1) Rosario tech rpt – not needed (BCSC agreed)
2) New San Juan tech rpt – Done (BCSC approved)
3) Revised Lamaque tech rpt – Done (BCSC approved)
4) Agreement on timing of Sigma o/p write-downs, release of Y/E financials and elimination of MCTO – From NR: “delayed for a short period of time”
5) Close off of PP – NR pending
6) Lamaque’s Q1 performance (target: 300 tpd or ___ ounces) – NR pending
7) Lamaque’s April performance (400 tpd target) – NR pending
8) Status of Rosario and Algamarca payment deferral situation
9) LT Debt, Mar. 25th NR: “To meet future capital needs, Century is currently engaged in preliminary negotiations with four separate banking and private equity institutions. Over the next 30 – 45 days Century will receive and review proposals from these groups for a senior project financing initiative regarding the Lamaque underground mine. Any potential financing package is not expected to be finalized until the third quarter of 2008.”
In my view, it would be in Century’s best interest to announce the institution that has been selected (along with signed term-sheet, if available) once they reach this stage. If the process is progressing well then they should be close to reaching this stage (given their published timeline). It would signal to the market that Century has been successful in making a significant step towards securing LT debt financing, in a market that is absolutely brutal to junior companies attempting to secure any type of financing. It would also demonstrate that Century’s assets are being viewed (by major financial institutions) as having significant value.
10) If Century is successful in reaching the signed term sheet stage with a LT Debt provider then it might open up possibilities of securing short-term bridge financing (to initiate long-term work on the project), as it often does with other companies? The LT Debt would not be finalized for at least another couple of months, even with up front term sheet signing. This difficult market situation will not help, but I suppose if we can make decent progress with LT Debt then it increases our chances for a short-term bridge loan (until the debt gets finalized). My feeling is that if the PP gets closed off (with near the targeted $ value) and the LT Debt progresses well, then I see the short-term bridge financing as non-crucial (optional or bonus even).
11) Will we have a new CEO appointed prior to AGM (per the wishes of an overwhelming percentage of blog viewers)? I believe the percentage is now up to 76 - that want a new CEO immediately.
12) Potential spin-out of Peru, and shares given to Century shareholders? A good conversion profile might be 1 Peru share for every 3 Century shares, which will enable the o/s Peru (newco) shares to be in the 60 – 65M range. I have absolutely no idea if the company is truly considering this option, but we all clearly recognize that we are receiving zero value for anything in Peru today. Personally, (if they are considering this) I think this decision should not be made until other key outcomes have occurred, and we ultimately know what happens to the share price of the collective company over the next several months. There are obvious (and potentially significant) pros to split Peru out immediately, but there are also pros for keeping it intact (i.e. Peru will allow Century to reach intermediate producer status quicker, and all of the publicity, share price and stability benefits that normally comes along with that accomplishment). Also, the whole Sulliden / Algamarca matter probably adds a very complex layer to the situation, and perhaps even makes it impossible to seriously consider a split-out of Peru assets at this time.
These are only (near-term) key events that come immediately to mind. I’ve probably missed a few.
9 comments:
Hi Production, you covered the key points. What about a new Chairman if the current CEO, PK is replaced?
If CMM replaces her with a new CEO will the board retain her as Chairman?
Why would they require bridge financing if they have the Leasing line, PP proceeds, SAG mill funds, unless to perhaps make some installment payments?
Natik
Production, I think the overall environment is not currently favorable for debt financings, due to the credit crunch. These problems are not unique to Century, but common to most juniors. Jim Sinclair had some thoughts on what is going on here in the sector:
Posted On: Saturday, April 26, 2008, 3:06:00 PM EST
Depressed About Gold Shares, Especially Juniors?
Author: Jim Sinclair
Dear CIGAs,
Nothing happens by chance! Please consider the following:
An excerpt from the below Reuters article:
"Small and medium-sized miners and juniors who are still in the exploration stage, are the easiest targets for bigger companies, but the acquisitions wave won't likely stop there, THEY SAID.”
