RNS Number:5875W
European Goldfields Ltd
15 May 2007
Immediate Release 15 May 2007
European Goldfields Limited
RESULTS FOR Q1 2007
STRATONI INCREASES PRODUCTION
STRATONI SILVER RESERVE SOLD TO SILVER WHEATON
15 May 2007 - European Goldfields Limited (AIM: EGU / TSX: EGU) ("European
Goldfields" or the "Company") today reports its results for the first quarter to
31 March 2007. Highlights during 2007 are:
Financial highlights:
* Sales of US$17.1m in Q1 2007, compared to $9.1m in 2006 - Sales up 88%
* Profit (before tax) of $5.7m in Q1 2007, compared with $1.0m in 2006
* Operating cash flow increasing to $7.3m in Q1 2007, up $4.9m over 2006
* Working capital of $45.2m at 31 March 2007; $102.7m post sale of the
Stratoni silver stream in April
Operational highlights:
* Attractive price secured on Stratoni silver stream sold to Silver
Wheaton
* Best production to date from Stratoni mine and mill
* New economic mineralisation discovered at Stratoni
* Two new contracts signed for the sale of Olympias gold concentrates
* Skouries technical feasibility study nearly completed
* Albion Process Technology achieved 92% gold recovery on Certej composite
sample
* Technical feasibility study submitted to Romanian government
* Target exploration under way to extend Certej life-of-mine
Commenting on the results, David Reading, Chief Executive Officer of European
Goldfields, said: "Our Stratoni operations continue to ramp up and produce
strong operating cash flow. This combined with the proceeds of the sale of the
silver stream to Silver Wheaton means we now have approximately US$100 million
in cash, which we intend to use to accelerate the development of our major gold
projects in Greece."
Conference Call & Webcast - 16 May 2007 at 10am EST / 3pm GMT
European Goldfields will host a conference call on Wednesday 16 May 2007 at 10:
00 a.m. ET / 3:00 pm (London, UK time) to update investors and analysts on its
results.
Participants may join the call by dialing one of the three following numbers,
approximately 10 minutes before the start of the call.
From North America: (Local) 416-644-3424 or (toll free): 1-800-589-8577
From the U.K. & France (toll free): 00-800-0000-2288
From Austria, Belgium, Denmark, Germany, Ireland, Iceland, Netherlands, Norway,
Sweden, Switzerland and Italy (toll free): 00-800-0022-8228
A live audio webcast of the call will be available on:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1868460
For those unable to join the live conference call, a replay will be available
until Wednesday 23 May 2007 at midnight by dialing (toll free) 1-877-289-8525 or
1-416-640-1917, Passcode 21232409#.
SELECTED FINANCIAL DATA
Three months ended 31 March
-----------------------
------------ -------------
(in thousands of US dollars, 2007 2006
except per share amounts) $ $
------------------ ------------ -------------
Statement of loss and deficit
Sales 17,083 9,083
Gross profit 10,139 4,295
Profit before income tax 5,676 1,037
Profit after income tax 3,957 161
Non-controlling interest (1,848) (475)
Profit/(loss) for the period 2,109 (314)
Earnings per share 0.02 0.00
------------------ ------------ -------------
------------------ ------------ -------------
(in thousands of US dollars) 31 March 31 December
2007 2006
$ $
------------------ ------------ -------------
Balance sheet
Working capital 45,201 41,854
Total assets 325,501 311,943
------------------ ------------ -------------
European Goldfields' unaudited consolidated financial statements and
management's discussion and analysis for the three-months periods ended 31 March
2007 and 2006 are filed on SEDAR at www.sedar.com.
STRATONI OPERATIONS (GREECE)
Highlights:
* Attractive price secured on Stratoni silver stream sold to Silver
Wheaton
* Best production to date from mine and mill
* New economic mineralisation discovered at Stratoni
Attractive price secured on Stratoni silver stream sold to Silver Wheaton - In
April 2007, European Goldfields announced that its 65%-owned subsidiary Hellas
Gold S.A. ("Hellas Gold") had agreed to sell to Silver Wheaton Corp. all of the
silver metal to be produced from ore extracted during the mine-life within an
area of some 7 km(2) around its zinc-lead-silver Stratoni mine in northern
Greece. Silver production at Stratoni is a by-product of lead-zinc operations.
