ELDORADO GOLD CORP /FI, 40-F filed on 3/31/2021
Annual Report (foreign private issuer)
v3.21.1
Document and Entity Information
12 Months Ended
Dec. 31, 2020
shares
Document - Document and Entity Information [Abstract]  
Document Type 40-F
Amendment Flag false
Document Period End Date Dec. 31, 2020
Document Fiscal Year Focus 2020
Document Fiscal Period Focus FY
Trading Symbol EGO
Entity Registrant Name ELDORADO GOLD CORP /FI
Entity Central Index Key 0000918608
Current Fiscal Year End Date --12-31
Entity Current Reporting Status Yes
Entity Common Stock, Shares Outstanding 174,931,381
Entity Emerging Growth Company false
v3.21.1
Consolidated Statements of Financial Position - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Current assets    
Cash and cash equivalents $ 451,962 $ 177,742
Term deposits 59,034 3,275
Accounts receivable and other 73,216 79,138
Inventories 176,271 163,234
Current portion of employee benefit plan assets 5,749 0
Assets held for sale 0 12,471
Current assets 766,232 435,860
Restricted cash 2,097 3,080
Other assets 39,562 22,943
Employee benefit plan assets 0 6,244
Property, plant and equipment 3,998,493 4,088,202
Goodwill 92,591 92,591
Total assets 4,898,975 4,648,920
Current liabilities    
Accounts payable and accrued liabilities 179,372 139,104
Current portion of lease liabilities 11,297 9,913
Current portion of debt 66,667 66,667
Current portion of asset retirement obligations 4,701 1,782
Liabilities associated with assets held for sale 0 4,257
Current liabilities 262,037 221,723
Debt 434,465 413,065
Lease liabilities 14,659 15,143
Employee benefit plan obligations 21,974 18,224
Asset retirement obligations 106,677 94,235
Deferred income tax liabilities 402,713 412,717
Total liabilities 1,242,525 1,175,107
Equity    
Share capital 3,144,644 3,054,563
Treasury stock (11,452) (8,662)
Contributed surplus 2,638,008 2,627,441
Accumulated other comprehensive loss (30,297) (28,966)
Deficit (2,125,326) (2,229,867)
Total equity attributable to shareholders of the Company 3,615,577 3,414,509
Attributable to non-controlling interests 40,873 59,304
Total equity 3,656,450 3,473,813
Total liabilities and equity $ 4,898,975 $ 4,648,920
v3.21.1
Consolidated Statements of Operations - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Revenue    
Metal sales $ 1,026,685 $ 617,823
Cost of sales    
Production costs 445,183 334,839
Depreciation and amortization 246,651 153,118
Cost of sales 691,834 487,957
Earnings (loss) from mine operations 334,851 129,866
Exploration and evaluation expenses 12,693 14,643
Mine standby costs 15,675 17,334
General and administrative expenses 28,561 29,180
Employee benefit plan expense 2,849 2,717
Share-based payments expense 10,692 10,396
Reversal of impairment 0 (96,914)
Write-down of assets 38,660 6,298
Foreign exchange gain (2,994) (625)
Earnings from operations 228,715 146,837
Other (expense) income (1,277) 11,885
Finance costs (50,943) (45,266)
Earnings before income tax 176,495 113,456
Income tax expense 79,134 39,771
Net earnings for the year 97,361 73,685
Attributable to:    
Shareholders of the Company 104,541 80,586
Non-controlling interests (7,180) (6,901)
Net earnings for the year $ 97,361 $ 73,685
Weighted average number of shares outstanding (thousands)    
Basic (in shares) 171,047,400 158,855,924
Diluted (in shares) 175,230,880 161,538,636
Net earnings per share attributable to shareholders of the Company:    
Basic earnings per share (in dollars per share) $ 0.61 $ 0.51
Diluted earnings per share (in dollars per share) $ 0.60 $ 0.50
v3.21.1
Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Statement of comprehensive income [abstract]    
Net earnings for the year $ 97,361 $ 73,685
Other comprehensive income (loss):    
Change in fair value of investments in equity securities, net of tax 1,546 1,256
Actuarial losses on employee benefit plans (3,440) (6,361)
Income tax recovery on actuarial losses on employee benefit plans 563 633
Other comprehensive income that will not be reclassified to profit or loss, before tax (1,331) (4,472)
Total comprehensive income for the year 96,030 69,213
Attributable to:    
Shareholders of the Company 103,210 76,114
Non-controlling interests (7,180) (6,901)
Total comprehensive income for the year $ 96,030 $ 69,213
v3.21.1
Consolidated Statements of Cash Flows
$ in Thousands
12 Months Ended
Dec. 31, 2020
USD ($)
Dec. 31, 2019
USD ($)
Operating activities    
Net earnings for the year $ 97,361 $ 73,685
Items not affecting cash:    
Depreciation and amortization 248,790 155,331
Finance costs 50,943 45,266
Interest income (2,056) (2,760)
Unrealized foreign exchange gain (2,999) (790)
Income from royalty sale 0 (8,075)
Income tax expense 79,134 39,771
Net loss (gain) on disposal of assets 2,587 (656)
Reversal of impairment 0 (96,914)
Write-down of assets 38,660 6,298
Share based payments expense 10,692 10,396
Employment benefit plan expense 2,849 2,717
Total adjustments to reconcile profit (loss) 525,961 224,269
Property reclamation payments (2,301) (2,807)
Employee benefit plan payments (2,633) (2,587)
Income taxes paid (87,872) (36,242)
Interest paid (44,373) (35,479)
Interest received 2,056 2,760
Changes in non-cash operating working capital 34,769 15,912
Cash flows used in operating activities 425,607 165,826
Investing activities    
Purchase of property, plant and equipment (190,908) (214,505)
Capitalized interest paid 0 (3,848)
Proceeds from the sale of property, plant and equipment 1,790 6,605
Proceeds on pre-commercial production sales, net 0 12,159
Purchase of investment in associate 0 (3,107)
Proceeds from sale of mining interest 9,896 1,397
Value added taxes related to mineral property expenditures, net (15,468) (1,590)
Proceeds from the sale of marketable securities 5,237 0
Decrease (increase) in term deposits (55,759) 3,371
Decrease in restricted cash 983 10,644
Net cash used in investing activities (244,229) (188,874)
Financing activities    
Issuance of common shares for cash, net of issuance costs 95,992 40,066
Acquisition of non-controlling interest, without change in control (7,500) 0
Contributions from non-controlling interests 421 2,791
Proceeds from borrowings 150,000 494,000
Repayment of borrowings (132,714) (600,000)
Loan financing costs 0 (15,583)
Principal portion of lease liabilities (9,807) (6,729)
Purchase of treasury stock (3,550) 0
Net cash generated from (used in) financing activities 92,842 (85,455)
Net increase (decrease) in cash and cash equivalents 274,220 (108,503)
Cash and cash equivalents - beginning of year 177,742 286,312
Cash in disposal group held for sale 0 (67)
Cash and cash equivalents - end of year $ 451,962 $ 177,742
v3.21.1
Consolidated Statements of Changes in Equity - USD ($)
$ in Thousands
Total
Share capital
Treasury stock
Contributed surplus
Accumulated other comprehensive loss
Deficit
Total equity attributable to shareholders of the Company
Non-controlling interests
Balance beginning of year at Dec. 31, 2018   $ 3,007,924 $ (10,104) $ 2,620,799 $ (24,494) $ (2,310,453)   $ 63,414
Shares issued upon exercise of share options, for cash   265            
Transfer of contributed surplus on exercise of options   103            
Shares issued to the public, net of share issuance costs   46,271            
Purchase of treasury stock     0          
Shares redeemed upon exercise of restricted share units     1,442 (1,442)        
Share based payment arrangements       8,187        
Acquisition of non-controlling interest, without change in control       0       0
Transfer to share capital on exercise of options       (103)        
Other comprehensive loss for the year attributable to shareholders of the Company         (4,472)      
Earnings attributable to shareholders of the Company $ 80,586         80,586    
Loss attributable to non-controlling interests (6,901)             (6,901)
Contributions from non-controlling interests               2,791
Balance end of year at Dec. 31, 2019 3,473,813 3,054,563 (8,662) 2,627,441 (28,966) (2,229,867) $ 3,414,509 59,304
Shares issued upon exercise of share options, for cash   3,559            
Transfer of contributed surplus on exercise of options   1,267            
Shares issued to the public, net of share issuance costs   85,255            
Purchase of treasury stock     (3,550)          
Shares redeemed upon exercise of restricted share units     760 (760)        
Share based payment arrangements       8,422        
Acquisition of non-controlling interest, without change in control       4,172       (11,672)
Transfer to share capital on exercise of options       (1,267)        
Other comprehensive loss for the year attributable to shareholders of the Company         (1,331)      
Earnings attributable to shareholders of the Company 104,541         104,541    
Loss attributable to non-controlling interests (7,180)             (7,180)
Contributions from non-controlling interests               421
Balance end of year at Dec. 31, 2020 $ 3,656,450 $ 3,144,644 $ (11,452) $ 2,638,008 $ (30,297) $ (2,125,326) $ 3,615,577 $ 40,873
v3.21.1
General Information
12 Months Ended
Dec. 31, 2020
Text block1 [abstract]  
General Information
1. General Information
Eldorado Gold Corporation (individually or collectively with its subsidiaries, as applicable, “Eldorado” or the “Company”) is a gold and base metals mining, development, and exploration company. The Company has mining operations, ongoing development projects and exploration in Turkey, Canada, Greece, Romania and Brazil.
Eldorado is a public company listed on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange (“NYSE”) and is incorporated in the province of British Columbia, Canada.
The Company's head office, principal address and records are located at 550 Burrard Street, Suite 1188, Vancouver, British Columbia, Canada, V6C 2B5.
v3.21.1
Basis of preparation
12 Months Ended
Dec. 31, 2020
Text block1 [abstract]  
Basis of preparation
2. Basis of preparation
These consolidated financial statements, including comparatives, have been prepared in compliance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The significant accounting policies applied in these consolidated financial statements are presented in Note 3 and, except as described in Note 5, have been applied consistently to all years presented, unless otherwise noted.
The consolidated financial statements have been prepared on a historical cost basis except for certain financial assets and liabilities which are measured at fair value.
The preparation of the consolidated financial statements in compliance with IFRS requires management to make certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.
The consolidated financial statements were approved by the Company's Board of Directors on February 25, 2021.
v3.21.1
Significant accounting policies
12 Months Ended
Dec. 31, 2020
Disclosure of Significant Accounting Policies [Abstract]  
Significant accounting policies
3. Significant accounting policies
3.1 Basis of presentation and principles of consolidation
(i)Subsidiaries and business combinations
Subsidiaries are those entities controlled by Eldorado. Control exists when Eldorado is exposed to, or has rights, to variable returns from the subsidiary and has the ability to affect those returns through its power over the subsidiary. Power is defined as existing rights that give the Company the ability to direct the relevant activities of the subsidiary. In assessing control, potential voting rights that currently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. All intercompany transactions, balances, income and expenses are eliminated in full upon consolidation.
The acquisition method of accounting is used to account for business acquisitions. The cost of an acquisition is measured at the fair value of the assets acquired, equity instruments issued and liabilities incurred or assumed at the date of exchange.
3. Significant accounting policies (continued)
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest.
The excess of the cost of acquisition over the fair value of Eldorado’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets acquired, the difference, or gain, is recognized directly in the consolidated statement of operations.
Transaction costs, other than those associated with the issue of debt or equity securities, which the Company incurs in connection with a business combination, are expensed as incurred.
The material subsidiaries of the Company as at December 31, 2020 are described below:
SubsidiaryLocationOwnership
interest
Operations and
development projects
owned
Tüprag Metal Madencilik Sanayi ve Ticaret AS ("Tüprag")
Turkey100%
Kişladağ Mine
Efemçukuru Mine
Hellas Gold SA ("Hellas") (1)
Greece100%
Olympias Mine Stratoni Mine
Skouries Project
Eldorado Gold (Québec) Inc. (formerly Integra Gold Corporation)Canada100%Lamaque Mine
Thracean Gold Mining SAGreece100%Perama Hill Project
Thrace Minerals SAGreece100%Sapes Project
Brazauro Recursos Minerais SA ("Brazauro")
Brazil100%Tocantinzinho Project
Deva Gold SA ("Deva")Romania80.5%Certej Project
(1) On May 11, 2020, the Company acquired the remaining 5% non-controlling interest in Hellas Gold SA (Note 10).

