MONTREAL, July 17 /PRNewswire-FirstCall/ -- European Goldfields Limited (AIM: EGU / TSX: EGU) is pleased to announce a 13% increase in reserve tonnes for its 65%-owned Skouries deposit in Northern Greece, which can now be reported as follows: > This increase in reserves results from a new mine plan and schedule which includes the adoption of a deeper open pit, an optimised sub-level cave underground mine design and improved long-term metal price forecasts. The updated reserve was estimated at a gold price of $425/oz and a copper price of $1.1/lb. Commenting on the announcement, David Reading, Chief Executive Officer of European Goldfields, said: "Our work to upgrade reserves has increased our understanding of the Skouries deposit and optimised its exploitation method. Independent studies demonstrate that Skouries is a robust project, at metal prices which remain conservative at $425/oz for gold and $1.1/lb for copper." The updated reserve is based on a new pit optimisation and subsequent practical pit design along with a detailed underground mine design based on relevant net smelter return (NSR) cut-offs and practical mining constraints which takes into account mining recoveries and dilution. Geoff Bull, Mike Beare and Edgar Urbaez of independent consultants SRK Consulting (UK) Limited were the Qualified Persons under Canadian National Instrument 43-101 responsible for preparing the updated reserve estimates for the Skouries deposit quoted above. A report from SRK will be filed on SEDAR (http://www.sedar.com/) within the next 45 days updating parts of the Behre Dolbear & Company, Inc.'s previous pre-feasibility study on the Skouries deposit filed at http://www.egoldfields.com/ and on SEDAR on 29 October 2004 under the category "Technical Report". Background Information on Skouries Skouries has been optimised as a 7M tonnes per annum operation with a low strip open pit of at least six years, followed by underground mining which will produce some 790,000t of copper and 3.9M oz of gold over a 21-year mine life. The start of full production is planned for 2009. This production rate is shown to be sustainable based on the detailed mine design carried out by SRK and benchmarking with other comparable mines. The Skouries deposit is a typical gold-copper porphyry deposit that forms a near vertical pipe and is located 35 km by road from the Stratoni port in northern Greece. Skouries is located on a high plateau with no habitation in the immediate vicinity. The mining at Skouries will be phased with the open pit mined at the target rate for the first six years and the underground mining development starting in the fourth year of operation. A continuous feed of 7M tonnes per annum to the plant is ensured by the use of stockpiled open pit low-grade material. The current model uses a 240m deep pit followed by an underground sub-level cave (SLC) operation, which gives the best economic return according a study by SRK. The metallurgy at Skouries is straight-forward. The mine will feed a process plant designed for a nominal throughput of 21,000 tonnes per day. The processing will comprise gyratory crushing for open pit and underground ore, single-stream SAG and ball-mill grinding. Approximately 30% of gold will be recovered by a gravity circuit to produce dore on site. A high-quality saleable copper/gold concentrate will also be produced by conventional froth flotation, thickening and filtration. Extensive test-work carried out by Lakefield Research and other consultants has shown average recoveries of 83.9% gold and 90.8% copper can be achieved. Concentrate grades of at least 26% copper and averaging 27 g/t gold are expected. The concentrates will be trucked to Hellas Gold's port storage facility at Stratoni, which is some 35 km away by road from the Skouries plant site. Golder Associates have carried out a pre-feasibility level study which incorporates the latest paste production technology in a phased tailings management facility (TMF) that will minimise land take and embankment height and provides increased stability. Paste tailings also allows a greater proportion of the process water to be collected and recycled at the process plant, reducing pumping costs and the quantity of make-up water needed. Studies have shown that the paste tailings are inert with low permeability. The use of paste tailings and a phased TMF also allows sequential rehabilitation of the tailings management facility to minimise active tailings areas. The Behre Dolbear report states the total measured and indicated resource at Skouries to be 191.2 Mt grading 0.82 g/t gold and 0.55% copper at a nominal cut-off grade of 0.4 g/t gold. The resource estimation is based on a nominal drillhole spacing of 50 metres. Gold and copper were analysed geostatistically for each lithology and an unconstrained 3-D resource block model was generated using values interpolated by ordinary kriging. 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 7.8 Moz gold, 65.8 Moz silver, 0.8 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 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. 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 http://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. DATASOURCE: EUROPEAN GOLDFIELDS LTD. CONTACT: European Goldfields: David Reading, Chief Executive Officer, Office: +44 (0)20 7408 9534, , website: http://www.egoldfields.com/; Buchanan Communications: Bobby Morse / Ben Willey, Office: +44 (0)20 7466 5000, Mobile: +44 (0)7802 875 227, ; Renmark Financial Communication: Tina Cameron, ; Neil Murray-Lyon, , Office: (514) 939-3989, Fax: (514) 939-3717, website: http://www.renmarkfinancial.com/

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