Monday, November 30, 2009
Some really positive developments today! The only condition for closing the $21 million PP that I thought might be a bit dicey after the recent bad press in Quebec was the renegotiation of the IQ debt. The deal reached under that political cloud was amazing. (One Quebec MP called Century a company they despised). I would have been happy with shares priced at 25 cents (the same deal as the other creditors received). For the past year where we have been most vulnerable was someone else buying the IQ debt and foreclosing on us. As Production said, IQ has treated Century extremely well.
I'll post today's trades in detail after this and will try to keep the "Today's Trades" link current from now on as it now appears we are back in business.
In the third quarter ended September 30, 2009 the Company reported an operating profit from mining operations, before depreciation, amortization and accretion, of $2,334,568 (2008 - $1,735,994) from gold revenues of $4,532,083 (2008 - $4,300,640). Expenses incurred in the mining operations were $2,197,515 (2008 - $2,564,646). For the quarter ended September 30, 2009 the Company reported net income of $2,689,470 or $0.01 per share, compared to net income of $607,382, or $0.004 per share in the prior period.
As at September 30, 2009 the Company had a working capital deficiency of $5,830,238 compared to a working capital deficiency of $14,985,245 at December 31, 2008, a decrease of 38%. The Company is working diligently to continue to reduce this deficit.
During the third quarter of 2009, the Company announced the signing of a term sheet for a US$33million prepaid gold forward sale to a major international bank with a significant gold trading business. This term sheet was conditional on a $20 million dollar equity offering. Consequently the Company signed a non binding term sheet with Gravity/Kirkland for a $21million dollar private placement. It is expected that these financings will close in mid December. In total the new financing will be providing the Company with $56 million dollars of new money to start up the Lamaque project. In addition to these financings, the Company has an arrangement with Investissement Québec to buy out their note for $8.75 million dollars and 5 million shares of Century.
In the third quarter the Company completed a flow-through private placement for $1.1 million. Two additional flow-through private placements in the amounts of $1.3 million and $2.7 million were completed in October and November.
The 2010 forecasted production from the Lamaque and San Juan is estimated to be 70,000 ounces. The cash cost at San Juan is expected to be similar to that in 2009. Lamaque's production costs will be capitalized until such time that the project reaches commercial production levels as defined under Canadian GAAP.
Margaret Kent, President and CEO of Century commented, "As we have discussed in our MD&A, the worst times are behind us. Our financing plans that we will be closing in mid-December will be accretive to our shareholders and insure over time that all our creditors will be paid in full. Our Peru operation continues to be cash flow positive and we look forward to reinvesting the cash generated from the operation to expand production".
Ms. Kent further commented, "The Company has worked diligently to reduce its working capital deficit. The year end financial statements, which will reflect the closing of the proposed financings will show a significant reduction in the Company's liabilities".
About Century Mining Corporation
Century Mining Corporation is a junior gold producer. The Company owns and is working towards the start up of the Lamaque mine in Québec that historically has produced over 9.2 million ounces of gold. In Peru, Century wholly-owned subsidiaries own an 82.6% interest in the San Juan Mine where the Company accounts for 100% of gold production. Total gold production for 2007 and 2008 was 63,124 and 14,252 ounces of gold, respectively.
Blaine, WA, Nov. 30 /CNW/ - Century Mining Corporation (CMM: TSX-V) announced that it has reached agreement in principle with Investissement Quebec for the repurchase of the long-term note held by Investissement Quebec. In exchange for payment of $8,750,000 in cash and the issuance of 5,000,000 common shares in the Company, Investissement Quebec has agreed to discharge the Company from all obligations under the note and to release all of its security interests in the property of the Company. Funding for the transaction will come from the debt and equity financings recently announced by the Company which are scheduled to close in early December. Also from the closing of the debt and equity financings the Company's working capital gold facility with Gerald Metals will be paid out. After the closing, the Company's only long-term debt will be the $33 million prepaid gold forward facility.
"Over the last several weeks and months, we have methodically taken the right steps towards the reopening of the Lamaque underground project. The repurchase of the note from Investissement Quebec is another major step forward in our financing and development plans" said Margaret Kent, President and CEO, Century Mining Inc.
The Company also announced the following management appointments:
Hugh W. Blakely, C.A., B.C. - is appointed to the position of Chief Financial Officer, effective November 18, 2009. Blakely was most recently Interim Chief Financial Officer of Canadian Royalties Inc. Previously, he held the position of Senior Vice-President and Chief Financial Officer of Heico's Canadian steel operations, operating under the name of Ivaco (formerly Ivaco Inc, a public company). During his tenure at Ivaco Inc, Mr. Blakely held a number of senior financial positions and worked in tandem with the Chief Restructuring Officer and Ivaco's financial advisors in managing the restructuring and sale of the businesses to Heico. He earned his Bachelor of Commerce from Concordia University and began his career with Coopers & Lybrand in Montreal and obtained his C.A. designation in 1974. Mr. Blakely is a solid professional with deep financial skills bringing over 30 years experience to Century.
Richard B. Meschke, J.D., M.B.A., B.A. - is promoted from Chief Financial Officer to Vice President, Legal and Corporate Development, where he will be leading the Company's major contract negotiations and growth and acquisition programs. Mr. Meschke has extensive experience completing acquisitions, optimizing operations and negotiating contracts in the mining industry. During 20 years with AMAX Inc., a major metals and energy company, and its successor, Cyprus Amax Minerals Company, Mr. Meschke held executive positions with finance, business development and operating responsibilities. His accomplishments include completion of more than $.5 billion in acquisitions and divestitures, and negotiation of long-term contracts representing in excess of $300 million in annual revenues. He also worked in the engineering and construction industry where he negotiated contracts up to $100 million in value. Mr. Meschke earned a B.A. from Wabash College, an M.B.A. from the University of Michigan and a law degree from Indiana University.
Peter A. Ball - will be joining the Company as Director, Investor Relations in early December 2009. Mr. Ball is a graduate of the Mine Engineering Program, Haileybury School of Mines and the Canadian Securities Program. Mr. Ball comes to Century with over 20 years experience in the resource industry, most recently at Hawthorne Gold Corp. and previously with El Dorado Gold Corp. He is well versed in corporate communications, public relations, engineering, business development initiatives, investor relations, marketing, finance and securities.
Margaret Kent, President and CEO of Century commented, "The Company has a very bright future, and over the coming months we plan to rebuild our corporate management and add staff to execute the Lamaque project. We are pleased to welcome Hugh and Peter to our team."
I have no idea where they got that many shares from. Most of the shares have been accounted for from PP's previous to this year, for example:
*Scion - they sold primarily during tax loss periods, and I do not recall Canaccord picking up a significant number of those shares
*Wega - their selling is vividly embedded in my mind (ugly period). Canaccord and Anonymous were anything but buyers. In fact, they piled on with the selling, in a massive way - almost as if someone was trying to break the company.
*The New York PP - almost all of those shares were sold by the NY investors directly to Peggy and Ross via a private transaction
*Late 2007 and early 2008 financings - we saw most of those shares sold by GMP, and we didn't see Canaccord making purchases
The only financings unaccounted for since 2005 are the $.13 - $.14 financings earlier in this year. It's not clear if Canaccord got their hands on any of those shares.
Friday, November 27, 2009
I think people forget that Lamaque has produced 9,287,450 ounces of gold since 1935 (almost entirely from the underground). A property cannot be that successful, for that period of time (including during periods of low gold prices), and not be world class and distinguished.
Quite often, the best places to find gold discoveries are places where gold has been mined successfully before. Right now, some of the greatest success stories in the world are located on properties with former production (along prominent gold belts in Canada - similar to Lamaque).
I posted this a few months ago, but I thought it's a good point to make again. It profiles the humble beginnings of 3 hugely successful Canadian mines/properties. I especially like the story of Goldcorp's Red Lake Mine. Also, that story reminds me of Lamaque's situation the most. The Red Lake Mine was left for dead at one point, but Goldcorp saw the potential and challenged that thinking. What is it now, the world's most highly regarded mine?
The other 2 mines profiled are Detour Gold's Detour Lake Mine and Osisko's Malartic Mine. Detour Gold (originally Pelangio) started with nothing and now its market cap is $1.2 billion. Same with Osisko, from nothing to $2.2 billion in market cap.
It is my belief that Lamaque will go down a similar path to these 3 mine/companies.
1) Goldcorp’s Red Lake Mine
“1994: Red Lake Mine was a marginal operation that been in continuous operation since 1948. It had been starved of capital and its performance had always been overshadowed by Campbell. Conventional wisdom said the Red Lake was finished, but Goldcorp challenged this belief at the beginning of 1995 when a $7 million exploration program was initiated that lead to the discovery of a high grade zone of gold mineralization.”
“1995: Significant discovery announced at Red Lake – nine holes averaging 311.31 grams of gold per tonne across 2.3 metres. The mineralization was discovered at a depth and location previously thought to have no potential.” The rest is history, right?
