CMM.V (Century Mining)
CENTURY MINING TO PURCHASE OPERATING MINE IN PERU AND ANNOUNCES PRIVATE PLACEMENT
Management Likes Resource Expansion Prospects at Mina Rosario de Belen
BLAINE, WA (CCNMatthews – May 7, 2007) Century Mining Corporation (TSX VENTURE: CMM - News) announces that it has signed an agreement to purchase Mina Rosario de Belen, an operating gold and silver mine located in northern Peru. Mina Rosario de Belen is owned by a Peruvian family, and is located near the town of Patival in the Angasmarca district of the state of La Libertad. The property is in the same mining belt that includes the Lagunas Norte Mine and the Yanacocha Mine, which are among the world’s largest gold mines. The mine property is approximately 12,471 hectares, adjacent to and directly to the south of the operating Santa Rosa Gold Mine.
Mina Rosario de Belen began operations in February of this year as an open-pit heap leach mine with an initial and expandable ore processing capacity of 5,000 tonnes per day. The mine and processing plant, still in the start-up phase, are currently operating at a rate of 2,000 tonnes of ore per day. The processing plant includes both a zinc precipitation circuit and a new carbon absorption circuit. Mina Rosario de Belen is equipped with leach-pad capacity for 10-million tonnes and a Merrill-Crowe zinc precipitation circuit, which currently operates at 530 gallons per minute. Power is currently generated on-site, with plans to connect to the national power grid in the second quarter of 2007.
Current start-up monthly production, on one 8-hour shift per day, 5 days per week, is 650 ounces of gold and 6,500 ounces of silver. Century management believes that the mine’s production can be increased to approximately 25,000 to 30,000 gold-equivalent ounces per year. Gold equivalents are calculated using a US$600/oz gold price and US$10/oz silver price. Cash costs of production are reported to be in the US$250-$300/oz range during the current start-up phase. A feasibility study has not been completed by Century and the estimate provided by the previous owners should not be relied upon.
The deposit has a reported historical resource of 18 million tonnes of ore grading 0.9 grams of gold equivalent per tonne or approximately 500,000 ounces of gold. This resource was calculated by the previous owner in 2001, however an NI 43-101-qualified report has not been completed on the deposit and the historical resource should not be relied on.
The deposit is open along strike and is amenable to modern exploration techniques. Based on the site visit and review of the owner’s drill data, trench sampling and geological maps and reports by Century’s Qualified Person, Dan Brost, Manager of Resource Geology, Century’s geological team plans to conduct a resource definition program to confirm the reported 18 million tonnes grading 0.9 g/t gold equivalent. The above quantity and grade estimates are Century’s only, and there has been insufficient drilling to date to define a NI 43-101 compliant measured mineral resource.
The resource is associated with an intrusive sub-volcanic unit that has cut across the sedimentary rocks of the Chimu Formation. The Chimu Formation hosts the nearby Santa Rosa gold deposit, which is currently producing 140,000 gold-equivalent ounces per year, and is also host to world-class gold deposits including Lagunas Norte, which is producing 1.1 million ounces of gold per year, and Yanacocha, which is producing 2.6 million ounces of gold per year.
The resource and geological setting are characteristic for this district, in that the resource is silver-rich and most of the mineralization is hosted in the oxidized intrusive unit. The exploration model (sandstone-hosted gold-silver) of the district could be applied to the area around the Patival land concessions with reasonable prospects for further discovery.
Given Rosario de Belen’s favorable geologic setting and its location adjacent to Santa Rosa, along a recognized trend that includes other large mines, the area is considered to be very prospective and could potentially host another Santa Rosa-type deposit.
Century has agreed to issue one million Century shares to the sellers as consideration for the purchase. Terms of the deal include a total purchase price of US$20.5 million in cash, to be paid in installments of US$3.25 million on closing in 45 days, US$3.25 million six months after closing, and US$13 million 12 months after closing, along with 500,000 shares of Century. Century has also agreed to pay a 1.5% NSR royalty to the sellers. Century expects to close the transaction in 45 days. The transaction is subject to the finalization of all documentation and approval of the TSX Venture Exchange.
The Company also announced a non-brokered private placement of units raising up to C$12 million. Each unit is priced at $0.89 and consists of one share plus one-quarter share purchase warrant exercisable at $1.17 for a period of 24 months. After 12 months the warrants will become exercisable within 20 days if the 20-day weighted average closing share price exceeds $1.25. The shares will be subject to restrictions on resale for four months. A large portion of the placement will be taken down by a significant European mining group.
No finder’s fee or brokers warrants will be paid.
Proceeds of the unit offering will be used for the acquisition of Mina Rosario de Belen, mining equipment, capital requirements at the San Juan Gold Mine and other general corporate working capital purposes.
Margaret Kent, President & CEO, said, “We are very excited to announce another quality acquisition in Peru. Rosario de Belen will not only add immediate ounces to Century’s production profile, but will also provide significant exploration potential, and the Company plans to aggressively increase resources here. This acquisition is consistent with the Company’s policy of finding and financing producing but undervalued gold mines on terms that can increase shareholder value.”
Best regards,
Sara Swisher
sswisher@centurymining.com
Century Mining Corporation
Phone: (360) 332-4653
441 Peace Portal Drive
Blaine, WA 98230
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 Québec 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. 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
If you do not wish to receive email announcements from Century Mining, simply reply to this message, and in the body of the message type: Cancel
