RNS Number:2374H
European Goldfields Ltd
08 November 2007
Immediate Release 8 November 2007
European Goldfields Limited
RESULTS FOR Q3 2007
PROFITS CONTINUE TO INCREASE
SIGNIFICANT PROGRESS AT CERTEJ
8 November 2007 - European Goldfields Limited (AIM: EGU / TSX: EGU) ("European
Goldfields" or the "Company") today reports its results for the third quarter to
30 September 2007. Highlights are:
Corporate & Financial highlights:
* European Goldfields added to S&P/TSX Global Gold Index
* Profit (before tax) of $31.9m in the first nine months of 2007, compared
to $5.4m in 2006
* Working capital of $224.3m at 30 September 2007, compared to $41.9m at
31 December 2006
Operational highlights:
* Stratoni sales up by 70% in the first nine months of 2007 compared to
2006
* Certej reserves increased by 20% - Full feasibility study to be
completed in Q1 2008
* Olympias payable gold in concentrate sales almost doubled in Q3 vs. Q2
2007
* Sale agreed for extra 71,000 tonnes of Olympias gold concentrates
* Contract signed for purchase of mill and plant equipment in Greece
* Airborne geophysics exploration under way in Greece to identify new
targets
Commenting on the results, David Reading, Chief Executive Officer of European
Goldfields, said: "European Goldfields continues to benefit from strong cash
flows from metal production at Stratoni and sales of gold concentrates from
Olympias. With the recent publication of additional reserves, Certej is proving
itself to be a robust gold and silver project, whilst our exploration programme
in Greece is expected to provide exciting new opportunities in a very
prospective licence area".
Conference Call & Webcast - 8 November 2007 at 10am EST / 3pm GMT
European Goldfields will host a conference call on Thursday 8 November 2007 at
10:00 a.m. EST / 3:00 pm (GMT) to update investors and analysts on its results.
Participants may join the call by dialing one of the three following numbers,
approximately 10 minutes before the start of the call.
From North America: (Local) 416-644-3423 or (toll free): 1-800-595-8550
From the UK, Austria, Belgium, Denmark, France, Germany, Ireland, Italy,
Netherlands, Norway & Switzerland (toll free): 00-800-2288-3501
From Sweden (toll free): 007-800-2288-3501 or (toll free): 009-800-2288-3501
A live audio webcast of the call will be available on:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2044020
For those unable to join the live conference call, a replay will be available
until midnight on 15 November 2007 by dialing (toll free) 1-877-289-8525 or
1-416-640-1917, Passcode 2125 0012#.
SELECTED FINANCIAL DATA
Three months ended 30 Sept. Nine months ended 30 Sept.
--------------- ----------- ----------- ----------- -----------
(in thousands of 2007 2006 2007 2006
US dollars,
except per share $ $ $ $
amounts)
--------------- ----------- ----------- ----------- -----------
Statement of loss
and deficit
Sales 21,663 15,211 63,690 32,568
Gross profit 11,273 7,958 36,361 16,583
Profit before 15,268 4,102 31,868 5,392
income tax
Profit/(loss) 12,504 2,984 24,589 2,835
after income tax
Non-controlling (348) (1,509) (4,990) (2,209)
interest
Profit/(loss) for 12,156 1,475 19,599 626
the period
Earnings/(loss) 0.07 0.01 0.14 0.01
per share
--------------- ----------- ----------- ----------- -----------
--------------------------- ------------ -------------
(in thousands of US dollars) 30 Sept. 31 December
2007 2006
$ $
--------------------------- ------------ -------------
Balance sheet
Working capital 224,289 41,854
Total assets 744,998 311,943
--------------------------- ------------ -------------
European Goldfields' unaudited interim consolidated financial statements and
management's discussion and analysis for the three- and nine-month periods ended
30 September 2007 and 2006 are filed on SEDAR at www.sedar.com.
CERTEJ PROJECT (ROMANIA)
Highlights:
* Certej reserves increased by 20% - Life-of-mine extended by two years
* Clear path to permitting
* Full feasibility study to be completed in Q1 2008
Certej reserves increased by 20% - Life-of-mine extended by two years - On 9
October 2007, European Goldfields announced a 20% increase in gold reserve
ounces for the Certej project, which can now be reported as follows:
Certej Reserves
Reserve Million Tonnes Average Gold Million Average Silver Million
Category Grade (g/t) Ounces Gold Grade (g/t) Ounces Silver
Probable 32.8 2.0 2.1 11.4 12.0
Note: Reserve based on pit optimisation using a gold price of $425/oz and a
silver price of $7/oz.
