Shafter Mine Moves Closer to Re-Opening with New Assessment

VANCOUVER, BRITISH COLUMBIA–(Marketwired – Aug 31, 2016) – Aurcana Corporation (AUN.V) – (“Aurcana” or the “Company”) today announced that it has received the results of an updated Preliminary Economic Assessment (the “PEA”) for its 100%-owned Shafter Project oxide silver deposit in Texas (“Shafter” or the “Project”).

The PEA incorporates the results of the Company’s recent mineral resource estimate, as disclosed in the Company’s news release dated January 12, 2016 (the “Resource Estimate”). The PEA is based on reopening the existing Aurcana underground access ramp, recommissioning of the existing leach-milling operation at 600 tons per day (TPD). This approach will focus on higher-grade mineralization and improved silver recovery.

Kevin Drover, President & CEO of Aurcana noted, “The PEA is a significant step forward for Aurcana. It provides a solid foundation for advancing the Project to the next stages of development. The fully permitted Shafter deposit is ideally poised in terms of project economics, with existing underground development, a mill and established infrastructure.”

PEA HIGHLIGHTS:

  • Base Case* post-tax NPV (5% discount rate) of $18 million, internal rate of return (“IRR”) of 40.9%. Aurcana has sufficient U.S. based tax losses to offset Federal tax liabilities.
  • Initial capital costs of approximately $13.2 million, including $1.1 million contingency.
  • Pre-production development of less than one year.
  • Mine production of just over 6 years.
  • Net average post-tax undiscounted operating cash flow of approximately $5.5 million per year.
  • Life of Mine payable production of 9.3 million ounces of silver
  • Average annual silver production during first six years of operation of 1.5 million ounces
  • Life of mine average silver recovery of 81.73%
  • Payback is approximately 1.7 year

*Base Case uses $20/oz silver.

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