Aurcana Announces Proposed Share Consolidation
Aurcana Corporation (“Aurcana” or the “Company”) (TSXV: AUN, OTCQX: AUNFF) is pleased to announce that is proposing a consolidation of its issued and outstanding common shares on the basis of one (1) post-consolidation common share for every eight (8) pre-consolidation common shares.
“After carefully considering Aurcana’s growth and strategic objectives, we believe that a consolidation could provide significant benefits to the company and its shareholders. This change may open the door to a large base of potential new investors and will qualify the company for a possible dual listing on a U.S. or other major stock exchange. This is an important step in Aurcana’s strategic efforts to become a senior silver producer” said Mr. Lenic Rodriguez, President & CEO.
Rationale
A share consolidation of company’s issued and outstanding common shares is in line with Aurcana’s strategic and growth objectives to become a major senior silver producer.
This action has no impact on company’s value or future cash flows.
While there are no guarantees, there may be important benefits that the proposed consolidation could provide, including:
- A higher post consolidation price per share could make Aurcana eligible for investment by a large base of potential new investors, who cannot otherwise invest below a minimum per share value.
- A larger investors pool may also result in a possible increase in trading volumes.
- A higher post consolidation price per share could also improve the company’s ability to pursue a dual listing on a major exchange and finance in the market, if warranted in the future.
- An increase in the share price in absolute dollar terms may improve the market perception of Aurcana’s stock.
- The proposed consolidation could also align company’s number of outstanding shares relative to its peers.
If approved, the Consolidation would reduce the Company’s 467,157,647 issued and outstanding Common Shares to approximately 58,394,706 Common Shares. The exercise or conversion price of outstanding stock options and warrants would be proportionately adjusted based upon the same consolidation ratio. The company name will remain unchanged after the consolidation.
The proposed Consolidation is subject to the approval of the TSX Venture Exchange and Aurcana’s shareholders.
Full details regarding the proposed consolidation will be included in the information circular to be mailed to all Aurcana shareholders of record on February 26, 2013 and posted on www.SEDAR.com in connection with the Special Meeting of Shareholders, which is scheduled to be held on Thursday, March 28, 2013.
About Aurcana Corporation
Arcana Corporation is an emerging senior silver producer with two operating mines located in Mexico and Texas, United States.
La Negra Mine, Mexico, current installed capacity is 2,500tpd. In order to allow for an increase in future production, La Negra mine is now working to increase mill capacity to 3,000 tpd by the end of Q1, 2013.
La Negra has a NI 43-101 M&I resource of 115.1 million (mm) oz silver, 1,418.7 mm lbs zinc, 539.5 mm lbs lead and 269.5 mm lbs copper and an Inferred Resource of 56.5 mm oz silver, 657.4 mm lbs zinc, 263.0 mm lbs. lead and 132.3 mm lbs copper.
Commissioning and mill testing of the Shafter Mine in Texas commenced on April 1, 2012 and commencement of commercial production was achieved in December 2012. The Shafter Silver Mine, according to the data from the published feasibility study, is expected to produce 3.8 million ounces of silver over 12 months once ramp up to its 1,500tpd capacity is completed.
Shafter has a NI 43-101 M&I Resource of 23.9 mm oz of silver and an Inferred Resource of 22.8 mm oz of silver. (All National Instrument 43-101 technical reserve reports can be found on SEDAR at: www.sedar.com)
Aurcana continues to focus on its future growth
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 andwww.otcmarkets.com.
ON BEHALF OF THE BOARD OF DIRECTORS OF
AURCANA CORPORATION
“Lenic Rodriguez“, President & CEO
For further information contact:
Lenic Rodriguez, President and CEO
Catalin Chiloflischi, Corporate Communications Director
Phone: (604) 331-9333
Toll Free: (866) 532-9333
Fax: (604) 633-9179
Email: ir@aurcana.com
www.aurcana.com
Gary Lindsey
StrataStar Group
720-273-6224
gary@strata-star.com
Don’t be sorry cfs!
We are all learning from each other.
You saw my comments regarding Aurcana.
Best,
Big Al
My posting above was a knee-jerk reaction.
Listing on Amex is a reason for the reverse split.
Lenic likes paper-lots of paper.He gives it to bankers and takes it from shareholders.
Howdy Matt,
Lenic is a very hard nosed businessman. He is very effective. This is not an easy game. Trust me. A lot of shareholders have done well with Aurcana including myself.
This is a nice little company that is a great example as to why investors need to stay informed and nimble.
Best,
Big Al
I guess you bought before April 2012. Most of those that bought in the last year have lost money.
How about 2010.
Best to you Consolidation,
Big Al
Blah, blah, blah. Aurcana’s share structure will leave it as a takeover candidate at best and a run to the bottom of the heap at worst.
Dream on, Lenic, as it stands this company is toast. Investors want real P/E ratios and EPS and this reverse split will not do enough to get the investors that bailed at $2 and $1 to get back in. Fire Lenic, that might just do it.
