Vancouver-based Aurcana Corporation is a junior silver miner with projects in the US (Texas) and Mexico. Ticker symbol AUN.V on the TSX and AUNFF on the pink sheets. Fully diluted the market cap is $369 million at $0.77 per share.
I have charted the company vs. the SLV (in blue) year to date. Many mining shares are highly correlated to the SLV and spot silver but they tend to lag and lead each other quite randomly in the short term. This gives us an opportunity to indicate when short term prices may be too low in regards to the underlying asset. I expect Aurcana to reverse and retrace upward toward the price of silver. The straight line of support from January and February should hold and since nothing but positive news regarding increased production and mill expansion has been coming out. By mid to late 2012 it is estimated that the Shafter Mine in Texas will produce 3.8 million ounces of silver per year. The SLV sits just above the 61.8 retracement and looks to be a good profit taking point to take some position off, for short term traders.
Same chart with the addition of SPY, QQQ, DIA and GLD to show silver's volatile price action has effected Aurcana and moving drastically independent of the overall equity market and even gold. One of the reasons I love the junior resource sector.
(charts available at freestockcharts.com)
$0.90 per share is a fair price for Aurcana in the current environment. With a floor of $0.68 and a ceiling just above $1.08, this will create some volatile price action on the way back up. Even if silver maintains it's correction, the share price should rebound somewhat. I like the company in the medium term from these levels and think Aurcana has further potential to expand production even more.
(charts available at freestockcharts.com)
Is aurcana producing now?
ReplyDeleteYes, Aurcana produced:
ReplyDelete228,201oz of silver in 2007
514,853oz in 2008 (125% increase in production)
749,442oz in 2009 (45% increase)
838,077oz in 2010 (11.8% increase)
and with 219,991oz mined in the first quarter of 2011, they are set to increase production again this year as Shafter comes into production and should be producing 500% more in 2013. 5 million ounces per year is very achievable.
Recently announced expansion of 500+ tpd at La Negra bringing production levels there to 2,000 tpd +,a 33% increase in production.
ReplyDeleteNew lead circuit being installed Q2 2011 should boost bottom line for La Negra.
Mining to begin at Shafter ASAP,as in this week.
Great update, thanks. Also I noticed in their news release their production date for Shafter moved from June 2012 to May 2012.
ReplyDeleteProfitability is projected for Arcana at $15.00/oz silver.
This company keeps impressing me.
Talked to IR some weeks ago and they are reiterating what the CEO has stated (Q2 conference call) and that is the possibility grows that AUN will attempt to achieve limited production status in 2011 at Shafter.
ReplyDeleteThey are presently permitted for 900 tpd at Shafter with construction accelerating.
The $4.5 m upgrade is on schedule and said to be completed early Q1 2012 at La Negra,bringing that operation to 2,000-2,100 tpd status.
So,both operations in full construction in line for 6.5 million oz Ag Eq production status in early 2012.
Hey, thanks for the update.
ReplyDeleteI have been quite busy, any word on financing after the broken Sprott deal?