EGU.L Regulatory News (EGU)

6 Jun 2007 07:28

European Goldfields Ltd06 June 2007 Immediate Release 6 June 2007 Acquisition of an Additional 30% Interest in Hellas Gold Purchase Price Reflects 15% Discounted on Value of Hellas Gold 6 June 2007 - European Goldfields Limited (TSX / AIM: EGU) (the "Company" or"European Goldfields") wishes to clarify its announcement of June 1, 2007regarding the proposed acquisition of an additional 30% interest in Hellas GoldS.A. ("Hellas Gold"), increasing the Company's total interest to 95%. The purchase price for the acquisition was agreed at US$178 million. Thispurchase price incorporates a 15% discount to the "see-through" value of HellasGold, which includes the value of Hellas Gold's operating and development assetsand its cash balance of US$78 million. The "see through" value of Hellas Goldand the purchase price for the additional 30% interest in Hellas Gold werecalculated as follows: See through value of Hellas Gold US$m European Goldfields market capitalization as at May 31, 20071 553Less:Value attributed to European Goldfields' Romanian assets (15% ofmarket (83)cap)Cash held by European Goldfields as at April 30, 2007 (17)---------------------------------------- ---------See through value of European Goldfields' 65% interest in Hellas Gold 453See through value of 100% interest in Hellas Gold 698 Purchase priceSee through value of 30% interest in Hellas Gold acquired 209Less: 15% discount (31)---------------------------------------- ---------Purchase price 178 1 Based upon the five-day volume-weighted average trading price of the Company'sCommon Shares on the TSX (C$5.14), 115.1 million issued shares and a US$:C$exchange rate of US$1.00 = C$1.07. It is expected that approximately 94% of the $178 million purchase price will bepaid to Aktor S.A. in common shares of the Company, the balance to be paid incash. Of this cash portion, 50% will be re-invested by Aktor into Hellas Gold,as funding towards maintaining its residual 5% shareholding interest in HellasGold. The $31 million discount on the value of Hellas Gold represents an immediateaccretion of approximately C$0.22 per common share of the Company, after takinginto account the 35.25 million new common shares expected to be issued asconsideration for the acquisition. To demonstrate and confirm its long-term commitment to the Company, Aktor hasagreed not to sell the shares it receives as consideration until the earlier ofthe fourth anniversary of the closing of the acquisition and the date on whichthe Company's Skouries gold-copper porphyry mining project commences production. A preliminary prospectus relating to a concurrent offering of common shares ofthe Company has been filed with the securities commissions or similarauthorities in certain provinces of Canada. The preliminary prospectus containspro forma financial statements of the Company that give effect to the proposedacquisition. The assumptions used in estimating the number of common shares ofthe Company to be issued as consideration for the acquisition are set out in thenotes to such pro forma financial statements. For further information please contact: European Goldfields: e-mail: info@egoldfields.comDavid Reading, Chief Executive Officer Office: +44 (0)20 7408 9534 RBC Capital Markets Office: +44 (0)20 7653 4093Patrick Meier / Peter Barrett-Lennard Evolution Securities Office: +44 (0)20 7071 4300Simon Edwards / Neil Elliot Buchanan Communications: e-mail: bobbym@buchanan.uk.comBobby Morse / Ben Willey Office: +44 (0)20 7466 5000 Renmark Financial Communication: e-mail: nmurraylyon@renmarkfinancial.comNeil G. Murray-Lyon Office: +1 514 939 3989 This information is provided by RNS The company news service from the London Stock Exchange