Eldorado Gold’s Earnings Call: Mixed Sentiments and Strategic Progress

Eldorado Gold’s recent earnings call painted a picture of mixed sentiments, showcasing both robust operational achievements and strategic progress, while also highlighting significant challenges. The company celebrated a successful share repurchase program and advancements in the Skouries project, yet faced concerns over increased cost guidance and operational hurdles at Olympias. Strong Gold Production and Cash Flow Generation Eldorado Gold reported a solid performance in gold production and cash flow generation, producing 115,190 ounces of gold and generating approximately $77 million in free cash flow, excluding capital investments in the Skouries project. This achievement underscores the company’s operational strength and its ability to generate substantial cash flow. Successful Share Repurchase Program In a move to return value to its shareholders, Eldorado successfully repurchased and canceled approximately 3 million shares, amounting to a total of $79 million during the quarter. This strategic decision reflects the company’s commitment to enhancing shareholder value. Advancement in Skouries Project The Skouries project saw significant progress, with Phase 2 construction reaching 73% completion. The first copper-gold concentrate production is on track for the first quarter of 2026, with the overall project capital remaining steady at $1.06 billion, indicating a strong forward momentum in this key project. Whole Ore Agglomeration Project at Kisladag Eldorado decided to proceed with the whole ore agglomeration project at Kisladag, investing approximately $35 million. This initiative aims to enhance permeability and improve leach kinetics, demonstrating the company’s focus on optimizing operational efficiency. Increased Costs and Revised 2025 Guidance The company revised its total cash costs upwards to between $1,175 and $1,250 per ounce sold, with all-in sustaining costs expected to be between $1,600 and $1,675 per ounce sold. This revision is driven by high gold prices, increased royalty rates in Turkiye, and lower-than-expected performance at Olympias, posing a challenge to cost management. Operational Challenges at Olympias Olympias faced significant operational challenges, with stockpiled ore impacting process water chemistry and leading to lower metal recovery. These issues are anticipated to persist into the second quarter of 2026, highlighting a critical area for operational improvement. Increased Lost Time Injury Frequency Rate The lost time injury frequency rate rose to 1.21 from 1.10 in the third quarter of 2024, indicating a need for enhanced safety measures. This increase underscores the company’s ongoing commitment to improving safety performance across its operations. Forward-Looking Guidance Looking ahead, Eldorado Gold provided detailed financial and operational guidance for the remainder of the year. The company revised its 2025 gold production guidance to between 470,000 and 490,000 ounces, with increased total cash cost guidance due to high gold prices and increased royalty rates. Sustaining capital costs are expected at the upper end of the range, while operations growth capital remains steady. The Skouries project capital investment was revised upward, yet the overall project capital estimate remains unchanged, reflecting strategic stability. In summary, Eldorado Gold’s earnings call highlighted a blend of strong operational performance and strategic progress, tempered by challenges in cost management and operational issues at Olympias. The company’s commitment to shareholder value and strategic project advancements remain key takeaways, as it navigates the complexities of the current market landscape.