Century Mining Corporation

Century Mining Corporation

May 17, 2006 09:56 ET

Century Mining Completes Acquisition of Control of San Juan Gold Mines S.A.A.

BLAINE, WASHINGTON--(CCNMatthews - May 17, 2006) - Century Mining Corporation (TSX VENTURE:CMM) today announced that it has closed all parts of the acquisition of 60 percent controlling interest in San Juan Gold Mines S.A.A.

The acquisition was completed by a wholly owned subsidiary of the Company, Century Mining Peru S.A.C. As previously announced, the Company purchased from Banco Wiese Sudameris US$9.9 million of debt securing the majority of the mining concessions owned by San Juan Gold Mines S.A.A. for US$2.5 million. The original deal also contemplated Century purchasing 60 percent interest in Minera Chorunga S.A.A. On closing, all concessions in Minera Chorunga were transferred to San Juan eliminating the need for the purchase of the equity interest in Minera Chorunga. Furthermore, US$600,000 that was to have been paid in equivalent value in the Company's common shares was paid in cash. The total transaction cost, including purchase of the debt, was US$5.1 million and the issuance of 1,000,000 common shares of the Company.

In addition, the Company directly purchased 11 more contiguous concessions totaling 3,200 hectares for US$54,100, which increased the total hectares purchased to 18,816.

Century Mining Peru S.A.C. will become the operator of the San Juan Gold Mine.

San Juan Gold Mines, in a company report dated December 31, 2000, which was verified by an independent consultant, stated an estimated resource of 4.4 million tonnes at a grade of 8.68 g/t gold containing 1.23 million ounces, which qualifies as an historical resource estimate according to NI 43-101 standards of disclosure. These resources have not been verified by an NI 43-101 Qualified Person and should not be relied on. The Company has commenced work to update the resource to NI 43-101 compliant standards of disclosure.

The Company will commence an exploration program to evaluate four targets: Santa Clarita, Lily-La Huaca, Erika and Golden Champune, and will select the target that shows the best prospects for immediate addition to resources. The Company will also examine its newly acquired surrounding land position for exploration opportunities.

As reported in the Company's news release of March 30, 2006, the San Juan Mine is currently producing approximately 12,000 ounces of gold per year from an average daily mill feed rate of 150 tonnes. In 2002, San Juan Gold Mines S.A.A. commissioned DMT-Montan Consulting GmbH of Essen, Germany to prepare a medium term business plan for the modernization and expansion of its mining operations. The report, titled "Three Years Business Plan for Empresa Minera San Juan Gold Mines S.A.A., Arequipa, Peru", was prepared by Dr.-Ing. Jurgen Kowalewski and dated November 8, 2002.

The Company currently anticipates that an expansion to 80,000 ounces per year of gold production is possible with a US$10.0 million capital investment. Dr. Kowalewski's report stated that an immediate expansion to 31,000 ounces per year at a cash cost of US$265 per ounce is possible with a US$2.0 million cash investment.

The Company has budgeted the following gold production from the San Juan gold mine: 2006 - 5,000 ounces at an estimated cash cost of approximately US$250 an ounce; 2007 - 20,000 ounces; and 2008 - 80,000 ounces.

Margaret Kent, President & CEO said: "This is our second acquisition in Peru in less than three months and will add significant resources to the Company's mineral inventory. We will be the operator of the project and the mine and will assess our alternatives for further investment in San Juan. We will be taking control of the mine immediately and will be presenting an operating plan in the near future."

About Century Mining Corporation

The Company forecasts gold production of 90,000 ounces at a cash cost of US$325 to US$350 an ounce from its Sigma Mine in Quebec in 2006. The Company owns the dormant Carolin gold mine in southwestern British Columbia; nine precious metals exploration properties located on the historic Juneau Gold Belt in Alaska; and production and exploration properties in Peru.

Margaret M. Kent, Chairman, President & CEO

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933 and as amended in Section 27E of the 1934 Act.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the contents of this press release.

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