Hi all,


RBC analysis released yesterday.


Aurcana Corp. - Growth prospects remain intact


Base case: C$1.25

Our base case price target of C$1.25 is derived by applying a 1.4x multiple to our estimated NAVPS and 10x multiple to our 2013E

CFPS. The target multiples used to value Aurcana are in line with the average multiples used to value the silver producers within our

coverage universe (excluding Silver Wheaton and Fresnillo).


Upside scenario: C$1.55

Our upside scenario assumes the underground operation at Shafter is able to support a 2,500 ton/day operation as well as successful

delineation of higher grade resources from within the northwest mineralized trend at La Negra. Assuming both scenarios play out

concurrently and the same target multiples are maintained, we estimate an upside scenario value of C$1.55. Our upside scenario is

based on 2014E cash flow instead of 2013E cash flow in order to better reflect the potential production upside compared to our base

case forecast.



Downside scenario: C$0.80

Our downside scenario assumes Aurcana continues to struggle to bring Shafter up to design levels, which is likely to weigh on the

company’s share price. Assuming investors would challenge the company’s ability to hit its own internally generated production

targets as well as the potential need for additional equity financing, we believe the company would trade at discounted multiples to its

peers. As such, applying discounted multiples of 0.75x NAV and 7.5x 2013E CFPS, we derive a downside scenario value of C$0.80.



GLTA, Matt