Eldorado Gold shares rise on Q1 production jump, earnings beat
Eldorado Gold (TSX: ELD) has reported a 21% bump in first-quarter production to 112,533 oz. gold from the same period last year on the back of higher gold production at most sites, notably an increase of 25% at its Kisladag operations in Turkey.
“Across the portfolio, the operations performed largely in line with our expectations, and are on track to deliver 475,000 to 515,000 ounces of gold in 2023, aligned with our guidance,” stated George Burns, Eldorado’s CEO, in a news release, adding that “consolidated gold production is weighted to the second half of 2023, with stronger production in the quarters ahead.”
The company sold a total of 109,817 oz. during the quarter at an average realized gold price of US$1,932 per ounce. Gold sales were 16% higher than last year’s first quarter thanks to increases in production at Kisladag, Lamaque in Quebec and Olympias in Greece.
Cash costs amounted to $766 per oz. sold during the period, down from the US$835 per oz. sold last year, primarily due to the higher gold production. All-in sustaining costs also decreased to US$1,184 per oz. from US$1,346 per oz. in the first quarter of 2022, reflecting lower cash operating costs combined with lower royalty expense.
Owing to the increased production/sales and lower operating costs, the company was able to book adjusted earnings before interest, taxes, depreciation and amortization of US$102.5 million for the quarter — nearly double the US$61.7 million recorded in last year’s first quarter.
Adjusted net earnings were US$20.5 million or US11¢ per share, a significant turnaround compared to last year’s first quarter net loss of US$19.3 million (US11¢ per share), beating analysts’ expectations by US5¢ per share.
Shares of Eldorado Gold surged 6.9% by 12:25 p.m. ET on the earnings beat, giving the diversified gold miner a market capitalization of $2.8 billion.
Eldorado recorded capital spending of US$83.4 million for the first quarter, including US$31.4 million in growth capital invested at Skouries in Greece. Growth capital at the operating mines of US$24.1 million was primarily related to productivity improvements at Kisladag.
Commenting on the expected improvements for the remainder of 2023, Burns said commissioning of a recently installed fine ore agglomeration drum at Kisladag has begun. It will continue to ramp up to nameplate design in the second quarter, which is expected to “improve recoveries and offer potential upside.”
In Greece, at Olympias, the company will look to continue the positive operating momentum of the first quarter into the rest of the year. Several key initiatives are underway including the implementation of bulk emulsion and ventilation on demand, designed to improve safety performance and efficiency.
