2 encouraging signs from Management

1) Transparency

I like the way Hulley presented the situation in the NR and the conference call. He was up front about the mine challenges faced at Lamaque in the first 7 months (which were all typical start up mine challenges) and his explanations of the actions taken by Century. As best I can tell, there were no game changing challenges.

Actually, even if I might be alone in this thinking, I am actually very impressed with the Lamaque start up thus far.

The one area I am most disappointed in is the lack of Bedard Dyke bulk sample tonnage going to the mill at end of July. I was under the impression that they could begin grabbing ore from the mineralized area fairly quickly, even before development of the long-hole stope itself. Once they secured the portal and gained access to the mineralized area, I fully expected them to begin sending Bedard Dyke bulk sample ore to the mill for processing. Perhaps they will begin soon, as they are now working in the mineralized zone.

I also think the production targets were too aggressive for year 1, due perhaps to not leaving sufficient time allotments for typical start up and development issues. However, this does not mean the overall start up plan was flawed (see below, I actually like the start up plan a lot).

Otherwise, I like how things are progressing so far. Here are just some of the positives (off the top of my head):

*As mentioned, I actually like the start up plan a lot - it was well thought out (going after near-surface ore - start with the most advanced Lamaque 2, while developing Bedard Dyke with excellent drill intercepts and bulk mineable with long-hole mining, and then transitioning to the North Wall which requires a bit more developing)

*I loved the concept of low-profile equipment for the flats the first time I heard the description of what it could do. It has changed how they perform room and pillar mining in the flats (with narrow veins). Anytime you can go from labour intensive jacklegs and slushers over to much more mechanized bulkier mining, IT`S A GREAT MOVE! It sounds like things are working really good so far (everything they thought it would be). However, as with anything new (even great things), there is a learning curve and optimization period. Heavy training is happening right now. Also, they have had to expand some areas of the already established tunnels from 6 ft to 6.5 ft to accomodate the size and quickness of the new low profile equipment.

*No issues with crusher replacement and restart of the milling circuit.

*Excellent gold recovery rate of 96.5%.

*Excellent near-surface drill results for the Bedard dyke.

*They are well into the development of the initial Bedard Dyke long-hole stope. I personally was not expecting long-hole mining until October-November timeframe due to the 150 day period between permits that I have discussed many times on the blog. As such, I would be pleased if they are able to actually begin long-hole mining in early October.

*I`m very pleased to hear that they have started working on the North Wall portal. As mentioned before, I wasn`t expecting any development work on the North Wall until Q4 and I wasn`t expecting any North Wall production until early January 2011. With portal work having started in July, it`s possible that we might get some North Wall production ounces in 2010.

*I am actually not as disappointed with the Lamaque 2 grade as most people appear to be. Per Adrian, the Lamaque 2 reserves grade is coming in as expected. This likely means that the grade for the core Lamaque 2 area is in the 5.0 g/t area. They are discovering more economical ore (non-reserves) areas and also the reserves stopes to be stronger than expected (with longer stope life). This is actually a very positive development. The grades are lower than grades in the reserves areas, but they are economical. Adrian also feels that they will be able to increase the grades in these areas over time. Also bringing the Lamaque 2 average overall grade lower is the mineralized development material. This material they are processing is economical, with grades above 1.0 g/t and located near surface. No point wasting this material if it`s economical and can give us gold ounces at US$1225 gold. I think Lamaque 2 is delivering well, even beyond original tonnage expectations. I think its performance looks less pleasing to some (due to the lower blended grade) because it is pretty much carrying all of the load for Lamaque, including having to compensate for the Bedard Dyke bulk samples not being prominent as yet (with its higher grades, to balance off the overall average). I think Lamaque 2 started slowly (party due to the equipment delivery delay) but I really like how it has performanced in the last 2.5 months.


2) Management appears to want to make this work in the public markets

I think delivering the Q2 financials 18 days before they are/were actually due is a huge statement. Finskiy would have never allowed that action to occur if he had intentions of suppressing the share price. I think it`s a very meaningful signal that he is sticking to his original plan of using Century as a vehicle to become a significant player in the gold mining space, in the public markets.


In conclusion, I commend Finskiy, Scola and Hulley for stepping up to the plate like they have the last few days. I don`t think we are going to reach our goals overnight, but I do think we are on the right track. I don`t think Century`s share price is reflective of all the positives. I would like to see Hulley, IR and Century`s management in general continue to educate the market. I think delivery is obviously very important but I also think educating the market is critical also. I would like to see Century provide consistent updates and education to the market, be it via the monthly updates or some other form. I think keeping the market and shareholders in the dark for long stetches at a time is a big mistake, especially during this absolutely critical development period.