EURO Ressources reports earnings for the first quarter ended March 31, 2023

NEWS RELEASE

Paris: EUR

EURO RESSOURCES REPORTS EARNINGS FOR THE
FIRST QUARTER ENDED MARCH 31, 2023

Paris, France, May 12, 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 first quarter ended March 31, 2023. These unaudited interim financial statements were approved by the Board of Directors on May 12, 2023. All financial amounts are expressed in Euros (“€” or “euros”) unless otherwise specified.

Highlights

Under IFRS, EURO reported net earnings of €6.1 million (€0.098 per share) for the first quarter of 2023, compared to €3.2 million (€0.051 per share) for the first quarter of 2022.  

EURO recorded revenues of €8.2 million in the first quarter of 2023 compared to revenues of €4.8 million for the first quarter of 2022.

Liquidity and capital resources

Cash at March 31, 2023 totaled €26.4 million as compared to €21.4 million at December 31, 2022. 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, 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 first quarter ended March 31, 2023, the Company recognized an unrealized gain under IFRS following the increase of the fair value of these marketable securities. Under IFRS, this gain of €0.4 million was recorded in other comprehensive income (gain of €0.3 million during the first quarter ended March 31, 2022).

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

As at March 31, 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 August 31, 2022, Orea reported that it has entered into a legally binding letter agreement with Nordgold to obtain its 55.01% interest in the Montagne d’Or joint-venture, following the sanctions imposed by the United States on Nordgold. On September 13, 2022, Orea confirmed that the French Government responsible for overseeing matters related to Russian sanctions, has approved the proposed transaction with Nordgold. 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 May 4, 2023, Orea provided an update on the closing of the acquisition of the additional 55.01% interest in the Montagne d’Or project holding company. The French government and Nordgold have both extended the deadline to close the acquisition to May 31, 2023. A final response from the Canadian government to Orea’s permit application regarding the acquisition is pending.