8th Jan 2007 07:00
European Goldfields Ltd08 January 2007 For Immediate Release 8 January 2006 Stratoni Mine Exceeds Production Target for 2006 Increase in Stratoni Reserves 8 January 2007 - European Goldfields Limited (TSX / AIM: EGU) is pleased toannounce that its subsidiary Hellas Gold S.A. has milled a total of 185,000 wetmetric tonnes (wmt) of ore in 2006 at its Stratoni zinc-lead-silver plant inNorthern Greece, exceeding the production target of 170,000 wmt for the year. Ore production rates from underground have steadily increased from 400 to almost900 tonnes per day during 2006. Ore production is expected to continue toincrease more rapidly than expected, up to a maximum of 400,000 tonnes per yearby end 2009. Hellas Gold completed seven shipments of concentrates from Stratoni in Q4 2006,and 20 shipments for the whole of 2006. Hellas Gold also completed six shipmentsof gold concentrates from an existing stockpile at Olympias in Q4 2006,representing half of the 12 shipments completed in 2006. This translates intothe following sales of concentrates: Q4 2006 Total 2006Zinc concentrate (tonnes) 10,425 32,351- Containing payable: Zinc (tonnes)* 4,418 13,775 Lead concentrate (tonnes) 5,124 15,780- Containing payable: Lead (tonnes)* 3,329 10,467Silver (oz)* 254,881 818,139 Gold concentrate (wet tonnes) 9,041 17,649* Net of smelter deductions Sales of contained metals increased by 38% for lead, 35% for silver and 39% forgold in Q4 2006 compared to Q3 2006, while decreasing by a marginal 6% for zinc.Also, these sales are expected to yield higher revenues per unit in Q4 2006 dueto more favourable metal prices during the last quarter of the year. EuropeanGoldfields expects to publish by 31 March 2006 its financial results for thethree-month period and year ended 31 December 2006. Increase in Stratoni Reserves - European Goldfields is also pleased to announcean increase in reserves at Stratoni, which can now be reported as follows underCanadian NI 43-101: Reserve Category '000t* Ag Ag Pb Pb Zn Zn g/t Moz* % '000t* % '000t*Proven 1,923 172 10.63 6.9 19 9.4 30Probable 259 172 1.43 7.3 133 11.6 181Total 2,182 172 12.06 6.9 152 9.7 211* After deduction of ore extracted since the start of mining operations in Q42005. Total reserve tonnes have increased by 23% over the reserves published prior tothe start of operations at Stratoni in Q4 2005, accounting for deduction of oresince then. The new reserve will add an extra year to Stratoni's life of mine, a20% increase over the remaining five-year mine life under the prior reserve. Amarginal reduction in grades is expected to be more than offset by greaterquantities of metal to be produced over the total life of mine and theramping-up of production going forward. The new reserve has allowed Hellas Gold to ramp-up its yearly ore productionschedule as follows: - Year 2006: 170,000 tonnes- Year 2007: 250,000 tonnes- Year 2008: 350,000 tonnes- Year 2009: 400,000 tonnes- Year 2010: 400,000 tonnes- Year 2011: 400,000 tonnes- Year 2012: 400,000 tonnes This new reserve is based on an updated measured & indicated resource estimatefor the Stratoni orebody, which results from a new optimised geological modelbased on revised geological mapping, additional data from underground sampling,and a more reliable understanding of the orebody after a full year of mining atStratoni. A better understanding of the orebody has also allowed Hellas Gold to defineincreased inferred resources comprising some 555,000 tonnes grading 7.3% lead,10.2% zinc and 181 g/t silver. In addition, Hellas Gold recently started a new exploration drilling programmeat Stratoni, which is expected to increase life of mine by another two years atleast. Initial drilling results are expected in Q1 2007. An important objectiveof the drilling programme is to upgrade existing inferred resources to fullCanadian NI 43-101 compliant reserves. Commenting on the announcement, David Reading, Chief Executive Officer ofEuropean Goldfields, said: "We are proud to have exceeded our promise to themarket in 2006 for our Stratoni operations. Production of zinc, lead and silverconcentrates continues to ramp-up at Stratoni in an environment of strong demandfor these metals, and this new reserve will allow us to mine for an additionalyear after 2011. Also, we look forward to adding more value at Stratoni byconverting existing inferred resources into reserves when our ongoing extensiondrilling programme is completed." Patrick Forward, General Manager, Exploration of European Goldfields, was theQualified Person under Canadian National Instrument 43-101 responsible forpreparing the updated resource and reserve estimates for the Stratoni depositquoted above. A report will be filed on SEDAR (www.sedar.com) within the nextforty-five days updating parts of Behre Dolbear & Company, Inc.'s previouspre-feasibility study on the Stratoni deposit filed at www.egoldfields.com andon SEDAR on 29 October 2004 under the category "Technical Report". 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 three major gold and base metal deposits in Northern Greece. Thedeposits are the polymetallic projects of Stratoni and Olympias which containgold, zinc, lead and silver, and the Skouries copper/gold porphyry body. HellasGold commenced production at Stratoni in September 2005 and selling an existingstockpile of Olympias gold concentrates in July 2006. Hellas Gold is applyingfor permits to develop the Skouries and Olympias projects.Romania - European Goldfields owns 80% of the Certej gold/silver project inRomania. European Goldfields is completing a feasibility study for submission tothe Romanian government in Q1 2007, in support of a permit application todevelop 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 statements and information contained in this document, including anyinformation as to the Company's future financial or operating performance andother statements that express management's expectations or estimates of futureperformance, constitute forward-looking information under provisions of Canadianprovincial securities laws. When used in this document, the words "anticipate","expect", "will", "intend", "estimate", "forecast", "planned" and similarexpressions are intended to identify forward-looking statements or information.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 price of gold, base metals or certain othercommodities (such as fuel and electricity) and currencies; uncertainty ofmineral reserves, resources, grades and recovery estimates; uncertainty offuture production, capital expenditures and other costs; currency fluctuations;financing and additional capital requirements; the successful and timelypermitting of the Company's Skouries, Olympias and Certej projects; legislative,political, social or economic developments in the jurisdictions in which theCompany carries on business; operating or technical difficulties in connectionwith mining or development activities; the speculative nature of gold and basemetals exploration and development, including the risks of diminishingquantities or grades of reserves; the risks normally involved in theexploration, development and mining business; and risks associated with internalcontrol over financial reporting. For a more detailed discussion of such risksand material factors or assumptions underlying these forward-looking statements,see the Company's Annual Information Form for the year ended 31 December 2005,filed on SEDAR at www.sedar.com. The Company does not intend, and does notassume any obligation, to update or revise any forward-looking statementswhether as a result of new information, future events or otherwise, except asrequired by law. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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