Etruscan’s Special Meeting of the Shareholders notice was filed and was posted on SEDAR on Sept. 15’09 by Etruscan’s lawyers. It means Etruscan’s financing deal with Endeavour was in the works prior to Century’s announcement on Sept 15’09.
Finskiy’s people currently occupy 2 seats on Etruscan’s Board of Directors. In all likelihood Etruscan’s BoD was aware of the Endeavour negotiations. If the Etruscan’s BoD was aware then one would think that Finskiy’s 2 BoD reps would be aware, thus Finskiy would likely be aware also.
If Finskiy was aware of Endeavour’s high probability of financing Etruscan then it means that he still entered into the Century deal even with this knowledge. As a result, it would mean that he knew that this was a strong possibility. If such is the case then I don’t see how Etruscan going in a different direction is a deal breaker for him and Century.
Quite frankly, I even figured that it was highly possible that Etruscan could seek financing elsewhere by the time our deal closes shortly after Oct. 27th (if they weren’t interested in a business combination). Although, I had hoped that Etruscan’s management would see the benefits on a business combination between Century and Etruscan that would have equated to 300,000 ounces of annual production over the next few years, US$425 – 450 cash op cost per oz, 9 million (plus) 43-101 ounces in the ground, all operations located in safe countries, greater asset diversity (where difficulties with 1 asset cannot fully collapse a company) and excellent exploration properties in some of the most strategic locations in the world. This type of company typically trades for C$1.5 billion to C$2.0 billion in this US$1,000 gold price environment (once Etruscan’s hedges were disposed of). This would have been worth $3.00 to $4.00 per share for both Century and Etruscan shareholders, as a combined company. Some companies even trade higher, such as Red Back Mining, with nearly C$3.0 billion in market cap (but with more expected production).
I think this is the vision Finskiy, Scola and Century’s management has for Century. I think it now pushes out the timelines with Etruscan going in a different direction, but I don’t think it changes the long-term growth strategy. Century still has the core assets to be used as foundation in moving towards this.
If Finskiy had knowledge beforehand of a possible Endeavour financing to Etruscan (which it appears that might have been a strong possibility) then he entered into the Century deal knowing that it could come to fruition.
Of course it’s impossible to know what direction both Finskiy and Scola will go, but if this Etruscan financing doesn’t come as a surprise to me then it shouldn’t have been a surprise to them either.
I have absolutely no idea what they are thinking right now about the Century financing. I suppose anything is possible. It would just be odd if Etruscan going in a different direction turns out to be a deal breaker for the Century deal, given that it was a highly probable outcome when Finskiy and Scola announced the deal with Century. Finskiy and Scola will own 44% of Century with conversion of the warrants. They would easily get back to 50.1% with a future financing or by backing shares on the open market – getting back to 50.1% is not an issue, plus they will still likely have majority representation on the BoD.
Again, I have absolutely no idea what direction Finskiy and Scola will go. Although, I do hope they stay with the plan of using Century as their preferred vehicle for gold investments. Based on the NR, it doesn’t sound like that was an overnight decision. They said they spent the last few months evaluating numerous opportunities before selecting Lamaque and Century as the core upon which they will base their portfolio. Is that core still intact today? The answer is yes.
From the Sept. 15’09 NR:
“With the Private Placement and the Etruscan Transaction, Finskiy, Scola, Gravity and Kirkland have demonstrated a commitment to make Century their preferred vehicle for gold investments, support the successful expansion of the Company's business, and grow Century into a significant gold producer.”
“Maxim Finskiy and Fran Scola, in a joint comment, said, ‘Our objective is to build a sizable gold mining company with initial operations and investments in Africa and the Americas. Over the last few months, we have evaluated numerous opportunities, and we are pleased that we have selected the Century management team and the Lamaque project as the core upon which we will base our portfolio. Our plans are to support Century, both financially and technically, in order to enhance the value of our share position.’"
