Century Converts Sigma-Lamaque To Full Underground Operation – Company Closes Open Pit –
Tuesday, November 6th, 2007
Century Mining Corporation announce that it has discontinued open pit mining operations at its Sigma gold mine at Val dâ€™Or, Quebec as of Monday, November 5, 2007, and will ramp up production from the Lamaque underground mine, which the Company reactivated in April 2007. â€œThe closure of the Sigma open pit was a difficult decision, but deteriorating ore grades in the open pit and increasing costs of operation because of rising fuel prices made the surface mine uneconomic,â€ said Centuryâ€™s President and CEO, Margaret Kent.
â€œWe are extremely enthusiastic about the prospects for the Lamaque mine, where we have had significant success since reopening this historic mining operation,â€ said Kent. â€œThese underground mines have produced over 9.5 million ounces from the 1930â€™s until the 1990â€™s.â€ The contiguous underground properties of both Sigma and Lamaque have been combined and are referred to jointly by the Company as the Lamaque mine.
The Lamaque mine is currently producing 350 to 400 tonnes of ore per day at an average grade of approximately 5.5 grams per tonne. The Company has applied for permits to increase production to over 1,800 tonnes of ore per day. Century expects Lamaque to yield positive cash flows by the end of the first quarter of 2008. The Company also expects that Lamaque will produce upwards of 100,000 ounces of gold per year at a cash cost of approximately $350 per ounce by the end of the first quarter of 2009. As a result of the shutdown of the open pit, the Companyâ€™s revised production guidance for the full year 2007 is 65,000 ounces.
As a result of the closure of the Sigma open pit, the Company will temporarily reduce its staffing levels at Val dâ€™Or this week by 191 employees, leaving employment of 110 at the site. This temporary workforce reduction, including both salaried and hourly employees, is necessary until these employees can be transitioned over to the Lamaque underground mine. As the Lamaque mine operations are expanded over the next several months, the employment levels will be increased to approximately 350 to 400 employees when the mine achieves full production of 1,800 tonnes of ore per day.
Century has also undertaken a major data compilation and mapping effort for the Lamaque property to demonstrate resources on the property and guide future expansion of mining operations. Use of recently digitized historic information and the application of geological models has resulted in the discovery of several new ore zones at the Lamaque property. Century is currently delineating and quantifying these ore zones in order to prepare and file an NI 43-101 report expanding the reportable reserves and resources at the mine by the end of the year.
On September 27, 2007 the Company announced a non-brokered private placement of up to US$20 million. The Company has chosen to close out that private placement after raising approximately US$7.3 million because of available financing alternatives including a proposed leasing line and adjustments to the Companyâ€™s senior notes.
To fund the Lamaque underground development and underground exploration and resource definition programs, plus other projects, Century is announcing plans to raise C$6-8 million through a common equity and flow-through offering. The terms of the offering are as follows:
Offering of up to 6.5 million units. Each unit will consist of:
Â· one flow-through common share
Â· one common share
Â· one full share purchase warrant, exercisable for two years from the date of issue at an exercise price of C$0.80
Proceeds of the offering will be used to fund the Lamaque exploration and resource delineation efforts, expansion of the Lamaque mine, and for working capital purposes, as follows:
Â· C$3-4 million flow-through Lamaque exploration and resource expansion; and
Â· C$2-3 million Lamaque underground mine development and working capital.
A finderâ€™s fee of 6% in cash and 6% in broker warrants will be paid.
For further information visit: www.centurymining.com