Century Mining Amends Forward Gold Purchase Agreement With Deutsche Bank and Confirms Start of North Wall Long Hole Stopes
VAL D'OR, QUEBEC -- (Marketwire) -- 07/25/11 -- Century Mining Corporation ('Century' or the 'Company') (TSX VENTURE: CMM) announces that it has entered into an amended and restated forward gold purchase agreement (the 'Amended Agreement') with Deutsche Bank AG, London Branch ('DBAG'), which Amended Agreement amends the forward gold purchase agreement and amendment agreement, each entered into between the parties in December 2009.
Under the original agreement, Century agreed to make scheduled monthly gold deliveries, including delivery of 667 ounces per month during 2011, for which it had received prepayment in 2009. Under the terms of the Amended Agreement, DBAG has agreed to amend Century's scheduled delivery obligations with respect to the months of June, July, and August 2011 (the 'Affected Delivery Periods'), allowing Century to receive the spot market price of gold at the time of the delivery for the required delivery of 667 ounces for each of the Affected Delivery Periods. As a result, Century will become indebted to DBAG in the amount of US$3.25 million (the 'Loan Amount').
The Loan Amount is repayable one year after the effective date of the Amended Agreement at a 23% annual rate of interest, subject to conversion by DBAG or prior repayment by Century. DBAG has the right (the 'Conversion Right'), to convert a portion or all of the Loan Amount, including any accrued and unpaid interest thereon, into Century common shares at a conversion price equal to: (i) the current Market Price (as defined in the policies of the TSX Venture Exchange) in respect of the principal amount of the Loan Amount, subject to adjustment in certain circumstances, and (ii) the Market Price at the date of settlement in respect of accrued interest on the Loan Amount, discounted to the maximum extent allowable under the TSX Venture Exchange policies. The Conversion Right shall not be exercisable within the first three months from the date of the Amended Agreement. The securities issued or issuable under the Amended Agreement shall be subject to a four-month hold period from the closing date of the Amended Agreement. The Amended Agreement is subject to various conditions including a limited equity offering and approval by the TSX Venture Exchange.
Use of proceeds will be solely for operational and mine development activities at Lamaque including increasing the development rate in the North Wall and Flats; a drilling plan in and around known stopes; information for future planning and reserve modeling; and continuation of dewatering at the current rate of 1,200 gallons per minute.
Lamaque Update
In addition, Century announces that the Lamaque Project has started the long hole stope mining from the higher grade bulk volume targets related to the dykes and shears in the North Wall. Now that the Company has access to this ore it will start the ramp up in mill feed tonnage to 2,000 tonnes per day forecast for the fourth quarter.
About Century Mining Corporation
Century Mining Corporation is a Canadian gold producer and holds strategic land positions in Canada, the United States and Peru. The Company's strategy is to grow to its gold production through existing mine expansions and acquisitions of other strategic and synergistic gold opportunities.
On behalf of Century Mining Corporation,
Daniel J. Major, President & CEO
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 including with respect to the intended use of proceeds raised in the private placement. 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 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.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Century Mining Corporation
Richard B. Meschke
(360) 332-4653 or Toll Free: (877) 284-6535
(360) 332-4652 (FAX)
rmeschke@centurymining.com
www.centurymining.com
Terre Partners
Joanna Longo
(416) 238-1414 (ext 233)
jlongo@terrepartners.com