Canadian miner Eldorado signs revised contract with Greece for Kassandra Mines

FILE PHOTO: A general view of the construction site of a mine of Hellas Gold, a subsidiary of Canadian mining company Eldorado Gold Corp, in Skouries, in the Halkidiki region, northern Greece February 15, 2015. REUTERS/Alexandros Avramidis /File Photo

ATHENS (Reuters) - Canada’s Eldorado Gold Corp on Friday signed a revised contract with Greece covering its mining operations in the north of the country, where it has faced repeated stalling over licensing delays and environmental concerns.

Eldorado has been in talks with the Greek government on a revised investment plan that would secure higher royalties from mining development and new jobs.

Shares in the company gained nearly 9% on the Toronto Stock Exchange on the amended agreement that includes an investment plan for the miner’s Skouries, Olympias and Stratoni/Mavres Petres mines and facilities in northern Greece, collectively the Kassandra Mines.

The contract will now allow for completion of construction at Skouries and transition of the project into production, expansion of Olympias to 650,000 tonnes per annum, further investment in exploration at Mavres Petres-Stratoni, among others, Eldorado said.

The investment plan has been revised to $3.1 billion from $1.4 billion, all the three mines will remain open and will be upgraded, while a total of 3,070 of workers will be employed, up from 1,650 today, Greek Energy Minister Kostas Skrekas said.

Under the revised contract, Eldorado will submit a new proposal for building a gold processing plant in 12-24 months, while there will be a 10% rise in royalties for Greece, Skrekas added.

Greece’s conservative government has pledged to unblock foreign investment to lift an economy that shrank by a quarter during a decade-long financial crisis, and help recovery after the COVID-19 pandemic.

Reporting by Angeliki Koutantou in Athens and Arundhati Sarkar in Bengaluru; editing by James Mackenzie and Shinjini Ganguli