June 05 2008 - News Release
Ms. Margaret Kent reports
CENTURY MINING ANNOUNCES UP TO C$6 MILLION IN FINANCINGS
Century Mining Corp., subject to regulatory approval, has arranged with a Swiss institution a $6.0-million financing for its Lamaque project.
Details of the financing
Convertible Debenture Facility for C$1.0 million:
- Zero-coupon facility with 12 month maturity.
- Lender has the right to convert the debenture into approximately 5.6 million Units at a price of C$0.18 per Unit within 12 months from issue.
- Each Unit will comprise one Common Share and One-Half of One Common Share Purchase Warrant. Each whole Common Share Purchase Warrant will entitle the holder to purchase an additional Common Share at an exercise price of $0.30 per share for a period of 18 months.
- Finder's fee of 6% to be paid in units.
Bridge Loan Facility for C$5.0 million --------------------------------------
- The term of the loan will be the earlier of 24 months or the date that the previously-announced project loan facility with Fortis becomes available for drawdown.
- The loan will bear interest of LIBOR + 6%.
- The loan will be secured by Lamaque milling circuit and other assets at the Sigma Lamaque Complex.
- Draw down conditional on due diligence on the Lamaque Mine and mining operations satisfactory to the lender.
- Finder's fee of 4% of the total facility to be paid in common shares of the company.
The convertible debenture is scheduled to close immediately and draw down of the bridge facility is expected in the near term. As announced on May 12, 2008 Century is currently negotiating a significant project loan facility with Fortis for up to C$70 million. The financings announced today were arranged to provide Century with sufficient capital to continue production expansion at the Lamaque Mine until the proceeds from the project loan facility are available.
Margaret Kent, President & CEO, commented: "Today's announcement is another important step in Century's plan to expand production at the Lamaque Underground Mine. The financing announced today will provide Century with the additional capital to operate the Lamaque Mine until the operation is cash flow neutral and the Fortis facility can be drawn down."
7 comments:
Although that is good news, it is not the GOOD news the market wants, and since RBC is our largest seller again, its not the news Wega wants either.
Not sure what to make out of this news release. The good news is we have just barely staved off a severe cash crunch. The bad news is we just added more dilution.
As Nino says, the news is not what the market was looking for what Wega(?) was looking for. RBC is selling into whatever bids that come up to $0.165.
The news is not bad, just not good. Looks like someone lost patience and is throwing in the towel and writing off their investment.
I'm holding off until I see what whoever is selling is up to and what the 2007 and Q1 financials look like.
You are both right, nino & bargin hunter.
This is not the news the market wants. I just hope that the BOD is paying ttention and do the right thing at the AGM (or before, like ASAP!).
If Wega is doing the selling again, I just don't understand their logic. Rather than writing off their investment, why not hang on to their shares, and team up with Scion and oust PK at the AGM. That would make more sense.
On the other hand, maybe the financials will be far worse than we dare to imagine. Soon we'll know.
If it is Wega selling, they stopped selling on April 16th for a reason, I believe they (like us) were led to believe PK was on her way out, and like us they were lied to. I do not think she is going away.
Well at least it is not the news that Wega wants. Wega is saying "we are willing to sacrifice more shares at this price level in order to force a change in the CEO position". They patiently held off selling for about 6 weeks, but are back sending a message that the share price won't be allowed to rise with PK at the top.
It is disappointing the bridge loan came with some dilution. Roxy14 reported earlier that he'd been told that the bridge financing would not likely come with convertibles, but when you can't raise money via the PP route, you are not in a very strong negotiating position. We did well in this credit environment that only $1 million of the $6 million total is convertible and that there are only half-warrants instead of the full warrants offered with the last PP.
Nevertheless the amount of dilution caused by this financing is a lot less than if the last PP had been filled. For $6 million, it will cost us 7.3 million shares and 2.9 million warrants.
The last PP raised $1.1 million and resulted in 4,345,000 new shares and 1,275,000 warrants. Had the full $4 million been raised, it would have cost more than 22 million shares and warrants. So ironically, the failure to raise $4 million from the PP was a good thing as far as dilution is concerned.
Rather than be disappointed that this news didn't help the share price, I think we have to be grateful to Wega for keeping the pressure on. I don't think there is any way that the BoD can let PK remain as CEO as long as any news that doesn't announce PK's resignation is met with indifference.
OTOH, this financing should dispel the notion that the company is close to bankrupcy or receivership. It was what the company needed to get to breakeven status at Lamaque and San Juan is generating positive cash flow.
Anyone buying Wega's shares here are likely to be well rewarded after PK is given the boot. IMO it is not a question of if but when.
To me todays news was great.
Dilution should be done for a long
time as long a Lamaque comes close
to forcasts. Now a question...
Other than forcing out PK, is there
any other possible reason for
Wega's actions???
PK must go, no question. One of the next two announcements must be her resignation!
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