Eldorado’s Skouries Milestone Leaves Power and Tailings on the Critical Path

Eldorado Gold has crushed first ore at Skouries, but the milestone does not yet prove that the Greek copper-gold project can operate as an integrated plant. The remaining test is concentrated in three linked systems: permanent power, flotation and filtered-tailings handling.

The project was 97% complete at June 30 and Eldorado still targets first copper-gold concentrate in the third quarter of 2026, followed by commercial production in the fourth quarter. Yet the crusher ran on temporary power, while full operation of the grinding, flotation, concentrate-handling and tailings circuits still requires final energisation and sign-off from the Greek power authority.

That distinction matters. Crushing demonstrates that the front end can receive and convey ore. It does not demonstrate stable throughput, metallurgical recovery, concentrate quality or reliable tailings disposal. Those are the variables that will determine whether Skouries becomes a cash-generating mine on schedule or remains a capital-consuming commissioning project for longer than planned.

Eldorado has built a substantial operating buffer. Total ore stockpiles reached about 3.9 million tonnes in July, including roughly 3.4 million tonnes from the open pit. At the end of June, the stockpile contained an estimated 134,000 ounces of gold and 44 million pounds of copper. This removes one common start-up risk: the plant should not be starved of feed while the mine ramps up.

The processing plant is also substantially complete. Integrated water testing has been conducted through the process-water, rougher-flotation and tailings-thickening systems. Supplier specialists are supporting commissioning of the SAG and ball mills, and the company has hired 12 experienced ramp-up specialists for the first three months of operations.

The unresolved issues are narrower but more consequential. Final site energisation remains dependent on inspection, metering and approval by the Greek authority. Eldorado has installed all 12 transmission towers and completed third-party substation testing, but generators can only support limited commissioning activity. They are not a substitute for the stable power required to run the full comminution and flotation circuit.

Filtered tailings are the other critical path. At the end of July, only two of the six filters had completed mechanical and electrical work and were ready for commissioning. The third thickener is not required for start-up, and some downstream tailings-handling infrastructure is also not needed for first concentrate, but the company still needs enough filtration and placement capacity to sustain production rather than merely produce an initial batch.

The capital position leaves little room for another large schedule slip. Eldorado estimates project capital of about $1.315 billion to commercial production, up from the $845 million initial Phase 1 estimate in the 2022 feasibility study. It has also allocated about $260 million of accelerated operational capital for pre-commercial mining, underground development and site work.

By June 30, cumulative Phase 2 project capital had reached $1.270 billion and cumulative accelerated operational capital was $201.3 million. Eldorado drew the €60 million contingent overrun facility during the second quarter, taking the fully drawn term facility to €740.4 million. The project remains funded, but use of the overrun facility shows that the remaining commissioning period is no longer being financed solely from the original debt package.

The original feasibility case remains attractive. Skouries is designed as a 20-year operation producing an average 140,000 ounces of gold and 67 million pounds of copper annually. At the study assumptions of $1,500 gold and $3.85 copper, the project carried a $1.3 billion after-tax net present value and a 19% internal rate of return. Stronger metal prices and improved concentrate terms should help offset capital inflation, but they cannot compensate for poor recovery or an extended ramp-up.

Eldorado has already signed sales agreements covering all expected 2026 concentrate volumes and part of 2027, with negotiations continuing for production through 2029. That reduces marketing risk. The next evidence investors need is operational: ore through the grinding and flotation circuits, saleable concentrate at expected specifications, functioning filtered-tailings disposal and sustained throughput on permanent power.

The execution burden is amplified by McIlvenna Bay in Saskatchewan. Eldorado acquired the project with Foran Mining and produced first copper concentrate there in June, but the mine is still working through equipment, instrumentation, filtration and process-optimisation issues during ramp-up. The company is therefore commissioning two technically different base-metal projects at the same time while its existing gold mines fund heavy capital expenditure.

Eldorado generated $149.5 million of operating cash flow in the second quarter, but reported negative free cash flow of $334.1 million as it invested in Skouries and McIlvenna Bay. Cash and equivalents stood at $554.6 million at June 30. The balance sheet can carry commissioning, but a delayed transition to commercial production would prolong negative free cash flow and postpone the expected step-up in group output.

First ore through the crusher is therefore a real milestone, not a finish line. Skouries will have crossed the more important threshold when permanent power supports integrated operation and the plant can repeatedly turn stockpiled ore into specification concentrate while safely filtering and placing tailings. Until then, the final 3% of construction carries more risk than its percentage suggests.