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.
4 comments:
"Provided documentation can be agreed upon in a timely manner, it is anticipated that funding may be available by the middle of June 2009."
Given the further selldown in Century share price, I can only assume that some people are assuming mid June to also be the document close off date. However, the NR doesn't say that. Rather, it says funding is to be expected at mid June. Timing of the close off will depend on how well the documentation process progresses. The NR doesn't say that we can't get documentation closure/sign off a good 2 to 3 weeks before mid June.
Production: I take that news release to read that the agreement should be signed off within 1-2 weeks as the funding would be transferred 30-45 days after signing according to March 24th NR?
"The Company and the consortium anticipate finalizing the underwriting on
this debt financing in approximately 21 days, with funding of the full amount to take place 30-45 days
after that."
Production, the selldown in the CMM price is coming from the usual suspects - Canaccord and Anonymous with Desjardin continuing to add to their profits. When the ask was at 18 cents, Anonymous undercut that with an ask of 17 cents and as soon as that was taken out, Canaccord jumped in and kept putting up shares at 17 cents. So far today they have sold another 200k shares.
I suspect that much of the "Anonymous" selling is really Canaccord selling.
The financing news has been badly mismanaged by Century. After telling the market on March 24 that it would close in 21 days, in two subsequent NR's, it hasn't said when it will close. This allows Canaccord to prey on nervous investors.
Rock3030, your logic makes sense.
Although they may have an internal target date, they may not be certain of the exact close off date as yet, as it will depend on how well the documents flow through the process. It's a lot of money for us and I'm sure it's a lot of money for the investors. I'm sure everyone wants to ensure all of the legal i(s) are dotted and legal t(s) are crossed.
A typical debt deals normally include debt convenant documents. I imagine it will be the same with this deal. Peggy will want to ensure they are extremely favourable to Century. There is no point rushing the close off if Peggy is not completely comfortable that the debt convenants are very reasonable and beneficial for Century. We have other options, so no point rushing a sign off if we are not comfortable with the legal details. Peggy and Ross own 5-10% of Century therefore they WILL ensure Century shareholders are well protected with this deal.
Having said all of that, I'm guessing a reasonable sign off target period is likely between the last week of May and first week of June. One week of May has already elaspsed. The Y/E financials will likely be issued first, and that will take another week or two. That brings us to about 21 days into May.
Off the top of my head, here are some administrative and legal work that will need to be done before sign off:
*transfer Lamaque assets to subsidiary, including the filling of paperwork with the appropriate legal and regulatory bodies
*negotiate details of IQ debt buyout, put together legal documentation and gain signoffs
*work out debt convenant details with the lenders and prepare legal documentations
*I imagine that the TSX Venture will need to approve the final details of the deal at some point. I just don't know if it needs to be done before sign off, or if it's a situation where sign off is published pending TSX Venture approval. If approval is required before final sign off then the timing of that would be out of Century's control.
*normal legal DD on lenders, etc.
*all of the numerous administrative and legal documentation work
*there will need to be time alotted for Century's BOD to meet to approve final deal and documents, as well as time for the lenders to do the same with their respective parties - there may also need to be an extra couple of days for in person sign offs (I don't know if this is a general tend, but I've personally noticed that Chinese tend to prefer (with the deals I've seen) to meet in person when signing off a deal, and they seem to like to celebrate the deal with group pictures and such)
These are all the reasons why I'm thinking last week May/first week June might be a good timeframe for signoff.
Carib, the constant Canaccord and Anonymous selling is odd indeed. I'm with you, I don't see where they could have gotten these shares from (to sell). We have both followed the flow of Century shares at a detailed level for many years now. All large share holdings have been accounted for, almost completely. Even the remaining Scion shares are only a fraction of the Canaccord net shares that were sold this year and last year. You have to kinda wonder what the end game is for the Canaccord sellers. If they are naked short sellers then they will be in big time trouble once Peggy delivers with financing. Goodness, the aggressive Canaccord selling even goes back to the period of Wega's attempt to kill the company. We now know that Canaccord was not selling the Wega shares, as we pretty much accounted for 100% of the Wega sales through another broker (it looks like canaccord just jumped on the bandwagon). With Wega being unsuccessful in killing Century, Canaccord is now on their own. They must have figured they got away with it when the share price hit $.01, in the middle of the worse economic crisis in 75 years. If the Canaccord seller is truly a naked short seller then he/she must have a boatload of shares to buy back. I wonder what his/her plan is? Are they capping the price on a daily basis to buy time to figure out what to do? Are they buying some time, in hopes that the Century deal falls apart, and the Century share price subsequent drops lower, to allow them to buy back the shares at much lower prices? Their worst nightmare is if Peggy delivers early and catches them offguard. Peggy should set a trap for them. She should make them think they have plenty of time, then deliver early on all the big ticket items, thus suddenly sending the share price up to a sustainable $.60. Catch them with their hands in the cookie jar. In this case, these will be expensive $.60 cookies to pay back.
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