European Goldfields Ltd. - Results for Q2 2008 - Stratoni production up 38% - Certej definitive feasibility study

    WHITEHORSE, YT, Aug. 14 /CNW Telbec/ - European Goldfields Limited
(AIM: EGU / TSX: EGU) ("European Goldfields" or the "Company") today reports
its results for the quarter to 30 June 2008. Highlights are:

    Financial highlights:

    - Revenues of $18.5m, versus $12.7m in Q1 2008
    - Cost per tonne falls 6% at Stratoni compared to Q1 2008
    - Working capital of $216.9m at 30 June 2008, compared to $225.7m at
      31 March 2008
    - Overall profitability impacted by lower metal prices

    Operational highlights:

    - Stratoni: Ore production up 38%, record metal production in June 2008
    - Skouries: Basic engineering complete
    - Olympias: Continued gold shipments, EIS for tailings reprocessing
    - Certej: Positive feasibility study and public hearings progress
    - Exploration in Greece: Magnetic modelling confirms large porphyry
    - Turkey: Team in place and exploration has commenced

    Corporate highlights:

    - New executive appointment
    - Lead hedges start to offset weaker commodity prices

    Commenting on the results, David Reading, Chief Executive Officer of
European Goldfields, said: "The quarter ended 30 June 2008 has again
demonstrated our ability to deliver significant milestones from our strength
in depth. Our Certej project continues to progress both through the permitting
process and as we substantiate its viability in detail through a definitive
feasibility study. Ramping up of production at Stratoni exemplifies our
strength in both operations and project development in Greece. We remain
focused and on track to secure further permits and make our next steps

    Conference Call & Webcast - 14 August 2008 at 10am ET / 3pm BST

    European Goldfields will host a conference call on Thursday 14 August 2008
at 10:00 a.m. ET / 3:00 pm (London, UK time) to update investors and analysts
on its results.
    Participants may join the call by dialing one of the three following
numbers, approximately 10 minutes before the start of the call.

    From North America: (Local) 416-644-3425 or (toll free): 1-800-732-9307
    From the UK, Austria, Belgium, Denmark, France, Germany, Ireland, Italy,
    Netherlands, Norway, Sweden & Switzerland (toll free): 00-800-2288-3501
    A live audio webcast of the call will be available on:

    For those unable to join the live conference call, a replay will be
available until Thursday August 21, 2008 at midnight by dialing (toll free)
1-877-289-8525 or 1-416-640-1917, Passcode 21279664#.

                           SELECTED FINANCIAL DATA

                                                  Three months ended 30 June
    (in thousands of US dollars,                            2008        2007
     except per share amounts)                                 $           $
    Statement of loss and deficit
    Sales                                                 18,461      24,944
    Gross profit                                           3,470      14,949
    Profit before income tax                                 242      10,925
    Profit after income tax                                  886       8,129
    Non-controlling interest                                 (74)     (2,794)
    Profit for the period                                    812       5,335
    Earnings per share                                      0.00        0.04

    Base metal prices in Q2 2008 were substantially lower than in prior
periods, which had a major impact on the Company's revenues and profitability.
In Q2 2008, zinc, which represents the Company's primary product from the
Stratoni operation was trading over 40% lower than in Q2 2007. For the same
period, lead traded over 30% lower. In addition, final pricing of Q1 2008
sales which took place in Q2 2008 resulted in a net reduction in Q2 sales of
over $2.5 million. A strengthening Euro against the US dollar also added
almost 20% to US dollar denominated unit costs from Q2 2007 to Q2 2008.

