0JSG Euro Ressources Sa

EURO RESSOURCES REPORTS EARNINGS FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2023

Paris, France, November 10, 2023: 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 nine months ended September 30, 2023. These unaudited interim financial statements were approved by the Board of Directors on November 10, 2023. All financial amounts are expressed in Euros (“€” or “euros”) unless otherwise specified.

Highlights

Under IFRS, EURO reported net earnings of €6.2 million (€0.100 per share) and €18.7 million (€0.299 per share) for the three and nine months ended September 30, 2023, respectively, compared to €2.9 million (€0.046 per share) and €9.3 million (€0.149 per share) for the three and nine months ended September 30, 2022, respectively.

EURO recorded revenues of €24.6 million in the first nine months of 2023 (€8.7 million in the third quarter of 2023) compared to revenues of €15.0 million in the first nine months of 2022 (€4.7 million reported in the third quarter of 2022).

Liquidity and capital resources

Cash at September 30, 2023 totaled €24.5 million as compared to €21.4 million at December 31, 2022. The increase was mainly due to cash flow from operating activities, partially offset by the dividends and income tax paid.

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 September 30, 2023, marketable securities were comprised of 19,095,345 shares of Orea Mining Corp. (“Orea”) (8.4% of outstanding shares; December 31, 2022: 8.8%) and 3,819,069 shares of Allegiant Gold Ltd. (“Allegiant”) (3.7% of outstanding shares; December 31, 2022: 3.7 %).

During the nine month period ended September 30, 2023, the Company recognized an unrealized loss under IFRS following the decrease of the fair value of these marketable securities. Under IFRS, this loss of €0.9 million was recorded in other comprehensive income (loss of €0.7 million during the nine months ended September 30, 2022).

Royalty assets (Refer to MD&A for more detail)

As at September 30, 2023, the Company’s impairment review indicated that the facts and circumstances did not represent an indication of potential impairment for Rosebel and Bombore.

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 December 21, 2022, Orea published its financial statements as of September 30, 2022 in which the investment relating to the Montagne d'Or project is fully depreciated. On January 4, 2023, Orea announced that it has signed a Definitive Agreement to acquire Nordgold’s 55.01% interest in the Montagne d’Or joint-venture company (“HoldingCo”). The Definitive Agreement was signed with the approval of the French treasury which is responsible for overseeing matters related to Russian sanctions. On March 1, 2023, Orea reported that it wished to obtain comfort on sanctions from the Canadien government prior to proceeding with closing. On June 9, 2023, Orea provided an update on the closing of the acquisition of the additional 55.01% interest in the HoldingCo. Orea’s application was rejected by the Canadian government based on the interpretation of the Minister that Orea cannot guarantee that any potential future CAN$100 million payment to Nordgold would be paid into a frozen account if sanctions still apply at the time of the payment. Following this, Orea announced on June 13, 2023 that they have provided Nordgold with a formal notice of termination of the acquisition. On July 6, 2023, Orea reported that Orea and Nordgold have mutually agreed to retract the termination of the acquisition and have proposed amended terms to the share purchase agreement. The applicable sanctions authorities have been provided with a copy of the amended agreement and have advised Orea that they are currently reviewing it. On July 20, 2023, Orea reported that the amended agreement has been fully executed by Orea and Nordgold. Orea remains the owner of a 44.99% interest in the Montagne d’Or project.

In the impairment test performed at December 31, 2022, the Company considered that the events that occurred in 2022 questioned the viability of the project and its ability to generate future economic interest. Consequently, the Company has fully impaired the value of its royalty asset as at December 31, 2022. No indication of recovery in the value of the royalty asset has been identified as at September 30, 2023.

RESULTS OF OPERATIONS UNDER IFRS

Nine months ended September 30, 2023 compared to the same period in 2022 (IFRS)

Under IFRS, EURO reported net earnings of €18.7 million (€0.299 per share) for the nine months ended September 30, 2023 compared to €9.3 million (€0.149 per share) for the nine months ended September 30, 2022.

During the nine months ended September 30, 2023, EURO accounted for revenues of €24.6 million, an increase compared to revenues of €15.0 million for the same period in 2022. Revenues were mainly attributable to the Rosebel royalty for the first nine months ended September 30, 2023 and only attributable to the Rosebel royalty in 2022. The increase in revenues was mainly due to a higher gold production of 170,126 ounces in the first nine months of 2023 compared to 110,774 ounces in the first nine months of 2022 (€7.9 million) and by a higher average gold price in the first nine months of 2023 of US$1,930 per ounce of gold compared to US$1,827 per ounce of gold in the first nine months of 2022 (€1.8 million), partially offset by a strengthened euro (€0.3 million). Euro also accounted for revenues from the silver stream of the Bombore mine for €0.2 million.

