The Sigma o/p closure is probably not a typical closure for a mine location, as the pit itself will continue to have a life (post o/p mining) and will need to act as a “catch basin” for u/g mining during the early stages (first couple/few years). As such, there may have been lengthy discussions between the BCSC and Century’s auditors/Century’s management with regards to the timing of the $23M write-down. From the auditor's perspective, it would simply be a matter of getting it right (from a GAAP accounting standpoint) - this supersedes whatever viewpoint the BCSC may have. Of course, it would be in everyone’s interests to both educate and satisfy the BCSC as best they can.
From an investor’s perspective, it is obviously better to perform a complete one time write-down in Q4’07 (of the entire $23M), and then move forward with only future expenditures from u/g. However, that’s not how it works either. It’s not a matter of what is good for shareholders at certain points in time. It’s about establishing whether the work done on the pit in the past (and the associated past expenditures, i.e. deferred stripping costs) will provide a benefit to underground mining in the future. Everything goes back to GAAP (Generally Accepted Account Principles). The GAAP principle relevant now (and also when companies choose to defer costs in the first place) is the Matching Principle. The auditors need to objectively establish if the current (cleared) status of the pit will provide benefits (i.e. less transportation expenditures) for underground mining. If the answer is “yes” then some of the Sigma capitalized costs should be released into the Income Statement (P&L) in future periods, in order to match the u/g revenues (and subsequent profits) that are benefiting from the Sigma open work that was performed in 2005, 2006 and 2007.
The Sigma pit will act as a key access and exit point, and as a crucial transportation area for u/g mining over (at least) the next 2 to 3 years:
*the haulage drift (primary access/exit point from u/g for the next 2-3 yrs) is directly in the Sigma o/p – the ore will be transported through the pit in order to reach the mill for processing (pit is vital for transportation purposes in the early years)
*the portal to access the Bedard Dyke on the Sigma pit wall – the ore will be transported through the pit, to the mill
Again, in my view, it is not about what is best for investors or what is best for the BCSC, but rather it’s about what fairly matches the benefits that will be gained from utilizing the Sigma pit as a “catch basin” and a key transportation route with future revenues / profits that will be generated from entire u/g operation.
I have no clue if this is what was discussed by the parties involved. I also have no clue if these discussions have truly delayed the normal course audit process. However, I am suggesting that this is a possibility. I am also suggesting that these are key points I would have brought up if I was involved in such meetings, as I see them as being essential to ensuring GAAP standards are being considered.
Either way, my guess is that the majority of the $23M will be released in 2007 as the core functionality of the Sigma o/p is no more.
Wednesday, April 30, 2008
Tuesday, April 29, 2008
Revised NI 43-101 rpt for Lamaque
It looks good. All of the reserves and resources are still intact. The BCSC change was strictly cosmetic. They wanted the mine life to be strictly based on the 1.1M in reserves. Everyone knows that (if a company can get 1.1M in reserves up front) then over the next 8 years of already established mine life the chances are excellent to getting some (if not a lot) of the remaining 3.5M ounces into reserves also.
I hope the link works, otherwise people can check their news sources for it. Here it is to the NR:
http://www.newswire.ca/en/releases/archive/April2008/29/c2979.html
I hope the link works, otherwise people can check their news sources for it. Here it is to the NR:
http://www.newswire.ca/en/releases/archive/April2008/29/c2979.html
43-101s fine w/ BCSC & short delay with financials
All NI 43-101 Technical Report Issues Resolved with BCSC
BLAINE, WA, April 29 /CNW/ - Century Mining Corporation (CMM: TSX-V)
today announced that its year-end 2007 financial statements will be delayed
for a short period of time because the Company's management has been dealing
with the issues surrounding the concerns of the British Columbia Securities
Commission (the "BCSC"), resulting in the Company's normal course audit
progressing slower than expected. As announced in a separate news release
today, the BCSC has today accepted the revised Lamaque NI 43-101 report, and
on April 16, 2008 the San Juan NI 43-101 report was accepted.
Margaret Kent, President and CEO, said, "We are working on all issues
raised by the BCSC. All issues surrounding the NI 43-101 reports have been
resolved, and we hope to have everything finalized in the near-term. In the
interim, this delay will not affect trading of Century's shares, but the Management Cease Trade Order will remain in effect."
BLAINE, WA, April 29 /CNW/ - Century Mining Corporation (CMM: TSX-V)
today announced that its year-end 2007 financial statements will be delayed
for a short period of time because the Company's management has been dealing
with the issues surrounding the concerns of the British Columbia Securities
Commission (the "BCSC"), resulting in the Company's normal course audit
progressing slower than expected. As announced in a separate news release
today, the BCSC has today accepted the revised Lamaque NI 43-101 report, and
on April 16, 2008 the San Juan NI 43-101 report was accepted.
Margaret Kent, President and CEO, said, "We are working on all issues
raised by the BCSC. All issues surrounding the NI 43-101 reports have been
resolved, and we hope to have everything finalized in the near-term. In the
interim, this delay will not affect trading of Century's shares, but the Management Cease Trade Order will remain in effect."
Monday, April 28, 2008
Quiet Before The Storm?
It's been pretty quiet here since the last news about the SJ 43-101 report. That should change this week as more news is expected.
We will certainly get the Q4 financials no later than tomorrow because that is the deadline for the 2007 annual financials. Those won't be pretty because we already know that they will include a writedown of $23 million for the Sigma Pit operations, but there will be Q4 hedge losses of somewhere around $4 million and operational losses for sure. All of this should be built into the share price because for the most part it is money already spent and reverses earlier operating profits.
Perhaps the company wants to get the annual financials out of the way before issuing any potentially good news. We should hear soon about the status of the PP, the MCTO, deferral of Peru payments and Lamaque operations.
Could there be management changes coming as well? Poll voting has slowed to a trickle, but the overwhelming consensus seems to be that PK should resign. Wega obviously wasn't selling to drive the price lower for a takeover bid, else they would have made a move by now. Perhaps they were insisting on other changes and therefore must have been promised something to suddenly stop selling after driving the price down to 16 cents.
As I write this the Century website is down. Are there changes to the website coming?
Whatever is happening behind the scenes, we need something to re-ignite investor interest in the company. Simply being woefully undervalued isn't enough it seems.
To encourage more discussion, I've lifted the restriction that comments can only be posted by those with a Google account and now anyone can post without having to log in. If the posting of comments privilege is abused, comments will be moderated before they appear on the blog.
We will certainly get the Q4 financials no later than tomorrow because that is the deadline for the 2007 annual financials. Those won't be pretty because we already know that they will include a writedown of $23 million for the Sigma Pit operations, but there will be Q4 hedge losses of somewhere around $4 million and operational losses for sure. All of this should be built into the share price because for the most part it is money already spent and reverses earlier operating profits.
Perhaps the company wants to get the annual financials out of the way before issuing any potentially good news. We should hear soon about the status of the PP, the MCTO, deferral of Peru payments and Lamaque operations.
Could there be management changes coming as well? Poll voting has slowed to a trickle, but the overwhelming consensus seems to be that PK should resign. Wega obviously wasn't selling to drive the price lower for a takeover bid, else they would have made a move by now. Perhaps they were insisting on other changes and therefore must have been promised something to suddenly stop selling after driving the price down to 16 cents.
As I write this the Century website is down. Are there changes to the website coming?
Whatever is happening behind the scenes, we need something to re-ignite investor interest in the company. Simply being woefully undervalued isn't enough it seems.
To encourage more discussion, I've lifted the restriction that comments can only be posted by those with a Google account and now anyone can post without having to log in. If the posting of comments privilege is abused, comments will be moderated before they appear on the blog.
Tuesday, April 22, 2008
The Poll Results
The online poll is very close to 100 visitors who have voted in favor of Peggy's immediate resignation from Century Mining. Is a prize awarded to the 100th visitor who votes for her to resign? The poll sure indicates that shareholders aren't happy with her. The AGM is only five weeks from now.
Sunday, April 20, 2008
Wega Files Insider Trading Report
The latest Wega sales of Century shares have been filed. You can view them here:
http://www.canadianinsider.com/coReport/allTransactions.php?ticker=cmm
Since Feb. 1 Wega has sold a total of 2,700,500 shares, but none the past 2 trading days. They still have 22.8 million.
http://www.canadianinsider.com/coReport/allTransactions.php?ticker=cmm
Since Feb. 1 Wega has sold a total of 2,700,500 shares, but none the past 2 trading days. They still have 22.8 million.
Saturday, April 19, 2008
San Juan Tech Rpt – first thoughts
The Tech Rpt is filed on SEDAR. I have only taken a quick glance thus far, but here are some immediate thoughts.
For the calculation of SJ 43-101 reserves a 4.5 g/t cut-off grade was used, which appears to be substantially more conservative relative to actual mining (2007 and historical – 3 g/t cut-off previously reported), as well as go forward mine plans.
SJ Tech Rpt ’08, Pg 97: “The mine uses a cut-off grade of 4.2 g/t gold that covers all the costs including exploration, refurbishment and increasing production levels. The reserves have been calculated using a slightly more conservative cut-off grade of 4.5 g/t Au.”
Pg 97: “If the cut-off grade is set to cover operating costs only, then a cut-off of 2.7 g/t at an 85% recovery would be appropriate at a US$800 gold price. Recent rapid increases in the price of gold have made either cut-off grade conservative.”
P&P reserves – 653,445 tonnes @ 8.87 g/t = 186,316 ounces, however SJ 43-101 Project Economics schedule (pg 122) uses a grade of 6.34 g/t. The company expects to see grade dilution of 40% (pg 130). As such, they have increased tonnes to be mined (5 yr life) from 653,445 to 914,823 (pg 130 and 122). This suggests to me that they are planning to mine a significant number of ounces with g/t grading between 2.7 and 4.5. My guess is that these ounces would not have been included in the SJ 43-101 resource count due to the 4.5 g/t cut-off.
