EURO Ressources reports earnings for the third quarter and nine months ended September 30, 2018 - Seite 3

Operating expenses for the nine months ended September 30, 2018 were €0.38 million similar to the amount recorded during the same period in 2017.  In 2017, operating expenses included a reimbursement of €0.1 million by the Government of France of operating taxes paid in prior years, partially offset by higher administrative costs and other fees.

The amortization expense of €0.35 million during the nine months ended September 30, 2018 was lower than the amortization expense of €0.50 million recorded during the same period in 2017, mainly due to lower production, higher reserves at the Rosebel mine, and the impact of a stronger annual average euro in 2018.

EURO recorded a foreign exchange gain of €0.26 million in the first nine months of 2018 compared to a loss of €0.31 million in the first nine months of 2017, mainly due to the weakening of the closing foreign exchange rate of the Euro compared to the United States dollar in 2018 compared to a strengthening in 2017.  This rate was used for the revaluation of dividends payable, bank accounts and income tax receivable.

EURO recorded an income tax expense of €5.9 million in the nine months ended September 30, 2018 compared to €5.8 million in the same period of 2017.  The increase is mainly explained by higher translation adjustments in 2018 partially offset by the absence of the tax on dividends in 2018.

Outlook

IAMGOLD Corporation reduced its 2018 Rosebel production guidance to be between 295,000 ounces and 311,000 ounces compared to between 311,000 and 326,000 ounces.  The decrease reflects lower mining tonnages and head grades experienced in the third quarter of 2018.  In 2018, the updated Rosebel royalty is expected to provide revenues to the Company of between approximately €22.6 million and €23.8 million (US$26.7 million and US$28.1 million).  These pre-tax numbers assume an average annual gold price of US$1,250 per ounce and an exchange rate of €1 for US$1.18.  The impact of changes in the average gold price on EURO's annual revenues, based on an estimated production of 303,000 ounces, would be approximately US$3.0 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 €1.2 million.  EURO's cash flow is expected to be primarily affected by income tax payments and eventual payment of dividends.  The Company maintains certain cash available to pursue opportunities that would enhance the Company's long-term business.