EGU.L Regulatory News (EGU)

12 Dec 2005 07:01

European Goldfields Ltd12 December 2005 For Immediate Release 12 December 2005 European Goldfields Limited FIRST ZINC SHIPMENT COMPLETED AT STRATONI European Goldfields Limited (AIM: EGU / TSX: EGU) is pleased to announce thatits 65%-owned subsidiary Hellas Gold S.A. has completed its first shipment of2,450 wet metric tonnes of zinc concentrates. The shipment was carried by a vessel loaded at Hellas Gold's Stratoni port,commissioned by MDIL (UK) Ltd under the off-take agreements announced on 10November 2005. The next shipment for lead/silver concentrates is scheduled in January 2006. Commenting on the shipment, David Reading, Chief Executive Officer of EuropeanGoldfields, said: "This first shipment in December is yet another milestone achieved this year,which follows the award of the Stratoni permits and plant commissioning inSeptember, the start of underground mining in October and the signing ofoff-take agreements in November. Building on the success at Stratoni, we lookforward to making significant progress on our other major gold and base metalsprojects of Olympias and Skouries in 2006." Background on Stratoni The Stratoni mill commenced production of concentrates in September 2005following the award by the Greek state of all necessary environmental and miningpermits. Based on historical production levels, the Stratoni mine is expected toproduce consistent grades of 8-10% lead, 8-11% zinc and 200 g/t silver, withconcentrator metal recoveries consistently high at around 90%. New production from underground started in October 2005. Production of ore overthe current life of mine is expected to reach the following volumes of ROM: - Year 1: 170,000 tonnes- Year 2: 250,000 tonnes- Year 3: 300,000 tonnes- Year 4: 375,000 tonnes- Year 5: 400,000 tonnes- Year 6: 400,000 tonnes The total proven and probable reserve at Stratoni is 1.923Mt grading 10.8% zinc,8.1% lead and 190 g/t silver. For additional information on the resource andreserve estimates for the Company's projects, please refer to the Company'sResources & Reserves Declaration at www.egoldfields.com/goldfields/resources.jsp. About European Goldfields European Goldfields Limited is a resource company involved in the acquisition,exploration and development of mineral properties in Greece, Romania and theBalkans. Greece - European Goldfields holds a 65% interest in Hellas Gold S.A. HellasGold owns assets in Northern Greece which consist of three deposits within70-year mining concessions covering a total area of 317 km(2). The depositsinclude the polymetallic projects of Stratoni and Olympias which contain gold,lead, zinc and silver, and the copper-gold porphyry body referred to asSkouries. All three deposits have been well defined with over 200,000 metres ofdrilling and the completion of feasibility studies and later engineeringstudies. The total proven and probable reserves of these assets are 17.2 Moz on a goldequivalent basis (65% attributable = 11.2 Moz) from a measured and indicatedresource base of 21.8 Moz gold equivalent (65% attributable = 14.2 Moz). These assets represent some of the largest defined deposits in Europe. The threedeposits are located within a 10 km radius of each other, making thiseffectively a gold and base metals centre. Furthermore, both Stratoni andOlympias were previously in production and have extensive existing mining andplant infrastructure and a ship loading facility on the Aegean Sea. HellasGold's assets also include potential revenue generating stockpiles and tailingslocated on the surface. In September 2005, Hellas Gold resumed production at Stratoni following theaward by the Greek state of all necessary environmental and mining permits.Production of ore is expected to reach 170,000 tonnes by the end of the firstyear of production, steadily increasing to 400,000 tonnes per annum by yearfive. Hellas Gold is in the process of applying for similar permits for Olympiasand Skouries. Romania - European Goldfields holds five mineral properties located within the "Golden Quadrilateral" area of Romania, where it has recently completed anin-house pre-feasibility study underpinning the value of its 80%-owned Certejdeposit. The Certej deposit hosts measured and indicated resources of 31.4 Mtgrading 2.1 g/t gold and 11 g/t silver for 2.34 Moz of gold equivalent (80%attributable = 1.88 Moz). For further information please contact: European Goldfields: David Reading, Chief Executive OfficerDavid Grannell, Chief Financial OfficerOffice: +44 (0)20 7408 9534 e-mail: info@egoldfields.comMobile: +44 (0)7703 190 652 website: www.egoldfields.com Buchanan Communications:Bobby Morse / Ben Willey e-mail: bobbym@buchanan.uk.comOffice: +44 (0)20 7466 5000Mobile: +44 (0)7802 875 227 The Sherbourne GroupForbes West e-mail: forbes@sherbournegroup.caOffice: +1 416 203 2200 Forward-looking Statements Certain information included in this document, including any information as tothe Company's future financial or operating performance and other statementsthat express management's expectations or estimates of future performance,constitute "forward-looking statements." The words "expect", "will", "intend","estimate" and similar expressions identify forward-looking statements.Forward-looking statements are necessarily based upon a number of estimates andassumptions that, while considered reasonable by management, are inherentlysubject to significant business, economic and competitive uncertainties andcontingencies. The Company cautions the reader that such forward-lookingstatements involve known and unknown risks, uncertainties and other factors thatmay cause the actual financial results, performance or achievements of theCompany to be materially different from its estimated future results,performance or achievements expressed or implied by those forward-lookingstatements and the forward-looking statements are not guarantees of futureperformance. These risks, uncertainties and other factors include, but are notlimited to: changes in the worldwide price of gold, base metals or certain othercommodities (such as fuel and electricity) and currencies; ability tosuccessfully integrate acquired assets; legislative, political or economicdevelopments in the jurisdictions in which the Company carries on business;operating or technical difficulties in connection with mining or developmentactivities; the speculative nature of gold and base metals exploration anddevelopment, including the risks of diminishing quantities or grades ofreserves; and the risks involved in the exploration, development and miningbusiness. These factors are discussed in greater detail in the Company'sManagement's Discussion & Analysis for the year ended 31 December 2004 filed onSEDAR at www.sedar.com. The Company disclaims any intention or obligation toupdate or revise any forward-looking statements whether as a result of newinformation, future events or otherwise. This information is provided by RNS The company news service from the London Stock Exchange