SOURCE: European Goldfields Ltd

March 18, 2010 03:19 ET

European Goldfields Announces 2009 Results

WHITEHORSE, YUKON--(Marketwire - March 18, 2010) -

For Immediate Release                                18 March 2010

                      European Goldfields Limited

                              RESULTS FOR 2009

18 March 2010 - European Goldfields Limited (TSX / AIM: EGU)("European
Goldfields" or the "Company") today announces its results for the year
ended 31 December 2009. The financial statements, as well as the
accompanying management's discussion and analysis, are available for
review at
and should be read in conjunction with this news release.

Q4 and 2009 Highlights
- Preliminary Environmental Impact Study approved by Greek State
- Record Olympias gold sales
- Skouries basic engineering complete; project advances to detailed
- All major capital development at Stratoni in place

- PUZ process significantly advanced with recent granting of final
- Basic engineering substantially complete
- Technical Report for construction permit application initiated
- Independent Consultant completes audit for Bank Finance

- Group wide, 2010 exploration budget of US$15 million
- Focus on adding resource ounces near to existing development
- Greece - geophysical survey confirms significant anomaly at
  Piavitsa extending 8 km
- Romania - surface work identifies new highly prospective
  epithermal and porphyry gold targets
- Turkey - high grade gold zone identified

- Martyn Konig appointed as Executive Chairman & President
- Bruce Burrows and Fred Vinton appointed as Non-Executive
- Strategic review determines management priorities; build out of
  technical team and progression of financing. Investor Relations and
  Treasury function established, rebranding of all corporate
- Added to S&P TSX Global Gold Index
- Further strengthened relationship and synergies with Aktor

- Sales of US$62.7m in 2009
- Gross profit up 107% 2009 vs 2008
- Project investment of US$47 million in 2009
- Strong balance sheet with working capital of US$145 million

Martyn Konig, Executive Chairman and President, commented:"2009 saw
significant progress in European Goldfields' strategy of
realising value from its 10 million ounces of gold reserves in Europe.
The Board and management team has been strengthened in preparation for
the Company's transition into a mid-tier producer, with a focus on
delivering key milestones and the de-risking of its substantial assets
in Greece and Romania. With significant progress being made in the
permitting process in both countries we are confident that 2010 will be
the most important year yet for advancing European Goldfields'
development projects towards production."

European Goldfields will host a conference call on Thursday 18 March
2010 at 11:00 a.m. ET / 3:00 pm (London, UK time) to update investors
and analysts on its results.

Participants may join the call by dialling one of the three following
numbers, approximately 10 minutes before the start of the call.

From North America: (toll free) 1 888 935 4577
From UK: (toll free) 0800 028 1277
From rest of world: +44 (0)20 7806 1957
Participant pass code:3174447

A live audio webcast of the call will be available on:

A replay of the webcast will be available on the same link from 5pm on
Thursday 18 March 2010.

                           SELECTED FINANCIAL DATA

                                        Year ended 31 December
(in thousands of US dollars,             2009             2008
except per share amounts)                   $                $
Statement of profit and loss
Sales                                  62,712           60,044
Gross profit                           11,670            5,647
(Loss)/Profit before income tax       (8,351)         (11,599)
Income taxes                          (3,376)           16,639
(Loss)/Profit after income tax       (11,727)            5,040
Non-controlling interest                 (56)              479
(Loss)/Profit for the period         (11,783)            5,519
(Loss)/Earnings per share              (0.07)             0.03

                             31 December 2009 31 December 2008
(in thousands of US dollars)                $                $
Balance sheet
Working capital                       144,899          192,675
Total assets                          744,100          766,095

European Goldfields' audited consolidated financial statements and
management's discussion and analysis for the years ended 31 December
2009 and 2008 are filed on SEDAR at


Permitting - Preliminary Environmental Impact Study Approved

In late September the then Ministry of Environment, Physical Planning
and Public Works, completed the Preliminary Environmental Assessment
and Evaluation based on the Preliminary Environmental Impact Study
("PEIS") submitted by the Company's 95%-owned subsidiary Hellas Gold
SA, and issued a pre-approval of the construction and operation of the
Project (the "Pre-Approval") in the province of Halkidiki, in
North-Eastern Greece.