Thursday, September 24, 2009
Wednesday, September 23, 2009
Century Mining to forego acquisition of Etruscan shares
I guess we don't get the C$11M in extra cash (we still get the original C$46.5M, plus the C$15M contingency warrants), but at least we will now issue 62M less Century shares. Hopefully the deal closes alright. Our new investors can still use Century as the same type of growth vehicle. There is huge share price appreciation still to be realized just from Century's assets alone (Lammaqe and San Juan). Also, for down the road, there are plenty of other emerging gold producing companies out there to merge with. Etruscan was not the only one. As such, it shouldn't change the long-term growth vision of the new shareholders. The gold price is expected to be strong for a long time. Century's share price has been suppressed for ages now. Unlocking it will be very rewarding for the new investors.
Here is Century's NR:
3:43 PM ET, September 23, 2009
BLAINE, WA, Sep. 23, 2009 (Canada NewsWire via COMTEX) -- - $20 million private placement proceeding as planned -
Century Mining Corporation (CMM: TSX-V) announced today that it will no longer proceed with the acquisition from Kirkland Intertrade Corp. all of the outstanding shares of 2190776 Ontario Inc. whose sole assets are 26,315,789 common shares and 6,890,741 share purchase warrants of Etruscan Resources Inc.
Century also confirmed today that the Company will proceed as planned with the $20 million private placement to Kirkland Intertrade Corp. (Kirkland") and Gravity Ltd. ("Gravity") announced on September 15. At the close of this transaction, Kirkland and Gravity will own 35.0% of the outstanding shares (44.1% after exercise of warrants) of Century. Regarding shareholder approval of the transaction, Century will hold a special meeting of shareholders on October 27, 2009 for the purpose of, among other things, approving the acquisition by Kirkland and Gravity of more than 20% of the outstanding shares of Century. As previously announced, Kirkland and Gravity will also provide Century with a $4 million bridge loan facility to address the Company's immediate working capital needs. The bridge loan is in final documentation and is expected to close by October 2, 2009.
On September 15, 2009, Century announced that it would issue 44,000,000 common shares of Century as consideration for the above-mentioned shares of Etruscan, and as a result Century would hold 19.9% of Etruscan assuming exercise of these warrants. Century also announced on the same day that it would acquire from Kirkland a US$3 million promissory note of Etruscan, convertible under certain circumstances into common shares of Etruscan, together with certain share purchase warrants of Etruscan in exchange for an additional 16,843,850 common shares of Century.
In consultation with Kirkland, it was decided that as a result of the private placement announced by Etruscan today, Century's proposed acquisition of the Etruscan shares would amount to a significantly lower percentage of the total outstanding Etruscan shares than originally intended by Century. The Company understands that subsequently Kirkland has agreed to sell its interest in Etruscan.
Margaret Kent, President and CEO of Century commented, "We are very disappointed that Etruscan has decided to pursue other alternatives in the financing of its operations. Century's management team has extensive experience in the banking community and the restructuring of debt. We anticipated a possible business combination with Etruscan that we believe would have added value for the shareholders of Etruscan. Century is now working closely with our new investors to close the proposed equity deal, and keep the startup of gold mining operations at Lamaque on schedule."
Here is Century's NR:
3:43 PM ET, September 23, 2009
BLAINE, WA, Sep. 23, 2009 (Canada NewsWire via COMTEX) -- - $20 million private placement proceeding as planned -
Century Mining Corporation (CMM: TSX-V) announced today that it will no longer proceed with the acquisition from Kirkland Intertrade Corp. all of the outstanding shares of 2190776 Ontario Inc. whose sole assets are 26,315,789 common shares and 6,890,741 share purchase warrants of Etruscan Resources Inc.
Century also confirmed today that the Company will proceed as planned with the $20 million private placement to Kirkland Intertrade Corp. (Kirkland") and Gravity Ltd. ("Gravity") announced on September 15. At the close of this transaction, Kirkland and Gravity will own 35.0% of the outstanding shares (44.1% after exercise of warrants) of Century. Regarding shareholder approval of the transaction, Century will hold a special meeting of shareholders on October 27, 2009 for the purpose of, among other things, approving the acquisition by Kirkland and Gravity of more than 20% of the outstanding shares of Century. As previously announced, Kirkland and Gravity will also provide Century with a $4 million bridge loan facility to address the Company's immediate working capital needs. The bridge loan is in final documentation and is expected to close by October 2, 2009.
