1) Production and Cash Cost Per Oz
Etruscan is starting to shape up well. Their Youga Mine is in Burkina Faso, West Africa. Burkina Faso is the poorest country in Africa (or amongst the poorest). The government owns 10% of Youga and they are extremely mining friendly. They look to the mining industry to generate a lot of jobs. They expect mining to be the top industry in Burkina Faso for a very long time into the future. The West Africa region itself is the most mining friendly region in Africa, by far.
Youga achieved commercial production in Jul'08 and made really good progress in ramping up production ounces in their Q4'08 timeframe (their reporting quarter is 1 month ahead of the calendar quarter):
*Sep’08 – 6,572 ounces
*Oct’08 – 7,457
*Nov’08 – 7,136
Their steady state production level is 7,000 ounces per month. They achieved that level in Q4’08. They also realized a cash op cost per oz of US$480. However, they experienced a couple of significant setbacks for the next 7 months after that point - Dec'08 to Jun'09. Their production and cash costs were severely impacted. They said the 2 primary problems were related to temporary power issues (until the permanent power line is put in place) and lower than forecast drill rig availability for the blasting of ore and waste. It appears as if solutions have been put in place to mitigate the problems, and the company continues to make improvements. As a result, their production output has picked back up over the past couple of months:
*May’09 – 3,626 ounces
*Jun’09 – 5,127
*Jul’09 – 6,093
*Aug’09 – 6,526
They are getting back closer to the 7,000 per month steady state production level (90% belonging to Etruscan). A 7,000 ounce per month production level represents an 84,000 ounce annual target for Youga. The annualized run rate based on the August production level is 78,312 ounces. It would be good if they could get back to the US$480 cash op cost per oz level – US$450 will probably be in reach once they get both production and grade up to planned levels, and perhaps even US$400 if they are really successful.
It’s crucial for them to demonstrate that they could deliver at the 7,000 oz per month level in the near future.
2) Reserves and Resource
Youga (Burkina Faso) - 90% = 481,000 ounces
Agbaou (Cote d'Ivoire) - 85% = 481,000
Finkolo (Mali) - 40% = 0
Total Reserves = 962,000 ounces
Youga (Burkina Faso) - 90% = 958,000 ounces
Agbaou (Cote d'Ivoire) - 85% = 1,094,000
Finkolo (Mali) - 40% = 395,000
Total Resource = 2,447,000 ounces
3) Calls / Hedges
They have puts in place to give them some price protection at a US$629 gold price. They paid for it with some calls. The call price is US$700. They originally had to deliver 246,306 ounces into the call position, but that is now been reduced to 161,792 ounces at end of May’09. I figured, with monthly production level of 7,000 ounces, they will be allowed to sell about 40% of their production ounces at the spot price in 2010, 42% in 2011, 63% in 2012 and 100% every year after that point.
Here is what Total Youga production might look like (assuming 7,000 ounces effective in 2010) for these time periods:
2009 (Jun – Nov) = 37,800 ounces
2010 fiscal yr = 84,000
2011 fiscal yr = 84,000
2012 fiscal yr = 84,000
2013 fiscal yr = 84,000
Here is the profile for the remaining call/hedge book ounces that are still to be delivered (according to their MD&A report) – to be sold at US$700 per oz:
2009 (Jun – Nov) = 30,876 ounces
2010 fiscal yr = 50,682
2011 fiscal yr = 48,750
2012 fiscal yr = 31,484
2013 fiscal yr = 0
Here is what might be available for sale at the spot price:
2009 (Jun – Nov) = 6,924 ounces
2010 fiscal yr = 33,318
2011 fiscal yr = 35,250
2012 fiscal yr = 52,516
2013 fiscal yr = 84,000
4) Primary Debt obligation
Their primary debt balance is now down to C$27M (at end of May’09). Payments are due on a quarterly basis over the next few years (I believe). They will likely need to achieve steady state production levels before start up debt covenants are fully satisfied (I have no info on the current status of any of this). The recent improvements in production will likely benefit Etruscan in achieving this objective in the not too distant future.
Their next largest debt is about C$8M. That debt is not due until their primary debt has been fully paid.
They also have about C$20M in accounts payables (balance at end of May’09).
They also have a few smaller debts (similar to the Convertible Promissory Note Century will be purchasing), but nothing significant.
5) Agbaou Advanced Stage Project
It is located in Cote d’Ivoire in West Africa. It is ready for development once funding is in place. Agbaou is 85% owned by Etruscan.
It is currently targeted for annual production of 82,000 ounces (69,700 for Etruscan), with US$507 cash op cost per oz. I believe they might be updating the feasibility study, and perhaps are expecting improvements in the numbers also. The start up cost is expected to be around US$105M plus working capital. They said that the costs were originally put together at peak market prices and with the assumption of using new equipment. They are reworking the numbers to incorporate more recent (lower) prices and some used equipment.
That’s all of the key areas I can think of right now.
If all goes well with Etruscan, I expect their share price to get back to at least $1.00 within the next 12 months. They use to trade in the $2.00 to $4.00. I think it's a good investment for Century.
A $1.00 Etruscan share price will likely increase the value of Century's investment in Etruscan to the C$30M to C$40 range (enough to offset almost all of Century's debt total, including the Prepaid Gold Sale).
