Stratoni Production and Sales
12 Months 12 Months
Q4 2008 Q4 2007 2008 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
12 Months 12 Months
Q4 2008 Q4 2007 2008 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.
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.
Contact Information: For further information please contact: European Goldfields: David Reading Chief Executive Officer e-mail: Tel: +44 (0)20 7408 9534 Buchanan Communications: Bobby Morse / Ben Willey e-mail: Tel: +44 (0)20 7466 5000 RBC Capital Markets: Andrew K Smith / Sarah Wharry e-mail: Tel: +44 (0)20 7653 4804