Sanayi Ve Ticaret A.S. (“Tuprag”) had entered into off-take agreements pursuant to which Tuprag agreed to sell a total of 24,000 dry metric tonnes of gold concentrate through the financial year ending December 31, 2017.

Debt
 
Senior Notes
On December 10, 2012, the Company completed an offering of $600.0 million senior notes (“the notes”) at par value, with a coupon rate of 6.125% due December 15, 2020. The notes pay interest semi-annually on June 15 and December 15. Net deferred financing costs of $7.3 million have been included as an offset in the balance of the notes in the financial statements and are being amortized over the term of the notes.
The fair market value of the notes as at June 30, 2017 is $614.8 million.
Equity
 
Common shares outstanding
- as of June 30, 2017
- as of July 27, 2017	 
716,829,782
794,010,680	
Share purchase options
- as of July 27, 2017
(Weighted average exercise price per share: $6.07 Cdn)	30,129,367  	

  

 	 	13 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	

Other Information
 
New Accounting Developments
The following standard has been published and is mandatory for Eldorado's annual accounting periods no earlier than January 1, 2018:

	·	IFRS 2 ‘Share-Based Payments’ – In June 2016, the IASB issued final amendments to this standard. IFRS 2 clarifies the classification and measurement of share-based payment transactions. These amendments deal with variations in the final settlement arrangements including: (a) accounting for cash-settled share-based payment transactions that include a performance condition, (b) classification of share-based payment transactions with net settlement features, and (c) accounting for modifications of share-based payment transactions from cash-settled to equity. IFRS 2 is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted. The Company is currently evaluating the extent of the impact of the adoption of this standard. A detailed review will be completed during the second half of 2017. The Company does not currently expect the impact of these changes to be material.	
 
	·	IFRS 9 ‘Financial Instruments’ – This standard was published in July 2014 and replaces the existing guidance in IAS 39, ‘Financial Instruments: Recognition and Measurement’. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted. The Company expects the classification of its financial assets and liabilities to remain consistent under the new standard, with the possible exception of equity securities. Under the new standard, equity investments that move through other comprehensive income can be recorded directly into its profit and loss results or continue recording against other comprehensive income with no profit and loss effect on sale. If the Company does not make an election, changes in fair value of the equity securities will be recognized in profit and loss results. The company does not expect to apply hedge accounting to hedge components of its non-financial items. A detailed review will be completed during the second half of 2017.	
 
	·	IFRS 15 ‘Revenue from Contracts with Customers’ – This standard contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized. This standard is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted. The Company is currently evaluating the extent of the impact of the adoption of this standard, primarily analyzing its doré and concentrate sale agreements. The new standard is not expected to significantly affect the gross amount of revenue recognized by the Company but the timing of recognition might differ. This will be closely tied to the timing of transfer of control to customers. A detailed review of contracts is underway and it is expected to be completed during the second half of 2017.	
 
	·	IFRS 16 ‘Leases’ – This standard was published in January 2016 and replaces the existing guidance in IAS 17, ‘Leases’ . IFRS 16 introduces a single accounting model for lessees and for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee will be required to recognize a right-of-use asset, representing its right to use the underlying asset, and a lease liability, representing its obligation to make lease payments. The accounting treatment for lessors will remain largely the same as under IAS 17. IFRS 16 is effective for annual reporting periods beginning on or after January 1, 2019, with early adoption permitted.	

 	 	14 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	

The Company is currently evaluating all operating leases as it is expected that, under this standard, the present value of most lease commitments will be shown as a liability on the balance sheet together with an asset representing the right of use, including those classified as operating leases under the existing standard. This implies higher amount of depreciation expense and interest on lease liabilities that will be recorded in the Company’s profit and loss results. Additionally, a corresponding reduction in general and administrative costs and/or production costs is expected.
 
Internal Controls over Financial Reporting
Eldorado’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Any system of internal control over financial reporting, no matter how well designed, has inherent limitations. As a result, even those systems determined to be effective can only provide reasonable assurance regarding the preparation and presentation of our financial statements. There have been no changes in our internal control over financial reporting in the second quarter of 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
Qualified Person
Except as otherwise noted, Paul Skayman, P. Eng., our Chief Operating Officer, is the Qualified Person under NI 43-101 responsible for preparing and supervising the preparation of the scientific or technical information contained in this MD&A and verifying the technical data disclosed in this document relating to our operating mines and development projects.
 