                                                         30 June     30 June
                                                            2008        2007
    (in thousands of US dollars)                               $           $
    Balance sheet
    Working capital                                      216,822     211,637
    Total assets                                         796,537     729,774

    European Goldfields' unaudited consolidated financial statements and
management's discussion and analysis for the three-month periods ended 30 June
2008 and 2007 are filed on SEDAR at

                             CORPORATE ACTIVITY


    - New executive appointment
    - Lead hedges start to offset weaker commodity prices

    New executive appointment

    On 8 July 2008, the Company was pleased to announce the appointment of
Mark Rachovides as Executive Vice President of the Company. He retains his
existing directorships of European Goldfields Limited and Hellas Gold SA, and
became a member of the senior executive team. He will directly support the
activities of the Company's Greek business and his role will also cover
business development, investor relations and corporate governance matters.

    Lead hedges start to offset weaker commodity prices

    Revenues from Stratoni base metal sales were impacted by the fall in both
zinc and lead prices at the end of June, as highlighted above. All shipments
with provisional pricing had to be marked to market at the end of the quarter
and lower prices were used than those billed on a provisional basis to
customers during the period. Partially offsetting this was the receipt of
$391,000 during Q2 under the Company's current lead option contracts.
Additional contracts become effective from 1 July 2008, so that a total of
900 tonnes of lead per month will be protected at an average price of over
$2,400 per tonne.

                         STRATONI OPERATIONS (GREECE)


    - Major step up in ore production
    - Unit operating costs fall 6%
    - Improved mine infrastructure
    - Process plant operated at full capacity in May and June
    - Record metal production in June 2008 and 21% up on Q2 2007
    - Life of Mine Tailings Strategy in place
    - Encouraging drill results from orebody extension

    Major step up in ore production

    The Stratoni mine consists of a lead-zinc-silver deposit and lies
approximately 4 km from the coastal town of Stratoni in northern Greece. In
Q2 2008, the Company's 95%-owned subsidiary Hellas Gold mined a total of
73,137 wet tonnes of ore (2007 - 53,088) and processed a total of
73,280 tonnes of ore (2007 - 48,179) at Stratoni. This represents a production
increase of 38% in ore mined and 52% in ore processed over Q2 2007. Hellas
Gold sold 8 shipments of base metal concentrates during Q2 (2007 - 8), being
four each of zinc and lead/silver.

    Summary production and sales were as follows:

                                                         Q2 2008     Q2 2007

    Ore mined (wet tonnes)                                73,137      53,088
    Ore processed (dry tonnes)                            73,280      48,179
    Zinc concentrate                                      14,139      10,485
      - Containing: zinc metal (tonnes)                    7,004       5,170
    Lead concentrate                                       6,443       5,955
      - Containing: lead metal (tonnes)                    4,201       4,109
        silver (ounces)                                  316,354     328,879


    Zinc concentrate (tonnes)                             11,224      14,007
    - Containing payable: Zinc (tonnes)(*)                 4,633       5,855
    Lead concentrate (tonnes)                              7,418       5,651
    - Containing payable: Lead (tonnes)(*)                 4,628       3,636
                          Silver (oz)(*)                 355,298     285,349

    Inventory (end of period)

    Ore mined (wet tonnes)                                 1,003       4,603
    Zinc concentrate (tonnes)                              5,660           2
    Lead/silver concentrate (tonnes)                       1,238       2,150
    (*) Net of smelter payable deductions,
    before deduction of smelting and refining charges

    Ore production rates from underground increased to an average of
1,100 tonnes per day in Q2 2008, and the mine now operates effectively at over
1,200 tonnes per day. The rate of ore production is expected to be sustained
in Q3 and to increase again in Q4 to achieve 2008 production in line with our

    Unit operating costs fall 6%

    In contrast to the cost pressures being felt by the mining industry as a
whole, unit costs at Stratoni fell 6% in Q2 2008 to (euro)103 per tonne of ore
processed, from (euro)110 per tonne in Q1 2008. This reflects the combined
benefit of a fixed price mining contract capping increases in mining costs and
higher operational throughput rates at the mill reducing plant and mine
overhead unit costs.

