Eldorado Gold Corp., battling to develop Greek mines in the face of government opposition, fell after the gold producer said it would suspend its operations in the north of the country.
The Vancouver-based producer tumbled 14 percent to C$4.48 at the close in Toronto, the biggest one-day drop since Jan. 21. The shares have declined 37 percent this year.
Citing an “openly hostile” Greek Energy Ministry, Eldorado said late Thursday it would suspend most mining and development activities at its operations in northern Greece including the Stratoni mine and Skouries and Olympias projects. It also said it would take legal action against the government’s decision, announced Wednesday, to revoke its technical studies at the development projects.
“At this point, Eldorado is unable to provide guidance with respect to timing of any potential court decision,” the company said in a statement.
The decision makes hostages out of almost 2,000 direct and indirect employees, the Greek Energy Ministry said in a statement later Friday on its website. It said the government won’t allow such tactics to become acceptable behavior.
Citing a lack of clarity about Eldorado’s operations in Greece, Bank of Nova Scotia cut its rating on the company’s shares to the equivalent of a hold from a buy. Prior to the announcement, Greek operations represented about 38 percent of the company’s overall net asset value per share, Scotia analyst Tanya Jakusconek said in a note Friday.
The Skouries gold and copper project in particular has attracted opposition concerned about its environmental impact. In 2013, police said they made arrests after masked attackers burned cars and machinery at the mine.
Eldorado also has assets in Turkey, China, Brazil and Romania.