(ii)Discontinued operations
A discontinued operation is a component of the Company’s business that represents a separate major line of business or geographical area of operations that has been disposed of, has been abandoned or meets the criteria to be classified as held for sale.
Discontinued operations are presented in the consolidated statement of operations as a separate line.
(iii) Assets held for sale
Assets and businesses classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Impairment losses on initial classification as held for sale and gains or losses on subsequent remeasurements are included in the consolidated statement of operations. No depreciation is charged on assets and businesses classified as held for sale.
Assets and businesses are classified as held for sale if their carrying amount will be recovered or settled principally through a sale transaction rather than through continuing use. The asset or business must be available for immediate sale and the sale must be highly probable within one year.
3. Significant accounting policies (continued)
(iv)  Investments in associates
Associates are those entities where Eldorado has the ability to exercise significant influence, but not control, over the financial and operating policies of those entities. Significant influence is presumed to exist when the Company holds between 20 and 50 percent of the voting power of another entity.
Associates are accounted for using the equity method (equity accounted investees) and are recognized initially at cost. The consolidated financial statements include Eldorado’s share of the income and expenses and equity movements of equity accounted investees, after adjustments to align the accounting policies with those of Eldorado, from the date that significant influence commences until the date that significant influence ceases.
When the Company’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Company has an obligation to make, or has made, payments on behalf of the investee.
At each statement of financial position date, each investment in associates is assessed for indicators of impairment.
(v)  Transactions with non-controlling interests
For purchases from non-controlling interests, the difference between any consideration paid and the relevant share of the carrying value of net assets of the subsidiary acquired is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
Eldorado treats transactions in the ordinary course of business with non-controlling interests as transactions with third parties.
(vi) Transactions eliminated on consolidation
Intra-company and intercompany balances and transactions, and any unrealized income and expenses arising from all such transactions, are eliminated in preparing the consolidated financial statements.
3.2 Foreign currency translation
(i)    Functional and presentation currency
Items included in the financial statements of each of Eldorado’s subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in U.S. dollars, which is the Company’s functional and presentation currency, as well as the functional currency of all significant subsidiaries.
(ii)    Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at that date. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognized in the consolidated statement of operations.
3.3 Property, plant and equipment
(i)    Cost and valuation
Property, plant and equipment are carried at cost less accumulated depreciation and any impairment in value. When an asset is disposed of, it is derecognized and the difference between its carrying value and net sales proceeds is recognized as a gain or loss in the consolidated statement of operations.
3. Significant accounting policies (continued)
(ii)    Property, plant and equipment
Property, plant and equipment includes expenditures incurred on properties under development, significant payments related to the acquisition of land, mineral rights and property, plant and equipment which are recorded at cost on initial acquisition. Cost includes the purchase price and the directly attributable costs of acquisition or construction required to bring an asset to the location and condition necessary for the asset to be capable of operating in the manner intended by management, including capitalized borrowing costs for qualifying assets.
(iii)    Deferred stripping costs
Stripping costs incurred during the production phase of a mine are considered production costs and included in the cost of inventory produced during the period in which the stripping costs are incurred, unless the stripping activity can be shown to provide access to additional mineral reserves, in which case the stripping costs are capitalized. Stripping costs incurred to prepare the ore body for extraction are capitalized as mine development costs (pre-stripping).
(iv)    Depreciation
Mine development costs, property, plant and equipment and other mining assets whose estimated useful life is the same as the remaining life of the mine are depreciated, depleted and amortized over a mine’s estimated life using the units-of-production method calculated based on proven and probable reserves.
Capitalized development costs related to a multi-pit operation are amortized on a pit-by-pit basis over the pit’s estimated life using the units-of-production method calculated based on proven and probable reserves related to each pit.
Capitalized stripping costs are amortized on a unit-of-production basis over the proven and probable reserves to which they relate.
Property, plant and equipment and other assets whose estimated useful lives are less than the remaining life of the mine are depreciated on a straight-line basis over the estimated useful lives of the assets.
Where components of an asset have a different useful life and the cost of the component is significant to the total cost of the asset, depreciation is calculated on each separate component.
Depreciation methods, useful lives and residual values are reviewed at the end of each year and adjusted if appropriate.
(v)    Subsequent costs
Expenditure on major maintenance or repairs includes the cost of replacement parts of assets and overhaul costs. Where an asset or part of an asset is replaced and it is probable that further future economic benefit will flow to the Company, the expenditure is capitalized and the carrying value of the replaced asset or part of an asset is derecognized. Similarly, overhaul costs associated with major maintenance are capitalized when it is probable that future economic benefit will flow to the Company and any remaining costs of previous overhauls relating to the same asset are derecognized. All other expenditures are expensed as incurred.
(vi)    Borrowing costs
Borrowing costs are expensed as incurred except where they are attributable to the financing of construction or development of qualifying assets requiring a substantial period of time to prepare for their intended future use. Interest is capitalized up to the date when substantially all the activities necessary to prepare the asset for its intended use are complete. Interest is ceased to be capitalized during periods of prolonged suspension of construction or development. Borrowing costs are classified as cash outflows from operating activities on the statement of cash flows except for borrowing costs capitalized which are classified as investing activities.
Investment income arising on the temporary investment of proceeds from borrowings specific to qualifying assets is offset against borrowing costs being capitalized.
3. Significant accounting policies (continued)
(vii)    Mine standby costs and restructuring costs
Mine standby costs and costs related to restructuring a mining operation are charged directly to expense in the period incurred. Mine standby costs include labour, maintenance and mine support costs incurred during temporary shutdowns of a mine or a development project.
3.4 Leases
A contract is or contains a lease when the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration.
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses, and is adjusted for certain remeasurements of the lease liability. The cost of the right-of-use asset includes the amount of the initial measurement of the lease liability, any lease payments made at or before the commencement date, less any lease incentives received, any initial direct costs; and if applicable, an estimate of costs to be incurred by the Company in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease. Right-of-use assets are presented in property, plant and equipment on the statement of financial position.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. The incremental borrowing rate reflects the rate of interest that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. The Company applies judgement to determine the lease term for some lease contracts which contain renewal options.
The Company does not recognize right-of-use assets and lease liabilities for leases of low-value assets, leases with lease terms that are less than 12 months at inception and arrangements for the use of land that grant the Company the right to explore, develop, produce or otherwise use the mineral resource contained in that land. Lease payments associated with these arrangements are instead recognized as an expense over the term on either a straight-line basis, or another systematic basis if more representative of the pattern of benefit. The Company applies judgement in determining whether an arrangement grants the Company the right to explore, develop, produce or otherwise use the mineral resource contained in that land.
3.5 Exploration, evaluation and development expenditures
(i)    Exploration
Exploration expenditures reflect the costs related to the initial search for mineral deposits with economic potential or obtaining more information about existing mineral deposits. Exploration expenditures typically include costs associated with the acquisition of mineral licences, prospecting, sampling, mapping, diamond drilling and other work involved in searching for mineral deposits. All expenditures relating to exploration activities are expensed as incurred except for the costs associated with the acquisition of mineral licences which are capitalized in property, plant and equipment.
3. Significant accounting policies (continued)
(ii)    Evaluation
Evaluation expenditures reflect costs incurred at projects related to establishing the technical and commercial viability of mineral deposits identified through exploration or acquired through a business combination or asset acquisition.
Evaluation expenditures include the cost of:
establishing the volume and grade of deposits through drilling of core samples, trenching and sampling activities for an ore body that is classified as either a mineral resource or a proven and probable reserve;
determining the optimal methods of extraction and metallurgical and treatment processes;
studies related to surveying, transportation and infrastructure requirements;
permitting activities; and
economic evaluations to determine whether development of the mineralized material is commercially viable, including scoping, pre-feasibility and final feasibility studies.
Evaluation expenditures are capitalized if management determines that there is evidence to support probability of generating positive economic returns in the future. A mineral resource is considered to have economic potential when it is expected that the technical feasibility and commercial viability of extraction of the mineral resource can be demonstrated considering long-term metal prices. Therefore, prior to capitalizing such costs, management determines that the following conditions have been met:
There is a probable future benefit that will contribute to future cash inflows;
The Company can obtain the benefit and control access to it; and
The transaction or event giving rise to the benefit has already occurred.
The evaluation phase is complete once technical feasibility of the extraction of the mineral deposit has been determined through preparation of a reserve and resource statement, including a mining plan as well as receipt of required permits and approval of the Board of Directors to proceed with development of the mine. On such date, capitalized evaluation costs are assessed for impairment and reclassified to development costs.
(iii)    Development
Development expenditures are those that are incurred during the phase of preparing a mineral deposit for extraction and processing. These include pre-stripping costs and underground development costs to gain access to the ore that is suitable for sustaining commercial mining, preparing land, construction of plant, equipment and buildings and costs of commissioning the mine and processing facilities. It also includes proceeds received from pre-commercial production.
Expenditures incurred on development projects continue to be capitalized until the mine and mill move into the production stage. The Company assesses each mine construction project to determine when a mine moves into the production stage. The criteria used to assess the start date are determined based on the nature of each mine construction project, such as the complexity of a plant or its location. Various relevant criteria are considered to assess when the mine is substantially complete and ready for its intended use and moved into the production stage. The criteria considered include, but are not limited to, the following:
the level of capital expenditures compared to construction cost estimates;
the completion of a reasonable period of testing of mine plant and equipment;
the ability to produce minerals in saleable form (within specification); and
the ability to sustain ongoing production of minerals.
3. Significant accounting policies (continued)
If the factors that impact the technical feasibility and commercial viability of a project change and no longer support the probability of generating positive economic returns in the future, expenditures will no longer be capitalized and the capitalized development costs will be assessed for impairment.
3.6 Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Company’s share of the net assets of the acquired business at the date of acquisition. When the excess is negative (negative goodwill), it is recognized immediately in income. Goodwill on acquisition of subsidiaries and businesses is shown separately as goodwill in the consolidated financial statements. Goodwill on acquisition of associates is included in investments in significantly influenced companies and tested for impairment as part of the overall investment.
Goodwill is carried at cost less accumulated impairment losses and tested annually for impairment. The impairment testing is performed annually or more frequently if events or changes in circumstances indicate that it may be impaired. Impairment losses on goodwill are not reversed.
Goodwill is allocated to cash-generating units (“CGUs") for the purpose of impairment testing. The allocation is made to those CGUs or groups of CGUs that are expected to benefit from the business combination in which the goodwill arose. If the composition of one or more CGUs to which goodwill has been allocated changes due to a reorganization, the goodwill is reallocated to the units affected.
3.7 Impairment of non-financial assets
Non-financial assets which include property, plant and equipment are reviewed each reporting period for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If such indicators exist, the Company determines the recoverable amount, and if applicable, recognizes an impairment loss.
An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost of disposal ("FVLCD") and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows or CGUs.
Value in use is determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset in its present form and its eventual disposal. Value in use is determined by applying assumptions specific to the Company’s continued use of the asset and does not take into account assumptions of significant future enhancements of an asset’s performance or capacity to which the Company is not committed.
FVLCD is the amount obtainable from the sale of an asset or CGU in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal. For mining assets, FVLCD is often estimated using a discounted cash flow approach because a fair value is not readily available from an active market or binding sale agreement. Estimated future cash flows are calculated using estimated future prices, mineral reserves and resources, operating and capital costs. All assumptions used are those that an independent market participant would consider appropriate. The estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Non-financial assets other than goodwill impaired in prior periods are reviewed for possible reversal of the impairment when events or changes in circumstances indicate that an item of mineral property and equipment or CGU is no longer impaired. An impairment charge is reversed through the consolidated statement of operations only to the extent of the asset’s or CGU’s carrying amount that would have been determined net of applicable depreciation, had no impairment loss been recognized.
3. Significant accounting policies (continued)
3.8 Financial assets
(i)    Classification and measurement
The Company classifies its financial assets in the following categories: at fair value through profit or loss (“FVTPL”), at fair value through other comprehensive income (“FVTOCI”) or at amortized cost. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
The classification of investments in debt instruments is driven by the business model for managing the financial assets and their contractual cash flow characteristics. Investments in debt instruments are measured at amortized cost if the business model is to hold the instrument for collection of contractual cash flows and those cash flows are solely principal and interest. If the business model is not to hold the debt instrument, it is classified as FVTPL. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payments of principal and interest.
Equity instruments that are held for trading (including all equity derivative instruments) are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as FVTOCI.
(a) Financial assets at FVTPL
Financial assets carried as FVTPL are initially recorded at fair value with all transaction costs expensed in the consolidated statement of operations. Realized and unrealized gains and losses arising from changes in the fair value of the financial asset held at FVTPL are included in the consolidated statement of operations in the period in which they arise. Derivatives are also categorized as FVTPL unless they are designated as hedges.
(b) Financial assets at FVTOCI
Investments in equity instruments as FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income (loss). There is no subsequent reclassification of fair value gains and losses to net earnings (loss) following the derecognition of the investment.
(c) Financial assets at amortized cost
Financial assets at amortized cost are initially recognized at fair value and subsequently carried at amortized cost less any provisions for credit losses.
(ii)    Impairment of financial assets
The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the credit risk on the financial asset has not increased significantly since initial recognition, the loss allowance is measured for the financial asset at an amount equal to 12-month expected credit losses. For trade receivables the Company applies the simplified approach to providing for expected credit losses, which allows the use of a lifetime expected loss provision.
Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was recognized.
(iii) Derecognition of financial assets
Financial assets are derecognized when they mature or are sold, and substantially all the risks and rewards of ownership have been transferred. Gains and losses on derecognition of financial assets classified as FVTPL or amortized cost are recognized in the consolidated statement of operations. Gains or losses on financial assets classified as FVTOCI remain within accumulated other comprehensive income (loss).
3. Significant accounting policies (continued)
3.9 Derivative financial instruments and hedging activities
Derivatives are recognized initially at fair value on the date a derivative contract is entered into. Subsequent to initial recognition, derivatives are remeasured at their fair value. Derivatives embedded in financial liability contracts are recognized separately if they are not closely related to the host contract. Derivatives, including embedded derivatives from financial liability contracts, are recorded on the statement of financial position at fair value and the unrealized gains and losses are recognized in the consolidated statement of operations. The method of recognizing any resulting gain or loss depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged.
Changes in the fair value of any derivative instruments that do not qualify for hedge accounting are recognized immediately in the consolidated statement of operations.
(i) Fair value hedge
Changes in the fair values of derivatives that are designated and qualify as fair value hedges are recorded in the consolidated statement of operations, together with any changes in the fair values of the hedged assets or liabilities that are attributable to the hedged risk.
(ii) Cash flow hedge
The effective portions of changes in the fair values of derivatives that are designated and qualify as cash flow hedges are recognized in equity. The gain or loss relating to any ineffective portion is recognized immediately in the consolidated statement of operations.
Amounts accumulated in the hedge reserve are recycled in the consolidated statement of operations in the periods when the hedged items will affect net earnings (loss) (for instance when the forecast sale that is hedged takes place). If a forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory) or a liability, the gains and losses previously deferred in the hedge reserve are included in the initial measurement of the cost of the asset or liability.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in the hedge reserve at that time remains in the reserve and is recognized when the forecast transaction is ultimately recognized in the consolidated statement of operations. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in other comprehensive income (loss) is immediately transferred to the consolidated statement of operations.
The Company has not designated any derivative contracts as hedges and therefore has not applied hedge accounting in these consolidated financial statements.
3.10 Inventories
Inventories are valued at the lower of cost and net realizable value. Costs incurred in bringing each product to its present location and condition are accounted for as follows:
(i)    Product inventory consists of stockpiled ore, ore on leach pads, crushed ore, in-circuit material at properties with milling or processing operations, gold concentrate, other metal concentrate, doré awaiting refinement and unsold bullion. Product inventory costs consist of direct production costs including mining, crushing and processing; site administration costs; and allocated indirect costs, including depreciation and amortization of mineral property, plant and equipment.
Inventory costs are charged to production costs on the basis of quantity of metal sold. At operations where the ore extracted contains significant amounts of metals other than gold, primarily silver, lead and zinc, cost is allocated between the joint products. The Company regularly evaluates and refines estimates used in determining the costs charged to production costs and costs absorbed into inventory carrying values based upon actual gold recoveries and operating plans.
3. Significant accounting policies (continued)
Net realizable value is the estimated selling price, less the estimated costs of completion and selling expenses. A write-down is recorded when the carrying value of inventory is higher than its net realizable value.
(ii)     Materials and supplies inventory consists of consumables used in operations, such as fuel, chemicals, reagents and spare parts, which are valued at the lower of average cost and net realizable value and, where appropriate, less a provision for obsolescence. Costs include acquisition, freight and other directly attributable costs.
3.11 Trade receivables
Trade receivables are amounts due from customers for the sale of bullion and metals in concentrate in the ordinary course of business.
Trade receivables are recognized initially at fair value and subsequently at amortized cost using the effective interest rate method. Trade receivables are recorded net of lifetime expected credit losses.
Settlement receivables arise from the sale of metals in concentrate where the amount receivable is finalized on settlement date based on the underlying commodity price. Settlement receivables are classified as fair value through profit and loss and are recorded at each reporting period at fair value based on forward metal prices. Changes in fair value of settlements receivable are recorded in revenue.
3.12 Cash and cash equivalents
