Crunch Time for Century Mining

When Century Mining (TSXV: CMM) announced a final release agreement to eliminate royalties and future payments associated with the Lamaque underground mine with Tech it looked like the company was moving in the right direction by taking control of its own destiny. On April 28th, 2010, just a few weeks later, Century Mining reported that its mill facility at the Lamaque gold project located in Val d'Or, Que., was fully operational and processing 900 tonnes to 1,100 tonnes per day of ore from current production and existing stockpiles. The company stated they were “fully financed and on budget for the ramping up of the company's Lamaque gold project, and is preparing for its first gold pour within the next week, nearly one month ahead of schedule.”

Investors responded to the company’s decisions and the shares moved from $0.41 on the day of the Tech announcement to $0.73 in late April. However the winds of change were beginning to blow through the historical mine shafts of the lamaque mine where mining had first started in 1937. Two weeks later British Columbia Securities Commission issued a cease trade order against Century Mining for failing to file audited financial statements and MD&A on time which, in hindsight, may have cast a prognostic cloud over the Lamaque gold project.

Lamaque Miner - photo by Patrick Sanfaçon. From the related addressing "A Case of Problems" by La Presse

As 2010 progressed it was becoming evident that the company was experiencing both production and profitability set-backs and they were required to complete a number of private placements. And today, the company issued a news release that summarized more delays and the need for additional financings.

The losses in mill throughput resulting from the crusher failure in February, 2011 had an adverse impact upon the company's cash flow and available finances. This severe constraint on finance availability forced management to halt the operations and put all other capital projects on hold. Shares of Century Mining are currently trading at $0.57 down $0.13 on the day.

Although operations at the mill are suspended it is certainly still “crunch time” for Century Mining as management now scrambles to meet its obligations associated with debt repayment and continuing working capital payments. And perhaps it couldn’t have happened at a better time – the management team of Century Mining is currently at PDAC – the Prospectors & Developers Association of Canada's annual conference that attracts many mining industry financiers and professionals with 20,000 attendees from 100 different countries. PDAC is the largest annual gathering of its kind in Canada.