The "Project", consists of:
- The development of mining and processing at the Skouries
- The next stages of the Olympias project, namely the mining and
  processing of ore and metallurgical treatment of the concentrate, to
  produce gold dore on site.
- Continuation of operations at the Mavres Petres deposit of the
  Stratoni Mine.
- The expansion of existing port facilities at Stratoni in service
  of the above projects' operations.

This Pre-Approval of the Project successfully concludes the major stage
of assessment by the authorities and will lead to the preparation and
submission of the Environmental Impact Study ("EIS") and supporting
studies required by Greek and European Legislation. The EIS will be
based on terms of reference as now defined by the Pre-Approval. The EIS
will be submitted to the relevant authorities for review and the normal
European Union public consultation requirements in the near future. The
Company is confident that the extensive detail of the successful
Pre-Approval process will in turn now optimise approval of the EIS.

Completion of sales of gold concentrates

Hellas Gold has now completed the sale of the Olympias pyrite gold
concentrate stockpile. Sales of gold concentrates during the year were
as follows:

                                 2009    2008
Gold concentrate (dry tonnes) 114,882  63,533

Sales of Olympias gold concentrate will resume once Hellas Gold
receives the permits to process 2.4Mt of stockpiled tailings arising
from the previous operations at Olympias and when plant rehabilitation
is completed. Reprocessed tailings will produce approximately 350,000
tonnes of concentrates (containing 238,000 oz of gold) over
approximately a three year period. Subsequently, the resumption of
underground primary mining operations at Olympias will produce more
gold bearing pyrite concentrates for sale. The Company has submitted an
Environmental Impact Study ("EIS") to allow the early processing of
these existing tailings and allow the rehabilitation of a significant
area of the Olympias valley. It is planned that this re-processing
will commence in parallel with refurbishment of underground
infrastructure to recommence primary mining production.

Since Olympias already benefits from extensive mining and plant
infrastructure including a concentrator plant, a shaft and a decline,
the project can be brought back into efficient operation quickly and at
relatively modest cost. Hellas Gold has commenced engineering work to
rehabilitate the Concentrator starting with a structural review. Scott
Wilson Mining Consultants has completed an initial underground mine
refurbishment study which is being optimised. Life of mine schedules,
plant refurbishment plans and cost studies for the Olympias project are
under technical and financial review with a view to accelerating the
construction of the gold dore plant.

Development Projects

During 2009, Outotec completed the fabrication of the SAG and ball
mills, motors and thickeners, which represents the bulk of the process
plant for the Skouries project. Process equipment is held at a storage
facility in Thessaloniki which has been approved by Outotec. With the
majority of the process plant fabricated the Company is in a position
to minimise the build time upon receipt of final permits. The Greek
engineering group ENOIA has issued the Basic Engineering package

Outotec is also well advanced with the Detailed Engineering of
instrumentation and control systems for the concentrator plant and
ENOIA is coordinating the overall control package including equipment
outside of Outotec's supply to provide a fully integrated system. A
hydrogeological study by IGME, the Greek geological survey, has been
also been completed and detailed design of all civil construction
activity including the tailings management facility ("TMF") is
currently being undertaken by Omikron Kappa.

The project utilises established technology and has a simple
flow-sheet. The involvement of Outotec through the engineering and
construction phases, together with its process guarantee, will enable a
smooth advancement to production and ensure the technical performance
of the plant. The balance of the project represents a large-scale
civil construction project which the company believes represents low
technical risk and can easily be sub-contracted.

Production at Stratoni

The Company's cash flow positive mining operations at Stratoni continue
to demonstrate European Goldfields' permitting and environmental
capabilities and commitment to the highest levels of social

The Company's 95%-owned subsidiary Hellas Gold mined a total of 231,397
wet tonnes in 2009 (2008 - 271,660). Sales from Stratoni were as

                                          2009      2008
Ore mined (wet tonnes)                 231,397   271,660
Zinc concentrate (tonnes)               37,132    44,838
- Containing payable:  Zinc (tonnes)*   15,276    18,496
Lead concentrate (tonnes)               17,001    22,321
- Containing payable:  Lead (tonnes)*   10,867    14,086
                       Silver (oz)*    823,191 1,077,550
Inventory (end of period)
Ore mined (wet tonnes)                       1     1,778
Zinc concentrate (tonnes)                2,817     2,975
Lead/silver concentrate (tonnes)           824       488
* Net of smelter payable deductions

Ore production rates from underground were lower than 2008 due to
unexpected poor geotechnical conditions, particularly in the upper
levels and in previously mined areas found not to be backfilled. Grade
was also affected as the poor geotechnical conditions forced the
operation to mine lower grade areas.

