Thursday, April 30, 2009

Century Mining Announces Late Filing Of Annual Financial Statements

BLAINE, WA, April 30 /CNW/ - Century Mining Corporation (CMM: TSX-V) announced today that it has filed a notice with the British Columbia Securities Commission (BCSC) pursuant to BCSC National Policy 12-203 advising that the Company will not be filing its annual financial statements ("financial statements") and Management's Discussion and Analysis (MD&A) for the year ending December 31, 2008 before the prescribed deadline of April 30, 2009. The Company has made an application under the aforementioned policy requesting that a Management Cease Trade Order be imposed in respect of this late filing.

The Company cited numerous changes, including the appointment of new auditors of the Company, the settlement of various debts and the appointment of a new Financial Officer in Peru, all of which contributed to the delay in filing. Specifically, Century was unable to fund the auditors of the Company in a timely manner due to a lack of working capital. This issue has since been resolved, and Century is working with the auditors to expedite the completion and filing of the financial statements and MD&A.

The Company made every effort to file the financial statements and MD&A by the prescribed deadline of April 30, 2009, but it has been determined by the Company and its auditors that no amount of effort will overcome the delays caused by the changes described above.

Century currently expects to file the Company's financial statements and MD&A on or before May 15, 2009. The Company also confirmed that it will provide default status reports so long as it remains in default of its requirements to file the financial statements and MD&A within the prescribed period of time.

Century confirmed that the delay in filing the Company's financial statements and MD&A will have no adverse effect on the Company's current financing initiatives as described in a separate press release issued on April 28, 2009. Furthermore, the financial statements do not contain any material gains or write-downs from the third quarter 2008 financial statements. Century also stated that there is no other material information concerning the affairs of the Company that has not been generally disclosed as of the date of this press release.

About Century Mining Corporation

Century Mining Corporation is a junior gold producer. The Company owns and is working towards the restart of the Lamaque mine in Québec that historically has produced over 9.2 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. Total gold production for 2006 and 2007 was 70,401 ounces and 63,124 ounces of gold, respectively.

"Margaret M. Kent"
Chairman, President & CEO

10 comments:

production05 said...

It's another setback, but understandable given the points I highlighted on a previous post:

*new auditors
*new accounting VP
*San Juan being the only source of capital prior to recent financing

It's better that they incur the 2 week delay (and take the public relations hit now) and ensure everything is accounted for properly.

I like how they have been paying down debt over the past 9 months. Sure, it has left us dried to the bones with regards to cash, but our balance sheet is continually being cleaned up. I like the recent move to eliminate $2M from the Quebec payables balance. I wonder how much more of the remaining $8M in Quebec payables they were able to eliminate (if any). They were still producing some ounces (even after Lamaque was closed) via spent carbons. The intention was to use whatever cash they got to help further pay down the Quebec payables.

roxy14 said...

Deja Vu

Ruffian said...

What I spoke to them last week they told me that there were no problems. Now this ... hopefully their NR isn't misinterpreted to be masking something more serious than what is stated.

production05 said...

This delay obviously sucks, but again I can appreciate the challenges of this situation. Of course, Century's management has performed terribly bad with regards to protecting shareholder value over the years - no question about it. However, they have really improved their performance over the past 8 months - when we needed them the most. These past 8 months have been the worst period for shareholders (in general) for any period over the past 75 years. Century's management came through for us, while many stronger companies got completely wiped out, even in the gold space. I think this had a lot to do with the business skills and vast experience (in both good and bad situations) of our management team. They went through some tough times in the past, and I think they were able to apply their learnings on how to survive in extremely difficult environments, especially when you are maybe lucky to have only crumbs to survive on. Many junior companies (and some mid-tier) companies did not have this type of qualified business leadership, thus were slaughtered alive over the past 8 months.

I don't think this provides forgiveness for the past failures of management with Century, but it's a first step to finally make things right for long suffering shareholders. Once management fully delivers for shareholders, only then will they regain their reputation.

