Century Mining:
*Outstanding shares = 366,963,444
*Current market cap = $154,00,000
*2011 production = 115,000 ounces
*2013 production = 130,000 (potential for 180,000 ounces whenever they choose to put in place a 3,000 tpd mining plan for Lamaque – 3,000 tpd milling capabilities already in place)
*Cash cost per ounce = $450 - 550
It`s about giving the market reasons to have investor confidence in both the operations and management, along with the abilities to attract large investors.
It`s difficult for Century to fully compete with the extremely (expected) low cost mid-tier producers, but with US$1,250 gold Century should at least be within viewing distance. Century`s market cap is not even in the same stratosphere (or troposphere or mesosphere for that matter). Century`s market cap is so far behind that it`s similar to being isolated on some distant (desolate) planet in some far out galaxy without any fancy atmospheric names as those.
IMO, near-term, Century needs to (among many other things) :
*continue delivering good levels of tpd at Lamaque 2, while also continuing to increase the average grade of the non-reserve stopes while also continuing to optimize the new low-profile equipment
*initiate reasonable ore feeds to the mill from the Bedard Dyke
*continue to demonstrate good development progress with the North Wall Zone
*do a much better job at educating the market of all the fabulous initiates Century has on the go and about the wonderful property that is Lamaque
Century should never be satisfied with sub-standard performance. If that culture exists then it should be purged immediately. Century should aim to achieve shareholder performance levels like management from these companies (never mind the huge successes for other companies, not on the list, such as Red Back, Eldorado, Randgold and many others):
1) Andean Resources:
*Outstanding shares = 541,,382,867
*Current market cap = $3,779,000,000
*2011 production = zero
*2013 production = 250,000 – 300,000 ounces
*Cash cost per ounce = less than $200
2) Semafo:
*Outstanding shares = 270,991,435
*Current market cap = $2,450,000,000
*2011 production = 235,000 – 260,000 ounces
*2013 production = 235,000 – 260,000 ounces
*Cash cost per ounce = $485 - 520
3) Alamos Gold:
*Outstanding shares = 115,779,106
*Current market cap = $1,999,000,000
*2011 production = 160,000 – 175,000 ounces
*2013 production = 250,000 - 300,000 ounces
*Cash cost per ounce = $338 (for core asset only – the new mine in 2013 will likely increase the avg)
4) Lake Shore Gold:
*Outstanding shares = 351,097,726
*Current market cap = $1,331,000,000
*2011 production = 120,000 ounces
*2013 production = 200,000 ounces
*Cash cost per ounce = $320 (old estimate only)
5) San Gold Corp:
*Outstanding shares = 277,934,000
*Current market cap = $1,264,599,700
*2011 production = unclear (these guys seldom ever give production guidance, or at least I almost never see any – IMO, their actual production (start up) performance continues to be poor over 2 years now (probably more like going back 5 years now, but that`s another story), yet the market gives them a $1.3 billion market cap and never ever punishes them for the sub-standard operating performance (it`s probably because they, and certain public people, hype their high grade zones non-stop to investors that like to eat up that stuff, but at some point they need to start showing the goods on the operations front, IMO))
*2013 production = unclear (at one point I remember seeing an old figure of 200,000 ounces), in Q2 2010 they had gold sales of 10,190 which is only 40,000 extrapolated on an annualized basis, with a head grade of 6.76 g/t and only a 93% recovery rate, with an $8M Income Statement loss
*Cash cost per ounce = unclear (again, at one point I remember seeing an old figure of $350), their actual cash cost per ounce was US$1,084 in Q2 2010
6) Aurizon (another company with operations in Quebec):
*Outstanding shares = 159,723,105
*Current market cap = $1,089,000,000
*2011 production = 150,000 – 175,000 ounces
*2013 production = unknown
*Cash cost per ounce = $425 (US$504 operating cost per oz in Q2`10)
7) Anatolia Minerals:
*Outstanding shares = 138,798,696
*Current market cap = $1,038,000,000
*2011 production = 145,000 ounces
*2013 production = 210,000 ounces
*Cash cost per ounce = $260 (old number)
8) Romarco Minerals:
*Outstanding shares = 469,398,375
*Current market cap = $953,000,000
*2011 production = zero
*2013 production = 150,000 ounces
*Cash cost per ounce = $266 (old number)
9) China Gold International Resource (formerly Jinshan Gold):
*Outstanding shares = 171,854,459
*Current market cap = $767,000,000
*2011 production = 120,000 ounces
*2013 production = 140,000 ounces
*Cash cost per ounce = $401
10) B2Gold:
*Outstanding shares = 311,648,609
*Current market cap = $586,000,000
*2011 production = 120,000 – 130,000 ounces
*2013 production = 120,000 – 130,000 ounces
*Cash cost per ounce = $558 (avg of their 2 mines)
11) St Andrew Goldfields:
*Outstanding shares = 360,382,257
*Current market cap = $443,000,000
*2011 production = 110,000 ounces
*2013 production = unclear
*Cash cost per ounce = $550
16 comments:
Excellent post, kinda put's things into perspective. We are definitely way under par at these levels.