Tuesday, September 15, 2009
Century Mining Announces Equity Financing Deal For Lamaque
- Century signs indicative term sheet for C$20 million financing and
acquisition of a significant investment in Etruscan Resources -
- Strategic investors to fund and support Century's growth into a new
significant gold producer -
BLAINE, WA, Sept. 15 /CNW/ - Century Mining Corporation (CMM: TSX-V) ("Century" or the "Company") announces that it has signed an indicative non-binding term sheet with Kirkland Intertrade Corp. ("Kirkland") and Gravity Ltd. ("Gravity") for a C$20,000,000 private placement and the acquisition by Century of an interest in Etruscan Resources Inc. ("Etruscan"). Kirkland and Gravity (together, the "Investor") are controlled by Russian investor Maxim Finskiy and American investor Fran Scola, respectively, who have agreed to work with Century management to build the Company into a significant gold producer.
The C$20 million private placement, when combined with the Company's previously announced US$25 million prepaid gold forward facility (see press release dated July 30, 2009), will provide the Company with the necessary capital to restart operations at the its Lamaque underground gold mine, located in Val d'Or Quebec.
Following closing of the transactions, and including its previous share purchase, the Investor will own 167,986,707 common shares of Century (217,986,707 assuming exercise of its warrants) representing approximately 45.8% (52.3% assuming exercise of its warrants) of Century's issued and outstanding shares. Upon completion of all the transactions, Century will own approximately 16.6% of the outstanding shares of Etruscan (22.2% assuming exercise of all of its warrants).
Details of the proposed transactions are as follows:
C$20,000,000 Private Placement ("Private Placement")
The Private Placement will be for 100,000,000 units ("Units") of Century to be issued at a price of C$0.20 per Unit. Each Unit will be comprised of one common share of the Company and one-half of one common share purchase warrant. Each whole common share purchase warrant will entitle the holder to purchase one common share of Century at a price of C$0.30 for a period of 18 months.
Century will grant the Investor pre-emptive rights to maintain its proportionate shareholding interest with respect to future issuances of securities by Century, so long as the Investor holds at least 19.9% of the outstanding shares of Century.
Upon closing, the Investor will be entitled to nominate three members to Century's Board, and an independent non-executive chairman will be named. Margaret Kent, CEO of the Company, and the majority of her management team will remain in place following closing.
The Company will pay a 2% cash finder's fee and 1,500,000 common share purchase warrants exercisable at C$0.20 each for a period of 18 months in connection with the Private Placement.
The proceeds from the Private Placement will be used to fund the initial development and operation of the Lamaque Mine and provide working capital to the Company, alleviating the Company's working capital deficit.
If following closing of the Private Placement the Company requires additional working capital to fund the development and operation of the Lamaque Mine, the Investor will provide the Company with all of part of such additional working capital through the exercise of the above described warrants or an additional private placement up to a limit of C$15,000,000.
The Investor has also acquired an additional 7,142,857 common shares of Century in a separate private transaction.
Interim Bridge Loan
The Investor has agreed to advance the Company a secured interim bridge loan in the principal amount of C$4.0 million to fund the Company's immediate working capital requirements to commence reopening of the Lamaque Mine. The bridge loan will bear interest at a rate of 10% per annum and will be secured against the Sigma mill equipment. The bridge loan is intended to be repaid on closing of the Private Placement, with the principal amount of the loan applied as part of the Investor's subscription price for the Units.
There are no arranging/underwriting fees payable by Century with respect to the loan.
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").
Closing Conditions
All of the transactions described above are subject to normal course due diligence and the entering into of definitive documentation. The Private Placement and the Etruscan Transaction are subject to approval of the TSX Venture Exchange, applicable approval by Century's shareholders and amendment of Century's shareholder rights plan in order to waive the application of the plan to the Private Placement and the Etruscan Transaction. The Private Placement and the initial tranche of the Etruscan Transaction are cross-conditional and are intended to close simultaneously within 45 days. The Bridge Loan will close in 14 business days. Work will commence at Lamaque immediately.
US$25 Million Gold Forward Facility
As previously announced on July 30, 2009, the Company will proceed with a US$25 million prepaid gold forward facility from a major international bank with a large gold trading business. The prepaid gold facility is a forward contract to deliver 51,728 ounces of gold over a five-year term. The facility has other price participation terms whereby the Company will receive an additional cash payment for gold pricing above US$800 per ounce, up to a maximum of US$950 per ounce. There are no upfront fees, warrants or interest payable to the bank during the term of the facility.
Objectives of Strategic Investment
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.
Century's management will immediately establish an acquisition team to work on future acquisitions of additional gold advanced development properties and production. The Investors are prepared to continue to invest in Century as appropriate acquisitions are identified.
Century is pleased to welcome its new investors and the Company's Board believes that this new investment will facilitate the successful start up of the Company's Lamaque project, support the expansion of operations at the Company's San Juan Gold Mine, and create opportunities for future acquisitions. Century is pleased to be acquiring a sizable block of shares in Etruscan, which has an ongoing operation, promising development properties and a strong exploration team. Century is fully supportive of Etruscan's management, and commends the team for their success in achieving their production and exploration goals.
