CENTURY MINING INSIDER EXERCISES CONVERSION RIGHTS AND WARRANTS
Blaine, WA: Century Mining Corporation (CMM: TSX-V) announced today that the Company’s Chairperson and CEO Margaret Kent has exercised all conversion rights and warrants associated with the C$200,000 convertible note announced on September 17, 2008. Ms. Kent has also elected to convert all interest accrued on the note into shares of the Company.
Pursuant to the terms of the note, Ms. Kent converted the note into units at $0.05. Each unit consisted of a common share and a common share purchase warrant exercisable at $0.10. The conversion of the principal amount, warrants and interest resulted in the issuance of 8,255,714 shares to Ms. Kent.
Ms. Kent now owns directly and indirectly 15,573,921 shares of the Company, or 7.9% of the total 197,978,400 outstanding shares of Century.
11 comments:
This is what I posted at Stockhouse regarding the early conversion of the $200k debenture:
None of the theories advanced here as the reason for PK converting her $200k investment into shares at this time make a lot of sense to me.
To suggest she is doing so to sell the shares on the open market as advanced by perfecttiming, aka Dec3, is really laughable. She already owned over 7 million shares and if she wanted to sell any shares she can start with those, but PK isn't going to be selling any shares at these prices.
Neither does it make sense to convert ahead of the closure of the $65 million financing deal. Nothing to be gained there either. She might as well continue to collect interest on the $200k loan and convert at the latest possible time.
So why now?
There are a few other theories that make more sense IMO.
The first is that it is another reduction in CMM debt - albeit a small reduction, but if you are pressuring your creditors to accept 25-cent shares in exchange for debt, surely the CEO can also exchange debt for shares as well now, rather than continue to collect interest. I think the financiers of the $65 million would like to see CMM reduce their debt as much as possible so that more money is available to develop Lamaque and San Juan.
Another possibility is to increase insider ownership of shares to help ward off a lowball hostile takeover bid, but again I think she could probably make the conversion after the takeover bid is made.
The most likely reason IMO is to make properties that were used as collateral against the $200k available as additional collateral for the $65 million financing.
The lenders of the $65 million may be asking for more than the Lamaque subsidiary as collateral for the $65 million loan and also want the properties that CMM put up as collateral for PK's $200k loan. We shareholders were never told what properties they were, but I suspect it was everything outside of Lamaque and San Juan and maybe even some of the San Juan properties. With PK converting the $200k into shares, those properties can now be used as additional collateral for the $65 million.
Why else would PK give up the monthly interest for the loan or the chance to pick up properties worth much more than $200k if the company could not pay back the $200k?
Whatever the reason, the early conversion is a positive for CMM shareholders.
Carib. I like your way of thinking. Sure does make a lot
of sense to me.
Your theory reads better than the others expounded on the Stockhouse bullboard. PK knows a thing or two about major debt financings.
Hi Carib,
I have an additional thought. I guess it’s more of a recommendation, if someone from Century happens to read this post.
Currently, the market gives us zero value for these properties:
*San Juan – small gold producing asset with almost 400,000 ounces of 43-101 resource and potential for significantly more on the San Juan property, but also on all the surrounding mineralized properties
*Erika – good potential for copper deposit – epithermal maybe
*Northbelt, Yellowknife, NWT (15 kilometer strike length) – 250,000 ounces of gold established already (including 45,000 @ 10.30 g/t and 130,000 ounces @ 4 g/t), and potential for a lot more
*Juneau, Alaskan properties – the recent positive Supreme Court ruling in favour of Coeur sets a very positive precedent for mining companies with properties in the Juneau area
*Goodchild, Ontario properties – early stage
Right now we get ZERO value for all of this.
Spinouts to shareholders can only be done in the form of dividends. The IQ contract states that a dividend cannot be paid to shareholders until the IQ debt has been retired. That will no longer be a barrier. Pledged assets cannot be spun out to shareholders. Also, that is no longer a barrier. Here is why:
1) The IQ debt will likely be retired once the US$65M financing for Lamaque is closed off.
2) Peggy just converted her debentures into shares, thus none of these properties are pledged as collateral anymore.
Thus, my recommendation is for Century to spin out all of the above properties into a NEWCO and give the NEWCO shares to existing Century shareholders via a dividend payout. There will no longer be any barriers once the $65M deal is closed.
This will allow Century Mining / Century Lamaque to be a pure play (good or bad), without influencing the rest of the company like it has been while we waited for financing over the past couple of years. The NEWCO will finally allow value to be established for our other properties. As San Juan has been carrying the company for a while now, a bit of the $65M can go towards paying down the San Juan payables and also provide a bit of cash for San Juan expansion. The NEWCO can also do a small financing to raise up front cash to explore both San Juan and Northbelt. Going forward, the NEWCO can produce cash/profits, via San Juan, to support future initiatives – as a producer, the company gets established with immediate self sustainability (in this environment, this is both attractive for shareholder investments and raising funds).
Century Mining / Century Lamaque can still maintain back in rights, for when it’s time for consolidation into a bigger gold producing company (down the road) – Century Lamaque, NEWCO, Module/Carolin…….
Century should announce the closing of the $65M financing and the spinout of the NEWCO in the same press release. This would allow the share price to reach a more reasonable level – it will attract both investors interested in Lamaque start up and investors interested in grapping the spinout value.
This would leave us shareholders with shares of 2 producing gold companies, with both companies having solid exploration upsides.
Anyway, this is just what I think they should do.
Let me know what you think, Carib, Roxy, Natik or anyone else.
good discussion guys. A couple of questions.
The hold period for the Flow through shares is just about up. If the financing is not closed, do you think we will see some increased selling?
Thanks,
North of 60
when are second quarter results due?
