Eldorado Gold(EGO) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In 2025, the company achieved revenue of $1.8 billion, operating cash flow of $743 million, and free cash flow of $316 million, excluding Skouries investment [8][13] - Net earnings attributable to shareholders for Q4 were $252 million, or $1.26 per share, while for the full year, net earnings totaled $520 million, or $2.56 per share, reflecting an increase compared to prior periods [13][14] - Free cash flow for Q4 was negative $55 million, or positive $109 million when excluding capital investment in Skouries, while for the full year, it was negative $233 million, or positive $316 million when excluding Skouries [16][17] Business Line Data and Key Metrics Changes - Gold production for 2025 was 488,268 ounces, with a strong performance from the Lamaque Complex and contributions from Klada and Efemçukuru [7][8] - In Q4, the company produced 123,416 gold ounces at an all-in sustaining cost of $1,894 per ounce sold [9][18] - Olympias produced 18,476.73 ounces in Q4, with all-in sustaining costs of $1,676 per ounce sold [25] Market Data and Key Metrics Changes - The company noted a favorable gold price environment contributing positively to operating cash flow [8][13] - Royalty expenses increased significantly, totaling $124 million in 2025, up from just over $79 million in 2024, primarily due to regulatory changes in Türkiye [17][18] Company Strategy and Development Direction - The acquisition of Foran Mining is expected to enhance the company's long-term growth pipeline and diversify its portfolio [6][35] - The company aims to advance a disciplined exploration program and has initiated a quarterly dividend program to return capital to shareholders [5][10] - Skouries is projected to be a transformational asset, expected to generate meaningful cash flow and reset the company's production profile [28][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term potential of Skouries, despite a delay in first production now expected in early Q3 2026 [10][12] - The company anticipates a significant increase in production in 2027, supported by a solid base of lower-cost operations [28][29] - Management highlighted the importance of maintaining a strong balance sheet to support growth initiatives and return capital to shareholders [20][35] Other Important Information - The company reported a lost time injury frequency rate of 0.55 in Q4, an improvement from 1.02 in Q4 2024, indicating a focus on workplace safety [9] - Total liquidity at year-end was approximately $976 million, providing flexibility for growth initiatives and capital returns [20] Q&A Session Summary Question: Regarding Klada's 2026 guidance being lower than before - Management acknowledged the impact of lower grades and higher stripping but indicated potential for new ore sources in the future [37][39] Question: Reception of the Foran Mining acquisition - Management reported positive feedback from investors, emphasizing the benefits of the acquisition for both companies [45] Question: Impact of delays on Skouries and tailings management - Management confirmed that the delay provides additional time to finalize equipment and improve ramp-up conditions, with a significant stockpile ready for processing [51][55]