This is the conference operator. Welcome to the Eldorado Gold Corporation fourth quarter and 2019 year-end results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Peter Lekich, Manager, Investor Relations. Please go ahead, Mr. Lekich.
Thank you, operator, and thank you, ladies and gentlemen, for taking the time to dial into our conference call today. With me in Vancouver this morning are George Burns, President and CEO, Phil Yee, Executive Vice President and CFO, Joe Dick, Executive Vice President and COO, Paul Skayman, Special Advisor to the COO, and Jason Cho, Executive Vice President and Chief Strategy Officer. Our release yesterday details our 2019 fourth quarter and year-end financial and operating results. This should be read in conjunction with our fourth quarter and year-end financial statements and management's discussion and analysis, both of which are available on our website. They have also been filed on SEDAR and EDGAR. All dollar figures discussed today are in US dollars unless otherwise stated. We will be speaking to the slides that accompany this webcast. You can download a copy of these slides from our website.
Before we begin, I would like to remind you that any projections included in our discussion today are likely to involve risks, which are detailed in our 2018 AIF and in the cautionary note on slide one. I will now turn the call over to George.
Thanks, Peter, and good morning, everyone. It's fantastic to see the response to our release this morning. Here's the format for today's call. I'll give an overview of the highlights along with some comments, then I'll pass it over to Phil to go through the financials. Paul will follow by reviewing operational performance, and Joe will say a few words on 2020 plans. Then we'll open it up for questions. Before we get into things, I want to say a warm welcome to Joe, our new COO. Joe has been with us for a few months and has had the opportunity to spend some time at our sites. He joins us from Newmont, where he was SVP for Latin America. He also has experience with Barrick and Rio Tinto. Welcome, Joe. Moving on to the highlights on the next slide, it was another solid quarter for both operationally and financially.
We produced a record 118,955 ounces of gold, our highest quarterly production in nearly four years. This is a result of increased production at Lamaque and Kisladag. Consolidated annual gold production came in on plan, and we ended the year with over 395,000 ounces, our highest total production in three years. Cash operating cost remained steady. Looking back, 2019 was a pivotal year in Eldorado's 25-year history. We put our first Canadian mine into commercial production. We restructured the balance sheet and reduced our total debt by $100 million, and we received long-awaited permits in Greece. On top of these accomplishments, our cornerstone asset, Kisladag, is now back on track. We are confident that the results of recent test work support an extended mine life of 15 years. I'm proud of the benefit that will come to local communities and the Greeks. Sorry about that.
Kisladag will once again provide long-term value for Eldorado stakeholders. Over to Greece, our team is working with ministry officials to advance our investment. To recap, we have received the Skouries construction permits that held us up since 2017. However, an updated investment agreement and permits for dry stack tailings are essential for the advancement of the investment and restart of the project. The revised investment agreement would not only provide a stable platform irrespective of future governing parties, it would also help in demonstrating Greece's commitment to working with foreign investors in order to attract capital needed to grow its economy. Just to remind everyone, we view Skouries as a world-class asset that will create approximately 1,000 well-paying jobs over its current 23-year mine life and generate significant tax and export revenues for the benefit of local communities and the Greek state.
Before I hand it over, you may have noticed that our logo is slightly different throughout this presentation. This refreshed logo is reflective of the evolution of our business and the new path forward. The new green color highlights the company's continuing commitment to put sustainability at the core of our business. As evidence of this, we are currently building a global sustainability management system that outlines the common set of performance standards by which we will operate. This will allow us to simplify our existing systems through harmonizing the way we do things. It will also improve efficiencies and consistencies across our business that will drive productivity. That's it from me. Over to you, Phil.
Thank you, George. Good morning, everyone. Starting on slide four, we provide an overview of Eldorado Gold's financial results for the fourth quarter and year ended December 31st, 2019. Eldorado generated $191.9 million in total metal revenue in the fourth quarter. This includes $176.1 million in gold revenue and is an increase of 107% over the comparative quarter in 2018. The increase resulted from higher gold sales volumes of 118,900 ounces versus 58,860 in Q4 of 2018, and a higher realized average gold price in the fourth quarter of $1,475 an ounce versus $1,245 per ounce in Q4 of 2018. For the full year 2019, Eldorado generated total metal revenue of $617.8 million, of which $530.9 million was gold revenue. This represents a 35% increase over 2018 and also resulted from higher gold sales volumes and a higher average gold price in 2019.