On September 15, 2009, Century announced that it would issue 44,000,000 common shares of Century as consideration for the above-mentioned shares of Etruscan, and as a result Century would hold 19.9% of Etruscan assuming exercise of these warrants. Century also announced on the same day that it would acquire from Kirkland a US$3 million promissory note of Etruscan, convertible under certain circumstances into common shares of Etruscan, together with certain share purchase warrants of Etruscan in exchange for an additional 16,843,850 common shares of Century.
In consultation with Kirkland, it was decided that as a result of the private placement announced by Etruscan today, Century's proposed acquisition of the Etruscan shares would amount to a significantly lower percentage of the total outstanding Etruscan shares than originally intended by Century. The Company understands that subsequently Kirkland has agreed to sell its interest in Etruscan.
Margaret Kent, President and CEO of Century commented, "We are very disappointed that Etruscan has decided to pursue other alternatives in the financing of its operations. Century's management team has extensive experience in the banking community and the restructuring of debt. We anticipated a possible business combination with Etruscan that we believe would have added value for the shareholders of Etruscan. Century is now working closely with our new investors to close the proposed equity deal, and keep the startup of gold mining operations at Lamaque on schedule."
I wonder if Century will get at least C$11M from today's Etruscan deal
At least C$8M from the sale of the 26.3M outstanding shares and from sale of warrants. Also, at least C$3M from settlement of the US$3 Convertible Promissory Note and associated warrants. If Etruscan's deal closes first then Finskiy may still give this cash to Century in exchange for his announced allotment of shares in Century. The today's announced $.30 price is pretty much the same price that Century was paying for those Etruscan shares so that is not a factor.
If Finskiy continues with Century's deal then it means that Century gets C$57.5M in cash at closing, instead of C$46.5M. Plus, there is also the C$15M when they choose to convert the warrants. That means we could have a cash pool of C$72.5M.
If Finskiy continues with Century's deal then it means that Century gets C$57.5M in cash at closing, instead of C$46.5M. Plus, there is also the C$15M when they choose to convert the warrants. That means we could have a cash pool of C$72.5M.
Tuesday, September 22, 2009
Etruscan - Special Meeting of Shareholders scheduled for Oct. 22'09
A note is posted on Sedar, under Etruscan. It was posted on Sept. 15'09 - same day as Century's financing announcement. It doesn't provide details, but states that the meeting to be conducted is categorized as "Special".
Century needs Etruscan's shareholders to waive the application of Etruscan's shareholder rights plan in order for Century to purchase the US$3 million promissory note of Etruscan (convertible under certain circumstances into common shares of Etruscan). Of course, this is completely independent of Century's financing efforts and Century's purchase of the 26.3M Etruscan outstanding shares. This does not impact the deal one way or the other.
It doesn't say what items Etruscan will be discussing at the Special Meeting, but hopefully Century's item will make it onto the agenda.
This was from Century's NR on Sept. 15'09:
"Etruscan Transaction"
"Concurrently with the closing of the Private Placement, Century will acquire from Kirkland all of the outstanding shares of 2190776 Ontario Inc. ("219") whose sole assets are 26,315,789 common shares and 6,890,741 share purchase warrants of Etruscan, in exchange for 44,000,000 common shares of Century. As a result, Century will hold 19.9% of Etruscan assuming exercise of these warrants. In addition, following approval by Etruscan shareholders of the waiver of the application of Etruscan's shareholder rights plan, Century will acquire from Kirkland a US$3 million promissory note of Etruscan, convertible under certain circumstances into common shares of Etruscan, together with certain share purchase warrants of Etruscan in exchange for 16,843,850 common shares of Century (collectively, the "Etruscan Transaction")."
Century needs Etruscan's shareholders to waive the application of Etruscan's shareholder rights plan in order for Century to purchase the US$3 million promissory note of Etruscan (convertible under certain circumstances into common shares of Etruscan). Of course, this is completely independent of Century's financing efforts and Century's purchase of the 26.3M Etruscan outstanding shares. This does not impact the deal one way or the other.
It doesn't say what items Etruscan will be discussing at the Special Meeting, but hopefully Century's item will make it onto the agenda.
