Canada-based Eldorado Gold Corp will no longer invest in its Greek mines. The announcement appeared on Monday under the pretext of heavy regulatory drag. The company claimed that it began facing the biggest setback to its investments since the debt crisis Greece went through in 2007.
Eldorado Gold’s Greek Mines Were Seen as Both Sources of Foreign Investments and Environmental Damages
On Monday, Eldorado Gold Corp. listed numerous halts to its investment that the Greek government generated. Due to this new relationship between the two entities, the company announced operative interruption until further notice.
Therefore, there will be no additional investments in the Olympians and Skouries plans which would also affect the Greek mine in Stratoni. As of September 22, these projects will be listed as plants on care and maintenance.
The Skouries mine, in particular, was a controversial topic for the Greek population and government. On the one hand, the state wanted to treat this project as an incentive for foreign investments in their national economy.
On the other hand, communities and activists frowned upon the precarious accordance with the local environmental regulations that Eldorado Gold applied. These arguments prevailed for years. Locals have even organized protests as they feared the mine would jeopardize the pristine touristic beaches.
Shares in Company Slid 48% Over the Past Year
The business disturbance occurred during the transition between two CEOs. Paul Wright was the first to enter the Greek market by purchasing Greek mines in 2012 for a total of $2 billion. However, the new CEO George Burns learned that this investment meant a lot of permit delays for the company. In the end, these events translated in significant revenue losses.
“These permit delays have negatively impacted Eldorado’s project schedules and costs.”
This Greek project alone brought the company down. In the past year only, shares in Eldorado Gold plummeted 48%. According to RBC Capital Markets, the company depends a lot of the uncertain success of this project as the Greek assets represent 40% of the net asset value.
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