Eldorado Gold Corporation (TSX: ELD) has reported robust Q3 2024 financial results, marked by revenue and profit growth driven by a high average gold price and strong sales. However, the company faces increasing cost pressures and operational challenges across its mines, prompting a narrowed production guidance for the remainder of 2024.
In Q3 2024, Eldorado reported a revenue of $331.8 million, up by 36% from $244.8 million in Q3 2023 and marking a strong 15.4% quarter-over-quarter growth from $287.6 million in Q2 2024. The primary driver of this revenue growth was the record-high average realized gold price of $2,492 per ounce, significantly above the $1,879 per ounce reported in Q3 2023 and also a substantial increase from the $2,274 per ounce achieved in Q2 2024.
Net earnings for Q3 2024 reached $101.1 million ($0.49 per share), a considerable recovery from the $6.6 million loss ($0.03 loss per share) in Q3 2023. On a quarter-over-quarter basis, net earnings surged from $67.9 million in Q2 2024, underscoring the effect of both high gold prices and optimized production volumes.
Adjusted net earnings also saw strong improvement, reaching $71 million ($0.35 per share) in Q3 2024, up from $35 million ($0.17 per share) in the same period last year and rising from $51.7 million in Q2 2024. While earnings reflect successful revenue generation, much of the gains were offset by higher derivative losses and elevated royalty costs in high-cost environments like Turkey.
Production costs increased steeply to $141.2 million in Q3 2024, up 22% from $115.5 million in Q3 2023 and a 9% rise over $129.4 million in Q2 2024. Total cash costs per ounce jumped to $953 from $794 per ounce in Q3 2023 and $894 in Q2 2024. Eldorado cited increased royalty payments due to higher gold prices, alongside labor costs and inflationary pressures, as key drivers of this increase.
All-in sustaining costs (AISC) per ounce also rose, averaging $1,335 in Q3 2024, compared to $1,177 in Q3 2023—a 13% year-over-year increase. Quarter-over-quarter, AISC climbed 5.5% from $1,265 in Q2 2024, marking an upward trend that could pressure future profitability if gold prices decline or if cost-saving measures are not effective.
Cash generated from operations reached $180.9 million, a sharp increase from $108.1 million in Q3 2023 and $151.2 million in Q2 2024. Operating cash flow before changes in working capital also rose to $166.5 million from $97.5 million year-over-year, reflecting higher revenue and stronger cost recovery despite rising production costs.
However, free cash flow excluding the Skouries project reached only $98.3 million, up from $37.3 million in Q3 2023 and $78.2 million in Q2 2024. When Skouries-related investments are factored in, free cash flow remains negative at -$4.8 million in Q3 2024, although this marks an improvement over the -$19.3 million in Q3 2023.
Skouries’ capital demands have grown substantially, with total growth capital expenditures at $158.1 million in Q3 2024 alone, $82.7 million of which was directed toward the project. As a result, Eldorado’s overall free cash position remains under pressure despite higher revenue. The continued negative free cash flow underscores Skouries’ capital intensity, raising questions about Eldorado’s future liquidity should costs at Skouries escalate further or if project timelines extend.
Eldorado’s cash, cash equivalents, and term deposits rose to $676.6 million by the end of Q3, up from $595.1 million at the end of Q2. However, increased debt levels—up 42% year-over-year to $849.2 million from $596.5 million in Q3 2023—suggest that Eldorado may need to secure further financing to maintain liquidity if cash flow challenges persist.
Eldorado’s Skouries project remains on budget and on track for first production in Q3 2025, with overall project completion at 79%. However, the project’s capital intensity remains a concern. Eldorado has already committed €201.8 million in financing via drawdowns in 2024, yet Skouries’ requirements could constrain cash flow if higher-than-anticipated expenses arise. With workforce productivity slightly ahead of plan, Eldorado expects to reach its staffing goal of 1,300 by year-end, though labor market tightness could pose ongoing cost challenges.
The company also revised its 2024 production guidance to 505,000–530,000 ounces, down from a prior estimate of up to 555,000 ounces. It also raised cash cost expectations, projecting total cash costs per ounce sold at $910 to $940, versus previous guidance of $840 to $940, largely due to increased royalty payments and labor costs in high-expense jurisdictions. AISC guidance was adjusted upward to $1,260–$1,290 per ounce from $1,190–$1,290, reflecting sustained cost inflation and rising production costs.
Eldorado Gold last traded at $24.22 on the TSX.
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