European Goldfields Limited
TSX : EGU
AIM : EGU

European Goldfields Limited

July 05, 2005 08:30 ET

European Goldfields Limited: Certej Pre-feasibility Study Highlights Opportunities; Drilling to Commence on Cainel

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - July 5, 2005) - European Goldfields Limited (TSX:EGU)(AIM:EGU)is pleased to announce that it has completed an in-house pre-feasibility study on its 80%-owned Certej project in the Southern Apuseni Mountains of Romania.

All the technical and financial components of a full pre-feasibility study have now been successfully completed. The study has resulted in:

- Confirmation that a concentrate can be produced with high grades of 18 to 20 g/t gold and up to 100 g/t silver

- An optimised open pit with low strip ratios

- The definition of sites for infrastructure and tailings disposal

- A clear understanding of all work required to complete an environmental impact assessment and achieve all necessary permitting.

David Reading, Chief Executive Officer of European Goldfields, said: "The demonstration of the ability to create high grade concentrates for Certej highlights exciting opportunities for the project and provides a clear way forward in terms of what is required to demonstrate a viable mining venture."

The initial indications from the financial evaluation work show that the project could support the necessary capital investment at realistic, long-term metal prices for gold and silver, assuming a sustainable market can be established for the sale of concentrates.

The pre-feasibility study on Certej will be published as soon as current resources can be converted into economic reserves, which is contingent on identifying a long-term market for the high grade, gold / silver flotation concentrate to be produced at Certej.

Alternatively, the company's technical team is looking at opportunities to produce gold dore on site either from an expanded project which includes supplementary feed from surrounding higher grade satellites, or by the optimisation of a cost-effective metallurgical process.

Background

Work on the in-house pre-feasibility study has been coordinated by the company's technical team, with detailed and specific support studies from various independent consultants including RSG Global Pty Ltd and SGS - Lakefield Research.

The study has resulted in a good understanding of the metallurgy and the opportunity to produce high grade concentrates, and the definition of a better constrained resource with a high grade core (announced on 28 February 2005).

The updated estimate undertaken by RSG Global outlined a measured and indicated resource of 31.4 Mt grading 2.1 g/t gold and 11 g/t silver for a total of 2.2 Moz of gold and 11 Moz of silver. The whittle 4X optimisation carried out on this resource produced an appropriate pit containing 22.6 Mt grading 2.0 g/t gold and 11.7 g/t silver with an average strip ratio of 2:1. The proposed open pit would therefore contain 68.3 Mt of total material which would include 45.7 Mt of waste and 22.6 Mt of ore.

It is envisaged that the project could mine and process 2.5 Mt per annum over approximately nine years.

Appropriate infrastructure including the plant site, offices and HV electrical reticulation system will be located close to the open pit. To minimise the environmental impact, existing infrastructure has been retained where possible, new or improved facilities have been included when required.

A site has been identified for the Tailings Management Facility which can accommodate up to 50 Mt of tailings. The waste rock dump will be placed close to the pit. No sites of special scientific interest or of historical importance are sited within the project foot print. No relocation of existing habitation is required for the development of the project.

A comprehensive review of all previous metallurgical testwork was undertaken which indicated that the old sampling was unrepresentative. A further 106 samples were taken over the total deposit area which indicated that acceptable carbon in leach (CIL) recoveries were restricted to only the oxidised portion of the material. A flotation testwork programme has confirmed that a gold bearing pyrite concentrate can be produced with high grades of 18 to 20 g/t gold and up to 100 g/t silver. At the proposed production rates, this would yield approximately 225,000 tonnes of concentrate per year with a gold recovery of about 87.5%. More recent metallurgical studies have highlighted that the concentrate produced in the early years of mining from the open pit will grade over 25 g/t gold and up to 150 g/t silver with gold recovery in excess of 90%. Additional metallurgical studies are in progress to endorse the current assumptions and provide further details in order to optimise process design.

Ongoing Exploration

Exploration work in Romania is now focused on defining higher grade (+2.5 g/t) satellites within a 10 km radius of Certej which when concentrated can sweeten the Certej material. As part of this strategy drilling will commence next week on the principal target within the newly acquired Cainel license. Surface and underground sampling of accessible areas has returned of 1.0 to 5.6 g/t gold over widths of 1 to 14 metres confirming the north - south veins and mineralized breccias. Unfortunately access to sample the main mineralized system has not been possible due to the partial collapse of old underground workings and thick surface colluvium. Historical data obtained from the Romanian state exploration was restricted to vein sampling only but obtained encouraging intercepts of 1 to 398 g/t over one metre widths. Plans of historic workings indicate that the strike of the system is 1 km and the main vein and splays in the Cainel zone occur over a width of some 100 metres with a secondary splay to the east covering a 200 metre width. This target area will be assessed by a reconnaissance drilling programme.

The proposed drill programme comprises 20 holes for 2,310 metres of drilling (860 metres diamond core and 1,450 metres reverse circulation). The programme will test the continuity of the main vein system, secondary splays and associated wallrock mineralisation along some 700 metres of strike with four, east - west drill fences.

European Goldfields is also assessing prospects within the Certej and Baita Craciunesti permits, previously investigated for their potential as stand alone projects, in an effort to define further feed for the Certej project. The work programme comprises geological remodelling, metallurgical testwork and, where necessary, drilling.

The Way Forward

European Goldfields continues to develop the metallurgical testwork programme which is directed at improving the Certej concentrate quality while maintaining high gold recovery, as well as conducting focused exploration programmes to expand the resource base. The metallurgical work is also investigating the feasibility of producing gold dore on site by a cost effective process design. An internal marketing study to explore potential buyers for the Certej concentrate is also in progress. The objective is to accomplish all of this work within the next six months. Completion of a full feasibility study will require an environmental impact assessment and more detailed engineering design.

Qualified Person

Patrick Forward, General Manager, Exploration of European Goldfields, was the Qualified Person responsible for reviewing this news release.

Forward-looking statements

This news release contains certain forward-looking statements concerning the Company's future operations, economic performances, financial condition and financing plans. These statements are based on certain assumptions and analyses made by the Company in light of the its experience and its perception of historical trends, current conditions and expected future developments as well as other factors the Company believes are appropriate in the circumstances. However, whether actual results and developments will conform to the Company's expectations and predictions is subject to a number of risks, uncertainties and assumptions. Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements, and there can be no assurance that the results or developments anticipated by the Company will be realised or, even if substantially realised, that they will have the expected consequences to or effects on the Company and its subsidiaries or their businesses or operations. The Company undertakes no obligation and do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law.

Contact Information

  • European Goldfields Limited
    David Reading, Chief Executive Officer
    Office: +44 (0)20 7408 9534
    Mobile: +44 (0)7703 190 652
    or
    European Goldfields Limited
    David Grannell, Chief Financial Officer
    Office: +44 (0)20 7408 9534
    Mobile: +44 (0)7703 190 652
    info@egoldfields.com
    www.egoldfields.com
    or
    Buchanan Communications
    Bobby Morse
    Office: +44 (0)20 7466 5000
    Mobile: +44 (0)7802 875 227
    bobbym@buchanan.uk.com
    or
    Buchanan Communications
    Ben Willey
    Office: +44 (0)20 7466 5000
    Mobile: +44 (0)7802 875 227