Dan
Big Al,
The greatest negative AUN has is Lenic.$3 million in 2011 in AUN cash and options.
Great projects,little to no regard towards the public shareholder.
I will give two examples,one comes from one of your interviews with Lenic:
“AUN is now self funding?” Al Korelin
: “Yes.” Lenic Rodiguez
: http://www.kereport.com/2011/10/22/week-silver-summit/
:
: “Our capital structure is by now completed.”
: Lenic Rodriguez
: http://www.gowebcasting.com/events/precious-metals-summit
: -conferences-llc/2011/09/15/aurcana-corporation/play/stre
: am/2985
Three weeks after uttering his public disclosure,Lenic diluted out his shareholders yet again.Please,tell me Lenic never knew he was in discussions for financing when he told the public the company was self-funding-right here.
November 15, 2011 Aurcana Announces Increase to Previously Announced Private Placement Financing to C$30.0 Million
November 11, 2011 Aurcana Announces Pricing of C$25.4 Million Private Placement Financing
Hi Matt,
I can obviously not tell people how to answer a question. I also have to believe what they say.
Big Al
Totally ok with that,Big Al.
Just pointing out what is a part of Lenic’s record.
Good research Matt. I do remember that interview too.
wow another reverse split. i hate these. when this happens the stock never really recovers full value. i bought this stock at $.38 & sold it a t$.95 & moved on to other oppotunities. just didn’t think this would go much further with almost 500 million shares. glad i did.
Looks like they are running low on cash too. A guarantee of more dilution to come after the split.
Dan
It has been a while since I have seen a reverse split work, Dan. But who knows in this case?
Big Al
Pardon me for being rough on Lenic, Al, as I know you know him personally but on a professional level he is going to get eaten alive by short sellers that like to short G&S stocks because of the blind belief that a gold bug can have in the demise of the US$. If he needs 50m$ to get everything on line he may have to offer another 10m shares at the post reversal split price.
Dan
It’s a good argument Dan, but I wonder how much cash Shafter will generate? I haven’t run the numbers on Aurcana for a long time, but that operation is now generating $$.
Just looking at the most recent financial statement published, http://www.aurcana.com/i/pdf/2012-Q3-FS.pdf , to Sept 30, 2012, La Negra was basically the bread winner with around $40.6 million of earnings over the first 3 quarters of 2012, with $6.9 million profit. That doesn’t go too far when divided-up 485 million times.
The good news for AUN holders is Shafter is going to stop costing money, and start making it. Around 3.9 million ounces of silver are planned to be mined this year, which is around $121 million of revenue at today’s $31/oz price. I don’t know projected net income, but extrapolating from La Negra (6.9M/40.6M = 17%), then 17% of Shafter’s revenue is $20.5 million, or .04 cents per share.
If you took 10 years of earnings from both mines, and discount a little, AUN should trade higher than .80/sh, maybe $1.20. That’s quite a feat considering what Lenic had to work with when he took over. It’s not a huge growth play, but as PM’s go up, and if they can mine more silver, or mine for lower cost, it can make money.
Thanks John W,
Big Al
For you that was a smart move dw!
Big Al
I could never figure out where long term economical water for Shafter was being sourced.
They did drill a well for which neighbors took issue.
You need economical water to pour 6 million ounces a year.
When a question goes unanswered it just hangs there… I thought water could be a problem. The region is distant from parts of Texas situated over sizable aquifer. It may or may not be an issue but a bigger problem developed in pursuing the question…no one would answer the question…Where is the economic supply of H2O going to be sourced?…..Silence is a sell signal.
Good question Dennis. I had asked that too — a well was the answer I was given, and I didn’t follow-up beyond that. I was told that by one of the senior site engineers.
Hi Dennis M,
I contacted the Company and very quickly received this back:
The Shafter mine water management system recycles most of the process water by design.
Some water is lost to evaporation due to the location although precipitation mitigates for a high percentage of what is lost in this way.
The small amount of makeup water required is sourced from the extensive system of shafts, drifts, raises and old stopes which are currently flooded.
There is a natural recharge rate in the area, through fractures and watersheds which should ensure that this source will be available over the life of the project.
RGMC have contracted world class organizations who are specialist in hydrogeology to monitor and advise on the complex subject of water management.
Regards
Sadek
Exploration stocks are the same as dot-bomb stocks. They are “concept” valued on a dream and hope. Dot-bombs and explorecos dont have any revenue, or cash flow, but just hope they can find enough customers/ore to go higher.
This is not investing. It is gambling.
Al you should commend your CPA. I remember you mentioning in 2011 how you disagreed with him on whether the conventional market would outperform the resource stocks. Your CPA nailed it.
I have lost so much money in gold stocks that I cannot believe it. I will not be listening to the show anymore nor listening to Embry or Sprott. My backside hurts so much by listening to Grandich, this show, Embry and others. I wish the companies paid me $5000 a month to promote them.
