Things are really shaping up for us, both at the macro and micro levels:
*the yield curve is starting to show that long-term investors are very concerned about inflation
*a lot of downward pressure on the US dollar, which will likely continue longer term due to the heavy dollar devaluation from unprecedented money printing, as well as the major US debt situation
*gold price now $966 US ($34 away from hitting $1,000, but likely sticking longer this time due to money managers now aggressively positioning themselves for longer term inflation concerns)
*LIBOR is still extremely low, thus making our LT Debt terms very attractive for lenders
*Q1’09 financials will likely be issued very soon (maybe within May 31’09 deadline)
*a few weeks ago (based on preparation work requirements I had envisioned) I had suggested that the last week of May / first week of June might be a reasonable time period to expect close off of the $65M US deal. It is now May 29th and (although anything is possible, both good and bad) I have every reason to believe that this is still a reasonable time period for close off, but perhaps more on the side of first week of June (given that May is almost over). It would be great if it could happen next week, especially if the gold price inches even closer to $1,000 US. In the past, we have had way more than our share of bad luck, bad bounces and bad performances. Let’s hope that we have reinvented ourselves to the point where (starting next week) we can finally view ourselves as a respectable (professional), top notch, gold mining producer. You know the company I envisioned seeing when I first began investing in Century.
*Other
Friday, May 29, 2009
Friday, May 22, 2009
CENTURY MINING REPORTS 2008 FULL YEAR FINANCIAL RESULTS
Century Mining Corp. has released its financial and operating results for the year ended Dec. 31, 2008. Century also announced that it is in the process of finalizing financial results for the 2009 first quarter, ended March 31, 2009, and will announce results immediately upon completion.
Summary of 2008 financial results
In the year ended Dec. 31, 2008, the company reported an operating profit from mining operations, before depreciation, amortization and accretion, of $6,017,441 (2007 -- $726,798) from gold revenues of $14,326,466 (2007 -- $48,062,870). Expenses incurred in these mining operations were $8,309,025 (2007 -- $47,336,072). For the year ended Dec. 31, 2008, the company reported a net loss of $807,070, or nil cents per share, compared with a net loss of $47,370,142, or 35 cents per share, in the prior year.
Century ran a test operation at the Lamaque underground mine from May, 2007, to July, 2008. The expenses of this operation, net of gold sales, were capitalized along with the balance of the feasibility work to produce a bankable feasibility study for the project.
Also during 2008, Century expended $1.66-million at the company's San Juan gold mine. These expenditures were mainly for additional equipment, exploration, shaft refurbishment and mine development. Century plans to continue these operational initiatives at San Juan, which will result in increased production levels. In 2008 the San Juan mine produced a total of 14,252 ounces of gold. Production for 2009 is expected to increase to approximately 16,000 ounces.
As a result of management initiatives to reduce overhead, Century recorded corporate administration expenses in 2008 of $2,222,450, down 51 per cent from $4,504,205 in the previous year. These expenses include salaries and benefits, as well as travel and accommodation expenses.
As at Dec. 31, 2008, the company had a working capital deficiency of $14,985,245, compared with a working capital deficiency of $12,910,084 at Dec. 31, 2007.
During the year under review, management implemented company-wide initiatives such as corporate and administrative cost reductions, negotiations with lenders and creditors, and deferral of certain executive salaries. These initiatives succeeded in providing Century with the time necessary to produce a bankable feasibility study for Lamaque and complete an exhaustive due diligence process with a major European bank, both of which are the basis for the $65-million (U.S.) debt financing announced in Stockwatch on March 24, 2009. The aforementioned initiatives also minimized further impacts to the company's balance sheet during the last year, while the company has been pursuing project financing.
Century's financial statements and management's discussion and analysis have been filed, and are available for viewing at SEDAR.
Outlook for 2009
Century has developed a bankable project at Lamaque that has successfully passed third party due diligence and risk assessment for a senior lending package. The company is committed to continued development of the project, including further additions of gold reserves and resources.
Century is currently in receipt of a $65-million (U.S.) financing underwriting commitment. Once a financing is closed it is expected that the first gold will be poured within four months of start-up.
In Peru, the company continues working on the development of the San Juan mine to anchor the company's growth of its Peruvian business unit. This business unit has provided the financing over the last year to assist with corporate expenditures while Century has been negotiating a financing package.
