Eldorado Halts Investment In Skouries Project In Greece
(Kitco News) - Eldorado Gold Corp. (TSX: ELD; NYSE: EGO) said Thursday it is putting its Skouries development project in Greece back on “care and maintenance” as it faces an ongoing stalemate with the government over securing necessary permits.
While dialogue between the company’s Greece subsidiary and the Ministry of Energy and Environment continues, Eldorado said it still has not secured an electromechanical installation permit for the Skouries flotation plant, as well as well as others needed, such as for relocation of antiquities at the Skouries site. Eldorado said it has also initiated three lawsuits in an effort to protect its interests.
The company said it will reassess its investment in the Skouries project upon receipt of the required permits and will also consider whether there is a “supportive” government open to discussions on the use and implementation of the best available technologies.
"Although we have made good progress on the Olympias Mine, we require the necessary permits and government support prior to investing further in Skouries,” said George Burns, Eldorado's president and chief executive officer. “As a consequence, we are now taking the necessary legal action to enforce the company's rights while continuing efforts to resolve outstanding matters through ongoing dialogue."
The company said progress continues on Olympias Phase I historical tailings cleanup, as well as ramp-up to commercial production at Olympias Phase II. Also, Eldorado said early indications from exploration drilling at Stratoni to extend the mine life are “positive.”
The company’s investment is considered one of the biggest in Greece, a nation in which the economy has been crippled by sovereign-debt issues.
Analysts with BMO Capital Markets said in a research note that they suspect that Eldorado is unlikely to be granted permits in Greece until an arbitration process has been resolved surrounding the alleged deficiencies regarding the technical study for the Madem Lakkos metallurgical plant.