Conventional, (is that Dave by chance?)
I mean this with a view towards improving your future results, but you’re responsible for your own investments. You always have been, and always will be. Al brings you information. Only you can act on it. Your comment essentially says you accepted Al’s information as advice, because you now attribute your outcome to him. That’s not fair to Al, or yourself.
Mining shares have sucked the last 3 years. But your comment also reveals that you presumed one person’s hold period to be the same as your own. Al’s timeline wasn’t to project performance from 2011 to 2013. You made that presumption.
Many of those invested here have some losses, but over 12 years, those come on top of fabulous gains. It’s awful to lose money, or to give back those gains. But you sound like you put too much into resource stocks. Were you diversified? Did you also hear Al talk about his real estate holdings, or conventional market holdings (such as Encompass)? You apparently didn’t follow everything he said My guess is you picked mostly mining stocks looking for the high multiple gains, anticipating that you’d be a millionaire, just around the corner.
Resource companies are investments for a longer time period, not a 6 month-to-2 year trade. They also take due diligence, no matter how much you’ve heard people talk about them. Resource companies are also used to hedge a falling dollar, and against uncertainty. That last part is what really concerns me over your comment. Here are some “what ifs”:
* the Fed stopped spending $85 billion a month to float the Treasury? It’s come to this: the country won’t survive without borrowing.
* What if…just if, bond’s had gone down the toilet by now?
* What conventional market investment alternative in 2011 did you have in mind? Would anything have worked for you? Coulda, woulda, shoulda. People lost all kinds of money in the 1990’s bull market too. You don’t know how you would have fared in an investment you didn’t make.
* Suppose precious metal were free to float, not managed by commodities exchanges and central banks? I lived the early 80’s and remember the times well. Nothing beat a solid resource company, not even gold or silver themselves. What if that had happened in the last two years, absent players like JP Morgan? What if it still does happen?
* What do you think will happen by, say, another 2 years (since that seems to be your investment horizon)? Or 4 years? 10? Where would you expect conventional markets (what those are) to be? Why?
Regarding your last sentence…I know a little bit about what it takes to run a website like this. Al would be dollars (and probably a few more hairs) ahead if he just shut this website down. I’m very glad it’s here. There’s nothing like it out there.
Many thanks John W,
All I can be is what I am.
I can at least say that I do not front-run and to the best of my knowledge no one of our guests does.
You, my friend, are a good guy!
Big Al
You’re a great guy and we’re lucky to have this forum and all the content and shows, completely for free. If someone can’t see that, well — I cannot imagine being so cynical and jaded. It would a long, sad life and I thank God I’m not like that.
Yeh John W,
In large part you are one of the main reason this thing is working for all of us. (Unfortunately, I am off about 50% in my recent private placements!)
Oh well, you gotta have fun!
Big Al
I would not take $5 per month to promote anyone. As you have probably figured out I pretty much put my money where my mouth is. I is simply more fun that way!
Sorry to see you go, but you gotta do what you gotta do.
Best,
Big Al
Big Al,
The greatest negative AUN has is Lenic.$3 million in 2011 in AUN cash and options.
Great projects,little to no regard towards the public shareholder.
I will give two examples,one comes from one of your interviews with Lenic:
“AUN is now self funding?” Al Korelin
: “Yes.” Lenic Rodiguez
: http://www.kereport.com/2011/10/22/week-silver-summit/
:
: “Our capital structure is by now completed.”
: Lenic Rodriguez
: http://www.gowebcasting.com/events/precious-metals-summit
: -conferences-llc/2011/09/15/aurcana-corporation/play/stre
: am/2985
Three weeks after uttering his public disclosure,Lenic diluted out his shareholders yet again.Please,tell me Lenic never knew he was in discussions for financing when he told the public the company was self-funding-right here.
November 15, 2011 Aurcana Announces Increase to Previously Announced Private Placement Financing to C$30.0 Million
November 11, 2011 Aurcana Announces Pricing of C$25.4 Million Private Placement Financing
I guess I missed my vitamin D this morning. I don’t own any AUN now but have been an owner off and on and have profited and lost on it. I am a little frustrated with companies that dilute like this. I think it keeps the next level of investor away from the whole industry.
Dan
Interesting point, Dan.
This is truly an interesting situation, isn’t it!
Big Al
Looks like the market has shown Aurcana what it thinks about reverse splits. The timing is very bad. This will only hurt the little guy in an unregulated market. They will find themselves in this same position down the road and will have helped nothing. Aurcana needs to read Jim Sinclair more often.
Insider selling
Reverse split
TIME TO BAIL OUT
This company is miss-managed.
(I own shares in this company, but I’m taking my losses.)
P.S. Next expect further dilution – No other point for reverse split.
Sorry, Big AL, but I call it like I see it.
(and I don’t like to knock stocks)