If the company procures the financing that it needs in June of this year and Lamaque starts production, it is expected that the combined production from the Lamaque and San Juan mines will be a total of 22,000 ounces of gold in 2009.
Margaret Kent, president and chief executive officer of Century, commented: "Management's focus is to work diligently to complete the financing to start up operations at Lamaque and expand gold production at the San Juan mine. With positive trends in gold spot prices and exchange rates, Century's management believes that the outlook for the company has improved significantly over the last year. This is evidenced by numerous inquiries from third parties regarding financings and other potential business combinations that Century has received over the past three months. Management and the board of directors remain committed to increasing shareholder value through financing and operational initiatives currently under way that will be accretive to shareholders. In addition, management and the board are committed to protecting shareholder interests from unsolicited offers through the Company's shareholder rights plan or any other means the board deems prudent."
Summary of 2008 financial results
In the year ended Dec. 31, 2008, the company reported an operating profit from mining operations, before depreciation, amortization and accretion, of $6,017,441 (2007 -- $726,798) from gold revenues of $14,326,466 (2007 -- $48,062,870). Expenses incurred in these mining operations were $8,309,025 (2007 -- $47,336,072). For the year ended Dec. 31, 2008, the company reported a net loss of $807,070, or nil cents per share, compared with a net loss of $47,370,142, or 35 cents per share, in the prior year.
Century ran a test operation at the Lamaque underground mine from May, 2007, to July, 2008. The expenses of this operation, net of gold sales, were capitalized along with the balance of the feasibility work to produce a bankable feasibility study for the project.
Also during 2008, Century expended $1.66-million at the company's San Juan gold mine. These expenditures were mainly for additional equipment, exploration, shaft refurbishment and mine development. Century plans to continue these operational initiatives at San Juan, which will result in increased production levels. In 2008 the San Juan mine produced a total of 14,252 ounces of gold. Production for 2009 is expected to increase to approximately 16,000 ounces.
As a result of management initiatives to reduce overhead, Century recorded corporate administration expenses in 2008 of $2,222,450, down 51 per cent from $4,504,205 in the previous year. These expenses include salaries and benefits, as well as travel and accommodation expenses.
As at Dec. 31, 2008, the company had a working capital deficiency of $14,985,245, compared with a working capital deficiency of $12,910,084 at Dec. 31, 2007.
During the year under review, management implemented company-wide initiatives such as corporate and administrative cost reductions, negotiations with lenders and creditors, and deferral of certain executive salaries. These initiatives succeeded in providing Century with the time necessary to produce a bankable feasibility study for Lamaque and complete an exhaustive due diligence process with a major European bank, both of which are the basis for the $65-million (U.S.) debt financing announced in Stockwatch on March 24, 2009. The aforementioned initiatives also minimized further impacts to the company's balance sheet during the last year, while the company has been pursuing project financing.
Century's financial statements and management's discussion and analysis have been filed, and are available for viewing at SEDAR.
Outlook for 2009
Century has developed a bankable project at Lamaque that has successfully passed third party due diligence and risk assessment for a senior lending package. The company is committed to continued development of the project, including further additions of gold reserves and resources.
Century is currently in receipt of a $65-million (U.S.) financing underwriting commitment. Once a financing is closed it is expected that the first gold will be poured within four months of start-up.
In Peru, the company continues working on the development of the San Juan mine to anchor the company's growth of its Peruvian business unit. This business unit has provided the financing over the last year to assist with corporate expenditures while Century has been negotiating a financing package.
If the company procures the financing that it needs in June of this year and Lamaque starts production, it is expected that the combined production from the Lamaque and San Juan mines will be a total of 22,000 ounces of gold in 2009.
Margaret Kent, president and chief executive officer of Century, commented: "Management's focus is to work diligently to complete the financing to start up operations at Lamaque and expand gold production at the San Juan mine. With positive trends in gold spot prices and exchange rates, Century's management believes that the outlook for the company has improved significantly over the last year. This is evidenced by numerous inquiries from third parties regarding financings and other potential business combinations that Century has received over the past three months. Management and the board of directors remain committed to increasing shareholder value through financing and operational initiatives currently under way that will be accretive to shareholders. In addition, management and the board are committed to protecting shareholder interests from unsolicited offers through the Company's shareholder rights plan or any other means the board deems prudent."
