BLAINE, WASHINGTON--(Marketwire - Nov. 12, 2010) -
NOT FOR DISTRIBUTION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES
Century Mining Corporation ("Century" or the "Company") (TSX VENTURE:CMM) is pleased to announce that the Company has entered into an agreement with a syndicate of agents co-led by Haywood Securities Inc. and Byron Capital Markets, and including Union Securities Ltd. (collectively, the "Agents") pursuant to which the Agents have agreed to offer for sale, on a best efforts private placement basis, up to 12,820,513 units of the Company (the "Units") at a price per Unit of C$0.39 (the "Unit Price") for gross proceeds to the Company of up to C$5,000,000 (the "Offering"). Each Unit will consist of one common share in the capital of the Company (a "Common Share") and one half of one Common Share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle the holder to purchase one Common Share for a period of 18 months following the closing of the Offering at an exercise price of C$0.60 per Common Share.
The Company has granted the Agents an option, exercisable in whole or in part at any time up to the closing of the Offering, to offer for sale up to an additional 5,128,206 Units at the Unit Price for additional gross proceeds to the Company of up to C$2,000,000.
The Company intends to use the net proceeds of the Offering to advance the Lamaque gold mine in Val d'Or, Quebec through the final commissioning stages of the operation. The proceeds will assist in funding the underground development of the Lamaque Flats, the Bedard Dyke and the North Wall ore production zones. Currently the mine is producing at approximately 1,000 tonnes per day (TPD), and with the commencement of mining in the North Wall zone in Q1/2011, daily production is expected to increase to approximately 1,500 TPD and reach a final steady state production rate of 2,100 TPD by Q4/2011. The 2011 production guidance remains intact at 80,000 to 90,000 ounces gold, is forecasted to become cash flow positive in Q1/2011, and to reach commercial production in the first half of 2011.
The Company has agreed to pay the Agents a cash commission equal to 6.5% of the gross proceeds raised in connection with the Offering and to issue compensation options entitling the Agents to purchase such number of Units that is equal to 6.5% of the aggregate number of Units sold pursuant to the Offering, at an exercise price equal to the Unit Price, for a period of 18 months following the closing of the Offering.
The Offering is subject to receipt of all necessary corporate and regulatory approvals, including the approval of the TSX Venture Exchange. All securities issued in connection with the Offering will be subject to a statutory hold period of four months plus one day from the date of issuance in accordance with applicable securities legislation.
The securities being offered hereby have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state or province in which such offer, solicitation or sale would be unlawful.
About Century Mining Corporation
Century Mining Corporation is a Canadian junior gold producer which 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
33 comments:
WHAT THE HELL IS GOING ON WITH THIS COMPANY. ARE WE JUST GOING TO BE DOING A PP A WEEK IN THE FUTURE?
STOP DILUTING. WHY THE HELL WOULD THEY DO TWO SEPERATE PP's IN THE SAME WEEK AT THE RIDICULOUS LEVEL OF $0.39?
I'm out, this is ridiculous. Good luck to those who stay.
Union Securities already provides analyst coverage of Century.
In addition to receiving cash compensation, Haywood Securities and Byron Capital Markets will receive plenty of options (exercise price of likely $.39 and exercise period of 18 months). If all goes well with Century`s ramp up in 2011 then the agents will make some really good profits just with the options alone. Also, since the offering will be done on a private placement basis, the take up may include a number of existing Haywood and Byron clients.
These are all reasons for Haywood and Byron to take a more active interest in following Century Mining, similar to Union Securities. We`ll have to wait and see.
Jim,
If you want out .. that is your perogative .. but your thinking that this dilution will have much impact on the SP is misguided.
12 million shares . . in a 400 million pool .. is 3%
If I said to you .. The stock will hit 2.00 when up and running .. "but if they had not diluted it would have hit 2.06" would you care ?
I would much rather have a smaller percent or "something" (2.00 as opposed to 2.06) than a larger percent of "nothing"
1500 tonnes per day by Q1 ... is a big deal .. then this company will be "something" that investors will be willing to pay for...
