Eldorado Gold shares slump on Greek mining halt (CBC News Business – August 19, 2015)


Relations between Vancouver-based Eldorado and the leftist Greek government have been testy

Shares of Eldorado Gold slid in Wednesday trading following reports that the Greek government is temporarily halting production at the company’s operations in northern Greece.

Reuters quoted Greek Energy Minister Panos Skourletis as saying Eldorado had “violated some terms.” He provided no elaboration.

“We are recalling the technical studies, which will result in the halting of operations at Skouries and part of operations in Olympiada,” Skourletis said, referring to two of the company’s mine sites.

According to the Associated Press, documents released by the ministry say the violations concern a project to build a copper and gold processing plant, including not carrying out certain tests on the flash smelting process proposed for use. According to the decision, the suspension will be lifted if the company resubmits the necessary documentation and meets the requirements within a year.

A spokesman for Eldorado in Greece said the company had not received any formal notice from the Greek government so was not in a position to comment.

Eldorado shares were down 45 cents at $5.01 in noon-hour TSX trading. The shares had dipped as low as $4.71 in morning trading. Its NYSE-listed shares were down about 9 per cent.

Long-running squabble

Relations between Vancouver-based Eldorado and the leftist Greek government have been testy. The governing Syriza party has tangled with the company before on environmental and financial grounds. In March, the government blocked construction of a processing plant at Eldorado’s Skouries mine.

Thousands of people have turned out on several occasions over the past two years to protest the company’s mining plans. The project in Skouries, in particular, has been divisive from the start, with communities and environmentalists saying it threatens the forest of Halkidiki and water quality in a natural area.

The company’s mining activities provide several thousand jobs in an economy that is reeling from a serious financial crisis. But the government said much-needed economic development can’t come at the expense of the environment.

“For the government, investments are welcome, they are necessary, essential, but the companies must also respect the terms to which they have committed so as not to harm the public interest and the environment,” Skourletis told reporters.

Just last week, Eldorado CEO Paul Wright said a Greek court had issued two decisions that “confirm once more the legality of our activities in northern Greece. This will allow Eldorado to accelerate construction activities at our Skouries project.”

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