Century eyes 80,000oz/y at San Juan in 2008

Washington state-based Century Mining (TSX-V: CMM) aims to increase production at its newly acquired San Juan gold mine in Peru to 80,000oz/y in 2008, the company's VP of investor relations Graham Eacott told BNamericas. "We need to mechanize the mine and carry out a rehabilitation program on the mills," Eacott said in a telephone interview, giving a ballpark cost figure for the project of US$10mn. Century acquired a 60% controlling interest in San Juan in May this year from a local family for US$5.1mn and 1 million Century common shares. The mine's current production rate is in the region of 10,000oz/y gold. The operation has five mills of some 150t/d of which only one is currently functioning, according to Eacott. At the same time, Century plans to conduct a US$300,000 exploration program at San Juan to upgrade resources into reserves compliant with Canadian reporting standard 43-101. "There is something like 1.2Moz of gold in [historical] resources that we want to upgrade to a reserve category," said the IR chief. There are at least six exploration targets on the 25,000ha San Juan property in southern Peru's Arequipa department, according to company documents. Century plans to complete 3,000m of surface and underground drilling by early February. Century entered Peru in February 2006 with the acquisition of the Colina Dorada exploration property in northern Peru's Piura department, where work is currently dormant as the company focuses on San Juan. "We saw Peru as having a very good workforce, good investment opportunities and a government that is in favor of mining," said Eacott. The company is particularly eyeing privately owned family mines that if modernized and explored hold a lot of upside potential, he said. In fact, Century signed in October an agreement with local miner Poderosa (CMPSA), owned by five Arias family sisters, to acquire a 38% stake in the company that owns the 100,000oz/y Poderosa gold mine in northern Peru. But according to Century, Poderosa breached the agreement in selling the 38% stake, held by two of the sisters, to local polymetallic miner Atacocha on the Lima Stock Exchange at the end of November. "We spent a fair bit of money in legal fees and putting financing in place [for Poderosa], it's well into six figures and we want to recover that and damages," said Eacott, adding Peruvian lawyers were handling the case. Elsewhere, Century owns the 100,000oz/y Sigma-Lamaque mining operations in Québec.