I believe Goldcorp used a similar modeling technique and approach (to assist with their exploration efforts) that Century is using with Lamaque right now.
2) Detour Lake
“The Detour Lake joint venture consists of the wholly owned exploration lands and the mine option lands covering the former Detour Lake mine which produced 1,764,985 ounces of gold during its 17-yearhistory.
How successful has Detour Gold’s exploration program been? Detour Gold currently has 13,200,000 of 43-101 ounces.
3) Osisko Exploration
“November 8, 2004: “The Canadian Malartic property includes the former Canadian Malartic Mine which produced over 1 million ounces of gold at an average grade of 3.37 g/t Au between the years 1935 - 1965. Historical production in the Malartic camp from 1935 to 1979 (Canadian Malartic and the adjacent Barnat-Sladen and East Malartic Mines) totaled over 5 million ounces (figures obtained from public data base of the Ministere des Ressources Naturelles du Quebec).”
“November 23, 2004: “…..announce results of the preliminary review of acquired technical documentation on its recently optioned Canadian Malartic property, Quebec. The review indicates that the Canadian Malartic property has a reported historical resource of over 500,000 ounces gold contained within several near-surface deposits.”
How successful has Osisko’s exploration program been? Osisko currently has 10,010,000 of 43-101 ounces.
We know about the Bedard Dyke (numerous high grade zones going potentially down to 1000 ft, from the surface) and the North Wall Dyke. Both will be mined via long hole stoping methods (which favours block mining) during the early years of mining after start up.
Below are the high grade / bulk mining zones discovered this year alone (via Vulcan) - it doesn't include the potential 2M bulk mining ounces in the plugs. There may be an opportunity to drill some zones identified in the April 6'09 NR during this current $4M underground drilling program at Lamaque. We may have to wait until we dewater below 1,200 ft to drill most of the other zones identified on this post.
1) April 6’09 NR – discovery of 3 completely separate new zones with bulk mining potential, located at points between the surface and 2,000 feet down. ‘Of more significance, is that some of these holes are step outs of over 300 feet from the main mine areas. There is a high probability that the ore extends from the main mine workings to these newly modeled intersections.’
Zone 1) – drill hole#1243 – 4.6 meters true thickness @ 30.2 g/t gold
- drill hole #369 – 10.6 meters true thickness @ 22.0 g/t gold
- drill hole #10875 – 1.7 meters true thickness @ 37.3 g/t gold
Zone 2) – drill hole #1676 - 3.0 meters true thickness @ 29.1 g/t gold
Zone 3) – drill hole#9251 – 4.2 meters true thickness @ 23.5 g/t gold
– drill hole#9477 – 7.2 meters true thickness @ 8.5 g/t gold
2) June 23’09 NR – located between 2,000 and 2,600 feet below the surface (231,333 ounces of M&I and 12,938 Inferred ounces added)
*drill hole #5729 – 15.6 meters true length @ 27.3 g/t gold – “a diamond drill hole within a dyke structure containing 51 true vertical feet grading 27.3 grams per tonne including 3.5 feet of 363.4 grams per tonne”
*drill hole #6414 – 9.0 meters true length @ 7.8 g/t gold
*drill hole #9391 – 7.5 meters true length @ 20.2 g/t gold
*drill hole #12257 – 6.3 meters true length @ 9.5 g/t gold
*drill hole #15021 – 14.1 meters true length @ 7.0 g/t gold
*drill hole #15581 – 18.2 meters true length @ 6.9 g/t gold
*drill hole #16539 – 10.6 meters true length @ 9.2 g/t gold
*drill hole #16542 – 21.6 meters true length @ 4.2 g/t gold
3) February 24’09 NR - “These newly defined dyke and shear structures indicate the presence of large virgin ore zones, which may be bulk mined within 2,000 feet of surface.” – located at 1000 to 2000 ft below the surface
The NR included 428,357 new M&I ounces and 285,452 new Inferred ounces. It is not likely that all of the new resources on this particular NR have bulk mining potential, but some of the ounces should have strong potential. Here are some drill results from this NR that certainly looks to have bulk mining potential:
*drill hole #16178 – 21.9 meters true length @ 8.3 g/t gold
*drill hole #16179 – 14.1 meters true length @ 10.5 g/t gold
*drill hole #14580 – 27.6 meters true length @ 9.0 g/t gold
*drill hole #16028 – 12.3 meters true length @ 3.8 g/t gold
*drill hole #14027 – 9.1 meters true length @ 5.5 g/t gold
Thursday, November 26, 2009
Century Mining Corporation (CMM: TSX-V) today announced that, subject to regulatory approval, it will complete a non-brokered private
The Company will issue 20,000,000 units at an issue price of $0.20 per unit. The proceeds from this offering will be used for the underground drilling of the Lamaque project in Val-d'Or, Quebec. This financing comprises a portion of the $21,000,000 private placement described in the Company's November 2, 2009 press release.
The Company will pay Oberon Capital Corporation for introducing subscribers to the Company a finder's fee of cash equal to 4% of the aggregate gross proceeds, and broker warrants equal to 4% of the aggregate number of flow-through shares. Each broker warrant shall be exercisable for 18 months from the date of issue and shall entitle the holder to purchase a common share of the Company for a price of $0.20. The flow-through share issuance is subject to approval by the TSX Venture Exchange. All of the securities issued under this private placement will be subject to a four-month hold period.
Margaret Kent, President and CEO of Century commented, "This financing is part of the $21 million private placement, the balance of which we expect to close in early December."
Let's assume San Juan can manage to eventually squeeze out 5,000 ounces per quarter (1,667 per mth) for the first 6 months of 2010, from having a 3rd shift in the schedule. Also, let's assume that SJ's production will increase to 6,250 ounces per quarter (2,083 per mth) for the last 6 months of 2010, from spending US$1.5M on the mill expansion. This would equate to 22,500 SJ ounces in 2010.
70,000 - 22,500 = 49,500 Lamaque ounces
'next year' The meaning of those 2 words is key to the rest of the analysis. Did something get lost in translation or does 'next year' literally mean 2010 calendar year, as oppose to something getting lost in translation and the intent is really first 12 months after gold pour (with Lamaque's 12 months bleeding into the first 3 months of 2011).
For the purpose of our analysis, let's assume that 'next year' literally means next calendar year (2010). That would therefore mean that Century intents to produce around 47,500 ounces over 9 months in 2010 (as first gold pour doesn't happen until Apr'10).
This is a meaningful development - the increased ounces, coupled with the US$1,190 gold price, improves our chances to become cash flow positive earlier. The Fortis (Jan'09) plan had a start date of April also. That plan had identified 38,363 ounces over the remaining 9 months of the start up year. Also, in the last conference all, it was identified that the plan was to produce 49,300 ounces for the first 12 months after first gold pour. This meant about 35,000 ounces for a 9 month period, which is consistent to the Fortis plan.
Quite frankly, given the most recent developments, I have been expecting more production than 35,000 ounces over the 9 month period. The recent developments being:
1) Century is now planning on spending $4M on exploration instead of $1M. Most of this money will be focused on upgrading existing 43-101 ounces to higher categories, with an extra focus on increasing near-surface reserves.
2) The gold price is now US$1,190 per oz. Lowering the cutoff grade from 2.5 g/t to 2.1 g/t (US$900 gold price - still very conservative) should increase reserves to be mined (even in the first 9 months).
Given these 2 significant factors, I do not see 47,500 ounces of production over the 9 months of gold pour in 2010 as being unrealistic. At least it shouldn't be if they execute. Actually, I will be disappointed if they are still targeting 35,000 ounces.
All 3 portals are in place (Sigma West Zone/Bedard Dyke, Cross-Over Zone, North Wall Dyke), although Century will likely need to perform some internal development to reach the various ore bodies, as well as development/preparation work before launching into the long hole stoping method of ore extraction.
Here is a short description of long hole stoping (from the World Gold Council):
"Where large blocks of ore can be identified and the surrounding rock is reasonably strong, then a long hole mining method is generally the lowest cost mining method. The result is not unlike an underground quarry. Access to the top and bottom of the ore block is established with drifts or tunnels. A vertical hole (slot raise) is created within the ore from the top of the block to the bottom. Long holes are drilled to blast vertical slabs off the ore block. Normally a loader will pick up the broken ore from the lower tunnel and take it away to an ore pass. For safety reasons, the loader is operated remotely by a radio control when it is inside the large open stope. Once the ore block has been blasted and extracted, the stope will normally be filled with waste rock to stabilise the void and make possible the extraction of adjoining ore blocks. This mining method is very popular, and is almost the underground analogy to the advances achieved in mechanising a large open pit. Where large blocks of ore can be identified in relatively strong rock this method is productive and has low costs."
Wednesday, November 25, 2009
By Alex Nicholson and Paul Abelsky
Nov. 25 (Bloomberg) -- Russia’s central bank will add Canadian dollars to its reserves and may include more currencies as it seeks to reduce its dependence on the U.S dollar.
