29th Sep 2005 07:01
European Goldfields Ltd29 September 2005 Suite 200, Financial Plaza 204 Lambert Street Whitehorse, Yukon Canada Y1A 3T2 For Immediate Release 29 September 2005 EUROPEAN GOLDFIELDS LIMITED OPERATIONAL UPDATE - STRATONI MILL PRODUCING European Goldfields Limited (AIM: EGU / TSX: EGU) is pleased to provide thefollowing update on Hellas Gold S.A.'s operations following the award of themining permit for Stratoni on 12 September: • Greek Ministry of Development publicly announces reopening of the Stratoni mine • Production has now resumed at the Stratoni mill • Underground mining to start in October • Work on the new Stratoni decline under way • Invitations to bid for lead & zinc concentrates issued to international traders • First shipment of concentrates from Hellas Gold's Stratoni port facility expected in November Commenting on the announcement, David Reading, Chief Executive Officer ofEuropean Goldfields, said: "We are delighted to have commenced production atStratoni, with cash-flow from the Hellas Gold project expected this year. Theproject has received strong support from the Greek government and localcommunities. This successful outcome paves the way for further development ofour Olympias and Skouries projects in Greece." Stratoni Mill The Stratoni Mill has now resumed production in Northern Greece. The mill has acapacity of more than 400,000 tonnes per year of run of mine ore. The mill iscurrently treating a stockpile of ROM material totalling some 15,000 tonnes. Thefirst shipment of lead and zinc concentrates is expected in November carried byvessels loaded at Hellas Gold's refurbished Stratoni port. Underground Mining Production faces have been made available through the recent refurbishment ofthe Stratoni mine and new backfill plants have been installed to open upadditional production areas and also for backfilling the old workings. Hellas Gold is in the final stages of negotiating a "turn-key" mining contractwith Aktor S.A., European Goldfields' partner and the largest constructioncompany in Greece. New production will be delivered from underground in October. Production of oreis expected to reach 170,000 tonnes by the end of the first year of full scaleproduction, steadily increasing thereafter. The total proven and probablereserve at Stratoni is 1.923Mt grading 10.8% zinc, 8.1% lead and 190 g/t silver. New Stratoni Decline In May 2005, Hellas Gold signed a fixed priced "turn-key" contract with Aktorfor the construction of a new 1,900-metre access tunnel (or decline) atStratoni. Work on the new decline has now commenced, following the award of theStratoni mining permit in September. The decline is being developed to provide improved access to the Stratonireserve and allow larger scale mining operations to be effected by the end of Q22006. The new decline is expected to raise mine output with a minimal increaseof labour, while removing the necessity to build a large underground maintenancefacility. The new decline will also provide access to conduct further drilling of thecurrent inferred resources in order to upgrade these into additional reserves. The new decline will pass from the old workings of Madem Lakkos to the currentreserves at Mavres Petres intersecting marble units in the process. Marbles arethe host rock to the mineralisation at Stratoni and a drill programme has beendesigned with the potential to find more resources in these areas, which havepreviously been inaccessible for drilling. Sale of Lead & Zinc Concentrates Hellas Gold has issued invitations to bid for lead and zinc concentrates to aselection of international traders. Responses are expected shortly, with a viewto securing a three-year plus off-take agreement by the end of Q4 2005. Stratoni concentrates are considered metallurgically 'clean' with littledeleterious material. This has ensured that in the past they have been easilysold and attract little by way of penalties. In September 2004, two shipments of lead and zinc concentrates of US$3.4 millionin value were sold from Stratoni through the refurbished port facility. About European Goldfields European Goldfields Limited is a resource company involved in the acquisition,exploration and development of mineral properties in Greece, Romania and theBalkans. Greece - European Goldfields holds a 65% interest in Hellas Gold S.A. HellasGold owns assets in Northern Greece which consist of three deposits within70-year mining concessions covering a total area of 317 km(2). The depositsinclude the polymetallic projects of Stratoni and Olympias which contain gold,lead, zinc and silver, and the copper-gold porphyry body referred to asSkouries. All three deposits have been well defined with over 200,000 metres ofdrilling and the completion of feasibility studies and later engineeringstudies. The total proven and probable reserves of these assets are 17.2 Moz on a goldequivalent basis (65% attributable = 11.2 Moz) from a measured and indicatedresource base of 21.8 Moz gold equivalent (65% attributable = 14.2 Moz). Theseassets 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, making themnear-production properties which require new permits. Hellas Gold's assets alsoinclude potential revenue generating stockpiles and tailings located on thesurface. Romania - European Goldfields holds five mineral properties located within the"Golden Quadrilateral" area of Romania, where it has recently completed anin-house pre-feasibility study underpinning the value of its 80%-owned Certejdeposit. The Certej deposit hosts measured and indicated resources of 31.4 Mtgrading 2.1 g/t gold and 11 g/t silver for 2.34 Moz of gold equivalent (80%attributable = 1.88 Moz). For additional information on the resource and reserve estimates quoted above,please refer to the Company's Resources & Reserves Declaration atwww.egoldfields.com/goldfields/resources.jsp. For further information please contact: European Goldfields:David Reading, Chief Executive OfficerDavid Grannell, Chief Financial Officer Office: +44 (0)20 7408 9534 e-mail: [email protected]: +44 (0)7703 190 652 website: www.egoldfields.com Buchanan Communications:Bobby Morse / Ben Willey e-mail: [email protected] Office: +44 (0)20 7466 5000Mobile: +44 (0)7802 875 227 The Sherbourne Group e-mail: [email protected] West Office: +1 416 203 2200 Forward-looking statements This news release contains certain forward-looking statements concerning theCompany's future operations, economic performances, financial condition andfinancing plans. These statements are based on certain assumptions and analysesmade by the Company in light of the its experience and its perception ofhistorical trends, current conditions and expected future developments as wellas other factors the Company believes are appropriate in the circumstances.However, whether actual results and developments will conform to the Company'sexpectations and predictions is subject to a number of risks, uncertainties andassumptions. Consequently, all of the forward-looking statements made in thisnews release are qualified by these cautionary statements, and there can be noassurance that the results or developments anticipated by the Company will berealised or, even if substantially realised, that they will have the expectedconsequences to or effects on the Company and its subsidiaries or theirbusinesses or operations. The Company undertakes no obligation and do not intendto update or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise, except as may be required underapplicable law. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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