Operator
Thank you for standing by. This is the conference operator. Welcome to the El Dorado Gold Second 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 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then 0. 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'd like to welcome you to our conference call to discuss our second 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 George Burns, Chief Executive Officer, Christian Milau, President, Paul Ferniehau, Executive Vice President and Chief Financial Officer, and Simon Hilley, Executive Vice President and Chief Operating Officer. Our release yesterday details our second quarter 2026 financial and operating results. The release should be read in conjunction with our Q2 2026 financial statements and management's discussion and analysis, both of which are available on our website. They've also both been filed on CDAR Plus and EDGAR. All dollar figures discussed today are U.S. dollars unless otherwise stated. For clarity, we have rounded some 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 George.
Thank you, Lynette, and good morning, everyone. I'll begin with an overview of our second quarter and provide a brief update on scurries. I'll then hand the call over to Paul to review the financials and then Simon with an update on McAvena Bay and our operations. Following that, Christian will make some concluding remarks before we open up the call for questions. Before getting into the second quarter, I want to note that as previously announced, I will be transitioning out of the CEO role this quarter as we reach our key milestone of first concentrate production and scurries. After nine years with El Dorado, I expect this to be my last quarterly conference call in this capacity. It's been a meaningful journey for me personally, and I'm proud of what we've accomplished. We have strengthened our operations, advanced our pipeline, and built a deeper bench of talent across the organization. I'd also like to thank our teams across the business for their support and commitment over the years, which has been fundamental to that progress. As we ramp up both Scurries and McAvena Bay towards commercial production, Christian has been closely engaged across the business and is well positioned to step into the role with continuity. I'm pleased to remain on the board to support the transition as the company enters into its next phase of growth and meaningful cash flow generation. I would also like to acknowledge the recent board leadership transition. On behalf of the company, I want to thank Steve Reed for his many years of leadership and guidance as chair. We are pleased to welcome Dan as chair and Patrick as lead independent director and I look forward to continuing to work with them and the Board in my ongoing role as Director. Turning to the quarter, we've had a solid start to 2026 with Q2 delivering production in line with the plan. Macamena Bay has achieved first copper and first zinc concentrate and continues to ramp up towards commercial production. While Scurries remains on track for first concentrate in Q3, having recently achieved first ore crushed. 2026 is a pivotal year for Eldorado as we advance scurries in Greece into operation and ramp up Makamena Bay and Saskatchewan. Together these assets are expected to enhance our production profile and cash flow generation. I'd also like to highlight a few achievements from the quarter that reflect the strength of our culture and our commitment to responsible mining. During the quarter, we published our Annual Sustainability Report, which outlines the progress we continue to make across our environmental, social, and governance priorities. I'm also very proud of our El Dorado Quebec team, which received several significant industry recognitions. Most notably, the team was awarded the 2025 F.J. O'Connell Trophy for Underground Operations. This long-standing award recognizes excellence in workplace health and safety and reflects the consistency, discipline, and commitment our teams bring to maintaining a strong safety culture every day. The team was also recognized by the Quebec Mining Association for their leading environmental management practices and for excellence towards sustainable mining framework. These awards highlight innovative approaches to environmental performance, operational efficiency, and responsible development. Together, these achievements reflect the dedication, engagement, and professionalism of our teams and reinforce the values that underpin our success across the organization. Finally, earlier this month, El Dorado was recognized on Time's 2026 list of Canada's best companies for the second consecutive year. This recognition reflects the strength of our culture, engagement of our people, and our commitment to creating long-term value through responsible business practices. I want to thank our employees across the global organization for the role they play in making achievements like this possible. turning the scurries on slide five i spent two weeks on site in july and came away extremely encouraged by the progress being made across the project seeing the work firsthand reinforced my confidence in both the quality of the execution and the readiness of the operations and commissioning teams as we move towards first concentrate production in this quarter as construction activities continue to wind