The sale was made in consideration of an upfront payment to Hellas Gold of
US$57.5 million in cash, plus a fee per ounce of silver to be delivered to
Silver Wheaton of the lesser of US$3.90 (subject to an inflationary adjustment
beginning after year three) and the prevailing market price per ounce. The
current Stratoni proven and probable silver reserve contains some 10Moz of
payable silver.
The deal amounts to $11.59 of revenue per payable reserve ounce of silver,
compared to the current silver spot price of $13.78/oz. On a discounted basis
(at 10%), this amounts to $10.39/oz of payable silver reserve, compared to the
current discounted silver spot price of $10.84/oz.
The transaction does not apply to any additional silver resources within Hellas
Gold's 317 km(2) of mining and exploration licences in northern Greece,
including silver resources at Hellas Gold's other mine of Olympias, except for a
right of first refusal granted to Silver Wheaton on similar future transactions
involving silver.
The proceeds of this transaction will be used to accelerate development and
provide flexibility in financing of the European Goldfields project pipeline in
Greece. The project development is planned in phases with the Company's flagship
project, the Skouries copper-gold porphyry, being a priority.
Best production to date from mine and mill - Hellas Gold has mined a total of
55,069 tonnes of ore in Q1 2007 at its Stratoni zinc-lead-silver plant in
Northern Greece, delivering against 2007 forecast and representing the best
quarterly production to date from the Stratoni mine and mill.
Hellas Gold completed five shipments of concentrates from Stratoni in Q1 2007,
compared with seven shipments in Q1 2006. This translates into the following
sales of concentrates:
Q1 2007 Q1 2006
Zinc concentrate (tonnes) 8,244 5,283
- Containing payable: Zinc (tonnes)* 3,463 2,335
Lead concentrate (tonnes) 3,774 4,623
- Containing payable: Lead (tonnes)* 2,486 3,166
Silver (oz)* 190,292 252,559
* Net of smelter deductions
In addition, Hellas Gold had a stockpile inventory of over 5,000 tonnes of zinc,
lead and silver concentrates at the end of Q1 2007.
Ore production rates from underground have steadily increased from 400 tonnes
per day in Q1 2006 to a steady 900 tonnes per day in Q1 2007 and the mine now
operates effectively at this level. Ore production is expected to continue to
ramp-up, up to a maximum of 400,000 tonnes per year by the end of 2009. This is
supported by the current development plan and the new decline which is scheduled
for completion by end of 2007.
Average ROM grades have increased between 6% and 12% for zinc, lead and silver,
reflecting the mining of higher grade areas in the upper levels of the orebody.
This has translated into a considerable improvement in concentrate grades in Q1
2007.
A ramp to access the upper parts of the mine is almost completed, along with
infrastructure to connect the upper part of the mine with existing ore bins to
improve ore handling and ventilation. This infrastructure has already started to
provide access to new working ends in the upper part of the mine to ensure the
ramp-up in production continues in 2007.
Significant progress has also been made on the new decline to the Mavres Petres
orebody, which has now approximately 1,300 metres and is advancing at over 5m
per day on average. The new decline is not necessary for mining in 2007 but
becomes critical for the future production ramp-up involving the deeper portions
of the orebody, as well as providing better ventilation.
Tailings strategy outlined - In order to ensure tailings storage capacity for
the life of mine, a global strategy for the management of tailings has been
developed by Hellas Gold. Additional tailings storage space has been created by
removing coarse tailings material from existing storage facilities to backfill
old mine workings. Dried fine material has also been moved from the existing
tailings ponds and placed in the voids created by removing the coarse tailings.
Following successful trials, two filter presses have been bought and will be
commissioned in Q2 2007. The filter press at the mill will be used for
processing the current production of fine tailings and water treatment sludge to
allow the maximum utilisation of the space created at the existing facility. The
second filter press will eventually be installed close to the new water
treatment plant, but will initially be used at the tailings ponds to treat the
wet tailings and water treatment sludge for dried cake storage. Current
production of coarse tailings from production will be used for backfill of
current workings.
Water management programme adopted - To reduce future water pumping and
treatment costs, Hellas Gold commenced backfilling of the old Madem Lakkos mine
workings. A total of some 20,000m3 of void has been filled so far. In addition,
a second water treatment plant at the Stratoni mine site will be commissioned in
2007 to improve efficiency and provide capacity for extreme rainfall events. The
new plant will include the second filter press to allow dry storage of treatment
residue as filter cake.
