EMC Puts Contractor On Protective Notice.

LONDON -- European Minerals Corporation ("EMC" or "the Company") (TSX:EPM)(AIM:EUM) is currently constructing a gold/copper mine at Varvarinskoye in Kazakstan.

EMC is in discussion with MDM Ferroman Pty Limited (MDM) respecting EMC's concerns regarding the lump sum turnkey contract ("LSTK") for the supply and construction of the Varvarinskoye process plant and associated infrastructure (referred to in EMC's press release dated December 1, 2005). Under the terms of the LSTK, MDM is obliged to supply the equipment for and build a process plant to treat a minimum of 4.2 million tonnes of ore per annum from the Varvarinskoye deposit, at a cost of US$55.7 million. The LSTK contains standard mining industry undertakings, including an obligation for MDM to provide, at its cost, a Performance Security, within a reasonable period of time after the date of execution of LSTK. To date, MDM has not delivered the Performance Security to the Company.

In light of MDM's non-delivery of the Performance Security, the Company has given 14 days notice to MDM that the Company has the right under the LSTK, but not the obligation, at the expiry of the notice period, to terminate the LSTK. Whether the Company exercises this right will depend on the circumstances prevailing at the expiry of such notice period.

The Company is seeking to clarify MDM's position over the next 14 days and is continuing to progress the Project via its own project team.

In light of the situation and as part of a precautionary set of measures, management of the Company is reviewing all its construction options for completion of the Project should the LSTK be terminated. In addition, management has been in contact with all major equipment suppliers and has confirmed that equipment deliveries are on schedule. While the lenders of the debt facility to the Project have indicated their support of the Company's actions, including the possible termination of the LSTK, certain defaults may be called under the debt facility agreement in connection with the termination of the LSTK. The Company intends to seek waivers of such defaults from the lenders if it terminates the LSTK. If such waivers are not forthcoming and defaults are called by the lenders, the lenders would be entitled to cancel the debt facility.

To date, the Company has spent approximately US$49 million out of the total project capital cost of approximately US$125 million and has not drawn down any of the debt facility. If the LSTK is terminated and the existing debt facility is not immediately available, management of the Company believes that, under existing market conditions, it would be able to raise alternative facilities to fund completion of the Project. This may nevertheless result in a delay to the Project's scheduled completion date.

Given the evolving nature of this situation, management will provide updates on a regular basis as appropriate in the circumstances.

The Company's public documentation is available on www.sedar.com.

European Minerals Corporation (AIM:EUM) (TSX:EPM)