Eldorado Halts Gold Mining Project in Greece

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Eldorado Gold Corporation (NYSE:EGO) (Vancouver, British Columbia) has decided to suspend some of its gold mining projects in Greece after a year of court battles with the government.

The company cited delays in receiving permits and the revoking of other licences for its decision to postpone development of the Skouries project in northern Greece and has warned it will do the same at the Olympias mine. Future expansion of the Stratoni mine, which has around three years of life remaining, has also been thrown into doubt.

Eldorado has already invested around $300 million in the Skouries mine, which has a projected output of 150,000 ounces per year (Oz/yr) of gold and 30,000 tonnes per year (T/yr) of copper. With an estimated lifespan of 27 years, Eldorado claimed it could be worth more than $500 million per year to Greece in export revenues from 2017. The mine employs 2,000 workers, with another 1,000 jobs promised by 2020. Eldorado recommenced operations at the mines, located on the Halkidiki peninsula, last October after it received an injunction over-ruling the government's stop-work order issued in August. For additional information, see October 9, 2015, article - Eldorado Restarts Controversial Greek Gold Project.

"Since 2012, we have created approximately 2,000 direct jobs in the country and invested in excess of US$700 million towards development of the Skouries and Olympias projects--including tax payments in excess of $130 million to the Greek government," explained Paul N. Wright , president and chief executive officer of Eldorado Gold. "However, since the beginning of 2015, the Ministry has adopted an openly confrontational attitude towards our business and investments, which has had a detrimental impact on our schedule and budget to develop our mineral assets in Halkidiki. Given the adverse circumstances mentioned above, it is prudent to reduce our capital allocation to Greece at this time."

He added: "We wish to recommence the suspended activities and our investment plans in Greece upon the timely issuance of the necessary permits and the establishment of a truly collaborative partnership, within the framework of the contractual obligations between Hellas Gold and the Greek State."

Eldorado warned that if permits are not cleared by March it will also stop its Phase II expansion at the Olympias project. Phase I tailings re-processing last year saw an additional 20,000 ounces of gold recovered. Full commissioning of the plant--Phase II--is expected this year. A total of 350,000-400,000 tonnes per year of ore will be treated during Phase II to recover lead/silver, zinc and gold.

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