All and all, things are looking good. Some bad habits still need to change, but generally there are a lot of positives and a lot of things are heading in the right direction.

Here is my grading (at this moment in time) of selective areas of Century:

*Century employees that kept things going during the financial crisis = A++

*IQ = A++

*Finskiy and Scola = A+

*The creditors that supported the company by signing up for the $.25 debt for share program (when the share price was far below $.25 on most days) = A+

*Lamaque exploration team = A-

*The people that built (and fine tuned) the Lamaque start up plan = A+

*Lamaque start up team = A

*Operations team at Lamaque = B- (early, could improve with time)

*IR = B (could easily be an A with more institutional investments and more analyst coverage)

*Meeting deadlines = D (big improvements due to Lamaque start up, as this use to be an F - the goal for this area needs to be A++)

*Credibility = D- (improved, lots more room to improve further)

*Communications = D+ (big improvement, as this use to be an F)

*Transparency = D

*Changing the perception/image of Century = D

*The people responsible for managing the audit process = F

*The person that wrote the MD&A = F



Here are my thoughts on the YE statements:

1) Performance Hurdle A was achieved. On April 29th, the company accessed the $5M from escrow. This is something they should include in one of their NR updates.
``Subsequent Events``
``o) On April 29 2010, the Company withdrew from the Performance Reserve Account US $5.0 million after having satisfied their obligations under Performance Hurdle A, as amended``

2) To access the next $8.5M in escrow, we can count SJ production as part of the 70K run rate production. This will make it more achievable as oppose to only being allowed to use Lamaque ounces. The note in the financials is consistent with the DB agreement document with regards to Performance Hurdle B. However, one should be aware that the start up guarantee still uses a 70K run rate target for Lamaque only (we don`t appear to be allowed to use SJ ounces for that goal, if I understand the DB document correctly).

Nevertheless, the inclusion of SJ ounces in the Performance Hurdle B target is extremely helpful. If SJ can continue to deliver 4,750 ounces of production per quarter then it means an annualized run rate contribution of 19,000 ounces. It means Lamaque only has to deliver run rate of 51,000 ounces. Assuming Lamaque eventually gets up to 95% recovery and 4.76 g/t grade, it means that Lamaque only has to deliver above 980 tpd in average ore for the 4 consecutive months, in order to achieve Performance Hurdle B. With only needing 980 tpd from Lamaque (@95% and 4.76 g/t), assuming Century can compensate later on for the early lower start up grade, we might be able to use May, June, July and August as the 4 consecutive months (without having to toss out May and June). If successful, it could mean we get to pull the next US$8.5M out of escrow in September (or October).

From YE financials:
``Once the Company has achieved a combined annualized production rate from the San Juan Mine in Peru and the Lamaque Mine based upon the sum of production for the period of four consecutive calendar months, of at least 70,000 ounces of gold, a further $8.8 million (US $8.5 million) can be withdrawn. (Performance B)``

From the Jan 14`10 DB agreement filed on SEDAR:
``Performance Hurdle B` means the Seller meets or exceeds an annualised
production rate from the Mining Projects (based upon the sum of production for the period of four consecutive calendar months ended immediately prior to the relevant Performance Reserve Account Release Date) of at least 70,000 Ounces of Gold which such production rate shall have been verified by the Buyer or by a third party appointed by the Buyer based upon refined Gold receipts issued by the Refiner and changes in the mill and mine inventory;``

3) I don`t see a note in this MD&A about the 2,000 unfinished Lamaque ounces that had been carried forward all this time. However, I still see about $1.7M of in-process gold booked at YE. The in-process gold total was about $2.1M at end of Q3. If I take the $2.1M Q3 amount and I divide by 2,000 ounces, I get about $1,050 per ounce value. If I then apply the $1,050 book price to the $1.7M in-process amount booked at YE, I get about 1,600 ounces. Perhaps we still have somewhere between 1,000 and 1,600 unfinished Lamaque ounces we can finish off (now that the mill is up again) and sell at the current $1,245 gold price.