This was from Century's NR on Sept. 15'09:
"Etruscan Transaction"
"Concurrently with the closing of the Private Placement, Century will acquire from Kirkland all of the outstanding shares of 2190776 Ontario Inc. ("219") whose sole assets are 26,315,789 common shares and 6,890,741 share purchase warrants of Etruscan, in exchange for 44,000,000 common shares of Century. As a result, Century will hold 19.9% of Etruscan assuming exercise of these warrants. In addition, following approval by Etruscan shareholders of the waiver of the application of Etruscan's shareholder rights plan, Century will acquire from Kirkland a US$3 million promissory note of Etruscan, convertible under certain circumstances into common shares of Etruscan, together with certain share purchase warrants of Etruscan in exchange for 16,843,850 common shares of Century (collectively, the "Etruscan Transaction")."
Century Mining Closes Flow-Through Share Financing
BLAINE, WA, Sept. 22 /CNW/ - Century Mining Corporation (CMM: TSX-V) announced today that it has closed a non-brokered private placement of 7,857,143 flow-through shares at a subscription price of C$0.14 per flow-through share for gross proceeds of C$1.1 million. This financing was originally announced on September 2, 2009. Century paid a finder's fee of 6% cash, and broker warrants equal to 6% of the number of flow-through shares purchased by investors introduced to the Company. All of the securities issued under this private placement are subject to a four-month hold period.
The proceeds from this offering will be used for the ongoing Vulcan computer modeling project, which is currently defining additional resources at Lamaque from the 2,000 to 3,000 foot levels, as well as further geological studies at Lamaque and the surrounding properties.
The proceeds from this offering will be used for the ongoing Vulcan computer modeling project, which is currently defining additional resources at Lamaque from the 2,000 to 3,000 foot levels, as well as further geological studies at Lamaque and the surrounding properties.
Thursday, September 17, 2009
The Special Meeting of Security Holders set for Oct. 27'09
The meeting is set for 42 days after the announcement. The date is within the 45 day close off timeframe. Hopefully 3 days is enough to close it off once shareholders approve the deal in about 40 days from now. If all the documents are in order then it should be. At least they have now published a firm date. Everything has been negotiated already and disclosed to the public, including names of the high profile investors (at least on the equity front). No haggling on jurisdiction type issues will be required, like the recent Far East financing situation. Also, no uncertainty about whether the investor will be forced to suddenly freeze investments due to being in the middle of Supreme Court (type) decisions, in the height of the greatest financial/economic meltdown in 80 years, like the Fortis situation. Everyone involved in this venture seems to want to immediately capitalize in the once in a lifetime opportunity the high gold price has presented to us, to create significant value via powerful public market forces. This is what is seems like anyway. If such is truly the case then the next 45 days should go smoothly.
The meeting info is on Sedar:
Meeting Location (if available): Vancouver Club 915 W. Hastings St. Vancouver BC
The meeting info is on Sedar:
Meeting Location (if available): Vancouver Club 915 W. Hastings St. Vancouver BC
C$3M - $5M could be left over for San Juan Expansion
(STATED IN $000s)
1) Available Cash from Finskiy, Scola and Prepaid Gold Sales financings
Equity = C$19,600 (C$20M gross, we pay only 2% fees)
Prepaid Gold Sales = C$26,620 (US$25M, we pay no fees)
Available Cash = C$46,220
2) Expenditures in first 12 months to restart Lamaque
The data was taken from the report prepared for Fortis. Some costs may require changes, but they should still be in the ballpark.
