How is gold creating value for society today?
In terms of the value that gold brings to society, there are two main areas of focus. Firstly, it functions as an excellent conductor of electricity and finds utilization in high-end electronics, albeit not in large quantities. Secondly, it dominates the jewelry sector, often seen as a form of investment, where people acquire gold not only to adorn themselves but to hold a tangible asset that can be passed down through generations or liquidated in later years.
Furthermore, gold is increasingly becoming a financial instrument, with numerous central banks globally amassing gold reserves to bolster their currencies. Investors are also turning towards gold to hedge risks in their portfolios, an approach further reinforced amid the financial crises and repercussions of COVID-19.
Do you see a change in how the younger generation and the general public perceive the mining industry and gold as an investment option? How does this relate to the trajectory of cryptocurrencies?
I have observed a definite shift in the industry, accelerating even more recently with a growing focus on sustainable mining practices. This shift could be instrumental in the younger generation gravitating towards gold as a more stable and tangible investment compared to cryptocurrencies, which often have a momentum-driven and cyclical nature. Gold offers a physical guarantee, adding a layer of security to the investment.
Looking ahead, initiatives by organizations like the World Gold Council aim to facilitate the easier acquisition of gold, potentially using mobile technologies to bring gold trading to a wider audience, fostering a more inclusive approach to gold as a store of wealth. By establishing globally accepted controls around this, the industry can assure investors of the physical existence of their gold, thereby protecting their investments and possibly driving a greater demand for gold.
Can you tell us about your move into copper production by 2025 and the rationale behind this decision, considering the dynamics of the copper market?
Certainly, the initiative to step into copper production with our project in Greece, slated to commence in mid-2025, is grounded in its substantial contribution to our revenue alongside gold. Skouries, the project in focus, promises a twenty-year mine life with promising exploration prospects beyond that. Copper revenue from this project would essentially cover all operational and sustaining capital costs, positioning the gold as a source of free cash flow.
Strategically, this project is aligned with the evolving needs of the European Union, responding to the increased demand for copper amid efforts to strengthen infrastructure and address climate change and energy concerns. Given the essential role copper will play in the global transition towards cleaner fuels, we anticipate a robust copper market in the coming decade, and believe that Eldorado is well-positioned to provide a part of the solution to the impending copper demand.
Given the projected increase in copper demand and the challenges in ramping up the supply, how do you foresee the landscape evolving, and what implications might it hold for the Western world and the EU?
The mining industry inherently demands time, with a complex process encompassing the discovery of economic deposits to the final stages of obtaining necessary permits and initiating construction, often stretching over a period of approximately ten years. While expansion opportunities in existing mines can somewhat expedite the process, it still doesn't address the potential surge in demand promptly.
Given this scenario, coupled with the essential role of copper in the transition to cleaner energy solutions, meeting the burgeoning demand poses a significant challenge for the industry. The situation as it exists today outlines a strenuous pathway ahead with potential delays in achieving the transition goals. The industry needs to navigate carefully, balancing the surge in demand with the environmental and social prerequisites to foster sustainable development. It is imperative to act judiciously to avoid a constrained supply scenario and facilitate a smoother transition in the energy landscape.
Regarding the 10-year average lead time in deploying mines and meeting supply demands, have you identified any innovative ideas during your discussions with policy makers and fellow CEOs to potentially reduce this lead time?
Certainly, the journey to reduce the lead time in deploying mines is not an easy one as each project presents its own unique set of challenges. The cornerstone of speeding up this process lies in a strategic collaboration between regulators and mining companies. Firstly, community consultation is imperative. It involves articulating the project details to the local communities and incorporating their feedback, ultimately aiming for social acceptance, which is a prerequisite to securing a permit. Enhancing the efficiency of this procedure is vital.
Furthermore, the permitting process itself is quite time-consuming, especially when regulatory agencies are inundated with information from numerous projects simultaneously.
The authorities need to be sufficiently staffed and possibly supported by consulting groups to expedite the analysis of the incoming data against the existing regulations. This approach will not only save time but also facilitate a smoother progression of projects, particularly in regions where staffing is limited.
Could you highlight the main factors contributing to Eldorado’s prolonged success in the mining industry?
Eldorado’s sustained success in the mining sector is founded on three pillars: a diversified portfolio of high-quality, long-life assets; a series of strategic growth projects unique amongst our peers; and an unwavering commitment to innovation, ESG, and sustainability. Our 30-year tenure in the exploration sector has seen the successful discovery, development, and operation of mines in Türkiye. We continue to focus our energies on our proven grounds: Türkiye, Canada, and Greece.
The strategically planned pipeline of growth projects ensures the continuity of our operations, even as we deplete our current resources. This pipeline includes promising prospects such as the Skouries copper-gold project in Greece and the high-potential Perama Hill situated in Greece. Apart from exploring new avenues, we are also investing in enhancing the throughput and recovery at our existing sites, Kışladağ and Olympias, to bolster our production profile and revenues. Lastly, our dedication to ESG and sustainability spearheads our innovative efforts to ensure more sustainable mining practices, one of which is a revolutionary approach to manage tailings more sustainably at Skouries, setting a benchmark in the industry.
