The conference call replay is now up on the Century website at http://www.centurymining.com/s/AudioVideo.asp and I have listened to it twice.
I was very impressed with Daniel Major as he comes across as someone who knows what he is talking about and I was pleased that he did not refer any questions to the bumbling Adrian McNutt. He is well informed about the operations after one month full-time on the job although he revealed that he has been on the Lamaque Operating Committee for the past year.
He disclosed that production increased every month in Q4 with production from the Lamaque Flats (LF)only at 480 tpd in Oct, increasing to 730 in Dec and 770 in January. The disclosure of only 480 tpd in October with little contribution presumably from Bedard Dyke (BD) really brings into question how McNutt could forecast production of 10,000 to 12,000 ozs in Q4.
December production was 1100 tpd consisting of 730 from LF and 370 from BD.
Although the stated January production from LF was 770, DM said the ultimate target is 1,000 tpd from LF and "we are very close to that as we speak". The balance will come from BD and the North Wall where there is higher grade ore. They are already finding higher grades from the second level of the BD.
Production from BD has been constrained to date because they could only process development ore while there was only one access route to the area. As of yesterday a raise has been established which becomes the second access route which will allow stope mining in addition to processing development ore. The North Wall will have the same requirement.
The forecast tonnage for 2011 is:
1200 tpd for Jan & Feb
1500 tpd for Mar & Apr
2,000 tpd for May - Dec.
At an average grade of 3.75 g/t, this translates into about 74,000 oz which is within the forecast of 70,000 - 75,000 oz.
Upgrades on the mill are scheduled for April which will increase the capacity from 1500 tpd to 2000 tpd. At that time production from North Wall will be added to make the jump from 1500 tpd to 2000 tpd.
I really liked the no hesitation responses to all of the questions. This guy comes across are very competent who knows what the issues are and how to achieve results.
To all of the long suffering shareholders I would say to remain patient for a little while longer as there is light at the end of the tunnel.
14 comments:
Great post carib:)
Yes Carib great post. I came away feeling much more positive about how things are shaping up.
Very nice post Carib. I hope to post a brief comment at some point down the road, after I have listened to the conference call.
Finskiy recently did something with 25,500,000 warrants (per SEDI), but I can`t figure out what he did.
The warrants do not expire until late June of this year. Thus, if he is doing something with them now (this early), the logical thinking is he is exercising them to provide cash to Century. That many warrants cashed in would provide Century with $7.65M in cash.
However, his SEDI transactions are confusing. He did reduce his warrants the 25.5M (it now shows him having only 941K remaining. It just not clear why he coded the 25.5M transaction as ``Other``, where all his previous warrant reduction transactions were coded as ``Exercise of warrants``.
Under Common Shares, he deducted 25.0 common shares to his total, instead of adding the 25.5 to the total (transaction also coded as ``Other``, instead of ``Exercise of warrants``). It doesn`t make sense. An exercise of Century warrants represents a purchase of common shares.
He did something similar last time also, when he exercised 1.9M warrants and then reduced in common shares by 1.9M (instead of adding 1.9M to his common share total). He recently reversed that 1.9M reduction by posting 1.9M increase. That only reserves the original entry though. He is still 1.9M short in the common total. He needs to do another 1.9M entry to reflect the original warrant exercise.
We will have to wait and see if he also reverses this 25.0M common share reduction entry.
What makes it extra confusing this time around is that both the 25.5M (warrant side entry) and the 25.0M (common side entry) transactions are coded as ``Other`` instead of the customary ``Exercise of warrants``. I don`t remember if the warrants are transferable. It would very unlikely that he brought in another partner and he transfered 25.5M warrants to the new partner along with exactly 25.0M million of his existing common shares. I guess anything is possible though, but that is very unlikely. It`s more likely that Finskiy made an error when posting his common shares (subtracted instead of adding). Let`s see if he makes a correction in the coming days.
I think using the code ``Other`` hints that this might be something other than a straight exercise of warrants.
There seems to be a corp pres. for Feb.
Carib,
I agree and I was also impressed by Mr. Major's frank and realistic approach. He clearly has a strong grasp of where we have been, where we are, and where we need to go.
It is apparent to me that dramatic improvement is happening on a monthly basis which is the key here. We have to remember this is a complicated underground project and not an open pit so it takes fine tuning.
