EUROPEAN GOLDFIELDS LIMITED - RESULTS FOR 2010

WHITEHORSE, March 15 /CNW/ --
WHITEHORSE, March 15 /CNW/ - European Goldfields Limited (TSX / AIM: EGU) ('European Goldfields' or the 'Company') today announces its results for the year ended 31 December 2010.  The
financial statements, as well as the accompanying management's
discussion and analysis, are available for review at http://www.egoldfields.com/egoldfields/en/financials/annuals and should be read in conjunction with this news release.

2010 Highlights

Greece

    --  EIS public consultation concluded with unanimous local
        government approval in December 2010
    --  US$300m Hellas Gold financing - Banks mandated

Romania

    --  Final EIS submitted and public consultation underway
    --  US$135m financing package secured

Exploration

    --  Greece - Piavitsa drill results confirm high grade
        mineralisation
    --  Romania - Significant assay results in the vicinity of Certej
    --  Turkey - Exploration confirms high grades at Salinbas
    --  US$15m budget for 2011

Financial

    --  Sales of US$49.9m
    --  Gross profit of US$4.8m
    --  Q4 Stratoni financial performance the best since 2007
    --  Project investment of US$47m in 2010
    --  Working capital of US$80m as at 31 December 2010

Martyn Konig, Executive Chairman and President, commented:

'Underpinned by another year of solid performance at our Stratoni mine
in Greece, which had its best financial performance in Q4 2010 since
2007, mostly due to higher realised base metal prices, we have made
exceptional progress in advancing the permitting process of our
development projects in both Greece and Romania. We were delighted to
receive the unanimous approval of the local Prefectural Council for our
Greek projects at the end of the year and are now initiating the same
public consultation process in Romania. Quite rightly, the
environmental permitting of our development projects has been a
technically detailed and exhaustive process. We are pleased that this
work is now largely complete, with our Greek EIS approval imminent and
the Romanian EIS going through the public consultation process. We
therefore look forward to commencing construction on all of our
development projects in 2011, which will be a transformational year for
the Company.'

 

                        SELECTED FINANCIAL DATA

                                          

                                 Year ended 31 December

(in thousands of US dollars,        2010           2009
except per share amounts)              $              $

Statement of profit and loss                           

Sales                             49,855         62,712

Gross profit                       4,816         11,670

(Loss)/Profit before income tax (42,620)        (8,351)

Income taxes                       (623)        (3,376)

(Loss)/Profit after income tax  (43,243)       (11,727)

Non-controlling interest             436           (56)

(Loss)/Profit for the period    (42,807)       (11,783)

(Loss)/Earnings per share         (0.23)         (0.07)

                                               

                             31 December 2010 31 December 2009
(in thousands of US dollars)                $                $

Balance sheet                                                 

Working capital                        79,635          146,799

Total assets                          718,813          744,100

European Goldfields' operations in 2010 were limited to the base metal
operation at Stratoni, as the Olympias gold concentrate sales ceased
after the end of 2009. Sales therefore declined by 21% in 2010, as no
high margin gold sales were achieved.  However, improved base metal
prices allowed the Stratoni mine to record earnings before interest,
taxation, depreciation and amortisation ('EBITDA') of $13.0m and a
gross profit of $5.5m for 2010. Higher expenses, primarily relating to
the corporate build-out in preparation for the development of our
projects and non cash share-based compensation, resulted in a larger
loss before tax of $42.6 million for 2010 compared to a loss of $8.4
million in 2009.

European Goldfields' audited consolidated financial statements and
management's discussion and analysis for the years ended 31 December
2010 and 2009 are filed on SEDAR at www.sedar.com.

OPERATIONAL AND DEVELOPMENT HIGHLIGHTS

GREECE SUMMARY

    --  EIS public consultation concluded with unanimous support
    --  Production from Stratoni mine above schedule for year
    --  Update of Skouries and Olympias Resources and Reserves underway
    --  Rehabilitation of the Olympias Plant well advanced 

EIS - Public consultation concluded with unanimous support - In December, the Company was pleased to announce that the public
consultation process for the development of the Project concluded with
unanimous support from the local Prefectural Council for the
Environmental Impact Study ('EIS').  This was the conclusion of the formal public consultation process
as required by law. The endorsement of the Prefectural Council was sent
to the Ministry of Environment, Energy and Climate Change for its final
approval of the EIS.

