EURO RESOURCES ANNOUNCES WINNINGS FOR THE
FIRST TRIMESTER FINISHED MARCH 312022
Paris, France, May 4, 2022: EURO Resources SA (“EURO” or “the Company”) (Paris: EUR) today announced its unaudited statutory interim financial results prepared in accordance with International Financial Reporting Standards (“ IFRS”) for the first quarter ended March 31, 2022. These unaudited interim financial statements were approved by the Board of Directors on May 4, 2022. All financial amounts are expressed in euros (“€” or “euros”) , unless otherwise stated.
Under IFRS, EURO recorded a net profit of €3.2 million (€0.051 per share) for the first quarter of 2022, compared to €1.8 million (€0.030 per share) for the first quarter of 2021 .
EURO recorded a turnover of 4.8 million euros in the first quarter of 2022 compared to a turnover of 3.5 million euros in the first quarter of 2021.
Cash and capital resources
Cash as of March 31, 2022 amounted to €23.4 million compared to €20.4 million as of December 31, 2021. The increase is mainly due to cash flows from operating activities.
EURO holds marketable securities related to mining companies which are part of a volatile market. Equity market price exposure risk relates to fluctuations in the market price of transferable securities. Investments in marketable securities are recorded at fair value.
As of March 31, 2022, marketable securities consisted of 19,095,345 shares of Orea Mining Corp. ”) (4.9% of outstanding shares; December 31, 2021: 4.9%).
During the first quarter ended March 31, 2022, the Company recorded an unrealized gain under IFRS following the increase in fair value of these marketable securities. Under IFRS, this gain of €0.3 million was recognized in other comprehensive income (loss of €1.0 million during the first quarter ended March 31, 2021).
(Refer to the management report for more details)
As of March 31, 2022, the Company’s impairment review indicated that the facts and circumstances did not represent an indication of potential impairment for Rosebel and Bombore.
With regard to Paul Isnard, the declarations of the French government in 2019 concerning the Compagnie Minière Montagne d’Or (the joint venture) created some uncertainty around the issuance of the various authorizations and permits not yet obtained and necessary for the development of the project, and can potentially affect the operational and financial capacities of the project. The JV is still awaiting a decision from the Court of Cassation on the admission and final hearing of an appeal by the French government on the renewal of the Montagne d’Or mining titles, following the rejection by the Administrative Court of Appeal of Bordeaux the appeal of the French Government in July 2021. In these circumstances, the Company maintains the same assumption resulting from the impairment test relating to the Paul Isnard royalty asset carried out on December 31, 2021. The Company continues to assume that the various authorizations and permits will be granted under conditions that will allow the JV to proceed with this project, although the timing is somewhat uncertain. No impairment charge was recorded in the statement of earnings for the period ended March 31, 2022.
First quarter ended March 312022 compared to the same period in 2021 (IFRS)
Under IFRS, EURO recorded a net profit of €3.2 million (€0.051 per share) for the first quarter of 2022 compared to €1.8 million (€0.030 per share) for the first quarter of 2021.
Revenue was €4.8 million in the first quarter of 2022, an increase from €3.5 million in the first quarter of 2021. Revenue was only attributable to the Rosebel royalty in the first quarter 2022 and 2021. The increase in revenues was mainly due to higher gold production of 35,213 ounces in the first quarter of 2022 compared to 29,232 ounces in the first quarter of 2021 (0.7 million euros), a weaker euro ( 0.4 million euros) and a higher average gold price in the first quarter of 2022 of 1,877 USD per ounce of gold compared to 1,794 USD per ounce of gold in the first quarter of 2021 (0.2 million euros).
During the first quarter of 2022, the Company recorded operating expenses of €0.1 million, at the same level as in the first quarter of 2021.
EURO recorded an income tax charge of €1.44 million in the first quarter of 2022 compared to €1.39 million in the first quarter of 2021. The slight increase is mainly due to the tax impact of the increase earnings in the first quarter of 2022 compared to the first quarter of 2021, partially offset by translation differences.
Production from the Rosebel royalty is expected to be between 113,000 ounces and 139,000 ounces in 2022. In 2022, the Rosebel royalty is expected to bring the Company revenues of between approximately €12.3 million and €15.2 million (14. US$8 million and US$18.2 million). . These pre-tax figures assume a gold price of US$1,700 per ounce and an exchange rate of €1 = US$1.20. The impact of changes in the average gold price on EURO’s annual revenue, based on an estimated production of 126,000 ounces, would be approximately $1.2 million for every $100 per ounce change. of the price of gold. The impact of a 5% variation in the average exchange rate on EURO’s annual revenues would be around €0.7 million.
The Bombore project is expected to reach commercial production in the third quarter of 2022.
The Company maintains certain cash available to pursue opportunities that would enhance the Company’s long-term business.
gglobal COVID-19[feminine] pandemic
The global COVID-19 pandemic continues to evolve. Despite large-scale mass vaccination programs intended to limit the effect of the virus in many countries, the emergence of new variants, such as the new Omicron variant, has led to a further rapid increase in infection rates. globally at the beginning of the first quarter of 2022. COVID-19 detection and mitigation protocols are continuously reviewed to adapt to the evolving situation. The Company is closely monitoring and taking the necessary steps to manage the impact of the COVID-19 pandemic on all aspects of its operations.
At Rosebel, the COVID-19 situation stabilized during the quarter, following an increase in new cases in January 2022. The site continues to monitor and implement mitigation measures to reduce the impact , including by actively engaging in community initiatives. About 46% of the workforce is fully vaccinated.
About the EURO
EURO is a French company whose principal assets are a royalty on the production of the Rosebel gold mine in Suriname (the “Rosebel royalty”), a royalty on the Paul Isnard concessions, a cash flow from a subsidiary of ‘Orezone Gold Corporation (“Orezone”) and Marketable Securities. The Rosebel gold mine is 95% owned by IAMGOLD Corporation (“IAMGOLD”) and operated by IAMGOLD. The Paul Isnard Concession Royalty is a net smelter production royalty on future production from the Paul Isnard Concessions and an area of interest surrounding the concessions in French Guiana, held under a joint venture agreement between Orea Mining Corp. . and Nord Gold SE (“Compagnie Minière Montagne d’Or”). The silver stream allows EURO to receive 50% of the life-of-mine payable silver production from Orezone’s Bomboré project, located in Burkina Faso, West Africa.
EURO has approximately 62.5 million shares outstanding. As of March 31, 2022, IAMGOLD France SAS (“IAMGOLD France”), an indirect wholly-owned subsidiary of IAMGOLD, owned approximately 89.71% of all outstanding issued shares of EURO. As of March 31, 2022, IAMGOLD France held 56,058,191 shares representing 112,116,382 voting rights or 94.25% of the voting rights of EURO. This threshold crossing results from an allocation of double voting rights.
Statements regarding forward-looking information: Certain statements contained in this press release are forward-looking statements. Investors are cautioned that forward-looking statements are inherently uncertain and involve risks and uncertainties.. There can be no assurance that future developments affecting the Company will be those anticipated by management.
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Additional information relating to EURO Resources SA is available on SEDAR at www.sedar.com. Any other request for information should be sent to: