Century Mining Announces Up To $3.7 Million Of Financings

BLAINE, WA, Sept. 17 /CNW/ - Century Mining Corporation (CMM: TSX-V) announced today that it has entered into a term sheet dated September 12, 2008 with U.K.-based Trafalgar Capital Specialized Investment Fund, FIS ("Trafalgar"), pursuant to which Trafalgar will provide to Century a bridge loan of up to $3.5 million, to be evidenced by a redeemable secured convertible note (the "Note"). The loan proceeds will serve as bridge financing, and allow Century to continue mine development, planning and other preparation activities at its Lamaque Mine. Century intends to repay this bridge financing through the completion of a financing relating to its Fortis Facility or through the sale of one or more of its mining properties.

In accordance with the term sheet, loan proceeds may be disbursed in up to four tranches, with $1.4 million, less fees and expenses, to be released at closing. Additional amounts of $850,000 and $720,000, respectively, may, at Century's request, be advanced at 30 days and 60 days post-closing, subject to approval by Trafalgar. A final advance of $530,000 may be released at Century's request at 90 days post-closing, subject to approval by Trafalgar.

The Note will bear interest at the rate of 12% per annum, compounded monthly, and will mature on the date which is the earlier of (i) four months from the closing date, and (ii) the date on which Century completes a financing transaction relating to the Fortis Facility with minimum proceeds of $5.0 million. If the Note is not repaid within four months of the closing date, amounts outstanding thereunder may be converted by Trafalgar into common shares of Century ("Common Shares") at the fixed conversion price of $0.05 (the "Fixed Conversion Price"), provided that no conversion will be permitted if it would result in Trafalgar holding greater than 9.99% of the Common Shares. Provided that the Common Shares are trading at or below the Fixed Conversion Price, the Century may at any time redeem the Note in exchange for cash, a 12.5% redemption premium and payment of all accrued interest outstanding thereunder.

Subject to the occurrence of an Option Share Redemption (as defined below), on the Maturity Date, Century will be required to redeem the Note in exchange for cash, a 7.5% redemption premium and payment of all accrued interest outstanding thereunder. Alternatively, on the Maturity Date, Century may elect to redeem the Note in exchange for Common Shares to be issued over a 24-month period (an "Optional Share Redemption"), in lieu of all principal outstanding, together with a 15% redemption premium, and interest accruing over such period. In the event of an Optional Share Redemption, Century will issue to Trafalgar (weekly, in four equal installments) such number of Common Shares as are equal to the principal, interest and redemption premium owed pursuant to a monthly payment schedule, divided by the then prevailing market price of the Common Shares (provided that such market price may not be less than $0.05 per share).

The Note financing remains conditional on completion of due diligence and receipt of TSX-V and other necessary regulatory approval.

The Note will be secured by a first charge/mortgage over Century's Québec milling assets, and a second charge/mortgage over Century's Québec mineral concessions. The terms of the Note will contain provision compensating Trafalgar for any appreciation of the European Union euro versus the Canadian dollar. Century will not receive the benefit of a reciprocal adjustment mechanism should the Canadian dollar strengthen against the euro.

In connection with the issuance of the Note, Century has agreed to pay to Trafalgar a commitment fee equal to 7% of the Note proceeds, and issue to Trafalgar from treasury a total of 15,000,000 Common Shares. At closing, Century has also agreed to pay a finder's fee of approximately $20,000 to two arm's length entities. The bridge financing is expected to close within the next three weeks.

For Century's immediate need to finalize the due diligence requirements for Fortis Bank and provide immediate working capital, an officer and director of Century has subscribed for a $200,000 secured convertible note. The note will bear interest at 15% and is convertible into units at $0.05 for a term of 18 months. Each unit is comprised of a common share and a common share purchase warrant exercisable for 18 months at $0.07. The note is secured against a package of exploration properties.

Margaret Kent, President and CEO of Century, said, "The combination of these two financings will provide the immediate and near-term financing necessary to take Century to a position to draw the senior secured financing Century is arranging for its Lamaque Project from Fortis Bank."

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 in addition to its Canadian projects. 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.


"Margaret M. Kent"

Chairman, President & CEO

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