The 220 decline and sump, the 360 adit and the main internal ramp at
Mavres Petres were completed and connected during the year. The main
fans were installed in the 360 adit affording the operation much
improved access, ventilation and supply facilities. The internal ramp
has been extended downwards to the 142 level from the 220 decline to
orebody extensions enabling additional large, more productive stopes to
be designed and mined. Second accesses from the main internal ramp to
an additional number of levels have been mined in 2009 to provide more
mining faces enhancing flexibility.


PUZ permit approvals complete

The last remaining approval required for the grant of the Zonal
Urbanisation Plan ("PUZ") relating to Certej was recently issued by the
Ministry of Environment. Formal public notice of this approval has
been issued in Romania and the full PUZ permit will be granted at the
next meeting of the Certej council.

The grant of the PUZ will be a significant milestone which takes
European Goldfields one step closer to production. Certej contains 2.4
million reserve ounces of gold, plus 17.3 million reserve ounces of
silver, and lies in an area which was a major gold producer
historically and retains considerable future potential. The Company is
already well advanced in the next and final substantive part of the
permitting process for Certej, which is the approval of the full
Environmental Impact Study.

Basic engineering substantially complete

The Basic Engineering ("BE") contract for the Certej project process
plant and associated infrastructure awarded to Aker Solutions
Engineering & Construction was completed in September 2009. The BE
covers the entire process plant engineering, encompassing all three
main areas of processing: the concentrator area, the Albion section and
gold-silver dore production by CIL. Xstrata Technology, who are the
owners of the Albion Process, were part of the BE team leading the
design of the Albion section of the plant. The capital and operating
costs calculated deviated little from previously estimated in-house
calculations developed from the 2008 Cost & Definition study, also
conducted by Aker Solutions. Basic design continues on the civil
engineering and infrastructure components of the project. This
includes geotechnical investigations with the assistance of Golder
Associates UK ("Golder") for the TMF, dumps and pump tests carried out
by Golder's PasteTecTM division on tailings which will allow the
detailed design of the tailings pumping and delivery system.

Technical Report in preparation for Construction Permit application

The Romanian contractor Cepromin has been appointed to prepare the
Technical Report, which involves advancing the BE level studies. This
work is due for completion in 2010, which together with the
environmental permits will be required for issuing the Construction

An audit has also been completed by an independent Technical Consultant
which was required in order to obtain bank finance. This audit looked
at every material aspect of the project and has confirmed the validity
of the Company's technical approach to the project.

Project Finance

European Goldfields commissioned an Independent Consultant to undertake
an audit for the Bank Financing of Certej which is now complete and
will form the basis for the conclusion of a project finance facility.
Negotiations with a group of financing institutions are well advanced:
a detailed term sheet has been agreed along with the roles for each
institution within the facility. The Company will make further
announcements as financing milestones are achieved.

Exploration summary

The Board of Directors has approved a group wide, results driven
exploration budget of US$15 million for 2010.


The Stratoni project, the Olympias and Skouries development projects
and three drill-ready exploration targets are hosted within European
Goldfields' 317 km2 Greek Licence Area. The total 2010 exploration
budget for Greece is US$9.2 million and an aggressive drilling and
exploration plan has been developed with the aim of defining new
massive sulphide and porphyry style resources in the indicated and
inferred categories.

Results of an airborne geophysics survey have significantly increased
the number and extent of conductive anomalies identified within the
Licence Area. Some of these anomalies are already known to host
mineralisation and others are currently untested. The EM survey had
already successfully confirmed an anomaly extending eight kilometres of
strike at the Piavitsa massive sulphide target; two kilometres of this
strike length have massive sulphide drill intercepts which correspond
exactly with the EM anomaly. To put this new exploration target in
context, the massive sulphide mineral reserves at Olympias have a
strike length which totals two kilometres. This historic drilling has
indicated that the grade, mineralogy and geometry of the Piavitsa
mineralisation is similar to that at Olympias.

