Century Mining narrows Q4 net loss to $8.6 million; revenue up slightly

Century, which has agreed to a takeover by White Tiger Gold (TSX:WTG) in an all-stock deal expected to close later this year, said its net loss in the three month ended Dec. 31 was $8.6 million or two cents per share.

That compared with a loss of $9.5 million or four cents per share in the same 2009 quarter.

Revenue for the three months ended Dec. 31 was just over $6 million, up from almost $5.9 million.

For the full year, Century suffered a net loss of $12.9 million or three cents per share on revenue of $22.2 million, compared with a net loss of $4 million or two cents a share on revenue of $18.8 million in 2009.

The 2010 net loss was impacted by a number of non-recurring items, including the writedown of tax in Peru upon an assessment by the taxation authority, an impairment loss on mineral property, plant and equipment and a sales tax assessment pertaining to prior periods.

In its outlook, Century said it was continuing with the ramp-up of production at the Lamaque project in Val d'Or, Que., and expects to achieve commercial production in the third quarter.

Meanwhile, its San Juan Mine in Peru "continues to be a source of cash and stability for the company and Century is expecting production growth in excess of 15 per cent above the approximately 19,000 ounces of gold the mine produced in 2010," it said.

San Juan's cash costs per ounce for 2011 are projected at US$720.

Overall, the company is projecting 2011 production of a total of 90,000 to 100,000 ounces of gold, including 70,000 to 75,000 ounces at Lamaque and 20,000 to 25,000 ounces at San Juan.

Guidance for 2012 remains at production of 120,000 ounces of gold, as Lamaque will be a full production for the entire year.

"We are looking forward to completing the combination with White Tiger Gold Ltd. and to the growth opportunities and financial support that the combination will bring to the operations," president and CEO Daniel Major said in a release.

Shareholders are to vote in May on the deal in which White Tiger has agreed to pay 0.4 of a share for each Century Mining share. Based on relative share prices when the deal was announced in mid-March — $4.55 for White Tiger and 58 cents for Century — the offer amounted to $1.82 per Century share or $742 million.

Stock in both companies is down sharply since then. Century Mining stock was off 1.5 cents at 46.5 cents in morning trading Monday on the TSX Venture market, while White Tiger shares were flat on the main board at $3.05.

At the conclusion of the deal, White Tiger shareholders would own about 39 per cent of the combined company and Century shareholders would own 61 per cent. White Tiger directors would make up the new board, although Major would remain president and CEO.

White Tiger is three-quarters owned by Russian mining magnate Max Finskiy, who is slated to become executive chairman of the combined business. It has five Russian subsidiaries that hold licences in the Savkino and Nasedkino mineral and gold deposits.

The company recently completed a private placement, but those shares are locked up and only about 10 per cent of White Tiger's outstanding shares are publicly traded.

Blaine, Wash.,-based Century's assets include the Lamaque project in Val D'Or and the San Juan mine in Peru.