Hi Joe: Yes Aurcana will survive. There are a few reasons the stock has dropped. The biggest reason is that there were many funds that were anticipating production from Shafter in the near future. When Aurcana announced in December that Shafter would go on care and maintenance, any of those funds jumped out of the stock. From my perspective, it was an over reaction and Aurcana shares dropped more than they should have, considering that La Negra is a producing mine that has grown every year since coming back on line with Aurcana. This year the guidance is for La Negra to produce 3.6 to 4 million ounces of silver equivalent. That alone should push the stock price up much higher than current levels. Last year La Negra provided 11.5 million in profits and this year we anticipate an increase of about 38% of silver equivalent ounces. And project the profits of La Negra to be above $20 million (if the price of silver were the same as last year - this is a moving target and out of Aurcana's control, so it is much harder to project). Shafter is currently being reviewed by MDA to help us determine how to go forward with that mine. There are three options, joint venture, sell or mine it ourselves. When the price of silver returns to a level in the low to mid twenties is when serious redevelopment will occur. At the current silver prices we will just define the plan and determine where to go with Shafter from there. Price is all about how many funds Aurcana can attract and keep. Aurcana was very successful in attracting funds before, but when the sector fell out of favor with the funds and when Shafter was no longer in the near term horizon many of them exited. We are currently working on helping them understand what the current excellent value of the company. Many of them say they are watching to see the financing re-defined, which happened several weeks ago and to see that the grades are improving at La Negra which will happen in the 3rd quarter. They are also wanted to know what direction we plan to take with Shafter. The refinancing required that more money was put into the account and that is what this financing is all about. 3.5 million has been committed to, but the last investor, put in a lot of money and asked the price to be reflected to the current share price, so because the amount was large the financing was revised. Still working on the last part of the financing. Actually, in comparison to other companies, Aurcana is raising money now, where most mining companies cannot raise money. I hope that helps.
Best Regards, Gary Lindsey Strata-Star gary@strata-star.com 720-273-6224 |