Greek authorities have temporarily suspended work at one of the mines run by Canada’s Eldorado Gold (TSX: ELD) (NYSE:EGO) in northern Greece, after determining the company had violated some terms.
According to the country’s energy and environment minister, Hellenic Gold — a subsidiary of the Vancouver-based company— infringed the terms of technical studies. The revocation of those studies approvals, Panos Skourletis added, meant work in the gold-copper Skouries mine must stop for now, Agence France Presse reports. He didn’t provide further details.
The Skouries mine has had locals divided since early 2011, when Hellenic Gold was granted approval to mine in the northern peninsula.
Some claim the operation, owned 95% by Eldorado, may hurt tourism and the environment, while others believe it is good news for Greece, as it will generate new jobs and bring hundreds of millions into the struggling economy.
Truth is Skouries was the flagship project of the last government’s foreign investment drive and, for many, remains a test case that would reveal whether Greece could protect foreign investors despite local opposition.
Eldorado has invested more than $450 million since 2012 on construction and development of the Skouries and Olympias mines in Greece, and had planned to invest another $200 million this year to advance construction at Skouries.
In April, one of Greece’s top courts handed a key victory to the Canadian gold miner, rejecting a decision that blocked its plans to build a key processing plant at Skouries.
A spokesman for Eldorado’s subsidiary said the company had not received any formal notice from the Greek government so was not in a position to comment.
Eldorado shares were down more than 8% at $4.99 in TSX noon trading. Its NYSE-listed shares were also down over 9%.