Greek notice of arbitration advances Eldorado’s project plans

Eldorado Gold Corp said on Thursday it received formal notice of arbitration from Greece, another advance in a long-running permit tussle, but the miner repeated more progress is needed for it to reconsider investment plans.

Eldorado warned on Monday that it would halt new investment in its Stratoni mine and Olympias and Skouries projects from Sept. 22.

It cited permit delays and a lack of clarity on an arbitration process that Greece announced in June to settle differences over mine development.

The Vancouver-based company said on Wednesday that the arbitration notice alleges its technical study for a metallurgical plant to treat concentrates is deficient and therefore violates the project’s environmental terms.

Eldorado said it was confident its study met requirements.

“Despite the Greek government’s refusal to engage with Eldorado, we believe that this matter could still be resolved through good faith negotiations. We again invite the ministry to engage with us for such purpose,” CEO George Burns said in a statement.

“Upon approval and receipt of all the required permits and a government that engages in good faith with the company, we will then be in a position to re-assess our investment options in Greece.”

Eldorado received two permits for its Olympias project on Wednesday, but said it is awaiting permits for its two other projects.

“We expect the next week will be a key period for Eldorado’s investments in Greece as we see how the government reacts to Eldorado’s hardline stance on future investment,” RBC Capital Markets analyst Dan Rollins said in a note to clients.

“We anticipate the start of arbitration over the coming days and appointment of an Eldorado nominee to the three-person arbitration panel.”

The arbitration notice relates to a plan submitted in 2014 for the Madem Lakkos metallurgical plant, for treating Olympias and Skouries concentrates, Eldorado said.

The company’s investment in northern Greece is among the biggest since the country’s debt crisis began seven years ago and is viewed as a test of the state’s resolve to attract foreign capital.

However, differences with the country, especially over compliance with environmental regulations, have dragged on for years.