Euromax Announces Ilovitza Pre-­‐Feasibility Study Results & Maiden Mineral Reserve

TSX-­‐V:  EOX www.euromaxresources.com

Euromax  Announces  Ilovitza  Pre-­‐Feasibility  Study  Results  &  Maiden  Mineral  Reserve  

Euromax  Resources  Ltd.  5  June  2014  (TSX-­‐V:  EOX):  (“Euromax”  or  the  “Company”)  is  pleased  to  announce  the results  of  the  Pre-­‐Feasibility  Study  (“PFS”),  including  a  maiden  Mineral  Reserve,  for  its  100%  owned  Ilovitza  gold-­‐ copper   porphyry   project   in   Macedonia.   With   an   NPV   of   US$675   million   the   PFS   demonstrates   the   economic robustness   of   the   Ilovitza   Project   (the   “Project”),   building   upon   the   significantly   increased   Mineral   Resource announced  3  December  2013,  as  well  as  incorporating  costs  based  on  supplier  quotes  and  engineering  studies carried  out  to  at  least  pre-­‐feasibility  industry  standards.

PFS  Highlights  (based  on  US$1,250/oz  Au  and  US$3.00/lb  Cu)

• Maiden  Total  Probable  Reserve  of  225  million  tonnes  containing:
  • 2.45  million  ounces  of  gold
  • 905  million  pounds  (411  thousand  tonnes)  of  copper
• Total  Sulphide  Probable  Reserve  of  209  million  tonnes  at  an  average  grade  of  0.34  g/t  Au  and  0.20%  Cu
• Total  Oxide  Probable  Reserve  of  16  million  tonnes  at  0.33  g/t  Au
• Throughput  of  10  million  tonnes  per  annum  and  mine  life  of  23  years
• Conventional  open  pit  with  strip  ratio  of  0.7:1 Average  process  recoveries  of  86.5%  gold  and  84%  copper

•

• Average  annual  payable  production  of  95,000  oz  gold  and  16,000  tonnes  of  copper
• World  Gold  Council  defined  Adjusted  Operating  Cash  Costs  of  US$216/oz  and  All-­‐In  Costs  of  US$334/oz*
• Pre-­‐tax  NPV^(5%)  of  US$675  million  and  Post-­‐tax  NPV^(5%)  of  US$558  million
• Pre-­‐tax  IRR  of  18.6%  and  Post-­‐tax  IRR  of  16.5% Initial  Capex  US$502  million  including  contingency

•

• Distributable  post-­‐tax  net  cash  flow  of  US$1.2  billion  after  capex

The  PFS  was  produced  by  the  following  experts  who  worked  with  the  Company’s  technical  team:

• Tetra   Tech   –   Geology,   Resources,   Mineral   Processing   and   Engineering,   Infrastructure,   Hydrolgeology, Hydrology;
• ACA  Howe  International  –  Mining  and  Reserves,  Mine  Infrastructure;
• Faculty  of  Civil  Engineering  from  St.  Cyril  and  Methodius  University  of  Skopje  –  Tailings

A  detailed  breakdown  and  discussion  of  the  PFS  results  can  be  found  in  the  Appendix  and  an  independent  NI  43-­‐ 101   compliant   technical   report   will   be   filed   on   SEDAR   and   the   Company’s   website   within   45   days   of   this announcement.

Project  Advancement  &  Financing  

The  Company  has  established  a  Technical  Advisory  Committee  (“TAC”)  of  leading  experts  in  their  fields  who  will form  the  core  of  the  owner’s  team  to  ensure  efficient  project  execution  and  who  will  oversee  the  progression  of the  Project  through  full  Feasibility  Study/Front  End  Engineering  Design  (“FS/FEED”)  and  into  construction.

The   recently   announced   sale   of   the   Company’s   Bulgarian   assets,   the   establishment   of   a   Balkan   focused exploration  services  company  and  corporate  streamlining,  has  freed  up  management  and  financial  resources  to be  wholly  dedicated  to  the  development  of  Ilovitza.

