Eldorado Gold's (NYSE:EGO) share price experienced a notable decline after the Q1 2019 financial results were reported and after the terms of Eldorado's debt refinancing were announced. The share price reached the $3.1 level on Friday, May 24. However, the next Monday, it opened at $3.47 and it kept on climbing, up to the peak value of $4.46, reached on June 5. The sudden growth was initiated by the latest developments in the political situation in Greece and further supported by the gold price that grew from $1,280 to $1,320/toz.
The Q1 2019 financial results, released on May 2, were not good. Eldorado Gold recorded earnings of $-27 million, adjusted net earnings of $-17.9 million and operating cash flow of $-9 million. However, the bad financial results were caused by some external factors that prevented the company from selling approximately 20,000 toz gold produced at its Efemcukuru mine. Although the sales will be most probably realized this quarter, further improving the Q2 financial results, the market reaction was very negative.
The markets reacted negatively also on the terms of Eldorado Gold's debt refinancing. The company issued senior second lien notes worth $300 million. The notes were issued at a 2% discount and they bear an interest of 9.5% p.a. They will mature in 2024. Eldorado was also able to secure a $450 million credit facility, consisting of a $200 million term loan and $250 million revolving credit facility. Both, the term loan and revolver, will bear an interest of LIBOR + 2.25-3.25% (approximately 4.5-5.5% right now). The term loan should be repaid in semi-annual payments starting on June 30, 2020, and the revolver should be repaid 4 years from closing.
The proceeds of the notes offering along with the term loan and revolver will be used to redeem the $600 million
