Response on Business Plans
April 20 2006 - 3:01AM
UK Regulatory
RNS Number:7034B
European Goldfields Ltd
20 April 2006
For Immediate Release 20 April 2006
European Goldfields Limited
Greek Government Positive on Business Plans
European Goldfields Limited (AIM: EGU / TSX: EGU) is pleased to announce that
its 65%-owned subsidiary Hellas Gold S.A. has received an official response from
the Greek Ministry of Development (the "Ministry") on the business plans
submitted in January 2006 for the projects of Skouries and Olympias. The
submission of the business plans represents a significant milestone in obtaining
the permits for these major gold and base metal projects in Northern Greece.
The response states that the Ministry is in agreement with the principles stated
in the business plans, and that the Ministry considers the business plans to be
in the best interest of the Greek economy. This response was received by Hellas
Gold within the timeframe provided for in its contract with the Greek State.
With this response, the Ministry endorses Hellas Gold's holistic and phased
approach to the development of the projects, with emphasis on achieving full
production at the Skouries gold-copper porphyry deposit as soon as possible, and
the phasing of the Olympias gold-lead-zinc-silver deposit. This approach
minimises financial risk by the phased injection of capital. The principal
revenue stream in the early phases will be through the sale of concentrates.
The response from the Ministry also has the benefit of providing a short-list of
the technical matters on which the Ministry would like some further
clarifications. These matters will be addressed in cooperation with the Ministry
in the context of Hellas Gold's ongoing work on a full environmental impact
study, which is expected to be submitted to the Greek government in Q3 2006. On
approval of the study, 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 plans and take into account any conditions in the environmental permit.
The mining permits are expected to be issued on approval of the technical report
by the Greek government.
Commenting on the announcement, David Reading, Chief Executive Officer of
European Goldfields, said: "The Hellas Gold team successfully delivered the
business plans on time to the Greek government for the major gold and base
metals projects of Skouries and Olympias in January 2006. We have now
constructively engaged with the Greek government on finalising the technical
reports for the project, in line with our contract with the Greek State. We are
encouraged that the Government acknowledged the merits of our business plans and
confirmed that our projects are in the best interest of the Greek economy."
About European Goldfields
European Goldfields Limited (the "Company") is a resource company involved in
the acquisition, exploration and development of mineral properties in Greece,
Romania and the Balkans.
Romania - The Company holds four mineral properties located within the "Golden
Quadrilateral" area of Romania. The Company recently announced the conversion of
resources into Canadian NI 43-101 compliant reserves for its 80%-owned Certej
project, underpinning the value of the project. The Certej deposit hosts
probable reserves of 27.7 Mt grading 2.0 g/t gold and 11.6 g/t silver for 1.76
Moz gold and 10.35 Moz silver (80% attributable). The Company is now completing
a final feasibility study for submission to the Romanian government by the end
of 2006, in support of an application for environmental and mining permits to
develop the Certej project.
Greece - The Company holds a 65% interest in Hellas Gold S.A. ("Hellas Gold").
Hellas Gold owns assets in northern Greece which consist of three deposits
within 70-year mining concessions covering a total area of 317 km(2). The
deposits include the polymetallic projects of Stratoni and Olympias which
contain gold, lead, zinc and silver, and the copper/gold porphyry body referred
to as Skouries. All three deposits have been well defined with over 200,000
metres of drilling and the completion of feasibility studies and later
engineering studies.
The total proven and probable reserves of these assets are 7.6 Moz gold, 65.8
Moz silver, 0.7 Mt copper, 0.7 Mt lead and 0.9 Mt zinc, from a measured and
indicated resource base of 9.4 Moz gold, 74.5 Moz silver, 1.0 Mt copper, 0.8 Mt
lead and 1.1 Mt zinc (65% attributable).
These assets represent some of the largest defined deposits in Europe. The three
deposits are located within a 10 km radius of each other, making this
effectively a gold and base metals centre. Furthermore, both Stratoni and
Olympias were previously in production and have extensive existing mining and
plant infrastructure and a ship-loading facility on the Aegean Sea.
Hellas Gold's assets also include potential revenue-generating stockpiles of
gold concentrates.
In September 2005, Hellas Gold resumed production at Stratoni following the
award by the Greek State of all necessary environmental and mining permits.
Hellas Gold is in the process of applying for similar permits for Olympias and
Skouries, having met its first milestone by submitting business plans to the
Greek government in January 2006.
For further information please contact:
European Goldfields: e-mail: info@egoldfields.com
David Reading, Chief Executive Officer website: www.egoldfields.com
Office: +44 (0)20 7408 9534
Buchanan Communications: e-mail: bobbym@buchanan.uk.com
Bobby Morse / Ben Willey
Office: +44 (0)20 7466 5000
Mobile: +44 (0)7802 875 227
The Sherbourne Group: e-mail: forbes@sherbournegroup.ca
Forbes West
Office: +1 416 203 2200
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
www.egoldfields.com/goldfields/resources.jsp. 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 information included in this news release, 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 statements". The words "expect", "will", "intend",
"estimate" and similar expressions identify forward-looking statements.
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 worldwide price of gold, base metals or certain other
commodities (such as fuel and electricity) and currencies; 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; and the risks normally involved in the
exploration, development and mining business. These factors are discussed in
greater detail in the Company's Annual Information Form for the year ended 31
December 2005, filed on SEDAR at www.sedar.com. The Company disclaims any
intention or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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