EURO RESSOURCES REPORTS
THE ENTERING INTO A CONFIRMATION AND CONSENT IN CONNECTION
WITH THE SALE OF ROSEBEL
Paris, France, February 1, 2023: EURO Ressources
S.A. (“EURO” or “the Company”) (Paris: EUR) today reported the
entering into a confirmation and consent in connection with the
sale of Rosebel.
On October 18, 2022 IAMGOLD Corporation
(“IAMGOLD”) made public announcement of its agreement with Silver
Source Group Limited and Zijin Mining Group Co. Ltd. regarding the
proposed sale of the shares of Rosebel Gold Mines N.V. (the “Zijin
Transaction”). The transaction closed on February 1, 2023. Rosebel
Gold Mines N.V. is the current owner of the Rosebel Gold Mine
assets in Suriname. Pursuant to a Participation Right Agreement,
IAMGOLD undertook to pay to the Company certain revenue stream
calculated on the basis of the production of the Rosebel Gold
Mine.
Following announcement of the Zijin Transaction,
the directors independent of IAMGOLD, being Susanne Hermans, Ian
Smith and David Watkins, who had no prior knowledge of the Zijin
Transaction, commenced a review of the Company’s historical records
with respect to the Participation Right Agreement and any other
ancillary agreement.
This included a review of the terms of a share
pledge agreement and hypothec on moveable property granted in
April, 2003 in favour of predecessor holder of the Participation
Right Agreement over certain of the shares of Rosebel Gold Mines
N.V. (the “Rosebel Security”). Copies of the documents evidencing
the Rosebel Security and its assignment to the Company were
provided, through counsel, to IAMGOLD.
At its meeting held on December 22, 2022, the
Board of Directors of the Company formalized in this respect the
appointment of a Special Committee comprised of Susanne Hermans,
Ian Smith and David Watkins with a view to assess any risk of the
Zijin Transaction for the Company and make any recommendation to
the Board of Directors and to the Company's officers to secure the
Company's rights.
The Special Committee reviewed the history of
the creation of the Participation Right Agreement and the Rosebel
Security.
The Special Committee also reviewed (i) parts
(including the text of publicly-redacted provisions) of the terms
of the October 18, 2022 agreement regarding the Zijin Transaction,
and (ii) the requested form of confirmation and consent, which
includes the release of the Rosebel Security, to be made by IAMGOLD
and the Company in favour of Silver Source Group Limited and
Rosebel Gold Mines N.V., which the Company understands is a
condition precedent to the completion of the Zijin Transaction (the
“Confirmation and Consent”).
The Special Committee reported to the Board of
Directors of the Company its recommendation regarding the
Confirmation and Consent on January 4, 2023.
Subsequent to the presentation of its report,
the Special Committee engaged in further discussions and
correspondence with IAMGOLD, represented by its Acting Chief
Financial Officer and Acting Chief Executive Officer.
As a result of such discussions and
correspondence, the Company’s circumstances are as follows:
(i) The
Special Committee was formally advised of IAMGOLD’s intentions
regarding the ongoing operation of the Rosebel Gold Mine should the
Zijin Transaction not be completed, including that IAMGOLD will be
forced to reallocate resources away from the Rosebel Gold Mine,
potentially placing the Rosebel Gold Mine operations on care and
maintenance, or otherwise significantly reducing operations,
resulting in an indefinite suspension of any revenue stream from
the Participation Right Agreement.
This represents a real risk to the Company as
the Company (a) does not have any right of action to force IAMGOLD
to operate the Rosebel Gold Mine and (b) the Company is currently
completely dependent on the revenues from the Participation Right
Agreement.
There is uncertainty regarding the exact
intentions of IAMGOLD should the Zijin Transaction not be completed
including the pure and simple abandonment of the Rosebel Gold Mine
which has been subject to a transaction value of more than $300
million.
