EGU European Gold

RNS Number:7827C
European Goldfields Ltd
11 May 2006

For Immediate Release                                                11 May 2006


                         Sale of Olympias Concentrates


European Goldfields Limited (AIM: EGU / TSX: EGU) is pleased to announce that
its 65%-owned subsidiary Hellas Gold S.A. has entered into an off-take agreement
with Shandong MIC BioGold Ltd (a subsidiary of Michelago Limited of Australia
(ASX: MIC)) for the initial sale of at least 18,000 wet metric tonnes (wmt) of
gold bearing pyrite concentrates currently located on the surface at Olympias in
Greece. The agreement also includes the possible sale of an additional 100,000
dry metric tonnes of concentrates over a three-year period from April 2007.


Olympias benefits from an existing stockpile of gold concentrates representing a
reserve of about 258,000 tonnes grading 23.3 g/t gold, in addition to
substantial underground reserves of gold, lead, zinc and silver.


The monthly shipments of the initial 18,000 wmt of concentrates are expected to
commence in May 2006 and end in April 2007, and may be suspended if certain
profitability thresholds are not met. Concentrates are to be treated at Shandong
MIC's Bacox process plant in China.


The price payable for the concentrates will vary with the prevailing gold price.
The agreement produces an attractive return for Hellas Gold at a gold price of
US$500/oz.


European Goldfields and Hellas Gold are currently pursuing other similar
opportunities for the sale of the remaining tonnage of concentrates in the
Olympias stockpile.


Commenting on the agreement, David Reading, Chief Executive Officer of European
Goldfields, said: "This initial contract with Shandong MIC demonstrates our
ability to monetise the Olympias stockpile. It is a first step towards selling
the whole stockpile and we expect to conclude similar arrangements in the near
future to achieve this objective. This represents one of many opportunities to
generate early revenue to assist with the financing of the development of our
major gold and base metals projects of Skouries and Olympias."


Holding in Company


As far as the Company is aware, on 21 April 2006, Mr. Frank Timis sold a total
of 8,696,576 common shares in the Company in the open market at a price of
C$4.40 per share. The shares were placed by RBC Capital Markets and Williams de
Broe Plc primarily to institutional investors in North America and the United
Kingdom. Following such sale, to the knowledge of the Company, Frank Timis does
not exercise control or direction over any of the outstanding common shares of
the Company.



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.


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.


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.


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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