EURO Ressources reports earnings for the first quarter ended March 31, 2020

NEWS RELEASE

Paris: EUR

EURO RESSOURCES REPORTS EARNINGS FOR THE
FIRST QUARTER ENDED MARCH 31, 2020

Paris, France, May 11, 2020:  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, 2020.  These unaudited interim financial statements were approved by the Board of Directors on May 8, 2020.  All financial amounts are expressed in Euros (“€” or “euros”) unless otherwise specified.

Highlights

Under IFRS, EURO reported a net profit of €5.0 million (€0.080 per share) for the first quarter of 2020, compared to €3.6 million (€0.057 per share) for the first quarter of 2019. 

EURO recorded revenues of €7.2 million in the first quarter of 2020 compared to revenues of €5.9 million for the first quarter of 2019. 

Liquidity and capital resources

Cash at March 31, 2020 totaled €36.5 million as compared to €31.6 million at December 31, 2019.  The increase was mainly due to 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 March 31, 2020, marketable securities were comprised of 19,095,345 shares of Columbus Gold Corp. (“Columbus”) (10.2% of outstanding shares; December 31, 2019: 10.6%) and 3,819,069 shares of Allegiant Gold Ltd. (“Allegiant”) (6.2% of outstanding shares; December 31, 2019: 6.2 %).

During the quarter ended March 31, 2020, the Company recognized an unrealized loss under IFRS following the decrease of the fair value of these marketable securities. Under IFRS, this loss of €1.1 million was recorded in other comprehensive income (€0.2 million during the quarter ended March 31, 2019).  

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

As at March 31, 2020, 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. A new French mining code that was expected to be enacted by the end of 2019, finally postponed to a later date, will clarify the framework and the environmental standards of the mining operations in France. The statements by the French Government regarding Compagnie Minière Montagne d’Or (the JV) in May 2019, to which the Paul Isnard royalty is attached, creates 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. Nevertheless, work continues on both the design of the project and the environmental framework around it. 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, 2019.  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, 2020.