Aurcana Corporation ("Aurcana" or the "Company") is pleased to announce that the 100% owned Shafter silver mine, southern Texas is being advanced. The Company has appointed a project manager for Shafter and work is underway on an internal scoping study which is expected to be completed in January 2009. The results of the scoping study and tradeoffs will be used to guide a prefeasibility study which the Company expects to be finished in June 2009.
Mr. Sandy McVey P.Eng., M.Sc., PMP. will oversee all aspects of Shafter including the scoping study and prefeasibility study. Mr. McVey has over 30 years experience working on mining operations and capital construction projects in North America, Africa and Europe, and has held positions of plant superintendent and mine manager for underground operations. Recently, Sandy was with a consulting engineering group based in Vancouver where he was involved in managing feasibility studies for two underground mines and one surface mine.
One feature to be incorporated into the scoping study is the use of a decline to enhance access to the deposit. The proposed decline will allow the use of larger mining equipment while at the same time enabling the existing 1,050 foot shaft and head frame to be used exclusively to hoist ore. This combination is forecast to enable the Shafter mine to increase production up to 1,500 tons per day of ore. The decline also potentially allows early production and cash flow, as it will initially target resource blocks in the upper levels of the mine above the water table.
With the dramatic fall in commodity prices Aurcana and its partner, Reyna Mining and Engineering, are optimizing the La Negra mine to ensure it can operate profitability on a continuous basis. The operation is under constant review to ensure "survivability" in these metal markets.
The Company and Reyna have been implementing operational and cost cutting measures. Operationally, La Negra has the benefit of multiple zones that have existing development and are primarily copper-silver. As such, a new mine plan has been formulated in order to mine from areas that require minimal development but also have higher grades of silver and copper. In order to ensure that the value of the ore being sent to the mill is maximized the new mine plan will selectively produce from these higher grade sources. All exploration drilling and any mine development not directly associated with immediate production from the higher grade sources have been suspended in order to reduce costs. To improve the operating margins, La Negra will be implementing a reduction in wages of 20% for all salaried workers, is negotiating to gain concessions from the unionized workforce and has made reductions in the number of employees. The mine has already been successful in renegotiating some contracts; in particular it's concentrate off-take agreements and is working with suppliers and other third parties to receive more favourable terms in the current markets. La Negra is already purchasing supplies at deeply discounted rates from local mines that have suspended operations.
La Negra recently reduced capital expenditures relating to its tailings facilities by working with outside consultants. Following the recommendation of the consultants the current tailings facility was upgraded at a cost of US$240,000 which has extended the life of the tailings facility for another ten years.
In order to conserve capital, the Company will be reducing corporate overhead and putting its Rosario project on care and maintenance. A small workforce will be kept at Rosario to provide security and to maintain the camp. Aurcana has been approached by several parties regarding a transaction for the Rosario project and as proposals are received they will be reviewed to maximize the value of Rosario in the current market.
The Company also announces that Mr. Brian Flower and Mr. Robert Fischer have resigned from the Board of Directors. Aurcana wishes to thank them for their services and support over the past four years.
Aurcana will file its third quarter financial statements during the week of November 24.
About Aurcana Corporation:
Aurcana Corporation's strategy is Growth through Acquisition. The 100% owned Shafter silver mine in Presidio County, Texas, which was acquired in July 2008 represents the third acquisition in two years.
The Shafter silver mine has a NI 43-101 measured and indicated resource of 23.8 million ounces or silver and an inferred resource of 22.8 million ounces of silver, both using a 4.0 ounce per ton cut off. The 80% owned La Negra mine in Queretaro State, Mexico, is a copper-silver-lead-zinc mine and has operated at 1,000 tonnes per day since Q3, 2007. The 100% owned Rosario mine in Sinaloa State, Mexico, is an advanced stage lead-zinc-silver exploration project. Andy Nichols, P.Eng., Vice President of Operations for Aurcana, and a Qualified Person as defined by National Instrument 43-101, supervised the preparation of the technical information in this release. The reader should be cautioned the Company has not completed feasibility studies confirming the projected production capacity for La Negra, Shafter or Rosario and there is no certainty the Company's plans will be economically viable.
ON BEHALF OF THE BOARD OF DIRECTORS OF
"Ken Booth", President
For further information, please visit the website at www.aurcana.com, or contact:
Ken Booth, President or
Jack Barnes, Investor Relations
Phone: (604) 331-9333
Toll Free: (866) 532-9333
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.
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