The European Bank for Reconstruction and Development (EBRD) has agreed to a C$81.5-million strategic investment in Canada-headquartered Eldorado Gold to continue work on its Skouries project, in northern Greece.
The investment will be effected by way of a private placement, whereby the EBRD will subscribe for 6 269 231 shares at C$13 a share.
The investment will be credited against the company’s 20% equity funding commitment to the Skouries project as per the terms of its financing facility that closed last month.
In addition, Eldorado has entered into an agreement with BMO Capital Markets and National Bank Financial, on behalf of a syndicate of underwriters to purchase on a bought deal basis 10 400 000 common shares at the same price as the EBRD placement for gross proceeds of C$135-million.
The underwriters have an over-allotment option to purchase up to an additional 1 560 000 common shares, exercisable, in whole or in part, at any time up to 30 days from the closing of the offering. In the event that the option is exercised in its entirety, the aggregate gross proceeds of the offering will be C$155-million.
Eldorado will use the proceeds of the offering to fund growth initiatives across the global portfolio, including some not currently contemplated within the company’s five-year plan, as well as for general corporate and working capital purposes.
“We are pleased to be announcing a strategic equity investment from the EBRD and we view its investment as an endorsement of the Skouries project and Eldorado’s commitment to the highest environmental and social standards across our portfolio,” said president and CEO George Burns.
“The EBRD's equity investment, coupled with the Greek lenders in our recently closed project finance facility, provides strategic partners as we advance Skouries towards commercial production,” continued Burns.
He also said that the proceeds from this financing would provide Eldorado with additional optionality across its global portfolio.
“With a number of exciting development opportunities that are not currently included within our five-year plan, this additional funding provides us financial flexibility to advance these projects, including the Perama Hill project in northern Greece. Perama Hill is a high-quality project with consultation activities expected to commence later this year and then advance through the EIA process over the next two years.
“At Olympias, we received a modified EIA in April that provides us the ability to expand the processing plant following ramp-up of development of the underground.
“In Canada, with a maiden reserve expected next year at our Ormaque discovery, we expect to undertake additional trade-off studies to determine the optimum approach to incorporate it into our plans. Additionally, in Türkiye, we have a number of exciting opportunities, including conversion of inferred resources at Efemçukuru and early-stage exploration targets that have the potential to add to an already robust production profile,” added Burns.