Acquisition of an Additional 30% Interest in Hellas Gold - Commencement of Equity Offering


    MONTREAL, June 1 /CNW Telbec/ - European Goldfields Limited
(TSX / AIM: EGU) (the "Company" or "European Goldfields") is pleased to
announce that it has agreed to acquire an additional 30% interest in Hellas
Gold S.A. ("Hellas Gold") which holds all the Company's Greek mineral assets,
increasing the Company's total interest to 95%. The Company also announces
that it has filed a preliminary short form prospectus for a marketed offering
of common shares of the Company (the "Shares"), to raise approximately
US$112 million in gross proceeds to fund development of the Company's projects
in Greece and Romania, and a secondary offering by a shareholder of up to
3 million existing shares on issue (approximately US$15 million).

    Acquisition of an Additional 30% Interest in Hellas Gold

    The Company has entered into an agreement with a wholly-owned subsidiary
of Aktor S.A. ("Aktor"), a wholly-owned subsidiary of Elliniki Technodomiki
TEB A.E. (ATHEX: ELTEX) ("El-Tech"), pursuant to which the Company has
conditionally agreed to acquire an additional 30% interest in Hellas Gold (the
"Acquisition") in consideration for US$178 million, payable in common shares
representing 19.9% of the issued and outstanding shares of the Company after
the completion of the equity offering (described below) and the balance, if
any, in cash. The Acquisition will increase the Company's total interest in
Hellas Gold to 95%.
    El-Tech is a large Greek conglomerate with a market capitalisation in
excess of US$2 billion and investments in four fields: construction,
concessions, energy and real estate. Aktor is Greece's largest construction
    As part of the Acquisition, Aktor has agreed to re-invest into Hellas
Gold 50% of the cash consideration it receives, if any, as funding towards
maintaining its residual 5% shareholding interest in Hellas Gold. On the
completion of the Acquisition, Aktor will also enter into a lock-up
undertaking with the Company whereby it will agree not to sell, transfer,
pledge or otherwise dispose of its Shares in the Company until the earlier of
the fourth anniversary of the closing of the Acquisition and the date on which
the Company's Skouries gold-copper porphyry mining project commences
production. Aktor does not currently hold any Shares of the Company and the
only shares of the Company it will hold will be the common shares issued as
consideration for the Acquisition.
    Closing of the Acquisition is subject to certain conditions, including
but not limited to completion of the treasury offering of new shares. The
Acquisition is expected to be completed within five days of the closing date
of the equity offering. The Company does not propose to make significant
changes to Hellas Gold's operations following the Acquisition. The Company
intends to appoint a representative of Aktor to its board of directors after
the closing of the Acquisition.
    In the year ended December 31, 2006, Hellas Gold reported profits before
tax of US$10 million. Pursuant to Rule 13 of the AIM Rules published by the
London Stock Exchange, the Acquisition is considered to be a Related Party
Transaction. The Company's directors consider, having consulted with its
nominated adviser, Evolution Securities Limited, that the terms of the
transaction are fair and reasonable insofar as its shareholders are concerned.

    Commencement of US$127 Million Equity Offering

    The Company is also pleased to announce that it has filed a preliminary
short form prospectus in all provinces except Quebec, for a public offering of
common shares (the "Offering"). Aggregate gross proceeds from the treasury
offering of new shares are anticipated to be approximately US$112,000,000. The
Company intends to use the net proceeds of the treasury offering for the
development of the Company's mineral projects in Greece and Romania, and for
general corporate purposes.
    The underwriters will have an option, exercisable for a period of 30 days
from the date of closing, to purchase up to a further 15% in additional Shares
over the treasury offering at a price equal to the offering price to cover
over-allotments and for market stabilization purposes (the "Over-Allotment
Option"). The Offering is being led by RBC Capital Markets as lead manager to
a syndicate of underwriters including Evolution Securities Ltd, Raymond
James Ltd, Dundee Securities Corporation and Orion Securities Inc.
    The Company intends to use the net proceeds of the treasury offering for
the development of the Company's mineral projects in Greece and Romania, and
for general corporate purposes.
    As part of the Offering, Mr Dimitrios Koutras, a director of the Company,
who currently owns of record 13,724,074 Shares representing approximately 12%
of the existing issued and outstanding common shares, may offer and sell in a
secondary offering up to 3 million shares on the same terms as the treasury
offering. The Company will not be entitled to any of the proceeds of the
secondary offering.
    Closing of the Offering is subject to certain conditions, including, but
not limited to, receipt of all necessary securities regulatory approvals
(including the approval of the Toronto Stock Exchange). The preliminary short
form prospectus has been filed on SEDAR at
    Commenting on the Acquisition and the Offering, David Reading, Chief
Executive Officer of European Goldfields, said:

    "The acquisition provides European Goldfields with the opportunity to
    increase its ownership of high quality projects in an accretive
    transaction which further aligns the interests of Aktor and European
    Goldfields shareholders."

