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Century Mining targets 300 000 to 500 000 oz/y

By: Liezel Hill
13th January 2010
Updated 2 hours 24 minutes ago


TORONTO (miningweekly.com) – After resolving its financial woes and bringing on a new large shareholder, TSX Venture Exchange-listed Century Mining is now fully funded and ready to get down to the business of growing gold production, CEO Margaret Kent said on Tuesday.

The company is forecasting output of about 65 000 oz of gold this year from its mines in Canada and Peru, but targeting eventual production levels of around 300 000 oz/y to 500 000 oz/y, she said on a conference call.

Century's current plans at its two mines would increase gold production to about 120 000 oz/y by 2012.

“So we have a nice growth profile. And of course, if we layer on top another acquisition, possibly by early 2011, that might add another 100 000 or 150 000 oz/y, and you can see we can reach that 300 000 oz target fairly quickly.”

Kent presented shareholders with a nice little gift on December 24: the news that Century had finalised the paperwork to raise C$60,75-million in a series of transactions, providing the firm with working capital and the cash it needed to reopen its Lamaque complex, in Quebec.

The company operated an openpit mine at the site until 2007, when high oil prices and surging operating costs prompted a decision to focus on the large underground resources.

Underground work started in 2007 and continued into the following year.

However, the just as the firm was making the transition from an underground test project into full-on production “the credit crisis hit us straight between the eyes”, Kent recounted.

After negotiating a $33-million prepaid gold forward facility with Deutsche Bank, a C$17-million private placement (including C$15,75-million to one buyer, Kirkland Intertrade) and C$9,1-million in flow-through placements, the company is now back on its feet.

The power to the Lamaque complex will be turned on in the next week or so, laid off workers are being recalled and underground development should get under way in February.

If all goes to plan, the company could pour its first gold in April and expects to produce about 45 000 oz from Lamaque this year, Kent said.

Looking ahead, Century plans to increase production to between 100 000 oz and 110 000 oz/y by 2013 at Lamaque through progressive expansions, and has estimated life-of-mine average cash costs at $450/oz to $500/oz.

However, Kent believes it would be “very realistic” to push production up to 150 000 oz/y.

At the firm's other operation, San Juan, in Peru, production is forecast at 20 000 oz this year, but should rise to 30 000 oz by 2012.

EXPLORATION

As mining gets under way again in Canada, Century is also planning an aggressive exploration and data compilation programme at Lamaque, to add to the measured and indicated resources and reserve categories.

In total, across its assets, the company has about six-million ounces of gold in reserves and measured, indicated and inferred resources.

Once operations at Lamaque are up and running, Kent said she also plans to start assessing the potential acquisitions or joint ventures on properties surrounding the Lamaque project.

Shares in Century Mining slid 1,3% on Tuesday, to C$0,38 apiece by 15:59 in Toronto.

However, the stock has more than doubled in the last two months.

Century also announced earlier in the day that it had appointed Fran Scola and William Lamarque to its board of directors.

Ross Burns, Ricardo Campoy, Allen Ambrose resigned their directorships, although Campoy will continue to act as an advisor to the board.

Keith Hulley will also advise the board.
Edited by: Liezel Hill