Aurcana Corporation ("Aurcana" or the "Company") is pleased to report the Company and Silvermex Resources Ltd. ("Silvermex") subsequent to its announcement on May 25, 2009 have entered into a definitive agreement (the "Agreement") effective October 9, 2009 (the "Effective Date") for the sale of the Rosario exploration and development project located in Sinaloa, State, Mexico.
Under the terms of the Agreement Silvermex on or before November 15, 2009 will pay CDN$250,000 and reimburse Aurcana for all maintenance expenses incurred from August 1, 2009 to November 15, 2009 less any amounts due from the sale of certain equipment to Aurcana. In addition to the cash payment Silvermex will issue 1,000,000 common shares on Closing. Upon commencement of commercial production or within 24 months from the Effective Date, Silvermex will issue an additional 1,000,000 common shares. The 2,000,000 common shares are subject to a voluntary escrow and will be released at a rate of 25% every three months, commencing three months from the date of issuance. Upon the earlier of six months from the commencement of commercial production or 30 months from the Effective Date Silvermex will pay to Aurcana an aggregate of US$2,500,000 in five instalments of US$500,000 over a 36 month period. Aurcana at its election may take common shares in lieu of cash payments effective as of instalment three. Silvermex also assumed the payment obligations to Grupo Mexico due on August 7, 2009 (US$366,893 paid by Silvermex) and US$731,500 plus IVA due on February 7, 2010.
Aurcana will now continue to focus on the development of the Shafter Silver Mine and the expansion and exploration plans for its La Negra Mine.
The Company further advises Mr. Ron Nichols has been appointed Sr. Vice President from Vice President of Exploration and Mr. Nils von Fersen has been appointed Vice President of Exploration from Exploration Manager. In addition, Mr. Ken Booth has resigned as director and Aurcana wishes to thank him for his contributions to date.
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 Sr. 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, Manager Investor 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.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy and accuracy of this Release.