Aurcana Corporation ("Aurcana" or the "Company") wishes to advise that subsequent to the filing of the Company's year ended December 31, 2008 audited financial statements and annual management discussion and analysis (the "Financial Statements") which contained two significant audit adjustments required as of yearend, specifically with respect to concentrate sales and the potential future tax effects of our acquisition of the Shafter project in Texas, the Company has elected to restate its Interim Filings for the period ended June 30, 2008 and September 30, 2008 to accurately reflect these adjustments.
During 2008, under the contract terms then in place, revenues from concentrate sales were recognized at the time of shipment to the port in Mexico based on metal prices at that time at 90% provisional value. Final pricing was generally set at 4 months after shipment or alternatively 1 month after receipt at smelter. With the precipitous decline in metal prices mid-year, a large number of open contracts for shipments were effectively re-priced at the lower prices in effect at settlement. This resulted in an adjustment to sales of US$4.8 million (approximately $5.1 million Canadian). This adjustment was reflected in the 2008 audited financial statements of the Company, however to allow for accurate quarterly comparisons, the effects of the decline in concentrate prices have been reallocated to the quarter where the original invoices were booked.
During Q3 2008 we also acquired the Shafter project in Texas. At yearend our tax advisors determined the possible future income tax consequences of this acquisition to be in the range of $16 million. Although an earlier determination of FIT was not feasible, as the acquisition occurred during Q3 2008 we have amended the quarterly to reflect the change to mineral properties and FIT liabilities.
A more detailed analysis of the changes is presented in Note 16 to the amended and restated June 30, 2008 and September 30, 2008 financial statements, as well as in the respective MD&A.
The 2008 annual audited financial statements were not affected by these changes
About Aurcana Corporation:
The Shafter silver mine, with a NI 43-101 measured and indicated resource of 24.6 million ounces of silver and an inferred resource of 22.8 million ounces of silver using a 4.0 ounce per ton cut off, is scheduled to produce at 3.5 million ounces silver per year. The 92% owned La Negra silver-lead-zinc-copper mine in Queretaro State, Mexico, is operating at 1,000 tonnes per day. 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 Vice President of Exploration for Aurcana, and a Qualified Person as defined by National Instrument 43-101, supervised the preparation of the technical information included this release.
ON BEHALF OF THE BOARD OF DIRECTORS OF
"Lenic Rodriguez", President
For further information on this release, visit the website at www.aurcana.com or contact:
Charles Jenkins, Chief Financial Officer
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.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy and accuracy of this Release.