New economic mineralisation discovered at Stratoni - Economic mineralisation has
been encountered in the new decline running between the existing reserve and
mined-out areas at Madem Lakkos. The decline exposed some 35 metres of strike
length and a minimum of 4 metres width. The zone is located approximately
half-way between the two previously known deposits at Stratoni. Average grades
from panel sampling of 6.2% lead, 11.2% zinc and 105 g/t silver compare
favourably with current reserves. The zone is open along strike, up and down dip
and towards the hanging wall and is interpreted as a footwall zone to the main
marble horizon. In addition to the intersected zone, there is a high potential
for further mineralisation where the zone intercepts the main marble both up dip
and to the east. A drill programme designed to define at least 200 metres of
strike and 75 metres of dip extent will commence in May 2007. The new decline
will enable immediate access for mining of any new discovery in this area.
Exploration drilling in progress - In October 2006, European Goldfields began an
exploration drilling programme at Stratoni. Stratoni already has well-defined
reserves over a six-year life of mine. Six areas targeted by the drilling are
obvious extensions to known mineralisation, in addition to more conceptual
targets between the two main Stratoni deposits.
The two targets being investigated first are known extensions to previously
mined areas of the Stratoni (Madem Lakkos) deposit, where production grades of
9.0 to 10.7% lead, 9.0 to 9.6% zinc and 160.0 to 185.3 g/t silver are recorded.
The programme is aimed at drilling out resources in these areas of known
economic mineralisation.
Drilling into the known extensions of the upper part of the eastern deposit at
Stratoni (Madem Lakkos) has confirmed the geological model with mineralisation
occurring in the fold hinge of an antiform in the upper levels. Mine workings
that were not recorded in the old mine plans have been shown to be more
extensive than previously thought. A second deeper target at Madem Lakkos will
be drilled in Q2 of this year.
The drilling programme will also investigate inferred resources which form
extensions to the western deposit at Stratoni (Mavres Petres). The drilling
programme is designed to upgrade these inferred resources to the measured and
indicated categories. These inferred resources are extrapolations from the known
reserves and comprise some 555,000 tonnes grading 7.3% lead, 10.2% zinc and 181
g/t silver.
Additional drilling will also be conducted from the new decline at regular
intervals along the rest of the 1.5 kilometre zone between the existing reserve
and mined-out areas at Madem Lakkos.
The drilling programme aims to significantly increase reserves and life of mine.
The existing environmental and mining permits for Stratoni will allow Hellas
Gold to immediately exploit any new discoveries resulting from this drilling
programme.
SKOURIES & OLYMPIAS PROJECTS (GREECE)
Highlights:
* Two new contracts signed for the sale of Olympias gold concentrates
* Skouries technical feasibility study nearly completed
* Permitting process under way
* Permit-wide exploration under way - Twenty exploration targets
identified
Two new contracts signed for the sale of Olympias gold concentrates - Hellas
Gold's Olympias project benefits from an existing stockpile of gold bearing
pyrite concentrates representing at 31 December 2006 a reserve of approximately
251,000 tonnes grading 23.27 g/t gold (containing 188,000 oz of gold), in
addition to substantial underground reserves of gold, lead, zinc and silver.
In Q1 2007, Hellas Gold completed nine shipments of gold concentrates from the
Olympias stockpile, compared to Nil shipments in Q1 2006. This amounts to the
shipment of 13,778 wet metric tonnes (wmt) of gold concentrates in Q1 2007,
compared to Nil in Q1 2006.
February 2007, Hellas Gold entered into a second off-take agreement with Golden
China Resources Corporation ("Golden China") for the sale of 100,000 tonnes of
gold concentrates. This concentrate will be treated over a three year period on
an equal profit share basis at Golden China's new dedicated bacterial oxidation
plant in Shandong, China, which is expected to be commissioned in September
2007.
In April 2007, Hellas Gold S.A. also entered into a third off-take agreement
with MRI Trading AG ("MRI Trading") of Switzerland for the sale of an additional
25,000 wmt of gold concentrates previously produced at the Olympias mine in
Greece. Hellas Gold will receive payment for the full 25,000 wmt of concentrates
up-front upon shipment of the first lot in Q2 2007. MRI Trading also has the
option to increase its order by a further 25,000 wmt, which is exercisable by 31
July 2007.