Cash and cash equivalents include cash on hand, short term bank deposits and other short-term highly liquid investments with maturities at the date of acquisition of 90 days or less. Cash and cash equivalents are classified as financial assets which are initially measured at fair value and subsequently measured at amortized cost.
3.13 Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Trade payables are recognized initially at fair value and subsequently measured at amortized cost.
3.14 Debt and borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost, calculated using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the consolidated statement of operations over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities and other borrowings are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility and other borrowings will be drawn down. In this case, the fee is deferred until the draw-down occurs at which time, these transaction costs are included in the carrying value of the amount drawn on the facility and amortized using the effective interest rate method. To the extent there is no evidence that it is probable that some or all of the facility and borrowings will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized over the period the loan facility to which it relates is available to the Company.
3. Significant accounting policies (continued)
3.15 Current and deferred income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognized in the consolidated statement of operations except to the extent that it relates to items recognized either in other comprehensive income or directly in equity, in which case it is recognized in other comprehensive income or in equity, respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings. The tax rate used is the rate that is substantively enacted.
Deferred income tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is not recorded if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss or on temporary differences relating to the investment in subsidiaries to the extent that they will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
3.16 Employee benefits
(i)    Defined benefit plans
The Company has defined benefit plans, where the level of benefit provided is based on the length of service and earnings of the person entitled. The cost of the defined benefit plan is determined using the projected unit credit method. The related pension liability recognized in the consolidated statement of financial position is the present value of the defined benefit obligation at the statement of financial position date less the fair value of plan assets.
The Company obtains actuarial valuations for defined benefit plans for each statement of financial position date. Actuarial assumptions used in the determination of defined benefit pension plan liabilities are based on best estimates, including rate of salary escalation and expected retirement dates of employees. The discount rate is based on high quality bond yields. The assumption used to determine the interest income on plan assets is equal to the discount rate.
Actuarial gains and losses are recognized in full in the period in which they occur in other comprehensive income without recycling to the consolidated statement of operations in subsequent periods. Current service cost, the vested element of any past service cost, the interest income on plan assets and the interest arising on the pension liability are included in the consolidated statement of operations.
Past service costs are recognized immediately to the extent the benefits are vested, and otherwise are amortized on a straight-line basis over the average period until the benefits become vested.
(ii)    Defined contribution plans
The Company’s contributions to defined contribution plans are charged to the consolidated statement of operations in the period to which the contributions relate.
3. Significant accounting policies (continued)
(iii)    Termination benefits
Termination benefits are recognized when there is a demonstrable commitment to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal, or providing benefits as a result of an offer made to encourage voluntary termination. Benefits falling due more than twelve months after the end of the reporting period are discounted to their present value.
(iv)    Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
3.17 Share-based payment arrangements
Share-based payment arrangements related to stock option awards, deferred share units, equity settled restricted share units and performance share units are measured at fair value. Compensation expense for all stock options awarded to employees is measured based on the fair value of the options on the date of grant which is determined using the Black-Scholes option pricing model. For equity settled restricted share units, compensation expense is measured based on the quoted market value of the shares. For equity settled performance share units with market based vesting conditions, compensation expense is measured based on the fair value of the share units on the date of grant which is based on the expected future forward price of the Company's shares and an index consisting of global gold-based securities. Deferred share units are liability awards settled in cash and measured at the quoted market price at the grant date and the corresponding liability is adjusted for changes in fair value at each subsequent reporting date until the awards are settled.
The fair value of the options, restricted share units, performance share units and deferred units are expensed over the vesting period of the awards with a corresponding increase in equity. No expense is recognized for awards that do not ultimately vest.
3.18 Provisions
Asset retirement obligations
A provision is made for mine restoration and rehabilitation when an obligation is incurred. The provision is recognized as a liability with the corresponding cost included in the asset to which the obligation relates. At each reporting date the asset retirement obligation is remeasured to reflect changes in discount rates, and the timing or amount of the costs to be incurred.
The provision recognized represents management’s best estimate of the present value of the future costs required. Significant estimates and assumptions are made in determining the amount of asset retirement obligations. Those estimates and assumptions deal with uncertainties such as: requirements of the relevant legal and regulatory frameworks, the magnitude of necessary remediation activities and the timing, extent and costs of required restoration and rehabilitation activities.
These uncertainties may result in future actual expenditure differing from the amounts currently provided. The provision recognized is periodically reviewed and updated based on the facts and circumstances available at the time. Changes to the estimated future costs for operating sites are recognized in the consolidated statement of financial position by adjusting both the asset retirement obligation and related assets. Such changes result in changes in future depreciation and financial charges.
3. Significant accounting policies (continued)
Other provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. They are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
3.19 Share capital
Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares and share options are recognized as a deduction from equity, net of any tax effects. Common shares held by the Company are classified as treasury stock and recorded as a reduction of shareholders’ equity.
3.20 Revenue recognition
Revenue is generated from the production and sale of doré, bullion and metals in concentrate. The Company’s performance obligations relate primarily to the delivery of these products to customers, with each shipment representing a separate performance obligation.
Revenue from the sale of doré, bullion and metals in concentrates is measured based on the consideration specified in the contract with the customer. The Company recognizes revenue when it transfers control of the product to the customer and has a present right to payment for the product.
(i) Metals in concentrate
Control over metals in concentrates is transferred to the customer and revenue is recognized when the product is considered to be physically delivered to the customer under the terms of the customer contract. This is typically when the concentrate has been placed on board a vessel for shipment or delivered to a location specified by the customer.
Metals in concentrate are sold under pricing arrangements where final prices are determined by market prices subsequent to the date of sale (the “quotational period”). Revenue from concentrate sales is recorded based on the estimated amounts to be received, based on the respective metal's forward price at the expected settlement date. Adjustments are made to settlements receivable in subsequent periods based on fluctuations in the forward prices until the date of final metal pricing. These subsequent changes in the fair value of the settlement receivable are recorded in revenue separate from revenue from contracts with customers.
Provisional invoices for metals in concentrate sales are typically issued shortly after or on the passage of control of the product to the customer and the Company receives 90 - 95% of the provisional invoice at that time. Additional invoices are issued as final product weights and assays are determined over the quotational period. Provisionally invoiced amounts are generally collected promptly.
(ii) Metals in doré
The Company sells doré directly to refiners, or, refiners may receive doré from the Company to refine the materials on the Company’s behalf and arrange for sale of the refined metal.
In the Turkey operating segment, refined metals are sold at spot prices on the Precious Metal Market of the Borsa Istanbul. Sales proceeds are collected within several days of the completion of the sale transaction. Control over the refined gold or silver produced from doré is transferred to the customer and revenue recognized upon delivery to the customer’s bullion account on the Precious Metal Market of the Borsa Istanbul.
In the Canada segment, doré and refined metals are sold at spot prices with sales proceeds collected within several days of the sales transaction. Control is typically transferred to the customer and revenue recognized upon delivery to a location specified by the customer.
3. Significant accounting policies (continued)
3.21 Finance income and expenses
Finance income includes interest income on funds invested (including financial assets carried at FVTPL) and changes in the fair value of financial assets at FVTPL. Interest income is recognized as it accrues in the consolidated statement of operations, using the effective interest method.
Finance expenses include borrowing costs, unwinding of the discount on provisions, changes in the fair value of financial assets at fair value through profit or loss and impairment losses recognized on financial assets. All borrowing costs are recognized in the consolidated statement of operations using the effective interest method, except for those amounts capitalized as part of the cost of qualifying property, plant and equipment.
3.22 Earnings (loss) per share
The Company presents basic and diluted earnings per share (“EPS”) data for its common shares. Basic EPS is calculated by dividing the earnings or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted EPS is determined by adjusting the earnings or loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares, which comprise share options, restricted share units and performance share units granted to employees.
v3.21.1
Judgements and estimation uncertainty
12 Months Ended
Dec. 31, 2020
Text block1 [abstract]  
Judgements and estimation uncertainty
4. Judgements and estimation uncertainty
The preparation of consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed at each period end. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Significant areas requiring the use of management assumptions, estimates and judgements include the valuation of property, plant and equipment and goodwill, estimated recoverable reserves and resources, inventory, current and deferred taxes, asset retirement obligations, commencement of commercial production and functional currency.
Actual results could differ from these estimates. Outlined below are some of the areas which require management to make significant judgements, estimates and assumptions.
(i) Valuation of property, plant and equipment and goodwill
Property, plant and equipment and goodwill are tested for impairment when events or changes in circumstances suggest that the carrying amount may not be fully recoverable. Goodwill is tested at least annually.
Calculating the recoverable amount, including estimated FVLCD of CGUs for property, plant and equipment and goodwill, requires management to make estimates and assumptions with respect to discount rates, future production levels including amount of recoverable reserves, resources and exploration potential, operating and capital costs, long-term metal prices, and estimates of the fair value of mineral properties beyond proven and probable reserves.
Changes in any of the assumptions or estimates used in determining the recoverable amount could result in additional impairment or reversal of impairment recognized.
4. Judgements and estimation uncertainty (continued)
(ii) Estimated recoverable reserves and resources
Mineral reserve and resource estimates are based on various assumptions relating to operating matters, including, with respect to production costs, mining and processing recoveries, cut-off grades, as well as assumptions relating to long-term commodity prices and, in some cases, exchange rates and capital costs. Cost estimates are based on feasibility study estimates or operating history. Estimates are prepared by appropriately qualified persons, but will be impacted by forecasted commodity prices, exchange rates, capital and production costs and recoveries amongst other factors. Estimated recoverable reserves and resources are used to determine the depreciation of property, plant and equipment at operating mine sites, in accounting for deferred stripping costs, in performing impairment testing and for forecasting the timing of the payment of decommissioning and restoration costs. Therefore, changes in the assumptions used could impact the carrying value of assets, depreciation and impairment charges recorded in the consolidated statement of operations and the carrying value of the asset retirement obligation.
(iii) Inventory
The Company considers ore stacked on its leach pads and in process at its mines as work-in-process inventory and includes them in production costs based on ounces of gold or tonnes of concentrate sold, using the following assumptions in its estimates:
the amount of gold and other metals estimated to be in the ore stacked on the leach pads;
the amount of gold expected to be recovered from the leach pads;
the amount of gold and other metals in the processing circuits;
the amount of gold and other metals in concentrates; and
the gold and other metal prices expected to be realized when sold.
If these estimates or assumptions are inaccurate, the Company could be required to write down the value it has recorded on its work-in-process inventories, which would reduce earnings and working capital.
(iv) Asset retirement obligation
The asset retirement obligation provision represents management's best estimate of the present value of future cash outflows required to settle the liability which reflect estimates of future costs, inflation, requirements of the relevant legal and regulatory frameworks and the timing of restoration and rehabilitation activities. Estimated future cash outflows are discounted using a risk-free rate based on U.S. Treasury bond rates. Changes to asset retirement obligation estimates are recorded with a corresponding change to the related item of property, plant and equipment. Adjustments to the carrying amounts of related items of property, plant and equipment can result in a change to future depreciation expense.
(v) Current and deferred taxes
Judgements and estimates of recoverability are required in assessing whether deferred tax assets recognized on the consolidated statement of financial position are recoverable which is based on an assessment of the ability to use the underlying future tax deductions before they expire against future taxable income. Deferred tax liabilities arising from temporary differences on investments in subsidiaries, joint ventures and associates are recognized unless the reversal of the temporary differences is not expected to occur in the foreseeable future and can be controlled, which requires judgement.
Assumptions about the generation of future taxable earnings and repatriation of retained earnings depend on management’s estimates of future production and sales volumes, commodity prices, reserves, operating costs, decommissioning and restoration costs, capital expenditures, dividends and other capital management transactions.
4. Judgements and estimation uncertainty (continued)
The Company operates in multiple tax jurisdictions and judgement is required in the application of income tax legislation in these jurisdictions. These estimates and judgements are subject to risk and uncertainty and could result in an adjustment to current and deferred tax provisions and a corresponding increase or decrease to earnings or loss for the period.
(vi) Commencement of commercial production
Until a mining property is declared as being in the commercial production stage, all costs related to its development are capitalized. The determination of the date on which a mine enters the commercial production stage is a matter of judgement that impacts when capitalization of development costs ceases and recognition of revenues and depreciation of the mining property commences and is charged to the consolidated statement of operations.
On March 31, 2019, the Company declared commercial production at the Lamaque mine, having reached certain milestones. Commercial production represents the point at which the group of assets were able to operate as intended by management. Upon declaring commercial production, Lamaque recognizes all revenue and costs in the consolidated statement of operations. Prior to March 31, 2019, costs incurred for construction, development and commissioning of the mine, net of pre-commercial sales, were recognized within mineral property in property, plant and equipment.
(vii) Functional currency
The functional currency for each of the Company’s subsidiaries is the currency of the primary economic environment in which the entity operates. The Company has determined the functional currency of each entity is the U.S. dollar. Determination of functional currency involves judgements to determine the primary economic environment and the Company reconsiders the functional currency of its entities if there is a change in events and conditions which determined the primary economic environment.
v3.21.1
Adoption of new accounting standards
12 Months Ended
Dec. 31, 2020
Disclosure of Significant Accounting Policies [Abstract]  
Adoption of new accounting standards
5. Adoption of new accounting standards
The following standards and amendments to existing standards have been adopted by the Company commencing January 1, 2020:
(a) Interest rate benchmark reform - Phase 1
In September 2019, the IASB issued first phase amendments IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Hedging and IFRS 7 Financial Instrument Disclosures to address the financial reporting impact of the reform on interest rate benchmarks, such as the discontinuance of the interbank offered rates. The first phase amendment is focused on the impact to hedge accounting requirements. Adoption of the first phase amendment had no material impact on the consolidated financial statements.
(b) Conceptual framework for financial reporting
In March 2018, the IASB revised the Conceptual Framework for financial reporting. The Conceptual Framework sets out fundamental concepts for financial reporting and guides companies in developing accounting policies when no IFRS standard exists. The Conceptual Framework sets out the objective of general purpose financial reporting; the qualitative characteristics of useful financial information; a description of the reporting entity; definitions of an asset, a liability, equity, income and expenses and guidance on recognition and de-recognition criteria; measurement bases and guidance on when to use them; concepts and guidance on presentation and disclosure; and concepts relating to capital and capital maintenance. Adoption of this standard had no material impact on the consolidated financial statements.
5. Adoption of new accounting standards (continued)
(c) Definition of a business
In October 2018, the IASB amended IFRS 3 Business Combinations to clarify the definition of a business, which is effective January 1, 2020. The amendment provides additional guidance on the definition of a business in determining whether a transaction results in an asset or business acquisition. The amendment includes an optional concentration test to permit a simplified assessment of whether an acquired set of activities and assets is not a business. If the concentration test is not met, or if an entity elects not to apply the test, then an assessment of the elements of a business is performed to determine whether the transaction results in an asset or business acquisition. Adoption of this standard had no material impact on the consolidated financial statements.
Below are new standards, amendments to standards and interpretations that have been issued and are not yet effective. The Company plans to apply the new standards or interpretations in the annual period for which they are effective.
(a) Property, plant and equipment - proceeds before intended use
On May 14, 2020, the IASB published a narrow scope amendment to IAS 16 Property, Plant and Equipment - Proceeds before Intended Use. The amendment prohibits deducting from the cost of property, plant and equipment amounts received from selling items produced while preparing the asset for its intended use.  Instead, amounts received will be recognized as sales proceeds and related cost in profit or loss.  The effective date is for annual periods beginning on or after January 1, 2022. The amendment must be applied retrospectively, but only to items of property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the amendments are first applied. The Company will adopt this narrow scope amendment on the date it becomes effective and does not expect a revision to comparative financial information in its consolidated financial statements as a result of adoption. 
(b) Interest rate benchmark reform - Phase 2
In August 2020, the IASB published the Interest Rate Benchmark Reform - Phase 2, which amends IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosure, IFRS 4 Insurance Contracts, and IFRS 16 Leases. The Phase 2 amendments address issues that may affect financial reporting related to financial instruments and hedge accounting resulting from the reform of an interest rate benchmark. The amendments are effective for annual periods beginning on or after January 1, 2021. The Company is assessing the effect of amendments related to the interest rate benchmark reform on its consolidated financial statements including the impact, if any, on amounts drawn on the Company's third amended and restated credit agreement (as defined below) which bear interest based on London Inter-Bank Offered Rate ("LIBOR"). The Company does not expect a material impact on its consolidated financial statements from the adoption of this amendment.
(c) Classification of liabilities as current or non-current
In January 2020, the IASB published narrow scope amendments to IAS 1 Presentation of financial statements. The narrow scope amendment clarifies that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date. The amendments are effective for annual periods beginning on or after January 1, 2023, and applied retrospectively. The Company will adopt the narrow scope amendments on the date it becomes effective and is currently evaluating the impact of the amendments on its consolidated financial statements.
v3.21.1
Cash and cash equivalents
12 Months Ended
Dec. 31, 2020
Cash and cash equivalents [abstract]  
Cash and cash equivalents
6. Cash and cash equivalents
December 31, 2020December 31, 2019
Cash$371,057 $173,801 
Short-term bank deposits80,905 3,941 
$451,962 $177,742 
v3.21.1
Accounts receivable and other
12 Months Ended
Dec. 31, 2020
Trade and other receivables [abstract]  
Accounts receivable and other
7. Accounts receivable and other
December 31, 2020December 31, 2019
Trade receivables$35,649 $35,107 
Value added tax and other taxes recoverable12,171 17,658 
Other receivables and advances5,843 10,756 
Prepaid expenses and deposits19,359 11,789 
Marketable securities194 3,828 
$73,216 $79,138 
v3.21.1
Inventories
12 Months Ended
Dec. 31, 2020
Classes of current inventories [abstract]  
Inventories
8. Inventories
December 31, 2020December 31, 2019
Ore stockpiles$6,327 $3,859 
In-process inventory and finished goods81,120 81,282 
Materials and supplies88,824 78,093 
$176,271 $163,234 

