CENTURY MINING ANNOUNCES TEMPORARY CURTAILMENT OF LAMAQUE UNDERGROUND PRODUCTION
- Company to continue development work, further resource upgrades and focus on achieving senior debt financing draw down -
Blaine, WA: July 2, 2008 - Century Mining Corporation (CMM: TSX-V) Century today announced that it will temporarily curtail production at the Company's Lamaque Underground Mine, located in Val d'Or Quebec. The Company also announced that mining operations at the San Juan Gold Mine in Peru will continue as normal.
Investor Conference Call
Management will host a conference call after the 2008 first quarter financial results are released to discuss the details of the financial results and the future strategies at its operations in Qu?bec and Peru. The date and other details of the conference call will be included in the first quarter financial results announcement.
Overview
Explaining today's decision, the Company cited economic and timing issues that favor a temporary curtailment of underground production. The Company stressed, however, that the operation will continue to remain open. Century expects to complete necessary preparations and close the financing in order to commence ramp up of the underground mining operations in November 2008.
Purpose of Curtailment
The Company's Board of Directors, after carefully evaluating current operations and near-term financial commitments and capital requirements, determined that there are significant benefits to curtailing production for a period of up to 6 months. During this period, the Company will utilize funds procured through the recently announced financings to fully focus the key staff on mine development, mine planning, permitting activities and financing due diligence activities. Century recommenced development at the Lamaque underground mine in May of 2007 and in parallel has undertaken a substantial data compilation program that has resulted in a NI 43-101 compliant technical report including 1.13 million ounces of gold reserves, 624,000 ounces of measured and indicated resources and 2.83 million ounces in the inferred resource category. During the interim curtailment, Century will maintain its key staff at the Lamaque Complex.
Financing
On June 5, 2008 the Company announced that it had secured a commitment for $6 million from MRI Trading AG. Century is also currently engaged in a due diligence process with Fortis Bank for a senior financing package of up to $70 million. Both of these financings are expected to proceed as planned during the interim period. Funds procured through the MRI facility will be used for the aforementioned due diligence activities, which will lead to the Company's ability to draw down on the Fortis facility.
Margaret Kent, President & CEO, commented: "The decision to implement a curtailment of production during this interim period for Lamaque was carefully considered by management and the Board of Directors based on all available financial and operational information. Underground mining at Lamaque carried out since May of last year has provided a thorough understanding of the mine and the associated operating costs. This information was needed to confirm previously reported feasibility numbers and provide the backup necessary for the current banking due diligence processes. The underground operation was operating at about 20% of optimum capacity, and the lack of necessary bridge financing to increase production has resulted in continued operating losses. By temporarily curtailing production the Company will be able to allocate all funding and dedicate all management resources to mine development so that full-scale production may begin immediately upon draw down of the previously announced Fortis Bank debt financing. Management believes that this plan will ensure the long-term success of the Lamaque Underground Mine and minimize further dilution to the Company's shareholders. During the interim period Century will work closely with the Company's financial backers and all other stakeholders to ensure a smooth transition from development to the restart of full-scale mining operations. The project has a 10 year life based on mineable reserves and it is expected that the overall mine life will approach 20 plus years, based on the known resource profile. A six month curtailment of production is a positive step toward achieving our long-term goals."
About Century Mining Corporation
Century Mining Corporation is an emerging mid-tier gold producer that is aggressively acquiring producing mines and exploration properties in Peru in addition to its Canadian projects. The Company owns and produces gold at the Lamaque mine in Qu?bec that historically has produced over 9.4 million ounces of gold. In Peru, Century wholly-owned subsidiaries own an 82.6% interest in the San Juan Mine where the Company accounts for 100% of gold production.
"Margaret M. Kent"
Chairman, President & CEO
For further investor information, please contact:
Brent Jones, Manager of Investor Relations
E-mail: bjones@centurymining.com
Phone: (877) 284-6535 or (360) 332-4653
Fax: (360) 332-4652
Website: www.centurymining.com
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this press release.
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.