This diluted mining method is most likely consistent with actual mining in 2007, as the 2007 average grade came in at 5.55 g/t (pg 87).
Working under this theory:
*467,062 tonnes @ 8.87 g/t (counted in 43-101)
*447,761 tonnes @ 3.70 g/t (potentially non-counted in 43-101)
That would need to be the profile in order to average 6.34 g/t, while mining 914,823 tonnes (instead of 653,445) and deliver 186,316 ounces (156,449 ounces after using an 84% recovery rate, pg 122), over the first 5 years of mine life.
This potentially means that the company is planning to mine 53,500 (3.7 g/t) ounces (that are not counted in 43-101) to supplement the 8.87 g/t reserves (over the next 5 yrs). It could also mean that 186,383 tonnes (653,445 – 467,062) of the 8.87 g/t P&P reserves might be left over, to extend mine life for another 2 years, as follows:
*186,383 tonnes @ 8.87 g/t (counted in 43-101)
*178,681 tonnes @ 3.70 g/t (non-counted in 43-101)
The financial economics of the extra 2 years have not been factored into the company’s model.
If this theory is correct then using the 3.7 g/t ore could potentially allow for an additional 75,000 mineable ounces (potentially not counted in 43-101), and potentially extend mine life for 2 years.
However, it is only an interpretation and a theory. This is only for discussion purposes. The company’s actual mine plan may be completely different from this interpretation. I only have access to the published data.
Let me know if there are any other interpretations.
For the calculation of SJ 43-101 reserves a 4.5 g/t cut-off grade was used, which appears to be substantially more conservative relative to actual mining (2007 and historical – 3 g/t cut-off previously reported), as well as go forward mine plans.
SJ Tech Rpt ’08, Pg 97: “The mine uses a cut-off grade of 4.2 g/t gold that covers all the costs including exploration, refurbishment and increasing production levels. The reserves have been calculated using a slightly more conservative cut-off grade of 4.5 g/t Au.”
Pg 97: “If the cut-off grade is set to cover operating costs only, then a cut-off of 2.7 g/t at an 85% recovery would be appropriate at a US$800 gold price. Recent rapid increases in the price of gold have made either cut-off grade conservative.”
P&P reserves – 653,445 tonnes @ 8.87 g/t = 186,316 ounces, however SJ 43-101 Project Economics schedule (pg 122) uses a grade of 6.34 g/t. The company expects to see grade dilution of 40% (pg 130). As such, they have increased tonnes to be mined (5 yr life) from 653,445 to 914,823 (pg 130 and 122). This suggests to me that they are planning to mine a significant number of ounces with g/t grading between 2.7 and 4.5. My guess is that these ounces would not have been included in the SJ 43-101 resource count due to the 4.5 g/t cut-off.
This diluted mining method is most likely consistent with actual mining in 2007, as the 2007 average grade came in at 5.55 g/t (pg 87).
Working under this theory:
*467,062 tonnes @ 8.87 g/t (counted in 43-101)
*447,761 tonnes @ 3.70 g/t (potentially non-counted in 43-101)
That would need to be the profile in order to average 6.34 g/t, while mining 914,823 tonnes (instead of 653,445) and deliver 186,316 ounces (156,449 ounces after using an 84% recovery rate, pg 122), over the first 5 years of mine life.
This potentially means that the company is planning to mine 53,500 (3.7 g/t) ounces (that are not counted in 43-101) to supplement the 8.87 g/t reserves (over the next 5 yrs). It could also mean that 186,383 tonnes (653,445 – 467,062) of the 8.87 g/t P&P reserves might be left over, to extend mine life for another 2 years, as follows:
*186,383 tonnes @ 8.87 g/t (counted in 43-101)
*178,681 tonnes @ 3.70 g/t (non-counted in 43-101)
The financial economics of the extra 2 years have not been factored into the company’s model.
If this theory is correct then using the 3.7 g/t ore could potentially allow for an additional 75,000 mineable ounces (potentially not counted in 43-101), and potentially extend mine life for 2 years.
However, it is only an interpretation and a theory. This is only for discussion purposes. The company’s actual mine plan may be completely different from this interpretation. I only have access to the published data.
Let me know if there are any other interpretations.
Wednesday, April 16, 2008
70% - blog viewers want change
Based on the poll results, it is clear that a significant percentage of the blog viewers want immediate change to top level management.
Can you blame them? We've gone from $1.89 in share price in 2006 to a low $.16 today. The company can spin it all they want, with all the excuses in the world, but the fact of the matter is that a lot of long-term Century Mining supporters/shareholders of the company are down materially on this investment. There needs to be accountability. There needs to be compassion. There needs to be leadership.
A true leader would do the things that are in the best interests of shareholders right now.
Can you blame them? We've gone from $1.89 in share price in 2006 to a low $.16 today. The company can spin it all they want, with all the excuses in the world, but the fact of the matter is that a lot of long-term Century Mining supporters/shareholders of the company are down materially on this investment. There needs to be accountability. There needs to be compassion. There needs to be leadership.
A true leader would do the things that are in the best interests of shareholders right now.
Update of "Comparison of Gold Cos."
I've updated the spreadsheet "Comparison of Gold Cos." with today's closing prices and CMM's updated 43-101 reserves and resources. I have not included anything for Rosario.
In that spreadsheet I have arbitrarily defined a Gold Oz. as reserves + 60% of measured and indicated resources + 40% of inferred resources. This conservatively assumes that eventually 60% of M&I resources and 40% of inferred resources will be converted into reserves.
Of the 20 companies profiled:
Avg market cap/gold oz = $177.10
CMM's market cap/gold oz = $10.08
Avg market cap/reserve oz = $326.01
CMM's market cap/reserve oz = $22.20
Avg market cap/M&I resource oz = $175.00
CMM's market cap/M&I resource oz = $14.95
CMM's share price could be 10 times what it is and it would still be valued at less than the average of 19 of its peers.
In that spreadsheet I have arbitrarily defined a Gold Oz. as reserves + 60% of measured and indicated resources + 40% of inferred resources. This conservatively assumes that eventually 60% of M&I resources and 40% of inferred resources will be converted into reserves.
Of the 20 companies profiled:
Avg market cap/gold oz = $177.10
CMM's market cap/gold oz = $10.08
Avg market cap/reserve oz = $326.01
CMM's market cap/reserve oz = $22.20
Avg market cap/M&I resource oz = $175.00
CMM's market cap/M&I resource oz = $14.95
CMM's share price could be 10 times what it is and it would still be valued at less than the average of 19 of its peers.
ACCORDING TO BRENT
Wega applied to be declassified as an insider as they say they have access
to no insider information... and it was granted and they can trade.
SJ 43-101 should be out today, tommorrow at the latest. Lamaque
update to follow soon.
to no insider information... and it was granted and they can trade.
SJ 43-101 should be out today, tommorrow at the latest. Lamaque
update to follow soon.
Tuesday, April 15, 2008
Countdown to April 17th
Will April 17th date be realized or unrealized?
March 25th NR: "Century announced today that the Company will provide a comprehensive update on operations in Peru concurrent with the announcement of the NI 43-101 technical report for the San Juan Gold Mine, which is expected on or before April 17."
I encourage people to express their thoughts in the comment section of this post over the next couple of days, as the deadline approaches. People should also comment on the NR (if/when released).
As a reminder, non-blog members can make a comment in the comment section. "Viewers may however leave comments on any post if they have a Google username." I believe a Google username is simple to get. To become a blog member (to make your own posts) you can contact Carib. "If you wish to become a Blog Member send an email request to centurycarib@gmail.com."
Based on the pole question, there seems to be a lot of viewers to the blog. Personally, it would be good to read some comments from those viewers also, especially in these difficult times for Century Mining shareholders. I really do encourage people to express themselves (in an non-offensive manner of course). Here is mine: A $.19 share price situation is something that is hard to stomach, swallow, comprehend, embrace, accept,.....
March 25th NR: "Century announced today that the Company will provide a comprehensive update on operations in Peru concurrent with the announcement of the NI 43-101 technical report for the San Juan Gold Mine, which is expected on or before April 17."
I encourage people to express their thoughts in the comment section of this post over the next couple of days, as the deadline approaches. People should also comment on the NR (if/when released).
As a reminder, non-blog members can make a comment in the comment section. "Viewers may however leave comments on any post if they have a Google username." I believe a Google username is simple to get. To become a blog member (to make your own posts) you can contact Carib. "If you wish to become a Blog Member send an email request to centurycarib@gmail.com."
Based on the pole question, there seems to be a lot of viewers to the blog. Personally, it would be good to read some comments from those viewers also, especially in these difficult times for Century Mining shareholders. I really do encourage people to express themselves (in an non-offensive manner of course). Here is mine: A $.19 share price situation is something that is hard to stomach, swallow, comprehend, embrace, accept,.....
Wega taking a break today, or
are they now selling under anonymous. I hope the forced break was due to the BCSC taking action (with Wega being an insider and all). However, in some recent days I've notice RBC/Wega not getting going (with their sales) until it was close to noon. Let's see what happens today.
Anonymous has sold most of the 60,500 shares so far today - I haven't noticed any by RBC.
Anonymous has sold most of the 60,500 shares so far today - I haven't noticed any by RBC.
Monday, April 14, 2008
Century Mining sues Stockhouse poster for defamation
It's all GoldenBull's fault! LOL!
