Bad News for Eldorado Gold and its Greek Projects

July 10, 2016 | By admin | Filed in: Eldorado GoldGreeceEnvironment.

Eldorado Gold’s stock is soaring on the NYSE and TSX stock
markets following the rising price of gold, but investors
are unaware of the most recent developments regarding the
company’s Greek projects.

In Greece, Eldorado is developing the Kassandra Mines in the
northern peninsula of Halkidiki, comprising the Skouries
gold-copper and the Olympias gold-silver-base metals projects,
as well as the producing Stratoni base metals mine.
Central to the company’s plan, and the most basic term of its
contract with the Greek state, is Eldorado’s obligation to
construct and operate a gold metallurgy plant. That’s because
it was deemed that domestic processing and production of pure
metals would add value to the exports and generate more
state revenue from taxes. It was later revealed, however,
that Eldorado is able to avoid tax in Greece by shifting
its profits through the Netherlands to the Barbados.

In fulfillment of its obligation Eldorado’s Greek subsidiary
Hellas Gold has submitted a copper-gold metallurgy plant, a
flash smelter and sulphuric acid unit. On Tuesday, July
5, the Greek Ministry of Environment returned the technical
study for the copper-gold metallurgy plant to Hellas Gold,
citing a number of serious flaws and deficiencies. Eldorado
must now correct and complete its study according to the
ministry’s guidelines and re-submit it within two

Eldorado intends to co-process the concentrates from Olympias
and Skouries using flash smelting, a copper smelting technology
invented and developed by the Finnish company Outokumpu (which
owns the technology). The projects received an environmental
permit in 2011, but Eldorado has yet to prove that the
process can be successfully applied to a feed containing the
arsenopyrite concentrate from Olympias, which has a very high
arsenic content (10-12%; the highest percentage
normally accepted by smelters is 0.5%). Project critics
have long argued that, based on scientific literature and plant
practice reports, this process is unsuitable for such “dirty”
concentrates, and have accused Hellas Gold of lying in order to
obtain the environmental permit.

One year ago, in April 2015, this metallurgy study was returned
to the company once again as false and inadequate, on the
grounds that the semi-industrial scale metallurgical tests that
would prove the applicability of the method to the specific
concentrates of Halkidiki had not been conducted on site (in
Stratoni), as required by the ministry, but at Outotec’s
facilities in Pori, Finland. Eldorado then challenged the
ministry’s decision to the State Council. The State Council
ruled in favor of Eldorado and ordered the ministry to
re-evaluate the metallurgy study and issue a new decision,
taking into account the testwork conducted in Finland.

The recent decision is therefore in compliance with the State
Council ruling. The 29-page document describes in detail the
flaws and deficiencies of the study submitted by Eldorado,
including inconsistencies between the data and basic design
parameters provided in the various sections of the study,
incomplete documentation, and the absence of specific studies
on each of the nine unit processes that constitute the
integrated metallurgical process. Furthermore, inadequate
information is provided on the management of the highly toxic
offgases and fugitive emissions inside the plant, which are
dangerous for the health and safety of the workers. Due to the
extremely high arsenic content of the Olympias concentrate,
more than 20,000 tons of arsenic will vaporize on a yearly

Most importantly, the tests conducted by Outotec at its Pori
facility result in an intermediate product, a new “concentrate”
derived from the flash smelter matte, and not metallic gold,
silver and copper. The ministry stresses the fact that the
production of pure metals is an explicit obligation of Eldorado
under its contract with the Greek state and a fundamental term
of the environmental permit. Such a unilateral
modification of the original business plan would thus be in
violation of both of the environmental permit and the terms of
the contract. Ιn fact the use of flash smelting, as described
in the environmental permit, is an absolute term for the
implementation of Eldorado’s business plan.
is not allowed to opt for a different processing method or
substantially modify the current one, as any such modification
would have to go through the environmental permitting process
all over again.

Ιn January, 2016, Eldorado Gold suspended operations at the
Skouries project citing the ministry’s delay in issuing
“routine permits”. A number of secondary permits were issued in
the months that followed. Then on May 9, Eldorado announced
that it had been given the green light by the ministry to
proceed and that construction at Skouries would recommence.
Several important issues however remained open, as the minister
himself has stated, including the evaluation of the metallurgy
process which is at the core of the entire permitting scheme.
Eldorado knew this, but did not inform its

Should the company fail to provide satisfactory answers within
two months, then all of the permits issued so far –
and the investment contract itself – will be put in

This article was originally published by
Hellenic Mining Watch

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