    "The offering provides the funding towards European Goldfields' pipeline
    of projects in Greece and Romania and provides flexibility in future
    financing and development options to enhance value to shareholders.
    Together the acquisition and the offering represent a company
    transforming transaction, which should maximise the return to our
    existing and new shareholders."

    The Shares have not been, nor will be, registered under the United States
Securities Act of 1933, as amended, or any state securities laws and may not
be offered or sold in the United States absent registration or applicable
exemption from the registration requirement of such Act and applicable state
securities laws. This press release shall not constitute an offer to sell or
the solicitation of an offer to buy, nor shall there be any sale of these
securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to qualification under the securities laws of any such
    Any public offering of securities to be made in the United States would,
if made, be made by means of a prospectus that could be obtained from the
Company that would contain detailed information about the Company and
management as well as financial statements.

    About European Goldfields

    European Goldfields is a resource company involved in the acquisition,
exploration and development of mineral properties in Greece, Romania and
South-East Europe.
    Greece - European Goldfields holds a 65% interest in Hellas Gold S.A.
Hellas Gold owns three major gold and base metal deposits in Northern Greece.
The deposits are the polymetallic projects of Stratoni and Olympias which
contain gold, zinc, lead and silver, and the Skouries copper/gold porphyry
body. Hellas Gold commenced production at Stratoni in September 2005 and
selling an existing stockpile of Olympias gold concentrates in July 2006.
Hellas Gold is applying for permits to develop the Skouries and Olympias
    Romania - European Goldfields owns 80% of the Certej gold/silver project
in Romania. European Goldfields submitted in March 2007 a technical
feasibility study to the Romanian government, in support of a permit
application to develop the project.

    Forward-looking statements

    Certain statements and information contained in this document, including
any information as to the Company's future financial or operating performance
and other statements that express management's expectations or estimates of
future performance, constitute forward-looking information under provisions of
Canadian provincial securities laws. When used in this document, the words
"anticipate", "expect", "will", "intend", "estimate", "forecast", "planned"
and similar expressions are intended to identify forward-looking statements or
information. Forward-looking statements include, but are not limited to, the
estimation of mineral reserves and resources, the timing and amount of
estimated future production, costs and timing of development of new deposits,
permitting time lines and expectations regarding metal recovery rates.
Forward-looking statements are necessarily based upon a number of estimates
and assumptions that, while considered reasonable by management, are
inherently subject to significant business, economic and competitive
uncertainties and contingencies. The Company cautions the reader that such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual financial results, performance or
achievements of the Company to be materially different from its estimated
future results, performance or achievements expressed or implied by those
forward-looking statements and the forward-looking statements are not
guarantees of future performance. These risks, uncertainties and other factors
include, but are not limited to: changes in the price of gold, base metals or
certain other commodities (such as fuel and electricity) and currencies;
uncertainty of mineral reserves, resources, grades and recovery estimates;
uncertainty of future production, capital expenditures and other costs;
currency fluctuations; financing and additional capital requirements; the
successful and timely permitting of the Company's Skouries, Olympias and
Certej projects; legislative, political, social or economic developments in
the jurisdictions in which the Company carries on business; operating or
technical difficulties in connection with mining or development activities;
the speculative nature of gold and base metals exploration and development,
including the risks of diminishing quantities or grades of reserves; the risks
normally involved in the exploration, development and mining business; and
risks associated with internal control over financial reporting. For a more
detailed discussion of such risks and material factors or assumptions
underlying these forward-looking statements, see the Company's Annual
Information Form for the year ended 31 December 2006, filed on SEDAR at The Company does not intend, and does not assume any
obligation, to update or revise any forward-looking statements whether as a
result of new information, future events or otherwise, except as required by

For further information:

For further information: European Goldfields: David Reading, Chief
Executive Officer,, Office: +44 (0)20 7408 9534; RBC
Capital Markets: Patrick Meier/Peter Barrett-Lennard, Office: +44 (0)20 7653
4093; Evolution Securities: Frank Moxon/Simon Edwards, Office: +44 (0)20 7071
4300; Buchanan Communications: Bobby Morse/Ben Willey,,
Office: +44 (0)20 7466 5000; Renmark Financial Communication: Neil G.
Murray-Lyon,; Barbara Komorowski,; Media - Eva Jura: (514) 939 3989, Fax: (514)

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