Eldorado Gold(EGO) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q2 2025, Eldorado Gold reported net earnings from continuing operations of $139 million or $0.68 per share, driven by higher average realized gold prices and strong gold sales, partially offset by increased production costs and income tax expenses [14] - Adjusted net earnings for the quarter were $90 million or $0.44 per share, excluding one-time non-recurring items [15] - Free cash flow for the quarter totaled negative $62 million; however, excluding capital investments in the Skirius project, free cash flow was positive $62 million compared to $34 million in Q2 2024 [15] - Total cash costs were $10.64 per ounce sold, and all-in sustaining costs stood at $15.20 per ounce sold [16] Business Line Data and Key Metrics Changes - The company achieved safe production of 133,769 gold ounces in Q2 2025, with the Lamaque complex and Kisladag exceeding expectations [7] - At the Olympias site, gold production was 15,978 ounces, with total cash costs of $15.78 per ounce sold, reflecting a 35% improvement in production and a 34% decrease in costs compared to Q1 [29] - The Kisladag operation produced 46,058 ounces at total cash costs of $11.33 per ounce sold, with production primarily driven by continued leaching of gold ounces from stacked ore [32] Market Data and Key Metrics Changes - The average realized gold price increased by 40% to $3,270 per ounce in Q2 2025, compared to $2,336 per ounce in the same period last year [16] - The company expects to produce between 460,000 and 500,000 ounces of gold in 2025, with guidance based on first-half performance [8] Company Strategy and Development Direction - Eldorado Gold is focused on advancing growth capital investments in Greece, creating diversification in its product portfolio with copper production expected to begin in 2026 [36] - The company is committed to achieving peer-leading shareholder returns supported by low-cost incremental production across its portfolio [36] - The expanded normal course issuer bid (NCIB) program aims to repurchase shares as a means of capital allocation while continuing to invest in long-term growth [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving production guidance for 2025, citing a strong balance sheet and quality assets [36] - The company acknowledged higher costs due to increased royalties driven by record high gold prices and higher labor costs [8] - Management remains focused on continuous improvement in safety performance and sustainability initiatives [11] Other Important Information - The company reported a lost time injury frequency rate of 0.95, an increase from the previous year, indicating a commitment to improving safety [10] - Eldorado Gold was recognized as one of Canada's best companies in 2025 by Time, based on strong performance and sustainability transparency [12] Q&A Session Summary Question: What is the expected CapEx spend in Q2? - Management indicated that Q2 spending was in line with expectations and anticipated a ramp-up in Q3 followed by a decrease in Q4 as commissioning begins [39] Question: Can you elaborate on the critical path for the filtered tailings plant? - The filtered tailings plant is on the critical path due to redesign challenges and extensive foundation work required, but progress has been made [40][41] Question: What is the rationale behind the recent drawdown on the terminal? - The drawdown is part of utilizing a project financing facility with advantageous interest rates, allowing for flexibility in capital allocation [45][50] Question: What is the expected gold output for Q3 versus Q4 at Kisladag? - Production is expected to be steady, with grades anticipated to be lower in the second half of the year, leading to slightly lower production rates [103] Question: How will the company manage euro exposure for the Scourias project? - The company has been using forward price contracts to manage euro exposure, with minimal direct exposure expected from accounting translation [100][102]