Friday, April 30, 2010

Today's Trading Summary

The usual suspects maintain their roles as the largest sellers.  The 2010 Trading summary (link on right) has been updated for April and 2010 and Canaccord and Anonymous continue to be the biggest net sellers.

Tax selling thoughts I posted on Stockhouse

Thursday, April 29, 2010

Today's Trading Summary

(Click to enlarge)

The McNutt barometer

``The options were exercised and either sold in a private transaction to minimize impact in the market, or continue to be held``

As mentioned yesterday, not everyone in the group sold their shares after exercising their options. It looks like at least one person held unto their exercised shares (at least for now). Who that person is could provide a hint on how senior management truly feels about the direction of Lamaque.

We know that Peggy sold her 200K exercised shares at $.63 on April 19th. As also mentioned, that sale had zero impact on her (and Ross`) 22.8M Century share position.

We`ll have to monitor SEDI over the next few days to see if McNutt sold his exercised shares also. He exercised the options on April 18th. I don`t know how much time they are given before they have to file their insider transactions, but I vaguely remember something like 10 days (I`m really not sure though). Peggy exercised her options on the 18th, sold privately on the 19th and filed on SEDI on the 28th.

If McNutt soon sells his newly exercised Century shares then it`s no big deal. It wouldn`t mean anything. He only had 75,000 Century shares prior to this recent exercise (although he still has about 700,000 options remaining). On the other hand, if McNutt suddenly starts accumulating shares (even through exercise of options) then this is likely a significant development. To be honest, even though McNutt is a senior manager at Century, he is the last person on earth I ever figured would accumulate Century shares. I say this simply because I have never seen anything like it from him since I`ve been an investor at Century (even though he is a VP Ops guy). You know, everyone has their own personal reasons not to purchase company shares - it could simply be that he doesn`t (didn`t) believe in making market investments. It`s really none of my business.

However, we should monitor if he keeps these 200,000 shares or if he sells them in the near-future. His exercise price was $.40. It means that he dished out $80,000 out of his own pocket. That`s a lot of personal cash to suddenly dish out for someone with (75,000) virtually no Century shares since the inception of the company (about 7 years ago).

McNutt is the VP Ops at San Juan, but he is probably helping out at Lamaque right now also while they search for a permanent Lamaque VP Ops. Either way, he should be in the know as a member of the senior management team.

I will post if I see him sell over the next couple of days.

Wednesday, April 28, 2010

Today's Trading Summary

Both Canaccord and Anonymous hammered the share price to drop it and keep it below 80 cents late in the day.  First Canaccord sold 98,000 at the 80 cent bid and Anonymous took out the last of the 80 cent shares which seemed to trigger some 80-cent stop losses.  That was followed by a 70k dump by Canaccord at 78 cents while Anonymous put 115k on the ask at 79 cents.  After these shares were bought up, Anonymous sold 162k at the bid dropping the price to 77 cents. 

San Juan exploration start up period

San Juan exploration start up was expected in Q4 this year. I wonder if the early gold pour at Lamaque has moved up the start period by a month or two. It would be good if they could start mid to late summer instead of Q4 - worst case scenario, Q4 is only about 5 or 6 months away. There are lots of intriguing test targets on the property. Century`s land package is large down there, but the property had essentially never been drilled prior to Century arriving on the scene. Century`s original drill program down there was very limited and didn`t go much outside the veins surrounding the San Juan Mine area. Also, I think the geologists have since had a chance to study the data and have built theories based on similar geological formations and structures in Peru and elsewhere around the world. I look forward to us testing those theories.

``Upon commencement of gold production at the Lamaque gold mine, senior management will focus its energy on expanding production at Lamaque. At its San Juan gold mine, the Company will be ramping up exploration efforts on specific targets to evaluate the large property position.``
From the NR, we are averaging 1000 tons per day. Assuming grade is steady at 4.6 g/t and recovery comes in at 96% and gold at $1165, we should generate 139 ounces per day or 4170 ounces per month. At a cash cost of $480 per ounce, we should be getting 4.9M in revenue at a cost of 2M for cashflow of 2.9M per month. We should only increase this number as our through put increases, up to 2000 t/d by the end of the year. Barring a colapse in the price of gold (I expect gold to continue it's uptrend) this will become a very nice long term hold.

Thoughts on today`s NR

1) ``is pleased to announce that the mill facility at its 100% owned Lamaque gold project located in Val-d'Or, Québec, Canada is fully operational``

I don`t get the impression that the market entirely appreciates the significance of that statement. In my view, this is a major hurdle/accomplishment. Even from a distance, I have observed countless number of start up mine operations experience either hard to locate (and correct) vibration problems or serious recovery issues or other processing problems. The companies that owned those particular start up operations either got severely crippled or were partly eaten by sharks.

2) ``is currently processing 900 to 1,100 tonnes per day of ore from current production and existing stockpiles``

A 900 - 1,100 tpd run rate represents production run rate of 47,000 to 57,000 ounces for Lamaque (assuming they hit the targeted 95% recovery rate and 4.76 g/t grade). I can only assume they did not go full out with 1,200 tpd because they want to ensure they can maintain that pace until Bedard Dyke ore mining comes online (and is ramped up to a reasonable level), otherwise I guess if they push the 1,200 tpd too early then they might use up too much of the stockpile and not be able to maintain these levels until BD arrives.

3) ``The executive team is extremely pleased with results to date at Lamaque, and we can now focus on reaching further milestones as we progress through 2010.``

This likely means that Finskiy and Scola are extremely pleased also. If the people with the most money invested (and with inside info) are please then that is likely a positive development for us small shareholders.

4) ``The Company currently has a workforce of 180 on site, including staff, union employees and general contractors. This workforce is focused on mine expansion, mill facility upgrades, site reclamation and monitoring and general site maintenance.``

The company had 115 employees at Lamaque at the beginning of April. They now have 180, once they include general contractors. I don`t think the difference of 65 is all contractors. My guess is they have made some good strides in April in hiring a good number of employee miners in anticipation of mining the Bedard Dyke.

Also, from the last couple of NRs, I get the impression that they seem to be partnering well with the Quebec government. Not only has the government purchased the 1M tonne waste rock from Century (for road building purposes) but Century seems to going strong (with them) in reclamation of the unused parts of the property and just making the pit area look more pleasing to drivings on the hwy.

5) ``The development crew underground continues to mine in three separate stoping complexes.``

This is positive, as they were about to get into the 3rd stoping area (in the last update). Still going strong with 3 stopes, it likely means the original stope (at the beginning of March) is still a strong ore provider.

6) ``The low profile underground mining equipment to be used to increase efficiencies and production in the Lamaque #2 zone is expected to arrive at the minesite within days and on schedule.``

Yes, on schedule, but would have nicer to get earlier in April though. It`s understanable as I think most of it is coming all the way from South Africa. Plus, we are still very fortunate to have our order filled so quickly after financing got closed off (especially with the mining business booming again).

7) ``The Company continues with its final mine planning for the Bedard Dyke and expects to collar the portal in the very near future.``

I don`t mind if the BD mine plan takes a bit longer to fine tune or implement. This is going to be an important mining area for the company in the future. Also, later on down the road they will need to put in the crown pillar to mine under the hwy and such, and to also initiative long-hole stope mining (which will be a big step for us, both efficiency wise and increased tonnage).

8) ``The Company is also now preparing to commence a 150,000 foot (45,000+ meter) exploration and definition drill program in May 2010 at Lamaque, and is expected to continue over a three-year period.``

I wouldn`t be surprised if the last 3 drill holes for BD gets released with launch of this new exploration program.

9) ``At its San Juan gold mine, the Company will be ramping up exploration efforts on specific targets to evaluate the large property position.``

It should be exciting to find out which targets they select at San Juan. You can see my post from a few weeks ago regards to tires they might want to briefly kick down in Peru.

