Century Reports Continued Progress During Second Quarter 2010
BLAINE, WASHINGTON -- (Marketwire) -- 08/13/10 -- Century Mining Corporation ('Century' or the 'Company') (TSX VENTURE: CMM) reports its financial and operating results for the second quarter and first half of 2010. See below for key highlights:
Three Months Six Months Six Months
June 30, 2010 June 30, 2010 June 30, 2009
Cash & Restricted Cash $ 9,365,313 $ 9,365,313 $ 396,253
Working Capital $ 2,728,839 $ 2,728,839 ($11,128,404)
Total Assets $ 130,670,527 $ 130,670,527 $ 92,226,846
Long Term Debt & Deferred
Revenue $ 32,234,804 $ 32,234,804 $ 326,619
Revenue $ 6,901,434 $ 11,799,445 $ 8,431,979
Earnings from Operations $ 3,483,142 $ 5,024,663 $ 3,934,892
Gold Production (ounces) 5,075 9,996 7,744
Mine Site Cash Cost
(US$/oz Au) $ 702 $ 639 $ 442
Realized Gold Price
(US$/ounce) $ 1,128 $ 1,096 $ 916
Weighted Avg. Common
Shares 345,362,196 342,124,016 181,539,921
Net Income (Loss) $ 255,098 ($298,089) $ 2,750,468
Net Income (Loss) per
share $ 0.00 ($0.00) $ 0.02
(Canadian $ except as noted)
As at June 30, 2010, the Company reported working capital of $2,728,839 compared to a working capital deficit of $11,128,404 for the corresponding date in 2009. During the ramp up of the Lamaque gold project in Val d'Or, Quebec, the Company spent capital on the purchase of new underground low profile mine equipment, the refurbishment of the Sigma mill facility, the construction of new crushers and conveyors, and began the payment of long-term debts negotiated with various suppliers.
In the first half of 2010, corporate administration expenses were $2,645,755 (first half 2009: $1,746,841), an increase of approximately 51%. These expenses are related to the re-start of the Lamaque operation including additional manpower, salaries and benefits, as well as travel and accommodation expenses.
Corporate Operational Outlook
San Juan Operation Update and Guidance
The San Juan operation is now producing at approximately 4,500 to 5,000 ounces of gold per quarter, and production guidance remains at 18,000 to 20,000 ounces in 2010. During the first half of 2010, ending June 30, 2010, San Juan produced 9,996 ounces of gold at an average mine site cash cost of $639 per ounce, and in the second quarter ending June 30, 2010 produced 5,075 ounces of gold at a mine site cash cost of $702 per ounce.
In the second quarter, cash costs increased due to additional expenses related to the construction of a new cyanide tailings pond facility, and a subsequent shut down of the mill circuits for a period of time. The CIL plant operated on restricted tonnage in the quarter and the project was completed in July 2010. Also transition ore from mining at the Jessica vein system required campaigning through the mill and produced a lower recovery. The average mine site cash cost for the San Juan mine for 2010 has subsequently increased from $550-$570 per ounce to $575-$625 per ounce, but is expected to decrease in 2011 back to the $550-$570 range.
With an investment of US$1.5 million in the operation, the production rate can be expanded from the current 250 tonnes per day to in excess of 400 tonnes per day, which will increase production to 6,000 to 7,000 ounces per quarter. The Company expects to make this investment after the Lamaque mine has reached capacity and the final draw of the Deutsche Bank AG forward gold purchase amount is made.
The mine is continuing with improvements of the tailings dam to increase tailings storage capacity for the planned future production increases. Gold production at San Juan is expected to reach 25,000 - 30,000 ounces of gold per year by 2012.
Lamaque Operation Update and Guidance
On April 30, 2010, the Lamaque mine poured its first gold bar, and subsequently produced a total of 3,942 ounces in the second quarter. Revenue associated with gold production at the Lamaque operation has been offset against the deferred development costs. Company's production guidance for Lamaque for 2010 has decreased from 35,000-40,000 ounces to 25,000-30,000 ounces gold, reflecting an overall production decrease of approximately 10,000 ounces for 2010.
During the startup and commissioning of the Lamaque Project certain equipment procurement, operational obstacles, and mining delays previously identified have hampered production. The Company has identified the following key operational obstacles that have directly affected the production guidance for 2010 as stated above:
1. Three week delay in electrical power grid being connected to minesite
affected access to the underground, mine development and the initial
stockpile of mill feed prior to mill being operational in April 2010;
2. Three week delay in receiving low-profile underground equipment
contributed to postponed underground mine and stope pre-development;
3. Delay in completion of technical reports from consultants, and
subsequent permits postponed the Bedard dyke portal and underground
development program;
4. Slower than expected recruitment of experienced management, technical
staff and underground mining employees has contributed to the delay in
the training on equipment and mining methods, and the management of ore
feed assay and sampling controls;
5. Competing with numerous other mining projects in the area for vendor
services and equipment.