1) I don't think the hold period is up for another 3 weeks to a month from now. Hopefully the $65M financing deal would have closed by then.
In any event, I think Union Securities likely is a key as to whether those investors would sell. I think the financing almost entirely went through them, to their clients. IMO, if Union still believes that the financing deal will go through then they will likely encourage (and give hope to) their clients to keep their Flow-through shares. Once the deal goes through Union will receive warrants to purcahse 10M (cheap) shares of their own. As such, they have incentive to ensure the share price maintains maximum levels - they will eventually become shareholders.
CENTURY MINING CORPORATION ("CMM")
BULLETIN TYPE: Private Placement-Non-Brokered
BULLETIN DATE: June 1, 2009
TSX Venture Tier 2 Company
TSX Venture Exchange has accepted for filing documentation with respect to a Non-Brokered Private Placement announced March 24, 2009:
Number of Shares: 15,384,615 flow-through shares
Purchase Price: $0.13 per share
Number of Placees: 14 placees
Finders' Fees: $120,000 cash and 615,385 warrants payable to
Union Securities Ltd.
307,692 warrants payable to MAK Allen & Day
Capital Partners
- Finder's fee warrants are exercisable at
$0.13 per share for 18 months
2) As a Venture company, the Q2'09 financials are not due until the end of August - slightly less than 2 months away.
I went back to the press releases to confirm the exact timing:
1)Closing of 13,482,141 flow-through shares announced on March 31'09:
"Blaine, WA: Century Mining Corporation (CMM: TSX-V) announced today that it has closed a non-brokered private placement of 13,482,141 flow-through shares"
2)Closing of the remaining shares announced on April 3'09:
"Blaine, WA: Century Mining Corporation (CMM: TSX-V) announced today that it has closed the remaining balance of a non-brokered private placement of 1,902,474 flow-through shares"
Just a thought.....
Does anyone think that one of the conditions on the financing would be for Peggy to hand over some control on how the funds are spent? Possibly have a couple of their own guys on the board? I could see this being an issues with Peggy given the type of person she is, and it's been one of my own "conspiracy theories" as to why they are still negotiating.
any comments?
You make a good point. I think it's possible, but unlikely. My guess is the delays are strictly administrative in nature. It's a complex deal with foreigners to Canada. My very very vague understanding (at a 10,000 foot level) is that the investors are new to investing in Canada. As such, lawyers of all parties have to look at all documents in detail, and then figure out what works best. Sometimes there are no right or wrong answers, but it's a matter of finding the best balance for all parties involved. I get the feeling it's past negotiation stages, but it's more lawyers going over things with a fine tooth comb. If such is the case then the obvious question is why wasn't all of this done earlier in the process, when the documents were being drafted. Quite frankly, I have absolutely no idea.
I guess there are many ways to look at the situation. Yes, it sounds like all parties have done a very poor job in pulling this together in an efficient manner, perhaps partly due to lack of experience dealing with partners in total opposite parts of the world, and language barriers, jurisdiction rights, political, legal and regulatory environments, and other such challenges. You know, it's completely different doing a financing deal with a known Canadian institution (i.e. Sprott Asset Management) versus working with a new partner in Asia, a business area that is totally unfamiliar. Not saying the businesses in Asia are not legit, but I imagine that less DD would be required for a deal with Sprott versus with someone unfamiliar and located in an unfamiliar business environment.
One can also view this in a more positive light. You know, the fact the all parties involved have been able to overcome all these challenges, and appears to be still moving forward (they could have quit ages ago), it very positive. It shows the determination of all parties to complete this deal.
Who knows what is truly happening, right?
We can only provide our best guesses (right, wrong or otherwise), and that's really about it.
Nevertheless, I get the general sense that all parties are focused on getting this deal done (I believe that Peggy's debt conversion NR was a statement that she is a believer, to Carib's point, I think it says that if the creditors can agree to convert debt to shares then she certainly can also). The obvious question is if everyone wants the deal done then why don't they just make it happen, right? I have no clue to the answer. My only guess is that if lawyers are pointing out logistical changes at the last minute, I imagine it takes time to make each one of those changes.
Like I said, these are only theories on my part (based partly on general sense I am getting and slight whispers I am hearing). It is impossible for any of us to know the complete story, or what is real and what is just fiction.
I really do think though that Century needs to update the market. There are no excuses for doing such a poor communication job. At the very least they should let people know that they are still working of closing off the deal, you know, so people know that the deal is still officially on the table, otherwise they will have no other choice but to come to their own conclusions.
As a side note, 3 mth LIBOR officially reached .5% this morning. At the end of the day, our potential lenders either like the deal (based on the overall package) or they don't. I don't think there will be one particular deciding factor (unless it is something material). As such, the significant fall in global market lending rates over the past few months (in itself) will likely not be a game changer.
Having said all that, I think the milestone .5% LIBOR is very supportive of Century's offer. I think the reason that no shares are being distributed to these potential lenders is because they are strictly interested in the annual income. I don't think they are interested in becoming shareholders or running the business. I think they are straight investors who are interested in putting their US$65M to work over the next 7 years, with an expectation of receiving a fixed income.
With lending rates reaching such a (milestone) all time low, it may take a while to increase again, especially with so much uncertainty in the economy (and some countries are now starting to debate whether a next round of quantitative easing is required to pull the economy out of the current situation). I think Century's terms provide RATE CERTAINTY to the lenders. I think the lenders are attracted to this, hence the reason they went for a straight 8% (year 1) and 6% (years 2 to 7), as opposed to LIBOR plus a certain percent.
All other things being equal, one would think that if the potential lenders liked the terms of our deal a few months ago (when rates were higher) then theoretically the terms should be more appealing now.
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