What happened
Shares of gold miner Eldorado Gold (EGO 3.07%) rose as much as 10.5% at the start of trading on April 28. As of 11 a.m. ET, the stock had settled to a 8.5% gain. The big news was the precious metals company's first-quarter 2023 earnings release, which hit the market after the close on April 27. Investors clearly liked what they saw.
So what
Production increased 21% year over year in the opening stanza of 2023. Higher production allowed the company to spread costs over more ounces, which helped to reduce all-in sustaining costs from $1,346 per ounce in the first quarter of 2022 to $1,184 this year. And, on top of that, the average realized price per ounce of gold sold rose to $1,932 in the first quarter of 2023 from $1,889 in the year-ago period. Basically, everything was moving in the right direction.
As a result of all that, revenue increased to $229.4 million from $194.7 in Q1 2022. The bottom line also improved, with adjusted earnings of $0.11 per share versus a loss of $0.11 per share a year ago. It's little wonder that investors were pleased with the update. Also of note, Eldorado highlighted further advancement on the company's Skouries project, including nailing down a material portfolio of the project's financing needs. This capital investment is expected to meaningfully increase the miner's production while also helping to reduce all-in sustaining costs.
Now what
Looking out to the rest of 2023, management reaffirmed its production guidance. However, that's more positive than it seems. The current target range of 475,000 to 515,000 ounces of gold suggests that production will rise as the year progresses, meaning more good news could be on the horizon. This seems like a very positive quarterly update and investors were probably right to read it that way and push the stock price higher.