“Technical preparations for transactions in Canadian dollars are underway,” Sergei Shvetsov, the bank’s financial operations head, told lawmakers in Moscow today, in remarks confirmed by a Bank Rossii official. “Then there may be one, two other currencies and that’s it.”
Russia aims to diversify its reserves, increase gold holdings and promote regional currencies in trade and finance to reduce risks posed by the dollar’s dominance. President Dmitry Medvedev has blamed the global financial crisis on an over- reliance on the U.S. currency. Russia’s interest in buying assets denominated in Canadian dollars is also part of its strategy of reducing exchange-rate volatility, said Vladimir Bragin, an economist at Trust Investment Bank in Moscow.
“They may not be seeking to invest a large amount of money,” Bragin said. Russia may be interested in buying bonds backed by the Canadian government or high-quality corporate debt, he said, and “the global economic recovery will boost prices for natural resources, strengthening the Canadian dollar.”
Canada’s dollar, nicknamed the loonie, appreciated to the highest in a week after the Russian announcement. The currency strengthened as much as 1.2 percent to C$1.0453 per U.S. dollar, the highest since Nov. 18, and was up 1 percent at 8:07 a.m. in Toronto, from C$1.0580 yesterday.
Russia’s decision reflects a desire to shield reserves against the dollar’s decline after the U.S. currency lost 13.3 percent against the euro in the past 12 months, making it the worst performer against Europe’s single currency of the 16 major currencies tracked by Bloomberg in the period.
The world’s biggest energy supplier is increasing foreign reserves in an effort to stem gains in the ruble. The Russian currency gained 8.7 percent against the dollar in the past three months, making it the second-best performer of the 26 emerging market currencies tracked by Bloomberg.
The ruble was little changed against the dollar and trading at 28.7915 at 5:20 p.m. in Moscow. Against the euro, the ruble lost 0.7 percent to trade at 43.4213.
Russia is in talks with India and Brazil to use their currencies in trade, First Deputy Central Bank Chairman Alexei Ulyukayev said last month. Russia already has agreements that allow the use of the ruble and yuan in cross-border trade, he said.
“With further acquisitions the goal is to form a mid-tier gold company with annual production of 300,000 ounces,” Finsky said yesterday in a telephone interview.
Century, which is based in Blaine, Washington, has two mining projects. Lamaque in Canada and San Juan in Peru are scheduled to produce more than 70,000 ounces of gold next year.
Finsky, 43, is also the head of Russian billionaire Mikhail Prokhorov’s mining company Intergeo and is a board member at OAO Polyus Gold, the country’s largest producer of the metal. Finsky doesn’t plan to consolidate his personal projects with Intergeo or Polyus, he said.
Century said yesterday it approved the sale of C$21million ($20 million) of shares. Kirkland Intertrade Corp., whose beneficial owner is Finsky, would be among the buyers, Century said last month.
Century was unchanged at 19.5 Canadian cents as of 11:11 a.m. in Toronto trading, valuing the company at C$38.6 million.
Tuesday, November 24, 2009
Monday, November 23, 2009
Margaret Kent, Chair, President and CEO of Century, concluded the meeting by saying that the Company expected the financing to close in early December and that the Lamaque underground project would reopen in January of 2010. The first gold pour is expected in April of 2010. Notices have been sent to mine staff. Similar notices of recall will be sent to hourly-paid workers in mid-December.
"NOTICE IS HEREBY GIVEN that a special meeting (the “Meeting”) of shareholders of Century Mining Corporation (the “Company”) will be held at The Vancouver Club, UBC Room, 915 West Hastings Street, Vancouver, British Columbia, V6C 1C6, on Monday, November 23, 2009, at 11:00 a.m. (Vancouver time)"
Also, people should be aware of the closing timeframe noted on the last NR. In a previous NR the company had stated that closing is expected on December 4th. However, the latest NR states "early December". It's wiser to give a time period in advance as oppose to a specific date. It's a complex closing, with many different parties involved, including the bank, Finskiy, Scola, and perhaps a number of sub-parties. I assume that all of the money will have to be in place with the various lawyers and all of the legal documentations will have to be ready, etc. Just one party being delayed (even for reasons beyond their control) could easily throw the close date off by a few days, I imagine.
"Closing of these financings, which will fund the restart of the Lamaque project in Val-d'Or, Quebec, is currently expected in early December 2009."
Saturday, November 21, 2009
Last Updated: Thursday, November 19, 2009 16:24:14 Vietnam (GMT+07)
Vietnam will import 6 tons of gold this month, state broadcaster VTV said on Thursday, after the central bank last week lifted a ban on imports to stabilize an overheating market.
So far, 1.5 tons had been imported, 500 kg each by Sacombank, ACB and Eximbank.
Saigon Jewellery Corp will import 1 ton, and 500 kg being imported by Agribank Jewellery Company will arrive in a few days, the VTV 1 Financial bulletin said
Friday, November 20, 2009
1) Polyus Gold - Finskiy is on the BoD and potentially one of the founders. Polyus is now trading for US$30.25, up about US$25 from the global crsis low of around US$5 last November.
2) Ecometals Ltd - Scola is the CEO. Ecometals is now trading at $.85 per share, up significantly from about $.10 just 5 months ago.
Hopefully between the market view of these 2 successful public company winners now being the face of Century and the financing being in place, Century will realize similar (or much better) share price success as Polyus and Ecometals.
Thursday, November 19, 2009
Polyus said in a statement that companies related to Prokhorov's investment vehicle, Onexim Group, and Kerimov's Nafta Moskva intended to sell the stake in the form of shares and/or American Depositary Receipts.
The sale is subject to market conditions and is expected to be executed through an accelerated book-building process, Polyus said. Credit Suisse Securities (Europe) Ltd and Renaissance Securities (Cyprus) Ltd are the joint bookrunners.
Prokhorov's Onexim holds a little under 30 percent in Polyus Gold and associated shareholders another 10 percent. Kerimov's Nafta Moskva has 37 percent. Polyus Gold's current market capitalisation is $11.24 billion.
(Editing by Jon Loades-Carter) Keywords: POLYUS/ (Moscow Newsroom, +7495 775 1242, firstname.lastname@example.org)
Wednesday, November 18, 2009
BLAINE, WA, Nov. 18 /CNW/ - Century Mining Corporation (CMM: TSX-V) today announced that, subject to regulatory approval, it has closed the second tranche of the flow-through equity financing, comprising 13.5 million flow-through shares at a price of $0.20 per share for gross proceeds of $2.7 million, which was originally announced on October 14, 2009. In connection with the second tranche, the Company paid a cash finder's fee of 4% of gross proceeds and issued broker warrants equal to 4% of the number of flow through shares issued. Each broker warrant is exercisable for 18 months from the date of issue and entitles the holder to purchase one common share of the Company for a price of $0.20 per share.
On November 2, 2009 the Company announced that, subject to regulatory approval, it had closed the first tranche of the flow-through equity financing by issuing approximately 6.5 million flow-through shares at a price of $0.20 per share for gross proceeds of approximately $1.3 million. The Company paid a cash finder's fee of 7% of gross proceeds and issued broker warrants equal to 7% of the number of flow-through shares issued in the first tranche of the financing. Each broker warrant is exercisable for 18 months from the date of issue and entitles the holder to purchase one common share of the Company for a price of $0.20 per share.
In aggregate, the Company issued a total of 19,998,074 flow-through shares at a price of $0.20 per share for total gross proceeds of $3,999,615 in both tranches of the financing. Total gross proceeds were reduced from $5.25 million originally contemplated and announced on October 14, 2009. All of the securities issued under these private placements will be subject to a four-month hold period.
"We are very pleased to have completed this additional tranche of financing. It will allow the Company to continue its exploration and resource delineation efforts for the Lamaque project," said Margaret Kent, President and CEO of Century Mining Corporation.
In addition, the Company is continuing to progress with preparations for completion of the C$21 million equity private placement and the US$33 million prepaid gold forward sale financing discussed in the November 2, 2009 press release, including the shareholders meeting scheduled for Monday, November 23, 2009. Closing of these financings, which will fund the restart of the Lamaque project in Val-d'Or, Quebec, is currently expected in early December 2009. A portion of the proceeds will be used to pay the remaining C$3.2 million financial guarantee requested by the Ministry of Natural Resources of Quebec for the final reclamation of the Sigma-Lamaque site after completion of mining.
