Greece to take Eldorado Gold to arbitration court over project

Eldorado Gold (TSX:ELD)(NYSE:EGO) may have to face Greek officials in an arbitration court as the country’s government sees the move as the preferred way to settle its differences with the Canadian miner.

In a statement (in Greek) posted on the Ministry of Energy and Environment’s website Thursday, minister George Stathakis said he had requested that the state’s legal advisers prepare for the arbitration process to begin.

He added the move aims to ensure Eldorado’s Greek unit Hellas Gold, which is developing the project in northern Greece, respects its contractual obligations.

But the Vancouver-based company said it has not received formal notification or any details of any arbitration proceedings. As a consequence, Eldorado’s operations and development projects are continuing according to plan, it noted.

The Canadian miner, which has one mine and three projects in Greece, added it has consistently received positive decisions from the nation’s authorities in 18 cases confirming the integrity of its permits.  It also said it has always operated in accordance with all applicable laws and regulations in every jurisdiction Eldorado does business.

Currently, the company is developing the Skouries and Olympias projects, in northern Greece, where it also has a third asset — Perama Hill — and operates the Stratoni mine.

The possible arbitration case would be the last in a string of challenges the gold company has had to overcome in the European country.

Eldorado said it would comment after receiving legal documents outlining the arbitration.

Shares in the company closed more than 9% lower in Toronto Thursday to Cdn$3.85 on the news, and were still declining Friday morning at the opening.