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

Financial Data and Key Metrics Changes - In Q4 2025, the company achieved net earnings attributable to shareholders of $252 million, or $1.26 per share, with full-year net earnings totaling $520 million, or $2.56 per share, reflecting an increase compared to the prior year [13][14][17] - Revenue for 2025 reached $1.8 billion, supported by higher average realized gold prices, despite lower production volumes compared to 2024 [17] - Free cash flow for the full year was negative $233 million, but positive $316 million when excluding capital investment in the Skouries project [16][17] Business Line Data and Key Metrics Changes - Gold production for 2025 was 488,268 ounces, with Q4 production at 123,416 ounces at an all-in sustaining cost of $1,894 per ounce sold [7][9] - The Olympias mine produced 18,476.73 ounces in Q4, while Klada and Efemçukuru produced 41,140 ounces and 14,496 ounces respectively, with varying all-in sustaining costs [25][26] - The Lamaque Complex delivered 49,307 ounces at an all-in sustaining cost of $1,392 per ounce sold [27] Market Data and Key Metrics Changes - The company noted a favorable gold price environment contributing positively to operating cash flow, with production costs increasing due to higher royalties and labor cost inflation [8][17] - The Turkish operations remain a stable cash-generating foundation for the company, despite local inflation impacting costs [8][17] 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, focusing on per-share value creation and sustainable free cash flow growth [6][36] - The company aims to advance its growth pipeline while maintaining flexibility to return capital to shareholders, including a newly initiated quarterly dividend program [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the delivery of the Skouries project, despite delays, emphasizing its long-term potential to generate meaningful cash flow [11][12] - The company anticipates a significant increase in production in 2027, supported by the addition of Skouries and a solid base of lower-cost operations [28][29] Other Important Information - The company reported a strong balance sheet with total liquidity of approximately $976 million at year-end, positioning it well for growth initiatives and capital returns [20] - The first production from Skouries is now expected in early Q3 2026, with commercial production anticipated in Q4 [10][11] Q&A Session Summary Question: Klada's 2026 guidance and its impact on 2027 - Management acknowledged that the 2026 guidance is lower due to lower grades and higher stripping, but they expect to open up new ore sources that could positively impact 2027 production [39][41] Question: Reception of the Foran Mining acquisition - Management reported positive feedback from investors regarding the acquisition, highlighting the benefits of combining high-quality assets and the potential for accelerated investment [48] Question: Tailings management and weather impact - Management confirmed that the delay provides breathing room for tailings management and that heavy rains have not caused significant construction delays [54][56]