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Canadian mining companies have had a rough go in Europe. Clobbered by political indecision and fierce opposition from environmental groups, Gabriel Resources seems on the verge of abandoning its 15-year attempt to open the continent’s biggest gold mine, in Romania. Eldorado Gold has been besieged by protests and an arson attack that have slowed, though not killed, its mine development in northern Greece.
Euromax Resources is proving the exception to the rule that no Canadian mining development in Europe shall go unchallenged. The company’s shares, which are listed on Toronto’s Venture exchange, tripled over a three-day period starting June 5, when it released a pre-feasibility study that, it claimed, amply displayed the “economic robustness” of its Ilovitza gold-copper deposit in southeast Macedonia. The shares last traded at 60 cents; at one point in April, they were under a dime.
The encouraging study means that the $500-million (U.S.) open-pit mine is almost certain to go ahead. “We have the chance to build the first greenfield mine that anyone has seen in the Balkans for 30 years,” says Euromax CEO Steve Sharpe.
Even better, the permitting risk, while not absent, seems low. Macedonia is a new country that is working hard to attract foreign investors. To streamline development, it front-end loads the permitting process, that is, government departments and regulators provide permits based on detailed conceptual studies. “You get government buy-in from day one,” Mr. Sharpe says, noting that Euromax expects no problems in obtaining the construction permit.
Compare this to Gabriel, which has spent about $550-million on project development and legal work on its proposed Rosia Montana mine, in the Transylvania mountains, with nothing to show for it. Every permit has been challenged by savvy and well-organized local and international environmental groups whose supporters, at times, have included Hungarian billionaire George Soros and actor Vanessa Redgrave. Rosia Montana has emerged as the textbook case on how not to develop a mine. Gabriel is not considering an international arbitration case to recoup the lost investment and profits.
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