Thank you for standing by. This is the conference operator. Welcome to the Eldorado Gold Corporation Q1 2021 Financial and Operational 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 Jeff Wilhoit, Interim Head of Investor Relations. Please go ahead, Mr. Wilhoit.
Thank you, Carl. Thanks everyone for taking the time to dial into our conference call today. On the line with me are George Burns, President and CEO, Phil Yee, Executive Vice President and CFO, and Brock Gill, Senior Vice President, Projects and Transformation. Brock Gill will present operations today as Joseph Dick is joining the call from a location that may experience connectivity issues. He may be available for portions of the question- and- answer period as technical conditions warrant. Also on the line for questions are Jason Cho, Executive Vice President and Chief Strategy Officer, and Peter Lewis, Vice President, Exploration.
Our release yesterday details our 2021 first quarter financial and operating results. This should be read in conjunction with our first quarter financial statements and management's discussion and analysis, both of which are available on our website. They've also been filed on SEDAR and EDGAR.
All dollar figures discussed today are U.S. 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 2020 AIF and in the cautionary note on slide two titled Forward-Looking Statements. I will now turn the call over to George.
Thanks, Jeff, and good day, everyone. Here is the outline for today's call. I'll provide a brief overview of Q1 results and highlights before passing it to Phil to go through the financials. Brock will follow by reviewing operational performance. We'll open it up for questions. For those of you who joined us on last year's first quarter earnings call, you will remember a very different tone as we discussed and evaluated the challenges of COVID-19 imposed on our business. While we continue to contemplate the impact that the pandemic has had on all of us, there is also a sense of renewed hope and optimism for the future.
On behalf of our management team and board of directors, I again extend my deepest thanks and appreciation to our employees and their families who tirelessly commit and persevere to ensure that Eldorado will emerge from this stronger and a more resilient company. Turning to our results in the quarter, I am very pleased with our solid start to 2021, both operationally and financially. Since we last spoke two months ago, our signed Investment Agreement governing the further development of Skouries, Olympias, and Stratoni, collectively known as the Kassandra Mines, was submitted and ratified by the Hellenic Parliament and has officially entered into Greek law through the publication in the Government Gazette. These are key milestones in unlocking the compelling value of our Greek assets.
We also reached important milestones at our Canadian operations as QMX shareholders voted overwhelmingly in favor of the transaction with Eldorado that officially closed on April 7th. With the strategic land position now 5.5x bigger, a newly discovered 800,000 oz gold resource at Ormaque, and a host of high potential exploration targets, our Quebec team is now focused on continued growth in this key jurisdiction. I've mentioned our success de-risking milestones in Greece achieved during the first quarter, and I'll spend a moment on timing of future milestones, specifically at the Skouries Gold-Copper Project. I'm very pleased with the latest milestone in Greece that we announced just yesterday. We now have approval for the use of dry stack tailings at Skouries.
This EIA modification will reduce the environmental footprint of tailings facility by 50% and will create a more efficient, safe, and streamlined operating mine. This was a tremendous piece of work by our teams and regulators and evidences our mutual desire to design Skouries with the lowest possible environmental impact. The updated feasibility study for Skouries continues to advance towards completion in the third quarter, which will accelerate the process of finalizing the funding and financing for this world-class project. In parallel, we are also getting ready to submit an EIA for the Kassandra Mines mirroring our development plans outlined in the Investment Agreement. Following that, we are pursuing a construction decision by year-end, and we'll look to restart construction in early 2022.
With timely completion of the construction in 2.5 years, low- cost production from Skouries represents significant upside to our current five-year production profile. Just a bit more color on dry stack tailings. Eldorado is an industry leader in using this best available technology. We deploy dry stack tailings at the majority of our mines and pioneered the use of it in Turkey and Greece. I am excited to now be able to implement this at Skouries. The bottom left picture here shows the processing facilities at Skouries. At the top, you will see the mill and the thickening ponds in the middle. The tailings filtration plant is a small building circled in yellow. This is a bit misleading, as the Skouries filtration plant is one of the largest in the world. It's the size of a soccer field and is shown in more detail on the bottom right.