About Century Mining Corporation
Century Mining Corporation is a junior gold producer. The Company owns and is working towards the start up of the Lamaque mine in Québec that historically has produced over 9.2 million ounces of gold. In Peru, Century's wholly-owned subsidiaries own an 82.6% interest in the San Juan Mine where the Company accounts for 100% of gold production. Total gold production for 2007 and 2008 was 63,124 and 14,252 ounces of gold, respectively.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Caution Concerning Forward-Looking Information
This press release contains forward looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of applicable Canadian securities laws. We use words such as "may", "will", "should", "anticipate", "plan", "expect", "believe", "estimate" and similar terminology to identify forward-looking statements and forward-looking information. Such statements and information are based on assumptions, estimates, opinions and analysis made by management in light of its experience, current conditions and its expectations of future developments as well as other factors which it believes to be reasonable and relevant. Forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those expressed or implied in the forward-looking statements and information and accordingly, readers should not place undue reliance on such statements and information. Risks and uncertainties that may cause actual results to vary include but are not limited to the conditional nature of the above transactions, the speculative nature of mineral exploration and development, including the uncertainty of reserve and resource estimates; operational and technical difficulties; the availability to the Company of suitable financing alternatives; fluctuations in gold and other commodity prices; changes to and compliance with applicable laws and regulations, including environmental laws and obtaining requisite permits; political, economic and other risks arising from our South American activities; fluctuations in foreign exchange rates; as well as other risks and uncertainties which are more fully described in our most recent annual and quarterly Management's Discussion and Analysis, in our Annual Information Form and in other filings made by us with the Securities and Exchange Commission and with Canadian securities regulatory authorities and available at www.sedar.com.
While the Company believes that the expectations expressed by such forward-looking statements and forward-looking information and the assumptions, estimates, opinions and analysis underlying such expectations are reasonable, there can be no assurance that they will prove to be correct. In evaluating forward-looking statements and information, readers should carefully consider the various factors which could cause actual results or events to differ materially from those expressed or implied in the forward-looking statements and forward-looking information.
For further information: Century Mining Corporation, Phone: (877) 284-6535 or (360) 332-4653, Fax: (360) 332-4652, Website: www.centurymining.com
1) India - recently purchased 200 tonnes from IMF (about 7M ounces)
2) Sri Lanka - been buying for 5 to 6 months now
3) Mauritius (even tiny Mauritius) - bought 2 tonnes (almost 70K ounces) from IMF
4) Russia - Central Bank of Russia said they will buy all of the gold the Russian govt is interested in selling (if the govt decides to sell). It has been rumoured that the Russian govt would like to sell 27 tonnes of gold in order to raise funds towards balancing its budget.
5) Taiwan - Taiwan's central bank is studying whether to raise the amount of gold in its forex reserves
6) China - going through a similar exercise as Taiwan
7) South Korea - going through a similar exercise as Taiwan
Tuesday, November 17, 2009
Monday, November 16, 2009
"In certain conditions, we will be ready to buy everything the State Depository offers for sale," deputy chief Alexei Ulyukayev said, RIA Novosti reported Monday.
The Finance Ministry in Russia is contemplating a sale of as much as 27 tons of gold to cover a portion of the state's budget deficit.
Gold prices have repeatedly set record highs in recent weeks. On Monday, gold was priced at $1,140.60 per ounce in New York.
Friday, November 13, 2009
Below are the conditions (taken from the Circular) along with my comments in bold:
The closing of the Private Placement is subject to, among other things, the following conditions:
(a) the Investor shall have completed customary due diligence in respect of the Company, and the results and assessment thereof shall be satisfactory to the Investor in its absolute discretion;
This was likely completed prior to the issuance of the circular, and especially since Finskiy and Scola have been working with Century for maybe 2.5 - 3.0 months now.
(b) there being no material change in the business condition (financial or otherwise), operations, performance or prospects of the Company at the time of Closing;
This looks to be fine, assuming the Lamaque operating license is in good status (which appears to be the case). Worst case scenario, Century now has $4M in bridge cash plus, good cash flow generated out of San Juan and about $350K representing the liquid portion of its strategic investments that can be turned into cash in an emergency situation.
(c) completion by Century and agreement by the Investor on the business plan and/or model;
This is a no brainer. It should have been completed a while ago, with agreement by not just Finskiy and Scola but by also the international bank. The process would have never gotten this far otherwise.
(d) the amendment of Century’s Rights Plan in form and substance satisfactory to the Investor (see “Amendment to Shareholder Rights Plan” below);
Will be easily approved on the 23rd.
(e) an agreement shall have been entered into with respect to either a buy-out or renegotiation of the long term note held by Investissement Québec, on terms satisfactory to the Investor acting reasonably;
Should be no issues here. IQ have been amazing partners along this journey. We owe them a big thank you once we back on more stable grounds.
(f) three members of the Board, currently contemplated to be Messrs Ambrose, Burns and Campoy, shall have resigned from the Board; the Investor’s nominees to the Board shall have been duly appointed to the Board and the independent director shall have been appointed to the Board and shall have been elected Chairman of the Board (see “Board of Directors” above);
I see no issues.
(g) the Board having established the Operating Committee with a mandate satisfactory to the Investor in its sole discretion, including the right of the Investor to appoint 50% of the members of the Operating Committee, and the appointees of the Investor having been appointed thereto (see “Operating Committee” above);
I see no issues.
(h) receipt of such regulatory and shareholder approvals as may be required on terms satisfactory to the Investor, acting reasonably;
TSX-V has already conditionally approved the deal and shareholders will approve on the 23rd.
(i) each of Ms. Kent, Mr. McNutt and Mr. Meschke shall have negotiated and executed new employment contracts with Century, on terms and conditions satisfactory to the Investor, recognizing the change in control and containing provisions for salary, bonus and benefits similar to those in the current contracts but with notice periods for termination of no less than six months, and incorporating provisions for existing executive stock options to be continued under the new contracts;
I see no issues.
(j) execution and delivery of definitive agreements, including, but not limited to, subscription agreements and a shareholder agreement between the Investor and Century (see “Shareholder Agreement” below);
I see no issues.
(k) closing of the Flow-Through Offerings;
Done (pending Century's conformation NR) - a significant milestone in the process.
(l) closing of the Project Financing on terms and conditions substantially the same as disclosed to the Investor and otherwise satisfactory to the Investor; and
I see no issues.
(m) evidence that available funding after the Private Placement is sufficient to provide Century with adequate working capital to fund the development and operation of the Project during the 12 months following the Closing date (which condition shall be satisfied no later than 5 days prior to the Closing date and the Investor shall advise Century of the fulfilment or non-fulfilment thereof on or prior to such
From today's TSX-V bulletin:
CENTURY MINING CORPORATION ("CMM")
BULLETIN TYPE: Private Placement-Non-Brokered
BULLETIN DATE: November 13, 2009
TSX Venture Tier 2 Company
TSX Venture Exchange has accepted for filing documentation with respect to
a Non-Brokered Private Placement announced October 13, 2009:
Number of Shares: 13,500,000 shares
Purchase Price: $0.20 per share
Number of Placees: 7 placees
Finder's Fee: $108,000 cash and *540,000 warrants payable to
Oberon Capital Corporation (David LeClaire)
* Finder's fee warrants are exercisable at $0.20 per share for 18 months.
A heavy buyer today was a broker that was rumoured to be amongst the analysts sniffing around March. It may mean something or it may mean absolutely nothing. If the heavy buying from this broker continues into next week then it may be meaningful, otherwise there would likely be no connections.
India may want more of the IMF gold, if China and Russia do not exercise their potential options to the gold first
'if it [the I.M.F.] offers to sell the gold'
"The Reserve Bank of India may buy more gold from the International Monetary Fund if it offers to sell the precious metal, a senior finance ministry official said."
Meaning, India is looking to buy more of the IMF gold if it's offered to them. As pointed out by the author, this statement would also hint that the IMF has offered the remaining 203.3 tonnes to other countries first (as an equal opportunity offer), with the logical countries including China and Russia. It sounds like if the other countries don't want to purchase some of the remaining 203.3 tonnes IMF gold then it India might be willing to step up to acquire more than the 200 tonnes they already purchased. It would be odd if China and Russia do not purchase at least a bit of the gold, as India made a big statement that the price is not going to get much cheaper (perhaps not even go back below US$1,000 for a while). If China and Russia decide to hold out for cheap prices then they make have to wait for a while.
Here is the article:
By Julian D.W. Phillips - Gold Forecaster Global Watch
The I.M.F. sold 200 tonnes to India, a New Announcement Due!
We have been prepped for this for so long now. It seems that the [concocted] cloud from the expected I.M.F. gold sales has been a threat to the gold price, for years. Now the clouds of speculation are being blown away and reality is presenting itself in a way never expected. Part of this has been the expectation that the I.M.F. gold sales would be dragged out over a long period. As we have been telling Subscribers for an equally long period, we did not think this would be the case, because the purpose of the sale was to maximize the proceeds and quickly. Now with India taking 200 tonnes of the 403.3 tonnes, our position has been verified.
India’s Gold Purchase - The Facts: -
The announcement of the sale of 200 of the 403.3 tonnes of gold at an average price of $1,045 is, we believe, the first of a minimum of two announcements that will see the 403.3 tonnes completely sold.
The Reserve Bank of India said the purchase was an official sector off-market transaction. The transaction, which is being settled now, involved daily sales, phased over a two-week period during October 19-30, with each daily sale conducted at a price set on the basis of market prices prevailing that day.
