Thank you for standing by. This is the conference operator. Welcome to the Eldorado Gold third quarter 2026 results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing star then zero. I would now like to turn the conference over to Lynette Gould, Vice President, Investor Relations, Communications, and External Affairs. Please go ahead, Ms. Gould.
Thank you, operator, and good morning, everyone. I would like to welcome you to our conference call to discuss our third quarter 2026 results. Before we begin, I would like to remind you that we will be making forward-looking statements and referring to non-IFRS measures during the call. Please refer to the cautionary statements included in the presentation and the disclosure on non-IFRS measures and risk factors in our management's discussion and analysis. Joining me on the call today, we have Christian Milau, President and Chief Executive Officer, Paul Ferneyhough, Executive Vice President, Strategy and Chief Financial Officer, and Simon Hille, Executive Vice President and Chief Operating Officer. Our release yesterday detailed our third quarter 2026 financial and operating results.
The release should be read in conjunction with our Q3 2026 financial statements and management's discussions and analysis, both of which are available on our website and have been filed on SEDAR+ and EDGAR. All dollar figures discussed today are U.S. dollars, unless otherwise stated. For clarity, we have rounded certain figures for the purposes of this conference call. We will be speaking to the slides that accompany this webcast, which can be downloaded from our website. After the prepared remarks, we will open the call for Q&A, at which time we will invite analysts to queue for questions. I will now turn the call over to Christian.
Thanks, Lynette, and good morning. I will begin with an overview of the third quarter and an update on Skouries. As I begin my first quarterly call as CEO, my focus is on building on Eldorado's high-quality, long-life asset base and the investments already made while improving execution consistency, enhancing capital discipline, and converting those investments into stronger cash flow and per-share value. With two new operations advancing through commissioning and ramp-up, together with significant exploration potential across the portfolio, you should expect us to set clear expectations, report transparently on our progress, and be disciplined in how we allocate capital and deliver our long-term plan. I cannot emphasize enough that our focus is on creating sustainable long-term value. We are making decisions with that objective in mind while remaining disciplined on near-term execution, capital allocation, and returns.
An important part of that discipline is how we approach project development and execution. With our recently hired and enhanced projects team embedded across the business, we have strengthened our approach to project governance. Going forward, we do not expect to undertake any significant capital project without the projects team involved from the outset, bringing greater discipline and consistency to project evaluation, planning, execution, and oversight. The Skouries inauguration earlier this month was a proud moment for our team, and the positive response from government representatives, including Prime Minister Mitsotakis, local communities, and other stakeholders, reinforced the significance of this project for Greece and the region. In addition, Skouries was designated a strategic project by the European Commission, and in the next week or so, we expect to be transporting our first batch of European-produced concentrate to a European smelter just a few hours from Skouries.
This is a key milestone for the team. Earlier in September, analysts and investors visited the site and saw firsthand the progress achieved as the operation advances through ramp-up. This week, we announced our first filtered tails, which was a critical milestone allowing the processing plant to operate continuously and start the ramp-up towards commercial production during this quarter. This is an exciting time for Skouries and all our partners and stakeholders. I also want to thank George for his leadership over the past nine years and for the strong foundation he helped build. I am pleased that he will remain an important shareholder, supporter, and board member. Turning to the quarter, the quarter marked an important step forward for Eldorado. Skouries produced first copper gold concentrate, and McIlvenna Bay continued to ramp up following first copper and zinc concentrate.
We expect both operations to achieve commercial production in late Q4. At Skouries, the ramp-up has taken longer and cost more than we expected, and it is important that we acknowledge that directly. Our immediate priority is to safely complete the remaining commissioning work, achieve commercial production, and establish stable, predictable operating performance. We are building strong momentum toward that goal and are encouraged by the progress we are seeing. Based on our year-to-date performance, we have revised our 2026 production guidance. For our operating assets, excluding Skouries and McIlvenna Bay, we now expect gold production of 410,000 ounces - 430,000 ounces. Strong performance at Lamaque is partially offsetting lower expected production at Kışladağ and Olympias, with the Olympias expansion now expected to begin ramping up in Q1 2027.
At Skouries, we now expect 2026 production of 10,000 ounces - 35,000 ounces of gold and 5 million lbs - 15 million lbs of copper, reflecting the slower-than-expected ramp-up. The revision reflects the timing of the ramp-up and does not change our current expectations for Skouries's long-term design capacity, and based on the progress we are seeing and our current ramp-up plans, we remain comfortable with our expectations for Skouries in 2027. Importantly, the momentum we have built over the last few days with the tailings filter presses and the processing plant now operational, we remain focused on maintaining that momentum through the remainder of the ramp-up. More broadly, despite the changes we are making to our 2026 guidance today, we remain comfortable with our overall outlook for 2027.
We expect to enter the year with Skouries and McIlvenna Bay advancing through ramp-up, the Olympias expansion coming online, and the benefits of the work underway at Kışladağ beginning to contribute. Turning more specifically to Skouries on slide five. First production of the copper gold concentrate was achieved on September 8. The process plant is substantially complete and operating as expected as a part of the ramp-up. The optimization and performance testing continuing across the circuit. One milestone we are particularly excited about is the start of the two filter presses at Skouries, which we announced on Monday. We continue to press tails successfully on a consistent basis this week. If you haven't yet watched the video that accompanied the release, I strongly encourage you to do so.
