Greek government efforts to push ahead with plans for a gold mine in northern Greece by Canada's Eldorado Gold have hit another obstacle after a decision from the Council of State raises doubts about the future of the investment.
Even though Eldorado Gold has not started extracting gold from the mine, located in the Chalkidiki region of Skouries, its revenues in Greece hit $140 million in 2019, on top of an additional 14.3 million euros it received in the form of a tax return from the Greek government.
In meetings held between Eldorado Gold chief George Burns and Energy and Environment Minister Kostis Hatzidakis and Prime Minister Kyriakos Mitsotakis over the summer, the Canadian company received assurances that Greece intends to help with the implementation of its investment plans. In the six months that have passed, some progress has been made. As Burns announced to shareholders last week during the presentation of 2019 earnings, permits have been issued allowing for the installation of electrical and mechanical equipment at the mines of Skouries and Olympiada, along with the installation of the Skouries mill building. Additionally, archaeologists have given the green light for the ancient findings located on the site to be moved elsewhere.
However, last week's court decision indicated that Eldorado Gold has some time yet on its gold mine as doubts arise as to whether the investment will go ahead at all.
Two days before the company presented its latest earnings figures, a significant decision from the Council of State, Greece's top administrative court, was published.
Via its Greek subsidiary, Hellenic Gold, Eldorado Gold had sought an annulment to a decision by the Environment and Energy Ministry saying that a technical study on the mine must be returned to the company and corrected. Essentially, the ministry is doubting crucial details about the investment and the company's ability to implement the plans, asking for more information on the gold mine, to label it as being environmentally sound.
Although the court has repeatedly supported Eldorado in its disagreements with the state, this time the decision appears to only partly side with the Canadian company. Out of the six reasons given by the ministry as to why it rejects the study, the court accepted the two that relate to crucial areas of production linked to its environmental impact.
Now, Eldorado must convince the Environment and Energy Ministry with a new study that it's gold mining techniques are safe for the environment. If it fails to do so, the investment will be at loose ends as the gold mine is at the center of its investment in northern Greece.
So far there has been no comment from the Canadian company, nor has there been any announcement on how it will overcome this obstacle. The company, however, is making money in Greece even though it is not yet mining for any gold.
According to earnings figures, Eldorado Gold showed revenues of $140.2 million in Greece last year, from the mining of other precious metals, beating income from its Canadian operations of $125.2 million. In Greece, the company has reported a loss, resulting in a tax return of 14.3 million euros for 2019, versus another tax return of $129.2 million in 2018.