European Goldfields moves to feasibility at Certej

Vancouver — By year-end 2006, European Goldfields (EGU-T, EGFDF-O) expects to have a final feasibility study in hand for its 80%-owned Certej gold-silver project in Romania’s southern Apuseni Mountains.

The company announced that resources at the potential open-pit project have been converted to probable reserves of 27.7 million tonnes averaging 2 grams gold and 11.6 grams silver per tonne, containing 1.76 million oz. gold and 10.35 million oz. silver.

The new estimate prepared by independent consultants RSG Global complies with National Instrument 43-101 reporting standards, and was calculated using a cutoff grade of 0.8 gram gold, a gold price of US$425 per oz., and a silver price of US$7 per oz.

The final feasibility study will incorporate recent metallurgical testing and data collected as part of the company’s in-house prefeasibility study, which also identified sites for mine-related infrastructure and tailings disposal. Pit-design work was also carried out that resulted in a strip-ratio estimate of 2.6:1 waste-to-ore.

European Goldfields envisages a mining and processing rate of 3 million tonnes per year for at least nine years, which would result in annual production of about 249,000 tonnes of concentrate with grades averaging 21 grams gold and 125 grams silver, based on an average recovery of 88% from conventional flotation. This would give the company an annual production rate of about 170,000 ounces of contained gold in concentrates. Letters of interest are in hand from two East European metal traders willing to purchase the concentrates.

Capital costs, based on the in-house prefeasibility study, are estimated at US$69 million, including the purchase of mining equipment and construction of a flotation mill. Mining costs were estimated at US$1.28 per tonne of material mined, while processing costs are estimated at US$5.11 per tonne processed.

As part of its ongoing studies, the company is examining alternative processing options, including producing gold dor on-site by using the Albion process followed by cyanidation. The Albion process is a combination of ultra-fine grinding and oxidation leaching at atmospheric pressure. The two stages of related test work concluded to date are reported to have shown positive results, with final results expected in the third quarter of this year.

Environmental studies are also ongoing, as the project could attract attention from some of the environmental groups currently trying to stop or stall development of the nearby Rosia Montana gold mine project held by Gabriel Resources (gbu-t, gbrrf-o) [See story, page B3]. European Goldfields says it has completed two levels of the necessary environmental impact assessments for Certej, and will now complete an environmental impact study in order to progress to permit applications by year-end.

The minority 20% interest in Certej is held 19.25% by a state-owned mining company, with the remainder shared by several Romanian shareholders. European Goldfields also holds exploration projects in Romania, mostly within a historic mining camp that has produced more than 40 million oz. gold since Roman times.

In addition to its Romanian assets, European Goldfields holds a 65% interest in Hellas Gold, which owns three deposits in northern Greece, including the Stratoni and Olympias gold-silver-lead-zinc projects, and the Skouries copper-gold porphyry project. All three deposits are at the feasibility and engineering stages of development.