Eldorado Gold: A High-Conviction Buy as Skouries Drives a New Growth Cycle

Eldorado Gold (Eldorado Gold Corp, ticker: EGO) stands at the threshold of a transformative phase, driven by the imminent ramp-up of its Skouries Project in Greece. As gold prices surge past $3,300 per ounce and global demand for safe-haven assets intensifies, Eldorado's strategic focus on unlocking the Skouries Project's potential—combined with a compelling valuation—positions it as a high-conviction buy for investors seeking exposure to the next leg of the gold bull market.

Skouries: The Catalyst for a New Era

The Skouries Project, located in the Halkidiki Peninsula of Northern Greece, is a high-grade copper-gold deposit with a projected 20-year mine life. As of June 30, 2025, construction progress stands at 70% completion, with first production of copper-gold concentrate expected in Q1 2026 and commercial production anticipated by mid-2026. While the project has faced delays due to labor market constraints and increased capital costs—now totaling $1.06 billion, up 15.5% from prior estimates—these challenges are being offset by strategic operational optimizations.

Eldorado has accelerated pre-commercial mining activities, gaining early access to higher-grade ore and streamlining process plant commissioning. The project's underground development, led by a leading European contractor, has advanced to the 350-meter level, with test stope drilling underway. These efforts are expected to reduce life-of-mine unit costs and position Skouries as a cornerstone of Eldorado's production and revenue growth.

For 2026, the project is forecast to produce 135,000–155,000 ounces of gold and 45–60 million pounds of copper, significantly diversifying Eldorado's revenue stream. Copper's inclusion in the portfolio adds resilience, as demand for the metal is surging in green energy transitions. The project's high-grade profile and long mine life also insulate Eldorado from near-term volatility in gold prices, a critical advantage in a market increasingly influenced by macroeconomic cycles.

Valuation Attraction in a Rising Gold Market

Eldorado's valuation multiples are compelling against both its historical performance and sector peers. As of July 2025, the company trades at a P/E ratio of 12.50, below the sector average of 14.40 and well below high-growth peers like Agnico Eagle (23.55) and Franco-Nevada (43.25). This discount reflects the market's underappreciation of Skouries' long-term value and Eldorado's disciplined capital allocation.

Gold's price trajectory further amplifies the case for Eldorado. The metal has surged 30% year-to-date, driven by geopolitical tensions, inflationary pressures, and central bank demand (J.P. Morgan estimates 710 tonnes of quarterly net purchases in 2025). Analysts project gold to reach $4,000 per ounce by mid-2026, with J.P. Morgan and BullionVault users forecasting continued strength through 2026. Eldorado's exposure to rising gold prices is amplified by its hedging strategy: zero-cost collars covering 28,000 ounces of gold at strike prices of $3,000–$4,537 per ounce from July 2027 to December 2027, providing downside protection while allowing upside participation.

Financial Strength and Strategic Discipline

Eldorado's balance sheet is a critical differentiator. With $1.1 billion in liquidity—$857 million in cash and undrawn amounts under the Skouries Project finance facility—the company is fully funded to execute its growth plan. The recent $155 million divestment of G Mining Ventures further strengthened liquidity, enabling a $58.4 million share buyback program and providing flexibility for strategic opportunities.

Despite the Skouries delays, Eldorado has maintained operational discipline. Its 2025 production guidance of 460,000–500,000 ounces of gold remains achievable, with contributions from existing assets like Kisladag and Olympias. The company's focus on cost efficiencies—such as mill expansion at Kisladag and optimized leaching processes—ensures that margins remain resilient even in a high-cost environment.

Risks and Mitigation

The primary risks to Eldorado's thesis include project execution delays, gold price volatility, and geopolitical uncertainties in Greece. However, the company's strong liquidity and diversified workforce (1,730 personnel on-site as of June 2025) mitigate these concerns. Additionally, Skouries' environmental and social governance (ESG) framework, including job creation and community investments in the Aristotle Municipality, aligns with global ESG trends, reducing regulatory and reputational risks.

Conclusion: A Conviction Play in a Gold-Driven World

Eldorado Gold's Skouries Project represents a rare combination of strategic growth, operational resilience, and undervaluation in a rising gold market. With gold prices poised to test new highs and Skouries on the cusp of commercial production, the company is well-positioned to deliver outsized returns for investors. At a P/E of 12.50 and a dividend yield of 5.45%, Eldorado offers both income and growth potential—a compelling proposition in a world increasingly uncertain.

For investors seeking a high-conviction position in the gold sector, Eldorado Gold's blend of catalysts and valuation makes it a standout candidate. As the Skouries Project transitions from promise to performance, the company is set to redefine its role in the global gold landscape.