El Dorado Gold (EGO) Q4 2025: Scurrius Delay Adds $50M Capex, 40% Production Growth Targeted for 2027
El Dorado Gold’s Q4 capped a year of disciplined execution, capital returns, and operational progress, even as the Scurrius project slipped by several months and added $50 million in construction costs. Management’s visibility into multi-year production growth remains intact, with Scurrius and portfolio expansion expected to drive a 40% output increase by 2027. The company’s enhanced capital return program and Foran Mining acquisition signal a strategic pivot to a more diversified, cash-generative portfolio with increased copper leverage.
Summary
- Scurrius Delay and Capex Increase: Three-month timing shift adds $50 million in project spend, but stockpiling and readiness improve.
- Capital Return Acceleration: Dividend initiation and $204 million in buybacks highlight confidence in cash flow inflection.
- Portfolio Diversification: Foran Mining deal and copper exposure broaden growth levers beyond gold alone.
Performance Analysis
El Dorado Gold delivered on the upper end of production guidance for 2025, with 488,268 ounces produced and solid operational contributions from the Lamaque complex, Kisada, and Olympias. Revenue reached $1.8 billion, and free cash flow excluding Scurrius investment was $316 million, reflecting a strong gold price environment and disciplined cost management. The balance sheet remains robust, with $976 million in liquidity supporting both growth and shareholder returns.
Cost inflation was evident, particularly in royalty expenses and labor, with total production costs rising to $678 million, largely driven by regulatory changes in Turkey and local inflation. All-in sustaining costs (AISC) for the year were $1,664 per ounce, with Q4 at $1,894, reflecting both high sustaining capex and lower gold volumes. Growth capital outlays were significant, especially at Scurrius, which absorbed $475 million in 2025. The NCIB buyback and new dividend program signal a shift to formalized capital returns, underpinned by confidence in near-term cash flow ramp-up.
- Cost Structure Pressure: Higher royalties and labor inflation, especially in Turkey, drove up production costs and AISC.
- Capital Allocation Shift: $204 million in share repurchases and a new quarterly dividend formalize a capital return framework.
- Growth Capex Concentration: Scurrius project dominated investment, with $475 million spent and additional $50 million flagged for the delay.
Despite the Scurrius delay, the company’s operational execution elsewhere remained steady, and the project’s fundamentals are unchanged, with management emphasizing minimal impact on long-term value creation.
Executive Commentary
"We delivered safe gold production at the upper end of our guidance... launching a quarterly dividend to formalize a capital return framework, and advancing a discipline exploration program that reinforces the company's discovery strategy."
George Burns, Chief Executive Officer
"Our balance sheet remains strong and provides the flexibility to support growth initiatives while returning capital to shareholders. Total liquidity was approximately $976 million at the year end, positioning us well to complete construction at Scurrius, support ramp-up, and continue disciplined capital allocation."
Paul Ferneyhau, Executive Vice President and Chief Financial Officer
Strategic Positioning
1. Scurrius Project: Delay, Readiness, and Cash Flow Inflection
Scurrius, copper-gold project, is now expected to reach first concentrate production in early Q3 2026, with commercial production in Q4. The delay, driven by moisture-damaged cyclone feed pump capacitors and power line approval slippage, increases project capex by $50 million. However, the delay also allows for more comprehensive equipment readiness and ore stockpiling, positioning Scurrius for a smoother ramp-up and enhanced early cash generation. Management expects Scurrius to be a low to negative AISC mine over its life, with substantial free cash flow yields post-2026.
2. Portfolio Expansion and Diversification
The Foran Mining acquisition adds a Canadian copper-gold development asset, increasing portfolio diversification and copper leverage. This move signals a shift toward a more balanced commodity mix and greater resilience against gold price volatility. Management also highlighted exploration ramp-up, with a 60% increase in planned 2026 spend, targeting resource conversion and new discoveries across Quebec, Turkey, and Greece.
3. Capital Return and Shareholder Alignment
El Dorado’s newly launched dividend and continued NCIB repurchases formalize a capital return framework, reflecting management’s confidence in the company’s free cash flow trajectory. The company repurchased $204 million in shares in 2025 and will initiate a quarterly dividend in Q1 2026, marking an important milestone in shareholder alignment and capital discipline.