Mr. storm pay via Blackberry
The gap in market cap highlights the current opportunity to buy CMM shares in my opinion.
But it should also be red flag to management that Bay St. is demanding real progress before respecting the company.
The gap may very well increase as those comparable companies increase in value with the price of gold.
Dave
Chillby
I totally agree with your view that we small fish ought to be heard. In my experience pertaining to all matters concerning minority right/treatment, it is of upmost importance the minority has cultivated a position whereby rendering them worth listening to and better still, have to be taken seriously.
As I see it, this blog is a perfect platform where we can consistently show our collective strength, wisdom, knowledge, resolve and portraiting at all times an unfailing image of a CMM minority shareholders grouping which is well informed, dedicated to fair plays and ready to defend our rights.
It will be helpful if we are being perceived to be a group of porcupines and not guppies.
Among the 4 failures Carib stated in his posting on the Sept/1/10, 3 were generally known but the 4th failure- its history of shunning Canadian brokerage houses when raising capital comes as a shock to me! I am deeply concerned that should the company continue to shun these Canadian money lords (no business=no gain to them), then the end result will surely be no client recommendation and no support from them (perhaps + bad mouthing too). As such, it will not be a surprice the SP will continue to lack legs/wings
I see this happens in my home zone. When a company has a fallout with one of the money lords, one will soon see its SP gradually deflates like a ballon. I am not sure how the Canadian money lords work but in my home zone, they do scratch each other's back.
I hope the coming new CEO (preferably a Canadian heavy weight) considers this as an urgent issue to be looked into.
Most of the fundraising that Iknow about took place under PeggY's term as CEO. Is is not true that Century HAD to borrow from non-Canadians because locals didn't care for the CEO and her company? She was surprisingly successful with the outsiders. That's how we got Finskiy and Scola, I think - among others - at least for major financing.
Going forward, however,we could try doing business with the locals now that Peggy is kinda gone. (She's still an advisor, right?).
It may be a case the money lords shunned CMM due to personality or other issues. But then we still do not see anything positive happens to the SP now that the suppose-to-be torn is removed. This does not compute.
Intuitively and instinctively, I view this as an issue of material importance. Could be decisive as far as SP performance is concerned.
We are awared we have done reasonably well in the mining fronts and other "in house" matters all this while but something is obviously still not right. Upon layering on the San Gold episode (SP$4.00)--a case of poor performance, weak reporting but with certain public figures hyping their high grade zones NON-STOP TO INVESTORS....as per Prod05's current posting, I must say my suspicion is strengthened.
I really like to see the co moves its head office back to Canada, be a bit more "Canadianised" and have a Canadian son for CEO if it is not too late.
Come to think of it, what has the co got to lose in doing these things? And what if they are the unspoken issues not resloved?
As per moving the head office back to Canada etc, I am actually echoing what Prod05 said in answer to a question on Sept/6/10 and further expanded by Carib in his "An Opposing View" in the same day. Only at the time of their presentations, it did not occur to me the implications of certain unspoken hints. Now, as things are unfolding, there are few things that do not compute and there are certain "circumstantial evidence" forcing me to rethink the whole issue and by Occam's Razor Theorem, I am inclined to think that perhaps one of the critical answers is staring at us all the times.
Having poured out what got stuck in my chest, plz do not tag me a communalist or worst, a racist. My perspective is part of my experience in the money world (and other worlds too)I observed in my time zone. I am in for the money in this endeaver so if the tone of the words is not desirable, I would like the blog administrator to give me a hint.
wingfong, will you please elaborate more plainly about what you are referring to when you say that "perhaps one of the critical answers is staring at us all the times"?
I found your posts quite cryptic, and it did not help me in the least deciphering it when you referenced posts and an answer to a question on Sept/6/10 when it was only Sept/5/10.
Hi Dave,
I`m sure Wingfong will be able to provide you with further clarity.
Nonetheless, I thought I would provide my brief interpretation, given I`ve heard the term ``Occam Razor`` before. Actually, I`m only familiar with the term by fluke. ``Occam`s Razor`` was the title of the 3rd episode, season 1, of the tv show called ``House MD``.
I think it means something like ``the simplest explanation is usually the correct one``.
I think that Wingfong is simply coming to the conclusion with his thought process that the simplest explanation (or one of the primary explanations) for Century`s market cap struggles and lack of respect is due to lack of Canadian presence (all across the board). Century needs:
*its head office in Canada (Toronto - world financing centre in the gold mining space)
*a high profile Canadian CEO that commands presence and respect of the institutional investment community in Canada
*an IR guy located in the heart of Bay St. that can knock on the door of every investment institution in Canada to better educate them on the significant strides the company is making, and to help build back the severe reputational damage - sometimes a real handshake and eye to eye contact is a good way to start.
