EGU.L Regulatory News (EGU)

19 Jul 2007 07:00

European Goldfields Ltd19 July 2007 Immediate Release 19 July 2007 European Goldfields Limited Ministry of Development Completes Review of Business Plan for Greek Gold Projects 19 July 2007 - European Goldfields Limited (TSX / AIM: EGU) (the "Company" or"European Goldfields") is pleased to announce that Hellas Gold S.A. has receiveda formal letter confirming that the Greek Ministry of Development has completedits review of Hellas Gold's business plan submitted in January 2006 for thejoint development of the Skouries and Olympias gold and base metals projects inNorthern Greece. In the letter, the Ministry of Development also re-declares its positive opinionof Hellas Gold's preliminary environmental impact study ("PEIS") which hasalready been submitted, and formally requests the Ministry of Environment toissue its official approval of the PEIS. The letter also states that the Ministry of Development "is in agreement withthe development of the project described in the business plan, as thisinvestment is particularly beneficial to the national and local economy (...)and reflects the intent of the contract signed between the Greek State andHellas Gold". This letter is addressed to Hellas Gold and the Ministry of Environment andrepresents a statement of support for the projects based on detailed studiescompleted by appropriate technical and advisory bodies appointed by the Ministryof Development. This letter represents the foundation for the fulfilment ofHellas Gold's business plan for Skouries and Olympias, in compliance with theGreek and EU legal framework. The business plan focuses on a phased approach to the development of theSkouries gold-copper porphyry deposit and the Olympias gold-lead-zinc-silverdeposit. The principal revenue stream in the early phases will be through thesale of concentrates. Hellas Gold's current plan is to develop Olympias in threephases to allow refurbishment of existing infrastructure and the subsequentconstruction of new gold processing facilities at Stratoni. Skouries willinitially be mined as a low strip open pit operation, followed by highlyproductive underground mining. This letter from the Ministry of Development re-confirms an earlier statementmade by the General Secretary of the Greek Ministry of Development, Mr NikosStefanou, when he publicly stated that the Government of Greece fully supportsthe development of mining projects in Chalkidiki, the region where the Skouriesand Olympias projects are located. In his speech, Mr Stefanou stated that "Themining Industry is extremely important for the regional development of Greece"and more specifically that "The government supports the development of the goldmining business in Chalkidiki, according to the environmental framework. Theexecution of this initiative will develop this region and provided work for 600people in the construction phase and 1300 people in the production." The speechwas made on 10 May 2007 in Athens and is available at www.ypan.gr/c_announce/45_3927_cms.htm. Commenting on the announcement, David Reading, Chief Executive Officer ofEuropean Goldfields, said: "We are delighted to report that the Greek Ministryof Development has completed its review of our business plan for the jointdevelopment of the Skouries and Olympias projects and that the ministryconfirmed our business plan is fully compatible with the socio-economic policiesof the Greek government. This means that our permit application has now passedthe stages of financial, technical and social evaluation and that only theapproval by the Ministry of Environment of our Preliminary Environmental ImpactStudy remains before we can proceed with the submission of our final EIS. Withsupport at the local and national levels in Greece and with a cash balance ofover US$200 million, we now plan to accelerate with renewed confidence thedevelopment of these projects." Hellas Gold is currently finalising a full environmental impact study ("EIS")which is expected to be submitted to the Greek government in the fourth quarterof 2007, addressing any comments received on the PEIS. On approval of the EIS,the environmental permits for Skouries and Olympias are expected to be issued.Hellas Gold now has clear guidelines from the Ministry of Environment on alltopics and technical studies that must be included in the EIS. Hellas Gold will then submit to the Greek government a final technical report onthe Skouries and Olympias projects, which will restate the principles of thebusiness plan and take into account any conditions detailed in the environmentalpermit. The mining permits are expected to be issued on approval of thetechnical report by the Greek government. About European GoldfieldsEuropean Goldfields 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 projects of Stratoni and Olympias which containgold, zinc, lead and silver, and the Skouries copper/gold porphyry body. HellasGold commenced production at Stratoni in September 2005 and selling an existingstockpile of Olympias gold concentrates in July 2006. Hellas Gold is applyingfor permits to develop the Skouries and Olympias projects.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: e-mail: info@egoldfields.comDavid Reading, Chief Executive Office: +44 (0)20 7408 9534Officer 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 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 Annual Information 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