Eldorado Gold Corporation (EGO) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presented strong financial performance with a significant revenue increase, driven by elevated gold prices, and a positive free cash flow when excluding Skouries investments. The expansion of the share repurchase program and strategic investments in Skouries and other projects indicate confidence in long-term growth. Despite some concerns about production delays and increased costs, management's optimistic guidance and strategic initiatives suggest a positive outlook. Given the market cap of approximately $3 billion, the stock is likely to experience a positive movement of 2% to 8%.
Key Financial Performance
Gold Production Achieved 133,769 gold ounces in Q2 2025, a 15% increase compared to Q1 2025. Reasons include higher throughput at Lamaque due to early processing of Ormaque bulk sample and optimization efforts at K??lada?.
Total Cash Costs $1,064 per ounce sold in Q2 2025, higher compared to 2024 due to increased royalties from record high gold prices and higher labor costs.
All-in Sustaining Costs (AISC) $1,520 per ounce sold in Q2 2025, higher compared to 2024 for similar reasons as total cash costs.
Net Earnings $139 million or $0.68 per share in Q2 2025, driven by higher average realized gold prices and strong gold sales, partially offset by increased production costs and income tax expenses.
Adjusted Net Earnings $90 million or $0.44 per share in Q2 2025, excluding one-time items like a $23 million foreign exchange gain and a $19 million unrealized gain on derivative instruments.
Free Cash Flow Negative $62 million in Q2 2025, but positive $62 million excluding capital investments in the Skouries project, compared to $34 million in Q2 2024. Reasons include strong operating asset performance and elevated gold prices.
Revenue $452 million in Q2 2025, a 52% increase from $297 million in Q2 2024, driven by a 40% rise in average realized gold price to $3,270 per ounce.
Production Costs $162 million in Q2 2025, a $34 million increase from Q2 2024, due to higher gold volumes sold and increased royalties.
Growth Capital Investments $47 million in Q2 2025, supporting projects like waste stripping at K??lada? and water management at Lamaque.
Tax Expense $45 million in Q2 2025, up from $21 million in Q2 2024, due to improved profitability in Canada and Türkiye.
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Operating Highlights
Gold Production: Achieved safe production of 133,769 gold ounces in Q2 2025, with Lamaque Complex and K??lada? exceeding expectations. Production guidance for 2025 is between 460,000 and 500,000 ounces.
Skouries Project: First stages of open pit mining commenced, with first oxide ore mined. Progress on construction is at 70%, with first copper-gold concentrate production expected in Q1 2026.
Olympias Mill Expansion: Mill expansion to 650,000 tonnes per annum is underway, with completion now anticipated by mid-2026.
Gold Prices: Average realized gold price increased by 40% to $3,270 per ounce in Q2 2025, compared to $2,336 per ounce in Q2 2024.
Share Repurchase Program: Repurchased over 28 million shares at a cost of $58 million year-to-date, with the program expanded to include the New York Stock Exchange.
Cost Management: Total cash costs were $1,064 per ounce sold, and all-in sustaining costs were $1,520 per ounce sold, impacted by higher royalties and labor costs.
Operational Efficiencies: Efemçukuru and Olympias stabilized production, with Olympias achieving a 35% improvement in gold production and a 34% decrease in costs over Q1 2025.
Sustainability and Safety: Introduced the Courageous Safety Leadership program and received multiple awards for sustainability and safety efforts in Canada and Greece.
Portfolio Diversification: Advancing Skouries project to include copper production by 2026, creating diversification in the product portfolio.
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Risk or Challenges
Lost Time Injury Frequency Rate (LTIFR): The LTIFR increased from 0.40 in Q2 2024 to 0.95 in Q2 2025, indicating a decline in safety performance. This poses operational risks and potential disruptions.
Higher Production Costs: Production costs increased by $34 million compared to Q2 2024, driven by higher royalties, labor costs, and taxes. This could pressure profit margins.
