S&P upgrades Eldorado Gold rating on stronger cash flow
Investing.com - S&P Global Ratings upgraded Eldorado Gold Corp. (NYSE:EGO) (TSX:ELD) to ’BB-’ from ’B+’ with a positive outlook, citing improved cash flow and leverage prospects driven by favorable gold prices and progress on development projects.
Eldorado generated S&P Global Ratings-adjusted EBITDA of more than $1 billion in 2025, up from just over $700 million in 2024, as the average gold price reached about $3,444 per ounce in 2025, up 44% from 2024. The company reported 2025 gross leverage of about 1.3x and held about $870 million in cash as of Dec. 31, 2025, despite continued spending on the Skouries project in Greece.
The Skouries copper-gold development project was about 90% complete as of Dec. 31, 2025, with about $250 million of spending remaining under a revised project cost estimate of $1.3 billion. S&P Global Ratings estimates production will begin in third quarter of 2026 and ramp up to commercial production in late 2026. The project is expected to produce an average of 140,000 ounces of gold and 67 million pounds of copper per year over an initial mine life of about 20 years.
Eldorado recently entered into a definitive agreement to acquire Foran for approximately C$3.8 billion in an almost all-stock deal, bringing the nearly completed McIlvenna Bay development project into its portfolio. The underground mine in Saskatchewan, Canada, was 85% complete as of Dec. 31, 2025, and is expected to produce annually about 41 million pounds of copper, 20,000 ounces of gold, 444,000 ounces of silver, and 54 million pounds of zinc over an 18-year reserve mine life. The transaction is expected to close in the second quarter of 2026, subject to shareholder votes, regulatory approvals, and customary closing conditions.
S&P Global Ratings expects Eldorado’s annual gold-equivalent production will increase more than 80% to about 900,000 ounces by the end of 2027, compared with 2025 production of 488,000 ounces. The ratings firm forecasts the combined entity’s adjusted debt to EBITDA will be well below 1.0x in 2027 and expects the company to generate about $2 billion of free operating cash flow in 2027-2028, assuming Skouries achieves steady state operations by mid-2027.
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