Eldorado Gold poised to secure Greek permits

Eldorado Gold’s Skouries Project in Greece, a high-grade gold-copper porphyry deposit. Source: Eldorado Gold Corp.

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Eldorado Gold Corp.’s [ELD-TSX; EGO-NYSE] efforts to secure key permits for its Skouries gold-copper project in Greece look like they are about to pay off. Greece’s new conservative government will soon issue the permits for the Skouries development, Greek Energy Minister Kostis Hatzidakis said on Monday September 2.

Vancouver-based Eldorado has two operating mines and two development projects in northern Greece, but has struggled with permit delays at Skouries for years.

However, Kostis Hatzidakis said Monday that the Greek government would fully conform with rulings by the country’s top administrative court. A ministry official told Reuters News Services that the rulings concerned permits for the installation of equipment for an enrichment plant at Skouries

Eldorado started construction at Skouries in 2013, then mothballed the gold-copper project in 2017, citing long-running permit delays. Skouries is expected to produce an average of 140,000 ounces of gold and 66.9 million pounds of copper annually during a projected lifespan of 23 years.

News of the energy minister’s comments sent Eldorado’s share price up 0.98% or 12 cents to $12.36. The shares are currently trading in a 52-week range of $3.36 and $12.85.

Eldorado CEO George Burns recently stepped up the company’s efforts to secure the permits by meeting with Greek Prime Minister Kyriakos Mitsotakis.

According to a published report, Mitsotakis reiterated the government’s support for the Canadian company’s plans in Greece on the condition that it respects environmental regulations and generates jobs.

Burns, for his part, expressed the company’s commitment to working with the government on ensuring that these terms are met, according to a report in ekathimerini.com.

Eldorado is a mid-tier gold and base metals producer with Christos Balakas as Vice President/General Manager for Greece.

It has a portfolio that includes mining, development and exploration projects in Turkey, Canada, Greece, Romania, Serbia and Brazil.

Key operations include the Kisladag and Efemcukuru mines in Turkey, the Olympias Mine in Greece and the Lamaque Mine in Quebec. Together they are expected to produce between 390,000 and 420,000 ounces this year at an all-in-sustaining cost of US $900-$1,000 an ounce.

However, analysts said Eldorado’s stock price has previously been held down by concerns about capital allocation decisions and the company’s inability to advance development of its Skouries gold-copper project in Greece.  While 50% constructed, the Skouries Project remains on care and maintenance pending the receipt of necessary permits from the Greek government.

It is why Burns is hoping that a new government will see that developing Skouries is a win-win – not only for Eldorado – but also for the Greek economy.

Situated in the Halkidiki Peninsula of northern Greece in the Serbo-Macedonian ore belt, Skouries is located on concessions that also contain the Olympias Mine, which produced almost 10,000 ounces of gold during the first quarter of 2019.

The Skouries gold-copper porphyry project is designed as a two-phase mining operation that produces a very clean gold-copper concentrate and is uniquely designed to deploy the best available technologies for tailings disposal, Burns said.

Phase one consists of an open pit mine and underground mine that will operate for 10 years. Phase 2 consists of mining from the underground mine for a further 13 years.

In 2018, Eldorado demanded a €750 million payment from Greece for damages related to project permit delays. The company’s planned investment in Greece has been viewed as one of the biggest in the country in years.


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