Why is it that amongst companies active in minerals, it is primarily and almost only precious metals shares that are under severe selling pressure?
Why is it that companies active in other mined products or co-products as below have their shares in major demand?
Did gold not rise from $248 to a high of $1033, yet even then the hammer was being applied to gold shares, especially those that hold the potential and promise of new production, as production declines?
Is there not a glaring example of a mined product in the form of potash this week? Did not an IPO in a mining company specializing in potash used as a fertilizer open up above its issue price by 58%?
Chemically, potash consists of potassium carbonate, but also might contain potassium oxide or potassium chloride, depending on how pure you consider the mixture. Usually, potash takes the form of powdery salts. Modern methods of extraction almost all rely upon deposits mined from ores, like sylvanite.
Nowadays our potash comes from mining and goes toward inorganic fertilizer rich in potassium.
Why are other mining entities acting so well, especially those with the following significant products:
• Antimony
• Beryllium
• Cadmium
• Chromium
• Cobalt
• Manganese
• PGMs
• Rhodium
• Tungsten
• Vanadium
How about simple iron ore and all those involved in all the criteria of exploration and development of crude oil? That is an extractive industry as is precious metals mining.
Your answer may be that gold is different but it is not. You might say others think that gold has topped, but it hasn’t.
The stimulants economically are the same for potash, iron ore and the other items listed above as it is for gold. It is the growth in Asia, the consequences of the effort to maintain the social order as the financial order implodes, and the condition of the US dollar.
Nothing happens by chance but for argument sake lets call it an opportunity to be seized. Many junior gold companies are so depressed that they are worth more dead than alive.
Gold and other metals shares are depressed so that they are selling well below their “Asset Vale.”
Asset Value is something that 3.7 generations have not taken into consideration where price is concerned. You may recall that I suggested to you that one major company would consolidate the industry. Keep that concept in mind. Major gold producers are in need of new production. This is FACT.
South African companies are in need of major projects OUTSIDE of the RSA. For the RSA gold producer there is no expansion of reserves in RSA because, even if they have it, they cannot produce it as the energy situation is already stressed beyond demand. This is a long-term problem unfortunately.
The major consolidator of the Gold mining industry may have gotten too greedy in waiting for future reserve properties to become ever cheaper and cheaper for acquisition or joint venture.
The game being played by design or serendipity is to depress the juniors or to take advantage of the decline in the juniors as a result of the poor share price action through starving the junior or explorer of financing.
Depressing the price of the shares of most junior situations results in starving precious metals juniors of financing and their shareholders would be ripe for a bid for the company at a price much lower then their highs when gold was at $600. It may also make the smaller company eager to make deals at less than advantageous conditions for their investors.
The key here is that the gold producing industry is in need of new resources as present resources are depleting. That is fact about which there is no question whatsoever.
It is much cheaper to pick up a property or entire company in a financially stressed condition because it cannot publicly finance for continued operation.
Let’s call the situation the taking advantage of a serendipitous development. To others it looks like the consolidators are holding a smoking gun. The weakness in this strategy is the advent of new competition for minerals internationally, primarily from Asia and the Middle East.
The Saudis and the Chinese are actively looking for mineral prospects from industrial to precious metals, from strategic metals and material to rare earths and beach sands, having publicly said so at top executive levels.
The major industry consolidators now have competition from companies with more liquidity and NO need for debt to take any property to production.
The advent of this new competition may well trump the western companies some feel are holding the smoking guns.
This competition from Asia and the Middle East may accelerate the consolidator, whose timing is a greed driven desire to get properties so cheap they might be considered free, to move sooner than later.
To call attention to the factual nature of this analysis please read the following article posted here April 11th this year regarding the stated interest of a major Chinese company given publicly at a recent professional mining conference and quoted therein.
Please note the all-important statement given by a top executive of the Chinese company:
"Small and medium-sized miners and juniors who are still in the exploration stage, are the easiest targets for bigger companies, but the acquisitions wave won't likely stop there, THEY SAID."
