Shares of Eldorado Gold Corp (USA) (NYSE:EGO) are tumbling today on news that the company’s subsidiary, Hellas Gold will suspend their Skouries Project in Halkidiki, Northern Greece. This, in conjunction with the decline in the price of gold today, has sent shares down over 20% this afternoon.
The suspension results in the lack of permitting that they have been able to receive from several Greek government agencies. This has been due to lobbyists who are against such projects. While this news sounds rather bleak, the company is seeking to remedy the situation in court.
On another front, Eldorado Gold Corp (USA) (NYSE:EGO) had some good news for another one of their projects, the Olympias Project.
“As part of Phase 2 of the Olympias Project, the underground mine is being readied to produce ore at a mining rate of approximately 385,000 tonnes per year,” the company explained. “As of the first quarter 2017, ore from the mine will then be treated at the Olympias mill, where refurbishment at a cost of approximately US$55 million is expected to be completed in 2016. However, refurbishment plans are dependent on the Ministry granting the required installation permit. In December 2015, Hellas Gold submitted all necessary documentation to the Ministry required to obtain this permit, which must be granted within 60 days from the time of submission according to the Greek mining regulations. Should the Ministry fail to issue the installation permit by the end of the first quarter 2016, Hellas Gold will also be forced to suspend all construction and development activities at its Olympias Project. There are currently approximately 500 people working on the Olympias Project.”
The stock is down 20.03% or $0.62 following the news, hitting $2.45 per share. About 6.78M shares traded hands or 115.24% up from the average. EGO has declined 32.97% since June 8, 2015 and is downtrending. It has underperformed the S&P500 by 25.49%.
From a total of 8 analysts covering Eldorado Gold Corporation (NYSE:EGO) stock, 2 rate it a “Buy”, 0 a “Sell”, and 6 a “Hold”. This means that 25% of the ratings are positive. The highest target price is $7 while the lowest target price is $3.75. The mean of all analyst targets is $4.99 which is 103.67% above today’s ($2.45) stock price. Eldorado Gold Corporation was the topic of 17 analyst reports since July 31, 2015 according to the firm StockzIntelligence Inc. RBC Capital Markets maintained shares on November 3 with a “Outperform” rating. TD Securities initiated shares with a”Hold” rating and a $4.50 target share price in their report from an August 20. Zacks upgraded EGO stock in a recent report from September 21 to a “Hold” rating. Finally, Howard Weil downgraded the stock to a “Outperform” rating in a report they issued on an August 24.
Eldorado Gold Corporation owns and operates mines around the world. The company has a market cap of $2.11 billion. The Company’s activities involve various facets of the mining industry, including exploration, development, production and reclamation. It currently has negative earnings. The Company’s operating gold mines include Kisladag in Turkey , Efemcukuru in Turkey (100%), Tanjianshan in China (90%), White Mountain in China (95%) and Jinfeng in China (82%).