EURO RESSOURCES 
By EURO Ressources S.A. (TSX: EUR; Euronext of the Bourse de Paris: EUR) today announced its audited consolidated financial results for the year ended December 31, 2006 prepared in accordance with International Financial Reporting Standards as adopted by the European Union.
During 2006, the Company benefited from the royalty income payable from the Rosebel Gold Mine and recorded $9.63 million (?7.67 million) of revenue compared to $5.13 million (?4.33 million) in 2005. Substantially all of this revenue is income from the Rosebel Royalty. Liquidated hedging costs associated with this revenue were $4.18 million (?3.33 million) compared to $0.5 million (?0.44 million) in 2005, providing net revenue of $5.45 million (?4.34 million) compared to $4.61 million (?3.89 million) in 2005.
James Dunnett, Directeur-Général of EURO stated: ?We have benefited from the substantially higher gold price in 2006 than we received in 2005. Rosebel continues to perform well with production of approximately 300,000 ounces during the year. Our liquidity position has strengthened as we have continued to pay down debt aggressively. The continued higher gold price bodes well for our cash flow in 2007, notwithstanding the adverse effect of the strike at Rosebel that occurred earlier this year.
?Nonetheless the Company reports a net loss of $3.19 million (?2.54 million) for the financial year due to fair value recognition of derivative mark-to-market losses on gold used to hedge certain of the future cash flow from the Rosebel Royalty. These unrealised derivative losses of $14.61 million (?11.06 million) compared to $9.56 million (?8.07 million) in 2005, before tax adjustment. These losses from fair value recognition do not reflect current cash-flow.?
EURO recognized a future tax credit of $9.73 million (?7.37 million), including $4.87 million (?3.68 million) compared to $3.09 million (?2.56 million) in 2005 in relation to the fair value derivative losses recorded during the year. The resultant net loss of $3.19 million (?2.54 million) compares to a loss of $0.71 million (?0.60 million) in 2005. The net loss per common share in issue during 2006 was 6.3 cents per share (5.5 ?uro cents per share) compared to a net loss of 1.5 cents per share (1.3 ?uro cents per share) during 2005.
Further analysis of the financial results follows:
- General and administrative expenses were $2.54 million (?2.02 million) (2005: $1.88 million, ?1.59 million) reflecting continued high legal and accounting expenses related to the dual listing of the Company and costs associated with seeking new business.
- Interest of $0.9 million (?0.7 million) (2005: $0.5 million, ?0.4 million) reflects the higher interest rates in 2006 compared to 2005.
- The decrease in amortization expense of $0.93 million (?0.70 million) (2005: $1.33 million, ?1.12 million) reflects the increase in resources of the Rosebel Royalty and the corresponding decrease in amortization expense per ounce.
Consolidated cash and short-term investments as of December 31, 2006 totalled $1.72 million (?1.30 million) versus $1.473 million (?1.24 million) at December 31, 2005.
As reported by IAMGold Corporation, gold production from the Rosebel mine was 300,727 ounces during 2006 and IAMGold currently forecasts production of 270,000 ounces of gold for Rosebel during calendar 2007. IAMGold has recently announced that it is considering a possible expansion of production at Rosebel to 400,000 ounces of gold production annually. 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, presently focused on acquiring and holding mineral royalties and similar interests 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 50.5 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 IAMGold's intentions to expand production at the Rosebel mine and of the Company to acquire additional royalty or mineral interests. There can be no assurance that future developments affecting the Company or the Rosebel gold mine 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:
James H. Dunnett,
Directeur-Général Email : jhdunnett@aol.com |
Susanne A. Hermans |