The  Company  is  implementing  its  finance  plan  in  two  phases:  Phase  1  to  cover  the  FS/FEED  costs  and  Phase  2  for the  financing  of  the  construction  capex.    Confidentiality  agreements  have  been  executed  and  due  diligence  is underway  with  several  potential  financing  partners,  contemplating  an  asset-­‐based  financing  for  Phase  1  to  the start  of  construction.

Financing  structures  being  considered  include  metal  streaming  and  royalty  arrangements.    The  agreed  structure will  be  designed  to  ensure  minimal  shareholder  dilution,  whilst  at  the  same  time  leveraging  the  asset  value,  so  as to  neatly  dovetail  into  the  Phase  2  financing  of  construction  scheduled  to  commence  in  2016.  Further,  with  the completion  of  the  PFS,  the  Company  is  now  able  to  engage  with  certain  banking  counterparties  to  initiate  due diligence  for  a  Project  Financing  to  fund  Phase  2,  the  construction.

Commenting  on  the  results  of  the  PFS,  Pat  Forward,  Chief  Operating  Officer,  said:  “Following  the  work  carried   out  in  2013  to  define  the  expanded  Mineral  Resource,  we  are  pleased  that  our  PFS  on  the  Ilovitza  Project  has   defined  a  financially  attractive  operation  based  on  a  robust  study,  more  than  justifying  the  next  steps  in  project   development.    We  are  now  in  an  excellent  position  to  build  on  this  as  we  continue  with  our  full  feasibility  work   and  then  the  front  end  engineering  and  continue  to  establish  our  owner’s  team  to  fulfil  our  ambition  to  build  and   operate  the  first  major  modern  mine  in  Macedonia.”  

Commenting   on   the   results   of   the   PFS,   Steve   Sharpe,   President   &   CEO,   said:   “Despite   incredibly   challenging   mining   equity   markets   that   have   seen   a   decline   in   the   market   value   of   our   Company   despite   the   significant   increase   in   the   asset   value   of   Ilovitza,   it   is   particularly   rewarding   to   be  able   to   now   publicly   demonstrate   the   exceptionally  robust  economics  of  the  Ilovitza  Project.  This  is  a  massively  important  project  for  Macedonia,  and  as   one  of  the  few  permitted  mining  projects  in  Europe,  will  dramatically  enhance  the  economic  profile  of  the  country.   The   overwhelming   local,   national,   and   indeed   supranational   support   for   the   project   places   us   in   the   enviable   position   of   certainty   of   development.   Our   immediate   task   is   for   the   management   team   to   deliver   the   implementation   of   a   minimally   dilutive   financing   package   and   the   management   of   the   DFS/FEED   process   to   ensure  the  start  of  construction  in  2016  and  first  production  in  2017.    These  areas  are  exactly  where  our  strongest   skill  sets  and  track  records  lie.”  

Conference  Call  

The  Company  will  be  hosting  a  conference  call  and  question  and  answer  session  to  discuss  the  results  of  the  PFS on   Friday   6th   June,   2014   at   10   am   EST   /   3pm   BST.     A   new   presentation   will   be   uploaded   to   the   Company’s website  in  advance  of  the  call.    To  participate  in  the  call,  please  dial:

United  Kingdom:  020  3139  4830  or  UK  Toll-­‐Free  Number:  0808  237  0030 Canada:  1  514  841  2196  or  Canada  Toll-­‐Free:  1  866  404  5783 United  States:  1  718  873  9077  or  US  Toll-­‐Free  Number:  1  866  928  7517 Participant  pin  code:  76848541#

Notes:

• Adjusted  Operating  Cash  Costs  and  All-­‐In  Costs  as  defined  by  the  World  Gold  Council  which  assumes  copper  as

a  by-­‐product  and  includes  US$1.8M  corporate  G&A.

