17th Jul 2006 07:01
European Goldfields Ltd17 July 2006 For Immediate Release 17 July 2006 European Goldfields Limited Skouries Reserves Increased by 13% European Goldfields Limited (AIM: EGU / TSX: EGU) is pleased to announce a 13%increase in reserve tonnes for its 65%-owned Skouries deposit in NorthernGreece, which can now be reported as follows: Reserve Category '000t Au Au Cu Cu g/t Moz % '000tProven 77,563 0.87 2.18 0.54 415Probable 68,667 0.78 1.73 0.55 374Total 146,202 0.83 3.91 0.54 789 This increase in reserves results from a new mine plan and schedule whichincludes the adoption of a deeper open pit, an optimised sub-level caveunderground mine design and improved long-term metal price forecasts. Theupdated reserve was estimated at a gold price of $425/oz and a copper price of$1.1/lb. Commenting on the announcement, David Reading, Chief Executive Officer ofEuropean Goldfields, said: "Our work to upgrade reserves has increased ourunderstanding of the Skouries deposit and optimised its exploitation method.Independent studies demonstrate that Skouries is a robust project, at metalprices which remain conservative at $425/oz for gold and $1.1/lb for copper." The updated reserve is based on a new pit optimisation and subsequent practicalpit design along with a detailed underground mine design based on relevant netsmelter return (NSR) cut-offs and practical mining constraints which takes intoaccount mining recoveries and dilution. Geoff Bull, Mike Beare and Edgar Urbaez of independent consultants SRKConsulting (UK) Limited were the Qualified Persons under Canadian NationalInstrument 43-101 responsible for preparing the updated reserve estimates forthe Skouries deposit quoted above. A report from SRK will be filed on SEDAR(www.sedar.com) within the next 45 days updating parts of the Behre Dolbear &Company, Inc.'s previous pre-feasibility study on the Skouries deposit filed atwww.egoldfields.com and on SEDAR on 29 October 2004 under the category "Technical Report". Background Information on Skouries Skouries has been optimised as a 7M tonnes per annum operation with a low stripopen pit of at least six years, followed by underground mining which willproduce some 790,000t of copper and 3.9M oz of gold over a 21-year mine life.The start of full production is planned for 2009. This production rate is shownto be sustainable based on the detailed mine design carried out by SRK andbenchmarking with other comparable mines. The Skouries deposit is a typical gold-copper porphyry deposit that forms a nearvertical pipe and is located 35 km by road from the Stratoni port in northernGreece. Skouries is located on a high plateau with no habitation in theimmediate vicinity. The mining at Skouries will be phased with the open pit mined at the target ratefor the first six years and the underground mining development starting in thefourth year of operation. A continuous feed of 7M tonnes per annum to the plantis ensured by the use of stockpiled open pit low-grade material. The currentmodel uses a 240m deep pit followed by an underground sub-level cave (SLC)operation, which gives the best economic return according a study by SRK. The metallurgy at Skouries is straight-forward. The mine will feed a processplant designed for a nominal throughput of 21,000 tonnes per day. Theprocessing will comprise gyratory crushing for open pit and underground ore,single-stream SAG and ball-mill grinding. Approximately 30% of gold will berecovered by a gravity circuit to produce dore on site. A high-quality saleablecopper/gold concentrate will also be produced by conventional froth flotation,thickening and filtration. Extensive test-work carried out by Lakefield Research and other consultants hasshown average recoveries of 83.9% gold and 90.8% copper can be achieved.Concentrate grades of at least 26% copper and averaging 27 g/t gold areexpected. The concentrates will be trucked to Hellas Gold's port storage facility atStratoni, which is some 35 km away by road from the Skouries plant site. Golder Associates have carried out a pre-feasibility level study whichincorporates the latest paste production technology in a phased tailingsmanagement facility (TMF) that will minimise land take and embankment height andprovides increased stability. Paste tailings also allows a greater proportion ofthe process water to be collected and recycled at the process plant, reducingpumping costs and the quantity of make-up water needed. Studies have shown thatthe paste tailings are inert with low permeability. The use of paste tailingsand a phased TMF also allows sequential rehabilitation of the tailingsmanagement facility to minimise active tailings areas. The Behre Dolbear report states the total measured and indicated resource atSkouries to be 191.2 Mt grading 0.82 g/t gold and 0.55% copper at a nominalcut-off grade of 0.4 g/t gold. The resource estimation is based on a nominaldrillhole spacing of 50 metres. Gold and copper were analysed geostatisticallyfor each lithology and an unconstrained 3-D resource block model was generatedusing values interpolated by ordinary kriging. 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 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 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). 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. 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 National Instrument 43-101 responsible for reviewing the disclosure of resource and reserve 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 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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