The Project consists of:

Α. Continuation of operations at the Mavres Petres deposit of the
Stratoni Mine.

Β. 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. This
includes the reprocessing of previously mined tailings.

C. The development of mining and processing at the Skouries project; and

D. The expansion of port facilities at Stratoni in service of the above
projects' operations.

Project Finance - Mandate for $300m Hellas Gold debt financing signed - The Company has signed a mandate letter with a group of financial
institutions (collectively, the 'MLAs') to arrange a US$300 million secured term and revolving facility for
its Greek subsidiary Hellas Gold SA ('Hellas Gold'). The Facility will be used to fund the development of the Skouries
open pit and associated processing facilities, the Olympias
concentrator and underground mine refurbishment and general corporate
purposes.

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 mandate through their respective
initial credit processes. The terms of the facility include no gold or
silver hedging requirement and a scheduled tenor of seven years. Since
the year end, two additional banks have received initial approvals to
join the facility. SRK has also been appointed to undertake technical
due diligence on behalf of the MLAs and has recently visited site in
that capacity.

Skouries Project - European Goldfields in conjunction with URS/Scott Wilson Mining have
undertaken a new National Instrument 43-101 technical study to revise
the Resources and Reserves in line with current metal prices and
operating and capital costs.  The update will be in line with the EIS
documentation currently being evaluated by the Greek authorities.

The final phase of the basic engineering of the process plant by Greek
engineering group, Enoia, is effectively complete and detailed tender
packages to carry out the civil engineering work have been
prepared.         

Olympias mine and plant rehabilitation in progress - In preparation for tailings reprocessing to produce pyrite arsenopyrite
gold rich concentrate, repair work to the concentrator building and
plant is nearing completion. A mechanical and electrical audit of the
plant has been carried out and the necessary purchase orders prepared
ready for placement.  Production of the pyrite arsenopyrite gold rich
concentrate is scheduled to commence later in 2011.

The refurbishment and enlargement of the mine access decline has also
progressed in preparation for the commencement of extending the mine
development to allow ore production once the reclamation of tailings is
finished.   

The Company is currently working toward updating the resources and
reserves for Olympias.  The update will reflect current metal prices as
well as updating operating and capital costs and be in line with the
EIS documentation currently being evaluated by the Greek authorities.

Production at Stratoni - Production from the underground mine was higher than scheduled for 2010.
The processing plant continued to perform well in terms of throughput,
recovery and concentrate quality.  In financial terms, the Stratoni
operation had its best performance in Q4 2010 since 2007, generating
EBITDA of $5.92 million in the quarter, and $13.0 million for the year.

The Company's 95%-owned subsidiary Hellas Gold mined a total of 235,674
wet tonnes in 2010 (2009 - 231,397). Sales from Stratoni were as
follows:

                                           2010          2009

Production                                                   

Ore mined (wet tonnes)                  235,674       231,397

Sales                                                        

Zinc concentrate (tonnes)                40,892        37,132

- Containing payable Zinc               16,842         15,276
(tonnes)*

Lead concentrate (tonnes)                16,759        17,001

- Containing       Lead (tonnes)*       11,073         10,867
payable:          

                   Silver (oz)*         836,718       823,191

Inventory (end of period)                                    

Ore mined (wet tonnes)                       24             1

Zinc concentrate (tonnes)                 2,517         2,817

Lead/silver concentrate (tonnes)          1,740           824

* Net of smelter payable deductions

ROMANIA

    --  Public consultation underway 
    --  Project Implementation Strategy has commenced  
    --  Technical Project nears completion
    --  Tender packages prepared

Public consultation underway - Following submission of the EIS for the Company's Certej Project in
Romania the final public consultation will take place in April and will
be conducted in accordance with EU Directives and Conventions and
Romanian Law.  Upon the satisfactory conclusion of this final public
consultation process, the environmental authorities will re-convene the
Technical Analysis Committee to confirm the decision regarding the
issuance of the environmental permit.

The final public consultation follows confirmation from the Romanian
Authorities that the EIS complies with all Romanian legislation, both
from a technical and legal perspective.  Notably the Company recently
received approval from CONSIB (the National Committee for Large
Embankments), a specialist committee constituted under the Ministry of
Environment, for the design of the Tailings Management Facilities for
the Certej project.