Margaret Kent, President and CEO of Century commented, "My management team and I are very pleased to welcome Mr. Finskiy, Mr. Scola and their associates as new investors in Century. The Board of Directors is confident that the Company will now be in a financial position which will permit the immediate commencement of operations at Lamaque. Century's vision is to create a formidable mid-tier gold producer, and we believe that today's financing announcement, along with the strategic acquisition of Etruscan shares, will help the Company achieve its goals. This funding allows us to immediately restart our flagship asset and aggressively pursue other production opportunities."
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."
About Kirkland Intertrade Corp.
Kirkland is beneficially owned by Maxim Finskiy. Mr. Finskiy is Chief Executive Officer of LLC Intergeo Managing Company, the mining and exploration arm of the private Russian conglomerate Onexim Group, which is Russia's largest investment fund with $25 billion in assets. From 2001 to 2008 he was Deputy General Director and Deputy Chairman of the Management Board of MMC Norilsk Nickel. Mr. Finskiy sits on the Board of Polyus Gold, one of the top world gold producers, incorporated in Russia.
About Gravity Ltd.
Gravity is the personal investment vehicle of Fran Scola. Fran Scola is a partner at LFM Partners, a partnership with extensive investments in the natural resources sector. He is a board member of seven different public and private mining companies. He is a former partner of Weintraub Investments, a San Francisco based hedge fund.
About Etruscan Resources Inc.
Etruscan Resources Inc. is a gold focused Canadian junior mining company with dominant land positions covering more than 10,000 square kilometers in West Africa. Etruscan is in the start-up phase of the Youga Gold Mine in Burkina Faso, which is expected to produce 88,000 ounces of gold per year at full capacity. The Agbaou Gold Project in Côte d'Ivoire and the Finkolo Gold Project in Mali are development stage projects. Advanced and early stage exploration projects are ongoing in Burkina Faso, Mali, Côte d'Ivoire, Ghana and Namibia. Etruscan also has a 47.4% interest in Etruscan Diamonds Limited which has a dominant land position in the Ventersdorp Diamond District located in South Africa where it is developing the Blue Gum Diamond Project.
About Century Mining Corporation
Century Mining Corporation is a junior gold producer. The Company owns and is working towards the start up of the Lamaque mine in Québec that historically has produced over 9.2 million ounces of gold. In Peru, Century's wholly-owned subsidiaries own an 82.6% interest in the San Juan Mine where the Company accounts for 100% of gold production. Total gold production for 2007 and 2008 was 63,124 and 14,252 ounces of gold, respectively.
"Margaret M. Kent"
Chairman, President & CEO
acquisition of a significant investment in Etruscan Resources -
- Strategic investors to fund and support Century's growth into a new
significant gold producer -
BLAINE, WA, Sept. 15 /CNW/ - Century Mining Corporation (CMM: TSX-V) ("Century" or the "Company") announces that it has signed an indicative non-binding term sheet with Kirkland Intertrade Corp. ("Kirkland") and Gravity Ltd. ("Gravity") for a C$20,000,000 private placement and the acquisition by Century of an interest in Etruscan Resources Inc. ("Etruscan"). Kirkland and Gravity (together, the "Investor") are controlled by Russian investor Maxim Finskiy and American investor Fran Scola, respectively, who have agreed to work with Century management to build the Company into a significant gold producer.
The C$20 million private placement, when combined with the Company's previously announced US$25 million prepaid gold forward facility (see press release dated July 30, 2009), will provide the Company with the necessary capital to restart operations at the its Lamaque underground gold mine, located in Val d'Or Quebec.
Following closing of the transactions, and including its previous share purchase, the Investor will own 167,986,707 common shares of Century (217,986,707 assuming exercise of its warrants) representing approximately 45.8% (52.3% assuming exercise of its warrants) of Century's issued and outstanding shares. Upon completion of all the transactions, Century will own approximately 16.6% of the outstanding shares of Etruscan (22.2% assuming exercise of all of its warrants).
Details of the proposed transactions are as follows:
C$20,000,000 Private Placement ("Private Placement")
The Private Placement will be for 100,000,000 units ("Units") of Century to be issued at a price of C$0.20 per Unit. Each Unit will be comprised of one common share of the Company and one-half of one common share purchase warrant. Each whole common share purchase warrant will entitle the holder to purchase one common share of Century at a price of C$0.30 for a period of 18 months.
Century will grant the Investor pre-emptive rights to maintain its proportionate shareholding interest with respect to future issuances of securities by Century, so long as the Investor holds at least 19.9% of the outstanding shares of Century.
Upon closing, the Investor will be entitled to nominate three members to Century's Board, and an independent non-executive chairman will be named. Margaret Kent, CEO of the Company, and the majority of her management team will remain in place following closing.
The Company will pay a 2% cash finder's fee and 1,500,000 common share purchase warrants exercisable at C$0.20 each for a period of 18 months in connection with the Private Placement.
The proceeds from the Private Placement will be used to fund the initial development and operation of the Lamaque Mine and provide working capital to the Company, alleviating the Company's working capital deficit.
If following closing of the Private Placement the Company requires additional working capital to fund the development and operation of the Lamaque Mine, the Investor will provide the Company with all of part of such additional working capital through the exercise of the above described warrants or an additional private placement up to a limit of C$15,000,000.
