Aurcana Silver Corp V.AUN.H

Stonecap keeps Aurcana at "outperform"

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Stonecap keeps Aurcana at "outperform", cuts target to $1.25

Tue 2:59 pm by Joyanta Acharjee

Stonecap Securities kept its "outperform" rating on Aurcana Corp. (CVE:AUN) but cut its target price to $1.25 from $1.30 after the company posted full-year 2011 earnings.

Aurcana is a silver explorer with interests in the Shafter silver mine in Texas as well as La Negra.

Amongst the highlights, Aurcana reported cash costs of $10.10 per silver equivalent ounce, down from $11.03 in 2010 and cash flow from operations was $17 million, of which $4 million was generated in the fourth quarter.

The company's management forecasts second-quarter throughput at Shafter of 132,000 tons, indicating that the mine is well on its way to achieving nameplate capacity.

Aurcana had cash of $36.5 million at year-end, which is more than sufficient to execute on exploration and growth plans for both La Negra and Shafter.

In a research note, Stonecap said: "With strong Q4 production and commissioning of Shafter proceeding ahead of schedule, Aurcana is well positioned to enter the ranks of mid-tier silver producers during 2012.

"We also note that the company’s expansion plans could increase production beyond our current forecasts."