July 24, 2012 / 3:58 PM / 6 years ago

Greek court lets Eldorado Gold proceed with mine project

ATHENS (Reuters) - A Greek court has allowed Eldorado Gold Corp (ELD.TO) to proceed with a gold mining project in the north of the country, revoking an order that had stopped work at the site, the Canadian miner said on Tuesday.

The news sent shares of Eldorado up 4.4 percent to C$10.40 on the Toronto Stock Exchange on Tuesday morning.

Earlier this month, the Council of the State, Greece’s highest administrative court, issued a provisional order suspending tree-cutting at Eldorado’s mining project in Halkidiki, northern Greece.

The court revoked that suspension order on Tuesday.

“The judges found that this investment is of particular benefit to the Greek economy,” an official at the council said.

“We are very pleased with the decision of the Council of State and will re-initiate our surface clearing activities in Halkidiki as soon as practically possible,” Eldorado Chief Executive Paul Wright said in a statement.

The ruling, however, is temporary until the council holds a full hearing, according to the court official and another official close to the proceedings.

Analysts warned on Tuesday that Eldorado will likely face more opposition from environmental activists as its various Greek projects move forward.

Eldorado operates the Stratoni mixed sulfide project in northern Greece and is developing three gold projects in the region.

“This will not be an isolated circumstance and anyone involved with (Eldorado) should expect to see from time to time the environment group in that part of the world trying to interfere with development of mines,” said Barry Allan of Mackie Research Capital.

Greece was an important producer of gold in ancient times, but recent attempts to develop the Halkidiki sites have failed as politicians have backed environmental groups opposed to mining.

Vancouver-based Eldorado employs about 680 people, including contractors, in Greece and expects to invest about $1 billion in the debt-plagued nation over the next five years.

$1=$1.02 Canadian Reporting by Harry Papachristou in Athens, Julie Gordon in Toronto and Bhaswati Mukhopadhyay in Bangalore; Editing by Peter Galloway

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