Eldorado Gold Q1 2025 Earnings: Revenue Surges as Costs Climb Amid Growth Investments

Eldorado Gold Corp (EGO) delivered a robust first quarter of 2025, with revenue soaring 38% year-over-year to $355.2 million, driven by a 41% jump in the average realized gold price to $2,933 per ounce. While production volumes remained stable, operational challenges and rising costs underscored the trade-off between near-term profitability and long-term growth investments. With its flagship Skouries copper-gold project nearing completion, the company faces a critical balancing act: sustaining cash flow while funding ambitious expansion plans.

Operational Highlights: A Gold Price Tailwind, but Mine-Specific Challenges

Eldorado’s Q1 gold sales of 116,263 ounces matched 2024 levels, but production dipped slightly to 115,893 ounces due to uneven performance across its mines. The Kisladag mine in Türkiye stood out, boosting output by 18% to 44,319 ounces, benefiting from higher grades and stacking rates. Meanwhile, Lamaque Complex in Canada saw a 4% production decline to 40,438 ounces due to lower grades, while Olympias in Greece struggled with a 37% drop to 11,829 ounces after unplanned maintenance disrupted operations.

Financial Performance: Costs Rise, but Cash Flow Remains Strong

Despite rising costs, Eldorado’s net earnings nearly doubled to $72 million ($0.35 per share), fueled by higher gold prices. However, total cash costs per ounce surged to $1,153—a 25% increase from 2024—due to elevated royalties, labor inflation, and mine-specific issues. All-in sustaining costs (AISC) rose to $1,559 per ounce, 24% higher than a year ago.

The company maintained strong liquidity, with cash reserves climbing to $978.1 million—up $121 million from Q4 2024—thanks to operating cash flow of $138 million and asset sales. This cash buffer is critical for funding its ambitious $1.06 billion Skouries project, now 66% complete.

Skouries Copper-Gold Project: The linchpin of future growth

Eldorado’s $1.06 billion Skouries project in Greece—now delayed until Q1 2026—remains central to its growth strategy. While construction costs have risen by $143 million due to labor shortages and inflation, progress on infrastructure (e.g., the filtered tailings plant and process plant) is advancing. Once operational, Skouries is expected to produce 135,000–155,000 ounces of gold and 45–60 million pounds of copper annually, significantly boosting Eldorado’s revenue and diversifying its product mix.

Challenges and Mitigation

1. Cost Inflation: Rising labor and energy costs, coupled with deeper mining at Lamaque, have pressured margins. However, currency devaluation in Türkiye and Canada partially offset these increases.
2. Operational Risks: Olympias’ Q1 production slump was resolved by Q2, but the mine’s AISC spiked to $2,842 per ounce, highlighting the risks of unplanned downtime.
3. Project Delays: Skouries’ $154 million in accelerated operational spending underscores the financial burden of bringing the project online.

Conclusion: A High-Reward, High-Risk Gamble

Eldorado’s Q1 results reflect a company capitalizing on gold’s strong price environment while navigating costly operational hurdles and ambitious growth projects. With $978 million in cash and a 460,000–500,000-ounce gold production guidance, the company is well-positioned to fund its expansion.

Investors, however, must weigh the risks:
- Near-term pressure on margins: AISC is expected to remain elevated at $1,370–$1,470 per ounce in 2025, limiting profit growth.
- Skouries’ success is critical: Delays or further cost overruns could strain liquidity.
- Geopolitical risks: Operations in Türkiye and Greece carry country-specific regulatory and political risks.

Despite these challenges, Eldorado’s long-term prospects hinge on Skouries’ on-time delivery and the sustained gold price. At current prices, even with elevated costs, the project’s gold and copper output could add $300–$400 million annually to revenue by 2026. For investors with a multi-year horizon, Eldorado’s growth trajectory—backed by strong balance sheet metrics—may justify the risks.

In the near term, the stock’s performance will likely remain tied to gold prices and Skouries’ progress. With the company’s shares trading at a P/E ratio of 18.5 (vs. industry average 22), there’s room for upside if costs stabilize and production targets are met. Eldorado’s Q1 results are a clear sign of its ambition—but execution will be the ultimate test.