Thursday, April 9, 2009

The target date is quickly approaching

I guess yesterday's increase in share price was due to increased anticipation that the deal is moving along well.

Back to our recent high grade drill results:

Agnico-Eagle is producing gold at Goldex for $24 Cdn ($19 US) per tonne. Remember, their reserve grade is only 2.05 g/t (or .07 oz/t). They are achieving such low cost per tonne through high volume bulk mining. Remember though, their low grade means that they have to go through 17 tonnes to produce 1 ounce of gold, thus their $323 US cash cost per oz in Q4. Having a grade of 1 oz/t only requires going through 1 tonne to produce 1 ounce.

As mentioned before, all of the 4 new high grade zones (5 of the 6 drill holes) at Lamaque show grades of close to 1 oz/t. We don't know what the final grade average will be for each zone (once the entire zone is fully drilled), but we know it will be high (some may even continue to be close to 1 oz/t). However, let's do a sensitivity analysis of the cash cost per oz of these zones, assuming 1 oz/t, .75 oz/t, .50 oz/t and .25 oz/t averages.

Let's use Goldex's Q4 result of $19 US cost per tonne. There doesn't appear to be any fundamental disadvantages with our 4 new high grade zones. None are located deeper than the Goldex reserves. Also, the thickness of our 4 new zones are better than vein thickness at Goldex, best I can see. In addition, we will likely perform high volume bulk mining also (assuming we firm up the deposits of course).

Remember, Goldex had to go through 17 tonnes to produce 1 oz of gold.

Using Goldex's cost per tonne, Lamaque's potential cash cost per ounce for each of our 4 high grade new zones (assuming we have success in firming up the deposits):

* @ 1 oz/t = $19 US cash cost per ounce

* @ .75 oz/t = $26 US

* @ .50 oz/t = $39 US

* @ .25 oz/t = $77 US

Remember, this is cash cost per oz for high volume bulk mining of ounces in these new high grade zones. Be it $19 or $26 or $39 or $77, it's all hugely profitable relative to a $900 gold price.

This is the potential of that last NR, just in case it wasn't quite clear.

2 comments:

rhump said...

All looks real good! It will mean something if PK et al. can close this financing ON TIME. I see it closing on or before Friday April 17th.

production05 said...

This is an article that I recall seeing on Tuesday evening. It was done by a group called Proactiveinvestors (out of UK I think). They found out about CMM at the Calgary Investment Conference last weekend. I didn't take the article seriously when I first read it as there was a major error in the ounces being reported. They are reporting open pit ounces from 2005, along with some inferred u/g ounces, but even those do not seem to be correct (even for outdated numbers). As such, I felt that the article lacked credibility due to their lack of research - maybe they just accessed an old page, being new to the company and all (they may not have known the difference).

Anyway, the next morning there happened to be a rise in Century's share price (with increased volume). The article may have contributed to it slightly, but I think that the increase was mainly due to increased positive vibes with the financing.

http://www.proactiveinvestors.com/companies/news/1250/century-mining-reports-high-grade-gold-intercepts-from-the-addition-of-diamond-drill-holes-into-computer-model-1250.html

Tuesday, April 07, 2009

Century Mining reports high grade gold intercepts from the addition of diamond drill holes into computer model


Some companies, despite their producing mines and even positive earnings, remain underfollowed and in all likelihood, undervalued. We had the good fortune of meeting one of them at the Cambridge Conference in Calgary. Canadian Venture listed Century Mining Corporation (TSX.V: CMM) emerging mid-tier gold producer with assets in Canada and Peru. The company announced today the discovery of several high-grade gold intercepts, which are the result of an ongoing data entry and computer modelling project.

CMM currently operates San Juan underground gold mine in Peru and Lamaque underground mine in Val-d’Or, Quebec. Current production is from San Juan mine and the company is about to restart Lamaque to be back in production through the proposed $65 million financing. Lamaque actually went into production in the spring of 2007, but is currently in the back burner.

It is important to highlight that CMM has continued its exploration efforts at the Sigma-Lamaque complex even during these challenging days. Clearly, the company is keen on adding shareholder value and is well aware that going into hibernation is unlikely to help those aspirations. Since announcing upgraded gold resources on February 25, these discoveries have identified three new zones of mineralized geologic structures on the Sigma side of the complex. Newly identified mineralized zones are the result of six diamond drill holes recently added to the existing Lamaque Mine database from surface to 2,000 feet extending north, west and south from previously modeled areas.

Drill holes 1243 and 1676 are believed to be indications of mineralized shears while holes 369, 10875 and 9251 indicate the presence of dykes similar to those which were historically mined by bulk mining methods. Dykes, Shears and Flat Veins are among the most common deposit types in the Lamaque Mine Complex which hosts mineralization in quartz-tourmaline veins. This style of mineralization has been mined successfully by both room and pillar of the flat veins and sub-level stoping of the dykes and shears. Historically, over 9.2 million ounces of gold have been successfully mined from the Lamaque Complex.

Sigma Lamaque complex has a NI 43-101 compliant Proven plus Probable Reserve of 17.49 million tonnes grading 1.46g/t gold containing 820,300 Oz gold. Its open pit Measured and indicated resource amounts to 4.495 million tonnes grading 2.19g/t gold containing 317,000 Oz gold and the inferred resource amounts to 14.737 million tonnes grading 1.92g/t gold containing 907,700 Oz gold. Its underground measured and indicated resource is 3.923 million tonnes grading 4.99g/t gold containing 630,000 Oz gold while the inferred resource is 10.10 million tonnes grading 5.26g/t gold containing 1,708,000 Oz gold.

Once CMM secures financing, the company is expected to hasten its march towards production at Lamaque. With currently high gold prices, Lamaque becomes distinctly economic and would help CMM finance its operations. The company also has exploration projects such as Colina Dorada Property in Peru and Northbelt leases in the Northwest Territories. In addition, CMM has interests in Alaska with the Treadwell Mine as the anchor project on the Juneau Gold Belt.

We will keep our investors updated on CMM and its progress. Markets are currently seeking producing gold companies with potential to increase their output. CMM has producing properties and is also about to increase its output with Lamaque expected to be back in business soon.


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.