September 15, 2017 / 9:09 AM / 2 years ago

Eldorado gets more Greek mine permits, but standoff persists

ATHENS/TORONTO (Reuters) - Greece granted Eldorado Gold Corp two remaining permits on Friday for its Olympias mine, the government’s latest attempt to defuse a standoff with the Canadian miner, which has threatened to suspend investment in the country.

President and Chief Executive Officer of Canadian Eldorado Gold Corporation George Burns addresses journalists during a news conference in Athens, Greece, September 11, 2017. REUTERS/Alkis Konstantinidis

After Eldorado warned on Monday that it could halt new investment starting Sept. 22, blaming years-long permit delays and a lack of information on an upcoming arbitration, Greece issued key mine permits on Wednesday and detailed arbitration proceedings on Thursday.

But the Vancouver-based miner continues to insist that it will only reconsider its investment plans after receiving a outstanding permit for a plant in Skouries and the government shows a willingness to engage in constructive talks.

“This is another positive step forward. However, we are still waiting on the other matters, which we continue to believe can be resolved through good faith negotiations,” Eldorado Chief Executive George Burns said in a statement.

Eldorado shares dipped about 2.4 percent in early trade on Friday, to C$2.83 in Toronto and $2.32 in New York, mirroring broad declines for gold miners. The stock had soared more than 20 percent this week.

“We are of the view that Eldorado’s recent decision has motivated the European government to scrutinize Greek policy regarding foreign investment, specifically regarding the company,” BMO analyst Andrew Kaip said in a note to clients.

“We see this as a positive event given that the company has invested an additional (approximate) $1 billion in the country since its $2 billion acquisition in 2012.”

Eldorado’s investment in northern Greece is among the biggest since the country’s debt crisis began in 2009 and has long been viewed as test of its resolve to attract foreign capital.

The miner spent nearly $2 billion in 2012 to purchase the Skouries mine along with Olympias and Stratoni projects in Greece.

But differences have dragged on, notably over compliance with environmental regulations, with local communities divided over Eldorado’s projects.

Workers fear job losses if the dispute is not resolved, while others worry Eldorado’s development plans will destroy the environment and tourism industry.

On Friday, the energy ministry published approval of Eldorado’s technical study to shut down an old Olympias mine, and a installation permit for a paste plant there, making the project fully operational.

Energy Minister George Stathakis said in parliament Friday that no licenses will be issued for Skouries before arbitration begins.

Additional reporting by Anirban Paul in Bengaluru and Jan Strupczewski in Tallinn, Estonia; Editing by Karolina Tagaris and David Clarke

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