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Aurcana Reports 26% Increase in YTD Silver Production at La Negra and Shafter Silver Mine Construction Update


October 7, 2011

Aurcana Corporation ("Aurcana" or the "Company") (TSXV: AUN, OTCQX: AUNFF") is pleased to report silver production for Q3 2011 of 244,243 ounces that is based on just 80 days of mill production at La Negra. Year-to-date ("YTD"), silver production has increased 26% to 742,026 ounces, compared to 587,057 ounces in 2010. As anticipated, Q3 2011 silver production was slightly lower than 2010's 250,953 ounces as a result of the La Negra ball mill being down nine mill days in order to upgrade a ball mill.

Due to this maintenance, total mill feed of 119,772 tonnes was 4% lower than the 125,050 tonnes for Q3 of 2010. However, on a daily basis when the mill was in production at La Negra, the improvements at La Negra resulted in a 7% increase in the number of tonnes milled per day of 1,497 compared to 1,405 in Q3 2010.

Of 119,772 mill feed tonnes in Q3, 17% (20,562 tonnes) were from NI 43-101 Measured and Indicated Resources and 83% (99,210 tonnes) were from new discoveries or non-compliant resources. La Negra is now applying 43-101 standards in developing new mineralized zones to increase our compliant resources. Additionally, new ore zone development initiatives are being carried out on the Northwest Trend.

La Negra Highlights

  • 26% increase in silver produced to 742,026 ounces YTD 2011 compared to 587,057 ounces for YTD 2010.
  • 47% increase in contained zinc to 1,253 tonnes compared to 850 tonnes for Q3 of 2010.
  • As anticipated, contained copper production was down to 362 tonnes in Q3 2011 compared to 492 tonnes in Q3 2010 due to variable ore zones. Aurcana experienced a significant improvement in realized contained copper grades rising to 23% in Q3 2011 from 13% in Q3 2010 due to the effect of the new lead circuit.
  • Lead circuit continues to perform well, producing 455 tonnes of contained lead which helped improve overall recoveries and increase the quality of our concentrates.
  • 4% increase in ore mined to 134,072 tonnes in Q3 2011 from 128,666 tonnes in Q3 2010.
  • 18% increase in mineralized materials stockpiled from beginning to end of Q3 2011, with the total stockpile now standing at 94,524 tonnes.

La Negra is on track to complete the ongoing mill upgrade to 2,000 tpd in Q1 2012, a 33% increase from the current capacity. This will bring the mill throughput capacity in-line with our planned mining operations of 2,000 tonnes per day. 

Shafter Mine Construction Milestones completed in Q3, 2011

The Company commenced construction of the Shafter Mine in January of this year with an anticipated completion date of May 2012. Significant milestones on the Shafter Mine include:

  • Portal is completed and the Ramp is now developed 300 feet underground.
  • Reclaim Tunnel has now been completed.
  • Ball Mill Foundations have been completed and the Mill has been delivered to site.
  • Two of the 6 Leach Tanks have been installed.
  • Air Permit has been received and the last permit is now in process for modifying the production rate to 1,500 tpd. Once this permit is received the Shafter mine will be fully permitted.
  • Construction of the Shafter office at the mine site is underway with the external parts of the building complete, construction is continuing with the interior.
  • The Merrill Crowe Equipment is built and ready for shipment.
  • The refurbishing and modifications to the Filter Presses for the mill are well underway.
  • Underground Production Equipment has been ordered for delivery in December 2011 through April 2012.
  • Underground Development Equipment is on site and being used for decline development.
  • There are 40 employees now on site.
  • Jason Cyr was appointed General Manager for Shafter, taking over responsibilities from the project manager in September, 2011.

Summary

During Q3 2011, La Negra continued to perform close to the 1,500 tonne per day production capacity. Construction of the Shafter Mine is on schedule and the Company advanced the permitting process, with only one permit outstanding at Shafter. Aurcana continues to focus on its future growth.

Corporate

The Company's shares are now also traded in the United States on OTCQX under the symbol "AUNFF". Investors can find current financial disclosure and Real-Time Level 2 quotes for the Company on www.otcqx.com andwww.otcmarkets.com

About Aurcana Corporation:

The Shafter Silver Mine is scheduled to start production within 7 months and it is estimated will produce 3.8 million ounces silver in the first year of operation. It has an 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. The 92% owned La Negra silver-lead-zinc-copper mine has produced 1 million ounces of contained silver over the last 4 quarters. 

The reader should be cautioned that the Company has not completed a feasibility study to confirm the projected production capacity for La Negra and there is no certainty the Company's plans will be economically viable.

This scientific and technical information contained in this news release has been reviewed by Andy Nichols, P.Eng. of the Company, and a Qualified Person ("QP") as defined by National Instrument 43-101 (Standards of Disclosure for Mineral Projects).



ON BEHALF OF THE BOARD OF DIRECTORS OF

AURCANA CORPORATION

"Lenic Rodriguez", President & CEO
For further information, visit the website at www.aurcana.com or contact:

Aurcana Corporation 
Phone: (604) 331-9333 
Toll Free: (866) 532-9333
Fax: (604) 633-9179 
Gary Lindsey, Corporate Relations
Phone: (720)-273-6224
Email: gary@strata-star.com

NR# 11-13

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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