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Aurcana Corporation Closes CDN$60 Million Equity
Financing
Aurcana Corporation ("Aurcana" or the "Company") is pleased to announce that it has closed its previously announced
fully subscribed Equity Offering (the "Offering"). The Company
has issued 193,548,387 units (the "Units") at a purchase price of
$0.31 per Unit for gross proceeds of CDN$60,000,000. Each Unit consists of
one common share (a "Share") of the Company and one half of one
common share purchase warrant. Each whole common share purchase warrant (a "Warrant")
permits the holder thereof to purchase a further common share (a
"Warrant Share") of the Company for a period of 36 months from
the closing of the Offering at a purchase price of CDN$0.41 per Warrant
Share.
Sunel Securities Inc., its US placement agent,
Sunrise Securities Corp. and its sub-agents (collectively, the
"Agent") acted as lead agent on the Offering. The Company paid to
the Agent a cash commission of CDN $3,969,674, representing 7% of the gross
proceeds of the Offering generated by the Agent, and issued to the Agent
12,805,262 compensation options (the "Compensation Options"),
which is equal to 7% of the number of Units sold by the Agent pursuant to
the Offering. Each Compensation Option is exercisable into one broker's
unit (a "Broker's Unit") at a price of CDN$0.41 per Broker's Unit
for a period of 24 months from the closing date of the Offering. Each
Broker's Unit consists of one common share in the capital of the Company
and one-half of one common share purchase warrant (each whole common share
purchase warrant, a "Broker's Warrant"). Each Broker's Warrant
entitles the holder to purchase one common share in the capital of the
Company (a "Broker's Warrant Share") for a period of 24 months
from the closing of the Offering at a purchase price of CDN$0.41 per
Broker's Warrant Share. In addition, the Company paid commissions of
$13,020 cash and issued 42,000 warrants ("Compensation Warrant")
Each Compensation Warrant entitles the holder to purchase one common share
in the capital of the Company (a "Compensation Share") for a
period of 24 months from the closing of the Offering at a purchase price of
CDN$0.41 per Compensation Warrant Share.The
Company plans to use the net proceeds from the Offering to fund capital
expenditures on its Shafter project in Texas, for general corporate
purposes and for the buy-back of the silver purchase agreement with a
wholly-owned subsidiary of Silver Wheaton Corp. (the "Agreement")
for US$25,000,000 plus the outstanding silver balance owing, which will
release Aurcana from all future obligations under
the Agreement. In accordance with Canadian securities legislation currently
in effect, the Shares, the Warrants and the Warrant Shares issued pursuant
to the Offering will have a restricted "hold" period in Canada of
four months plus one day from the date of closing of the Offering.
A portion of the Units in the Equity Offering was placed with investors
within the United States ("U.S. Investors"). The U.S. Investors
qualified as either i) "Qualified
Institutional Buyers," as that term is defined in Rule 144A,
promulgated under the Securities Act of 1933, as amended (the "1933
Act"), or ii) "Accredited Investors," as that term is
defined in Rule 501(a) of Regulation D, promulgated under the 1933 Act
("Regulation D"). The placement of the Units within the United
States was made in compliance with the exemption from the registration
requirement of the 1933 Act provided by the safe harbour
articulated in Regulation D. The Shares, Warrants and Warrant Shares
comprising the Units (the "Securities") placed with U.S.
Investors constitute restricted securities, and the Securities will bear a
restrictive legend preventing resale within the United States except for
those sales made in compliance with the 1933 Act. Any resale of the Securities
outside of the United States must be made in compliance with Regulation S,
promulgated under the 1933 Act.
Mr Lenic Rodriguez, the
Company's President, stated "This is a very significant day for Aurcana as it completes the major turn-around
activities initiated in May 2009 with the change of Leadership in the
Company. The buy back of the silver purchase agreement greatly enhances the
cash flow at the La Negra mine in Mexico, which
will provide additional funds to Aurcana to
supplement the funds received from this equity financing. With the expected
closing of the previously announced CDN$25 million debt financing arranged
with Sprott Asset Management and Sprott Resource Lending Partners, Aurcana
now has a clear path to production at our Shafter silver mine in Texas. We
are now solidly on our way to reaching our short term objective of becoming
a mid tier silver producer with annual silver production growing to 5
million ounces. The commitment shown by a number of major financial
institutions who have participated in our financing endorses the viability
of Aurcana, its management, the La Negra mine and the Shafter development project."
About Aurcana Corporation:
Aurcana is a growth oriented, silver and base
metal producer focused on near-production opportunities. Our primary assets
are the La Negra Mine in Mexico and the Shafter
Silver Project in Texas. The Shafter Silver Mine is scheduled to start up
production within 18 months of securing permits and financing, producing
3.8 million ounces of silver in the first year. It has a NI 43-101 measured
and indicated resource of 24.6 million ounces of silver (2,900,000 tons at
8.48Ag opt) and an inferred resource of 22.8 million ounces of silver
(2,167,000 tons at 10.52 Ag opt) using a 4.0 ounce per ton cut off. The reader
should be cautioned that the Company has not completed a feasibility study
confirming the projected production capacity for La Negra
and there is no certainty the Company's plans will be economically viable.
ON BEHALF OF THE BOARD OF DIRECTORS OF
AURCANA CORPORATION
"Lenic Rodriguez", President and CEO
For further information, visit the website at www.aurcana.com or contact:
Jack Barnes, Corporate Relations
Aurcana Corporation
Phone: (604) 331-9333
Toll Free: (866) 532-9333
Fax: (604) 633-9179
Email: jbarnes@aurcana.com
NR#10-18
THIS PRESS RELEASE SHALL NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES OF THE COMPANY IN ANY JURISDICTION. THE
OFFER AND SALE OF THE SECURITIES IN THE PROPOSED OFFERING HAS NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND WILL NOT BE OFFERED OR SOLD IN THE UNITED
STATES ABSENT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING
THE OFFERING OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE ACT IS AVAILABLE TO THE COMPANY.
Caution Regarding Forward-Looking Statements -- This news release
contains certain forward-looking statements, including statements regarding
the business and anticipated financial performance of the Company. These
statements are subject to a number of risks and uncertainties. Actual
results may differ materially from results contemplated by the
forward-looking statements. Factors that could cause actual results to
differ materially from those in the forward-looking statements include
unsuccessful exploration results, 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.
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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