On June 5, 2008 Century announced $6 million in financings consisting of a $1 million convertible debenture and a $5 million bridge loan. They received the CD but not the bridge loan.
The terms of the CD was a zero coupon with a 12-month maturity with the debenture convertible into shares at 18 cents at any time within 12 months. The conversion terms also included a half-warrant priced at 30 cents.
Conversion would ultimately result in the issue of 5,555,555 shares and a further 2,777,777 shares on conversion of the warrants into shares for a total of 8,333,332 shares.
In the Q1 Management Discussion and Analysis dated May 31, 2009, Century stated that there were 17,234,154 shares reserved for issuance on the conversion of two convertible debentures.
On the Century website the number of shares shown for convertible debentures is 8,900,822 - a reduction of 8,333,332 shares.
What this indicates is that the MRI $1 million CD has not and will not be converted into shares as the June 5, 2009 maturity date has expired.
Whether intentional or not, the delay in getting closure on the US$65 million financing appears to have saved investors the dilution of 8.3 million shares. Of course the C$1 million is now due and payable, but assuming Century closes the financing, that payment is a lot more desirable than issuing 8.3 million shares and warrants to be dumped into the market at any price over 18 cents and 30 cents for the warrants.
Incidentally even though the CD total on the website has been reduced to 8,900,822, the total diluted number has not been likewise adjusted. It should now be less than 209 million and most of the warrants and options are currently out of the money.
5 comments:
Hi Carib, good work!
The TSE shows 169,073,000 for outstanding shares. I am totally comfortable with that #, as I have been reconciling to it all along, with historical transactions.
If we add in the March/April Flow-Through financing of 15,384,615 shares (primarily Union Security clients) then we get 184,475,214 outstanding shares (with a tiny reconciling difference of 17,599). This 184,475,214 is what Century now shows on its website as being outstanding at May 31, 2009.
The May 31, 2009 warrants (stated as equivalent to common shares) number is shown on the company's website as 9,278,743. It is comprised of the following:
1) 6,590,000 - from '07 NY financing, with $.75 conversion price and Q4'09 expiry date (essentially all of this is now owned by Peggy and Ross - Century management)
2) 1,388,889 - MRI, with $.30 conversion price and June 2010 expiry date ($1M Cdn / $.18 per share / 2 = half warrants / 2 = warrants stated as equivalent to common shares)
3) 1,270,000 - part of the $.23 share offering in early 2008 (carries a $.40 conversion price and expires in late 2010)
The company's website shows 8,900,822 in convertible debentures (held by estate related to Century management) and 6,984,750 in options.
As a result, the identified FD share count is 202,654,779 (184,475,214 + 9,278,743 + 8,900,822 + 6,984,750).
However, as mentioned by Carib, the company current shows 217,954,861 as FD shares on the company's website.
My guess is that the company likely left the higher number in place (even though it's a May 31, 2009 reporting snapshot) in anticipation that the 10,000,000 warrants will be awarded to Union Securities in the near future, as the $65M financing is closed.
In addition, creditor debt for shares initiative (5,265,472 shares) was closed off in June.
These 2 items brings the FD count to within the ballpark of 217,954,861. As such, if this number comes to fruition then it would be a very good news story, as it would mean that we get the $65M to restart Lamaque and maintain a fully loaded share count of 217,954,861, during a period of the worst economic conditions in 75 years.
I am now rethinking the MRI warrants. If the units of the debendures are not converted (and MRI gets paid with cash) then not only do MRI not get the common shares but they don't get the warrants either, as the units never got converted. I think this was your point also.
The bottom line is that MRI is now a shareholder, as least not through the convertible debenture process.
The warrant total is still 9,278,743. That likely means the different is accounted for through odds and ends finder's fees issued warrants, including the 923,077 from the March/April '09 financing.
"The bottom line is that MRI is now a shareholder, as least not through the convertible debenture process."
Just to be clear, obviously, that should read MRI is NOT a shareholder, .....
we are the 17 of june and they still not close the financial project why its so long
Can the financing really be closed before Lamaque is transferred? And can Lamaque really be transferred before the AGM, according to the below statement from the AGM schedule on their website?
7. to consider and, if deemed advisable, to pass (with or without variation) a special resolution attached hereto
as Appendix C (the “Transfer Resolution”), authorizing and approving the transfer by the Company of the
Company’s Lamaque Mine and related assets to a wholly-owned Canadian subsidiary of the Company and
the assumption by the wholly-owned subsidiary of liabilities, if any, related to such assets selected by the
board of directors of the Company, in order to facilitate the provision of security to the lenders under a
proposed debt financing for the development of the Company’s Lamaque Mine; and
8. to transact such further or other business as may properly come before the Meeting or
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