Company Update

Suite 200, Financial Plaza

204 Lambert Street

Whitehorse, Yukon

Canada Y1A 3T2

Company Update

7th July 2011 - European Goldfields Limited (AIM: EGU / TSX: EGU) (the"Company") has noted the recent movement in its share price.

The Company would like to confirm that over recent days it has been in active and close dialogue with the Ministry of Environment, Energy and Climate Change ("MOE"), regarding the permitting of its Greek projects. Based upon those discussions, the Company is highly confident of a positive outcome. Remarks reported in the press today, following a press conference held by the MOE, further underscore that level of confidence.

About European Goldfields

European Goldfields is a developer-producer with globally significant gold reserves located within the European Union. The Company generates cash flow from its 95% owned Stratoni operation, a high grade lead/zinc/silver mine in North-Eastern Greece. European Goldfields will evolve into a mid-tier producer through responsible development of its project pipeline of gold and base metal deposits at Skouries and Olympias in Greece and Certej in Romania. The Company plans future growth through development of its highly prospective exploration portfolio in Greece, Romania and Turkey.

For further information please see the Company's website at www.egoldfields.com 

For further information please contact:

European Goldfields Liberum Capital Limited

Steve Sharpe, VP Business Development Simon Atkinson

e-mail: info@egoldfields.com Tom Fyson

Tel: +44 (0)20 7408 9534 Tel: +44 (0)20 3100 2000

Brunswick Evolution Securities Limited

Carole Cable / Fiona Micallef-Eynaud Tim Redfern

e-mail: egoldfields@brunswickgroup.com Neil Elliott

Tel: +44 (0)20 7404 5959 Tel: +44 (0)20 7071 4300