In addition, the magnetic component of the survey has already
identified a 17 kilometre by six kilometre belt of porphyry intrusives
over which a three dimensional model has been completed defining two
other major targets, Fisoka and Tsikara. Follow-up reconnaissance
mapping on the ground has confirmed the presence of porphyry style
mineralisation. Historic drill results at Fisoka show mineralisation
but Tsikara is a virgin target. The identification of open pittable
porphyry style copper and gold resources has the potential to defer the
underground development costs of the Skouries project.Romania

In Romania a results driven exploration programme has been designed
with a total cost of some US$4.4 million with the aim of testing
current targets and delineating early project stage resources.

Along the volcanic belt which hosts the Certej project, surface work
including extensive soil sampling, geophysical surveys and
re-interpretation of existing data has outlined a series of epithermal
gold targets proximal to the Certej deposit and the historic Brad

In addition porphyry style mineralised targets have been identified
around the Deva porphyry which historically produced some 20Mt at 0.8%
Cu and with the gold grade unrecorded.


An exploration budget of US$2.2 million covering a results driven
programme of drilling, trenching and continued surface exploration and
licence acquisition has been approved for Turkey.

Mapping and sampling has confirmed that porphyry mineralisation
continues to the south of the previously recognised outcrops, and this
additional extension increases the size potential of the porphyry
system. A high-grade gold zone has also been identified at some three
km to the southwest of the Ardala porphyry. Trenching has returned
bedrock intercepts of between 6 and 46 metres at grades of between 2.8
and 9.6 g/t gold (using a 0.5g/t gold lower cut-off and no upper
cut-off grade) over a 360m strike length with mineralisation open to
the south.

The Company continues to consolidate ground to the south of the Ardala
licence and has finalised an agreement with Aldridge Minerals Inc
("Aldridge") for the joint development of Aldridge's Derinkoy
properties, which covers an area of 40 km2 adjacent to the Company's
Ardala Licences. The Company continues to look for new opportunities in
Turkey and the exploration team has conducted a number of exploration
site visits to various portfolios, properties and deposits, both within
the Ariana JV area of interest and elsewhere in Turkey.


Board Changes

The Company is pleased to announce that it has appointed Alfred Merton
Vinton to its Board of Directors. The appointment of Mr. Vinton as our
third Independent Non-Executive Director will add valuable industry
experience and insight to the Board.

Mr. Vinton (aged 71) is Deputy Chairman of The Unipart Group of
Companies. He is also a director of Dinamia SCR S.A, GP Investments
Ltd, and Hochschild Mining plc, as well as a number of Latin American
and European investment funds. From 1995-2009 he was Chairman of
Electra Partners, the well-known private equity firm. Prior to 1995, he
had served as Chief Executive of Quilvest Ltd, Chief Operating Officer
of N M Rothschilds, and for 25 years worked for J P Morgan, latterly as
Senior Vice President responsible for the bank's business in the UK and
Scandinavia. See Appendix A at the end of this section for further
information on Mr. Vinton's current and past directorships.

Mr. Vinton is a highly respected and well known industry executive
whose appointment will augment the Board's commercial and operational
experience. Mr. Vinton has already joined the Company's Audit,
Compensation and Nominating and Corporate Governance Committees.

In addition the Company is pleased to announce the appointment of
Varshan Gokool as Vice President, Treasurer. Mr. Gokool brings
corporate banking, trading and industry experience to the management
team.Prior to joining European Goldfields, Mr. Gokool was Treasurer at
Katanga Mining Limited where he was responsible for the treasury
activities of the Company which included the arrangement of funding for
its Kamoto Copper Project in the Democratic Republic of Congo. Mr.
Gokool is a graduate of the University of Cape Town with a B.Bus.Sci
(Finance), and is a CFA Charterholder.

European Goldfields added to S&P/TSX Global Gold Index

The Company is pleased to announce that, as a result of Standard &
Poor's Canadian index changes following the quarterly S&P/TSX Composite
Index review, European Goldfields has been added to the S&P Global Gold
Index. The change will be effective on Monday, March 22, 2010.