The Reserve Bank of India may buy more gold from the International Monetary Fund if it offers to sell the precious metal, a senior finance ministry official said.
The total sales proceeds are equivalent to $6.7 billion. Payment is expected to be in major currencies that make up the SDR. Please note that it will not be made in just the U.S. $.
The Ramifications: -
* The sales are establishing a good short-term average price, so as not to leave the I.M.F. or India open to the accusation of selling too low or too high. Inside India, gold buyers across the country have to be made aware that their central bank feels these to be good prices. We expect a pick-up in Indian retail buying because of this consequential feeling of security in buying gold at these prices.
* The R.B.I. will buy more “if it [the I.M.F.] offers to sell the gold”. So, either the I.M.F. is selling the gold in chunks [and not the whole amount to anybody], perhaps offering it to a few central banks. Hence, the Reserve Bank of India is waiting to see it the offers to others are taken up. If they are not then it will pick up the refused amount. Perhaps they will take the entire 403.3 tonnes.
* If the amounts are refused by other central banks, it seems unlikely that the public will hear of these refusals. So we expect either another announcement saying India has bought the balance of 203.3 tonnes, in addition to the first tranche of 200 tonnes, or that another central bank [China, Russia?] has bought the balance.
* Any concurrent/consequential sales being made by the I.M.F. are likely to be announced very soon.
* There seems little point to a sale being made anonymously now that the India purchase has been announced, the cat is out of the bag. Add to that the fact that central banks are buying gold has already turned the market tide that for more than 25 years has expected central banks to be sellers. Officially, publicly, they are buyers now.
* Most people expected China or Russia to be the buyers, because they have been buying gold in the open market for years now. The announcement that India has bought so much and is prepared to buy more now enlarges the list of central bank buyers. This action speaks far louder than words. Since then Sri Lanka has said it is buying gold for its reserves [although only a guessed amount of 5.3 tonnes. Who next?
* Gold has a firm place in the monetary system,[as a reserve asset, not a means of exchange] in the face of an unstable monetary system, that is still decaying. This purchase expresses that sentiment, at central bank level.
* The shape of market demand will and is already broadening to include major institutions. Their appetite has a huge capacity, so traditional gold demand may well be pushed to one side as they buy what they want. This will be at current or higher and possibly much higher prices.
Wednesday, November 11, 2009
1) If SJ’s production remains at Q2 level:
Q2 production = 4,290 ounces (17,160 annualized ounces)
Q2 cash cost per oz = US$437
Current US/Cdn exchange rate = 1.046
(US$1,115 – US$437) * 1.046 = C$709 Operating Margin per oz
4,290 ounces * C$709 = C$3,042,417 Operating Profit for the next 90 days at SJ, assuming the gold price stays at US$1,115
Of that op profit amount, about $900K on avg will need to go towards covering company overall G&A, at least until Lamaque’s financing has been closed off and it is able to carry a fair share of the company’s G&A. Also, let’s say that on average about $400K will need to go towards ongoing mine development on a quarter to quarter basis (every mine requires ongoing development capital).
2) Switch to a 3 shift schedule at SJ:
Milling capabilities are limited to around 250 tpd at SJ (based on my calculations, Q2 averaged around 253 tpd), until expansion (see #3 below). In the meantime, hopefully we will be able to squeeze out a bit of extra production from the following move:
Q2’09 MD&A: “Management has recently implemented a new three shift per day operating schedule at the San Juan mine. The mine is also planning improvements of the tailings dam to increase tailings storage capacity.”
I’m hoping this means that they are going to a 3rd shift of both mining and milling, without reducing significant hours from the 1st shift and the 2nd shift. If it means shifts 1 and 2 remains intact and the new (potentially new) 3rd shift represents mainly (or partly) incremental hours then it may equate to a higher tpd and production ounces prior to making the necessary capital investment for mill expansion. Basic logic would dictate an increase is warranted, but I don’t know either way though as I have no other details.
3) A small US$1.5M investment can push SJ’s annualized gold production to 25,000 ounces:
Q2’09 MD&A: “The San Juan operation continues to produce at the rate of 4,000 to 4,500 ounces of gold per quarter. The operation is in need of cash for expansion. With US$1.5 million of additional cash investment in the operation, it can be expanded from 250 tons per day to 400 tons per day, which will increase production by over 50% to 6,000 to 6,500 ounces per quarter.”
6,250 ounces * C$709 = C$4,432,425 Operating Profit per quarter after SJ gets expanded, assuming the gold price stays at US$1,115
4) A more extensive upgrade to SJ (maybe mid-term) can enable us to realize 30,000 ounces:
7,500 ounces * C$709 = C$5,318,910 Operating Profit per quarter after this expansion, assuming the gold price stays at US$1,115
Tuesday, November 10, 2009
You can listen from the 4:25 mark to the 9:00 mark of the presentation if you like – that’s the part of the presentation where it’s relevant to our efforts with Lamaque u/g.
1) Peggy talks about updating the resource total with ounces up to 1000 ft. This version of the 43-101rpt was eventually released in Jan’08. As a result, this 43-101 rpt (Jan’08) included both existing 43-101ounces (from various levels in the mine) plus the newly added ounces up to 1000 ft (see note 2 for details). Subsequently (in 2009), ounces from 1000 to 2000 ft and ounces from 2000 to 2600 were added to the Jan’08 43-101 total. Ounces will continue to be added until the Vulcan modeling team reaches 6000 ft.
2) You can hear Peggy talk about the discovery of 1.7M ounces located between Sigma (Placer Dome owned) and Lamaque (Teck Cominco owned). We now know that area as the Cross Over Zone in the 43-101 report. You will see the slide (around the 7:07 mark) that identifies the ounces as being located from 0 to 1000 ft of the surface – another slide around the 6:38 mark also identifies the zones from 0 – 1000 ft. You will notice that those ounces are labeled Cross Over Zone, Sigma West Zone, Road Zone and North Wall Dyke. You will notice that the ounces are essentially the same as what we currently have booked in the 43-101 rpt for those zones. You will also observe that Peggy confirms that these ounces are all located 1000 ft of the surface. There are 2 versions of ounces profiled on the slide – @ 2.5 g/t cutoff and @ 3.5 g/t cutoff.
3) This is where you can see an example of how a change in cutoff grade might impact our total ounces. In this example, reducing the cutoff by 1 g/t, from 3.5 g/t to 2.5 g/t, increased ounces by 32% (for ounces located within 1000 ft of the surface) – 7:07 mark.
4) You can hear Peggy mention about the existence of some historical drill data that supports bulk mining potential in the Lamaque plug – around the 7:27 mark.
5) You can hear Peggy mention about the additional drill hole (s) for the Bedard Dyke, which enabled the company to identify multiple high grade zones going all the way down in the dyke – around the 6:00 mark.
Monday, November 9, 2009
"OVER 3.6 MILLION OUNCES WAS PRODUCED FROM THE MAIN PLUG, REPRESENTING THE MAJORITY OF THE LAMAQUE MINE'S 4.5 MILLION OUNCES."
That was a short excerpt from their NR issued last week. What they forgot to mention is that that plug (Century's Lamaque Main Plug) has extremely high potential for a new zone (s) at depth (Century has mentioned in the past that they have some historical drilled data). Also, Century's (u/g) West Plug has the same potential. Together, Century believes that those 2 plugs possess the potential to deliver another 2 million ounces for us. This is in addition to our current 6 million ounces.
These new zones in the Century plugs would be bulk mining zones (my guess, s/b cost effective to mine via bulk mining at depth, especially with say plus US$500 gold).
There is a short note on slide 11 in Century's March 2009 Corporate Presentation (still on the website).
Although the Vulcan modeling initiative may be able to provide further data on these new zones (once the program reaches to those levels), it will still be about another 2-3 years (once dewatering occurs) until we will be able further drill those zones. However, the gold is not going anywhere. Plus, we already have 6 million other ounces to work with.
Sunday, November 8, 2009
Scola is involved with a number of companies also, including being the CEO for a TSX-V company called Ecometals. That company is currently going through the preparation/permitting process to allow them to drill a property adjacent Aurelian's major gold discovery in Ecuador (now owned by Kinross Gold). It sounds like (based on Ecometals' findings from preliminary work done on their own property) they feel like there is extremely high probability for success on their own property.
As you can see, these guys live and breath gold. They know the value of Century's 6,000,000 (43-101) ounces (and counting - with 2,600,000 u/g ounces being located within 300 metres of the surface at Lamaque), with at least $150,000,000 of infrastructure already in place (Lamaque and San Juan combined), with the capabilities to one day produce 200,000 annual ounces (Lamaque and San Juan combined), with US$1,105 gold.
Here is part of a article that got published this evening:
How the tables turned dramatically for gold
Key events on gold in 2009
11-3 - IMF sells 200 tons of gold to the Reserve Bank of India for $6.7 billion.
