Century completes financing package

Century Mining Corp. said yesterday that completion of a $60.75-million financing package will enable it to reopen the Lamaque underground gold mine near Val d'Or and put it into commercial production in 2011.

Century said it has posted the full financial guarantees required by the Quebec government for site reclamation after mining ends.

The firm has also repaid an Investissement Québec loan with $8.7 million from the financing and 5 million common shares.

The financing included a $33-million (U.S.) interest-free prepaid gold loan negotiated with Deutsche Bank covering future delivery of 61,183 ounces of gold over five years, subject to certain conditions.

It also included private placements of equity with a group led by MMC Intergeo Managing Co., the mining and exploration arm of the $25-billion Russian conglomerate Onexim Group, headed by Maxim Finsky, Century said.

As a result of the placements, previous share acquisitions and the exercise of warrants, the Russian group can raise its total holding to more than 44 per cent of Century's equity.

About 40 workers will be hired by late January and underground work will start at Lamaque in February.

The crusher will be upgraded and commercial production is set for early in 2011, with an annual target output of 45,000 ounces.

The financing will also support more exploration in the Lamaque area to boost reserves.

Century CEO Margaret Kent, a controversial figure in Canadian mining, said the financing marks "a turning point" for her company.

Finsky said in a statement the Russian firm's aim is to develop Century into an "intermediate-sized gold producer." It also holds properties in the U.S. and in Peru.

The Lamaque and companion Sigma underground mines date back to the mid-1930s. They produced about 10 million ounces before closing because of low gold prices.

The former McWatters Mining Co. bought the properties from Placer Dome in the mid-1990s. Lamaque's underground operation had been shut down in 1985 and Sigma continued till 2000.

Century bought the properties in 2004, and in 2006 planned to reopen Lamaque's underground operations.

The firm said the $3.5 million committed to the province for reclamation will cover the cost of restoring an existing open pit at Lamaque-Sigma. "We have active plans to start the restoration this year," a spokesman said.