TIDMEGU
RNS Number : 4481I
European Goldfields Ltd
15 June 2011
Suite 200, Financial Plaza
204 Lambert Street
Whitehorse, Yukon
Canada Y1A 3T2
For Immediate Release
RESULTS FOR Q1 2011
15 June 2011 - European Goldfields Limited (TSX / AIM: EGU)
("European Goldfields" or the "Company") today reports its results
for the quarter ended 31 March 2011. The financial statements, as
well as the accompanying management's discussion and analysis, are
available for review at
http://www.egoldfields.com/egoldfields/en/financials/quarterlies
and should be read in conjunction with this news release.
Operational and development highlights
Greece
-- Minister Birbili confirms final Joint Ministerial Decision to
be delivered within 3 weeks
-- Ministry confirms full technical and environmental review
complete
-- New equipment orders for the Olympias Mill ready for
placement
-- Invitation to bid package finalised for the Skouries EPC
contract
Romania
-- Local public consultation process complete and CONSIB
approval
-- Engineering for Technical Project complete
-- Construction of second weir commenced
Corporate activity
-- SRK audit of the Certej project advancing
-- Working towards ICMM accreditation
Financial
-- Sales of US$13.5 million
-- Working capital of US$70 million
-- IFRS reporting adopted
Martyn Konig, Executive Chairman and President, commented:
"We had hoped by this point to have been able to announce the
approval of our EIS, and with it the inward investment and job
creation that is clearly much needed by the Greek economy. We are
of course disappointed that this is not yet the case, however we
are pleased that Minister Birbili has informed us that a final
Joint Ministerial Decision will be made within 3 weeks. In
anticipation of approval, we have been diligently preparing, both
at a corporate and operational level, so that we are well placed
for the efficient and expeditious build-out of the projects as soon
as it is granted."
SELECTED FINANCIAL DATA
Quarter ended 31 March
------------------------------------------------
(in thousands of US
dollars, 2011 2010
except per share amounts) $ $
---------------------------- ----------------------- -----------------------
Statement of profit
and loss
Sales 13,531 10,435
Gross profit 2,793 896
Profit/(loss) before
income tax (4,933) (5,686)
Income taxes 2,354 (1,048)
Profit/(loss) after
income tax (2,579) (6,734)
Non-controlling interest 9 (77)
Profit/(loss) for the
period (2,570) (6,811)
Earnings/(loss) per
share (0.01) (0.03)
---------------------------- ----------------------- -----------------------
31 December
(in thousands of US 31 March 2011 2010
dollars) $ $
--------------------- -------------- ------------
Balance sheet
Working capital 70,483 79,555
Total assets 512,739 507,293
--------------------- -------------- ------------
OPERATIONAL AND DEVELOPMENT HIGHLIGHTS
GREECE
Permitting - Minister for Environment, Energy and Climate
Change, Ms Birbili, has informed the Company that the Joint
Ministerial Decision will be made within the next 3 weeks. This
follows a comprehensive review and evaluation by the Ministry of
Environment, which has confirmed it is now complete.
Olympias - The Company plans to place orders for the new
equipment required for the reprocessing of tailings at the Olympias
Mill immediately after receiving the EIS approval. Once approval
has been received, first gold production is scheduled for Q1 2012
from the reprocessing of tailings at 63,000 oz per annum, with
primary underground gold production expected to commence Q4 2015 at
an initial rate of 125,000 gold equivalent ounces per annum.
Skouries - The invitation to bid package for the Engineering,
Procurement and Construction ("EPC") contract for the Skouries
Project has been completed and is ready for submission to
prospective contractors directly upon receipt of EIS approval. Once
the EIS has been received, open pit production at Skouries is
expected to commence in Q1 2014 at an annualised average rate of
350,000 gold equivalent ounces.
The Company's 95%-owned subsidiary, Hellas Gold, mined a total
of 50,282 wet tonnes in Q1 2011 (Q1 2010 - 63,294). Sales from
Stratoni were as follows:
Q1 2011 Q1 2010
Production
Ore mined (wet tonnes) 50,282 63,294
Sales
Zinc concentrate (tonnes) 8,337 8,830
- Containing payable Zinc
(tonnes)* 3,392 3,633
Lead concentrate (tonnes) 3,653 3,759
- Containing payable: Lead
(tonnes)* 2,512 2,385
Silver (oz)* 188,304 178,184
Inventory (end of period)
Ore mined (wet tonnes) 3,826 14,089
Zinc concentrate (tonnes) 2,232 2,839
Lead/silver concentrate
(tonnes) 1,387 1,105
* Net of smelter payable deductions
Production at Stratoni - Production from the underground mine
was under budget for the quarter due to poor geotechnical
conditions. This is due to the convergence of the main Stratoni and
footwall faults bounding the orebody, which have affected mining in
the upper levels of the mine. The mine has therefore suffered from
fewer faces being available than anticipated and a greater
dependence on lower grade areas than originally scheduled. Plans
have been redrawn and a revision is in progress to recoup metal
production in the second quarter.
