SAN DIEGO, March 17 /PRNewswire-FirstCall/ -- (Pink Sheets: EGDD) Eastern Goldfields, Inc. ("EGI") is pleased to announce that it has received the completed Bankable Feasibility Study ("BFS") from Turgis Consulting (Pty) Limited ('the "Consultant") for the underground section of the Lily Gold Mine in the Mpumalanga Province of South Africa The BFS has resulted in the following projected mineral resources as of December 2007. These estimated mineral resources are determined in accordance with the South African Code for Reporting Mineral Resources and Mineral Reserves (SAMREC Code). MINE & CATEGORY F2007 Tons Grade Content (000) g/t kg Oz Measured 7,515 3.15 24,000 761,000 Indicated 1,820 3.14 6,000 184,000 Inferred 9,858 3.09 30,000 979,000 Total 19,193 3.12 60,000 1,924,000 The underground ore body at the Lily Gold Mine covers an overall strike length of 2,000 m. The width of the ore body varies from 2 m to 15 m with an overall average of 4.1 m. A total of 108 diamond drill holes was completed for estimation of the mineral resources and reserves to a depth of between 600m and 700m below surface. The average dip of the ore body is 700 and both the ore and host rocks are considered to be generally competent. A pay limit of 2.0 g/t was used for mine planning purposes in the BFS. This, together with the calculated and assumed losses detailed in the report resulted in the calculation of the following mineral reserves as summarized below: SUMMARY OF MINERAL RESERVES FOR LILY UNDERGROUND MINE Tonnes RoM Grade Au content(g) Au content Proven reserves 0 0 0 0 Probable reserves 5,768,834 3.00 17,301,866 556,268 Total reserves 5,768,834 3.00 17,301,866 556,268 The Consultant believes that the Lily Gold Mine ore is unusual for the area in that it has been found to be free milling (i.e. non-refractory) and high gold recoveries may be achievable with conventional milling, gravity gold concentration and cyanidation. Lily's management conducted a full suite of test work prior to adopting a gravity and carbon-in-leach circuit, resulting in an overall projected recovery of 95.45 per cent (based on the tests that were conducted). A substantial revision of the geological model in February 2008, based on the diamond drilling, resulted in a plan for the mining of a projected 40,000 tonnes per month. Plant tailings are to be disposed to on a site close to the mine. The 23 hectare site, based on the Consultant's current assessment, is capable of handling all of the tailings for the currently planned mining life, with a maximum tailings wall height of 40m and a maximum annual rate of rise of 3.3 m. The basis of costing used in the BFS include provision for new plant and equipment and bottom up operating costs using either first principles or first principles coupled with existing labor rates. Contingencies and EPCM provision have been added. A gold price of $800/oz ($1=ZAR7) was used for revenue calculations. Based on these factors and assuming no changes in labor rates, the geological model, gold prices, and other assumptions, the Consultant has projected that the discounted cash flow analysis will likely be as follows: Capital expenditure ZAR488M US$ 70 M Operating Cost ZAR239/t US$34. t NPV@5% ZAR583 M US$83M NPV@10% ZAR304M US$43M IRR 25% Over the projected 14 life of mine, the project may generate projected revenues of ZAR2.96Bn (US$422.9m) for a projected operating expenditure of ZAR1.38Bn (US$197.1m), a projected capital expenditure of ZAR488M (US$69.7m) yielding a projected profit before tax of ZAR1.093Bn (US$156.1m). These are future projections and the actual results that the Company achieves may be different. From a technical risk perspective and assuming that the assumptions and models employed by the Consultant are accurate, the project appears to have low risk characteristics. The Consultant believes that the geology is well known to the Company and the project will be managed by personnel who are familiar with it. If these assumptions are accurate, the Consultant believes that the mining methods appear to be proven, and are now currently being practiced in early mining by the Company. The Company has already recruited the core of the team required to operate and manage the mine. From a metallurgical perspective, the ore appears to be well known, full test work has been undertaken and the mine already has a history of successfully processing the ore. If the Consultant's assumptions and estimates are accurate, the upside potential may also include the likelihood of potential capital cost reductions by adopting an owner build approach going forward, and optimization of the 40,000 tonnes per month production rate into the detailed design of the plant from the outset. The Consultant also believes that the Company will be able to further extend the mineral resource and reserve base, if conditions allow. The Consultant anticipates that the access and mining approach is flexible and easily amenable to further extensions. Mike McChesney, President of Eastern Goldfields, stated, "We are very pleased with our technical consultant's attention to detail and the professional manner in which they conducted their studies. With the completion of this Bankable Feasibility Study we are closer to our goal of putting the Lily underground mining project into full production. We believe the project is very robust and has substantial benefits for both the people of Mpumalanga and the shareholders of the Company. The benefits to the regional economy will be widespread, through the employment of the local workforce and suppliers." About EGI: EGI is a growing company engaged in the mining, exploration and acquisition of gold properties in some of Southern Africa's most prospective regions. The company holds mineral rights over 34,600 acres (14,000 ha), currently has mineral resources in excess of 2.2 million ounces and mineral reserves in excess of 565,000 oz. FORWARD-LOOKING STATEMENTS This press release contains 'forward-looking statements'. These are statements concerning plans, objectives, goals, strategies, expectations, estimates, intentions, projections, developments, future events, or performance, underlying (expressed or implied) assumptions and other statements that are other than historical facts. In some cases forward-looking statements can be identified by the use of forward-looking words such as 'believes,' 'expects,' 'may,' 'will,' 'should,' or 'anticipates,' or the negative of these words or other variations of these words or comparable words, or by discussions of plans or strategy that involve risks and uncertainties. Management wishes to caution the reader that these forward- looking statements, including, but not limited to, statements regarding the Company's plans, goals the estimates and assumptions regarding the Lily Gold Mine, the projections made by the Bank Feasibility Study, and, the business strategy of the Company and other matters that are not historical facts are only predictions. No assurances can be given that such predictions and the estimates regarding mineral reserves, success of mining plans, or other projections will prove correct or that the anticipated future results will be achieved. Actual events or results may differ materially either because one or more predictions or assumptions, prove to be erroneous or as a result of other risks facing the company. Forward-looking statements should be read in light of the cautionary statements and risks that include, but are not limited to, the risks associated with a small company, the likelihood that the assumptions and estimates made by the Consultant later prove inaccurate, a decline in the price of gold, adverse labor conditions in the mining labor market in South Africa, the intense competition the company faces from others, and technological changes. Any one or more of these or other risks could cause actual results to differ materially from the future results indicated, expressed, or implied in such forward-looking statements. We undertake no obligation to update or revise any forward-looking statement to reflect events, circumstances, or new information after the date of this press release or to reflect the occurrence of unanticipated or other subsequent events. DATASOURCE: Eastern Goldfields, Inc. CONTACT: Derrick Short of Eastern Goldfields, Inc., +1-619-497-2555

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