At a share price of 3 cents per share and 168.7 million shares outstanding, CMM has a market cap of just over $5 million. With almost 5 million of 43-101 certified ounces, that is equivalent to $1 per ounce for a commodity trading at $800 per ounce. Absurd to say the least!
However a more realistic valuation may be based on the enterprise value of the company. This is defined as market cap - cash + debt and is equivalent to what someone would have to pay to buy the company based on its current market cap.
In CMM's case they have cash + investments + accounts receivable + inventory (primarily 3,200 oz of gold in the Lamaque milling circuit) + prepaid expenses = $9.7 million.
On the debt and financial obligations side they have long term debt + loans+ accounts payable + lease obligations + hedge payouts + asset retirement obligations = $48.2 million.
Therefore their enterprise value is $5 million - $9.7 million + $48.2 million = $43.5 million.
So what does a potential buyer get for $43.5 million?
We have buildings, plant and equipment and spares that cost us $73 million, but original capital costs for most of this for the previous owners was much higher.
We have 43-101 certified 4.9 million oz of gold, including 1.3 million ounces of reserves and it's only a matter of time before a lot of the resources get converted into reserves.
We have $80 million in future tax credits at Lamaque.
We have significant exploration potential at S-L and other surrounding properties.
We have good exploration potential for a copper-gold porphyry at the Erika property at San Juan.
We have the potential to receive millions of dollars in settlement of the Poderosa property.
What we don't have is the cash needed to realize all of this potential. If we do get the Fortis financing then the current share price should be the bargain of the century. If not, I can't imagine we couldn't get multiples of 3 cents for the sale of the company.
Friday, September 5, 2008
CMM Announces Resolution Of All Remaining Litigation With Sulliden
BLAINE, WA, Sept. 5 /CNW/ - Century Mining Corporation (CMM: TSX-V) announced today that the lawsuit brought against it, Century Mining Finance Corp. and others, in the Ontario Superior Court of Justice has been dismissed at no cost to the Company. This brings to an end all proceedings in Ontario against Century and those associated with it relating to the Shahuindo Property, Sulliden Exploration Inc. and Minera Sulliden Shahuindo SAC.
Today's announcement brings to an end all litigation between Century and Sulliden in Canada and Peru.
Margaret Kent, President & CEO said: "We are pleased that the lengthy litigation process regarding Shahuindo is now ended. As we move through the current transitional phase, management and the Board of Directors are confident that the Lamaque and San Juan gold mines will provide significant value to shareholders and provide a solid foundation for growth."
Today's announcement brings to an end all litigation between Century and Sulliden in Canada and Peru.
Margaret Kent, President & CEO said: "We are pleased that the lengthy litigation process regarding Shahuindo is now ended. As we move through the current transitional phase, management and the Board of Directors are confident that the Lamaque and San Juan gold mines will provide significant value to shareholders and provide a solid foundation for growth."
Tuesday, September 2, 2008
Link to the Q2 News Release
Margaret Kent, President & CEO of Century said, "we are working diligently to arrange a short-term bridge facility. Concurrently, we are looking at a number of strategic alternatives which may include the sale of certain assets or the Company as a whole."
Link will be posted in the comment section also.
http://www.newswire.ca/en/releases/archive/September2008/02/c8866.html
Link will be posted in the comment section also.
http://www.newswire.ca/en/releases/archive/September2008/02/c8866.html
Saturday, August 30, 2008
Tuesday, August 26, 2008
CMM Terminates Option To Purchase Rosario De Belen
BLAINE, WA, Aug. 26 /CNW/ - Century Mining Corporation (CMM: TSX-V) announced today that it has executed agreements terminating its option to purchase Mina Rosario de Belen, an operating gold and silver mine located in Peru. The agreements to purchase Rosario de Belen were originally announced on May 7, 2007.