Thursday, May 21, 2009
Monday, May 18, 2009
Friday, May 15, 2009
Thursday, May 14, 2009
Wednesday, May 13, 2009
Tuesday, May 12, 2009
Monday, May 11, 2009
Friday, May 8, 2009
Thursday, May 7, 2009
Lamaque subsidiary formed
May 7, 2009
CENTURY MINING ANNOUNCES FORMATION OF NEW WHOLLY-OWNED SUBSIDIARY
Blaine, WA: Century Mining Corporation (CMM: TSX-V) announced today that the formation and establishment of Lamaque Mining Corporation (LMC) was completed on April 29, 2009. LMC is a wholly-owned subsidiary of Century formed under applicable federal laws in Canada.
LMC was established for the specific purpose of satisfying certain conditions set forth in the US$65 million loan underwriting commitment received by the Company and announced on April 28, 2009, to fund the restart of gold mining operations at Century’s Lamaque Mine in Quebec. Pursuant to conditions of the commitment, Century will transfer all assets and liabilities associated with the Lamaque Mine into LMC, and all of the shares of LMC will be pledged as part of the security package for the loan. Century is working with Union Securities Ltd. and their legal representatives to complete the documentation, including the underwriting agreement, necessary to close this transaction.
The Company further stated that the final terms and conditions of the debt financing are substantially the same as those originally announced by Century on March 24, 2009 Provided documentation can be agreed upon in a timely manner, it is anticipated that funding may be available by the middle of June 2009.
CENTURY MINING ANNOUNCES FORMATION OF NEW WHOLLY-OWNED SUBSIDIARY
Blaine, WA: Century Mining Corporation (CMM: TSX-V) announced today that the formation and establishment of Lamaque Mining Corporation (LMC) was completed on April 29, 2009. LMC is a wholly-owned subsidiary of Century formed under applicable federal laws in Canada.
LMC was established for the specific purpose of satisfying certain conditions set forth in the US$65 million loan underwriting commitment received by the Company and announced on April 28, 2009, to fund the restart of gold mining operations at Century’s Lamaque Mine in Quebec. Pursuant to conditions of the commitment, Century will transfer all assets and liabilities associated with the Lamaque Mine into LMC, and all of the shares of LMC will be pledged as part of the security package for the loan. Century is working with Union Securities Ltd. and their legal representatives to complete the documentation, including the underwriting agreement, necessary to close this transaction.
The Company further stated that the final terms and conditions of the debt financing are substantially the same as those originally announced by Century on March 24, 2009 Provided documentation can be agreed upon in a timely manner, it is anticipated that funding may be available by the middle of June 2009.
Wednesday, May 6, 2009
Today's Trades
The trades for May 6 have been posted to the Today's Trades link.
At 3:45 EDT Canaccord dumped 110,000 shares at market to take out the 18-cent, 17.5-cent and a chunk of the 17-cent bids which immediately caused Wolverton to sell 50k at market and for Anonymous to chip in with 12,500 sold at market.
Canaccord seems to have an unlimited supply of shares for sale. So far in 2009 they have sold over 5 million shares net and they had net sales of over 18 million in 2008.
I've added a new link entitled "2009 Trading Summary" to show the activity of all brokerage houses in 2009.
At 3:45 EDT Canaccord dumped 110,000 shares at market to take out the 18-cent, 17.5-cent and a chunk of the 17-cent bids which immediately caused Wolverton to sell 50k at market and for Anonymous to chip in with 12,500 sold at market.
Canaccord seems to have an unlimited supply of shares for sale. So far in 2009 they have sold over 5 million shares net and they had net sales of over 18 million in 2008.
I've added a new link entitled "2009 Trading Summary" to show the activity of all brokerage houses in 2009.
Monday, May 4, 2009
Filing extension granted by BCSC
Century Mining Granted Extension For Filing Of Annual Financial Statements
BLAINE, WA, May 4 /CNW/ - Century Mining Corporation (CMM: TSX-V) announced today that the British Columbia Securities Commission (BCSC) has granted the Company an extension for filing its annual financial statements and Management's Discussion and Analysis (MD&A) for the year ending December 31, 2008. This extension is a result of a request filed with the BCSC by Century on April 28, 2009. A Management Cease Trade Order is also in effect until all appropriate filings are complete. Century is currently in the process of finalizing the financial statements and MD&A, and the Company anticipates filing in the next two weeks.