On the positive side of the Lamaque operation, improvements in underground production through the controlling dilution and blasting, and continued efficiencies in the operation of the new low-profile underground equipment, have increased production with more predictable grades and mill recoveries exceeding budget. The Lamaque operation is now staffed with an experienced surface and underground work force, and an underground mine contractor has been hired to advance the development of the Bedard dyke.
Subsequent to the quarter ending June 30, 2010, July production has increased to approximately 820 tpd, and early August production has reached close to 1,000 tpd. The guidance for 2011 at Lamaque remains at 80,000 to 90,000 ounces, and Lamaque is anticipated to reach commercial production in the first half of 2011.
The consolidated production outlook for the Company is approximately 45,000 to 50,000 ounces in 2010, 115,000 ounces in 2011, and 130,000 in 2012. The long term cash cost, on a consolidated basis for the Lamaque and San Juan operations, is estimated to range between $450 to $550 per ounce.
Keith Hulley, Interim CEO of Century commented, 'The Company's initial six months of 2010 have been a challenge, with the usual start-up operational difficulties. Our team at the Lamaque operation have done well bringing the project into production, and have worked through some difficult obstacles and unexpected delays resulting in lowering of our corporate production outlook. The operational startup issues are being resolved as we continue with the start-up activities.'
On July 28, 2010, Margaret M. Kent, the Company's Chairman, President and Chief Executive Officer resigned. The Board of Century accepted her resignation and has initiated a global executive search for a new President and CEO. During this period of transition, the Board has appointed Mr. Keith Hulley, a Century Director, as interim CEO, and also promoted Mr. Adrian McNutt from VP Operations to Chief Operating Officer. The Company continues with the search for a new President and CEO and expects to be able to make the appointment and announcement in the fall of 2010.
Conference call
Management will host a conference call on Friday, August 13th at 11:00 a.m. Pacific time (2:00 p.m. Eastern time) to discuss the six months and second quarter ending June 30, 2010.
Mining analysts, investors and the media are invited to dial toll-free 1-888-942-9044 in Canada and the United States, or 1-517-308-9426 from international locations (normal toll rates do apply) and state the verbal passcode 'CenturyMining'. Please dial approximately 5 minutes before the start of management's presentation. The presentation will be followed by a question and answer period.
The conference call will be archived for later playback and may be accessed by dialing 1-800-406-7492 or 1-203-369-3274 and entering the pass code 1324#, or via www.centurymining.com via a downloadable audio file. The archived playback will be available until September 10, 2010 11:59 p.m. Pacific Time.
The second quarter Financials and Management Discussion & Analysis is available on the Company's website at www.centurymining.com and have been filed on www.sedar.com.
About Century Mining Corporation
Century Mining Corporation is a Canadian junior gold producer and holds strategic land positions in Canada, United States and Peru. The Company's strategy is to grow to an intermediate gold producer through existing mine expansions and acquisitions of other strategic and synergistic gold opportunities.
On behalf of Century Mining Corporation,
Keith Hulley, Interim CEO
Caution Concerning Forward-Looking Information
This press release contains forward looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of applicable Canadian securities laws. We use words such as 'may', 'will', 'should', 'anticipate', 'plan', 'expect', 'believe', 'estimate' and similar terminology to identify forward-looking statements and forward-looking information. Such statements and information are based on assumptions, estimates, opinions and analysis made by management in light of its experience, current conditions and its expectations of future developments as well as other factors which it believes to be reasonable and relevant. Forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those expressed or implied in the forward-looking statements and information and accordingly, readers should not place undue reliance on such statements and information. Risks and uncertainties that may cause actual results to vary include but are not limited to the speculative nature of mineral exploration and development, including the uncertainty of reserve and resource estimates; operational and technical difficulties; the availability to the Company of suitable financing alternatives; fluctuations in gold and other commodity prices; changes to and compliance with applicable laws and regulations, including environmental laws and obtaining requisite permits; political, economic and other risks arising from our South American activities; fluctuations in foreign exchange rates; as well as other risks and uncertainties which are more fully described in our annual and quarterly Management's Discussion and Analysis included in this Annual Report, in our Annual Information Form and in other filings made by us with the Securities and Exchange Commission and with Canadian securities regulatory authorities and available at www.sedar.com.
While the Company believes that the expectations expressed by such forward-looking statements and forward-looking information and the assumptions, estimates, opinions and analysis underlying such expectations are reasonable, there can be no assurance that they will prove to be correct. In evaluating forward-looking statements and information, readers should carefully consider the various factors which could cause actual results or events to differ materially from those expressed or implied in the forward-looking statements and forward-looking information.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Century Mining Corporation
Peter A. Ball
Director of Investor Relations
(360) 332-4653 or Toll Free: (877) 284-6535
pball@centurymining.com
www.centurymining.com