It's impressive to see the sheer scale of the filter presses in operation, the filter cake discharging onto the conveyors, and the material moving out to the tailings management facility. It's a great visual representation of the progress being made at Skouries. Those two filter presses enable continuous plant operation, which is an important step forward. We require four operating filter presses to support commercial production, and commissioning of the remaining units is progressing well. With the additional units expected to come online in November, and likely within the next couple of weeks. The site was successfully energized on September 28, completing the connection to grid power. All temporary generators have now been demobilized, providing the reliable long-term power infrastructure needed for commissioning and ramp-up.
Mining activities in both the open pit and underground continue to perform well, with a significant stockpile of both open pit and underground ore, providing substantial feed availability as the plant ramps up. Underground development is advancing according to plan with 2,100 meters completed during the quarter, and the east ramp breakthrough achieved. Following first concentrate and the revised timing of commercial production, estimated total project capital for Skouries is approximately $1.425 billion, an increase that consists of $65 million of project capital and $45 million of previously guided growth capital that had been expected following commercial production but is now expected to be incurred prior to commercial production and is therefore reported as project capital. To reiterate, this $45 million of capital is not new, it's just reclassified from the operating period to the capital period before commercial production.
The actual increase of $65 million primarily reflects higher contractor workforce requirements, extended use of temporary power, additional owners' costs, and other execution-related costs associated with the longer commissioning period. We also expect accelerated operational capital of $390 million, an increase that consists of $95 million of additional operational costs and $35 million of previously guided sustaining capital that had been expected following commercial production. It is now expected to be incurred and capitalized during the pre-commercial production period and is therefore reported as accelerated operating capital. Again, this $35 million of capital is not new and just reclassified from the operating period to the capital period before commercial production. The actual increase of $95 million primarily reflects activities that support continued growth of the ore stockpiles ahead of our first production, further advancement of the underground mine, and advancing the site general earthworks.
We have also taken a cautious and prudent approach by separately identifying up to an additional $30 million contingency that may be incurred depending on the exact timing of commercial production. The classification of these expenditures will depend on when commercial production is achieved, with amounts potentially reflected in project capital, AOC, sustaining capital, or growth capital. Given the positive momentum we have seen over the past week, we certainly do not expect to use this contingency. However, in the interest of being prudent and transparent, we believe it is appropriate to include it in our estimates at this stage. Based on our current cost and schedule assumptions, the project remains fully funded. With that, I will turn it over to Paul to review the financial results.
Thank you, Christian, and good morning, everyone. Turning to slide six. Our third quarter financial results benefited from higher realized gold prices while we continued to invest significantly in driving Skouries and McIlvenna Bay towards commercial production. During the quarter, we produced 106,000 ounces of gold and sold 107,000 ounces. Lamaque delivered another strong quarter benefiting from higher throughput grade and recoveries, including the contribution from Ormaque. This helped partially offset lower production at Kışladağ and Efemçukuru. Revenue increased 18% year-over-year to $512 million, supported by an average realized gold price of $4,326 per ounce in the quarter, compared with $3,527 per ounce in the third quarter of 2025. The benefit from higher realized prices more than offset the impact of lower gold sales volumes. Production costs were $200 million compared with $164 million in the prior year quarter.
The increase primarily reflected higher royalties, higher costs at Lamaque and Olympias, and the inclusion of pre-commercial production costs at McIlvenna Bay. Total cash costs averaged $1,415 per ounce sold, while AISC averaged $2,050 per ounce sold. The year-over-year increases primarily reflected higher production costs, lower gold sales volumes, and higher sustaining capital. These impacts were partially offset by increased by-product credits. Depreciation and amortization was $59 million, compared with $63 million in the prior year quarter, primarily reflecting lower production at Kışladağ. We also recorded a $4 million foreign exchange gain, primarily reflecting movements in the euro on euro-denominated debt and payables. Other income was approximately $6 million, and finance costs were approximately $14 million. The increase in finance costs reflecting higher interest and financing costs on cumulative debt and changes in the fair value of redemption option derivatives.
Income tax expense was $92 million, including $62 million of current tax expense and $30 million of deferred tax expense. Overall, net earnings attributable to shareholders from continuing operations were $118 million or $0.45 per share, compared with $56 million or $0.28 per share in the third quarter of 2025. Adjusted net earnings were $127 million or $0.49 per share, compared with $82 million or $0.41 per share a year ago. Overall, higher realized gold prices provided a meaningful benefit during the quarter, partially offsetting the impact of lower sales volumes and continued investment in our growth projects. Turning to slide seven. Our balance sheet and liquidity remain important priorities as we complete the investment programs at Skouries and McIlvenna Bay.
In August, we increased our revolving credit facility from $450 million to $600 million, extended its maturity to March 1st, 2029, and improved our financial flexibility through enhanced pricing and beneficial covenant terms. At quarter end, we had approximately $397 million of cash and cash equivalents and $275 million of availability under the credit facility, providing total liquidity of $672 million. We also held $72 million of restricted cash in the Skouries debt service reserve account, which has been funded ahead of declaring project completion. Turning to cash flow. Net cash generated from operating activities was $135 million in the quarter. Importantly, cash flow from operating activities before changes in working capital was $249 million, compared with $184 million in the prior year quarter. Consolidated free cash flow was negative $191 million, reflecting the significant level of investment in Skouries and McIlvenna Bay as both operations advanced towards commercial production.