4. Operating Mine Optimization
At Kisada, Turkish gold mine, higher waste stripping and mine optimization are underway to unlock additional ore zones and stabilize long-term production. The shift to a $2,100 pit shell, enabled by higher metal prices, is expected to extend mine life and support steady annual output, albeit with short-term cost and production variability.
5. Cost Management Amid Inflation
Management continues to navigate inflationary pressures, with particular attention to labor and royalty costs in Turkey and currency impacts in Greece. Sustaining and growth capex are being balanced against the imperative to maintain operational flexibility and fund exploration-led growth.
Key Considerations
El Dorado Gold’s 2025 results and 2026 outlook reflect a company at a multi-year inflection, balancing near-term project execution risks with a clear path to scale, diversification, and capital returns.
Key Considerations:
- Scurrius Ramp-Up Readiness: Delay provides additional ore stockpiling and equipment completion, supporting a robust start-up profile.
- Exploration-Driven Upside: 60% increase in exploration spend targets resource conversion and new discoveries across core jurisdictions.
- Portfolio Resilience: Foran Mining acquisition and copper exposure reduce single-asset and single-metal risk.
- Cost Headwinds: Ongoing royalty and labor inflation, especially in Turkey, require active management to protect margins.
- Capital Return Commitment: Dividend initiation and buybacks reinforce management’s confidence in sustainable free cash flow.
Risks
Execution risk at Scurrius remains the most material near-term concern, with further delays or cost overruns possible if additional equipment or regulatory issues emerge. Inflationary pressures, especially in Turkey, could further erode margins if not offset by productivity gains or higher realized prices. Regulatory and permitting risks, particularly for power infrastructure in Greece, remain outside management’s direct control and could still affect commissioning timelines. Portfolio diversification reduces commodity risk, but integration of new assets such as Foran Mining carries its own challenges.
Forward Outlook
For Q1 2026, El Dorado expects:
- Scurrius first production in early Q3, commercial production in Q4.
- Gold production guidance of 490,000 to 590,000 ounces for 2026.
For full-year 2026, management provided:
- All-in sustaining cost guidance of $1,670 to $1,870 per ounce (excluding Scurrius for most of the year).
- Growth capital of $375 million to $405 million, sustaining capital of $140 million to $165 million.
- Exploration spend of $75 million to $85 million, up 60% year over year.
Management highlighted several factors that will shape 2026:
- Successful Scurrius commissioning and ramp-up are pivotal for the company’s cash flow inflection.
- Portfolio optimization, including the Kisada pit expansion and Foran Mining integration, remain under close watch for delivery risk and upside potential.
Takeaways
El Dorado Gold enters 2026 with a strong operational base, a clear path to multi-year production growth, and a new capital return framework. The Scurrius delay, while notable, is mitigated by improved readiness and does not alter the long-term value proposition.
- Production Growth Path: Scurrius and portfolio expansion set up a 40% output increase by 2027, with copper exposure adding resilience.
- Capital Returns and Balance Sheet Strength: Dividend and buybacks are underpinned by robust liquidity and anticipated free cash flow ramp.
- Execution Watchpoints: Scurrius commissioning, inflation management in Turkey, and integration of Foran Mining are the critical levers for 2026 and beyond.
Conclusion
El Dorado Gold’s 2025 performance and 2026 outlook reflect a company at a strategic crossroads: operational discipline and capital returns are now matched by a multi-year growth and diversification plan. While Scurrius’ delay and capex increase are near-term hurdles, the overall growth thesis and cash flow inflection remain intact.
Industry Read-Through
El Dorado’s experience underscores the persistent risk of project delays and cost inflation in the mining sector, even for well-capitalized operators. The company’s move to formalize capital returns and diversify into copper signals a broader trend among gold producers seeking resilience and growth beyond single-commodity exposure. Inflationary pressures in emerging markets, and regulatory bottlenecks for infrastructure, remain key sector-wide risks. Investors should expect more gold miners to pursue copper assets, ramp up exploration, and adopt more disciplined capital return frameworks as cash flows improve and portfolio risk management becomes paramount.