Eldorado Gold's Q1 2025 Earnings: Strong Performance Amid Rising Costs

Eldorado Gold Corporation reported robust first-quarter 2025 results, with revenue surging 38% year-over-year to $355.2 million, driven by a 41% rise in the average realized gold price to $2,933 per ounce. While operational challenges and cost pressures emerged, the company maintained its full-year production guidance and advanced its flagship Skouries Copper-Gold Project in Greece. Here’s a deep dive into the numbers and their implications for investors.

Financial Highlights: Revenue Growth Outpacing Costs

The quarter’s standout performance was revenue growth, fueled by elevated gold prices, which rose to multi-year highs in early 2025. Net earnings more than doubled to $72.0 million ($0.35 per share) compared to $35.2 million ($0.17 per share) in Q1 2024. However, costs also climbed:
- Total cash costs rose to $1,153 per ounce sold (vs. $922 in Q1 2024), reflecting higher royalties and inflation.
- All-in sustaining costs (AISC) increased to $1,559 per ounce (vs. $1,262 in Q1 2024), driven by sustaining capital investments and operational hurdles.

Despite these headwinds, Eldorado’s cash position strengthened to $978.1 million, up $121.3 million from Q4 2024, thanks to asset sales and strong operating cash flow.

Operational Performance: Mixed Results Across Mines

While production dipped slightly to 115,893 ounces (vs. 117,111 ounces in Q1 2024), certain mines delivered standout performance:
- Kisladag (Türkiye): Production jumped 18% to 44,319 ounces, driven by higher grades and stacking rates.
- Lamaque (Canada): Output fell 4% to 40,438 ounces due to lower grades and deeper mining operations.
- Olympias (Greece): Struggled with unplanned maintenance, reducing production by 37% to 11,829 ounces. Issues were resolved by Q2, positioning the mine for a rebound.

Skouries Copper-Gold Project: Progress and Cost Challenges

The Skouries project, Eldorado’s growth engine, remains on track for first production in Q1 2026, with construction 66% complete as of March 2025. Key milestones include:
- Advanced construction of the Filtered Tailings Plant and Primary Crusher Building.
- Piping installations and water testing underway in the Process Plant.

However, costs have risen:
- Total project capital increased to $1.06 billion, up $143 million from prior estimates, due to labor shortages and supply chain pressures.

Investors should monitor whether these cost overruns will delay the project or require further funding.

Risks and Outlook: Balancing Growth with Inflation

Key Risks:
1. Cost Inflation: Rising labor costs in Turkey and Greece, coupled with higher royalties, could pressure margins if gold prices soften.
2. Project Execution: Skouries’ delayed timeline and budget overruns highlight execution risks in large-scale mining ventures.
3. Currency Fluctuations: Weakening local currencies (e.g., Turkish lira) partially offset costs in Q1, but this effect may diminish.

Positive Drivers:
- Gold Price Resilience: With the average realized price at $2,933/oz, Eldorado benefits from a favorable macro backdrop.
- Strong Liquidity: The $978 million cash balance provides a buffer against capital-intensive projects like Skouries.
- 2025 Guidance: Production targets of 460,000–500,000 ounces remain intact, with costs expected to trend downward in H2.

Conclusion: A Stock to Watch for Gold Bulls, With Caveats

Eldorado Gold’s Q1 results underscore its ability to capitalize on high gold prices while navigating operational and cost challenges. The company’s Skouries project, once operational, could add 135,000–155,000 ounces of gold annually by 2026, positioning it for long-term growth.

However, investors must weigh these positives against risks like rising costs and project delays. The stock’s performance will hinge on:
- Gold Price Stability: If prices remain above $2,000/oz, Eldorado’s margins will expand.
- Skouries Execution: On-time delivery of the project is critical to justifying its elevated capital costs.
- Cost Controls: Reducing AISC below $1,500/oz in H2 will be key to sustaining profitability.

For now, Eldorado Gold remains a compelling play on the gold sector, but its success hinges on balancing growth ambitions with disciplined cost management.