- Management and insider cease trade order revoked today -
BLAINE, WA, July 18 /CNW/ - Century Mining Corporation (CMM: TSX-V) announced today that the management cease trade order issued by the British Columbia Securities Commission (BCSC) on March 20, 2008 was revoked today, and the Company has resolved all outstanding issues regarding disclosure with the BCSC.
Margaret Kent, President & CEO said: "We have worked diligently over the past several months to address all of the disclosure issues raised by the British Columbia Securities Commission and we are pleased to announce that these have now been resolved. The Company maintains a policy of meeting all disclosure requirements of the TSX-V, the BCSC and all other regulatory bodies. We look forward to continuing our focus on completing necessary financing to fund the restart and ramp up of production at the Lamaque underground mine."
11 comments:
Now lets see some Wolverton buying
on Monday on behalf of Peggy and
Ross. Time to put your money where
your mouth is.
It must have been a huge mess in the books of CMM if it took nearly four months of 'diligent' work by PK & associates to clean it up. What does that tell us about Management's competence to run this Company? Tim Gooch, are you still with us?
As Optimusprime said in an earlier posting, we owe a great deal of thanks to BCSC for sticking up for shareholders. CMM's Management does not seem to care for us.
Roxy, the proof will be in the pudding on Monday and throughout the week. PK, BJ and the rest of the gang have been promoting CMMs value all the way down from over a dollar. What better bargain is there than 8 cents CMM shares? They should be good for no fewer than 10 million shares if they believe in their story and CMMs future. Wow, what a temendous opportunity for them to demonstate confidence in the company and profit on top of it all. They are sitting on top of all the info while the rest of us can only guess what is coming next?
The most important remaining item is now for Century to clear up the serious questions regarding whether the company is a going concern or not:
Scenario 1: success with debt financings. Bridge financing followed by Fortis financing. I rate the current chances for success on this front as slim due to the ongoing severe financial crisis that we are in the midst of.
Scenario 2: major equity financing at these low share prices. Century could raise $3.5 million by issuing 60 million shares at 6 cents. This would be highly dilutive to current share holders, but now that the MCTO has been rescinded, management may just have the gall to go this route, since insiders will now be able to take up the bulk of this cheap paper. Those wishing for insiders to purchase a lot of shares should be careful what they wish for, since it will most probably take the form of their taking part in a cheap financings.
Scenario 3: Reduce the monthly burn rate so that the company can survive on San Juan cash flows until the debt and/or equity markets recover, no matter how long this takes. This is my preferred scenario for obvious reasons. Jim Sinclair who’s opinion I highly respect is insisting that the POG will hit $1200 before the end of 2008, which is less than 6 months away. Assuming the true San Juan cash cost is around $700 per oz, $1200 POG will provide a positive cash flow of $500 per oz or $8 million per year at 16,000 per oz yearly production rate. This should be adequate to keep the company alive until debt financing can be arranged, regardless of how long it takes. As Production05 pointed out, San Juan should be the contingency plan since whatever can go wrong should be assumed will go wrong in the efforts to close on the Fortis debt financing, including some things not in Century’s control. In support of higher POG and San Juan being the cash cow that saves the day even at the current low production levels, I close with this very recent quote by Richard Russell:
...Some of the best writings on gold today comes from my old New York friend, Ron Rosen, who writes the Rosen Market Timing Letter. Ron is a close student (to put it mildly) of the markets, gold, gold history and gold action. Below are a few paragraphs from Ron's current report:-
"This world has been functioning for decades on faith and trust in paper money and the politicians backing it. One day, hopefully, citizens of the world will know better than to trust their politicians with anything that vaguely resembles money. The pain associated with this learning lesson is in the process of being hammered home. There may be some violent corrections on the way up to the ultimate destination for gold, silver, and their shares. However, the percentage of the price corrections should remain relatively normal. As the climb in price becomes more extensive and violent, the corrections may become shorter in time consumed. A "blowoff" is what the precious metals complex is in the process of beginning.
"The gold market chart of 1978 closely resembles the gold market chart of 2008. The patterns, once a breakout above a previous multi-year high occurred, are nearly identical. If you compare the first seven months after the breakout to a new all time high occurred in 1978 to the first seven months after the breakout to a new all time high occurred in 2008 you will see nearly identical patterns. In 1978 gold rose from the breakout price of $192 to the ultimate high of $873. That was an increase of 450%. If the current gold breakout from the $850 high increases by 450% the ultimate high will be $3,825.00. However, we are living in more dangerous financial times than existed in the 1978 to 1980 period.
"The daily chart below shows that gold is clearly overbought. The series of gaps as gold rises are called "runaway" gaps. Gold is moving into the beginning of what I call a potential buying stampede. Those who have traded out of gold (and there are a lot of them) are now being left behind. In a buying stampede, overbought conditions are traditionally ignored. The idea at this point is to get into the item (gold), and those who wait are left behind. We last experienced a buying stampede in gold during 1979-1980. It may be a bit early, but I suspect that if gold closes above 1000 we will be close to another buying stampede."
baystock, welcome as a member of the Century Mining blog. I posted your comment before realizing you had already posted as a member and therefore removed the duplicate post.
