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:
http://www.theaureport.com/pub/na/6145
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