TIDMEGU
RNS Number : 8290L
European Goldfields Ltd
19 January 2009
+----------------------------------------+--------------------------------------------------------------------------------------------------------------------------------------------------+
| Immediate Release | 19 January 2009 |
+----------------------------------------+--------------------------------------------------------------------------------------------------------------------------------------------------+
European Goldfields Limited
STRATONI MINE PRODUCTION UP 26% IN 2008
19 January 2009 - European Goldfields Limited (TSX / AIM: EGU) is pleased to
announce that Stratoni mine production of 271,660 wet metric tonnes for 2008
showed an increase of 26% compared to 2007, as new mine infrastructure was
completed and operating efficiencies were achieved. During the same period, a
total of 263,314 dry metric tonnes of ore was processed through the Stratoni
mill.
European Goldfields' subsidiary Hellas Gold S.A. completed 10 shipments of
concentrates from its Stratoni zinc-lead-silver plant in Northern Greece in Q4
2008 (Q4 2007 - 8), and 30 shipments for the whole of 2008 (2007 - 26).
Detailed production and sales from Stratoni were as follows:
Stratoni Production and Sales
+-----------------------------------------+------------------+------------+--
=----------------+----------------------+
|
| Q4 2008 | Q4 2007 | 12 Months 2008 | 12 Months 2007
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
| Production
| | | |
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
| Ore mined (wet tonnes)
| 70,468 | 50,643 | 271,660 |
214,875
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
| Ore processed (dry tonnes)
| 73,320 | 53,813 | 263,314 |
211,749
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
|
| | | |
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
| Zinc concentrate
| 12,106 | 9,082 | 46,123 |
38,152
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
| - Containing: Zinc metal
(tonnes) | 5,914 | 4,425 | 22,694 |
15,891
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
| Lead concentrate
| 6,750 | 6,012 | 22,759 |
23,123
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
| - Containing: Lead metal
(tonnes) | 4,434 | 4,021 | 15,014 |
14,963
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
| Silver (oz)
| 336,336 | 316,837 | 1,140,210 |
1,172,234
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
|
| | | |
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
| Sales
| | | |
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
| Zinc concentrate (tonnes)
| 11,210 | 10,191 | 44,838 |
38,152
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
| - Containing payable: Zinc
(tonnes)* | 4,591 | 4,209 | 18,496 |
15,890
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
| Lead concentrate (tonnes)
| 7,556 | 8,004 | 22,321 |
23,123
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
| - Containing payable: Lead
(tonnes)* | 4,775 | 5,082 | 14,086 |
14,963
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
| Silver (oz)*
| 363,205 | 399,272 | 1,077,550 |
1,172,233
|
+-----------------------------------------+------------------+------------+
=------------------+----------------------+
* Net of smelter payable deductions,
before deduction of smelting and refining
charges
Ore production rates from underground have steadily increased from an average of
885 tonnes per day in 2007 to 1,100 tonnes per day in 2008, and the mine now
operates effectively at over 1,200 tonnes per day.
In the current metal price and general economic environment, Hellas Gold will
postpone any further ramp up in production levels until an improvement in metal
prices is sustained. Therefore, Stratoni mine production is expected to remain
at current levels, resulting in mine production of approximately 300,000 wet
metric tonnes for 2009. This approach minimises the overall cost base at the
mine and focuses on the achievement of operating efficiencies. The group also
benefits from its lead hedge programme which in 2009 has put options over 7,200
tonnes of lead at a price of $2,500 per tonne.
In addition, Hellas Gold completed 10 shipments of gold-bearing pyrite
concentrates from its existing stockpile at Olympias in Q4 2008 (Q4 2007 - 15),
and 34 shipments for the whole of 2008 (2007 - 47).
Sales of gold-bearing pyrite concentrates were as follows:
Olympias Gold Concentrates Sales
+-----------------------------------------+------------------+------------+--------------------+----------------------+
| | Q4 2008 | Q4 2007 | 12 Months 2008 | 12 Months 2007 |
+-----------------------------------------+------------------+------------+--------------------+----------------------+
| Sales | | | | |
+-----------------------------------------+------------------+------------+--------------------+----------------------+
| Gold concentrate (dry tonnes) | 18,566 | 21,385 | 63,533 | 79,552 |
+-----------------------------------------+------------------+------------+--------------------+----------------------+
As previously announced, 2008 gold concentrate shipments were below expectations
largely due to bottlenecks caused by protracted industrial action at the port of
Thessaloniki. In response, Hellas Gold has recently increased the availability
of containers for shipment of its material through Thessaloniki which should
allow Hellas Gold to achieve its original sales forecast of 100,000 wet metric
tonnes in 2009.
Directors and Employees Dealings
The Board resolved at a meeting held on 5 December 2008, that Directors' and
certain employees' bonuses for the year ended 31 December 2008 would be partly
paid in Restricted Share Units ("RSU's") in European Goldfields in lieu of cash.
In accordance with this previous resolution the Company also confirmed today
that a total of 484,779 RSUs were issued on 16 January in accordance with the
terms of the Company's RSU Plan, subject to Canadian Regulatory Approval. All
RSUs granted under this award will vest in two equal tranches in January 2010
and January 2011. This included the award of 108,958 RSUs to David Reading,
75,568 RSUs to Tim Morgan-Wynne and 36,173 RSUs to Mark Rachovides all of whom
are Directors of the Company. A further 264,080 RSUs were awarded to other
employees throughout the group.
European Goldfields expects to publish by 31 March 2009 its financial results
for the three-month period and year ended 31 December 2008.
About European Goldfields
European Goldfields Limited is a resource company involved in the acquisition,
exploration and development of mineral properties in Greece, Romania and
South-East Europe.
Greece - European Goldfields holds a 95% interest in Hellas Gold S.A. Hellas
Gold owns three major gold and base metal deposits in Northern Greece. The
deposits are the polymetallic operation at Stratoni, the Olympias project which
contains gold, zinc, lead and silver, and the Skouries copper/gold porphyry
project. Hellas Gold commenced production at Stratoni in September 2005 and
started selling an existing stockpile of gold concentrates from Olympias in July
2006. Hellas Gold is applying for permits to develop and build the Skouries and
Olympias projects.
Romania - European Goldfields owns 80% of the Certej gold/silver project in
Romania. In July 2008, the National Agency of Mineral Resources approved the
technical feasibility study in support of its permit application and issued a
new mining permit for the Certej project.
For further information please contact:
+----------------------------------------+----------------------------------------------------------------------------------------+
| European Goldfields: | e-mail: info@egoldfields.com |
| David Reading, Chief Executive Officer | Tel: +44 (0)20 7408 9534 |
| | |
+----------------------------------------+----------------------------------------------------------------------------------------+
| Buchanan Communications: | e-mail: bobbym@buchanan.uk.com |
| Bobby Morse / Ben Willey | Tel: +44 (0)20 7466 5000 |
| | |
+----------------------------------------+----------------------------------------------------------------------------------------+
| RBC Capital Markets: | e-mail: andrew.smith@rbccm.com |
| Andrew K Smith / Sarah Wharry | Tel: +44 (0)20 7653 4804 |
| | |
+----------------------------------------+----------------------------------------------------------------------------------------+
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
www.egoldfields.com/goldfields/resources.jsp. 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 2007, 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
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