JOHANNESBURG (miningweekly.com) – Canada’s Eldorado Gold on Monday announced that it would suspend investment at its operations in Greece, citing delays in obtaining routine permits and licences for the construction of the Skouries and Olympias projects.
The company said that no additional investment would be made into the Kassandra mines, which include Skouries, Olympias projects, as well as the operating Stratoni mine, in Halkidiki.
These assets would be placed on care and maintenance, starting on September 22, affecting about 2 310 employees and contractors.
The Skouries project employs 530 and the Olympias project has a head count of 950. The Stratoni mine provides employment to about 830 people.
Eldorado estimated that it would spend $30-million to prepare for care-and-maintenance activities and that the sustaining maintenance costs would amount to about $25-million a year.
The announcement was made days before Eldorado and the Greek government are supposed to enter into an arbitration process to settle their differences. The Energy Minister George Stathakis previously said that an arbitration process would begin on September 15, lasting three months.
The company, however, said that it was still waiting for additional information regarding the pending arbitration process and that it had not yet received formal notification.
Eldorado CEO George Burns said in a statement that the miner would not continue to “put capital at risk” without the necessary permits and licences for the construction and development of the Skouries and Olympias projects, in which it had already invested $750-million to date.
Eldorado paid nearly $2-billion for the Kassandra mines in 2012 and Burns said that, since the acquisition, the group had invested an additional $1-billion in Greece.
Eldorado also owns the Perama Hill and Sapes projects, in Thrace. These assets are already on care and maintenance, pending approvals for an environmental impact study for Perama Hill and a drilling permit for Sapes.
“We have a responsibility to our shareholders to allocate capital to projects not only with the best rates of return, but also in locations where host governments are supportive of our investment and work with us to grow a sustainable future,” Burns stated.
Newswire Reuters quoted Defence Minister Panos Kammenos as saying on Monday that it was "not pleasant" to see investment leaving the country, but stressed that investments had to be carried out in line with the country’s legislation and with that of Europe. The Minister, according to the newswire, was speaking on Skai TV.
Eldorado's TSX-listed stock took a beating following the news, falling as low as C$2.31 a share on Monday morning, as trading got under way.