In my letter to the Board of Directors before the AGM, I outlined a few examples of the deception and lies told by Ms Kent through news releases and conference call comments over the past 2 years. Nothing has changed.
Here is more proof of how we have been deceived with respect to this year's financing activities:
March 20 news release:
The Company’s cash requirements for 2008 total $12 million. A sum of $9.3 million of this amount will be used for the ramp up of the Lamaque underground mining operation. On Friday March 14, the Company received Credit Committee approval for a $7.5 million leasing line for the Lamaque project. The Company intends to cover the balance of the shortfall, as well as capital requirements for San Juan and additional working capital with a $4 million private placement and the $2.0 million in proceeds from the recent sale of the SAG mill. The Company has retained First Canadian Securities to assist with the placement, which will be a combination of flow-through shares for Lamaque underground development and units for necessary working capital.
March 25 news release:
Capital requirements in 2008 will be covered by a $7.5 million leasing line and an additional $4.0 million equity placement. The Company is working with First Canadian Securities on the placement, which will be a combination of flow-through shares for Lamaque underground development and units for necessary working capital.
May 19 news release:
Century Mining Corporation (CMM: TSX-V) announces today that, subject to regulatory approval, it has closed a non-brokered private placement of 1,275,000 units at a subscription price of C$0.23 per unit for gross proceeds of C$293,250.
Century also announces that, subject to regulatory approval, it has closed a non-brokered private placement of 3,070,000 flow-through shares at a subscription price of C$0.25 per flow-through share for gross proceeds of C$767,500. This financing was previously announced on March 27, 2008.
In addition, the Company announced that it has closed a non-brokered private placement of 1,428,571 flow-through shares at $0.35 per flow-through share for gross proceeds of $500,000.
[Comment: $1.5 million raised out of the $4 million needed as identified above – still need another $2.5 million]
June 6 News Release:
Century Mining Corporation (CMM: TSX-V) announced that, subject to regulatory approval, it has arranged with a Swiss institution a C$6.0 million financing for its Lamaque Project.
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.
[Comment: This $6 million is $3.5 million more than was is needed for 2008 capital expenditures required for 2008 and to reach cash-flow neutral status in Q3 2008]
June 24 News Release:
To reach a positive cash flow status at Lamaque, the Company will need to secure bridge financing of up to $10 million, comprising debt and an equipment leasing package. The Company intends to replace this bridge debt facility with a senior debt facility that will allow the expansion to continue.
On June 5, 2008 the Company announced that it had secured a commitment for $6 million of this facility from MRI Trading AG.
[Comment: But according to the March 20 news release, the Company already has Credit Committee approval for a $7.5 million leasing line – so what’s the problem?]
We have recently announced bridge financing, and we are working to complete the due diligence required to enable completion of the Fortis senior debt facility which will fully fund the project.
[Comment: No indication here that more funding is needed besides the current bridge financing.]
Our recent share price decline has come from repeated program sales from a significant shareholder who has declined to work with management to move its block of stock.
[Comment: And how did management plan to move this block of stock. The inference here is that if Wega would agree to sell its shares at the current 9 to 10 cents market price, management would arrange a block purchase. Wega is, as of July 4, selling its shares at 6 cents. If there was anyone whom management identified as a buyer of Wega shares at 9 cents, they would have bought Wega’s shares in the market at 6 cents.]
June 27 AGM:
Ms. Kent discloses that there is no leasing line.
2007 Year end Financials filed on June 24:
In December 2007, KCL West Holdings (Federal Equipment), a supplier of Komatsu parts and equipment to the Sigma-Lamaque Mine filed a suit against the Company in the Quebec Superior Court for approximately $1 million in accounts past due. On February 29, 2008, Century filed a defense against the amounts claimed by KCL West Holdings and filed a counter claim for approximately $250,000 demanding credit for parts returned, parts and components available for return, and damages to the Company’s equipment from improper parts supplied by KCL West Holdings. Since that time, the Komatsu Equipment leases have been assigned to KCL West Holdings. The Company is in the process of negotiating a global settlement with KCL West Holdings whereby the existing parts inventory would be credited to a negotiated settlement relieving the Company of all liability surrounding the open pit fleet and associated spares.
