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Eldorado Gold amends investment in Greece or Just Games for a Handful of Gold?

It has been an affair of love and hate: Protagonists are: an investor –  Canadian gold-miner Eldorado Gold -, three Greek governments and the locals in Skouries divided over whether to allow gold-mining or not. Lots of tears were shed and lots of anger occurred in the last three years and thus on both sides. And now, the Eldorado Gold announced it was suspending much of its mine construction and envelopment in Greece ‘after a year of confrontation’ with the SYRIZA-ANEL government. In a press conference earlier today, the CEO of Eldorado Gold, Paul Wright claimed that the Greek government was playing “sick political games on the back of the investment.”

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However, Energy Minister Panos Skourletis clarified that there was a meeting scheduled for yesterday (Monday) between him and Eldorado Gold CEO and that this meeting was canceled on the initiative of Paul Wright.

“At the initiative of the Managing Director of El Dorando we had booked an appointment yesterday. He preferred to cancel it, to give the press conference and to schedule the appointment for tomorrow. I think this behavior is challenging. Because if you want to negotiate with somebone you cannot create  faits accomplis. The Greek government cannot be blackmailed,” Minister Skourletis told the media, adding that “the government will protect the public interest and the environment.”

So, there was a meeting scheduled for yesterday Monday, but instead of going to the meeting Eldorado Gold CEO Paul Wright preferred to cancel it, issue a statement, hold a press conference where he put his conditions for negotiations open to public and then he would go to a meeting with the Minister after all this drama?

In its long statement issued in Vancour on Jan 11/2015, Eldorado Gold states among others:

“Eldorado Gold Corporation (“Eldorado” or the “Company”) confirms that it will implement significant changes to its investment plans in Greece going forward.

In order to complete the construction and development of its mining projects (the “Kassandra Mines”) in Halkidiki, northern Greece , Hellas Gold , a Greek subsidiary of Eldorado, requires the approval of various routine permits and licenses from a number of government agencies, predominantly under the direction of the Ministry of Energy and Environment (the “Ministry”).

Hellas Gold received approval for its Environmental Impact Study in 2011, yet since 2012, the Ministry and other agencies have not entirely fulfilled their permitting and licensing obligations primarily as a result of the lobbying efforts by anti-development interest groups. In addition, during 2015, the Ministry revoked or suspended certain permits of Hellas Gold ( news releases dated: March 2, 2015 & August 19, 2015 ), which has had a negative impact on the Company’s schedule and budget to develop its assets.”(full statement here)

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.

“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.

Some 600 jobs could be lost in Skouries project.

According to Reuters, “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.”

PS I have no idea how big boys – investors and governments – play their little games in order to achieve the best deal, but this seems interesting to follow. I suppose, the deal would be been much easier if there was more transparency. Just saying/

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