Eldorado Gold Receives Positive News From Greece

The company has established dialogue with Greek government officials

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In regard to the development of its Greek assets, Eldorado Gold Corp. (EGO, Financial) announced Sept. 21 it has established constructive dialogue with Greece's Ministry of Energy and Environment.Ă‚

Specifically, the discussions focus on the development of subsidiary Hellas Gold SA's Kassandra Mine assets, which include the Olympias, Stratoni and Skouries mines.

This news is positive for investors, who have seen the stock's market value increase nearly 9% to its current price of approximately $2.21 per share in less than one week after the Greek government issued several operational authorizations. At the same time, gold lost more than $27 per ounce, or 2.1%, on the London Bullion Market.

President and CEO George Burns said the management team is “very pleased with the constructive dialogue that is underway."

"Furthermore, last week the Ministry issued a number of long overdue routine permits for our Olympias project," he said. "As a result of these developments, we have decided to temporarily postpone our decision to place our assets in Halkidiki on care and maintenance."

In response to the Greek government’s slow response to issuing the necessary building permits and licenses for its projects, the Canadian miner announced last week it was halting investments in Greece and putting those assets on care and maintenance.

It did not act on that decision, however, because it received the necessary permits to continue its operations.

However, on Sept. 14, the company announced it had received an arbitration notice from the government agency, which claimed the company had violated its Transfer Contract and environmental terms of the project. Burns said he is confident the arbitration process will "be concluded in a timely and efficient manner."

Currently, Eldorado has market capitalization of $1.71 billion, a price-book (P/B) ratio of 0.46, a price-earnings (P/E) ratio of 276.25, a price-sales (P/S) ratio of 3.48 and an EV/Ebitda ratio of 13.40.

The analysts’ average target price is $3.17, and the recommendation rating is 2.6 out of 5.

Disclosure: I have no positions in Eldorado Gold Corp.