BLAINE, WASHINGTON--(Marketwire - Sept. 17, 2010) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Century Mining Corporation ("Century" or "the Company") (TSX VENTURE:CMM) is pleased to announce, due to strong interest in the Company's activities, an additional private placement financing of 3,076,923 units (the "Units") of the Company, at a price of $0.39 per Unit, for gross proceeds of $1,200,000. Each Unit will consist of one common share and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will be exercisable for one common share at $0.60 for 18 months from closing.
The Company will pay a cash finder's fee of 5% of the gross proceeds of the private placement. The completion of the private placement is subject to regulatory approval by the TSX Venture Exchange and completion of documentation. All securities issued under this private placement will be subject to a four-month hold period.
The proceeds from this offering will be used for the continuing commissioning of its Lamaque Gold Mine operation in Val d'Or, Quebec, Canada, and as working capital. Century has been advised that Kirkland Intertrade Corp and Gravity Ltd. have consented to the Offering and will not exercise their pre-emptive rights in respect thereto as provided in the current Shareholders Agreement.
About Century Mining Corporation
Century Mining Corporation is a Canadian junior gold producer and holds strategic land positions in Canada, United States and Peru. The Company's strategy is to grow to an intermediate gold producer through existing mine expansions and acquisitions of other strategic and synergistic gold opportunities.
On behalf of Century Mining Corporation,
Keith Hulley, Interim CEO
7 comments:
Thanks Yikes1! It`s always good to hear about ``strong interests in the companies activities.`` Let`s hope they now begin to focus on taking advantage of the strong gold price for their shareholders (like the majority of exploration companies, junior producers and mid-teir producing companies out there.
Prod05, Do you think CMM has enough cash now to complete development of Bedard and Northwall.
Or do you think there will be more PP?
Suppose we get all the money we need from PP, can we cancel the Deutsche Bank deal. I would rather sell gold at a higher price.
Thank you for sharing your views.
Hoping that the placee is some reasonable institution. If so, it might signal the begining of solid instituonal interest in the Co. It is high time/overdue IMO.
That's what I was thinking as-well WingFong.
Hi Keith,
I think there are too many variables at this particular point in time for non-insiders (like you and I) to figure out if this $6 million financing will be sufficient as we move forward:
1) Lamaque no. 2: We can come up with lots of guesses but we could never truly know how Lamaque no. 2 is performing on the cost per ounce front at 1000 tpd, 3.5 – 4.0 gt grade and 96% recovery, as a stand alone operation right now (without ore feed from anywhere else).
2) Bedard Dyke: The company has given up start up target period but (given the track record) we cannot truly know when it will actually come online, and how quickly it will ramp up to reasonable levels. There needs to be a historical record of improved consistency first, before we are able to increase our reliance on company target dates.
Fyi, Higher throughput (tpd) is important to reducing cash cost per ounce due to economies of scale factor. A certain percentage of the costs in most types of operations is fixed. Let`s say the costs are 75% variable and 25% fixed (just as an example for this exercise). Currently, the 1,000 tpd has to carry its variable costs plus all of the fixed operating costs for the entire Lamaque operation. Now, when Bedard Dyke comes online, Lamaque 2 will continue to carry a variable cost per ounce amount at the same level, but it will now be allowed to carry less of the fixed costs. The fixed costs do not increase with throughput. The BD throughput and the Lamaque 2 throughput will share the original fixed cost amount, thus automatically lowering the overall cost per ounce (for both ore feed areas). This is a key reason why the Bedard Dyke throughput and the North Wall throughput coming online is very important in reducing cash cost per ounce, and ultimately generating good cash flows to support business needs.
3) North Wall: Same explanation as BD, we don`t know when it will truly come online and how quickly it will be ramped up to reasonable levels.
4) Remaining development costs for BD and full development costs for NW: We do not know the remaining cash needs to bring these 2 projects to production stage.
to be continued....
...... continued.
5) Accounts payable and accrued liabilities: The balance was $11.8M at the end of Q2. The company is planning on carrying $8M at any given time on a go forward basis (per info gathered by the Union Securities analyst). A balance of $8M is very reasonable for a producing company of this size. They will need to pay down at least $3.8M by end of year to get the balance down to $8M, say, by year end. Payables are unsecured liabilities so it probably gives us some flexibility to better align the payments with our revised/delayed ramp up schedule.
Century also show $3.3m in Current portion of LT Debt. They will either need to pay this amount this year or at some point over the next 12 months.
Of note , we have $7.3M in Other Receivables booked in the Balance Sheet. Of that total, $5.2M represents VAT recoveries we may receive from the Peruvian government (tax department) at some point in the future. There is no guarantee how much we will get back and how long it will take (it could be a while), thus it is better not to rely on the cash in the short-term.
6) Capital lease financing facilities: This $9M facility (announced June 28`10) still hasn`t been closed off as yet (or at least hasn`t been announced). It had certain conditions that were not disclosed. Perhaps the conditions related to ramp up levels, and subsequent got delayed due to the mine delays – I have no idea. Regardless, with this record gold price level and with gold mining being a hot business right, I don`t see a realistic scenario where we don`t get capital lease financing from somewhere. Though, we may have to make high monthly payments for our equipment until we have long-term capital lease financing in place.
Conclusion:
We have this $6M cash from the PP. If BD comes online soon and NW comes online in Dec or Jan then Lamaque might be in a position to start driving out good cash to support the business. We still have Finskiy`s $8M worth of warrant conversions that he will need to exercised within the next 9 months before they expire. We still have the $9M in the DB escrow account which might come available end of Feb or end of mar if BD and NW come online early enough.
San Juan`s profits can continue to carry the Corporate G&A costs.
There might be sufficient cash to address short-term cash needs, but that will depend heavily on the near-term success of Bedard Dyke and maybe the North Wall.
I`m with you, I would like to see them not have to access the the remaining Deutsche Bank funds, and thus reduce the gold payments to DB. I have a feeling they will access the $9M cash regardless, but we will have to wait and see.
Thank you Production05. I have a much greater understanding of CMM financial position than before. I will keep my fingers crossed for BD and North wall to come online sooner than later.
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