BLAINE, WA, May 4 /CNW/ - Century Mining Corporation (CMM: TSX-V) announced today that the British Columbia Securities Commission (BCSC) has granted the Company an extension for filing its annual financial statements and Management's Discussion and Analysis (MD&A) for the year ending December 31, 2008. This extension is a result of a request filed with the BCSC by Century on April 28, 2009. A Management Cease Trade Order is also in effect until all appropriate filings are complete. Century is currently in the process of finalizing the financial statements and MD&A, and the Company anticipates filing in the next two weeks.
Sunday, May 3, 2009
Thoughts on key liabilities
1) At end of Q3, $951K owing to Gerald Metals to close off hedge position and a balance of $1,869K in Working capital gold facility. The company had 3,000 ounces sitting in inventory at Lamaque. The company stated that they would pay down the $951K and the $1,869K via proceeds of the processed ounces in Lamaque's inventory. This was likely done in Q4. It is also likely that either that credit line (Working capital gold facility) or another credit line was utilized again, due to the extremely tight cash situation. It's unclear if they were successful in producing additional ounces at Lamaque (over the past 9 months) via spent carbons (they were planning to).
2) $15.4M Cdn owing to IQ (our secured lender) at end of Q3'08 - I continue to maintain that a key reason that Century is in such a favourable position now is due to the positive support provided by IQ during the difficult times. In addition, the January planning document stated that IQ was willing to settle the debt for only $9.0M Cdn had the Fortis deal gone through, thus giving Century a discount of $6.4M plus interest incurred since Q3. Nothing is ever guaranteed, but it would be reasonable to think that IQ would transfer some of that discount to this new $65M US deal, right? The settlement might not quite be $9M, as our potential new deal is for $65M US (higher) vs the Fortis deal of $55M US, but my guess is that the IQ discount will likely be in the same ballpark. My logic for this belief is that the extra cash will leave Century on more solid ground, and I think IQ is interested in establishing a successful Lamaque operation - I'm of the belief that IQ and the province of Quebec has job creation as a top priority for Quebec in these terrible economic times (mining is a major employment engine in Quebec).
3) Net Accounts Payable of $11.5M Cdn ($15M A/P and $3.5 Accounts Receivable) at end of Q3'08. In the January planning document, it showed that Quebec (excluding San Juan) had $10M Cdn in payables to be settled. Century has subsequentely announced that creditors agreed to settle $2.0M Cdn of the liabilities for shares of Century (@ $.25 per share). This is a very positive sign, as it demonstrates that our creditors believe in the direction of Century. It think it is also an indication that our creditors welcome the additional business they will receive from Century starting up Lamaque again, especially during these tough economic times - it is in their best interest to continue to support us. I think Century's success benefits everyone (miners looking for employment, creditors/suppliers, government, community, $65M lenders, shareholders.....).
2) $15.4M Cdn owing to IQ (our secured lender) at end of Q3'08 - I continue to maintain that a key reason that Century is in such a favourable position now is due to the positive support provided by IQ during the difficult times. In addition, the January planning document stated that IQ was willing to settle the debt for only $9.0M Cdn had the Fortis deal gone through, thus giving Century a discount of $6.4M plus interest incurred since Q3. Nothing is ever guaranteed, but it would be reasonable to think that IQ would transfer some of that discount to this new $65M US deal, right? The settlement might not quite be $9M, as our potential new deal is for $65M US (higher) vs the Fortis deal of $55M US, but my guess is that the IQ discount will likely be in the same ballpark. My logic for this belief is that the extra cash will leave Century on more solid ground, and I think IQ is interested in establishing a successful Lamaque operation - I'm of the belief that IQ and the province of Quebec has job creation as a top priority for Quebec in these terrible economic times (mining is a major employment engine in Quebec).
3) Net Accounts Payable of $11.5M Cdn ($15M A/P and $3.5 Accounts Receivable) at end of Q3'08. In the January planning document, it showed that Quebec (excluding San Juan) had $10M Cdn in payables to be settled. Century has subsequentely announced that creditors agreed to settle $2.0M Cdn of the liabilities for shares of Century (@ $.25 per share). This is a very positive sign, as it demonstrates that our creditors believe in the direction of Century. It think it is also an indication that our creditors welcome the additional business they will receive from Century starting up Lamaque again, especially during these tough economic times - it is in their best interest to continue to support us. I think Century's success benefits everyone (miners looking for employment, creditors/suppliers, government, community, $65M lenders, shareholders.....).