The new reserve results from a better conversion of resources into reserves,
combined with increased resources, and is based on the production of a
gold-bearing concentrate followed by the production of gold and silver as dore
on site by means of the Albion Process. The previous reserve estimate published
in April 2006 was based on the less-economical development option involving the
direct sale of a gold-bearing flotation concentrate.
The better conversion from resources to reserves reflects improved metallurgical
recoveries following completion of extensive bulk continuous metallurgical
test-work, an in-house pre-feasibility study and subsequent pit optimisation and
pit design work by RSG Global Consulting Pty Ltd ("RSG Global"), which included
a geotechnical drilling programme designed by Golder Associates of the UK.
The Albion Process is a combination of ultra-fine grinding of concentrates and
oxidative leaching at atmospheric pressure. The liberated gold and silver is
then recovered as dore by the conventional Carbon in Leach ("CIL") process.
The deposit will be mined by open pit methods with a strip ratio of 3.1:1. The
project will involve the mining and processing of 3.0 million tonnes of ore per
annum over at least eleven years, compared to the nine-year mine life under the
previous reserve estimate. This is expected to yield approximately 160,000 oz of
gold and 820,000 oz of silver per year in dore, reflecting an average total
process recovery of 81% for gold and approximately 75% for silver.
Clear path to permitting - European Goldfields is now in the detailed planning
phase for the Certej project and has established a clear path to applying for
permits to develop the project, having already submitted a Technical Feasibility
Study ("TFS") to the Romanian government in March 2007, which will be followed
by the submission of an Environmental Impact Study ("EIS") by the end of 2007.
The residues from the flotation and gold plants will be disposed of in two
separate but adjoining tailings management facilities ("TMF"), which are ideally
located and designed for this project.
In September 2006, European Goldfields announced that the Hunedoara County
Council had issued a General Urbanisation Certificate for the Certej project.
The certificate confirms the designation of Certej as an industrial mining area
and confirms local community support for the project. This important milestone
is the first official step in the permitting process for Certej.
All mining permits and a detailed urbanisation plan are expected by mid-2008
following a standard public consultation process with the local community.
Full feasibility study to be completed in Q1 2008 - European Goldfields is in
the final stage of completing a full feasibility study for the Certej project,
which will be used for internal approval and presentation to banks and other
sources of potential financing of the project. The only major pending studies
are the EIS and the TMF review by Golder Associates, which are due for
completion by the end of 2007, and the engineering study for the process plant
and associated infrastructure by Aker Kvaerner Engineering Services, scheduled
for completion in Q1 2008.
STRATONI OPERATIONS (GREECE)
Highlights:
* Sales increased by 70% in the first nine months of 2007 compared to 2006
* Better production grades achieved year to date compared to reserve
grades
* Filter presses installed to fully utilise available tailings storage
capacity
* Mining at margin of inferred resources confirms expected grades
Sales up by 70% in the first nine months of 2007 compared to 2006 - Hellas Gold
mined a total of 56,075 tonnes of ore in the third quarter of 2007 and 164,232
tonnes during the first nine months of 2007 at its Stratoni mine. Hellas Gold
completed 5 shipments of concentrates from Stratoni in the third quarter of 2007
(2006 - 6) and 18 shipments in the first nine months of 2007 (2006 - 13). This
translates into the following sales of concentrates:
Q3 2007 Q3 2006 9 Months 2007 9 Months 2006
Production
Ore mined (wet tonnes) 56,075 49,652 164,232 129,370
Sales
Zinc concentrate (tonnes) 5,710 11,130 27,961 21,926
- Containing payable:
Zinc (tonnes)* 2,364 4,702 11,682 9,357
Lead concentrate (tonnes) 5,694 3,696 15,119 10,656
- Containing payable:
Lead (tonnes)* 3,759 2,418 9,881 7,138
Silver (oz)* 297,321 189,349 772,962 563,258
Inventory (end of period)
Ore mined (wet tonnes) 4,868 3,617 4,868 3,617
Zinc concentrate (tonnes) 2,797 1,199 2,797 1,199
Lead/silver concentrate
(tonnes) 2,042 1,345 2,042 1,345
* Net of smelter payable deductions
As at 30 September 2007, concentrate inventory levels represented approximately
one shipment each of lead and zinc concentrates.
Ore production rates from underground have steadily increased from 670 tonnes
per day in the first nine months of 2006 to 870 tonnes per day in the first nine
months of 2007, and the mine now operates effectively at over 925 tonnes per
day. The rate of ore production is expected to continue to increase up to the
end of 2009.
Better production grades achieved year to date compared to reserve grades -
Mined grades have continued to be in line with the high levels experienced in
the first half of 2007. On average, mined and processed lead and zinc grades
have been on average approximately 19% and 6% respectively higher than reserve
grades in the first nine months of 2007. As a result, concentrate production and
sales are at relatively high levels.