In addition to strengthening our business in Q1, I am pleased to report that Eldorado made significant progress on key sustainability initiatives during the quarter. Notably, we advanced articulation of our new Sustainability Framework and launched our Global Sustainability Integrated Management System, or SIMS for short. These reflect our commitment to doing business the right way and putting responsible practices at the core of all that we do. Our Sustainability Framework is our foundation for how we approach responsible mining. It articulates four key pillars that are our commitments across environment, social, and governance indicators, as detailed on the slide here. In delivering on these, we believe we will continue to be a preferred partner for host communities and countries and have access to capital to be able to grow our business for the benefit of all stakeholders.
In Q1, we rolled out SIMS that integrates sustainability, responsibility, and accountability across all of Eldorado's core business functions at all levels of the organization. This management system is a set of performance standards by which we will be able to better measure and track our ESG performance. We have integrated other responsible mining frameworks, such as the Mining Association of Canada's Towards Sustainable Mining and the World Gold Council's Responsible Gold Mining Principles, into SIMS, that in adhering to our own standards, we are also complying with these leading frameworks. In short, the core objectives of SIMS are regulatory compliance with voluntary commitments, responsible risk management, and continuous improvement. With that, I'll turn things over to Phil for a review of first quarter financials.
Thank you, George. Good day, everyone. Starting with slide eight, solid operational results and revenues in Q1 2021 were consistent with plan and expectations, and production is in line with our 2021 annual guidance. Adjusted earnings per share was lower than expected due to increased taxes resulting from the weakening Turkish lira during the quarter and higher depreciation. Turning to a brief review of the numbers, strong operating results and a realized gold price of $1,723 per oz in the first quarter led to a 20% increase in adjusted EBITDA to $108 million, compared to adjusted EBITDA of $90 million in the first quarter of 2020. The realized gold price reflects negative provisional pricing adjustments related to concentrate sales from the previous quarter.
The company reported net earnings to shareholders in Q1 2021 of $8.3 million, or $0.05 per share, compared to a net loss of $4.9 million or $0.03 loss per share in the first quarter of 2020. After adjusting for one-time non-recurring items, including a $12 million non-cash loss on foreign exchange translation of deferred tax balances related primarily to the Turkish lira, adjusted net earnings for Q1 2021 increased to $21 million or $0.12 adjusted earnings per share, compared to $12.5 million or $0.08 adjusted net earnings per share in the same quarter one year ago. As stated earlier, adjusted earnings per share of $0.12 per share was lower than expectations due to higher current taxes, a result of the weakening lira, and higher depreciation in the quarter. Tax expense totaled $28.2 million in Q1 2021 compared to $21.4 million in Q1 2020.
Approximately $9 million of current tax expense in the quarter related to taxable unrealized foreign exchange gains. These gains were primarily due to the significant weakening of the Turkish lira during the quarter, which went from TRY 7.44 to the U.S. dollar at the start of the year to TRY 8.24 a t the end of Q1. This weakening lira increased the value of our U.S. dollar-denominated cash in local currency terms, leading to a taxable foreign exchange gain. Another development related to tax was the recently annozd temporary increase in the corporate tax rate in Turkey, whereby the current effective tax rate of 20% will increase to 25% for 2021 and then decrease to 23% for 2022. The rate is then expected to return to 20% for 2023 onwards.
This increase will be retroactive to January 1, 2021. It has not been reflected in our Q1 interim financial results due to the timing of the annozment. The increased tax rate, including the retroactive adjustment for Q1, will be reflected in our Q2 results. Depreciation expense totaled $56.3 million in Q1 2021 compared to $52.4 million in Q1 of 2020. The increase was primarily a result of higher tons mined in the quarter as compared to Q1 of last year. The lower average grade at Kışladağ in the quarter contributed increased depreciation on a per oz sold basis as compared to Q1 2020. This increase was partially offset by lower depreciation resulting from a change in estimate, whereby a portion of inferred mineral resources are now included in the depreciation calculation commencing at the start of 2021.
