11th May 2006 07:01
European Goldfields Ltd11 May 2006 For Immediate Release 11 May 2006 Sale of Olympias Concentrates European Goldfields Limited (AIM: EGU / TSX: EGU) is pleased to announce thatits 65%-owned subsidiary Hellas Gold S.A. has entered into an off-take agreementwith Shandong MIC BioGold Ltd (a subsidiary of Michelago Limited of Australia(ASX: MIC)) for the initial sale of at least 18,000 wet metric tonnes (wmt) ofgold bearing pyrite concentrates currently located on the surface at Olympias inGreece. The agreement also includes the possible sale of an additional 100,000dry metric tonnes of concentrates over a three-year period from April 2007. Olympias benefits from an existing stockpile of gold concentrates representing areserve of about 258,000 tonnes grading 23.3 g/t gold, in addition tosubstantial underground reserves of gold, lead, zinc and silver. The monthly shipments of the initial 18,000 wmt of concentrates are expected tocommence in May 2006 and end in April 2007, and may be suspended if certainprofitability thresholds are not met. Concentrates are to be treated at ShandongMIC's Bacox process plant in China. The price payable for the concentrates will vary with the prevailing gold price.The agreement produces an attractive return for Hellas Gold at a gold price ofUS$500/oz. European Goldfields and Hellas Gold are currently pursuing other similaropportunities for the sale of the remaining tonnage of concentrates in theOlympias stockpile. Commenting on the agreement, David Reading, Chief Executive Officer of EuropeanGoldfields, said: "This initial contract with Shandong MIC demonstrates ourability to monetise the Olympias stockpile. It is a first step towards sellingthe whole stockpile and we expect to conclude similar arrangements in the nearfuture to achieve this objective. This represents one of many opportunities togenerate early revenue to assist with the financing of the development of ourmajor gold and base metals projects of Skouries and Olympias." Holding in Company As far as the Company is aware, on 21 April 2006, Mr. Frank Timis sold a totalof 8,696,576 common shares in the Company in the open market at a price ofC$4.40 per share. The shares were placed by RBC Capital Markets and Williams deBroe Plc primarily to institutional investors in North America and the UnitedKingdom. Following such sale, to the knowledge of the Company, Frank Timis doesnot exercise control or direction over any of the outstanding common shares ofthe Company. About European Goldfields European Goldfields Limited (the "Company") is a resource company involved inthe acquisition, exploration and development of mineral properties in Greece,Romania and the Balkans. Greece - The Company holds a 65% interest in Hellas Gold S.A. ("Hellas Gold").Hellas Gold owns assets in northern Greece which consist of three depositswithin 70-year mining concessions covering a total area of 317 km(2). Thedeposits include the polymetallic projects of Stratoni and Olympias whichcontain gold, lead, zinc and silver, and the copper/gold porphyry body referredto as Skouries. All three deposits have been well defined with over 200,000metres of drilling and the completion of feasibility studies and laterengineering studies. The total proven and probable reserves of these assets are 7.6 Moz gold, 65.8Moz silver, 0.7 Mt copper, 0.7 Mt lead and 0.9 Mt zinc, from a measured andindicated resource base of 9.4 Moz gold, 74.5 Moz silver, 1.0 Mt copper, 0.8 Mtlead and 1.1 Mt zinc (65% attributable). These assets represent some of the largest defined deposits in Europe. The threedeposits are located within a 10 km radius of each other, making thiseffectively a gold and base metals centre. Furthermore, both Stratoni andOlympias were previously in production and have extensive existing mining andplant infrastructure and a ship-loading facility on the Aegean Sea. Hellas Gold's assets also include potential revenue-generating stockpiles ofgold concentrates. In September 2005, Hellas Gold resumed production at Stratoni following theaward by the Greek State of all necessary environmental and mining permits.Hellas Gold is in the process of applying for similar permits for Olympias andSkouries, having met its first milestone by submitting business plans to theGreek government in January 2006. Romania - The Company holds four mineral properties located within the "GoldenQuadrilateral" area of Romania. The Company recently announced the conversion ofresources into Canadian NI 43-101 compliant reserves for its 80%-owned Certejproject, underpinning the value of the project. The Certej deposit hostsprobable reserves of 27.7 Mt grading 2.0 g/t gold and 11.6 g/t silver for 1.76Moz gold and 10.35 Moz silver (80% attributable). The Company is now completinga final feasibility study for submission to the Romanian government by the endof 2006, in support of an application for environmental and mining permits todevelop the Certej project. For further information please contact: European Goldfields: e-mail: [email protected] Reading, Chief Executive Officer website: www.egoldfields.comOffice: +44 (0)20 7408 9534 Buchanan Communications: e-mail: [email protected] Morse / Ben WilleyOffice: +44 (0)20 7466 5000Mobile: +44 (0)7802 875 227 The Sherbourne Group: e-mail: [email protected] WestOffice: +1 416 203 2200 Resources & Reserves Parameters For additional information on the resource and reserve estimates quoted in thisnews release, please refer to the Company's Resources & Reserves Declaration atwww.egoldfields.com/goldfields/resources.jsp. Patrick Forward, General Manager,Exploration of the Company, was the Qualified Person under Canadian NationalInstrument 43-101 responsible for reviewing the disclosure of resource andreserve estimates quoted in this news release. 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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