The winners of the Poll to the right are the “Not a Chance” group with honourable mention to “Sceptical”
What was telling by the price action today is that the market expects Century to miss its forecasts as they have done nothing but over-promise and under-deliver for years. They always have excuses, but the common denominator is Adrian McNutt, now that Peggy has gone and Hulley has retired. It is also an indicator of just how undervalued the company is – based on its assets; otherwise if it were trading anywhere near fair value, it would have been punished for this latest miss.
How bad was the latest miss? Well on November 15 which was already half way through Q4, the company lowered its guidance for Lamaque to 18,000 to 20,000 for 2010. Considering that the total production to the end of Q3 was 8,401 ozs, Q4 production needed to produce 10,000 oz to be near the low end of the range. What we got was 6,018 oz – a miss of some 40%. How can you miss by 40% when your forecast only has 6 weeks to go?
When someone asked Hulley on the CC why should investors believe the new revised forecasts, he seemed almost offended by the question and assured listeners that Century had a high degree of confidence in meeting its lowered guidance. I don’t blame Hulley – he has to rely on his operations manager Mr. McNutt.
2011 guidance for Lamaque has been lowered from 80k to 90k ounces to 70k to 75k ounces for a total, including San Juan, of 90k to 100k ozs. The key going forward will be the degree of confidence the market has in the new CEO, Daniel Major. I’ll be listening with interest to what he has to say tomorrow and how much he defers to McNutt?
The company really needs to break its 2011 forecast down to quarterly forecasts and meet or beat each of those quarterly forecasts. This time last year the 2010 forecast for Lamaque was 40,000 to 45,000 ozs. Actual production of 14,419 demonstrated a huge over-promise and under-deliver.
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