The impact of this change primarily is at Lamaque and better reflects the pattern in which the future economic benefits of assets are expected to be consumed. I am pleased to report continued increased financial strength and liquidity as shown on slide nine. At quarter end, we had unrestricted cash and cash equivalents and term deposits of $533.8 million. We also had $99.6 million undrawn and available under a revolving credit facility. Eldorado is in a net cash position as at March 31, 2021, and lowered our net leverage ratio to effectively 0 compared to 0.89x at the end of the first quarter of 2020, reflecting continued reduction of debt. Our Q1 2021 free cash flow totaled $24.6 million, significantly higher than the $7.2 million generated in Q1 2020.
Looking to the balance of this year, our free cash flow generation in future quarters will be deployed increasingly towards those capital investments essential to our continued growth. With that, I'll now turn it over to Brock to go through the operational highlights.
Thanks, Phil, good day everyone. Starting with slide 10, our positive first quarter operating performance set the tone for what I believe will be a strong year for Eldorado. I've been impressed by the pace, energy, and agility of our teams at site. We produced 111,742 oz of gold in the quarter at cash operating costs of $641 per oz sold and all-in sustaining costs of $986 per oz sold. Our cornerstone Kışladağ Mine deserves special recognition for its strong finish to the quarter. All of our operations met head on the continued challenges brought about by the pandemic and its impact on the ongoing global operating environment. Staying with Kışladağ, first quarter gold production totaled 46,172 oz at cash operating costs of $492 per oz. The team there proactively managed through a minor geotechnical issue in the pit high wall that deferred access to higher planned grades.
The resulting lower average grade in the first quarter was partially offset by outperformance on tons mined and placed. Mining has since resumed in the affected area, and the high wall issue has been resolved. Bench stability at Kışladağ is very good. On the processing side, two new CIC trains were successfully brought online during the quarter, which has increased our solution processing capacity going forward from 3,250 to 3,750 cubic meters per hour. The installation of a new carbon regeneration kiln remains on track for scheduled completion in mid-May, which is expected to drive improved gold recoveries in the circuit. The commissioning of the high- pressure grinding roll circuit remains on track for the third quarter. As you can see from the picture here, the HPGR building has been erected and partially cladded in preparation for equipment delivery, which is en route.
The commissioning manager is now on site. We are also progressing well on our multi-year pre-stripping campaign, and studies are ongoing to assess the potential for accelerating this work in an effort to bring value forward at Kışladağ. Over to Efemçukuru, where first quarter gold production totaled 23,298 oz at cash operating costs of $525 per oz. The recently installed flotation columns continue to operate well as we also evaluate optimum ranges. This will result in significant improvements in the quality of our gold concentrate. Turning to our Canadian operations, first quarter tons and grade at Lamaque came in as expected. First quarter gold production totaled 28,835 oz at cash operating costs of $759 per oz. The underground decline between Triangle and the Sigma Mill has reached the approximate midway point of total planned distance of 3.3 km.
We remain on track to connect the two drives by the end of this year. Completion of the decline is expected to reduce operating costs as surface haulage costs are eliminated and the current ramp up underground route is replaced with straight line haulage to the Sigma Mill. At Ormaque, early results of infill drilling on this 800,000-oz maiden gold reserve have been positive. Preliminary mine planning studies are underway to assess the initial scope of this resource within the Lamaque operation. Once completed, the underground decline will enable the team to drift over the deposit and gain additional information to integrate this promising new discovery in future mine plans. Over to Greece. At Olympias, first quarter gold production totaled 13,437 oz at cash operating costs of $1,145 per oz. We recently initiated leadership training surrounding our overall group transformation plans.
This is a wide-ranging, sustained effort that touches every part of our business in Greece, from employee education and training to physical plant and business systems upgrades. As Skouries continues to advance, we will ensure that it does so while adopting best practices and a culture of success before the first shovels are in the ground. Implementing this scale of change at an existing operation like Olympias is challenging, but the long-term benefits in productivity, efficiency, and safety will result in a stronger operation with greatly enhanced economic opportunities. Touching briefly on our two key growth projects in Greece, the project management contract for Skouries has been awarded and pre-construction work is proceeding, including structural cladding for the mill as well as continued preservation activities. Completion of the feasibility study is expected late in the third quarter.
