24th Apr 2007 07:02
European Goldfields Ltd24 April 2007 For Immediate Release 24 April 2007 European Goldfields Limited Stratoni Silver Reserve Sold to Silver Wheaton 24 April 2007 - European Goldfields Limited (TSX / AIM: EGU) (the "Company") ispleased to announce that its subsidiary Hellas Gold S.A. has agreed to sell toSilver Wheaton Corp. (TSX: SLW; NYSE: SLW) all of the silver metal to beproduced from ore extracted during the mine-life within an area of some 7 km(2)around its zinc-lead-silver Stratoni mine in northern Greece. Silver productionat Stratoni is a by-product of lead-zinc operations. The sale is made in consideration of an upfront payment to Hellas Gold ofUS$57.5 million in cash, plus a fee per ounce of silver to be delivered toSilver Wheaton of the lesser of US$3.90 (subject to an inflationary adjustmentbeginning after year three) and the prevailing market price per ounce. Thecurrent Stratoni proven & probable silver reserve contains some 10Moz of payablesilver. The transaction does not apply to any additional silver resources within HellasGold's 317 km(2) of mining and exploration licences in northern Greece,including silver resources at Hellas Gold's other mine of Olympias, except for aright of first refusal granted to Silver Wheaton on similar future transactionsinvolving silver. The proceeds of this transaction will be used to accelerate development andprovide flexibility in financing of the European Goldfields project pipeline inGreece. The project development is planned in phases with the Company's flagshipproject, the Skouries copper-gold porphyry, being a priority. Commenting on the announcement, David Reading, Chief Executive Officer ofEuropean Goldfields, said: "We are delighted to have completed this importanttransaction with Silver Wheaton. Silver at Stratoni is a by-product of lead, andrepresents only 13% of our payable revenue at Stratoni. By monetising our silverreserve now, this allows us to accelerate the development of our other majorgold projects in Greece and fund further exploration work on specific targets." About European Goldfields European 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 submitted in March 2007 a technical feasibilitystudy to the Romanian government, in support of a permit application to developthe project. For further information please contact: European Goldfields: e-mail: [email protected] David Reading, Chief Executive Office: +44 (0)20 7408 9534Officer Buchanan Communications: e-mail: [email protected] Bobby Morse / Ben Willey Office: +44 (0)20 7466 5000 Renmark Financial Communication: e-mail: [email protected] G. Murray-Lyon Office: +1 514 939 3989 Forward-looking statements Certain 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 include, but are not limited to, the estimation ofmineral reserves and resources, the timing and amount of estimated futureproduction, costs and timing of development of new deposits, permitting timelines and expectations regarding metal recovery rates. Forward-lookingstatements are necessarily based upon a number of estimates and assumptionsthat, while considered reasonable by management, are inherently subject tosignificant business, economic and competitive uncertainties and contingencies.The Company cautions the reader that such forward-looking statements involveknown and unknown risks, uncertainties and other factors that may cause theactual financial results, performance or achievements of the Company to bematerially different from its estimated future results, performance orachievements expressed or implied by those forward-looking statements and theforward-looking statements are not guarantees of future performance. Theserisks, uncertainties and other factors include, but are not limited to: changesin the price of gold, base metals or certain other commodities (such as fuel andelectricity) and currencies; uncertainty of mineral reserves, resources, gradesand recovery estimates; uncertainty of future production, capital expendituresand other costs; currency fluctuations; financing and additional capitalrequirements; the successful and timely permitting of the Company's Skouries,Olympias and Certej projects; legislative, political, social or economicdevelopments in the jurisdictions in which the Company carries on business;operating or technical difficulties in connection with mining or developmentactivities; the speculative nature of gold and base metals exploration anddevelopment, including the risks of diminishing quantities or grades ofreserves; the risks normally involved in the exploration, development and miningbusiness; and risks associated with internal control over financial reporting.For a more detailed discussion of such risks and material factors or assumptionsunderlying these forward-looking statements, see the Company's Annual Information Form for the year ended 31 December 2006, filed on SEDAR atwww.sedar.com. The Company does not intend, and does not assume any obligation,to update or revise any forward-looking statements whether as a result of newinformation, future events or otherwise, except as required by law. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
EGU.L