Aurcana Corporation
TSX VENTURE : AUN
OTCQX : AUNFF

Aurcana Corporation

April 14, 2015 12:15 ET

Aurcana Reports 2014 Financial Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - April 14, 2015) - Aurcana Corporation ("Aurcana" or the "Company") (TSX VENTURE:AUN)(OTCQX:AUNFF) is pleased to report its audited financial results for December 31, 2014. The summary of the selected financial information should be read in conjunction with the audited financial statements and the related management's discussion and analysis dated April 13, 2015 together referred to as the "Financial Statements", which have been filed on SEDAR (www.sedar.com) and the Company's website (http://www.aurcana.com). All figures are in US dollars unless otherwise noted.

The most significant highlights for 2014 were:

  1. Silver Equivalent production increased 29% to 3,704,237 ounces in 2014 compared to 2,868,460 ounces in 2013.
  2. Ore milled from La Negra increased 17% to 961,840 tonnes in 2014 from 825,014 tonnes in 2013.
  3. Earnings from mining operations in 2014 decreased to $2.5 million, compared to $11.5 million in 2013, due to decreases in metals prices and producing lower grade silver.
  4. Revenues decreased to $42.7 million in 2014 from $45.0 million in 2013 due to decreases in metals prices and producing lower grade silver.
  5. Operating cash flow before changes in working capital of ($0.4) million compared to ($5.0) million in 2013.
  6. Cash cost per tonne milled decreased 11% in 2014 to $32.66 from $36.58 in 2013.
  7. Production cash cost per silver equivalent to $8.48 ounce in 2014, from $10.52 in 2013.
  8. Silver production increased by 18% in 2014 to 1,476,729 ounces compared to 1,255,444 ounces in 2013.

Earnings

The Company had earnings from mining operations of $2.5 million for the year ended December 31, 2014, compared to $11.5 million in 2013; loss before taxes of ($21.0) million compared to ($134.8) million in 2013. Loss per share was ($.28) in 2014 compared to loss per share of ($2.31) in 2013.

The decrease in earnings from mining operations was related to the decrease in the selling prices of metals produced by the Company in 2014.

Revenue

During the year ended December 31, 2014, the Company generated revenues from the sale of 13,797 tonnes of copper concentrate (2013: 10,082 tonnes); 18,429 tonnes of zinc concentrate (2013: 15,887 tonnes); 3,297 tonnes of Lead Concentrate (2013: 3,006 tonnes); and 1,212,868 ounces of silver (2013: 1,073,072 ounces) for total net revenues of $42.7 million (2013: $45.0 million).

The average price for sales of copper, silver, zinc and lead during the year were copper; $3.06 (2013: $3.29) per pound; silver $18.70 (2013: $22.92) per ounce; zinc $0.99 (2013: $0.86) per pound and lead $0.94 (2013: $0.97).

La Negra Mine Production Highlights

  • 17% increase in milled tonnes processed for a total of 961,840 tonnes during the year ended December 31, 2014, (2013: 825,014).
  • Reorganization of Senior Management at the La Negra mine in 2014.
    • Production controls have steadily improved including: grade control, dilution control and mining of higher grade areas of the mine.
    • Cost control measures were implemented in 2014 through workforce reduction, capital expenditure controls, inventory and direct purchase controls. Cost reduction will continue through 2015.
  • 10,367 metres of underground diamond drilling and mine development were completed in 2014 to delineate extensions to mineralized zones at La Negra.
  • Average silver grade per tonne was 58 grams in 2014 compared to 60 grams in 2013. The decrease in silver grade was due to increased throughput of lower grade mineralization during the first half of the year and blending of different mineral types to meet concentration specifications as well as increased mine development to support higher mine production rates in the future.

The loan facility from Orion Mine Finance Fund 1 LP ("Orion"), an affiliate of Orion Mine Finance Group was ammended and reduced on April 29, 2014 (see press release of same date). Additionally, during the year Orion agreed to defer principal and interest payments from Q3, 2014 in return for one additional year of off-take agreements until 2021 (see press release December 1, 2014).

Subsequent to 2014, the company announced that it has entered into an agreement to settle the class action litigation against the company and two former employees. (see press release February 10, 2015)

Mr. Kevin Drover, President & CEO stated, "Cost reduction has been our focus during 2014, yet our team has achieved the best year ever in silver production reaching 3.7 million ounces of silver equivalent for 2014. La Negra is positioned for growth and working toward becoming one of the lowest cost silver producers."

Summary

In July, 2014 Mr. Kevin Drover was named the new President and CEO of Aurcana Corporation. After taking the helm, Mr. Drover initiated a cost reduction program which has significantly lowered the costs of production. The cost reduction program will continue in 2015. The La Negra mining operations production controls have steadily improved. Safety continues to be a high priority. Metal concentrate prices continued to drop during 2014 putting pressure on profit margins. The Shafter property remains on care and maintenance until silver prices rise. The Company expects significant increases in production in 2015 and beyond.

To read complete Financial Statement click on this link: http://aurcana.com/_resources/financials/2014-FS.pdf

To read complete MD&A click on this link: http://aurcana.com/_resources/financials/2014-MDA.pdf

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.

About Aurcana Corporation

Aurcana Corporation is a primary silver producing company with two properties: the La Negra Mine in Mexico and the Shafter Silver Project in Texas, US. The latter was put on care and maintenance in December 2013, in part due to depressed silver prices. The Company is developing new mining plans for both properties as it continues to work to improve margins and shareholder value.

The technical information in this release has been reviewed by Jerry Blackwell (PGeo.), a Director and technical advisor to the Company and a Qualified Person as defined by National Instrument 43-101.

ON BEHALF OF THE BOARD OF DIRECTORS OF

AURCANA CORPORATION

Kevin Drover, President & CEO

NR-4-15

This news release contains certain forward-looking statements, including statements regarding forecast silver production, silver grades, recoveries, potential mineralization, exploration result, 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. Fforward-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 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. 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, risks related to international operations, unsuccessful exploration results, 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 by applicable law. Accordingly, readers should not place undue reliance on forward-looking statements.

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.

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