Shares of Eldorado Gold (NYSE:EGO) were down 9% as of 3:40 p.m. EST Friday after the miner reported quarterly and year-end 2020 earnings Thursday night. The gold producer's operational results were solid, but the price of the metal is down more than 2.5% on the day.
Gold is in the midst of a sell-off that has it trading at prices last seen in June 2020. The precious metal is down about 5% just in the last two weeks. But the gold producer reported that it met its expectations for the year as it managed through the pandemic impacts. Total gold production increased 34% in 2020 versus 2019. Though quarterly gold production was the company's highest in almost five years, the drop in pricing led to a sequential quarterly decrease in both gold revenue and overall revenue compared to the third quarter 2020.
With the price of the metal currently trading around second-quarter 2020 levels, investors are reacting to that downtrend, along with net earnings that dropped significantly versus both the prior-year period and sequentially.
The decrease is attributable to a $40.0 million writedown of capital works in progress for the miner's Kisladag project in Turkey. The project didn't meet production expectations in 2020, and is expected to drop another 30% in 2021, leading an overall 16% decline in expected gold production.
Unless pricing in the metal rebounds, the year ahead will be a slower year for the producer, and investors are accounting for that.