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Newsletter Οκτώβριος 2012

ANALYSIS

Minerals and Metallurgy—Unique Prospects

The Minerals and Metallurgy sector of Greece, with roots in Ancient times, offers investors attractive potential for investment in an area with significant resources and strong demand.

From the days when the famous marble of Pendeli was quarried to build the Acropolis of Athens, Greece has been known for its superb mining wealth. Today, Greek marble remains in demand worldwide and, in addition, other minerals share the spotlight in international markets.

The Greek mining and metallurgy industry accounts for approximately 4 percent of GDP and employs roughly 80,000 workers. An important part of production supplies raw materials for cement, the generation of energy, and to manufacture non-ferrous metals such as aluminum and nickel. With annual sales of almost 1.2 billion Euros, the sector is important for employment and future growth.

Export Profile
The mining industry has a strong outward-looking profile and exports account for more than 70% of sales. For certain minerals Greece holds a leading position in the global market.

Greek mining companies are well run and hold significant market shares worldwide in products such as bauxite, alumina, aluminum, nickel, caustic calcined magnesia, dead burned magnesia, raw magnesite, pumice, silica and ornamental stones.

Gold Mining
Greece also has gold deposits and significant gold reserves have been identified in Thrace.

In 2011, Canadian Eldorado Gold Corporation acquired all of the issued and outstanding common shares of European Goldfields Ltd. and its multi-stage assets located in Greece. The total transaction value was approximately C$2.5 billion. In Greece, it operates Thracian Gold Mining. 

In describing its operations in Greece, Thracian Gold Mining has stated: “Nature has been generous in the region of Thrace, as far as the gold reserve in Perama, which is geographically located in a highland region away from urban centers, without any development pattern and proper for mining operations.

“The Perama Hill gold project, located in the Northeastern Greece, in the border between the Rodopi and Evros Prefectures, is a late-stage development project in Greece. The project, with presently defined proven and probable reserves of 975,000 ounces of gold, will be developed as an open pit mine producing approximately 120,000 ounces annually at cash costs projected to be less than US $300 per ounce. Total invested capital will be approximately 150 million Euros.”

Other Specific Projects
Privatisation of LARCO, the 5th largest nickel producing company in the world. According to the Medium-Term Fiscal Strategy, 55.2% of the shares of LARCO that belong to the Hellenic Republic will be sold. The Ministry of Finance has appointed HSBC Bank PLC and PriceWaterhouseCoopers Business Solutions as financial advisors.

Larco General Mining & Metallurgical Company S.A. engages in the exploration, mining, smelting, and marketing of ferronickel. It offers nickel and aggregates for steel producers in Europe. The company also provides slag for the production of concrete, and for covering of oil tubes or other similar works in Europe, North Africa, and the Middle East. Larco General Mining & Metallurgical Company S.A. was founded in 1963 and is based in Athens.

Greece’s mining industry employs a well-educated, highly skilled workforce and has well trained technical staff. In addition, the fine tuning of the industry for many years has led to competitive operating costs.

Greece offers generous investment incentives and the Fast Track Law supports large-scale projects.

Currently, a number of tenders are underway.
• Sappes project, Au [GOLD], Ag [SILVER], 0.8 bn € total value
• Perama project Au [GOLD], Ag [SILVER], 1.8 bn € total value
• Olympias project Pb [LEAD], Zn [ZINC], Au [GOLD], Ag [SILVER], 6.4 bn € total value
• Skouries project Cu [COPPER], Au [GOLD], 8.6 bn € total value
• Stratoni project Pb [LEAD], Zn [Zinc], Ag [SILVER], 0.6 bn € total value

Public consultation for the launch of three international public tenders for the lease of three public mining sites:
• Kallintiri
• Vathi – Gerakari
• Polikastro – Skra