STOCK PROFILE - Aurcana Corp. - Last updated Jan. 4/07; 

Aurcana Corporation is primarily a precious metals company that is in the process of moving from an "exploration" company into a "producing" company... AUN's mining operations are concentrated in the country of Mexico... AUN's head office is located in Vancouver, BC, Canada...  Aurcana is listed on the Toronto Venture Exchange under the symbol "AUN".

In Feb. 06 Aurcana issued a press release that it had signed a letter-of-intent to acquire controlling interest of the La Negra Silver-Zinc-Copper-Lead mine located in Queretaro State, Mexico... since that time, Aurcana has raised the required financing to purchase the mine, and has subsequently completed the mine acquisition.

The acquisition of the La Negra mine is a major milestone in the companys history... as the La Negra mine moves Aurcana from being just another "exploration" company to a "producing" company... and this is a very important distinction to make because statistically; less than 1 in 1,000 mining exploration projects ever make it to the true "production" stage... "exploration companies" face very slim odds in ever becoming a "true producer", and a mining exploration company that cannot eventually make it to production, a merger, or a buy-out, eventually faces dilution, bankruptcy, dormancy, re-organization, or similar value-destroying fates.

Pictures from Aurcana's La Negra Mine ...

While the acquisition of the La Negra mine is a major milestone for Aurcana... there are still some risks in this company that require monitoring... probably the biggest risk is the La Negra mine itself; whether or not the mine can be operated profitably?, and if so, how profitably and for how long?... and because previous resource estimates for the La Negra mine are not 43-101 data compliant, it means there's a risk the previous resource estimates for La Negra may not be as accurate as compared to today's Canadian 43-101 reporting standards... however, at this point I wouldn't get over-alarmed about this fact, primarily because the previous owner of the mine was a Mexican company and was not subject to the current Canadian Securities standards, and there is a longer trail of production history with the La Negra Mine.

Because the La Negra mine has a previous production history (according to the Aurcana web site): the La Negra mine has previously produced 323 million lbs. Zinc, 70 million lbs. Copper, and 161 million lbs. Lead... the current non-43-101 resource estimates and operating history would still provide a certain level of guidance... so if/when the La Negra mine does conform to the current Canadian 43-101 standards, and if the results were to be good, it'd likely add some additional value to the company at that point.

Another risk for Aurcana that requires some monitoring is "country risk"... because the La Negra mine is located in a 3rd world country; Mexico, and is thus subject to certain associated risks... in fact, everyone has recently seen/heard of the ongoing civil unrest over recent election results in Mexico... however, putting some of that risk into perspective; most of the violent civil unrest has been concentrated in the Oaxaca district of Mexico... Oaxaca has a very long history of civil unrest.

IMO, if the civil unrest was to spread dramatically throughout Mexico, I'd argue that risks to the Mexican mining industry would be temporarily increased mostly in relation to things like general strikes and road blockades, etc. ... as opposed/compared to other types of current country risks associated with certain South American countries where the entire business ideology is at risk of quick, sudden, and radical changes... also, on a positive note in relation to country risk, Aurcana's La Negra mine is located in the "Queretaro" district of Mexico; the on-line dictionary Wikipedia partially describes the Queretaro district as "a quite calm place, with no civil unrest, low crime and a high standard of living".

So, while there are risks yet to be quantified relating to the profitability and resource estimates on the La Negra mine... a potential positive resource note is; in addition to it's historical Silver production, the mine has previously produced 323 million lbs. Zinc, 70 million lbs. Copper, and 161 million lbs. Lead... and anyone who has studied the historical inventory and price levels of Zinc, Copper, and Lead know prices and demand for these commodities are strong, and readily available world-wide supplies of Zinc, Copper, and Lead are at very low levels, the dynamics of which are unlikely to change much in the short-term, IMO. 

So providing AUN mngmt. can bring the La Negra mine into full production, eventually achieving profitability, as well as eventually proving resource estimates that show a longer-term profitable life for the mine, IMO Aurcana's shares could produce healthy rates of return sometime within the next 12 - 24 months from current levels.

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