Monday May 12, 11:57 am ET
BLAINE, WA, May 12 /CNW/ - Century Mining Corporation (CMM: TSX-V), is pleased to announce the appointment of Fortis (Belgian-Dutch leading financial institution), as Lead Arranger and underwriter for a fully underwritten project loan facility of up to US$70 million to fund the Lamaque Underground Mine expansion project.
The project loan facility's primary use of proceeds includes capital expenditures to expand production to 115,000 ounces per annum, at an estimated cash production cost of $425 per ounce, associated hedging, working capital, and for general corporate purposes.
As announced on March 25, 2008 capital requirements for the Lamaque Underground Mine in 2008 total approximately $9.3 million. Going forward, Century expects capital expenditures for Lamaque of $25.5 million and $20.0 million in 2009 and 2010, respectively.
Closing on the project loan facility will be subject to completing satisfactory due diligence, credit approvals, and negotiating loan and security documentation. The Company and Fortis anticipate having the facility in place within 4-5 months.
Margaret Kent, President & CEO, commented: "We are very excited to have the support of Fortis. This debt facility will allow Century to achieve its medium and long-term objectives with respect to the Lamaque expansion project."
About Fortis
Fortis is an international financial services provider engaged in banking and insurance. Fortis offers its personal, business and institutional customers a comprehensive package of products and services through its own channels, in collaboration with intermediaries and through other distribution partners. With a market capitalisation of EUR 35.1 billion (31/03/2008), Fortis ranks among the 15 largest financial institutions in Europe. Its sound solvency position, presence in more than 50 countries and dedicated, professional workforce of 60,000 enables it to combine global strength with local flexibility and provide its clients with optimum support. More information is available on www.fortis.com.
Press Contacts: Brussels: +32 (0)2 565 35 84
About Century Mining Corporation
Century Mining Corporation is an emerging mid-tier gold producer that is aggressively acquiring producing mines and exploration properties in Peru. The Company owns and produces gold at the Lamaque mine in Québec that historically has produced over 9.4 million ounces of gold. In Peru, Century wholly-owned subsidiaries own an 82.6% interest in the San Juan Mine where the Company accounts for 100% of gold production. Century subsidiaries have also recently acquired Rosario de Belen where it accounts for 100% of both gold and silver production. Century's growth strategy is to acquire gold producing assets in South America that will substantially reduce the Company's consolidated total cash cost of production and where there is exceptional exploration potential to expand production at these mines.
"Margaret M. Kent"
Chairman, President & CEO
15 comments:
Beautiful, isn't it?
From today's NR: "The project loan facility’s primary use of proceeds includes capital expenditures to expand production to 115,000 ounces per annum, at an estimated cash production cost of $425 per ounce, associated hedging,......."
It looks like the 115,000 oz per yr and the $425 cost per oz represents a base case scenario.
The revised Lamaque scoping study / 43-101 tech rpt was filed on SEDAR just recently (April 29'08), which includes the Lamaque Economics Model (pg 167), for ACTUAL MINE AND PRODUCTION PLANNING / WORKING PURPOSES. The Economics Model useD the following targets of production:
*2008 - 27,223 ounces
*2009 - 112,430
*2010 - 160,849
*2011 - 170,763
*2012 - 170,763
*2013 - 164,818
*2014 - 162,336
At these levels of production, the (LOM) cash cost per ounce is expected to be $365 (used in the model), instead of the $425 used for the base case level.
In addition, the NR noted that the funds will be used for "associated hedging" also. I believe that means that they might be planning to eliminate the remining hedges with some of the $70 cash. It probably means that they renegotiated some of the 24,000 hedged ounces (that remained at early Jan'08) and pushed them to later in the year. It might have allowed them to sell some of the produced ounces at spot prices in Q1 and Q2, when cash was most needed.
Very positive and more news to follow within the next week or so.
Positive news that will do it for me will be an announcement that PK has resigned from the board, effective immediately.
Natik, I deleted your double post. (To others, it wasn't blog censorship.)
I have to agree with your comment. Long suffering investors have been starved for a bit of good news and when it comes, management somehow manages to screw it up.
"Hedging" is a dirty word for gold investors. I believe, as Production pointed out, that the hedging referred to in the NR was the paying off of the existing hedges, but if so, why didn't the NR say that? Why leave it open to speculation that the financing might have hedging strings attached to it. Otherwise why even mention the word hedging?
Time for a change at the top!
Hi Natik,
My guess is that even PK recognizes that the market will never fully embrace Century unless a new CEO is put in place. I am of the belief that PK will do the right thing for shareholders (at least at this stage). As such, I think change is coming. Here are just a couple reasons why I think PK will support the idea of a new CEO:
1) Century was started up by PK & RB - it's her baby. I think she truly wants it to succeed. I think she recognizes that Century's ultimate success will give her a lot of personal satisfaction, and maybe even help to partly repair her severely damaged reputation in the mining world.
