Shares of Canadian gold miner Eldorado Gold (NYSE:EGO) are up 20% as of 11:30 a.m. EDT today. The stock surge comes on the heels of the Greek government announcing it will grant permits for Eldorado's projects in the country.
The Greek government and Eldorado have been at loggerheads over the past couple of years regarding Eldorado's mines in the country. Concerns over the environmental impact of the company's operations have resulted in the government dragging its feet with some permits and other approvals for the expansion of its existing Olympias mine and the Skouries development project. These two assets are critical to Eldorado's growth. Seventy-eight percent of Eldorado's capital spending is dedicated to these two mines and they represent some of the company's lowest-cost operations.
After threatening to cease operations at the two facilities and several of Eldorado's employees protesting the government, Greece's energy minister announced today that he expects to sign all outstanding permits for one of its mines. This should put the company back on track to a certain degree in the country.
Eldorado has big plans for its Greece operations. Olympias and Skouries are expected to generate close to 25% of its total gold production in the coming years. Working with the Greek government has been a sticking point for quite some time, but this is hopefully the first step in the right direction for the company. I can't say with any certainty that it will have similar success with its other projects there, though, which should give investors some pause.