As a result of the termination of the agreements, all of the shares of Mina Rosario de Belen have been turned back to the previous owners. In a separate agreement, all of the concessions have also been returned to the previous owners. The previous owners have assumed all of Rosario de Belen's accounts payable. The effect on the Century balance sheet will be a reduction in accounts payable of approximately $1.2 million. Century has already recorded a write-down in its financial statements related to the termination of the Rosario de Belen transaction.
Margaret Kent, President & CEO said: "The decision to terminate the Rosario de Belen deal is part of the Company's renewed focus on its core assets, specifically the recommencement of mining operations at Lamaque and the San Juan Mine."
About Century Mining Corporation
Century Mining Corporation is an emerging mid-tier gold producer that is aggressively acquiring producing mines and exploration properties in Peru in addition to its Canadian projects. The Company owns the Lamaque mine in Québec that historically has produced over 9.4 million ounces of gold. In Peru, Century wholly-owned subsidiaries own an 82.6% interest in the San Juan Mine where the Company accounts for 100% of gold production.
<<
"Margaret M. Kent"
Chairman, President & CEO
As a result of the termination of the agreements, all of the shares of Mina Rosario de Belen have been turned back to the previous owners. In a separate agreement, all of the concessions have also been returned to the previous owners. The previous owners have assumed all of Rosario de Belen's accounts payable. The effect on the Century balance sheet will be a reduction in accounts payable of approximately $1.2 million. Century has already recorded a write-down in its financial statements related to the termination of the Rosario de Belen transaction.
Margaret Kent, President & CEO said: "The decision to terminate the Rosario de Belen deal is part of the Company's renewed focus on its core assets, specifically the recommencement of mining operations at Lamaque and the San Juan Mine."
About Century Mining Corporation
Century Mining Corporation is an emerging mid-tier gold producer that is aggressively acquiring producing mines and exploration properties in Peru in addition to its Canadian projects. The Company owns the Lamaque mine in Québec that historically has produced over 9.4 million ounces of gold. In Peru, Century wholly-owned subsidiaries own an 82.6% interest in the San Juan Mine where the Company accounts for 100% of gold production.
<<
"Margaret M. Kent"
Chairman, President & CEO
Tuesday, August 19, 2008
A Visit to Quebec - Serious Mining Country
From Kitco. No specific mention of Lamaque, but good exposure for this region nonetheless.
The video crew of the Korelin Economics Report, namely Sarah, Kathy and yours truly recently spent a little under two weeks in Quebec, Canada where we divided our time between the towns of Duparquet, Malarctic, Val d’Or and Rouyn Noranda visiting mining properties. We were hosted by the folks from Clifton Star Resources and Niogold Mining, but we also visited other properties including portions of those held by Osisko.
At the beginning of our visit, we were joined by Louis James of Casey Research and Laura Stein, the belle of the mining investment community. Later we met up with Greg McCoach of The Mining Speculator, Bob Moriarty of 321 Gold, analyst David Smith, Marshall Berol of the Encompass Fund and Dan Pisenti of Whitehall Parker Securities.
For the Korelins it was a valuable educational experience. Our hosts Harry Miller and Fred Archibald of Clifton Star Resources and Mike Iverson and Rock LeFrancois of Niogold gave us an extensive tour of this prolific mining area, opening our eyes to a region that, in my mind, many resource investors are overlooking.
The countryside is some of the most beautiful that I have seen anywhere in the world. Gorgeous lakes, known for exciting walleye fishing, were everywhere. Beautiful green forests were abundant. And, yes there were some challenging and scenic golf courses. Even the little mining town of Duparquet, population about 1500, had a course with a welcoming clubhouse where Kathy, Sarah, Fred and I had a great lunch.
Whether it was in a fixed winged aircraft, in a helicopter, riding in corporate vehicles or tramping through the bush to visit drill rigs or mine sites, we got an excellent perspective of the area.
Lately, a lot of attention has been drawn to mining companies located in South America, Mexico and China. These areas, to be sure, are home to some serious projects, many of which could return profits to their shareholders.
