Aurcana Reports Third Quarter Financial Results
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov 29, 2013) -
Aurcana Corporation ("Aurcana" or the "Company")
(TSX-VENTURE:AUN)(OTCQX:AUNFF) wishes to report its unaudited
financial results for the third quarter ended September 30,
2013.
The Q3 2013 Earnings Webcast and Conference Call has been
scheduled for 11:00am Pacific Time (2:00 pm Eastern Time) on Monday
December 2, 2013. See the bottom of this press release for
details.
Highlights of Third Quarter ended September 30, 2013:
- Total silver equivalent ounces produced in Q3 2013 increased by
5% to 754,788 oz, compared to 718,063 oz in Q3 2012.
- Total silver equivalent produced for the first 9 months of 2013
increased by 14% to 2,165,865 oz, compared to 1,899,281 oz during
the same period one year ago.
- Total Cash Cost, net of by-product credits, was $6.45 per
ounce, down 17% from $7.79 in Q2 2013 and up 9% from $5.90 in Q3
2012.
- The cash cost per milled tonne for Q3 2013 was $32.85 vs.
$32.50 in Q3 2012;
- Total Revenues for Q3 2013 were $10.4 million, down $4.6
million from $15.0 million in Q3 2012, due to a combination of
lower silver prices, lower grade material mined in the development
of new producing areas and higher unsold inventories at the end of
the period;
- Total Earnings from mining operations for Q3 2013 were $2.6
million and $9.9 million for the first 9 months of 2013;
- Net loss for Q3 2013 was $15.5 million. Included in the third
quarter net loss of $15.5 million, the Company recorded an
impairment charge related to Shafter property, plant, equipment and
mineral properties of $6,138,442 and also recorded a total of
$6,813,729 for certain expenses incurred at Shafter mine during the
first nine months of 2013.
The summary of the selected financial information should be read
in conjunction with the unaudited financial statements and the
related management's discussion and analysis for the three and nine
month periods ended September 30, 2013, together referred to as the
"Financial Statements" filed on www.sedar.com and available on
www.aurcana.com. All figures are in US dollars unless otherwise
noted.
Third Quarter Production and Operational Highlights
La Negra Mine
- During Q3 2013 La Negra's mill averaged 2,632 tonnes per day
("tpd"), a 15% increase from 2,289 tpd averaged during Q3
2012.
- The average silver grade during Q3 2013 was 55 grams per tonne
("g/t"), compared to 80 g/t in 2012. The decrease in silver grade
during this period was due to an increase in mine development to
support higher mine production rates in the future. Currently
sufficient mine development has been completed at the La Negra mine
to support two years of production and Aurcana will therefore
reduce mine development at La Negra in the short term. La Negra's
mine plan includes a transition to mining higher silver grade
mineralized zones from the upper levels of the La Negra mine in
2014 and 2015.
- Aurcana has ordered a raise-boring machine to construct
ventilation raises and ore passes to provide ventilation in the new
mining areas and allow for the transfer of ore via gravity from the
upper levels to the main haulage level below. It is anticipated
that this will increase productivity and reduce operating costs.
The raise-borer is expected to be commissioned in Q2 2014.
- The inventory of copper/silver concentrates increased to 1,705
tonnes, with commensurate reductions in metal sales and revenues.
The mine and plant expansion combined with greater production from
the copper-rich lower levels of La Negra resulted in higher copper
concentrate production than anticipated exceeding the capacity of
the existing filter press and constraining mill throughput. A new
larger capacity filter press has been received and is expected to
be commissioned in Q1 2014. This improvement is expected to allow
for sustainable production at the targeted 3,000 tpd level.
- During Q2 2013, the Company initiated a planned 15-hole, 5,000
metre surface drill program in order to better define gold
mineralization announced on February 11, 2013. A total of 1,773
meters were drilled but gold values lacked continuity and the
program was terminated.
- Underground diamond drilling and mine development at La Negra
continue to delineate additional mineralized zones. Drill crews
completed 10,128 metres of diamond drilling during 2013 versus
9,399 meters for the same period one year ago. La Negra scheduled
13,500 meters of drilling for completion in 2013 versus 13,311
meters drilled in 2012. Drilling objectives are to better define
mineralized zones to support short and medium term mine
planning.
- In response to lower silver prices, La Negra has undertaken
cost cutting measures to improve margins while also cutting back on
capital expenditures. These include:
- Suspension of surface exploration diamond drilling
activities;
- Refocusing mine development to areas of higher grade
mineralization;
- Reducing the use of contractors;
- Optimizing power usage by rescheduling certain activities,
particularly crushing, to off-peak hours thereby reducing energy
costs; and
- Improving equipment maintenance to increase utilization rates
and productivities thereby reducing the need for additional capital
investment.
Shafter Mine
- The Company continues to make capital improvements to the
processing facility at Shafter to improve throughput rates and
recoveries.
- The Shafter plant while still in commissioning and development
processed a total of 46,516 tons during Q3 2013, an average of 505
tpd. Throughput was limited due to shortages of spare parts and
mining resources brought upon by lack of funding prior to the
Company's debt financing which closed in September, 2013.
Mechanical problems with the ball mill curtailed commissioning in
October. The necessary parts for repair are on order and the mill
should be repaired by January 2014.
- The current April 2001 block model of the Shafter mineralized
resources, used to support the June 2011 feasibility study, has
been an inconsistent predictor of tons and grade in the old
Presidio Mine area and new remodeling is being undertaken by Mine
Development Associates ("MDA") of Reno Nevada. This work, when
complete, together with a re-evaluation of project economics with
respect to lower silver prices, will determine new higher cut-off
grades and optimum throughput rates for both mine and mill.