If it takes 5 Million more to get the company there .. so be it.
When I talked to Pete .. he mentioned they were burning through cash in Q3.
Thought I would post my thoughts on why: (rough quick and dirty calculations)
Assume a Q3 mill rate of 600 tonnes/day at 3.5 grams/tonne.
This equals 2100 oz/month .. after 660 goes to Deutchbank .. 1440 ounces are left.
1440 x 1200 = 1.73 Million in total revenue.
Cost of labor: (really rough est)
200 workers @ 80,000/year salary = 1.33 million/ monthin salary alone. And these workers are likely getting in lots of overtime right now .. bumping the total up up up.
This leaves 400,000 for (lights, power, maintenance) never mind the contractors paid to advance into the Bedard dyke, engineering firms doing stability studies) .. equipment loans .. and a host of other fees and expenses.
Using a figure of cash costs of 600per ounce .. over 7000 oz/month this is equal to 4.2 million a month total (which is probably low because ramp up is more exensive)
4.2 million expenses - 1.7 income = 2.5 million deficit.
San Juan (thank goodness) is providing 1600 oz/month at a profit of roughly 600/oz = 1 Million profit.
total monthly deficit is still 1.5 million.
Re-Do the numbers with 1500 tonnes/day @ 4 grams/tonne
6000 oz/month - 660 to Deutchbank = 5540 oz x $1300/oz = 7.2 million revenue
Costs stay the same (likely decrease as contractors are done)
7.2 M - 4.2 M = 3 million a month in profits from Lamaque..
add another million from San Juan and the company is making 4 million /month
The slow ramp up in production has been very costly .. as the number show ..
From Peter ..and the latest release it looks like they have moved up to 1000 tonnes/day (and I think this is conservative - new management does not seem to be giving "rose colored" estimates like the old")
Will be interesting to see the actual Q3 numbers on Monday.
Cheers all..
Mike
Now that we seem to have all this money from PP. Do we still need the DB deal? I think we should scrap the DB deal if we are going to be cash flow positive by Q1 and we have enough money to ramp up production to where we want to be in Q1.
That would be Great, but I'd imagine the DB covered this option...
Seems to me with each passing day before the conference call we get more and more info. What more will there be left to tell us we don't already know on Tuesday?
1000 tpd is a welcome development and if they hit 1500 tpd by year end we'll be good to go.
Also, that's a good point. Does anyone know if there is an "out" in the DB deal?
The CC was set up for the Q3 results, was it not? The more info we have, the better the discussion should be on the CC...hopefully.
It is obvious we have come to a definitive mine advancement stage of the Lamaque Flats, BD and NW ore production zones. As per the NR--the final commissioning stages of the operation.
From the NR, I have noted the followings:-
-current prod. app. 1000tpd
-prod reaching 1500tpd with NW
coming in Q1/2011
-become cash flow +ve Q1/2011
-reach commercial prod H1/2011
-achieving final steady state
prod rate of 2100tpd Q4/2011
To me, following the Co many thousands of miles away, this is by far the most concrete CMM NR I have read n I am pleased to say that the targets n time frames matches up to the conclusions drawn tro past discussions, members's updates and particularly Prod05's endless inputs.
KH did not say much all these months but in this NR he has revealed a lot. If he is a cautious
person as I perceive him to be, achieving the targets set forth in this NR must therefore be highly probable.
2011 will indeed be a definitive year for CMM and for our investments. I harbour high hopes and I will hold and sit tight. I am glad to have come so far.
In my mind, if a Co comes to a final stage to fruition (as CMM is) and is short of a few millions, what is there to do except to pump in the few millions n vault the co over the threahold?
I view these PP's as these few millions (in my time zone, we call it the final decisive kick in front of the goal post).
Noting that these moneys are coming from FS(shrewd investor cum insider)n the likes of Haywood, Byron n Union Securities (old Canadian foxes if I may say) I derive certain sense of relief coz I believe these moneys will not come in if they do not see the huge positives n do not believe the CMM story. As what Mike said, what is the material difference if the SP is $2.06 without dilution and $2.00 with dilution?
