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Eldorado Gold shares rise on mine development agreement with Greek government

CALGARY — Shares in Eldorado Gold Corp. rose Friday after it announced a negotiated agreement with the Greek government that could allow more development of its mines in northern Greece.

The Canadian company says the deal amends a 2004 transfer agreement between its subsidiary, Hellas Gold S.A., and the Hellenic Republic to provide a modernized framework that allows it to invest in its Skouries, Olympias and Stratoni mines and facilities, collectively called the Kassandra Mines.   

It says the deal, which requires Greek parliament ratification before taking effect, would allow completion of construction and the start of production at Skouries, along with expansion of the Olympias mine to 650,000 tonnes per annum.

It is also to provide for upgrades to the port facilities at Stratoni to allow for bulk shipment of concentrates and allow further investment in exploration there.

National Bank Financial analyst Mike Parkin says the agreement is a "critical component" for advancement of the Skouries project and has been highly anticipated.

Eldorado shares rose by as much as 12.5 per cent in trading in Toronto on Friday.

Eldorado president George Burns says the agreement signals a "new beginning" for the company, which has had a rocky relationship with the Greek government and local mining opponents.

“This agreement is the culmination of dedicated, determined efforts and reflects a true desire from both parties to deliver a commercial framework that can realize the potential of the Kassandra Mines for all stakeholders," he said.

"Both Olympias and Skouries have the potential to be tier-one assets that, when combined with the rest of our portfolio, will be transformational for Eldorado."

This report by The Canadian Press was first published Feb. 5, 2021.

Companies in this story: (TSX:ELD)

The Canadian Press