UPDATE 1-Eldorado Gold suspends much of its mine construction in Greece

Mon Jan 11, 2016 5:51pm EST
 
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(Adds more details on suspensions, background)

Jan 11 (Reuters) - Canadian miner Eldorado Gold Corp on Monday said it was suspending much of its mine construction and development in Greece after a year of confrontations with the Greek government that included permits being revoked and delayed by the state.

Eldorado said it would suspend construction at its Skouries project and warned that it would do the same at its Olympias project if it did not receive a permit by the end of March. It has halted development work its Perama Hill and Sapes projects but could restart at a later date.

It is also considering whether to halt future expansion of its Stratoni mine, which has around three years of life left.

Eldorado said in a statement that it would prefer to create more jobs and carry on with construction and development in Greece.

"However, we have a duty to all our stakeholders and the significant time and process risks created by Greece's Ministry of Energy and Environment have left us with no choice but to reduce activities and personnel," Eldorado Chief Executive Officer Paul Wright said.

Eldorado has created around 2,000 direct jobs in Greece, it said. It did not say how many jobs would be affected by its reduction in activities.

Eldorado's Greek assets make up about 30 percent to 40 percent of the Vancouver-based miner's net asset value, according to analysts' estimates. Its stock is down 40 percent in the last 12 months, largely due to its problems in Greece.

It has invested more than $300 million in the Skouries project.

The company will hold a press conference in Athens at 11 a.m. local time (0900 GMT) on Tuesday and a conference call at 8 a.m. EST (1300 GMT).

(Reporting by Nicole Mordant in Vancouver; Editing by Chris Reese and Lisa Shumaker)