SOURCE: EURO Ressources

April 30, 2008 17:26 ET

EURO Ressources : Profitable 1st Quarter 2008 Financial Results

PARIS--(Marketwire - April 30, 2008) - EURO Ressources S.A. (TSX: EUR) (PARIS: EUR) today released its unaudited consolidated financial statements for the quarter ended 31 March 2008 prepared in accordance with International Financial Reporting Standards as adopted by the European Union. These statements report a profit of EUR 0.79 million for the first quarter of 2008, compared to a loss of EUR 0.33 million for the equivalent period in 2007.

During the first quarter, the Company recorded EUR 3.15 million of revenue compared to EUR 1.34 million in the first quarter of 2007. Substantially all of this revenue is from the Rosebel royalty. Gold hedging losses associated with EURO's scheduled repayments of the Rosebel acquisition financing were EUR 1.00 million in the first quarter of 2008 (2007: EUR 0.99 million) providing net revenue after scheduled hedging liquidation losses of EUR 2.16 million (2007: EUR 0.34 million).

The increase in revenue from Rosebel primarily reflects the increase in the average gold price to $924.83/ounce for the first quarter 2008 compared to $649.82/ounce for the same period last year, a 42.3% increase. The proportion of gold production from hard rock increased to 35.71% from 8.1% in the first quarter of 2007 giving an effective participation threshold price of $317.86 this quarter compared to $304.03 a year ago: the resultant amount payable per ounce of attributable production increased from $345.79 to $606.97, an increase of 75.53%. Production of 76,002 ounces during the first quarter of 2008 was 59.6 % higher compared to 47,610 ounces in the first quarter of 2007, when production was adversely affected by a strike at Rosebel.

James H. Dunnett, Directeur-Général of EURO stated: "The increased price of gold during the period allowed for a record royalty income in US dollars. Gold production at 76,002 ounces during the quarter was much improved on 2007 when Rosebel suffered strike action. Management continues to seek to liquidate the remaining gold hedge from available funds. The recent decline in the gold price has enabled EURO to further reduce its hedge exposure.

"Optimisation of the mill at Rosebel continues according to statements made by IAMGOLD and the mill expansion is expected to be completed by November 2008. These developments bode well for 2009 and beyond."

Separately, EURO reports that Golden Star has submitted a scoping study on Paul Isnard that reports an Inferred Resource containing approximately 2 million ounces of gold. This study concludes that further definition (infill) drilling is required to bring the resource to the Indicated or Measured categories. Golden Star has confirmed that they do not intend to proceed with any further work on the property pending clarification of the areas in French Guiana where mining development may be permitted.

A review of the results for the first quarter of 2008 and the comparative period of 2007 is as follows:

General and administrative expenses were EUR 0.41 million (2007: EUR 0.50 million), an 18% reduction reflecting improved managerial control of expenses. Interest expense decreased in the first quarter of 2008 to EUR 0.03 million (2007: EUR 0.15 million) reflecting the retirement in September 2007 of the loan from Golden Star and reduced principal outstanding to Macquarie Bank.

Amortization expenses at EUR 0.10 million (2007: EUR 0.10 million) were the same as the first quarter last year although production was much higher, reflecting the change in accounting estimates of the resource at Rosebel to include the full amount of the remaining participating ounces under the Rosebel royalty, which resulted in a higher resource base in computing the amortization per ounce of production. Following settlement in full of the contingent element of the Rosebel royalty, there was no debt accretion charge during the quarter (2007: EUR 0.09 million).

Notwithstanding the economic effectiveness of the derivatives used to hedge certain of the future cash flow from the Rosebel royalty, which were implemented as a requirement of our loan from Macquarie, EURO has recognized against income the total unrealized mark-to-market position of our outstanding gold hedge position. The unrealized mark-to-market derivative losses in the first quarter of 2008 of EUR 0.61 million (2007: a gain of EUR 0.018 million), before tax adjustment, do not reflect or affect current cash-flow.

EURO has recognized a future tax credit on the first quarter 2008 balance sheet of EUR 7.40 million (31 December 2007: EUR 7.83 million) being EUR 3.20 million against the unrealized mark-to-market losses recorded at 31 March 2008 and EUR 4.20 million in respect of cumulative net operating losses.

Consolidated cash and cash equivalents at 31 March 2008 totalled EUR 0.2 million. EURO expects to have sufficient cash flow to fund our on-going operational needs and to provide sufficient resources to investigate acquisition opportunities.

More detailed information about the Rosebel gold mine is available on IAMGOLD's website at: www.iamgold.com.

About EURO

EURO is a French company, focused on owning royalties and similar interests on operating gold mines. EURO also holds certain gold mineral rights in French Guiana including Paul Isnard which comprises 8 concessions and a PER over 140 sq. km. EURO has approximately 60.6 million shares outstanding.

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. Such statements include comments regarding the Company's intentions with respect to it reduction of its hedge position. 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 US Securities Act of 1933 and may not be offered or sold in the United States or to a US person absent registration or an applicable exemption from registration.

Contact Information

  • Additional information relating to EURO Ressources S.A. is
    available on SEDAR at www.sedar.com. Further requests for
    information should be addressed to:

    James H. Dunnett

    Directeur-Général

    Tél.: +1 604 710 2242

    Email : Email Contact

    Susanne A. Hermans

    Vice-President Finance

    Tél.: +1 303 204 7771

    Email : Email Contact

    This information is provided by HUGIN