In 2020, inventories of $367,310 (2019 – $296,218) were recognized as an expense during the year and included in cost of sales.
During the year ended December 31, 2020, charges of $2,122 and $206 were recognized in production costs and depreciation, respectively, to reduce the cost of lead and zinc concentrate inventory at Stratoni to net realizable value. During the year ended December 31, 2019, charges of $632 and $1,894 were recognized in production costs and depreciation, respectively, to reduce the cost of lead, zinc and gold concentrate inventory at Olympias and Stratoni to net realizable value.
v3.21.1
Other assets
12 Months Ended
Dec. 31, 2020
Miscellaneous non-current assets [abstract]  
Other assets
9. Other assets
December 31, 2020December 31, 2019
Long-term value added tax and other taxes recoverable$32,148 $13,749 
Prepaid forestry fees2,655 3,222 
Prepaid loan costs (Note 15(b))
2,191 2,865 
Other assets2,568 3,107 
$39,562 $22,943 
v3.21.1
Non-controlling interests
12 Months Ended
Dec. 31, 2020
Disclosure of subsidiaries [abstract]  
Non-controlling interests
10. Non-controlling interests
On May 11, 2020, the Company purchased the remaining 5% interest in Hellas, a subsidiary of the Company, for cash consideration of $7,500. Hellas operates the Olympias and Stratoni mines and holds the Skouries project. Additional consideration may become payable under certain circumstances but is not expected to be material. As Hellas was controlled by the Company prior to the acquisition, $4,172 was recorded in contributed surplus representing the difference between the cash consideration and the carrying value of the non-controlling interest at the date of purchase.
The following table summarizes the information relating to each of the Company’s subsidiaries that has material non-controlling interests (“NCI”). The amounts disclosed for each subsidiary are based on those included in the consolidated financial statements before inter-company eliminations. As the Company purchased the remaining 5% interest in Hellas, the carrying value is nil at December 31, 2020. The non-controlling interest portion of the income statement and statement of cash flow amounts for Hellas prior to the acquisition in 2020 are presented in the table below.

