Hello John
your making it sound like you are surprised that Century is reporting a loss for the year end 2005, i cannot understand this thinking as it has been well spoken for that they would incur loss's in 2005, start-up procedures are a bitching??
as for Tads numbers, he was fairly close in that, his stated loss was about 1 million more than what was actually reported, and when one looks at what and how the loss's have been accrued CMM isn't looking so bad after all??
Tads figures from this post, by the way he has acknowledged he has done an error??.................on my orders he received 40 lash's as punishment, and told never to err again or punishment will be most brutal??
"Had a chance to go through the SEDAR files for the MD&A and the YE 2005 financial figures. Doesn't look to bad at all considering it's looking through the rear view mirror at the start-up phase of operations. Compares quite well with most of their peer group. Take a look at Alamos Gold's net loss of US$9.44 million for last year during their start-up at Mulatos.
stockhouse.ca
Cash flow expectations for Q4 were fairly well in line, however the overall net loss for the year was substantially higher that I was expecting .... most likely due to the fact I ain't no accountant, and didn't take into consideration the depreciation, amortization and accretion costs of $2,327,492 that were expensed in Q4 '05, and the non-derivative losses, and the higher costs for corporate administration from additional staff being hired as part of the company's growth in Q4, the additional financing charges and the expensing of the options to mg't.
stockhouse.ca
Like I said, it's looking through the rear view mirror, but on the positive side, the company showed two consecutive quarters of positive operating cash flow. And that was with gold at substantially lower prices, and the cash costs during Sigma start-up much higher, and partially due to the fact that the company was basically "waste-bound" in the pit until end of October. Can't candy coat the net loss no matter how you want to massage it, however, we were all looking at a net loss for 2005 anyhow.
We've got a base to measure off of now, as do the institutional investors and their analysts. Ya gotta think at least one or two of the big lads in Toronto might just like what they see ? Or do they wait until the company issues their Q1 2006 financial results ?
Looking forward,...."
as can be seen from your highlighted post on SI;
"The net loss for the year of $9.2 million, or $0.22 per share, was exacerbated by approximately $5.0 million of non-cash items that were expensed, which were directly related to the senior debt that the Company incurred to acquire the Sigma-Lamaque assets and provide working capital during the bulk sample program, start-up and achievement of commercial production, as well as by an additional $1.3 million of unrealized losses on derivative contracts."
as can be viewed with this post from Tad as well;
"So I doubt we'll see much more than perhaps $5.5 million in net loss for all of 2005. Compare that to Glencairn, Alamos, Queenstake, and a number of other mining operations for 2005. This was just a reasonable estimation, that's all."
stockhouse.ca
After adding back the non-cash items that were expensed to the net change in non-cash working capital balances, the Company reported cash flows from operating activities of $4.9 million in 2005.
and what follows is from Century's releases;
from this report at Sedar
new.stockwatch.com
Assets
Current
Cash and cash equivalents $ 808,896 $ 1,568,776
Accounts receivable 1,787,048 40,354
Inventories (Note 5) 2,414,436 -
Prepaid expenses & deposits 266,061 336,707
$5,276,441 1,945,837
not sure where your issue with accounts receivable and inventory comes from??
5. Inventories 2005 2004
In process gold $ 1,658,821
Finished gold 405,778
Consumables 349,837
$ 2,414,436
d) Inventory
In process gold inventory is valued at the lower of average production cost and net realizable
value. Production costs include mining costs, direct labor, operating materials and supplies,
transportation costs, royalties and an applicable portion of operating overhead, including
depreciation and depletion.
Consumables and supplies, which consist of spare parts and consumable goods used for general
repairs and maintenance, are recorded at the lower of cost and net realizable value.
Gold doré and gold bullion awaiting delivery to refinery or settlement are carried at the lower of
average cost or market value.
also you wrote;
"Additionally, we still have DERIVATIVE LOSSES of 1,293,463 sitting on the balance sheet in the
Current Liability section.
This loss will be taken into the P&L in 2006.
The question I have is:
Was this a valuation amount calculated at
the end of 2005 and THEREFORE may increase
as the price of Gold increases thru out 2006 or
was this a fixed amount."
t) Derivative contracts
The Company has identified the quantity and period of future gold production to be hedged based
on the mining plans for its Sigma Mine. The Company assesses, both at the hedge’s inception
and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly
effective in offsetting cash flows of hedged items.
The Company enters from time to time into commodity contracts, prepaid forward sales
agreements to manage the price volatility of the commodities produced at its operating mine and
the foreign currency exposure for its Canadian operations.
All derivative financial instruments are accounted for on a mark to market basis.
as seen under
"Liabilities and Shareholders’ Equity
Current
Accounts payable and accrued liabilities $ 7,386,932 $ 791,725
Working capital gold facility (Note 9) 1,287,219 -
Current portion of long-term liabilities (Note 8 and 10) 3,819,851
Unrealized losses on derivative contracts 1,293,463
13,787,465 791,725
Long-term notes (Note 10) 12,768,472 13,544,000
Asset retirement obligation (Note 13) 2,262,090 2,200,000
Capital lease obligation (Note 8) 3,806,169 -
32,624,196 16,535,725
it is listed as "UNREALISED LOSS's", but they are required to list them, anyone can play semantics when it comes o hedging and derivatives??
you also wrote;
"The question I have is:
Was this a valuation amount calculated at
the end of 2005 and THEREFORE may increase
as the price of Gold increases thru out 2006 or
was this a fixed amount."
the way i understand these derivatives is they are constantly being re-evalated, this can be confirmed by the company??