Qualified  Person  

Mr  Patrick  Forward,  FIMMM,  a  Qualified  Person  under  National  Instrument  43-­‐101  Standards  of  Disclosure  for Mineral  Projects  of  the  Canadian  Securities  Administrators  and  COO  of  the  Company,  reviewed  and  approved  the scientific  or  technical  disclosure  in  this  release  and  has  verified  the  data  included.

About  Euromax  Resources  Ltd.    

Euromax  is  a  Canadian  exploration  and  development  Company  with  gold  and  base  metal  assets  in  Macedonia and  Serbia  and  an  exploration  services  company  in  Bulgaria.  We  are  focused  on  developing  mineral  resources  in Southeastern  Europe,  with  the  objective  of  becoming  a  world-­‐class  mining  company  in  the  region.  Our  strength lies  in  our  corporate  and  local  management  and  technical  expertise  in  Macedonia,  Bulgaria  and  Serbia.

This  news  release  contains  forward-­‐looking  statements  including  but  not  limited  to  statements  regarding  a  maiden  reserve  estimate;  the   completion  of  a  Pre-­‐Feasibility  Study;  completion  of  a  Definitive  Feasibility  Study,  and  securing  of  finance  for  its  Ilovitza  project,  including  in   respect  of  either  Phase  1  or  Phase  2.    In  making  the  forward-­‐looking  statements  in  this  release,  the  Company  has  applied  certain  factors   and  assumptions  that  are  based  on  information  currently  available  to  the  Company  as  well  as  the  Company's  current  beliefs  and   assumptions  made  by  the  Company,  including  with  respect  to  mineral  resource  estimates,  that  the  key  assumptions  and  parameters  on   which  such  geological  interpretations  are  based  are  reasonable,  that  the  Company  will  be  able  to  obtain  the  necessary  supplies,  equipment,   personnel  and  any  financing  required  to  carry  out  its  planned  activities,  that  the  Company's  objectives  concerning  the  Ilovitza  project  can   be  achieved  and  that  the  Company's  activities  will  proceed  as  expected.  Although  the  Company  considers  these  assumptions  to  be   reasonable  based  on  information  currently  available  to  it,  they  may  prove  to  be  incorrect,  and  the  forward-­‐looking  statements  in  this   release  are  subject  to  numerous  risks,  uncertainties  and  other  factors  that  may  cause  future  results  to  differ  materially  from  those   expressed  or  implied  in  such  forward-­‐looking  statements.  Such  risk  factors  may  include,  among  others,  that  that  mineral  resources  are  not   as  estimated,  unexpected  variations  in  mineral  resources,  grade  or  recovery  rates,  actual  results  of  exploration  activities  will  be  different   than  anticipated,  data  and  assumptions  underlying  the  geological  interpretations  may  prove  to  be  inaccurate,  incomplete  or  to  have   been  incorrectly  interpreted,  that  the  Company  will  not  be  able  to  obtain  the  necessary  supplies,  equipment,  personnel  and  any  financing   required  to  carry  out  its  planned  activities.  Readers  are  also  encouraged  to  review  all  Company  documents  filed  with  the  securities   authorities  in  Canada,  including  the  Management  Discussion  and  Analysis  in  respect  of  the  Company's  recent  financial  statements  under   the  heading  "Operational  and  Other  Business  Risks",  which  documents  describe  material  factors  and  assumptions  and  risks  that  apply  to   the  forward  looking  statements  in  this  release.  Readers  are  cautioned  not  to  place  undue  reliance  on  forward-­‐looking  statements.  The   Company  does  not  intend,  and  expressly  disclaims  any  intention  or  obligation  to,  update  or  revise  any  forward-­‐looking  statements  whether   as  a  result  of  new  information,  future  events  or  otherwise,  except  as  required  by  law.  

Neither  TSX  Venture  Exchange  nor  its  Regulation  Services  Provider  (as  that  term  is  defined  in  the  policies  of  the  TSX  Venture  Exchange)     has  reviewed  or  accepts  responsibility  for  the  adequacy  or  accuracy  of  this  release.  