2) PK is a shareholder of the company, with a good size number of shares and options. She is in a position to make many millions of dollars, even with only slight success by Century.
Production05
Hi Carib,
I agree with you. The news yesterday should have come across as being positive news, but it appears as if the NR was completely inadequate (to put is nicely), IMO. As such, they ended up turning good news into a market selloff, or so it seems today (with the share price reaching $.165).
They provided major news, but with little details to accompany it. I believe it might have left people guessing on key details associated with LT Debt (and they might have guessed worst case scenarios). In addition, the little details provided was very unclear, and created more uncertainty than it did clarity.
(during upcoming NRs) in addition to begin providing details about the LT Debt agreement with Fortis, I would like them to update us on short-term cash funding initiatives. The PP is still o/s, with no updates (we have no clue as to how it is progressing and when it is expected to be closed off). They should also give us an appreciation as to whether they intend to look into short-term bridge financing. Also, where is the update on how operations at Lamaque is progressing? Quite frankly, how do they expect people to buy into any of this if they are in the dark about current operations at Lamaque?
Production05
Production, assuming that Century can arrange bridge financing, what security can they provide to the lender? Would it be the Lamaque mine assets? Going one one step further, if the Fortis financing fails to materialize, would that leave a $15 million bridge loan secured with a $100 million mine? When the trend is to get out of hedging why is CMM even mentioning it in their press release? Whoever wrote this press release knew exactly what the natural result would be. They're toying with shareholders.
Hi Natik,
I have said before that there needs to be accountability, compassion and leadership. We have 5,000,000 ounces (1.321M oz reserves) in the ground that are 43-101 compliant (BCSC approved also). We have assets at Lamaque alone with replacement value of $100,000,000. We have operations infrasturcture at 3 difference locations (albeit 2 are small scale). The gold price is $865 per oz. Yet, here we sit with a $.17 share price ($27.6M market capitalization) - a complete freefall from $1.89 in 2006. In my books, this does not cut it. This is not my idea of protecting shareholder value and neither is it my idea of generating shareholder value.
In addition, there appears to be very little market interest for Century Mining right now, and more and more long time shareholders are throwing in the towel with each passing day, IMO.
Despite the assets, and the good potential of those assets in this gold bull market (best in history), Century's management has been unable to even stop the bleeding, never mind move us back up to more reasonable levels. Ultimately, that is the bottom line, and it is really all that matters at this stage. There needs to be immediate change at the top. I believe that the market is saying immediate means right this second.
Quite frankly, the next NR from Century has to have the words "new Century Mining CEO". Whether they already have someone selected or not doesn't really matter. They need to tell the market firmly that someone new will be running the show going forward, no if's, and's and but's.
Seriously, they need to make that annoucement tomorrow. Until they do that, every other NR they issue will simply be noise, IMO.
Production05
From what the market is telling us, the NR from yesterday is bad but there is more bad news to come. Like Production5 said, if you piece together all the assets, everything looks amazing, however, the underlying problem is the market has no confidence in CMM's management.
Like they say, the market knows. The piece of bad news that's out there is likely related to the private placement. I hate saying this, but it's likely a disaster. Now the next question is what do we do from here? Dilute somemore? or short term bridge or more hedging? either way, the market hates it and it's showing in the SP.
I am hoping for a miracle tomorrow with the Q4 results and management update, but I have given up.
I was just about to ask why the sellers are selling so cheaply with so many buyers lined up. Anonymous' post just answered it. Looks like we gonna need divine intervention to stay above 17 cents with millions of 43-101 ounces of gold in the ground.
As previously mentioned, I am of the belief that bridge financing is the key to short-term cash requirements. In my opinion, bridge financing was not possible prior to this Fortis LT Debt possibility. With the Fortis LT Debt mandate now in place, it provides a solid opportunity for other companies to step in with bridge financing proposals.
If Century is able to secure bridge financing within the next few weeks, the PP then becomes almost completely irrelevant, IMO. It wouldn't matter how sick and unsuccessful the PP is, and how much they end up missing PP target amounts by.
Actually, if they get bridge financing quickly and they end up falling way short on the PP then it could actually end up being a blessing in disguise, believe it or not. It would mean less share dilution for shareholders.
If people are selling due to thinking that the PP is brutal (as the "anonymous" poster is suggesting) then I think they are selling way too early, with incomplete info to perform a complete assessment. They need to wait until we find out about the bridge financing situation. As mentioned, bridge financing completely eliminates the need for a PP.
The Company and Fortis anticipate having the facility in place within 4-5 months.
When I read that the first thing that I thought was that PK is not going away, she just bought herself another 4-5 months. Maybe the market is thinking the same.
no Nino, PK bought a one-way ticket to Tamerlane. Departure date TBA.
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