Operating expenses for the nine months ended September 30, 2023 were €0.52 million compared to €0.39 million for the same period in 2022. The increase was mainly due to higher legal fees in 2023.

The amortization expense of €0.44 million during the nine months ended September 30, 2023 was higher than the amortization expense of €0.20 million recorded during the same period in 2022, mainly due to Bombore royalty asset amortization based on production achieved during the first nine months of 2023 and higher production at the Rosebel mine compared to the same period in 2022.

The investment income for the nine months ended September 30, 2023 was €0.93 million compared to €0.13 million for the nine months ended September 30, 2022. The increase was mainly due to the increase in the interest rates and to higher bank balances in the first nine months of 2023.

EURO recorded a foreign exchange gain of €0.56 million in the first nine months of 2023 compared to a loss of €0.15 million in the first nine months of 2022, mainly due to the revaluation of dividends payable, bank accounts and income tax payable.

EURO recorded an income tax expense of €6.4 million in the nine months ended September 30, 2023 compared to €5.1 million in the same period of 2022. The increase was mainly due to the tax impact of higher earnings, partially offset by translation adjustments.

Third quarter ended September 30, 2023 compared to the same period in 2022 (IFRS)

Under IFRS, EURO reported net earnings of €6.2 million (€0.100 per share) for the third quarter of 2023 compared to €2.9 million (€0.046 per share) for the third quarter of 2022.

Revenues were €8.7 million during the third quarter of 2023, an increase compared to €4.7 million for the third quarter of 2022. Revenues were mainly attributable to the Rosebel royalty in the third quarter of 2023 and only attributable to the Rosebel royalty in 2022. The increase in revenues was mainly due to a higher gold production of 60,595 ounces in the third quarter of 2023 compared to 36,051 ounces in the third quarter of 2022 (€3.3 million) and by a higher average gold price in the third quarter of 2023 of US$1,928 per ounce of gold compared to US$1,729 per ounce of gold in the third quarter of 2022 (€1.2 million), partially offset by a strengthened euro (€0.6 million). Euro also accounted for revenues from the silver stream of the Bombore mine for €0.1 million.

During the third quarter of 2023, the Company recorded operating expenses of €0.13 million compared to €0.10 million during the same period in 2022. The increase was mainly due to higher legal fees and exchange and listing fees in the third quarter of 2023.

The amortization expense of €0.14 million during the third quarter of 2023 was higher than the amortization expense of €0.07 million recorded during the third quarter of 2022, mainly due to higher production at the Rosebel mine and to Bombore royalty asset amortization based on production achieved during the third quarter of 2023.

The investment income in the third quarter of 2023 was €0.28 million compared to €0.08 million in the third quarter of 2022. The increase was mainly due to the increase in the interest rates and to higher bank balances during the third quarter of 2023.

EURO recorded a foreign exchange gain of €0.10 million in the third quarter of 2023 compared to €0.09 million in the third quarter of 2022, mainly due to the revaluation of dividends payable, bank accounts and income tax payable.

EURO recorded an income tax expense of €2.6 million in the third quarter of 2023 compared to €1.9 million in the third quarter of 2022. The increase was mainly due to the tax impact of higher earnings, partially offset by the tax impact of the change in fair value of the marketable securities and translation adjustments. 

Outlook

Since January 31, 2023, Rosebel Gold Mines is 95%-owned and operated by Zijin, and as such, no information on anticipated production for the year 2023 has been disclosed for the Rosebel royalty.

Orezone announced on December 1, 2022 that the Bombore gold mine had achieved commercial production. No information on anticipated production for the year 2023 has been disclosed related to the silver stream.

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.

About EURO

EURO is a French company whose main assets are a royalty on the Rosebel Gold Mines 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. Rosebel Gold Mines is 95%-owned and operated by Zijin Mining Group Co. Ltd. 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, owned by the Montagne d’Or project holding company which 44.99% is owned by Orea Mining Corp. (“Orea”). 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 September 30, 2023, 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 September 30, 2023, IAMGOLD France held 56,242,153 shares representing 112,300,344 voting rights or 94.37% 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:

Attachment

• PR 23-09EN 2023 11 10 EURO - News release-2023 Q3 Results_Final

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