24th Oct 2006 07:01
European Goldfields Ltd24 October 2006 For Immediate Release 24 October 2006 EXTENSION DRILLING STARTS AT STRATONI European Goldfields Limited (AIM: EGU / TSX: EGU) is pleased to announce thestart of an exploration drilling programme at Hellas Gold's Stratonizinc-lead-silver mine in Northern Greece. A contract securing the drilling righas been signed with Drillcon LDA and drilling started yesterday. Stratoni already has well-defined reserves over a six-year life of mine. Sixareas targeted by the drilling are obvious extensions to known mineralisation,in addition to more conceptual targets between the two main Stratoni deposits. The drilling programme is expected to significantly increase reserves and lifeof mine. Initial drilling results are expected by year end. An important objective of the drilling programme is to upgrade inferredresources extending from the Stratoni (Mavres Petres) deposit to the measuredand indicated categories. These inferred resources, which are located in fourtarget areas and are extrapolations from the known reserves, comprise some375,000 tonnes grading 7.5% lead, 9.5% zinc and 160 g/t silver. Two further targets are known extensions to previously mined areas of theStratoni (Madem Lakkos) deposit, where production grades of 9 to 10.7% lead, 9to 9.6% zinc and 160 to 185.3 g/t silver are recorded. The programme is aimed atdrilling out resources in these areas of known economic mineralisation. The Stratoni mine resumed operations in September 2005 and is on track toproduce over 170,000 tonnes of ore by the end of 2006, steadily increasing to400,000 tonnes per annum by year five. The existing environmental and miningpermits for Stratoni will allow Hellas Gold to fully exploit any new discoveriesresulting from this drilling programme. Commenting on the announcement, David Reading, Chief Executive Officer ofEuropean Goldfields, said: "We are excited about the start of our drillingprogramme at Stratoni. Drilling will be value-driven as it will target obviousextensions to known deposits, which usually yields the best results." Background information The Stratoni mine comprises two marble hosted massive sulphide deposits that areabout1.5 kilometres apart, with the Mavres Petres deposit to the west and the MademLakkos to the east. The drilling programme will focus on six known targets. Theobjective is to: • upgrade inferred resources extending from the Mavres Petres reserves in four target areas• find western extensions to the mined-out Madem Lakkos deposits in two target areas• investigate marble units between the two deposits that are largely unexplored. Drilling will start with the investigation of the western extension of themined-out Madem Lakkos deposit, which is easily accessible from the firstavailable drilling bay in the new decline being developed for the Stratonioperation. Drill stations near to the top of the decline will allow a series offanned drillholes to investigate the extension of this deposit. The drilling is being conducted from a new decline currently being excavated toaccess the base of the existing Stratoni reserve. The decline crosses the 1.5kilometre zone between the existing reserve and mined-out areas, providingexcellent access for exploration of this highly prospective corridor. Thedecline will also enable immediate access for mining of any new discoveries. The new decline has already intersected lead and zinc sulphide mineralisationover a true thickness of approximately 1.75 metres, confirming EuropeanGoldfields' current geological model for extensions of the existing Stratonireserve. Significantly, this mineralisation occurs within the same marble unit as theexisting reserve and, like the Mavres Petres reserve, is immediately adjacent tothe Stratoni fault which is a conduit for mineralisation. This indicates thepotential for further zones of mineralisation to occur along the 1.5 kilometrecorridor formed by the marbles and the fault. The drilling programme is divided into two phases. Phase 1 is the extension ofknown mineralisation, infill drilling on inferred resources and investigationbetween the two known deposits; Phase 2 will provide infill drilling of anymineralisation found between the two deposits in order to quantify resources inthese areas. Phase 2 drilling is dependant on the results of Phase 1. The totalplanned drilling metres in Phase 1 is 7,000 and the maximum metres inPhase 2 is 5,800. Patrick Forward, General Manager, Exploration of European Goldfields, was theQualified Person under Canadian National Instrument 43-101 responsible forreviewing this news release. 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 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 5000 Renmark Financial Communication: website: www.renmarkfinancial.comTina Cameron e-mail: [email protected]: +1 514 939 3989 Forward-looking statementsCertain 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:
EGU.L