EGO — Eldorado Gold Corporation

Eldorado Gold (EGO) Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Gold Production: 105,000 ounces produced, 103,000 ounces sold; lower than Q2 2025 due to planned lower grades at Kisladag and Efemçukuru, partially offset by higher-grade ore at Lamaque.
• Revenue: Increased to $487 million from $452 million year-over-year, driven by a higher realized gold price of $4,379 per ounce.
• Production Costs: $185 million, up from $162 million in Q2 2025, attributed to higher royalty costs and inflation-related increases in labor and maintenance.
• Total Cash Costs: Averaged $1,432 per ounce sold; All-in Sustaining Costs (AISC) averaged $1,926 per ounce sold.
• Net Earnings: $173 million or $0.68 per diluted share, compared to $139 million or $0.67 per diluted share in Q2 2025. Adjusted net earnings rose to $137 million or $0.54 per share from $90 million or $0.44 per share.
• Cash Position: Ended the quarter with $555 million in cash and equivalents, plus $300 million available on the revolving credit facility.
• Free Cash Flow: Negative $334 million due to investments in Skouries and McIlvenna Bay, but underlying operations generated $41 million in free cash flow.

2. Strategic Updates and Business Highlights

• Skouries Project: On track for first concentrate production in Q3 2026; first ore crushed achieved. The project is transitioning into commissioning, with significant progress made on infrastructure.
• McIlvenna Bay: Achieved first copper and zinc concentrate production; ramping up towards commercial production. An integrated study for potential mill expansion is underway.
• Sustainability Initiatives: Published annual sustainability report and received industry recognitions for safety and environmental management.
• Leadership Transition: George Burns is transitioning out as CEO, with Christian Milau set to take over, ensuring continuity.

3. Forward Guidance and Outlook

• Production Growth: Expecting meaningful growth in production and cash flow as Skouries and McIlvenna Bay ramp up in the second half of 2026.
• Capital Allocation: Focus on funding development and ramp-up of Skouries and McIlvenna Bay, maintaining a strong balance sheet, and returning capital to shareholders through dividends and share repurchases.
• Commercial Production: Anticipated for McIlvenna Bay in Q3, contingent on achieving stable throughput and producing salable concentrate.

4. Challenges and Points of Concern

• Production Declines: Lower production and sales volumes at Kisladag and Efemçukuru due to planned lower grades and waste removal activities.
• Cost Increases: Rising production costs driven by inflation and higher royalty rates, impacting profitability.
• Debt Levels: Total debt at $1.75 billion, with project financing repayments starting at the end of the year, raising concerns about leverage management.
• Operational Risks: Potential delays in achieving commercial production at Skouries due to commissioning challenges and reliance on Greek authorities for power connection.

5. Notable Q&A Insights

• McIlvenna Bay Ramp-Up: Currently operating at approximately 70% of nameplate capacity during commissioning, with expectations to reach commercial production by Q3.
• Skouries Power Connection: Connection to the grid is expected by the end of August, but operations can proceed using gensets in the interim.
• Labor Shortages: Addressed concerns about labor availability in Saskatchewan, with strategies in place to attract and retain staff.
• Kisladag Production Guidance: Anticipated improvement in production in Q3 as the year progresses, despite being a low production year due to cutback activities.

Overall, Eldorado Gold's Q2 2026 results reflect a solid financial performance amidst strategic advancements in key projects, though challenges related to production costs and operational risks remain.