For additional context, the established operating portfolio generated $98 million of free cash flow before the investment in Skouries and McIlvenna Bay during the quarter. This compared with $77 million in the prior year period. This provides clear visibility into the cash generated by the established operating portfolio while we complete this significant phase of growth investment. During the quarter, cash capital expenditures were approximately $206 million at Skouries and $69 million at McIlvenna Bay, underscoring the significant level of investment reflected in the consolidated free cash flow. Looking ahead, our capital allocation priorities remain disciplined. First, completing the commissioning and ramp-up to commercial production levels of Skouries and McIlvenna Bay remain our immediate capital priority. Second, we will maintain balance sheet strength and financial flexibility as these two assets transition from investment towards material cash generation.
Third, as the new operations stabilize and free cash flow improves, we will evaluate the appropriate balance amongst debt reduction, reinvestment, and shareholder returns, including the size of our quarterly dividend and potential share repurchases. With that, I'll turn it over to Simon for an operational update.
Thank you, Paul. Starting at McIlvenna Bay on slide eight. The total project capital cost estimate from June 1, 2024, to commercial production is now expected to be $975 million, an increase of approximately $23 million following a slower-than-expected ramp-up towards commercial production, which is expected in late Q4. For 2026, growth capital post commercial production is expected to be approximately $15 million, and sustaining capital post commercial production is expected to be $10 million. The full process plant is operational with average throughput in the 70% range. We have focus on improved availability and operational consistency. The remaining ramp-up activities are focused primarily on solid-liquid separation in the pyrite and tailing thickeners, reagent control, and improving filtration rates and filter availability. Beyond the ramp-up, we continue to advance exploration opportunities to unlock additional value for McIlvenna Bay and broader district.
We remain on track to include an inaugural inferred mineral resource for McIlvenna Bay in our annual mineral reserve and mineral resource update in the fourth quarter. Given the exciting prospectivity at the McIlvenna Bay deposit, we are undertaking additional work before updating the McIlvenna Bay technical report. This includes evaluating shaft location, material handling options for both deposits, and planning resource conversion drilling along with mill expansion study already underway. We expect to update the technical report once the work has advanced.
Moving to slide nine and the Lamaque complex. The team delivered another strong quarter, producing 52,748 ounces of gold, supported by strong mill performance, higher head grade and recoveries, including positive contribution from Ormaque. Ormaque is becoming an increasingly important source of high-grade ore for Lamaque. Cost performance remained strong, with total cash costs of $897 per ounce sold and all-in sustaining costs of $1,436 per ounce sold.
The latter reflecting the earlier transition of Ormaque underground development from growth capital to sustaining capital. Moving to slide 10 at Kışladağ. Production totaled 22,713 ounces of gold, reflecting lower grade ore stacked, which is associated with mine sequencing as the operation continued to accelerate waste removal from phase VI and the western area. Completion of necessary bench cleanup progressed more slowly than planned during the quarter, delaying access to higher-grade material, which was realized in September. The higher-grade material is now being stacked on the Northeast leach pad. However, given the approximate 300-day leach cycle, the associated production benefit is expected towards the end of fourth quarter and into 2027. All-in sustaining costs were $2,832 per ounce sold, reflecting mine sequencing and the associated lower production, higher cash costs, and higher sustaining costs. The accelerated waste stripping is expected to improve access and operating flexibility going forward.
We are also continuing to advance initiatives, including the whole ore agglomeration circuit, which remains on track, with commissioning and ramp-up expected in the first half of 2027. These initiatives are expected to support improved operational consistency and long-term performance. Moving to slide 11 at Efemçukuru, the operation produced 17,073 ounces of gold. All-in sustaining costs were $2,313 per ounce sold, reflecting lower ounces sold and slightly higher total cash costs and sustaining capital expenditures. Efemçukuru continues to be a consistent contributor to the portfolio. While the grades were lower in the quarter, the team continued to deliver strong throughput and advanced development work in the Kokarpinar deposit to support the mine life extension. Moving to slide 12 at Olympias. We produced 13,430 ounces of gold. Lower gold grades were partially offset by higher mill throughput, while stable ore blend and stronger flotation performance supported improved metal recoveries.
Quarterly gold production was impacted by a decision to stockpile material with elevated lead and zinc content that was originally expected to be processed at the end of the third quarter. This material is expected to be introduced through the controlled blending program during the fourth quarter to maintain stable plant performance and to optimize recoveries. All-in sustaining costs were $2,067 per ounce sold, supported by higher by-product credits. Completion of the 650,000 tonne per annum expansion is ongoing, with the final circuit tie-ins planned for the first quarter of 2027 and ramp up to nameplate capacity anticipated in the first half of 2027. Across the portfolio, our focus remains on safe, disciplined execution while advancing the operational improvements and growth initiatives that support Eldorado's next phase of production and cash flow. With that, I'll turn the call over to Christian Milau for closing remarks.
Thanks, Simon. Q3 was an important quarter for Eldorado. Skouries achieved first concentrate, McIlvenna Bay continued its ramp-up, and our established operations generated meaningful production in a strong gold price environment. We've also just returned from McIlvenna Bay, where we visited the site alongside our board of directors. Seeing the operation firsthand reinforced the quality of this long-term asset. There's meaningful expansion potential in the next few years and exceptional exploration potential over the long term. I want to acknowledge the hard work of the team advancing the ramp-up. As I begin as CEO, my approach is straightforward: set clear expectations, report transparently on progress, and respond quickly when results differ from plan. I'm confident in the quality of the mines and exploration properties across the portfolio and in the cash flow potential of the investments we have made.