Forward-Looking Information and Risks
This MD&A includes statements and information about what we expect to happen in the future. When we discuss our strategy, plans, outlook, and future financial and operating performance, the price of gold and other commodities, our cash costs targets, production and expenditures, our mineral reserve and resource estimates, our proposed exploration, development and acquisitions; our expectations as to future performance at our mines, or other things that have not yet happened in this review, we are making statements considered to be forward-looking information or forward-looking statements under Canadian and United States securities laws. We refer to them in this document as forward-looking information .
Key things to understand about the forward-looking information in this document:

	•	It typically includes words and phrases about the future, such as: plan, expect, forecast, intend, anticipate, believe, estimate, budget, continue, projected, scheduled, may, could, would, might, will , as well as the negative of these words and phrases.	
	•	Although it represents our current views, which we consider to be reasonable, we can give no assurance that the forward-looking information will prove to be accurate.	
	•	It is based on a number of assumptions, estimates and opinions including things like the future price of gold and other commodities, the political, economic, permitting and legal environment in which we operate, currency exchange rates, anticipated costs and spending, production, mineral reserve and resource estimates and metallurgical recoveries, impact and integration of acquisitions, dispositions, suspensions or delays on our business and our ability to achieve our goals.	
	•	It is also subject to the risks associated with our business, including	
	•	volatility of global and local economic climate and geopolitical risk	
	•	title, permitting and licensing risks,	
	•	gold and other metal price and currency volatility and the impact of any hedging activities,	
	•	risks associated with mining operations and development,	
	•	risks of operating in foreign countries,	
	•	regulatory risks,	
	•	actual and estimated production and cost of production,	
	•	discrepancies between actual and estimated mineral reserves and resources,	

	•	the speculative nature of gold exploration,	
	•	acquisition risks, and	
	•	other risks that are set out in our Annual Information Form.	

 	 	15 	

 	 	 	

(in United States dollars, tabular amounts in millions, except where noted)	
 	 	
MANAGEMENT’S DISCUSSION and ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the three and six month periods ended June 30, 2017	  	
 	 	
If our assumptions prove to be incorrect or the risks materialize, our actual results and events may vary materially from what we currently expect.
Forward-looking information is designed to help you understand management’s current views of our near and longer term prospects, and it may not be appropriate for other purposes. We will not necessarily update this information unless we are required to by securities laws.
The Company’s operations are subject to a number of risks and other uncertainties, including risks related to the Company’s foreign operations, government, environmental and other regulations and operating costs. Occurrence of various factors and uncertainties of risk cannot be accurately predicted and could cause actual results to differ significantly from our current expectations and result in a material adverse effect on the Company’s operations or profitability. A comprehensive discussion of the Company’s risks and uncertainties is set out in our Annual Information Form dated March 30, 2017. By this reference we hereby incorporate this discussion as a part of this MD&A. The reader is directed to carefully review this discussion for a proper understanding of these risks and uncertainties.

 

 	 	16 	

 	 	 	

 
Form 52-109F2
Certification of Interim Filings
Full Certificate
 
I, George Burns, President and Chief Executive Officer of Eldorado Gold Corporation certify the following:

	1.	I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Eldorado Gold Corporation (the “issuer”) for the interim period ended June 30, 2017.	
 
	2.	Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.	
 
	3.	Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.	
 
	4.	The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.	
 
	5.	Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings	
 
	(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that	
 
	(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and	
 
	(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and	
 
	(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.	
 
	5.1	The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Committee of Sponsoring Organizations of the Treadway Commission (2013) (COSO) framework.	
 
	5.2	N/A	

 	 	 	

 	 	 	
 
	5.3	N/A	
 
	6.	The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2017 and ended on June 30, 2017 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.	
 
Date: July 28, 2017

“George Burns”
______________________________
George Burns
President & Chief Executive Officer

 	 	 	

 	 	 	

 
Form 52-109F2
Certification of Interim Filings
Full Certificate
 
I, Fabiana Chubbs, Chief Financial Officer of Eldorado Gold Corporation certify the following:

	1.	I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Eldorado Gold Corporation (the “issuer”) for the interim period ended June 30, 2017.	
 
	2.	Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.	
 
	3.	Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.	
 
	4.	The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.	
 
	5.	Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings	
 
	(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that	
 
	(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and	
 
	(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and	
 
	(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.	
 
	5.1	The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is the Committee of Sponsoring Organizations of the Treadway Commission (2013) (COSO) framework.	
 
	5.2	N/A	

 

 	 	 	

	5.3	N/A	
 
	6.	The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2017 and ended on June 30, 2017 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.	
 
Date: July 28, 2017

“Fabiana Chubbs”
_______________________________
Fabiana Chubbs
Chief Financial Officer