Last year earnings were released on the 7th of November.
Second quarter silver prices averaged $28.51. Third quarter probably $30.
Should be good operating cash flow improvement.
Should see Shafter startup come the beginning of December.
Operating cash flow for the third quarter should be in the range of 6.5 to 7.0 million dollars for the quarter.
That is about $25 million/year at these $30 levels of metal prices.
Sounds like Shafter will finally begin commercial production in December ( ? )
That will gradually increase cah flow rates....doubling and possibly tripling cash flow rates by the end of next year. ( ? )
Most likely the outstanding warrants will be exercised and about $57 million will also go into the company's coffers (Note that there is potential for some of those warrants to be excercised before the end of this year to avoid higher tax rates... but then more money comes in sooner)
About $107 cash flow ( say 50 from operating and 57 from financing ) will give Lenic some very good bargaining positions this next year.
As of June 30, 2012 details of outstanding warrants are as follows:
Number of Exercise Expiry Date
3,156,000 $ 0.40 June 30, 2013
24,960 $ 0.35 June 30, 2013
47,626,926 $ 0.41 December 7, 2013
6,165,801 $ 0.41 December 7, 2012
26,426,500 $ 1.00 November 29, 2013
always difficult to predict cash flows at the current 5-7 million level. It is a composit of many different current asset/payables transactions and changes in balances of same.
The most interesting comment by Lenic was the last of the conference call when he said that he expected 100 million cash flow rate by the end of 2013.
The table below is from a June 1st release.
What investors need to keep in mind is that Shafter is a HIGH GRADE deposit.
While it is disapointing to be taking a while to get into full production a little perspective would be advised.
The mill is being tuned for now...and expanded to 2,500 over the next 18 months to 2 years.
The mine over the next year is going to be developing the rich mantos and spider web of feeder veins to feed the mill with the best grades of ore.
I consider this company a big PIGGY BANK
Hole S-12-403 was drilled at an angle of -80 degrees oriented due East and cut 30 feet of mineralization from 382 feet to 412 feet with an average grade of 23.37 ounces of silver per ton. Significant trace amounts of gold are associated with several intervals. Core recovery was very good over the intersection, with the exception of one low grade interval within the zone. The core section of the high grade zone averages 36 ounces/ton over fourteen feet. Figure 2 is a section indicating the location of Hole S-12-403.
From To Ag oz/ton Au oz/ton
382 384 30.81 0.03
384 386 15.54 0.01
386 388 9.51 0.01
388 390 2.38 0.01
390 392 13.53 0.01
392 394 46.28 0.02
394 396 16.28 0.01
396 398 37.44 0.00
398 400 45.06 0.01
400 402 46.63 0.01
402 404 30.96 0.02
404 406 31.51 0.03
406 408 8.81 0.01
408 410 6.27 0.00
410 412 9.39 0.01
Lenic Rodriguez, President of Aurcana Corporation states, "this is the highest grade intersection encountered to date at the Shafter Mine and we expect to encounter more of the same as we develop the underground operation"
Vertical Hole S-12- 402 located approximately 180 feet south of S-12-403 intersected 41 ounces of silver over two feet from 378 -- 380 feet.
Additional surface and underground drill holes are being processed and results will be released at a later date.
In addition to the Shafter mine ramping up toward $25 million/qrtly operating cash flow during the third and fourth quarter we will have over $50 million in warrants exercised this year.
The first two qrts should provide Aurcana about $25 million in total cash flow as Shafter and La Negra ramp up new higher levels of throughput.