EURO Ressources reports earnings for the second quarter and six
months ended June 30, 2022
EURO RESSOURCES REPORTS
EARNINGS FOR THE SECOND QUARTER
AND SIX MONTHS ENDED JUNE
30,
2022
Paris, France, August 5, 2022: EURO Ressources
S.A. (“EURO” or “the Company”) (Paris: EUR) today announced
its unaudited statutory interim financial results prepared in
accordance with French Generally Accepted Accounting Principles
(“GAAP”) and its unaudited condensed interim financial statements
prepared in accordance with International Financial Reporting
Standards (“IFRS”) for the six months ended June 30, 2022.
These unaudited interim financial statements were approved by the
Board of Directors on August 5, 2022. All financial amounts
are expressed in Euros (“€” or “euros”) unless otherwise
specified.
Highlights
Under French GAAP, EURO reported a net profit of
€8.1 million (€0.130 per share) for the six months ended
June 30, 2022 (€4.4 million for the second quarter of
2022 (€0.07 per share)) compared to €4.5 million
(€0.072 per share) for the six months ended June 30, 2021
(€1.1 million for the second quarter of 2021 (€0.018 per
share)).
Under IFRS, EURO reported a net profit of €6.4
million (€0.103 per share) for the six months ended June 30, 2022
(€3.3 million for the second quarter of 2022 (€0.052 per
share)) compared to €3.3 million (€0.054 per share) for the
six months ended June 30, 2021 (€1.5 million for the
second quarter of 2021 (€0.024 per share)).
EURO recorded revenues of €10.3 million
(excluding foreign exchange gain) in the first six months of 2022
(€5.5 million in the second quarter of 2022) compared to
revenues of €5.7 million in the first six months of 2021
(€2.2 million reported in the second quarter of 2021).
On June 9, 2022, EURO paid dividends of
€15.6 million (€0.25 per share).
Liquidity and
capital resources
Cash at June 30, 2022 totaled €13.3 million
as compared to €20.4 million at December 31, 2021. The
decrease was mainly due to the dividends paid, partially offset by
cash flow from operating activities.
Marketable securities
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 June 30, 2022, marketable securities
were comprised of 19,095,345 shares of Orea Mining Corp. (“Orea”)
(9.0% of outstanding shares; December 31, 2021: 9.3%) and
3,819,069 shares of Allegiant Gold Ltd. (“Allegiant”) (3.7% of
outstanding shares; December 31, 2021: 4.9%).
During the six month period ended June 30,
2022, the Company recognized an unrealized loss under IFRS
following the decrease of the fair value of these marketable
securities. Under IFRS, this loss of €0.6 million was recorded
in other comprehensive income (loss of €0.9 million during the six
months ended June 30, 2021). Under French GAAP, the loss of
€1.0 million was recorded in the financing charges in the
statement of earnings.
Royalty assets(Refer to
MD&A for more detail)
As at June 30, 2022, the Company’s impairment
review indicated that the facts and circumstances did not represent
an indication of potential impairment for Rosebel and Bombore.
An indication of impairment was identified for
the Paul Isnard royalty asset as at June 30, 2022, due to the fact
that the JV partner, Nordgold, has been sanctioned by the U.S
department of Treasury, in connection with the Ukraine conflict. At
this time, it is not known what impact the sanctions will have on
Nordgold and its ability to continue its responsibilities under the
shareholders’ agreement in place between Orea and Nordgold,
relating to the Montagne d’Or project. The statements by the French
Government in 2019 regarding the Compagnie Minière Montagne d’Or
(the joint venture) 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 May 10,
2022, Orea reported that the French Supreme Court has admitted the
final appeal of the French Government on the renewal of the
Montagne d’Or project mining titles, following the fact that the
Administrative Court of Appeal in Bordeaux had rejected the French
Government’s appeal in July 2021. On June 30, 2022, Orea reported
that it has initiated negotiations with Nordgold to obtain its
55.01% interest (for a total of 100%) in the Montagne d’Or
joint-venture. In the impairment test performed at June 30, 2022,
the Company considered if the various authorizations and permits
would be granted under conditions that will allow the JV to go on
with this project as well as the implications of the sanctions
placed on Nordgold. Despite the uncertainty about the timing of
obtaining the permits and the sanctions imposed on Nordgold, there
is currently no indication that the permits will not be renewed by
the French government or that the Company’s royalty interest will
be affected by the sanctions. The risk of non-recoverability is
very low, even if the cash flows of the project are delayed.