*contant Canadian presence in the community and in the media
*hype the fact that this is a Canadain gold mining company (in a period of all time high gold prices, with its flagship operation in one of the best mining jurisdictions in the world) that is in the process of moving towards becoming a significant player in the space (similar to the majority of successful gold mining companies in the industry)
Hi Dave
Sorry for the typo error, Dave, my apology, it should be August/6/10 and Prod05 answered the question in "Question to Ponder" and Carib subsequently gave his view in "An opposing View" on the same day.
Prod05 read me correctly, that is what I mean and I must say he has explained the matter better than I do. Tks Prod05.
Hi Prod05
I do not know precisely how Canadians respond to gold mines/gold mining matters as such. All I know is every community has its own cultural differences, preferences and values etc etc especially coming from very established communities that have long histories (be it struggle or glory). If I am not wrong, believe the Lamaque Quebec area is one of the oldest gold mining districts in Canada with a long history possibly filled with memories and memorable events.
I come from a time zone populated with people of very diversed cultures hence I do have first hand experience rendering me to pay respect to these cultural differences whenever I want to put things across or get them done.
I owned one of the comparison companies China Gold International, when the market cap was similar to CMM now only a year and a half ago. China Gold was similarly moving from a lower level of production (40k ounces to 100-120k) much like us. The key trigger moment was 2 months in a row of production that was now on the NEW production pace.
This lead to a entire year of revaluation and a 1000% gain. I sold too early between the 500-600% gain but this just shows how quickly this can move once it gains some steam. I honestly don't really worry that much about our position because we are trading below liquidation value in my opinion.
I have been adding every chance I can get because I know how this story goes. Once we get a new CEO and announce a couple months that are at a 100k+ per year pace everyone will jump on the bandwagon and no-one will even remember when this traded under 50 cents.
We are currently trading at a level as if Lamaque and Peru are a year or two away from production and we still need construction financing. . . this is a total joke. But the market constantly creates these incorrect valuations and they will in time correct themselves and violently.
Real_Economics
I followed the company for a while ( sadly without action taken) when it was called Jinshan Gold but only now do I know it has a name change to China Gold International Resources.
Your view..100K+ PER YEAR PACE production announcement for a few months has merits. It sure could be a positive trigger to CMM's SP.
By the way, Jinshan Gold is Chinese and it may be laterally translated to Gold- Mountain Gold or Mountain Of Gold (Jinshan=gold mountain or gold hill in Chinese and Yinshan is silver mountain)
Funny they find it useful to have a name change to China Gold Internal Resources. Perhaps CMM can consider doing the same as per Carib's previous suggestion. Still like to say want I had said thus--how about NEW CENTURY GOLD CORPORATION?. A new name and a new CEO a good match?
I like New Century Gold or just Century Gold Mining. I think Gold needs to be in the NAME for optimal positioning for the final mania phase.
Yes, the name change of Jinshan to China Gold International is only recent. When I bought, it was a valuation play just like CMM. But now they are somewhat reasonably valued, though I think all gold miners are still undervalued - but compared to CMM they are fairly valued.
To me, it was a no brainer to roll these profits into CMM.
For one, the production profiles in a year will be almost identical. CMM's reserves will be superior, with our cash cost slightly higher. So let's call this a wash.
Our mining jurisdiction is SUPERIOR from a political standpoint. They get cheaper labor, but we get a more friendly government.
In addition, we are a better future takeover target because we could get picked up by Agnico Eagle or Newmont or Kinross or any of these Val Dor area giants in the future, wheras they are already a puppet of the Chinese government, which will never sell a natural resource asset.
However, this comparison is silly because we are trading at about 1/5th of their market cap! One freakin FIFTH!!!!
I would say we may have a larger market cap in 2-3 years and right now we are freakin 1/5th.
I saw this same disparity about 2 years ago as much as I don't like Coeur D'Alene "CDE" it was simply overly beat up to be trading at 1/3rd the market cap of Silver Standard. They were just about to launch Palmarejo and now going to be a 20 million ounce a year Silver producer.
Meanwhile, Silver Standard, which rich in "in ground" resources, was not even producing at all and in construction of their first mine.
Within a year, as production at CDE's new mine ramped up, CDE made up this difference and now trades at a higher market cap than SSRI.
My point isn't that CDE is better than SSRI, it's just that these types of inequities and imbalances WILL work themselves out over time. We should be thankful they exist because that's how were going to make so much dough.
We just need to be patient in my opinion. We are like the first few monkey's in the "100 monkeys" tale. Once the 100th monkey starts buying CMM, it will cause a mania.
Real_Economics
Very refreshing views and comparative studies. Hope to read more postings from you.Helpful material. Tks.
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