European Goldfields

REDUCE

08/07/2011 Robert Tyerman

The Greek government has approved European Goldfields' Environmental Impact Study for developing its assets in the country. Giorgos Papakonstantinou, Environment Minister in Athens, has given the green light to the AIM and Toronto-quoted company's 95%-owned local subsidiary, Hellas Gold.

Based in the Yukon, Canada, European Goldfields (EGU) can now proceed with its development plan. This includes continuing operations at its Strationi high-grade lead, zinc and silver mine, which is already generating cash flow, and mining and processing ore at its Olympias project, containing an estimated potential resource of eight million oz of gold, 789,000 tonnes of copper and1.6m tonnes of lead.

In addition, the company, which lost nearly $43m (£25.6m) last year and $13.5m in the first quarter of 2011, wants to develop a third project, Skouries, and to expand port facilities at Stratoni. European Goldfields also plans to develop assets in Romania and Turkey.

Recommended by Growth Company Investor at 135.5p in 2009 and again at £4 last year, European Goldfields' somewhat illiquid shares now change hands at 812p. Partial profit taking might be prudent, while retaining a chunk for potential future growth.

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