I certainly would not want any of my readers or listeners to The Korelin Economics Report radio program to discount the potential offered in these parts of the world, but I do need to point out that Quebec too has a lot to offer.
First of all, the provincial government strongly supports the miners both in terms of putting sensible regulations in place and providing monetary support that includes rebates from the government for qualified mining work.
The miners live up to their responsibilities by utilizing environmentally sound practices and supporting the communities where they are located.
As an example, a portion of the town of Malarctic is being moved, lock stock and barrel, to a location away from an important resource deposit controlled by Osisko. This company is not randomly moving buildings, but they are keeping neighborhoods together and completely updating each building and home after it is transported to the new location. Needless to say, this is a win-win situation for both the town’s residents and the mining company.
Far and away the majority of the people living in this region benefit from the mining industry whether it is through direct employment or the sale of goods and services.
I learned this not only on the property visits, but in restaurants and, believe it or not, on the golf course in Val d’Dor where I met a number of both currently active and retired people many of whom were third or fourth generation miners.
I bring this up as a comment to those folks who subscribe to the theory that the mining industry has no regard for environmental issues and I would suggest that anyone who feels that way visit Quebec and see first hand just how environmentally conscious these miners are.
Called the “Golden Highway”, the country that we saw from Duparquet to Val d’Or was impressive. Millions of ounces of gold have been mined in the past and the results of current testing indicate that many more will be mined there in the future.
It’s hard to fail when companies have a qualified work force, a supportive government, existing infrastructure and a large amount of mineralization yet to be discovered.
As you can tell, I was impressed. We recorded a lot of radio while we were there and if you did not hear it on your local station simply go to our website, www.kereport.com where all the recent shows are archived and take a listen.
A.B. Korelin
The video crew of the Korelin Economics Report, namely Sarah, Kathy and yours truly recently spent a little under two weeks in Quebec, Canada where we divided our time between the towns of Duparquet, Malarctic, Val d’Or and Rouyn Noranda visiting mining properties. We were hosted by the folks from Clifton Star Resources and Niogold Mining, but we also visited other properties including portions of those held by Osisko.
At the beginning of our visit, we were joined by Louis James of Casey Research and Laura Stein, the belle of the mining investment community. Later we met up with Greg McCoach of The Mining Speculator, Bob Moriarty of 321 Gold, analyst David Smith, Marshall Berol of the Encompass Fund and Dan Pisenti of Whitehall Parker Securities.
For the Korelins it was a valuable educational experience. Our hosts Harry Miller and Fred Archibald of Clifton Star Resources and Mike Iverson and Rock LeFrancois of Niogold gave us an extensive tour of this prolific mining area, opening our eyes to a region that, in my mind, many resource investors are overlooking.
The countryside is some of the most beautiful that I have seen anywhere in the world. Gorgeous lakes, known for exciting walleye fishing, were everywhere. Beautiful green forests were abundant. And, yes there were some challenging and scenic golf courses. Even the little mining town of Duparquet, population about 1500, had a course with a welcoming clubhouse where Kathy, Sarah, Fred and I had a great lunch.
Whether it was in a fixed winged aircraft, in a helicopter, riding in corporate vehicles or tramping through the bush to visit drill rigs or mine sites, we got an excellent perspective of the area.
Lately, a lot of attention has been drawn to mining companies located in South America, Mexico and China. These areas, to be sure, are home to some serious projects, many of which could return profits to their shareholders.
I certainly would not want any of my readers or listeners to The Korelin Economics Report radio program to discount the potential offered in these parts of the world, but I do need to point out that Quebec too has a lot to offer.
First of all, the provincial government strongly supports the miners both in terms of putting sensible regulations in place and providing monetary support that includes rebates from the government for qualified mining work.
The miners live up to their responsibilities by utilizing environmentally sound practices and supporting the communities where they are located.