Therefore, the Company continues to assume that the various
authorizations and permits would be granted under conditions that
will allow the joint venture to go forward with this project,
although the timing is somewhat uncertain. No impairment charges
were recorded in the statement of earnings for the period ended
June 30, 2022.
Comments on financial results prepared
in accordance with French GAAP for the six month
period ended June 30,
2022 compared to
the same period in
2021
Under French GAAP and IFRS, EURO accounted for
revenues of €10.3 million (excluding foreign exchange gain),
an increase compared to revenues of €5.7 million for the same
period in 2021. Revenues were only attributable to the Rosebel
royalty for the first six months ended June 30, 2022 and 2021. The
increase in revenues was mainly due to higher gold production of
74,723 ounces in the first six months of 2022 compared to 47,404
ounces in the first six months of 2021 (€3.3 million), a weakened
euro (€0.9 million) and a higher average gold price in the first
six months of 2022 of US$1,874 per ounce compared to US$1,803 per
ounce in the first six months of 2021 (€0.4 million).
Under French GAAP, operating expenses (excluding
amortization expense) for the six months ended June 30, 2022 were
€0.35 million compared to €0.30 million during the same period
in 2021. The increase was mainly due to higher administrative costs
in 2022.
The depreciation expense related to intangible
assets was €0.11 million during the first half of 2022
compared to €0.07 million during the first six months of 2021.
This increase was mainly due to higher production at the Rosebel
mine.
Financial results included a foreign exchange
gain on bank accounts under French GAAP of €1.9 million in the
first six months of 2022 compared to a foreign exchange gain on
bank accounts of €0.57 million in the first six months of
2021. The increase of the foreign exchange gain was mainly due to
the weakening of the Euro compared to the United States dollar in
2022 compared to the same period in 2021.
During the first six months ended June 30,
2022, EURO recorded an income tax expense of €2.8 million
compared to €1.7 million during the six months ended June 30,
2021. The increase was mainly due to the tax impact of higher
earnings and translation adjustments, partially offset by the tax
impact of the change in fair value of the marketable
securities.
Select IFRS financial
results
Since December 31, 2010, EURO no longer prepares
and publishes consolidated financial statements for French
purposes; only French GAAP can be applied for the presentation of
statutory financial statements and approval by the shareholders.
However, in order to comply with Canadian requirements and have
equivalency of information between French financial requirements
and Canadian financial requirements, the following information on
the IFRS financial results is provided for comparison purposes.
Six months ended
June 30,
2022 compared to
the same period in
2021
(IFRS)
Under IFRS, EURO reported a net profit of €6.4
million (€0.103 per share) for the six months ended June 30, 2022
compared to €3.3 million (€0.054 per share) for the six months
ended June 30, 2021.
Under IFRS, revenues totaled €10.3 million
in the first half of 2022 compared to revenues of €5.7 million
during the same period in 2021, the same as under French GAAP as
explained above.
Operating expenses for the six months ended June
30, 2022 were €0.29 million compared to €0.26 million in
the same period in 2021. The increase was mainly due to higher
administrative costs, exchange and listing fees and audit fees,
partially offset by lower legal fees.
The amortization expense of €0.13 million
during the six months ended June 30, 2022 was higher than the
amortization expense of €0.08 million recorded during the same
period in 2021, mainly due to higher production at the Rosebel
mine.
EURO recorded a foreign exchange loss of €0.24
million in the first six months of 2022 compared to a loss of
€0.25 million in the first six months of 2021, mainly due to
the revaluation of dividends payable, bank accounts and income tax
payable.