10) ``Upon commencement of gold production at the Lamaque gold mine, senior management will focus its energy on expanding production at Lamaque.``

Our Lamaque mill is officially capable of processing 3,000 tpd of high grade our. At 95% recovery and 4.78 g/t grade, that`s 157,000 ounces of annual production. No point wasting such capabilities with a $1,165 gold price available. If they have success with the new drill program (in moving more near-surface ounces into P&P) then I hope management will be able to implement a new mine plan to scale up from 105,000 ounces of production to 150,000 ounces within the next couple of years (prior to the shafts being ready). If so, we could become a mid-tier gold producer just from organic growth alone, with 180,000 ounces of production (150K Lamaque and 30K San Juan).

11) `On the exploration and geology front, the Company controls significant property positions in Canada, Peru and the United States that have been barely explored, and provide additional excellent discovery upside for the Company as we look to appoint a new VP Geology in the near future,`

Once Lamaque is more established, I would like to see us get going with our Northbelt (Yellowknife), NWT property, either with a JV partner running with it or us driving it alone (100%). I`m ok either way, despite Peggy`s reputation in that part of the wooks. There are no gold mines in the area anymore. The economic crisis has beaten down places like. Creating jobs (without sacrificing the environment of course) should be a top priority in northern Canada. The Federal government earlier in the year allocated funding ($12M I think) towards beefing up northern administrative departments in Canada to allow for projects to processed faster, especially in the mining industry. They want to make northern Canada more business friendly, while still not harming the environment.

I think a JV situation works best for us, but I don`t mine Century moving the property forward by itself with Finskiy and Scola being the investor face and significant shareholders in the company.

Everything I have seen about Northbelt makes me believe that we have significant potential for a mine on this property (this could be our 4th organic mine - see Carolin below for the 3rd mine). The property has a 15 kilometre strike length, in a 10M (+) ounce production (proven) volcanic belt. There are already 2 established non-43101 deposits already delineated on the property. One of the mineralized structures has 135,000 ounces (4.0 g/t grade) at relatively shallow depths. What`s really exciting about it is that it is both open along strike (open in all directions) and at depth. The second deposit has about 45,000 ounces (about 10 g/t grade) and is likely open also. There are numerous gold showings along the property also. There is also a large zinc showing, but that`s secondary as it is not our focus right now. At the very least, I would like to see either us or a JV partner get up there and start punching holes at least in the 135,000 ounce structure (if not both deposits) where we know for sure it is open in all direction. Hundreds of exploration companies waste millions of dollars trying unsuccessfully to find ore bodies. We have already found at least a couple of ore bodies on this property (potentially a lot more). No point wasting it with $1,165 gold.

If we are not going to consolidate the small producers in the Val d`Or area for a while then I would like us to bring Carolin / Module back in-house (via takeover). We still own most of the Carolin Mine. Module has done a good job under the circumstances - they have struggled mightily with raising funds. Carolin will never be a spectacular mining operation but it could still be very fruitful. I really like the exploration results shown by Module. I think the property has 700,000 - 1,000,000 ounce potential. With advancement of exploration, I think it can be a 50,000 - 60,000 ounce operation that can be fast tracked into production. This can be Century`s 3rd organic mine. However, a lot of exploration work needs to done and I don`t think Module is in a position to move aggressively (like Century will be). I think it`s almost zero risk for Century to bring in-house. Century can still keep the Module geologist to be dedicated with running with the project. Module has a market cap of only about $1.6M. Century can probably bring them in-house for far less than $5M. Best I can understand, the Deutsche Bank agreement allows for acquisitions of $5M (or less) at anytime. Module shareholders get to share in the upside to all of Century, while Century can ensure that Carolin moves aggressively forward, and hopefully becomes our 3rd organic mine. Carolin already has a lot of infrastructure in place (as a past producer). As a result, it should be less costly to develop than a brand new mining operation. Of course, it`s totally impossible to know right now, but my guess would be in the $20M - $40M range (excluding exploration costs). It`s the type of small organic growth that Century should be able to handle through cash flow over time.

12) No mention in the NR about starting to review strategic opportunities. You almost get the feeling that the other small producers are not quite ready to pool their assets together with Century to form a powerful $2 - 3 billion gold mining player. I`m ok with that also. I am also ok if they want to team up with another company. As I`ve identified above, Century has plenty of organic opportunities to work with. I don`t have a problem with Century just sitting back and growing it`s cash position - maybe do a one time dividend payout to shareholders (as a reward to all of the long suffering Century shareholders).

If the small Val d`Or area producers (and their shareholders) don`t want to cut a deal with Century, and don`t want Peggy, Finskiy and Scola to use their connections to arrange debt financing deals for them then I`m ok with that. However, I`m looking at their numbers and it makes me wonder how they are going to move forward without taking a hit. It also gives me the impression that Peggy and Finskiy are just going to sit back for a while and let them feel the pain until them come to their senses.

Best I can tell, Alexis Minerals (AMC) had a $4.2M debt due today and $2.1M due in July. They also have $13.7M in current payables. They need to raise $33.7M to develope the Snow Lake Mine. It`s not clear how much more they need to move their Lac Pelletier operation forward (they are in feasibility phase) but I remember seeing an old number of $8M. They also need to perform vital exploration on at least a couple of their key development properties. I think they still have a bit of cash, but I guess is that it`s very little relative to cash needs. They currently have almost 220M shares outstadning. At a $.30 share price, if they were to cover all these cash needs via PP then that works out to 205M more shares with say 103M full warrants (assuming half warrants per share given).

Northern Star Mining (NSM) has a $42M debt amount ($31M * 1.375 redemption rate - best I can tell) coming due mid next year.

It`s hard to believe that Richmont Mines (RIC) would want to truck their ore 110 km and 100 km for processing when their are more economical solutions available, but who knows, maybe they do.

Century's Lamaque Mill Facility Fully Operational & Provides Further Progress Update for Lamaque Gold Project

Apr 28, 2010 09:15 ET

BLAINE, WASHINGTON--(Marketwire - April 28, 2010) - Century Mining Corporation ("Century" or the "Company") (TSX VENTURE:CMM) is pleased to announce that the mill facility at its 100% owned Lamaque gold project located in Val-d'Or, Québec, Canada is fully operational and is currently processing 900 to 1,100 tonnes per day of ore from current production and existing stockpiles. The Company is fully financed and on budget for the ramping up of the Company's Lamaque gold project, and is preparing for its first gold pour within the next week, nearly one month ahead of schedule.

"Century is about to take a new step forward with imminent gold production at the Lamaque gold mine. We are making ready on all fronts for this exciting point in the re-opening of our second gold mine, on budget and ahead of schedule. Our metallurgical team is preparing the facility for the first gold pour and I look forward to seeing the yellow metal 'Pour in Val-d'Or'. Century Mining is fully cashed up and looking to build the next mid-tier gold producer. The executive team is extremely pleased with results to date at Lamaque, and we can now focus on reaching further milestones as we progress through 2010. On the exploration and geology front, the Company controls significant property positions in Canada, Peru and the United States that have been barely explored, and provide additional excellent discovery upside for the Company as we look to appoint a new VP Geology in the near future," commented Margaret M. Kent, President & CEO of Century Mining Corporation.

Lamaque Gold Mine Update

The Company continues to have excellent progress at the Lamaque mine site and expects to pour gold within a week. The Company currently has a workforce of 180 on site, including staff, union employees and general contractors. This workforce is focused on mine expansion, mill facility upgrades, site reclamation and monitoring and general site maintenance.

The development crew underground continues to mine in three separate stoping complexes. Ore that had been brought to the surface and stockpiled is being processed, now that the 3,000 tonne per day capacity mill is fully operational. The low profile underground mining equipment to be used to increase efficiencies and production in the Lamaque #2 zone is expected to arrive at the minesite within days and on schedule. The Company continues with its final mine planning for the Bedard Dyke and expects to collar the portal in the very near future. The Bedard Dyke is the second zone in the mine plan to be developed through long-hole open-stoping, which will subsequently increase the daily tonnage. All underground access portals are collared via the historical Sigma pit, which is located only a few hundred meters from the 3,000+ tonne per day milling facility.