9. Working Capital Facility
In July 2005, the Company entered into an In-Process Gold Purchase Facility with a gold trading
firm, under which this firm made available to the Company up to $1.0 million, on an uncommitted
revolving credit facility basis, secured by future sale by the Company of In-Process Gold from the
Sigma Mine. Interest accrues on amounts drawn down by the Company at LIBOR plus 3% per
annum.
The holders of convertible debentures (Note 10) have entered into a subordination agreement
pursuant to which they subordinated their first priority secured interest on the In-process Gold to the
gold trading firm. As consideration, the Company amended the conversion price of $1.0 million
worth of the 2004 convertible debentures from $0.51 to 95% of the market price at the time of
conversion, subject to a minimum of $0.35 per share. The Company valued the amendment in the
conversion price at $123,100 using the Black Scholes option valuation model. This amount has
been expensed as additional fees.
As at December 31, 2005 there was 2,152 ounces of gold committed under this facility.
sure doesn't look like a lot being commited here??
10. Long-Term Notes
As part of the Sigma-Lamaque asset acquisition, the Company assumed a debt of $18,544,000 due
to Investissement Québec (IQ). Of this amount, $5,000,000 was repaid upon closing. The balance of
$14,461,472 including principal of $13,544,000 and interest of $917,472 at December 31, 2005 is
repayable according to the following terms:
a) Interest: The debt bears interest at IQ Prime + 0.75%, calculated daily on the unpaid balance,
and payable quarterly beginning December 31, 2004. In 2005, the Company entered into a
new agreement with Investissement Québec to defer interest payments for 2005 and payable
with the principal outstanding without any penalty. Subsequent to year end, the Company paid
interest of $266,250 for the first quarter of 2006 via the issuance of 221,875 shares.
b) Principal: is repayable quarterly according to the following schedule:
i) Payable June 30, 2006: $846,500
ii) Payable Sept. 30, 2006, and quarterly thereafter
until December 31, 2010: $423,250
iii) Any remaining balance is due December 31, 2010
iv) Should any balance be unpaid as at March 31, 2011, IQ has the right and option to
convert the balance in whole or part to common stock at the average trading price of the
prior 20 days, provided that the conversion does not create a change in control of the
Company, or results in IQ owning more than 19.9% of voting shares of the Company.
b) In addition to the principal payments above, beginning in the fiscal year-ended December 31,
2008, additional principal payments are required to the extent of 30% of free cash flow from the
Sigma Mine site, after:
i) Principal and interest payable to other creditors that have financed this project;
ii) Royalties and taxes;
iii) Up to $1.5 million of actual head office costs;
iv) Up to $1 million of exploration and exploitation expenditures incurred on assets acquired
as part of this transaction, or which would supply ore to be treated in the plant acquired in
this transaction.
c) The principal amount of the debt is repayable without penalty at any time. In addition, if the
balance is prepaid in full, the amount repayable will be discounted as follows if paid on or
before the last day of: Discount on Balance:
i) December, 2006 20%
ii) December, 2007 15%
iii) December, 2008 10%
iv) December, 2009 5%
d) The debt is secured with a first charge on the mining claims and mining concessions purchased
as part of the Sigma-Lamaque asset acquisition.
e) This long-term debt is subordinate to the convertible debenture holders’ security interest in the
Sigma-Lamaque plant and equipment, and to the security of a financial institution providing a
future hedging line of credit.
as for shares??
from this newsrelease;
ccnmatthews.com
"Repurchase of Investissement Quebec (IQ) debt
Further to the decrease in cash costs at the Sigma Mine, the Company has negotiated a repurchase of the IQ debt, including repayment of all principal, interest and any other amounts owing by the Company to IQ. At December 31, 2005 the amount owing to IQ was $14,461,472, including principal of $13,544,000 and deferred interest.
The Company will pay to IQ C$8,000,000 in cash and issue 5,000,000 common shares of Century to IQ in settlement of the outstanding debt. Closing of this transaction is expected to occur on March 10, 2006 and is subject to the Company obtaining satisfactory financing on commercially reasonable terms for the cash amount and receipt of all necessary regulatory approvals for the issuance of the common shares."
ccnmatthews.com
"Century and Investissement Quebec (IQ) have agreed that Century will satisfy its March 31, 2006 quarterly interest payment owing to IQ by issuing common shares of Century, subject to regulatory approval. Century will issue 221,875 common shares in satisfaction of the March 31st interest payment of $266,249.56 owing to IQ. The shares will be subject to restrictions on resale for four months. The Company has elected at this time not to settle the outstanding IQ debt as previously mentioned in a press release."
the shares that you have read for allocation are most likely attributable to the possible outcome of how IQ's debt will be finalised??
IOW's if the share price is higher there will be less shares to issue, and o of course the minimum price has already been set??
hope this helps bring some clarity to your thoughts, i have done this rather quickly so if there are some errors, they are strictly intentional??
if you need more information, it would be far more appropiate for you to call the company and raise your concerns, there is also the conference call we all can listen in on??
best regards
tanoose |
