Eldorado Gold Says it Will Stop Investing in Greece

After facing protracted permitting delays at its Skouries and Olympias projects, the company says it will suspend investment at its Greek assets.

greece

Intermediate gold miner Eldorado Gold (TSX:ELD,NYSE:EGO) said on Monday (September 11) that it plans to suspend investment at its assets in Greece. 

The company made the decision after protracted permitting and licensing delays at its Skouries and Olympias projects in the country. According to Eldorado, the delays have hindered its ability to “effectively advance development and operation of these assets.”

Eldorado will place both projects on care and maintenance starting on September 22. The company’s Stratoni mine will also be placed on care and maintenance, and Eldorado will not make any further investments in its Perama Hill and Sapes projects. Skouries, Olympias and Stratoni are located in Halkidiki, and are known as the Kassandra mines, while Perama Hill and Sapes are located in Thrace.

Gold Outlook Report - Late 2017!

Get your FREE Updated Gold Outlook Report

Includes expert commentary, production numbers and gold stocks to keep an eye on.

Click here to get your free report!

“It is extremely unfortunate to find ourselves at this impasse when we should be advancing an important commercial project in partnership with Greece,” said George Burns, president and CEO of Eldorado. According to Burns, the company has invested $1 billion in Greece since acquiring the Kassandra mines in 2012, and that figure would double with the development of Olympias, Skouries and Penama Hill.

“However, as a result of the delay in issuing permits by the Greek government, Eldorado is unable to continue investing in the country.  We have a responsibility to our shareholders to allocate capital to projects not only with the best rates of return, but also in locations where host governments are supportive of our investment and work with us to grow a sustainable future,” he commented.

The announcement came during an annual trade fair in Thessaloniki, where the Greek prime minister typically lays out economic policy. “It might be a move of political pressure towards the government at a crucial time,” Interior Minister Panos Skourletis said of Eldorado’s statement. He added that Greece is friendly toward foreign investment, but because Eldorado is focused on mining, it is a special case.

“Such kinds of investments no longer exist in the rest of Europe. They’re not allowed due to the great environmental cost they have. So it’s wrong to connect this particular case with the general picture in the area of investments (in Greece),” he noted. The Kassandra mines have faced opposition since before Eldorado was in the picture, largely from locals concerned about their potential environmental impact.

The Greek government said at the end of August that arbitration with Eldorado would begin this month. Eldorado said in Monday’s press release that it is still awaiting formal notification of arbitration, but “is confident that any potential arbitration will again demonstrate [its] adherence to all applicable laws and regulations.”

In addition to its Greek assets, Eldorado has projects in Turkey, Romania, Brazil and Canada. Its most recent acquisition came earlier this year, when it bought Integra Gold in a deal valued at about C$590 million; through the transaction, Eldorado gained control of the Quebec-based Lamaque South gold project. The company will reassess investment options in Greece if it receives the required permits.

As of 1:40 p.m. EST on Monday, Eldorado’s share price sitting at C$2.38 on the TSX, down 4.42 percent; it was down 5.34 percent on the NYSE, trading at US$1.96.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

FREE Report - How Will Trump Affect Your Gold Investments? 

Trump’s policies are affecting gold. You should know what’s going on. Click here to get our FREE report.

Click here to get your free report!

Discover what the experts see coming in the Age of Trump with our INN Insider's Report free of charge! Includes expert insights into Trump and his effect on mining and gold.

 

Get the Latest Gold Investing Stock Information

Get the latest information about companies associated with Gold Investing delivered directly to your inbox.

Gold
Gold Mine Development
Gold Production/Mining
Gold Project Generators
Gold Prospecting and Exploration
Gold Resource Definition/Pre Feasibility
Gold Resource Expansion/Feasibility Study/PEA
Other Companies

By selecting company or companies above, you are giving consent to receive email from those companies. And remember you can unsubscribe at any time.

Gold Outlook Report - Late 2017!

Get your FREE Updated Gold Outlook Report

Includes expert commentary, production numbers and gold stocks to keep an eye on.

Click here to get your free report!
Comments

Leave a Reply