Century Mining Gold Resources GUILLOTINED in Micon Review

http://www.mineweb.com/mineweb…..pid=102055

 

Century Mining's (TSX-V: CMM) defined gold ounces at its Lamaque mine in Quebec dropped precipitously following a Micon International reserve and resource update.

Measured and indicated resources fell 75 percent from 2.4 million ounces to 587,000 ounces gold; proven and probably reserves, which were included in measured and indicated resources, were cut by more than half from 1.1 million ounces to 451,000 ounces gold; and inferred resources, meanwhile, dropped over 40 percent to 1.9 million ounces gold.

Century Mining had little choice but to release the updated – if much diminished – resources, Major argued, as a more extensive review would have taken up to half a year. Meanwhile, however, the merger with White Tiger Gold – opposed vociferously by some investors – would not have been able to proceed and Century Mining would be materially “constrained” in what it would be allowed to disclose about its ongoing operations.

Calling it an “interim process” Major stressed the temporary nature of the report throughout the conference call, arguing resources and reserves would climb back, to an unspecified degree, within the next year after Century Mining updates and adds to them.

“We are confident we can add new resources,” he said.

Major sought to calm any concern over mining operations noting a few times that despite the shrink in reserves and resources Century Mining's operations would not be affected in the short and medium term and that it would have “no impact on the merger.” He pointed out that White Tiger had signalled its continued support for the merger.

In explaining the technical reasons for the reduction in reserves and resources, Major singled out the use of what he called “more rigorous processes, especially geostatistics.” Century Mining, in its press release outlining the reserve and resource update, noted that “this approach is more conservative than the approach utilized in the past.”

Major also pointed to “inappropriate” modelling of resources in the Cross Over zone, where a block model originally developed for open-pit mining was adapted for underground use by previous operators of the Lamaque mine.

Further stymying the reserve and resource update were difficulties in finding historic data needed to support confidence in the previous and much heftier 2009 resource estimate.

“We called everyone we knew” to get the data, Major said during the question and answer period in response to searing comments from the conference call's first questioner. But it was to no avail.

The first questioner, who identified herself as Melissa Eerie (spelling and background unverified), opened up an anger-tinged censure of Major's management of Century Mining and the latest resource update with an undoubtedly sarcastic preface.

Mr Major, let me first congratulate you on being nominated for the 2011 E. J. Smith award named in honour of Captain Edward John Smith who steered the RMS Titanic into an iceberg and sunk her on her maiden voyage,” Eerie said. “You, sir, have taken Century Mining Corporation and steered it into an iceberg known as White Tiger Gold, sinking the share price over 60 percent in three months. This is not an easy feat to accomplish with gold at $1,500 per ounce. And I daresay it requires a unique combination of arrogance and incompetence.” Surprised

 

Major was quick to defend Century Mining against the accusations from the questioner who, among other allegations, suggested Century Mining was rushing the resource update to “ram through” the merger with White Tiger Gold and that it was sitting on high grade material at the Lamaque mine while mining lower-grade ore in the meantime.

Sounding as if he may have been trying to control the tenor of his response, Major reiterated that the resource update was an “interim process” and that Century Mining had little choice to release it so as to move Century Mining forward. Major's voice rose notably as he tossed aside the suggestion Century Mining was stockpiling high grade ore, stating: “I'm not covering them up. They're all there.”
 
He explained that as volumes picked up at Lamaque, grades had dropped and, furthermore, that with access to but two stopes at Lamaque getting higher grades proved difficult.

 

“So, no. We haven't got high grade stockpiles hanging around.”

The initially tense question and answer period became more civil as a series of other questioners inquired more staidly about Century Mining's ongoing and future operations. Major noted grade should improve at Lamaque as it draws water down in parts of the mine, gaining access to more stopes.

Major also argued throughout the conference call that the silver lining of the Micon review was that now, with a better understanding of Lamaque geology, Century Mining had generated new dyke and shear targets which hitherto had gone unnoticed. “That is the future,” he said.

While Major couldn't predict when the merger with White Tiger Gold might proceed to a shareholder vote, as it depended on TSX reviews of documents, he did suggest it might come in August. If the TSX was done with its review by middle of July, then 30 days after that “there can be a vote for shareholders.”

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LMFAO!  Is there a transcript of the whole call somewhere???

 

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