9th Oct 2007 07:00
European Goldfields Ltd09 October 2007 For Immediate Release 9 October 2007 European Goldfields Limited Certej Reserves Increased by 20% Life-of-Mine Extended by Two Years 9 October 2007 - European Goldfields Limited (TSX / AIM: EGU) is pleased toannounce a 20% increase in gold reserve ounces for the Certej project, which cannow be reported as follows: Certej Reserves Million Average Gold Million Average Silver Million Reserve Category Tonnes Grade (g/t) Ounces Gold Grade (g/t) Ounces Silver Probable 32.8 2.0 2.1 11.4 12.0 Note: Reserve based on pit optimisation using a gold price of $425/oz and asilver price of $7/oz. The new reserve results from a better conversion of resources into reserves,combined with increased resources (see below), and is based on the production ofa gold-bearing concentrate followed by the production of gold and silver as doreon site by means of the Albion Process. The previous reserve estimate publishedin April 2006 was based on the less-economical development option involving thedirect sale of a gold-bearing flotation concentrate. The better conversion from resources to reserves reflects improved metallurgicalrecoveries following completion of extensive bulk continuous metallurgicaltest-work, an in-house pre-feasibility study and subsequent pit optimisation andpit design work by RSG Global Consulting Pty Ltd ("RSG Global"), which includeda geotechnical drilling programme designed by Golder Associates of the UK. The Albion Process is a combination of ultra-fine grinding of concentrates andoxidative leaching at atmospheric pressure. The liberated gold and silver isthen recovered as dore by the conventional Carbon in Leach ("CIL") process. The deposit will be mined by open pit methods with a strip ratio of 3.1:1. Theproject will involve the mining and processing of 3.0 million tonnes of ore perannum over at least eleven years, compared to the nine-year mine life under theprevious reserve estimate. This is expected to yield approximately 160,000 oz ofgold and 820,000 oz of silver per year in dore. Commenting on the announcement, David Reading, Chief Executive Officer ofEuropean Goldfields, said: "We are delighted to report a 20% increase in goldreserve ounces and in mine life at Certej. The new reserve estimate confirmsthat the Certej project is robust at $425/oz gold. Our four projects in Greeceand Romania now contain reserves of almost 10M oz of gold, 78M oz of silver,0.8M tonnes of copper and 1.6M tonnes of combined lead and zinc." Increase in Certej Resources European Goldfields is also pleased to announce a 9.2% increase in gold resourceounces for its Certej project in Romania, which can now be reported as follows: Certej Resources Resource Million Average Gold Million Ounces Average Silver Million OuncesCategory Tonnes Grade (g/t) Gold Grade (g/t) Silver Measured 3.9 2.3 0.3 5 0.7Indicated 37.6 1.9 2.3 11 13.7Measured +Indicated(total) 41.5 2.0 2.6 11 14.3Inferred(East/WestDomains) 3.4 1.6 0.2 4 0.4Inferred(FarWest/ 3.8 1.4 0.2 8 1.0CentralDomains)Inferred(total) 7.1 1.5 0.3 6 1.4 Note: At a 0.8g/t Au lower cut-off grade. Uniform conditioning and a 12.5mE x6.25mN x 2.5mRL selective mining unit reported for the west and eastern domainsand ordinary kriging for the far west and central domains. The previous resourceestimate was quoted at a 1.0g/t Au lower cut-off grade; however, the 9.2%increase in gold resources is calculated using a comparable lower cut-off gradeof 0.8g/t Au. Small numeric differences may occur due to number rounding. The new resource follows the completion of a programme of in-fill drilling ofinferred resources and also incorporates data from holes used for geotechnicalwork and metallurgical sampling. The new drilling also identified higher grademineralisation on the southern flank of the west domain of the deposit. Harry Warries, Ben Palich and Jan de Visser of independent consultants RSGGlobal have reviewed this news release and were the Qualified Persons underCanadian National Instrument 43-101 responsible for preparing the updatedresource and reserve estimates for the Certej deposit quoted above. A technicalreport from RSG Global will be filed on SEDAR (www.sedar.com) within the next 45days. Background Information on Certej Capital and operating costs - Total capital costs for the Certej project arecurrently estimated at $111 million for the purchase of mining equipment andland, and the construction of a process plant, tailings and otherinfrastructure. However, European Goldfields is investigating "through thefence" oxygen supply, which would save some $23 million of oxygen plant capital.The mining costs are currently estimated at $1.23/tonne of material mined, andthe processing costs are estimated at $9.09/tonne of ore processed. Theseestimates will be updated once the full feasibility study on Certej is completed(see below). Technical feasibility study submitted - In March 2007, European Goldfieldssubmitted a Technical Feasibility Study ("TFS") to the Romanian government, insupport of its permit application to develop the Certej project. The metallurgical process design is based on extensive comminution and flotationtestwork to produce a gold bearing concentrate and then processing by means ofthe Albion Process. The project is expected to yield an average of 308,000tonnes of flotation concentrate per annum with high grades ranging between 17-19g/t gold and 80-130 g/t silver (depending on the source of the ore in thedeposit), with a flotation gold recovery of approximately 90%, followed by anAlbion gold recovery of approximately 90%, resulting in a total process goldrecovery of 81%. This is expected to yield approximately 160,000 oz of gold and820,000 oz of silver per year in dore. The residues from the flotation and gold plants will be disposed of in twoseparate but adjoining tailings management facilities. Albion Process Technology achieved 90% gold recovery in continuous pilot planttests - European Goldfields is currently completing an extensive metallurgicaltestwork programme using the Albion Process at the facilities ofHydrometallurgical Research Laboratories Testing ("HRL") in Australia. Smallscale batch tests had achieved gold recoveries of 90-93% and established