European Goldfields Announces C$23.6 million Private Placement.

Business Editors

TORONTO, ONTARIO--(BUSINESS WIRE)--Jan. 22, 2004

European Goldfields Limited (the "Company") (TSX VENTURE:EGU) announces a non-brokered private placement of up to a total of 9,458,750 special warrants at a price of Cdn$2.50 per special warrant for total subscription proceeds of up to Cdn$23,646,875. Each special warrant is convertible into one common share without par value in the capital of the Company on completion of the acquisition described below. If the acquisition is not completed by March 31, 2004, the Company will repurchase the special warrants and each holder will be entitled to receive its pro rata share of the subscription proceeds and any interest accrued thereon. The private placement is subject to the approval of the TSX Venture Exchange.

The Company will use the subscription proceeds to fund, in part, the acquisition by its wholly-owned subsidiary, European Goldfields (Greece) Limited ("EG Greece"), of 30% of the issued shares of Hellas Gold S.A. for a subscription price of 18 million Euros and exploration work at the Company's Romanian properties. The balance of the subscription price will be funded from the proceeds of the private placement of Cdn$19,528,400 of convertible notes by the Company which completed on December 12, 2003.

Hellas Gold S.A. is a Greek company which was incorporated for the purpose of entering into a contract with the Greek state (the "State Contract") dated December 12, 2003 to purchase the Kassandra Mine assets for 11 million Euros. These assets include mining concessions over a total area of 314 square kilometres which include two deposits known as the Olympias and Stratoni deposits, together with other assets. The State Contract was ratified by Greek parliament on January 8, 2004 and it is anticipated but not yet confirmed that it will be passed into law on or about January 27, 2004.

EG Greece has not yet entered into definitive binding agreements with respect to the acquisition of its interest in Hellas Gold S.A. and the acquisition is subject to the approval of the TSX Venture Exchange.

The Company entered into a memorandum of understanding ("MOU") with Aktor S.A., acting on its own behalf and on behalf of other Greek entities (collectively, the "Greek Partners") and Global Mineral Resources Ltd. ("GMR"), a company controlled by Frank Timis, an insider of the Company, outlining the general terms on which these entities would endeavour to acquire, develop and exploit interests in the Kassandra Mine assets. The MOU provided, among other things, for the incorporation of a company to hold the parties' interests in these assets and the investment by the Greek partners of $6 million Euros to acquire a 70% interest in the new company, the investment by the Company of 18 million Euros to acquire a 30% interest in the new company and the grant to GMR of a right to acquire a 21% interest in the new company for 18 million Euros.

The Company is currently negotiating the final terms of a shareholders' agreement under which EG Greece will acquire its interest in Hellas Gold S.A. The Company cannot confirm when or if these negotiations will be successfully concluded.

European Goldfields is a Canadian based resource company involved in the acquisition, exploration and development of mineral properties in Romania and the Balkans.

On Behalf of the Board:

Eduardo Baer

President and Chief Executive Officer

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release and the information contained herein.