The Investor has also acquired an additional 7,142,857 common shares of Century in a separate private transaction.
Interim Bridge Loan
The Investor has agreed to advance the Company a secured interim bridge loan in the principal amount of C$4.0 million to fund the Company's immediate working capital requirements to commence reopening of the Lamaque Mine. The bridge loan will bear interest at a rate of 10% per annum and will be secured against the Sigma mill equipment. The bridge loan is intended to be repaid on closing of the Private Placement, with the principal amount of the loan applied as part of the Investor's subscription price for the Units.
There are no arranging/underwriting fees payable by Century with respect to the loan.
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").
Closing Conditions
All of the transactions described above are subject to normal course due diligence and the entering into of definitive documentation. The Private Placement and the Etruscan Transaction are subject to approval of the TSX Venture Exchange, applicable approval by Century's shareholders and amendment of Century's shareholder rights plan in order to waive the application of the plan to the Private Placement and the Etruscan Transaction. The Private Placement and the initial tranche of the Etruscan Transaction are cross-conditional and are intended to close simultaneously within 45 days. The Bridge Loan will close in 14 business days. Work will commence at Lamaque immediately.
US$25 Million Gold Forward Facility
As previously announced on July 30, 2009, the Company will proceed with a US$25 million prepaid gold forward facility from a major international bank with a large gold trading business. The prepaid gold facility is a forward contract to deliver 51,728 ounces of gold over a five-year term. The facility has other price participation terms whereby the Company will receive an additional cash payment for gold pricing above US$800 per ounce, up to a maximum of US$950 per ounce. There are no upfront fees, warrants or interest payable to the bank during the term of the facility.
Objectives of Strategic Investment
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.
Century's management will immediately establish an acquisition team to work on future acquisitions of additional gold advanced development properties and production. The Investors are prepared to continue to invest in Century as appropriate acquisitions are identified.
Century is pleased to welcome its new investors and the Company's Board believes that this new investment will facilitate the successful start up of the Company's Lamaque project, support the expansion of operations at the Company's San Juan Gold Mine, and create opportunities for future acquisitions. Century is pleased to be acquiring a sizable block of shares in Etruscan, which has an ongoing operation, promising development properties and a strong exploration team. Century is fully supportive of Etruscan's management, and commends the team for their success in achieving their production and exploration goals.
Margaret Kent, President and CEO of Century commented, "My management team and I are very pleased to welcome Mr. Finskiy, Mr. Scola and their associates as new investors in Century. The Board of Directors is confident that the Company will now be in a financial position which will permit the immediate commencement of operations at Lamaque. Century's vision is to create a formidable mid-tier gold producer, and we believe that today's financing announcement, along with the strategic acquisition of Etruscan shares, will help the Company achieve its goals. This funding allows us to immediately restart our flagship asset and aggressively pursue other production opportunities."
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."
About Kirkland Intertrade Corp.
Kirkland is beneficially owned by Maxim Finskiy. Mr. Finskiy is Chief Executive Officer of LLC Intergeo Managing Company, the mining and exploration arm of the private Russian conglomerate Onexim Group, which is Russia's largest investment fund with $25 billion in assets. From 2001 to 2008 he was Deputy General Director and Deputy Chairman of the Management Board of MMC Norilsk Nickel. Mr. Finskiy sits on the Board of Polyus Gold, one of the top world gold producers, incorporated in Russia.
About Gravity Ltd.
Gravity is the personal investment vehicle of Fran Scola. Fran Scola is a partner at LFM Partners, a partnership with extensive investments in the natural resources sector. He is a board member of seven different public and private mining companies. He is a former partner of Weintraub Investments, a San Francisco based hedge fund.
About Etruscan Resources Inc.
Etruscan Resources Inc. is a gold focused Canadian junior mining company with dominant land positions covering more than 10,000 square kilometers in West Africa. Etruscan is in the start-up phase of the Youga Gold Mine in Burkina Faso, which is expected to produce 88,000 ounces of gold per year at full capacity. The Agbaou Gold Project in Côte d'Ivoire and the Finkolo Gold Project in Mali are development stage projects. Advanced and early stage exploration projects are ongoing in Burkina Faso, Mali, Côte d'Ivoire, Ghana and Namibia. Etruscan also has a 47.4% interest in Etruscan Diamonds Limited which has a dominant land position in the Ventersdorp Diamond District located in South Africa where it is developing the Blue Gum Diamond Project.
About Century Mining Corporation
Century Mining Corporation is a junior gold producer. The Company owns and is working towards the start up of the Lamaque mine in Québec that historically has produced over 9.2 million ounces of gold. In Peru, Century's wholly-owned subsidiaries own an 82.6% interest in the San Juan Mine where the Company accounts for 100% of gold production. Total gold production for 2007 and 2008 was 63,124 and 14,252 ounces of gold, respectively.
"Margaret M. Kent"
Chairman, President & CEO
Friday, September 4, 2009
Century Mining Increases Flow-Through Offering To C$1.1 Million
BLAINE, WA, Sept. 4 /CNW/ - Century Mining Corporation (CMM: TSX-V) announces today that the private placement of flow through shares announced on September 2, 2009 will be raised from C$400,000 to a maximum of C$1.1 million, due to increased investor interest in the offering. All other terms and conditions remain the same as announced on September 2. Century expects the financing to close on September 9, 2009.
