The chief executive of Eldorado Gold (TSX: ELD; NYSE: EGO) said the company wants to build a better relationship with the government of Greece to resolve issues over plans to mine gold in the country, rather than just relying on the courts.
The country’s leftist government last month said it was revoking a permit for technical studies for a $1 billion project, alleging that Eldorado violated contractual terms over technical studies. Eldorado’s Greek subsidiary, Hellas Gold S.A., suspended operations during a legal challenge. The suspension affected the Stratoni Mine as well as the Skouries and Olympias projects.
“I am quietly optimistic that we will get there with the government. But if we don’t, then we’re going to have to take alternative action,” said Paul Wright, chief executive officer of Eldorado, during an appearance at the Denver Gold Forum Tuesday.
If the differences cannot be resolved, the company cannot continue investing in the country, he suggested.
“Our expectation is we will again prevail, as we have done now on 13 separate occasions in rulings by the Council of State,” Wright said. “However, our challenge in Greece is to get to a much better place as it relates to the relationship with a government of the country that is truly collaborative and recognizes the value of this investment to the country. We look forward to further engagement when the new government is formed in the next couple of days.”
The party of Alexis Tsipras, who was prime minister, was re-elected over the weekend.
The company is developing the Skouries and Olympicas projects. Eldorado has spent $450 million on the projects since 2012 and has over 2,000 direct employees. Eldorado estimates that it would pay $1 billion in direct taxes to the Greek government in the next 20 years.
Eldorado is seeking injunctive relief, which the court deferred until after the election. A decision could come as early as this week, Wright said. Meanwhile, a court hearing on the main issue – the government’s decision to recall Eldorado’s permit — is set for Oct. 2.
Wright was asked if Eldorado would resume work right away if it prevails in the court system.
“Our approach to this will be to put people back to work if we are legally entitled to,” Wright answered. “But I just want to emphasize for us, it’s not about the legality. It is about the model of not having a supportive government that just doesn’t work for us.”
He pointed out that the mining issue was the No. 3 topic of debate going into the Greek elections, with many candidates expressing support for mining investment in the country.
http://www.kitco.com/-By Allen Sykora of Kitco News; asykora@kitco.com
