August 12, 2011 / 7:38 AM / 6 years ago

UPDATE 1-Euro Goldfields Q2 loss narrows, Olympias on schedule

* Q2 pretax loss narrows to $15.2 million

* Olympias on track for first production in Q2 2012 (Adds details, background)

LONDON, Aug 12 (Reuters) - Miner European Goldfields EGUq.L, which secured a long-awaited Greek permit last month, posted a narrower pretax loss for the second quarter and said it had made “major progress” with its Olympias project, on track for first production next year.

In the three months to the end of June the group made a pretax loss of $15.2 million, compared to $20.3 million loss in the same period a year ago, as it increased gross profit almost fivefold to $2.8 million.

The group, which currently depends on its small Stratoni mine for revenue, was awarded a much-delayed mining permit for its Skouries and Olympias projects in Greece last month, a green light that will turn the miner into Europe’s largest primary gold producer.

It has also begun evaluating a move from its current listing on London’s junior AIM market to the main market of the London Stock Exchange. Goldman Sachs has been appointed to advise on the shift and on a potential change in domicile, as the miner tries to secure better access to capital markets.

Lazard are also providing financial advice.

“With the (Greek) EIS approval in hand and under the stewardship of our newly appointed COO, we have hit the ground running both at Olympias and Skouries and we are firmly on schedule for first gold production from our Olympias tailings project in Q2 2012,” Executive Chairman Martyn Konig said.

European Goldfields said a comprehensive document to commission bids for the Skouries project construction was ready to be issued to major contractors, adding the recruitment proces was well advanced.

The group also said it was drill testing near mine targets in Greece and was working to define resources at three-advance-stage exploration targets, starting with Piavitsa.

Shares in the group were down 0.3 percent at 730 pence at 0730 GMT, in line with the broader market. (Reporting by Clara Ferreira-Marques)

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