down and commissioning activities increase, the workforce at site has declined from a peak of approximately 3,200 people to approximately 2,650 this week, reflecting the project's transition into final stages of execution. The team achieved an important milestone in July with first ore crushed in the primary crusher, marking the start of commissioning of the crushing circuit the process plan is substantially complete with wet commissioning well underway water circulation testing through the entire circuit to the tailings thickener and filter feed tanks is underway two tailings thickeners are ready for first door commissioning at the filtered tailings plant mechanical and electrical work on two of the six filters has been completed with both filters ready for commissioning on the power infrastructure construction of all 12 towers and conductors is complete final site energization and receipt of final sign-off remains contingent on expect inspection which includes final testing and installation of media equipment by the relevant Greek Authority in the interim we have added additional gen sets to support commissioning activities these gen sets will allow us to test the full processing circuit and produce first concentrate however full site energization remains necessary for achieving stable consistent production ramp up to nameplate winding activities continue to perform well ahead of startup we have approximately 4 million tons of ore stockpiled representing the full plan mill feed for 2026 and into 27 providing a strong foundation for ramp-up as we will process higher-grade ore in 2026. In the interim, we have added additional gensets to support commissioning and startup. Together, Scurries and McAvena Bay are expected to transform El Dorado's production profile, providing a foundation for meaningful growth in cash flow, copper production, and portfolio diversification in years ahead. With that, I'll turn the call over to Paul to review the financial results.
Thank you, George, and good morning, everyone. Turning to slide six, El Dorado delivered another strong quarter, reflecting the benefits of a higher gold price environment, solid operating performance across the portfolio, and disciplined execution as we advanced both Scurius and McElvenna Bay toward meaningful value creation. In the second quarter, we produced 105,000 ounces of gold and sold 103,000 ounces. While production and sales were lower than the prior year period, primarily due to planned lower tons and grades at Kisledag and lower grades at FM Chukuru, this was partially offset by stronger performance at LOMAC, which benefited from increased throughput and the contribution of higher grade ORMAC ore. Revenue increased to $487 million, up from $452 million in the prior year period, as a significantly higher realized gold price of $4,379 per ounce, more than offset lower sales volumes. Production costs were $185 million compared to $162 million in Q2 2025. The increase primarily reflects higher royalty costs associated with stronger metal prices, particularly in Turkey and Greece, together with increased labor, contractors, and maintenance in both Turkey due to inflation and planned maintenance, as well as LAMAC as mining activities continue to advance deeper into the triangle complex. Total cash costs averaged $1,432 per ounce sold, while ASIC averaged $1,926 per ounce sold. The year-over-year increase was driven by higher production costs and lower ounces sold, partially offset by lower sustaining capital expenditures. Appreciation and amortization declined to $54 million, largely reflecting lower production volumes at Kistlodag. We also recorded a $14 million foreign exchange gain compared to a loss in the prior year period, driven primarily by movements in the euro relative to the U.S. dollar on our euro-denominated debt and payables. Other income was $23 million in the quarter, reflecting gains associated with our project financing derivatives, while finance costs increased to $10 million, primarily due to the change in fair value on embedded debt redemption option derivatives. Income tax expense was $55 million compared to $33 million in the prior year period, reflecting higher profitability and current taxes and mining duties from operations in Canada and Turkey. Net earnings attributable to shareholders from continuing operations were $173 million or $0.68 per diluted share compared to 139 million dollars or 67 cents per diluted share in Q2 2025. Adjusted net earnings increased to 137 million dollars or 54 cents per share compared to 90 million dollars or 44 cents per share a year ago. Overall the quarter demonstrates the strength of our operating platform and the leverage of the business to higher gold prices while continuing to invest aggressively in the next phase of Eldorado's growth. Turning to slide eight, we ended the quarter with $555 million of cash and cash equivalents, providing substantial liquidity as we moved through the final stages of development and commissioning at Scurius and ramp up at McElvenner Bay. In addition, we maintained approximately $300 million of available capacity on our revolving credit facility, reinforcing our overall liquidity position. Net cash generated from operating activities was $150 million compared to $158 million in Q2 2025. The modest decline reflects higher taxes paid, lower gold ounces sold, increased production
