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The goal will be to settle differences regarding Eldorado’s plans for Northern Greece, where it has one mine and two projects.
Greece plans to kick off arbitration with Eldorado Gold (TSX:ELD,NYSE:EGO) in September, the country said on Thursday (August 31).
The goal will be to settle differences regarding Eldorado’s plans for Northern Greece. The company operates the Stratoni silver–lead–zinc mine in the area, and has been trying to develop the Skouries and Olympias projects for years.
“We have decided to resort to arbitration to stop the tug of war which has been going on for many years and have things cleared up,” Energy and Environment Minister George Stathakis told Greek state television. Arbitration will start on September 15 and will last three months, he added.
Back in June, Greece said that state legal advisors had been asked to prepare for arbitration. The government had previously planned to begin the process this month.
The major differences the parties hope to resolve relate to testing methods to comply with environmental regulations at Skouries, where final permits are still pending. The company said production at the gold-copper asset is now targeted for 2020, a year later than originally expected.
Licensing for the company’s Olympias project, which contains silver, lead and zinc in addition to gold, is in the final stage, and Eldorado expects to begin production there before December.
Earlier this year, the company shelved expansion plans for its flagship Kisladag mine in Turkey and put off a development decision on a project in Brazil, citing lower gold prices. Eldorado also left China after 11 years of operations in 2016, when it sold its stakes in two mines and a development project to Yintai Resources (SZSE:000975) for $600 million.
Looking for less geopolitical risk, Eldorado acquired gold junior Integra Gold in May. It said at the time that the purchase would expand its opportunities in Canada’s Eastern Abitibi region.
The company has not yet commented on the new date proposed for the start of the arbitration, as it is still awaiting formal notification about the process.
As of 2:00 p.m. EST on Thursday, Eldorado’s share price was down 1.69 percent on the NYSE, trading at US$2.04. Eldorado has been on a downtrend since January, and its share price hast lost 36.8 percent since the beginning of the year.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
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