Wingfong:
For me, the difference between $2.00 and $2.06 is roughly $20K.... but hey, who's counting? LOL
Weary Canuck
If we can't get out of BD, may be we can use that extra cash to finally build the power line to San Juan, reducing cost and empowering the lives of the miners.
I have to admit, i'm not a fan of dilution and would have preferred they did these PPs once we achieved a much higher share price level.
However, that being said. I agree with everyone that it's clear significant PROGRESS which was key has been made. Considering the complexity of the scope and uncertain elements of the Lamaque project, when it comes down to it, we are just a couple months off original schedule based on some late equipment arrivals which is really not bad.
Given that we are at minimum 400-500% undervalued, we can absorb the 8-10% total share dilution from these final private placements (I'm counting all of them) without changing the upside multiple that significantly.
From my experience, it appears to me that we have simply been a little early on this inevitable epic revaluation move. Somewhere between this Tuesday and when we announce cash flow positive status, we will begin the inevitable major revaluation which will likely begin with a burst and not end until we are at levels where .45 will seems like an eternity ago.
A little birdie told me new pres/ceo hopefully by Christmas.
Candidates narrowed down and
depends on when current commitments
can be fulfilled.
Roxy,
Did the birdy mention any of the potential candidates?
No DSL but its down to 1 or 2
Thanks, Roxy. That's great news!
I wonder if they'll touch on this during the conference call.
Roxy,
Wow that would be fantastic. Peter told me it may not be until Q1 or Q2 of 2011 which is quite a bit further along than Christmas so the street would absolutely love to see them resolve the CEO issue earlier. (And with a great pick!)
RE
PS - Keep that birdie close and GPS-chipped so it can tell you more - haha
Per Co's 2011 prod estimates on its web site--San Juan 24K oz Au, Lamaque 80K-90K oz Au (latest NR mentioned 80K-90K estimates intack)
Fiddling around with some figures coming out from Lamaque together with some estimates:-
-@1500tpd(Jan-Mar/11)@ 3.5g/t get us 1500x90x3.5x0.96/31.3=14585oz
(10% increase on tonnage and ore grade for deriving the followings)
-@1650tpd Q2 get us =17648oz
-@1800tpd Q3 get us =21152oz
-@2000tpd Q4 get us =258360z
Total=14585+17648+21152+25836=79221oz + San Juan's 24000oz=103221oz
Cash cost-$550/oz @$1300 gold, co generates an EBITDA of $750/oz mined($1300-$550). Less extra expenses of #300/oz (a typical industry average),Co will generate $450 of margin for every oz mined. 103221ozx$450=$46.4million/yr
At $1500 gold figures are $950/$650/$67.1million/yr
At $1650 gold figures are $1100/$800/$82.5million/yr
Looks good n hope so.
Wingfong, I believe the grades will settle higher into the 4s. The 3.5 current # is due to a larger portion being taken out of the flats. BD and North Slope should increase the overall grade.
Cheers and have a great weekend all!
RE
RE
All the more better if ore grades settle into the 4's or higher,
Cheers
I see that the latest PP has a $90,000 cash payment to Irina Artemova. Is this the same Irina who recently married Fran Scola?
Rejig the figures somewhat:-
-@1500tpd Q1/11 @4.0g/t get us
1500x90x4.0x0.96/31.1=16669oz Au
(10% increase in tonnage milled and 5% increase in ore grades)
-@1650tpd Q2/11 @4.2g/t=19252oz Au
-@1800tpd Q3/11 @4.4g/t=22003oz Au
-@2000tpd Q4/11 @4.6g/t=25559oz Au
Total=16669+19252+22003+25559+ San Juan's 24000 = 107483oz/yr
Cash cost of $550/oz. At $1300 gold, Co generates an EBITDA of $750/oz mined ($1300-$550). Less extra expenses of $300/oz mined (a typical industry average), Co will generate $450 of margin (in my time zone we call it net profit) for every oz mined which is = 107483 x $450 = $48.3 million/yr
-@$1500 gold, figures are $950/$650/$69.8 million/yr
-@$1650 gold, figures are $1100/$$800/$86.0 million/yr
Looks good and hope it pans out well
Based on these highly probable figures, there is no reason why I should capitulate. On the contrary, I will sit and wait for the potential if not inevitable revaluation of the stock. By all accounts, 2011 will certainly be a defining year for CMM. It is my belief it will bring rewards to those who have the patience.