U/g development - US$11,584
U/g utilities - 299
U/g equipment (see note below) – 5,118
Mill and processing – 1,291
Surface equipment - 786
Surface infrastructure – 1,030
Sustaining capital - 128
Sub-total = US$20,236 (C$21,547)
Warehouse inventory – 1,878 (C$2,000)
Outstanding Quebec payables – 9,392 (C$10,000, there is currently C$16.6M in company wide payables on the books including San Juan, but there is also C$6.1M receivables, thus a net eventual payout of C$10 is probably still reasonable)
G&A – 2,818 (C$3,000)
Environmental bond – 1,127 (C$1,200)
Lamaque resource upgrade – 939 (C$1,000)
Expenditures to restart Lamaque = US$36,390 (C$38,747)
Notes:
These expenditures no longer apply:
US$3,035 Contingency (I’ve built in contingency elsewhere below)
C$5,000 Escrow Overrun Account
C$9,000 IQ repayment (IQ will still be with us)
C$2,500 Bridge Repayment (the new $4M bridge loan is just an advance of the C$46.2M financing, and doesn’t involve other investors that need to be repaid)
3) Possible Surplus Cash
Available Cash = C$46,220
Expenditures to restart Lamaque - C$38,747
Possible leased equipment – (C$5,000) - they should be able to purchase most of the equipment with capital leases, which pushes out the payments over several years
Contingency and Working Capital – C$5,000
To clean up remaining small items on the Balance Sheet – C$2,000
Total Cash requirements in the first 12 months = C$40,747
Possible surplus cash to expand San Juan = C$5,473 (C$46,220 – C$40,747)
If that doesn’t work out then there is also the C$15M contingency that can be accessed at any time (by either exercising the warrants or doing private placements, depending of if the share price is above $.30 or below).
1) Available Cash from Finskiy, Scola and Prepaid Gold Sales financings
Equity = C$19,600 (C$20M gross, we pay only 2% fees)
Prepaid Gold Sales = C$26,620 (US$25M, we pay no fees)
Available Cash = C$46,220
2) Expenditures in first 12 months to restart Lamaque
The data was taken from the report prepared for Fortis. Some costs may require changes, but they should still be in the ballpark.
U/g development - US$11,584
U/g utilities - 299
U/g equipment (see note below) – 5,118
Mill and processing – 1,291
Surface equipment - 786
Surface infrastructure – 1,030
Sustaining capital - 128
Sub-total = US$20,236 (C$21,547)
Warehouse inventory – 1,878 (C$2,000)
Outstanding Quebec payables – 9,392 (C$10,000, there is currently C$16.6M in company wide payables on the books including San Juan, but there is also C$6.1M receivables, thus a net eventual payout of C$10 is probably still reasonable)
G&A – 2,818 (C$3,000)
Environmental bond – 1,127 (C$1,200)
Lamaque resource upgrade – 939 (C$1,000)
Expenditures to restart Lamaque = US$36,390 (C$38,747)
Notes:
These expenditures no longer apply:
US$3,035 Contingency (I’ve built in contingency elsewhere below)
C$5,000 Escrow Overrun Account
C$9,000 IQ repayment (IQ will still be with us)
C$2,500 Bridge Repayment (the new $4M bridge loan is just an advance of the C$46.2M financing, and doesn’t involve other investors that need to be repaid)
3) Possible Surplus Cash
Available Cash = C$46,220
Expenditures to restart Lamaque - C$38,747
Possible leased equipment – (C$5,000) - they should be able to purchase most of the equipment with capital leases, which pushes out the payments over several years
Contingency and Working Capital – C$5,000
To clean up remaining small items on the Balance Sheet – C$2,000
Total Cash requirements in the first 12 months = C$40,747
Possible surplus cash to expand San Juan = C$5,473 (C$46,220 – C$40,747)
If that doesn’t work out then there is also the C$15M contingency that can be accessed at any time (by either exercising the warrants or doing private placements, depending of if the share price is above $.30 or below).
Technical help? - this could be huge for us
“Maxim Finskiy and Fran Scola, in a joint comment, said, ‘……. Our plans are to support Century, both financially and technically, in order to enhance the value of our share position.’"
It looks like our new investors are willing to supply more than just money, but technical expertise also.
From EET’s Sept 2’09 NR: “Operations at Youga are under the direct supervision of Etruscan's Chief Operating Officer, Stephen Stine, who has been based at site since early May. Mr. Stine's mandate is to optimize operations at Youga to achieve steady state production, and in this regard he is also overseeing the strengthening of the mine management team.”
From EET’s April 23’09 NR: “Gerald J. McConnell, President of Etruscan stated: ‘We are delighted that our new strategic shareholder, Maxim Finskiy, introduced Steve to us and that Steve has agreed to join our senior management team.’”
“He was also recently appointed as a Director of Etruscan”
Stephen Stine appears to be Finskiy’s technical guy. I believe Stine has a consulting company and does consulting work for various companies. It appears as if Finskiy brought him in to clean up EET’s operation. He also occupies 1 of the 2 EET board seats assigned to Finskiy.
