EURO Ressources S.A.
TSX : EUR
PARIS : EUR

EURO Ressources S.A.

November 16, 2005 10:28 ET

EURO Ressources S.A. Announces Profitable Third Quarter Results

PARIS--(CCNMatthews - Nov 16, 2005) -

EURO Ressources S.A. (TSX: EUR) (Euronext of the Bourse de Paris: EUR) today announced its unaudited interim financial results for the three months ended September 30, 2005, prepared in accordance with Canadian GAAP. These results record a third quarter net income of $253,000 compared to net income in the second quarter of $197,000. (All financial amounts are expressed in U.S. dollars unless otherwise indicated).

James H. Dunnett, Directeur-General of EURO Ressources S.A. commented: "We are pleased to report a third consecutive quarter of profitable results, reflecting the benefits of the acquisition of the Rosebel royalty and the financial restructuring undertaken during the last financial year. The continued strong production performance at Rosebel, combined with continuing high gold prices during the quarter, has allowed EURO to report another profitable quarter. The outlook for the fourth quarter remains positive with higher gold prices so far this period."

Rosebel Royalty

As reported by Cambior Inc., production from the Rosebel gold mine for the nine months ended September 30, 2005, totaled 257,573 ounces of gold. Although Cambior maintains its publicly stated forecast of 320,000 ounces of gold production from Rosebel for calendar 2005, gold production in the third calendar quarter was 82,006 ounces compared to 89,614 ounces in the second quarter.

More detailed information about the production levels and reserve statements of the Rosebel gold mine, can be viewed on Cambior's website at: www.cambior.com.

The results for the three months to September 30, 2005, together with Management's Discussion and Analysis ("MD&A") dated November 15, 2005, are summarized below:

Three Months Ended September 30, 2005

Revenue for the three months ended September 30, 2005, of $1.1 million (2004: $24,000), consisted substantially of income from the Rosebel royalty, payable to the Company on production from the Rosebel Gold Mine. This is stated net of hedging costs.

During the three months ended September 30, 2005, the Company recorded net income of $253,000 or $0.006 per share compared to a net loss of $(742,000) or $(0.02) per share during the three months ended September 30, 2004. General and administrative costs were $299,000 during the three months ended September 30, 2005, compared to $410,000 during the same period last year. This decrease in general and administrative costs reflects the reorganization completed in Q4 2004 which also reduced interest costs to $138,000 during the three months ended September 30, 2005, compared to $309,000 during the comparative period in 2004.

The increase in depreciation and amortization expenses of $359,000 (2004: $3,000) during the three months ended September 30, 2005, records the amortization of the acquisition costs of the Rosebel royalty in 2005. The charge of $47,000 for debt accretion relates to the accounting treatment for the deferred component of the Rosebel royalty purchase consideration.

Nine Months Ended September 30, 2005

During the nine months ended September 30, 2005, the Company recorded net income of $0.7 million, or $0.015 per share, compared to a net loss of $(2.1 million), or $(0.05) per share, during the same period last year. The improvement in profitability was primarily attributable to income from the Rosebel royalty and a reduction of general and administrative costs.

Liquidity

Consolidated cash as of September 30, 2005, was $690,000 compared to $1,000 at the end of 2004. The Company expects that its current cash flow position will enable it to adequately fund all of its operational and debt service requirements. The closing of the previously announced private placement of shares to Macquarie Bank Limited is expected to close shortly after the Extraordinary shareholder meeting of the Company scheduled for December 8, 2005. This will further strengthen liquidity for the Company.

French Guiana and Exploration

The Company's properties in French Guiana remain optioned to Golden Star under the Option Agreement with the Company. Separately, certain limited production of gold has continued under a lease arrangement providing for royalty payments to EURO. This has minimized the illegal operations that were being undertaken until recently on the Company's properties.

About EURO Ressources

EURO Ressources S.A. is a French company, presently seeking to acquire and hold mineral royalties on operating gold mines. Additionally, the Company continues to hold certain exploration and development mineral rights, principally gold, in French Guiana, which are the subject of joint venture arrangements. The Company has approximately 45.4 million shares outstanding.

Statements Regarding Forward-Looking Information: Some statements contained in this news release are forward-looking statements. Investors are cautioned that forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause actual results to differ materially. Such statements include comments regarding the intentions of the Company to acquire additional royalty or mineral interests, estimates of mineral reserves made by Cambior Inc. in respect of the Gross Rosebel mine and Cambior's anticipated production levels from that mine. There can be no assurance that future developments affecting the Company will be those anticipated by management.

Additional information relating to EURO Ressources S.A. is available on SEDAR at www.sedar.com.

Contact Information

  • EURO Ressources S.A.
    James H. Dunnett, +1 604-710-2242
    Directeur-General
    +1 604-608-3283 (FAX)
    Email: jhdunnett@aol.com
    or
    Allan J. Marter, +1 303-894-4631
    President