(ii) The
Special Committee was also advised by IAMGOLD of IAMGOLD’s views
that completion of the Zijin Transaction would result in the
operations of the Rosebel Gold Mine being carried on by a new,
financially stronger, operator with a stated plan to accelerate
production and, thus, payment of the Company’s entitlements under
the Participation Right Agreement.
(iii) The
Confirmation and Consent creates a risk for the Company: The
payment under the Participation Right Agreement shall remain an
unsecured obligation of IAMGOLD and the Company will therefore
depend solely on the financial capacity of IAMGOLD, even if the
operations of the Rosebel Gold Mine continue and the production
should have entitled the Company to receive payment. IAMGOLD
confirmed in this regards that it was not in capacity to grant to
the Company alternate security due to its banking arrangements and
covenants.
The Special Committee is of the opinion that
there is no straightforward solution to address the issues and
risks raised. The Special Committee is also of the opinion that the
situation of the Company would have been different should IAMGOLD
and/or the directors and officers of the Company (part of IAMGOLD's
management), having knowledge of the contemplated transaction, had
involved the Company’s Board of Directors in the discussions and,
in any event, prior to entering into any definitive agreement
regarding the Zijin Transaction.
The Special Committee has considered the
understanding and agreement of IAMGOLD (the “IAMGOLD
Understanding”), including the interpretation of certain provisions
of the Participation Right Agreement, and the appointment of an
officer or consultant directly engaged by the Company to pursue
corporate development opportunities on behalf of the Company.
In light of the forgoing considerations, and the
negotiations undertaken by the Special Committee with IAMGOLD, the
Special Committee recommends that the Board of Directors of the
Company approve the execution and delivery of the Confirmation and
Consent, including the release of the Rosebel Security.
At its meeting held on January 25 2023, the
Board of Directors of the Company accepted the recommendation of
the Special Committee and those members of the Board of Directors
independent of IAMGOLD (being the members of the Special Committee)
approved the execution and delivery of the Confirmation and Consent
by the Company.
The Company is relying on the exemption from the
requirement for minority shareholder approval under Multilateral
Instrument 61-101 – Protection of Minority Securityholders in
Special Transactions (“MI 61-101”) of the Confirmation and Consent
set out in section 5.7(e) of MI 61-101 on the basis that (a) in
light of the anticipated material detrimental effect on the
operations of the Rosebel Gold Mine and the resulting loss of the
Company’s revenue stream under the Participation Right Agreement
should the Zijin Transaction not be completed, the Company would be
in serious financial difficulty; (b) the execution and delivery of
the Confirmation and Consent, and the matters agreed with IAMGOLD
under the IAMGOLD Understanding are designed to improve the
financial position of the Company; and (c) taken as a whole the
execution and delivery of the Confirmation and Consent and the
matters agreed with IAMGOLD as set forth in the IAMGOLD
Understanding are reasonable in the circumstances faced by the
Company.
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. On October 18 2022, IAMGOLD
announced that it had entered into a definitive agreement with
Zijin Mining Group Co. Ltd. to sell its interests in the Rosebel
mine. The existing royalty on Rosebel held by EURO will remain an
obligation of 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. Orea Mining Corp. now holds a 100%
interest in the Montagne d’Or project. The silver stream entitles
EURO to receive 50% of the payable silver production over the life
of mine on Orezone’s Bombore mine, located in Burkina Faso, West
Africa.
EURO has approximately 62.5 million shares
outstanding. At December 31, 2022, IAMGOLD France S.A.S. (“IAMGOLD
France”), a wholly owned subsidiary of IAMGOLD, owned 90% of all
issued outstanding shares of EURO. As at December 31, 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 BarryDirecteur GénéralTel: +1 450 677 0040Email:
tbarry@euroressources.net |
Sophie
HalléDirecteur Général DéléguéTel: +1 450 677 0040Email :
shalle@euroressources.net |
- PR 23-01EN 2023 02 01 EURO - News release - Report of the
Special Committee v2
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