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Message: New Union Securities Update
CMM Has a New President
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BRIAN MOK, Union Securities (01/05/2011) "The search is over—Century announced that effective today it has appointed Daniel Major as president, CEO and director of the company. The interim CEO, Keith Hulley, will be retiring; in addition, from stepping down as the CEO, Mr. Hulley will also be leaving the board of directors. Mr. Major, a mining engineer by background, brings 25 years of experience to Century, which includes project development, operations management, financing, and mergers and acquisitions. Since our last update, Century has reduced its 2010 production forecast for Lamaque to 18 Koz. to 20 Koz. (previously 25–30 Koz.) where the previously disclosed issues have had a greater than anticipated impact on the initial months of production startup. However, the company has maintained its 2011 production outlook at Lamaque of 80–90 Koz. In light of the progress to date, we have taken a more conservative position, estimating Lamaque could produce 67,500 oz. in 2011. Despite our lower production expectations, we believe that the company could achieve commercial production, and be cash-flow positive during Q211. H111 is key for Lamaque—Maintaining target price and rating: The appointment of Mr. Major as CEO addresses the uncertainty in the company's leadership; however, to completely remove the overhang that has been on the stock in recent months, we believe the company will need to demonstrate that many of the issues that hindered startup at Lamaque have been dealt with, and its production goals remain on track. Consequently, we believe the next six months could be critical for the stock. At this time, we have maintained our target price of $0.90 and Speculative Buy rating for Century." |
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