Century Mining Corp (C:CMM)
Shares Issued 162,965,695
Last Close 4/11/2008 $0.20
Monday April 14 2008 - Street Wire
by Mike Caswell
Century Mining Corp. and its president, Margaret Kent, are suing a Stockhouse forum poster for defamation. The company claims a poster using the name TheGoldenBull placed messages on the forum that mean Ms. Kent is a liar, has committed securities fraud, and is physically unattractive and stupid, among other things.
The suit was filed in B.C. Supreme Court on April, 10, 2008. It identifies the plaintiffs as Century and Ms. Kent. The company says it does not know the defendant's true name, and it only names him as John Doe, aka TheGoldenBull, in the suit.
According to Century's suit, TheGoldenBull published defamatory posts from Sept. 27, 2006, to Feb. 20, 2008, on Stockhouse. The company includes 15 recent ones in its suit, four of which are below.
Dec. 11, 2007, post
One, posted on Dec. 11, 2007, reads as follows:
"So....what you are basically saying is that the equity raising, done at 40cents, was used to cover the hedging losses? My god, what a joke for a company you have here.
"Well, the facts are, the dumb cow hedged about 30,000 ounces of future production to raise about half a million dollars, which she has already spent. The unrealized loss on 30,000 ounces is over $3m, do the math.
...
"You have to hand it to the market, its Always right. The pumpers are struggling like mad to keep this POS above 30 cents. They will fail, the market is always right. 20 cents or lower by x-mas, it will happen.
"As Century is being run into the ground by this stupid hag ALL might argue a cf multiple of 10x is too aggressive, especially given the precarious cash situation, run down operations, missed targets, executive staff flight, massive payments due for property payments, retrenchments, leases on idle equipment, underwater hedge book, massive requirement for capex ...etc,etc,etc......
"A multiple of 5x cf is probably more realistic, and that gives you a share price of 10cents, or one dime (good call Canon5). Personally, I wouldn't even pay 10 cents for this swirling turd."
Jan. 21, 2008, post
Century also complains that the poster said the company is a related party to the Sanchez Paredes group. Although the suit does not directly explain why an association with the group is defamatory, a Jan. 21, 2008, post that it quotes repeatedly refers to something called "S-P." It came as Century was in the midst of its attempted takeover of Sulliden Exploration Inc.
"Hoppy,
"Poor CMM Kitty, kerrrr SPLAT!!!!!!!
"Do they get to look at only CMM's books or can they look at the related parties in the transaction, S-P, etc?
"S-P's books must be fun to read, let's see what is the accounting treatment for an (alleged) coke shipment seized by the DEA?? Alleged bribes to judges, politicians, police, and hit men; is this treated as an expense or a future receivable? Boy, Century is really going to have their hands full merging these two companies. Lol.
"But seriously, the real reason CMM is falling like a turd from a pigeon is that they appear to be out of cash. I believe they said (last cc) they had about $1.5m, which when you subtract the $1m per quarter they have to pay their (alleged!) coke dealing partners, leaves about 36 hours of working capital in the old kitty. Looks like another private placement on the way.
...
"Please do your own due diligence, and remember the S-P group is only alleged to be coke dealers and money launderers, as reported by Peru's top newspaper and investigating journalist and must be assumed to be innocent until convicted!
"The Golden Bull!"
Jan. 22, 2008, post
The suit quotes several other posts of a similar flavour, one referring to "inconsistent information spewed forth by the old fat sow," and another attacking the company's hedging position, which it says was 24,000 ounces of gold at less than $700 per ounce.
The posts also continued to speculate that the company will need cash soon.
"Get ready for the next unit placement. Peg will issue shares at any price, even down to a penny; she does not give a toss about ANY of you small shareholders. As long as her insider buddies get the insider track to short in advance of the announcement, all is A-OK for her and her insider buddies," reads a Jan. 22, 2008, post.
Another post, on Jan. 24, 2008, continued in the same vein.
"Pollyanna,
"You should really do your posting BEFORE you take your medications.
"And now, when old Pig fails to pay up her $1m per quarter to these S-P drug runners that she put your company in bed with she will have a fine mess on her hands. They don't seem like the type that will take IOU's- more like fingers.
"Again, have a look at the thorough and objective report from Rosens on your blighted company. Good god. How on earth CMM are even allowed to trade is a miracle. In fact if the TSX was doing its job Century would be suspended from trading without further notice.
"And one more point, the hedge book is less than $700, not $740 and 24,000 is more than 1 years production.
"GB"
Feb. 1, 2008, post
Another post, on Feb. 1, 2008, speculates on production at the company's San Juan mine after a change of the author of its National Instrument 43-101 report.
"San Juan is reportedly doing just about 12,000 ounces per year, annualized from one good quarter. They were desperate for cash, so what do you do when you are desperate for cash? You cut back on development and high grade the place. A la Sigma. We will see in about 4 month's time.....
"And you say (or Ms reliable Peggy (lol) says...) they will increase production at SJ (and SL!) 100% in less than 12 months. December let me tell you a thing about mining. Even good, well run companies with real management and execution ability have trouble increasing production by that amount in that little time. Pure fantasy - It ain't gonna happen. When has old Peg increased production at any of her operations? ever?"
The post then gets into the company's Lamaque mine in Quebec (which was once owned by Placer Dome Canada Ltd.).
"So why did the original owner [leave] all these many years of ounces in the reserve category? Well, the most likely answer is because they were un-minable, tied up into pillars, etc. Placer employees did not mine these ounces and they ARE professional miners.
"And how would Peg even know? The place is still under water, they don't have the permit, or the water is too polluted to release without building an expensive treatment plant."
"And the mine plan with the capital costs and the NPV story. Well, it was done in a big hurry, in-house with no outside verification. Guaranteed, the numbers came right out of her a$$. Classic Peggy bait and switch- she will have a new story in six months."
Additional posts on Feb. 19, 2008, and Feb. 20, 2008, contained similar statements. One on Feb. 18, 2008, states that cheap unit private placements are reserved for "insider buddies" who create rumours to pump the stock on bulletin boards, among other things.
Century and Ms. Kent complain that the postings mean that Ms. Kent is incompetent and has committed securities fraud, among other things. They also allegedly mean that Century is not a worthwhile investment, that Ms. Kent has exploited the company's low share price for personal gain and that Century's management cannot be trusted.
Century complains that the defendant knew that each of the posts was false, and published them with malice. Many people have viewed the posts, and as of the date of the lawsuit, TheGoldenBull continues to post false and defamatory messages, the company claims.
As a result of the posts, Ms. Kent and Century say they have suffered damage to their reputations, loss and expense.
They are seeking general, special and punitive damages, plus a permanent injunction restraining the defendant from publishing further statements that are defamatory of Century and Ms. Kent.
The lawsuit was filed on the company's behalf by Dianne Prupas.
Century closed Friday at 20 cents, down a penny.
© 2008 Canjex Publishing Ltd.
Century Mining Corp (C:CMM)
Shares Issued 162,965,695
Last Close 4/11/2008 $0.20
Monday April 14 2008 - Street Wire
by Mike Caswell
Century Mining Corp. and its president, Margaret Kent, are suing a Stockhouse forum poster for defamation. The company claims a poster using the name TheGoldenBull placed messages on the forum that mean Ms. Kent is a liar, has committed securities fraud, and is physically unattractive and stupid, among other things.
The suit was filed in B.C. Supreme Court on April, 10, 2008. It identifies the plaintiffs as Century and Ms. Kent. The company says it does not know the defendant's true name, and it only names him as John Doe, aka TheGoldenBull, in the suit.
According to Century's suit, TheGoldenBull published defamatory posts from Sept. 27, 2006, to Feb. 20, 2008, on Stockhouse. The company includes 15 recent ones in its suit, four of which are below.
Dec. 11, 2007, post
One, posted on Dec. 11, 2007, reads as follows:
"So....what you are basically saying is that the equity raising, done at 40cents, was used to cover the hedging losses? My god, what a joke for a company you have here.
"Well, the facts are, the dumb cow hedged about 30,000 ounces of future production to raise about half a million dollars, which she has already spent. The unrealized loss on 30,000 ounces is over $3m, do the math.
...
"You have to hand it to the market, its Always right. The pumpers are struggling like mad to keep this POS above 30 cents. They will fail, the market is always right. 20 cents or lower by x-mas, it will happen.
"As Century is being run into the ground by this stupid hag ALL might argue a cf multiple of 10x is too aggressive, especially given the precarious cash situation, run down operations, missed targets, executive staff flight, massive payments due for property payments, retrenchments, leases on idle equipment, underwater hedge book, massive requirement for capex ...etc,etc,etc......
"A multiple of 5x cf is probably more realistic, and that gives you a share price of 10cents, or one dime (good call Canon5). Personally, I wouldn't even pay 10 cents for this swirling turd."
Jan. 21, 2008, post
Century also complains that the poster said the company is a related party to the Sanchez Paredes group. Although the suit does not directly explain why an association with the group is defamatory, a Jan. 21, 2008, post that it quotes repeatedly refers to something called "S-P." It came as Century was in the midst of its attempted takeover of Sulliden Exploration Inc.
"Hoppy,
"Poor CMM Kitty, kerrrr SPLAT!!!!!!!
"Do they get to look at only CMM's books or can they look at the related parties in the transaction, S-P, etc?
"S-P's books must be fun to read, let's see what is the accounting treatment for an (alleged) coke shipment seized by the DEA?? Alleged bribes to judges, politicians, police, and hit men; is this treated as an expense or a future receivable? Boy, Century is really going to have their hands full merging these two companies. Lol.
"But seriously, the real reason CMM is falling like a turd from a pigeon is that they appear to be out of cash. I believe they said (last cc) they had about $1.5m, which when you subtract the $1m per quarter they have to pay their (alleged!) coke dealing partners, leaves about 36 hours of working capital in the old kitty. Looks like another private placement on the way.
...