Wednesday, September 2, 2009
Century Mining Announces C$400,000 Flow-Through Financing
BLAINE, WA, Sept. 2 /CNW/ - Century Mining Corporation (CMM: TSX-V) today announced that, subject to regulatory approval, it will complete a non-brokered private placement of up to C$400,000 comprised of flow-through shares.
The Company will issue 2,857,143 common shares on a flow-through basis at an issue price of $0.14 per share.
The Company will pay Union Securities Ltd. for introducing subscribers to the Company a finder's fee of cash equal to 6% of the aggregate gross proceeds, and broker warrants equal to 6% of the aggregate number of flow-through shares. Each broker warrant shall be exercisable for 18 months from the date of issue and shall entitle the holder to purchase a common share of the Company for a price of $0.14. The flow-through share issuance is subject to approval by the TSX Venture Exchange. All of the securities issued under these private placements will be 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.
Margaret Kent, President and CEO of Century commented, "As discussed in the announcement of the Company's second quarter financial results, a special committee of the Board of Directors is reviewing proposals for a major project financing that is expected to close this fall. In the meantime, Century is continuing work on Vulcan computer modeling project for Lamaque."
The Company will issue 2,857,143 common shares on a flow-through basis at an issue price of $0.14 per share.
The Company will pay Union Securities Ltd. for introducing subscribers to the Company a finder's fee of cash equal to 6% of the aggregate gross proceeds, and broker warrants equal to 6% of the aggregate number of flow-through shares. Each broker warrant shall be exercisable for 18 months from the date of issue and shall entitle the holder to purchase a common share of the Company for a price of $0.14. The flow-through share issuance is subject to approval by the TSX Venture Exchange. All of the securities issued under these private placements will be 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.
Margaret Kent, President and CEO of Century commented, "As discussed in the announcement of the Company's second quarter financial results, a special committee of the Board of Directors is reviewing proposals for a major project financing that is expected to close this fall. In the meantime, Century is continuing work on Vulcan computer modeling project for Lamaque."
Friday, August 28, 2009
q2 results
Century reports second quarter 2009 financial results
BLAINE, WA, Aug. 28 /CNW/ - Century Mining Corporation (CMM: TSX-V) is pleased to announce its financial and operating results for the second quarter ended June 30, 2009.
Second Quarter Highlights
-------------------------
- Century recorded operating profit at San Juan and for the Company as a whole.
- All litigation regarding Compania Minera Poderosa was settled.
- The Company reduced its working capital deficiency by $3.9 million, or 26%, compared to December 2008.
Second Quarter Results
----------------------
In the second quarter ended June 30, 2008 the company reported an operating profit from mining operations, before depreciation, amortization and accretion, of $2,115,901 (2008 - $1,437,174) from gold revenues of $4,347,387 (2008 - $3,121,143). Expenses incurred in the mining operations were $2,231,486 (2008 - $1,683,969). For the quarter ended June 30, 2009 the Company reported net income of $1,137,857 or $0.01 per share, compared to net income of $2,538,817, or $0.01 per share in the prior period. The net income in the 2008 quarter was solely as a result of the return of the Rosario de Belen shares to the sellers.
As at June 30, 2009 the Company had a working capital deficiency of $11,128,404 compared to a working capital deficiency of $14,985,245 at December 31, 2008, a decrease of 26%. The Company is working diligently to continue to reduce this deficit.
During the second quarter of 2009 the Company settled all litigation with respect to the Company's October 2006 binding agreement to acquire an investment in Compania Minera Poderosa S.A. ("CMPSA"), a Peruvian gold mining company. Under the terms of the settlement agreement, the Company received (i) a US$300,000 cash payment and (ii) 260,868 shares of CMPSA in exchange for a US$300,000 deposit that had been paid by the Company. All litigation brought by the Company, the sellers, the other buyer and other parties was dismissed.
The Lamaque project is world class and management has been working to deliver a financing package with terms that are in the best interests of all of our stakeholders. To this end, the Company has considered a number of financing offers. The Company is currently in receipt of several equity financing offers which would supplement the prepaid gold forward term sheet that the Company is in the process of closing. The Company will continue negotiations only on those offers that allow the Company to honor its obligations to its stakeholders. A financing package will also only be acceptable that allows the existing shareholders to reap the upside benefits
of our estimated six million ounces of gold currently contained in reserves and resources at Lamaque. Proposals received to date have involved offers of mergers or business combinations, the sale of a substantial amount of equity, or some combination thereof.
A special committee of the Board of Directors has been appointed to review and evaluate the current offers for equity financing. It is expected that this process will take two weeks to complete.
Margaret Kent, President and CEO of Century commented, "Century is proceeding with the $45 million financing announced on July 30. Century is working closely with Union Securities Ltd., and we believe the final closing of this deal will occur this fall."
Regarding Lamaque, Ms. Kent further commented, "Century recently hosted a technical review at the Lamaque mine site, which was attended by approximately 35 industry professionals. Due to the success of this event, the Company will host another presentation and mine tour for industry analysts from major brokerages in Canada and the U.S. in mid September. The purpose of these on-site technical reviews is to demonstrate to the mining and financial communities the exciting results achieved at Lamaque over the past year."
