5 economic benefits of gold mining investment in Greece

The contribution of mining to Greece’s economic growth and development has a history as old as the civilization itself. Since 1,000 B.C., Greeks have been using their mineral resources to build cities, establish trade networks and expand empires.

Revenues from the high-grade silver mines of Laurion, south of Athens in Attica, financed the emergence of Athens as a cultural, economic and military capital in the 5th Century B.C. Further north, the gold deposits of central Macedonia and Thrace funded Alexander the Great’s conquest east and the creation of an empire that, at its peak, stretched across three continents.

Today, the Olympias and Skouries mines that Eldorado Gold is developing in Halkidiki have the potential to make Greece a leading gold producer in Europe.

“The benefits these projects are estimated to generate for local communities, municipal and national governments and the Greek economy are significant ,” says Eduardo Moura, Vice President and General Manager of Eldorado’s operations in Greece. “With mine lives of approximately 25 years each, we see great potential for these projects to contribute to Greece over the long term.”

Here are five benefits Greece is already realizing from Eldorado’s investment in Halkidiki:

1. Jobs

In a country where unemployment exceeds 23%, Eldorado has created more than 2,000 new jobs in the past five years. We are proud that 87% of our employees in Greece are hired from local communities.

We now have approximately 2,400 employees and contractors, and we estimate another 3,000 direct and indirect jobs will be created when Olympias and Skouries reach full production.

Employees take a break at our Olympias project.

2. Taxes and wages

Our projects have the potential to sustain generations of Greeks in family-supporting jobs. In the past three years, we have paid approximately US$100 million in employee wages and benefits. We estimate we will pay more than US$1.5 billion in salaries and benefits over the course of our operations.

In the same timeframe, we will also generate more than US$1 billion in taxes for the Greek government.

3. Community investment

Eldorado currently contributes about €3 million annually to local infrastructure improvements, healthcare accessibility and civil services. Eldorado’s support has helped build new water supply networks, repave roads, update biological treatment plants, and rejuvenate local spaces. Eldorado also supports the Paleohori Healthcare Centre in Halkidiki. Contributions have helped modernise facilities and equipment and with other day-to-day operating costs.

We estimate Olympias and Skouries could contribute approximately US$80 million towards local community and infrastructure projects over the course of their 25 year mine lives.

Greek Orthodox Church in the village of Paleohori, Greece

4. FDI revenues

With foreign direct investment (FDI) in Greece 57% lower in 2015 versus 2014, Eldorado’s projects are a valuable source of revenue for the Country. In 2015, our investment of more than US$200 million accounted for almost 20% of FDI in Greece. (FDI in Greece in 2015 was US$1.1 billion according to the OECD).

With plans to invest over US$1 billion in the 25 years Olympias and Skouries will be in operation, Eldorado will continue to be one of the larger foreign investors in Greece.

5. Export revenues

Greek exports will also be positively impacted by the metals mined from Olympias, Skouries and Stratoni. When in full production, annual export revenues of approximately US$450 million per year (depending on metal prices) would help Greece to pay for the goods and services it currently imports. Mineral exports will also help to reduce Greece’s current trade deficit.

Stratoni processing and export facility

source: http://blog.eldoradogold.com

 

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Eldorado Reports 2015 Year-End and Fourth Quarter Financial and Operational Results

In the annual review of  Eldorado Gold, ( read the full review here) there is a detailed report on the progress of the company’s investments in Greece , as follows :

 GREECE

In order to complete the construction and development of its Kassandra mining projects in Halkidiki, northern Greece, Hellas Gold, a subsidiary of Eldorado, requires the approval of various routine permits and licenses from a number of government agencies, predominantly under the direction of the Ministry of Environment and Energy (the “Ministry”).

Hellas Gold received approval for its Environmental Impact Study in 2011. Since 2012, the Ministry and other agencies have not entirely fulfilled their permitting and licensing obligations primarily as a result of the lobbying efforts by anti-development interest groups. While Hellas Gold is presently unable to complete its full development plans in Halkidiki as a result of the actions and/or inactions of the Ministry and other agencies regarding the timely issuance of routine permits and licenses, the Company remains committed over the long-term to the projects and its numerous stakeholders within the country.

Olympias

The Olympias plant treated 589,675 tonnes of tailings at a grade of 1.99 grams per tonne during 2015. A total of 16,396 ounces of gold were produced during the year. The Olympias plant ceased treating tailings during the first quarter of 2016.

On March 22, 2016, the Company was granted the required installation permit to begin the next phase (“Phase II”) of Olympias.  During 2015 basic engineering for Phase II was completed, and full implementation began with detailed engineering and procurement of long lead items was well advanced by year end. Underground mine development and refurbishment continued at Olympias during 2015, with underground ore production for Phase II projected to begin before the end of 2016. During 2015, 659 meters of underground access were rehabilitated and 1,901 meters of new development were completed. In addition, approximately 330 meters were advanced on the main Stratoni-Olympias decline, bringing total decline advance project-to-date to 1,950 meters. Capital costs incurred in 2015 were $97 million, consisting of $72 million in construction capital and $25 million in capitalized cost for tailings retreatment.

