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News for 'AUNFF' - (Aurcana Reports First Ever Sales and Gross Profit)
VANCOUVER, BRITISH COLUMBIA, Nov 26, 2007 (Marketwire via COMTEX) -- Aurcana
Corporation ("Aurcana" or the "Company") (TSX VENTURE:AUN) is pleased to report
its financial results for the three and nine month periods ended September 30,
2007. The summary of the selected financial information should be read in
conjunction with the unaudited financial statements for the nine months ended
September 30, 2007 and the related management's discussion and analysis dated
November 22, 2007 together referred to as the "Financial Statements", which have
been filed on www.sedar.com and the Company's website www.aurcana.com. All
figures are in Canadian dollars unless otherwise noted.
Highlights of the 3rd Quarter September 30, 2007 results are:
- 74,000 tonnes of ore processed
- 3,800 tonnes of concentrate sold
- Revenues of $3,936,000
- Operating cash flow of $754,142 and gross operating profit was $1,194,320
- C$14.8 million in cash held on deposit with major bank (no exposure to Asset
Backed Commercial Paper) working capital of C$14.3 million
- Working capital of C$14.3 million
Overall Performance:
La Negra
During the third quarter the operation performed as expected. Efforts during the
first six months of 2007 were concentrated on ensuring the mill was
reconditioned to obtain a capacity of 1,000 tonnes per day, an increase of 25%
of the previous operating capacity and this capacity was achieved in the third
quarter.
Morale at the mine continues to be high and recent monthly production levels at
the mine are on target with expectations of an average of 1,000 tonnes per day
and monthly sales on target with expectations for a restarted mine. It is
expected that with the recent acquisition of new underground equipment the mine
will sustain production to meet mill throughput.
The Company also recently commenced a 15,000 metre underground diamond drill
exploration program to define additional resources.
Rosario
On February 22, 2007, the Company received Exchange approval to enter into an
Option Agreement to acquire, through its subsidiary, Aurcana de Mexico, an 100%
interest in a silver-zinc-lead-gold Property, Rosario (Rosario) located in
Sinaloa State, Mexico for US$3,000,000.
Following its technical and legal review of the Rosario Property, the Company on
August 7, 2007 exercised the Option to Purchase and executed a Sale and Purchase
Agreement to acquire a 100% undivided interest in Rosario, under the following
terms:
February 22, 2007 US$250,000 upon signing the option agreement (paid)
August 7, 2007 US$250,000 upon signing the purchase agreement (paid)
February 7, 2008 US$1,250,000
February 7, 2009 US$1,250,000
Development at the Rosario site has been proceeding well and the Company expects
to begin production from the mine before the end of fiscal 2008. To assist in
meeting its goal of production start up in the last quarter of 2008, Aurcana has
acquired a critical piece of mill equipment. Currently, lead times in the mining
industry for both mill equipment and mining equipment are becoming increasingly
longer but Aurcana has been successful in securing a SAG ("Semi-Autogenous
Grinding") mill that will be instrumental in the refurbishment of the Rosario
mill and ensure that timelines are maintained. The SAG mill is capable of
processing up to 1200 tonnes per day.
Results of Operations:
Production
Production, at La Negra, for the three and nine months ended September 30, 2007
was 74,000 metric tonnes of ore producing 3,800 tonnes of concentrate (2006 -
Nil). The target production levels are 1,000 tonnes of ore production per day on
a 75 day quarter for a total expected production of 75,000 metric tonnes.
Sales
The mine generated its first sales of $4,951,000 during the three months ended
September 30, 2007 of which the Company's 80% share was $3,936,000 (2006 - Nil).
Operating Margin
The Company's gross margin for the three months ended September 30, 2007 was
$1,194,000 or 30% (2006 - Nil), and reflects the efforts the Company has made to
bring production to market quickly. The cost of sales for the three months ended
September 30, 2007, were $2,742,000. Lower cost of sales in the future, are
expected. Operating costs during this period marked the Company's first
commercial production which the Company expects to be lower in the following
subsequent quarters. Recent equipment acquisitions, along with scheduled
maintenance and final refurbishments of existing facilities continue to result
in improved efficiency.
Income
Net loss for the three months ended September 30, 2007 of $144,000 ($0.00 per
share basic and diluted) compares with a loss of $1,482,000 ($0.01 per share
basic and diluted) for the same period in 2006.
Net loss for the nine months ended September 30, 2007 of $3,374,000 ($0.04 per
share basic and diluted) compares with a loss of $1,692,000 ($0.03 per share
basic and diluted) from the same period in 2006.
Cash Flows
Cash flow from operating activities (before changes in non-cash working capital)
for the three months ended September 30, 2007 was $754,000 compared to the cash
flow of $181,000 for the same period in 2006.
For the nine months ended September 30, 2007, the Company generated a positive
cash flow from operations (before changes in non-cash working capital) of
$390,000 compared to negative cash flow of $143,000 for the same period in 2006.
The most notable changes for the three months ended September 30, 2007 were a
$1,008,000 increase in trade accounts receivable, a $1,537,000 increase in other
accounts receivable, a $296,000 increase in inventory, and a $1,550,000 increase
in accounts payable providing a net cash inflow of $1,213,000 from changes in
non-cash working capital items.
For the nine-month period, the Company completed a $21,000,000 financing and
received, net of expensed, $20,020,000 from the issuance of shares, and repaid
$1,130,000 of long-term debt.
After taking into account $4,503,000 incurred on mineral property development
and capital asset purchases of $785,000, there was a net increase in cash
balances of $14,820,000 for the nine months ended September 30, 2007.
At September 30, 2007, cash balances totalled $14,820,000.
Liquidity
The working capital position of the Company is positive. Current assets exceed
current liabilities by $14,264,000 compared to a working capital deficiency of
$922,000 at December 31, 2006. While management expects positive cash flow from
the La Negra operation there will still be considerable outflows in the near
term as the Rosario project is developed.
Corporate Highlights:
1. Aurcana has a strong balance sheet, growing revenues from the La Negra Mine
and projected revenue starting Quarter 4, 2008 from its second project Rosario;
2. The Company has a diversified asset base and will be producing five different
metals from La Negra and Rosario;
3. Aurcana has significant exploration potential at both of La Negra and
Rosario;
4. Aurcana has shown it ability to implement and follow through with its plan to
become a significant base - precious metal producer;
5. The Company has a network of contacts that can lead to the acquisition of
additional projects that are in production or at advanced development or
exploration stages all within its corporate mandate.
With a strong balance sheet, 1,000 tonnes per day production established at La
Negra, Rosario slated to add additional production of 800 tonnes per day by the
end 2008, a very positive outlook for the price of commodities, along with the
continued expansion of Aurcana's shareholder base, a very bright, exciting and
rewarding future await Aurcana and its shareholders.
Ken Booth, President, stated: "The future for La Negra is very promising as we
continue to improve on all aspects of the operating. The ongoing exploration
program will provide us with the capacity to potentially expand the mill to
2,000 tonnes per day, and provide further efficiencies."
Aurcana is a Canadian junior mining company listed on the TSX Venture Exchange,
symbol: AUN. The Company remains focused on the acquisition, development and
operation of silver, zinc and copper mines with good infrastructure and ore
reserves/resources that require minimal capital and time to re-start.
ON BEHALF OF THE BOARD OF DIRECTORS OF AURCANA CORPORATION
Ken Booth, President
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. 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.