2007 Year end MD&A filed on June 24:
The Company is in negotiations to procure the financing needed to complete the developments at the Lamaque and San Juan mines so that a total of 40,000 ounces of gold can be produced this year. This forecast has been reduced from prior estimates because of the closure of the Company’s Sigma open pit operation and a slower-than expected ramp up of operations at Lamaque.
[Comment: The prior estimate of 55,000 oz did not include any production from the Sigma open pit which was shut down on November 5, 2007.]
July 2 News Release:
On June 5, 2008 the Company announced that it had secured a commitment for $6 million from MRI Trading AG. Century is also currently engaged in a due diligence process with Fortis Bank for a senior financing package of up to $70 million.
[Comment: Still no official notification that there is no $7.5 million equipment leasing line. The only persons that know about it are the handful of people that attended the postponed, relocated AGM, scheduled for 3PM on the Friday before the Canada Day long weekend.]
BTW, I intend to keep reminding the Board of their duty to shareholders by sending them a copy of this. If ever there is a Class Action lawsuit, they won't be able to plead ignorance.
8 comments:
Boy PK would make a great CEO
on many Pinksheet stocks.
From my standpoint, the constant contradictory information disseminated by management has been misleading to the point of fraudulent. If I had the resources, I would certainly attempt to hold management responsible for essentially (imo) stealing shareholder's money by way of knowingly innacurate news releases. All IMO of coure, but I'm sure many other's as well.
hockeylad33
The lease line was cancelled because the balance sheet was horrible. The Q1 will confirm. The IR department should share some
responsibility. This is a material item. They knew and didn't inform shareholders.
A class action suit is easier said than done. I've checked. We'd have to have a cohesive group of shareholders and have to prove clear and blatant negligence or breach of duty.
carib, anyone, do you know a comparable mine in Peru to San Juan?
Being one that believes that “It’s always about money”, can someone tell me how would/or did management of this company have or will have a monetary gain by issuing false or misleading N/R’s?
For those that still believe that PK is the only one that can get us out of this mess, WAKE UP!!!! SHE GOT US INTO THIS HUGE MESS. (she mislead us as shareholders and the BOD are at fault for not being there to protect us….. this is stuff people go to jail for)
Nino, what is your solution to the mess?
If Wega and Scion could have agreed to cooperate with retail shareholders long ago PK might have been hauled on the carpet to explain her disastorous moves and misleading statements.
Instead, Wega got all in a huff because she wouldn't accept their debt financing offers last year. lol They were in love with her 12 months ago at the London mining show. PK knew she'd get the boot real quick if Wega was both shareholder and banker.
The only organized campaign to dislodge PK came from the retail shareholders. Yet, when the votes were counted, it appears that a huge cohort of retail shareholders supported PK. WTF? They had Ingalls and Scheider in NY support too. Go figure! Wega didn't even vote all their shares, and it appears that Scion didn't vote any shares.
No my friend, there are forces and powers at work in the backrooms and corridors of power that slugs like us have no appreciation for.
Wega has said that they won't stop selling until they see a reason to stop. That tells me that they aren't interested in selling their block of shares. They're punishing the share price mercilessly. They know that PK can't afford another PP at this share price. the more pain the retail feels, the more pressure is turned up on PK, BJ, and the Board by the retail. You have to admire their ruthless style.
PK must have really conned them. During Wega's DD they sent people to Quebec, Peru, and Blaine to review the operations, inspect the books, and interview CMM officials. Then they plowed $12 million into CMM. Even their banker Pareto were singing praises to CMM.
As unbelievable as these prices seem, two years ago CMM was $1.89. Last year - April - they were as high as $1.28. Last January after the Lamaque 43-101 they were up to $0.57. When they hit $1.89 Peru wasn't even in the equation and they didn't have 43-101's. Crazy man!
optimusprime, start fighting dirty?
Hi Nino,
You may have a point in your advice. But can you be more specific and elaborate a bit. [Mind you, that may inform the 'enemy' about what's to come!]
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