Century Mining Corp said in a statement on Tuesday that it has put all capital projects on hold at their Lamaque gold mine in Val d'Or, Québec. The hold has been indicated due to equipment problems.
The mine located near Val d’Or had already seen reduced throughput last month due to a cone crusher failure. This had severely impacted its cash flow as the replacement was completed only by March6, 2011.
With the cash crunch the company has decided to put on hold plans to ramp up ore production, the refurbishing of a third ball mill and the up gradation of the crusher conveyor system. They will also be shelving plans to dewater the underground area at present.
The company statement said that they were considering all options as they sought to meet debt repayments and working capital needs. The delays will slow the ramp-up process and lengthen the period in which the company will operate on a cash-negative basis.
The shares of the company came down by 16% after the statement was released. Shareholders can expect a review of the impact of the crusher failure and the new revised estimate of the gold output at Lamaque for 2011 in a little while. The current guidance for output at the Lamaque mine was between 70,000 to 75,000 ounces of gold.