Century Mining (CCM-V) shares jumped 32% today after the company released a new reserve estimate and technical report for its Lamaque underground gold mine in Val d’Ore, Que., where production began last May.
Shares were up 13 to 50 each on a trading volume of 2.9 million shares.
Proven and probable reserves for the Lamaque mine now total 7.7 million tonnes grading 4.56 grams gold per tonne for 1.1 million oz. gold.
Measured and indicated resources stand at 3.7 million tonnes grading 5.27 grams gold per tonne for 624,000 oz. gold while inferred resources register in at 17.8 million tonnes grading 4.83 grams gold per tonne for 2.8 million oz. gold.
Century president and CEO Margaret Kent says the results substantiate the significant reserves and resources remaining at Lamaque, which produced 4.55 million oz. gold between 1935 and 1985.
“The Lamaque operation will become an important part of the company’s future,” Kent said in a statement. “We believe that the results of this study will substantiate to current shareholders and future investors the value of this asset.”
Assuming a gold price of US$800 per oz. with the Canadian dollar on par with the United States dollar, the technical report gave the project an internal rate of return of 232% and estimated the net present value of the project at $297 million.
Century is in the process of ramping up production at Lamaque with the goal of producing 140,000 to 160,000 oz. gold per year.
The company plans to continue development and refurbishing at Lamaque until 2012 when the Lamaque No. 3 winze is expected to be complete.
Capital costs over the next four years will reach $63 million.
At a rate of 3,000 tonnes per day over a mine life of 10 years, operating costs will be about $53.14 per tonne.
To reach its production goal, Century has started an aggressive recruitment campaign to add to underground staff.
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