Net earnings to shareholders in the fourth quarter was $91.2 million or $0.57 per share, compared to a net loss to shareholders of $218.2 million or $1.38 loss per share in the fourth quarter of 2018. Net earnings in the fourth quarter reflect an impairment reversal of $85.2 million or $68.2 million net of deferred tax for the Kisladag Leach Pad and related assets, reflecting the Kisladag mine life extension to 15 years. There was also an increase in depreciation in the fourth quarter in line with increased sales volumes. Net loss in the fourth quarter of 2018 included an impairment adjustment of $330.2 million or $247.7 million net of deferred tax, which is related to Olympias. For the full year 2019, net earnings to shareholders was $80.6 million or $0.51 per share, reflecting essentially the same drivers as outlined for the fourth quarter.
This represents a significant improvement over the full year 2018 net loss of $361.9 million or $2.28 loss per share. Adjusted net earnings for the fourth quarter was $20.3 million or $0.13 per share, which was a significant improvement over the fourth quarter 2018 adjusted net loss of $18.9 million or $0.11 loss per share. In both periods, net earnings were adjusted primarily to remove the impairments and the impairment reversal. For the full year 2019, adjusted net earnings were $5.6 million or $0.04 per share, compared to adjusted net loss of $28.6 million or $0.17 loss per share for 2018. The strong sales in the fourth quarter resulted in EBITDA of $158.7 million and adjusted EBITDA of $80.3 million, an improvement over the loss before interest, taxes, depreciation, and amortization of $327.9 million and adjusted EBITDA of $9 million in the fourth quarter of 2018.
For 2019, EBITDA amounted to $311.3 million and adjusted EBITDA was $235.6 million. This is compared to a loss before interest, taxes, depreciation, and amortization of $361.8 million and adjusted EBITDA of $99.6 million for 2018. Again, adjustments were primarily the impairment items discussed earlier. Fourth quarter also represented a third consecutive quarter of positive free cash flow after achieving commercial production at Lamaque at the end of March of 2019. Finance costs were $8 million in the fourth quarter and $45.3 million for the year, compared to $5.6 million for the full year of 2018. The significant increase in 2019 over 2018 primarily reflects interest no longer capitalized following the commencement of commercial operations at Lamaque in the second quarter of 2019 and the transfer of Skouries to care and maintenance at the end of 2018.
Income tax expense amounted to $39.8 million for 2019, compared to a tax recovery of $86.5 million in 2018. The tax expense in 2019 primarily relates to income tax on operations in Turkey and mining duties for Lamaque. Deferred tax recoveries in 2019 relating to fixed asset movements, currency movements, and a corporate tax rate reduction in Greece were almost fully offset by a $17 million deferred tax expense as a result of the impairment reversal for Kisladag. The tax recovery in 2018 primarily resulted from the impairment charges in that year. Depreciation and amortization increased to $153.1 million in 2019 from $105.7 million in 2018, reflecting the increase in sales volumes in 2019, as well as the commencement of commercial operations at Lamaque during the year. Eldorado reported $64.2 million in net cash generated from operating activities in the fourth quarter and $165.8 million for the full year 2019.
This was also a significant increase from the fourth quarter of 2018 of 4.9 million and 67.5 million for the full year 2018. We finished the year with approximately $366 million in available liquidity. Of this, $181 million was in cash equivalents, and term deposits as at December 31, 2019. Approximately $185 million remained available under the $250 million revolving credit facility, which remains undrawn. Approximately $65 million of this facility is allocated to secure certain reclamation obligations in connection with our operations. I will now turn it over to Paul for a recap of operations.
Thanks, Phil. I'd like to echo George's comments and welcome Joe on board as well. Here's a quick summary of our quarterly and year-to-date operating results. As George mentioned, we produced 118,955 ounces of gold in the quarter at cash operating costs of $621 per ounce sold and all-in sustaining costs of $1,110 per ounce sold. This was more or less in line with expectations. Similarly, production for the year was also in line with expectations. We produced 395,331 ounces at a cash cost of $608 per ounce, and an all-in sustaining cost of $1,034 per ounce. This was our highest total production rates in three years. Looking forward, our 2020 production is expected to grow approximately 35%. Forecasting annual production of between 520,000 and 550,000 ounces of gold at cash costs of $550-$600 per ounce, and all-in sustaining costs of $850-$950 per ounce in 2020.