Our focus now is on executing the remaining ramp-ups and translating that potential into stronger sustainable cash generation and per share value starting in 2027. Beyond the near term ramp-ups, we have substantial opportunity within the portfolio. Our job is not to chase growth for growth's sake. It is to maximize the value of the assets we already own, invest where returns justify it, strengthen the balance sheet, and grow per share value. Realizing that potential requires disciplined execution as we ramp up our growth projects through mid-2027. That is where our focus will remain. Thank you for your support and time today. I'll now turn the call back to the operator for questions from our analysts.
Thank you. We'll now begin the Q&A session. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. Our first question is from Cosmos Chiu with CIBC. Please go ahead.
Great. Thanks, Christian and team. My first question is on Skouries, and great to see that you've got the two first filter presses now in place. Is that what we need to monitor in terms of the pathway to commercial production, getting the filter presses up to four filter presses? Or is there other stuff that we should be monitoring as well?
Hi, Cosmos, it's Simon.
Hi, Simon.
Thanks for the question. When we think about the operation at Skouries, two filters. When we're operating in sort of porphyry ore types, so the long-term ore type, the sulfide that we're producing there. Generally, to get to full nameplate, we probably need four filters operating. Through commissioning, our plan always is to sort of start at about 50% and then ramp through to that 100% mark. With four filters, we generally, when we think about filtration, we like four operating and one spare. Our target is to get to five available. Right now, we have two operating. As we recorded, we've got two more coming online in the next week to two weeks, and then we'll be really available to ramp the mill up to support that.
That's really the last milestone, if you want to think about it in terms of our ability to get to full production. There's nothing else holding us back of significance.
Cosmos, it's Paul. Of course, once Simon and the team have finished producing concentrate, we've got to get it to market, which is where we actually get our cash. What I can tell you is you should be looking out for confirmation of our first deliveries. We're anticipating those to go to a European smelter just a few hours away. That'll be the next big phase. What I can also confirm is we have got contracts in place for offtake that covers basically the bulk of the next two and a half years. Once the facilities are humming along, we're going to be able to move that concentrate to our offtake partners, and all the logistics for that are in place and ready to go.
Great. Maybe switching gears to McIlvenna Bay, and kind of same type of question. Reading through your MD&A, it sounds like the key here is getting availability up at the process plant, either be equipment or instrumentation or whatnot. Is that sort of like the critical path to commercial production? Again, is there something else that we should be aware of?
Hi, Cosmos, me again. I think you've kind of articulated it fairly well. It's really about, we have had some challenges at the back end of the plant, not really the front end of the plant, predominantly, where our solid-liquid separation in the thickening and filtration units has had some ramp-up challenges. We think we've got a good line of sight on the root causes of what was holding us back there now, and we're at the right side of that moving forward. So we anticipate that we'll be able to achieve our commercial production in this fourth quarter.
Great. You had mentioned it, kind of touched on it previously, talking about the different studies in place, the silver-lead circuit, and potential for a mill expansion at McIlvenna Bay. That could culminate into an updated technical report for McIlvenna Bay. You stopped short in terms of potentially providing a timeline in terms of when that study might come out. Could you maybe give us a bit more granularity in terms of timing and when we can expect some of these potential projects and upside potential to be quantified in some type of technical report?
Yeah. Excellent question. I am happy to talk to this one. It is pretty exciting for us. There are so many things, opportunities that we see at McIlvenna Bay. We want to make sure that we have good clarity on our vision going forward and that we wrap in all the strategic aspects. We will probably be able to provide, I guess, more detail in our guidance at the beginning of the year as to the timing of the studies. But there are quite a few moving pieces. As you mentioned, we have the silver-lead circuit already underway and in terms of study and an expansion to 7,000 tons per day running concurrently.
We have materials handling study and shaft location, trying to adjust for the magnitude of the deposit that we see at Tesla which coming out at the end of the fourth quarter as some exciting news coming forward. So we are working towards pulling all those pieces together into a strategic plan and then make sure that when we talk to the market and yourselves that we have really a good clean line of sight of what all those elements and value aspects are going to bring to the table. So, probably Q1, with our guidance, we will be able to give more timing detail.
Cosmos, I am just going to add that, certainly in 2027, we are focused on starting shareholder returns in a material way and taking a bit of a breather. So you should not expect construction of any kind of expansion or anything during 2027. It is more about taking a breather year, looking at our capital allocation, shareholder returns, and starting to generate and hit our cash flow inflection point, which is still on track for the early part of 2027. So we are excited about that. There is a bit of fatigue with projects I know right now, and we have a number of them underway, but we are so close to the finish line. It is a very exciting period right now.
That is good to hear. Maybe one last question, and I guess since I have you here, Christian, bigger picture, as you mentioned, the commercial production at Skouries is slightly delayed, and the commercial production at McIlvenna Bay is slightly delayed, but that is 2026. You touched on it in terms of potential impact into 2027, but could you maybe make a broader comment in terms of some of these issues or delays, are they more encapsulated in 2026? Is there any kind of potential impact into what we can expect in terms of production into 2027? Could you, maybe Christian, make a comment?
Yeah, sure. Thanks, Cosmos, and you're absolutely correct. I did allude to that in the comments, and we don't expect that impact on 2027 production. Really this fourth quarter is the heavy lifting, and we're really pleased with how Skouries is going, even over the last few weeks since you visited site or since the analysts visited site. I think 2027 is not impacted by this. We think that we've got a reasonable expectation, and we've given good guidance for next year, and we're comfortable with that.
