EGU.L Regulatory News (EGU)

10 Jan 2005 07:00

European Goldfields Ltd10 January 2005 For Immediate Release 10 January 2005 European Goldfields Awarded New Exploration Licence in Romania European Goldfields Limited (AIM: EGU / TSX-V: EGU) (the "Company") is pleasedto announce that its wholly-owned subsidiary European Goldfields Romania SRL hasbeen awarded by The National Agency for Mineral Resources in Romania (NAMR) anexploration license for the Cainel perimeter located in the historic goldproducing area of the "Golden Quadrilateral" area of Romania. The licence wasawarded following a public tender in which two other exploration companiesparticipated. The licence is for an initial term of three years, renewable for an additionalterm of three years under certain conditions. The licence covers an area of 31.3km2 and lies only 10 km to the northwest of the Company's 80%-owned Certejdeposit and surrounding satellite bodies, where the Company has undertaken anin-house resource development and pre-feasibility programme, expected to becompleted by the second quarter of 2005. To date, encouraging drilling results highlight grade continuity at Certej andthe potential to optimise and redesign an appropriate open pit for exploitingthe deposit. A previous resource estimate of the Certej deposit undertaken byRSG Global of Perth, filed on SEDAR on 29 January 2004 under the category "Engineering Report", outlined an indicated resource of 34.7Mt grading 2.1g/tgold and 10 g/t silver for 2.5Moz Au Eq. This estimate was based on a selectivemining unit model utilising 10 x 10 x 10 metre blocks and a 1g/t Au cut off. Mineralisation in the Cainel perimeter occurs as brecciation, alteration andveining associated with intermediate intrusive and extrusive Neogene volcanicswithin Neogene sediments and occurs along the same northwest trending structuralbelt as the Certej deposit. Historic workings indicate that the mineralisedsystems occur over a strike length of some 1000 metres and over a discontinuouswidth of some 250 metres. The Cainel perimeter has never been available to a commercial explorationcompany. However, the area has been the subject of sporadic small scaleunderground mining since 1844, though records show that this only exploited atdepth with the top 200 metres being preserved. Simple gravity recovery methodsutilised in the historic operations indicate that the gold occurred freely andthe ore is non-refractory. Furthermore, exploration of known veining was conducted by the Romanian Stateminerals company Minexfor between 1958 and 1977. Exploration indicated that theaverage grade of the veins was between 3.4 and 3.9 g/t Au based on gravimetricassays only, further supporting the evidence for free gold. Neither the historic production nor the exploration tested the extensive wallrock alteration and brecciation around the veining. However, recent grabsampling at surface conducted by European Goldfields has indicated the followinggrade ranges in mineralised areas: - Altered andesite 0.1 to 39.7 g/t Au- Veining 0.3 to 18.6 g/t Au- Breccia 0.1 to 8 g/t Au Areas of waste rock and tailings have also been identified on the licence andthe historic exploration programme by Minexfor indicated that one waste dump hadan average grade of between 0.8 and 0.9 g/t Au. Grab sampling by EuropeanGoldfields indicates that waste material grades between 0 and 152 g/t Au. European Goldfields plans a programme of orientation work in early 2005 followedby a systematic evaluation of the Cainel perimeter using diamond core drilling,channel sampling of accessible outcrop and underground workings and bytrenching. Finally, the Company has decided to relinquish its 80%-owned exploitationlicence for the Zlatna perimeter in Romania where exploration undertaken since1999 had not yet demonstrated the economic viability of the deposit. This willallow the Company to concentrate its exploration and pre-feasibility activitiesto the more contiguous Certej and Cainel perimeters. David Reading, Chief Executive Officer of the Company, said: "The new licence award consolidates the position of European Goldfields as aprominent exploration company in Romania, one of the most prominent goldprovinces in Europe. We will benefit from the close proximity of the Cainellicence to our existing Certej operations in further developing an area ofconsiderable opportunity. "This award provides European Goldfields with a strong growth platform inRomania, enhancing our ability to further extract value through ourcomprehensive knowledge of the area as well as through our strong partnerships." Disclaimer The quantity and grade of the possible Cainel mineral deposit is conceptual innature, there has been insufficient exploration to define a mineral resource onthe property and it is uncertain if further exploration will result in discoveryof a mineral resource on the property. Forward-Looking Statements This news release contains certain forward-looking statements concerning theCompany's future operations, economic performances, financial condition andfinancing plans. These statements are based on certain assumptions and analysesmade by the Company in light of its experience and its perception of historicaltrends, current conditions and expected future developments as well as otherfactors the Company believes are appropriate in the circumstances. However,whether actual results and developments will conform with the Company'sexpectations and predictions is subject to a number of risks, uncertainties andassumptions. Consequently, all of the forward-looking statements made in thisnews release are qualified by these cautionary statements, and there can be noassurance that the results or developments anticipated by the Company will berealised or, even if substantially realised, that they will have the expectedconsequences to or effects on the Company and its subsidiaries or theirbusinesses or operations. The Company undertakes no obligation and does notintend to update or revise any forward-looking statements, whether as a resultof new information, future events or otherwise, except as may be required underapplicable law. For further information please contact: European Goldfields:David Reading, Chief Executive OfficerDavid Grannell, Chief Financial Officer London Office: +44 (0)20 7408 9536 e-mail: info@egoldfields.comLondon Mobile: +44 (0)7703 190 652 website: www.egoldfields.com Buchanan Communications:Bobby Morse / Ben Willey +44 (0)20 7466 5000 e-mail: bobbym@buchanan.uk.com The TSX Venture Exchange has not reviewed and does not accept responsibility forthe adequacy or accuracy of this release and the information contained herein. This information is provided by RNS The company news service from the London Stock Exchange