We expect lower all-in sustaining costs than 2019 actuals, as production is expected to increase this year. That's it from me. A short section this time around. Over to Joe.
Thanks, Paul, and good morning, everyone. It's a pleasure to be part of the Eldorado team, especially at such an exciting time in our business. Now, going to slide 6, we'll get a look at our 5-year outlook. Full year production figures remain the same for 2020 as what you saw in January 2019. As we've talked before, production will decrease in 2021 as we mine lower grade at Kisladag. What I want to highlight is our sustained annual gold production beyond 2020. This is a sizable improvement over what you saw last year. In addition to the mine life extension at Kisladag, we are forecasting a step-up in production at Lamaque to 150,000 ounces per year through accelerated development. This does require an expansion to the existing permit for triangle underground extraction rates.
We're also forecasting an increase in production from Olympias, and we'll discuss that a bit further later in this call. Post-2020, we are now forecasting an annual average of over 450,000 ounces of gold per year from our base operations, and our key development projects provide potential growth to this production profile. Over to Kisladag on slide seven. The headline at Kisladag is an average of 160,000 ounces of gold per year for 15 years. The project is self-funding and reestablishes Kisladag as a cornerstone of our company. As you may remember, the company announced in January 2019 that it would suspend work on the mill in favor of resuming mining, crushing, and heap leaching. The company also announced that it would continue test work on deeper material at Kisladag to see how it responded to longer leach cycles with the aim of extending mine life.
Later in 2019, the company announced that given the test work to date, it did expect to extend the mine life at Kisladag. Additionally, the company conducted high pressure grinding roll, or HPGR test work on several bulk samples. These samples were then tested to see how they would perform under a 250-day leach cycle. The results of the test work indicate that a combination of HPGR and longer leach cycles will yield recoveries of approximately 56%. This test work, now complete and coupled with extensive test work covering the remaining reserve, we have a comprehensive understanding of how the ore body will behave going forward. As a result, we collectively are confident, very confident in our new mine plan. A 43-101 compliant report confirming our new reserves of over 4 million ounces of gold will be published before the end of this quarter.
Looking at slide 8, we have an outline showing the scale of the new pit looking to the north. The darker yellow is the existing pit mine to date, and the shaded yellow is the new reserve pit. This new pit contains 173 million tons of ore, resulting in the 15-year mine life. Slide 9 takes us to Lamaque. Our guidance for Lamaque increases to approximately 150,000 ounces per year by 2022. We will achieve this by increasing our mining rates to roughly 2,200 tons per day, which is the current capacity of the Sigma Mill. This expansion requires no incremental capital and it simply accelerates underground development. Eldorado will continue to study ways to optimize the Triangle deposit. Initially, we'll focus on the decline from Triangle to the Sigma Mill.
Following that, we will look at de-bottlenecking the mill and a long-term tailings solution to enable us to go beyond 2,200 tons per day. With the recent discovery of the Ormaque and continued exploration success at Triangle, the company has deferred release of a PEA. We feel that incorporation of new information into the study will allow us to better scope the full potential of Lamaque. On to Olympias at slide 10. 2019 was disappointing. Olympias finished the year with lower production and higher costs than planned. However, we did establish a positive trend in the second half of the year by improving the underground development and backfill cycles. During 2020, we will continue to focus on development and include additional initiatives aimed at further enhancing our productivity.
The guidance we have issued shows a continued positive trend and shows we are expecting to achieve higher production at lower costs than 2019. We expect continued progress beyond 2020, resulting in improved cost performance over time. We still have a ways to go at Olympias, but we are making progress, and we expect the necessary step change in productivities over the next two years. On that basis, our five-year plan includes an expansion at Olympias to 650,000 tons per year. Further details on the expansion will be outlined in a technical study that will also be published by the end of this quarter. With that, I'll turn it back to George for closing remarks.
Thanks, Joe. Before wrapping up, I want to take a moment to thank our global teams for their collaboration and drive in 2019, particularly the Kisladag team for putting the mine back on track and Lamaque team for an excellent first year. Together, we achieved multiple significant milestones, making it a pivotal year for Eldorado. I'm very proud that we delivered our highest annual production in three years while maintaining steady operating costs. We expect this positive momentum to continue with 2020 production forecasted to grow to between 520,000 and 550,000 ounces. The expected increased cash flow will give us options to invest in our growth projects and pay down our debt. We will continue to put safety, sustainability and governance at the core of our business as we seek ever better ways to operate. Thank you, everyone. I will now turn it over to the operator for questions.