Great. Thanks, Christian, Simon, Paul and team for answering all my questions. That's all I have. Thank you.
Thanks, Cosmos.
The next question is from Tanya Jakusconek with Scotiabank. Please go ahead.
Oh, great. Good morning, everybody. Thank you so much for taking my questions. Maybe I'll go to Paul Ferneyhough since I was a bit confused last night with all of these new capital numbers provided. I just wanted to reconfirm my understanding, and if that's correct. Paul, when I think about Skouries, the additional capital, so not movement from one category to another, but additional monies that have to go out the door for Skouries is really the $65 million + the $95 million, which is $160 million. Is that a correct way of looking at it?
Tanya, yes, that's exactly correct.
Okay. For McIlvenna Bay, it's $23 million. So the total of $183 million is the additional capital new that has to go out the door for these two projects.
Yeah, that would be the absolute increase. Obviously, as we pointed out, we're not going to be incurring certain growth and sustaining capital. But as far as the absolutes are, yes, you've got the figures exactly correct.
Then in the operating mines, there was about a $55 million increase between sustaining and development, so a total 55. So I should be thinking that $237 million is the total additional capital for all development and operating mines. Is that a correct way of understanding it?
Yeah, I think you've picked up the right figures from the forecast to the end of the year.
Okay. Thank you for that. As I said, it was a bit confusing for me with all of the movements in different categories. I wanted to come back to the 2027 guidance, because I'm trying to reconcile three mines, and maybe someone can help me. I don't know if that's Simon. But I'm going to start with Kışladağ. Given all of the slower recovery, now we have access, Simon, to higher grade ore, so the 300-day leach cycle. We had a guidance of 140,000 ounces - 160,000 ounces for 2027, and that's up from the 105,000 ounces - 130,000 ounces , which had been the previous guidance. How should we be thinking about 2027? Do we actually have that higher grade coming through and the leach cycle to stabilize and maintain that 140,000 ounces - 160,000 ounces ?
Thanks for the question, Tanya. As we look forward into 2027, obviously, we're in the process of doing our detailed budgets towards the back end of this year, and we'll have more accurate guidance coming forward. But yeah, as we'd previously discussed, 2026 was always a cutback year for us, in the open pit where we're going to be in lower grade. The intention of that is to ensure that we can set the mine up for the next several years at a steady production rate. We see that range that we'd previously guided, getting back into that as our normal cadence for Kışladağ going forward. And we have the benefit of the whole ore agglomeration circuit, which will improve that leach cycle, which has been obviously a critical constraint to the operation being commissioned through the end of Q2.
By second half of next year, we are really excited to see how that performs. Because as we have talked previously, permeability and leach rate are intimately linked, and we expect that to have a direct impact on the speed at which we can, that leach cycle days is into production. We are quite excited by that. We think we are through the most difficult part of the transition for Kışladağ now.
Okay. Thank you for that. The two mines that are ramping up, which one is Olympias and the second is Skouries. I think the guidance for 2027 of the 150,000 ounces- 180,000 ounces and the 50 million lbs - 70 million lbs of copper for 2027 assumes a one-year full guidance of normalized ramp up like it was a steady state. My understanding for Skouries is that we are not going to get to steady state until mid-2027. Can someone explain to me how that 150,000 ounces - 180,000 ounces and that 50 million lbs - 70 million lbs is going to pan out? Should I be halving those? What adjustments should we be thinking?
Again, we will give more accurate guidance in the beginning of the year as we always do, Tanya. However, we have a couple of levers that we are going to evaluate through the budgeting period. While we are saying that we will be ramping up to full production in the first half of 2027, we do have the benefit of 5 million tons in front of the mill today, in terms of being able to now pick and choose grade. That grade that we have stacked is quite a bit higher than the life of mine grade. We do think that we should be able to maintain those ranges that we have previously forecasted. The exact details, we are working through right now.
I think, Tanya, it is Christian here. I think we did take into consideration that there is a first half of the year. We are ramping towards that full throughput when we put out the 150,000 ounces - 180,000 ounces. That was already factored in. I think when we come out with our guidance, we may have to indicate a little more first half versus second half or something, but, comfortable with the full year for sure.
Okay. The better grade from the stockpile can give us some buffer for 2027. The 2028 had also a step up. I am just wondering if I move that 2027 number into 2028, just because of the delay. I guess we will see more of an update. I think you are putting out a new. Are you putting out a new study on Skouries that we will be able to reconcile some of these numbers?
That is correct, Tanya Jakusconek. We plan to have one out by the end of Q1 to update our current position and the value of the stockpiles and the detail inside of that.
Okay. Olympias, similar thing, we are ramping up in the first part of H1 of 2027. So maybe the 75,000 ounces -90,000 ounces in 2027 needs to be shaved a little bit unless you had factored in a ramp up in those 2027 estimates.
Yeah, you are probably correct there that that is going to be a little softer because of the ramp up in the first half. We do not have the exact numbers today, but we will come out with that in early Q1 to give you better guidance. But it would probably be at the lower end of that range right now.
Okay. Thank you, Simon. That's very helpful. Maybe if I could talk about just costing as I think about your cost base going into 2027. Can you maybe share, besides diesel that we all know and fuel that's higher, can you maybe share what you're seeing on your input costs for inflation? I think your inflation assumption, I'm trying to see where you guys were for inflation. About 6% in your 2026 numbers. Just on inflation, what you're seeing overall, like you're thinking about for 2027, especially for labor and consumables within your cost structure.
