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
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- 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
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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."

1 comment:

Peter said...

I was quite pleased with the latest earnings. Just based on Peru, we seem to be able to claim 4 cents a year. Figure that one out, as far as a multiple, as see where it gets you. I see lots of big producers with no multiples at all, and here we are, trading at 13 cents, and a 4 cents profit per year. If that doesn't justify 40 cents, I don't know what does. If we can get Lamaque started up, I think we can have a major increase in the share price. The financing has to go through, but I'm afraid the numbers bandied about are a little to Sallyanneish! From my limited experience, when you are in a deal like Century's, you are not in the drivers seat. Those who will take down this private placement will squeeze everyone to get the best price and best deal. I heard the CEO talk about a 1/4 warrant, and I almost laughed out loud. This is not a bought deal!! It’s a best efforts. And I have seen bought deals, where you get a full 5 year warrant. I believe we are in the pricing range currently, meaning a new issue of shares should be at about 13 cents, and at the very least a half warrant, but more likely a full warrant, and here’s the kicker - possible 5 year term! As a shareholder, I don't particularly like this, but, without the new money, we can't get to the next stage, so it is very much a symbiotic existence. We need them, so we can't complain about dilution, we have to suck it up, and get busy with building a world class mine, and hopefully, a work class company!!