Slowlane, I don't own any explorers. Just juniors with known resources. Take a look at CMM, with millions of oz gold resources and 100K oz/yr producer and run by the former Royal Oak management. I think it had the highest volume today on the TSX. I heard John Embry on ROBTV when referring to the high cost gold producers and how he thinks they will also do well, even though they may get of to a late start, saying that shares of Sigma Mines in the 70's went from $3 to $30. I think we will see a repeat of those percentage moves in this cycle also:
'Smarter' Peggy back in the mining game
Former CEO of defunct Royal Oak Mines has a new strategy to go along with her new name and company
Drew Hasselback
Financial Post
Thursday, May 12, 2005
1 |CREDIT: Peter Redman, National Post
Century Mining CEO Margaret "Peggy" Kent says "I think I'm more capable than ever of protecting my shareholders' money."
The most controversial woman in mining is back with a new name, a new company, a new plan to become a major player in the Canadian gold industry -- and last but not least, a new look.
Margaret "Peggy" Kent -- perhaps better known as the former Peggy Witte -- is chief executive of Century Mining Corp., a junior gold producer with a small mine in Quebec.
The thin, long-haired blonde at Century's helm would be barely recognizable to those who remember Ms. Kent as the plus-sized brunette who presided over the rise and fall of Royal Oak Mines Ltd. in the 1990s.
"I'm smarter now. I think I'm more capable than ever of protecting my shareholders' money because of what I've been through," Ms. Kent says. "Anybody who walks down the street and says they're going to be right 100% of the time ought to be knocked off their pedestal. If I'm right 66% of the time, I'm happy."
Last September, Century bought the Sigma-Lamaque gold mine in Val d'Or, Que. The mine had belonged to McWatters Mining Inc., a tiny gold producer in bankruptcy protection. Century leapt at the chance to buy Sigma-Lamaque, which has an estimated resource of four million ounces of gold, for $25.8-million.
"It was basically the steal of a lifetime," Ms. Kent says.
Sigma-Lamaque has produced 9.2 million ounces of gold since 1934, but in recent years the mine has had its problems. When Century's geologists and engineers looked at the data, they decided the previous operators had grossly misunderstood the nature of the open pit deposit.
Century retooled the mining plan, and figure they can produce gold at a cash cost of US$290 an ounce -- cheap enough to generate cash in an environment where the price of gold is cruising above US$400 an ounce. Century poured its first gold from Sigma-Lamaque in March.
"Everybody said to me, 'Peggy, you're a glutton for punishment. Why would you go out and buy another difficult mine?' Well, what else are you going to buy for $25-million?"
Ms. Kent expects the mine to produce about 110,000 ounces of gold a year, generate $60-million a year in revenue, and create at least $10-million a year in cash flow. She wants to use that cash to rebuild her reputation in the Canadian gold business.
A fierce negotiator, a decade ago Ms. Kent was lauded as one of the shrewdest operators in the mining business. In 1994, she launched a $2.4-billion bid to buy Lac Minerals Ltd., a company four times Royal Oak's size. Royal Oak ultimately lost a bidding war to Barrick Gold Corp., but the audacity of the move shocked Bay Street. The Financial Post named her Newsmaker of the Year. Chatelaine magazine named her Woman of the Year.
But Ms. Kent was also a controversial figure. Royal Oak was rocked by a long and bitter strike at the Giant mine in Yellowknife in 1992. The experience was devastating. A disgruntled worker was convicted of second-degree murder after a bomb exploded at the mine, killing nine workers.
By the late 1990s, Royal Oak had fallen into receivership after the price of gold collapsed below US$260 an ounce. Ms. Kent had to balance the competing interests of bondholders owed $175-million with another creditor who had secured a loan to Royal Oak's flagship Kemess mine in British Columbia.
"It was really, really tough. I was the ham in the middle of the sandwich, and it wasn't like I had white bread on each side of me, either. I had the heaviest, hardest bread on both sides of me," she says.
Ms. Kent oversaw the restructuring in 1999, then largely disappeared from public view. She managed some privately held real estate investments, devoted time to raising her two young children at her home near Seattle, Wash., and reverted to her maiden name, Kent.
"I stayed busy, but very much wanted to stay out of the limelight. I lost a lot of weight. I got my health back."
A metallurgical engineer by training, Ms. Kent quietly looked for a way to return to the mining business. One venture, Eden Roc Mineral Corp., tried looking for gold in Cote d'Ivoire, but suspended operations when the West African company became politically unstable.
A chance to return to the North American gold scene emerged in 2003. Ms. Kent and several of her former colleagues from Royal Oak got together and launched Century.
The goal is to build a company that will eventually produce one million ounces of gold a year. At its peak, Royal Oak had production of 600,000 ounces of gold equivalent.
"We almost made it before. We're going to make it this time." |