Tanya, it's Paul. The big swing there really comes from Türkiye. What goes on both in the political situation, the management of the economy there, and how it impacts our lira costs, which is about 40% of our business there. They're coming out of a period of hyperinflation, which means they're down to 20%, 25%, and then how that plays against the government's control or allowance of devaluation of the currency there. So we're still paying attention to that. I expect a bit more devaluation in the lira next year than we've seen this year. Currently, the government there is forecasting inflation in the 20% - 30% range. So we'll have to see as we get closer to the year-end and understand when we'll next potentially see elections in Türkiye and how that plays out.
Across the Greek operations, inflation is in a much more reasonable place and I'm expecting next year, overall, maybe 3% - 5%. We will be looking at employee wages there as well, as we think about the next set of collective bargaining agreements. But I'm not expecting any massive surprises there in that part of the world. In Canada, I think it will just be along the lines of what we see across the country as a whole. So again, 3% - 5% range. Ultimately, depending on whether or not we see any significant movements between the Canadian and the US dollar as we report those Canadian-based costs in our figures there. So I don't see any big changes. As far as input costs are concerned, diesel has been the one that's seen the biggest change this year.
That impacts this year, in particular, Kışladağ, where we've seen diesel go up something in the 20%, 25% range, following on from the conflict in the Gulf there. Diesel will be an important component of Skouries next year, of course, with our open pit mining. So we're going to be paying close attention to what goes on with the diesel price through the back end of this year and make sure that we include clear guidance on that as we provide our guidance early next year under our usual timetable.
Okay. Are you seeing much in terms of turnover at all? It is about 7% for you guys. Are you seeing any of that in the tight labor market?
Really I would say turnover for us is in those areas where we are competing against other key players. In Greece, we do not really suffer from that. We are the only metal miner there. In Türkiye, I think we compete very well and our staff live close to our mines, and so it is a big deal for them to up their lives and move to another operator. The big area where we have to watch, is obviously in Lamaque, where we have got other operators in and around our facilities. I think historically we have been very good in terms of holding on to our excellent operating team there. Turnover has been 3%-5%. It is a little bit different in McIlvenna Bay. It is a fly-in, fly-out operation for a large amount of the staff.
They do not have that book where their families are living a short distance away from where they are working. It is much easier for people to move between different fly-in, fly-out sites. We are paying close attention to remaining competitive in terms of our remuneration packages, but also building the Eldorado culture there, the way we operate, the way that we connect with our staff, our focus on safety, our focus on sustainability in the environment. In the end, those are almost the biggest hooks, as long as you are paying competitively. Yes, we see higher turnover there. But that is not unexpected for a fly-in, fly-out operation.
It is in a Canadian market that has been heating up a bit.
Yeah
with a lot of the new permits. I think the support from both Minister Hodgson and Prime Minister Carney pushing for a lot more sort of responsible resource development in the country is a positive thing, but it does put a bit of pressure on labor.
Christian, if I could have a final question on just the shareholder return. What do you need to see to really be aggressive on your shareholder return? Do you need your assets to announce commercial production? Do you need to see that inflection point in free cash flow, so that would be later in the first half of 2027? How would you prioritize share buyback versus increase in dividends? How do you look at all that?
Yeah, I certainly hope that we outperform that expectation, and that we will be hitting free cash flow positive sooner, certainly early in 2027. If we are even lucky, it could be late 2026. That will give us a chance, certainly with our guidance to come out, or with our Capital Markets Day in the first quarter or so, with a bit more clarity on that. But definitely at these sort of price levels for our shares, we need to be looking at buying back more shares, continuing our dividend, and we will evaluate whether we want to increase that in the short term, but certainly in the longer term, we need to look at our dividend.
But at this time, I suspect looking at our shares, they are going to be one of the best allocations of capital within our portfolio because, we think they are trading too cheaply right now, and it still has a bit of that development overhang in them. We are pretty excited. I think the first part of 2027, we will be hitting that cash flow inflection. I think we can give some pretty good guidance early-ish in the new year.
Okay. Thank you so much for taking all my questions and good luck.
Thanks, Tanya.
The next question is from Ralph Profiti with Stifel Financial. Please go ahead.
Yeah. Thanks, operator, and good morning. Thanks for taking my questions. I have just two follow-ups. Firstly, is the early data that you're getting on these, the filter presses at Skouries, meeting specifications, right, with regards to things like cycle times, moisture content, drainage? It wasn't clear to me whether or not we're at the point where the entire system, meaning press conveyance and deposition, is operating as a single continuous unit now. Is that a prerequisite for commercial production?
Thanks, Ralph. It's Simon. Excellent question. We're actually pretty excited to how well the filters have been ramping up. In terms of cycle times, our target is, let's say, roughly four cycles per hour, and we're within that window per filter, and we're within that window already, which is quite remarkable for a ramp-up and a filter of this size. For me, that's a great sign. In terms of the moisture content, yeah, we're sort of in the range, expected range, with obviously some tweaks to go, but definitely what we call transportable and stackable moisture range right now. That also is an excellent sign that these filters were the right choice for us, in this application. In terms of the conveyance and stacking system, yes, you're right.
All of those elements are now operating, which is why we were so very excited to show that with the video online to sort of show end-to-end that now, from crusher through to stacking, in the tailings management facility, we have all of those pieces operational, which allows us to continue to operate. Moving forward, there isn't anything fundamental in that system that is now not operating or not operational.
