EURO Ressources S.A.

EURO Ressources S.A.

March 30, 2006 12:42 ET

EURO Ressources S.A. Announces Mark-to-Market Accounting for Hedging Arrangement

PARIS--(CCNMatthews - Mar 30, 2006) -

EURO Ressources S.A. (TSX: EUR) (Euronext of the Bourse de Paris: EUR) today announced that an unrealized, non-cash mark-to-market loss of $9.56 million (2004: nil), before tax adjustment, would be included in its audited financial results for the year ended December 31, 2005, prepared in accordance with Canadian GAAP.

James Dunnett, Directeur-General of EURO, said: "These unrealized mark-to-market loss of $9.56 million, before tax adjustment, do not reflect current cash-flow. If hedge accounting continued to be applied, these prospective losses would have been brought to account against the matching income in future periods, and the contango costs inherent in the mark-to-market loss now reflected against current income would not arise."

In the first quarter of 2005, EURO implemented hedge accounting for its forward gold pricing derivatives established in January. EURO also used hedge accounting for additional derivatives acquired in August 2005. In completing its audited financial statements for 2005 EURO has determined that despite the fact that the derivatives are economically effective, EURO's derivatives do not qualify for hedge accounting under Canadian GAAP. The derivatives must therefore be "marked to market" and the losses or profits brought to income as they arise. As a result, EURO will restate its unaudited financial statements for the interim periods ended March 31, June 30 and September 30, 2005.

EURO expects to announce its 2005 financial results and release the restated interim unaudited statements on or before March 31, 2006.

EURO Ressources S.A. is a French company, presently focused on acquiring and holding mineral royalties on operating gold mines. Additionally, EURO continues to hold certain exploration and development mineral rights, principally gold, in French Guiana, which are the subject of joint venture arrangements. EURO has approximately 49 million shares outstanding.

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

James H. Dunnett, Allan J. Marter
Directeur-General President
Tel: 604-710-2242 Tel: 303-894-4631
Fax: 604-608-3283

Contact Information

  • EURO Ressources S.A.
    James H. Dunnett, 604-710-2242
    604-608-3283 (FAX)
    Allan J. Marter, 303-894-4631