As an example, a portion of the town of Malarctic is being moved, lock stock and barrel, to a location away from an important resource deposit controlled by Osisko. This company is not randomly moving buildings, but they are keeping neighborhoods together and completely updating each building and home after it is transported to the new location. Needless to say, this is a win-win situation for both the town’s residents and the mining company.
Far and away the majority of the people living in this region benefit from the mining industry whether it is through direct employment or the sale of goods and services.
I learned this not only on the property visits, but in restaurants and, believe it or not, on the golf course in Val d’Dor where I met a number of both currently active and retired people many of whom were third or fourth generation miners.
I bring this up as a comment to those folks who subscribe to the theory that the mining industry has no regard for environmental issues and I would suggest that anyone who feels that way visit Quebec and see first hand just how environmentally conscious these miners are.
Called the “Golden Highway”, the country that we saw from Duparquet to Val d’Or was impressive. Millions of ounces of gold have been mined in the past and the results of current testing indicate that many more will be mined there in the future.
It’s hard to fail when companies have a qualified work force, a supportive government, existing infrastructure and a large amount of mineralization yet to be discovered.
As you can tell, I was impressed. We recorded a lot of radio while we were there and if you did not hear it on your local station simply go to our website, www.kereport.com where all the recent shows are archived and take a listen.
A.B. Korelin
Monday, August 18, 2008
Quiet around here (...quiet before the 'storm'?)
Oh boy, it's sure quiet around here! I guess most folks (blog members, posters) are enjoying their holidays (except for Carib, Production & Natik, it seems).
Questions for the Blog: (1) Is the Fortis deal now in jeopardy (perhaps), since no 'bridge financing' seems iminent? (2) Is Tim Gooch still on board?
Enjoy the summer (what's left of it)!
Questions for the Blog: (1) Is the Fortis deal now in jeopardy (perhaps), since no 'bridge financing' seems iminent? (2) Is Tim Gooch still on board?
Enjoy the summer (what's left of it)!
Thursday, August 14, 2008
Thoughts on the gold price
It's quite something to watch with what's been happening with the gold price. The economic data could not be better for gold, yet the market is selling gold and embracing the US $ like we have never seen before. In my view, we are looking at the early stages of stagflation (when both growth and inflation are out of control simutaneously), if the data continues to trend in the current direction. The retail sales and housing figures are brutal – serious growth issues (switching to a lower priced operation like Walmart is nothing to get excited about – it means people are feeling the squeeze). At the same time, the inflation numbers are flying higher. All validated within the last couple of days (look it up!). It amazes me that we are seeing such a flight to the US $, especially under these circumstances. I think it's because the Euro economy is slowing down (and raising their interest rates), coupled with the market now expecting the US Fed to maybe raise US rates in order to fight off inflation (thus protecting the US dollar) – controlling inflation has always been their top priority. It still amazes me though, given that a rate increase will only negatively impact US growth (even futher) - the US Feb is stuck. I guess they are counting on the recent decrease in oil prices to be the saviour of everything. However, even with the substantial decrease, $114 oil is not quite the $60 (or $20) that they use to have. I would say that anything around $100 is quite damaging. Then again, is $100 even sustainable, given the ongoing tensions of all the many oil producing / shipping places in the world? It doesn’t take much for something to blow up, as we see all the time, be it Nigeria, Iran, etc (fyi, Iran is talking tough again, and the US no longer has Russia to step in as the "middle man”).
I was listening to an expert the other day and he was saying that there is a watch list out there of 95 US banks that could go under, due to the current crisis. This is a serious situation! Indymac recently went under and they weren’t even included in the list of 95. This person was saying that he was telling people that Freddie and Fannie were in trouble, and this was as early as 2 years ago – at the time, he was laughed at by the American media. The US Fed recent bail out of Freddie and Fannie will cost the American people dearly – the US printing press couldn’t be any busier. It’s not looking pretty long-term for the US economy. Who knows how much of this US $ recovery is due to US elections? Nevertheless, the fundamentals are not looking good for the US economy.