- Concurrently, plans are being developed to rehabilitate the
mine shafts, hoisting systems and mine dewatering system in the
eastern extension of the ore body thereby allowing access to this
non-mined area delineated by Gold Fields in the late 70's and early
80's. This work will be followed up with a comprehensive mine plan
with subsequent development of production stopes to complement
production from the old Presidio Mine area.
- An equipment malfunction (turbo failure) on November 1, 2013
resulted in smoke generation and a suspicion of fire underground,
which later proved to be incorrect. The subsequent precautionary
mine evacuation and MSHA investigation has caused all mining
operations to be suspended while the mine ventilation system is
being upgraded.
- The curtailment of underground operations, probably through
mid-December 2013, will delay planned underground diamond drilling
and mine development.
- In the first nine months of 2013, capitalized expenses (net of
proceeds generated from silver sales) totaled $9.6 million.
- The total capital costs required for the process facility to
design capacity were originally estimated to be approximately $18.5
million, of which some $5.5 million has been spent as of the end of
Q2 2013. Capital outlays have been reassessed and some $5 million
of the original amount have now been deferred indefinitely while
preserving the ability to reach a sustainable throughput and
acceptable recoveries. However, the funds previously allocated to
these deferred costs will now be required to rehabilitate the
infrastructure to allow for the exploitation of the eastern
non-mined extension of the Shafter mineralized zone.
- In August 2013 a second new tailings filter press was received
and commissioned. This replaced the second of three used
low-capacity tailings filter presses that were contributing to
operational delays and reduced recovery rates. The upgrade in
filter presses is a continuation of several plant improvements
designed to reach the planned throughput.
- New precipitate filter presses were received and commissioned
in October 2013. Additional refinery equipment is arriving and will
be installed and commissioned in Q4 of 2013.
- Foundation work has commenced on the three counter current
decantation (CCD) and new primary thickener tanks in October 2013.
Actual tank fabrication is commencing January 2014 with a goal to
have a fully operational circuit during Q2 2014.
- Proposals are being solicited for targeted automation of
process plant components to achieve improved process control and
lower reagent consumptions. Planning has commenced to replace
liquid cyanide shipments with solid briquettes to reduce
transportation costs. Some of the components necessary for this
improvement are already in place and minimum capital expense will
be required for the transition.
Conference call details
Conference date: |
Monday, December 2, 2013 |
|
|
Conference time: |
11:00AM Pacific Time / 2:00pm EST |
|
|
Participant dial-in number(s): |
Can: 416-340-2216 / US & Canada: 866-223-7781 / Int:
800-6578-9898 |
|
|
Participant pass code: |
Not required |
The recorded conference call will be posted to Aurcana's
website.
Please follow this link for the upcoming Aurcana webcast:
http://www.gowebcasting.com/5112
Financial Statements and MD&A
To read complete Financial Statement and MD&A please visit:
www.aurcana.com, or www.sedar.com.
About Aurcana Corporation
Aurcana Corporation is a primary silver producing company with
two mines: the La Negra Mine in Mexico and the Shafter Mine in
Texas, US. The Company is positioned to grow organically from its
existing mines in its pursuit to become a senior silver
producer.
Corporate
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.
Lenic Rodriguez, President & CEO
AURCANA CORPORATION
Mr Andrew Kaczmarek a qualified person (as defined in National
Instrument 43-101) and the Company's Chief Operating Officer, has
reviewed and approved the scientific and technical information
contained in this release.
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.
NR-13-37
This news release contains certain forward-looking
statements, including statements regarding planned upgrades and
improvements to the La Negra and Shafter mines, the forecast silver
production, silver grades, recoveries, potential mineralization,
exploration results, future plans and objectives of the Company and
the business and anticipated financial performance of the Company.
These statements are forward-looking statements that involve
various risks and uncertainties. These forward-looking statements
include, but are not limited to, statements with respect to mining
and processing of mined ore, achieving projected recovery rates,
anticipated production rates and mine life, operating efficiencies,
costs and expenditures, changes in mineral resources and conversion
of mineral resources to proven and probable 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.
Exploration results that include geophysics, sampling and
drill results on wide spacings may not be indicative of the
occurrence of a mineral deposit. Such results do not provide
assurance that further work will establish sufficient grade,
continuity, metallurgical characteristics and economic potential to
be classified as a category of mineral resource. A mineral resource
which is classified as "inferred" or indicated" has a great amount
of uncertainty as to its existence and economic and legal
feasibility. It cannot be assumed that any or part of an "indicated
mineral resource" or "inferred mineral resource" will ever be
upgraded to a higher category of resource. Investors are cautioned
not to assume that all or any part of mineral deposits in these
categories will ever be converted into proven and probable
reserves.
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, the Company having sufficient working
capital to fund planned upgrades and improvements to the La Negra
and Shafter mines, risks related to international operations,
unsuccessful exploration results, the ability of suppliers to
provide equipment, the availability of skilled labour, 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 pursuant to applicable securities laws.
Accordingly, readers should not place undue reliance on
forward-looking statements.
Aurcana CorporationLenic RodriguezPresident & CEO(604)
331-9333 or Toll-Free: (866) 532-9333(604) 633-9179Aurcana
CorporationCatalin ChiloflischiCorporate Communications
Director(604) 331-9333 or Toll-Free: (866) 532-9333(604)
633-9179ir@aurcana.comwww.aurcana.com
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