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Aurcana Corporation Announces Commencement of CBCA Proceedings to

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basserdan Member Level  Tuesday, 11/03/15 01:38:03 PM
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Aurcana Corporation Announces Commencement of CBCA Proceedings to Implement Restructuring Transaction

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct 30, 2015) - Aurcana Corporation (TSX VENTURE:AUN; OTC:AUNFF) (the "Company" or "Aurcana") announces that it is today commencing proceedings under the Canada Business Corporations Act (the "CBCA Proceedings") to implement the restructuring transaction announced by the Company on October 16, 2015 (the "Restructuring Transaction") under which all of the Company's debt obligations to Orion Mine Finance (Master) Fund I L.P. (the "Lender"), as lender under the Company's amended and restated senior secured credit facility dated April 29, 2014 (the "Facility"), will be extinguished.

As announced in the Company's news release dated October 16, 2015, the Restructuring Transaction has the following key elements:

* all of the debt obligations due and in default under the Facility will be exchanged for the Company's interests in its Mexican subsidiaries that own the La Negra mine, resulting in the elimination of approximately US$38.7 million of principal amount of secured debt due and in default under the Facility on completion of the Restructuring Transaction;

* the Company's annual interest costs will be reduced by approximately US$2.3 million;

* a newly incorporated affiliate of the Lender ("Newco") will purchase certain non-core equipment from Aurcana and certain of its subsidiaries for a total purchase price of US$3.5 million;

* Newco will pay Aurcana US$40,000 per month for a total period of 12 months for certain consulting services to be provided to Newco by specified officers of Aurcana in connection with the operation of the La Negra mine;

* the Company will retain all of its other assets, including the Shafter mine, with no dilution to shareholders; and

* the Restructuring Transaction is expected to be implemented on or before December 4, 2015.

Aurcana's trade creditors, as well as its obligations to employees, are unaffected by the Restructuring Transaction and will continue to be paid or satisfied in the ordinary course of business. Further details regarding the Restructuring Transaction and the facts and circumstances that led to the Restructuring Transaction are available in the Company's letter to shareholders dated October 19, 2015, which has been posted on the Company's web page ( http://www.aurcana.com ), and in the audio play-back of the Company's investor call held on October 21, 2015, which is available through the play-back instructions set out in the Company's October 19, 2015 news release.

The Restructuring Transaction will be implemented by way of a Plan of Arrangement to be approved by the Ontario Superior Court of Justice (Commercial List) (the "Court"), and is subject to Court approval and the receipt of all necessary regulatory and stock exchange approvals. A hearing for approval of the Restructuring Transaction by the Court is scheduled for November 13, 2015 at 330 University Avenue, Toronto, Ontario at 10:00 a.m. A copy of the Company's application materials for the hearing to be held before the Court on November 13, 2015 will also be posted on the Company's web page today.

About Aurcana Corporation

Aurcana Corporation is a primary silver producing company with two properties: the La Negra Mine in Mexico and the Shafter Silver Project in Texas, US. The latter was put on care and maintenance in December 2013, in part due to depressed silver prices.


"Kevin Drover", President & CEO

For further information, visit the website at http://www.aurcana.com


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