Stine appears to have done a great job in spearheading EET’s operational turn around, including overseeing the mine management team. He began working at the site in early May’09. Here is the mine production since then:
*May’09 – 3,626 ounces
*Jun’09 – 5,127
*Jul’09 – 6,093
*Aug’09 – 6,526
I can see Finskiy bringing Stine over to Century to provide his technical expertise on Lamaque, while continuing to support Etruscan also (he might afford to spend far less time with the Etruscan mine once everything is up and running, one he puts good supporting staff in place).
Century will take over Finskiy’s 2 positions on EET’s board. I can see Stine remaining in 1 of those 2 positions. I can also picture him being appointed to Century’s board, if he does indeed provide technical support to Century.
If Stine is not available then I’m sure Finskiy and Scola will find another A grade technical expert to drive Lamaque’s success. This might be why the GM position was never announced.
This could end up being the best part of the entire deal, if it comes to fruition.
It looks like our new investors are willing to supply more than just money, but technical expertise also.
From EET’s Sept 2’09 NR: “Operations at Youga are under the direct supervision of Etruscan's Chief Operating Officer, Stephen Stine, who has been based at site since early May. Mr. Stine's mandate is to optimize operations at Youga to achieve steady state production, and in this regard he is also overseeing the strengthening of the mine management team.”
From EET’s April 23’09 NR: “Gerald J. McConnell, President of Etruscan stated: ‘We are delighted that our new strategic shareholder, Maxim Finskiy, introduced Steve to us and that Steve has agreed to join our senior management team.’”
“He was also recently appointed as a Director of Etruscan”
Stephen Stine appears to be Finskiy’s technical guy. I believe Stine has a consulting company and does consulting work for various companies. It appears as if Finskiy brought him in to clean up EET’s operation. He also occupies 1 of the 2 EET board seats assigned to Finskiy.
Stine appears to have done a great job in spearheading EET’s operational turn around, including overseeing the mine management team. He began working at the site in early May’09. Here is the mine production since then:
*May’09 – 3,626 ounces
*Jun’09 – 5,127
*Jul’09 – 6,093
*Aug’09 – 6,526
I can see Finskiy bringing Stine over to Century to provide his technical expertise on Lamaque, while continuing to support Etruscan also (he might afford to spend far less time with the Etruscan mine once everything is up and running, one he puts good supporting staff in place).
Century will take over Finskiy’s 2 positions on EET’s board. I can see Stine remaining in 1 of those 2 positions. I can also picture him being appointed to Century’s board, if he does indeed provide technical support to Century.
If Stine is not available then I’m sure Finskiy and Scola will find another A grade technical expert to drive Lamaque’s success. This might be why the GM position was never announced.
This could end up being the best part of the entire deal, if it comes to fruition.
Wednesday, September 16, 2009
Carib, request
My understanding is that Cannacrap was at it again yesterday, by selling heavily at the close - they knocked the share price down substantially and eliminated the positive upward movement.
Were they responsible for today's situation as well. Either way they can't hold it down forever. Century becomes a new company, in a US$1,017 gold price environment, once the deal closes in 45 days. Actually, work starts immediately and we receive a get a $4M bridge loan in 14 days. Cannacrap and others can manipulate/suppress the share price in the short-term, but they can't stop the company from taking positive steps towards moving forward. I assume "immediately" means early stage work (i.e. placing orders, initiating the recruitment efforts, ground preparation onsite, finalizing deal to get the new Lamaque GM onboard) towards restarting Lamaque has begun.
Can you post the trading details when/if you get the chance? Thanks!
Were they responsible for today's situation as well. Either way they can't hold it down forever. Century becomes a new company, in a US$1,017 gold price environment, once the deal closes in 45 days. Actually, work starts immediately and we receive a get a $4M bridge loan in 14 days. Cannacrap and others can manipulate/suppress the share price in the short-term, but they can't stop the company from taking positive steps towards moving forward. I assume "immediately" means early stage work (i.e. placing orders, initiating the recruitment efforts, ground preparation onsite, finalizing deal to get the new Lamaque GM onboard) towards restarting Lamaque has begun.
Can you post the trading details when/if you get the chance? Thanks!
Subscribe to:
Posts (Atom)