I feel very confident our value will be realized in due time and and happy to wait here as always as things progress. I've looked everywhere and another play that is equally undervalued vs peers where the turnaround is happening right now simply does not exist.
Cheers,
RE
real_economics, if one has confidence in the numbers projected by our new CEO, then we are just 3 months away from being a 100,000 oz/yr producer. I certainly have more confidence in him, based on a single CC, than I ever had in McNutt.
DM is forecasting 2,000 tpd at a grade of 3.75 g/tonne in May this year which will result in an annual production rate of 82,000 oz/yr. Add in a production rate of 20,000 oz/yr from San Juan, and we become a 100,000 oz/yr producer in just 3 months from now. At 1500 tpd from Lamaque next month we are a 82,000 oz/yr producer.
Can anyone name a single company that is producing 100,000 oz/yr and can sustain that production for at least 10 years that has a market cap of less than $500 million? There are not many below a billion dollar market cap.
I have no doubt that once we can demonstrate that we are a 100,000 oz/yr producer, our market cap will exceed $500 million which puts us well over the elusive $1.00 share price.
It's not much longer now to wait to reap the rewards and the risk of buying or adding to positions at this share price is very limited.
over the past few months, we had been circling around the markers of commercial production, cash-flow positive and becoming a 100000oz/yr producer. It looks like we are going to see them crossed-over near term. I for one, am glad to have loaded to the gill n have followed the co thus far. Agree the sp will vault over the illussive $1.00 in due course in this defining year of 2011. Incidentally, heard the second caller in the CC mentioning something about some party having certain design on CMM prompting the caller to suggest CMM may need to watch its back. Is there any merit in this? Hope someone can shed somelight for my file.
WF,
Yes, that 2nd call was a ridiculous comment. They were referring to Integra Gold, once Kalahari Resources. Integra has some decent drill results but zero infrastructure and still not much in regards to actual 43-101 proven resources. The concept that they would "take over" Century is more than ridiculous. If anything, they would like to position themselves to be an attractive future target for Century.
RE
RE
tks for the comment
No problem WF. That call really blew my mind. It almost sounded to me like someone trying to market Integra to CMM investors listening to the call.
Carib - going back to your question:
Can anyone name a single company that is producing 100,000 oz/yr and can sustain that production for at least 10 years that has a market cap of less than $500 million? There are not many below a billion dollar market cap.
My answer is no. There are some that are close but they are in Africa with high political risk.
There were also some that DID fit this criteria in 08 and 09, but they were all promptly revalued above 500 mil market cap.
So essentially, when we complete our ramp up eventually, I agree there is no way we don't go over a dollar.
RE
As for Integra taking Century...wasn't Kalahari a Richard Hughes company? Where would they get the money for a takeover, if so? RH leaves no money in his companies, as far as I can tell. They seem to exist for the purpose of buying him new furniture.
Over a million shares traded on the OTC today...looks like the word is getting out.
Since the appointment of the new ceo, daily volumn todate has consistently clocked +-1million shares, way above the volume traded at +-100k shares some nine months ago.Believe CMM is begining to attract more and more investors big and small and yes it does look like word is getting out and CMM is becoming less of an unknown hole in the ground. It is said that junior gold miners with market caps exceeding $300million tend to draw a broader audience of institutional investors . If it is true, then it is very likely we are looking at such a sweet spot near term.
Real_Economics - Timmins and La Mancha are two comparable companies to century on the level of bargain hunting, but you're right about there not being many solid producers under that market cap in safe political and financial jurisdictions.
Hopefully gold can breeze through the $1380 levels, it seems time for gold to start retesting those resistance levels. I still think there's plenty of room for gold to continue on with the US in the situation they're in, liquidity is just driving the markets up from those QE's, 100% there is going to be a QE3, just depends on the strength of the package. Also, the US seems to be on the path of devaluing their currency to be more competitive on the export front, it'll help them reach their GDP growth targets. Gold will rise from a weak USD.
Lot of decent signs pointing to $1500, maybe even $1600/ounce gold this year. I'm just concerned past 2012 for the POG. POG should be stable up until then from economies battling inflation, stagflation (UK maybe?) and rising debts...only question is, what will the POG be after interest rates rise and growth becomes semi sustainable? Century might have to really watch their costs, hopefully we're efficiently running by then.
Either way, conference call was pretty decent, he handled the questions well, but Century has been such a roller coaster that you really won't know until they release the numbers.
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