December 31, 2020December 31, 2019
HellasDevaHellasDeva
NCI percentage
0% (1)
19.5 %5 %19.5 %
Current assets$— $3,178 $67,902 $1,867 
Non-current assets— 412,251 1,858,544 415,149 
Current liabilities— (235)(1,050,952)(312)
Non-current liabilities— (322,454)(405,318)(294,493)
Net assets$— $92,740 $470,176 $122,211 
Carrying amount of NCI$— $37,520 $13,362 $42,903 
Cash flows used in operating activities$(6,535)$(3,750)$(215)$(4,856)
Cash flows generated from (used in) investing activities(16,708)10 (45,216)(15)
Cash flows generated from financing activities18,927 4,754 50,026 4,803 
Net increase (decrease) in cash and cash equivalents$(4,316)$1,014 $4,595 $(68)
Revenue$65,781 $— $140,156 $— 
Net loss and comprehensive loss (33,824)(27,604)(107,758)(6,494)
Net loss allocated to NCI(1,691)(5,383)(5,388)(1,266)
Dividends paid to NCI— — — — 
(1)The Company purchased the remaining 5% non-controlling interest in Hellas on May 11, 2020.

Net loss allocated to NCI in the consolidated statement of operations includes $106 related to non-material subsidiaries (2019 – $247). The carrying value of the NCI related to non-material subsidiaries is $3,353 (2019 – $3,039).
v3.21.1
Property, plant and equipment
12 Months Ended
Dec. 31, 2020
Disclosure of detailed information about property, plant and equipment [abstract]  
Property, plant and equipment
11. Property, plant and equipment
Land and buildingsPlant and equipmentCapital works in progressMineral propertiesCapitalized EvaluationTotal
Cost
Balance at January 1, 2019$192,244 $2,112,033 $109,361 $4,169,157 $93,459 $6,676,254 
Additions/transfers (1)
17,379 85,929 19,735 68,794 3,393 195,230 
IFRS 16 transition adjustment7,555 1,734 90 — — 9,379 
Proceeds on pre-commercial production sales, net— — — (12,159)— (12,159)
Commercial production transfers27,070 92,791 — (119,861)— — 
(Impairment) reversal — 11,690 (15,268)— — (3,578)
Write-down of assets— (1,979)— — (16)(1,995)
Other movements/transfers(1,715)33,335 (30,103)(505)(129)883 
Transfer to assets held for sale (Note 32)
— (11,690)— — — (11,690)
Disposals(22)(4,455)(737)(2,421)— (7,635)
Balance at December 31, 2019$242,511 $2,319,388 $83,078 $4,103,005 $96,707 $6,844,689 
Additions/transfers (1)
$14,737 $82,285 $61,135 $55,971 $2,115 $216,243 
Write-down of assets— — (40,030)— — (40,030)
Other movements/transfers1,841 22,371 (20,594)(2,217)(28)1,373 
Disposals(402)(10,297)(76)— (102)(10,877)
Balance at December 31, 2020$258,687 $2,413,747 $83,513 $4,156,759 $98,692 $7,011,398 
Accumulated depreciation
Balance at January 1, 2019$(47,974)$(1,008,763)$— $(1,631,041)$— $(2,687,778)
Depreciation for the year(10,605)(107,654)— (51,965)— (170,224)
Impairment reversal— 90,825 — 9,667 — 100,492 
Other movements(206)(1,049)— 213 — (1,042)
Disposals2,058 — — — 2,065 
Balance at December 31, 2019$(58,778)$(1,024,583)$— $(1,673,126)$— $(2,756,487)
Depreciation for the year$(13,898)$(159,759)$— $(84,947)$— $(258,604)
Other movements(125)(1,985)— 247 — (1,863)
Disposals54 3,880 — 115 — 4,049 
Balance at December 31, 2020$(72,747)$(1,182,447)$— $(1,757,711)$— $(3,012,905)
Carrying amounts
At January 1, 2019$144,270 $1,103,270 $109,361 $2,538,116 $93,459 $3,988,476 
At December 31, 2019$183,733 $1,294,805 $83,078 $2,429,879 $96,707 $4,088,202 
Balance at December 31, 2020$185,940 $1,231,300 $83,513 $2,399,048 $98,692 $3,998,493 