BLAINE, WA, Aug. 28 /CNW/ - Century Mining Corporation (CMM: TSX-V) is pleased to announce its financial and operating results for the second quarter ended June 30, 2009.
Second Quarter Highlights
-------------------------
- Century recorded operating profit at San Juan and for the Company as a whole.
- All litigation regarding Compania Minera Poderosa was settled.
- The Company reduced its working capital deficiency by $3.9 million, or 26%, compared to December 2008.
Second Quarter Results
----------------------
In the second quarter ended June 30, 2008 the company reported an operating profit from mining operations, before depreciation, amortization and accretion, of $2,115,901 (2008 - $1,437,174) from gold revenues of $4,347,387 (2008 - $3,121,143). Expenses incurred in the mining operations were $2,231,486 (2008 - $1,683,969). For the quarter ended June 30, 2009 the Company reported net income of $1,137,857 or $0.01 per share, compared to net income of $2,538,817, or $0.01 per share in the prior period. The net income in the 2008 quarter was solely as a result of the return of the Rosario de Belen shares to the sellers.
As at June 30, 2009 the Company had a working capital deficiency of $11,128,404 compared to a working capital deficiency of $14,985,245 at December 31, 2008, a decrease of 26%. The Company is working diligently to continue to reduce this deficit.
During the second quarter of 2009 the Company settled all litigation with respect to the Company's October 2006 binding agreement to acquire an investment in Compania Minera Poderosa S.A. ("CMPSA"), a Peruvian gold mining company. Under the terms of the settlement agreement, the Company received (i) a US$300,000 cash payment and (ii) 260,868 shares of CMPSA in exchange for a US$300,000 deposit that had been paid by the Company. All litigation brought by the Company, the sellers, the other buyer and other parties was dismissed.
The Lamaque project is world class and management has been working to deliver a financing package with terms that are in the best interests of all of our stakeholders. To this end, the Company has considered a number of financing offers. The Company is currently in receipt of several equity financing offers which would supplement the prepaid gold forward term sheet that the Company is in the process of closing. The Company will continue negotiations only on those offers that allow the Company to honor its obligations to its stakeholders. A financing package will also only be acceptable that allows the existing shareholders to reap the upside benefits
of our estimated six million ounces of gold currently contained in reserves and resources at Lamaque. Proposals received to date have involved offers of mergers or business combinations, the sale of a substantial amount of equity, or some combination thereof.
A special committee of the Board of Directors has been appointed to review and evaluate the current offers for equity financing. It is expected that this process will take two weeks to complete.
Margaret Kent, President and CEO of Century commented, "Century is proceeding with the $45 million financing announced on July 30. Century is working closely with Union Securities Ltd., and we believe the final closing of this deal will occur this fall."
Regarding Lamaque, Ms. Kent further commented, "Century recently hosted a technical review at the Lamaque mine site, which was attended by approximately 35 industry professionals. Due to the success of this event, the Company will host another presentation and mine tour for industry analysts from major brokerages in Canada and the U.S. in mid September. The purpose of these on-site technical reviews is to demonstrate to the mining and financial communities the exciting results achieved at Lamaque over the past year."
Wednesday, August 26, 2009
Stats - 20 avg and 30 day avg
CMM share price:
*20 day average = $.143
*30 day average = $.147
CMM share price closed at $.14 or above:
*on 17 of the past 20 days
*on 27 of the past 30 days
*20 day average = $.143
*30 day average = $.147
CMM share price closed at $.14 or above:
*on 17 of the past 20 days
*on 27 of the past 30 days
Monday, August 10, 2009
Century grants $.18 stock options to Director and Officers in lieu of cash bonuses and other compensation
Century Mining Grants Stock Options
BLAINE, WA, Aug. 10 /CNW/ - Century Mining Corporation (CMM: TSX-V) announced today that it has granted a total of 3,150,000 stock options, of which 2,950,000 were granted to directors and officers of the Company. The stock options are exercisable into common shares of Century at an exercise price of C$0.18 per share for a period of five years. Century's common shares closed at C$0.145 on the TSX Venture Exchange on August 7, 2009.
These options were granted to directors and officers of Century for significant progress on the development of the Lamaque project in lieu of cash bonuses and other compensation to management.
Century Mining has 197,978,400 common shares issued and outstanding. Under the terms of the Company's "rolling" Incentive Stock Option Plan, a maximum of 19,797,840 shares are available to be issued pursuant to the exercise of options at this time. Including this grant of 3,150,000 options, a total of 9,989,750 shares have been reserved for issuance pursuant to outstanding option grants. A further 9,808,090 shares are available for issuance pursuant to future option grants at this time.
BLAINE, WA, Aug. 10 /CNW/ - Century Mining Corporation (CMM: TSX-V) announced today that it has granted a total of 3,150,000 stock options, of which 2,950,000 were granted to directors and officers of the Company. The stock options are exercisable into common shares of Century at an exercise price of C$0.18 per share for a period of five years. Century's common shares closed at C$0.145 on the TSX Venture Exchange on August 7, 2009.
These options were granted to directors and officers of Century for significant progress on the development of the Lamaque project in lieu of cash bonuses and other compensation to management.
