Finskiy's Planned Takeover

The Planned Takeover of Century Mining by Finskiy and Associates

Chronology of Events

Date	Action – Century Mining
15-Sep-09	Century announces a C$20 million equity financing with Kirkland ( Max Finskiy) and Gravity (Fran Scola)
23-Nov-09	Century shareholders approve an amended $21 million financing with Finskiy and Associates (Scola), hereinafter referred to as “Finskiy”.
30-Dec-09	Disclosure:  Finskiy holds 121,122,759 shares representing 36.6% of outstanding shares and including warrants, hold 170,497,759 shares representing 44.8% of outstanding shares if all warrants are exercised
13-Jan-10	Three members of Century’s Board of Directors(BOD) resign (Burns, Ambrose and Campoy) and two new directors are named – Fran Scola and W. Lamarque, representing Finskiy.  This leaves M. Kent, President and CEO, and W. Sheriden, Corporate Secretary and only Canadian on the BOD.
14-Jan-10	A Shareholder’s Agreement is filed on Sedar.  Of note are the following conditions of agreement: Until such time that all of Finskiy’s warrants are exercised, if the BOD determines that the company needs additional working capital, the BOD can provide a “Funding Notice” for Finskiy to exercise some or all of outstanding warrants, provided they are “in the money”, otherwise a PP will be issued to Finskiy to raise capital. The BOD shall comprise 5 directors:  2 incumbent directors, 2 Finskiy-nominated and a Chairman that is mutually selected by both parties.  At the next AGM the BOD is to be increased to 7 directors with one of these being a Finskiy director and the other an incumbent director.  Finskiy’s nominee is Keith Hulley and Century’s incumbent director is R. Campoy.  In the interim period, both are “advisors” to the board.
19-May-10	Management Information Circular for AGM is issued.  Proposed directors are the current BOD plus Campoy and Hulley.  Scola, Lamarque, Hulley and Campoy are deemed to be “Independent” directors.  M. Kent is to continue as Chairman of the Board because of her knowledge and experience.  Comment:  This is a violation of the Shareholders Agreement to have 7 directors and a new Chairman and ensures that Finskiy maintains a 50% representation on the BOD.
11-Jun-10	Century AGM – all proposed Directors are elected.  The BOD now has 4 American directors, 1 UK director and 1 Canadian director.  Comment: The constitution of the BOD violates the Canada Business Corporations Act where at least 25% of the BOD must be Canadian residents.
11-Jun-10	All 6 Directors are awarded 250,000 options each.
28-Jun-10	Century announces the resignation of President and CEO, Margaret Kent, effectively immediately.  Director K. Hulley is named as interim CEO while a global executive search is undertaken for a replacement.  It is later disclosed that M. Kent is to receive a $1 million payment as settlement for her “resignation”.  Comment:  Finskiy appointed directors now constitute 60% of the 5-member BOD and are in control.
29-Jul-10	Interim CEO and Director, K. Hulley is awarded 300,000 options, presumably as recognition of increased responsibilities.  Director R. Campoy is awarded 250,000 options for undisclosed services.
5-Jul-10  to 9-Oct-10	Finskiy exercises 22,933,333 warrants to provide $6,880,000 under the provisions of the Shareholders Agreement to provide working capital, leaving 26,441,667 warrants available for exercise.
16-Sep-10	Century announces closing of $5 million PP
24-Sep-10	Century announces closing of $1.2 million PP
19-Oct-10	Deutshe Bank provides $4 million in funding
9-Nov-10	Century announces $1.5 million PP and a $2.5 million Flowthrough PP
10-Nov-10	Century announces closing of $1.5 million PP.  Comment: The PP had one placee and although the identity was not disclosed, the $90,000 finder’s fee was paid to Fran Scola’s new Russian bride.
12-Nov-10	Century announces $5 million PP
16-Nov-10	K. Hulley discloses in a conference call that Century has no plans to raise additional funds.  He also says that the global executive search for a new CEO is continuing.
1-Dec-10	Century announces closing of $2.5 million PP
23-Dec-10	Century announces closing of $4 million PP ($1 million less than planned).  In summary $18,780,000 in funding  is raised between 16-Sep-10 and 23-Dec-10
4-Jan-11	Century announces the appointment of a new President, CEO and Director, Daniel Major.  Keith Hulley resigns from the BOD.  Major’s previous position was CEO and Director of Ecometals.  Other members of the BOD of Ecometals include Fran Scola, William Lamarque and Keith Hulley – all Finskiy appointees to Century’s BOD.  Comment: The Century BOD continues to be dominated by Finskiy appointees and is still in violation of the Canadian Business Corporations Act.
