Mr. Kevin Drover reports

AURCANA REPORTS Q2, 2014 FINANCIAL RESULTS

Aurcana Corp. has released its unaudited financial results for the second quarter ended June 30, 2014. The summary of the selected financial information should be read in conjunction with the condensed interim consolidated financial statements, and the related management discussion and analysis for the quarter ended June 30, 2014, together referred to as the "financial statements," which have been filed on SEDAR and the company's website. All figures are in U.S. dollars unless otherwise noted.

The most significant highlights for the second quarter ending June 30, 2014, were:

• Silver-equivalent ounces produced decreased by 4 per cent, with 786,505 ounces produced in second quarter 2014, compared with 818,060 in second quarter 2013;
• Silver production was down 6 per cent to 329,368 ounces in second quarter 2014, compared with 351,210 ounces in second quarter 2013;
• Revenues decreased $2.1-million to $9.2-million in second quarter 2014 from $11.3-million in second quarter 2013, mainly due to a combination of lower metal prices, lower amount of ounces sold and higher TCRC deductions;
• Mineralization milled was down 1 per cent to 232,763 tonnes in second quarter 2014, compared with 235,388 tonnes in second quarter 2013;
• The average silver grade was 55 grams per tonne in second quarter 2014 compared with 59 grams per tonne in second quarter 2013, due to increased throughput of lower-grade mineralization;
• Cash cost per silver-equivalent ounce increased 16 per cent to $10.29 in second quarter 2014, compared with $8.90 in second quarter 2013, due to lower silver ounces produced and increased production costs.

Revenue

During the quarter ended June 30, 2014, the company generated revenues from the sale of 272,027 ounces of silver (second quarter 2013: 315,070 ounces); 2,869 tonnes of copper concentrate (second quarter 2013: 2,548 tonnes); 4,138 tonnes of zinc concentrate (second quarter 2013: 4,881 tonnes); and 731 tonnes of lead concentrate (second quarter 2013: 843 tonnes); for total net revenues of $9.2-million (second quarter 2013: $11.3-million).

The average price for sales of silver, copper, zinc and lead during the quarter was $20.43 silver (second quarter 2013: $21.72) per ounce of silver; $3.09 (second quarter 2013: $3.24) per pound of copper; 95 cents (second quarter 2013: 84 cents) per pound of zinc; and 96 cents (second quarter 2013: 95 cents) per pound of lead.

Earnings

The company had losses from mining operations at La Negra for the quarter ended June 30, 2014, in the amount of $1.4-million (2013: earnings of $2.6-million) and earnings of $2-million for the first six months of 2014 (2013: earnings of $7.3-million). The decrease in earnings from mining operations at La Negra for the current period against the same period of the previous year was mainly related to the decrease in metal prices, lower silver grade at the La Negra mine and lower mill throughput as a result of mill downtime due to mechanical problems.

Operations review:

• On April 29, 2014, Aurcana announced that it had completed the restructuring of a loan with Orion Mine Finance (Master) Fund I LP, an affiliate of Orion Mine Finance Group;
• In July, 2014, Kevin Drover was appointed president and chief executive officer of Aurcana. Mr. Drover has more than 40 years of experience in mining operations, including as vice-president of operations at Kinross Gold Corp.;
• Management has initiated a review of all facets of the company including capital expenditures, staffing levels, cost controls and resource estimates. At La Negra, the immediate focus will be on cost reductions, productivity and efficiency improvements, reducing mining dilution, and improving grade estimation practices and control;
• During the month of July, a number of changes were implemented at the La Negra mine, including a change in mining method that has resulted in an improvement in the silver grade from an average of 50 grams per tonne in June to an average of 68 grams per tonne in July, a 36-per-cent improvement;
• In addition, Aurcana has commissioned a new resource estimate for its La Negra mine. Updated details of the company's operations at La Negra, including an updated resource estimate, will be contained within a technical report issued within 45 days of the company's initial reporting of the results of the resource estimate;
• • The resource estimate will be done in accordance with CIM standards for the estimation of mineral resources and mineral reserves best practice guidelines, and supported by a technical report conforming to National Instrument 43-101 standards of disclosure for mineral projects. The company has engaged AMC Mining Consultants (Canada) Ltd. to complete this work, with an anticipated completion date in the fourth quarter of 2014;
  • The objective in preparing a new resource estimate is to provide shareholders with updated information on the grade, tonnages and metal potential at La Negra, and to provide Aurcana's mine management with a more reliable and current model for production planning;
  • Since the previous resource estimates dated June 30, 2012, mining operations at La Negra have ramped up to approximately 3,000 tonnes per day, resulting in a larger drawdown of lower-grade mineralization. Over the past 26 months, there have been significant downward movements in metal prices, and while the company expects commodity prices to improve over time, the changes call into question the current applicability of some of the underlying assumptions in the existing resource model, including metal prices. At the La Negra operation, the company has been able to successfully explore and develop new zones of mineralization as well as extend known zones such that approximately 35 per cent of current production comes from areas outside the earlier block models. Aurcana's new management group feels that these factors dictate the need for a revised resource estimate;
• In addition to the above, the board and management will be exploring alternatives that could result in an improved balance sheet and increased shareholder value.

To improve the company's short-term liquidity, Orion Mine Finance (Master) Fund I, an affiliate of Orion Mine Finance Group, has agreed to defer principal and interest payments during July, August and September, 2014, which would otherwise be due under Aurcana's senior secured credit facility with Orion. These amounts will be added as a principal and amortized ratably over the remaining 43 months of the term of the credit facility, with payments by the company recommencing on Oct. 31, 2014. In return, Aurcana has agreed to extend the copper, zinc and lead offtake agreements with Orion by one additional year, to 2021. For more information on the credit facility and the offtake agreements, see the company's news releases dated April 29, 2014, and April 30, 2014.

The outlook for silver-equivalent production in 2014 continues to be 3.6 million to four million ounces.

Corporate

The company's shares are also traded in the United States on OTCQX under the symbol "AUNFF." Investors can find current financial disclosure and real-time level 2 quotes for the company on the OTCQX website.

The company also announces the appointment of Donna Moroney as corporate secretary of the company, and that the TSX Venture Exchange has approved an amendment to the company's stock option plan, which is a fixed plan, to increase the number of shares reserved for issuance under the plan to 8,379,852, which remains less than 10 per cent of the total issued and outstanding shares of the company.

The technical information in this release has been reviewed by Jerry Blackwell, PGeo, a director and technical adviser to the company, and a qualified person as defined by NI 43-101.

We seek Safe Harbor.