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Aurcana stocks slide after shuttering Texas mine, management takes pay cuts

Aurcana stocks slide after shuttering Texas mine, management takes pay cuts

Photo by Bloomberg

20th December 2013

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – The TSX-V-listed shares of emerging silver producer Aurcana Corp this week fell nearly 38.46%, after the firm on Thursday announced it would place one of its two operating mines on care and maintenance.

The Vancouver-based firm said it had decided to shutter the Shafter mine, in Texas, citing the current economic conditions and low silver prices as the main factors influencing the board’s review of the development and mining operations.

It had notified employees on Wednesday of the pending action.

Aurcana said it was planning to start an exploration programme designed to test targets within Shafter's known mineralised areas in further detail, to help determine whether additional higher grades could be delineated. Aurcana geologists had identified areas of interest to justify such a programme.

"Aurcana's management and its board of directors are very disappointed that in spite of many of our employees' best efforts, the prevailing economic conditions, in particular low silver prices, have caused the company to suffer significant losses from the Shafter project's operations, resulting in an unsustainable drain on the company's treasury," Aurcana president and CEO Lenic Rodriguez said.

As a result shelving the project, the company would also not proceed with the planned updated resource estimate on the Shafter project.

Further, Aurcana's board of directors and senior management had agreed take a 20% pay cut as part of an on-going cost reduction programme.

Aurcana also operates the La Negra mine, in Mexico.

On Friday, Aurcana’s stock fell a further 11.11%, or C$0.08, to change hands at C$0.64 apiece – a far cry from the C$8-a-share levels seen at the start of the year.

Edited by Creamer Media Reporter

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