Outlook, from MD&A

The Company continues to add ounces to the Lamaque resource base and with combined reserves and resources currently over 6 million ounces of gold the mine

The last number published for Lamaque was 5.5M ounces (June'09). Is the over 6.0M currently for Lamaque a typo? Or, have they added ounces since June'09. Perhaps they adjusted it to reflect the lower cutoff grade (from 2.5 g/t to 2.1 g/t - going from using US$800 gold price to US$900), as I've been anticipating they will eventually. If the current Lamaque number is truly over 6.0M then the overall company number might be close to 6.5M currently (when adding in SJ). I guess we'll see eventually.

The combined production forecast of both mines when Lamaque is at capacity will be over 130,000 ounces per year at cash cost of US$450-US$500 per ounce.

We are probably talking about a couple of years down the road. I take it the break down will be 100,000 for Lamaque and 30,000 for San Juan. They can only set the targets based on the 1.3M current reserves. What's interesting is that the majority of the 2.6M ounces residing 1000 ft (300 meters) of the surface have not been moved into P&P Reserves as yet. Century has launched a $4M exploring program. This should allow more of the 2.6M ounces to be moved into higher resource categories, including P&P Reserves. If a larger number of those ounces are moved into P&P Reserves then hopefully the company will look to fast track production to the 100,000 per year level at Lamaque. Also, hopefully they will look to increase the long term production target beyond 100,000 (mill capacity is in place to handle much higher production). Given the proximity to the surface, theoretically, mine development and mining of these ounces should be independent of dewatering the lower levels and refurbishing the shafts (required to drill and mine the areas below 1200 ft) - assuming there is sufficient space to maneuver around for all initiatives.

First thing is first though, we need to close off the financings then we need to establish profitable production at Lamaque. The US1,200 (+) gold price will be extremely helpful.

From the MD&A:

"The outlook for Lamaque technically is exceptional. The Company continues to add ounces to the Lamaque resource base and with combined reserves and resources currently over 6 million ounces of gold the mine should be a significant producer for many years to come. The combined production forecast of both mines when Lamaque is at capacity will be over 130,000 ounces per year at cash cost of US$450-US$500 per ounce. Management has continued to focus on the technical aspects of the project and has continued to support the group of employees and staff at the mine through this difficult time. The fact that the project successfully passed the stringent due diligence process is evidence that the project is robust and is ready to restart when the financing is closed."

"The outlook for San Juan is also positive, but San Juan can only achieve its production goals for 2010 when capital needed to complete the refurbishment of the milling facilities is available. Until closing of the larger financings, cash continues to flow from Peru to support management and head office expenses, leaving the necessary mill expansion and other cost saving efforts unfunded."

"The Company’s assets at Lamaque and San Juan are very good projects and the potential to realize significant shareholder value from these existing assets is excellent. Management’s focus is to work diligently to close the announced financing packages by the middle of December. This will ensure that the Company’s working capital deficit is eliminated, and the necessary start up and expansion work is completed at the Lamaque and San Juan mines. When this happens the company will have two long life assets that have the potential to generate substantial cash flow at current and projected gold prices. Until then, the Company will not be completing any further acquisitions or be spending any corporate cash flow on its other existing development projects."

"With gold approaching US$1,200 per ounce and the Company is ready to restart the Lamaque project the outlook for the Company has improved significantly. Management looks forward to a robust year in 2010 as we work to implement all the Company’s growth plans."