    Improved mine infrastructure to increase mine productivity

    The connection of the new Decline at Mavres Petres to the lower levels of
the main workings was completed in late March resulting in much improved
ventilation and access for materials and equipment. The main fans are
installed and tested and will be put into operation once ventilation doors and
an electrical sub-station are complete.
    Access for equipment and materials through the Decline has enabled trial
'large stope' drifting with dimensions of over 5m by 5m in the lower mine
levels, using bolts and shotcrete as support. The larger stope sizes increase
efficiencies resulting from higher tonnages per blast. An assessment of the
use of this configuration in other production areas is in progress.
    A new portal at the 360 level is complete and a roadheader was
commissioned and started excavating a new decline which will connect from
surface to the upper mine workings, providing additional access, ventilation
and backfill services for the upper levels of the orebody.

    Process plant throughput

    Plant throughput was a record 33,437 dry tonnes in June 2008 at almost
1,200 dry tonnes per operating day compared to the average 1,100 tonnes per
operating day for Q2 2008 as a whole. During May and June, an equivalent
annualised throughput of over 400,000 tpa was achieved continuously. Zinc and
lead metal recoveries are being maintained over budget at a consistent 92%.
The overall result was the combined production of zinc and lead metal
totalling 11,205 tonnes in the quarter (9,279 tonnes in Q2 2007) and a record
5,310 tonnes of combined zinc and lead metal production for the month of June
2008. The on-stream analyser has been operational for over a month and will
continue to optimise the metallurgical performance of the operation.

    Life of mine tailings strategy in place

    The installation of two filter presses means that Stratoni produces filter
cake instead of higher volume fine tailings slurry and water treatment sludge.
Existing coarse tailings at surface have been excavated for use as backfill,
creating additional volume at the Karakoli and Chevalier tailings facilities.
The combination of lower volume filter cake and increased surface storage
volumes in the existing tailings facilities ensures that sufficient capacity
exists for the foreseeable future. The use of the filter presses has also
optimized materials handling and is beginning to reduce costs. The coarse
tailings fraction from the mine production will continue to be used as
backfill in Mavres Petres and Madem Lakkos.

    Encouraging drill results from orebody extension

    Infill drilling of inferred resources to the east of current reserves
within the Stratoni mine and drilling further to the east, in a zone of
mineralisation encountered in the new decline, has commenced. Drill intercepts
to date from these zones are as follows:

    Hole              From        To    Length        Pb        Zn        Ag
    SDD15            127.5     141.2      13.7       4.5      14.7       135
    SDD1040-1          0.6      10.1       9.5       9.8      14.8       194
    SDD1040-2          7.9      11.6       3.7       4.8       8.1        94
    SDD1050-1            2       5.6       3.6       4.3       8.3        93
    SDD1050-2           30     30.85      0.85       4.5      35.5       101
    SDD1050-3          2.9      10.1       7.2       6.0      10.6       118
    SDD1050-4          5.8       7.5       1.7       9.4      17.8       132
    SDD1050-7          7.8      12.5       4.7      21.7      23.9       397
    SDD1050-11           6       7.2       1.2       5.8      11.3       110

    Mine development to the west of the defined measured and indicated
resources on the 268m level has confirmed the extension of the mineralisation
in an area currently defined as inferred resources. Drilling down the orebody
from this level has confirmed that the mineralisation continues to the 250m
level. Intercepts to date are as follows:-

    Hole              From        To    Length        Pb        Zn        Ag
    MP623/628_1          0         8         8       2.7       9.7        73
    MP623/628_1         12        16         4       5.4      10.6       135
    MP624/628_2          0        18        18       7.0       9.3       179
    MP626/628_4          0        16        16       6.3      10.3       179
    MP627/628_5          0         8         8       5.7       3.8       165

    Grades from the new intercepts on both the east and west sides of the
current reserves compare well with the run of mine grades and they are
expected to add to the resources and reserves at Stratoni by year end.
    Hellas Gold is considering the option of acquiring a core drilling rig in
order to continue drilling of the Stratoni orebody. The rig would be used to
continue drilling the eastern extensions to the existing reserve and, on the
completion of necessary development, would be used to delineate resources
along the western extension to the mine including the drilling out of inferred