We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. We will pause for a moment as callers join the queue. The first question comes from Mike Parkin with National Bank. Please go ahead.
Hi, guys. Thanks for taking my questions. With the Olympias expansion study coming out, should we be looking for that largely to be the addition of the ball mill that you've spoken to in the past?
Yeah, that's correct. There's some subtle changes elsewhere in the plant, but the major change is that addition of a ball mill.
Are we still thinking CAPEX somewhere in around $20 million-$25 million?
Yeah, a little bit more than that, Mike, but not significant.
Okay. Where do you see OPEX per ton on an overall basis kind of trending as whatever % drop from where it's kind of been, or however you want to communicate it with that expansion?
I see that we'd be looking at the +30% improvements in OPEX, roughly, and perhaps more.
I guess you get a double whammy because you're increasing your lead and zinc as well, so that makes a big difference to cash operating costs. Yeah.
Okay. With Kisladag, can you just give us an update on the fleet there? Is it owner operated? If it is, what's the condition of it now that you're looking at such a massive mine life extension there? Will there be a need to replace the fleet in the next few years?
The fleet is owner operated, and we don't see a need to replace the fleet. The Caterpillar trucks will run to about 150,000 hours, and the Hitachi is somewhere just shy of 100,000.
Okay. Just the last one for me. Now that you've got such a long, sustainable 500,000-ounce production base, does that change your thoughts towards Skouries in terms of a need for a third party now that you've got longevity within the asset base that's producing?
No, our strategy remains unchanged. Step one is to finalize an agreement with the Greek state on investor protections and permits for the Skouries dry stack tailings redesign, and then to work on financing. Our primary strategy is to find a partner, and two significant reasons for that. One is funding. We view it strategically the right path forward for Eldorado to have a partner to fund remaining capital, to have Skouries brought into commercial production. Second, just portfolio management of risk. That strategy remains unchanged.
All right. That's it for me, guys. Thanks, and congrats on the life of mine update for Kisladag. That's great.
Thanks, Mike.
The next question comes from Carey MacNeil with Haywood Securities. Please go ahead.
Thanks, operator. Joe or Paul, do you need any incremental permits for the Kisladag new mine plan?
No, we don't, Carey. The plan still fits within the footprint of the original expansion area. All good in terms of what we're planning to do from a permit standpoint.
Okay. You still need to relocate the crushing infrastructure because it'll fall within the pit though, right?
No, we don't. The north side actually doesn't move. There's a little bit of infrastructure yards associated with sort of mobile equipment, et cetera. The crusher will stay where it is and most of the offices, et cetera, stay where they are as well.
Okay. Just to follow up on Mike's question, then no new gear needed for that plan. You'll just be rebuilding the equipment as time goes on, and it'll last for the life of the project then.
Yes, that's correct.
Okay. For Olympias, I know the current plan was 420,000 ton a year, but I'm not sure what the permit was for. Do you need a permit there to go to 650,000 tons a year?
Yes, we will need a permit to increase to that level. We're currently authorized at 440.
Is that an amendment or is that something that you think would take a long time to actually achieve?
Bill, it's an amendment to the existing permit, and our production ramp up is consistent with our expectations on permitting there.
Okay, great. I guess on Olympias, just you're obviously struggling on the cost side there or have been, and I know this year you've got the forecast for, I think it was $800-$900 an ounce for cash costs. I guess last year they were north of $1,200. Just in simple terms, what are you doing to get those costs lower?
Presently, as I mentioned, we are working on development cycle. We've brought in a development contractor to help us pick up there. We continue to work on backfill cycle and more volume in pace than cemented aggregate fill. We're also doing a couple of kind of minor projects underground to help us with maintenance facilities and pumping facilities underground. Really the majority of it is likely to be non-technical and more sustained leadership and improvement of basic operations and operational standards. It's pretty basic stuff.
Okay. That's great. Thanks very much, guys. Congratulations on the new mine plan.
Thanks, Carey.
The next question comes from Tanya Jakusconek with Scotiabank. Please go ahead.
