The property is in the same mining belt that includes the Lagunas Norte Mine and the Yanacocha Mine, which are among the world’s largest gold mines. The mine property is approximately 12,471 hectares, adjacent to and directly to the south of the operating Santa Rosa Gold Mine.
Mina Rosario de Belen began operations in February of this year as an open-pit heap leach mine with an initial and expandable ore processing capacity of 5,000 tonnes per day. The mine and processing plant, still in the start-up phase, are currently operating at a rate of 2,000 tonnes of ore per day.
The processing plant includes both a zinc precipitation circuit and a new carbon absorption circuit. Mina Rosario de Belen is equipped with leach-pad capacity for 10-million tonnes and a Merrill-Crowe zinc precipitation circuit, which currently operates at 530 gallons per minute. Power is currently generated on-site, with plans to connect to the national power grid in the second quarter of 2007.
Current start-up monthly production, on one 8-hour shift per day, 5 days per week, is 650 ounces of gold and 6,500 ounces of silver. Century management believes that the mine’s production can be increased to approximately 25,000 to 30,000 gold-equivalent ounces per year. Gold equivalents are calculated using a US$600/oz gold price and US$10/oz silver price.
Cash costs of production are reported to be in the US$250-$300/oz range during the current start-up phase. A feasibility study has not been completed by Century and the estimate provided by the previous owners should not be relied upon.
The deposit has a reported historical resource of 18 million tonnes of ore grading 0.9 grams of gold equivalent per tonne or approximately 500,000 ounces of gold. This resource was calculated by the previous owner in 2001, however an NI 43-101-qualified report has not been completed on the deposit and the historical resource should not be relied on.
The deposit is open along strike and is amenable to modern exploration techniques. Based on the site visit and review of the owner’s drill data, trench sampling and geological maps and reports by Century’s Qualified Person, Dan Brost, Manager of Resource Geology, Century’s geological team plans to conduct a resource definition program to confirm the reported 18 million tonnes grading 0.9 g/t gold equivalent.
The above quantity and grade estimates are Century’s only, and there has been insufficient drilling to date to define a NI 43-101 compliant measured mineral resource.
The resource is associated with an intrusive sub-volcanic unit that has cut across the sedimentary rocks of the Chimu Formation. The Chimu Formation hosts the nearby Santa Rosa gold deposit, which is currently producing 140,000 gold-equivalent ounces per year, and is also host to world-class gold deposits including Lagunas Norte, which is producing 1.1 million ounces of gold per year, and Yanacocha, which is producing 2.6 million ounces of gold per year.
The resource and geological setting are characteristic for this district, in that the resource is silver-rich and most of the mineralization is hosted in the oxidized intrusive unit. The exploration model (sandstone-hosted gold-silver) of the district could be applied to the area around the Patival land concessions with reasonable prospects for further discovery.
Given Rosario de Belen’s favorable geologic setting and its location adjacent to Santa Rosa, along a recognized trend that includes other large mines, the area is considered to be very prospective and could potentially host another Santa Rosa-type deposit.
Century has agreed to issue one million Century shares to the sellers as consideration for the purchase. Terms of the deal include a total purchase price of US$20.5 million in cash, to be paid in installments of US$3.25 million on closing in 45 days, US$3.25 million six months after closing, and US$13 million 12 months after closing, along with 500,000 shares of Century.
Century has also agreed to pay a 1.5% NSR royalty to the sellers. Century expects to close the transaction in 45 days. The transaction is subject to the finalization of all documentation and approval of the TSX Venture Exchange.
The Company also announced a non-brokered private placement of units raising up to C$12 million. Each unit is priced at $0.89 and consists of one share plus one-quarter share purchase warrant exercisable at $1.17 for a period of 24 months. After 12 months the warrants will become exercisable within 20 days if the 20-day weighted average closing share price exceeds $1.25. The shares will be subject to restrictions on resale for four months. A large portion of the placement will be taken down by a significant European mining group.
No finder’s fee or brokers warrants will be paid.
Proceeds of the unit offering will be used for the acquisition of Mina Rosario de Belen, mining equipment, capital requirements at the San Juan Gold Mine and other general corporate working capital purposes.
Margaret Kent, President & CEO, said, "We are very excited to announce another quality acquisition in Peru. Rosario de Belen will not only add immediate ounces to Century’s production profile, but will also provide significant exploration potential, and the Company plans to aggressively increase resources here. This acquisition is consistent with the Company’s policy of finding and financing producing but undervalued gold mines on terms that can increase shareholder value."