"Please do your own due diligence, and remember the S-P group is only alleged to be coke dealers and money launderers, as reported by Peru's top newspaper and investigating journalist and must be assumed to be innocent until convicted!
"The Golden Bull!"
Jan. 22, 2008, post
The suit quotes several other posts of a similar flavour, one referring to "inconsistent information spewed forth by the old fat sow," and another attacking the company's hedging position, which it says was 24,000 ounces of gold at less than $700 per ounce.
The posts also continued to speculate that the company will need cash soon.
"Get ready for the next unit placement. Peg will issue shares at any price, even down to a penny; she does not give a toss about ANY of you small shareholders. As long as her insider buddies get the insider track to short in advance of the announcement, all is A-OK for her and her insider buddies," reads a Jan. 22, 2008, post.
Another post, on Jan. 24, 2008, continued in the same vein.
"Pollyanna,
"You should really do your posting BEFORE you take your medications.
"And now, when old Pig fails to pay up her $1m per quarter to these S-P drug runners that she put your company in bed with she will have a fine mess on her hands. They don't seem like the type that will take IOU's- more like fingers.
"Again, have a look at the thorough and objective report from Rosens on your blighted company. Good god. How on earth CMM are even allowed to trade is a miracle. In fact if the TSX was doing its job Century would be suspended from trading without further notice.
"And one more point, the hedge book is less than $700, not $740 and 24,000 is more than 1 years production.
"GB"
Feb. 1, 2008, post
Another post, on Feb. 1, 2008, speculates on production at the company's San Juan mine after a change of the author of its National Instrument 43-101 report.
"San Juan is reportedly doing just about 12,000 ounces per year, annualized from one good quarter. They were desperate for cash, so what do you do when you are desperate for cash? You cut back on development and high grade the place. A la Sigma. We will see in about 4 month's time.....
"And you say (or Ms reliable Peggy (lol) says...) they will increase production at SJ (and SL!) 100% in less than 12 months. December let me tell you a thing about mining. Even good, well run companies with real management and execution ability have trouble increasing production by that amount in that little time. Pure fantasy - It ain't gonna happen. When has old Peg increased production at any of her operations? ever?"
The post then gets into the company's Lamaque mine in Quebec (which was once owned by Placer Dome Canada Ltd.).
"So why did the original owner [leave] all these many years of ounces in the reserve category? Well, the most likely answer is because they were un-minable, tied up into pillars, etc. Placer employees did not mine these ounces and they ARE professional miners.
"And how would Peg even know? The place is still under water, they don't have the permit, or the water is too polluted to release without building an expensive treatment plant."
"And the mine plan with the capital costs and the NPV story. Well, it was done in a big hurry, in-house with no outside verification. Guaranteed, the numbers came right out of her a$$. Classic Peggy bait and switch- she will have a new story in six months."
Additional posts on Feb. 19, 2008, and Feb. 20, 2008, contained similar statements. One on Feb. 18, 2008, states that cheap unit private placements are reserved for "insider buddies" who create rumours to pump the stock on bulletin boards, among other things.
Century and Ms. Kent complain that the postings mean that Ms. Kent is incompetent and has committed securities fraud, among other things. They also allegedly mean that Century is not a worthwhile investment, that Ms. Kent has exploited the company's low share price for personal gain and that Century's management cannot be trusted.
Century complains that the defendant knew that each of the posts was false, and published them with malice. Many people have viewed the posts, and as of the date of the lawsuit, TheGoldenBull continues to post false and defamatory messages, the company claims.
As a result of the posts, Ms. Kent and Century say they have suffered damage to their reputations, loss and expense.
They are seeking general, special and punitive damages, plus a permanent injunction restraining the defendant from publishing further statements that are defamatory of Century and Ms. Kent.
The lawsuit was filed on the company's behalf by Dianne Prupas.
Century closed Friday at 20 cents, down a penny.
© 2008 Canjex Publishing Ltd.
Tic Toc,,,,,,,
April 17th is fast approaching. The SJ Tech Report et al. CMM needs to be released on/before the April 17th otherwise PK MUST GO. She cannot be trusted! She has said too many things ( fault of hers???? don't know don't care) which have not come to fruition. This is a total loss of credibility. If her or her subordinates do not meet this deadline then there will be no turning back for me. I will join the Wega selling and never look back again. With her at the helm this company has only one way to go, bankruptcy! She spends anything, everything and even what she borrows. Wega has called her on her shinanagans. They have the power and the wear withall to do it. Unfortunately, the retailers get done in again.
She kind of reminds me of the US President. Look the mess they are in.
Sorry to be so negative, but this person has extinguished every last flicker of hope I ever had for this company. she must go!!!!!!!!!!!!
She kind of reminds me of the US President. Look the mess they are in.
Sorry to be so negative, but this person has extinguished every last flicker of hope I ever had for this company. she must go!!!!!!!!!!!!
Saturday, April 12, 2008
San Juan's market value (via another company)
Please note that it is not my intention to knock Sierra Minerals (TSX:SIM). I wouldn't doubt that they're a decent enough little company. Few of their shares ever trade, but their management has done a much better job in protecting shareholder value than Century's management has done for its shareholders.
Nevertheless, let's take a look at Sierra's pure data relative to San Juan (alone).
Sierra has a current market cap of $27,653,700. It's safe to say that Century's shareholders are receiving ZERO value for it's San Juan asset.
Sierra Minerals:
*Production ounces in 2007 = 17,606
*Cash cost per oz in 2007 = $548 US
*43-101 ounces in ground = no resource count as yet
*Planned production ounces in 2008 = 20,000 (at least it appears to be)
*Operating location = Mexico
San Juan (excluding the producing Rosario, other the potential Peruvian spin-out assets):
*Production ounces in 2007 = 12,000 (assumed - based on 8,911 after 3 quarters)
*Cash cost per oz in 2007 (this is a MAJOR performance advantage for SJ) = $323 US (average after 3 quarters)
*43-101 ounces in ground = no resource count as yet
*Planned production ounces in 2008 = 20,000
*Operating location = Peru
From an asset fundamental perspective (management not part of the equation), I do not see anything that Sierra has that San Juan would not have as a stand alone company.
Production05
Nevertheless, let's take a look at Sierra's pure data relative to San Juan (alone).
Sierra has a current market cap of $27,653,700. It's safe to say that Century's shareholders are receiving ZERO value for it's San Juan asset.
Sierra Minerals:
*Production ounces in 2007 = 17,606
*Cash cost per oz in 2007 = $548 US
*43-101 ounces in ground = no resource count as yet
*Planned production ounces in 2008 = 20,000 (at least it appears to be)
*Operating location = Mexico
San Juan (excluding the producing Rosario, other the potential Peruvian spin-out assets):
*Production ounces in 2007 = 12,000 (assumed - based on 8,911 after 3 quarters)
*Cash cost per oz in 2007 (this is a MAJOR performance advantage for SJ) = $323 US (average after 3 quarters)
*43-101 ounces in ground = no resource count as yet
*Planned production ounces in 2008 = 20,000
*Operating location = Peru
From an asset fundamental perspective (management not part of the equation), I do not see anything that Sierra has that San Juan would not have as a stand alone company.
Production05
Friday, April 11, 2008
Thoughts on Wega selling
Friday's trades have been posted.
Production, I think Wega is trying to lead a revolt against PK's leadership and management of CMM. While it is true that the Lamaque 43-101 news pushed our share price to 55 cents, Wega didn't start selling until the share price had declined to 34 cents. That might have been their breaking point.
Two years ago today our stock closed at $1.43 and the POG closed at $597.75. Today we are at 20 cents and the POG is $925. What possible excuse could there be for the current CEO to be still in charge?
The last positive news we had was the purchase of San Juan and at that time we were told that SJ would produce 80,000 oz in 2008.
In the interim we have lost several CFO's, Exploration Managers, General Managers at Sigma-Lamaque, a Manager of Resource Geology, a Manager of Investor Relations, two Directors and many others, yet the Head Honcho appears to be untouchable.
No shareholder wants to see an ever decreasing share price when the value of the company's assets suggest that it should be 5 or 10 times higher, but maybe Wega's thinking that "no pain, no gain" is the right course of action.
Imagine if we were making a bid for SUE today and used the formula of paying a 30% premium to the respective closing prices. That means we'd have to offer 3.7 CMM shares for every SUE share. And what does SUE have? A very tenuous claim to a low-grade deposit of 2 million resource ounces in Peru with no infrastructure.
Something's gotta give!
Production, I think Wega is trying to lead a revolt against PK's leadership and management of CMM. While it is true that the Lamaque 43-101 news pushed our share price to 55 cents, Wega didn't start selling until the share price had declined to 34 cents. That might have been their breaking point.
Two years ago today our stock closed at $1.43 and the POG closed at $597.75. Today we are at 20 cents and the POG is $925. What possible excuse could there be for the current CEO to be still in charge?
The last positive news we had was the purchase of San Juan and at that time we were told that SJ would produce 80,000 oz in 2008.
In the interim we have lost several CFO's, Exploration Managers, General Managers at Sigma-Lamaque, a Manager of Resource Geology, a Manager of Investor Relations, two Directors and many others, yet the Head Honcho appears to be untouchable.
No shareholder wants to see an ever decreasing share price when the value of the company's assets suggest that it should be 5 or 10 times higher, but maybe Wega's thinking that "no pain, no gain" is the right course of action.
Imagine if we were making a bid for SUE today and used the formula of paying a 30% premium to the respective closing prices. That means we'd have to offer 3.7 CMM shares for every SUE share. And what does SUE have? A very tenuous claim to a low-grade deposit of 2 million resource ounces in Peru with no infrastructure.
Something's gotta give!
Thursday, April 10, 2008
Today's Trading
Today's trades have been posted. RBC sold 239,500 shares in the last hour of trading.
