Friday, August 28, 2009

q2 results

Century reports second quarter 2009 financial results

BLAINE, WA, Aug. 28 /CNW/ - Century Mining Corporation (CMM: TSX-V) is pleased to announce its financial and operating results for the second quarter ended June 30, 2009.

Second Quarter Highlights
- Century recorded operating profit at San Juan and for the Company as a whole.
- All litigation regarding Compania Minera Poderosa was settled.
- The Company reduced its working capital deficiency by $3.9 million, or 26%, compared to December 2008.

Second Quarter Results

In the second quarter ended June 30, 2008 the company reported an operating profit from mining operations, before depreciation, amortization and accretion, of $2,115,901 (2008 - $1,437,174) from gold revenues of $4,347,387 (2008 - $3,121,143). Expenses incurred in the mining operations were $2,231,486 (2008 - $1,683,969). For the quarter ended June 30, 2009 the Company reported net income of $1,137,857 or $0.01 per share, compared to net income of $2,538,817, or $0.01 per share in the prior period. The net income in the 2008 quarter was solely as a result of the return of the Rosario de Belen shares to the sellers.

As at June 30, 2009 the Company had a working capital deficiency of $11,128,404 compared to a working capital deficiency of $14,985,245 at December 31, 2008, a decrease of 26%. The Company is working diligently to continue to reduce this deficit.

During the second quarter of 2009 the Company settled all litigation with respect to the Company's October 2006 binding agreement to acquire an investment in Compania Minera Poderosa S.A. ("CMPSA"), a Peruvian gold mining company. Under the terms of the settlement agreement, the Company received (i) a US$300,000 cash payment and (ii) 260,868 shares of CMPSA in exchange for a US$300,000 deposit that had been paid by the Company. All litigation brought by the Company, the sellers, the other buyer and other parties was dismissed.

The Lamaque project is world class and management has been working to deliver a financing package with terms that are in the best interests of all of our stakeholders. To this end, the Company has considered a number of financing offers. The Company is currently in receipt of several equity financing offers which would supplement the prepaid gold forward term sheet that the Company is in the process of closing. The Company will continue negotiations only on those offers that allow the Company to honor its obligations to its stakeholders. A financing package will also only be acceptable that allows the existing shareholders to reap the upside benefits
of our estimated six million ounces of gold currently contained in reserves and resources at Lamaque. Proposals received to date have involved offers of mergers or business combinations, the sale of a substantial amount of equity, or some combination thereof.

A special committee of the Board of Directors has been appointed to review and evaluate the current offers for equity financing. It is expected that this process will take two weeks to complete.

Margaret Kent, President and CEO of Century commented, "Century is proceeding with the $45 million financing announced on July 30. Century is working closely with Union Securities Ltd., and we believe the final closing of this deal will occur this fall."

Regarding Lamaque, Ms. Kent further commented, "Century recently hosted a technical review at the Lamaque mine site, which was attended by approximately 35 industry professionals. Due to the success of this event, the Company will host another presentation and mine tour for industry analysts from major brokerages in Canada and the U.S. in mid September. The purpose of these on-site technical reviews is to demonstrate to the mining and financial communities the exciting results achieved at Lamaque over the past year."

Wednesday, August 26, 2009

Stats - 20 avg and 30 day avg

CMM share price:

*20 day average = $.143

*30 day average = $.147

CMM share price closed at $.14 or above:

*on 17 of the past 20 days

*on 27 of the past 30 days

Monday, August 10, 2009

Century grants $.18 stock options to Director and Officers in lieu of cash bonuses and other compensation

Century Mining Grants Stock Options

BLAINE, WA, Aug. 10 /CNW/ - Century Mining Corporation (CMM: TSX-V) announced today that it has granted a total of 3,150,000 stock options, of which 2,950,000 were granted to directors and officers of the Company. The stock options are exercisable into common shares of Century at an exercise price of C$0.18 per share for a period of five years. Century's common shares closed at C$0.145 on the TSX Venture Exchange on August 7, 2009.

These options were granted to directors and officers of Century for significant progress on the development of the Lamaque project in lieu of cash bonuses and other compensation to management.

Century Mining has 197,978,400 common shares issued and outstanding. Under the terms of the Company's "rolling" Incentive Stock Option Plan, a maximum of 19,797,840 shares are available to be issued pursuant to the exercise of options at this time. Including this grant of 3,150,000 options, a total of 9,989,750 shares have been reserved for issuance pursuant to outstanding option grants. A further 9,808,090 shares are available for issuance pursuant to future option grants at this time.

Saturday, August 8, 2009

Another company with prepaid gold sales

I recently did some research on other companies with a prepaid gold sale financing. I only found one other recently announced deal. The company is called Luna Gold. They are small in every aspect relative to Century. However, they went down a similar financing path. They did a huge (extremely dilutive) equity financing early this year and then they completed a prepaid gold sales financing just 2-3 months ago.

They have 346.4M shares outstanding, but yet they trade at $.39 per share.

