CENTURY
ACQUIRES CONTROL OF SHAHUINDO PROJECT AND SURROUNDING PROPERTY IN PERU
Century Mining Corporation (“Century” – TSX-V:CMM
– May 16, 2007) announced today that it has purchased 100% of the shares
of Compania Minera Algamarca S.A., Compania de Explorations Algamarca S.A.,
Andean Mining Gold, Import & Export A.C.D., S.A., and Inversiones Mineras
Sudamericanas S.A.. These companies own the 26 concessions, the surface rights,
the mortgages and all litigation rights in respect of the precious metal
property known as “Shahuindo” in the district of Cachachi, province of Cajabamba,
department of Cajamarca in northern Peru.
The purchase price for 100% ownership of these companies is $US31
million, which is being financed by the sellers over a 2-year period. An
initial installment by Century of US$1 million will be paid immediately and
Century will continue payments of US$1 million each quarter for the remaining 7
quarters during the 2-year post closing period pursuant to the terms of the
purchase agreement. At any time up to the end of the two-year post closing
period, Century will effect a payment of US$20 million, with the balance
payable 18 months later. Any quarterly installments made after February 6,
2008, will not be applied against the balance payable. The financing is non-
recourse to Century Mining, or any of its subsidiaries and in certain circumstances
the payments can be accelerated.
Concurrent with this transaction, Century acquired an option to
purchase the mining concessions and surface rights surrounding Shahuindo,
called the “Atimmsa Project” for US$21 million. This property,
totaling 10,000 hectares of mining concessions and 142 hectares of surface
rights may contain further extensions of the Shahuindo deposit.
The purchase price for the Atimmsa Project is to be paid in two
installments and within the same timelines prescribed in the Shahuindo
transaction: (i) US$12.5 million upon exercise of the option (also to be
financed by the sellers) and which may, at Century’s discretion, be paid
at any time within two years following the closing of the Shahuindo
transaction; and (ii) US$8.5 million due in 12 months after the exercise of the
option. Additional consideration in the form of a 2% NSR on both the Shahuindo
and the Atimmsa Projects is also payable.
After a thorough legal review completed by the company and its
advisors, and a review of the history of the dispute that has surrounded the
title to the Shahuindo mining project, Century believes that the companies it
is buying are the rightful owners of the properties and associated surface
rights. Century has also taken the additional steps necessary to acquire the
surrounding mining concessions and surface rights in order to be
well-positioned to further develop the project. As part of the transaction, the
selling group will continue to manage the ongoing litigation in the Peruvian
court system.
Century plans to move the Shahuindo project forward, including
undertaking background sampling for application of the environmental permit.
Algamarca currently has on site a camp and the personnel necessary to undertake
this work.
Margaret Kent, President & CEO of Century, commented, “We
believe that there are over 2 million ounces of gold and gold equivalents at
Shahuindo, which makes this an exceptional project for Century. We are going to
build a mine at Shahuindo. My exploration team and I have visited the project
and we view the Atimmsa property as a very exciting addition to the core
Shahuindo property. Century has significant experience operating in Peru, with two
producing operations and over 500 employees. We are also confident in our legal
position in the litigation surrounding the Shahuindo Project. Rosario de Belen
is similar to Shahuindo as it is located in the same district and is an open
pit heap leach operation. This will facilitate extensive operational synergies,
and we plan to build a similar but larger operation at Shahuindo. Shahuindo
could be operational as early as the 4th quarter of 2009, with gold
equivalent production of 125,000-150,000 ounces per year. This acquisition is
consistent with Century’s strategy of increasing production while
lowering cash costs through the consolidation of gold assets in the Americas. We
are very excited that Century is continuing to grow with a world class
asset.”
Conference call
Management will host a conference call today (May 16, 2007) at 1:00
p.m. Pacific time (4:00 p.m. Eastern time) to discuss recent acquisitions in Peru. Mining
analysts, investors and the media are invited to phone 1-888-566-5775, or
1-517-308-9367 if outside Canada
and the U.S.A.,
followed by the pass code 9930656 approximately 5 minutes before the start of
management’s presentation. The presentation will be followed by a
question and answer period.
A replay of the conference call can be heard through Wednesday, May 23
by dialing 1-800-814-6746, or from outside North America
1-203-369-3827.
Regards,
Sara Swisher
Century Mining Corporation
Century Mining Corporation: is an emerging mid-tier gold producer
that is aggressively acquiring producing mines and exploration properties in Peru. The
Company owns and produces gold at the Sigma and Lamaque mines in Qu�bec that historically
have produced over 9.4 million ounces of gold. In Peru, Century owns an 82.6%
interest in the San Juan Mine where the Company accounts for 100% of gold
production. The Company has also recently acquired Rosario de Belen where it
accounts for 100% of both gold and silver production. Century’s growth
strategy is to acquire gold producing assets in South
America that will substantially reduce the Company’s
consolidated total cash cost of production and where there is
exceptional exploration potential to expand production at these mines.
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
information within the meaning of applicable securities laws. We use words such
as “may”, “will”, “should”,
“anticipate”, “plan”, “expect”,
“believe”, “estimate” and similar terminology to
identify forward-looking information. It is 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 information involves
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 accordingly, readers should not place undue
reliance on those statements. 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
resource 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 and in other filings made by us with
Canadian securities regulatory authorities and available at www.sedar.com.
Century Mining Coroporation: 441
Peace Portal Drive / Blaine,
WA 98230
/ Phone: (360) 332-4653
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