EUROPEAN GOLDFIELDS LIMITED - RESULTS FOR Q3 2010

WHITEHORSE, Nov. 11 /CNW/ - European Goldfields Limited (AIM: EGU /TSX: EGU) ("European Goldfields" or the "Company") today reports its results for the quarter ended 30 September 2010. The financial statements, as well as the accompanying Management's Discussion & Analysis, are available for review at http://www.egoldfields.com/egoldfields/en/financials/quarterlies and should be read in conjunction with this news release.

Operational and development highlights:

• Greece: final EIS submitted and public consultation underway
• Romania: final Certej EIS submitted
• Olympias mine and plant rehabilitation in progress

Corporate activity:

• Greece: financing alternatives under consideration
• Appointment of Company Secretary

Financial highlights:

• Sales US$9.2 million
• Working capital of US$97 million

Commenting on the results, Martyn Konig, Executive Chairman and President of European Goldfields, said:

"During the quarter we were pleased to announce that the Company submitted both the Greek and Certej EIS's which are now being reviewed by the relevant authorities and which remain on schedule for final approval. In particular in Greece we recently announced that the EIS has been passed from the Ministry of Environment, Energy and Climate Change to the local authorities in Halkidiki, thereby initiating the public consultation process.

We have already announced a financing package for Certej and are in the advanced stages of finalising a financing solution for our Greek development projects. Our primary consideration has been to minimise shareholder dilution and a formal announcement will be made shortly. Whilst our operating mine continued to perform well during the quarter, our key development projects in both Greece and Romania remain fully on track to advance European Goldfields towards becoming a mid-tier gold producer by 2013".

SELECTED FINANCIAL DATA

	Quarter ended 30 September
(in thousands of US dollars, except per share amounts)	2010 $				2009 $
Statement of profit and loss
Sales	9,204				17,037
Gross profit	336				3,563
Profit/(Loss) before income tax	(2,746)				(1,332)
Income taxes	960				(1,847)
Profit/(Loss) after income tax	(1,786)				(3,179)
Non-controlling interest	141				56
Profit/(Loss) for the period	(1,645)				(3,123)
Earnings/(Loss) per share	(0.01)				(0.02)
(in thousands of US dollars)	30 September 2010 $				30 September 2009 $
Balance sheet
Working capital	97,359				146,158
Total assets	734,252				749,870

OPERATIONAL AND DEVELOPMENT HIGHLIGHTS

GREECE

• Final EIS submitted
• EIS public consultation underway
• Stratoni production on schedule
• Olympias mine and plant rehabilitation in progress

Final EIS Submitted - The final Environmental Impact Study ("EIS") for the Company's Project in Halkidiki (the "Project") in North-Eastern Greece was submitted to the Greek Ministry of Environment, Energy and Climate Change ("MoE").

In late September 2009, the Greek authorities completed the Preliminary Environmental Assessment and Evaluation based on the Preliminary Environmental Impact Study ("PEIS") submitted by the Company's 95%-owned subsidiary Hellas Gold SA, and issued a pre-approval of the construction and operation of the Project.

The Project consists of:

• The development of mining and processing at the Skouries project
• The next stages of the Olympias project, namely the mining and processing of ore and metallurgical treatment of the concentrate, in accordance with the business plan as originally submitted
• Continuation of operations at the Mavres Petres deposit of the Stratoni Mine
• Development of the port facilities at Stratoni to service the above projects' operations

The completion and submission of the final EIS is another landmark in European Goldfields' development of the Project.

The EIS is subject to the final stages of a decision-making process that conforms to the EU Directive on Environmental Impact Assessment. In summary, the EIS is being reviewed by the competent authorities and is subject to public consultation, the requirements for which are set out in this EU Directive and embodied in Greek law.

EIS Public Consultation Underway - As announced on 8 November 2010, the MOE has completed its review and delivered the EIS to the local authorities in Halkidiki and notices were issued in local newspapers thereby initiating the process of public consultation. The MOE acting through a Special Technical Committee has reviewed the EIS in detail and provided important guidance to Hellas Gold in concluding that the EIS conforms to relevant Greek and EU requirements.

Public Consultation will last for 35 days from 30th of October thereby both allowing local stakeholders and potentially affected communities to offer their comments and any further views to be communicated to the Special Technical Committee as part of the conclusion of the environmental permitting process for the Project.

Stratoni Production

														Q3 2010			Q3 2009
Production
Ore mined (wet tonnes)														54,093			57,235
Sales
Zinc concentrate (tonnes)														8,818			7,937
- Containing payable:  Zinc (tonnes)*														3,672			3,325
Lead concentrate (tonnes)														2,691			4,736
- Containing payable:  Lead (tonnes)*														1,798			3,042
													Silver (oz)*	135,361			228,574
Inventory (end of period)
Ore mined (wet tonnes)														9,074			8,097
Zinc concentrate (tonnes)														4,143			607
Lead/silver concentrate (tonnes)														2,841			901

*    Net of smelter payable deductions

Production from the underground mine continued to be on schedule for the year. The processing plant performed well in terms of throughput, recovery and concentrate quality. Significant amounts of concentrate production remained unsold at quarter end, resulting in unusually high concentrate inventory levels. This inventory was shipped in October and will be reflected in Q4 results.

