Eldorado Gold Corp suspends dividend as it reports monster $1.24 billion loss

Eldorado Gold Corp. suspended its dividend and reported a monster fourth quarter loss late Wednesday because the company struggles to maneuver forward with its troubled Greek assets.

The Vancouver-based miner said its Q4 loss would be a whopping US$1.24 billion. That includes US$1.25 billion of writedowns, largely on its projects in Greece. In January, the company halted most of its activity in northern Greece after neglecting to receive permits on the reasonable timeline in the leftist Syriza government. Lower assumed metal prices also affected the carrying values of the assets.

Once the writedowns were stripped out, Eldorado had an adjusted loss of US$19.3 million, or two cents a share. Which was slightly below most analyst estimates, though Eldorado maintained it’s performing well.

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“I’m very pleased to provide strong operational results,” leader Paul Wright said on the business call Thursday, noting the company beat its production and price guidance in 2015.

However, Eldorado still decided to suspend its semi-annual dividend. The organization blamed a minimal gold price (among additional factors), despite the fact that gold has rallied to date in 2016. Eliminating the dividend helps you to save Eldorado about US$14 million a year, though Wright said hello could be reinstated later in 2016.



“We still think that some of funds from operations ought to be shared with our investors and look forward to resuming dividend payments in a stronger gold price environment,” the company said in a statement.

Even after the dividend suspension, BMO Capital Markets analyst Andrew Kaip said inside a observe that he expects Eldorado will draw funds from its US$375 million credit facility to be able to fund its “longer-dated” growth initiatives.

Most of these growth plans are in Greece, high continues to be plenty of uncertainty. The company has faced opposition from both government and local protestors that has disrupted its plans. It spent more than US$300 million around the Skouries project, its biggest asset in Greece, before halting construction in January due to permitting delays.

Eldorado did report some positive news from Greece recently, because it received a building permit for any processing plant at Skouries and a license because of its Olympias project. Other permits and licenses are still needed at Skouries, but Wright said recent conversations with the government have been more constructive.

One of the question marks surrounding Eldorado is what it will do with its Chinese assets, that the clients are keen to divest. Eldorado has looked into a preliminary public offering for the assets in Hong Kong, but has also been approached by potential buyers. On Thursday, Wright said he anticipates an answer in the “near term,” and expects to supply updates around the process within the second quarter of 2016.

pkoven@nationalpost.com

Twitter.com/peterkoven