Stratoni Silver Reserve Sold to Silver Wheaton
24 April 2007 - European Goldfields Limited (TSX / AIM: EGU) (the "Company") is pleased to announce that its subsidiary Hellas Gold S.A. has agreed to sell to Silver Wheaton Corp. (TSX: SLW; NYSE: SLW) all of the silver metal to be produced from ore extracted during the mine-life within an area of some 7 km� around its zinc-lead-silver Stratoni mine in northern Greece. Silver production at Stratoni is a by-product of lead-zinc operations.
The sale is made in consideration of an upfront payment to Hellas Gold of US$57.5 million in cash, plus a fee per ounce of silver to be delivered to Silver Wheaton of the lesser of US$3.90 (subject to an inflationary adjustment beginning after year three) and the prevailing market price per ounce. The current Stratoni proven & probable silver reserve contains some 10Moz of payable silver.
The transaction does not apply to any additional silver resources within Hellas Gold's 317 km� of mining and exploration licences in northern Greece, including silver resources at Hellas Gold's other mine of Olympias, except for a right of first refusal granted to Silver Wheaton on similar future transactions involving silver.
The proceeds of this transaction will be used to accelerate development and provide flexibility in financing of the European Goldfields project pipeline in Greece. The project development is planned in phases with the Company's flagship project, the Skouries copper-gold porphyry, being a priority.
Commenting on the announcement, David Reading, Chief Executive Officer of European Goldfields, said: "We are delighted to have completed this important transaction with Silver Wheaton. Silver at Stratoni is a by-product of lead, and represents only 13% of our payable revenue at Stratoni. By monetising our silver reserve now, this allows us to accelerate the development of our other major gold projects in Greece and fund further exploration work on specific targets."
About European Goldfields
European Goldfields 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 65% interest in Hellas Gold S.A. Hellas Gold owns three major gold and base metal deposits in Northern Greece. The deposits are the polymetallic projects of Stratoni and Olympias which contain gold, zinc, l
ead and silver, and the Skouries copper/gold porphyry body. Hellas Gold commenced production at Stratoni in September 2005 and 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.
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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 pric
e 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 assumpt
IONS UNDERLYING THESE FORWARD-LOOKING STATEMENTS, SEE THE COMPANY'S ANNUAL INFORMATION 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.
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European Goldfields
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CODE : EGU.L |
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European Goldfields is a gold producing company based in United kingdom. European Goldfields produces gold, lead, silver and zinc in Greece, develops copper, gold and silver in Greece and in Romania, and holds various exploration projects in Romania. Its main asset in production is STRATONI in Greece and its main assets in development are SKOURIES and OLYMPIAS in Greece and CERTEJ in Romania. European Goldfields is listed in Canada, in Germany, in United Kingdom and in United States of America. Its market capitalisation is GBX 147.8 billions as of today (US$ 232.7 billions, € 174.0 billions). Its stock quote reached its lowest recent point on December 05, 2008 at GBX 100.00, and its highest recent level on January 28, 2011 at GBX 990.40. European Goldfields has 183 932 000 shares outstanding. |