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LilNev2000
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LilNev2000's Blog : Aurcana Corporation - What should their next move be?

Date May 6, 2012    Comments Comments (5)    Rate this post Recommend This Post (149)   
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As Aurcana Corporation is bringing its Shafter Mine online, there has been lots of chatter on the stock bulletin boards as to what they should do next.  


The different choices are:



  1. Dividend in form of cash or silver

  2. Rollback of shares

  3. Share Buyback

  4. Reinvest profits into new mining projects


My choice is number 4.  Even when Shafter comes online, Aurcana will need to replace the reserves it's now taking out of the ground.  A dividend or share buyback just reduces the amount of cash they have on hand to do such strategic moves in order to increase reserves. They will need cash in order acquire properties as banks haven't been in the mood to financing "risky" mining projects since 2008.  With close to 500 million shares outstanding, diluting shareholders in order to raise money would be counterproductive at this point.  


A rollback of shares in my opinion does nothing to help the company.  Any investor with a computer can go and see the reasons why this company did a rollback.  A rollback doesn't enhance share value.


Right now Lenic Rodriguez and crew need to concentrate on getting Shafter up and running and making sure that their mill upgrades at Shafter and La Negra go smoothly.  Once the cash starts rolling in at a high rate, then they need to look at expanding their reserves.  They'll need all the cash they can to make that happen.  I rather see the money reinvested in the company rather than give me a dividend for being a loyal shareholder.  A couple of pennies per share won't give the warm and fuzzy feeling like another producing mine would financed purely through cash flows.


Listen to the Year End Aurcana Corporation conference call here:http://www.aurcana.com/mp3/Aurcana-Year-End-2012-04-16.mp3.  Being concerned about their reserves, I asked Lenic a question about their future exploration during the question and answer period of the call.

5 Comment(s):

Author JohntheWizard     Date May 7, 2012 02:08 Abuse this post Report Abuse
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LilNev,
As I told you, I bought a small part of Aurcana with my US broker for $0.78 on Dec 2010 at closing. A year later, the stock valued $0.71, last Friday it sold for $0.97. I usually don't hold stocks longer than a few weeks and follow a pretty rigid quantitative investment (or trading if you like) system. But this one I'll keep until you give us here a clear sell signal, or when the silver price gets under $23 as you once wrote here.
Thanks,
John
Author StocksEarningResearch     Date May 7, 2012 07:28 Abuse this post Report Abuse
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Why you pumping this penny stock all the time.
Author LilNev2000     Date May 7, 2012 19:51 Abuse this post Report Abuse
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I pump the stock JaiH because it's a quality stock with good management. There is plenty of room for growth in its stock price when you compare it to their peers Silvercorp and First Majestic. With production about to triple/quadruple, why wouldn't I pump it?
Author JoeJustJoe     Date May 15, 2012 15:46 Abuse this post Report Abuse
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Not too shabby, 30% downside in 2 weeks or less in AUNFF. Even the MoBros wud have a tuff time picking a single ticker to match yer effert. Like I sed ba ba bafo...the best thing AUNFF cud do is jist pay you to STF...up!, clown. *-) 3J
Author LilNev2000     Date June 1, 2012 10:51 Abuse this post Report Abuse
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Joe,

Aurcana pays me with an increasing stock price. From 9 cents to 90 cents is payment enough in 3 years is payment enough. When the stock is trading near $2 in about a year, will you complain when it has a small pullback?
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