Joint Venture in Turkey With Ariana Resources
WHITEHORSE, YT, Feb. 28 /PRNewswire-FirstCall/ — European Goldfields Limited (TSX / AIM: EGU) is pleased to announce that it has signed a Heads of Agreement with Ariana Resources plc (AIM: AAU) (“Ariana”) for the joint development of Ariana’s properties in North-eastern Turkey, which include the Ardala copper-gold porphyry and eleven other licences covering a total area of 168km2.
These projects are located in the Pontides region of Turkey, a highly prospective geological terrain containing several major deposits. The Ardala Cu-Au porphyry has been the subject of reconnaissance drilling around the periphery of a porphyry intrusion, which identified encouraging grades of copper and gold. It has a 600m x 700m surface exposure centred on a magnetic high of 1,000m x 1,000m extent. Copper-gold mineralisation has also been identified on other properties in the vicinity of Ardala within granitoids and in the surrounding country rocks.
Under the agreement, European Goldfields will initially own 51% of the properties transferred by Ariana into the joint venture. European Goldfields will then fund all development costs of these initial properties and any future properties located within a defined area in North-eastern Turkey until completion of a Bankable Feasibility Study, at which time European Goldfields’ interest in each relevant project will increase to between 80% and 90%, respectively.
In addition, European Goldfields has agreed to subscribe for new shares in Ariana at 5 pence per share in a private placement, resulting in European Goldfields owning 20% of the outstanding shares in Ariana following the placement, for a total consideration of approximately (pnds stlg)890,000.
Ariana also holds properties in Western Turkey where exploration of epithermal vein systems has drill tested a number of targets and defined other targets for further investigation. Ariana has also developed an extensive remote sensing database covering the most prospective parts of Turkey.
Completion of the joint venture and the placing is expected by mid-April 2008, conditional upon satisfactory due diligence and the signing of definitive agreements.
Commenting on the strategic alliance, David Reading, Chief Executive Officer of European Goldfields, said: “We are excited at this opportunity of rapidly growing our business into Turkey in partnership with Ariana Resources, which has a proven track record of securing prospective exploration licences and operating effectively in the country. This joint venture is part of our strategy to expand into the mineral belts within South-East Europe and represents an obvious extension with similar geology and the same styles of mineralisation as we have already encountered in Greece. European Goldfields continues in its long-term objective of becoming a major precious and base metals producer in South-East Europe.”
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 commenced selling an existing stockpile of Olympias gold concentrates in July 2006. Hellas Gold is applying for permits to develop the Skouries and Olympias projects.
Romania – European Goldfields owns 80% of the Certej gold/silver project in Romania. European Goldfields submitted in March 2007 a technical feasibility study to the Romanian government, in support of a permit application to develop the project.
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 2006, filed on SEDAR at http://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.
EUROPEAN GOLDFIELDS LTD.
CONTACT: European Goldfields: David Reading, Chief Executive Officer,info@egoldfields.com, +44 (0)20 7408 9534; Buchanan Communications: BobbyMorse; Ben Willey, bobbym@buchanan.uk.com, +44 (0)20 7466 5000; RenmarkFinancial Communication: Jason Roy, jroy@renmarkfinancial.com; Josh Rivard,jrivard@renmarkfinancial.com; Media -Francois Trepanier,ftrepanier@renmarkfinancial.com, (514) 939-3989, Fax: (514) 939-3717,http://www.renmarkfinancial.com/; RBC Capital Markets: Andrew K Smith; Sarah Wharry,andrew.smith@rbccm.com, +44 (0)20 7029 7882