Canada’s Eldorado Gold has won a key battle in its ongoing row with Greece after an arbitration panel ruled in favor of the company’s technical plans to build a metallurgy plant to process concentrate mined from Skouries and Olympias in Northern Greece.
The panel rejected allegations that a technical study submitted by Eldorado was deficient and in violation of a transfer contract and the environmental terms of the project,” Eldorado Gold said.
The panel’s verdict rejects the Greek government’s motion that the company violated its contractual obligations by submitting a deficient plan for the Madem Lakkos metallurgy plant, Eldorado said.
Authorities had also argued Eldorado breached a 2003 contract by which its subsidiary Hellas Gold acquired the Kassandra assets — Olympias, Skouries and Stratoni — in the country’s Halkidiki region.
The company’s President and CEO, George Burns, hailed the ruling. “We believe this decision provides a foundation to allow us to advance dialogue with the Greek government in order to define a mutually-agreeable and clear path forward for our Kassandra investments,” he said in the statement.
Burns added the company expected the Greek government to fulfill its obligations under the 2003 contract, including issuing the outstanding permits for the Skouries project.
Vancouver-based Eldorado, which decided to freeze investment and suspend operations in Skouries last November following a years-long permit tussle with Greece, said it will now consider its next steps.
Last week, Eldorado filed an updated technical report on the Skouries development that it said reduces the project footprint by 40 percent.
The mine, which has 3.77 million ounces of gold reserves and 779 million pounds of copper, has a 21 percent after-tax internal rate of return and net present value of $925 million, the report said.
Speculation surrounding the outcome of the arbitration lifted the company’s shares on Tuesday. It closed almost 6.6% higher in Toronto to Cdn$1.14 — the stock’s best day in six months.
The ruling “should reduce the level of perceived political risk related to the company’s Greek build-out, which has been a key headwind for Eldorado shares the last few years,” RBC Capital Markets analyst Dan Rollins said in a note to clients.(reuters, mining.com)
