CENTURY MINING ANNOUNCES UP TO $3.7 MILLION OF FINANCINGS
Blaine, WA: September 17, 2008 - Century Mining Corporation (CMM: TSX-V) announced today that it has entered into a term sheet dated September 12, 2008 with U.K.-based Trafalgar Capital Specialized Investment Fund, FIS ("Trafalgar"), pursuant to which Trafalgar will provide to Century a bridge loan of up to $3.5 million, to be evidenced by a redeemable secured convertible note (the "Note"). The loan proceeds will serve as bridge financing, and allow Century to continue mine development, planning and other preparation activities at its Lamaque Mine. Century intends to repay this bridge financing through the completion of a financing relating to its Fortis Facility or through the sale of one or more of its mining properties.
In accordance with the term sheet, loan proceeds may be disbursed in up to four tranches, with $1.4 million, less fees and expenses, to be released at closing. Additional amounts of $850,000 and $720,000, respectively, may, at Century's request, be advanced at 30 days and 60 days post-closing, subject to approval by Trafalgar. A final advance of $530,000 may be released at Century's request at 90 days post-closing, subject to approval by Trafalgar.
The Note will bear interest at the rate of 12% per annum, compounded monthly, and will mature on the date which is the earlier of (i) four months from the closing date, and (ii) the date on which Century completes a financing transaction relating to the Fortis Facility with minimum proceeds of $5.0 million. If the Note is not repaid within four months of the closing date, amounts outstanding thereunder may be converted by Trafalgar into common shares of Century ("Common Shares") at the fixed conversion price of $0.05 (the "Fixed Conversion Price"), provided that no conversion will be permitted if it would result in Trafalgar holding greater than 9.99% of the Common Shares. Provided that the Common Shares are trading at or below the Fixed Conversion Price, the Century may at any time redeem the Note in exchange for cash, a 12.5% redemption premium and payment of all accrued interest outstanding thereunder.
Subject to the occurrence of an Option Share Redemption (as defined below), on the Maturity Date, Century will be required to redeem the Note in exchange for cash, a 7.5% redemption premium and payment of all accrued interest outstanding thereunder. Alternatively, on the Maturity Date, Century may elect to redeem the Note in exchange for Common Shares to be issued over a 24-month period (an "Optional Share Redemption"), in lieu of all principal outstanding, together with a 15% redemption premium, and interest accruing over such period. In the event of an Optional Share Redemption, Century will issue to Trafalgar (weekly, in four equal installments) such number of Common Shares as are equal to the principal, interest and redemption premium owed pursuant to a monthly payment schedule, divided by the then prevailing market price of the Common Shares (provided that such market price may not be less than $0.05 per share).
The Note financing remains conditional on completion of due diligence and receipt of TSX-V and other necessary regulatory approval.
The Note will be secured by a first charge/mortgage over Century's Qu?bec milling assets, and a second charge/mortgage over Century's Qu?bec mineral concessions. The terms of the Note will contain provision compensating Trafalgar for any appreciation of the European Union euro versus the Canadian dollar. Century will not receive the benefit of a reciprocal adjustment mechanism should the Canadian dollar strengthen against the euro.
In connection with the issuance of the Note, Century has agreed to pay to Trafalgar a commitment fee equal to 7% of the Note proceeds, and issue to Trafalgar from treasury a total of 15,000,000 Common Shares. At closing, Century has also agreed to pay a finder's fee of approximately $20,000 to two arm's length entities. The bridge financing is expected to close within the next three weeks.
For Century's immediate need to finalize the due diligence requirements for Fortis Bank and provide immediate working capital, an officer and director of Century has subscribed for a $200,000 secured convertible note. The note will bear interest at 15% and is convertible into units at $0.05 for a term of 18 months. Each unit is comprised of a common share and a common share purchase warrant exercisable for 18 months at $0.07. The note is secured against a package of exploration properties.
Margaret Kent, President and CEO of Century, said, "The combination of these two financings will provide the immediate and near-term financing necessary to take Century to a position to draw the senior secured financing Century is arranging for its Lamaque Project from Fortis Bank."
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.