Hellas Gold has now secured the sale of a total of 209,000 wmt of Olympias
concentrates (containing approximately 148,000 oz of gold) over a three year
period to four different off-takers - Golden China, MRI Trading AG, a subsidiary
of Celtic Resources and Euromin S.A. - with expressions of interest to sell up
to an additional 132,000 wmt of concentrates if the initial shipments are
successful.
Hellas Gold plans to resume underground mining operations at Olympias after the
necessary permits are awarded, producing further gold bearing pyrite
concentrates for sale to existing and new off-takers.
The price payable for the concentrates varies with the prevailing gold price.
The agreements produce an attractive return for Hellas Gold at a gold price of
US$500/oz.
Skouries technical feasibility study nearly completed - Hellas Gold has
completed most technical studies for the final bankable feasibility study on its
Skouries project in Northern Greece. Skouries is a typical gold-copper porphyry
deposit that forms a near vertical pipe. These studies include:
* A cost and definition study for the process plant and associated
infrastructure, undertaken by Aker Kvaerner Engineering Services
* A cost and definition study for underground mechanical and electrical
utilities, undertaken by Scott Wilson Mining
* The design of the tailings management facility, undertaken by Golder
Associates
* A study of hydrogeology and creek boundaries by the Greek Institute of
Geology & Mineral Exploration (IGME), to be used in the development of a new
hydrogeological model
* A reserves estimate, undertaken by SRK Consulting
* Mining studies undertaken by SRK Consulting, Scott Wilson Mining and
other international consultants.
Mining studies carried out to date confirm that Skouries can be mined as a low
strip open pit operation and as a highly productive underground mine. This would
produce annually up to 43,000t of copper and 220,000 oz of gold over a mine life
of over 20 years. This production rate is shown to be sustainable based on the
detailed mine design carried out by SRK Consulting and benchmarking with other
comparable mines.
The metallurgy at Skouries is considered to be straight-forward. The processing
will comprise gyratory crushing for open pit and underground ore, single-stream
SAG and ball-mill grinding. Approximately 30% of gold will be recovered by a
gravity circuit to produce dore on site. A highly-marketable copper/gold
concentrate will also be produced by conventional froth flotation, thickening
and filtration.
Extensive testwork completed by Lakefield Research and other consultants has
shown average recoveries of 84% gold and 91% copper can be achieved. Concentrate
grades of approximately 26% copper and averaging 27g/t gold are expected.
The concentrates will be trucked to Hellas Gold's port storage facility at
Stratoni, which is approximately 15km away by road from the proposed Skouries
plant site. Skouries is located on a high plateau with no habitation in the
vicinity.
The study by Golder Associates incorporates the latest paste production
technology in a phased tailings management facility (TMF) that will minimise
land take and embankment height and provides increased tailings stability. The
study shows that the paste tailings are inert. The use of paste tailings and a
phased TMF also allows sequential rehabilitation of the tailings management
facility to minimise active tailings areas.
The technical studies indicate to date that the project will require
approximately US$270 million in initial capital expenditure under the following
categories:
* $188 million for the process plant and associated infrastructure
* $53 million for the tailings management facility
* $21 million for the open pit
* $8 million for other costs
Operating costs for the open pit mining are expected to be Euro1.28 per tonne, and
Euro6.05 per tonne for the underground mining.
Hellas Gold plans to publish the results of the final feasibility study on
Skouries once the final Environmental Impact Study (EIS) is completed.
Hellas Gold has initiated discussions with Outokumpu Oy for the purchase of mill
and plant equipment and with Aktor S.A. for the construction of the plant and
related infrastructure.
Permit-wide exploration under way - Twenty exploration targets identified -
Hellas Gold holds 317 km(2) of highly prospective exploration licences in
northern Greece. Recent work by European Goldfields has highlighted a total of
twenty exploration targets, including six advance targets and extensions to
known deposits, seven targets of known mineralisation for follow-up work and
seven conceptual targets. The geological context of the targets has been
identified and a model for the emplacement of known mineralisation has now been
developed.
The model indicates that there are more than 20 km of structural corridors that
have acted as mineralising pathways with marble hosted polymetallic massive
sulphide mineralisation, including the Stratoni and Olympias deposits. The model
also identifies a 10 km long intrusive belt which hosts the Skouries copper/gold
porphyry.