Below is some key info on both companies. The wildcard in the comparison is Century’s debt covenant situation (including the Completion Guarantee). I have profiled the Completion Guarantee for Luna Gold. We don’t know what is in the debt covenants for Century and whether everything is reasonable. As such, I will leave that out of the equation for Century, given that we have nothing to work with at this time.

Assuming debt covenants are reasonable for Century, with Luna Gold currently trading at $.39 per share (after going down a similar path) I hope $.39 would be a good starting point for Century as well (if/once our deal closes). It would be better than the current $.145 share price (again, if the deal is not too risky of course). Given the comparative numbers between the 2 companies, logic would suggest that Century should trade higher than Luna Gold upon closing, but (after being beaten down for so long) I’m sure we will all settle for $.39 as a starting point (if we can get it).

Luna Gold

*outstanding shares – 346,393,000
*current share price - $.39
*current market cap - C$131.1M
*Country – Brazil
*P&P Reserves – 729,000 ounces
*Total Resource – 1,300,000 ounces
*prepaid gold sales committed to financing – unclear, but it appears to be ongoing (it could eventually be over 200,000 ounces, if I understand their situation correctly)
*prepaid gold sales as a % of P&P Reserves – 17%
*prepaid gold sales as a % Total Resource – 17%
*completion guarantee (part of debt covenants) – “Luna has provided a completion guarantee that within 30 months from the date that Sandstorm makes the Upfront Payment, the Project will produce a minimum of 12,500 ounces of payable gold in any three consecutive month period.”
*production start up – Q2’10
*2010 targeted production – unclear
*2011 targeted production – 60,000 ounces
*2012 targeted production - 60,000 ounces
*2013 targeted production - 60,000 ounces

Century Mining

*outstanding shares (after deal closes) – 329,300,000 (assuming $.18 Flow-Through shares, $.15 regular shares, 2M shares issued for commissions)
*current share price - $.145
*current market cap - C$28.7M
*Country – Canada (Quebec), Peru
*P&P Reserves – 1,300,000 ounces (Lamaque & SJ)
*Total Resource – 6,000,000 ounces (Lamaque & SJ)
*prepaid gold sales committed to financing – 50,000 ounces in total
*prepaid gold sales as a % of P&P Reserves (Lamaque & SJ) – 3.8%
*prepaid gold sales as a % Total Resource (Lamaque & SJ) – .8%
*primary completion guarantee (part of debt covenants) – unclear at this time
*production start up – SJ currently in production, Lamaque targeted for production Jan’10
*2010 targeted production – 67,000 ounces (Lamaque & SJ)
*2011 targeted production – 71,000 ounces (Lamaque & SJ)
*2012 targeted production - 104,000 ounces (Lamaque & SJ)
*2013 targeted production - 130,000 ounces (Lamaque & SJ)

Friday, August 7, 2009

Peggy, BOD, please do the right thing to protect shareholders

I listened to parts of the conference call again. Let me premise everything I've wrote with regards to this latest financing deal by saying that my thoughts are based strictly on the info that is available publicly to us investors. What is not clear is what the debt covenants will look like. I've assumed that the Asian debt deal fell through because the debt covenants / terms were too unfavourable and left Century investors at risk of instantly losing everything.

I don't know what the debt covenants will look like for this new deal. If it is unreasonable and too risky for shareholders also then Peggy needs to take a serious look at the possible merger deal that was identified in the conference call (while it's still on the table). (the other option) the major that is interested in a J/V (majority controlling interest) in Lamaque doesn't look too appealing as a first option, as we become submissive, plus we get no cash flow unless the majority owner decides to declare dividends.

The caller on the conference call may have stepped over the line at times, but I think he was just an extremely concerned shareholder. A lot of investors have lost a lot of money on this investment. We are at a major crossroad right now. The next move is absolutely critical.

Peggy needs to swallow her pride and do what is best for Century shareholders. What is best also means balancing the risks to ensure we survive in good shape. Peggy and the BOD needs to continue negotiations with the merger partner to see if the deal can be bettered, as a backup plan. In a nutshell, I think this is the point the caller was really trying to make. I agree. I don't get the impression that Century is working that angle, which concerns me. I want to see a backup plan that is being actively worked on, even if we are committed to closing the bank/equity deal.

I am not interested in an all or nothing situation. If the debt covenants are unreasonable and put us at risk of instantly losing everything then we should try to negotiate better debt covenant terms with the bank, otherwise we should more actively explore the merger option. A merger deal might be safer, if the other company comes with good advanced staged properties. It reduces the risk substantially in case the Lamaque ramp up gets delayed. You know, the company can still continue onwards in decent shape due to the other good properties.

Right now, the number 1 priority should be establishing stability and reducing the risks.

Sunday, August 2, 2009

Anybody notice the last sentence

Our potential long-term relationship with a bank well established in the gold business will allow the Company to capitalize upon various opportunities that will present themselves in the gold market. This has been a long process, but during this time the Company has continued to work on the Lamaque project and enhance the value of the project. Unfortunately, this has not been reflected in the Company's share price. This mine is shaping up to contain an exceptionally large resource. This financing package will afford our shareholders a tremendous amount of upside and we will start up the mine in September with gold production by January. This is why I recently converted my debenture and exercised my warrants."