Positive update on legal proceedings

As reported previously in June 2005, certain residents of Stratoniki
village submitted a request for the annulment of the Greek government's
joint ministerial decision approving the EIS for the Stratoni mine
(the"JMD Approval"). In November 2005, the same petitioners submitted a
request for the annulment of the decision of the Minister of
Development approving the technical study for the exploitation of the
Mavres Petres mine that forms part of the Stratoni complex (the "MOD
Approval"). The JMD Approval and the MOD Approval are necessary for
the continued operation of the Stratoni mine. In both cases the
petitioners alleged a lack of legal basis for the approvals and
potential harm to the environment and their properties. The Greek
government, supported by the Company, the Association of Extractive
Companies, and two workers' unions, has taken a position that the
approvals are valid. In December 2005, the petitioners requested an
injunction to stop work on the Stratoni project pending the hearing of
the requests for annulment, but the court rejected the request. A
hearing on both requests for annulment was held in late 2009 and the
Company is now pleased to confirm that the Council of State has
published its judgement to reject both requests for annulment in all

Long term incentive plan

European Goldfields is currently finalising a Long Term Incentive Plan
("LTIP") for employees. As benefits under the LTIP will not take
effect for some time the Board has agreed to approve a Special Grant of
RSUs and Share Options to inter alia Messrs Rachovides and Morgan-Wynne
being Directors and Officers of the Company and to Messrs Forward and
Dimitriadis being Officers of the Company. The Company is examining
longer term options such as an Employee Benefit Trust in the context of
developing the LTIP plan. Details of the Special Grant will be
finalised and the grant will be actually made once the Company has
decided upon these arrangements and this is expected by 31 March 2010.
Options issued under the Special Grant will be priced at $6.03
reflecting the stipulations of the Company's Option Plan at the time of
Board approval. Further details will be disclosed at the time the
Special Grant is actually made.

Outlook and Strategy

The Company initiated a Strategic Review in November 2009 which was
completed in January 2010. The review focused on assessing the
Company's key resource requirements - personnel, infrastructure and
finance - in order to prepare for the next phase of the Company's
development as it moves towards becoming a mid-tier producer. As a
consequence of this review, the Company has already established a new
Investor Relations and Treasury function and further key hires will be
made in the near future. European Goldfields has been through a
rebranding process and the new website and communication materials
better support the Company's intention to reposition itself in the
market. We have already expanded our positive research coverage by
brokers in the UK and North America and are in the process of further
broadening our exposure.

A major part of the Strategic Review was to prepare a highly detailed
technical roadmap and resourcing plan which will be implemented as we
further progress with permitting. In addition, the Company continues
to advance discussions on the financing of its project portfolio with
initial focus on Certej.

There is considerable potential to significantly add to the Company's
gold resource inventory during 2010. The Company already benefits from
an unusually high level of reserves and a high resource to reserve
conversion ratio. However, the broader potential around its current
operational and development assets is currently untested and newly
identified drill ready targets present the opportunity to fast track
the Company's US$15 million 2010 exploration program with a view to
increasing resource ounces.

The management of European Goldfields continues to demonstrate its
ability to deliver on permitting, further derisking a globally
significant gold reserve base and adding shareholder value. As the
Company nears the conclusion of the permitting process for its
development stage projects, management's priority will be to fully
realise the potential of its current assets. This demonstration of
permitting ability will be brought to bear on any new opportunities
presented by the exploration programme or by acquisition.

Appendix A

Mr. Vinton currently holds the following directorships:
Emergent Asset Management Ltd
Applerigg Ltd (Formerly Sand Aire)
NAMS1 Private Equity International Ltd
Dinamia, SCR S.A.
American Museum in Britain
GP Investments Ltd
MBA Latin America Opportunity Fund
EQMC Europe Development Capital Fund PLC
MBA Multistrategy Investment Fund
Hochschild Mining plc

Previous directorships held during the last 5 years:

Sand Aire Private Equity
Amerindo Internet Fund
Lambert Howarth Group plc
Patagonia Argentine Recovery Fund
EP Private Equity

Save as set out above, there is no information in relation to Mr.
Vinton's appointment required pursuant to Schedule 2 paragraph (g) of
the AIM rules for Companies.

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 and the sale of gold concentrates
from Olympias. 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.

For further information please see the Company's new website at

For further information please contact:

European Goldfields:                    Buchanan Communications:
Sally Schofield, VP Investor Relations  Bobby Morse / Katharine Sutton
Tel: +44 (0)20 7408 9534                Tel: +44 (0)20 7466 5000

RBC Capital Markets:
Josh Critchley

Matthew Coakes
Tel: +44 (0)20 7653 4000

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
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 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 timing and
amount of estimated future production, costs and timing of development
of new deposits, 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 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;
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
2008, filed on SEDAR at 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.

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          The company news service from the London Stock Exchange


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