ROMANIA
Local public consultation process complete and CONSIB approval -
The local public consultation process for the Certej Project in
Romania held in April has now concluded. Consultations were
conducted by authorities from the regional environmental department
and were held in two villages. The local public consultation
followed confirmation from the Romanian authorities that the EIS
complies with all Romanian legislation, both from a technical and
legal perspective. Most notably, this included the approval from
CONSIB (the National Committee for Large Embankments), a specialist
committee constituted under the Ministry of Environment, for the
design of the tailings management facilities for the Certej
Project. The cross border consultation process is well advanced and
any public meetings will be established by the Romanian and
neighbouring country authorities. Once the consultation process has
been completed the environmental authorities will re-convene the
Technical Analysis Committee to confirm the decision regarding the
issuance of the environmental permit.
Engineering for Technical Project complete - The engineering for
the Technical Project which has been prepared by Cepromin, and is a
key component of the requirements under Romanian legislation for
the award of the construction permit, is complete. The necessary
approval process by the relevant authorities has commenced with the
submission of designs for the process plant facilities for fire
prevention and fire fighting systems.
Construction of second weir commenced - The construction of the
second of two large reinforced concrete rectangular notch weirs has
commenced (first weir completed Q4 2010) along the stream valley,
below the site of the planned tailings facilities. These will allow
accurate flow measurements to be taken as part of the planned
environmental monitoring programme.
EXPLORATION
Greece - Surface work continues at the Piavitsa site with infill
soil geochemistry and detailed mapping being carried out prior to
drilling to enhance target definition. Other targets identified by
a compilation of all existing data and local knowledge are also
being prioritised.
Romania - Having identified several promising targets using
surface geochemistry and geophysics, the Company is now seeking to
upgrade its prospecting licences to exploration licences to the
west of Certej. The Company received an operating licence for the
Baita Craciunesti licence adjacent to its Certej mining licence and
exploration is underway that aims to define satellite reserves for
the main Certej deposit by the end of this year.
Turkey - Drilling continues at the Company's Salinbas target,
focused on investigating a potential South West extension to known
mineralisation. In addition, a geochemical survey of the area has
produced encouraging results, providing additional targets for the
2011 drilling programme and a regional exploration programme over
the Pontide Belt is ongoing.
CORPORATE ACTIVITY
SRK are continuing to complete the necessary Technical,
Environmental and Social Audit of the Certej project in order to
under-pin and finalise the structure of the Company's financing
package.
Led by the Executive Chairman and President, supported by
Company specialists, the Company continues to work towards
International Council on Metals and Mining ("ICMM") accreditation.
This organisation promotes best practice throughout the industry,
to which we lend our full support. We are currently working with a
third party sustainability consultancy to aid us in the process and
have completed a materiality and gap analysis exercise, the output
of which is now under internal review.
About European Goldfields
European Goldfields is a developer-producer with globally
significant gold reserves located within the European Union. The
Company generates cash flow from its 95% owned Stratoni operation,
a high grade lead/zinc/silver mine in North-Eastern Greece.
European Goldfields will evolve into a mid-tier producer through
responsible development of its project pipeline of gold and base
metal deposits at Skouries and Olympias in Greece and Certej in
Romania. The Company plans future growth through development of its
highly prospective exploration portfolio in Greece, Romania and
Turkey.
Patrick Forward supervised and prepared the scientific and
technical information included in this press release. Mr. Forward
is a "qualified person" for purposes of National Instrument 43-101.
Mr. Forward is the Company's Vice President of Projects and
Exploration.
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 conversion of mineral resources
to mineral reserves, the timing and amount of estimated future
production, costs and timing of development of the Skouries,
Olympias and Certej projects, 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 receipt in a timely fashion of any
further permitting for the Company's 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 2010, filed on SEDAR at
www.sedar.com. 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 law.
For further information please see the Company's website at
www.egoldfields.com
For further information please contact:
European Goldfields Liberum Capital Limited
Steve Sharpe, SVP Business Development Simon Atkinson
e-mail: info@egoldfields.com Tom Fyson
Tel: +44 (0)20 7408 9534 Tel: +44 (0)20 3100 2000
Brunswick Evolution Securities Limited
Carole Cable / Fiona Micallef-Eynaud Tim Redfern
e-mail: egoldfields@brunswickgroup.com Neil Elliot
Tel: +44 (0)20 7404 5959 Tel: +44 (0)20 7071 4300
This information is provided by RNS
The company news service from the London Stock Exchange
END
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