VANCOUVER, BRITISH COLUMBIA--(Marketwire - 04/18/11) - Aurcana Corporation (TSX-V:AUN - News) ("Aurcana" or the "Company") reports that Aurcana's Board of Directors did not approve the terms of a proposed US$25M credit facility announced on November 19, 2010 to provide additional funding to advance the Company's Shafter Project in Texas with Sprott Asset Management LP ("SAM") and Sprott Resource Lending Partnership ("SLP"). The Board determined that the restrictive covenants proposed in the credit facility and the cost to the Company was not in the best interests of the Company and its shareholders. Silver prices have increased substantially since commencing negotiations on the credit facility in October, 2010. Assuming that silver prices remain in the current price range of $35 per ounce, the aggregate cost of the debt facility to the Company will be approximately US$50M to borrow US$25M over a 3 year period. In addition, the overly restrictive terms of the credit facility will result in undue risk to the assets and future operations of the Company. The Board of Directors provided authority to the Company's President to renegotiate the terms of the credit facility but the negotiations with SAM and SLP have been unsuccessful.On April 15, 2011, Aurcana was served with a Notice of Civil Claim filed in the British Columbia Supreme Court against Aurcana by SAM and SLP seeking damages for breach of good faith negotiations and making a claim for:
The Company entered into two non-binding term sheets dated October 26, 2010 ("Non-Binding Term Sheets") with respect to the debt facility. The Company's only obligations to SAM and SLP if the Company did not proceed with the credit facility is privacy, confidentiality, jurisdiction and the payment of legal fees and other out of pocket expenses in connection with the Non-Binding Terms Sheets.The Company has acted in good faith on behalf of its shareholders and will vigorously defend the claim that it was under no obligation to proceed to enter into a credit facility and to do so would have been exceedingly onerous to its shareholders.ON BEHALF OF THE BOARD OF DIRECTORS OF AURCANA CORPORATIONLenic Rodriguez, President and C.E.O.For further information, visit the website at www.aurcana.com.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.
1. Specific performance of the financing including payment to SAM and SLP
standby fees calculated on the current price of silver;
2. Damages for Breach of Contract;
3. Accounting for profits and benefits;
4. Punitive and exemplary damages; and
5. Interests and costs and such other relief.