                          SKOURIES PROJECT (GREECE)

    Continued progress on engineering

    The Basic Engineering package for the Skouries project has been submitted
to the company by Outotec. The fabrication of the SAG and ball mills, also by
Outotec, is progressing to schedule: the shells of both units are nearing
completion and have been inspected. The remaining components are all due for
delivery to site in Q3 2009.
    Orders for the long lead items outside of Outotec's scope are being
prepared by local engineering consultants, ENOIA, for placement in Q3 this
year and include a primary crusher, transformers and switch gear. Detailed
fabrication engineering drawings for the flotation tank cells and paste
thickeners are well advanced in readiness for order placement.
    Hellas Gold, ENOIA and Outotec have progressed the process plant layout
and optimised the overall arrangement. Improvements in the location of various
plant units have provided an opportunity to reduce construction costs,
primarily by lowering the volume of excavation necessary for their
installation. A geotechnical assessment of the plant area has been completed
and a confirmatory drilling programme is planned.
    The Greek Civil Engineering Company, MHXME S.A,, has been selected to
carry out the civil design of the Skouries Project. The relevant contract is
expected to be signed during Q3.
    Greek geotechnical consultants Omicron Kappa have completed the detailed
design of the open pit and submitted their engineering work for the roads
network, although the latter requires some further optimisation.
    Continued progress on project engineering and design allows for the
scheduled start up of the Skouries project in 2010.

                          OLYMPIAS PROJECT (GREECE)


    - Continued sale of gold bearing concentrates
    - Olympias refurbishment plan underway
    - Submission of EIS for re-treatment of existing tailings

    Continued sale of gold concentrates

    The Company's 95%-owned Olympias project benefits from an existing
stockpile of gold-bearing pyrite concentrates which represented, at
31 December 2007, a reserve of approximately 172,000 tonnes grading 23.5 g/t
gold (containing 130,000 oz of gold), in addition to substantial underground
reserves of gold, lead, zinc and silver.

    Sales of pyrite concentrates in the quarter were as follows:

                                                         Q2 2008     Q2 2007

    Gold concentrate (dry tonnes)                         22,479      12,686

    In Q2 2008, 22,479 tonnes of gold bearing pyrite concentrate was sold,
almost doubling our performance in Q2 2007. Industrial action by port workers
at Thessaloniki persists which has had a negative impact. The Company
understands that the situation at the Thessaloniki Port will improve in
Q3 2008.
    Hellas Gold has now secured the sale of the entire stockpile to six
different purchasers, thereby effectively creating a market for its gold
concentrates which did not exist prior to 2007.

    Olympias refurbishment plan underway

    An inspection of the condition of the underground workings at Olympias has
confirmed that mine can be brought back into production. Dewatering pumps have
been operating since the mine was placed on care and maintenance and the shaft
and winder are operable. Ventilation fans will require replacement.
    A contract for the rehabilitation of the Olympias process plant is
expected to be awarded in Q3. This entails repairing damaged structural
concrete, replacing missing equipment and purchasing new process units for
treating the existing stockpiled tailings. As at Stratoni, the coarse fraction
of the concentrator residue can be used for backfill underground, and the
fines processed by filter press technology for solid disposal. Inert
by-product sand from the planned treatment of existing tailings to produce
further gold concentrate is suitable to improve the appearance of the beach at

    Submission of EIS for Olympias Mill refurbishment and re-treatment of
    existing Olympias tailings

    On May 16th 2008, an EIS was submitted to the Ministry of Environment for
the refurbishment of the existing Olympias Mill and the re-treatment of the
existing Olympias tailings. A public hearing in respect of the submitted EIS
is expected to take place in Q3 this year. The treatment of the 3.4 million
tonnes of existing Olympias tailings is expected to produce a further
350,000 tonnes of gold concentrate for sale to current customers.