Forecast ore production for 2007 has been reduced by approximately 10% from the
originally forecasted 250,000 tonnes due to poor ground conditions in the upper
area of the mine, requiring shotcrete equipment. As a result, development of an
internal ramp to access the upper parts of the mine is slower than expected and
face availability has been reduced from an expected 15 to 11 faces. However,
this is not expected to affect forecast metal production as grades have been
significantly higher than expected in 2007.
The excavation of a new decline to the Mavres Petres orebody, critical to future
production ramp-ups and ventilation, is over 90% completed at 1,630 metres.
Connection of the decline to the lower ramp will enable the introduction of
shotcreting equipment into the upper levels, which is expected to ameliorate the
poor ground conditions encountered there.
Filter presses installed to fully utilise available tailings storage capacity -
The two filter presses purchased to maximise storage space for fine tailings and
water treatment plant sludge have been fully installed and are in the final
stages of commissioning. Results to date have been excellent. The filter presses
produce a solid cake from fine tailings and allow solid deposition of fine
particle sludge from the water treatment plant. Previously, this sludge material
required thickening and pumping to the tailings dams for storage, which is
inefficient in terms of cost and utilisation of dam storage capacity. The
backfilling of old mine workings with coarse tailings to create additional
tailings storage space on surface has resulted in a total of some 30,000 m3 of
void in the old Madem Lakkos mine workings being filled to date. This
backfilling should also reduce mine water pumping from underground and
associated treatment costs.
New mineralisation discovered at Stratoni - New mineralisation has been
encountered during the excavation of the new decline running between the
existing reserve and mined-out areas at Madem Lakkos. Average grades from panel
sampling compare favourably with current reserves. A drill programme designed
to define at least 200 metres of strike and 75 metres of dip extent has
commenced with results expected in the fourth quarter of 2007. Initial results
indicate that the zone has an average width of 6.55 metres with a weighted
average grade of 0.7 to 14.8% Pb, 1.3 to 22.1% Zn and 16 to 307g/t Ag. The new
decline will enable immediate access for mining of any new discovery in this
area.
Mining at margin of inferred resources confirms expected grades - Stratoni
benefits from inferred resources, which are extrapolations from the known
reserves and comprise some 555,000 tonnes grading 7.3% lead, 10.2% zinc and 181
g/t silver. These inferred resources are currently being mined at the margin,
confirming expected grades. Drilling on 25m centres is planned in early 2008 in
the upper west and lower east parts of the orebody which account for some 85% of
the inferred resources. The drill programme is expected to convert the inferred
resources to the measured and indicated categories, which can be immediately
converted to proven and probable reserves as the areas are adjacent to current
mine infrastructure.
SKOURIES & OLYMPIAS PROJECTS (GREECE)
Highlights:
* Payable gold in concentrate sales almost doubled in Q3 vs. Q2 2007
* Sale agreed for extra 71,000 tonnes of gold concentrates
* Contract signed for purchase of mill and plant equipment
Sale agreed for extra 71,000 tonnes of gold concentrates - Hellas Gold's
Olympias project benefits from an existing stockpile of gold-bearing pyrite
concentrates which represented, at 31 December 2006, a reserve of approximately
252,000 tonnes grading 23.3 g/t gold (containing 188,000 oz of gold), in
addition to substantial underground reserves of gold, lead, zinc and silver.
Hellas Gold completed 13 shipments of gold concentrates from the Olympias
stockpile in the third quarter of 2007 (2006 - 5) and 31 shipments in the first
nine months of 2007 (2006 - 5). This translates into the following sales of
concentrates:
Q3 2007 Q3 2006 9 Months 2007 9 Months 2006
Sales
Gold concentrate
(dry tonnes) 28,393 6,134 58,169 8,039
In Q3 2007, Hellas Gold entered into two off-take agreements with a subsidiary
of Celtic Resources Holdings Plc (AIM: CER) and Trafigura Beheer B.V. for the
sale of a total of 71,000 wet metric tonnes (wmt) of gold concentrates. Celtic
Resources has pre-paid for 50,000 wmt of concentrates in October 2007 and agreed
to take delivery of the concentrates by the end of September 2009. Trafigura
Beheer B.V. has agreed to take delivery of 21,000 wmt of concentrates by the end
of 2007. In total, these 71,000 wmt of concentrate contain approximately 50,000
oz of gold.
Hellas Gold has now secured the sale of the entire stockpile to six different
purchasers - Golden China Resources Corporation, Celtic Resources Holdings Plc,
MRI Trading AG, Yantai Non-ferrous Metals Group Trading Co. Ltd, Euromin S.A.
and Trafigura Beheer B.V.