A programme of mapping, reinterpretation and modelling has been undertaken on
the Piavitsa advanced target. This polymetallic massive sulphide target
comprises a 6 km mineralised structure with a 3.5 km central zone expressed by
old manganese oxide open pits. Within the zone, seven holes drilled by the
previous owners over 1300 metres of strike length and some 500 metres of known
down dip extent define three mineralised horizons averaging 12 metres width
including high grade zones averaging around six metres width. Grades within the
intercepts ranged from 0.3 to 22.2 g/t gold, 0 to 533 g/t silver, 0 to 26% zinc
and 0 to 12% lead. The current programme has confirmed the potential of the
Piavitsa target over a three kilometer strike length and has identified a high
grade shoot within the main horizon. The work also identifies previously
unsampled horizons of potential economic mineralisation and points to the
possibility of further high grade shoots at depth. These targets will be tested
with geophysics in H2 2007 and subsequently drilled out.
Pilot ground based geophysical programmes are currently under way in order to
assess the effectiveness of EM geophysical surveys over areas that are
prospective for massive sulphide mineralisation. Once the results have been
considered, European Goldfields plans to fly airborne magnetic surveys over the
entire licence block and airborne EM surveys over the massive sulphide belts.
The airborne surveys are planned for H2 2007 and are aimed at identifying new
target areas and prioritising these with existing targets in preparation for
drilling in 2008.
CERTEJ PROJECT (ROMANIA)
Highlights:
* Albion Process Technology achieved 92% gold recovery on composite sample
* Technical feasibility study submitted
* Environmental Impact Study nearly completed
* Final bankable feasibility study to be completed by end-2007
* Clear path to permitting
* Target exploration under way to extend life-of-mine
Albion Process Technology achieved 92% gold recovery on composite sample -
European Goldfields' 80%-owned Certej project involves the treatment of
flotation concentrate to produce a gold/silver dore by using the Albion Process.
The Albion Process is owned jointly by Xstrata and Highlands Pacific/OMRD and
the exclusive global agent is Core Resources. Xstrata and Core Resources offer
testwork, design and technical back-up to the technology.
The Albion Process is a combination of ultra-fine grinding of concentrates and
oxidatative leaching at atmospheric pressure. The liberated gold and silver is
then recovered to dore by the conventional Carbon in Leach process.
European Goldfields is currently completing an extensive metallurgical testwork
programme at the Core Resources nominated test facility, Hydrometallurgical
Research Laboratories (HRL), in Australia.
Recent results using the Albion Process suggest recoveries from a composite
concentrate sample of approximately 92% for gold and up to 95% for silver can be
achieved. The estimated residence times for obtaining the required degree of
oxidation and subsequent cyanide leaching together with the consumable levels of
oxygen, cyanide and limestone are in line with what would be expected with this
process. These factors impact positively on the project economics in terms of
both capital and operating costs compared to other technologies for treating the
Certej gold ores. European Goldfields is of the opinion that incorporating the
Albion Process into the treatment route provides a viable development option for
the Certej project.
Technical feasibility study submitted - In March 2007, European Goldfields
submitted a Technical Feasibility Study (TFS) to the Romanian government, in
support of its permit application to develop the Certej project.
The Technical Feasibility Study (TFS) pulls together all the constituent unit
operations of the Certej project from resource estimation to tailings disposal
in a single study document which is required by the Romanian government as part
of the permitting process. This document has been generated by Cepromin, a well
established Romanian consulting engineering group which ensures that it conforms
to the procedural requirements. The TFS comprises a number of specialist studies
undertaken by relevant experts and with the active involvement of European
Goldfields engineers.
The Certej reserve contains 27.7M tonnes of ore grading 2.0 g/t gold and 11.6 g/
t silver, representing 1.76Moz of gold and 10.4Moz of silver. The deposit
extends from surface and will be mined by open pit methods with a strip ratio of
3:1. RSG Global of Australia used all the available geological and technical
data to carry out pit optimisation work and this has resulted in a project which
is planned to involve the mining and processing of 3.0 Mt of ore per annum over
at least nine years.