Century Mining has 197,978,400 common shares issued and outstanding. Under the terms of the Company's "rolling" Incentive Stock Option Plan, a maximum of 19,797,840 shares are available to be issued pursuant to the exercise of options at this time. Including this grant of 3,150,000 options, a total of 9,989,750 shares have been reserved for issuance pursuant to outstanding option grants. A further 9,808,090 shares are available for issuance pursuant to future option grants at this time.
Saturday, August 8, 2009
Another company with prepaid gold sales
I recently did some research on other companies with a prepaid gold sale financing. I only found one other recently announced deal. The company is called Luna Gold. They are small in every aspect relative to Century. However, they went down a similar financing path. They did a huge (extremely dilutive) equity financing early this year and then they completed a prepaid gold sales financing just 2-3 months ago.
They have 346.4M shares outstanding, but yet they trade at $.39 per share.
Below is some key info on both companies. The wildcard in the comparison is Century’s debt covenant situation (including the Completion Guarantee). I have profiled the Completion Guarantee for Luna Gold. We don’t know what is in the debt covenants for Century and whether everything is reasonable. As such, I will leave that out of the equation for Century, given that we have nothing to work with at this time.
Assuming debt covenants are reasonable for Century, with Luna Gold currently trading at $.39 per share (after going down a similar path) I hope $.39 would be a good starting point for Century as well (if/once our deal closes). It would be better than the current $.145 share price (again, if the deal is not too risky of course). Given the comparative numbers between the 2 companies, logic would suggest that Century should trade higher than Luna Gold upon closing, but (after being beaten down for so long) I’m sure we will all settle for $.39 as a starting point (if we can get it).
Luna Gold
*outstanding shares – 346,393,000
*current share price - $.39
*current market cap - C$131.1M
*Country – Brazil
*P&P Reserves – 729,000 ounces
*Total Resource – 1,300,000 ounces
*prepaid gold sales committed to financing – unclear, but it appears to be ongoing (it could eventually be over 200,000 ounces, if I understand their situation correctly)
*prepaid gold sales as a % of P&P Reserves – 17%
*prepaid gold sales as a % Total Resource – 17%
*completion guarantee (part of debt covenants) – “Luna has provided a completion guarantee that within 30 months from the date that Sandstorm makes the Upfront Payment, the Project will produce a minimum of 12,500 ounces of payable gold in any three consecutive month period.”
*production start up – Q2’10
*2010 targeted production – unclear
*2011 targeted production – 60,000 ounces
*2012 targeted production - 60,000 ounces
*2013 targeted production - 60,000 ounces
Century Mining
*outstanding shares (after deal closes) – 329,300,000 (assuming $.18 Flow-Through shares, $.15 regular shares, 2M shares issued for commissions)
*current share price - $.145
*current market cap - C$28.7M
*Country – Canada (Quebec), Peru
*P&P Reserves – 1,300,000 ounces (Lamaque & SJ)
*Total Resource – 6,000,000 ounces (Lamaque & SJ)
*prepaid gold sales committed to financing – 50,000 ounces in total
*prepaid gold sales as a % of P&P Reserves (Lamaque & SJ) – 3.8%
*prepaid gold sales as a % Total Resource (Lamaque & SJ) – .8%
*primary completion guarantee (part of debt covenants) – unclear at this time
*production start up – SJ currently in production, Lamaque targeted for production Jan’10
*2010 targeted production – 67,000 ounces (Lamaque & SJ)
*2011 targeted production – 71,000 ounces (Lamaque & SJ)
*2012 targeted production - 104,000 ounces (Lamaque & SJ)
*2013 targeted production - 130,000 ounces (Lamaque & SJ)
They have 346.4M shares outstanding, but yet they trade at $.39 per share.
Below is some key info on both companies. The wildcard in the comparison is Century’s debt covenant situation (including the Completion Guarantee). I have profiled the Completion Guarantee for Luna Gold. We don’t know what is in the debt covenants for Century and whether everything is reasonable. As such, I will leave that out of the equation for Century, given that we have nothing to work with at this time.
Assuming debt covenants are reasonable for Century, with Luna Gold currently trading at $.39 per share (after going down a similar path) I hope $.39 would be a good starting point for Century as well (if/once our deal closes). It would be better than the current $.145 share price (again, if the deal is not too risky of course). Given the comparative numbers between the 2 companies, logic would suggest that Century should trade higher than Luna Gold upon closing, but (after being beaten down for so long) I’m sure we will all settle for $.39 as a starting point (if we can get it).
Luna Gold
*outstanding shares – 346,393,000
*current share price - $.39
*current market cap - C$131.1M
*Country – Brazil
*P&P Reserves – 729,000 ounces
*Total Resource – 1,300,000 ounces
*prepaid gold sales committed to financing – unclear, but it appears to be ongoing (it could eventually be over 200,000 ounces, if I understand their situation correctly)
*prepaid gold sales as a % of P&P Reserves – 17%
*prepaid gold sales as a % Total Resource – 17%
*completion guarantee (part of debt covenants) – “Luna has provided a completion guarantee that within 30 months from the date that Sandstorm makes the Upfront Payment, the Project will produce a minimum of 12,500 ounces of payable gold in any three consecutive month period.”