Okay. Great. That's helpful, Simon. Thank you. As a follow-up, it also wasn't clear to me whether McIlvenna Bay's all the liquid separation issues are to deal with control systems, or is this sort of a physical recalibration of things like reagents. I was just wondering which one it is of the two, and are you able to quantify sort of some of the data that you're getting on the potential that this is having to recoveries?
Thanks, Ralph. To sort of be more specific, we've had all of the above challenges that we've been working through systematically. Initially we had a chemistry issue, we then had a sort of process control and operational issue, all of which we've now resolved. From the solid liquid separation, in terms of the filtration, we have had some challenges with filter cloth, early failures and systematic challenges in terms of how the filter has been performing. We have recently turned the corner on getting more consistency from those units, and we think that while there's still optimization in front of us, we have a good part of that resolved now. To answer the recovery issue, this is really the back end that we've been talking about. Just to remind you that the pyrite concentrate that's produced at McIlvenna Bay is really to desulfidize the tail.
And then we put that in our backfill, and that goes back into the underground stopes, so that the tailings that we ultimately filter and dry stack, is now non-sulfide. It is depleted of sulfide and therefore non-potentially acid generating. That's a key design and sustainability element of the McIlvenna Bay project. In terms of the front-end recoveries, in terms of the copper and the zinc recoveries, we're quite pleased with how well the flotation circuit and downstream elements have all been operating today. We don't see any impact on recoveries at all because they're sort of somewhat different circuits. But thank you very much for the question.
Yeah, great. I appreciate the answers. Very helpful. Thanks to you and the team.
Thanks, Ralph.
The next question is from Lawson Winder with Bank of America Securities. Please go ahead.
Yeah. Thank you very much, operator. Good morning, Christian, Paul, and Simon.
Hi.
Thanks for today's update. I just wanted to come back to Skouries. It's actually quite reassuring that you're pointing to no change to the 2027 production numbers. I wanted to ask, though, with respect to that, just two things. One, the stockpile grew materially, which is great to see. You're at 4.8 million tonnes. How much of that is the friendly sulfide ore? How many weeks or months of sulfide ore do you have before you have to introduce the oxide ore? Paul, I'd have a follow-up for you, which is just with the slight delay here in commercial production at both Skouries and Olympias, is there any impact or read-through for the offtakes that you had so diligently signed over this year? Are there any penalties to that? Thank you.
Thanks, Lawson. Yeah, good question around what is in the stockpiles. Roughly, I think nearly 50% of the stockpiles are predominantly sulfide material. One of the things we probably didn't talk about in this release was the open pit now is in the primary sulfide ore. Every truck and bench that we mine from the open pit really is predominantly the sulfide ore. We can feed sulfide ore directly from the open pit into the crusher, along with supplementing that from the stockpile material. We really do have the luxury of being able to blend that moving forward.
Our plan, I think we've spoken about previously, our plan would be to blend in oxide towards the back end of this year and into 2027 in the 20%-30% range, as we become making sure that we maximize our extraction from those different ore types, those oxide ore types. There isn't any limitation in terms of how we see that going forward in terms of the process plant.
Lawson, it's Paul. Just on the commercial terms for the offtake. It is a seller's market right now, and we've been able to negotiate into that. We've been very careful to ensure we've got flexibility that allows us to deliver when the mine is ready. There are no penalties. We're committed to certain volumes to certain offtakers. That's all been negotiated as part of excellent commercial terms around treatment charges at the moment and flexibility for us to deliver over the next two and a half years, volumes that have been committed. No, we're getting ready for our first shipments, and really looking forward to working with our offtakers as our production starts to ramp up.
I was just going to add, Lawson, it's Christian, that the stockpile is over 5 million tonnes now, so it has continued to grow. Hence, we continue to spend on accelerated operating capital because it's just beneficial to the long-term ability to feed that plant, which will be hungry next year.
Okay, great. With respect to this discussion around the free cash flow inflection we're expecting in 2027, one element of this is going to be the sustaining CapEx. With the current operations, the sustaining CapEx guidance was increased for 2026. We're looking at $170 million-$190 million now. Prior was $140 million-$165 million. What does that portend for the current operating assets 2027-wise? Is $170 million-$190 million a good run rate now for 2027? Thinking of the additional sustaining CapEx that will be added from Skouries and McIlvenna Bay, typically, with newer mines, you'd expect sustaining CapEx to be a little less intensive. Just given some of the work that's being done at those assets, what are the expectations around sustaining CapEx for the two projects, Skouries and McIlvenna Bay?
What are the key items that we should be considering for those assets post commercial production?
Maybe I'll just jump in with the first answer to that. I think you can think of it as continuing on and maybe double that amount when you add the several new mines in and the upgraded capacity at Olympias. Give or take, double that amount is probably a reasonable range for now, and obviously, we'll give more clarity when we come out in January or so with our new guidance.
Yeah. Just from my point of view, we're working through our budgets at the moment, and just like any company that works through their budgets, there's always challenge when the teams come back with their laundry list of requirements for the following year. We're in the midst of discussing that with them. I'd also remind us that at Skouries, for example, we're also still building our paste plant, which is accelerated to support the underground development, which we're also moving forward faster than the original technical study would suggest. And we will continue to raise the embankment at the tailings management facility, as well as complete our long-term mine water treatment plant. So there's a number of activities that are going to be ongoing next year. But as Christian said, I think up to double is going to be the place that's going to be initially.
