Paris, May 5, 2021: EURO Ressources S.A.
("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, 2021. These unaudited interim financial statements were approved by the Board of Directors on May 5, 2021. All financial amounts are expressed in Euros ("€" or "euros") unless otherwise specified.
Under IFRS, EURO reported a net profit of €1.9 million (€0.030 per share) for the first quarter of 2021, compared to €5.0 million (€0.080 per share) for the first quarter of 2020.
EURO recorded revenues of €3.5 million in the first quarter of 2021 compared to revenues of €7.2 million for the first quarter of 2020.
Liquidity and capital resources
Cash at March 31, 2021 totaled €34.6 million as compared to €31.5 million at December 31, 2020. The increase was mainly due to cash flow from operating activities.
EURO holds marketable securities related to mining companies which are part of a volatile market. Share market price exposure risk is related to the fluctuation in the market price of marketable securities. Investments in marketable securities are recorded at fair value.
As at March 31, 2021, marketable securities were comprised of 19,095,345 shares of Orea Mining Corp. ("Orea") (9.3% of outstanding shares; December 31, 2020: 9.7%) and 3,819,069 shares of Allegiant Gold Ltd. ("Allegiant") (6.2% of outstanding shares; December 31, 2020: 6.2 %).
During the quarter ended March 31, 2021, the Company recognized an unrealized loss under IFRS following the decrease of the fair value of these marketable securities. Under IFRS, this loss of €1.0 million was recorded in other comprehensive income (€1.1 million during the quarter ended March 31, 2020).
(Refer to MD&A for more detail)
As at March 31, 2021, the Company's impairment review indicated that the facts and circumstances did not represent an indication of potential impairment. In May 2019, The French Government declared the Montagne D'Or project not yet compatible with environmental requirements. The statements by the French Government regarding the Compagnie Mini?re Montagne d'Or (the joint venture) in May 2019, to which the Paul Isnard royalty is attached, have created some uncertainty around the delivery of the various authorizations and permits not yet obtained and required for developing the project, and can potentially affect the operational and financial capacities of the project. On December 24, 2020, the Cayenne Administrative Court ordered the French State to extend the Montagne d?Or mining concessions within 6 months of the decision. On February 3, 2021, the French Government announced that it was appealing the Administrative Court's decision to extend the Montagne d'Or mining concessions. In those circumstances, the Company is maintaining the same assumption from the impairment test related to the Paul Isnard royalty asset performed as at December 31, 2020. The Company continues to assume that the various authorizations and permits would be granted under conditions that will allow the JV to go on with this project, though the timing is somewhat uncertain. No impairment charges were recorded in the statement of earnings for the quarter ended March 31, 2021.
First quarter ended March 31, 2021 compared to the same period in 2020 (IFRS)
Under IFRS, EURO reported a net profit of €1.9 million (€0.030 per share) for the first quarter of 2021 compared to €5.0 million (€0.080 per share) for the first quarter of 2020.
Revenues were €3.5 million during the first quarter of 2021, a decrease compared to €7.2 million for the first quarter of 2020. Revenues were only attributable to the Rosebel royalty in the first quarter of 2021 and 2020. The decrease in revenues was mainly due to lower gold production of 29,232 ounces in the first quarter of 2021 compared to 65,399 ounces in the first quarter of 2020 (€4.0 million) due to lower throughput, and reflecting an increasing proportion of higher grade ore sourced from the Saramacca deposit which resulted in reduced production from the Rosebel concession. The Saramacca deposit is not included in the property as per the participation right agreement. The decrease in revenues is also due to a strengthened euro (€0.3 million), partially offset by a higher average gold price in the first quarter of 2021 of US$1,794 per ounce of gold compared to US$1,583 per ounce of gold in the first quarter of 2020 (€0.6 million).
During the first quarter of 2021, the Company recorded operating expenses of €0.12 million, same level as the first quarter of 2020.
EURO recorded an income tax expense of €1.4 million in the first quarter of 2021 compared to €2.2 million in the first quarter of 2020. The decrease was mainly due to the tax impact of lower earnings in the first quarter of 2021 compared to the same period in 2020, partially offset by translation adjustments and by the tax impact of the change in fair value of the marketable securities.
The Rosebel royalty production is anticipated to be between 144,000 ounces and 171,000 ounces in 2021. In 2021, the Rosebel royalty is expected to provide revenues to the Company of between approximately €16.5 million and €19.6 million (US$19.7 million and US$23.3 million). These pre-tax numbers assume a gold price of US$1,750 per ounce and an exchange rate of €1 for US$1.19. The impact of changes in the average gold price on EURO's annual revenues, based on an estimated production of 158,000 ounces, would be approximately US$1.5 million for each US$100 per ounce change in the gold price. The impact of a 5% change in the average foreign exchange rate on EURO's annual revenues would be approximately €0.9 million. EURO's cash flow is expected to be primarily affected by income tax payments. The Company maintains certain cash available to pursue opportunities that would enhance the Company's long-term business.
GLOBAL COVID-19 PANDEMIC
The global COVID-19 pandemic continues to evolve including the continuing imposition of restrictions on the movement of people and goods, social distancing measures, restrictions on group gatherings, quarantine requirements and contact tracing. Despite the beginning of mass immunization campaigns across several countries, another wave of new COVID-19 cases is emerging globally, triggering the return of more aggressive mitigation strategies. These include the re-imposition of hard social distancing measures such as quarantines, curfews and lockdowns in certain jurisdictions. The Company has been closely monitoring and taking necessary measures to manage the impact of the COVID-19 pandemic on all aspects of its operations.
There has been an increase in positive COVID-19 cases during the first quarter in Suriname and, as a result, additional restrictions around daily commuting of employees to limit the contact within the site and neighboring communities have been implemented, resulting in the necessity to add site accommodations at Rosebel which is in progress. To accommodate the full workforce under established COVID-19 protocols, a project has been underway at Rosebel that added 150 beds in the first quarter 2021, enabling mining capacity to increase and will add a further 210 beds in the second quarter of 2021.
EURO is a French company whose main assets are a royalty on the Rosebel gold mine production in Suriname (the "Rosebel royalty"), a royalty on the Paul Isnard concessions, and marketable securities. The Rosebel gold mine is 95%-owned by IAMGOLD Corporation ("IAMGOLD"), and is operated by IAMGOLD. The royalty on the Paul Isnard concessions is a net smelter returns production royalty on future production of the Paul Isnard concessions and an area of interest surrounding the concessions in French Guiana, owned under a joint venture agreement between Orea Mining Corp. and Nord Gold SE.
EURO has approximately 62.5 million shares outstanding. At March 31, 2021, IAMGOLD France S.A.S. ("IAMGOLD France"), an indirect wholly owned subsidiary of IAMGOLD, owned approximately 89.71% of all issued outstanding shares of EURO. As at March 31, 2021, 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 a double voting rights allocation.
Statements Regarding Forward-Looking Information: Some statements in this news 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.
Not for distribution to United States newswire services or for dissemination in the United States. The securities referred to herein have not been registered under the United States Securities Act of 1933, as amended (the Securities Act), and may not be offered or sold in the United States or to a U.S. person absent registration, or an applicable exemption from the registration requirements of the Securities Act.
Additional information relating to EURO Ressources S.A. is available on SEDAR at www.sedar.com. Further requests for information should be addressed to:
|Tidiane Barry |
Tel: +1 450 677 0040
|Sophie Hall?, Directeur G?n?ral D?l?gu? |
Tel: +1 450 677 0040
Email : email@example.com
- PR 21-05EN 2021 05 05 EURO - News release-2021 Q1 Results_Final