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"We would never have come down here if we didn't expect to continue to build on operations"

Peter Ball

Director of investor relations/Century Mining

Published Thursday, May 20, 2010

Since forming in 2003, Canadian junior Century Mining has made significant acquisitions of producing gold operations in Peru and Canada, as well as various exploration properties.

In southern Peru's Arequipa region, Century operates its 82.6%-owned San Juan gold mine, where the company intends to increase production to 30,000oz in 2012.

BNamericas spoke with director of investor relations Peter Ball during his recent trip to Lima to attend the 9th International Gold Symposium.

BNamericas: What is Century doing to increase production at San Juan?

Ball: We are shipping a number of pieces of equipment from the Lamaque operation [in Quebec] down to the San Juan operation so we can work to modernize the entire facility and eventually expand production. We are expanding production from 20,000oz this year to 24,000oz next year, and 30,000oz the following year.

We're looking to bring a number of scoop trams, trucks and jumbo drills, which this operation has never seen yet. So this is going to be really beneficial for the mine and personnel because we are bringing in modernized equipment. We've never been able to afford this before, but with the Lamaque operation up-and-running this has allowed us to ensure that we can get some equipment down here. It should be arriving in early Q3.

BNamericas: Do the current high gold prices impact Century’s business plan?

Ball: Not really. Our overall cash costs for the company are in the US$475-550/oz range.

BNamericas: What is Century’s outlook for cash costs in 2010?

Ball: We are hoping to keep them in the US$500-550/oz range. We produced at US$488/oz in 2008 and US$497/oz in 2009. As we look to expand the operation and to bring in more modernized equipment, cash costs could potentially decrease.

It’s a diesel run facility, so one day we would like to work with the Peruvian government to bring in a power line. There is a grid that we could connect to and if we can work together, it could bring electricity to the community. We work in part now to provide electricity through our diesel plant to members of the community. It would be beneficial for everyone. We have to work to see how that can move forward, including who will fund it, how it will be funded and when it will be funded.

BNamericas: Does Century have any plans for new exploration activities or expansions in Peru?

Ball: Century believes that Peru is an excellent place to operate as a mining company. It’s a leader in many of the precious and base metal commodities. We want to be part of that growth. We have a corporate office in Lima that has 25-30 fulltime employees, so we have a great step into Peru. We have a proven and stable operation in San Juan and if there are other opportunities [to expand] then for sure. We would never have come down here if we didn’t expect to continue to build on operations.

BNamericas: What is the progress of works on the storage capacity at San Juan's tailings facility?

Ball: We are about 95% done. I was talking to the guys from the site yesterday [May 17] and I believe that the tailings capacity will be done at the end of June, so the end of the second quarter.

BNamericas: Century has also been carrying out exploration on the San Juan property, how is that progressing?

Ball: Since the economy struggled through 2008-09, we have been mainly focused on just keeping the operation running, keeping employment at the mine site and getting the company through the tough times.

Now that we are heading into the later part of 2010, we have a 220km2 land position in the Chorunga valley and there are a number of prospects to do some regional reconnaissance exploration, but I’m not sure about a drilling program. We could potentially have a drilling program going in H2.

BNamericas: Can you discuss the February strike at San Juan?

Ball: There was a work stoppage for about a week and we worked with the Canadian embassy and local officials. We worked through it and I think we were successful, and both parties are marching forward to keep the mine in production.

BNamericas: Will it have any impact on this year's production?

Ball: There were a few days that affected the operation, but we expect to meet our production target.

BNamericas: How does Century see the current labor situation in Peru?

Ball: I think there is always room for improvements to ensure the needs of the workers, the community and the environment are taken care of. Century has taken steps on those initiatives to get to know what those needs are, what people want to see for their community and for their families. Together, Century and the community can move forward. We need each other.

BNamericas: What are Century’s expectations from the International Gold Symposium?

Ball: It's a great opportunity to network, to meet your colleagues in the industry in Peru and to find new opportunities, as well as just being here. We are part of Peru, part of the mining community. We’ve been here for a number of years and we look forward to coming back.

By Ryan Dube


http://www.bnamericas.com/interviews/mining/Peter_Ball_,Century_Mining,