VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 3, 2008) - Aurcana Corporation (TSX VENTURE:
AUN -
News; "Aurcana" or the "Company") is pleased to announce it has agreed to acquire a 100% interest in the Shafter Silver Mine ("Shafter") from Silver Standard Resources Inc. ("Silver Standard"). Shafter is located in southwest Texas and is fully accessible via paved highway from El Paso, Texas. Shafter has an estimated measured and indicated resource of 21,000,000 ounces of silver and an inferred resource of 20,200,000 ounces of silver. This estimate is based on a previously prepared technical report for Silver Standard by Pincock Allen and Holt on the Shafter Silver Mine dated April 10, 2001 and filed on SEDAR June 3, 2002. A copy of the report is available on SEDAR (
www.sedar.com) under Silver Standard's profile. Details of the estimated resource are shown in the table below:
--------------------------------------------------------------------------Estimated ContainedResources Tons Silver oz./ton Silver Ounces--------------------------------------------------------------------------Measured 658,000 9.89 6,500,000--------------------------------------------------------------------------Indicated 1,427,000 10.14 14,500,000--------------------------------------------------------------------------Measured & Indicated 2,085,000 10.06 21,000,000----------------------------------------------------------------------------------------------------------------------------------------------------Inferred 1,572,000 12.83 20,200,000--------------------------------------------------------------------------
The Company plans to commission a NI 43-101 compliant technical report to confirm the resource estimate.
Shafter's past production history spanned the period from 1883 to 1942 when the mine was closed by the War Act. Total production during that period was 2.306 million tons of ore containing 35.153 million ounces of silver at an average grade of 15.24 ounces of silver per ton.
All necessary infrastructure is in place at Shafter with a major power line and paved highway crossing the property, an electrical sub-station on site, a 320 metre shaft serviced by a 80 ton per hour hoist, 1,555 metres of underground development and an 800 ton per day conventional mill that was moved to Shafter in 2003.
Aurcana will use the expertise and experience of its operating team, which successfully refurbished and restarted the La Negra mine in 13 months, to assemble the mill and re-start the mine at Shafter. The Company estimates that the Shafter mine could be in production in just over 15 months.
"Acquiring the Shafter Silver Mine from Silver Standard Resources has significantly accelerated Aurcana's commitment to become an emerging silver producer," states Ken Booth, President of Aurcana. "We will now focus on identifying additional high quality silver assets."
The acquisition terms require Aurcana to pay Silver Standard $23 million in cash; 15 million Aurcana common shares; and a $10 million convertible debenture paying a 3% coupon with a three year term and convertible into 6.62 million Aurcana common shares at $1.51 per share. Total consideration based on Aurcana's closing price of $0.64 on April 1, 2008 is $42.6 million. The acquisition is subject to the signing of a definitive agreement and a closing on or before June 30, 2008. The acquisition is subject to certain conditions including acceptance of the TSX Venture Exchange.
About Aurcana Corporation:
Aurcana Corporation is a Canadian mining company listed on the TSX Venture Exchange, symbol AUN. The 80% owned La Negra silver-lead-zinc-copper mine in Queretaro State, Mexico operates at 1,000 tonnes per day. The 100% owned Rosario silver-lead-zinc-gold mine in Sinaloa State, Mexico is advancing to commence production at a planned rate of 800 tonnes per day in 2009. The reader should be cautioned the Company has not completed feasibility studies confirming the projected production capacity for La Negra and Rosario or the feasibility of the Shafter Mine and there is no certainty the Company's plans will be economically viable. The Company is currently carrying out aggressive exploration programs at La Negra and Rosario in order to increase historical reserves and resources and with success this could lead directly to expansion of production.
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
Ken Booth, President
For further information, please visit the website at: www.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.