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Eldorado Gold's Q1: Ambitious, Despite The Complex Situation

May 01, 2020 10:29 AM ETEldorado Gold Corporation (EGO), ELD:CA4 Comments


  • Eldorado Gold produced 115,950 toz gold in Q1 2020.
  • The AISC declined to $952/toz gold.
  • An operating cash flow of $53.3 million, net loss of $4.9 million, and adjusted net income of $12.5 million was recorded.
  • The 2020 production and cost guidance was reiterated.
  • The expansion of the Lamaque mine that could increase its annual production by approximately 60,000 toz gold was permitted.

Eldorado Gold (NYSE:EGO) is another mid-tier gold miner that released its Q1 2020 financial results. Although it had to face some disruptions caused by the coronavirus, the negative impacts on Q1 were relatively small, they will be more visible in Q2.

In Q1, Eldorado produced 115,950 toz gold. The most gold was produced at Kisladag (50,176 toz), followed by Lamaque (27,353 toz), Efemcukuru (23,239 toz), and Olympias (15,182 toz). The Q1 production is slightly lower than the Q4 production, which is caused especially by the fact that the Lamaque mine was suspended for 7 days in late March. It is possible to estimate that this suspension reduced the Q1 production by approximately 2,300 toz gold. The mine was suspended until April 15, which means that in Q2, the Lamaque mine production should be lower approximately by 4,600 toz, compared to normal.

Eldorado's total cash costs increased by 4% compared to Q4, to $678/toz. However, the AISC declined notably. In Q4, it stood at $1,110/toz, but in Q1, it declined by more than 14%, to $952/toz. This is very good news, as it shows that Eldorado's 2020 objective to reach AISC of $850-950/toz is achievable.

Source: own processing, using data of Eldorado Gold

Eldorado's revenues grew to $204.7 million, reaching the highest level in more than 2 years. Compared to Q4 2019, the revenues increased by 6.7% and compared to Q1 2019 even by 156%. Although the copper and silver by-product credits decreased, Eldorado's revenues improved due to the higher realized gold prices that increased from $1,475/toz in Q4 to $1,580/toz in Q1. The operating cash flow declined quarter-over-quarter, but it remains in line with the previous three quarters, above the $50 million level. A net loss of $4.9 million was recorded, however, a big part of it is attributable to a loss on the non-cash revaluation of the derivative related to redemption options in the debt and

This article was written by

Peter Arendas profile picture

Peter Arendas is an associate professor at the University of Economics in Bratislava. He has over 15 years of investing experience. Peter specializes in covering small and mid-cap companies in the resource sector with an in-depth insight into the precious and industrial metals royalty & streaming industry.

Peter is the leader of the investing group Learn more.

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Comments (4)

Looks like ELD will be one of those dogs with higher production, higher POG, and even higher spending ( nobody really knows for what) to make sure it stays in the red. It looks like management continue to be the only people benefiting from this company.........
Peter Arendas profile picture
Actually, the cash flows are more important than net income, as net income can be artificially reduced by various accounting procedures, in order to limit the tax liabilities.
A score card:

May 1 2020.

Gold price London pm fix $1686
Share price $ 9.29
Cash and cash equivalents $363M
Long term debt $418M

May 1 2017

Gold price London pm fix $1255
Share price $15.25
Cash and cash equivalents $864M
Long term debt $592M

Please explain where the “Ambition” is in all of this!!!
Peter Arendas profile picture
"Ambition" is something related to the future, not to the past development.
What I consider to be ambitious: Eldorado reiterated the cost and production guidance despite the current situation. They will expand the Lamaque production (which should lead also to lower costs). The Skouries mine development is still on the table (although no news was provided this quarter).
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