The metallurgical process design is based on extensive testwork covering
comminution and flotation to produce a gold bearing concentrate and then
processing to dore by means of the Albion Process.The comminution and flotation
testwork has mainly been carried out by SGS-Lakefield of Canada who are well
regarded in the field. All the ore types respond well to flotation and at the
annual mining rate would yield approximately 275,000 tonnes of concentrate per
annum with high grades ranging between 17 - 22 g/t gold and 85 - 165 g/t silver
(depending on the source of the ore in the deposit), with a flotation gold
recovery of approximately 88%. This translates into an annual planned production
of approximately 170,000 oz of contained gold in the concentrate.
The flotation concentrate will then be directed to the Albion Process section of
the plant. The main pit material responds the best to the Albion Process and the
material from the West requires increased oxidation time and achieves
approximately 2% less gold recovery. The West ore will be processed at the end
of the project and therefore has less impact on the project economics. The TFS
has based the preliminary design and cost estimates of the Albion Process and
gold plants on the testwork by HRL.
The residues from the flotation and gold plants will be disposed of in two
separate but adjoining tailings management facilities (TMFs). The design of
these for the TFS has been carried out by the Department of Civil Engineering at
the University of Bucharest. This centre has carried out the design of many TMFs
in Romania which are presently in operation.
The TFS has used the data from the mining, processing, TMF and other studies to
establish operating and cost estimates and define the project to confirm the
viability of the project and provide technical back-up to the Environmental
Impact Study and a basis for the subsequent Bankable Feasibility Study.
Environmental impact study nearly completed - In 2006, European Goldfields
completed all necessary Environmental Impact Assessments (Levels I and II), a
Social Impact Assessment Study and an Archaeological Study, in support of its
permit application to develop the Certej project.
Work is now progressing well on the Environmental Impact Study (EIS), which is
due for completion in Q3 2007. The EIS will have been carried out over a period
of a year to cover the four seasons for accumulating certain required base line
data. The EIS is a detailed multi-discipline study assessing the environmental,
social and health impacts of the project on the affected area.
This study is being coordinated and managed by the independent Romanian
contractor, National Research and Development Institute for Industrial Ecology
(ECOIND) who have conducted many such studies for the Romanian authorities and
have an international reputation. ECOIND will ensure the EIS is prepared to the
regulatory framework established by Romanian law.
The EIS is a major landmark in the permitting process and the TFS forms part of
the back-up documentation required.
Final bankable feasibility study to be completed by end-2007 - The Bankable
Feasibility Study (BFS) will be the definitive study which will be used to
accurately assess the viability of the Certej project and for presentation to
the banks and other sources to raise finance for the project.
The TFS will provide the majority of the technical information and design
criteria for the BFS phase of the project.
The BFS is scheduled for completion in Q4 2007 and will be managed by European
Goldfields. The constituent studies will be conducted by suitably qualified
independent international contractors. An Invitation to bid for the process
section of the BFS will be issued to suitable consultants shortly.
The contractor conducting the BFS for the process plant and associated
infrastructure will include all the testwork information, including the final
results from the ongoing Albion Process testwork programme, the resulting design
criteria package for the Ultra Fine Grinding IsaMill and the leaching process
with the associated costs. The design put forward in the TFS will be refined,
expanded upon and carried out in more detail.
The BFS will include the final open pit optimisation study, which will take into
account the latest testwork and the effect on assessing ore extraction and
processing economics and include the results of the infilling drilling programme
currently in progress to convert inferred resources within the pit area.
Once the project finance is secured, the next step will be to advance to basic
and detailed engineering, construction and commissioning. The Certej project is
planned for a 2010 start up.
Clear path to permitting - European Goldfields has established a clear path to
applying for permits to develop the Certej project, having already submitted the
TFS to the Romanian government in March 2006. This will be followed by the
submission of the EIS in Q3 2007.
In September 2006, European Goldfields announced that the Hunedoara County
Council has issued a General Urbanisation Certificate for the Certej project.
The certificate confirms the designation of Certej as an industrial mining area
and confirms local community support for the project. This important milestone
is the first official step in the permitting process for Certej.
The permits and a detailed urbanisation plan are expected by the end of 2007
following a standard public consultation process with the local community.
Customary construction and public utility permits are expected to follow by
mid-2008 when the detailed engineering design has been completed for the site
plant.
Target exploration under way to extend life-of-mine - Exploration in Romania
will focus on extending the life-of-mine of the Certej project and increasing
the number of conceptual and regional targets for further exploration in the
South Apuseni Mountain area.
