Rising metal prices help European Goldfields to narrow Q3 loss

The group is still in the process of getting permits for its flagship Skouries and Olympias projects.

LONDON (Reuters) - 

European Goldfields Ltd (EGU.TO) (EGUq.L), which mines metals in Greece, posted a narrower third quarter loss on Tuesday due to a rise in metals prices.

The London- and Toronto-listed firm posted a loss of $3.21 million for the three months to the end of September compared with loss of $5.3 million in the same period last year.

The AIM-listed company produces silver, zinc and lead at its only producing mine, Stratoni, and is in the process of getting permits for its flagship Skouries and Olympias projects.

The zinc price MZN3 has rebounded by about 80% so far this year to around $2,150 per tonne, but is still well below last year's peak of $2,900.

The firm said on Oct. 6 that it had won preliminary approval to build Skouries and Olympias, which would boost its gold output fivefold. The company has spent $120 million on the projects and needs a further $330 million to bring them into production by 2012.

The firm said it had $124.1 million in cash and cash equivalents at the end of September, down from $170.3 million at the end of 2008.

European Goldfields sold 21,734 tonnes of gold concentrates from stockpiles at Olympias in the quarter, up 71% over the same period last year.

The group's London shares have gained 168% this year and closed on Monday up 7.2 percent to 425 pence as gold prices XAU= touched new record peaks.

(Reporting by Eric Onstad; Editing by Erica Billingham)

© Thomson Reuters 2009 All rights reserved.

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