Hi bigjohn,
Good to hear from you.
I don`t expect to see any takeover offers (hostile or friendly) for Century. It is now virtually impossible for any company to succeed in gaining majority control of Century without the blessings of Finskiy (especially if shares from Scola, Peggy and Ross Burns are aligned with his shares, which they are and will be). This is actually good for us small shareholders. It means that we can wait for production ramp up to drive share price closer to fair value levels, instead of being on the lookout for severely lowball (opportunistic) takeover offers flying our way.
Finskiy and Scola are looking to make zillions of dollars from this investment via the public market. Over time, they are looking to use Century as the vehicle to build one of North America`s largest gold producers. Over time, in my view, their annual production target for Century is 300,000 ounces then 500,000 ounces and then 1,000,000 ounces. In my view, only after reaching 1,000,000 ounces of annual gold production (much further down the road) will they consider selling the company - likely to a major like Agnico or Kinross or Polyus, etc. Nothing is ever set in stone and things can always change, but it is my belief that the current plan looks something like this.
2 comments:
Hi Production05,
We (small shareholders) are indeed fortunate to have Finskiy & Scola involved with CMM in a major way. I think you are right that their position practically eliminates the likelyhood of any takeover.
They each have impressive CVs. I wonder whether they are also personal friends, or just business associates.
Do you think one of them could become the new Board Chairman at the AGM?
Thanks again for your most valuable/informative postings.
bigjohn37
Hi bigjohn,
You`re welcome! Actually, I`m not really sure if Finskiy and Scola were friends first before becoming associates. There does seem to be a solid trust between the 2 partners though. Integrity is a hard quality to find, especially in the business world (assuming they both have it of course).
Here is something that is interesting: 4 of the 7 directors for Ecometals are associated with Finskiy-Scola, either via Century`s BOD or via Onexim`s BOD (of course Onexim is the $25 billion Russian company Finskiy is involved with).
Let me explain. Here are the 4 names:
*Hulley (Century Advisor - will likely be director at the AGM)
*Scola (Century Director)
*Lamarque (Century Director)
*Charlier (Onexim Director)
It says a couple of things to me. Firstly, it likely means that all of these guys work well as a team together (there is a shared vision of running the business). Secondly, it likely means that Finskiy is very trusting of Scola`s opinion because it looks like Scola might have been the person to recommend Hulley and Lamarque as Directors of Century.
With regards to when we get the new Chairman. By the way, per Peggy in the last conference call, the new Chairman will likely need to be Canadian (in order to keep regulatory balance, or something like that). As a result, I don`t think it will be Finskiy or Scola. Also, per previous agreement, the Chairman will need to be independent of Century and the Finskiy team.
Anyway, there are 2 possibilities that immediately come to mind:
1) Century could appoint the new Chairman once an ideal Canadian one has been found.
2) Century might wait until they do a significant acquisition (once Century`s share price is much higher). It would be extra incentive when acquiring a company if a member of their BOD can become the Chairman of Century.
Fyi, per the deutsche bank deal agreement filed on SEDAR, I don`t think Century can do an acquisition over $5M until the commitment guarantees have been lifted. I think that means we have to produce a run rate production of 70,000 ounces from Lamaque for 4 consecutive months first, before we can be free. Using the projected 4.76 g/t grade and the projected 94 - 96% recovery rate, that`s about 1,300 to 1,400 tpd. There seems to be some talk that they can achieve those levels later this year. We`ll see I guess.
Yeah, if I understood the DB agreement correctly, Century can still do a minor acquisition anytime, but it can`t be more than $5M (combined cash and non-cash). There is really not much they can pick up for $5M. It might work if they can pick, say, an undervalued property in a strategic location from a company or owner that is struggling (i.e. a nearby property in either Val dÒr or San Juan that can eventually provide mill feed).
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