Free Cash Flow: Free cash flow was negative $62 million in Q2 2025, primarily due to capital investments in the Skouries project. This could strain liquidity if sustained.
Skouries Project Risks: The Skouries project requires significant capital investment ($117 million in Q2 2025) and is on a tight schedule. Delays or cost overruns could impact financial performance.
Olympias Mill Expansion Delays: The mill expansion at Olympias has been delayed to mid-2026 due to permitting and engineering issues, potentially affecting production targets.
Currency and Tax Impacts: Strengthening of the euro against the U.S. dollar increased costs at Olympias, and higher tax expenses impacted profitability.
Geometallurgical Study Delays: The geometallurgical study for K??lada? has been delayed to Q1 2026, which could affect future operational planning and efficiency.
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Guidance & Outlook
Gold Production Guidance: The company expects to produce between 460,000 and 500,000 ounces of gold in 2025, with production likely to be around the midpoint of this range based on first-half performance.
Cost Projections: Total cash costs and all-in sustaining costs for the full year are expected to be at or above the high end of the guidance range due to elevated gold prices, higher royalties, and increased labor costs.
Skouries Project Timeline: The Skouries copper-gold project is expected to achieve first copper-gold concentrate production in Q1 2026 and commercial production by mid-2026. The project capital guidance for 2025 is $400 million to $450 million.
Olympias Mill Expansion: The mill expansion at Olympias to 650,000 tonnes per annum is now anticipated to be completed by mid-2026 due to delays in permitting and engineering detail.
Kisladag Circuit Expansion: The expansion of the secondary crusher circuit at Kisladag has been accelerated to facilitate operational de-bottlenecking and reduce wear on the high-pressure grinding roll circuit.
Geometallurgical Study at Kisladag: The geometallurgical study for future mining phases at Kisladag is now expected to be completed in Q1 2026 due to slower-than-expected progress in drilling, core logging, and metallurgical testing.
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Shareholder Return Plan
Expanded Normal Course Issuer Bid (NCIB): The NCIB was reapproved and expanded to include the New York Stock Exchange in addition to the Toronto Stock Exchange. Year-to-date, over 28 million shares have been repurchased at a cost of $58 million. The company views repurchasing shares at current market prices as a prudent way to deploy capital while continuing to invest in long-term growth.
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Key Q&A
Q:What is the expected CapEx spend trend for Skouries in the upcoming quarters?
A:The CapEx spend is expected to ramp up in Q3 and then decrease in Q4 and Q1 as the project moves into commissioning and startup.
Q:What is the critical path item for the Skouries project and why?
A:The critical path item is the filtered tailings plant. It is critical due to its redesign, requiring extensive geotechnical investigation and foundation work, including over 600 concrete reinforced steel pilings. This work took significant time but is nearly complete.
Q:Why did the company draw down EUR 154.1 million on its term loan despite having over $1 billion in cash?
A:The company is utilizing the project financing facility with advantageous interest rates to fund 80% of the Skouries investment. This approach provides flexibility for future debt repayment and share buybacks.
Q:What is the purpose of the potential investment in the HPGR circuit at K??lada??
A:The investment aims to close the HPGR circuit with additional screening and whole ore agglomeration to achieve a more uniform final product, improve throughput, and address wear components to prevent damage to the HPGR.
Q:What caused the delay in drilling for the K??lada? pushback program?
A:The delay was caused by substandard drill equipment from the initial contractor, leading to a termination and a 3-month delay in finding a new contractor.
Q:What is the expected timeline for Skouries' first gold pour and commercial production?
A:The first gold pour is expected in Q1, with commercial production anticipated by midyear next year, defined as achieving 70% throughput and expected recovery levels.
Q:What is the company's plan for ramping up to steady-state production at Skouries?
A:The company expects to ramp up to nameplate capacity by Q3, with a smooth ramp-up process supported by extra filter capacity and variability in filter cloth to handle oxide ore types.
Q:What are the company's plans for its equity investments?
