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Eldorado Gold granted key permit for Olympias mine in Greece

Eldorado Gold says that mining activities by the previous owner of the Olympias project left behind more than 2.4 million tonnes of tailings. The miner has been rehabilitating 26.5 hectares of land, an area equivalent to the size of about 35 soccer fields, with the aim of returning the Olympias valley to a green area. (Image courtesy of Eldorado Gold)

Eldorado Gold’s (TSX: ELD) (NYSE:EGO) subsidiary in Greece Hellas Gold said Tuesday the environment ministry has granted the company a long-awaited licence from for its Olympias project, located in the country’s north.

The permit allows Eldorado to set up a processing plant in Olympias, which is crucial for the development of the mine.

“The project can now continue so that from the first quarter of 2017 the ore that will be produced at the mine will be processed at the Olympias facility,” Hellas Gold said in a statement (in Greek).

Greece’s leftist government had revoked Eldorado’s permit in August over environmental tests on the project but the country’s top administrative court annulled the government’s decision in January.

The permit allows Eldorado to set up a processing plant in Olympias, which is crucial for the development of the mine.

The Canadian company has been at odds with the Greek government for some time and earlier this year suspended work at its Skouries gold mine, one of the four projects the company has in Greece, adding that it was reviewing all of its activities in the country.

Late last month, the Vancouver-based miner was finally granted a building permit for the Skouries processing plant, but Eldorado decided to keep the project halted until the issuance of “pending routine permits and license,” which it needs to resume activities.

Despite the hurdles, the company has allocated $155 million, or about two-thirds of its total development budget for 2016, to develop its Olympias project.

The company is not the first miner to struggle in Greece. In the 1990s, the Skouries and Olympias projects belonged to TVX Gold Inc., which failed to develop them because of local opposition.

Eldorado had said it believed it could do better, in part because of its experience in developing mines in both neighbouring Turkey and China.

Currently the company employs 2,000 workers in an area with an unemployment rate above 30%.

Eldorado Gold is scheduled to release it results for 2015 on Wednesday, March 23.