Hellas Gold plans to process 2.4Mt of stockpiled tailings arising from the
previous operations at Olympias, which will produce approximately 350,000 tonnes
of concentrates, and resume underground mining operations at Olympias after
permits are awarded, producing more gold bearing pyrite concentrates for sale to
existing and new off-take purchasers.
Olympias benefits from extensive mining and plant infrastructure already in
place, including a concentrator plant, a shaft down to a depth of 400 metres
below surface and a port facility nearby at Stratoni. International contractor
Outotec Minerals OY inspected the facilities in July 2007 and concluded that the
plant could be brought back into efficient operation quickly and at relatively
modest cost.
Skouries technical feasibility study nearly completed - Hellas Gold has
completed most technical studies for the full feasibility study on its Skouries
gold-copper project, confirming that Skouries can be mined as a low strip open
pit operation and as a highly productive underground mine. This is expected to
produce annually up to 43,000 tonnes of copper and 220,000 oz of gold over a
mine life of over 20 years.
Outstanding work on the full feasibility study consists of the incorporation of
the environmental impact study and minor optimisation studies on landtake
positioning around the open pit, water diversion and costs in the open pit.
Contract signed for purchase of mill and plant equipment - In June 2007, Hellas
Gold signed a contract with Outotec Minerals OY for the supply of a large
technology package for the copper-gold concentrator plant of Skouries. The total
contract value exceeds Euro30 million and cover grinding, flotation, thickening and
automation technologies including engineering and commissioning services. A
deposit of Euro6 million was paid to secure the fabrication of the primary SAG and
ball mills and for Outotec to commence with basic design. Hellas Gold is also
investigating ways to cooperate with other parties for the development of the
Skouries project.
Permitting process moving forward - In July 2007, Hellas Gold received a formal
letter confirming that the Greek Ministry of Development had completed its
review of Hellas Gold's business plan submitted in
January 2006 for the joint development of the Skouries and Olympias gold and
base metals projects in Northern Greece.
In the letter, the Ministry of Development also re-declared its positive opinion
of Hellas Gold's preliminary environmental impact study ("PEIS") which has
already been submitted, and formally requested the Ministry of Environment to
issue its official approval of the PEIS.
Hellas Gold is currently finalising a full environmental impact study ("EIS")
which is expected to be submitted to the Greek government in the first quarter
of 2008, addressing any comments received on the PEIS which are expected by the
end of 2007. On approval of the EIS, the environmental permits for Skouries and
Olympias are expected to be issued.
Hellas Gold will then submit to the Greek government a final technical report on
the Skouries and Olympias projects, which will restate the principles of the
business plan and take into account any conditions detailed in the environmental
permit. The mining permits are expected to be issued on approval of the
technical report by the Greek government.
Airborne geophysics exploration under way to identify new targets - Hellas Gold
holds 317 km(2) of highly prospective exploration licences in northern Greece.
No systematic modern exploration has ever been conducted over the licences and
this will be the first survey of its kind. The expected targets can be broadly
divided into massive sulphides in the north and west of the permit area, and
porphyry mineralisation in a northeast trending belt to the south. The whole
area is currently being surveyed by Fugro Airborne Surveys using airborne
electromagnetic ("EM") and radiometric techniques which will detect the
magnetised porphyries and their alteration haloes as well as improving knowledge
of geological structures over the whole area. Following a successful pilot
programme of ground based EM, the north and east of the licence area is also to
be covered by Fugro using airborne EM in order to detect massive sulphide
bodies. The work is expected to generate significant new targets and will put
these into context along with those previously identified during GIS compilation
work, including the Olympias look-alike orebody at Piavitsa and porphyry
mineralisation at Fisoka. This will allow more informed target prioritisation on
the current licence area before more detailed investigation commences in 2008.
For further information please contact:
European Goldfields: e-mail: info@egoldfields.com
David Reading, Chief Executive Tel: +44 (0)20 7408 9534
Officer
Buchanan Communications: e-mail: bobbym@buchanan.uk.com
Bobby Morse / Ben Willey Tel: +44 (0)20 7466 5000
Renmark Financial Communication: e-mail: nmurraylyon@renmarkfinancial.com
Neil G. Murray-Lyon Tel: +1 514 939 3989
Evolution Securities e-mail: simon.edwards@evosecurities.com
Simon Edwards / Neil Elliot Tel: +44 (0)20 7071 4300
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 Info
rmation Form for the year ended 31 December 2006, 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCILFIDLSLDIID
European Gold (LSE:EGU)
Historical Stock Chart
From Jun 2024 to Jul 2024
European Gold (LSE:EGU)
Historical Stock Chart
From Jul 2023 to Jul 2024