8-19 - The World Gold Council said that central banks bought 14 tons of gold in the second quarter of 2009 - "the first net purchase by central banks for a considerable length of time."
8-13 - South Africa gold production down 12% in June v. a year ago.
Saturday, November 7, 2009
The $293,000 payment referred to in the article is not a recent payment. It was made prior to 2008. This is what the 2008 YE Financials had to say on the subject:
The Company is obliged to post reclamation bonds to provide for environmental remediation of its mine sites in Quebec at the end of their useful life. Subject to schedules provided by the Quebec Mining Act and related regulations, the Company is obliged to post bonds accumulating to 70% of the estimated future remediation costs. The Company is currently in negotiation with the Quebec Ministry of Natural Resources regarding the estimate of remediation costs and the required bond amount and timing. Significant factors at issue are the current status of the mine in temporary shutdown and the Company’s plans for re-start, the timing of the reclamation requirements for waste dumps of the open pit operation, and the specific requirements for topsoil cover on the waste dumps. Based upon the Company’s future remediation plan of $4.6 million, the Ministry of Natural Resources has estimated the total future remediation cost at $5,000,000. Given the present idle status of the mine, the Ministry has demanded posting of the entire 70% bond, or $3.5 million, at this time. According to the Company’s remediation estimate and plans for re-start of operations, the Company estimates that the amount of bonding currently required would be $1.5 million.
The Company has reclamation bonds in the amount of $493,000 (2007 - $493,000) of which $293,000 is being held for the Sigma-Lamaque Complex. The Company did not make any payment in 2008 due to placing the Sigma-Lamaque on care and maintenance and the Company’s working capital deficiency. An amount of $1.2 million has been provided in the Company’s overwritten cost estimate for the re-start of the Lamaque mine to correct this deficiency upon start-up. Using the Company’s estimate of bonding requirements, following is a schedule of the estimated future bonding requirements.
Annual Amount Cumulative Bond to be Posted
Due 2009 $ 1,200,000 $ 1,493,000Due 2010 $ - $ 1,493,000
Due 2011 $ 60,800 $ 1,553,800
Due 2012 $ 178,600 $ 1,732,400
Friday, November 6, 2009
Jul. 11’05 NR: “A combination of reconnaissance, mapping in the open pit, and two historic diamond drill
holes led to the discovery.”
Drill hole #1: 24 metres of 12.8 g/t gold
Drill hole #2: 64 metres of 14.9 g/t gold
Based on a verbal presentation, corporate presentations and other info, it is clear that there was at least one subsequent expansion drill hole. This 3rd hole confirmed the presence of at least 3 sizeable high grade zones within the Bedard Dyke. The high grade zones are located at various levels along the dyke. The technical DD expert believes that the dyke likely goes down as far as 1000 ft from the surface.
There was also some (limited) mining done on the Bedard Dyke adjoining (or adjacent to) the pit wall while the Sigma pit was in production. This limited (test) mining likely provided valuable information about the Bedard Dyke.
Conventional long hole open stoping methods will be used to mine the Bedard Dyke, which allows for less waste material to be transferred, and subsequently should help in reducing cash cost per oz.
Jan’09 DD (bankable) rpt: “The Bedard Dyke and North Wall zones are to be mined using conventional long hole open stoping methods (LHOS).”
“Century’s re-evaluation of the LHOS method will permit mined stopes to be filled with development waste thereby reducing geotechnical risks and reducing waste transport requirements.”
The next 3 comments suggest that the Bedard Dyke includes at least some bulk mineable ore tonnage (with high grades). As we know, bulk mining is far cheaper to perform – the high grade ore and location of within 1000 ft (300 m) of the surface simply makes the mining economics that much better.
1) Jan’09 DD (bankable) rpt: “the bulk ores contained in the Bedard Dyke (Sigma West)”
2) Jul. 11’05 NR: “The Bédard Dyke can be accessed from the wall of the open pit, and because of the near-vertical nature of the structure, it can be easily mined by large-tonnage underground techniques. Historically, shears of this type in the Sigma and Lamaque Mines were extensively exploited in the underground workings.”
3) Jul. 11’05 NR: “….dyke of the type historically known to host high-grade mineralization in the Sigma-Lamaque Complex
Jul. 15’05 NR: “similar dykes at the Sigma-Lamaque Complex have historically produced several hundred thousand tonnes of gold ore”
The Bedard dyke will be accessed through the Sigma pit.
Having made all of those points, I must note also that without current drill updates it is impossible for us to know how many ore tonnes will be accessible right away and when the high grade zones will be drilled and available for mining. Hopefully they will begin to provide some of the more specific mining details once they begin issue drill results.
Thursday, November 5, 2009
Here is a percentage breakdown of ounces by Lamaque level location:
*0 to 1000 ft (300 m) of the surface = 48% (2,656,440 ounces)
*1000 to 2000 ft = 13% (715,854)
*2000 to 2600 ft = 4% (244,271)
*Unknown locations (unknown to me) = 34% (1,865,958)
*West Plug o/p = 1% (69,163)
More detailed breakdown of ounces by Lamaque level location:
0 to 1000 ft (300 m) of surface:
* North Wall Zone = 664,380 ounces
* Sigma West Zone = 93,540 (Bedard Dyke to come)
* Road Zone = 241,947
* Cross-Over Zone = 1,656,573
1000 to 2000 ft, Below Sigma Pit = 715,854
2000 to 2600 ft, Below Sigma Pit = 244,271
Unknown locations (unknown to me):
* Sigma Below Open Pit = 1,711,213 ounces
* Lamaque Main Mine = 128,968
* Lamaque #2 Mine = 25,777
West Plug o/p = 69,163
And, don't forget that most of these ounces were based on a 2.5 cutoff grade. They need to be recalculated using a 2.1 cutoff, which will result in a substantial increase in 43-101 gold resources.
* Mechanical mining is planned for months 4 to 6.
* The gold price is essentially US$1,100 right now. In a nutshell, we only have to lower our cash cost per oz to that level in order to break even operationally while we ramp up during the start up period. It makes our job much easier than if the gold price was say US$700 (as it was not too long ago). On top of that, a number of experts are now expecting the gold price to reach US$1,500 by June 2010. The way I see it, any gold price between US$1,100 and US$1,500 by June of next year just further improves our chances to achieve positive cash flow earlier in the ramp up phase.
2) Now, this next opportunity has the potential to be a real game changer for our reserves and also our production ounces in years 1, 2 and 3.
As we know, the company is planning to mine ounces located within 1,000 ft of the surface in the first 3 years. The locations they will be mining from during that period are as follows:
* The North Wall Zone - 256,708 P&P Reserves currently
* The Sigma West Zone - 22,108 P&P Reserves currently (but this is before adding in the Bedard Dyke ounces, which is being aggressively drilled right now, and should be material)
* The Cross-Over Zone - 0 P&P Reserves right now (but look below)
Now, here is the huge opportunity. In 2007, when we first learned about the discovery of the Cross-Over Zone, we were told that the ounces were located within 1,000 ft of the surface and we were also told that there were 1.7M new "virgin" ounces.
Take a look at M&I and Inferred ounces for the Cross-Over Zone. There are 530,098 M&I Cross-Over Zone ounces in our 43-101 report and 1,126,475 Inferred Cross-Over Zone ounces, for a total of 1,656,573 Cross-Over Zone ounces (close to the 1.7M virgin ounces that was talked about in 2007, being located 1,000 ft of the surface).
If I ran Century I would be drilling these Cross-Over Zone ounces hard right now - I would especially be focused on bringing most of the 530,098 M&I ounces in Reserves immediately. What could that do to our near-term production totals?
In addition, the North Wall Zone has 407,672 Inferred ounces. I would be drilling these ounces madly into reserves also.
As you can see, the opportunity to exponentially increase near-term reserves (1,000 ft of the surface) and increase near-term production appears to be enormous for all 3 near-term targeted mining zones (The North Wall Zone, The Sigma West Zone, The Cross-Over Zone).
I really hope this is what the $4M exploration funding is for. The company would be nuts not to execute the exploration plan I just described above.
The investors behind a firm planning to reopen the Caribou mine near Bathurst hope there might be enough ore deep in the ground to extend its life at least another two decades.
Fran Scola, one of three principal financial backers of Maple Minerals Corp., said Wednesday the company knows the mine - only operable with high market prices for zinc - is forecast to be out of ore in a few years' time.
"If my memory serves me right, seven to nine years," Scola said. "But we hope there's potential with drilling to find more ore, deeper.
"We hope that if we can restart the mine, the economics are favourable and we get the necessary support from the local government, that we could run this mine for 20 to 30 years, with some luck and some deep exploration," Scola said.
The company believes it can achieve low-cost production of zinc, lead and silver at Caribou.
Maple Minerals Corp. recently completed the first of a two-stage process to acquire the assets of Blue Note Caribou Mines Inc., the junior firm that operated the underground mine and nearby Restigouche open-pit mine until the markets crashed about a year ago.
