Canadian mining company suspends work at Greek site, lays off 600

ATHENS, Greece -- Canadian mining company Eldorado Gold says it is suspending work at a site in northern Greece and laying off 600 workers following protests by local residents and a spat with the country's government.

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The Vancouver-based company (TSX:ELD) says it's suspending operations at a gold mine at Skouries, one of four major Greek sites where Eldorado is involved through its subsidiary Hellas Gold.

Eldorado Gold CEO Paul Wright said a further 500 jobs at another project were also likely to be cut later in the year.

Wright accused the government of using the mining project as a "political toy" but insisted the company had no plans to pull out of Greece.

Eldorado says it has invested more than US$700 million since 2012, including taxes to the Greek government, for development of the Skouries and Olympias projects.

Elected a year ago, the left-wing government has expressed support for resident protest groups near Skouries who oppose the project on environmental grounds.

There have also been both pro-mine protests, including one in April 2015 that attracted an estimated 4,000 supporters of the Skouries mine that caused police to shut down major roads in Athens for several hours.

The company announced Monday, after North American stock markets closed, that it would be making significant changes to its investment plans in Greece, including a suspension of work at the Skouries project. It says it would spend about US$1 million per month to maintain the site's assets and safeguard the environment.

Eldorado also warned that Phase 2 of its Olympias underground mine, which is scheduled to begin producing ore by the first quarter of 2017, could also be suspended if it doesn receive a necessary permit by the end of March. Hellas Gold currently employs 500 people at that site.

And its Stratoni Mine, which currently has about three years of known reserves, is under review "in light of the current investment climate in Greece." The mine requires additional development and drilling that would cost US$25 million over the next three years, the company said.

Eldorado says it will provide further plans for 2016 on Jan. 25.

With files from The Canadian Press



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