EURO recorded an income tax expense of
€3.2 million in the six months ended June 30, 2022 compared to
€1.8 million in the same period of 2021. The increase was mainly
due to the tax impact of higher earnings and translation
adjustments, partially offset by the tax impact of the change in
fair value of the marketable securities.
Second quarter ended June 30,
2022 compared to
the same period in 2021
(IFRS)
Under IFRS, EURO reported a net profit of
€3.3 million (€0.052 per share) for the second quarter of 2022
compared to €1.5 million (€0.024 per share) for the second
quarter of 2021.
Revenues were €5.5 million during the
second quarter of 2022, an increase compared to €2.2 million
for the second quarter of 2021. Revenues were only attributable to
the Rosebel royalty in the second quarter of 2022 and 2021. The
increase in revenues was mainly due to higher gold production of
39,510 ounces in the second quarter of 2022 compared to 18,172
ounces in the second quarter of 2021 (€2.6 million), a weakened
euro (€0.5 million) and a higher average gold price in the second
quarter of 2022 of US$1,871 per ounce compared to US$1,816 per
ounce in the second quarter of 2021 (€0.2 million).
During the second quarter of 2022, the Company
recorded operating expenses of €0.18 million compared to
€0.14 million during the same period in 2021. The increase was
mainly explained by higher administrative costs, exchange and
listing fees and audit fees, partially offset by lower legal
fees.
The amortization expense of €0.07 million
during the second quarter of 2022 was higher than the amortization
expense of €0.03 million recorded during the second quarter of
2021, mainly due to higher production at the Rosebel mine.
EURO recorded a foreign exchange loss of €0.24
million in the second quarter of 2022 compared to a loss of
€0.18 million in the second quarter of 2021, mainly due to the
revaluation of dividends payable, bank accounts and income tax
payable.
EURO recorded an income tax expense of
€1.8 million in the second quarter of 2022 compared to
€0.4 million in the second quarter of 2021. The increase was
mainly due to the tax impact of higher earnings and translation
adjustments, partially offset by the tax impact of the change in
fair value of the marketable securities.
Outlook
The Rosebel royalty production is anticipated to
be between 113,000 ounces and 139,000 ounces in 2022. In 2022, the
Rosebel royalty is expected to provide revenues to the Company of
between approximately €12.3 million and €15.2 million (US$14.8
million and US$18.2 million). These pre-tax numbers assume a gold
price of US$1,700 per ounce and an exchange rate of €1 for US$1.20.
The impact of changes in the average gold price on EURO’s annual
revenues, based on an estimated production of 126,000 ounces, would
be approximately US$1.2 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 €0.7
million.
The Bombore project is anticipated to reach
commercial production in the third quarter of 2022.
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. COVID-19 detection and mitigation protocols are reviewed on
an ongoing basis to adapt to the evolving situation. 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.
The COVID-19 situation at Rosebel and in
Suriname has remained stable during the second quarter. The
majority of the COVID-19 measures have been lifted in Suriname
while Rosebel continues to require face masks indoor with
additional mitigating measures to continue reducing the impact of
COVID-19 at site.
About EURO
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, a
silver stream from a subsidiary of Orezone Gold Corporation
(“Orezone”), 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 (“Compagnie Minière
Montagne d’Or”). The silver stream entitles EURO to receive 50% of
the payable silver production over the life of mine on Orezone’s
Bomboré Project, located in Burkina Faso, West Africa.
EURO has approximately 62.5 million shares
outstanding. At June 30, 2022, IAMGOLD France S.A.S. (“IAMGOLD
France”), an indirect wholly owned subsidiary of IAMGOLD, owned 90%
of all issued outstanding shares of EURO. As at June 30, 2022,
IAMGOLD France held 56,242,153 shares representing 112,300,344
voting rights or 94.38% of the voting rights of EURO.
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 |
Sophie
Hallé |
Directeur
Général |
Directeur
Général Délégué |
Tel. : +1
450 677 0040 |
Tel. : +1
450 677 0040 |
E-mail :
tbarry@euroressources.net |
E-mail :
shalle@euroressources.net |
- PR 22-06EN 2022 08 05 EURO - News release-2022 Q2
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