At Perama Hill, an updated 43-101 study remains on schedule for completion this year. We also continue to see great exploration potential in the Thrace region, supporting opportunities for growth in and around Perama Hill. With that, I will turn it back to George for closing remarks.
Thanks, Brock. Whether it's de-risking the Greek assets, exciting capital investments underway at Kışladağ, or optimizing our high-potential Canadian operations, Eldorado remains well-positioned for success. Our balance sheet continues to emerge as a major strength, which will enable us to maximize this potential and surface value for our shareholders and our stakeholders where we operate. Thank you, everyone. I will now turn it over to the operator for questions.
Thank you. 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 speaker phone, 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 Cosmos Chiu from CIBC. Please go ahead.
Great. Thanks, George, Phil, and Brock. Maybe a few questions from me here. First off, can we have maybe a discussion on taxes, hopefully without giving everyone a huge headache here? Phil, as you said, earnings were lower than the numbers on the street, just given taxes and also depreciation. On taxes, I calculate that taxes were about 71% of earnings in the quarter, which is really high. Even if I back out some of the one-time items, it's still 41%. I guess, given the continuing volatility in the Turkish lira, could you give us a bit more guidance in terms of how we should model and look at taxes for the remainder of 2021?
Sure. Thanks, Cosmos.
Hi.
Good morning. Yeah, good question. The taxes, the effective tax rate you outlined is accurate, but that includes cash and non-cash types of adjustments. If you look at the current tax rate, it's about 30.6%. That includes, like in Turkey, that includes the corporate tax, which for Q1 was at 20%. The retroactive portion of that reflecting the increase to 25 has not been booked yet because of the timing of the announcement. That'll be picked up in Q2. The other part of the taxes in Turkey is tied to a foreign exchange tax. It's a quarter-to-quarter adjustment. When the Turkish lira weakens compared to the U.S. dollar, there's an additional tax that's imposed.
When the Turkish lira strengthens versus U.S. dollar, that tax is then credited back. In Q1, there was a significant weakening of the Turkish lira, higher than eight, and that resulted in the higher tax. That was unique to Q1. In Q2, the forecast for the Turkish lira is forward. There's still, I think, concerns with some of the economic policies and actions that are being taken with the Turkish Central Bank. The forecast is still for the lira to remain around eight for the time being.
Even if it drops to eight, there would be a slight credit back in Q2. If it drops below eight, the credit would be higher. That's kind of a fluctuating impact. Again, it's dependent on what's happening in Turkey. The other part of the current tax is really the Quebec mining duties, and that's just the provincial mining duties. The federal tax piece is offset by loss carryforwards in Quebec. The largest component is Turkey. Like I said, the one factor that we know for sure is that the corporate tax rate is going from 20% to 25%. That'll be affecting Q2, and the foreign exchange will depend on the fluctuation of the lira.
Okay, great. Thanks, Phil. I'm not sure if my Q2 tax estimate will be any more accurate, but we'll give it a try. Maybe switching gears to Greece. First of all, congratulations on getting the Investment Agreement ratified and also getting the dry stack tailings approved. On that, George, and team, as you mentioned, you're now working on an updated technical report. Clearly, the last technical report was completed in March 2018, some of the input costs have increased, steel prices and other prices as well. Not sure how much you can share with us at this point in time, but could you give us a bit more color in terms of potential changes and how we should look at CapEx of this project on a go-forward basis?
It's George. I'll maybe take a kick at it.
Hi, George
Joe could jump in. Thanks for the congratulations. It was a fantastic first quarter for us getting the Investment Agreement hammered out. That Investment Agreement is sort of a state-of-the-art agreement that puts protections in place for Eldorado, but also for the government. It was a mutually beneficial Investment Agreement, in spite of COVID, we were able to hammer that out over the last year plus. It was great news yesterday to get the permit approved for Skouries dry stack. That's a massive improvement and a benefit to everybody and an attribute to our company's commitment to ESG.
On the technical report, that is the next major milestone for us, and I'll just give you a general characterization. You got to recognize that Skouries is half built. The main infrastructure for the plant is in place, so the grinding section, foundations, flotation cells, most of the tanks.
There is a lot already on the ground. Obviously, there's still a lot to be done. Our remaining capital, it's $700 million. When you look at that, though, we've got the dry stack filter plant to purchase and construct. We've got the primary crusher to construct. In terms of the dry stack facilities, we've got to procure the equipment and the building and steel for that. There will be some escalation on the costs associated with that over the last couple of years. Predominantly, the rest of the things we need in the plant are on the ground. There's a lot of things to be done. We got the starter dam, and basically, it's a rock dam that will ensure the dry stack filter tailings have a in perpetuity control for any kind of erosion.
We've got the open pit pre-stripped, so we're ready to deliver ore to the plant once everything else is ready. There's a lot of work to do in the underground. Right now, the decline is at the top of the underground section of the ore body, but there's a lot of lateral development, vertical development, test stoping in order to have the underground ready for commercial production. Yeah, there obviously is going to be some escalation on some of the materials we have yet to procure. We think we're in a really good position to really push productivity and efficiencies on construction. In the end, I'm not expecting any material change in estimate. It's really about giving us the assurance and putting us in the best position possible to negotiate the financing terms that we need in order to get the construction started. Stay tuned.
We're all going to have the answers to this as we get that study completed in Q3, and we'll be in a lot better position to finalize financing.
Great. Yeah, it seems like ages ago now, but I remember being on site three or four years ago now, and yes, you're right, a lot of the infrastructure was already in place at Skouries. Maybe just a quick follow-up and my last question here. As you said, financing. You gave us some goalposts during the prepared remarks. You talked about feasibility study coming out in Q3 or updated technical report in Q3, then potentially starting construction or continuing construction earlier on in 2022. In between, should we expect bring in a financing partner? You've talked about potentially a joint venture partnership in the past. Do you need that in place before starting construction? Is that sort of the timeline that we should be looking at?
I'll just answer at a high level and let Jason jump in to provide some additional comments. Yes, our strategy for the year is to get the technical study completed in Q3, and that positions us best to be able to finalize the financing. Joint venture is one of the primary things we continue to be focused on for a multitude of reasons. One is to provide capital, two is to bring another important voice to the investment, as these are multi-decade, high quality assets that over time will have many governments come and go. There's a lot of factors that will be used in our decision-making. Maybe I'll let Jason jump in here with a few comments.
Yeah, thanks, George. Cosmos Chiu, consistent with George has already said, timing with respect to the updated feasibility study, and the updated EIA are critical pieces to ensure that we land on more optimal terms with respect to funding. As you've seen it from the budgets, there is capital being allocated to early-stage works, and I would suggest that we probably would continue to do that. As it relates to making material commitments without a funding partner, without funding properly in place, that probably is not likely to happen. The idea is to progress through the balance of this year, and as George had mentioned is, try to land on something later this year or early next.
Great. Thanks a lot. Those are all the questions I have. Have a good weekend.
Thanks, Cosmos.
The next question comes from Kerry Smith from Haywood Securities. Please go ahead.
Thanks, operator. George, what is the timing for the updated EIA for Kassandra, I guess, for the whole Kassandra operation? Does that EIA need to be approved before you could start construction at Skouries, or is Skouries covered off under the existing EIA with the amendment for the dry stack tailings?
Hi, Kerry. Thanks for those questions. The amended EIA that we're actively working on with government is primarily for Olympias and Stratoni. We have what we need to be able to proceed with Skouries from a permitting perspective. For Olympias, as you know, our plan is to continue to ramp up infrastructure and development in the underground mine to be able to support higher production rates. That is really going to make Olympias a solid asset for us. By ramping up the underground production, our fixed costs remain fixed, and our variable costs will drop dramatically, and that will provide some significant margin. Productivity and efficiency improvements are key, but so is getting this permit submitted and approved that will enable us to increase throughput and value. That's a key part of this new permit.
A second piece, as you know, we produce concentrates and we ship those concentrates, and our current methodology is pretty high cost. By doing some additional upgrades to the Stratoni port, we accomplish a couple of things. One, we can ship more of the concentrate out in bulk. That improves safety issues related to concentrate movement. We'll be putting environmental improvements into these upgrades and modernizing the Stratoni facility, and we'll be lowering our operating costs by having lower cost transport. To answer your question, it's a work in progress. We're expecting to be able to file that permit later this year. Because it, unlike the Skouries modification, where it was purely environmental benefits, there was absolutely no additional environmental risk. It was reducing footprinting, increasing water recycle, all very positive things.
