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Eldorado Gold remains committed to its investment in Greece

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The reasons why Eldorado Gold Corporation proceeded with the recent Application for Payment towards the Greek State explains Mr. Christos Balaskas, Vice-President and General Manager, Greece of the company who has been interviewed by Capital.gr. As Mr. Balaskas stresses instead of being in the full development of the project - which would bring huge economic benefits to the national and local economy - after 21 months the case is pending for the second time before the CoS.

- Mr. Balaskas why did you proceed to the recent Application for Payment towards the Greek State?

The specific application follows the delays on the issuance of the permits for the companys project in Skouries, including losses for costs and lost profits. Although it is a non-judicial claim for payment and does not initiate legal or judicial proceedings, the company is committed to protecting its investments here in Greece – and around the world, especially when we are talking about delays in issuing permits, for long periods such as in our case.

- What was the reason for the arbitration process and what does its decision mean for the development of your projects in Chalkidiki?

With the application for arbitration, filed in Sep, 20 2017 the Greek State claimed that Eldorado did not fulfill its obligations under the Transfer Contract, the agreement between the State and the company. More specifically, the Greek government alleged that the Technical Study for the Madem Lakkos Metallurgical Unit, - which would treat Olympias Phase III and Skouries concentrates, as submitted in December 2014, was deficient and therefore in breach of the Transfer Contract. However, despite the States claims, the Arbitration Panel rejected this request, validating our stated commitment for the full development of our investment in Halkidiki.

And its not just that. Apart from the outcome of the recent Arbitration process, it is important to note that the integrity of the companys projects over the years, both from an environmental and technical perspective, have been upheld by eighteen positive rulings by the Council of State (CoS) based on the regulatory framework of the Greek State and the European Union.

- The Ministry of Energy & Environment (the Ministry) speaks about an integral investment and based on that, it has not proceeded to the issuance of the Skouries permits. Especially after the outcome of the arbitration process, the Ministry reminds that the provision of guarantees for the production of pure metals is a fundamental prerequisite for the full development of the project. Is the company going to produce pure metals?

Based on our obligations under the Contract with the Greek State, it is clear that the company will produce pure refined copper, gold and silver from the Metallurgical Unit, and it has satisfied and provided all necessary technical assurances for this purpose. There is no question about this, given that Eldorado remains committed to the responsible development of its investment in Halkidiki in accordance with the Investment Plan and the Environmental Impact Study, both approved by the Greek state.

However, it is important to make clear that the pending permits are routine permits, which are a prerequisite for the project to move on to the final stage, i.e. the production of pure metals. Not granting them constitutes an obstacle to proceeding to the final stage.

- Are you in the position to proceed to the construction of the Metallurgy Unit, have you received the necessary permits?

The truth is that instead of being in the full development of the project - which would bring huge economic benefits to the national and local economy - after 21 months the case is pending for the second time before the CoS, which we have resorted to, following the repeated evasions and delays in the issuance of the permits from the Ministry.

More specifically, the Technical Study of the Madem Lakkos Metallurgical Unit was filed on 22/12/2014 and was not accepted by the Ministry. Subsequently, after the decision of the CoS, which was positive for the company, it was resubmitted and rejected yet again by the Ministry with the case being resumed at the CoS as from 28/12/2016. 

Lets make it clear that it is not just about granting pending permits, but it is about a never-ending process of being asked to present data from our side to confirm our commitment for our intention to proceed with the investment. We have been involved in this process from the very beginning, but we also require a supportive government open to discussions regarding the use and implementation of best available technologies.

- Regarding the company’s project in Skouries, what is the current situation?

I would like to make it clear that the principal permits and approvals for the Skouries project have already been granted and the pending ones are purely follow-up routine permits, that are necessary for the ongoing development of Skouries.  Currently outstanding are: the amended Electromechanical Installation permit for the Skouries flotation plant, the relocation of antiquities at site, and the Updated building permit for the Skouries plant. Requirements for Skouries permits have been fully met by Hellas Gold, and as such are legally due to be issued. There is no legal or contractual reason to withhold them. At this time, there are exposed high-value infrastructures which remain inactive due to the outstanding permits.

- The Skouries project remains on the front line. Why is this project so important for you, but still a red flag for the government?

Indeed, this is about a very important project, which would bring economic prosperity to the Halkidiki region, as it would generate 1,000 additional jobs during the construction phase and an average of 700 direct jobs for the next 20 and more years of operation. 

Over the 25+ years the Kassandra Mines will be in operation, our investments have the potential to generate: ~5,000 direct and indirect jobs, €1.5 billion in salary payments, €3 billion in payments to Greek suppliers, €1 billion in direct taxes for the Greek state, €450 million in annual export revenue, €80 million in community investment

As far as the side of government is concerned, the issue of Skouries has been wrongly associated with the arbitration process, for reasons, that I am not in a position to know, especially if we consider that the result of the arbitration process was in favor of Hellas Gold and although had been so promised by the ministry we are still waiting to receive the required routine permits,

The significance of this project for the company is also reflected in the Skouries Updated Technical Report submitted by the company to the Ministry on March 29th, 2018, updating the parameters of the initial study reflects some of the best available control technology, a dramatically reduced environmental footprint and utilizes filtered dry stack tailings. In addition, the open pit will last for a maximum of 9 years, while for the remaining 15 years, the Skouries mine will operate underground exploitation and a parallel full restoration of surface mining sites, which also drastically reduces the environmental footprint of the project.
 
I would like to elaborate on the importance of the full restoration of the mining activity areas, since the practice of rehabilitating an area in parallel with the mining activity until its full restoration, is among the best practices globally and a high investment few companies decide to implement. Eldorado is not only committed towards that direction, but also proves practically its intention in the Olympias region, where the company reclaims an area of 260.000 sqm, having already removed 2.6 million tonnes of wet tailings from the previous mining activity. Additionally, the company started a nursery of 150.000 sqm with more than 300 different species of local plants, which addresses the needs of the mines’ reclamation works as well as those of the region.

- What is the next day of your relation with the Ministry after the latest developments and of course what is the next day of the investment?

Eldorado has always operated in consistency towards finding a mutually agreeable solution with the Greek State for the responsible development of its projects in Greece, including of course the issuance of the pending permits, which should have been already issued, particularly for Skouries as they are long overdue.

- I would like to finish with a comment concerning the situation in the local community regarding the investment and more specifically for your environmental footprint in the area.

From the very beginning, we have developed a constructive dialogue with the local community, we stand next to them, in an effort to be "good neighbors" for the surrounding areas, but also to support the prosperity of the region.

We fully understand that mining has impacts, and we are focused on minimizing those  throughout the life cycle of our projects, using the best available technologies such as comprehensive monitoring systems (one of the most developed environmental monitoring programs in Europe with 320 environmental inspection points and direct posting of all measurements of these data on a special platform online), from dry stack tailings and parallel reclamation (restoring historic mine waste areas left over from previous operators).

We believe that the local community - and Northern Greece in general - should claim its growth opportunities by exploiting its significant, proven mineral wealth. Based on this, only for 2017, the company invested €1.7 million in local community development initiatives and projects, apart from its 2,300 employees, and invested €160 million in local suppliers/contractors, contributing substantially to local economy and growth.

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