|Thu Sep 9, 2010|
Aurcana Corporation Reports 54% Increase In Earnings From Mining Operations For Q2, 2010
|Aurcana Corporation (the "Company") announced today its financial and operating results for the six months ended June 30, 2010. The following summary of selected financial information should be read in conjunction with the unaudited consolidated financial statements for the six months ended June 30, 2010 and the related management's discussion and analysis dated August 30, 2010, which have been filed on SEDAR (www.sedar.com). All figures are in Canadian dollars unless otherwise stated.|
Second Quarter Highlights:
* restated to exclude amortization and depletion and re-allocate to expenses.
For the three months ended June 30, 2010, the Company posted consolidated net sales of $4,935,470 (2009: $3,621,463), earnings from mining operations of $1,324,845 (2009: $858,932), a loss from operations including corporate expenses of $1,152,800 (2009: $685,116), and a consolidated net loss of $3,136,875 (2009: net earnings of $2,837,660).
Included in the net loss was the effect of an unrealized foreign exchange loss of $1,914,167 (2009: gain of $2,493,822) resulting from the strengthening (2009 -- weakening) of the US dollar against the Canadian dollar during the quarter. Also included in the 2009 net earnings was a gain on settlement of debt of $1,022,725.
Another significant portion of the net loss recorded in Q2, 2010 was a loss from trading activity of $847,072 (Q2, 2009: $297,287), the amount of which pertains to the contract the Company has with Silver Wheaton (Caymans) Ltd. ("Silver Wheaton") whereby it is contracted to sell to Silver Wheaton the equivalent of 50% of the silver metal produced from ore extracted during the mine-life at La Negra.
During the three months ended June 30, 2010, the Company spent $1,556,943 (2009: proceeds on sale of $138,189) on the purchase of property, plant and equipment and $614,271 (2009: $674,582) on mineral property expenditures, with the majority of the purchases going towards the La Negra plant expansion which was completed in June 2010.
LA NEGRA MINE
The following table summarizes La Negra production and sales information:
Mining operations and exploration drilling at La Negra continue to delineate additional mineralized zones, either between or as extensions of existing ore zones which add to the life of La Negra. During the quarter ended June 30, 2010, 45,000 tonnes (of the 93,201 tonnes milled) were mined from outside the existing reserve base. Results from new drilling have indicated the potential of up to 80,000 tonnes for the Cobriza Zone. Operationally, La Negra has the benefit of multiple mineral deposits that have existing development and range from copper-silver rich to lead-zinc-silver rich deposits.
The operation is under constant review to monitor operational and cost cutting measures. Management cost variance reports were designed and are being implemented in 2010. The expansion of the plant to 1,500 Tonnes Per Day was completed during the quarter ended June 30, 2010 and a significant increase of metal production is anticipated for the 2nd half of the year. Metallurgical tests have been initiated in order to define the optimum parameters for the production of a lead-silver concentrate in addition to the present copper-silver-zinc concentrate. As a result of the expansion, the life of the existing tailings facility is estimated to be reduced to 5 years and several options to maintain extended capacities are under review.
About Aurcana Corporation:
The Shafter Silver Mine is scheduled to start up production within 18 months of securing permits and financing, producing 3.9 million ounces silver in the first year. It has a NI 43-101 measured and indicated resource of 24.6 million ounces of silver (2,900,000 tons at 8.48Ag opt) and an inferred resource of 22.8 million ounces of silver (2,167,000 tons at 10.52 Ag opt) using a 4.0 ounce per ton cut off. The 92% owned La Negra silver-lead-zinc-copper mine is on target to increase production to over 2 million ounces Silver Equivalent annually with its plant expansion to 1,500 t/d, which was completed in June 2010. The reader should be cautioned the Company has not completed a feasibility study confirming the projected production capacity for La Negra and there is no certainty the Company's plans will be economically viable. Ron Nichols, P.Eng. a Director and Senior Vice President for Aurcana, and a Qualified Person as defined by National Instrument 43-101, supervised the preparation of the technical information in this release.
ON BEHALF OF THE BOARD OF DIRECTORS OF
"Lenic Rodriguez", President
For further information, visit the website at www.aurcana.com or contact:
Jack Barnes, Corporate Relations
Phone: (604) 331-9333
Toll Free: (866) 532-9333
Fax: (604) 633-9179
Caution Regarding Forward-Looking Statements -- This news release contains certain forward-looking statements, including statements regarding the business and anticipated financial performance of the Company. These statements are subject to a number of risks and uncertainties. Actual results may differ materially from results contemplated by the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include unsuccessful exploration results, changes in metal prices, changes in the availability of funding for mineral exploration and development, unanticipated changes in key management personnel and general economic conditions. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and should not place undue reliance on such forward-looking statements. The Company does not undertake to update any forward-looking statements, oral or written, made by itself or on its behalf.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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