MANDATE FOR CERTEJ PROJECT FINANCE SIGNED

 

TIDMEGU 
 
RNS Number : 3830J 
European Goldfields Ltd 
30 March 2010 
 

 
 
For Immediate Release 
                                              30 March 2010 
 
                          European Goldfields Limited 
 
 
                    MANDATE FOR CERTEJ PROJECT FINANCE SIGNED 
                            PROJECT MANAGER APPOINTED 
 
30 March 2010 - European Goldfields Limited (TSX / AIM: EGU) ("European 
Goldfields" or the "Company") is pleased to announce the signing of a mandate 
letter with a group of financial institutions to arrange and underwrite a US$125 
million debt financing to be used to part fund the development costs of the 
Certej project.  The mandated lead arrangers are Caterpillar Financial SARL, ING 
Bank N.V., Investec Bank plc, UniCredit Bank AG, London Branch and WestLB AG, 
London Branch, (together the "MLAs"). 
 
The mandate letter has been signed on the basis of a term sheet which has been 
agreed between the Company and the MLAs, each of which has received approval to 
proceed with the transaction through their respective initial credit processes. 
The term sheet sets out detailed terms and conditions of the debt financing 
which include: 
 
·      No hedging that limits upside exposure of the shareholders to gold prices 
·      Security upon the Certej project assets 
·      Scheduled tenor of 8 years 
·      Separate term loan and revolving credit facility tranches 
·      Sharing of surplus future project cash flows between the Company and the 
MLAs, reducing the base case tenor of the term loan to approximately 7 years 
·      A guarantee from the Company of the debt payment obligations until such 
time as the project achieves completion, by the satisfaction of certain 
operational, legal and economic tests. 
The arranging and underwriting conditions agreed by the MLAs in the mandate 
letter are subject to final due diligence, customary market conditions and 
obtaining final internal credit approvals.  As previously reported, the Company 
appointed SRK Consulting ("SRK") as the independent technical consultant to the 
Certej project in mid-2009 to act on behalf of the MLAs. The technical, social 
and environmental due diligence is complete and SRK are in the process of 
finalising their report. 
 
This is an important further step in the development of the Certej project and 
in the Company's wider relationships with the debt capital markets.  European 
Goldfields is very pleased to be working with such high quality financial 
institutions, all with extensive experience and excellent credentials in global 
mining finance. 
 
The Company is also pleased to announce the appointment of Alan Baker as Project 
Manager for the Certej gold-silver project in Romania.  Alan will join the team 
at Deva Gold and take responsibility for advancing the Certej project through 
the development process towards production. 
 
Mr Nicolae Stanca, Managing Director of Deva Gold SA, welcomes Alan as a 
valuable addition to his team. 
 
Alan brings over 30 years of experience in the mining sector to his new position 
in as Project Manager for Certej.  He previously acted as Project Manager for 
Anatolia Minerals on the Copler deposit where he was responsible for the 
construction of a heap leach operation including process plant, mine and 
associated infrastructure in Eastern Turkey.  Prior to this he was Project 
Manager at European Minerals on the Varvarinskoye project in Kazakstan where he 
was responsible for managing the design and construction of the gold-copper open 
pit mine, process plant and associated infrastructure on the greenfield site 
with a total capex of US$160 million. 
 
Before this Alan acted as Construction Superintendent for Golden Star Resources 
at their Bogoso mine in Ghana where he was directly responsible for overseeing 
the refurbishment of the second hand Bondaye CIL plant and other process and 
mining related projects.  He has also worked in Senior Management roles for 
Ashanti Goldfields where he gained extensive underground experience and was 
responsible for project coordination and construction with an annual budget of 
up to US$100 million. In his early career he worked in the UK, South Africa and 
Zambia on a variety of mining projects. He has fulfilled the role of Client's 
representative and also worked for various contractors associated with the 
mining industry. 
 
Certej Project Summary 
 
The Certej project is an epithermal gold/silver deposit located in the "Golden 
Quadrilateral" area of the Apuseni Mountains of Transylvania in Western Romania, 
a highly prospective region which has historically produced upwards of 30 
million ounces of gold. The Certej deposit lies within a brownfield site with 
excellent existing infrastructure and a history of production which dates back 
300 years; the open pit and plant were worked as recently as 2006. The Certej 
orebody comprises four distinct ore zones, amenable to extraction by 2 adjacent 
open pits that are well defined by extensive drilling. 
 
The Certej deposit has a calculated NI 43-101 compliant mineable reserve of 32.8 
million tonnes of ore grading 2.0 g/t gold and 11.4 g/t silver, representing 2.1 
million ounces gold and 12.0 million ounces silver.  A further 4.1 million 
tonnes of ore from lower grade material and existing dumps will contribute an 
additional 290,000 ounces of gold and 8.8 million ounces of silver in the latter 
years of the mine. Reserves will be extracted using a conventional open pit 
method with a strip ratio of 3.1:1. The project will involve the processing of 3 
million tonnes of ore per annum over an open pit life of 11.5 years with an 
overall mine life of 16 years. The ore will be processed using flotation to 
produce a pyrite gold concentrate and then ultrafine grinding and ambient 
pressure oxidation using the Albion Process developed by Xstrata to produce gold 
and silver doré on site. Average annual production is expected to be 155,000 
ounces of gold and 820,000 ounces of silver during the life of the open pit 
after which the plant will be fed by lower-grade material, stockpile and dumps. 
The project will involve an anticipated project capex of approximately $190 
million which includes pre-stripping in year 1. 
 
The Technical Study, required to obtain the relevant construction permits, is 
currently underway with completion anticipated in Q2 2010, ready for submission 
on approval of the Environmental Impact Study. The project upside includes 
numerous drill ready targets both near mine and within the wider licence area. 
Further long term exploration potential exists within the Certej-Brad Belt. 
 
About European Goldfields 
 
European Goldfields is a developer-producer with globally significant gold 
reserves located within the European Union. The Company generates cash flow from 
its 95%-owned Stratoni operation, a high grade lead/zinc/silver mine in 
North-Eastern Greece and the sale of gold concentrates from Olympias. European 
Goldfields will evolve into a mid-tier producer through responsible development 
of its project pipeline of gold and base metal deposits at Skouries and Olympias 
in Greece and Certej in Romania. The Company plans future growth through 
development of its highly prospective exploration portfolio in Greece, Romania 
and Turkey. 
 
For further information please see the Company's new website at 
www.egoldfields.com 
 
For further information please contact: 
 
European Goldfields:                                                   Buchanan 
Communications: 
Martyn Konig, Executive Chairman                                  Bobby Morse / 
Katharine Sutton / James Strong 
Sally Schofield, VP Investor Relations                              e-mail: 
[e-mail] 
e-mail: [e-mail]: [phone] 
Tel: [phone] 
 
RBC Capital Markets: 
Josh Critchley 
e-mail: [e-mail] 
 
Matthew Coakes 
 
e-mail: [e-mail] 
 
Tel: [phone] 
 
 
 
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/egoldfields/en/operationsprojects/state 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 2009, 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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