Frustrating, embarrassing, more kicks in the groin area for long suffering shareholders, but at least the core business is moving along

We need to shed the label of being a mickey mouse operation (we were on our way, but this is a big setback, confidence and perception wise).

As frustrating and embarrassing as this CTO situation is, with yet another kick in the groin for LONG LONG LONG suffering Century shareholders, at least our bread and butter parts on the business should still be trucking along alright.

I am not as much disappointed with the company/auditors needing a bit of extra time with the YE audit process (due to the complexity aspects) as I am with the company allowing the situation to reach BCSC initiated full CTO stage.

Although, a sharp finance team would never ever (under no circumtances, IMO) have allowed this to happen. I know from experience. I have been involved in YE audit processes (on the company side), where major complex reorganizations (and accounting treatments) were encountered (far larger than what Century went through here). The deadlines were set in stone and there were no allowable excuses for missing them. As such, the key is staying ahead of the game and leaving yourself significant room for last minute surprises (even if it means the accounting staff has to burn the midnight oil for several months straight, including weekends). It comes down to taking pride in your job. Also, there needs to be open conversations with the auditors throughout the year (if possible). For example, Century`s CFO should have been running potential accounting treatments by the auditors as early as Q4 last year (even prior to the financing close). A successful audit process is about a good partnership between the company and the auditor, and to ensure no major surprises - COMMUNICATION/ADVANCE AGREEMENT ON ACCOUNTING TREATMENTS IS VITAL. The CFO should put pressure on the audit firm to ensure the auditors step up, and also work overtime if necessary, if they are not carrying their side of the deal. The CFO`s job is to manage the process.

Honestly, having lived through major (complex) YE processes (where there is no tomorrow if you don`t meet your deadlines), I am just shocked to see how frequently Century misses on its Y/E deadlines (and even how many last minute submissions with quarterly statements, or so it seems). Again, I don`t know if it`s a lack of pride, lack of accountability, lack of burning the midnight oil, lack of advance communications/partnership with the auditors, lack of planning, lack of pressure from executives..... It`s impossible for us to know. Though, IMO, there is a critical flaw somewhere. In my view, the problems need to be identified and corrected if the company is serious about growing or even confidence from the market (especially from instituations).

Anyway, (as disappointed as I am about missing the filing deadline - I can give them a break as the executives were focused on delivering operationally, which is much more vital) I am more disappointed that they allowed the situation to end up turning into a BCSC initiated (full) CTO. It`s not clear if they missed the boat in not applying for a management CTO (far less damaging) or if they somehow maxed out on that option (from previous years).

Anyway, here is the positive: Gold price is strong and we are pouring gold - that is what ultimately matters the most. Regardless of everything else, we must deliver operationally at Lamaque otherwise we will have serious issues to overcome.


*230 ounces from Lamaque for the wk of April 30th = about $270K in gross revenue (assuming around $1,175 gold price)

*the rumour seems to be 700 ounces per wk (this is probably reasonable for early low grade processing, 900 tpd @ 95% recovery will likely eventually get us about 900+ ounces per week once we eventually step it up to around 4.76 g/t) = about $840K in gross revenue for week ending May 7th at Lamaque (assuming $1,200 gold price)

*let`s go with another 700 ounces for wk ending tomorrow, May 14th = about $870K in gross revenue at Lamaque (assuming $1,240 gold price)

That would equate to almost $2M in gross revenue at Lamaque since we starting pouring gold. That goes a long way in covering a chunk of our daily operating costs (even though the costs will be capitalized until commercial production).

Also, at the current gold price, we are likely looking at generating about $900K per month of operating profits out of San Juan (not gross revenue, but Ops contribution). This is even after deducting the 200 ounces per month going towards the prepaid gold program and maybe, say, profits from another 100 ounces to cover the operating costs to produce the 200 prepaid ounces.

Then, we still don`t know what the status is with the 2,015 ounces previously sitting in the Lamaque in-process inventory (to be fully processed after restart of the mill operation). That will give us about $2.5M at current gold prices.