Century Mining Corporation
TSX VENTURE : CMM

Century Mining Corporation

April 16, 2007 09:30 ET

Century Mining Achieves Fourth Quarter Net Income of C$2.6 Million and Records First Annual Net Income of C$1.3 Million in 2006

BLAINE, WASHINGTON--(CCNMatthews - April 16, 2007) - Century Mining Corporation (TSX VENTURE:CMM) ("Century", "Century Mining", or the "Company"), today announced its audited financial results for the fourth quarter and year ended December 31, 2006.

(This news release contains Forward-Looking information that is subject to risk factors and assumptions as set out in our Cautionary Statement on Forward-Looking information located at the end of this news release)

Highlights

- Gold production at the Sigma mine was 16,494 ounces in the fourth quarter of 2006 and 70,401 ounces for the full year. Century's 2006 production was 73,823 ounces for the full year, including 3,422 ounces from the San Juan Mine(1).

- Revenue was $11.1 million in the fourth quarter, a 20.2% increase over the same period last year, and the average gold price realized was US$621 per ounce of gold sold. Full-year revenue was a record $45.1 million, an 86.6% increase over the 2005, and the average gold price realized for last year was $584 per ounce of gold sold.

- Net earnings for the fourth quarter were $2.6 million or $0.02 per share (diluted), compared to a net loss of $4.4 million or $0.10 per share in the same period last year. Net earnings for the full-year were a record $1.3 million or $0.01 per share (diluted), compared with a net loss of $9.2 million or $0.22 per share in 2005.

- During 2006 it became viable to process ore with a lower grade than in the Sigma mine plan. The Company therefore lowered the cutoff grade per ton of ore from 0.85 g/ton to 0.5 g/ton, reducing the design strip ratio from 4.25 to 2.5:1. The resulting excess deferred stripping costs for the year have been capitalized in the fourth quarter to reflect the revised mine plan.



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Cash Costs of
Production (gold oz) production (US$/oz)
-----------------------------------------------------
Q1 18,943 386
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Q2 18,012 414
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Q3 16,952 422
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Q4 16,494 330
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2006 70,401 390
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- Operating profit from mining operations was $13.7 million in 2006, compared to $1.8 million in 2005. The cash position was $802,132 at December 31, 2006 compared to $808,896 at December 31, 2005 and long-term debt was $11.9 million at December 31, 2006 compared to $12.8 million at December 31, 2005.

- Capital expenditures, including capitalized stripping and pay downs on leased equipment, were $19.5 million in the fourth quarter and $35.5 million for the full-year.

- Proven and Probable Mineral Reserves(3) at December 31, 2006 were 820,300 ounces of gold, net of 2006 production. This is an increase of 28,172 ounces, after deducting production for the year. These amounts do not include the effects of the San Juan Gold Mine acquisition.

- Production(2) for 2007 is expected to be approximately 100,000 ounces of gold at a cash cost of US$370 to $390 per ounce. Beyond 2007, gold production is expected to grow to 130,000 to 150,000 ounces in 2008.

(1) In 2006, the Company capitalized all San Juan expenses, including exploration, net of revenues from gold production of 3,422 ounces. Century will continue to capitalize net expenses until such time as the mine reaches commercial production, which is expected to occur in 2008.

(2) Please refer to the risk factors and assumptions set out in our Cautionary Statement at the end of this news release for information related to risks and uncertainties associated with guidance presented in this release.

(3) Century's mineral reserves herein described have been prepared under the guidance of Mr. Ross F. Burns, P.Geo., LG, Vice President of Exploration, who is designated as a Qualified Person with the ability and authority to verify the authenticity and validity of the data.

Margaret Kent, President & CEO, commenting on Century's 2006 results, said: "We are very pleased that the Company reported net income for the full year. In my 30 years experience in the mining industry, this is the first operation I have been involved with that made a net profit in just the first full year of commercial production. Although we fell short of our production target in 2006, I maintain my firm belief that top priority should be placed on maximizing profits, rather than production ounces. The Sigma open pit mine will never be a low cost mine, but the company and its management continue to manage this operation in a way that maximizes profits. Century has grown significantly since the start of production in 2005, and will continue to do so, as we focus on both organic growth at existing operations and new acquisitions in Canada and South America. For the Sigma-Lamaque Complex, in particular, management is currently finalizing plans that will further enhance profitability. Specific initiatives for Sigma-Lamaque will be announced in a forthcoming press release."

"In Peru, we are in the process of rehabilitating the mill at the San Juan Mine to achieve production in 2008 of 35,000 ounces of gold. Concurrently, Century is advancing the drilling and exploration program at San Juan that began in December 2006. We will be preparing a technical report to qualify the resources to NI 43-101 standards of disclosure based on the results of this exploration program. For the future, we plan to fully mechanize parts of the mining operations, while outlining plans to further expand mill capacity, eventually aiming for an annual production rate of 80,000 ounces of gold."

