NEWS RELEASE |
On
Following announcement of the Zijin Transaction, the directors independent of IAMGOLD, being
This included a review of the terms of a share pledge agreement and hypothec on moveable property granted in April, 2003 in favour of predecessor holder of the Participation Right Agreement over certain of the shares of
At its meeting held on
The Special Committee reviewed the history of the creation of the Participation Right Agreement and the Rosebel Security.
The Special Committee also reviewed (i) parts (including the text of publicly-redacted provisions) of the terms of the
The Special Committee reported to the Board of Directors of the Company its recommendation regarding the Confirmation and Consent on
Subsequent to the presentation of its report, the Special Committee engaged in further discussions and correspondence with IAMGOLD, represented by its Acting Chief Financial Officer and Acting Chief Executive Officer.
As a result of such discussions and correspondence, the Company’s circumstances are as follows:
(i) The Special Committee was formally advised of IAMGOLD’s intentions regarding the ongoing operation of the Rosebel Gold Mine should the Zijin Transaction not be completed, including that IAMGOLD will be forced to reallocate resources away from the Rosebel Gold Mine, potentially placing the Rosebel Gold Mine operations on care and maintenance, or otherwise significantly reducing operations, resulting in an indefinite suspension of any revenue stream from the Participation Right Agreement.
This represents a real risk to the Company as the
There is uncertainty regarding the exact intentions of IAMGOLD should the Zijin Transaction not be completed including the pure and simple abandonment of the Rosebel Gold Mine which has been subject to a transaction value of more than
(ii) The Special Committee was also advised by IAMGOLD of IAMGOLD’s views that completion of the Zijin Transaction would result in the operations of the Rosebel Gold Mine being carried on by a new, financially stronger, operator with a stated plan to accelerate production and, thus, payment of the Company’s entitlements under the Participation Right Agreement.
(iii) The Confirmation and Consent creates a risk for the Company: The payment under the Participation Right Agreement shall remain an unsecured obligation of IAMGOLD and the Company will therefore depend solely on the financial capacity of IAMGOLD, even if the operations of the Rosebel Gold Mine continue and the production should have entitled the Company to receive payment. IAMGOLD confirmed in this regards that it was not in capacity to grant to the Company alternate security due to its banking arrangements and covenants.
The Special Committee is of the opinion that there is no straightforward solution to address the issues and risks raised. The Special Committee is also of the opinion that the situation of the Company would have been different should IAMGOLD and/or the directors and officers of the Company (part of IAMGOLD's management), having knowledge of the contemplated transaction, had involved the Company’s Board of Directors in the discussions and, in any event, prior to entering into any definitive agreement regarding the Zijin Transaction.
The Special Committee has considered the understanding and agreement of IAMGOLD (the “IAMGOLD Understanding”), including the interpretation of certain provisions of the Participation Right Agreement, and the appointment of an officer or consultant directly engaged by the Company to pursue corporate development opportunities on behalf of the Company.
In light of the forgoing considerations, and the negotiations undertaken by the Special Committee with IAMGOLD, the Special Committee recommends that the Board of Directors of the Company approve the execution and delivery of the Confirmation and Consent, including the release of the Rosebel Security.
At its meeting held on
The Company is relying on the exemption from the requirement for minority shareholder approval under Multilateral Instrument 61-101 – Protection of Minority Securityholders in Special Transactions (“MI 61-101”) of the Confirmation and Consent set out in section 5.7(e) of MI 61-101 on the basis that (a) in light of the anticipated material detrimental effect on the operations of the Rosebel Gold Mine and the resulting loss of the Company’s revenue stream under the Participation Right Agreement should the Zijin Transaction not be completed, the Company would be in serious financial difficulty; (b) the execution and delivery of the Confirmation and Consent, and the matters agreed with IAMGOLD under the IAMGOLD Understanding are designed to improve the financial position of the Company; and (c) taken as a whole the execution and delivery of the Confirmation and Consent and the matters agreed with IAMGOLD as set forth in the IAMGOLD Understanding are reasonable in the circumstances faced by the Company.
About EURO
EURO is a French company whose main assets are a royalty on the Rosebel Gold Mine production in Suriname (the “Rosebel Royalty”), a royalty on the Paul Isnard concessions, a silver stream from a subsidiary of Orezone Gold Corporation (“Orezone”) and marketable securities. On
The royalty on the Paul Isnard concessions is a net smelter returns production royalty on future production of the Paul Isnard concessions and an area of interest surrounding the concessions in
EURO has approximately 62.5 million shares outstanding. At
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
Additional information relating to EURO Ressources S.A. is available on SEDAR at www.sedar.com. Further requests for information should be addressed to:
Directeur Général Tel: +1 450 677 0040 Email: tbarry@euroressources.net | Directeur Général Délégué Tel: +1 450 677 0040 Email : shalle@euroressources.net |
Attachment
- PR 23-01EN 2023 02
01 EURO - News release - Report of the Special Committee v2
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