Eldorado targets Skouries 2026 output of 10,000-35,000 oz gold and 5M-15M lb copper as commercial production slips to late Q4

Earnings Call Insights: Eldorado Gold Corporation (ELD:CA; EGO) Q3 2026

Management View

• "As I begin my first quarterly call as CEO, my focus is on building on Eldorado's high-quality, long-life asset base... while improving execution consistency, enhancing capital discipline and converting those investments into stronger cash flow and per share value." (President, CEO & Director Christian Milau)
• "Based on our year-to-date performance, we have revised our 2026 production guidance." (President, CEO & Director Milau) "For our operating assets, excluding Skouries and McIlvenna Bay, we now expect gold production of 410,000 to 430,000 ounces." (President, CEO & Director Milau)
• "Skouries produced first copper-gold concentrate and McIlvenna Bay continued to ramp up following first copper and zinc concentrate. We expect both operations to achieve commercial production in late Q4." (President, CEO & Director Milau)
• "At Skouries, the ramp-up has taken longer and cost more than we expected." (President, CEO & Director Milau) "Our immediate priority is to safely complete the remaining commissioning work, achieve commercial production and establish stable, predictable operating performance." (President, CEO & Director Milau)
• "Revenue increased 18% year-over-year to $512 million." (CFO & Executive VP of Strategy Paul Ferneyhough) "Overall, net earnings attributable to shareholders from continuing operations were $118 million or $0.45 per share." (CFO & Executive VP of Strategy Ferneyhough)
• "The total project capital cost estimate from June 1, 2024, to commercial production is now expected to be $975 million, an increase of approximately $23 million." (Executive VP & COO Simon Hille)

Outlook

• "For our operating assets, excluding Skouries and McIlvenna Bay, we now expect gold production of 410,000 to 430,000 ounces." (President, CEO & Director Milau) "At Skouries, we now expect 2026 production of 10,000 to 35,000 ounces of gold and 5 million to 15 million pounds of copper, reflecting the slower-than-expected ramp-up." (President, CEO & Director Milau)
• "We expect both operations to achieve commercial production in late Q4." (President, CEO & Director Milau) "We remain comfortable with our expectations for Skouries in 2027." (President, CEO & Director Milau)
• "The Olympias expansion [is] now expected to begin ramping up in Q1 2027." (President, CEO & Director Milau)

Financial Results

• "Revenue increased 18% year-over-year to $512 million, supported by an average realized gold price of $4,326 per ounce." (CFO & Executive VP of Strategy Ferneyhough)
• "Total cash costs averaged $1,415 per ounce sold, while AISC averaged $2,050 per ounce sold." (CFO & Executive VP of Strategy Ferneyhough)
• "At quarter end, we had approximately $397 million of cash and cash equivalents and $275 million of availability under the credit facility, providing total liquidity of $672 million." (CFO & Executive VP of Strategy Ferneyhough)
• "Consolidated free cash flow was negative $191 million, reflecting the significant level of investment in Skouries and McIlvenna Bay." (CFO & Executive VP of Strategy Ferneyhough) "During the quarter, cash capital expenditures were approximately $206 million at Skouries and $69 million at McIlvenna Bay." (CFO & Executive VP of Strategy Ferneyhough)
• "In August, we increased our revolving credit facility from $450 million to $600 million, extended its maturity to March 1, 2029." (CFO & Executive VP of Strategy Ferneyhough)