"We are taking steps to build Century into a profitable mid-tier gold producer with a solid asset base in Quebec and outstanding production and exploration opportunities in Peru. Our stronger balance sheet will enable us to finance future growth and acquisitions on more favorable terms. We are also building a solid base of institutional shareholders who recognize management's track record to add shareholder value by acquiring assets at a significant discount to typical industry valuation multiples. We believe that Century is well positioned to grow in value as we pursue new opportunities with our team of highly experienced mining and financial professionals."

Summary of Financial and Operating Results



--------------------------------------------------------------------------
Canadian
dollars 2006 Q4-2006 Q3-2006 Q2-2006 Q1-2006
--------------------------------------------------------------------------
Results
--------------------------------------------------------------------------
Mine revenues 45,135,717 11,059,159 11,045,950 11,878,882 11,151,726
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Operating
profit from
mining
operations 13,703,412 5,080,956 3,671,599 2,911,936 2,038,921
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Net income
(loss) 1,266,500 2,554,626 1,107,485 (1,198,135) (1,197,835)
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Net income
(loss) per
share 0.01 0.02 0.01 (0.01) (0.01)
--------------------------------------------------------------------------
Financial
position
--------------------------------------------------------------------------
Cash and cash
equivalents 802,132 802,132 3,436,073 8,481,360 2,883,663
--------------------------------------------------------------------------
Total assets 98,783,040 98,783,040 94,407,128 88,166,375 59,163,033
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Long-term
debt 11,921,972 11,921,972 11,921,972 11,921,972 12,345,922
--------------------------------------------------------------------------
Shareholders'
equity 60,129,560 60,129,560 56,937,514 55,747,845 24,492,475
--------------------------------------------------------------------------
Shares
issued and
outstanding 117,859,689 117,859,689 115,762,884 115,574,009 88,110,789
--------------------------------------------------------------------------


Revenue from metal sales increased 86.6% percent in 2006 over 2005 from $24.2 million to $45.1 million, primarily as a result of increased production and higher realized gold prices. The average realized gold price for the fourth quarter and full-year of 2006 was US$621 and US$584 per ounce, respectively, compared with US$446 and US$466 per ounce, in the same respective periods of 2005. The average spot price for the fourth quarter and full-year of 2006 was US$613 and US$604 per ounce, respectively, compared with US$474 and US$443 per ounce in the same respective periods in 2005.

Century produced 16,494 gold ounces in the fourth quarter at the Sigma mine, and, including the San Juan Mine, 73,823 ounces for the full-year at a cash cost of US$390 per ounce. The 4th quarter operating costs reflect the additional deferred stripping and are not an indication of the cash cost of operating on an ongoing basis. The average cash cost for the year is indicative of the cash cost of operating on an ongoing basis.

The Company sold 17,885 gold ounces in the fourth quarter and 70,450 ounces in 2006, an increase from the 53,523 gold ounces sold in 2005, which included 10,356 ounces produced during the pre-production phase.

In 2006, corporate administration expenses were $3,955,957, compared to $1,910,024 in 2005. These expenses include salaries and benefits, as well as travel expenses. The increase of $2,045,933 mainly reflects a higher level of business activity and expansion of the Company into Peru.

Before net changes to non-cash working capital balances, cash flows provided by operating activities were $7,732,767. Major items added back to the net income of $1,266,500 include amortization, depreciation and accretion of $3,652,814, amortization of deferred finance fees of $1,081,620, stock-based compensation of $634,285, and unrealized losses on derivative contracts of $316,075. After the net change of $2,406,453 to non-cash working capital balances, cash flows provided by operating activities in 2006 were $5,326,314.

2006 Mineral Reserve and Resource Update

As of December 31, 2006, Century's total Proven and Probable Mineral Reserves(i) increased to 820,300 ounces of gold from 792,128 ounces at December 31, 2005. Gold reserves increased by 28,172 ounces, net of 2006 production depletion.



Gold oz
Reserves at December 31, 2005 792,128
-------
Production depletion (74,895)

Reserve additions 103,067
-------
Reserves at December 31, 2006 820,300
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(i) Does not include San Juan Mine

Gold reserves increased at Sigma due to the addition of 85,400 ounces from the Lamaque West Plug. These ounces were brought into reserves from the resource calculated in 2003 due to the results of the infill drilling completed in 2005 and the pit design completed in 2006. The inferred West Plug resources increased from 30,000 ounces in 2005 to 32,000 ounces at Dec. 31, 2006. The Sigma open pit reserve increased as the cutoff grade was lowered to 0.5 g/t gold from 0.85 g/t gold. The Residual Open Pit Resources remained unchanged from 2005 with a total of 317,000 ounces in Measured and Indicated and 875,000 ounces in Inferred Resources.