I was listening to an expert the other day and he was saying that there is a watch list out there of 95 US banks that could go under, due to the current crisis. This is a serious situation! Indymac recently went under and they weren’t even included in the list of 95. This person was saying that he was telling people that Freddie and Fannie were in trouble, and this was as early as 2 years ago – at the time, he was laughed at by the American media. The US Fed recent bail out of Freddie and Fannie will cost the American people dearly – the US printing press couldn’t be any busier. It’s not looking pretty long-term for the US economy. Who knows how much of this US $ recovery is due to US elections? Nevertheless, the fundamentals are not looking good for the US economy.
Monday, August 11, 2008
Pretty quiet
It looks like the 9.6 million share day on Aug 1 and the 75% gain was a speculative blip now. With no news to feed the speculation we have drifted back down to a low of 4.5 cents today.
If there is any consolation, today is the first day in several months than RBC didn't sell a single share. Today it was a TD seller that sold almost 1 million shares and much of the buying came from flippers looking for a half-cent gain.
I haven't been posting the daily trades recently, but if this something that anyone is interested in now that Wega is not much of a factor, let me know.
SJ must be keeping the company afloat while efforts are continuing to secure bridge financing.
It is not helping that the price of gold dropped $30 today in about an hour. Is this a steeper than normal correction in the long term gold bull or a reversal? There is some pretty good insight about this topic in this Resource Investor article:
http://www.resourceinvestor.com/pebble.asp?relid=45229
Here is an excerpt:
We are in about the same position as the big plunge in the CDNX in 2002 for just about all the comparison metrics except that both gold and silver are multiples of where they were then. So, what we are witnessing right now is much, much worse than the 2002 retreat in the index’ relationship to gold metal. That’s what makes the ghastly conditions in the small resource companies today so dang maddening. It just doesn't make any sense to those who expected the small resource companies to leverage the price gains for the metals. Calling small resource companies cheap right now is like calling the universe big. Both are gross understatements.
Anyone can rattle off a long list of reasons for the illogical price action, investor fear, the Credit Crunch, flight to cash, etc., but what it boils down to is a vacuum of liquidity in the small resource sector. Hardly anyone is buying and every day someone quite literally HAS to sell. Today, often that means selling into weak or nonexistent bids, driving the small guys into or under the basement.
Investor confidence in small resource companies (and for that matter virtually all highly speculative issues) has been shattered. Holders of those stocks are demoralized and reeling from portfolio shock if they have held on at all. Very few of the funds which had been buying these unbelievable high-percentage-on-tiny-volume dips are still doing so, and now rumors are swirling that more than one large Canadian or Bahamian hedge fund, funds that were heavily invested in the small miners have blown up and have been (or are being) liquidated, putting intense downward pressure on shares of the companies those funds held. (The rumors are likely true.)
If there is any consolation, today is the first day in several months than RBC didn't sell a single share. Today it was a TD seller that sold almost 1 million shares and much of the buying came from flippers looking for a half-cent gain.
I haven't been posting the daily trades recently, but if this something that anyone is interested in now that Wega is not much of a factor, let me know.
SJ must be keeping the company afloat while efforts are continuing to secure bridge financing.
It is not helping that the price of gold dropped $30 today in about an hour. Is this a steeper than normal correction in the long term gold bull or a reversal? There is some pretty good insight about this topic in this Resource Investor article:
http://www.resourceinvestor.com/pebble.asp?relid=45229
Here is an excerpt:
We are in about the same position as the big plunge in the CDNX in 2002 for just about all the comparison metrics except that both gold and silver are multiples of where they were then. So, what we are witnessing right now is much, much worse than the 2002 retreat in the index’ relationship to gold metal. That’s what makes the ghastly conditions in the small resource companies today so dang maddening. It just doesn't make any sense to those who expected the small resource companies to leverage the price gains for the metals. Calling small resource companies cheap right now is like calling the universe big. Both are gross understatements.