    Progress in permitting process

    In July 2007, the Company received a formal letter confirming that the
Greek Ministry of Development had completed its review of the Company's
business plan, and re-confirmed its positive opinion of the Company's
preliminary environmental impact study ("PEIS") which had already been
submitted, and formally requested the Ministry of Environment to issue its
official approval of the PEIS.
    As reported previously, approval of the PEIS had been delayed due to
specific delays in other ministerial input into the final report. This
affected a large number of projects, public and private, in Greece. The
Company is pleased to report that progress has resumed and the specific
procedures that remained outstanding to finalise approval have now been
initiated. The Company remains confident of a positive outcome to the process.
    Approval of the PEIS by the Ministry of Environment will be expressed as
an invitation to the Company to submit its full environmental impact study
("EIS") based on clearly defined parameters. On approval of the EIS, the
environmental permits for Skouries and Olympias are expected to be issued.
    The Company will then submit to the Greek government a final technical
report on the Skouries and Olympias projects, which will restate the
principles of the business plan and take into account any conditions detailed
in the environmental permit. The mining permits are expected to be issued on
approval of the technical report by the Greek government.

                            EXPLORATION IN GREECE

    Update on Piavitsa and Fisoka targets

    An airborne geophysical survey, comprising aeromagnetic, radiometric
surveys and EM surveys, was completed by Fugro Airborne Surveys in December
2007 in order to delineate magnetised porphyritic intrusives and their
alteration haloes, to define conductive bodies relating to massive sulphide
mineralisation and to elucidate the geological structure which has controlled
emplacement of mineralisation. The survey has been very successful in meeting
these objectives with the following highlights:-

    - A 17 kilometre by 6 kilometre belt of porphyry intrusives has been
      identified, over which a three dimensional model has been completed
      defining two other major targets, at Fisoka and a previously
      unrecognised target comprising a complex of porphyries that coalesce at
    - Follow-up reconnaissance mapping on the ground has confirmed the
      presence of porphyry style veining and intense alteration over the
      defined porphyry targets and allowed initial holes to be targeted with
      further ground work planned to define more drill targets.
    - Confirmation of the continuity of mineralisation at the Piavitsa
      massive sulphide target along two kilometres of known strike plus a
      further six kilometres strike length defined by conductive anomalies at
      the site have been revealed. Drilling of this exciting target is
      planned for later in the year.
    - Further post processing of the geophysical data continues to define
      other targets in the concession area.

                           CERTEJ PROJECT (ROMANIA)


    - Feasibility study results
    - Public hearings completed and PUZ approval
    - Exploration update

    Feasibility study results

    Certej is an epithermal gold/silver deposit located in the "Golden
Quadrilateral" area of the Apuseni Mountains of Transylvania in Western
Romania, 12km from the regional town of Deva.
    European Goldfields owns 80% of the project through its subsidiary Deva
Gold. There is an existing open pit that was operated by the Romanian State
mining entity Minvest until 2006, for which Deva Gold holds a valid operating
    Following detailed technical and economic studies on Certej culminating
with the definitive feasibility study announced on July 23 2008, the Company
was pleased to report that the project continues to be on track for
permitting. We have concluded that key technical milestones can be achieved
and that a fully viable development of the project can now be established
within key operational criteria.


    The Certej definitive feasibility study is based on conventional open pit
mining of the Certej gold/silver project, processing of 3Mt of ore a year with
production of doré on site and tailings storage in an adjacent facility.

    Tonnes                                                            32.8Mt
    Gold Grade                                                       2.0 g/t
    Silver Grade                                                    11.4 g/t
    Strip Ratio                                                          3.1
    Annual Throughput                                                    3Mt
    Overall Gold Recovery                                                81%
    Overall Silver Recovery                                              74%
    Base Life of Mine                                             11.2 years

    The Certej orebody is well defined based on an extensive drilling and
exploration programme which defines a Measured and Indicated Resource
comprising 41.5 Mt of ore with grades of 2.0 g/t Au & 11 g/t Ag at a 0.8 g/t
Au cut-off. The main mineralised zone is some 1,500 meters long by 500 meters
wide and occurs as sub-horizontal, to moderately dipping zones.
    The mineable reserve comprises 32.8 million tonnes of ore grading 2.0 g/t
gold and 11.4 g/t silver, representing 2.1 million ounces of gold and
12.0 million ounces of silver mined by conventional open pit methods with a
strip ratio of 3.1:1.

