Friday, December 4, 2009

Century Announces Financing Update

BLAINE, WA, Dec. 4 /CNW/ - Century Mining Corporation (CMM: TSX-V) today announced that management is diligently continuing its efforts towards the completion of documentation and closing of the previously reported US$33 million prepaid gold facility with a major international bank and the $21 million private placement. Further to previous press releases, the Company now expects that closing of these financings will be prior to the Christmas Holidays.

Margaret Kent, President and CEO of Century commented, "Other than finalization of documentation, no other significant business issues remain that affect the closings".

8 comments:

production05 said...

It sucks that it's pushed back to Christmas, but I think this following comment somewhat addressed the primary area I wasn't too clear about:

"Margaret Kent, President and CEO of Century commented, 'Other than finalization of documentation, no other significant business issues remain that affect the closings'."

I wasn't too sure how the Bedard Dyke drilling delay during the 2 weeks in October had impacted the closing. I was guessing the bank might have needed to see sufficient enough (positive) drill results from the current Bedard Dyke drill program (since it's the first location to be mined) before closing the deal.

If there are no significant business issues remaining then that 2 week delay in October is now a non-issue.

I hope that this delay is due to Century and Finskiy working on a more favourable deal with the bank. I really like my credit line suggestion or at least a better prepaid gold price with the bank.

production05 said...

'Other than finalization of documentation, no other significant business issues remain that affect the closings'

For me, this statement is turning out to be huge. It just continues to confirm really pivotal items in my mind:

1) As mentioned already, results from the Bedard Dyke drilling doesn't appear to be an issue with the bank.

2) It confirms that both the technical DD (especially for Lamaque) and the business DD (Balance Sheet, etc.) have passed stringent tests by Finskiy and Scola.

3) It confirms that both the technical DD (especially for Lamaque) and the business DD (Balance Sheet, etc.) have passed stringent tests by the "Major International Bank".

4) It likely means that the Bedard Dyke drilling is positive, which likely bodes well for availability of solid ore feed and ore grade for the restart of Lamaque (and hopefully an early cash flow positive situation). It could mean that Finskiy's recent talk about the 70,000 ounce production pace for 2010 (Lamaque and San Juan combined) is supported by the plan coming together.

If Finskiy & Scola and the bank are both comfortable with all of the technical and business aspects of Century then the logical question is what is holding up the closing? Everyone has had at least 3 months to put the paperwork together. The delay can't be related to timing of the cash. If the cash wasn't available until Christmas then they would still be able to close the deal off now and then state that the cash will be deposited in 3 weeks.

As a result, I am still wondering if Peggy and Finskiy are trying to make the deal a bit more balanced. At least I hope so. I also wonder if someone wants to wait for a couple of weeks to see where the gold price settles in at before finalizing the price for the prepaid gold sales.

To be honest, I'm surprised that another bank hasn't stepped up with a better prepaid gold sales offer, especially now that we have deep pocket significant shareholders with connections and credibility, in Finskiy and Scola - it removes a lot of risk. After all, it's not very difficult to beat the US$541 gold price the bank has offered. Gold companies are not hedging their gold right now. This is probably how that Australian near producing company was able to get their US$1,500 hedge price - the investor likely had to pay up if he wanted to purchased forward delivered ounces.

production05 said...

Oh, I had one more immediate thought that I forgot to share earlier. We can rule out any money issues (as in the investors not being able to come up with the money).

The US$33M is pocket change for any "major international bank" on the planet that survived last's financial crisis.

With regards to Finskiy, he likely got back at least $15M in total from his Etruscan transactions (shares, warrants, debt repayment and interest payment). Remember, that $15M is just extra cash for him. He went into the Century transaction with the intention of selling his Etruscan holdings to Century in exchange for Century shares (not cash), prior to Endeavour taking over Etruscan of course. As a result, he obviously had sufficient cash for his part of the $20M PP, even prior to the $15M cash coming available from Etruscan.

Based on the latest funding structure, Finskiy and Scola now only have to come up with $16M in total. I would say it should be a no brainer given the knowledge we already have.

So, clearly, we should be able to rule out lack of investment capital as being a factor in the delay.

yikes1 said...

Considering the amount of fuss people made over how careful CMMs NRs have been in the past, Peggy coming out and saying that it's basically paperwork left is a huge statement.
As Prod05 has stated above, why three weeks for paperwork? Perhaps it's CMM holding up the transaction for one reason or another(as mentioned by Prod05, waiting for a better gold price offer). It sounds like CMM is finally in the drivers seat.

Anonymous said...

I agree Yikes. She finally puts out a release in a timely manner instead of letting us twist in the wind waiting. Too bad the thing didnt close but the russians didnt give up $4 mil for nothing :)
A NR of some of the results of driling and logging of past cores would be a great distraction right NOW.

roxy14 said...

Dissagree. Would rather they announce those after deal is done
to keep momentum going. If price
retraces back to .20 before announcement I'll consider that
a great buying opp. Announcing
before will only provide traders
another opportunity to flip, especially with Cannacord and
Annomyous still around.

Anonymous said...

Point taken. I will be on the buy for sure if we see .20 even .21.

Anonymous said...

I agree with "yikes" observation that we were given a statement by CMM about the fact that what's left to do to close the deal(s) is not major. In the past, I don't think we would have seen any such statement. We would have been sitting and wondering, as usual. This statement, in addition to what it means for the deal, is an encouraging signal to my mind, that things are gonna change in the way of customer/shareholder communications with Finsky and Scola as part of the business. Good stuff.