Mr. Lenic Rodriguez reports

AURCANA REPORTS Q2 2013 FINANCIAL RESULTS AND PROVIDES UPDATE

Aurcana Corp. has released its unaudited financial results for the second quarter ended June 30, 2013.

The second quarter 2013 earnings webcast and conference call have been scheduled for Aug. 30, 2013, at 10 a.m. PST (1 p.m. EST). See herein for details.

Lenic Rodriguez, Aurcana's president and chief executive officer, said: "We are pleased to report that Aurcana increased its second quarter silver equivalent production from La Negra by 38 per cent over the first quarter of 2013, and the mill at La Negra exceeded its new capacity of 3,000 tonnes per day. With technical improvements at Shafter now under way and increased efficiencies at La Negra, the company remains strategically positioned for continued growth."

Highlights of La Negra's second quarter ended June 30, 2013:

• A 38-per-cent increase in silver equivalent ounces produced to 818,060 ounces during second quarter 2013 over the first quarter of 2013 and a 19-per-cent increase over the same period in 2012;
• A 73-per-cent increase in ore mined for a total of 249,036 mined tonnes during second quarter 2013 compared with 143,718 tonnes in second quarter 2012;
• A 33-per-cent increase in ore milled for a total of 235,388 milled tonnes during second quarter 2013 compared with 176,591 tonnes in second quarter 2012;
• A 41-per-cent increase in the mill processing rate over the previous quarter to 3,057 tpd in second quarter 2013 compared with 2,169 tpd in first quarter 2013;
• The total cash cost per silver ounce net of byproducts for second quarter 2013 of $7.79, up 85 cents from $6.94 in second quarter 2012;
• The cash cost per milled tonne for second quarter 2013 down 6 per cent to $30.84 from $32.97 in second quarter 2012;
• Total revenues for second quarter 2013 of $11.3-million, down $2.4-million from $13.7-million in second quarter 2012, mainly due to lower silver and base metals prices, lower silver grades, and higher inventories at quarter-end;
• Net income in second quarter 2013 was $300,000, down from $1.4-million in second quarter 2012.

The summary of the selected financial information should be read in conjunction with the unaudited financial statements and the related management's discussion and analysis for the three- and six-month periods ended June 30, 2013, together referred to as the financial statements filed on SEDAR and available on the Aurcana website. All figures are in U.S. dollars unless otherwise noted.

Update on Red Kite financing

The company announces that it is working with Red Kite mine finance on the settlement of definitive loan documentation for a three-year loan facility of $50-million and an off-take agreement for the silver produced at the Shafter mine. The transaction is now expected to be completed in September, 2013.

Second quarter production and operational highlights

La Negra mine:

• Mine development continued in 2013 to support the mine expansion with production in part realized from development headings, albeit at a lower silver grade. La Negra now has developed the equivalent of two years of additional production. Planning is now focused on increasing silver grades by developing and mining higher-grade mineralized zones.
• Planning includes the purchase of a raise boring machine to construct several ore passes connecting the upper reaches of the mine that have higher silver grades with the main ore haulage on the 2,000-metre level. The raise boring machine is expected to be commissioned in first quarter 2014.
• A mineral reserve estimate by Mine Development Associates has been initiated with completion expected in early 2014. The mineral reserve estimate and an updated resource estimate will include updated assumptions regarding metal prices with a focus on higher-margin production. The report will also include new drilling completed at La Negra since the last technical report was completed in 2012.
• The company ended second quarter 2013 with higher inventories of copper-silver concentrates reducing revenues. The mine and plant expansions, combined with higher production from the copper-rich lower levels of La Negra, resulted in the production of more copper concentrate than anticipated, exceeding the capacity of the existing filter press. A new larger-capacity filter press has been ordered with delivery anticipated by the end of third quarter 2013.
• To reduce costs and improve efficiencies at La Negra, the company reduced surface exploration, postponed investments in non-critical areas and focused additional efforts in mining areas having higher silver grades.

Shafter mine:

• The Shafter mine is making additional capital improvements to ensure that the process plant will achieve its target capacity of 1,500 tpd.
• The estimated total capital cost required to achieve target capacity of 1,500 tpd at Shafter is approximately $18.5-million, of which a total of approximately $5.5-million has been expended by the end of second quarter 2013. It is anticipated that the balance of $13-million will be financed by way of the Red Kite financing, currently being finalized. Management expects completion of all construction and upgrade work during 2014, subject to the successful completion of the financing.
• Silver output in 2013 at the Shafter mine was constrained by bottlenecks in the processing plant pending the delivery, installation and commissioning of key pieces of equipment. All proceeds generated from silver sales during second quarter 2013 were credited to capital costs.
• On Aug. 15, 2013, a second new tailings filter press was delivered to Shafter. This replaced the second of three used low-capacity tailings filter presses that were contributing to operational delays and reduced recovery rates. Together with the new filter press installed in May, 2013, Shafter should reach a capacity of 1,200 tpd. A third filter press will be ordered with expected delivery by year-end. This press will bring the Shafter circuit up to the design capacity of 1,500 tpd.
• New larger precipitate filter presses and furnaces, together with a larger drying oven and retorts, have been ordered and are expected to be commissioned in October, 2013. This equipment is expected to result in a significant improvement in the silver recovery and the quality of dore bars produced on site.
• A higher degree of automation and better process controls are to be installed in the process facility. This activity began in May, 2013, and will continue until projected completion in 2014.
• SGS Metcon conducted metallurgical testing investigating the benefits of a flotation circuit at the Shafter mill. The results indicated that a flotation circuit will help achieve recoveries of up to 80 per cent of the high-grade silver contained in sulphide minerals at Shafter that otherwise would not be recoverable in the leach circuit. This cost is included in Shafter's total capital requirements.
• The first group of locally trained miners has graduated and began working at Shafter in late July, 2013, alongside experienced miners. This mining course will be offered several times a year and is being co-ordinated with the superintendent of the local Presidio school system.
• Aurcana has engaged Mine Development Associates to generate an updated mineral reserve estimate for the Shafter mine. Completion is expected during fourth quarter 2013.

The company expects that the Shafter plant will run at a rate of approximately 600 tpd during third quarter 2013 and achieve its design target of 1,500 tpd during 2014, subject to the successful completion of the Red Kite financing.

               CONFERENCE CALL DETAILS

Conference date                Aug. 30, 2013                     
Conference time                10 a.m. PST/1 p.m. EST                  
Participant dial-in number(s)  Canada 416-340-8018/United States and Canada 866-223-7781/
                               international 800-6578-9898                   
Participant passcode           Not required                                

The recorded webcast will be posted to Aurcana's website.

Financial statements and management's discussion and analysis

To read complete financial statements and MD&A, please visit Aurcana's website or SEDAR.

We seek Safe Harbor.