Skouries

Engineering design work for the processing plant and surface facilities progressed during 2015, with engineering at over 93% complete by year end. During the year a substantial amount of the equipment and various steel structures required to complete construction of the plant and facilities were delivered to the Skouries site, with over 80% of the procurement scope completed by the end of the year. Work continued on construction of the process plant and road access was completed to the base of the tailings dam.

Work on the development of the Skouries underground mine design was advanced during 2015 from scoping level through prefeasibility level. The underground mine design is expected to be completed in 2016. The mine is projected to produce 4.5 million tonnes per year using shaft and ramp access with sub level open stoping along vertical development intervals of 60 meters. The open pit is expected to be used for disposal of mill tailings during the life of the underground operation. The open pit is projected to operate for a period of 8 years to be followed by 22 years of underground mining. During 2015 a total of $112.9 million was spent at Skouries, excluding capitalized exploration and capitalized interest.

On January 11, 2016, the Company announced that construction and development activities at the Skouries project were being suspended due to delays in the issuance of routine permits and licenses by the Greek permitting authorities. Environmental protection works and care and maintenance activities continued to be performed in order to safeguard the environment and the assets of the Company at site at a cost of approximately $1.0 million per month.

Stratoni

Stratoni produced 31% less concentrate than in 2014 mainly due to lower mine output. Mine output was impacted by fewer available underground production faces as well as an extended mine shutdown related to Kassandra mines’ permitting issues. Stratoni reported a loss from mining operations of $12.5 million (2014: gross profit $0.6 million). The loss included a write down of inventory to net realizable value of $3.3 million. In addition to the shortfall in production, the profitability of mining operations was impacted by weak lead and zinc prices. Capital expenditures for the year included upgrades to health, safety and environmental equipment, and upgrades to the water treatment plant.

In 2016, the Company expects to process 220,000 tonnes of ore at grades of 6.2% lead, 10.0% zinc and 163 grams per tonne silver.  Sustaining capital for the year is expected to be $10.0 million.

The Mavres Petres Mine currently has a mine life of approximately three years based on the known proven and probable reserves.  Geological potential exists to expand resources at Mavres Petres and extend mine life, however, in order to delineate additional resources, a mining development and drilling campaign would be required at an estimated cost of $25 million over the next three years, assuming timely issuance of any permits that may be required.

Perama Hill

Project engineering was completed during the year on Perama Hill and the project was placed on care and maintenance pending receipt of the Environmental Impact Assessment approval. In 2015, a total of $1.0 million was spent on the Perama Hill project.

source: eldoradogold.com.,  ellinikoschrysos.gr

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Eldorado Gold to stop investments in Greece

Canadian mining company Eldorado Gold says it is suspending work at a site in northern Greece and laying off 600 workers following protests by local residents and a spat with the country’s left wing government.

The Vancouver, Canada-based company said Tuesday that it was suspending operations at a gold mine at Skouries, one of four major Greek sites where the company is involved.

Eldorado Gold CEO Paul Wright said 500 more jobs were also likely to be cut later in the year.

Wright accused the government of using the mining project as a “political toy” but insisted the company had no plans to pull out of Greece.

Elected a year ago, the leftwing government has expressed support for resident protest groups near Skouries who oppose the project on environmental grounds.

Wright said the company might suspend works in the Olympias site in Chalkidiki if the license is not approved within three months. Eldorado Gold has also frozen the projects in Perama Hill and Sapes in Thrace. They are also considering freezing the expansion of the mine at Stratoni.

The company CEO gave a press conference where he said that, “Since 2012 we created 2,000 direct and 3,000 indirect jobs and invested more than 700 million euros for development projects in Skouries and Olympias. We have paid over 700 million euros in taxes for Skouries and Olympias.”

“We invest in many countries but in Greece, our investment became politicized, it turned into a political game,” Wright said. “Greek finance ministers invite foreign investors to come to Greece. We are an example for foreign investors. We need to be partners with the government and have good cooperation to achieve the investment for our own benefit and for the economy.” He also added that the company has asked to meet with Prime Minister Alexis Tsipras but he has not yet responded.

Wright gave detailed figures of what the project in Chalkidiki would mean to the Greek economy:

1 billion euros in social security contributions
1.5 billion euros in salaries
100 million euros in associations and local organizations
150 million euros in environmental improvements
75 million in infrastructure projects in the region
2.5 billion euros in payments to local suppliers of goods and services

This is the first and perhaps the largest private investment of foreign capital in our country, totaling 1.2 billion euros, say financial analysts.