I don't think it is Wega, but more likely an existing shareholder exchanging shares for 23-cent PP shares (ie selling shares to raise the funds for the PP).
It's worth the 2-cent hit to get the free 40-cent warrants.
Expect more of this until the PP closes.
I don't think it is Wega, but more likely an existing shareholder exchanging shares for 23-cent PP shares (ie selling shares to raise the funds for the PP).
It's worth the 2-cent hit to get the free 40-cent warrants.
Expect more of this until the PP closes.
Wednesday, April 9, 2008
Potential (key) NRs in April
1) Close off of PP to fund Lamaque’s near-term development needs.
2) Sign-off to defer Rosario and Algamarca payments into 2009.
3) NR to provide an update on progress at Lamaque. I would like to see the NR include:
*final tpd result for Q1
*how tpd is progressing in April (mtd)
*an outlook for tpd expectations to the balance of Q2
4) Update on Peru – I would like to see the NR include:
*of course the long awaited SJ 43-101 resource report (hopefully we see 800K ounces or greater)
*SJ’s tpd results for Q1
*near-term plans to ramp up to (at least) 350 tpd at SJ
*detailed plans to get to 700 tpd run rate by end of 2008 at SJ
*operation and exploration plans for Rosario
5) NR to tell us that all BCSC demands have been officially met, and that the Management Cease Trade order has been lifted.
This was just a quick and dirty (off the top of my head) list. Let me know if I missed anything.
Production05
2) Sign-off to defer Rosario and Algamarca payments into 2009.
3) NR to provide an update on progress at Lamaque. I would like to see the NR include:
*final tpd result for Q1
*how tpd is progressing in April (mtd)
*an outlook for tpd expectations to the balance of Q2
4) Update on Peru – I would like to see the NR include:
*of course the long awaited SJ 43-101 resource report (hopefully we see 800K ounces or greater)
*SJ’s tpd results for Q1
*near-term plans to ramp up to (at least) 350 tpd at SJ
*detailed plans to get to 700 tpd run rate by end of 2008 at SJ
*operation and exploration plans for Rosario
5) NR to tell us that all BCSC demands have been officially met, and that the Management Cease Trade order has been lifted.
This was just a quick and dirty (off the top of my head) list. Let me know if I missed anything.
Production05
Tuesday, April 8, 2008
From the March 25th PR
A lot of attention is being paid to Lamaque and rightly so. Now we need to see how PERU is doing. PK has put a April 17th deadline on this "comprehensive update". Lets see if we get the NI 43-101 from SJ and updates on RdeB, Shahuindo. Poderosa would be nice too.
Century announced today that the Company will provide a comprehensive update on operations in Peru concurrent with the announcement of the NI 43-101 technical report for the San Juan Gold Mine, which is expected on or before April 17. Century is currently renegotiating certain key contracts in Peru, including the purchase terms for both Rosario de Belen and Shahuindo. No immediate payments are anticipated to the sellers. Century will provide further details when the negotiations are concluded.
My first post. Looking forward to the constructive debate on CMM's chances and PK's future. Layout and topics look great. All the Best! rhump
Century announced today that the Company will provide a comprehensive update on operations in Peru concurrent with the announcement of the NI 43-101 technical report for the San Juan Gold Mine, which is expected on or before April 17. Century is currently renegotiating certain key contracts in Peru, including the purchase terms for both Rosario de Belen and Shahuindo. No immediate payments are anticipated to the sellers. Century will provide further details when the negotiations are concluded.
My first post. Looking forward to the constructive debate on CMM's chances and PK's future. Layout and topics look great. All the Best! rhump
Today's Trading
I know that being classified as an insider, Wega Mining is supposed to be operating under a Management Cease Trade Order (MCTO), but today's selling by RBC (the same house that Wega has used to buy/sell CMM shares in the past) and the similar programmed selling looks suspiciously like Wega's modus operandi.
However the selling by RBC on the last day before the CTO on March 14 appeared to be Wega selling as well, but when Wega filed its last insider trading reports, they only filed sales up to March 13.
Today's trades can be seen by clicking on the "Today's Trades" link on the right. There is also a link to the latest insider filings.
However the selling by RBC on the last day before the CTO on March 14 appeared to be Wega selling as well, but when Wega filed its last insider trading reports, they only filed sales up to March 13.
Today's trades can be seen by clicking on the "Today's Trades" link on the right. There is also a link to the latest insider filings.
Lamaque – tpd analysis (and thoughts)
It looks like tpd at Lamaque is finally starting to climb, after a very slow start. Tpd in Q3’07 and Q4’07 were pretty much flat. I believe there were many challenges in Q4, but here are a couple that immediately come to mind:
*CMM went through a material change in Oct and Nov (a hard and abrupt cutover from o/p to u/g). This would have created a lot of non-operational issues for management to deal with, and thus takes away from operational focus.
*severe u/g worker shortages – Century initiated an aggressive recruitment and training program to address this ramp up issue. I did not expect them to realize the benefits of these efforts until about 4 – 5 months afterwards, as it takes months for folks to be recruited, trained up and go through their initial learning curve. I think the numbers are showing that we are now seeing the fruits of the labour, effective in Mar’08.
I think we are well on our way now (pending any major setbacks). Here is what the tpd has looked like for Lamaque (since Q3’07), and what I would like to see the next 3 months (as a minimum). I would like to see them increase the tpd by 75 each month. Realistically, with the PP soon to be closed off, I would like to see them do much better than 75.
(90 days assumed for each quarter, and 30 days for each month, with the exception of Feb)
* Q3’07 act – 200 tpd (18,000 total tonnes for quarter – info from Q3 cc)
* Oct act – 172 tpd (5,137 tonnes – Feb 21’08 NR)
* Nov act – 207 tpd (6,200 tonnes – Jan 14 cc)
* Dec act – 233 tpd (7,000 tonnes – Jan 14 cc)
* Jan act – 260 tpd (7,783 tonnes – Feb 21 NR)
* Feb est - ??? tpd (no results available - let’s assume only 270 tpd)
* Mar mtd – 325 tpd (Mar 25th NR, results only at 23rd – chance to be 330–335)
* Apr target – 400 tpd (s/b achieved if no major issues – I hope to see 410-425)
Going forward, with the PP soon to be closed off, I am fully expecting them to increase tpd by at least 75 on average in each future month – as already mentioned. I will be extremely disappointed if I don’t see it. I suppose timing in reaching ore areas might throw off the month to month consistency, that’s probably why quarterly averages are more reliable (for example, 1 month we could see 40 and the next month 110, but it would average out to 75) – I think that would be acceptable also. Quite frankly, they would need to increase tpd by more than 75 per month once they reach the 2nd half of 2008, if 2008 2nd half targets are to be met.
This is what May and Jun would look like if they meet the Apr target and are able to increase tpd by the 75 per subsequent Q2 months:
* May – 475 tpd
* Jun – 550 tpd
With regards to Q1’08 overall, the average tpd would be around 285 (if we use 260, 270 and 325). The company’s target is 300 tpd. If it turns out to be slightly short (of the target) then they could probably make it up with grade. As mentioned in a previous post, the company has not actually started mining the 1.1M reserve ounces (4.78 g/t) as yet (they are developing towards it, but need the cash to get there quicker). As such, they are mining additional material at this time. That is why they set their g/t target to only 3.5 in 2008. As they mentioned in their Mar. 25th NR, they expect actual g/t in Q1’07 to come in over 4.0. The higher grade will hopefully offset the lower tpd, which hopefully will lead to production ounces being met in Q1 (we’ll have to wait and see).
With regards to Q2’08 overall, the average tpd would be around 475 (if they are able to hit 400, 475 and 550). This would beat their Q2’08 target of 450 tpd.
Production05
*CMM went through a material change in Oct and Nov (a hard and abrupt cutover from o/p to u/g). This would have created a lot of non-operational issues for management to deal with, and thus takes away from operational focus.
*severe u/g worker shortages – Century initiated an aggressive recruitment and training program to address this ramp up issue. I did not expect them to realize the benefits of these efforts until about 4 – 5 months afterwards, as it takes months for folks to be recruited, trained up and go through their initial learning curve. I think the numbers are showing that we are now seeing the fruits of the labour, effective in Mar’08.
I think we are well on our way now (pending any major setbacks). Here is what the tpd has looked like for Lamaque (since Q3’07), and what I would like to see the next 3 months (as a minimum). I would like to see them increase the tpd by 75 each month. Realistically, with the PP soon to be closed off, I would like to see them do much better than 75.
(90 days assumed for each quarter, and 30 days for each month, with the exception of Feb)
* Q3’07 act – 200 tpd (18,000 total tonnes for quarter – info from Q3 cc)
* Oct act – 172 tpd (5,137 tonnes – Feb 21’08 NR)
* Nov act – 207 tpd (6,200 tonnes – Jan 14 cc)
* Dec act – 233 tpd (7,000 tonnes – Jan 14 cc)
* Jan act – 260 tpd (7,783 tonnes – Feb 21 NR)
* Feb est - ??? tpd (no results available - let’s assume only 270 tpd)
* Mar mtd – 325 tpd (Mar 25th NR, results only at 23rd – chance to be 330–335)
* Apr target – 400 tpd (s/b achieved if no major issues – I hope to see 410-425)
Going forward, with the PP soon to be closed off, I am fully expecting them to increase tpd by at least 75 on average in each future month – as already mentioned. I will be extremely disappointed if I don’t see it. I suppose timing in reaching ore areas might throw off the month to month consistency, that’s probably why quarterly averages are more reliable (for example, 1 month we could see 40 and the next month 110, but it would average out to 75) – I think that would be acceptable also. Quite frankly, they would need to increase tpd by more than 75 per month once they reach the 2nd half of 2008, if 2008 2nd half targets are to be met.
