What Eldorado Gold (EGO) Said on Its Q3 Earnings Call

Key Points

• Skouries’ ramp-up has been delayed: Commercial production is now expected in late 2026, while total project capital rose to approximately $1.425 billion. Eldorado said the project remains fully funded.
• Higher gold prices boosted quarterly results: Revenue increased 18% year over year to $512 million, and adjusted earnings rose to $0.49 per share from $0.41. However, continued investment in Skouries and McIlvenna Bay drove consolidated free cash flow negative $191 million.
• Production guidance was reduced for established mines: Eldorado now expects 2026 gold production of 410,000–430,000 ounces, excluding Skouries and McIlvenna Bay. Management expects both new projects to reach nameplate capacity around mid-2027 and plans to prioritize balance-sheet strength and shareholder returns.

Eldorado Gold NYSE: EGO reported third-quarter 2026 results marked by higher realized gold prices, continued investment in its Skouries and McIlvenna Bay projects, and revised production guidance following slower-than-expected ramp-ups at those new operations.

President and Chief Executive Officer Christian Milau, speaking on his first quarterly call as CEO, said the company is focused on improving execution consistency, strengthening capital discipline and converting its asset base into cash flow and per-share value. He said Eldorado has enhanced its projects team and does not expect to pursue significant capital projects without the group’s involvement from the outset.

Skouries Ramp-Up Extends, Capital Estimate Rises

Skouries produced its first copper-gold concentrate on Sept. 8, while the project’s tailings-filter presses began operating during the week of the call. Milau said two filter presses are operating and enable continuous plant operations, while the remaining units were expected to come online in November. Four operating presses are needed to support commercial production, with five available presses targeted to provide operating redundancy.

The site was connected to grid power on Sept. 28, allowing temporary generators to be demobilized. Mining in both the open pit and underground mine continued to perform well, with the company reporting a significant ore stockpile and 2,100 meters of underground development completed during the quarter.

However, Eldorado now expects commercial production at Skouries in late 2026 rather than earlier expectations, following a longer and more costly commissioning process. Total project capital is now estimated at approximately $1.425 billion. The increase includes $65 million of additional project capital, largely related to contractor workforce requirements, temporary power, owners’ costs and other execution-related costs. Another $45 million previously expected after commercial production has been reclassified as project capital.

The company also expects $390 million in accelerated operating capital at Skouries, including $95 million in additional costs for stockpile growth, underground development and site earthworks. A further $35 million was reclassified from sustaining capital. Eldorado identified up to $30 million of additional contingency depending on the precise timing of commercial production, though Milau said the company did not expect to use it based on recent progress.

Management said the project remains fully funded. The company expects its first concentrate shipment to a European smelter in the coming weeks and said it has offtake contracts covering most expected output over the next two and a half years. Chief Financial Officer Paul Ferneyhough said those contracts provide delivery flexibility and do not carry penalties related to the later ramp-up.

Quarterly Financial Results Supported by Gold Prices

Eldorado produced 106,000 ounces of gold and sold 107,000 ounces in the third quarter. Revenue rose 18% year over year to $512 million, supported by an average realized gold price of $4,326 per ounce, compared with $3,527 per ounce in the prior-year quarter.

Net earnings attributable to shareholders from continuing operations totaled $118 million, or $0.45 per share, compared with $56 million, or $0.28 per share, in the third quarter of 2025. Adjusted net earnings were $127 million, or $0.49 per share, versus $82 million, or $0.41 per share, a year earlier.

Production costs rose to $200 million from $164 million, reflecting higher royalties, higher costs at Lamaque and Olympias, and pre-commercial production costs at McIlvenna Bay. Total cash costs averaged $1,415 per ounce sold and all-in sustaining costs were $2,050 per ounce sold.

Cash flow from operating activities before changes in working capital increased to $249 million from $184 million a year earlier. Consolidated free cash flow was negative $191 million as Eldorado continued to invest in the two new operations. The established operating portfolio generated $98 million of free cash flow before investments in Skouries and McIlvenna Bay.

At quarter-end, the company had $397 million in cash and cash equivalents and $275 million available under its credit facility, for total liquidity of $672 million. Eldorado increased its revolving credit facility to $600 million in August and extended its maturity to March 2029.

Guidance Revised as Established Mines Face Mixed Results

For its established operating assets, excluding Skouries and McIlvenna Bay, Eldorado revised 2026 gold-production guidance to 410,000 to 430,000 ounces. Strong performance at Lamaque partially offset lower expected output at Kışladağ and Olympias.

Lamaque produced 52,748 ounces of gold during the quarter, aided by higher throughput, grades and recoveries, including ore from Ormaque. Total cash costs were $897 per ounce sold and all-in sustaining costs were $1,436 per ounce sold.

Kışladağ produced 22,713 ounces, as lower-grade ore was stacked while the mine accelerated waste removal and bench cleanup. The company said higher-grade material became available in September, but the approximately 300-day leach cycle means the production benefit is expected toward the end of the fourth quarter and into 2027. The whole-ore agglomeration circuit remains on track for commissioning and ramp-up in the first half of 2027.

Olympias produced 13,430 ounces. Its expansion is now expected to begin ramping up in the first quarter of 2027, with nameplate capacity expected in the first half of that year. Efemçukuru produced 17,073 ounces and continued development work at the Kokarpinar deposit to support a mine-life extension.

McIlvenna Bay and 2027 Priorities

McIlvenna Bay’s full processing plant is operational, with throughput averaging in the 70% range. Commercial production is expected in late 2026, although total project capital from June 2024 through commercial production is now estimated at $975 million, about $23 million higher than previously expected.

Chief Operating Officer Simon Hille said remaining work is concentrated on improving solid-liquid separation, reagent control, filtration rates and equipment availability. He said copper and zinc recovery performance in the front-end flotation circuit has been encouraging.

Management reiterated that it does not expect the 2026 ramp-up delays at Skouries to affect its broader 2027 outlook. It expects both Skouries and McIlvenna Bay to reach nameplate capacity around mid-2027. Eldorado plans to provide updated 2027 guidance early in the year and said an updated Skouries technical report is expected by the end of the first quarter.

Milau said the company intends to emphasize balance-sheet management, exploration and shareholder returns as cash flow improves. He said Eldorado does not expect to begin construction on major expansion projects in 2027 and will evaluate debt reduction, dividends, share repurchases and reinvestment as its new mines stabilize.

About Eldorado Gold (NYSE:EGO)

Eldorado Gold Corporation is a Canadian mining company focused on the exploration, development and operation of gold properties. The company produces gold and related by-products, including silver, and manages a portfolio of mines and development projects in Türkiye, Greece and Canada.

Eldorado's operations and projects include the Kisladag and Efemcukuru gold mines in Türkiye, the Olympias polymetallic mine and Skouries copper-gold project in Greece, and the Lamaque gold operation in Quebec, Canada.

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