Eldorado Gold (EGO) Q2 2026 earnings review
Record Prices Mask Slumping Volumes and Surging Costs
Eldorado Gold's Q2 2026 results present a stark paradox: despite a 22% plunge in consolidated gold production, revenue climbed 8% YoY and Adjusted Net Earnings jumped 52%. This financial beat was entirely engineered by a soaring realized gold price ($4,379/oz vs $3,270/oz a year ago). Operationally, the quarter was tough. Kisladag's production collapsed 58% as planned, pushing its AISC to a staggering $2,407/oz. With three of its four operating mines now carrying AISC above $2,200/oz, Eldorado is leaning heavily on the Lamaque Complex to generate cash. However, the future is arriving rapidly: the newly acquired McIlvenna Bay mine produced its first concentrate, and the flagship Skouries project crushed its first ore. The company is enduring deep negative free cash flow today to finalize this transformational copper-gold pivot.
🐂 Bull Case
The massive capital burn is ending. Skouries is 97% complete, has crushed first ore, and is fully funded to commercial production in Q4. McIlvenna Bay hit first copper concentrate in June and zinc in July, launching Eldorado into significant multi-jurisdiction copper production.
While other assets struggle with costs, Lamaque delivered 52,340 ounces at an AISC of $1,192/oz. It continues to be the financial bedrock allowing the company to fund its growth ambitions.
🐻 Bear Case
Excluding Lamaque, the remaining three mines are severely pressured. Kisladag, Efemcukuru, and Olympias all reported AISC over $2,250/oz, destroying operational leverage despite record metal prices.
Q2 Free Cash Flow came in at negative $334.1M due to an immense $441.3M capital outlay. Even stripping out Skouries and MacBay, core free cash flow contracted 33% YoY to $40.9M.
⚖️ Verdict: ⚪
Neutral. Eldorado is surviving a painful operational transition largely because the gold market is bailing it out. The short-term operational optics are poor, but the impending cash flow inflection point from Skouries and McIlvenna Bay in H2 2026 makes the long-term thesis highly compelling.
Key Themes
McIlvenna Bay Acquisition Validated by First Production
The $2.39 billion all-share acquisition of Foran Mining in April 2026 is already bearing operational fruit. McIlvenna Bay produced its first copper concentrate in June and zinc in July, pivoting Eldorado into a major critical minerals player in a Tier-1 jurisdiction (Saskatchewan). Plant throughput reached 5,405 tonnes, producing ~65k lbs of copper, with commercial production targeted for Q3 2026.
Skouries Reaches the Final Yard
The agonizing wait for Skouries is almost over. Overall project progress hit 97% complete. The primary crusher crushed first ore in July, and the open pit and underground operations have built a massive 3.6-million-tonne stockpile. First concentrate remains on track for Q3 2026, which will structurally lower consolidated unit costs and drastically change the company's free cash flow profile.
Record Gold Prices Bail Out Cost Inflation
The macro tailwind is doing the heavy lifting. The average realized gold price surged to $4,379/oz (+34% YoY). This unprecedented pricing power drove revenue up 8% YoY and Adjusted Net Earnings up 52%, perfectly masking a 22% drop in ounces produced and a 27% surge in AISC.
Kisladag Production Collapse & Cost Spike
Kisladag's performance is reversing dramatically. Q2 production crashed 58% YoY (19,108 oz vs 46,058 oz) due to a planned transition into lower-grade ore and accelerated waste stripping (Phase 6). Consequently, unit economics broke down: AISC essentially doubled YoY to $2,407/oz. This severely limits Kisladag's near-term cash generation capabilities.
High Gold Prices Trigger Punitive Royalties
Eldorado is experiencing the double-edged sword of record gold prices. The recently expanded Turkish Mining Law features a sliding scale where royalties increase as gold surpasses specific bands (maxed at $5,101/oz). In Q2, royalty expenses surged to $33.8 million from $28.7 million. Higher royalties in Turkey and Greece accounted for roughly 23% of the total production cost increases in Q2.
Massive Capex Drain Hits Free Cash Flow
The final construction push is heavily draining liquidity. Negative free cash flow worsened from -$61.6M in Q2 2025 to -$334.1M in Q2 2026. This was driven by $154.6M in Skouries project capital, $59.6M in Skouries operational capital, and an additional $78.1M integration hit at McIlvenna Bay. Even when excluding these two mega-projects, base Free Cash Flow dropped to $40.9M, highlighting that the underlying operations are generating less cash.
CEO Succession Plan Finalized
George Burns is stepping down as CEO on September 30, 2026, passing the baton to current President Christian Milau. This leadership transition aligns perfectly with the transition of Skouries and MacBay from development assets into commercial operations, signaling a shift in focus from project construction to operational optimization.
Other KPIs
Accelerating significantly. Up 33% YoY from $211.8M in Q2 2025. Margins expanded despite operational underperformance solely due to gold price realization.
Down heavily from $869.4M at year-end 2025, driven by aggressive growth capital deployment, share buybacks, and high tax payments ($67.4M in Q2). Liquidity remains sufficient given the fully drawn $843.6M Term Facility for Skouries, but the cash buffer is tightening.
A rare bright spot in the portfolio. Lamaque's total cash costs only rose from $721/oz a year ago. It delivered 50% of the company's total gold production this quarter, proving its worth as Eldorado's anchor asset while other mines struggle.
Guidance
Accelerating. The guidance was raised from the prior 490k-590k range strictly to account for the initial gold production coming online from the newly acquired McIlvenna Bay mine.
Stable. The company maintained its core operational guidance, meaning that H2 must shoulder a heavy burden of production, as H1 delivered only 204,974 oz against a 460,000 oz midpoint.
Stable. The company maintained its cost guidance range, which assumes cost pressures from Q2 will normalize. Given Q2 AISC hit $1,926/oz, achieving this full-year target requires significant cost deflation or volume recovery in H2.
Initial post-acquisition guidance. Operating costs per tonne are expected to range between $90 to $110 by December 2026, setting the baseline for unit cost expectations as the asset ramps up.
Key Questions
Kisladag's Path to Cost Normalization
AISC at Kisladag spiked to $2,407/oz this quarter due to phase 6 waste stripping. At what point in late 2026 or 2027 do you project unit costs returning to historical averages, and what gold price is required to keep the asset cash-flow positive in the interim?
Skouries Power Energization
The power line towers are built, but final site energization is awaiting sign-off from the Greek authority. Given past regulatory delays in Greece, what is the contingency plan if final meter installation pushes past Q3, and what are the daily holding costs if the plant cannot run at full capacity?
McIlvenna Bay Expansion Funding
You've initiated a study to expand McIlvenna Bay throughput to 7,000 tpd and add a silver-lead circuit by 2028-2030. How will this be funded in the context of the heavy debt load taken on for Skouries?