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European Minerals to Acquire Lero Gold

On Friday morning I received news that European Minerals intends to acquire Lero Gold. At first I was upset. Actually very upset. I kept reading the news release and then after hearing directly from Lero Chairman Dr. Sergey Kurzin, I couldn�t be happier. This is going to be a huge win-win for both European Minerals and Lero Gold shareholders.

You may recall I mentioned Kurzin�s name when I introduced Lero Gold to you back in February. Kurzin was the primary reason I took a hard look at Lero. Kurzin means strong management.

Following Kurzin is like following the money. Over the years we have profited handsomely with his winners.

Dr. Sergey Kurzin is a Russian-born research engineer who moved to the United Kingdom in 1990 and has played a key role in initiatives to acquire and progress several important Former Soviet Union (FSU) mining assets. These include Julietta (a high grade gold deposit in Magadan, Russia with Bema Gold), Kupol (a high grade epithermal gold deposit in Chukotka, Russia, also with with Bema Gold.

One of our best winners last year was UrAsia Energy which morphed into Uranium One. It was another triple digit winner that went from pennies to dollars in just a matter of months. A key player in that deal was Kurzin, who seems to have a unique talent for sniffing out high potential resource projects in the former Soviet Union (FSU) countries.

Kurzin was also a founder of European Minerals, back in 1995. However the management of EPM was left in other hands. The current management needed some additional expertise to help get the Varvarinskoye gold and copper mine running smoothly. The company also needed a cash injection before they could themselves move into a cash flow positive position.

Hence an opportunity arose where Kurzin and his team will take over the management of European Minerals. The win for European shareholders is that the grossly undervalued Varvarinskoye mine will reach its potential faster: 149,000 ounces of gold and 25 million pounds of copper per year. By year end, their goal is to reach 99% capacity from the mill which will generate an annual cash flow of $250 million.

The existing European management team was having difficulty in getting their mine into production. That�s why I was more then a little shocked at the headline that EPM was intending to acquire Lero Gold.

However now I�m greatly relieved.

As for Lero shareholders - well again, in just three months another Kurzin deal has done well for us. We�re up about 80% so far and we�ll no doubt have another triple digit winner on our hands shortly.

The immediate objective for Lero is to advance their Taldybulak copper/gold property in Kyrgyzstan this project toward a Definitive Feasibility Study (DFS).

Lero should soon have an initial resource calculation ready, a 43-101 compliant report, which by my math will be a huge step towards outlining a 10 million ounce resource at Taldybulak. Oh, and add in almost 2 billion pounds of copper.

The win for Lero shareholders will be that they can take part in the cash flow and further development of the Varvarinskoye project while the Taldybulak project advances.

Details of the Acquisition (from the press release)

Under the terms of the Acquisition, Lero shareholders will receive one common share of EMC for each issued share of Lero, representing a value of C$0.98 per share based upon the 20-day volume weighted average price of EMC on the Toronto Stock Exchange (the �TSX�) for the 20- day period leading up to and including April 17, 2008. This represents an 9% premium to Lero�s 20-day volume weighted average trading price based on the 20-day volume weighted average prices of EMC and Lero shares on the TSX and TSX Venture Exchange, respectively.

Subject to receipt of required stock exchange approval, following the completion of the Acquisition, EMC�s shares will continue to be listed on the TSX and admitted to trading on the AIM market of the London Stock Exchange (�AIM�).

The combined company will focus on regional consolidation and growth opportunities in the countries of the former Soviet Union. Some of the salient terms of the Acquisition and characteristics of the combined company are set forth below:

� Upon the closing of the Acquisition, Dr. Sergey V. Kurzin, currently Chairman of Lero,
will join the board of EMC as Executive Chairman, together with Dr Alexander
Yakubchuk (currently Chief Executive Officer of Lero) and Mr Takhirzhan T. Baratov
(currently the chairman of EMC�s Kazakh subsidiary, JSC Varvarinskoye).

� At the next meeting of shareholders of EMC following the closing of the Acquisition, the name of EMC will be changed to Orsu Metals Corporation (�Orsu�).

� Concurrent with this announcement of the Acquisition, Lero announces a C$40,000,000 �bought deal� financing with Canaccord Adams Limited, details of which are set out below. Of this financing, US$25 million will be lent by Lero to EMC (the �Lero Loan�) prior to closing of the Acquisition on the terms outlined below.

� Endeavour Mining Capital Corp. has agreed to provide a US$5 million bridge loan to
EMC for working capital purposes to be repaid upon the completion of the Lero Loan.

� EMC is currently commissioning the Varvarinskoye gold/copper project in Kazakhstan where commercial production is expected to be achieved by the end of Q3 2008. At steady state production the mine is expected to produce 149,000 ounces of gold and 26 million pounds of copper annually in its first three years of production.

� As previously announced (see EMC�s press release dated 31 March 2008) EMC has appointed an independent engineering company to undertake a scoping study to engineer the expansion of the Varvarinskoye plant throughput beyond the currently planned 4.2 million tonnes per annum.

� Lero is currently exploring the Taldybulak Talas gold copper deposit in Kyrgyzstan and is also exploring at the Karchiga copper deposit in western Kazakhstan. Lero expects to announce National Instrument 43-101 compliant resource estimates for both properties by the end of April 2008.

� The board of directors of Lero believes there is substantial exploration upside at their Taldybulak Talas and Karchiga deposits and also within EMC�s three square kilometer mining lease for Varvarinskoye and surrounding 220 square kilometre exploration
licence.


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