This is what May and Jun would look like if they meet the Apr target and are able to increase tpd by the 75 per subsequent Q2 months:
* May – 475 tpd
* Jun – 550 tpd
With regards to Q1’08 overall, the average tpd would be around 285 (if we use 260, 270 and 325). The company’s target is 300 tpd. If it turns out to be slightly short (of the target) then they could probably make it up with grade. As mentioned in a previous post, the company has not actually started mining the 1.1M reserve ounces (4.78 g/t) as yet (they are developing towards it, but need the cash to get there quicker). As such, they are mining additional material at this time. That is why they set their g/t target to only 3.5 in 2008. As they mentioned in their Mar. 25th NR, they expect actual g/t in Q1’07 to come in over 4.0. The higher grade will hopefully offset the lower tpd, which hopefully will lead to production ounces being met in Q1 (we’ll have to wait and see).
With regards to Q2’08 overall, the average tpd would be around 475 (if they are able to hit 400, 475 and 550). This would beat their Q2’08 target of 450 tpd.
Production05
Sunday, April 6, 2008
Welcome to new Visitors
I see by the increase in the number of votes on the poll that we are getting a few new visitors to the blog today.
First a word on the poll itself. You are being asked whether PK should be dismissed immediately, or be given a bit more time to turn things around. The other choices are i) to give her until the AGM on May 29 and if the share price is still less than 50 cents by that date, then she should go or ii) give her until the end of Q3 (sept 30, 2008) to see if Lamaque meets its current forecast of producing 750 tpd in Q3. The latter is key to CMM's future and if that production forecast is met, it would be the first one and perhaps reason to stay the course.
Personally I think she has to do both to stay around. If the share price is less than 50 cents on May 29, then its time to go. If the share price is higher than that on May 29, but if on Sept 30, the production forecasts haven't been met, then her time should be up.
This is a critical time for CMM. Items that are key to its future are getting the financing needed to ramp up both Lamaque and San Juan as well as money for exploration on other properties; and securing an agreement with Algamarca to delay payment terms for both Rosario and Shahuindo. IMO PK should stay to see these through. If they don't get done, then she should go.
Visitors are encouraged to use the Comment link at the bottom of each post to comment on that post. You need a Google account and if you don't have one it only takes a minute to sign up. This is to avoid multiple "Anonymous" comments by the same person. Comments are not currently moderated, but they will be if they are abused.
If you want to have posting privileges, then send an email to the email address above, telling me who you are. It would help if you have a positive respectful history of posting on Stockhouse or if you are recommended by one of the Blog Members.
Dissenting opinions are welcome, but we ask that all posters be treated with respect and that appropriate language is used at all times.
Carib
First a word on the poll itself. You are being asked whether PK should be dismissed immediately, or be given a bit more time to turn things around. The other choices are i) to give her until the AGM on May 29 and if the share price is still less than 50 cents by that date, then she should go or ii) give her until the end of Q3 (sept 30, 2008) to see if Lamaque meets its current forecast of producing 750 tpd in Q3. The latter is key to CMM's future and if that production forecast is met, it would be the first one and perhaps reason to stay the course.
Personally I think she has to do both to stay around. If the share price is less than 50 cents on May 29, then its time to go. If the share price is higher than that on May 29, but if on Sept 30, the production forecasts haven't been met, then her time should be up.
This is a critical time for CMM. Items that are key to its future are getting the financing needed to ramp up both Lamaque and San Juan as well as money for exploration on other properties; and securing an agreement with Algamarca to delay payment terms for both Rosario and Shahuindo. IMO PK should stay to see these through. If they don't get done, then she should go.
Visitors are encouraged to use the Comment link at the bottom of each post to comment on that post. You need a Google account and if you don't have one it only takes a minute to sign up. This is to avoid multiple "Anonymous" comments by the same person. Comments are not currently moderated, but they will be if they are abused.
If you want to have posting privileges, then send an email to the email address above, telling me who you are. It would help if you have a positive respectful history of posting on Stockhouse or if you are recommended by one of the Blog Members.
Dissenting opinions are welcome, but we ask that all posters be treated with respect and that appropriate language is used at all times.
Carib
SUE & CSM - thoughts
I have a theory on a potential scenario.
Facts:
*significant investment by Stan Bharti and Aberdeen in SUE
*Aberdeen VP now on SUE's BOD
*Stan Bharti and Aberdeen had an extremely close relationship with Desert Sun Mining (it was one of Aberdeen's biggest success stories). From their website: "Aberdeen will provide valued-added managerial and Board advisory services to companies as we have done with much success in the past, most recently with First Uranium Corp & Desert Sun Mining"
*the former Desert Sun trio now control 43% of CSM's BOD (meaning, these Aberdeen connected guys will probably be able to do whatever they choose, and it wouldn't take much to win over the CSM BOD):
1) Stan Bhanti - he was Desert Sun's Chairman
2) Bruce Humphrey - he was Desert Sun's CEO
3) Peter Tagliamonte - he was VP & COO at Desert Sun
*SUE's share price skyrocketed last week
*CSM's share price surprising (relatively) strong over the past few weeks, even while other company's in the space were selling off significantly
*CMM's share price dropped even further this past week (establishing even newer all time lows), which potentially signifies that they are not currently targeted to be acquired with SUE (if SUE is indeed being acquired).
Here is a potential scenario:
CSM try to do this in phases. First they buy out SUE at a significant premium to get their half of the negotiating rights to Shahuindo. The SUE jump in share price would support this. SUE shareholders benefit from A) the instant rise in share price and B) future increases in CSM share price at later dates. The fact that CMM's share price didn't receive a positive bump means that they are not included in this first phase.
Once CSM has control of SUE then they can start talking to CMM about a number of possibilities, including:
1) cheap merger with CMM (CMM would probably get ripped off big time)
2) a Shahuindo J/V between CMM and CSM
3) CSM offers to buy out all ownership rights (from CMM) to Algamarca (if possible) - with say a $20M premium paid to CMM (or something CMM would find hard to refuse - funded by Aberdeen). CMM can then use the $20 to go development crazy on their other properties.
Anyway, this is only one possible scenario. Who really knows the truth I suppose, right?
Regardless of what SUE, CSM, Aberdeen, or anyone else is cooking up for Century, the bottom line is that Century needs to get going with some positive news - until then, we are dead in the water, unfortunately.
Production05
Facts:
*significant investment by Stan Bharti and Aberdeen in SUE
*Aberdeen VP now on SUE's BOD
*Stan Bharti and Aberdeen had an extremely close relationship with Desert Sun Mining (it was one of Aberdeen's biggest success stories). From their website: "Aberdeen will provide valued-added managerial and Board advisory services to companies as we have done with much success in the past, most recently with First Uranium Corp & Desert Sun Mining"
*the former Desert Sun trio now control 43% of CSM's BOD (meaning, these Aberdeen connected guys will probably be able to do whatever they choose, and it wouldn't take much to win over the CSM BOD):
1) Stan Bhanti - he was Desert Sun's Chairman
2) Bruce Humphrey - he was Desert Sun's CEO
3) Peter Tagliamonte - he was VP & COO at Desert Sun
*SUE's share price skyrocketed last week
*CSM's share price surprising (relatively) strong over the past few weeks, even while other company's in the space were selling off significantly
*CMM's share price dropped even further this past week (establishing even newer all time lows), which potentially signifies that they are not currently targeted to be acquired with SUE (if SUE is indeed being acquired).
Here is a potential scenario:
CSM try to do this in phases. First they buy out SUE at a significant premium to get their half of the negotiating rights to Shahuindo. The SUE jump in share price would support this. SUE shareholders benefit from A) the instant rise in share price and B) future increases in CSM share price at later dates. The fact that CMM's share price didn't receive a positive bump means that they are not included in this first phase.
Once CSM has control of SUE then they can start talking to CMM about a number of possibilities, including:
1) cheap merger with CMM (CMM would probably get ripped off big time)
2) a Shahuindo J/V between CMM and CSM
3) CSM offers to buy out all ownership rights (from CMM) to Algamarca (if possible) - with say a $20M premium paid to CMM (or something CMM would find hard to refuse - funded by Aberdeen). CMM can then use the $20 to go development crazy on their other properties.
Anyway, this is only one possible scenario. Who really knows the truth I suppose, right?
Regardless of what SUE, CSM, Aberdeen, or anyone else is cooking up for Century, the bottom line is that Century needs to get going with some positive news - until then, we are dead in the water, unfortunately.
Production05
San Juan (conservative version)
I asked Brent for an appreciation of current tpd at SJ. He actioned all of my other requests, but completely avoided this one. It’s either due to A) things have suddenly gone terribly bad at SJ, or B) they want any potential near-term ramp up at SJ to be a surprise.
Actual tpd SJ (based on 90 days in quarter) = 155 (Q1), 211 (Q2), 234 (Q3)
Per the Jan. 14’08 cc, actual tpd (which fully supports the 1,300 Dec’07 ounces) was around 277 in Dec’07.
During the early Dec’07 (Q3) cc, they said that tpd was 250 at SJ. They said that they were working on mining new areas that would increase production by 20 – 100 tpd. As such, it seems like the best case scenario at the time was 350 tpd (250 + 100). I think they said that they were going to increase mining from the Mercedes and San Juan veins, but also start mining additional veins.
I can see how it might be possible to mine up to 350 tpd (or even higher) really soon at SJ, without injecting any new capital.
The big unknown is mill capacity. We know that they are currently licensed to operate the mill up to 750 tpd (but can apply to increase that capacity level especially once they are ready to ramp up to 1,500 tpd – to the 70 - 80K oz production range). We also know that it takes $1.5 – 2.0M to ramp milling capacity up to 700 tpd (per Brent, this will not happen until funding is available later in 2008 – perhaps the debt financing funds?).