(1)There were no amounts included in property, plant and equipment that relate to capitalized interest during the year ended December 31, 2020 (2019 - $3,848 capitalized).
11. Property, plant and equipment (continued)
In accordance with the Company’s accounting policies each CGU is assessed for indicators of impairment, from both external and internal sources, at the end of each reporting period. If such indicators of impairment exist for any CGUs, those CGUs are tested for impairment. The recoverable amounts of the Company’s CGUs are based primarily on the net present value of future cash flows expected to be derived from the CGUs. The recoverable amount used by the Company represents each CGU’s FVLCD, a Level 3 fair value measurement, as it was determined to be higher than value in use.
(i) Olympias
As at December 31, 2019, Management determined that weaker-than-expected production at Olympias during 2019 and rising market rates for concentrate treatment charges indicated a potential impairment for Olympias. Using a FVLCD approach, the Company assessed the recoverable amount of the Olympias CGU at December 31, 2019. Based on its assessment, the Company determined that no impairment loss or reversal of impairment for the Olympias CGU was required.
In December 2020, as a result of more stable production volumes at the Olympias mine which provided a more reliable basis to estimate future results, the Company updated its unit cost estimates and mining assumptions used for estimating reserves, including increased mining dilution and decreased mining recovery. These factors resulted in an increase in cut-off values and led to a 23% decrease in proven and probable reserves, which the Company considered to indicate a potential impairment for Olympias. Using a FVLCD approach, the Company assessed the recoverable amount of the Olympias CGU as at December 31, 2020. Based on its assessment, the Company determined that no impairment loss or reversal of impairment for the Olympias CGU was required.
The significant assumptions used for determining the recoverable amount of the Olympias CGU are reflected in the table below. Management used judgement in determining estimates and assumptions with respect to discount rates, future production levels including amount of recoverable reserves, resources and exploration potential, operating and capital costs, long-term metal prices and estimates of the fair value of mineral properties beyond proven and probable reserves. Metal pricing assumptions were based on consensus forecast pricing and discount rates were based on a weighted average cost of capital, adjusted for country and other risks specific to the CGU. Changes in any of the assumptions or estimates used in determining the fair values could impact the impairment analysis.
20202019
Gold price ($/oz)
$1,850 - $1,550
$1,400 
Silver price ($/oz)
$25 - $21
$18 
Lead price ($/t)
$2,000 - $1,975
$2,100 
Zinc price ($/t)
$2,575 - $2,400
$2,400 
Discount rate
6.0% - 6.5%
6.0 %
In advance of signing an amended investment agreement with the Hellenic Republic in early 2021, the Company determined that certain of its capital works in progress at Olympias would no longer be required and will not be completed. Accordingly, capitalized costs of $40,030 were recorded as a write-down of assets as at December 31, 2020.
11. Property, plant and equipment (continued)
(ii) Kişladağ
During the quarter ended December 31, 2019, the Company completed testwork assessing metallurgical recoveries of deeper material from the pit over an extended leach cycle. A new production plan was developed utilizing the leach pad for the life of the Kişladağ mine and no longer required the construction of a mill. As a result, the Company recorded an impairment reversal to the Kişladağ leach pad costs and related plant and equipment of $100,492 ($80,143, net of deferred tax) as at December 31, 2019. The resulting carrying value of the Kişladağ leach pad costs and related plant and equipment represents the carrying value of these assets, net of depreciation, that would have been determined had the original September 30, 2018 impairment not been recognized. There was an additional impairment loss recorded of $15,269 ($11,910, net of deferred tax) to write-off capitalized costs relating to the mill construction project.
v3.21.1
Goodwill
12 Months Ended
Dec. 31, 2020
Changes in goodwill [abstract]  
Goodwill
12. Goodwill
As of December 31, 2020 all goodwill relates to the Lamaque CGU. Goodwill is tested for impairment annually on December 31 and when circumstances indicate that the carrying value may not be recoverable. Impairment is determined for goodwill by assessing the recoverable amount of the CGU. The recoverable amount of the Lamaque CGU is based on the net present value of future cash flows expected to be derived from the CGU. The recoverable amount used by the Company represents the CGU’s FVLCD, a Level 3 fair value measurement, as it was determined to be higher than value in use.
The significant assumptions used for determining the recoverable amount of goodwill in the Lamaque CGU are reflected in the table below. Management used judgement in determining estimates and assumptions with respect to discount rates, future production levels including amounts of recoverable reserves, resources and exploration potential, operating and capital costs, long-term metal prices and estimates of the fair value of mineral properties beyond proven and probable reserves. Metal pricing assumptions were based on consensus forecast pricing, and the discount rates were based on a weighted average cost of capital, adjusted for country risk and other risks specific to the CGU. Cash flows were projected through to 2030. Changes in any of the assumptions or estimates used in determining the fair values could impact the recoverable amount of goodwill analysis.
20202019
Gold price ($/oz)
$1,850 - $1,550
$1,400
Discount rate5%5%

The estimated recoverable amount of the Lamaque CGU including goodwill exceeded its carrying amount as at December 31, 2020 by approximately $269,000. Impairment would result from a decrease in the long-term gold price of $325 per ounce, or an increase in operating expenditures by 25%.
v3.21.1
Leases and right-of-use assets
12 Months Ended
Dec. 31, 2020
Disclosure of Leases [Abstract]  
Leases and right-of-use assets
13. Leases and right-of-use assets
As a lessee, the Company leases various assets including mobile mine equipment, office and properties. These right-of-use assets are presented as property, plant and equipment.
Right-of-use
Land and buildings
Right-of-use
Plant and equipment
Total
Cost
Opening balance at January 1, 2019$— $11,345 $11,345 
Initial adoption of IFRS 167,555 1,824 9,379 
Additions552 13,463 14,015 
Disposals— (232)(232)
Balance at December 31, 2019$8,107 $26,400 $34,507 
Additions6,922 4,372 11,294 
Disposals(474)(931)(1,405)
Balance at December 31, 2020$14,555 $29,841 $44,396 
Accumulated Depreciation
Opening balance at January 1, 2019$— $— $— 
Depreciation for the year(1,184)(4,705)(5,889)
Disposals— 151 151 
Balance at December 31, 2019$(1,184)$(4,554)$(5,738)
Depreciation for the year(1,200)(5,926)(7,126)
Disposals81 206 287 
Balance at December 31, 2020$(2,303)$(10,274)$(12,577)
Right-of-use assets, net carrying amount at December 31, 20196,923 21,846 28,769 
Right-of-use assets, net carrying amount at December 31, 2020$12,252 $19,567 $31,819 
Interest expense on lease liabilities is disclosed in Note 18(b) and the cash payments for the principal portion of lease liabilities is presented on the Consolidated Statement of Cash Flow. The Company's future obligations related to lease liabilities is disclosed in Note 24.
v3.21.1
Accounts payable and accrued liabilities
12 Months Ended
Dec. 31, 2020
Trade and other current payables [abstract]  
Accounts payable and accrued liabilities
14. Accounts payable and accrued liabilities
December 31, 2020December 31, 2019
Trade payables$65,060 $67,107 
Taxes payable10,997 13,205 
Accrued expenses103,315 58,792 
$179,372 $139,104 
v3.21.1
Debt
12 Months Ended
Dec. 31, 2020
Borrowings, by type [abstract]  
Debt
15. Debt
December 31, 2020December 31, 2019
Senior secured notes due 2024, net of unamortized discount and transaction costs of $8,680 (2019 - $13,806)(Note 15 (a))
$226,647 $287,568 
Term loan, net of unamortized transaction costs of $1,491 (2019 - $2,239) (Note 15 (b))
131,842 197,761 
Revolving credit facility (Note 15 (b))
150,000 — 
Redemption option derivative asset (Note 15 (a))
(7,357)(5,597)
Total debt$501,132 $479,732 
Less: Current portion66,66766,667 
Non-current portion$434,465 $413,065 