The total Measured and Indicated Underground Resources at year end 2006 remained unchanged from 2005 at 3,923,000 tonnes at a grade of 4.99g/t gold containing 630,000 ounces of gold. The Inferred Underground Resources also remained unchanged from 2005 at 10,101,000 tonnes at a grade of 5.26 containing 1,708,000 ounces of gold.

Outlook

Commencement of commercial production at the Sigma Mine in the second quarter of 2005 reflected growth of the Company from exploration and development to a gold producer. The Sigma Mine has generated positive cash flow in each of the six quarters since that time. At current gold prices, and with the planned opening of the Lamaque underground operation to supplement the open pit, the Company expects that this mine will continue to generate positive cash flow. In 2006, the Company recorded net income for the first time in its three-year history.

In 2007, the Company plans to produce a total of 100,000 ounces of gold, including 74,000 ounces from the Sigma open pit, 12,000 ounces from the Lamaque underground mine, and 14,000 ounces from the San Juan underground mine in Peru, at an estimated cash cost of approximately US$370 to US$390 per ounce.

The Company is ready to commence production at the underground Lamaque Mine and is awaiting receipt of a permit prior to commencement of mining. The Lamaque ore will be combined with the Sigma ore and delivered to the Sigma mill. The significantly higher ore grades (approximately 5 to 6 g/t) than in the Sigma pit (1.6 g/t) are expected to have a positive impact on production and unit cash costs at the Val d'Or operations.

The Company has commenced a program of major rehabilitation at the San Juan Mine in Peru in order to return the mine and mill to their nominal rated capacity of approximately 35,000 ounces of gold per year. The program includes mechanized mining and refurbishing and/or replacement of the mills and other ancillary equipment. The Company plans to expand production to approximately 70,000 to 80,000 ounces a year over the next two to three years.

At the same time, the Company has embarked on a major exploration program at the mine and will commence exploration on the nearby properties upon receipt of additional exploration permits. The results of the exploration program at the San Juan Mine will form the basis of a technical report to qualify the gold in resources previously estimated by the former owner to NI 43-101 standards of disclosure. These exploration programs could have the potential to create a major mining district based on the results of previous exploration work.

The Company is well positioned to grow in market value as management pursues new opportunities, particularly in Quebec and Peru, with an emphasis on the acquisition of low-cost producing gold mines and assets that generate cash flow or that can be returned to profitability in the near term. In this regard, a number of opportunities have been reviewed over the last year.

Since the Company's entry into Peru early in 2006, management has been developing strong relationships and networks in that country to identify projects for acquisition. The Company, in conjunction with its Peruvian subsidiary, has developed some important strategic relationships that should enable the Company to meet its objectives of increasing production and reducing cash costs to position the Company for a higher market valuation.

Conference call

Management will host a conference call on Friday, April 20 at 11:00 a.m. Pacific time (2:00 p.m. Eastern time) to discuss 2006 results and future developments at its operations in Quebec and Peru. Mining analysts, investors and the media are invited to phone 1-888-809-8974, or 1-210-234-0008 if outside Canada and the U.S.A., followed by the pass code 18290 approximately 5 minutes before the start of management's presentation. The presentation will be followed by a question and answer period.

A replay of the conference call can be heard through Friday, April 27 by dialing 1-888-562-2923, or from outside North America 1-203-369-3750.

About Century Mining Corporation

Century Mining Corporation is an emerging mid-tier gold producer that is aggressively acquiring producing mines and exploration properties in Peru. The Company owns and produces gold at the Sigma and Lamaque mines in Quebec that historically have produced over 9.4 million ounces of gold. In Peru, Century owns an 82.6% interest in the San Juan Mine where the Company accounts for 100% of gold production. Century's growth strategy is to acquire gold producing assets in South America that will substantially reduce the Company's consolidated total cash cost of production and where there is exceptional exploration potential to expand production at these mines.

Margaret M. Kent, Chairman, President & CEO

Caution Concerning Forward-Looking Information

This press release contains forward-looking information within the meaning of applicable securities laws. We use words such as "may", "will", "should", "anticipate", "plan", "expect", "believe", "estimate" and similar terminology to identify forward-looking information. It is based on assumptions, estimates, opinions and analysis made by management in light of its experience, current conditions and its expectations of future developments as well as other factors which it believes to be reasonable and relevant. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those expressed or implied in the forward-looking statements and accordingly, readers should not place undue reliance on those statements. Risks and uncertainties that may cause actual results to vary include but are not limited to the speculative nature of mineral exploration and development, including the uncertainty of reserve and resource estimates; operational and technical difficulties; the availability to the Company of suitable financing alternatives; fluctuations in gold and other resource prices; changes to and compliance with applicable laws and regulations, including environmental laws and obtaining requisite permits; political, economic and other risks arising from our South American activities; fluctuations in foreign exchange rates; as well as other risks and uncertainties which are more fully described in our annual and quarterly Management's Discussion and Analysis and in other filings made by us with Canadian securities regulatory authorities and available at www.sedar.com.

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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