    Mine Planning and Scheduling

    Production                                      Years 1-3   Life of mine
    Average gold production, oz pa                    172,000        156,000
    Average silver production, oz pa                  720,000        814,000

    The study is based on owner operated mining of 3 million tonnes of ore per
annum over at least eleven years by a conventional open pit, drill/blast and
shovel/truck method. The mining will extend the existing open pit at Certej
and the mine will eventually comprise a main pit and a west pit.


    The run of mine ("ROM") ore will be processed in three distinct stages:

    - Flotation of ROM material to produce a pyrite, gold-silver concentrate
    - Ultra fine grinding and ambient pressure leaching of the concentrate
      using Xstrata's Albion process, to liberate the gold and silver
    - A standard CIL circuit to process the oxidised concentrate and produce
      gold and silver doré on site

    Annual metal production will average approximately 160,000 ounces of gold
and 800,000 ounces of silver. The process route is based on extensive
metallurgical sampling and testwork, including a full programme of locked
cycle flotation tests, large scale laboratory Albion Process tests, two
continuous pilot scale runs of the Albion Process and a continuous CIL pilot
plant test. Material for the testwork was obtained from diamond drill core and
was representative of the entire mineable reserve.

    Tailings management

    The proposed TMF is located in a valley roughly 1.5 kilometres to the
northeast of the mine site. The flotation tailings, comprising approximately
80% of the total tailings, will be stored in the main dam. The CIL tailings
will be held in a separate dam located immediately upstream of the flotation
dam and will re-circulate water back to the CIL plant.
    The Company also has a second option for the TMF located closer to the
mine. This second option has sufficient capacity to store life of mine
tailings and a study is being undertaken to define the engineering design and
establish the expenditure for this alternative.
    The costs of the first option have been incorporated into the capital
    A waste management plan has been incorporated in the recently submitted
Environmental Impact Study.


    The area has experienced a substantial economic revival in the past four
years with major investments from international and local corporations. It is
served by good infrastructure with 110kV power supply and water pipelines
arriving within two kilometres of the mine. The project has paved roads
directly to site and the region has a large road-building programme to improve
these further. The Certej project also benefits from two rail loading
facilities at the major rail-head at Deva. Deva is connected to the main Black
Sea port of Constantia by the Romanian highway and rail network and is
serviced by three international airports, all within two hours drive of the
    The project will employ over 300 people from the Certej area, whose recent
mining history ensures a good skills base is available in the local labour


    There are no settlements in the vicinity of the proposed mine and TMF
sites. Detailed field work has established that there are no archaeological
remains on the site. Both the mine site and the TMFs are shielded by
topography and there is no visual impact on settlements. All the necessary
studies to comply with Romanian and EU legislation and international best
practice have been completed.

    Capital Costs

    Capital                                                (euro)      (euro)
                                                         million     million
                                                         Initial  Sustaining
    Mining Fleet                                            19.0         7.4
    Pre-strip                                                8.5           -
    Plant                                                   91.5           -
    Infrastructure                                          11.0         2.9
    TMF                                                      6.5        14.4
    Rehabilitation                                                       6.5
    TOTAL                                                  136.5        31.2

    Capital costs comprise the estimates produced by each contributing
consulting group. Aker Solutions made a series of recommendations regarding
plant optimisation which were subsequently actioned by Deva Gold. The current
capital cost estimate for the plant incorporates the following optimisation

    - Improved site layout following geotechnical investigations
    - Competitive up to date quotations for equipment
    - Use of local construction rates based on local quotes
    - Use of Romanian contractors
    - Other in country cost opportunities