Based on putting various pieces of info together, it would appear to me as if Century believes that they currently have milling capacity for 350 tpd, without spending additional capital on the 2nd mill circuit. Clearly, Century is NOT counting on the $1.5 – 2.0M in mill upgrade (to 700 tpd) to deliver at least 20,000 - 21,500 oz production run rate (as that is what a 350 tpd mill can provide without additional capital upgrades) – the 700 tpd operation would deliver 35,000 – 40,000 (potentially higher depending on grade).
From the AIF (May’07): “One circuit is currently running well for 300 tonnes per day, and includes the CIP circuit. The second circuit, with a potential capacity of 250 tonnes per day, requires rebuilding with a capital cost of approximately US$1.5M.
Clearly, the $1.5 – 2.0M is to refurbish the final 250 tpd of the milling operation. Also, as you can see 300 + 250 = 550 tpd, and not 700 tpd. As such, it would almost seem as if Century currently has processing capabilities of 450 tpd. I just don’t know this stuff well enough to know what is giving them the extra 150 tpd milling capabilities (300 vs 450) – perhaps either or both the CIP circuit (the CIP circuit recovers the gold remaining in the tailings from the primary mill circuit) and the Merrill Crowe zinc precipitation are helping in some unknown way. Chances are probably greater than they have added extra ball mills to first circuit.
I guess the bottom line is that if they plan on ramping up to 350 tpd in the near future (per the math from the conference calls) then they must foresee having both mining and processing capabilities in place to ramp up to that level.
As mentioned above, I truly do not know what the status is of San Juan. I have absolutely no clue if things have gone terribly bad with regards to tpd or if things are still progressing well. Nevertheless, taking all of the info listed above into consideration, I’ve built a hopeful tpd profile for SJ. Using 84.8% recovery, 5.8g/t grade, this profile would give us 18,900 ounces at SJ for 2008. Given the YTD ounces produced at Q3’07, they probably finished 2007 at around the 12,000 oz level.
A hopeful view for 2008 at SJ:
Jan – 270 tpd
Feb – 275
Mar – 280
Apr - 290
May – 300
Jun - 325
Jul – 350
Aug - 350
Sep - 350
Oct - 350
Nov - 350
Dec - 350
Production05
Actual tpd SJ (based on 90 days in quarter) = 155 (Q1), 211 (Q2), 234 (Q3)
Per the Jan. 14’08 cc, actual tpd (which fully supports the 1,300 Dec’07 ounces) was around 277 in Dec’07.
During the early Dec’07 (Q3) cc, they said that tpd was 250 at SJ. They said that they were working on mining new areas that would increase production by 20 – 100 tpd. As such, it seems like the best case scenario at the time was 350 tpd (250 + 100). I think they said that they were going to increase mining from the Mercedes and San Juan veins, but also start mining additional veins.
I can see how it might be possible to mine up to 350 tpd (or even higher) really soon at SJ, without injecting any new capital.
The big unknown is mill capacity. We know that they are currently licensed to operate the mill up to 750 tpd (but can apply to increase that capacity level especially once they are ready to ramp up to 1,500 tpd – to the 70 - 80K oz production range). We also know that it takes $1.5 – 2.0M to ramp milling capacity up to 700 tpd (per Brent, this will not happen until funding is available later in 2008 – perhaps the debt financing funds?).
Based on putting various pieces of info together, it would appear to me as if Century believes that they currently have milling capacity for 350 tpd, without spending additional capital on the 2nd mill circuit. Clearly, Century is NOT counting on the $1.5 – 2.0M in mill upgrade (to 700 tpd) to deliver at least 20,000 - 21,500 oz production run rate (as that is what a 350 tpd mill can provide without additional capital upgrades) – the 700 tpd operation would deliver 35,000 – 40,000 (potentially higher depending on grade).
From the AIF (May’07): “One circuit is currently running well for 300 tonnes per day, and includes the CIP circuit. The second circuit, with a potential capacity of 250 tonnes per day, requires rebuilding with a capital cost of approximately US$1.5M.
Clearly, the $1.5 – 2.0M is to refurbish the final 250 tpd of the milling operation. Also, as you can see 300 + 250 = 550 tpd, and not 700 tpd. As such, it would almost seem as if Century currently has processing capabilities of 450 tpd. I just don’t know this stuff well enough to know what is giving them the extra 150 tpd milling capabilities (300 vs 450) – perhaps either or both the CIP circuit (the CIP circuit recovers the gold remaining in the tailings from the primary mill circuit) and the Merrill Crowe zinc precipitation are helping in some unknown way. Chances are probably greater than they have added extra ball mills to first circuit.
I guess the bottom line is that if they plan on ramping up to 350 tpd in the near future (per the math from the conference calls) then they must foresee having both mining and processing capabilities in place to ramp up to that level.
As mentioned above, I truly do not know what the status is of San Juan. I have absolutely no clue if things have gone terribly bad with regards to tpd or if things are still progressing well. Nevertheless, taking all of the info listed above into consideration, I’ve built a hopeful tpd profile for SJ. Using 84.8% recovery, 5.8g/t grade, this profile would give us 18,900 ounces at SJ for 2008. Given the YTD ounces produced at Q3’07, they probably finished 2007 at around the 12,000 oz level.
A hopeful view for 2008 at SJ:
Jan – 270 tpd
Feb – 275
Mar – 280
Apr - 290
May – 300
Jun - 325
Jul – 350
Aug - 350
Sep - 350
Oct - 350
Nov - 350
Dec - 350
Production05
Saturday, April 5, 2008
Big Miners Could Be On The Prowl
Posted by Santo02 on Stockhouse and worth posting here.
Big miners could be on the prowl
DAVID PARKINSON
Globe and Mail Update
April 4, 2008 at 7:41 AM EDT
Investors in the mining sector may have been too busy salivating to notice, but metal commodity prices haven't been the only thing going through the roof. The costs of developing new mines have also been soaring – and that could foreshadow a new round of takeovers in the sector, analysts at RBC Dominion Securities Inc. said yesterday.
The investment bank's mining group issued a report showing that in the past year and a half, capital cost estimates for major mining projects under development have surged by an average annualized rate of more than 56 per cent.
Much like Canada's oil sands companies (which are, for the most part, essentially developing mining projects), mine developers are being hammered by surging labour costs amid acute shortages of skilled workers, as well as sharp increases in costs for materials. Costs for steel and cement have risen by as much as 40 per cent annually over the past two years, the report said.
One of the most glaring examples of these runaway costs is right here in Canada. The estimated capital budget for the Galore Creek copper/gold project in British Columbia has jumped from $1.1-billion in the fall of 2005 to a whopping $5-billion today – prompting the project's owners, Teck Cominco Ltd. and NovaGold Resources Inc., to put the project on hold while they seriously rethink the whole thing.
But the cost increases are hardly unique to that project or even this country. New mine developments in such far-flung places as Alaska, Australia, Panama, Romania, Russia and Papua New Guinea have seen project cost estimates soar over the past year, in many cases doubling or even more.
“We do not believe an end is in sight,” the RBC analysts said.
This is creating a very risky and expensive environment for embarking on new mining projects – and this, the analysts believe, is creating the impetus for takeovers.
The pieces of the argument fit together nicely. Mining companies, especially big senior names, are kicking off cash like never before, thanks to record commodity prices. Cash flow at such mining giants as BHP Billiton Ltd., Barrick Gold Corp. [ABX-T] and Xstrata PLC have more than tripled in the past three years.
But these seniors have the same problem they have always had: They have mature mines whose resources are dwindling yearly, and to keep their businesses growing, they have to find ways to replace those depleted reserves and then some.
Developing new mines is all fine and good, but why bother when development costs are skyrocketing? Why not put all that loose cash to work buying existing assets that are already late in the development process? You've got the cash to pay for it, the risk is reduced, and the reward can be realized much sooner.
“Companies looking to expand production, or replace a declining production profile, may be better off acquiring companies with one or more late-stage development projects, rather than funding existing early-stage projects all the way through development,” the analysts wrote.
“The most likely targets for M&A in the short term will likely be companies with established production and/or reasonably near-term growth certainty,” they said.
On the top of that list is Kinross Gold Corp. [K-T], which has a couple of projects (Kupol in Russia and Paracatu in Brazil) slated for completion this year. With a market cap of $14-billion, Kinross would probably be a mouthful for all but the biggest of mining companies. But the RBC analysts also mention some smaller names that fit the mould – including Centerra Gold Inc. [CG-T] and Eldorado Gold Corp. [ELD-T]
Even if these companies don't get taken out, they could still offer nice near-term growth with relatively low development risk. Other stocks fitting this description include Agnico-Eagle Mines Ltd. [AEM-T], Jaguar Mining Inc. [JAG-T], Anatolia Minerals Development Ltd. and European Goldfields Ltd., the analysts said.
On the other hand, RBC cautioned investors to be wary of capital-intensive projects that are years away from completion.
That flashes a yellow light over Barrick. The gold mining giant has three such projects that fit this risky profile: Donlin Creek in Alaska, Pueblo Viejo in the Dominican Republic and Pascua Lama in Argentina/Chile.
“We feel such long-lead-time projects are unlikely to be sought after until permitting and timelines are better delineated,” they said.
http://www.reportonbusiness.com/servlet/story/RTGAM.20080403.wparkinson0404/BNStory/robColumnsBlogs/home
Big miners could be on the prowl
DAVID PARKINSON
Globe and Mail Update
April 4, 2008 at 7:41 AM EDT
Investors in the mining sector may have been too busy salivating to notice, but metal commodity prices haven't been the only thing going through the roof. The costs of developing new mines have also been soaring – and that could foreshadow a new round of takeovers in the sector, analysts at RBC Dominion Securities Inc. said yesterday.