Olympias mine and plant rehabilitation in progress - The refurbishment and enlargement of the mine access decline progressed well during the quarter.  Following a structural survey, repair work to the Concentrator building and plant is nearing completion in preparation for tailings reprocessing to produce pyrite gold concentrate. A mechanical and electrical audit has been carried out and the necessary purchase orders prepared. 

The Company is currently working toward optimising and updating the resources and reserves for Olympias.  The original resource model from 1999 rejected certain mineralised areas as uneconomic at the then prevailing metal prices. These are being reassessed in a more realistic metal price environment with the expectation of restoring these mineralised areas into the resource model and expanding the resource and reserve base.  In parallel with this, the mine plan will be updated and revised.

ROMANIA

• Final EIS submitted
• Certej Implementation Strategy Underway

Final EIS Submitted - The final EIS for the Company's Certej Project in Romania was submitted during the quarter. This follows the issue of the Zonal Urbanisation Plan ("PUZ") planning document by local authorities in May 2010, which included an environmental summary and public consultation, and the subsequent definitive confirmation of final guidelines for the EIS. The completion and submission of the final EIS report is another landmark in European Goldfields' development of the Certej Project.

The EIS is now subject to the final stages of a Romanian decision-making process that conforms to the EU Directive on Environmental Impact Assessment.  In summary the EIS is being reviewed by the competent authorities and is subject to public consultation, the requirements for which are set out in this EU Directive and embodied in Romanian law.

Certej Implementation Strategy Underway - The Certej Project team have finalised the procurement and implementation strategy for the process plant, which divides the flow sheet into three discrete sections: Comminution and concentration, Albion oxidation and gold recovery.  Invitations to bid have been prepared on this basis for the provision of the equipment and specialist engineering services to major international equipment companies who have already been engaged in a pre-qualification exercise and have confirmed their intention to bid on this basis. 

It is also planned that the civil engineering and earth moving works will be awarded in no more than two major contracts to cover the initial construction of the tailings facilities and the preparation of the plant, dump and stockpile areas.  Corresponding engineering design work is approximately 95% complete by our local contractor Cepromin who have been commissioned to prepare the Technical Project report which is required under Romanian legislation for the Construction Permit.

Final geotechnical drilling and associated engineering studies for the process plant, tailings management facilities and open pits have been completed by the Company in cooperation with Golder Associates UK.

GROUP EXPLORATION UPDATE

Greece - Work has focused on the Piavitsa prospect, which historic drilling has shown to be an Olympias look-alike target with high grade polymetallic mineralisation in massive sulphides. New sampling of previously drilled core is being carried out in order to confirm historic assays over previously identified massive sulphide mineralisation and to test new zones of previously unrecognised mineralisation and alteration.  Soil geochemical samples have also been taken aimed at confirming extensions to the known Piavitsa mineralisation, indicated by conductive units which were revealed by an airborne geophysical survey.  Results from the sampling are expected in the coming weeks.

Romania - Four exploration boreholes were drilled to test potential gold mineralisation that is close to, but currently outside the planned Certej open pit footprint. Significant assay results include 17 m grading 3.40 g/t gold and 3.76 g/t silver west of the open pit and 16m grading 2.24 g/t gold and 2.94 g/t silver northwest of the pit. Further drilling and trenching is planned in Q4 2010.

A new exploration survey located 12 km northwest of Certej, within the vicinity of an historic gold mining area, has identified a number of significant anomalies, supported by soil geochemistry and mapping. The anomalies potentially represent previously undiscovered extensions to zones of gold mineralisation. Preparations are currently being made to drill the most significant anomalies in late Q4 2010 and early 2011.

Turkey - Drill testing of the Ardala porphyry copper gold target and Salinbas epithermal gold zone, both held in joint venture with Ariana Resources plc, continued during the quarter.  Results of the programme have confirmed mineralised targets and will be published during Q4 2010.

CORPORATE ACTIVITY

Financing - Work with the Certej project finance banks has progressed, with facility documentation in an advanced form and technical due diligence essentially complete.  Following the submission of the final EIS in Greece, the Company has advanced the negotiation of a bank facility for the development of its Skouries project.  It is anticipated that this facility will provide substantially all the anticipated US$300 million construction capital for the project.  As with Certej, the Company will require that this facility also does not commit to any hedging of the gold price upside.  A term sheet is in final draft form prior to agreeing mandate terms with the new bank group, and it is expected that commercial terms will be similar to those already negotiated for Certej. A further announcement on this is expected shortly.

Euromines Gold Group - We are pleased to announce that Mark Rachovides, Executive Vice President of the Company, has been appointed as Chairman of the Euromines Gold Group, a body to which we are pleased to give our full support.

New Appointments - Deborah Paxford has been appointed as Company Secretary. Before joining European Goldfields, Ms. Paxford was Company Secretary at ZincOx Resources plc where she was responsible for all company secretarial matters as well as providing legal advice to management.  Ms. Paxford qualified as solicitor in 1995 and spent eight years working in private practice at two leading London law firms before moving in-house as legal adviser for an international software company, where she spent five years advising on corporate and commercial matters.

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. 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.

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, VP Projects & 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.

For further information please see the Company's new website at www.egoldfields.com

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