Key Points to Watch for in Eldorado Gold’s 4Q16 Results



Project update

Eldorado Gold (EGO) provided an update on its growth and exploration projects during its investor day on September 7, 2016. The company now has most of the permits in hand, and it’s restarting its development plans at Skouries and Olympias, which are high-quality projects. In 3Q16, the company acquired an exploration license for its Bolcana porphyry project in Romania. It has already started drilling in this area. Eldorado also has a 100%-owned Brazilian development project, Tocantinzinho, which is pending board approval and could come online in 2019.

With these projects, Eldorado’s production could double by 2020, and its unit costs could fall. Investors look forward to more updates on these with its fiscal 2016 results.

Peers (GDX) (GDXJ) New Gold (NGD), Coeur Mining (CDE), and Agnico Eagle Mines (AEM) are also developing projects to improve their production and cost profiles.

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Production growth

Eldorado Gold’s (EGO) 3Q16 production of 117,782 ounces was 36% down YoY (year-over-year). Eldorado divested its Chinese assets during this period. The company also reduced its production guidance for 2016 from 570,000 ounces to 495,000 ounces. The new guidance takes into account discontinued operations.

Turning positive

Many analysts have turned positive on Eldorado following its project update. The ability to fund these projects internally through the proceeds from its asset sales could boost analyst and investor confidence further. Among intermediate gold miners, Eldorado Gold (EGO) is analysts’ favorite, with 64% “buy” ratings and 36% “hold” ratings. There are no “sell” ratings on the stock. For more details, please read Why is Eldorado Gold a Favorite among Intermediate Gold Miners?


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