The Company is also now preparing to commence a 150,000 foot (45,000+ meter) exploration and definition drill program in May 2010 at Lamaque, and is expected to continue over a three-year period. Upon commencement of gold production at the Lamaque gold mine, senior management will focus its energy on expanding production at Lamaque. At its San Juan gold mine, the Company will be ramping up exploration efforts on specific targets to evaluate the large property position.


A group of senior management employees and former officers of the Company recently exercised approximately 600,000 options that were held since being granted five years ago on April 18, 2005 at $0.40 per unit. The options were exercised and either sold in a private transaction to minimize impact in the market, or continue to be held. Additional information on insider transactions can we viewed at

About Century Mining Corporation

Century Mining Corporation is a Canadian junior gold producer and holds strategic land positions in Canada, United States and Peru. The Company's strategy is to grow to an intermediate gold producer through existing mine expansions and acquisitions of other strategic and synergistic gold opportunities.

On behalf of Century Mining Corporation,

Margaret M. Kent, President & CEO

Tuesday, April 27, 2010

Today's Trading Summary

Article: Quebec mining sector answers crit

Quebec mining sector answers critics
(National Post)
Updated: 2010-04-27 09:46

Stung by controversy over a uranium project on Quebec's North Shore and an unflattering report from the province's auditor general, Quebec's mining industry is now trying to set the record straight with a new study that says the sector will contribute significantly to the economic recovery.

About $4-billion worth of mining investment projects have been announced and should get off the ground before 2013, officials with the industry's two largest trade groups told reporters on Monday. Since 2000, exploration activity alone has increased on average by 65% a year, reaching $440-million in 2008.

"I don't think this is a political game," Association mini¨¨re du Qu¨¦bec chairman Michel Leclerc said when asked if the study increases the industry's sway among lawmakers. "We simply want to show to the people who we are as a group. Because obviously we didn't know. Six months ago, we didn't know [these] numbers."

He said while residents of outlying areas such as Abitibi are more knowledgeable about mining companies and their activity, "there is a perception we have to change" among people in larger cities.

Quebec's mineral industry generates 2.4% of the province's gross domestic product and 52,000 jobs, the study concludes. It has contributed $281-million a year on average since 2000 to the provincial treasury in taxes. Ten new mining projects, nine worth $200-million each, will start this year.

The study is the first to measure the entire value of mining activity, from exploration to initial transformation. It found that Quebec's mining suppliers, who manufacture ventilation systems and other products, have generated a sub-industry in their own right, more than doubling their exports over eight years to $196-million in 2008.

The findings come one year after a hard-hitting report by Quebec's auditor general noted the province collects little in royalties from mining companies. The Quebec government moved in its latest budget to address that situation, raising mining duties to 16% by 2012 and switching to a "mine-by-mine" system of taxation, which means companies will no longer be able to apply the losses at one mine to lower the profits of another.

More recently, a public outcry hitting the industry erupted late last year after 20 doctors quit at a regional hospital in Sept-Iles to protest plans to build a uranium mine nearby. The doctors said they feared for the health of their families and the region's populace. Vancouver-based Terra Ventures Inc. froze its exploration of the site in December.

Quebec produces some 30 minerals, including gold, silver, copper and zinc. Stornoway Diamond Corp. said last month it is on track to open the province's first diamond mine, an operation that could yield 1.8 million tonnes of kimberlite every 12 months.

Monday, April 26, 2010

Today's Trading Summary

Lots of trading; some profit taking and no surprise at who the biggest seller was.

Saturday, April 24, 2010

Contingency cash sources

The two requirements for Century to access the first $5M within the escrow account:

1) new crusher installed and operating to DB`s satisfaction

2) 16,800 tonnes of processed ore over a 14 day period (works out to 1,200 tpd)

With 200 tpd average realized in March, we probably had stockpiled around 6,000 tonnes of ore coming into April. Century`s mining target for April is 200 - 300 tpd. Let`s assume they averaged 275 tpd over the first 24 days of April (including today - Saturday).

275 tonnes * 24 days = 6,600 for 24 days in April

6,000 March + 6,600 = 12,600 tonnes of stockpiled ore

Century`s target for ore mining in May is 500 - 800 tpd.

Let`s be conservative. Let`s assume that Century only mines 300 tpd for the next 14 days.

At 300 tpd new ore mined, Century has potentially reached the point where it could pull 900 tpd from the stockpiled ore total in order to process 1,200 tpd over the next 14 days.

As a result, (assuming crusher installation and ore mining have both progressed well) the option of accessing the first $5M from escrow may be available in the near-future.

Assuming 95% gold recovery and 4.76 g/t grade, the 16,800 tonnes of ore could eventually be converted to 1,832 ounces. At the current gold price, this is worth $2.1M in gross revenue.

There is potentially also the 2,015 in unfinished gold inventory at Lamaque that can be finished off once the milling circuit is up and running again. At the current gold price, this is worth $2.3M in gross revenue.

Potential cash injection at Lamaque in the near-term:

$2.1M + $2.3M + $5.0M = $9.4M

Of course some of this money will need to go towards carrying our 115 employees at Lamaque (which probably cost around $575K per month) and also covering all of the other costs to operate Lamaque. We also have to cover our Corporate G&A costs. The non-employee mine development costs (and other such start up/ramp up costs) should already be funded from the orginal financing (non-escrow amount).

Some of this newly available cash can go towards our new Lamaque exploration program being launched in May.

Assuming all is progressing well, the numbers are suggesting that we should still be well funded. As a further contingency, we are generating positive cash flow out of San Juan, if a bit of emergency cash was needed to be redirected temporarily to Lamaque. As even a further contingency, we have the $15M worth of warrants from Finskiy. Those warrants are well in the money ($.30 exercise price versus current share price of $.72).

Friday, April 23, 2010

A link to the latest Victor Goncalves interview

Victor is now thinking that Century`s share price could eventually hit the $2.00 - $2.50 range. Victor is also thinking that Century may eventually be in a position to consolidate the Val dÒr area.

Of note, I`m of the view that it is almost impossible for Agnico-Eagle to consolidate the small producers in the Val dÒr area. I think the small producers would be committing suicide if they ever merged or allowed themselves to be acquired by Agnico-Eagle - at least suicide as in completely eliminating the (huge) exponential upside potential for their shareholders. As detailed in one of my recent posts, a Val d`Or area consolidation (between Century and the other small producers in the area) will provide at least a quadruple increase in share price (in the short-term and much more in the mid-term and long-term) for shareholders of all small producing companies that participate in the Century consolidation effort.

Here is the Century related part of the Gold Report interview with V. Goncalves:

TGR: Do you have any companies in mind that you see presenting these kinds of opportunities?

VG: Oh, absolutely. The first one is a no-brainer and I love no-brainer stories. No-brainer stories are great because you don't have to worry about them. Century Mining Corp. (TSX.V:CMM) is one of those no-brainer stories. Century Mining got really beat up for quite a while. Then it turned around quite nicely for multiple reasons. One reason is a Russian group bought 45% of the company to get the company into production. They got the money they needed to put their Lamaque Mine into production. It's not in production yet, but they're working on that right now. What's interesting is the numbers. Between their Peruvian operation and their Quebec operation, which is the Lamaque Mine, the company should be producing between 140,000 and 150,000 ounces of gold a year. All-in costs should be around $460 an ounce. So you're looking at a company that could be making in the order of $70 million or $80 million a year before taxes. You factor a 10 or 12 multiple into that, which is quite low, and you could be looking at a stock price that is $2, $2.50 just for fair valuation. The share price is currently at $.60. It's moved up a little bit in the past couple of weeks-month, but it's still very cheap. That's a no-brainer.

TGR: Is Century Mining something you would hold on a long-term basis?

VG: I would and do have a core position on Century Mining. The company has 6 million ounces of gold in all categories as it is now. To date it's produced 9 million. I think the blue-sky potential is multiple millions more. That's certainly a company that can expand production. It can potentially even start consolidating the Val D'or area just by default of having a stronger stock price and a lot of money in the bank. Whether it is Century or some else like Agnico-Eagle Mines (TSX:AEM), I think that it is a likely scenario.