Blue Note went into receivership last February and declared bankruptcy in July; Bob Smith of PricewaterhouseCoopers LLP is negotiating the sale with Maple Minerals Corp.
Smith said Maple Minerals bought the mining equipment and other tangible personal property of Blue Note for US$3 million and if the court approves Stage 2 early next month, the company will pay US$1.25 million for the mines, land, buildings and other assets.
"The deal we struck is we will both work hip-to-hip to make this mine work if we can," Smith said, pointing out Maple Minerals is getting good bang for its buck: Blue Note had invested about $150 million into the mine before halting operations.
Maple Minerals currently has experts poring over old data from the Caribou mine to look at the economic feasibility of reopening, Scola said. He said the company plans to leave the Restigouche open-pit mine untouched; it is nearly out of minerals and too close to a salmon preserve Maple Minerals does not want to risk polluting.
Under new ownership, the Caribou mine could employ as many people as through Blue Note - which created about 250 jobs in the Bathurst area while the mine was open.
"Our hope is to reopen and our hope is the employment levels would be the same," Scola said.
The company will be looking for government support he but did not specify whether this would be financial or otherwise.
"We don't know everything for sure because we're still examining the situation but we would like the government to create the kind of atmosphere that would give us the best chance for success," Scola said.
"Like anything, it's always a partnership between public and private."
Geoffrey Cowley, appointed the company's CEO, is by trade a metallurgist who has significant experience in metal mining operations in Africa, Asia, Middle East and in the countries of the former Soviet Union.
Cowley was previously CEO of Kinross Gold Corp. (TSX:K) in Russia and before that served as chief executive of Strikeforce Mining and Resources PLC, a large Russian mining company.
The principle investor in Maple Minerals is Maxim Finskiy, who formed Russia's Norilsk Nickel as well as Polyus Gold - the country's largest gold company.
Peggy Smith, president, CEO and chairwoman of Century Mining Corp. (TSX.V:CMM), is also a key investor.
Scola considers himself a venture capital investor for mining companies; he sits on the board of seven public and private mining firms and has investments in several others.
Wednesday, November 4, 2009
ATTENTION: SHAREHOLDERS OF CENTURY MINING CORPORATION
This Notice accompanies, and should be read in conjunction with, the management proxy circular (the “Circular”) of Century Mining Corporation (the “Company”) dated October 27, 2009 in respect of the special meeting of shareholders of the Company to be held on Monday, November 23, 2009.
With respect to the Company‟s proposed $21,000,000 Private Placement of Units (see “Particulars of Matters to be Acted Upon at the Meeting – Private Placement” in the Circular), please note the following amendments to the Private Placement and to the disclosure in the Circular:
(i) Of the 105,000,000 Units to be issued under the Private Placement, the Common Shares issued in connection with up to 20,000,000 Units may be issued on a „flow-through‟ basis (the “Flow-Through Units”). All other aspects of the Flow-Through Units, if issued as such, will remain the same as for the Units. For greater certainty, the Flow-Through Units, if issued, will be issued at Cdn$0.20 per Flow-Through Unit with each Flow-Through Unit consisting of one „flow-through‟ Common Share and one-half of one Common Share purchase warrant. Each whole Warrant will entitle the holder to purchase one Common Share at price of Cdn$0.30 for a period of 18 months, subject to the Company‟s right to accelerate the expiry date of the Warrants as set out in the Circular.
(ii) If Flow-Through Units are issued, of the net proceeds to be received by the Company from the Private Placement, up to $4,000,000 will be used to incur Canadian exploration expenses (“CEE”). Such CEE will be renounced to applicable subscribers.
The above change was made subsequent to the date and printing of the Circular. We apologize for the confusion.
Capitalized terms used herein but not defined herein, have the meaning given to such terms as set out in the Circular.
BY ORDER OF THE BOARD
(signed) Margaret M. Kent
MARGARENT M. KENT
Chairman, President and CEO
I mailed the IR( i know Brent has left the company ), i let you know. In the Circular i can't see anything about it, but the thing that could stand against it, is this: that we get more from the ~61k expanded gold deal ounces wise, then from the original deal. It also say´s that the money could change, and because of the current gold price and if it remains, maybe just maybe we may get even better conditions. This money is important especially if it's net money as i understand it is, it would currently give us US$1,5M per year*5= US$7,5M / Juha
Tuesday, November 3, 2009
I wouldn’t be totally surprised if we are up to 7,000,000 ounces now, if we lower our cutoff grade / increase our gold price to around US$900 plus toss in a few historical ounces (non-43-101) from our minor properties.
In 2007, Century published (in a presentation) u/g ounces based on a cutoff of 2.5 g/t vs 3.5 g/t. The difference in the 2.5 vs 3.5 cutoff grade itself works out to 29%. That 1 g/t change in grade resulted in a 32% change in resource ounces (2,015,000 ounces vs 2,655,000 ounces). In that example the resource ounces (M&I and Inferred) changed similarly to the percentage change in cutoff grade.
Let’s apply that same logic to our current situation.
If you look on pages iii and iv of the most recent Lamaque technical rpt you will notice that the 960,094 (new) ounces added to Lamaque’s 43-101 resource total in 2009 was calculated using a cutoff grade of 2.1 g/t. This is likely due to the gold price being high for an extended period of time. You will also notice that the other 4,589,547 ounces (that make up the current Lamaque 43-101 total of 5,549,641 ounces) was based on a cutoff grade of 2.5 g/t. The 2.5 g/t was from the January 2008 calculation which used an US$800 gold price. The 2.1 g/t grade cutoff ounces likely uses a gold price around US$900 - more reflective of today’s gold price (but still conservative given our current US$1,085 price). All of this strongly indicates that the 4,589,547 ounces need to be recalculated using a lower cutoff grade / higher gold price. Century likely needs to bring the original person back in to perform the recalculation. Hopefully they will use some of the flow-through money to do this in the near future.
Until then, let’s see if we can come up with a wild ballpark estimate of what the new numbers might look like.
Original cutoff grade of 2.5 g/t vs current cutoff grade of 2.1 g/t = 16% change
Lamaque ounces still stated at 2.5 cutoff of 4,589,547 * 1.16 = 5,323,875 ounces (after lowering cutoff to 2.1 g/t)
Wild ballpark estimate of Lamaque using 2.1 cutoff = 5,323,875 + 960,094 = 6,283,969 ounces
Let’s apply the same logic to San Juan (using the same percentage to keep it simple):
377,916 ounces * 1.16 = 438,383 ounces
Lamaque and San Juan (ballpark recalculation):
6,283,969 ounces + 438,383 ounces = 6,722,351 ounces
Of course, the actual recalculation would be much more complex that this. Although basic logic would suggest that our current 43-101 resource count should be around this ballpark number, we all know that there are no guarantees due to a lot of other factors to be considered during the actual calculation. Obviously, no one should make investment decisions based on such high level assumptions and calculations.
Also, just for fun, let’s see if we can come up with close to 7,000,000 combined recalculated and historical ounces for Century.
Northbelt property (Yellowknife, NWT) – historical, non-43-101 ounces:
Our property has a strike length of 15 kilometers, along a volcanic belt that has produced over 10 million ounces.
We have at least 2 gold deposits on the property that I am aware of.
Our current resource total = 175,000 ounces (historical, non-43-101)
130,000 ounces @ 4.00 g/t (Nebex calculation in the 90s)
45,000 ounces @ 10.30 g/t (Crestarum deposit)
Both gold deposits appear to be open.
There seems to be a large zinc deposit also (which appears to be open) and numerous other showings as well.
Of course, as we all know, Century has much more higher priorities right now. We probably wouldn’t be able to get to Northbelt for another couple of years. It seems to have really good potential though.
Fyi, the Yellowknife area is starting to get active in gold mining again, led by a company call Tyhee Development Corp. They did a really good job with exploring their deposit. I think the grade might be a tad on the lower end though, but they seem to want to develop it to production stage in about 3 years. They don’t seem to be having problems with permitting or any other local tasks. I think they are trying to raise the cash to move forward with development.
Our large Northbelt property appears to be prime real estate for the area (along the volcanic belt). If gold mining really heats up there then we are positioned well.
Aumaque property (near Lamaque) – historical, non-43-101 ounces:
Our current resource total = 68,000 ounces (historical, non-43-101)
51,000 ounces @ 8.57 g/t (original work)
17,000 ounces @ 6.03 g/t (Alotta work in the late 80s)
7,000,000 combined recalculated and historical ounces for Century:
6,722,351 + 175,000 + 48,000 = 6,965,351 ounces
Monday, November 2, 2009
I'm looking forward to the "Change of Control" more than getting the $21 million. If that happens, we will finally enter a new era where the value of our assets is not severely discounted because of who the management is. In that regard, I've added a new poll asking the simple question "Do you believe the $21 million PP will close".
I've also added a new link to the Circular that describes the conditions of the PP that the investors are being asked to approve. That one is a no-brainer. Every shareholder should read it and vote, although I believe a non-vote is the same as a Yes vote.
