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Message: Stock Rating: Speculative Buy Target Price: $0.90 Aug 16 Union-Securities
Century Mining Corporation (CMM-TSXV) $0.43 2010 Production Forecast Reduced at Lamaque – Focus on 2011 Brian Mok, P.Eng, MBA 416-775-5135 bmok@union-securities.com 16-Aug-10 Stock Rating: Speculative Buy Target Price: $0.90 2009A 2010E 2011E 2012E Revenue ($ mm) C$18.8 $20.5 $117.6 $116.4 Gold Production. (k oz) 17.0 49.1 105.6 116.7 Adj. EPS ($0.02) ($0.01) $0.07 $0.06 CFPS ($0.02) ($0.01) $0.10 $0.09 P/E n.m. n.m. 5.7 6.6 P/CF n.m. n.m. 4.3 4.9 Total Cash Costs (US$/oz) $485 $691 $532 $514 Projected Return 109.3% Shares Outstanding, Basic (M) 347.2 Shares Outstanding, FD (M) 410.8 Market Capitalization $149.3 52 Week High/Low $0.87/$0.11 Fiscal Year End Dec. 31 Net Asset Value/Share ($) $1.00 C$, unless otherwise stated Century Mining Corporation is a Canadian junior gold producer with strategic land positions in Canada, United States and Peru. The Company's strategy is to grow to an intermediate gold producer through existing mine expansions and acquisitions of other strategic and synergistic gold opportunities. (
www.centurymining.com)
Source: Company Reports; Union Securities estimates Comments Q2/10 Results: Century reported EPS and CFPS of $0.00, in line with our estimates. Production from the San Juan
Mine in Peru was 5,075 oz for the quarter, 8.5% above our estimate of 4,679 for the quarter. Cash costs for Q2/10 were significantly higher than estimated (US$ 702/oz vs our estimate of US$557/oz) due to costs associated with the completion of a new cyanide tailings facility and the processing of transition ore from the Jessica Vein. Century has maintained its production forecast for San Juan at 18,000-20,000 oz in 2010; we have estimated production will be approximately 19,000 oz. Lamaque start up proceeding slower than company’s expectations: Century now expects that 2010 gold
production from Lamaque will be 25,000 to 30,000 oz; a 10,000 oz reduction from its previous guidance. The company cites delays in connecting the minesite to the power grid, receiving low profile equipment and obtaining permits for the Bedard dyke program. The company also cites the shortage of available services and equipment as well as skilled personnel due to the mining activity in the region. Century has maintained its 2011 production forecast of 80,000 to 90,000 oz. We have maintained our 2010 production estimates at Lamaque of 30,000 oz. We have also left our 2011 production estimate at 82,700 oz. Recommendation Maintaining C$0.90 target and Speculative Buy Rating: Overall the news from CMM is mixed, however, we
believe that any weakness in the stock price would be a buying opportunity given the delays and reduction in production have already been incorporated into our numbers, many of the production obstacles have been dealt with, and the longer term guidance remains intact. We have maintained our $0.90 target price and a Speculative Buy
10 Recommendations
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