current 3m libor rate, and some thoughts

It looks like it stayed pretty much the same, perhaps a slight decrease to 3.535%.

With the recent dramatic fall in gold price, we are fortunate to have a semi-low cost producer in San Juan. With the previous (and current) fall in prices related to consumables, fuel, etc., coupled with the 8% (or so) decrease in value (vs US dollar) of the Peruvian currency vs Q2 timeframe, we might have a shot at seeing a cash cost per oz within the $350 - 425 US range effective Q4 and going forward (if the deflation environment remains). If Century moves to producing 25,000 - 35,000 ounces from San Juan down the road (instead of current production of around 16,000) then the possibility of a cash cost per ounce of $300 - 350 US may be possible within a deflationary environment. As you can see, production of 25,000 - 35,000 ounces with cash cost per oz of $300 - 350 US and any gold price between $500 US and $1,000 US can still be very favourable for a small cap company, especially one with currently a $.025 share price.

It is my belief that Century's management should start working on this plan (if they haven't already) in case the current (low) gold price discourages their potential lenders (Trafalgar and BNP Paribas/Fortis) from closing the current deals. Century can then put Lamaque on hold until the gold price and the credit environment picks up again. The key to this plan though is that management needs to aggressively reach out to the cashed up base metals and uranium companies out there that are looking to partner up with a company with a gold junior company with a producing asset and/or a very near producing asset. Century has both, plus semi-low production cost per oz at San Juan. There are uranium and base metal companies out there with $10 - 20M Cdn net cash in the bank. There are also junior (pure) gold exploration companies out there with $5 - 7M in net cash, and many many years away from producing anything.

Here are the 2 options Century should aggressively look into (even while simultaneously trying to close the deal for the loan and LT Debt):

1) Try to merge with 1 junior company with $10 - 20M in cash. If it's with a base metal or uranium company then the base metal or uranium properties can always be spun out to shareholders in a year or two once those prices have recovered - no one misses out on anything.

2) Try to merge with at least 2 of the juniors with $5 - 7M cash each.

The merged company can then renegotiate down (substantially) the $18M accounts payable amount within the balance sheet (this shouldn't be a problem as everyone is looking for immediate cash right now, and are willing to be creative) and then pay off the newly renegotiated balance. The merged company should then inject a few million of the remaining cash into bringing San Juan up to 25,000 to 35,000 ounces of production.

The new company should then eliminate almost 80% of the Corporate overhead until both the gold price and credit market picks up again.

These moves will allow Century Mining to become free trading again, as there would be no other roadblocks. They can still carry and service IQ's debt, as the principle payment is only $1M per year plus interest payments - 15 year payment plan is excellent. Also, the gold price would not be an issue, as the business would be solid on solid ground at any gold price over say $500 US. A $1,000 US gold price would just be a big fat bonus for shareholders, if these actions were taken.

I just hope that management is aggressively exploring this possibility. I think these simple moves can quickly turn this company around, and I think the economic conditions have created situations where companies with a bit of cash are desperate to hook up with undervalued (semi-low) cost gold companies with an already established revenue stream. We are fortunate to not only have that, but a company maker mine (Lamaque) that can go into production shortly after sufficient funding is gained down the raod (perhaps once the credit markets pick up again, if the BNP Paribas/Fortis situation doesn't work out short term).