EGU.L Regulatory News (EGU)

21 Apr 2008 07:01

European Goldfields Ltd21 April 2008 For Immediate Release 21 April 2008 European Goldfields Limited Joint Venture finalised with Ariana Resources 21 April 2008 - European Goldfields Limited (TSX / AIM: EGU) is pleased toannounce that it has signed definitive documentation governing a Joint Venture("JV") with Ariana Resources plc (AIM: AAU) ("Ariana"). The JV will becomeeffective when the transfer of Ariana's properties, currently in progress, isconfirmed by the General Directorate of Mining Affairs in Turkey. The JVinvolves the development of Ariana's properties in north-eastern Turkey, whichinclude the Ardala copper-gold porphyry and fifteen other licences covering atotal area of 229km2. Highlights •JV to explore and develop Ariana's current properties in the Greater Pontides region of north-eastern Turkey ("the AOI") • Strategic Partnership within the AOI to define new opportunities for the JV •Right of first opportunity granted to European Goldfields outside the AOI •David Reading to join the board of Ariana as a non-executive director •European Goldfields to subscribe for 20% of the issued share capital of Ariana through a £900,000 private placement of shares Details of Joint Venture The JV is focused on the Greater Pontides region of Turkey, a highly prospectivegeological terrain containing several major deposits. The JV will focus initially on the Ardala copper-gold porphyry project which hasshown encouraging grades of copper and gold in previous exploration. It has a600m x 700m surface exposure centred on a magnetic high of 1,000m x 1,000mextent. Copper-gold mineralisation has also been identified on other propertiesin the vicinity of Ardala within granitoids and in the surrounding countryrocks. European Goldfields will own 51% of the JV company into which Ariana willtransfer the relevant properties. European Goldfields is funding all developmentcosts of these initial properties and any future properties located within theAOI until the delivery of the first Definitive Feasibility Study ("DFS"), atwhich time European Goldfields' interest in each relevant project will increaseto 80% on current licences in the JV or 90% on new areas generated by the JV. A period of joint funding after DFS has been agreed, but if at any time duringthis period Ariana is diluted to below 5% it will adopt a 1.5% Net SmelterReturn ("NSR") on the project in question. Any project that falls short of a0.5Moz Au (or equivalent) threshold, will be assigned back to Ariana, in whichcase European Goldfields will adopt a 1.5% NSR. Ariana has also granted European Goldfields a right of first opportunity overprojects located in Turkey but outside of the AOI, on terms that will beindependent of the JV agreement. This right will not apply within the WAVEProject Area in western Turkey, as Ariana intends to develop projects withinthis area independently. Subject to completion of the JV arrangements, European Goldfields will subscribefor new shares in Ariana at 5 pence per share in a private placement for a totalcash consideration of approximately £900,000, resulting in European Goldfieldsowning 20% of Ariana. As part of this subscription, European Goldfields hasagreed certain rights to maintain its interest at the 20% level. David Reading, CEO of European Goldfields commented: "We are delighted to enter into partnership with Ariana and see this as anexciting and relatively low risk entry into the highly prospective geologicalterrains of Eastern Turkey. Ariana's local skill and knowledge and its proventrack record within Turkey can allow exploration work to start almostimmediately on the current licence portfolio including the promising Ardalatarget. European's entry into Turkey is part of our focused growth strategy ofexpanding into the mineral belts of South East Europe." Dr. Kerim Sener, Managing Director of Ariana, commented: "The start of our Joint Venture and Strategic Partnership with EuropeanGoldfields in Turkey, marks a significant milestone in the development of theCompany. The combination of our in-country knowledge and skills, with thefinancial and technical strength of European Goldfields, is a win-win. Aspartners, Ariana and European Goldfields are ideally matched as we share acommon philosophy and sense of purpose". "We are delighted to welcome David Reading, CEO of European Goldfields, to theboard of Ariana as a non-executive director. He brings with him a new layer ofoperational expertise and corporate skills, that will be invaluable as Arianadevelops its projects in western Turkey." "The acquisition of 20% of the Company by European Goldfields, at a pricepremium to market, must be recognised as a sign of great confidence. With thisfunding secured, the next stages of our progress at Kiziltepe and Tavsan, willbe marked by an increase in tempo towards project development." About European Goldfields European Goldfields Limited is a resource company involved in the acquisition,exploration and development of mineral properties in Greece, Romania andSouth-East Europe. Greece - European Goldfields holds a 95% interest in Hellas Gold S.A. HellasGold owns three major gold and base metal deposits in Northern Greece. Thedeposits are the polymetallic operation at Stratoni, the Olympias project whichcontains gold, zinc, lead and silver, and the Skouries copper/gold porphyryproject. Hellas Gold commenced production at Stratoni in September 2005 andcommenced selling an existing stockpile of Olympias gold concentrates in July2006. Hellas Gold is applying for permits to develop the Skouries and Olympiasprojects. Romania - European Goldfields owns 80% of the Certej gold/silver project inRomania. European Goldfields submitted in March 2007 a technical feasibilitystudy to the Romanian government, in support of a permit application to developthe project. For further information please contact: European Goldfields Limited: e-mail: info@egoldfields.com David Reading, Chief Executive Officer Tel: +44 (0)20 7408 9534 Buchanan Communications: e-mail: bobbym@buchanan.uk.com Bobby Morse / Ben Willey Tel: +44 (0)20 7466 5000 Renmark Financial Communication: e-mail: tcameron@renmarkfinancial.comTina Cameron Tel: +1 514 939 3989 RBC Capital Markets: e-mail: andrew.smith@rbccm.com Andrew K Smith / Sarah Wharry Tel: +44 (0)20 7029 7882 Forward-looking statements Certain statements and information contained in this document, including anyinformation as to the Company's future financial or operating performance andother statements that express management's expectations or estimates of futureperformance, constitute forward-looking information under provisions of Canadianprovincial securities laws. When used in this document, the words "anticipate","expect", "will", "intend", "estimate", "forecast", "planned" and similarexpressions are intended to identify forward-looking statements or information.Forward-looking statements include, but are not limited to, the estimation ofmineral reserves and resources, the timing and amount of estimated futureproduction, costs and timing of development of new deposits, permitting timelines and expectations regarding metal recovery rates. Forward-lookingstatements are necessarily based upon a number of estimates and assumptionsthat, while considered reasonable by management, are inherently subject tosignificant business, economic and competitive uncertainties and contingencies.The Company cautions the reader that such forward-looking statements involveknown and unknown risks, uncertainties and other factors that may cause theactual financial results, performance or achievements of the Company to bematerially different from its estimated future results, performance orachievements expressed or implied by those forward-looking statements and theforward-looking statements are not guarantees of future performance. Theserisks, uncertainties and other factors include, but are not limited to: changesin the price of gold, base metals or certain other commodities (such as fuel andelectricity) and currencies; uncertainty of mineral reserves, resources, gradesand recovery estimates; uncertainty of future production, capital expendituresand other costs; currency fluctuations; financing and additional capitalrequirements; the successful and timely permitting of the Company's Skouries,Olympias and Certej projects; legislative, political, social 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; the risks normally involved in the exploration, development and miningbusiness; and risks associated with internal control over financial reporting.For a more detailed discussion of such risks and material factors or assumptionsunderlying these forward-looking statements, see the Company's AnnualInformation Form for the year ended 31 December 2006, filed on SEDAR atwww.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 newinformation, future events or otherwise, except as required by law. This information is provided by RNS The company news service from the London Stock Exchange