2nd Aug 2006 07:01
European Goldfields Ltd02 August 2006 For Immediate Release 2 August 2006 European Goldfields Limited Clear Path for Permits at Certej European Goldfields Limited (AIM: EGU / TSX: EGU) is pleased to report that ithas established a clear path to applying for permits to develop its 80%-ownedCertej project in Romania. European Goldfields has recently completed all necessary Environmental ImpactAssessments (Levels I and II) for the Certej project, and is now activelyconducting various additional studies in support of its permit application,including: • a Social Impact Assessment Study, to be completed by November 2006 • an Archaeological Study, to be completed by the Ministry of Culture by November 2006 • an Environmental Impact Study (EIS), to be completed in December 2006 • a Romanian Feasibility Study (RFS), to be submitted to the government together with the EIS in December 2006 European Goldfields already holds a mining permit for Certej, which is currentlybeing exploited in a small scale by Minvest S.A., the company's partner inRomania. Minvest, the state-owned mining company, owns the remaining 20%interest in Certej. In December 2006, European Goldfields plans to submit the RFS and EIS as part ofits application for environmental and mining permits, allowing an increase inproduction at Certej and the processing of ore on site. The permits and adetailed urbanisation plan would then be expected by end-August 2007 following astandard public consultation process with the local community. Customaryconstruction and public utility permits would follow later in 2007 when thedetailed engineering design has been completed for the site plant. In the meantime, European Goldfields expects to receive by November 2006 ageneral urbanisation certificate confirming the designation of Certej as anindustrial mining area. ECOIND and Cepromin, Romanian companies with proven track records inenvironmental research and permitting procedures, and the Technical Universityof Civil Engineering Bucharest have been employed to assist in preparing thesestudies. Flexibility of two viable development options - European Goldfields is activelypursuing two viable development options for the Certej project: • the production and sale of high-grade gold/silver flotation concentrates • the production of gold dore on site using the Albion Process. The project can also be developed in phases, starting with the sale ofconcentrates in the early years followed by the production of gold dore on site. Using the Albion Process to produce gold dore on site is expected tosignificantly increase project profitability and returns. Commenting on the Certej project, David Reading, Chief Executive Officer ofEuropean Goldfields, said: "We are delighted to have the flexibility of twoviable development options for the Certej project. We are now activelycompleting the necessary studies in support of our permit application which weexpect to submit by the end of 2006. Having identified a clear path topermitting, we now look forward to accelerating the development of the projectin the coming months." Sale of high-grade concentrates - In April 2006, European Goldfields announcedthe conversion of resources into Canadian NI 43-101 compliant reserves for theCertej deposit, based on the sale of concentrates option. The reserve estimationwas carried out by independent consultantsRSG Global Pty Ltd ("RSG Global"). This confirmed that the project can supportthe necessary capital investment and produce a robust return at a gold price of$425/oz and above. This estimation followed the completion of extensive metallurgical testwork, anin-house pre-feasibility study and subsequent pit optimisation and pit designwork by RSG Global, which included a geotechnical drilling programme andgeotechnical pit design parameters completed by Golder Associates of the UK. The project is expected to involve the mining and processing of 3.0 Mt per annumover at least nine years. This would yield approximately 249,000 tonnes ofconcentrate per annum with high grades averaging 21 g/t gold and 125 g/t silver,with a flotation gold recovery of approximately 88%. This translates into anannual production of approximately 170,000 oz of contained gold in theconcentrate. Production of gold dore on site - The Albion Process is an alternativedevelopment route to the sale of concentrates at Certej. The Albion Process is acombination of ultra-fine grinding and oxidatative leaching at atmosphericpressure. European Goldfields announced in July 2006 that it had received additionalresults of batch metallurgical testwork indicating a substantial increase ingold recoveries from samples of flotation concentrates produced from Certej ore.The new results using the Albion Process at optimised oxidation conditionssuggest recoveries from concentrates of approximately 96% for gold, compared topreviously reported recoveries of 84%. Silver recoveries remain stable,averaging 92%. Hydrometallurgy Research Laboratories (HRL, a subsidiary of Xstrata PLC) iscompleting the Stage III pilot plant scale continuous testwork programme usingthe Albion Process, after which European Goldfields expects to publish CanadianNI 43-101 compliant reserves based on this process by the end of 2006. HRL hasalready successfully completed Stages I and II of the metallurgical testworkprogramme. 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 7.8 Moz gold, 65.8Moz silver, 0.8 Mt copper, 0.7 Mt lead and 0.9 Mt zinc, from a measured and indicatedresource base of 9.4 Moz gold, 74.5 Moz silver, 1.0 Mt copper, 0.8 Mt lead 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 revenue-generating stockpiles of goldconcentrates. 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). 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. 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 5000Mobile: +44 (0)7802 875 227 Renmark Financial Communication: website: www.renmarkfinancial.comNeil Murray-Lyon e-mail: [email protected] Perron e-mail: [email protected]: +1 514 939 3989 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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