4) Current Liabilities:

a) There is an amount of $3.2M labelled as deferred revenue - booked as Current Liabilities. This represents the current portion of the prepaid gold sales commitment.

Financials: ``The current portion of deferred revenue represents the revenue expected to be recognized in 2010 in respect of gold to be delivered in 2010 pursuant to this agreement.``

MD&A: ``The Company has recognized a current liability for the ounces to be delivered in the next twelve months. ``

b) The $1M Convertible Debenture (MRI) has since been retired (converted to shares).

c) Their A/P and Accrued Liabilities area is quite confusing to me. It was about $14.2M in Q3. For YE, they are now showing $14.4M plus $5.0M in current portion of LT debt. Here is the note about the $5.0M:

``During the year, the Company renegotiated amounts owing to certain vendors and creditors, whereby payment terms were extended into 2012........... As a result of this extension of payment terms, these amounts have been reclassified from accounts payable to Long-Term Debt. The payments under these extended terms are as follows: 2010 - $4,952,767; 2011 - $910,504; 2012 - $494,021.``

Where I am confused is how $14.2M at Q3 turned into $20M+ (with $19.4M due in 2010). This isn`t what I was expecting. I was expecting some of the $14.2M to still be unpaid (perhaps maybe with a remaining outstanding balance below $10M). I certainly was not expecting it to grow from $14.2M to $20M+, especially given that this period for prior to Lamaque start up. If all $20M+ existed in Q3 then I am unclear where the difference was booked (above the $14.2M). It would have been nice if they had provided better disclosure in the YE financials, with perhaps a reconciliation between Q3 and YE. I guess even though the current obligation of $19.2M is substantial, at least it is (or should be) unsecured obligations. That should provide an opportunity to renegotiate if all of the cash is not available during 2010. The recent $5.0 from escrow will help. The $8.5M from escrow later in the year will help also. Hopefully we will also have surplus cash from both operations . We also have the $15M worth of Finskiy and Scola emergency warrants (currently way in the money). The A/P and Accrue Liabilities area is our main payment area (from the balance sheet) so there shouldn`t be a major need to divert cash to other balance sheet items. We do not have to pay interest on the DB gold sales (if we are on time with our deliveries of course). We do not have to make any cash payments on the principal either. This should all help in allowing us to address the A/P and Accrued Liabilities situation.

5) Income Statement

As a general comment, personally, I found their commentary/lack of explanations on key Income Statement lines to be extremely poor. Going from reporting strong profits all year long to suddenly showing a significant YE loss is something that warrants up front explanations, in my view. Without it, it`s a very quick way of losing credibility and encouraging people to second guess all future published information, in my opinion.

Best I can tell, the loss resulted from a number of (net) factors - it`s not nearly as bad as it appears on the surface (the up front costs of the various financings is one of the big contributors):

a) Mining operating expenses went from being $6.7M at YTD Q3 to $13.0M at Y/E. This represents an increase of $6.3M in one quarter alone. This is the reason for the operating loss in Q4 and plays a significant role in driving out the net loss in overall 2009. Now, SJ did 17,036 ounces in `09 @ US$485 cash cost per ounce. That works out to around $8.3M in mine operating costs (maybe a bit more after converting to cdn$), but it doesn`t equate to the C$13.0M booked for 2009. This would suggest that there are other costs booked as well. The extra costs are likely mine development costs that were expensed. Either heavy Q4 work that was done or work that was done in previous quarters and released at YE (by the auditors), or a combination of both. They may have also been a change in accounting treatment the drove the catch up. This is why the company`s MD&A is so poor. The market should not have to go through this exercise in blindly trying to put the pieces together (certainly not with something so critical to the outcome of the statements and the performance of the company).

b) $5.2M in financing charges

MD&A: ``transaction costs pertaining to the forward gold purchase agreement and other financings of $5,255,943``

c) Offsetting a portion of those new charges is a $4.8M gain resulting from various items (otherwise the net loss would have been a lot worst).
``a gain on settlement of debts of $4,777,370``

d) There were a few other (smaller) contributors also, such as $700K in stock base compensation (a non-cash item of course).