Here is the link to the complete Gold Report interview:

Wednesday, April 21, 2010

The Lamaque video

The Quebec exploration rebate program

I wonder if we finally get to participate, now that we are putting new holes in the ground.

Quebec offers cash rebate incentives of 47% on exploration expenditures made on Quebec mineral properties.

I wasn`t able to find the official rules online. However, I don`t get the sense that producing companies are excluded from participating in the program. After all, Richmont Mines is a producer and they booked $1.3M in exploration tax rebates in 2009 (likely pertaining to exploration from 2008 and likely relating to their producing Beaufor Mine - nearly 100% of their 2008 Quebec exploration expenditures incurred at Beaufor).

Back to Century, it would be a nice bonus if we are allowed to participate. For example, (for simplicity sake) let`s just say we spent $1M on Bedard Dyke exploration, it would then mean (following the logic) we get back $470K in rebates. It seems like the rebate cheques are not issued until a year later so we may have to wait until 2011 for our cheque (assuming we get one of course).

Taking it a step further, if we eventually incur say $4M on our new Lamaque exploration program I wonder if we will eventually receive a $1.88M rebate cheque. That would a nice bonus. You know, serious cash flow from our production ounces that can be directed towards growing the business both organically and through acquisitions, while we use the rebate cheques to move more ounces into P&P in order to replenish ounces used up in production.

That`s a good business model. No wonder Quebec is ranked the number one mining jurisdiction in the entire world.

Tuesday, April 20, 2010

YE statement deadline

Someone posted on Stockhouse that Peter Ball mentioned that statements will be out mid to late next week.

As a result, I posted the following comment/note on Stockhouse:

Yeah, it means that CMM is not late with the YE statements. I think Venture companies have to submit by April 30th. I think TSX ``big board`` companies have to submit by March 31st.

However, I am still somewhat disappointed that CMM didn`t get the statements in by April 15th. This would have been a great opportunity to show the TSX that CMM is ready to play in the big leagues with the TSX ``big board`` players. CMM has had a checkered past in meeting statement deadlines (usually with legit reasons, but still), and this would have been a good opportunity to show that CMM can step up (and file on March 31st) if granted an opportunity to graduate to the TSX.

After all, CMM did file on April 16th three years ago so they have shown they can do better than April 30th.

Maybe it`s a cost situation. It may cost more to have CMM`s staff work overtime to prepare the statements earlier and then the auditors might charge greater fees to have more people assigned to the CMM audit in order to complete the audit in less time. I know how these things work. I bet this is a key reason Century didn`t push the audit far ahead of schedule. Once they are on the TSX board (hopefully next year) then they will be able to hire more Century staff in anticipation of higher requirements.

Sunday, April 18, 2010

My thoughts on synergistic opportunities for small Val dÒr area producers

This is what I would do if was was consolidating small gold producers in the Val dÒr area.

This is only what I would do. This is only for blog discussion purposes. Naturally, no one should make investment decisions based on this blog post. The reality of what is happening may look completely different from my ideas. I have absolutely no privileged info as to what is actually being discussed. Also, NONE OF THE COMPANIES DISCUSSED BELOW (INCLUDING CENTURY MINING) MIGHT BE EVEN REMOTELY INTERESTED IN ANY OF MY IDEAS FOR SYNERGISTIC GAINS.

Firstly, I would prefer to see Century`s management stay completely away from any consolidations until Century`s share price hits $1.50 per share. Unlike some of the small producers in the Val dÒr area, I do not believe that Century needs to consolidate with other companies in the near-term of mid-term for Century shareholders to realize a significantly appreciated share prices. I just think it is absolutely essential for Century to deliver and excel with Lamaque (and continue with good results from San Juan). I think it is also mandatory for Century to demonstrate high standards with other areas of the business too (which, among many other things, includes issuing financial statements on time).

The 4 companies I would like to see consolidate are: Century (CMM), Northern Star Mining (NSM), Richmont Mines (RIC) and Alexis Minerals (AMC). Metanor (MTO) is a longer term possibility also, but I personally wouldn`t involve them at this time. Metanor is located too far north and do not offer sufficient synergistic opportunities to justify being included in this first phase of the consolidation process, IMO (even though they have one good property in the Val dÒr area with Inferred 43-101 resources). Wesdome is way too expensive to be considered, IMO.

Along with CMM`s share price needing to go to $1.50, it is my personal view that the share price of RIC, AMC and NSM all need to decrease for me to feel comfortable with a consolidation. With Century at $1.50, I might be able to live with the current share price of AMC at around $.35 (although I would prefer to see them at $.30 due to likely still needing about $30M or so to move their projects forward) and NSM at around $.30 (although I would prefer to see NSM at $.26 to $.28 due to having $42M in debt coming due in Aug/Sep of 2011, and me seeing their share price in serious trouble unless they get significant external help, again only my opinion). I see RIC`s share price as being too high right now – for my consolidation proposal. It needs to come down for my liking, especially when looking at results from their current operating mines.

Having said all of that, I would like to see a consolidation with CMM, NSM, RIC and AMC, but again, ONLY AT THE RIGHT PRICES. I would like Century to take the NO PRICE, NO DEAL approach. Realistically, I think the chances of it (all of these companies consolidating together) happening in the first consolidation phase is SLIM TO NONE. I think it needs to happen, but I think (IMO) there are TOO MANY EGOS involved and there will likely be (IMO) TOO MUCH PROTECTIONISM (especially with senior management level). What I think is most likely to happen is Century merging with only one of the companies, at least in the first phase consolidation.

It`s too bad because I think a CMM, NSM, RIC and AMC merger (at the right prices) would result in shareholders of all 4 companies realizing a triple (and a lot more over time with demonstrated execution) in their respective share price used at consolidation point.

Assuming all 4 companies merge, Century will likely need to arrange for debt/credit line financing to support the AMC ramp up. Depending on how Lamaque comes along with ramping up, Lamaque may be able to fund exploration and development efforts for many of the small properties over the next couple of years. Also, Century might be able to use the $15M from warrants plus CF from the consolidated assets to pay down the NSM $42M debt coming due Aug/Sep of 2011.

The consolidated group will have a flagship asset in Lamaque, to anchor the company. Having a 150,000 ounce per year type pure gold producer is essential for a growth company like this. The market wouldn`t embrace this type of company as much without a flagship asset like Lamaque, with 6 million ounces in the ground. Also, for the market to embrace this, it is critical to show a clear strategy of how the consolidated company will take severally under performing assets and turn them into winners. I think I have identified one major change that will partly address this and a few minor ones also. Here is how I would structure CMM, NSM, RIC and AMC into one company or at least here is what the consolidated company would look like (if I was in charge of such a task):

1) Lamaque Mill (CMM)

Ramped up to 2,000 tpd will likely generate 110,000 oz per year production. Shaft refurbishment in about 4 years will likely take it to 150K oz per yr. However, I`m hoping they will implement the 150,000 mine plan prior to 4 years (without using the shafts), especially if they are able convert significant ounces into P&P (in the upper levels) via the upcoming exploration program.

2) Beacon Mill (NSM)

RIC is currently bringing back the Francoeur mine into production for mid 2011. For starters, they are expecting 35,000 ounces of production per year for about 4 years. I believe the grade is plus 6 g/t. There is solid exploration potential to increase mine life. The problem with Francoeur is it is located (25 Km west of Rouyn-Noranda, Quebec) 110 kilometres from RIC`s Camflo Mill (near Val dÒr). They are currently planning to truck the ore 110 kilometres for processing. I believe it will cost RIC about $15M more to bring Francoeur to production stage. They can handle this through their existing cash position.

RIC recently initiated exploration on its Wasamac (advance exploration) property. It is located 10 km from Francoeur and 100 km from RIC`s Camflo Mill. They are currently planning to truck the ore 100 km for processing, once in production. Over 285,000 inferred ounces have been identified (plus 6 g/t grade). Drilling soon to be under way to move those ounces upwards and to add new ounces. There appears to be excellent exploration potential on existing known zones. Of course, a production decision cannot be made on the property without much more work being done first. It`s also a past producer with some mining infrastructure in place.