    Additional opportunities are being investigated, but have not yet been
incorporated, into the cost estimate, including:

    - Use of second hand grinding mills
    - Use of waste rock for the new highway project in the district that will
      reduce waste rock disposal quantities and costs
    - Increasing the project life to 15 years through the processing of
      existing dump material and lower grade material that falls within the
      current pit design and would be economic above a gold price of
      $700 per ounce

    Financial returns

    Cash Operating Cost                         (euro) per tonne    US$/oz(*)
    Mining                                           1.23 (mined)        111
    Processing (inc TMF)                        10.53 (processed)        234
    G & A                                        0.36 (processed)          8
    TOTAL                                                                353
    (*) Net of silver by product credits
    Gold Price ($/oz)                                                    650
    Silver Price ($/oz)                                                   12
    Post tax IRR                                                        20.3%

    The financial returns achieved by the project show that it is robust at
metal prices of $650 per ounce for gold and $12 per ounce for silver and the
IRR exceeds the company threshold of 20%.
    The internal rate of return of 20.3% is post taxation and royalties. In
addition, project finance has been assumed on the basis of a conservative
50:50 debt: equity ratio.

    Progress on Permitting

    The permitting process is now well advanced and Deva Gold has already
submitted a Technical Feasibility Study, an Environmental Impact Study and a
Zonal Urbanisation Plan (PUZ) to the relevant Romanian authorities.
    Deva Gold already holds an operating permit for Certej, by virtue of the
small scale production and sale of concentrates carried out from an existing
open pit. The EIS and the Technical Feasibility Study address a proposed
increase in mine production at Certej and the processing of ore on site. The
environmental permit and an updated mining permit are expected in Q4 2008
following completion of the public consultation process.
    Deva Gold has advanced the planning procedures for the Zonal Urbanisation
Plan approval including two public meetings with the affected local
communities. The regional Environmental Department from Timisoara has received
an official letter from the local Council of Certej giving its full support to
the project, recognising the sustainable development and benefits the project
brings to the local economy.
    Following receipt of the necessary Environmental and Construction permits
the Company will work toward raising the necessary project finance. The
project will then progress to detailed engineering, procurement and


    The potential to increase the life of the Certej project is being pursued.
The current reserve is defined at metal prices of $425 per ounce of gold and
$7 per ounce of silver. The open pit shell used to define the reserve has a
natural depth limit due to the shape of the orebody, however there is
considerable material within the designed open pit that would be economic at
higher metal prices and the possibility of a low grade stockpile to be fed
through the mill at the end of mine life is being investigated. In addition
there are numerous old dumps within the company's concessions that are within
trucking distance and many of these contain potentially economic grade
material. A programme of sampling and, where appropriate, drilling of the
dumps is underway with the aim of defining measured and indicated resources
within this material. It is believed that the mine life can be extended to
some 15 years with the combined dump and in-pit lower grade material.


    Exploration and administration teams in place

    Administration and exploration teams are now in place with a Chief
Geologist from the Company now appointed. Control systems have been
implemented and a budget for the initial work programme agreed.
    An exploration programme has commenced in northeast Turkey. The Ardala
porphyry target area has been completely remapped and available core re-logged
and selectively sampled.
    Mapping and sampling of other targets within the JV portfolio has also
started together with a generative programme to define areas for new permit
applications and to compile a regional geological model for the Eastern
Pontides belt of Turkey.

    Resources & reserves parameters

    For additional information on the resource and reserve estimates quoted in
this news release, please refer to the Company's Resources & Reserves
Declaration at 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.

    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 2007, 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,, +44 (0)20 7408 9534; Buchanan
Communications: Bobby Morse / Ben Willey,, +44 (0)20
7466 5000; Renmark Financial Communication: Henri Perron,; John Boidman,;
Media: Eva Jura,;, (514)
939-3989, Fax: (514) 939-3717; RBC Capital Markets: Andrew K Smith,, +44 (0)20 7029 7882

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