Vancouver-based company Eldorado Gold (TSX:ELD)(NYSE:EGO), Greece’s biggest foreign investor, is temporarily postponing its decision to halt operations and investment in the country as it begins talks with the government.
"We are very pleased with the constructive dialogue that is underway with the Ministry of Energy and Environment,” chief executive George Burns said in a statement. “[However] we preserve the right to place our assets on care and maintenance and to take prompt legal action to protect the company and its assets in Greece should [the talks] prove unsuccessful.”
The miner warned last week it would halt new investment and operations in Greece from September 22, unless the country granted it permits and showed willingness to engage in constructive talks.
The company, which employs about 2,400 people in the country including permanent staff and contractors, noted at the time that if the shutdown took place all but 300 workers responsible for maintaining mining facilities would be laid off.Since then, Greece has issued several of the pending permits and even sent Eldorado a long-awaited arbitration notice regarding the company’s plant for treating concentrates from the Olympias and Skouries project, in the country’s in the Stratoni Valley.
Today's announcement comes just a few hours after hundreds of Greek miners fearing job losses marched through Athens on Thursday, holding signs that said "YES to mines, NO to unemployment,” according to Greekreporter.com.
The company, which has one mine and three projects in Greece, has been trying to develop the Skouries and Olympias projects in the north of the country for years, but local opposition and differences with authorities, especially over compliance with environmental regulations, have delayed progress.
Not including Stratoni’s $2 billion acquisition, the gold miner has invested about $1 billion in the European country since 2012, and such figure would double if it could fully develop its other assets in Halkidiki, northern Greece, the company said last week.
Several in the community oppose mining in the forested country’s north because they believe the activity would hurt the regional tourism industry, destroy the area’s rich vegetation and pose a contamination risk to the groundwater.
Eldorado counters that, together with generating new jobs and bringing hundreds of millions into Greece’s struggling economy, it has taken all necessary measures to protect the surroundings. Further, the miner says it’s still carrying out environmental clean-up work even of its predecessors.
Uncertainty about the company’s projects in the European country has weighed heavily on its share price, which is down about 47% in the past year, touching a 14-year low of $2.24 on Aug. 4. The stock, however, jumped Thursday on the news, trading almost 6% higher in pre-market in New York to $2.34. Since Eldorado's threat last week, the stock has gained almost 8% in New York and more than 10% in Toronto.