Certej Implementation Strategy Underway - The Certej Project team has finalised the procurement and implementation
strategy for the process plant, which divides the flow sheet into three
discrete sections: Minerals Processing, Albion oxidation and gold
recovery.  Invitations to bid have been prepared on this basis for the
provision of the equipment and specialist engineering services.  Major
international equipment companies have already been engaged in a
pre-qualification exercise and have confirmed their intention to bid on
this basis.  As part of their technical due diligence for the project
lenders, SRK have reviewed the Company's implementation strategy and is
satisfied with its progress to date.

It is also planned that the civil engineering and earth moving works
will be awarded to a single contractor to cover the initial
construction of the tailings facilities and the preparation of the
plant, dump and stockpile areas.  Corresponding engineering design work
is effectively complete by Cepromin for the Technical Project report,
which is a key requirement under Romanian legislation in order to
obtain the Construction Permit.  Pre-qualification documentation is
being prepared to allow early engagement with suitable contracting
groups.

Final geotechnical site investigation including 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.

As part of the ongoing preparation for site establishment and
mobilisation activities, the project team has identified the critical
path items to establish site access.  These will be prioritised as soon
as site preparation can commence.

Project Finance - During 2010, the Company significantly advanced the credit committed US$135 million
financing package to part fund the development costs of the Certej
gold-silver Project in Romania, through legal documentation and
technical, environmental and social due diligence.  The structure of
the financing package consists of an eight year US$120 million secured
limited recourse debt facility and a US$15 million secured equipment
lease facility. The commitments are on the basis of detailed term
sheets which have been agreed with the Company and a Technical,
Environmental and Social Audit of the Project conducted by SRK
Consulting on behalf of the banks.  The terms of the facility include
no hedging that limits upside exposure of shareholders to gold prices.

EXPLORATION

The Board of Directors has approved a group-wide, results driven
exploration budget of US$15 million for 2011.

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 has confirmed that the previously identified high grade massive
sulphide mineralisation occurs within a lower grade halo.  Further
drilling is planned in 2011 with the objective of delineating a
preliminary resource on this target.  Soil geochemical samples have
also been taken and these have confirmed extensions to the known
Piavitsa mineralisation, indicated by conductive units which were
revealed by an airborne geophysical survey. The extension targets will
also be drill tested in 2011. 

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 17m
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 early 2011.

A new exploration survey located 12km northwest of Certej, within the
vicinity of an historic gold mining area, has identified a number of
significant anomalies, supported by ground geophysics 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
2011.

Turkey - Exploration has focused on three targets: the Salinbas Gold Zone, the
Ardala copper-gold porphyry within the Ariana joint venture and the
Derinkoy gold target in the Aldridge Minerals joint venture. Regional
sampling aimed at selecting other targets for licence applications has
also continued across the Pontide region. Results from the trenching
and initial drilling programme in Turkey have been highly encouraging
and continued drilling is expected to yield further results in the
coming months

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.

In Turkey, European Goldfields operates an exploration programme through
two Joint Venture ('JV') companies. The JV with Ariana Resources is
focused on the Greater Pontides region of Turkey, a highly prospective
geological terrain containing several major deposits. The JV with
Aldridge focuses on the Derinkoy properties which are adjacent to the
Ardala property in N.E Turkey and show very encouraging styles of gold
mineralisation. The properties lie within an area of interest known as
the 'Pontid JV' which is defined as part of the Ariana JV agreement.

Patrick Forward supervised and prepared the scientific and technical
information included in this press release.  Mr. Forward is a
'qualified person' for purposes of National Instrument 43-101.  Mr.
Forward is an employee of European Goldfields.

Disclosure of mineral resources and reserves for Deva Gold's Certej
deposit is derived from a technical report dated 26 February 2009
prepared under the supervision of Patrick Forward, the Company's Vice
President, Projects and Exploration, a 'Qualified Person' under NI
43-101. The report discloses the data verification procedures that have
been used in collecting, compiling, interpreting and processing the
data used to estimate resources and reserves.  The data verification
procedures for the exploration boreholes are similar to those described
in such report.  The data verification process includes quality
assurance and quality control procedures put in place by the Company as
described in the report, and reviews by independent consultants of
drill hole information on geological sections prepared by the Company
and previous owners.

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 website at www.egoldfields.com

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