Mega mergers ahead for mining industry
Fri Apr 11, 2008 6:13pm BST
By Ignacio Badal – Analysis
SANTIAGO (Reuters) - With metal prices holding in what many call a super cycle, the global trend toward mergers and acquisitions will continue among miners, according to analysts and executives who attended the CRU/Cesco copper week in Santiago this week.
Small and medium-sized miners, and juniors who are still in the exploration stage, are the easiest targets for bigger companies, but the acquisition wave won't likely stop there, they said.
Mining analysts agree the market will soon see more huge takeover bids announced, like the failed attempt by Brazilian mining giant Vale (VALE5.SA) (RIO.N) to buy Xstrata (XTA.L) for more than $90 billion.
Executives say acquisitions will continue because global copper demand is growing and supplies are tight, so new supply has to be brought on line. The easiest way to do that is to buy existing producers.
Companies will be on the lookout for producing assets and smaller players won't have the same access to financing to bring new output on line.
"(Mining) costs have skyrocketed in recent years, with the subprime crisis and the disappearance of securitized debt markets ... it is increasingly difficult to finance, meaning only the best capitalized players can afford to invest," said Bart Melek, a Toronto-based analyst with BMO Capital Markets.
"We may well be entering an era of super-consolidation. We'll see what pans out during the course of the next two years," Charlie Sartain, the chief executive of Xstrata Copper, told the CRU conference on Thursday.
Words like mergers, acquisitions and takeovers were among the most heard at the CRU and Cesco copper week, where potential buyers and sellers huddled in hallways and hotel lobbies.
More…
Baystock, if Century can negotiate financing ( long and bridge) for Lamaque would it be viewed as positive or negative in view of Mr. Sinclair's article?
Natik, if Century can negotiate financing on good terms, it would clearly be a strong positive. A well financed mining company with prospects for generating good cash flows in the near future would command a much higher market valuation than the same company if it were cash starved and not able to pursue it business goals without enormous share dilution. But I am extremely sceptical that Century will do a debt financing any time soon and on favorable terms. If they had that capacability they would have done so by now. The fact that they were forced to sell their gold forward at $700 last year, issue ten's of millions of shares in the 20-30 cents range speaks loud and clear as to their chances for a debt financing any time soon and on reasonable terms. A debt financing that requires them to hedge a significant amount of their production would be be a disaster in my view.
Baystock,
Isn't Lamaque supposed to be self funding as soon as next year?, if everything goes as planned that is.
My main concern is still the Rosario payment, and what they will do with Shauindo. Even if they manage to do a PP at .35c next time, they will need to dilute the stock with 40M extra, and maybe full warrants on top of that, and if that will be the case maybe CMM will never be an $1 stock again. But if you say Baystock that CMM probably will not be able to do any debt financing for either Rosario, Shauindo and if needed for Lamaque, i trust you ofcourse but i still hope until i have been convinced(of you or someone else)that this last PP are the end of a bad scenario that have been lasting longer then expected, and that it will turnaround for us soon.
Juha, self-funding sounds great, but I will only believe it when I see it. At the moment any and all projections by Century are suspect. But there Lamaque and San Juan assets are real. I am working on the assumption they will have at least 250 million shares outstanding before they get to the self-funding point. This is just for turning around Lamaque and San Juan. A successful turnaround of these two operations would warrant a $1 billion market cap, so why quibble about whether there are 200 or 250 million shares outstanding to get us there ? At this point I am assigning zero significance to Shahuindo and Rosario, since both require a successful renegotiation of the purchase terms.
All my stocks are in the green today, almost all. I don't have to mention which one isn't, again. When will this nightmare be over?
Since no one as taken a run at Century at these prices it must mean?
ALL of MY stocks are in the red today. And CMM is only ONE of them. The best way to end the 'nightmare' is to sell and get out, n'est-ce pas?
Everyone is waiting for the financing (debt and pp) to be published.
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