*production start up – Q2’10
*2010 targeted production – unclear
*2011 targeted production – 60,000 ounces
*2012 targeted production - 60,000 ounces
*2013 targeted production - 60,000 ounces
Century Mining
*outstanding shares (after deal closes) – 329,300,000 (assuming $.18 Flow-Through shares, $.15 regular shares, 2M shares issued for commissions)
*current share price - $.145
*current market cap - C$28.7M
*Country – Canada (Quebec), Peru
*P&P Reserves – 1,300,000 ounces (Lamaque & SJ)
*Total Resource – 6,000,000 ounces (Lamaque & SJ)
*prepaid gold sales committed to financing – 50,000 ounces in total
*prepaid gold sales as a % of P&P Reserves (Lamaque & SJ) – 3.8%
*prepaid gold sales as a % Total Resource (Lamaque & SJ) – .8%
*primary completion guarantee (part of debt covenants) – unclear at this time
*production start up – SJ currently in production, Lamaque targeted for production Jan’10
*2010 targeted production – 67,000 ounces (Lamaque & SJ)
*2011 targeted production – 71,000 ounces (Lamaque & SJ)
*2012 targeted production - 104,000 ounces (Lamaque & SJ)
*2013 targeted production - 130,000 ounces (Lamaque & SJ)
Friday, August 7, 2009
Peggy, BOD, please do the right thing to protect shareholders
I listened to parts of the conference call again. Let me premise everything I've wrote with regards to this latest financing deal by saying that my thoughts are based strictly on the info that is available publicly to us investors. What is not clear is what the debt covenants will look like. I've assumed that the Asian debt deal fell through because the debt covenants / terms were too unfavourable and left Century investors at risk of instantly losing everything.
I don't know what the debt covenants will look like for this new deal. If it is unreasonable and too risky for shareholders also then Peggy needs to take a serious look at the possible merger deal that was identified in the conference call (while it's still on the table). (the other option) the major that is interested in a J/V (majority controlling interest) in Lamaque doesn't look too appealing as a first option, as we become submissive, plus we get no cash flow unless the majority owner decides to declare dividends.
The caller on the conference call may have stepped over the line at times, but I think he was just an extremely concerned shareholder. A lot of investors have lost a lot of money on this investment. We are at a major crossroad right now. The next move is absolutely critical.
Peggy needs to swallow her pride and do what is best for Century shareholders. What is best also means balancing the risks to ensure we survive in good shape. Peggy and the BOD needs to continue negotiations with the merger partner to see if the deal can be bettered, as a backup plan. In a nutshell, I think this is the point the caller was really trying to make. I agree. I don't get the impression that Century is working that angle, which concerns me. I want to see a backup plan that is being actively worked on, even if we are committed to closing the bank/equity deal.
I am not interested in an all or nothing situation. If the debt covenants are unreasonable and put us at risk of instantly losing everything then we should try to negotiate better debt covenant terms with the bank, otherwise we should more actively explore the merger option. A merger deal might be safer, if the other company comes with good advanced staged properties. It reduces the risk substantially in case the Lamaque ramp up gets delayed. You know, the company can still continue onwards in decent shape due to the other good properties.
Right now, the number 1 priority should be establishing stability and reducing the risks.
I don't know what the debt covenants will look like for this new deal. If it is unreasonable and too risky for shareholders also then Peggy needs to take a serious look at the possible merger deal that was identified in the conference call (while it's still on the table). (the other option) the major that is interested in a J/V (majority controlling interest) in Lamaque doesn't look too appealing as a first option, as we become submissive, plus we get no cash flow unless the majority owner decides to declare dividends.
The caller on the conference call may have stepped over the line at times, but I think he was just an extremely concerned shareholder. A lot of investors have lost a lot of money on this investment. We are at a major crossroad right now. The next move is absolutely critical.
Peggy needs to swallow her pride and do what is best for Century shareholders. What is best also means balancing the risks to ensure we survive in good shape. Peggy and the BOD needs to continue negotiations with the merger partner to see if the deal can be bettered, as a backup plan. In a nutshell, I think this is the point the caller was really trying to make. I agree. I don't get the impression that Century is working that angle, which concerns me. I want to see a backup plan that is being actively worked on, even if we are committed to closing the bank/equity deal.
I am not interested in an all or nothing situation. If the debt covenants are unreasonable and put us at risk of instantly losing everything then we should try to negotiate better debt covenant terms with the bank, otherwise we should more actively explore the merger option. A merger deal might be safer, if the other company comes with good advanced staged properties. It reduces the risk substantially in case the Lamaque ramp up gets delayed. You know, the company can still continue onwards in decent shape due to the other good properties.
Right now, the number 1 priority should be establishing stability and reducing the risks.
Sunday, August 2, 2009
Anybody notice the last sentence
Our potential long-term relationship with a bank well established in the gold business will allow the Company to capitalize upon various opportunities that will present themselves in the gold market. This has been a long process, but during this time the Company has continued to work on the Lamaque project and enhance the value of the project. Unfortunately, this has not been reflected in the Company's share price. This mine is shaping up to contain an exceptionally large resource. This financing package will afford our shareholders a tremendous amount of upside and we will start up the mine in September with gold production by January. This is why I recently converted my debenture and exercised my warrants."
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