In the case of expanding Olympias, we're obviously moving more tons out of the underground, more tons through the plant, more tailings to be dewatered and dry stacked, all that has to be properly engineered and assessed from an environmental impact perspective. Again, we're using best available technologies for this, we got to go through the regulatory procedures and approvals. Expect to file later this year, expect to have an approval sometime next year. There's really no urgency on Olympias because, as you see in our five-year guidance that contemplates this expansion of Olympias, it's kind of a steady ramp up over time. We've got the existing capacity for the early stage ramp up. We simply need this permit to be able to deliver the overall five-year plan.
Obviously, the sooner the better on Stratoni, the quicker we can lower our margins on concentrate handling and shipment, the better. We're working our way through that regulatory process, and I think you can see from what we've accomplished in the last two years, we've got a very supportive government that's looking to do the right things as we are, protect the environment, create jobs and wealth for everybody. We're feeling pretty optimistic about this, and we'll keep you updated.
Okay, great. Thanks for that. Just secondly on Perama, if you get the 43-101 out in Q2, is that report required for the EIA submission, or can the EIA be submitted before that comes out?
Well, the 43-101 is simply just updating all of our technical information and keeping ourselves and the market appraised of that opportunity. In terms of progressing Perama, there's still a lot to be done. We've got the Strategic Environmental Assessment to be completed. When that's pulled together, there'll be a lot of stakeholder engagement with the communities, and with government. There's a lot of work to be done to ensure everybody understands the benefits, the environmental protection that's being embedded in this updated study, and then to get the acceptance of the communities and the government through permitting to be able to proceed. All in all, there's a lot to be done over this year and next to get Perama in a position to be our next construction opportunity, and we'll keep you updated as that unfolds.
What would the rough timing be then, George, to file the strategic EIA and then secondly, to get it approved? Do you have a sense for that?
Yeah, it's early enough stage. I'd just tell you we expect to submit this year, and I would expect to see an approval next year.
Okay. Yeah, that's helpful. Maybe just a question for Phil on this Turkish tax increase going from 20% to 25%, and then their intention to ratchet it back to 20% by 2023. How likely is that to happen? You very rarely see a government raise taxes and then lower them. Obviously, it can happen, but are you fairly confident that that would be the case?
Hi, Kerry. Good morning. The tax increase was announced on April 16th, that's like two weeks ago. A fairly recent development. The tax increase is affecting everybody. It's not unique to the mining sector. I think it's viewed as the government's response to some of the current economic challenges that are being faced in the country. I suspect at this point that, since they've put it out and it's been official, that is the general plan, to raise it to 25% and then slowly reduce it over the next couple of years. I think it's really going to depend on how successful they see that in terms of mitigating their current economic challenges. Whether it will change or not, Kerry, remains to be seen, but that's what's been enacted and communicated to everybody, to the market.
I suspect that at this point, that's what they're comfortable with.
Right. Okay. Just one last.
I might just jump in there for a second. Obviously, it's impossible for us to know and predict what the government will do. I think they're giving us their intentions, and for now we're assuming that's the case. Just to give you an example, we had that in Greece. We had taxes at 24%, increased to 29%, and then reduced back to 24%. It does happen. I think overall long-term trend in government taxes typically go up, not down, but we have seen that.
Right. Okay. Now, just one last question on the operations for Kışladağ. The Q1 grade was lower, and from Brock's comments, it sounds like that was due to a wall failure which limited access to a higher- grade portion. Your guidance for the year, I think, is 0.77 grams overall, and you were 0.69 grams in Q1. Is the grade still going to average 0.77 for the year, or will you think you'll be less than that because of this issue in Q1?
Yeah, we're expecting grade for the year to be as expected. It's just from a sequencing perspective, Q1 was expected to be stronger. As you said, we had a minor high wall failure from a safety perspective. It limited access on the ramp going into the bottom. Once that stabilized and was cleaned up, we're back in the bottom now. It's just a shifting of grade in the year. The one thing I'd point to from a positive perspective, Kerry, is if you look at Q1, the throughput was up pretty significantly, and that counteracted and helped with the lower grade in terms of our internal quarterly expectations. From my perspective, that's an opportunity that we'll continue to focus on.