Wingfong - I agree with your numbers. If we take a 10 times industry standard margin market cap target for these numbers, that comes out to a market cap between 483 million and 860 million roughly.
That is at minimum a 300% gain from here but it could easily be justified that we go much higher just to get anywhere close to where peers are valued.
An upward adjustment can be made from our grade, friendly political jurisdiction and total 43-101 gold all superior to peers with equal cash flow and thus giving us a lower multiple.
When we get a new CEO, assuming a good pick, I believe that will also close our current discount gap.
RE
Re
I get your points n am looking forward to the revaluation run. The uptrending price of gold(anticipating much higher than $1650), the world demands for gold, the mine's progres per the Lamarque Flats, BD and NW,the maturing and well run-in of the mill,the miners n equipment particularly the LP equipment, the 6 million oz going to be potentially 10 million oz NI43-101 reserve & resources, the imminent completion of the management line up, the potentials for San Juan etc etc make good sense to me. Hope what we expect do pan out well.
Dennis here:
The Q3,10 financials come out tomorrow night after market close. I've been privileged to try to follow the expertise of Production05, Mike, Real Economics, Mrstormplay and many other knowledgeable bloggers. I'd like to suggest that shortly thereafter a few of the more knowledgeable bloggers give us an opinion on what they feel is important and relevant from the standpoint of us Retail Investors and even from the standpoint of institutional investors. I see this as an adjunct to better understanding the next day's report and "question period".
Lastly, I am concerned about the optics of the $90,000 payment to an Irina Artemova. I intend to do a due diligence enquiry.
2nd Lastly..... could someone please explain to me what is meant by "flow through shares" and if they create a further dilution.
The next two days will be very interesting and I wait with anticipation.
Dennis, New Brunswick
Flow through means exploration costs are passed on to the investors so that deduct them on their tax returns. CMM would give up the deduction. High income investors get an immediate tax benefit which lowers their average cost.
From Dennis
Thank you psl. Without boasting or bragging, in one of the recent PPs, I participated as one of the placees by calling Peter Ball and requesting a position. Peter was able to facilitate me and I purchased 25,000+ shares. The paperwork is somewhat legal and daunting so I don't think anything over 25K is worthwhile. So I got 25,000 shares at .39 + the 1/2 share warrant. (....and I'm just a small retail investor)
What I am leading to and getting back to psl's answer to my question as to what flow thru shares are, it has been on the back of my mind that CMM should (if retail investors want to be considered for larger positions) have a pool of names, that could be approached inorder to take advantage of ways of reducing our average cost of shares when they are going out to private placements in order to raise capital. In essence, I was able to advantage share in the dilution. It's not as bitter a pill to swallow.
Markets are closed..... I'm waiting, waiting, waiting
Dennis, New Brunswick
Does seem to be taking a while to release the Q3's...
Can't believe I'm STILL waiting around at work for them to release the financials...unbelievable...should I expect anything less from Century though?
Financials are already filed with Sedar which means they will be posted on Sedar tomorrow at 8am. The NR, along with the updated presentation etc will be out at 8pm tonite (Ontario time). He said there is about 7-8 pages of info, pretty comprehensive so sounds good to me. My biggest worry was that they would miss the dead line and get an awful black eye again however Peter reassured me that this would not be the case. Hopefully, a sign of things to come!
Glorieux
I think I'll just kill myself if they miss another deadline relating to the financials...
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