Gold mines and projects in Greece – One of the main factors behind the stock price decline for Eldorado Gold
Eldorado took a decision several years ago to focus on gold-mining in Greece. The company has invested approximately $3 billion in the Kassandra Mines (Olympias, Skouries, Stratoni) in Halkidiki and the Perama Hill and Sapes projects in Thrace, all in Greece. However, the Greek government is far from being supportive of these projects. Eldorado has been strugglingto receive the necessary permits and after several years of frustrations, it announced to stop any new investments in Greece in September 2017.
This move encouraged the Greek gold miners to organize a large demonstration in Athens. All these actions put a pressure on the Greek government who issued the operating permit for the Olympias mine, valid for a period of three years since September 2017. However, EGO waited on other important permits to be issued as well, which did not happen.
Moreover, Eldorado received a formal notice from Greece starting an arbitration procedure. Greece claimed that the technical study for the Madem Lakkos Metallurgical Plant for treating Olympias and Skouries concentrates in the Stratoni Valley, submitted in December 2014, is deficient and hence in violation of contract regarding the environmental terms. Eldorado was confident that they did everything right. The arbitration panel should originally come up with a decision at the beginning of February 2018, but the arbitration period has been extended until 6 April 2018.
To conclude the Greek story, EGO has just recently announced in preliminary results for 2017 that “Olympias Phase II completed commissioning and achieved commercial production on December 31”. So some positive developments after all.
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