Investors should continually revisit companies that they have looked at in the past – both those companies that they researched and decided not to invest in and those companies that they researched and decided to invest in. This constant review ensures that good opportunities are more likely to be acted on when they arise.
Aurcana is a company that has been on our radar for awhile and we’ve discussed its value with readers in a previous article (http://www.metalsnews.com/Metals+News/MetalsNews/Dr.+Allen+M.+Alper+and+Aaron+Hoos/FEATURED84790/Aurcana+Mining+Silver+and+Expanding.htm). Aurcana Corporation (TSX.V: AUN) is a junior mining company, which owns 100% of a silver mine in Texas and 92% of a silver-copper-lead-zinc mine in Mexico. Along with these two good projects, Aurcana has good financials and experienced leadership; which were the factors that caught our attention in the first place.
Recently, we spoke with Lenic Rodriguez, President and CEO of Aurcana for an update on the company. On the day of our scheduled interview, we were privileged to hear about the very recent exciting news report Aurcana gave, and the resulting impact on Aurcana’s stock price.
“Our stock price has increased dramatically,” said Mr. Rodriguez. “We just made a news release and reported on production and earnings from our mining operations, and our stock price has increased 20%.”
The report is entitled “Aurcana Achieves Record Production, Revenues, Silver Sales, and Earnings” (http://www.aurcana.com/s/NewsReleases.asp?ReportID=431878&_Type=News-Releases&_Title=Aurcana-Achieves-Record-Production-Revenues-Silver-Sales-and-Earnings-From-...) and the company proudly speaks of improved production and the result of improved sales.
Mr Rodriguez summarized the process leading up to this report: “We started working on increasing the capacity at La Negra late last year and finished the summer of this year and production is underway now. Also, commodity prices have a huge impact as well.”
Their La Negra project, located in Queretaro State, Mexico, is 92% owned by Aurcana and is a silver-copper-lead-zinc mine. Production in 2009 was approximately 750,000 ounces of silver and 3 million pounds of copper, and 3 million pounds of zinc.
So, what’s next for La Negra? Well, along with operating efficiently at a higher capacity, Mr. Rodriguez has plans to expand aggressively even further: “We are finalizing plans to increase our silver production and we’re going after a silver-rich area of La Negra. That should be completed by March 2011. The only thing holding us back right now is equipment, but the equipment will be delivered in February. We are expecting to increase silver production and lead, and it will also eliminate the penalties that we are charged by the buyer.”
“We also have the silver mine in Texas, Mr. Rodriguez said, “and we are looking to complete some major financing shortly. That will make it fully funded so we can put the mine into production by June 2012. By then we will expect silver production of 5 million pounds per year, which is a total cubic equivalent of 6.5 million ounces. We expect a ten year mine life.”
The Shafter project, located in Presidio County, Texas, is owned 100% by Aurcana and has a 43-101 silver resource of 24.6 million ounces (Measured and Indicated), 22.8 million ounces (Inferred) and a completed Prefeasibility Study. In a previous interview with Mr. Rodriguez, he said this mine will be one of the largest pure silver mines in the world and will increase silver production in the US by 10%.
Although full operation is still a year and a half away, Mr. Rodriguez isn’t holding back on getting ready. He said: “The mine is fully permitted and we have already started the preliminary activities such as securing the key equipment, key personnel, and the major contract for the mine construction. Everything is already underway.”
And, just after our interview with Mr. Rodriguez, Aurcana released another news report (http://www.aurcana.com/s/NewsReleases.asp?ReportID=432552&_Type=News-Releases&_Title=Aurcana-Corporation-Closes-CDN60-Million-Equity-Financing) indicating that $60 million in financing came through for the company. Along with funding their construction at Shafter, it will also help to pave the way for a stronger future for Aurcana because it allows them to buy back a silver purchase agreement that was in place, thus providing more cash flow to Aurcana.
So, why would investors be interested in Aurcana? We’ve previously reported that they are a junior with the makings of becoming a serious major producer: They have good projects, experienced leadership, and sound financials. But after this interview, there is even more to be excited about: There’s the progress they’re seeing in both Shafter and La Negra. And Mr. Rodriguez adds: “In La Negra, we have a 15 or 20 year life-of-mine. There are 28 ore bodies there and we are only mining three of them. So we have an aggressive expansion production.” So Aurcana is taking a long-term view.
We think Aurcana is an interesting story and a compelling opportunity and its days as a news-making silver producer have only just begun.
REFERENCES
View our previous article (http://www.metalsnews.com/Metals+News/MetalsNews/Dr.+Allen+M.+Alper+and+Aaron+Hoos/FEATURED84790/Aurcana+Mining+Silver+and+Expanding.htm)
http://www.aurcana.com