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Skouries main adit. (Image courtesy of Eldorado Gold)
Canada’s Eldorado Gold (TSX:ELD) (NYSE:EGO) has threatened legal action against the Greek government after the country’s energy ministry halted production at the company’s Skouries gold and copper mine in northern Greece.
In a statement late Wednesday, the Vancouver-based firm confirmed its subsidiary Hellenic Gold had been accused of violating the terms of certain required technical studies. However, the miner says such tests were indeed conducted, but at a facility in Finland, not on-site, as the Greek authorities demand.
“We are most disappointed and perplexed by this entirely inappropriate decision of the Ministry of Energy, which puts 5,000 direct and indirect jobs in Greece at risk,” Eldorado chief executive officer, Paul Wright, said in the statement.
“ … We will once more take legal action against a decision of the Ministry in order to safeguard the rights of Eldorado, Hellas Gold, our Greek employees and the communities and stakeholders that support our projects in Halkidiki.”
The mine has been a bone of contention ever since Hellenic Gold was granted approval to mine in the northern peninsula, back in 2011.
Some claim the operation, owned 95% by Eldorado, may hurt tourism and the environment, while others believe it is good news for Greece, as it will generate new jobs and bring hundreds of millions into the struggling economy.
Test case
Skouries was the flagship project of the previous government’s foreign investment drive and, for many, remains a test case that would reveal whether Greece could protect foreign investors despite local opposition.
Eldorado has invested more than $450 million since 2012 on construction and development of the Skouries and Olympias mines in Greece, and million this year to advance construction at Skouries.
In April, one of Greece’s top courts handed a key victory to the Canadian gold miner, rejecting a decision that blocked its plans to build a key processing plant at Skouries.
Eldorado shares were hit hard by the news Wednesday, trading 10% lower to $4.90 at 10:01 a.m. in Toronto, the steepest intraday fall since Jan. 30.
8 Comments
Robert Hassard
Eldorado, sue the Hellinic out of these Greek Beggars……
Danny the Ex Democrat
Good. Greece is corrupt and trying to extort Eldorado.
The usual suspects of leftist socialist losers who ruin everything they touch with their moronic ideology that only impoverishes the masses and gets people killed.
Danny the Ex Democrat
This is SUCH a BS technicality.
The corrupt leftists have an agenda so they will use anything they can to push it.
Dan Meldrum
So we have no jobs – we are in debt up to our eyebrows – we have very little foreign investment – so I have an idea!!! lets annoy the few foreign investors we have – close down their operations to discourage any future investment.
Matt
Maybe it is true and all Greeks are blind and need to be on the dole? Funny part is a Greek immigrant in North America is hard working, generally, but all the good ones must have left, leaving behind the laziest slugs the EU has ever seen.
Gene Byrge
Beware of Greeks……..
Mark Harder
I notice that the Greek gov. tried to block the building of a processing plant. On the other hand, there are governments that discourage mining unless processing was done in-country. One of the problems of economies that depend on resource extraction is that those resources leave the country with no value added, which limits the benefits to the local economy. All other things being equal, I would think that processing the gold in Greece would have a net benefit.
A.M. Landau
Good luck Eldorado, with Grece’s financial situation, should the trial take place in Greece, the judge will probably be more interested in pulling all the copper out of the walls.