EGU European Gold

RNS Number:0919H
European Goldfields Ltd
02 August 2006



For Immediate Release                                             2 August 2006

                          European Goldfields Limited

                        Clear Path for Permits at Certej


European Goldfields Limited (AIM: EGU / TSX: EGU) is pleased to report that it
has established a clear path to applying for permits to develop its 80%-owned
Certej project in Romania.


European Goldfields has recently completed all necessary Environmental Impact
Assessments (Levels I and II) for the Certej project, and is now actively
conducting various additional studies in support of its permit application,
including:

   * a Social Impact Assessment Study, to be completed by November 2006
   * an Archaeological Study, to be completed by the Ministry of Culture by
    November 2006
   * an Environmental Impact Study (EIS), to be completed in December 2006
   * a Romanian Feasibility Study (RFS), to be submitted to the government
    together with the EIS in December 2006


European Goldfields already holds a mining permit for Certej, which is currently
being exploited in a small scale by Minvest S.A., the company's partner in
Romania. Minvest, the state-owned mining company, owns the remaining 20%
interest in Certej.


In December 2006, European Goldfields plans to submit the RFS and EIS as part of
its application for environmental and mining permits, allowing an increase in
production at Certej and the processing of ore on site. The permits and a
detailed urbanisation plan would then be expected by end-August 2007 following a
standard public consultation process with the local community. Customary
construction and public utility permits would follow later in 2007 when the
detailed engineering design has been completed for the site plant.


In the meantime, European Goldfields expects to receive by November 2006 a
general urbanisation certificate confirming the designation of Certej as an
industrial mining area.


ECOIND and Cepromin, Romanian companies with proven track records in
environmental research and permitting procedures, and the Technical University
of Civil Engineering Bucharest have been employed to assist in preparing these
studies.


Flexibility of two viable development options - European Goldfields is actively
pursuing two viable development options for the Certej project:

   * the production and sale of high-grade gold/silver flotation concentrates
   * the production of gold dore on site using the Albion Process.


The project can also be developed in phases, starting with the sale of
concentrates in the early years followed by the production of gold dore on site.


Using the Albion Process to produce gold dore on site is expected to
significantly increase project profitability and returns.


Commenting on the Certej project, David Reading, Chief Executive Officer of
European Goldfields, said: "We are delighted to have the flexibility of two
viable development options for the Certej project. We are now actively
completing the necessary studies in support of our permit application which we
expect to submit by the end of 2006. Having identified a clear path to
permitting, we now look forward to accelerating the development of the project
in the coming months."


Sale of high-grade concentrates - In April 2006, European Goldfields announced
the conversion of resources into Canadian NI 43-101 compliant reserves for the
Certej deposit, based on the sale of concentrates option. The reserve estimation
was carried out by independent consultants
RSG Global Pty Ltd ("RSG Global"). This confirmed that the project can support
the necessary capital investment and produce a robust return at a gold price of
$425/oz and above.


This estimation followed the completion of extensive metallurgical testwork, an
in-house pre-feasibility study and subsequent pit optimisation and pit design
work by RSG Global, which included a geotechnical drilling programme and
geotechnical pit design parameters completed by Golder Associates of the UK.


The project is expected to involve the mining and processing of 3.0 Mt per annum
over at least nine years. This would yield approximately 249,000 tonnes of
concentrate per annum with high grades averaging 21 g/t gold and 125 g/t silver,
with a flotation gold recovery of approximately 88%. This translates into an
annual production of approximately 170,000 oz of contained gold in the
concentrate.


Production of gold dore on site - The Albion Process is an alternative
development route to the sale of concentrates at Certej. The Albion Process is a
combination of ultra-fine grinding and oxidatative leaching at atmospheric
pressure.


European Goldfields announced in July 2006 that it had received additional
results of batch metallurgical testwork indicating a substantial increase in
gold recoveries from samples of flotation concentrates produced from Certej ore.
The new results using the Albion Process at optimised oxidation conditions
suggest recoveries from concentrates of approximately 96% for gold, compared to
previously reported recoveries of 84%. Silver recoveries remain stable,
averaging 92%.


Hydrometallurgy Research Laboratories (HRL, a subsidiary of Xstrata PLC) is
completing the Stage III pilot plant scale continuous testwork programme using
the Albion Process, after which European Goldfields expects to publish Canadian
NI 43-101 compliant reserves based on this process by the end of 2006. HRL has
already successfully completed Stages I and II of the metallurgical testwork
programme.


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).


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.


For further information please contact:

European Goldfields:                    website: www.egoldfields.com
David Reading, Chief Executive Officer  e-mail: info@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

Renmark Financial Communication:        website: www.renmarkfinancial.com
Neil Murray-Lyon                        e-mail: nmurraylyon@renmarkfinancial.com
Henri Perron                            e-mail: hperron@renmarkfinancial.com
Office: +1 514 939 3989



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

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