Hoch & Vos Investment Corp.

April 26, 2011 12:17 ET

Hoch & Vos Investment Corp. Sends Letter to Century Mining Corp. Board

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 26, 2011) -

Hoch & Vos Investment Corp. sent the following letter to Century Mining Corp.'s Board of Directors:

Dear Board of Directors:

As a long-term shareholder of Century Mining Corporation ("CMM"), we are writing to express our dissatisfaction with the management and Board of Directors of the company. Since the announcement of a merger with White Tiger Gold Ltd. ("White Tiger") on March 08, 2011 that purportedly valued CMM at $1.80/share, the share price of CMM has decreased from $0.58 to a close of $0.375 on April 25, 2011 (a 35% decline). The declining share price among other things reflects a lack of confidence in the Board of Directors' ability and willingness to protect minority shareholders and concerns surrounding White Tiger's intrinsic share value as noted in a press release dated April 18, 2011 by certain concerned CMM shareholders (http://www.marketwire.com/press-release/Century-Mining-Corporation-Concerned-Shareholders-Question-Business-Combination-with-1429090.htm).

As a result of the recent share price decline, CMM is trading at an enterprise value below $180 million, a significant discount to our estimated fair value. With 1.2 million oz of gold reserves and 1.3 million oz of gold resources, CMM is currently valued at less than $72/oz of gold reserves and resources. Similar sized gold producers with comparable 2011 production estimates (100,000 oz per year) and run-rate cash costs (less than $600/oz) trade at 3-4x the valuation of CMM.

Some CMM shareholders speculate that recent negative operational news that plunged the stock price was exacerbated or overemphasized by current management. Those shareholders cite the excessively negative tone used to describe the potential consequences of the broken crusher at the Lamaque mine. While management warned of severe liquidity constraints resulting from the incident, it failed to mention that the broken crusher resulted in less than $3 million of revenue merely being delayed due to postponement of ore throughput, a small sum relative to the market capitalization of the company. Furthermore, management failed to bring due attention to positive company developments such as the receipt of $7.65 million of cash from warrant exercise by a CMM investor, which helps to resolve current liquidity issues.

We believe that the potential for conflict of interest which exists among CMM's Board of Directors must be resolved. CMM's Board of Directors, and therefore management, is heavily influenced by Maxim Finskiy, a Russian businessman who owns approximately 30% of CMM and 75% of White Tiger. Mr. Finskiy has strong incentives to keep CMM's share price low so that White Tiger could acquire the company at a price lower than fair value. Minority shareholders fear that management will acquiesce to the disappearing market value of the company.

Given the above, we recommend that the Board of Directors immediately take action to safeguard minority interest, improve corporate governance and public accountability of the Board of Directors, and establish a positive course of action to restore investor confidence and maximize long-term shareholder value.


Daniel Lau, B.Comm, J.D.

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