COMPANY UPDATE

 Suite 200, Financial Plaza

204 Lambert Street

Whitehorse, Yukon

Canada Y1A 3T2

For Immediate Release

COMPANY UPDATE

18 February 2011 - European Goldfields Limited (AIM: EGU / TSX: EGU) (the "Company") has noted the recent movement in its share price following speculation in the market regarding the progress of our Greek permits. European Goldfields continues to make substantial progress on all of its assets and is looking forward to announcing the conclusion of the permitting process for its Business Plan in Greece.

The Company is confident that the permitting process in Greece is coming to a successful conclusion and expects to be able to make a further announcement in the near future.

The permitting process involves a detailed Business Plan that covers several assets and activities and entailed the largest Environmental Impact Study ("EIS") hitherto submitted in Greece. The Company has complete confidence in the integrity of what has been a long, complex and detailed evaluation and approval process.

In preparation for the anticipated receipt of permits, the Company is finalizing an update to the Business Plan and Reserve and Resource Statement (NI 43-101) to reflect both prevailing commodity prices and costs.

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.

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