Q&A

• Cosmos Chiu, CIBC Capital Markets: asked whether getting to 4 filter presses is the key item to watch for Skouries commercial production; Executive VP & COO Hille said, "Generally, to get to full nameplate, we probably need 4 filters operating," adding, "There's nothing else holding us back of significance." CFO & Executive VP of Strategy Ferneyhough added, "you should be looking out for confirmation of our first deliveries," and said, "we have got contracts in place for offtake that covers basically the bulk of the next 2.5 years."
• Cosmos Chiu, CIBC Capital Markets: asked about the critical path at McIlvenna Bay; Executive VP & COO Hille said, "we have had some challenges at the back end of the plant... where our solid-liquid separation... has had some ramp-up challenges," and added, "we anticipate that we'll be able to achieve our commercial production in this fourth quarter."
• Tanya Jakusconek, Scotiabank: pressed on what is truly incremental capital at Skouries; CFO & Executive VP of Strategy Ferneyhough confirmed, "yes, that's exactly correct" that the additional outlays were $65 million plus $95 million, and also confirmed McIlvenna Bay was "$23 million" higher.
• Tanya Jakusconek, Scotiabank: challenged 2027 production framing for Skouries and Olympias ramp-ups; Executive VP & COO Hille pointed to flexibility from stockpiles, saying, "we do have the benefit of 5 million tonnes in front of the mill today," while President, CEO & Director Milau said, "we did take into consideration that there is a first half of the year. We're ramping towards that full throughput" in the 2027 ranges.
• Lawson Winder, BofA Securities: asked about sustaining capex implications for a 2027 free cash flow inflection; President, CEO & Director Milau said, "you can think of it as kind of continuing on and maybe double that amount" when adding new mines and Olympias capacity.
• Harrison Reynolds, RBC Capital Markets: asked for commercial production definition and nameplate timing; CFO & Executive VP of Strategy Ferneyhough said, "you're looking for 60% to 80% of throughput... and steady operations for... between 20 to 30 days," while Executive VP & COO Hille said the company is guiding "to be conservative to be sort of by the middle of 2027" for nameplate.

Sentiment Analysis

• Analysts: slightly negative to pressing on execution risk and capital clarity, highlighted by "I was a bit confused" (Tanya Jakusconek, Scotiabank) and repeated probing on ramp timing, sustaining capex, and penalties.
• Management: slightly positive but more defensive on schedule/cost drift, with explicit acknowledgments such as "the ramp-up has taken longer and cost more than we expected" (President, CEO & Director Milau) alongside reassurance including "we remain comfortable with our expectations for Skouries in 2027" (President, CEO & Director Milau).
• Versus Q2: the tone shifted from commissioning optimism (Q2 focus on being "on track for first concentrate in Q3") to tighter scrutiny on revised 2026 guidance, incremental capital, and definitions for commercial production.

Quarter-over-Quarter Comparison

• Leadership and governance emphasis increased in Q3, with "my first quarterly call as CEO" and added project governance framing, including "we have strengthened our approach to project governance" (President, CEO & Director Milau), versus Q2’s transition messaging from outgoing CEO.
• Skouries messaging moved from Q2 confidence around first concentrate timing and grid/filters being "ready for commissioning" to Q3’s explicit reset: "the ramp-up has taken longer and cost more than we expected" and updated 2026 Skouries production ranges (President, CEO & Director Milau).
• McIlvenna Bay discussion shifted from Q2 ramp commentary (operating "in the sort of 70% range") to Q3’s focus on back-end constraints: "solid-liquid separation" and filtration availability (Executive VP & COO Hille).
• Analysts’ focus broadened from commissioning milestones in Q2 to Q3 capital categorization, sustaining capex trajectory, and shareholder returns timing.

Risks and Concerns

• "At Skouries, the ramp-up has taken longer and cost more than we expected." (President, CEO & Director Milau) "Our immediate priority is to safely complete the remaining commissioning work." (President, CEO & Director Milau)
• "estimated total project capital for Skouries is approximately $1.425 billion" with "the actual increase of $65 million" plus accelerated operating capital increases including "the actual increase of $95 million." (President, CEO & Director Milau)
• "we have had some challenges at the back end of the plant" at McIlvenna Bay, specifically in "solid-liquid separation" (Executive VP & COO Hille).

Final Takeaway

Management framed Q3 as a milestone quarter with first Skouries concentrate and continued McIlvenna Bay ramp-up, while resetting near-term expectations through revised 2026 guidance and higher pre-commercial spend at Skouries and McIlvenna Bay. Leadership emphasized tighter project governance and capital discipline, reiterated late Q4 commercial production targets for both new operations, and maintained language around a 2027 cash flow inflection and increased shareholder returns focus once ramp-ups stabilize.

Read the full Earnings Call Transcript

Seeking Alpha's Disclaimer: This article was automatically generated by an AI tool based on content available on the Seeking Alpha website, and has not been curated or reviewed by humans. Due to inherent limitations in using AI-based tools, the accuracy, completeness, or timeliness of such articles cannot be guaranteed. This article is intended for informational purposes only. Seeking Alpha does not take account of your objectives or your financial situation and does not offer any personalized investment advice. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank.