Results for Q3 2007 - Profits continue to increase - Significant progress at Certej

    WHITEHORSE, YT, Nov. 8 /CNW Telbec/ - European Goldfields Limited
(AIM: EGU / TSX: EGU) ("European Goldfields" or the "Company") today reports
its results for the third quarter to 30 September 2007. Highlights are:

    Corporate & Financial highlights:

    - European Goldfields added to S&P/TSX Global Gold Index
    - Profit (before tax) of $31.9m in the first nine months of 2007,
      compared to $5.4m in 2006
    - Working capital of $224.3m at 30 September 2007, compared to $41.9m at
      31 December 2006

    Operational highlights:

    - Stratoni sales up by 70% in the first nine months of 2007 compared to
    - Certej reserves increased by 20% - Full feasibility study to be
      completed in Q1 2008
    - Olympias payable gold in concentrate sales almost doubled in
      Q3 vs. Q2 2007
    - Sale agreed for extra 71,000 tonnes of Olympias gold concentrates
    - Contract signed for purchase of mill and plant equipment in Greece
    - Airborne geophysics exploration under way in Greece to identify new

    Commenting on the results, David Reading, Chief Executive Officer of
European Goldfields, said: "European Goldfields continues to benefit from
strong cash flows from metal production at Stratoni and sales of gold
concentrates from Olympias. With the recent publication of additional
reserves, Certej is proving itself to be a robust gold and silver project,
whilst our exploration programme in Greece is expected to provide exciting new
opportunities in a very prospective licence area".

    Conference Call & Webcast - 8 November 2007 at 10am EST / 3pm GMT

    European Goldfields will host a conference call on Thursday 8 November
2007 at 10:00 a.m. EST / 3:00 pm (GMT) 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) 416-644-3423 or (toll free): 1-800-595-8550
    From the UK, Austria, Belgium, Denmark, France, Germany, Ireland, Italy,
    Netherlands, Norway & Switzerland (toll free): 00-800-2288-3501
    From Sweden (toll free): 007-800-2288-3501 or (toll free): 009-800-2288-

    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 midnight on 15 November 2007 by dialing (toll free)
1-877-289-8525 or 1-416-640-1917, Passcode 2125 0012#.

                           SELECTED FINANCIAL DATA

                                  Three months ended       Nine months ended
                                             30 Sept.                30 Sept.
    (in thousands of US dollars,    2007        2006        2007        2006
     except per share amounts)         $           $           $           $
    Statement of loss and
    Sales                         21,663      15,211      63,690      32,568
    Gross profit                  11,273       7,958      36,361      16,583
    Profit before income tax      15,268       4,102      31,868       5,392
    Profit/(loss) after
     income tax                   12,504       2,984      24,589       2,835
    Non-controlling interest        (348)     (1,509)     (4,990)     (2,209)
    Profit/(loss) for the
     period                       12,156       1,475      19,599         626
    Earnings/(loss) per share       0.07        0.01        0.14        0.01

                                       30 Sept. 2007        31 December 2006
    (in thousands of US dollars)                   $                       $
    Balance sheet
    Working capital                          224,289                  41,854
    Total assets                             744,998                 311,943

    European Goldfields' unaudited interim consolidated financial statements
and management's discussion and analysis for the three- and nine-month periods
ended 30 September 2007 and 2006 are filed on SEDAR at

                           CERTEJ PROJECT (ROMANIA)


    - Certej reserves increased by 20% - Life-of-mine extended by two years
    - Clear path to permitting
    - Full feasibility study to be completed in Q1 2008

    Certej reserves increased by 20% - Life-of-mine extended by two years - On
9 October 2007, European Goldfields announced a 20% increase in gold reserve
ounces for the Certej project, which can now be reported as follows:

                               Certej Reserves
                                 Average     Million     Average     Million
    Reserve          Million        Gold      Ounces      Silver      Ounces
     Category         Tonnes  Grade (g/t)       Gold  Grade (g/t)     Silver
    Probable            32.8         2.0         2.1        11.4        12.0
    Note: Reserve based on pit optimisation using a gold price of $425/oz and
          a silver price of $7/oz.

    The new reserve results from a better conversion of resources into
reserves, combined with increased resources, and is based on the production of
a gold-bearing concentrate followed by the production of gold and silver as
doré on site by means of the Albion Process. The previous reserve estimate
published in April 2006 was based on the less-economical development option
involving the direct sale of a gold-bearing flotation concentrate.
    The better conversion from resources to reserves reflects improved
metallurgical recoveries following completion of extensive bulk continuous
metallurgical test-work, an in-house pre-feasibility study and subsequent pit
optimisation and pit design work by RSG Global Consulting Pty Ltd ("RSG
Global"), which included a geotechnical drilling programme designed by Golder
Associates of the UK.
    The Albion Process is a combination of ultra-fine grinding of concentrates
and oxidative leaching at atmospheric pressure. The liberated gold and silver
is then recovered as doré by the conventional Carbon in Leach ("CIL") process.
    The deposit will be mined by open pit methods with a strip ratio of 3.1:1.
The project will involve the mining and processing of 3.0 million tonnes of
ore per annum over at least eleven years, compared to the nine-year mine life
under the previous reserve estimate. This is expected to yield approximately
160,000 oz of gold and 820,000 oz of silver per year in doré, reflecting an
average total process recovery of 81% for gold and approximately 75% for

    Clear path to permitting - European Goldfields is now in the detailed
planning phase for the Certej project and has established a clear path to
applying for permits to develop the project, having already submitted a
Technical Feasibility Study ("TFS") to the Romanian government in March 2007,
which will be followed by the submission of an Environmental Impact Study
("EIS") by the end of 2007. The residues from the flotation and gold plants
will be disposed of in two separate but adjoining tailings management
facilities ("TMF"), which are ideally located and designed for this project.
    In September 2006, European Goldfields announced that the Hunedoara County
Council had issued a General Urbanisation Certificate for the Certej project.
The certificate confirms the designation of Certej as an industrial mining
area and confirms local community support for the project. This important
milestone is the first official step in the permitting process for Certej.
    All mining permits and a detailed urbanisation plan are expected by
mid-2008 following a standard public consultation process with the local

    Full feasibility study to be completed in Q1 2008 - European Goldfields is
in the final stage of completing a full feasibility study for the Certej
project, which will be used for internal approval and presentation to banks
and other sources of potential financing of the project. The only major
pending studies are the EIS and the TMF review by Golder Associates, which are
due for completion by the end of 2007, and the engineering study for the
process plant and associated infrastructure by Aker Kvaerner Engineering
Services, scheduled for completion in Q1 2008.

                         STRATONI OPERATIONS (GREECE)


    - Sales increased by 70% in the first nine months of 2007 compared to
    - Better production grades achieved year to date compared to reserve
    - Filter presses installed to fully utilise available tailings storage
    - Mining at margin of inferred resources confirms expected grades

    Sales up by 70% in the first nine months of 2007 compared to 2006 - Hellas
Gold mined a total of 56,075 tonnes of ore in the third quarter of 2007 and
164,232 tonnes during the first nine months of 2007 at its Stratoni mine.
Hellas Gold completed 5 shipments of concentrates from Stratoni in the third
quarter of 2007 (2006 - 6) and 18 shipments in the first nine months of 2007
(2006 - 13). This translates into the following sales of concentrates:

                                      Q3          Q3    9 Months    9 Months
                                    2007        2006        2007        2006
    Ore mined (wet tonnes)        56,075      49,652     164,232     129,370
    Zinc concentrate (tonnes)      5,710      11,130      27,961      21,926
    - Containing payable:
       Zinc (tonnes)(*)            2,364       4,702      11,682       9,357
    Lead concentrate (tonnes)      5,694       3,696      15,119      10,656
    - Containing payable:
       Lead (tonnes)(*)            3,759       2,418       9,881       7,138
       Silver (oz)(*)            297,321     189,349     772,962     563,258
    Inventory (end of period)
    Ore mined (wet tonnes)         4,868       3,617       4,868       3,617
    Zinc concentrate (tonnes)      2,797       1,199       2,797       1,199
     concentrate (tonnes)          2,042       1,345       2,042       1,345
    (*) Net of smelter payable deductions

    As at 30 September 2007, concentrate inventory levels represented
approximately one shipment each of lead and zinc concentrates.
    Ore production rates from underground have steadily increased from
670 tonnes per day in the first nine months of 2006 to 870 tonnes per day in
the first nine months of 2007, and the mine now operates effectively at over
925 tonnes per day. The rate of ore production is expected to continue to
increase up to the end of 2009.

    Better production grades achieved year to date compared to reserve
grades - Mined grades have continued to be in line with the high levels
experienced in the first half of 2007. On average, mined and processed lead
and zinc grades have been on average approximately 19% and 6% respectively
higher than reserve grades in the first nine months of 2007. As a result,
concentrate production and sales are at relatively high levels.
    Forecast ore production for 2007 has been reduced by approximately 10%
from the originally forecasted 250,000 tonnes due to poor ground conditions in
the upper area of the mine, requiring shotcrete equipment. As a result,
development of an internal ramp to access the upper parts of the mine is
slower than expected and face availability has been reduced from an expected
15 to 11 faces. However, this is not expected to affect forecast metal
production as grades have been significantly higher than expected in 2007.
    The excavation of a new decline to the Mavres Petres orebody, critical to
future production ramp-ups and ventilation, is over 90% completed at
1,630 metres. Connection of the decline to the lower ramp will enable the
introduction of shotcreting equipment into the upper levels, which is expected
to ameliorate the poor ground conditions encountered there.

    Filter presses installed to fully utilise available tailings storage
capacity - The two filter presses purchased to maximise storage space for fine
tailings and water treatment plant sludge have been fully installed and are in
the final stages of commissioning. Results to date have been excellent. The
filter presses produce a solid cake from fine tailings and allow solid
deposition of fine particle sludge from the water treatment plant. Previously,
this sludge material required thickening and pumping to the tailings dams for
storage, which is inefficient in terms of cost and utilisation of dam storage
capacity. The backfilling of old mine workings with coarse tailings to create
additional tailings storage space on surface has resulted in a total of some
30,000 m3 of void in the old Madem Lakkos mine workings being filled to date.
This backfilling should also reduce mine water pumping from underground and
associated treatment costs.

    New mineralisation discovered at Stratoni - New mineralisation has been
encountered during the excavation of the new decline running between the
existing reserve and mined-out areas at Madem Lakkos. Average grades from
panel sampling compare favourably with current reserves. A drill programme
designed to define at least 200 metres of strike and 75 metres of dip extent
has commenced with results expected in the fourth quarter of 2007. Initial
results indicate that the zone has an average width of 6.55 metres with a
weighted average grade of 0.7 to 14.8% Pb, 1.3 to 22.1% Zn and 16 to
307g/t Ag. The new decline will enable immediate access for mining of any new
discovery in this area.

    Mining at margin of inferred resources confirms expected grades - Stratoni
benefits from inferred resources, which are extrapolations from the known
reserves and comprise some 555,000 tonnes grading 7.3% lead, 10.2% zinc and
181 g/t silver. These inferred resources are currently being mined at the
margin, confirming expected grades. Drilling on 25m centres is planned in
early 2008 in the upper west and lower east parts of the orebody which account
for some 85% of the inferred resources. The drill programme is expected to
convert the inferred resources to the measured and indicated categories, which
can be immediately converted to proven and probable reserves as the areas are
adjacent to current mine infrastructure.



    - Payable gold in concentrate sales almost doubled in Q3 vs. Q2 2007
    - Sale agreed for extra 71,000 tonnes of gold concentrates
    - Contract signed for purchase of mill and plant equipment

    Sale agreed for extra 71,000 tonnes of gold concentrates - Hellas Gold's
Olympias project benefits from an existing stockpile of gold-bearing pyrite
concentrates which represented, at 31 December 2006, a reserve of
approximately 252,000 tonnes grading 23.3 g/t gold (containing 188,000 oz of
gold), in addition to substantial underground reserves of gold, lead, zinc and
    Hellas Gold completed 13 shipments of gold concentrates from the Olympias
stockpile in the third quarter of 2007 (2006 - 5) and 31 shipments in the
first nine months of 2007 (2006 - 5). This translates into the following sales
of concentrates:

                                      Q3          Q3    9 Months    9 Months
                                    2007        2006        2007        2006
    Gold concentrate (dry
     tonnes)                      28,393       6,134      58,169       8,039

    In Q3 2007, Hellas Gold entered into two off-take agreements with a
subsidiary of Celtic Resources Holdings Plc (AIM: CER) and Trafigura Beheer
B.V. for the sale of a total of 71,000 wet metric tonnes (wmt) of gold
concentrates. Celtic Resources has pre-paid for 50,000 wmt of concentrates in
October 2007 and agreed to take delivery of the concentrates by the end of
September 2009. Trafigura Beheer B.V. has agreed to take delivery of
21,000 wmt of concentrates by the end of 2007. In total, these 71,000 wmt of
concentrate contain approximately 50,000 oz of gold.
    Hellas Gold has now secured the sale of the entire stockpile to six
different purchasers - Golden China Resources Corporation, Celtic Resources
Holdings Plc, MRI Trading AG, Yantai Non-ferrous Metals Group Trading Co. Ltd,
Euromin S.A. and Trafigura Beheer B.V.
    Hellas Gold plans to process 2.4Mt of stockpiled tailings arising from the
previous operations at Olympias, which will produce approximately
350,000 tonnes of concentrates, and resume underground mining operations at
Olympias after permits are awarded, producing more gold bearing pyrite
concentrates for sale to existing and new off-take purchasers.
    Olympias benefits from extensive mining and plant infrastructure already
in place, including a concentrator plant, a shaft down to a depth of
400 metres below surface and a port facility nearby at Stratoni. International
contractor Outotec Minerals OY inspected the facilities in July 2007 and
concluded that the plant could be brought back into efficient operation
quickly and at relatively modest cost.

    Skouries technical feasibility study nearly completed - Hellas Gold has
completed most technical studies for the full feasibility study on its
Skouries gold-copper project, confirming that Skouries can be mined as a low
strip open pit operation and as a highly productive underground mine. This is
expected to produce annually up to 43,000 tonnes of copper and 220,000 oz of
gold over a mine life of over 20 years.
    Outstanding work on the full feasibility study consists of the
incorporation of the environmental impact study and minor optimisation studies
on landtake positioning around the open pit, water diversion and costs in the
open pit.

    Contract signed for purchase of mill and plant equipment - In June 2007,
Hellas Gold signed a contract with Outotec Minerals OY for the supply of a
large technology package for the copper-gold concentrator plant of Skouries.
The total contract value exceeds (euro)30 million and cover grinding,
flotation, thickening and automation technologies including engineering and
commissioning services. A deposit of (euro)6 million was paid to secure the
fabrication of the primary SAG and ball mills and for Outotec to commence with
basic design. Hellas Gold is also investigating ways to cooperate with other
parties for the development of the Skouries project.

    Permitting process moving forward - In July 2007, Hellas Gold received a
formal letter confirming that the Greek Ministry of Development had completed
its review of Hellas Gold's business plan submitted in January 2006 for the
joint development of the Skouries and Olympias gold and base metals projects
in Northern Greece.
    In the letter, the Ministry of Development also re-declared its positive
opinion of Hellas Gold's preliminary environmental impact study ("PEIS") which
has already been submitted, and formally requested the Ministry of Environment
to issue its official approval of the PEIS.
    Hellas Gold is currently finalising a full environmental impact study
("EIS") which is expected to be submitted to the Greek government in the first
quarter of 2008, addressing any comments received on the PEIS which are
expected by the end of 2007. On approval of the EIS, the environmental permits
for Skouries and Olympias are expected to be issued.
    Hellas Gold 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.

    Airborne geophysics exploration under way to identify new targets - Hellas
Gold holds 317 km2 of highly prospective exploration licences in northern
Greece. No systematic modern exploration has ever been conducted over the
licences and this will be the first survey of its kind. The expected targets
can be broadly divided into massive sulphides in the north and west of the
permit area, and porphyry mineralisation in a northeast trending belt to the
south. The whole area is currently being surveyed by Fugro Airborne Surveys
using airborne electromagnetic ("EM") and radiometric techniques which will
detect the magnetised porphyries and their alteration haloes as well as
improving knowledge of geological structures over the whole area. Following a
successful pilot programme of ground based EM, the north and east of the
licence area is also to be covered by Fugro using airborne EM in order to
detect massive sulphide bodies. The work is expected to generate significant
new targets and will put these into context along with those previously
identified during GIS compilation work, including the Olympias look-alike
orebody at Piavitsa and porphyry mineralisation at Fisoka. This will allow
more informed target prioritisation on the current licence area before more
detailed investigation commences in 2008.

    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,, +44 (0)20 7408 9534; Buchanan
Communications: Bobby Morse/Ben Willey,, +44 (0)20 7466
5000; Renmark Financial Communication: Tina Cameron,; Barbara Komorowski,; Media - Eva Jura,; (514) 939-3989, Fax: (514) 939-3717,; Evolution Securities: Simon Edwards/Neil Elliot,, +44 (0)20 7071 4300

Organization Profile


More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890