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.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
US PPI report to test Bitcoin, gold and Nasdaq as December rate hike looms
Nvidia falls to its lowest valuation in 14 years! "Super bull" Tom Lee calls for bottom fishing, retail investors are buying more as it drops, but Wall Street is divided
After the market opened on Thursday, retail investors went against the trend and bought up Nvidia, with net purchases reaching $111 million in just half an hour, setting a record for the same period. Investors such as Tom Lee have publicly supported the company, with institutions optimistic about strong order backlogs extending to 2028, robust revenue growth, and opportunities created by declining valuations. Meanwhile, institutions like Bernstein and Goldman Sachs have become more cautious about Nvidia's outlook, with concerns focusing on management succession and technological leadership following Jensen Huang's departure.
Jane Street boosts Fidelity Bitcoin ETF stake 8x in Q3, trims BlackRock IBIT
From SpaceX to Anthropic, the market has new strategies for dealing with tech giants' IPOs
The market's response strategies to major listings are currently centered around "index inclusion expectations": the new regulations allow mega IPOs to be included in the six major indices within 15 days, triggering concentrated buying by passive funds. Investors are positioning themselves in advance and using options to hedge and amplify buying power. However, Anthropic has a free float of only about 6%; shares available for sale by employees on the first day and privately placed shares with no lock-up period may create supply pressure. On the other hand, index arbitrageurs are facing a rare opportunity.
Crypto prices
More