2-Feb-11	Finskiy disposes of 25,500,000 of his remaining 26,441,667 warrants in a Sedar filing transaction denoted as “97- Other”.  Comment:  This presumably removes the warrants that are available to be exercised on demand via a “Funding Notice” by the BOD for working capital – a possible violation of the Shareholders Agreement dated January 14, 2010.   Finskiy also disposes of 25,000,000 shares in another Sedar filing transaction denoted as “97 – Other”.  Comment:  It is unclear whether these shares and the exercised warrants above could be counted as “minority shares” in any future merger vote.
3-Feb-11	Century issues a news release on 2010 production and 2011 guidance.  Although Q4 production was below expectations, there is no suggestion that additional funds are required.
4-Feb-11	Century’s new CEO, Daniel Major, hosts a conference call.  Comments: He comes across as very competent and professional and extremely upbeat about Century’s operations and production forecasts.  He would not respond to any questions about finances because of being “in a blackout period”.
8-Feb-11	Century Mining and White Tiger Gold (WTG) enter into an agreement whereby WTG agrees to provide a bridge loan to Century for $800,000 (disclosed in a March 11 news release)
8-Feb-11	Fran Scola disposes of 4,900,000 of his 7,142,857 shares in a Sedar filing transaction denoted as “97 – Other”. Comment: See comment above for 2-Feb-11.
9-Feb-11	Century experiences failure of its new cone crusher (disclosed in a March 8 news release).  The crusher is inoperable for 9 days. Comment:  The crusher failure occurred after Century and WTG agree to a bridge loan – calling into question the need for any funding.  The mill throughput in January was 944 tpd which should have generated net revenues (after 667 oz paid to Deutshe Bank) of about $3 million (assuming 3.2 g/t and $1400 gold).  San Juan is also generating net positive cash flow in excess of $1million/month.
18-Feb-11	Fran Scola disposes of 1,250,000 shares in a Sedar filing transaction as “97 – Other”.  Total shares remaining = 992,857.  Comment: See comment above for 2-Feb-11.
22-Feb-11	Century files with Sedar a Notice of a Special Meeting of Shareholders to be held on April 12.  An identical notice is filed by White Tiger Gold.  Comment:  This leads to speculation of a takeover bid or merger with WTG.
8-Mar-11	Century issues an extremely pessimistic news release that includes the news of the cone crusher failure on February 9, and it portrays the company as being in a near desperate financial condition.  Comment:  The news release was issued with the knowledge that an announcement of a “Business Combination” with WTG was imminent and also such a news release would cause a severe negative impact on the stock price.  The share price had risen to close at 76 cents on March 6 and on March 8 it closed at 58 cents on extremely heavy volume of over 12 million shares.  Follow-through selling on March 9 dropped the closing price further to 51 cents.
14-Mar-11	Century and WTG announce a Proposed Business Combination that already has the unanimous consent of both BOD’S and endorsement of their respective third party financial advisors.  Among the onerous conditions is that Century will be obligated to pay a termination payment of $13,500,000 to White Tiger in certain circumstances, including if Deutsche Bank does not approve of the Business Combination by March 25.  Comment:  How can Century’s BOD agree to such a provision – If DB does not agree,  Century pays WTG $13.5 million.  $13.5 million is an obscene amount to pay for a termination fee.
15-Mar-11	The offer of 0.4 Century shares for 1 WTG share has an implied value of $1.80/share based on the previous day’s closing price of $4.50 for WTG shares.  Century’s stock price opens at 77 cents, briefly peaks at 83 cents before beginning its descent to a closing price of 67 cents as shareholders realize that WTG shares are not worth anything like $4.50/share.  3 days later Century shares close at 52 cents. The CEO’s of Century and WTG, D. Major and G. Cowley host a conference call and are confronted by a polite but hostile group of Century shareholders who consider the offer of 0.4 shares for 1 WTG to be extremely unreasonable.  It is an exercise in damage control.  D. Major states in response to a question that WTG approached Century at the beginning of March.  Comment:  That response is inconsistent with the actual facts stated above.