News

March 25, 2009

European Goldfields Has No Doubts It Will Be Able To Fund An Increase In Production To 400,000 Ounces Of Gold Per Year By 2011

By Alastair Ford

One or two numbers jump out at you straight away when you look at the latest set of financial results from European Goldfields. The first is that the company has US$193 million in the bank, or did, as at 31st December 2008. The second is that although the decline in base metals prices over the past 12 to 18 months has taken a toll on cash flows, the company is still, technically, profitable, if you allow a one-off income tax adjustment to be taken into consideration. And, for good measure, we might add a further number, which must be of great significance in these times of quantitative easing and general uncertainty - gold reserves stand at over 10 million ounces. All in all, that’s not such a bad place to be.

To be sure, though, there’s still plenty of work to be done for the company to get to where it wants to go. For one thing, chief executive David Reading estimates that in total European Goldfields will require US$475 million to build everything it wants to build. That spend breaks down as follows: US$175 million is earmarked for the Certej gold property in Romania, which currently boasts over two million ounces of gold and 12 million ounces of silver on an initial 11.5 year mine life; US$260...