Yes. Good morning, everybody. Just wanted to circle back on Kisladag, if I could. Just wanted to ask George, I think on the last conference call, we talked about the HPGR as part of the option for Kisladag, and we talked about the fact that you were kind of going through it in parallel, but you needed more time and likely needed the end of 2020 to have more clarity. I was a bit surprised to see that this is the option that we went with. Can you just talk about what changed over this period?
Sure, Tanya. If you go back a year ago when we did the first round of HPGR tests, those tests didn't give us a lot of information. We basically over-crushed, had too many fines in the product, and were unable to get solutions through the column. Those results weren't very positive. I think for us, these HPGR tests require large samples. We were able to run multiple samples through multiple suppliers. We've done the leach test work, and we now know the range by which we can put energy into crushing and fracturing of the rock to optimize recovery. What I would describe for you is the results came back very positive and consistent, and what we have in our outlook and what you'll see in the upcoming technical study are solid, consistent results. I'd also mention that there's still some upside remaining.
We know we can push the circuit harder and create access to additional gold, and it's trying to find that optimum position between particle size and not pushing it too far where you have a permeability issue. I guess what I'd tell you, the surprise was with these new results, we're able to find that sweet spot to be in, and I think we've landed on a conservative case that we're confident we can deliver. There's some upside to be able to push that circuit a bit harder and perhaps push that recovery slightly above the 56% we now have in our life-of-mine assumptions.
Okay. Just so I understand correctly, was it, George, that when we did the conference call in, I guess it was November, when you were still looking at the tests of like a year ago? Is it that you've done new testing from over the last quarter on the HPGR that gives you this comfort level?
Yeah, those test results just came in in the new year, and those results were dramatically consistent and positive. We didn't want to give the market a positive outlook till we have data to support it. I would say for myself, I was surprised it dramatically came back so positive. When you look at it, we over-crushed a year ago. We now have data to support what others in the industry have seen, that this technology can actually improve fracturing and improve recovery in a leaching scenario.
Okay, it was just a change of these results that you got from November to today?
Yeah, dramatic change in the output of the test results.
Okay. Maybe just moving on to just the permit that we need at Olympias. George, where are we in terms of the whole permitting aspect with Greece? I know that we were looking to want to have permits at several operations, Perama Hill, just adjustments at Skouries on some of the permits, and now Olympias. Have we started the permitting process on all of these?
Yes, we're engaged with the Greek state on permitting strategy, and on our side, in various stages of engineering and design. On the Greek state side, we're in agreement on the method and what's required to get these additional permits. I would describe it as we're progressing down that line and expect to have good progress this year.
Okay. You've kind of taken the approach with the government of seeking permits on all of them at the same time?
Yeah, they're all tracking at a different pace. I'd say the Skouries dry stack tailings ahead of the others from a progress perspective. They're all moving in the direction to support the assumptions in our life-of-mine plans.
Okay. Maybe just moving to Lamaque, if I could. I think on the call I heard that going from 1,800 tons a day to 2,200 requires no additional capital except for underground development. What amount of underground development will be required?
It's really more just a speed-up of the plan development, Tanya. It's not per se an extra capital. It would just be bringing that development forward. You could look at it as, if we're running 20% faster, we'll have 20% more development effectively.
Okay. Though, going to the 2,500 tons a day, though, I think that one would require the capital. I think on the mine tour, we had talked about additional capital if we were to go to that level.
Yeah, we're still focused on pre-feasibility study engineering in the second half of the year, and that will study the decline, the crusher conveyor, subsequent mill upgrades required to push us past 2,200 tons a day, and eventually, a long-term tailings solution that would be placed underground. That work is continuing, and we'll have those results in the second half and determine next steps for Lamaque in terms of growth capital.
Okay. Again, we need amendments to permits to go to 2,200, correct?
Yeah, we filed the permit to expand the Triangle production daily rate from 1,800 tons a day to 2,600 tons a day. That was filed in December. We've seen all of our permits at Lamaque come in timely as expected and foresee that around the middle of the year.
Okay.
Well ahead of our needs.
Okay, perfect. Thank you.
Thank you.
Once again, if you have a question, please press star, then one. This concludes the question and answer session. I would like to turn the conference back over to Mr. George Burns for any closing remarks.
Well, thank you everybody. It's been a remarkable day for us. Look forward to catching up with you shortly on our Q1 results. Have a great day.
This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.