AMC`s Lac Pelliteir property is located 10 km from Wasamac and 20 km from Francoeur, but 100 km from AMC`s Aurbel Mill. AMC is planning on trucking the Lac Pelliteir ore 100 km for processing.

NSM`s Beacon Mill is located 28 km from NSM`s main mining property. The mill can currently process 900 tpd.

This is the biggest synergistic opportunity for all the companies I believe. I would physically move NSM`s Beacon Mill from its current location (near Val dÒr) and put it on the Wasamac property (near Rouyn-Noranda). Simultaneously, I would upgrade that mill from 900 tpd to 1,800 tpd. I would then have the Francoeur ore, the Wasamac ore (once ready) and the Lac Pellitier ore all feeding into the relocated and expanded Beacon Mill. It would mean Francoeur ore travels only 10 km instead of 110 km, Wasamac ore travels zero km instead of 100 km and Lac Pelliteir ore travels only 10 km instead of 100 km. It likely means that marginal high cash cost mined suddenly become very competitive mines (with not just savings from less travelling but serious economies of scale savings also), with a much greater chance of remaining open if the gold price should happen to fall. It suddenly means an extremely attractive 110,000 oz per year operation with very solid further potential. The market should heavily embrace this approach especially relative to the extremely fragmented and super high cash cost per oz approach in the plans by the various companies today.

Century may need to fund the mill relocation and expansion through debt/credit line if timing of cash flow (of the consolidated company) does not support this initiative.

My thoughts on what to do with the NSM ore is discussed further down the post.

3) Aurbel Mill (AMC)

AMC`s Lac Herbin mining area (40K oz per yr) is fairly close to the Aurbel Mill.

RIC`s Beaufor ore (20K oz per yr) currently travels to the Camflo Mill located on the west side of Val dÒr. With the consolidation, the Beaufor ore can go to the Aurbel Mill which is much closer. This should represent a cost savings (trucking about 8 km instead of going about 30 km). Although, the biggest problem with Beaufor is inconsistent performance, mainly extremely poor performance (IMO) and lack of material exploration success despite significant exploration programs (IMO). It`s a relatively small operation, but I think assistance from new geologists might be able allow for new approaches, especially if it gets worked into the Vulcan approach that Century uses.

The McKenzie Break property (NSM) is a somewhat advanced exploration and development property, located about 25 km away from the Aurbel Mill. I would send the McKenzie Break ore to the Aurbel Mill (represents about 10 km savings as part of the consolidated group – NSM currently has plans for the ore to eventually be processed at the Beacon Mill (at the current Beacon Mill location). Although there are some significant infrastructure in place at McKenzie Break, there is still a lot of work remaining (especially on the exploration front) before a production decision can be made (I think). It is also not clear how much it can contribute to yearly production. I have plugged in 15K oz per year (once up and fully running), simply to max out the Aurbel Mill capacity. I have assumed the Aurbel Mill can contribute around 75,000 ounces per year to production.

The Aurbel Mill will likely be the highest cost per ounce operation within the consolidated portfolio.

4) Camflo Mill (RIC)

This mill is located about 3 or 4 km away from NSM`s Midway property (NSM`s primary property). The Midway property is a very advanced stage property. It may be ready to produce ounces on a consistent basis in the near-term, but it`s not clear if it needs an injection of cash to get it ramped up properly. It has a decent size resource base (about 550K 43-101 and about 300K non-43101) but appears to have really good potential for further ounces through exploration. I have the Midway property eventually maxing out the Camflo Mill capacity at say around 65,000 ounces per yr (although NSM doesn`t appear to provide production guidance on its properties). The consolidated approach provides a savings of about 24 km of trucking distance (sending ore next door to Camflo rather than sending it to the current Beacon Mill location).

Also, there is no guidance by NSM for cash cost per oz, but logic would suggest it should be decent.

Midway generates a bit of silver. I don`t know if Camflo can handle silver. I know base metal by-products need additional processing. I don`t believe additional processing is required for by-product silver also, although I really don`t know. I think the term dore bars are used to refer to pours that include both gold and silver combined. Either way, I`m sure an add on can be done if necessary.

5) Snow Lake Mill (AMC)

This is the old New Britannia mine (in Manitoba) that was successfully operated by Kinross and High River Gold (for 10 years I think). A good size resource base has been identified. There also remains good exploration potential. Most of the cash needed by AMC will go towards work on this operation. I believe the mill is fully operational and can handle around 80,000 oz per yr (once they ramp to such levels over the next couple of years).

Cash cost per oz should be solid, if execution goes well.

6) San Juan Mill (CMM)

Will be ramped up to 30,000 ounces per yr.

7) Island Gold Mill (RIC)

The mine is located in Ontario. The operation has been relatively poor thus far, in my opinion of course. However, I like the potential for performance becoming better. I also really like the exploration upsides. There are a number of good targets elsewhere on the property.

The operation can probably deliver steady state production of around 45,000 ounces per year. It has a 650 tpd mill.


I`m not concerned with too many projects coming together all at once. I say that for many reasons. Firstly, the flagship asset (Lamaque) would be up and running. Secondly, all of the assets discussed are currently being worked on with solid plans in place to bring them to production (none of these represent building a mining operation from scratch, which would be a totally different game).

I would keep all of the operating teams in place. The teams can continue to progress with their respective projects as if nothing happened. Where the redundancy can be found is at top level management (duplicate CEOs, duplicate Vps, etc.). I would remove all of that redundancy and use some of those savings to create a transition/co-ordination team. I would have all of the projects report into this team. The team will ensure the master plan is being followed and will be in charge of driving efficiencies.


After successful execution, and if we continue to realize a strong gold price, I see this type of company with a $2.0(+++) billion market cap – easily realizing significant gains for all of the shareholders participating in the consolidated company. On the flipside, I see it as a lost opportunity for shareholders of small producers in the Val dÒr area if the management of those companies don`t get their act together and finally start creating shareholder value. IMO, it has been a pathetic last 5 years for shareholders of these companies (yet the gold price has more than doubled, almost tripled, in that timeframe).

Status of certain management teams:

RIC – a 20% shareholder of RIC is now Chairman. He recently appointed 4 additional directors (people he is comfortable with). He is looking for a partner (or partners) to transform the company to mid-tier producer status.

NSM – they recently appointed a new CEO with a primary mandate of growing their company.

Thursday, April 15, 2010

Today's Trading Summary

AGM changed to June 3rd


To: All Canadian Securities Regulatory Authorities


Dear Sirs:

We advise of the following with respect to the upcoming Meeting of Security Holders for the subject Issuer:

Meeting Type : Annual General and Special Meeting
Record Date for Notice of Meeting: 13/04/2010
Record Date for Voting (if applicable): 13/04/2010
Beneficial Ownership Determination Date: 13/04/2010
Meeting Date : 03/06/2010 (amended)
Meeting Location (if available) :

Tudor E & W Room
National Club
303 Bay Street
Toronto, ON

Tuesday, April 13, 2010

Today's Trading Summary

Caldwell dumped 250k to drop the share price to 58 cents.  I don't think these shares were purchased in the market and may possibly be some of those shares that were issued for debt at 25 cents.  I'd say the other creditors are kicking themselves now for not accepting the shares for debt offer.  Nice to see Canaccord buying for a change.
I've added a couple of media links on the right.

One note about size of first gold pour

Unless I am mistaken, gold producers always pour their gold into gold bar containers. I believe the sizes vary. I know that there are 600 ounce bars, but there are likely 200 ounce bars as well. However, I do believe the typical bar size for gold pours is 400. I think 400 gold bar ounces is what the central banks store in their vaults. As a side note fyi, I think the Lamaque gold gets sold to the Canadian Mint.

As a result, first gold pour does not mean only 1 ounce, with only $1,150 in gross revenue value. First gold pour for Lamaque will likely provide us 400 ounces and gross revenue value of $460,000.