Reconciliation of debt arising from financing activities:
2020202020192019
Senior notes due 2024 and term loanRevolving credit facilitySenior notes due 2024 and term loan Senior notes due 2020
Balance beginning of year $479,732 $— $— $595,977 
Financing cash flows related to debt:
Redemption of Senior notes due 2024(66,047)— — — 
Scheduled repayment of term loan (66,667)— — — 
Proceeds from revolving credit facility— 150,000 — — 
Repayment of Senior notes due 2020— — — (600,000)
Proceeds from Senior secured notes due 2024, net of discount— — 294,000 — 
Proceeds from term loan— — 200,000 — 
Loan financing costs— — (15,583)— 
Total financing cash flows related to debt(132,714)150,000 478,417 (600,000)
$347,018 $150,000 $478,417 $(4,023)
Non-cash changes recorded in debt:
Amortization of discount and transaction costs of Senior notes due 2024 due to early redemption2,286 — — — 
Amortization of financing fees and discount relating to Senior notes due 2024 and term loan3,588 — 2,206 — 
Change in fair value of redemption option derivative asset relating to Senior secured notes due 2024(1,760)— (4,224)— 
Prepaid credit facility financing costs— — 3,333 — 
Amortization of deferred costs for Senior notes due 2020, and deferred costs expensed upon note redemption— — — 4,023 
Balance end of year$351,132 $150,000 $479,732 $— 
15. Debt (continued)
(a) Senior Secured Second Lien Notes due 2024
On June 5, 2019, the Company completed an offering of $300,000 senior secured second lien notes (the "senior secured notes”) at 98% of par value, with a coupon rate of 9.5% due June 1, 2024. The senior secured notes pay interest semi-annually on June 1 and December 1, beginning December 1, 2019.
The senior secured notes are redeemable by the Company in whole or in part, for cash:
i)At any time prior to December 1, 2021 at a redemption price equal to the sum of 100% of the aggregate principal amount of the senior secured notes, plus accrued and unpaid interest, and plus a premium equal to (a) the greater of 1% of the principal amount of the senior secured notes to be redeemed and (b) the difference between (i) the outstanding principal amount of the senior secured notes to be redeemed and (ii) the present value of the redemption price of the senior secured notes on December 1, 2021 plus the remaining interest to December 1, 2021 discounted at the treasury yield plus 50 basis points.
ii)At any time prior to December 1, 2021 up to 35% of the original principal amount of the senior secured notes with the net cash proceeds of one or more equity offerings at a redemption price equal to 109.5% of the aggregate principal amount of the senior secured notes redeemed, plus accrued and unpaid interest ("Equity Redemption Option").
iii)On and after the dates provided below, at the redemption prices, expressed as a percentage of the principal amount of the notes to be redeemed, set forth below, plus accrued and unpaid interest on the senior secured notes:
December 1, 2021                       107.125%
December 1, 2022 and thereafter       100.000%
The redemption features above constitute an embedded derivative asset, which is recognized separately at fair value and is classified as fair value through profit and loss. The increase in fair value for the year ended December 31, 2020 is $1,760 (2019 - $4,224).
On August 31, 2020, the Company paid $65,530 to redeem $58,574 of senior secured notes pursuant to the equity redemption option, including a $5,565 redemption premium and $1,391 of interest accrued to the date of redemption. On December 1, 2020, the Company paid $8,183 to redeem $7,473 of senior secured notes pursuant to the equity redemption option, including a $710 redemption premium. As a result of the redemptions, $2,286 of unamortized discount and deferred transaction costs were recognized as finance costs together with the $6,275 redemption premiums.
The senior secured notes are secured on a second lien basis by a general security agreement with the Company’s real property in Canada and shares of SG Resources B.V., Tüprag Metal, Eldorado Gold (Greece) BV, Eldorado Gold (Québec) Inc., all wholly owned subsidiaries of the Company. During the year ended December 31, 2020, the Company paid $1,344 to Tüprag, a subsidiary, relating to guarantee fees.
The senior secured notes contain covenants that restrict, among other things, the ability of the Company to incur certain capital expenditures, distributions in certain circumstances and sales of material assets, in each case, subject to certain conditions. The Company is in compliance with these covenants at December 31, 2020.
The fair market value of the senior secured notes as at December 31, 2020 is $260,500 (2019 - $324,000).
15. Debt (continued)
(b) Senior Secured Credit Facility
In May 2019, the Company executed a $450,000 amended and restated senior secured credit facility (“the third amended and restated credit agreement” or “TARCA”) which consists of the following:
i)A $200,000 non-revolving term loan ("Term loan") with six equal semi-annual payments commencing June 30, 2020.
ii)A $250,000 revolving credit facility with a maturity date of June 5, 2023.
On March 30, 2020, the Company drew $150,000 under the revolving credit facility as a proactive measure in light of the uncertainty surrounding the novel coronavirus ("COVID-19") pandemic. The Company has no immediate need for the funds and this amount remains outstanding at December 31, 2020 (2019 - nil). At December 31, 2020, the $150,000 credit facility draw is classified as non-current according to its contractual maturity.
In 2020, the Company made two scheduled payments of $33,333 each in June and December relating to the $200,000 Term loan.
As at December 31, 2020, the Company has outstanding non-financial (Greece) and Financial (Canada) letters of credit of EUR 57,600 and CAD $400, respectively and totaling $70,800 (2019 - EUR 57,600 and CDN $400, totaling $64,500). The letters of credit were issued to secure certain obligations in connection with the Company's operations (Note 16) and reduce availability under the revolving credit facility by corresponding amounts. In February 2021, the TARCA was amended such that the non-financial letters of credit no longer reduce credit availability under the revolving credit facility. A repayment of $11,100 of principal on the Term loan was made in conjunction with this amendment.
The TARCA contains covenants that restrict, among other things, the ability of the Company to incur additional unsecured indebtedness except in compliance with certain conditions, incur certain lease obligations, make distributions in certain circumstances, sell material assets or carry on a business other than one related to mining. Significant financial covenants include a minimum Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) to interest ratio and a maximum debt net of unrestricted cash ("net debt") to EBITDA ratio ("net leverage ratio"). The Company is in compliance with its covenants at December 31, 2020. 
Both the term loan and revolving credit facility bear interest at LIBOR plus a margin of 2.25% – 3.25%, dependent on a net leverage ratio pricing grid. As at December 31, 2020, the Company’s current interest charges and fees are as follows: LIBOR plus margin of 2.25% on the term loan and any amounts drawn from the revolving credit facility; two thirds the applicable margin (1.50%) on non-financial letters of credit plus 0.37%, and 2.25% on financial letters of credit plus 0.37%, secured by the revolving credit facility, and 0.5625% standby fees on the available and undrawn portion of the revolving credit facility.
The TARCA is secured on a first lien basis by a general security agreement from the Company, the Company's real property in Canada and shares of SG Resources B.V., Tüprag Metal, Eldorado Gold (Greece) BV, Eldorado Gold (Québec) Inc., all wholly owned subsidiaries of the Company.
Fees relating to the revolving credit facility have been recorded in other assets at the time of establishment and are being amortized over the term of the TARCA. As at December 31, 2020, the prepaid loan cost was $2,191 (2019 – $2,865).
v3.21.1
Asset retirement obligations
12 Months Ended
Dec. 31, 2020
Disclosure of Asset Retirement Obligations [abstract]  
Asset retirement obligations
16. Asset retirement obligations
TurkeyCanadaGreeceRomania
Brazil (1)
Total
At January 1, 2020$39,196 $12,638 $42,650 $1,533 $— $96,017 
Accretion during the year753 243 863 34 52 1,945 
Revisions to estimate5,539 80 10,056 94 — 15,769 
Settlements(672)— (1,629)— — (2,301)
Disposal— — — — (52)(52)
At December 31, 2020$44,816 $12,961 $51,940 $1,661 $— $111,378 
Less: Current portion— — (4,701)— — (4,701)
Long term portion$44,816 $12,961 $47,239 $1,661 $— $106,677 
Estimated undiscounted amount$56,752 $14,218 $65,564 $2,153 $— $138,687 

(1) The asset retirement obligation related to the Vila Nova mine was included in liabilities associated with assets held for sale at December 31, 2019 and disposed of in 2020 (Note 32)
TurkeyCanadaGreeceRomaniaBrazilTotal
At January 1, 2019$36,479 $12,215 $40,069 $1,364 $4,016 $94,143 
Accretion during the year981 316 1,090 39 106 2,532 
Revisions to estimate 2,330 107 3,704 130 — 6,271 
Settlements(594)— (2,213)— — (2,807)
Reclassified to liabilities associated with assets held for sale— — — — (4,122)(4,122)
At December 31, 2019$39,196 $12,638 $42,650 $1,533 $— $96,017 
Less: Current portion— — (1,782)— — (1,782)
Long term portion$39,196 $12,638 $40,868 $1,533 $— $94,235 
Estimated undiscounted amount$48,064 $14,998 $56,467 $2,287 $4,416 $126,232 

The Company’s asset retirement obligations relate to the restoration and rehabilitation of the Company’s mining operations and projects under development. The expected timing of cash flows in respect of the provision is based on the estimated life of the various mining operations. The net increase in the estimate of the obligation in 2020 was mainly due to an update of estimated closure costs at Olympias, Stratoni and Kişladağ, together with lower discount rates.
16. Asset retirement obligations (continued)
The provision is calculated as the present value of estimated future net cash outflows based on the following key assumptions:
TurkeyCanadaGreeceRomaniaBrazil
%%%%%
At December 31, 2020
Inflation rate
0.7 to 1.5
0.9
0.4 to 1.7
1.5— 
Discount rate
0.7 to 1.5
0.9
0.4 to 1.7
1.5— 
At December 31, 2019
Inflation rate1.81.8
1.7 to 1.9
1.91.6
Discount rate1.91.9
1.7 to 2.3
2.31.6

