SHAFTER SILVER MINE TIMELINE AND UPDATEAurcana appoints project manager for Shafter mine
2008-11-20 15:39 ET - News Release
Mr. Ken Booth reports
AURCANA CORPORATION: SHAFTER SILVER MINE TIMELINE AND UPDATE
AurcanaCorp.'s 100-per-cent-owned Shafter silver mine, Southern Texas, isbeing advanced. The company has appointed a project manager forShafter, and work is under way on an internal scoping study, which isexpected to be completed in January, 2009. The results of the scopingstudy and trade-offs will be used to guide a prefeasibility study,which the company expects to be finished in June, 2009. Sandy McVey,PEng, MSc, PMP, will oversee all aspects of Shafter, including thescoping study and prefeasibility study. Mr. McVey has over 30 years ofexperience working on mining operations and capital constructionprojects in North America, Africa and Europe, and has held positions ofplant superintendent and mine manager for underground operations.Recently, Mr. McVey was with a consulting engineering group based inVancouver, where he was involved in managing feasibility studies fortwo underground mines and one surface mine. One feature to beincorporated into the scoping study is the use of a decline to enhanceaccess to the deposit. The proposed decline will allow the use oflarger mining equipment, while at the same time enabling the existing1,050-foot shaft and headframe to be used exclusively to hoist ore.This combination is forecast to enable the Shafter mine to increaseproduction up to 1,500 tons per day of ore. The decline alsopotentially allows early production and cash flow, as it will initiallytarget resource blocks in the upper levels of the mine above the watertable. With the dramatic fall in commodity prices, Aurcana and itspartner, Reyna Mining and Engineering, are optimizing the La Negra mineto ensure it can operate profitability on a continuous basis. Theoperation is under constant review to ensure survivability in thesemetal markets. The company and Reyna have been implementing operationaland cost-cutting measures. Operationally, La Negra has the benefit ofmultiple zones that have existing development and are primarilycopper-silver. As such, a new mine plan has been formulated in order tomine from areas that require minimal development but also have highergrades of silver and copper. In order to ensure that the value of theore being sent to the mill is maximized, the new mine plan willselectively produce from these higher-grade sources. All explorationdrilling and any mine development not directly associated withimmediate production from the higher-grade sources have been suspendedin order to reduce costs. To improve the operating margins, La Negrawill be implementing a reduction in wages of 20 per cent for allsalaried workers, is negotiating to gain concessions from the unionizedwork force and has made reductions in the number of employees. The minehas already been successful in renegotiating some contracts, inparticular its concentrate off-take agreements, and is working withsuppliers and other third parties to receive more favourable terms inthe current markets. La Negra is already purchasing supplies at deeplydiscounted rates from local mines that have suspended operations. LaNegra recently reduced capital expenditures relating to its tailingsfacilities by working with outside consultants. Following therecommendation of the consultants, the current tailings facility wasupgraded at a cost of $240,000 (U.S.), which has extended the life ofthe tailings facility for another 10 years. In order to conservecapital, the company will be reducing corporate overhead, and puttingits Rosario project on care and maintenance. A small work force will bekept at Rosario to provide security and to maintain the camp. Aurcanahas been approached by several parties regarding a transaction for theRosario project and, as proposals are received, they will be reviewedto maximize the value of Rosario in the current market. The companyalso announces that Brian Flower and Robert Fischer have resigned fromthe board of directors. Aurcana wishes to thank them for their servicesand support over the past four years. Aurcana will file itsthird-quarter financial statements during the week of Nov. 24.
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