Anyone can rattle off a long list of reasons for the illogical price action, investor fear, the Credit Crunch, flight to cash, etc., but what it boils down to is a vacuum of liquidity in the small resource sector. Hardly anyone is buying and every day someone quite literally HAS to sell. Today, often that means selling into weak or nonexistent bids, driving the small guys into or under the basement.
Investor confidence in small resource companies (and for that matter virtually all highly speculative issues) has been shattered. Holders of those stocks are demoralized and reeling from portfolio shock if they have held on at all. Very few of the funds which had been buying these unbelievable high-percentage-on-tiny-volume dips are still doing so, and now rumors are swirling that more than one large Canadian or Bahamian hedge fund, funds that were heavily invested in the small miners have blown up and have been (or are being) liquidated, putting intense downward pressure on shares of the companies those funds held. (The rumors are likely true.)
Gold miners cut hedge positions by 18 pct in Q2 - report
Where in the World is PK hiding? I heard that she was in New York last week meeting with investment banks. She went there last year around this time and look what it accomplished. Nothing! Those NY managers who weren't laid off, fired, or arrested for their part in the subprime mess are probably on extended vacations.
Gold miners cut hedge positions by 18 pct in Q2 - report
Mon Aug 11, 2008 5:16am EDT
LONDON, Aug 11 (Reuters) - Gold miners cut their hedging positions by nearly 18 percent in the second quarter of 2008 from the quarter before, and are on track to trim their hedges by a total 10 million ounces in the full year, a report said.
The quarterly report by Societe Generale and metals consultancy GFMS Ltd said miners reduced their outstanding hedges by 4.06 million ounces in the quarter, to 18.81 million ounces.
Hedging allows producers to lock in prices for future output, but it can backfire if spot prices rise above the hedged price. A recent rise in spot gold prices has prompted many miners to cut their hedged positions.
The most prominent reduction came from Anglogold Ashanti (ANGJ.J: Quote, Profile, Research, Stock Buzz), which cut its hedges by 2.71 million ounces, the report said. Fresh hedging remained limited, it added.
"The intentions of producers outlined after the first quarter have materialised into meaningful volumes of activity in the second quarter," said the report.
"However, with these significant actions out of the way, the scope for further significant cuts to the book in the second half is somewhat limited."
"Current evidence suggests the de-hedging levels in the second half of 2008 will slow considerably," it added. "Our outlook for the year remains essentially the same, at around 10 million ounces of de-hedging in total."
(Reporting by Jan Harvey; Editing by Michael Roddy)
Gold miners cut hedge positions by 18 pct in Q2 - report
Mon Aug 11, 2008 5:16am EDT
LONDON, Aug 11 (Reuters) - Gold miners cut their hedging positions by nearly 18 percent in the second quarter of 2008 from the quarter before, and are on track to trim their hedges by a total 10 million ounces in the full year, a report said.
The quarterly report by Societe Generale and metals consultancy GFMS Ltd said miners reduced their outstanding hedges by 4.06 million ounces in the quarter, to 18.81 million ounces.
Hedging allows producers to lock in prices for future output, but it can backfire if spot prices rise above the hedged price. A recent rise in spot gold prices has prompted many miners to cut their hedged positions.
The most prominent reduction came from Anglogold Ashanti (ANGJ.J: Quote, Profile, Research, Stock Buzz), which cut its hedges by 2.71 million ounces, the report said. Fresh hedging remained limited, it added.
"The intentions of producers outlined after the first quarter have materialised into meaningful volumes of activity in the second quarter," said the report.
"However, with these significant actions out of the way, the scope for further significant cuts to the book in the second half is somewhat limited."
"Current evidence suggests the de-hedging levels in the second half of 2008 will slow considerably," it added. "Our outlook for the year remains essentially the same, at around 10 million ounces of de-hedging in total."
(Reporting by Jan Harvey; Editing by Michael Roddy)
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