European Goldfields Limited

European Goldfields Limited

March 30, 2005 08:30 ET

European Goldfields Limited: Environmental Permits Awarded for Stratoni Mine


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: EUROPEAN GOLDFIELDS LIMITED

TSX, AIM SYMBOL: EGU

MARCH 30, 2005 - 08:30 ET

European Goldfields Limited: Environmental Permits
Awarded for Stratoni Mine

WHITEHORSE, YUKON--(CCNMatthews - March 30, 2005) - European Goldfields
Limited (TSX:EGU)(AIM:EGU) is pleased to announce that its 65%-owned
subsidiary Hellas Gold S.A. has been awarded by the Greek state all
environmental permits for mining operations at the Stratoni deposit.
Following normal procedure, a technical committee formed by the Greek
government is completing a final overview of Hellas Gold's mining plan
for the Stratoni deposit. Final approval to commence mining operations
is expected shortly.

The Stratoni orebody is a polymetallic massive replacement-type deposit
with proven and probable reserves totalling 1.64Mt of ore grading 7.6%
lead, 10.2% zinc and 179g/t silver.

The environmental permits provide for an "overhand cut and fill" mining
method, the use of mechanical excavation machines wherever possible,
truck haulage from underground workings, the construction of a new water
treatment plant and various other environmental protection, monitoring
and rehabilitation measures.

Hellas Gold expects to start mining operations during the second quarter
of 2005 by means of the existing adit while excavating a new access
tunnel to the Stratoni reserves.

Subject to final approval of Hellas Gold's mining plan, construction on
a new adit is expected to begin within the next few weeks to provide
improved access to the Stratoni reserve and allow full-scale mining
operations to commence by year end.

David Reading, Chief Executive Officer of European Goldfields, said:

"The gaining of the Stratoni environmental permit is a major milestone
in the development of European Goldfields' strategy. We can now focus on
finalising our mining plan for Stratoni, with a view to recommence
mining operations and produce near term cash flow from the Hellas Gold
projects.

We have worked closely with the Greek Government to gain this permit,
and this successful outcome paves the ways for further development of
the assets."

About European Goldfields

European Goldfields is a resource company involved in the acquisition,
exploration and development of mineral properties in Greece, Romania and
the Balkans.

Greece - European Goldfields holds a 65% interest in Hellas Gold S.A.
Hellas Gold owns assets in Northern Greece which include 70 year mining
concessions over a total area of 317 km2 and three polymetallic
near-production deposits, known as Olympias, Stratoni and Skouries, with
total proven and probable reserves of 17.04Moz of gold equivalent (65%
attributable: 11.08Moz).

The Stratoni and Olympias deposits were previously in production and
benefit from significant infrastructure which includes underground
mining development, two plants and a ship loading facility on the Aegean
Sea. Hellas Gold's assets also include potential revenue generating
stockpiles located on the surface.

Romania - European Goldfields holds five mineral properties located
within the "Golden Quadrilateral" area of Romania, where it has embarked
on a resource development and pre-feasibility programme to underpin the
value of its 80%-owned Certej deposit and surrounding satellite bodies.
A current resource estimate outlines measured and indicated resources of
31.4Mt grading 2.1g/t gold and 11.0 g/t silver for 2.34Moz of gold
equivalent (80% attributable: 1.87Moz). This estimate was based on a
selective mining unit model using 6.5 X 12.5 X 2.5 metre blocks and a
1g/t gold cut-off grade.

Further work at Certej now focuses on completing an in-house
pre-feasibility study, the next phase of which will concentrate on
optimising mining and understanding the variable metallurgical
recoveries. Scoping work on pit optimisations will establish the mining
cut-off grades and associated strip ratios for appropriate and optimum
exploitation of the deposit. The metallurgical testwork includes
mineralogical studies into the gold disposition within the
mineralisation, and floatation testwork aimed at maximising gold
recoveries.

Reserve and Resource Parameters

Disclosure of mineral reserves for Hellas Gold's Olympias, Stratoni and
Skouries deposits is derived from a Pre-feasibility Study prepared by
Behre Dolbear & Company, Inc. and filed on SEDAR at www.sedar.com on 29
October 2004 under the category "Technical Report", and European
Goldfields' news release and material change report filed on SEDAR on 7
March 2005.

Disclosure of mineral resources for European Goldfield's 80%-owned
Certej deposit is derived from a resource estimate prepared by RSG
Global Pty Ltd and filed on SEDAR on 23 March 2005 under the category
"Technical Report".

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 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 with 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 realized or, even if substantially realized, 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 does 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.


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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    European Goldfields Limited
    David Reading, Chief Executive Officer
    +44 (0) 20 7408 9536 (London Office)
    +44 (0)7703 190 652 (London Mobile)
    or
    European Goldfields Limited
    David Grannell, Chief Financial Officer
    +44 (0) 20 7408 9536 (London Office)
    +44 (0)7703 190 652 (London Mobile)
    info@egoldfields.com
    www.egoldfields.com
    or
    Buchanan Communications
    Bobby Morse/Ben Willey
    +44 (0) 20 7466 5000
    bobbym@buchanan.uk.com