I had posted a comparative analysis back on April 8th (located in the comment area of a post on that day). Century was trading at $.47 at the time (but Lamaque wasn`t pouring gold).
Developments/accomplishments since April 8th:
* Century is now pouring gold at Lamaque.
* The gold price is now at an all time high, at US$1,255 (up from around US$1,150 on April 8th).
* Twice as many mining stopes have been opened up and are being mined in the Lamaque flats (since April 8th).
* All of the low profile (room and pillar mining) equipment have arrived and have all likely been deployed (by now).
* We have launched a new exploration program which has many objectives (including provide vital rock info in advance of mining in the Lamaque flats)
* We are likely about 10 days away (or so) from start up of bulk sample mining at the Bedard dyke.
* We are about 2.5 months closer to getting our long-hole stoping permit to authorize long-hole stoping (low cost bulk mining) at both the Bedard dyke and the North Wall dyke.
* We are likely about 4 months away from development start up of the North Wall zone (our 3rd source for Lamaque near-term ore feed (with possible production in early 2011). I think the main mineralized structure is the North Wall zone is the North Wall dyke, but I believe the North Wall also has mineralized shears, flats and I think perhaps even dippers. Dykes, shears, flats and dippers are the 4 primary types of mineralized structures on the Sigma side of Lamaque. I don`t remember the details perfectly but I`m pretty sure the Bedard dyke has 2 (maybe still potential for 3) of the 4 types within its zone and the North Wall zone has all 4 types (I think - for sure it has 3 times). Again, low cost (long-hole stoping) bulk mining will be the primary mining method for both Bedard and North Wall.
* The property is a lot cleaner now than it was back on April 8th (with Century seeming to be working successfully with the government with the clear up efforts).
* Excellent progress made at San Juan since April 8th (including the successful lowering of hoisting capabilities with the internal shaft, thus providing greater mining access to deeper parts of San Juan`s mesothermal veins).
YET, Century`s share price is still pretty much the same as April 8th - $.51.
With the new exploration program, I would like to see Century move some of the 600,000 M&I Cross-over ounces into P&P and some of the 1.1M Inferred Cross-over into M&I – they should be able to eventually access most of the Cross-over ounces via the haulage drift and Lamaque no. 2 decline (it`s still worth it even if they have to put in other secondary declines and perform further development work).
Also, the North Wall has about 250,000 P&P ounces currently and 400,000 (+) Inferred ounces. I would like to see them move the Inferred ounces upwards at some point during the current exploration program.
After Century moves more Cross-over and North Wall ounces into P&P, I wonder if they will consider ramping up production at Lamaque to 155,000 ounces annually, strictly from mill feed from the declines (instead of waiting 4 years for the shafts to be refurbished). With the extra mill capacity and US1,255 gold, it`s a waste to just leave 1/3 of the (3,000 t/d) mill capacity idle for 4 years (that will be a huge opportunity cost).
If Century cannot not supply the Lamaque mill with 155,000 ounces per by mid-term then they need to go out and acquire a nearby property that can supply the extra mill feed to get to 155,000 ounces. Doing nothing, and not finding either an organic solution or an external solution, would be a terrible business decision (especially with US$1,255 gold, but likely more like US$1,500 gold).
Century Mining:
*Outstanding shares = 345,300,000
*Current market cap = $176,103,000
*2011 production = 115,000 ounces
*2013 production = 135,000 or 190,000 ounces
*Cash cost per ounce = $450 - 500
If Century continues successfully down the path I described, I do not see the following companies as having assets that are substantially more superior than what Century has (both with production and ounces in the ground). Yet, the gap in market value between Century and all these companies is unreal. Century`s share price will likely receive a major revaluation once management provides firm evidence that Lamaque is well on the way to being successful:
1) Alamos Gold:
*Outstanding shares = 115,127,000
*Current market cap = $2,014,722,500
*2011 production = 167,500 ounces (avg)
*2013 production = 300,000 ounces
*Cash cost per ounce = $338 (for core asset only)
2) Lake Shore Gold:
*Outstanding shares = 349,151,000
*Current market cap = $1,145,215,280
*2011 production = 120,000 ounces
*2013 production = 200,000 ounces
*Cash cost per ounce = $320 (old estimate only)
3) San Gold Corp:
*Outstanding shares = 277,934,000
*Current market cap = $1,264,599,700
*2011 production = unclear
*2013 production = unclear (at one point I remember seeing an old figure of 200,000 ounces)
*Cash cost per ounce = unclear (again, at one point I remember seeing an old figure of $350)
4) Aurizon:
*Outstanding shares = 159,421,000
*Current market cap = $825,800,780
*2011 production = 150,000 ounces
*2013 production = 240,000 ounces
*Cash cost per ounce = $435
5) Semafo:
*Outstanding shares = 268,640,000
*Current market cap = $2,407,014,400
*2011 production = 245,000 ounces (avg)
*2013 production = 245,000 ounces
*Cash cost per ounce = $500
6) Romarco Minerals:
*Outstanding shares = 465,554,000
*Current market cap = $912,485,840
*2011 production = no production ounces until 2012
*2013 production = 150,000 ounces
*Cash cost per ounce = $266 (old number)
7) Jinshan Gold:
*Outstanding shares = 170,744,000
*Current market cap = $689,805,760
*2011 production = 120,000 ounces
*2013 production = 140,000 ounces
*Cash cost per ounce = $401
8) B2Gold:
*Outstanding shares = 310,744,000
*Current market cap = $567,483,000
*2011 production = 125,000 ounces
*2013 production = 133,000 ounces
*Cash cost per ounce = $475
9) St Andrew Goldfields:
*Outstanding shares = 328,060,000
*Current market cap = $426,478,000
*2011 production = 110,000 ounces
*2013 production = unclear
*Cash cost per ounce = $550
4 comments:
It really is a stunning under valuation. You'd think it wouldn't be able to last too long, given the progress that is being made on the new mine.
It's the kind of situation that should appeal to any value investor, but I suppose some won't be interested until we have the numbers for Lamaque.
From the current share price it's an 8 bagger just to get it valued comparably to its peers. If gold goes to $2,000, it's a twenty bagger. If their exploration adds another 2 million ounces....
Just have to keep buying and waiting for market recognition, whilst dreaming of building your own harem.
Anon: are those "bags" a bit aggressive? Maybe Carib or P5 could take some stabs at possible price points but those seem a tiny bit optimistic...
Silence is deafening but yet they apparently are running full steam ahead and all is going well still.
rock3030
You are probably right, but it's nice to dream! Until we can crunch the numbers we can only guess at the potential value.
Having said that I remember looking at San Gold over a year ago, they weren't mining at a profit, I'm not sure they are yet and look at the share price, marching to the heavens.
Sometimes the value the market puts on a stock is inexplicable. Some get liked, some don't. But here, the value seems to be exceptional, it's just not well known.
I'd have thought John Doody would find it interesting. There's just not that many gold producers this cheap, with the ounces they have.
With all due respect...harem builders are out to lunch. Managing two women (1 wife, 1 daughter) is about all I can take at one time. All yours, Anon!
The silence is only heard out here-its pretty noisy up in Lamaque these days. If you examine the amount of work CMM has accomplished over the last 60 days, you might think its pretty impressive. Interesting to see who is accumulating shares on the QT out in the boutiques and banks. I'm not sure when the debt-holders who were paid in shares will finish stepping on our sp, but every sale they make reduces their ability to hold us down. Should be very interesting about August to see what happens here. Besides, DB doesn't just stand for DeutscheBank...but I digress...feminine hygeine isn't the topic here, is it?
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