A:The company plans to divest its Romanian assets this year and continue holding its toehold investments in Probe and Amex.
Q:What is the expected allocation of Skouries' 2026 production between H1 and H2?
A:The production is expected to be heavily weighted to the second half of the year.
Q:What is the company's approach to its NCIB share repurchase program?
A:The company plans to be opportunistic, repurchasing shares when prices are undervalued, with a 12-month program allowing up to 5% of share capital repurchase.
Q:How is the company managing the ramp-up of electrical and instrumentation trades at Skouries?
A:The company is in the early stages of ramping up electrical work, with productivities meeting or exceeding expectations. Contractors have the necessary workforce, and backup alternatives are in place.
Q:How is the company managing euro exchange rate exposure for Skouries?
A:The company has forward price contracts and euro deposits at Hellas Gold to mitigate exchange rate risks, with no material impact expected on overall project costs.
Q:What is the expected gold output trend for K??lada? in H2?
A:Gold output is expected to be slightly lower in H2 due to lower grades, with production steady between Q3 and Q4.
Q:What is the company's approach to updating its year-end reserves?
A:The company plans to slightly increase its gold price assumption for reserve updates, remaining conservative to ensure strong margins and alignment with 5-year guidance.
Q:Review of Unclear Management Responses
A:Management avoided providing a specific timeline for the first gold pour within Q1 or the exact timing of achieving commercial production. Additionally, they did not provide a detailed breakdown of the expected production allocation for Skouries in H1 and H2 of 2026.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Award
Executive VP
Markets Research
NCIB
Ormaque
Québec
Research Division
Stock Exchange
Türkiye
asset Eldorado
circuit
conveyor photo
cornerstone
currency
elevation
expansion
feed conveyor
feeder
foundation
gain
mining equipment
optimization effort
personnel
photo slide
pit mining
plant work
processing portion
project capital
reclaim
strengthening euro
sustainability
tank
testing
throughput processing
tunnel concrete
work front
work installation
EGO Transcript
Eldorado Gold Corporation (ELD:CA) Q1 2026 Earnings Call Transcript
Positive5-1
The earnings call highlighted strong adjusted net earnings and increased gold production at Lamaque and Olympias, along with effective cost management. The Q&A reassured investors about labor and cost pressures, with no significant risks anticipated. The detailed responses and progress in key projects like Skouries and Foran suggest confidence in future performance. Given the market cap, these factors suggest a positive stock price movement within the 2% to 8% range over the next two weeks.
Eldorado Gold Corporation (EGO) Q2 2025 Earnings Call Transcript
Positive8-1
The earnings call presented strong financial performance with a significant revenue increase, driven by elevated gold prices, and a positive free cash flow when excluding Skouries investments. The expansion of the share repurchase program and strategic investments in Skouries and other projects indicate confidence in long-term growth. Despite some concerns about production delays and increased costs, management's optimistic guidance and strategic initiatives suggest a positive outlook. Given the market cap of approximately $3 billion, the stock is likely to experience a positive movement of 2% to 8%.
Eldorado Gold Corporation (EGO) Q1 2025 Earnings Call Transcript
Positive5-2
The earnings call indicates strong revenue growth and improved cash flow, despite increased costs and tax expenses. The Q&A section reveals confidence in project completion and shareholder value return, boosting sentiment. However, caution is warranted due to increased costs and lack of clear guidance on NCIB. The market cap suggests moderate sensitivity, leading to a prediction of a 2% to 8% stock price increase.
Eldorado Gold Corporation (EGO) Q3 2024 Earnings Call Transcript
Unknown11-1
The earnings call summary presents a mixed picture. Financial performance shows increased net earnings and cash flow, but with negative free cash flow and increased costs. The Q&A reveals some uncertainties, particularly regarding underground development and inflationary pressures. However, optimistic guidance on production and liquidity provides balance. The market cap suggests moderate reaction, leading to a neutral prediction.
EGO Report
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