If we can maintain an increase in throughput, well, that's going to create more ounces and that's going to shorten the mine life slightly but create more value. We're looking at continuous improvement everywhere. The team there was successful at having a really solid quarter on throughput. We're not changing our guidance on this. I'm just pointing out that was a great result for the quarter and it's something we're going to try to repeat. If we're successful on that, there could be some upside at Kışladağ on the year in the future.
Right. Okay. That's great. That's helpful. Thank you very much.
The next question comes from Mike Parkin from National Bank Financial. Please go ahead.
Hey, guys. Congrats on the development at Skouries. That's encouraging to see. With Perama, I just wanted to confirm that. It's included under the same EIA that the Kassandra Mines is, or is it separate?
No, it's a separate asset. We're working on a separate EIA to support that project.
Okay. Does the March 2018 feasibility study for Skouries include the economic benefits of what you're proposing to do at the Stratoni port in terms of transportation costs, or is that an upside scenario that we would be seeing with this updated feasibility study coming in Q3?
Joe or Brock, you can jump in there.
As of 2018, the port changes were slightly less than we're anticipating now. There should be or is potentially some upside in this technical report.
Okay. All my other questions were answered. Thanks very much, guys.
Thanks, Mike.
The next question comes from Tanya Jakusconek from Scotiabank. Please go ahead.
Great. Good morning, everyone. Congrats again on getting that tailings permit for Skouries. That's good news. If I could ask, a lot of my questions have been asked already, but I have two outstanding. Maybe just for Phil, we were off on our depreciation forecast for the quarter. Can you just provide us some guidance on what to expect for this year?
Hi, Tanya. Sure. Our depreciation, particularly at Lamaque, was tracking higher on a per-ounce basis than some of our other assets. We've introduced a change in estimate and given that Lamaque is a relatively new mine and it's growing, so we've added a portion of the inferred. That's going to reduce the depreciation charge going forward, especially for Lamaque. I think that's probably the one key item. I think maybe the other point is that our depreciation is based on tons mined. I think some models perhaps may be basing depreciation on ounces produced. We did see a bit of a skew this quarter in Q1 at Kışladağ because the tonnage mined went up. The higher tons and the lower grade led to the higher depreciation per oz in Q1.
Those are, I think, two factors that need to be considered in aligning depreciation models going forward.
Okay. I was just kind of thinking maybe from a bigger picture, like if something like $150 million-$200 million, would we be in the ballpark there?
I just trying to find the number that's in our budget. Don't have that handy at this point in terms of total dollar amounts. I think we are tracking, consistent with based on those adjustments.
Okay.
Perhaps I can get back with the numbers.
Yeah, maybe that'd be great. Thank you.
I don't have the full numbers.
Maybe just on the technical side, just trying to understand because you work in various jurisdictions in the world. What sort of inflationary pressures are you seeing, if any, through your cost structure besides fuel, which we appreciate, and steel? Are you seeing anything in labor? Are you seeing anything in cyanide, tires, freight? Just what are you seeing?
Yeah. We're not seeing anything abnormal, and I think that's, well, been a bit of surprise with all the COVID issues. We're obviously seeing inflationary impacts in Turkey with the U.S. to lira ratio. On the other hand, although the inflation's up in the country, the exchange rate counteracts that. We've seen that over the 20 years we've been in Turkey. Other inflationary periods have come, and the FX kind of washes it out. Although it's been a horrible, tough year on the planet, we haven't seen any unusual moves in inflationary-wise so far.
Even in your labor, George?
Well, like I said, in our labor, we have, as inflation goes up in Turkey, our labor costs get ratcheted up with that. Because of the FX, that generally gets washed out. Again, wages go up with inflation each year, there's nothing abnormal happening in terms of labor inflation either.
Okay. All right. Thank you so much for the color. I look forward to that number. Thank you.
Thank you.
Thank you. This concludes the question- and- answer session and today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.