“We operate in good faith and Hellas Gold has complied with all contractual obligations, however, due to unfavorable conditions it is prudent to reduce capital investment in Greece at the time,” said a company statement addressed to the Athens Stock Exchange.

The Canadian company attributes the decision to stop the investment to the policies of the Ministry of Environment and Energy. Wright described the attitude of the Greek government as “openly confrontational” and argues that its subsidiary Hellas Gold is “unable at this stage to complete its investment plans in Chalkidiki because of acts and omissions of the ministry and other public services, relating to the timely issuance of routine licenses and permits which is a legal and contractual obligation of the Greek government.”

Wright clarified that the investment has great prospects and Eldorado Gold is willing to continue the investment. However, he said, the Greek Ministry of Environment and Energy creates significant risks and obstacles that leave no other choice but to reduce activities and staff.

“We hope to resume our activities and investment plans in Greece if we get the necessary permits on time and there is a real working relationship in the context of contractual obligations between Hellas Gold and the Greek government,” he noted. “We would like to create more jobs but the policy of the environment ministry made that impossible.”

In Skouries 600 workers will lose their jobs. This will be done gradually, as the company will maintain the workers who are essential for the basic functions for a period of 3-4 months, which has set a timeframe for the company to get license approval from the Ministry of Environment and Energy.

In Olympias 500 workers are at risk of losing their jobs. In this case the project continues and is awaiting approvals that will determine whether or not the investment will continue.

Wright will meet with New Democracy president Kyriakos Mitsotakis, PASOK leader Fofi Gennimata, Potami leader Stavros Theodorakis, and Centrists Union president Vassilis Leventis to discuss the situation.

The government does not succumb to blackmail, says Environment Min Skourletis
The government does not succumb to blackmail, Environment and Energy Minister Panos Skourletis on Tuesday said in statements to Praktorio 104.9 FM following “Eldorado Gold” announcement that it partly suspends its construction works at Skouries.

Skourletis expressed his disappointment over the fact that CEO of the Canadian company, Paul Wright, decided to cancel their scheduled meeting on Tuesday.

Skourletis sternly criticized those who accuse the government that 2,000 people will lose their jobs after the retirement of Eldorado from Northern Halkidiki and cleared out that the decision will affect around 830 workers.

source: Greekreporter.com, Philip Chrysopoulos – Jan 12, 2016

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Hellas Gold: Profitability in the midst of crisis

Eldorado Gold is moving on the second phase of its business development in the Greek market through its subsidiary Hellas Gold. According to the CEO of Eldorado Gold Mr. Paul Wright, “in the framework of the announcement of the financial results of the Canadian multinational for the second quarter of 2015, the company will continue to the next stage of its development in Skouries and Olympias under its contracts and in collaboration with 2,000 employees in the country”. In particular during the second quarter of 2015 the activities of Eldorado Gold in Greece focused, among others, in exploring deposits in the Halkidiki area in the porphyry zone in the region of Skouries/Tsikara/Fisoka.

Meanwhile the Greek subsidiary Hellas Gold decided to proceed directly with 60 recruits, as well as increases in productivity bonuses because of the implementation of the seven-day operation program in the production process. 600 additional recruits are expected to be implemented by promoting the building permit of the enrichment factory and the logging permit in Skouries, Halkidiki. According to the CEO of the company. Mr. Michael Theodorakopoulos, “the mining company has ensured stability in recent years in payrolls, dealings and turnover and significant momentum in commissions, trade and construction. New jobs are added to the existing capacity of 2,000 workers currently employed in “Cassandra Mines” in NE Chalkidiki. It is worth noting that the job applications submitted to the company have reached the number of 11,000.

According to the parent company Eldorado Gold there is significant progress in Skouries in regards to the implementation of the expansion project, the construction of factories that serve the exploitation and processing of minerals has been completed, and the installation of factory equipment has begun. The development of the next phase has been determined in Olympias from which the calculated revenue is 618 million dollars before taxes from the first five years of the second production phase (except 2016). In Stratoni the overall ore production in the second quarter of 2015 was lower on an annual basis. The capacity of the plant was affected by the decline in the production of mines and the miners’ strike in support of the company’s projects in the area of ​​Skouries.

Overall in the second quarter of 2015, Eldorado Gold produced a total of 181,160 ounces of gold (including production by the site of Olympias), compared to 200,551 in the corresponding quarter of 2014 with the adjusted net profit standing at 17 million dollars over 35.9 million dollars. in 2014. In the second quarter of 2015 the company’s revenues amounted to 214.2 million dollars. Revenues from gold sales amounted to 204.2 million dollars. On the part of the Canadian multinational estimates for 2015 refer to gold production of 690,000 ounces.

NAFTEMPORIKI, 08/01/2015, by Letta Kalamara

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