I certainly agree with much of your post in that if the financing falls through, then we should focus on San Juan until financing is available. If the financing does fall through, then PK has clearly proven herself to be a liability and must surely be fired. A new and more credible CEO would certainly have more success in raising funds and future PP's wouldn't be at current prices.
Brent told me that the current burn rate is $300k per month, so SJ should be able to handle that and included in that $300k are the fixed costs at Lamaque for technical and supervisory staff so the burn rate could be reduced further.
The average cash costs at SJ in 2007 were $430/oz and although they jumped up to $619 in Q1-08, we've been told that this was because of the start of mining operations at two new veins and that these costs should come down in a quarter or two. We'll see. Nevertheless we should certainly see cash costs below $600 and perhaps closer to $500 based on costs to date.
I don't think the company could issue 60 million shares in a PP to mostly insiders. I believe the TSX-V has a limit of 25% dilution in a 12-month period without shareholder approval. The insider buying had better be in the market starting on Monday.
I understand that the Peru rep at the AGM stated that SJ produced 250 tpd in Q1 and that production declined in April and May because of development work, but would be 350 tpd for the June - December period without any new significant capital investment. He claims that he could get SJ up to 35,000 opy next year with minimal capital investment.
Well Q1 did come in at 250 tpd and the grade and recovery rates were better than expected which resulted in 4,058 oz in Q1. If those grades can be maintained at 350 tpd then we may be currently producing at the rate of 5,600 oz/qtr. or 22,400 opy.
At a $600 cash cost and a $1,000 gold price, that is $9 million in cash flow per year and at a $1,200 gold price, it is over $13 million per year in cash flow which is more than our current market cap.
If we re-invest some portion of that cash flow into plant modernization at SJ, then production jumps to 35,000 opy and cash flow at $1,000 gold and $500 cash costs becomes $17.5 million - more than enough to re-start Lamaque. At your expected $1,200 gold price, the cash flow jumps to $24.5 million/yr. and SJ alone would be worth $1/share.
Baystock, valid comments. PK received four financing proposals from lenders (Montreal, Chicago, ?,?) prior to the AGM. She stated that none of them were beneficial to CMM which I interpreted to mean that they were highly dilutive or probably included significant hedging, hence the Lamaque curtailment and focus on the MRI and Fortis debt.
I have my doubts as well about the debt financings. With PK's reputation for misleading shareholders since 2006 this would fit her annual story telling antics to keep the dream alive while she works another angle. Given how difficult it is for juniors to arrange suitable finanincg, why would MRI or Fortis loan a penny to CMM? If we assume that the MRI/Fortis deals are red herrings, then what are PK and the BoD really planning to turn CMM around?
Incidentally, PK continues to state (as of yesterday) that the MRI financing will be secured.
CMM currently receives no share value for San Juan. The San Juan manager stated that he could double SJ's production in 2009 if he gets the capital investment he needs at the mine. Here's a suggestion how to kill two birds with one stone. Settle the Poderosa litigation and reinvest the proceeds into SJ. It is embarrassing that PK burned millions on Shahuindo and Rosario when she had the SJ in her backpocket.
Carib, thanks for the welcome and your reply. I was't implying that Century would do a large share placement, but just to be prepared for this prospect, since issuing paper is what venture companies seem to do best. A neighbor of ours in Peru and also listed on the venture, Gold Hawk (CGK) with 171 million shares outstanding, closed a PP last week for 55 million shares at 6 cents. And they are reputed to have respected and professional management.
If a small capex could take San Juan up to 35,000 oz per year next year, I hope that this endeavor will receive the immediate attention from management to make this happen, since there can be nothing more critical then getting into a positive cash flow position. In fact this begs the question of why 2 years after the San Juan acquisition we are not already there.
If the San Juan operation is now at 350 TPD for 20,000 oz per year at $500 cash cost, then we are making $450 per oz now and already doing better than the cash flow break even point. In fact if we subtract the $4 million yearly burn rate from the $9 million San Juan cash flow that still leaves $5 million per year in pretax net cash flow. We are supposedly trading for 2.5x current pretax cashflow. This would mean that the current financial situation of the company is not as dire as the 7 cents SP seems to suggest. So what are we to believe ? Clearly the company has a severe credibility problem and insiders will need to aggressively step up to the plate and purchase shares on the open market starting Monday. Their actions will speak louder than their words, which the market understandably views with extreme skepticism due to numerous missed projections and the inability to focus on a coherent business plan.
The other flip side to this is Scion can now start what Wega was doing.
I want to see Peggy and team working with Scion to see whether they can be a friendly investor and take a large stake in the company.... i.e. remove restrictions on ownership etc. and give them a seat on the BOD.
If we get Scion or another friendly on board, this stock will not be in the toilet. Problem is we have no friendly's on our side.
i just came home, it doesn't seem like any insiders bought today.. Maybe they want a cheap PP at this price instead?
Are insiders even allowed to buy now - given that they have the inside track on the financing situation???
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