This delay could have likely been avoided had the auditors started on time. Century didn't have the extra cash at the time though, and probably not a lot of bridge loan support (on favourable terms anyway) with the Fortis deal being declined and all. I guess they could have done a $.02 financing, but shareholders would have suffered with the major dilution, right? They waited for a higher share price and finally raised some funds at $.13, even though it resulted in the financials being at risk of delay. Delays are never good, but I think they made the best choice under the circumstances.

I don't think that this delay remotely compares to the delay from last year. The 2 situations are night and day. Last year's delay was related to about 50 issues that had to be addressed (not even mentioning that Wega was doing their best to kill the company, IMO).

This is a totally different situation. We have a lot going for us right now. I don't even think we have any major issues to address, over and above closing off the various financings and filing our financials of course.

I think the NR is suggesting the same also:

"Century confirmed that the delay in filing the Company's financial statements and MD&A will have no adverse effect on the Company's current financing initiatives as described in a separate press release issued on April 28, 2009. Furthermore, the financial statements do not contain any material gains or write-downs from the third quarter 2008 financial statements. Century also stated that there is no other material information concerning the affairs
of the Company that has not been generally disclosed as of the date of this press release."

roxy14 said...

Production I agree with a lot of your points. But I'd just like to
know why she would wait until the
last possible minute to file for
the extension. Don't you think it
would have been less harmfull to
have done this a couple of weeks
ago?

production05 said...

Hi Roxy,

Unfortunately, I really don't have a clear answer for you. However, based on the NR it sounds like they understood the importance of meeting the deadline and looked at every possible way of achieving it. From the NR:

"The Company made every effort to file the financial statements and MD&A by the prescribed deadline of April 30, 2009, but it has been determined by the Company and its auditors that no amount of effort will overcome the delays caused by the changes described above."

Fortunately, I am somewhat familiar with the Y/E financial process and the Y/E audit process. In particular, it's very difficult to determine how long the audit process will take. It could vary drastically from year to year, believe it or not. Also, it's pretty much out of the hands of Century. It's all up to the auditors. The auditors need to gain reasonable assurance that the financial statements fairly represent the performance, assets and liabilities of the company. There are a number of standard (detailed) checks that they need to perform throughout the audit. Some checks could be short and others could be lengthy, but one cannot know until the checks are being performed. If auditors are new to the process, the company and the gold/mining sector then there may be additional learning curves involved.

Adding to the complexity are the recent developments. For example, Century just announced the paydown of $2M in payables (which obviously was not negotiated until recently, as the share price didn't hit $.25 until recently). Assuming they want to report this in the Y/E statements, they would have to go back and re-open those statements and then adjust all of the impacted areas in the Y/E package. The auditors may then need to review (potentially re-audit) some or all of the affected areas. In certain cases, the auditors may need to contact some of the creditors to gain various confirmations (as part of the sample checks).

That's just one example of how one little last minute change can impact the entire process. I haven't even mentioned about the various sign-offs that are required, both from the auditors and Century, and Century's BOD.

Anyway, like I said, I really don't have a clear answer for you, but it sounds like it had to do with a combination of factors. The auditors may not have been as far behind as of a couple of weeks ago (thus Century not submitting their request to BCSC at the time). Perhaps the last minute transactions threw things off.

roxy14 said...

Thanks Production.

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Carib said...

Very good points regarding the delay in reporting 2008 financials Production.

The process was complicated by the fact that Century changed auditors since the last reporting period and thus it would have taken the new auditors a considerable period of extra time to review all of the documentation that Deloitte was familiar with. They also probably already knew of Century's financial condition and may have insisted on upfront payment of fees before beginning work. It is also the busiest time of the year for auditing firms and the new auditor would naturally give precedence to long-standing clients.

Century was probably not in a position to pay auditor fees until they closed the recent 13-cent PP and I agree with Production, a 13-cent PP is a lot better than a much lower one.

It really is amazing how the company has managed to remain solvent for the past year when all attempts to raise operating capital since last Spring failed to materialize. It took PK's CD financing in December and loans from Tamerlane to keep the Fortis Due Diligence process going. It is this independent 3rd party report that has been the reason that we are now able to attract debt financing.

Today's trades have been posted. No selling by Canaccord at these prices - in fact Canaccord was a modest buyer. I expect that the 16-cent low today will prove to have been a great buying opportunity.