|Thu Sep 30, 2010|
Aurcana Reports Positive Feasibility Study on Shafter Silver Mine
|Aurcana Corporation ("Aurcana" or the "Company") is pleased to announce the positive results of a recently completed Feasibility Study on its 100% owned Shafter Silver Mine located in Presidio County, SW Texas.|
The full report will be available on the Aurcana website (www.aurcana.com) and on SEDAR (www.sedar.com) within 45 days of this release.
The economics presented are based on a silver price of $15.53 per ounce, being the current three-year average silver price.
These results are broadly in line with the July 2009 Prefeasibility Study which indicated a 25% IRR at $13.55 per ounce of silver and a capital requirement of $40 million. The current study indicates an improved economic picture due to the increase in silver price which more than offsets capital cost increases identified through the increased rigor of this Study.
The Mineral Resource is materially the same as disclosed in the previously filed Technical Report "Shafter Silver Project", June 30, 2008, and the Mineral Reserve is materially the same as disclosed in the previously filed Technical Report "Prefeasibility Study on Shafter Silver Mine", April 2009.
Only the Measured and Indicated Mineral Resource has been used for conversion to Mineral Reserve, and only the Mineral Reserve has been used in the economic analysis. No part of the Inferred Mineral Resource has been included in the Mineral Reserve or economic analysis.
Basic engineering of the mill and surface infrastructure was completed in May 2010. The project is fully permitted, and amendments to existing permits to reflect the project's final configuration are in the hands of the regulatory agencies. Amendments are minor in nature, and the regular and positive interaction with the regulatory agencies has resulted in the Company receiving indications that permits will be amended as requested.
Shafter is a historical mine which produced 35 million ounces of silver between 1883 and 1942 when it closed due to the War Act and low silver prices. From 1979 to 1982 an extensive surface and underground drilling program delineated the extension of the orebody for a mile east of the old mine, resulting in a Measured and Indicated Resource of 24 million ounces of silver and an Inferred Resource of 23 million ounces of silver at 4 ounces per ton cut-off. Aurcana purchased Shafter fully permitted in 2008. The reader should be cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability.
Encouraged by the positive results of the Feasibility Study and high silver prices, Aurcana is actively seeking financing to allow the 18 months construction program to start immediately upon receipt of funding.
Project execution planning is essentially complete, key personnel, consultants, and engineers are identified for construction, and equipment for developing the mine and constructing the mill has been identified and in certain cases, secured. All essential permits are in hand and are being updated to reflect the latest project configuration.
Mr. Lenic Rodriguez, President and CEO of the Company, comments,
"We are pleased with the results of this Feasibility Study. Shafter is a strong project even at the base case of $15.53 silver price, and we have a very good upside potential for upgrading the 2.2 million Inferred tons to Measured and Indicated by delineation and in-fill drilling. As well, the orebody is open to the west and east.
Qualified Person for the Feasibility Study:
Mr. Jack Burgess, PE, is the Independent Qualified Person as defined by National Instrument 43-101 who supervised the preparation of the Feasibility Study. Mr. Burgess has over 30 years international mine management experience, has been a consultant to the owners of the Shafter Silver Mine for more than 12 years, and was a contributing Qualified Person for previous Studies.
Qualified Person for this News Release:
Mr. Andy Nichols, P.Eng, Vice President of Operations of Aurcana Corporation, is the non-independent Qualified Person for this News Release. He has +30 years relevant experience in silver and base metal mining in North America, Zambia, and Asia.
About Aurcana Corporation:
Aurcana is a growth oriented, silver and base metal producer focused on near-production opportunities. Our primary assets are the La Negra Mine in Mexico and the Shafter Silver Project in Texas. The Shafter Silver Mine is scheduled to start up production within 18 months of securing permits and financing, producing 3.8 million ounces of 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 the recently completed expansion to 1,500 tonnes per day. The reader should be cautioned that 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.
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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