Saturday, May 2, 2009
3 mth libor rate now 1.01% (20 yr low)
I can only find a chart that goes back 20 years - I wouldn't be surprised if the 1.01% is an all time low.
The 3 month libor had increased to 4.8% back in October (the height of this credit crisis). The 3 month libor is recognized (globally) as the benchmark lending rate. It provides an indication of lending between banks. A high rate means lending between banks is less, and a low rate is the opposite.
Right now, a 1.01% rate means there is heavy lending between banks. The problems (during the credit crisis period) have been related to banks not lending sufficiently to consumers, although other indicators might be suggesting that that has increased slightly.
This low rate is a direct result of all of the trillions of dollars that have been pumped into the banking systems by governments around the world, in their attempts to avoid a 1930s type depression - more quantitative easing still to come. This is an unprecedented flood of money. IMO, it is an early indication of money supply now embedded into the system, just waiting to explode into inflation once the global economy gets reflated in the next couple of years.
With all that fiat money overflowing the system, I can picture the 3 month libor rate being extremely low for a long time into the future. I wouldn't be surprised if the rate falls below 1%. To be honest, if there is another round of major quantitative easing by the governments then I wouldn't rule out .5%.
Interest rates for a lot of loans are calculated based on libor (a floating rate) + a certain fixed percent (i.e. 4%). Some deals are based on a straight (fixed) rate to ensure certainty over an extended period of time.
Based on the March 24th NR, the deal with our $65M US potential lenders is for 8% (year 1) and 6% for each subsequent year. I'm getting the impression that our potential lenders are smart business people. I think they are seeing the scenario I just described above, where libor is almost nothing and will likely not go much higher for a long time into the future (due to the massive injection of stimulus money by governments). It will likely be hard to get an extremely high return on invested money for a while into the future (especially as lending really picks up). By signing up to a fixed interest rate deal with Century, it allows them to get a semi-decent yearly return, but more importantly it allows them rate certainly in an industry (gold) expected to perform well over the next 7 years.
I wouldn't be surprised if our potential $65M lenders want this deal to be fully closed off as quickly as we do.
The 3 month libor had increased to 4.8% back in October (the height of this credit crisis). The 3 month libor is recognized (globally) as the benchmark lending rate. It provides an indication of lending between banks. A high rate means lending between banks is less, and a low rate is the opposite.
Right now, a 1.01% rate means there is heavy lending between banks. The problems (during the credit crisis period) have been related to banks not lending sufficiently to consumers, although other indicators might be suggesting that that has increased slightly.
This low rate is a direct result of all of the trillions of dollars that have been pumped into the banking systems by governments around the world, in their attempts to avoid a 1930s type depression - more quantitative easing still to come. This is an unprecedented flood of money. IMO, it is an early indication of money supply now embedded into the system, just waiting to explode into inflation once the global economy gets reflated in the next couple of years.
With all that fiat money overflowing the system, I can picture the 3 month libor rate being extremely low for a long time into the future. I wouldn't be surprised if the rate falls below 1%. To be honest, if there is another round of major quantitative easing by the governments then I wouldn't rule out .5%.
Interest rates for a lot of loans are calculated based on libor (a floating rate) + a certain fixed percent (i.e. 4%). Some deals are based on a straight (fixed) rate to ensure certainty over an extended period of time.
Based on the March 24th NR, the deal with our $65M US potential lenders is for 8% (year 1) and 6% for each subsequent year. I'm getting the impression that our potential lenders are smart business people. I think they are seeing the scenario I just described above, where libor is almost nothing and will likely not go much higher for a long time into the future (due to the massive injection of stimulus money by governments). It will likely be hard to get an extremely high return on invested money for a while into the future (especially as lending really picks up). By signing up to a fixed interest rate deal with Century, it allows them to get a semi-decent yearly return, but more importantly it allows them rate certainly in an industry (gold) expected to perform well over the next 7 years.
I wouldn't be surprised if our potential $65M lenders want this deal to be fully closed off as quickly as we do.
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