Vancouver, BC, August 14, 2015, Aurcana Corporation ("Aurcana" or the "Company") (TSXV: AUN, OTCQX: AUNFF) is pleased to report its unaudited financial results for the quarter ended June 30, 2015 (“Q2 2015”). The summary of the selected financial information in this press release should be read in conjunction with the unaudited financial statements and the related management's discussion and analysis for the three months ended June 30, 2015, together referred to as the "Financial Statements", which have been filed on SEDAR (www.sedar.com) and the Company's website (http://www.aurcana.com). All figures are in US dollars unless otherwise noted.
Mr. Kevin Drover, Aurcana’s President and CEO, said. “Over the past year we have adapted to very difficult metals markets, reducing our production costs by 26% per ounce on a silver equivalent basis. The Company continues to focus on reducing operating costs and increasing efficiencies. Operations are impacted by the current poor metals prices however Aurcana is now well positioned to benefit from any improvement in metals prices, particularly silver and copper prices.
Significant highlights for Q2 2015 were:
The Company had earnings (losses) from mining operations at La Negra for the quarter ended June 30, 2015 in the amount of ($0.6) million, compared to ($1.4) million in Q2 2014, primarly due to weaker metals prices and lower grades of mineralization in mined material. Net loss for the quarter decreased to ($1.8) million or ($0.02) per share, compared with a net loss of ($7.4) million or ($0.11) per share in Q2 2014.
During the quarter ended June 30, 2015, the Company generated total net revenues of $7.4 million (Q2 2014: $9.2 million) from the sale of 222,149 ounces of silver
(Q2, 2014: 272,027 ounces); 3,020 tonnes of copper concentrate (Q2, 2014: 2,869 tonnes); 3,441 tonnes of zinc concentrate (Q2, 2014: 4,138 tonnes); and 579 tonnes of lead concentrate (Q2, 2014: 731 tonnes).
The average price obtained for silver, copper, zinc and lead during Q2 2015 were: silver $16.32 (Q2 2014: $20.43) per ounce; copper $2.69 (Q2 2014: $3.09) per pound; zinc $0.95 (Q2 2014: $0.95) per pound; and lead $0.95 (Q2 2014: $0.96) per pound.
La Negra Mine Operations Update
Overall production decreased in the second quarter of 2015 compared to Q1, 2015 and Q4, 2014 due to revisions in mine planning and delays in the implementation of continuous seven-day shifts throughout the operation. This resulted in lower than planned pre-development advances and lower metal grades. With improvements in metal prices and an increase in sustaining capital the mine intends to ramp production back-up to 3,000 tpd during the latter part of the year.
Approximately 48% of the mineralized material milled was mined from within previously defined resources. The additional mineralized material milled was mined from areas adjacent to established resources and from other areas identified as a result of our exploration success. Underground diamond drilling and mine development at La Negra continues to delineate extensions to mineralized zones. Drill crews completed 4,220 metres of diamond drilling during the first six months of 2015.
During the second half of 2015 Aurcana will continue its cost reduction and efficiency initiatives which provides the Company with a competitive cost base. These actions include continued focus on grade control, Dilution control, increasing production and productivity, while continuing to optimize the mine plan. Given the current economic pressures on metal prices, management believes this strategy will enable it to remain viable and be well positioned to take advantage of any potential future increase in metal prices.
To improve the Company’s short term liquidity, the Company’s principal lender permitted the Company to make interest only payments on the Company’s senior debt and defer payments on the principal amount owed from January to July 2015 until August 31, 2015 under the current debt facility agreement. The Company is in discussions with its principal lender to restructure its debt under a new credit agreement which is required to ensure the company’s on-going viability. There can be no assurance that the Company will be successful in its attempts to restructure its debt.
The Company reached a settlement agreement in February, 2015 for the class action litigation filed against the Company. The settlement provided for the full and final settlement, release and dismissal of all claims brought under the class action and was subject to a number of customary conditions, including the receipt of court approval, which was received on April 10, 2015. See the Company’s press releases dated February 26, 2015 and April 22, 2015 for further information including filing and distribution instructions.
In July 2014 Mr. Kevin Drover was appointed the new President and CEO of Aurcana Corporation and immediately instituted a program to modernize the La Negra mine, emphasize health and safety in all units of the operation and reduce overall costs. This initiative has achieved significant success, the full impact of which has been diminished by poor commodity prices.
To read the complete Financial Statements click on this link:
To read the complete MD&A click on this link:
The Company’s shares are 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 and www.otcmarkets.com.
About Aurcana Corporation
Aurcana Corporation is a primary silver producing company with two properties: the La Negra Mine in Mexico and the Shafter Silver Project in Texas, US. The latter was put on care and maintenance in December 2013, in part due to depressed silver prices. The Company is developing new mining plans for both properties as it continues to work to improve margins and shareholder value.
The technical information in this release has been reviewed by Jerry Blackwell (PGeo.), a Director and technical advisor to the Company and a Qualified Person as defined by National Instrument 43-101.
ON BEHALF OF THE BOARD OF DIRECTORS OF
“Kevin Drover”, President & CEO
For further information, visit the website at www.aurcana.com or contact:
Phone: (604) 331-9333
Toll Free: (866) 532-9333
Fax: (604) 633-9179
Gary Lindsey, Corporate Communications
This news release contains certain forward-looking statements, including statements regarding forecast metals production, metals grades, operational costs, recoveries, potential mineralization, exploration result, future plans and objectives of the Company, including the ability of the Company to restructure its outstanding debt and the business and anticipated financial performance of the Company. These statements are forward-looking statements that involve various risks and uncertainties. Forward-looking statements include, but are not limited to, statements with respect to mining and processing of mineralized material, achieving projected recovery rates, anticipated production rates and mine life, operating efficiencies, costs and expenditures, changes in mineral resources and reserves, and other information that is based on forecasts of future operational or financial results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or does not expect”, “is expected”, anticipates” or “does not anticipate” “plans”, “estimates” or “intends” or stating that certain actions, events or results “ may”, “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be “forward-looking statements”. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to materially differ from those reflected in the forward-looking statements.
Actual results may differ materially from results contemplated by the forward-looking statements. Important factors that could differ materially from the Company’s expectations include, among others, risks related to international operations, unsuccessful exploration results, conclusions of economic evaluations and changes in project parameters as plans continue to be refined as well as 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, except as required by applicable law. Accordingly, readers should not place undue reliance on forward-looking statements.
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.