The discount rate is a risk-free rate based on U.S. Treasury bond rates with maturities commensurate with site mine lives. U.S. Treasury bond rates have been used for all of the mine sites as the liabilities are denominated in U.S. dollars and the majority of the expenditures are expected to be incurred in U.S. dollars. Similarly, the inflation rates used in determining the present value of the future net cash outflows are based on estimated U.S inflation rates.
In relation to the asset retirement obligations in Greece, the Company has the following:
a) A €50,000 Letter of Guarantee to the Ministry of Environment and Energy and Climate Change ("MEECC") as security for the due and proper performance of rehabilitation works committed in relation to the mining and metallurgical facilities of the Kassandra Mines (Olympias, Stratoni and Skouries) and the removal, cleaning and rehabilitation of the old Olympias tailings. This Letter of Guarantee is renewed annually, expires on July 26, 2026 and has an annual fee of 187 basis points.
b) A €7,500 Letter of Guarantee to the MEECC for the due and proper performance of the Kokkinolakkas Tailings Management Facility, committed in connection with the Environmental Impact Assessment approved for the Kassandra Mines (Olympias, Stratoni and Skouries). The Letter of Guarantee is renewed annually and expires on July 26, 2026. The Letter of Guarantee has an annual fee of 187 basis points.
c) Restricted cash of $2,060 (2019 - $3,080) relates to an environmental guarantee deposit posted as security for rehabilitation works in relation to the Lamaque mine.
v3.21.1
Employee benefit plans
12 Months Ended
Dec. 31, 2020
Disclosure of defined benefit plans [abstract]  
Employee benefit plans
17. Employee benefit plans
December 31, 2020December 31, 2019
Employee benefit plan expense:
Employee Benefit Plan$3,036 $2,778 
Supplemental Pension Plan(187)(61)
$2,849 $2,717 
Actuarial losses recognized in the statement of other comprehensive income (loss) in the period, before tax$(3,440)$(6,361)
Cumulative actuarial losses recognized in the statement of other comprehensive income (loss), before tax$(29,639)$(26,199)
17. Employee benefit plans (continued)
Defined Benefit Plans
The Company operated a registered pension plan (“the Pension Plan”) and operates a Supplemental Pension Plan (“the SERP”), which are defined benefit pension plans in Canada. The SERP is a Retirement Compensation Arrangement (“RCA”), which is a trust account. As it is a trust account, the assets in the account are protected from the Company’s creditors. The RCA requires the Company to remit 50% of any contributions and any realized investment gains to the Receiver General of Canada as refundable tax.
These plans, which were only available to certain qualifying employees, provide benefits based on an employee’s years of service and final average earnings at retirement. Annual contributions related to these plans are actuarially determined and are made at or in excess of minimum requirements prescribed by legislation.
Eldorado’s plans have actuarial valuations performed for funding purposes. The last actuarial valuations for funding purposes performed for the Pension Plan and the SERP are as of January 1, 2017. The measurement date for the SERP to determine the pension obligation and assets for accounting purposes was December 31, 2020.
The SERP is designed to provide supplementary pension benefits to qualifying employees affected by the maximum pension limits under the Income Tax Act pursuant to the registered Pension Plan. Further, the Company is not required to pre-fund any benefit obligation under the SERP.
No contributions were made to the Pension Plan and the SERP during 2020 (2019 – nil). Cash payments and transfers totaling $18,224 were made directly to beneficiaries during the year (2019 – $26,771) from Pension Plan and SERP assets. For the year 2021, no contributions are expected to be made to the SERP.
On December 13, 2019, the Company resolved to wind-up the Pension Plan and the SERP. During September 2020, the Pension Plan was settled through the purchase of an annuity on behalf of the members. Accordingly, the plan assets and liabilities were re-measured on September 30, 2020, and a gain on settlement of $5 has been recognized in other income.
The SERP’s defined benefit obligation has been measured as at December 31, 2020 based on the face value of the actual residual lump sum payments expected to be paid to members. The plan settlement has been measured based on market conditions as at December 31, 2020.
Subsidiaries Employee Benefit Plans
According to the Greek and Turkish labour laws, employees are entitled to compensation in case of dismissal or retirement, the amount of which varies depending on salary, years of service and the manner of termination (dismissal or retirement). Employees who resign or are dismissed with cause are not entitled to compensation. The Company considers this a defined benefit obligation. Amounts relating to these employee benefit plans have been included in the tables in this note under “Employee Benefit Plan” when applicable.
Defined Contribution Plans
The Company operates a defined contribution plan which is only available to certain qualifying employees. The amount of defined contribution pension plan expense for the year ended December 31, 2020 is $339 (2019 –$404). The amount of contributions to the defined contribution plan for the year ended December 31, 2020 is $344 (2019 – $718).
17. Employee benefit plans (continued)
The amounts recognized in the consolidated statement of financial position for all pension plans are determined as follows:
December 31, 2020December 31, 2019
Employee benefit plansSERPTotalEmployee benefit plansSERPTotal
Present value of obligations$(21,974)$(2,721)$(24,695)$(20,182)$(18,366)$(38,548)
Fair value of plan assets— 8,470 8,470 1,958 24,610 26,568 
Asset (liability) on statement of financial position$(21,974)$5,749 $(16,225)$(18,224)$6,244 $(11,980)

The movement in the present value of the employee benefit obligations over the years is as follows:
20202019
Employee benefit plansSERPTotalEmployee benefit plansSERPTotal
Balance at January 1,$(20,182)$(18,366)$(38,548)$(16,239)$(37,075)$(53,314)
Current service cost(2,446)— (2,446)(2,181)(172)(2,353)
Past service cost— — — — (97)(97)
Interest cost(639)(547)(1,186)(669)(1,447)(2,116)
Actuarial gain (loss)(2,664)548 (2,116)(3,097)(4,781)(7,878)
Assets distributed on settlement3,146 14,945 18,091 — 24,430 24,430 
Benefit payments1,172 180 1,352 1,576 2,189 3,765 
Exchange gain (loss)(361)519 158 428 (1,413)(985)
Balance at December 31,$(21,974)$(2,721)$(24,695)$(20,182)$(18,366)$(38,548)

The movement in the fair value of plan assets over the years is as follows:
20202019
Employee benefit plansSERPTotalEmployee benefit plansSERPTotal
At January 1,$1,958 $24,610 $26,568 $1,864 $46,195 $48,059 
Interest income on plan assets42 736 778 72 1,809 1,881 
Actuarial gain (loss)59 (1,383)(1,324)82 1,435 1,517 
Contributions by employer1,281 — 1,281 — — — 
Assets distributed on settlement(3,141)(14,945)(18,086)— (24,430)(24,430)
Benefit payments(138)(180)(318)(152)(2,189)(2,341)
Exchange gain (loss)(61)(368)(429)92 1,790 1,882 
At December 31,$— $8,470 $8,470 $1,958 $24,610 $26,568 
17. Employee benefit plans (continued)
The amounts recognized in the consolidated statements of operations are as follows:
20202019
Employee benefit plansSERPTotalEmployee benefit plansSERPTotal
Current service cost$2,446 $— $2,446 $2,181 $172 $2,353 
Interest cost639 547 1,186 669 1,447 2,116 
Past service cost— — — — 97 97 
Loss on settlement(5)— (5)— 32 32 
Expected return on plan assets(44)(734)(778)(72)(1,809)(1,881)
Employee benefit plans expense (recovery)$3,036 $(187)$2,849 $2,778 $(61)$2,717 

The actual return on plan assets was a loss of $546 (2019 – gain of $3,439).
The principal actuarial assumptions used were as follows:
20202019
Employee benefit plansSERPEmployee benefit plansSERP
GreeceTurkeyCanadaCanadaGreeceTurkeyCanadaCanada
%%%%%%%%
Expected return on plan assets— — 3.1 3.1 — — 3.9 3.9 
Discount rate - beginning of year0.9 13.0 3.1 3.1 1.7 15.0 3.9 3.9 
Discount rate - end of year0.4 12.8 — 3.1 0.9 13.0 3.1 3.1 
Rate of salary escalation1.7 8.5 — — 2.7 8.2 2.0 2.0 
Average remaining service period of active employees expected to receive benefits— — — — — — 0.6 years0.6 years

Plan Assets
The assets of the employee benefit plan are nil following the purchase of an annuity on behalf of the members of the Pension Plan. The assets held in the SERP account are held in cash with a major custodian and are invested only in conformity with the investment requirements of applicable pension laws.
17. Employee benefit plans (continued)
The following table summarizes the defined benefit plans’ weighted average asset allocation percentages by asset category:
December 31, 2020December 31, 2019
Employee benefit plans (2)
SERPEmployee benefit plansSERP
Investment funds
   Money market80 %%%
   Canadian fixed income— %98 %— %
   Canadian equities— %— — %
   US equities— %— — %
   International equities— %— — %
Other (1)
20 %— 93 %
100 %100 %100 %
(1)Assets held by the Canada Revenue Agency in the refundable tax account
(2)The Pension Plan was settled in September 2020

The sensitivity of the overall pension obligation to changes in the weighted principal assumptions is:
Change in assumptionImpact on overall obligation
Discount rate
Increase by 0.5%
Decrease by $1,583
Decrease by 0.5%
Increase by $1,544
Salary escalation rate
Increase by 0.5%
Increase by $1,497
Decrease by 0.5%
Decrease by $1,558
v3.21.1
Other (expense) income and finance costs
12 Months Ended
Dec. 31, 2020
Analysis of income and expense [abstract]  
Other (expense) income and finance costs
18. Other (expense) income and finance costs
(a) Other (expense) income December 31, 2020December 31, 2019
 Interest income and other income (expense)$1,310 $3,154 
 Gain on disposition of Vila Nova (Note 32)
2,451 — 
 Gain (loss) on disposal of assets(5,038)656 
 Income from royalty sale— 8,075 
$(1,277)$11,885 

In June 2019, the Company recognized other income of $8,075 from the sale of a 2.5% net smelter return royalty interest ("NSR") on a property in Turkey. The NSR had a carrying value of nil. Consideration for the sale was $8,075, of which $3,075 was received in cash and $5,000 was settled through the transfer of a mineral property license to the Company in October 2019.
18. Other (expense) income and finance costs (continued)
(b) Finance costsDecember 31, 2020December 31, 2019
 Interest on the senior secured notes$29,486 $18,087 
 Interest on the term loan6,380 6,611 
 Interest on the redeemed 2012 notes— 17,525 
 Other interest and financing costs4,397 3,196 
Senior secured notes redemption premium6,275 — 
Amortization of discount and transaction costs of senior secured notes due to early redemption2,286 — 
 Write-off of unamortized transaction costs
 of 2012 notes and ARCA (Note 15(b))
— 3,559 
 Redemption option derivative gain (Note 15(a))
(1,760)(4,224)
 Interest expense on lease liabilities1,934 1,828 
 Asset retirement obligation accretion1,945 2,532 
 Total finance costs$50,943 $49,114 
 Less: Capitalized interest— 3,848 
$50,943 $45,266 
During the three months ended March 31, 2019, the Company capitalized $3,848 of interest relating to the 2012 notes in property, plant and equipment at the Lamaque mine while this operation was in the pre-commercial production phase. No interest was capitalized subsequent to March 31, 2019 following the declaration of commercial production at Lamaque mine.
v3.21.1
Income taxes
12 Months Ended
Dec. 31, 2020