I remember Peter posting last week that his Canaccord broker couldn't get him a piece of the PP. I don't know why not unless it is because the two biggest sellers last week were the dynamic duo of Canaccord and "Anonymous". If I were as short as they were I wouldn't want anyone contributing to a CMM PP.
Finally, if we can close the PP, then I see this blog becoming more relevant and active again. In that regard I'd like to see some posters that can only "comment" send me an email requesting membership so that they can freely post. This would apply to yikes1, juha, rock3030, rick and rhump to name a few. Unfortunately "comments" have to be moderated to keep out the wilful bashing and there can be a considerable lag from the time you post until I see and authorize the comment. There is no moderation of members' posts.
From today's NR: "Together with previously acquired securities, following closing of the Private Placement, assuming full subscription of the $21,000,000 and excluding any flow-through shares purchased by the Investor pursuant to the Flow-Through Financing, the Investor, together with its associates and affiliates, will hold 112,142,857 Common Shares (164,642,857 Common Shares assuming exercise of its warrants) representing approximately 33.9% of the issued and outstanding Common Shares (42.9% assuming exercise of its warrants)."
That leaves the C$5M (with stand by guarantee from the Investor) as more than enough funds to go towards cleaning up small liabilities on the Balance Sheet before closing off the bank financing.
That then leaves the C$4M bridge financing to go almost entirely towards surface exploration at Lamaque and work on Vulcan resource modeling.
From the NR:
“Proceeds from the Flow-Through Financing will be used for surface exploration at the Lamaque property and to further delineate reserves and resources.”
“The Private Placement, when combined with the Bank Financing, will provide the Company with approximately $57 million of capital to restart the Lamaque underground gold mine project, located in Val d'Or Quebec. Furthermore, the additional $4 million from the Flow-Through Financing will allow for continued exploration on Century's extensive land position.”
They specially mentioned surface exploration at Lamaque. We know that they are drilling the Bedard Dyke (perhaps from both the surface and from within the pit). I wonder if they will also be drilling the M&I ounces located from 0 to 1,000 feet of the surface, in order to increase the near surface reserves. Off the top of my head I can’t recall how deep a standard drill (or even a deep drill) can reach from the surface.
Here is where this aggressive drilling can be a game changer during the ramp up period. If they are aggressively drilling near surface M&I ounces into reserves (in areas easily accessible for near-term mining) then we could be looking at higher production ounces in the ramp up period than previously forecasted.
- Files circular for shareholder meeting for approval of private
- Closes $1.3 million of "flow-through" equity financing -
- Increases equity financings by an additional $5 million -
BLAINE, WA, Nov. 2 /CNW/ - Century Mining Corporation (CMM: TSX-V) ("Century" or the "Company") announces that it has closed a portion of the flow-through equity financing originally announced on October 14, 2009 (the "Flow-Through Financing") and has filed on SEDAR the circular for a special meeting of shareholders to approve the private placement of units to Kirkland Intertrade Corp. ("Kirkland") and Gravity Ltd. ("Gravity") (together, the "Investor") which was announced originally on September 15, 2009 (the "Private Placement").
The Company announced today that the Flow-Through Financing of $5.25 million comprised of common shares issued on a "flow-through" basis at $0.20 per share has been reduced to $4 million and that $1.3 million of that amount has been closed. The remaining $2.7 million is expected to close in November. Proceeds from the Flow-Through Financing will be used for surface exploration at the Lamaque property and to further delineate reserves and resources.
The special meeting of shareholders has been scheduled for Monday November 23, 2009 at 11:00am Pacific Standard Time at the Vancouver Club in Vancouver, British Columbia. The proxy circular has been mailed to shareholders and is available for review on SEDAR.
The Company's Board of Directors has unanimously recommended that shareholders approve, among other things, the amendment of the Company's Shareholder Rights Plan to enable the Private Placement to the Investor to be completed. Members of management holding common shares of the Company have executed voting support agreements to vote their shares in favour of the resolution authorizing and approving a $21 million private placement of units of the Company (as described below), the creation of new 'control persons' of the Company and the consequent amendment of the Company's Shareholder Rights Plan.
With respect to the Private Placement, Century has agreed, subject to entering into mutually agreeable subscription agreements, to issue an aggregate of 105,000,000 units ("Units") at $0.20 per Unit for gross proceeds of $21,000,000 increased from $20,000,000 originally announced on September 15, 2009. Each Unit will consist of one common share of the Company and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to purchase one common share of the Company at a price of $0.30 for a period of 18 months. Of the 105,000,000 Units to be issued under the Private Placement, the common shares issued in connection with up to 20,000,000 Units may be issued on a 'flow-through' basis (the "Flow-Through Units"). All other aspects of the Flow-Through Units, if issued as such, will remain the same as for the Units. The Flow-Through Units, if issued, will be issued at $0.20 per Flow-Through Unit with each Flow-Through Unit consisting of one 'flow-through' common share and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to purchase one common share at a price of $0.30 for a period of 18 months. In combination with the $4 million of flow-through shares described above, the total equity issuance of $25 million represents a $5 million increase in the amount of funds raised through equity financings.
The Investor has agreed, subject to entering into mutually acceptable subscription agreements, that with its associates and affiliates, it will subscribe for $16,000,000 of Units. If additional purchasers acceptable to Century and the Investor are not identified and binding subscription agreements are not entered into prior to closing of the Private Placement for the remaining $5,000,000 of Units, the Investor has agreed, subject to entering into mutually agreeable subscription agreements, to subscribe for the remaining $5,000,000 of Units.
Together with previously acquired securities, following closing of the Private Placement, assuming full subscription of the $21,000,000 and excluding any flow-through shares purchased by the Investor pursuant to the Flow-Through Financing, the Investor, together with its associates and affiliates, will hold 112,142,857 Common Shares (164,642,857 Common Shares assuming exercise of its warrants) representing approximately 33.9% of the issued and outstanding Common Shares (42.9% assuming exercise of its warrants).
The Company also announced an update to the prepaid gold forward sale financing facility (the "Bank Financing") with a major international bank ("the Bank") which was originally announced on July 30, 2009. Pursuant to the Bank Financing, subject to minor variations of certain terms based upon fluctuations in gold prices prior to closing of the Bank Financing, the Bank is expected to purchase from Century approximately 61,000 ounces of gold over a five-year term, for which the Bank has agreed to pay to Century, upon closing, US$33 million (of which no more than US$10 million is to be deposited into a performance reserve account). One of the conditions of closing of the Bank Financing is that the Company raise US$16 million of equity, which will be satisfied by the proposed Private Placement.
The Private Placement, when combined with the Bank Financing, will provide the Company with approximately $57 million of capital to restart the Lamaque underground gold mine project, located in Val d'Or Quebec. Furthermore, the additional $4 million from the Flow-Through Financing will allow for continued exploration on Century's extensive land position.
The Company anticipates closing of the Private Placement and the Bank Financing on or before December 4, 2009. All securities issued under the above transactions will be subject to a four-month restriction on resale.
For more information, please refer to the Company's press releases of July 30, 2009, September 15 and 23, 2009 and October 14, 2009, all of which are available on SEDAR and on the Company's web site.
Margaret Kent, President and CEO of Century, commented, "We are very pleased to announce these updates with respect to the equity private placements and the prepaid gold forward sale facility. My management team and I have been working diligently with all of the investor groups and we are encouraged by the progress we have achieved in satisfying the requirements to enable the closing of all of the transactions. Management and the Board of Directors recommend that shareholders approve the Private Placement to Kirkland and Gravity which will facilitate achievement of Century's vision of creating a formidable mid-tier gold producer. This funding allows us to immediately restart our flagship asset and aggressively pursue other production opportunities."
About the Investor
Kirkland is beneficially owned by Maxim Finskiy. Mr. Finskiy is Chief Executive Officer of LLC Intergeo Managing Company, the mining and exploration arm of the private Russian conglomerate Onexim Group, which is Russia's largest investment fund with $25 billion in assets. From 2001 to 2008 he was Deputy General Director and Deputy Chairman of the Management Board of MMC Norilsk Nickel. Mr. Finskiy sits on the Board of Polyus Gold, one of the top world gold producers, incorporated in Russia.
Gravity is the personal investment vehicle of Fran Scola. Mr. Scola is a partner at LFM Partners, a partnership with extensive investments in the natural resources sector. He is a board member of seven different public and private mining companies. He is a former partner of Weintraub Investments, a San Francisco-based hedge fund.
About Century Mining Corporation
Century Mining Corporation is a junior gold producer. The Company owns and is working towards the start up of the Lamaque mine in Québec that historically has produced over 9.2 million ounces of gold. In Peru, Century's wholly-owned subsidiaries own an 82.6% interest in the San Juan Mine where the Company accounts for 100% of gold production. Total gold production for 2007 and 2008 was 63,124 and 14,252 ounces of gold, respectively.
"Margaret M. Kent"
Chairman, President & CEO