Eldorado Gold unit gets €680 million project financing facility

By William Gullotti

Buffalo, N.Y., Dec. 15 – Eldorado Gold Corp. announced its wholly owned subsidiary, Hellas Gold Single Member SA, signed a €680 million project financing facility for the development of its Skouries Project in Northern Greece, according to a 6-K filing with the Securities and Exchange Commission.

The new facility is subject to customary closing conditions, which are expected to be satisfied for the initial drawdown to occur in the first quarter of 2023. It will be available for three years, with a seven-year period for repayment. Repayment is expected to commence June 30, 2026.

The facility is a term facility consisting of a €480 million commercial loan, €100 million of initial funding from the Greek Recovery and Resilience Facility (RRF) and a €100 commercial bridge loan expected to be replaced by an additional RRF loan in 2023.

Also included is a cost overrun facility, a contingent facility that may be tapped for an additional 10% of capital costs.

Interest on the commercial loans is variable, based on Euribor plus a fixed margin. At signing, interest was set at 5.4% until project completion and at 5.2% following project completion, with 70% of the variable rate exposure to be hedged via an interest rate swap for the term of the facility.

The initial RRF loan bears fixed interest at 3.04%, and the additional RRF loan’s interest rate will be set at the time the bridge loan is replaced.

Hellas will hedge limited volumes of gold and copper production to manage downside commodity price exposure and support minimum debt service coverage ratios. It is expected that hedging will be limited to not more than 50% of the first year of commercial production and this will be reviewed at least annually. The company will also hedge a portion of its foreign exchange exposure. Terms of the hedging program will be confirmed with the initial drawdown.

The term facility is non-recourse to Eldorado and the collateral securing the facility covers the Skouries Project and the Hellas operating assets. The remaining 20% of project funding is expected to be fully covered by Eldorado’s existing cash and future cash flow from operations. Until such further equity is fully invested, Eldorado’s investment undertaking for the project will be fully backstopped by a letter of credit from its existing revolver.

National Bank of Greece SA and Piraeus Bank SA are the lead arrangers.

Eldorado Gold is a Vancouver, B.C.-based gold producer.

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