By Mining Journal
The unexpected move came as Eldorado workers, worried about an estimated 2,000 job losses from the company’s pullout, protested outside the country’s energy ministry.
Vancouver, Canada-based Eldorado has been dealing with delays and opposition for years over permits for its Greek projects, and said on Monday it would put its Olympias and Skouries mines on care and maintenance in hopes of spurring the government to solve the impasse.
“This is a positive step forward; however, we are still waiting on other permits,” Eldorado CEO George Burns said. The company also received a modified electromechanical installation permit for a tailing management facility.
Among permits still outstanding is approval of the technical study for the old Olympias mine closure and installation permits for the paste plants at the project, as well as an amended electromechanical installation permit for the Skouries flotation plant.
Eldorado said it will re-assess its investment options after receiving all required permits, as well as getting clarity around the pending arbitration process that Greece filed for in June over the company’s development plans for Skouries.
“Open dialogue with the government would be the company’s preference rather than legal recourse and arbitration but we are confident that any potential arbitration will again demonstrate Eldorado’s adherence to all applicable laws and regulations and its commitment to developing its Greek assets safely, responsibly and with utmost care for the environment,” Burns said.
The Olympias operating permit is valid for three years.
Eldorado bought the Kassandra trio of mines – Olympias, Skouries and the currently operating Stratoni – in 2012 for US$2 billion, amounting to one of the largest foreign investments in Greece since the country slid into a debt crisis seven years ago.
Olympias has been expected to add 72,000 ounces per annum of gold and 55,000oz of gold-equivalent to Eldorado’s production, and Skouries phase I is envisioned with annual average production of around 150,000oz of gold.
Eldorado shares jumped 16.5% on the news in New York trading, hitting their highest level since late July.
RBC Capital Market analyst Dan Rollins said he would wait to see how the next two weeks play out before formally adjusting his forecasts based on the latest drama.
But he said his net asset value for Eldorado assuming no value for any of the Greek assets would be $1.84/share, versus $3.04/share including the Greek assets. He values the Olympias NAV at $0.70/share and Skouries at $0.38/share. Eldorado’s stock last traded at $2.30.