Certej life-of-mine extension work comprises drilling out inferred resources and
deeper, potentially high grade feeder zones, in-fill drilling and metallurgical
testwork on satellite deposits, investigation of high grade vein deposits near
to the project that could sweeten the feed grade in the early project life and
the development of targets that could enhance the value of concentrates
produced, by the addition of copper rich material for example. Drilling to
convert inferred resources (currently treated as waste where they fall in the
open pit) to the indicated category has now commenced and will be completed in
two phases, the second phase being results dependant. Phase one comprises a
total of eight diamond drillholes and phase two comprises seven diamond
drillholes.
European Goldfields has identified thirteen targets in total within its current
concessions and plans to carry out exploration work on six of them in 2007. The
two most advanced targets, Teascu and Pitigus, are effectively contiguous to one
another and are located some seven kilometres from Certej. In-house resource
estimates on these two targets are expected by Q3 2007 following in-fill
drilling.
European Goldfields is planning a major programme of airborne geophysics and
regional mapping and geochemical surveys in order to generate and prioritise
regional and conceptual targets in the region. The results will be used to
further develop the model built up during recent generative work which
highlighted the importance of the overall structural framework in controlling
intrusives and for the channeling, concentrating and trapping of mineralisation.
Systematic investigation of these targets, including drilling, metallurgical
testwork and resource definition, is planned for 2008.
For further information please contact:
European Goldfields: website: www.egoldfields.com
David Reading, Chief Executive Officer e-mail: info@egoldfields.com
Office: +44 (0)20 7408 9534
Buchanan Communications: e-mail: bobbym@buchanan.uk.com
Bobby Morse / Ben Willey
Office: +44 (0)20 7466 5000
Renmark Financial Communication: website: www.renmarkfinancial.com
Neil G. Murray-Lyon e-mail: nmurraylyon@renmarkfinancial.com
Office: +1 514 939 3989
Resources & reserves parameters
For additional information on the resource and reserve estimates quoted in this
news release, please refer to the Company's Resources & Reserves Declaration at
www.egoldfields.com/goldfields/resources.jsp. Patrick Forward, General Manager,
Exploration of the Company, was the Qualified Person under Canadian National
Instrument 43-101 responsible for reviewing the disclosure of resource and
reserve estimates quoted in this news release.
Forward-looking statements
Certain statements and information contained in this document, including any
information as to the Company's future financial or operating performance and
other statements that express management's expectations or estimates of future
performance, constitute forward-looking information under provisions of Canadian
provincial securities laws. When used in this document, the words "anticipate",
"expect", "will", "intend", "estimate", "forecast", "planned" and similar
expressions are intended to identify forward-looking statements or information.
Forward-looking statements include, but are not limited to, the estimation of
mineral reserves and resources, the timing and amount of estimated future
production, costs and timing of development of new deposits, permitting time
lines and expectations regarding metal recovery rates. Forward-looking
statements are necessarily based upon a number of estimates and assumptions
that, while considered reasonable by management, are inherently subject to
significant business, economic and competitive uncertainties and contingencies.
The Company cautions the reader that such forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause the
actual financial results, performance or achievements of the Company to be
materially different from its estimated future results, performance or
achievements expressed or implied by those forward-looking statements and the
forward-looking statements are not guarantees of future performance. These
risks, uncertainties and other factors include, but are not limited to: changes
in the price of gold, base metals or certain other commodities (such as fuel and
electricity) and currencies; uncertainty of mineral reserves, resources, grades
and recovery estimates; uncertainty of future production, capital expenditures
and other costs; currency fluctuations; financing and additional capital
requirements; the successful and timely permitting of the Company's Skouries,
Olympias and Certej projects; legislative, political, social or economic
developments in the jurisdictions in which the Company carries on business;
operating or technical difficulties in connection with mining or development
activities; the speculative nature of gold and base metals exploration and
development, including the risks of diminishing quantities or grades of
reserves; the risks normally involved in the exploration, development and mining
business; and risks associated with internal control over financial reporting.
For a more detailed discussion of such risks and material factors or assumptions
underlying these forward-looking statements, see the Company's Annual
Information Form for the year ended 31 December 2006, filed on SEDAR at
www.sedar.com. The Company does not intend, and does not assume any obligation,
to update or revise any forward-looking statements whether as a result of new
information, future events or otherwise, except as required by law.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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