5th Oct 2006 08:42
European Goldfields Ltd05 October 2006 For Immediate Release 5 October 2006 LICENCE AGREEMENTS SIGNED FOR ALBION PROCESS AT CERTEJ European Goldfields Limited (AIM: EGU / TSX: EGU) is pleased to announce that ithas entered into Licence Agreements securing the Albion Process Technology forits 80%-owned Certej project in Romania. The Licence Agreements were entered into with Xstrata Queensland Limited andHighlands Frieda Limited, the co-owners of the technology. Commenting on the agreements, David Reading, Chief Executive Officer of EuropeanGoldfields, said: "We are delighted to be involved with companies such asXstrata, Highlands and their agent Core Resources in the development of theCertej project. The Albion Process is an exciting technology which is wellsuited to Certej and which should significantly increase the profitability ofthe project." Flexibility of two viable development options - European Goldfields is activelypursuing two viable development options for the Certej project: • the production and sale of high-grade gold/silver flotation concentrates • the production of gold dore on site using the Albion Process. Using the Albion Process to produce gold dore on site is expected tosignificantly increase project profitability and returns. The project can also be developed in phases, starting with the sale ofconcentrates in the early years followed by the production of gold dore on site. Sale of high-grade concentrates - In April 2006, European Goldfields announcedthe conversion of resources into Canadian NI 43-101 compliant reserves for theCertej deposit, based on the sale of concentrates option. This confirmed thatthe project can support the necessary capital investment and produce a robustreturn at a gold price of $425/oz and above. This estimation followed the completion of extensive metallurgical testwork, anin-house pre-feasibility study and subsequent pit optimisation and pit designwork by RSG Global, which included a geotechnical drilling programme andgeotechnical pit design parameters completed by Golder Associates of the UK. The project is expected to involve the mining and processing of 3.0 Mt per annumover at least nine years. This would yield approximately 275,000 tonnes ofconcentrate per annum with high grades ranging realistically between 17 - 22 g/tgold and 85 - 165 g/t silver (depending on the source of the ore in thedeposit), with a flotation gold recovery of approximately 88%. This translatesinto an annual production of approximately 170,000 oz of contained gold in theconcentrate. Production of gold dore on site - The Albion Process is an alternativedevelopment route to the sale of concentrates at Certej. The Albion Process is acombination of ultra-fine grinding and hot oxidative leaching at atmosphericpressure. European Goldfields announced in July 2006 that it had received additionalresults of batch metallurgical testwork indicating a substantial increase ingold recoveries from samples of flotation concentrates produced from Certej ore.The new results using the Albion Process at optimised oxidation conditionssuggest recoveries from concentrates of approximately 96% for gold, compared topreviously reported recoveries of 84%. Silver recoveries remain stable,averaging 92%. Hydrometallurgy Research Laboratories (HRL, a subsidiary of Xstrata PLC) isconducting the Stage III pilot plant scale continuous testwork programme usingthe Albion Process, after which European Goldfields expects to publish CanadianNI 43-101 compliant reserves based on this process in Q1 2007. HRL has alreadysuccessfully completed Stages I and II of the metallurgical testwork programme. About European Goldfields European Goldfields 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 the three major gold and polymetallic deposits of Stratoni, Skouriesand Olympias in Northern Greece. Hellas Gold commenced production at Stratoni inSeptember 2005 and selling an existing stockpile of Olympias gold concentratesin July 2006. Hellas Gold is applying for permits to develop the Skouries andOlympias projects. Romania - European Goldfields owns 80% of the Certej project in Romania.Resources were recently converted into Canadian NI 43-101 compliant reserves,underpinning the value of the project. European Goldfields is now completing afeasibility study for submission to the Romanian government in Q1 2007, insupport of a permit application to develop the project. For further information please contact: European Goldfields: website: www.egoldfields.comDavid Reading, Chief Executive Officer e-mail: [email protected]: +44 (0)20 7408 9534 Buchanan Communications: e-mail: [email protected] Morse / Ben WilleyOffice: +44 (0)20 7466 5000Mobile: +44 (0)7802 875 227 Renmark Financial Communication: website: www.renmarkfinancial.comTina Cameron e-mail: [email protected] Murray-Lyon e-mail: [email protected]: +1 514 939 3989 Forward-looking statements Certain information included in this news release, including any information asto the 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; the successful andtimely permitting of the Company's Skouries, Olympias and Certej projects;legislative, political, social or economic developments in the jurisdictions inwhich the Company carries on business; operating or technical difficulties inconnection with mining or development activities; the speculative nature of goldand base metals exploration and development, including the risks of diminishingquantities or grades of reserves; and the risks normally involved in theexploration, development and mining business. These factors are discussed ingreater detail in the Company's Annual Information Form for the year ended 31December 2005, filed on SEDAR at www.sedar.com. The Company disclaims anyintention or obligation to update or revise any forward-looking statementswhether as a result of new information, future events or otherwise. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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