It`s possible that our stockpiled ore could be nearing 10,000 tonnes by now (March plus first 13 days of April). Assuming the target of 94-96% recovery rate and 4.76 g/t grade, those 10,000 tonnes might eventually (once processed) give us around 1,450 ounces or $1.7M in gross revenue.

Once we start processing at a rate of 1,200 tpd, it should only take 2.3 days worth of processed ore to drive out one 400 ounce gold bar. One day of processing 1,200 tonnes of ore can contribute 174 ounces of gold ($200,000 of gross revenue) towards a gold bar.

Again, we should also have the 2,015 ounces of unfinished gold sitting in Lamaque inventory. The Gerald Metals credit line balance was eliminated last December. These ounces should be now free of security obligations. Also, we should now (once the milling circuit is up and running again) be able to move them into finished gold (ready to be sold) - $2.3M in gross revenue for us.

Once ready, if we are able to crank up processing at Lamaque to 1,200 tpd on a very consistent basis (again, successfully hitting 94-96% and 4.76 g/t), I am able to visual the gross revenue from these ounces carrying the operating costs at Lamaque and allowing the financing dollars to be focused heavily on development and exploration.

There will be a lot of different types of costs, but labour should be one of the big ones. There were 115 employees at Lamaque at the beginning of April (per the last NR). Let`s assumed average annual (loaded) compensation of around $60,000 ($5,000 per mth). That likely means that about $575K per month for employee compensation. That will increase as we continue to staff up. However, increased staffing should also increase our gold output and gross revenue.

There are plenty of other high costs also that will widdle down our gross revenue (i.e. power, cost to operate heavy machinery, etc.). Nonetheless, if we can deliver a 400 ounce gold bar ($460,000 gorss revenue) every 2.3 days (once we crank things up) then we will likely be in good shape.

When we crank things further up to 2,000 tpd, we are looking at producing 291 gold ounces per day. That would mean driving out a 400 ounce gold bar (and $460,000 of gross revenue, at current gold price) every 1.4 days (from Lamaque alone).

Now, our prepaid gold sales commitment in 2010 (per the Jan. 14th SEDAR document) is as follows:

*200 ounces per month to DB from January to May = 1,000 ounces
*667 ounces per month to DB from June to December = 4,669 ounces

We should be having no problems delivering the 200 ounces to DB out of San Juan at this time (we currently produce 4,700 ounces at San Juan per quarter). Come June, if we are able to crank tpd up to 1,200 at Lamaque then I see no issues in delivery 667 ounces per month to DB for the balance of 2010. At 1,200 tpd, it should only take us 3.8 days of the month to drive out 667 ounces to DB from Lamaque. That only represents 12.8% of a standard month.

Employees Ratify Terms of Collective Agreement at Lamaque

Apr 13, 2010 09:00 ET

Century Mining Employees Ratify Terms of Collective Agreement at Lamaque Gold Mine-Pushing Forward to First Gold Pour

BLAINE, WASHINGTON--(Marketwire - April 13, 2010) - Century Mining Corporation ("Century" or the "Company") (TSX VENTURE:CMM) is pleased to announce that the members of the Syndicat des Employes de les Mines Sigma (Quebec) Ltee, the bargaining unit representing its hourly employees at the Lamaque Gold Mine in Val d'Or, Quebec, have ratified the renewal of the existing collective agreement. This agreement, which was ratified by more than 90% of the voting union members, provides for the continuation of the existing collective agreement until March 31, 2011. As part of the negotiations the Company has agreed to make wage adjustments to bring Century's wage scale in line with other underground mine operators in the area.

"This agreement is another positive step in the continued advancement of the Lamaque Gold Mine towards its first gold pour in the second quarter of 2010. The signing of this collective agreement is a positive milestone, and the Company looks forward to working closely with all its employees, both hourly and staff, over the many years ahead at Lamaque. We have established excellent, safe working conditions at a competitive wage scale which will allow the retention and recruitment of the best miners, operators and tradespeople of the Abitibi region," commented Margaret M. Kent, President & CEO Century Mining.

Monday, April 12, 2010

Today's Trading Summary

You have to wonder where Canaccord is getting all of the CMM shares.  I expected some short covering by now.
It would be great if you could resume your postings on "today's trades". Someone must be doing a lot of buying lately. Perhaps even 'CANACRAP' is buying!? Maybe we are really close to the pouring of that first gold bar.

PS: Production05--thanks again for your excellent postings.

Friday, April 9, 2010

Active high grade gold mills located within a 30 km radius of Val dÒr

I didn`t include the Osisko mill and Agnico`s Goldex mill as they are both low grade huge tonnage type mills. Plus, Osisko`s mill will likely not be active for another couple of years.

1) Lamaque (Century) - 3,000 tpd, but (per the Jan`09 DD rpt) the option exists to ramp it back up to previous higher levels after additional modification (perhaps even back to the old 5,000 tpd level, but with efficient high grade crushing this time around).

2) Kiena (Wesdome) - 2,000 tpd

3) Aurbel (Alexis Minerals) - 1,400 tpd

4) Camflo (Richmont Mines) - 1,300 tpd

5) Beacon (Northern Star Mining) - 900 tpd

This 30 km radius area comes across as being one of the hottest and one of the most actively explored areas by gold juniors in the entire world. In my view, there will be huge demand, both near-term and many years into the future, for milling assistance by junior exploration companies. These juniors will not be able to build their own processing facilities - the going rate to build the smallest of milling operations is something like $35M.

Lamaque is the flagship (higher grade) u/g asset in this entire space. This should be an advantage to Century when consolidation begins (consolidation is badly needed and far overdue in this area). IMO, the whole area has gotten so fragmented because none of the management teams wanted to give up control and everyone overvalued their own situations. As a result, shareholders from most of these companies have suffered mightily. It would be wise for all the small struggling producers in this area (and slightly further above this area) to finally take advantage of their surroundings and finally participate in the gold bull market.

Video replay from December - Analyst/VP, Mark Lackey

This was the BNN video from last December (for anyone who hasn`t seen as yet). It`s with Mark Lackey who is the VP of strategies at Hampton Securities. It`s only 30 seconds but his comments were genuine. He backed up his views by purchasing over 500,000 Century shares with his own personal money. He is probably up about 75% (at least) on this investment. He talks Century at about the 5.15 mark of the video.

Carib, we now have 2 analyst videos on Century. Not sure if it`s worth having a video area on the blog page to link these 2 analyst videos (perhaps more to come). They are not posted on the Century site so this can act as a compliment for people performing DD on Century.

Today`s BNN clip on Century

Victor says Century is easily $1.50. He says he is a big believer in the story. He was on the Commodities Mailbag show on BNN. He mentions Century Mining at around the 3.30 mark on the video. Hopefully Mark Lackey (Hampton Securities) will get back on BNN soon also.

Thursday, April 8, 2010

Even though (now) fully financed, Century`s $.47 share price still includes ZERO value for Lamaque

No value given for almost 6M 43-101 ounces in the ground and no value for having one of the largest milling operations (and one of the very few milling operations) in the entire gold mining region (and the only mill in the region with significant spare capacity (both from 2,000 to 3,000 tpd, and the abilities to scale back up to 5,000 tpd with further midifications) - in a region where there seems to be limitless small exploration companies, with gold deposits, that will be looking to hook up with a local mill operation to process their ore in the near-future and for many years into the future (either via JV or M&A, custom milling or otherwise)).

Century needs to do a far better job in selling itself. It actually has something of significant value to sell, unlike the majority of the companies in the space, in my opinion.

Century`s financial stats for the first 9 months of 2009 (YE numbers should be out around April 15th):

1) 2009 (first 9 months) Earnings from Mine Operations = $6,269,460

2) 2009 (first 9 months) Cash Flow from Operations = $7,716,484

3) 2009 (first 9 months) Net Profit for Century overall = $5,439,938

Century realized record gold production at San Juan in Q4. Also, the gold price was a historical record high in Q4. Century`s full year numbers will be higher than those 9 month numbers.

