When considering the plight of Europe, a handful of flailing countries should immediately spring to mind.
If you thought of Greece as being one of them… then good for you!
But conversely, when you are asked which European nation possibly holds more resource wealth than any other nation in the EU, which country now springs to mind?
Surprisingly, it’s Greece again.
And no, that’s not a type-o.
As bizarre as it sounds, the Greeks may have the magic bullet to a very successful (and profitable) turnaround – and sooner than you think.
You see, the world thinks of Greece as a ticking time bomb of unsustainable debt that constantly threatens to throw the Eurozone into a tailspin.
But while this is true, the Greeks also possess a rich abundance of natural resources, which could arguably make it one of the wealthiest countries in Europe and a serious producer on the world stage.
One of these resources is gold.
Gold Mining In Greece?
The current economic crisis has spurred a new urgency in the government to create jobs. And gold mining is gathering momentum after Greece began what it called a “fast-track” approvals program.
Today, companies like Eldorado Gold Corp. (ELD) and Glory Resources Ltd. (GLY) are developing four mines that should turn Greece into Europe’s biggest producer of the precious metal by 2016.
In other words, Greece is rich with gold and they’re open for business.
Sadly, had they adopted this pro-mining stance only a few years ago they could’ve lessened some of the pain they’re feeling today.
Case in point, Canadian-based European Goldfields Ltd. tried for three years to get drilling permits in Greece. Former Head of Business Development Steve Sharpe knew the vast potential the country had, and much of his Company’s future production was going to rely on Greek resources.
Unfortunately, during the long and painful wait to get approval, European Goldfields’ shares sunk like a stone from the recession and the company was acquired by Eldorado Gold Corp. in late 2011 for pennies on the dollar.
The web of bureaucratic red tape, taxes and fees known as the Greek government is so complex and difficult for foreign businesses to navigate through, that the European Commission estimated that the administrative burden to deal with it is equivalent to 7% of its GDP – twice the EU average.
But as I always like to say, better late than never.
Now it appears that Greece has finally come to terms with their counter-productive rules to conducting business.
Mining projects of “national importance” are finally being fast-tracked. Their archaic tax system is being revamped by the Ministry of Finance. It may be hard to believe, but Greece is rapidly becoming an attractive country for foreign investment.
Eldorado Gold and Glory Resources
As mentioned earlier, two of the more notable mining programs being expedited right now are for Eldorado Gold and Australian miner, Glory Resources.
The four mines approved between the two companies are slated to make Greece Europe’s largest gold producer by 2016 – overtaking Finland.
From the four mines alone, it’s estimated that within four years, gold production in the country will rise to 425,000 ounces from only 16,000 ounces produced last year.
That’s an increase of more than 26-fold and nearly double what Finland mined in all of 2011!
“We think Greece has the potential to be a major gold producer. It is bizarre that Greece is virtually unexplored because of the political situation that prevailed before the crisis,” says Jeremy Wrathall, Chairman of Glory Resources.
To make things even more interesting, modern exploration techniques have not been used in Greece at all – making the country an ideal target for miners itching to drill on rich, untapped land.
With Eldorado and Glory Resources leading the charge, I believe these companies will have a solid year as their Greek mines move closer toward production.
But these two miners have merely opened the door for others to move in, so don’t be surprised when Greece doles out more drill permits in the coming months.
I’m keeping a close eye on China, as they have always been keen on growing their market presence in Europe and the Middle East.
Recently, the Greek Consulate scheduled a major Privatization and Investment Forum in Shanghai to tout its 50 billion euro campaign to attract Chinese investors.
The aftermath of this forum could see Chinese firms move in quickly on affordable Greek assets, ultimately opening up the floodgates for foreign investment.
The Greeks may have dug themselves a hole that they can’t get out of.
But at least now there’s light at the end of the tunnel.
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