Please ensure Javascript is enabled for purposes of website accessibility

Why Eldorado Gold Stock Soared Today

By Neha Chamaria – Oct 13, 2021 at 2:19PM

Key Points

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The gold stock will likely upgrade its 2021 guidance later this month.

What happened

Shares of Eldorado Gold (EGO -1.56%) took off today, jumping as much as 9.4% as of 1:50 p.m. EDT. The market is clearly impressed with the gold stock's preliminary third-quarter numbers and expects it to upgrade its full-year guidance on Oct. 28.

So what

Eldorado Gold announced an 8% year-over-year jump in its gold production to 125,459 ounces for the third quarter, with production from its largest mine, Kisladag in Turkey, rising 16% and exceeding the company's forecast. 

Today, National Bank also raised its price target on Eldorado Gold to 18 Canadian dollars per share from CA$17.50 a share.

A person holding a gold ore rock.

Image source: Getty Images.

Thanks to strong production in the nine months through September, Eldorado Gold said it is reviewing its previous full-year production guidance and will provide an update during its earnings release later this month.

For perspective, Eldorado Gold's gold production through nine months declined 9.6% to 353,268 ounces. The gold miner expected an even bigger drop, but stronger production from Kisladag in the third quarter thanks to operational improvements now means Eldorado Gold will likely be able to produce more gold this year than the 430,000 ounces to 460,000 ounces it projected earlier.

That's got the market excited and investors are bidding the gold stock higher today.

Now what

Exceeding production guidance is welcome, but investors in Eldorado Gold may want to pay greater attention to the progress in mines that Eldorado Gold was upbeat about when it stepped into 2021 -- the Skouries project in Kassandra mines, Greece, for example.

Earlier in the year, management stated, "Our focus in 2021 is on unlocking the compelling value at Skouries and throughout our portfolio." However, the company hasn't restarted the mine yet and is perhaps awaiting more approvals; management hasn't said anything about it yet. That's something investors may want to watch out for in the gold stock's upcoming earnings report.

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.