Let`s say that Cash Flow from Operations come in at around $9.0M for full year 2009.

We know that San Juan`s production target is around 20,000 ounces in 2010, which is about 3,000 ounces greater than 2009. Let`s say that it (plus the US$1,100+ gold price for the entire year) pushes the 2010 cash flow up to $11M (just San Juan, without Lamaque).

$11,000,000 / 340,000,000 outstanding Century shares = $.032 CF per share

$.032 * 15 CF to share price ratio in a US$1,150 gold price bull market = $.485 share price

Today`s Century share price closed at $.47


By the way, San Juan has been hugely successful relative to other small gold focused producers. San Juan has carried costs for the entire Century business. Very few small producers in the space even show a profit.

Below is a comparative analysis (of companies with small producing gold mines) I had orginally posted back in February. Look especially at the cash cost per oz of these small operations.

The results below reflect Q3`09 results .

San Juan Gold Mine (Century Mining):

*Operating country - Peru
*Operating earnings - $2,334,568
*Net income (Net loss), company overall - $2,689,470
*Gold production or sale (ounces) - 4,561
*Total cash cost per oz - US$486

1) Dynacor Gold Mines:

*Operating country - Peru
*Operating earnings (Loss) - $(329,215)
*Net income (Net loss), company overall - $(1,529,000)
*Gold production or sale (ounces) - 3,321
*Total cash cost per oz - US$877

2) Sierra Minerals:

*Operating country - Mexico
*Operating earnings - $806,445
*Net income (Net loss), company overall - $30,751
*Gold production or sale (ounces) - 5,162
*Total cash cost per oz - US$753

3) Olympus Pacific:

*Operating country - Vietnam
*Operating earnings (Loss) - $330,247
*Net income (Net loss), company overall - $(2,175,166)
*Gold production or sale (ounces) - 4,053
*Total cash cost per oz - n/a

4) Alexis Minerals:

*Operating country - Canada (Quebec)
*Operating earnings - $352,619
*Net income (Net loss), company overall - $(1,714,536)
*Gold production or sale (ounces) - 7,883
*Total cash cost per oz - US$888

5) Avnel Gold:

*Operating country - Mali
*Operating earnings - $415,000
*Net income (Net loss), company overall - $(1,420,000)
*Gold production or sale (ounces) - 4,314
*Total cash cost per oz - US$802

6) Caledonia Mining:

*Operating country - Zimbabwe
*Operating earnings - $1,802,000
*Net income (Net loss), company overall - $846,000
*Gold production or sale (ounces) - 4,117
*Total cash cost per oz - n/a

7) Starcore International:

*Operating country - Mexico
*Operating earnings - $1,687,000
*Net income (Net loss), company overall - $562,000
*Gold production or sale (ounces) - 5,400 (gold equivalent)
*Total cash cost per oz - US$449

Tuesday, April 6, 2010

We are only scratching the surface in gold potential at Lamaque

1) 6 million ounces (or so) already identified (a lot of it being located only 1,000 ft/305 metres of the surface)

2) Century has reasons (including a limited few deep, strictly historical (non-43-101 compliant), drill holes in the database) to believe that the Lamaque Main Plug and the West Plug (both bulk mineable plugs) extends below the 3,500 ft/1,067 metre level on the Lamaque side (last depth mined). In the past, Teck was able to mine millions of ounces within (and around) the Lamaque Main Plug, down to 3,500 ft. Century geologists believe that the potential exist for these 2 plugs still host another 2 million ounces.

3) With Lamaque only being mined down to 3,500 ft/1,067 metres, (aside from bulk mineable plug potential) the logical thinking is that vein potential exist at Lamaque that could be similar to what has been realized next door on the Sigma side.

4) From today`s NR:

``Historically the Sigma mine was developed to the 6,100 foot level and the Lamaque mine to the 3,500 foot level. The Company believes that the gold mineralization continues to depth beneath both areas, and historically the grade has increased as the mine was developed deeper.``

The Sigma side has been mined down to 6,100 ft/1,860 metres. With expected higher grades at further depth (similar to many other u/g mines in the world) Century geologists are thinking there might be mineable mineralization below this level. This would have been a major challenge back when the gold price was US$250 - 300. However, a longer term gold price of anywhere between US$500 and US$1,100 makes for a good avenue to explore (especially if the grades at lower depth increases as is expected). One thing to remember is if the gold price happens to fall back then it means that operating costs (the inflated costs) will fall back also. For example, when the gold price was say US$350 to US$400 some of Barrick`s mines use to incur about US$150 to produce an ounce of gold. Now, I believe those same ounces (for those particular mines) are costing Barrick US$350 to US$500 to produce.

One should note that 1,860 metres convert to 1.86 kilometres.

Up the road from Lamaque, Agnico-Eagle is mining the LaRonde Mine down to 2.2 kilometres. They are currently putting in an internal shaft extention below that level to allow them to mine below 3.0 kilometres next year. In addition, Agnico-Eagle is currently exploration below 3.0 kilometres in hopes of going even deeper.

Agnico-Eagle can do this partly because they have by-product base metal credits. Lamaque will never be able to March LaRonde`s very low (net of by-product credits) cash cost per oz. However, if Century is able to identify reasonable grades at depth, mining below 1.86 kilometres on the Sigma side of Lamaque should be a profitable venture.

Check out Agnico`s video to see what they are doing with LaRonde (you have to click to the right where it says ``LaRonde video`` to get the video started). Century should try to do a similar video for Lamaque.

Century Prepares for First Gold Pour on Schedule at Lamaque Gold Project

Apr 06, 2010 09:38 ET

Century Prepares for First Gold Pour on Schedule at Lamaque Gold Project

BLAINE, WASHINGTON--(Marketwire - April 6, 2010) - Century Mining Corporation ("Century" or the "Company") (TSX VENTURE:CMM) is pleased to provide a progress update at its 100% owned Lamaque gold project located in Val-d'Or, Quebec, Canada. The Company is fully financed for the reopening of the Company's Lamaque gold project, and is on schedule and budget for its first gold pour in the second quarter of 2010.

Since reopening the Lamaque gold project in early January 2010, the Company has rehired and brought on a mining team in excess of 115 employees, and continues to fill vacant positions. The underground development crews continue to make excellent progress by re-opening the existing workings and are currently mining in #90 and #107 stopes, gearing up for the opening of #115 stope, and mining in several jumbo development headings that are located in ore. The crews continue to slash areas of the underground workings and main ramp to allow access for larger mine vehicles to reach the deeper ore zones, and have completed the installation of the new ventilation infrastructure. The development crews continue to stockpile underground ore at surface next to the crusher in preparation of production.

The Company has received a significant amount of the new equipment required for the re-opening of the Lamaque gold mine including the jaw crusher, cone crusher and crusher motors for the milling facility, and a 6 yard scooptram, a single boom jumbo drill, a 35 tonne truck, two scissor lifts and a boom truck for use underground. The new low profile equipment is expected to arrive on site in April, and the engineering team is in the process of procuring and installing the long term mine electrical system. Additional mine equipment not required at the Lamaque mine, including a two boom jumbo drill, small scooptram, two small underground trucks, and multiple jacklegs are being readied for shipment to the Company's San Juan gold mine in Peru to assist in the modernization and expansion of that operation.

The milling team continues to make significant progress as they complete the modifications within the Lamaque mill facility and maintain the refurbishment on schedule. The 3,000+ tonne per day milling facility is expected to commence grinding test runs on April 8, 2010 in preparation for mill feed throughput from the stockpiled ore mined underground since March 1, 2010. As indicated earlier in the year, gold production is expected by the end of May 2010, but with the current progress both on surface and underground, the first gold pour could be brought forward if operations continue at the current rate. The engineering and operational teams continue to monitor this situation and will adjust mine plans accordingly.

