EURO Ressources : EURO Ressources Reports Earnings for the Third Quarter and Nine Months Ended September 30, 2010
November 12 2010 - 4:04PM
Marketwired
EURO RESSOURCES REPORTS EARNINGS FOR THE THIRD QUARTER AND NINE
MONTHS ENDED SEPTEMBER 30, 2010
PARIS, France, November 12, 2010: EURO Ressources S.A. (Paris:
EUR) ("EURO" or the "Company") today announced its unaudited
consolidated financial results for the third quarter and first nine
months ended September 30, 2010 prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union. All financial amounts are expressed in Euros.
EURO reported a net profit of 10.43 million (0.167 per share)
for the nine month period ended September 30, 2010 and a net profit
of4.48 million (0.072 per share) for the third quarter of 2010;
this compares to a net profit of 7.74 million (0.124 per share)
for the first nine months of 2009 and a net profit of 3.12 million
(0.050 per share) for the third quarter of 2009.
The following comments on the results for the third quarter and
nine months ended September 30, 2010 are taken from our
Management's Discussion and Analysis:
Three months ended September 30, 2010 compared to three months
ended September 30, 2009
EURO had revenue of 7.37 million in the quarter ended September
30, 2010 compared to 5.28 million in the third quarter of 2009, an
increase of 40%. Substantially all of this revenue comes from the
Rosebel royalty. The Rosebel gold mine produced 105,623 ounces of
gold during the third quarter of 2010, a 5% decrease from the
111,657 ounces of gold produced in the third quarter of 2009,
resulting primarily from processing lower head grades. This
decrease is substantially offset by the 28% increase in the average
price of gold for the quarter ended September 30, 2010 of $1,226.75
per ounce of gold as compared to $959.97 per ounce of gold for the
same period in 2009.
Operating expenses in the third quarter of 2010 were 0.24
million, as compared to 0.52 million for the third quarter of
2009. The decrease of 53% was largely due to the security costs at
the Paul Isnard Properties in French Guiana no longer being the
Company's responsibility since the beginning of 2010, whereas
during the third quarter of 2009 the Company incurred 0.31 million
related to these costs.
Although, there was a 5% decrease in gold production at the
Rosebel mine for the third quarter of 2010 as compared to the third
quarter of 2009, there was a 4% increase in amortization expense of
0.168 million for the third quarter 2010 as compared to 0.162
million for the same period last year. This increase is
attributable to the weakened Euro currency with a foreign exchange
impact for the quarter of 10%.
Since the last 5,700 ounces of gold from the gold hedge contract
were settled at the end of January 2010, the Company has no more
financial instrument expense related to gold for the quarter ended
September 30, 2010. This compares to a financial instrument expense
related to gold of 0.30 million for the quarter ended September
30, 2009, at which time there were 5,700 ounces of gold remaining
under the Company's gold hedge contract.
Nine months ended September 30, 2010 compared to nine months
ended September 30, 2009
EURO had revenue for the first nine months of 2010 of 18.83
million compared to 14.10 million for the first nine months of
2009, with 18.76 million earned from the Rosebel royalty (13.73
million during the same period last year). The 34% increase in
revenue for the first nine months of 2010 is mainly due to a 27%
increase in the average gold price for the nine months ended
September 30, 2010 to $1,177.85 per ounce of gold (2009: $930.60
per ounce of gold). This increase is partially offset by a 6%
decrease in gold production for the first nine months of 2010 to
290,015 ounces of gold, as compared to 308,322 ounces of gold for
the same period last year. The weakened Euro currency was another
contributing factor to explain the increase in revenue with a
foreign exchange impact of 4% for the nine months ended September
30, 2010.
In April 2010, EURO entered into a foreign exchange forward
contract with its financial institution to mitigate the impact of
foreign exchange on the issuance premium that was paid in May 2010.
As required by French law, the issuance premium was to be paid in
Euros. As the Rosebel royalty is received in US dollars and EURO
cash balances are carried in US dollars, a foreign exchange forward
contract was entered into to ensure EURO would have sufficient
liquidity to meet the issuance premium. The forward price agreed to
was 1 for $1.3570 and on the day of maturity the exchange rate was
1 for $1.2201. Given the unanticipated devaluation of the Euro at
that time, a realized financial instrument expense of 1.8 million
(equivalent of $2.39 million) was recorded in the income statement,
(2009:0).
EURO recorded an income tax expense of 5.69 million for the
nine months ended September 30, 2010.
EURO recognized a temporary future tax credit for the nine
months ended September 30, 2010 of 0.15 million. Since there are
no more tax losses carried forward, the deferred tax asset relates
to temporary differences.
Liquidity
Consolidated cash and cash equivalents at September 30, 2010
totalled 6.32 million. All of the cash and cash equivalents are
unrestricted. EURO expects to have sufficient cash flow to fund its
on-going operational needs.
About EURO
EURO is a French company whose principal asset is the Rosebel
Royalty on gold production at the Rosebel mine operated by IAMGOLD
Corporation ("IAMGOLD"). EURO has approximately 62.5 million shares
outstanding. Since December 17, 2008, EURO is a majority owned
subsidiary of IAMGOLD. IAMGOLD owns today directly and indirectly
approximately 86% of EURO.
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. 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.
Additional information relating to EURO Ressources S.A. is
available on SEDAR at www.sedar.com. Further requests for
information should be addressed to:
Larry E. Phillips Directeur-Général Tel:+1 4163604710 Email :
phillips@euroressources.net
Susanne A. Hermans Vice-President Finance Tél.: +1 303 204 7771
Email : shermans@euroressources.net
This information is provided by HUGIN
Larry E. Phillips Directeur-Général Tel:+1 4163604710 Email :
Email Contact Susanne A. Hermans Vice-President Finance Tél.: +1
303 204 7771 Email : Email Contact
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