Eldorado Gold: Q1 25 performance exceeds market forecasts

Eldorado Gold released its Q1 25 results on May 1, 2025, posting 37.7% y/y revenue growth to US$355.2m, driven by an increase in the average realized gold price. As a result, EBITDA rose by 38.1% to US$163m, with a margin of 45.9%. Net profit grew by 105.7% to US$72m, with margins expanding from 13.6% to 20.3%. In addition, Q1 25 sales exceeded analysts' revenue estimates by 7.2%.

Eldorado Gold Corporation, which was formed in 1992 and is headquartered in British Columbia, Canada, is a gold and base metals mining, development, and exploration company. It has mining operations, ongoing development projects and exploration in Turkey, Canada, and Greece. The company employs over 5,800 people.

It operates four mines - the Kisladag mine, which contributed 38% of total gold produced in Q1 25; the Lamaque mine, which contributed 35%; the Efemcukuru mine, which produced 17%; and the Olympias mine, which produced 10% of total gold.

Record gold prices

Eldorado Gold achieved a remarkable milestone, producing over 115,893oz of gold, closely in line with the 117,111oz produced in Q1 24. Total gold sales reached 116,263oz, with each ounce fetching an impressive average price of US$2,933, a significant increase from the US$2,086 per ounce realized in Q1 24.

Looking ahead, the company remains steadfast in its FY 25 production guidance, aiming to produce between 460,000 to 500,000oz of gold. Production is expected to be weighted towards the second half of the year, promising a surge in activity and output. Financially, the company anticipates total full-year cash costs of between US$980 and US$1,080 per ounce sold, with an average All-In Sustaining Cost (AISC) projected to be between US$1,370 to US$1,470 per ounce sold.

Skouries mine

In a significant milestone for the company, first production from the Skouries mine is anticipated in Q1 26, with commercial production slated for mid-2026. This high-grade copper-gold porphyry deposit will be exploited using a blend of conventional open pit and underground mining techniques. The mine boasts an initial lifespan of 20 years, during which it is projected to yield an average of 140,000oz of gold and 67 million pounds of copper annually.

The company achieved substantial capex, totaling US$173.2m in Q1 25. This includes US$83.8m dedicated to the Skouries project, focusing on major earthworks and infrastructure construction, alongside US$6.4m for accelerated operational capital. Additionally, growth capital at the operating mines amounted to US$38.9m, primarily allocated to Kisladag for ongoing waste stripping and the construction of the second phase of the North Heap Leach Pad and related infrastructure.

Increase in cash and debt levels

Eldorado Gold reported a solid performance over the FY 21-24 period, posting a revenue CAGR of 12% to reach US$1,322m. EBITDA surged 18% to US$670m in FY 24, with margins expanding from 43% to 50.7% in FY 24, driven by operational efficiencies. Net income grew at a CAGR of 28.6% to US$289m in FY 24.

The company generated consistent positive cash from operations over the same period, rising from US$362m in FY 21 to US$645m in FY 24. Cash and cash equivalent grew from US$481m to US$857m in FY 24. Despite total debt increasing from US$512m to US$930m in FY 24, the debt-to-equity ratio only slightly increased to 23.9% in FY 24 from 14.1% in FY 2021, remaining comfortably below the 100% threshold. In addition, ROE improved significantly from 0.3% in FY 2021 to 8.1% in FY 2024.

In comparison, Alamos Gold, a local peer, posted a revenue CAGR of 17.8% over FY 21-24, reaching US$1,400m. EBITDA surged at a CAGR of 18.6% to US$684m in FY 24, with margins expanding from 49.8% to 50.8%. Net income jumped at a remarkable CAGR of 62.1%, reaching US$284m in FY 24.

Positive long-term trajectory

Over the past year, Eldorado Gold's stock has delivered modest returns of approximately 13.2%, reflecting a positive fundamental trajectory. However, in comparison, Alamos Gold delivered higher returns of 47.4%.

Eldorado Gold is currently trading at a P/E ratio of 10.2x, based on the FY 25 estimated EPS of US$1.7. This is in line with its three-year historical average of 10.1x but lower than Alamos Gold's P/E of 20.8x. Likewise, the company is trading at EV/EBITDA multiple of 4.9x, based on the FY 25 estimated EBITDA of US$788.1m, which is lower than its three-year historical average of 5.4x and Alamos Gold’s 9.5x.

Eldorado Gold is generally liked by analysts, with one 'Buy' rating, four 'Outperform' ratings, and four 'Hold' ratings, resulting in an average target price of US$22.6, which implies 26.8% upside potential from the current price.

Analysts' positive outlook is further supported by an anticipated revenue CAGR of 23.5% over FY 24-27, reaching US$2,491m in FY 27. They also anticipate an EBITDA CAGR of 29.5% over the same period, reaching US$1,476m, with margins expanding from 51.4% in FY 24 to 59.2% in FY 27. Additionally, analysts estimate a net profit CAGR of 35.1%, reaching US$712m, with margins expanding from 21.9% in FY 24 to 28.6% in FY 27. For Alamos Gold, analysts estimate a revenue CAGR of 15%, an EBITDA CAGR of 23.5%, and a net profit CAGR of 32.1%.

Overall, Eldorado Gold's Q1 25 results showed impressive revenue and earnings growth, largely thanks to higher gold prices. The company expects initial production from the Skouries mine in early 2026. However, Eldorado Gold faces significant foreign exchange risk due to its operations in Turkey, Canada, and Greece, exposing the company to currency fluctuations from transactions denominated in foreign currencies. Additionally, Eldorado is subject to price risk stemming from volatility in gold and metal prices.