The investment bank's mining group issued a report showing that in the past year and a half, capital cost estimates for major mining projects under development have surged by an average annualized rate of more than 56 per cent.
Much like Canada's oil sands companies (which are, for the most part, essentially developing mining projects), mine developers are being hammered by surging labour costs amid acute shortages of skilled workers, as well as sharp increases in costs for materials. Costs for steel and cement have risen by as much as 40 per cent annually over the past two years, the report said.
One of the most glaring examples of these runaway costs is right here in Canada. The estimated capital budget for the Galore Creek copper/gold project in British Columbia has jumped from $1.1-billion in the fall of 2005 to a whopping $5-billion today – prompting the project's owners, Teck Cominco Ltd. and NovaGold Resources Inc., to put the project on hold while they seriously rethink the whole thing.
But the cost increases are hardly unique to that project or even this country. New mine developments in such far-flung places as Alaska, Australia, Panama, Romania, Russia and Papua New Guinea have seen project cost estimates soar over the past year, in many cases doubling or even more.
“We do not believe an end is in sight,” the RBC analysts said.
This is creating a very risky and expensive environment for embarking on new mining projects – and this, the analysts believe, is creating the impetus for takeovers.
The pieces of the argument fit together nicely. Mining companies, especially big senior names, are kicking off cash like never before, thanks to record commodity prices. Cash flow at such mining giants as BHP Billiton Ltd., Barrick Gold Corp. [ABX-T] and Xstrata PLC have more than tripled in the past three years.
But these seniors have the same problem they have always had: They have mature mines whose resources are dwindling yearly, and to keep their businesses growing, they have to find ways to replace those depleted reserves and then some.
Developing new mines is all fine and good, but why bother when development costs are skyrocketing? Why not put all that loose cash to work buying existing assets that are already late in the development process? You've got the cash to pay for it, the risk is reduced, and the reward can be realized much sooner.
“Companies looking to expand production, or replace a declining production profile, may be better off acquiring companies with one or more late-stage development projects, rather than funding existing early-stage projects all the way through development,” the analysts wrote.
“The most likely targets for M&A in the short term will likely be companies with established production and/or reasonably near-term growth certainty,” they said.
On the top of that list is Kinross Gold Corp. [K-T], which has a couple of projects (Kupol in Russia and Paracatu in Brazil) slated for completion this year. With a market cap of $14-billion, Kinross would probably be a mouthful for all but the biggest of mining companies. But the RBC analysts also mention some smaller names that fit the mould – including Centerra Gold Inc. [CG-T] and Eldorado Gold Corp. [ELD-T]
Even if these companies don't get taken out, they could still offer nice near-term growth with relatively low development risk. Other stocks fitting this description include Agnico-Eagle Mines Ltd. [AEM-T], Jaguar Mining Inc. [JAG-T], Anatolia Minerals Development Ltd. and European Goldfields Ltd., the analysts said.
On the other hand, RBC cautioned investors to be wary of capital-intensive projects that are years away from completion.
That flashes a yellow light over Barrick. The gold mining giant has three such projects that fit this risky profile: Donlin Creek in Alaska, Pueblo Viejo in the Dominican Republic and Pascua Lama in Argentina/Chile.
“We feel such long-lead-time projects are unlikely to be sought after until permitting and timelines are better delineated,” they said.
http://www.reportonbusiness.com/servlet/story/RTGAM.20080403.wparkinson0404/BNStory/robColumnsBlogs/home
Recent Private Placements
September 27:
Announced:
$20 million PP consisting of:
36.5 million Units @ C$0.55, including 18.25 million warrants @ C$0.75
Closed Nov. 5:
Raised $7.3 million, resulting in issue of approx. 13 million shares @ $0.55 and 6.5 million warrants @ $0.75
November 24:
Announced:
$4 million in FT Shares @ $0.50 = 8 million shares
$4 million in PP common shares @ $0.40 w/half warrant @ $0.75 = 10 million shares + 5 million warrants
Closed Jan. 10:
Raised $2.8 million, resulting in 5.6 million FT shares @ $0.50
No PP shares
December 24:
Announced :
7.5 million FT shares priced at $0.35
Closed Jan 10:
Issued 3,154,715 FT shares @$0.35
March 27:
Announced:
Closure of Dec 24 PP by issuing 1,142,827 FT shares @ $0.35 for proceeds of $400,000
New PP for up to $4.5 million consisting of:
- 25-cent FT shares, or
- 23-cent common shares with full warrant @$.40
Summary and Commentary:
In September they tried to raise $20 million, but could only raise $7.3 million.
On November 24 they tried to raise $8 million with an offer of 40-cent PP shares with half warrants and 50-cent FT shares. They sold 5.6 million of the 8 million target FT shares, but apparently there were no takers for any PP shares and warrants at 40 cents.
On December 24 they tried to raise $2.6 million with an offer of 7.5 million FT shares @35 cents. On Jan 10 they said they closed that offering and issued 3.15 million of the 7.5 million shares offered. On March 27 however, they said they issued an additional 1.15 million for a total of 4.3 million FT shares @ 35 cents.
Finally on March 27 they are trying to raise $4 million with a combination of 25-cent FT shares and 23-cent common shares with a full warrant, with fees paid the highest in their history.
It’s not a good record of attempted fund raising. If the original $20 million financing announced in Sept was fully subscribed, they probably would have paid off the call options and proceeded with the SJ expansion.
It also appears that based on past history, we are more likely to see a majority of this PP to be FT shares. There is only a 2-cent difference and sentiment is so low that more will likely choose the lower risk option of the FT shares than the better upside prospects of the common shares with full warrants. Looking at the past recent failures, it’s not hard to understand the sweet deal CMM had to offer this time to raise the $4 million. There is also a big incentive for First Capital to peddle the FT shares because of the additional 7% options with warrants they receive for that choice.
Therefore I’m optimistic that a majority of the shares issued under this PP will be FT shares or at least 50%. Assume:
9 million FT shares @ $0.25 = $2,250,000 * 93% = $2,092,500
9 million common shares @ $0.23 = $2,070,000 * 93% = $1,925,100
Warrants from common shares = 9 million @ 40 cents
Options from FT shares = 630,000 shares @ $0.23 + 630,000 warrants @40 cents
Total dilution this PP = 28,260,000 shares for approx $8 million.
Total dilution from other PP's since Sept 07 = 23 million shares and 6.5 million warrants
Shares o/s Sept 30 = 139,696,935
Shares o/s after this PP (not incl warrants) based on above assumptions = approx 181 million.
Announced:
$20 million PP consisting of:
36.5 million Units @ C$0.55, including 18.25 million warrants @ C$0.75
Closed Nov. 5:
Raised $7.3 million, resulting in issue of approx. 13 million shares @ $0.55 and 6.5 million warrants @ $0.75
November 24:
Announced:
$4 million in FT Shares @ $0.50 = 8 million shares
$4 million in PP common shares @ $0.40 w/half warrant @ $0.75 = 10 million shares + 5 million warrants
Closed Jan. 10:
Raised $2.8 million, resulting in 5.6 million FT shares @ $0.50
No PP shares
December 24:
Announced :
7.5 million FT shares priced at $0.35
Closed Jan 10:
Issued 3,154,715 FT shares @$0.35
March 27:
Announced:
Closure of Dec 24 PP by issuing 1,142,827 FT shares @ $0.35 for proceeds of $400,000
New PP for up to $4.5 million consisting of:
- 25-cent FT shares, or
- 23-cent common shares with full warrant @$.40
Summary and Commentary:
In September they tried to raise $20 million, but could only raise $7.3 million.
On November 24 they tried to raise $8 million with an offer of 40-cent PP shares with half warrants and 50-cent FT shares. They sold 5.6 million of the 8 million target FT shares, but apparently there were no takers for any PP shares and warrants at 40 cents.
On December 24 they tried to raise $2.6 million with an offer of 7.5 million FT shares @35 cents. On Jan 10 they said they closed that offering and issued 3.15 million of the 7.5 million shares offered. On March 27 however, they said they issued an additional 1.15 million for a total of 4.3 million FT shares @ 35 cents.
Finally on March 27 they are trying to raise $4 million with a combination of 25-cent FT shares and 23-cent common shares with a full warrant, with fees paid the highest in their history.
It’s not a good record of attempted fund raising. If the original $20 million financing announced in Sept was fully subscribed, they probably would have paid off the call options and proceeded with the SJ expansion.
It also appears that based on past history, we are more likely to see a majority of this PP to be FT shares. There is only a 2-cent difference and sentiment is so low that more will likely choose the lower risk option of the FT shares than the better upside prospects of the common shares with full warrants. Looking at the past recent failures, it’s not hard to understand the sweet deal CMM had to offer this time to raise the $4 million. There is also a big incentive for First Capital to peddle the FT shares because of the additional 7% options with warrants they receive for that choice.
Therefore I’m optimistic that a majority of the shares issued under this PP will be FT shares or at least 50%. Assume:
9 million FT shares @ $0.25 = $2,250,000 * 93% = $2,092,500
9 million common shares @ $0.23 = $2,070,000 * 93% = $1,925,100
Warrants from common shares = 9 million @ 40 cents
Options from FT shares = 630,000 shares @ $0.23 + 630,000 warrants @40 cents
Total dilution this PP = 28,260,000 shares for approx $8 million.
Total dilution from other PP's since Sept 07 = 23 million shares and 6.5 million warrants
Shares o/s Sept 30 = 139,696,935
Shares o/s after this PP (not incl warrants) based on above assumptions = approx 181 million.
Subscribe to:
Posts (Atom)