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La Negra Corporate Update


August 17, 2009

Aurcana Corporation ("Aurcana" or the "Company") is pleased to announce the mining operation at it's 92% owned La Negra Mine has seen a number of significant developments over the last few months. 

Onsite personnel are now in control of all the daily functions of the mine operation. Key senior staff positions in geology, human resources, and the mill-flotation plant have been strengthened with the addition of highly qualified personnel. Plant optimization studies are under way, focused on improving mill and flotation circuit performances. Two new, large, flotation cells have been installed to replace a part of the old copper-zinc circuit. Metallurgical tests are being conducted in Vancouver with the aim of producing a higher quality copper concentrate by gravimetric separation of the contained lead and associated silver. Initial results are encouraging. The addition of a lead-silver concentrate would result in an overall improvement in the recovery of the payable metals and a reduction of smelter penalties. 

Plans for a 4,500 meter underground diamond drilling program are being finalized in order to outline additional ore reserves to provide the feed that will be needed for the mill expansion program. A bid process is underway and drilling will commence once an underground diamond drill contractor is selected.

June was a very successful month with sales of $1,529,600, based on 90% of the value of the concentrate shipped. This is a 49% increase from the January to May, 2009 average sales of $1,025,000 per month. Metal sales in June totalled 97,809 ounces of Silver, 281,657 pounds of Copper, and 250,666 pounds of Zinc. 

Aurcana has completed re-negotiations to spread out its payments with all of its major creditors, which will allow Aurcana to dedicate the additional free cash flow towards expanding and improving the operations.

  • A term sheet with market terms over a three year period has been negotiated with our concentrate buyer, Trafigura in order to settle the outstanding amount owing due to the negative price adjustments to the final concentrate invoices that resulted from the precipitous metal price drops of late last year. The Company is currently working with Trafigura to complete the definitive agreement.

     

  • The Company is currently working with management of Silver Wheaton to enter into a definitive agreement to allow for delayed deliveries of silver from La Negra mine.

     

  • A reduced interest payment on the Convertible debenture with Silver Standard has been paid and terms for the remaining two years re-negotiated to both parties satisfaction.

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 in this release.

ON BEHALF OF THE BOARD OF DIRECTORS OF
AURCANA CORPORATION

"Lenic Rodriguez", President 

For further information, visit the website at www.aurcana.com or contact:
Jack Barnes, Manager Investor Relations
Aurcana Corporation
Phone: (604) 331-9333
Toll Free: (866) 532-9333
Fax: (604) 633-9179 
Email: jbarnes@aurcana.com

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.

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