Terrorists bomb Greek government office — Protest against TVX Olympias project injures police officer

Saying it was protesting plans by TVX Gold (TVX-T) to develop the Olympias gold project in northern Greece, a terrorist faction called the Fighting Guerrilla Formation exploded a bomb at the office of Greek Industry Minister Vasso Papandreou on Dec. 10.

The blast injured one member of a police bomb-disposal crew.

An anonymous call to an Athens newspaper warned of the attack, and that a second bomb had been placed at the Athens offices of TVX Hellas, TVX’s Greek subsidary. Nothing was found at the company offices.

Another anonymous tipster called a local radio station after the blast to claim responsibility and to say the first warning had been meant to lure the police’s anti-terrorist squad to the government office in central Athens.

The attack followed a bombing attempt a few days before, when another anonymous tip led police to the Industry Ministry, where they defused a home-made time bomb.

TVX has a feasibility study under way at Olympias, situated on Greece’s Khalkidiki Peninsula, where production from a lead-zinc-silver orebody started in 1976. TVX’s intention is to put the deposit’s gold resource — which occurs in refractory arsenic-rich zones of the main massive sulphide body — into production, and pressure-oxidize the material in an new recovery plant. The arsenic-rich mineralization raised fears of arsenic releases into the atmosphere or surface waters; that previous mining operations in the region had damaged some areas gave the fears greater credibility.

TVX, backed by the national government, put forward plans that included cleanup of the areas affected by earlier mining. Local residents organized some protests against the development in 1996, but more recently blocking the project has become a cause clbre among environmentalists and some local politicians.

In response to the environmental concerns, which were seen as threats to the tourist industry, the local municipalities agreed that the Greek national geological institute should recommend sites for the gold plant and tailings dam. Opponents of the project were not impressed: they blockaded the mine site, which led the government to reinforce the police presence in the area.

The protests turned ugly near the end of November, when a group of 20 protesters fired on three police vehicles.

TVX and the Greek government have since reaffirmed their commitment to the Olympias project and TVX still expects to deliver its feasibility report in early 1998.

TVX bought the assets of Kassandra Mines (including Olympias) in 1995 for US$47 million. The company expects to spend about US$300 million on the Olympias project, upgrading the existing base-metal operation and building the gold plant.

A lawsuit currently being tried in Ontario alleges that TVX used confidential information from a group of three investors in deciding to bid on its Greek properties, then held by Kassandra Mines. The investors, Hendrik Visagie, David Lean and James Stephenson, entered a joint-venture agreement with TVX in 1994 to bid on the property, an agreement from which TVX later withdrew.

The group is claiming ownership of the properties, or in the alternative, damages of $500 million plus a 12% interest in the properties with an option to buy an additional 12%. TVX counters that it acted on information that became public before it notified the investors that it was withdrawing from the agreement.

The base metal deposit at Olympias has a resource of 18.2 million tonnes grading 4.3% lead and 5.4% zinc. The gold resources include 12 million tonnes measured and indicated, grading 7.4 grams gold and 150 grams silver per tonne; 6 million tonnes inferred, grading 6.7 grams gold and 117 grams silver; and about 2.7 million tonnes of stockpiled muck and tailings.

Recent infill drilling in the West Zone of the Olympias deposit has confirmed earlier grade estimates of 5.5% lead and 7.7% zinc, plus 10.4 grams gold.

Operations at TVX’s two other Greek properties, the Skouries gold-copper project and the Stratoni lead-zinc mine, were not affected by the protests.

TVX’s resource calculation for Skouries is slated to be complete by the end of January.