Okay. I appreciate that color. And then maybe just finally on McIlvenna Bay. You had previously noted that we should be modeling cost per tonne or OpEx per tonne of about $90-$110 by the end of December. So with the update, you're still planning to get to that $90-$110, but it wasn't clear to me when you expect to get there. And maybe for context, can you give us an idea of what you're expecting for an average cost OpEx per tonne for Q4 2026? And then when you get to that $90-$110 level in 2027.
Thanks, Lawson Winder. So maybe to answer the first part of that question. Yeah, again, a little similar to Skouries, we do have substantial stockpiles in front of our mill at McIlvenna Bay. We have roughly 400,000 tons, which is a substantial amount. We also have multiple stopes available underground. So until as we ramp up the mill and start drawing on those underground stopes and synchronizing that with paste backfill, we're not going to hit our steady state optimization point in the mine and mill combined. So, that's going to be transitioning through this quarter. In terms of when do we still think those 90- 110 for the mine is a reasonable number from what we see, but we haven't got to that confirmation point given that we haven't got to those tonnages just yet.
But we should be moving through that as we move into commercial production in the coming months. In terms of how that impacts 2027, we will obviously give greater clarity on that at our guidance in January as we sort of finalize the working budgets that we have today. I do not have any new numbers for that right now.
I would probably start out at sort of around the upper end of that range to start, and then we will try and be working down obviously into the range over the next quarter or two or three.
Okay. That is helpful. Thank you both. Thank you all.
Once again, if you have a question, please press star then one. The next question is from Harrison Reynolds with RBC. Please go ahead.
Hi, good morning, and I appreciate the detail provided so far on the operations. Wondering if you could characterize your current expectations for what commercial production means to you for both Skouries and McIlvenna Bay. What percentage of nameplate and for how many days? Also, I mean, great to see the reiterated 2027 guidance and the confidence there. I'm wondering if you could say when you're expecting nameplate capacity to be reached, approximately. Thank you.
Harrison, Paul here. Commercial production, there is a significant amount of flexibility that management have in terms of exactly when we strike that designation. But really it reflects the fact that the assets are performing in line with management expectations. So in line with why you invested in the processing facilities and the mining. Couple of things. Basically, you're looking for 60%-80% of throughput. The production of a saleable concentrate, and steady operations for, let's say, somewhere between 20-30 days, although they're not necessarily consecutive days. But that's sort of the generally accepted definition, and that's what we're going to be looking for, both from Skouries and from McIlvenna Bay.
Got it. On the nameplate capacity at both of those operations, is that a mid-2027 item or when about in 2027 do you expect to be hitting nameplate capacity at both mines?
Yeah, thanks, Harrison. It's Simon. We're sort of guiding on this to be conservative, to be sort of by the middle of 2027, just to ensure that we don't overstate capabilities and to give the teams time to optimize the circuits that they have. But yeah, right now we don't see anything challenging us to achieving that today.
Got it. If I could fit in one more. You mentioned capital returns are going to be an increasing priority in 2027. That's great to hear. Net debt's at $1.6 billion. Wondering how you're thinking about the best use of capital between buybacks, debt reduction, and the necessary reinvestment of the projects, and what you think the repayment cadence is from here.
Harrison, the way I think about the debt, it sort of breaks down into three things. We've got commitments, we've got nice to haves, and then we've got things for the future. Obviously, for both McIlvenna Bay and for Skouries, we've got commitments under our project financing. We're going to start making repayments under both of those agreements from the end of this year onwards. Those obviously have to be met first. Secondly, on the debt, the project financing debt that we acquired with the Foran acquisition runs at a much higher interest rate than we can obtain as a corporation.
I'm going to be looking to refinance that at least on a temporary basis, bearing in mind the cash flow inflection that's coming early next year so we get it closer to our sort of net level of financing, and we have opportunities to do that. Then finally, in the longer term, it's then assessing what's the right capital stack for us across our project financing, our revolving credit facilities, and our bond. That'll be something that we're working on through next year. The one other thing, just before I hand you over to Christian, I think he's going to talk about the equity returns, is we have been using our revolving credit facility, recently renegotiated and upsized with better interest rates than we had before. Paying that back during next year will also be a priority as we move into the beginning of the year.
Those are the sort of the ways that we're thinking about the debt.
I think as well, the next sort of phases are we've got exploration that we want to do. There is an extremely exciting portfolio that we really haven't been talking about much. During that Capital Markets Day, I think we will get a chance for Clare to actually walk through all the assets. Allocating, I do not know, call it $80 million-$100 million probably to exploration will be a critical element and will have high returns. I think, like I said earlier, projects we will take a bit of a breather on. There are no major projects that we need to start next year, expansion at Lamaque or at McIlvenna Bay or even at Perama Hill. I think 2028 is the earliest you would be starting any material spend on those actual construction projects at the earliest.
There will be none of that in a way next year. Dividends and buybacks I think are going to be critical. At the moment, with, like I said earlier, the share price where it is and the multiples and valuation, we will be very happy to be buying our own shares. I think the return on buying our own shares will be one of the best uses of the capital we will have. I think progressively over time, increasing our dividend as we move into a more steady state, cash flowing period during the year, I think that will also take a bit more priority. We are going to have lots of nice options and some good uses of that capital, but I think that priority starts to shift heavily towards shareholder returns as well next year.
Understood. Thank you. Appreciate the detail on the call today and looking forward to the year ahead. Thanks for taking my questions.
Thanks, Harrison Reynolds.
That's all the questions we have for today. This concludes the Q&A session and today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.