It's been a busy week for investors in the metals complex, with earnings season have finally kicked off in full swing. Eldorado Gold (NYSE:EGO) was the most recent company to release its Q3 earnings report, and results were mostly in line with what analysts were expecting. The company produced 101,596 ounces in the quarter and is on track to meet annual production guidance of 390,000 to 420,000 ounces. All-in sustaining cost guidance is tracking a little higher than expected but could reach the range provided with a strong Q4. While Eldorado Gold managed to put up a decent quarter, despite slight misses on the top and bottom line, I continue to see the stock as inferior to its peers based on its three-year guidance, and higher cost profile vs. other intermediate producers. The stock should do fine in a rising gold (GLD) price environment, but I would rank the stock as a Sector Perform. This means that it should perform in line with the Gold Miners Index (GDX), but the Gold Miners Index provides lower risk due to its diversification.
(Source: Company Website)
Eldorado Gold has come a long way from the depths of its bear market in 2018 and has managed to pull costs down from two horrendous quarters in Q3 2018 and Q1 2019, of $1,112/oz and $1,132/oz, respectively. All-in sustaining costs for Q3 2019 came in at $1,031/oz, and all-in sustaining costs for the first nine months of 2019 are sitting at $998/oz. These figures are roughly 5% above guidance provided in February of $950/oz for the year, and it's certainly possible the company could meet this guidance. Annual production guidance is sitting at 276,376 ounces to finish Q3, and the company will need 113,000 ounces of production to meet the low end of its guidance. The company reiterated its guidance in the release and plans on meeting this guidance.
