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Gold/Mining/Energy : Century Mining Corporation

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From: John McCarthy	7/23/2006 7:43:39 PM
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A comment - just my dumb ass 2 cents ..... There seems to me a false sense of urgency. Not sure why there should be. Whats happened so far? (a) We failed to meet production levels. (b) Because we missed budgeted production levels our OPTIONED GOLD (the $550 oz stuff) was a higher % of the oz's we sold - and therefore - the revenues we received - than would have been had we meet budgeted production targets. This resulted in LOWER revenues than were expected. In cost accounting parlance: Our Revenue Mix sucked ..... (c) Additionally, (a) and (b) brought about (1) a higher Cost of Goods sold and (2) we took a hit on the difference between our Optioned gold and actual market price .... as an expense hit on our P&L thats what has happened .... Going forward to 3rd quarter .... (1) the trucks are late ..... and no one can define how late ..... but they are VERY LATE. (2) I don't know mining or whats involved but I have concluded that 3rd quarter production cannot make up for the YTD shortfall in production. Said another way - if the new trucks are involved in hauling out (is it called tailings?) of the last year and a half - well - then they aren't involved in bring ore to the mill ...... and hence 3rd quarter production will suffer - against - trying to make up the YTD shortfall in production - as well as - bringing down Cost of Goods Sold to whatever the YTD originally projected target level was. So I am thinking for now that 3rd quarter production is going to be a BUST - in terms of - bring YTD ACTUAL back to YTD BUDGET. Additionally, if all these trucks do is move tailings because there is so much of it - then perhaps we miss our QUARTERLY production target too. I just don't know. (3) While (2) is going on we are ALSO gonna spend millions in that line item in our Profit and Loss Statement called EXPLORATION EXPENSE. We will do this because we HAVE TO. Its gotta be several millions for both the 3rd and 4th quarter. These exploration costs will KILL OFF us reporting significant profitablility for the 3rd quarter. Now think about 3rd quarter reporting. We and (potential investors) won't see these numbers until LATE NOVEMBER. I assume our 3rd Quarter P&L is gonna be a bust: (a) YTD ACTUAL PRODUCTION not equal to YTD BUDGETED PRODUCTION (b) Low earnings after taxes (EAT) because of ongoing EXPLORATION costs. (c) Incremental costs of the new trucks. (d) Whatever unexpected pops up. If I am right - the stock price should go in the SHITTER around that time. Going forward to the 4th quarter .... There are two big variables: (a) The weather - does it slow down production. (b) The then current price of market gold. And .... thats it ..... all prior negatives are behind us. (a) the trucks are on board .... (b) by the time they report 4th quarter we should have a complient document for the oz at SJ. (c) we will KNOW whether L is a working mine or not (d) we will have some sense of production at SJ. (e) with the exception of the weather - we should make our budgeted production number - at least - on a quarterly basis (although the mix from S and L and P) might be different than expected (f) we should realize actual market prices for the gold we produce versus this $550 stuff. Going forward to the 1st quarter 2007 .... This is the sweet spot: We find out how much gold GC has. We hopefully and easily acheive our budgeted production levels. We should know all this by May-2007. regards, John McCarthy

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