Information and data received from the February 2010 exploration and definition drill program on the Bedard Dyke has assisted in the completion of the mine plan and block model for the upcoming underground development program in the Bedard Dyke zone. The current design is being reviewed by Golder Associates for rock mechanics, and the Company is currently implementing the staffing plan and services engineering and design for the project. The development crews are currently preparing to secure the ground above the Bedard Dyke portal area, level the pad in front, and finalize the purchase of the required electrical equipment. The Bedard Dyke is the second zone in the mine plan to be developed through long-hole open-stoping, which will subsequently increase the daily tonnage. The Company is currently finalizing the mine plans for the third zone, named the North Wall, which will be mined with the same method and is expected to be developed in the latter part of 2010. All three areas, Lamaque #2, Bedard Dyke and North Wall, are all accessed via the historical Sigma pit.

The Company is finalizing the upcoming 150,000 foot (45,700+ meter) exploration and definition drill program at Lamaque, which is expected to commence in May 2010 and continue over a three-year period. Historically the Sigma mine was developed to the 6,100 foot level and the Lamaque mine to the 3,500 foot level. The Company believes that the gold mineralization continues to depth beneath both areas, and historically the grade has increased as the mine was developed deeper. The onsite assay lab is now fully operational and will be essential to ensure that accurate and timely sampling from the mine stope development continues without delay, and will also play a key role in ensuring assays are received from the drill program.

Members of the environmental team are preparing plans for waste dump reclamation and expect to commence the removal of material in the second quarter of 2010. Century is taking the steps and making the required investments to minimize the visible areas of the mine from the town and to also control any potential dust from the site. The Company has also arranged the sale of approximately one million tonnes of waste material from the waste dump on site, which will be used as road material offsite by an external contractor.

Senior management continues to focus its energy on the reopening of the Lamaque gold mine. Upon the first gold pour and successful commencement of operations at Lamaque, the Company will ramp up exploration efforts on priority targets and take action on its corporate strategy of reviewing synergistic gold opportunities to take the necessary steps to becoming a mid-tier gold producer.

About Century Mining Corporation

Century Mining Corporation is a Canadian junior gold producer and holds strategic land positions in Canada, United States and Peru. The Company's strategy is to grow to an intermediate gold producer through existing mine expansions and acquisitions of other strategic and synergistic gold opportunities.

On behalf of Century Mining Corporation,

Margaret M. Kent, President & CEO

Sunday, April 4, 2010

Thoughts on first gold pour timeline

If one was to wear a PR campaign hat then first gold pour in April or May is better for short term positive market vibes AND FOR SHAREHOLDER CONFIDENCE IN THIS MANAGEMENT TEAM. Beating expectations is something this company NEVER did in the past. Long time shareholders suffered deeply and continually. Long time Century shareholders deserve the world for all that they have suffered through (even pre-financial crisis) during a period of the highest gold prices in the history of the planet.

However, when one puts on the operating efficiency hat then the view of a June 1st gold pour may be preferable.

With 200 tpd mining achieved at the end of March (assuming peak at 200 tpd for March, and not an avg of 200 tpd for the month), then we may be looking at about 3,000 to 3,500 tonnes of ore stockpiled in March.

If the company delivers on the target of 200 - 300 tpd ore mined in April then we may be looking at a further 6,000 to 8,000 tonnes of ore stockpiled in April.

This would bring us to a total of somewhere between 9,000 to 11,500 tonnes of ore stockpiled at the end of April.

Now, the company`s target for ore mining is 500 - 800 average for May. Let`s assume they deliver on that.

Let`s also assume they start the crushing process at mid May, with the intentions of first gold pour on June 1st (to hit the clock target on the company`s website).

It would likely mean a further 8,000 - 9,000 tonnes of ore gets stockpiled in the first half of May.

If all goes well, this would now bring the stockpiled ore total up to somewhere between 17,000 to 21,000 tonnes of ore.

If they are still mining 500 - 800 tpd in the second half of May, I can easily see them mixing in ore from the 17,000 to 21,000 tonne stockpile, to enable them to run 1,200 tpd through the mill once processing start up begins.

I think running 1,200 tpd through the mill starting in mid May is much more efficient than running maybe 400 - 600 tpd (daily mined + from stockpile) through the mill starting mid April.

Under this scenario, I can see them using the stockpile ore to enable them to process 1,200 tpd (through the mill) for both the second half of May and June, and maybe part of July.

As such (from the presentation):

``average daily tonnage is expected to average 1200-1400 tpd for 2010 as new zones are brought into production in the latter part half of 2010``

This statement may be refering to tpd average from the milling operation for 2010.

Who knows - only time will tell I suppose.

Saturday, April 3, 2010

Idea for a Century base metals exploration company

The new company would strictly be to create shareholder value for existing Century shareholders (something that has been foreign to long suffering Century shareholders). I posted it on Stockhouse as a comment to a Stockhouse post.

Friday, April 2, 2010

Owner of the property immediately to the Northwest and West of Lamaque

Firstly, you`re very welcome Carib.

The property that borders Lamaque, to the northwest and west (the west portion represents mining rights underneath Val dÒr), is currently owned by a private (exploration) company called Harricana River Mining. It looks like Harricana`s Val dÒr property has about 195,000 (uncut) 43-101 ounces (@ 5.22 g/t) - per Copper Reef`s March 19th NR. Harricana is in the process of being acquired by a tiny company (Copper Reef) that trades of the CNSX exchange.

Here is Harricana`s website. There is hardly anything on the site. However, they do have a few maps, which might provide an appreciation of the property location.

Link to Copper Reef`s website:

A Few Comments

Thank-you Production05 for your continuing excellent contributions to the Blog.  It is very much appreciated by me and I'm sure all readers of the blog.

I don't know how Century can say they expect to average 1200 - 1400 tpd in 2010, but only peak at 2,000 tpd in 2011.  If we start in March at 200 tpd and finish in December at 2,000 tpd then that is an average of 1,100 tpd for the March to December period - assuming a steady rate of increase.  Over the whole year, it is less than 1,000 tpd average.

If we exit 2010 at a production rate of 2,000 tpd, that is equivalent to over 100,000 oz/yr from Lamaque alone.  San Juan should be at an annual rate of 20,000 oz/yr by then as well giving an annual production rate of 120,000 oz/yr by year-end.  I don't see how we can still be capitalizing costs for the full year if commercial production is defined as 60% of rated capacity.

At a production rate of 120,000 oz/yr and a cash cost of say $550/oz, we would be generating annual cash flows (at $1100 gold) of $66,000,000.  A 10x multiple would equate to a share price of about $1.65.  9 months is not long to wait for a quadrupling of the current share price if Century "walks the talk".  A key to shorter term price appreciation may be the Analysts' Tour in May.  I don't think pouring the first gold bar will be all that significant.  We poured lots of gold bars from the Sigma Pit.  The key for institutions will be cash flow and earnings.

I've added a new link to the right entitled "2010 Trading Summary" and provided a direct link to the April Corporate Presentation.

Thursday, April 1, 2010

April`s Corporate Presentation

Now on website. No major changes. A few quick notes:

1) (pg. 17 ) They confirmed that they have started to receive the new u/g equipment.

2) (pg. 17) Tender out for the 45,000 meter drill program.

3) (pg. 17) They mined 200 tpd u/g in March. Now, it doesn`t say if that is an average or if it is the max. If it`s the average for the month then the current tpd mining level might be slightly higher, at they would have been ramping up throughout the month. Having said that, I noticed that they kept the April targeted tpd at 200 - 300. If it`s not a conservative range then it likely means they expect to mine at current levels for the next month. Their target is 500 - 800 in May. I would like to see them ramp up much higher in April than the current 200 tpd level, but they likely need to wait for the additional ore sources to be prepared for mining first. I guess the good part is that all of the ore mined in March, and the ore to be mined in April (until they begin processing), is being stockpiled - eventually we will see the tpd mining numbers ramped up (the 500-800 in May) complimented further by the stockpiled ore (to push production in the first month or two).

4) (pg. 18) They have left this comment in place: ``average daily tonnage is expected to average 1200-1400 tpd for 2010``

5) (pg. 18) This comment is new to the presentation: ``in 2011 production is anticipated to peak around 2,000tpd``