For  more  information,  please  visit  www.euromaxresources.com  or  contact:

Steve  Sharpe,  President  &  CEO  

+44  (0)20  3667  2970 [email protected]

Karen  Coke,  Investor  Relations  Manager  

+44  (0)20  3667  2970 [email protected]

Tom  Panoulias,  N.  American  Representative  

[email protected] +1  416  294  5649

Bobby  Morse,  Louise  Mason  

Buchanan +44  (0)20  7466  5000 [email protected] [email protected]

APPENDIX  A  

Geology  &  Resources  –  The  Ilovitza  porphyry  system  is  located  in  southeast  Macedonia,  within  the  tertiary  belt associated   with   the   Carpathian   arc.     The   intrusive   is   about   1.5   km   in   diameter   and   comprises   a   dacite-­‐ granodiorite   plug,   emplaced   along   the   northeastern   border   of   the   Strumica   graben.     Mineralisation   is   typical porphyry  style  veining,  most  intense  within  the  potassic  zone.    The  mineralisation  shows  good  continuity  and homogeneity  that  lends  itself  well  to  bulk-­‐mining  methods.  The  current  pit-­‐constrained  Mineral  Resources  for the  property,  details  of  which  were  announced  on  the  3  December  2013  can  be  summarised  as  follows:

Mineral  Resource  (Effective  27  November  2013)  

Notes:

1. Dollar  equivalent  cut-­‐off  based  upon  the  following  calculation  Dollar  Eq.  =  (Au  *  recovery  *  price)  +  (Cu  *  recovery  *  price),  using  the  following inputs:

• Au  process  recovery  in  oxide  86%  based  on  early  test  work
• Cu  process  recovery  in  oxide  0%  based  on  early  test  work
• Cu  process  recovery  in  fresh  85%  based  on  early  test  work
• Au  process    recovery  in  fresh  65%  based  on  early  test  work
• Spot  metal  prices  effective  19  August  2013  (Au  =  US$1,366/oz,  Cu  =  US$3.30/  lb)

2. Resource  cut-­‐off  of  US$16  used  for  sulphide  material

3. Resource  cut-­‐off  of  US$8  used  for  oxide  material

4. Numbers  may  not  add  exactly  due  to  rounding

5. Mineral  resources  that  are  not  mineral  reserves  do  not  have  demonstrated  economic  viability.  The  estimate  of  mineral  resources  may  be materially  affected  by  environmental,  permitting,  legal,  title,  taxation,  socio-­‐political,  marketing,  or  other  relevant  issues.  The  mineral  resources in  this  news  release  were  estimated  using  current  Canadian  Institute  of  Mining,  Metallurgy  and  Petroleum  (“CIM”)  standards,  definitions  and guidelines.

6. For  additional  information  on  key  assumptions,  parameters  and  methods  used  to  estimate  the  mineral  resources  and  mineral  reserves,  including quality  assurance  measures  and  other  technical  information  in  respect  of  Ilovitza,  please  refer  to  our  technical  report  entitled  "Resource  Update on  the  Ilovitza  Project,  Macedonia"  and  with  an  effective  date  of  27  November  2013.

Mining  &  Reserves  –  Mining  is  planned  via  conventional  open  pit  methods  using  a  large  scale  mining  fleet  that enables  bulk-­‐mining  at  a  rate  of  10  million  tonnes  a  year.    The  good  continuity  of  grade  in  the  main  mineralised areas  enables  mining  to  be  carried  out  at  a  low  average  strip-­‐ratio  of  0.7:1.    Ore  will  be  crushed  with  a  gyratory crusher  at  the  pit  exit  before  being  transported  to  the  mill  by  conveyor.    With  the  completion  of  the  PFS,  the Company  is  pleased  to  announce  a  new  Mineral  Reserve  for  the  project  which  is  summarised  in  the  table  below:

Mineral  Reserve  (Effective  June  2014)  

Notes:

1. Sulphide  mill  cut-­‐off  of  0.3  g/t  gold  equivalent  based  upon  the  following  calculation:

• Recovered  gold  equivalency  based  on  =  (recovery  *Au  grade)  +  ((Cu  grade  *  recovery  *  copper  price)/  gold  price)
• Au  and  Cu  process  recoveries  of  90%  based  on  early  test  work
• Mining  recovery  95%
• Mine  dilution  5%
• Metal  prices  Au  =  US$1,250/oz,  Cu  =  US$3.00/lb)

Assumed  process  cost  per  in-­‐situ  tonne  US$8.05 •

2. Oxide  mill  cut-­‐off  of  0.25  g/t  gold  upon  the  following  calculation:

Recovered  gold  based  on  =  (recovery  *Au  grade)

•

• Au  process  recovery  90%  based  on  early  test  work
• Mining  recovery  95%
• Mine  dilution  5%
• Metal  prices  Au  =  US$1,250/oz,  Cu  =  US$3.00/lb)
• Assumed  process  cost  per  in-­‐situ  tonne  US$6.90

Processing  –  Ore  will  be  milled  by  SAG  and  Ball  mills  and  then  processed  by  a  concentrator  using  conventional flotation  to  produce  a  copper-­‐gold  concentrate  with  the  flotation  tailings  being  re-­‐treated  to  recover  further  gold doré  on  site.  Test  work  conducted  by  SGS  Mineral  Services  in  the  UK  has  confirmed  an  overall  process  recovery  of 86.5%  for  gold  and  84%  for  copper  and  the  PFS  study  is  based  on  shipping  concentrate  to  the  Pirdop  smelter  in Bulgaria.

Tailings  –  Waste  rock  from  the  open  pit  will  be  used  to  construct  the  tailings  embankment.    Whilst  the  mining operation  does  not  require  significant  pre-­‐stripping,  some  10Mt  of  inert  waste  rock  mining  has  been  brought forward  in  schedule  to  the  construction  period  for  a  starter  dam.    The  dam  will  then  be  raised  over  the  mine  life using  the  down-­‐stream  construction  approach.    A  crusher  will  be  located  at  the  embankment  site  in  order  to allow  engineered  fill  to  be  placed  on  the  upstream  face,  which  will  also  be  lined.    The  plant  site  is  situated  above the  tailings  facility  and  thickeners  will  be  utilised  to  produce  a  thickened  tailings  to  be  pumped  to  the  facility below.

Infrastructure  –  A  site  plan  has  been  developed  covering  haul  roads,  workshops,  access  roads  from  the  National Highway,   water   balance   pumping   scheme   and   power   infrastructure   from   the   main   110kV   supply   some   7 kilometres  from  the  plant  have  been  developed  for  the  project  using  Macedonian  and  European  rates.

Capital  Costs  –  Capital  Cost  estimates  were  developed  using  quotations  for  mobile  and  plant  equipment  and engineering  studies  carried  out  to  at  least  pre-­‐feasibility  industry  standards.    The  Capital  Cost  Summary  is  include in  the  table  below:

Capital  Cost  Summary

Operating  Costs  –  Operating  costs  were  derived  from  quotations  for  fuel,  power,  consumables  and  reagents  from suppliers   in   Macedonia   and   internationally   where   local   costs   were   not   verifiable   and   local   and   international labour  costs  as  appropriate.    The  Operating  Costs  estimate  is  included  in  the  table  below:

Operating  Cost  Summary

Financial  Analysis  –  The  PFS  demonstrates  a  robust  NPV  at  a  5%  discount  of  US$675  million  with  an  IRR  of  19% before  tax  and  an  after  tax  NPV  at  a  5%  discount  of  US$558  million  and  after  tax  IRR  16%.  The  following  table illustrates  the  sensitivity  to  changes  to  the  calculated  IRR  and  NPV  at  0%,  5%  and  7.5%  discount  rates  at  various gold  and  copper  prices.    No  assurance  or  guarantee  is  provided  that  the  calculated  IRR  or  NPV  values  will  be achieved.

Pre-­‐tax  NPV  and  IRR  sensitivity  to  metal  prices