Greece wants Eldorado Gold’s Hellas mine to dig it out of financial ruin

Despite ongoing opposition, Canada’s Eldorado Gold Inc. (TSX:ELD) (NYSE:EGO) is gearing up to start production at its 95%-owned Hellas Gold Mine in Greece, as Greek authorities have reportedly woken up to the potential of the country’s mining industry.

In November riot police barred about 3,000 people protesting against the company’s plans in the country. While no incidents were reported, locals are divided about the company's planned operations.

Currently, Vancouver-based Eldorado is involved in four gold projects, all of them located in northern Greece.

Three of the mining endeavours are at the planning stage. The fourth and largest, in northern Greece’s Halkidiki peninsula, was carried out more than 10 years ago by another Canadian firm, TVX.

Halkidiki has a long mining history. The area has yielded diverse metals for more than 2,000 years. As modern extraction and processing methods took over, the peninsula’s mining future became a recurrent topic in local debates over large-scale mining, environmental safety, job generation and tourism.

Supporters believe it will create jobs and bring hundreds of millions into the struggling Greek economy. Adversaries claim extraction activities will endanger lives through pollution, devastating ancient forests and driving tourists away from the region.

“In this difficult time — but also regardless of the circumstances — we owe it to ourselves to ensure the best possible exploitation of wealth this country has to offer to drive growth and bolster the economy,” Associated Press quoted Deputy Energy and Environment Minister Asimakis Papageorgiou as saying.

“No one doubts any longer that northern Greece is a source of mineral wealth, with a total wealth in metals exceeding euro20 billion,” he added.

Hellas gold mine is expected to start operations by mid-2015 creating about 2,000 jobs in the next five years.

If Eldorado Gold’s mines and other producers continue to advance their operations as planned, Greece will overtake Finland as the continent's largest gold producer within four years.

Finland, which mined 220,000 ounces in 2011, currently ranks 40th among the world's gold producers.

According to the US Geological Survey, in 2010 Greece was Europe's largest bauxite producer and the world's biggest supplier of perlite, used in insulation and as a soil replacement in horticulture.

Gold is currently the only metal targeted by authorities for fast-track approvals.

Image: Statue of Athena, with gold applications. © Dimitrios

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