Haywood Securities analyst Kerry Smith says Greece’s energy minister Panos Skourletis was on a “fishing expedition” when he revoked the technical studies on Eldorado Gold’s (TSX: ELD; NYSE: EGO) Skouries and Olympias gold projects in the Halkidiki peninsula of northern Greece, forcing the company to halt its operations in the country and start laying off workers.
On Aug. 19, Eldorado reported the suspension, based on the test work on the Olympias phase 3 flash smelting process. The ministry of energy claims the company violated contract terms by completing the pilot scale test work in Finland and not Greece. The test work is part of the technical studies for both Skouries and Olympias, which make up the basis of other permits Eldorado needs to start constructing the assets that are crucial for its long term growth.
Smith points out he has never heard of a requirement in the permitting process for companies to do test work at site, especially when Halkidiki has no expertise in flash smelting. If that was the case authorities would have flagged this issue earlier, Smith says, noting Eldorado has had permits for both projects for some time.
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