Vancouver-based junior miner Aurcana has agreed to buy the historic Shafter silver mine, in south-west Texas, from Silver Standard Resources, the firm announced on Thursday.

Aurcana will pay Silver Standard approximately $42,6-million, comprising $23-million in cash; 15-million in Aurcana shares; and a $10-million convertible debenture, paying a 3% coupon with a three-year term and convertible into 6,62-million Aurcana common shares.

The Shafter mine produced silver from 1883 to 1942, and most of the necessary infrastructure remains place, including a major power line and paved highway crossing the property, an electrical substation on site, a 320-m shaft serviced by a 80-t/h hoist, 1 555 m of underground development and an 800-t/d conventional mill that was moved to Shafter in 2003.

Aurcana, which plans to assemble the mill and restart production as soon as possible, estimates that output could resume at Shafter in little more than 15 months' time.

The price of silver, which has both industrial and fabrication uses, has risen significantly over the last couple of years, and touched $21,35/oz, its highest point since March 1980, last month.

The Shafter mine has an estimated measured and indicated resource of 21-million ounces of silver and an inferred resource of 20,2-million ounces, Aurcana said.

The company plans to commission a NI 43-101 compliant technical report to confirm the resource estimate, it said on Thursday.

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