theoptimum conditions for the continuous pilot plant testwork required to prove theamenability of the Albion Process for the Certej concentrate. A Phase 1 pilot scale test was carried out which confirmed that gold extractionsin excess of 90% could be achieved on a continuous basis at sulphur oxidationrates in the Albion Process of around 70%. The testwork also confirmed theconsumable levels were in the expected range. A programme of flotation concentrate grade optimisation work was then undertakenand on completion a second Phase 2 continuous pilot plant run was completed inJune 2007. This confirmed the high gold extractions of 90% achieved in the Phase1 run and that the flotation concentrate is amenable to treatment by the AlbionProcess. A continuous CIL pilot plant was then run for 41/2 days on the productfrom the Phase 2 Albion Process run. Further optimising work and equipment testsby vendors are also nearing completion and a final design report will then beissued by Core Resources and Xstrata Technology allowing an engineering designcompany to calculate costs for the bankable feasibility study. During the testwork campaign at HRL, a large batch scale Albion test wascompleted on the concentrate from the West ore zone of the Certej deposit whichhad previously proved to be uneconomic to processing using the Albion Process.This work demonstrated that by applying a slightly higher oxidation rate, a goldrecovery of 90% could also be achieved from the West ore zone. This is a verypositive result as it could increase the operating life of the Albion Process byat least three years. A definitive mineralogical study describing the four ore zones of the Certejdeposit was completed by Amtel of Canada which indicated that there is potentialfor increasing flotation gold and silver recoveries above those achieved in thelaboratory scale tests. Environmental impact study nearing completion - In 2006, European Goldfieldscompleted all the necessary Environmental Impact Assessments (Levels I and II)and a Social Impact Assessment Study in support of its permit application todevelop the Certej project. Work is now progressing well on the Certej environmental impact study ("EIS"),which is due for completion in October 2007 after some contributory studies arefinalised. The EIS will have been carried out over a period of a year to coverthe four seasons for accumulating certain required base line data. The EIS is adetailed multi-discipline study assessing the environmental, social and healthimpacts of the project on the affected area. Full feasibility study to be completed by Q1 2008 - Once the EIS is completed,European Goldfields expects to complete a full feasibility study, which will beused for internal approval and presentation to banks and other sources ofpotential financing of the project. The full feasibility study is scheduled forcompletion in the first quarter of 2008. A contract to undertake an engineering study of the process plant and associatedinfrastructure has been awarded to Aker Kvaerner Engineering Services. This willinclude the final results of the completed Albion Process testwork programme,the design criteria package for the Ultra Fine Grinding IsaMill and the leachingprocess with the associated costs. Site visits have been undertaken to gatherthe additional design and site data needed to produce the definitive costestimate and study. Clear path to permitting - European Goldfields has established a clear path toapplying for permits to develop the Certej project, having already submitted theTFS to the Romanian government in March 2007, which will be followed by thesubmission of the EIS in the fourth quarter of 2007. In September 2006, European Goldfields announced that the Hunedoara CountyCouncil had issued a General Urbanisation Certificate for the Certej project.The certificate confirms the designation of Certej as an industrial mining areaand confirms local community support for the project. This important milestoneis the first official step in the permitting process for Certej. All mining permits and a detailed urbanisation plan are expected by mid-2008following a standard public consultation process with the local community. About European GoldfieldsEuropean 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: e-mail: [email protected] Reading, Chief Executive Tel: +44 (0)20 7408 9534Officer Buchanan Communications: e-mail: [email protected] Morse / Ben Willey Tel: +44 (0)20 7466 5000 Renmark Financial Communication: e-mail: [email protected] G. Murray-Lyon Tel: +1 514 939 3989 Evolution Securities e-mail: [email protected] Edwards / Neil Elliot Tel: +44 (0)20 7071 4300 Forward-looking statementsCertain 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 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 price of gold, base metals or certain othercommodities (such as fuel and electricity) and currencies; uncertainty ofmineral reserves, resources, grades and recovery estimates; uncertainty offuture production, capital expenditures and other costs; currency fluctuations;financing and additional capital requirements; the successful and timelypermitting of the Company's Skouries, Olympias and Certej projects; legislative,political, social or economic developments in the jurisdictions in which theCompany carries on business; operating or technical difficulties in connectionwith mining or development activities; the speculative nature of gold and basemetals exploration and development, including the risks of diminishingquantities or grades of reserves; the risks normally involved in theexploration, development and mining business; and risks associated with internalcontrol over financial reporting. For a more detailed discussion of such risksand material factors or assumptions underlying these forward-looking statements,see the Company's Annual Information Form for the year ended 31 December 2005,filed on SEDAR at www.sedar.com. The Company does not intend, and does notassume any obligation, to update or revise any forward-looking statementswhether as a result of new information, future events or otherwise, except asrequired by law. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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