Aurcana
Aurcana did very well for us in 2012, we were perhaps over-exposed in the stock which lowered the effect of other stocks not performing as well. AUN has gone from being our largest holding to now being a much smaller one. We knew that the big trigger came on December 14th when the company announced commercial production at Shafter. After that, we couldn't really see any large triggers and we acted on it.

Shafter is roughly 1.5 years delayed if you consider the initial outlined plans. The company is now expecting to be at full capacity at the end of 2013 and until the filter presses are installed in the beginning of Q2, the mine will be producing at ~600 tpd. So, hiring people and be fully staffed but only running at a 40% capacity will likely have a bigger risk of surprising to the downside rather than to the upside. We need to be very clear on this, we have no reason to think that something is not right, but we don't like the odds regarding Shafter on a shorter term basis.

We should also point out that La Negra is looking quite good in our mind. Sure, recovery was down in mid-year but let's hope that the recovery improvements we saw in Q4 will continue along with grade increases. The company is expecting the recovery rates to get back over 80% again and that is good news.

Aurcana is in our mind a unique growth story if/when they deliver on their plans. And when you consider that this is in the much smaller silver space, we are even more intrigued. However, with the reasons stated above, we are now a bit cautious on the stock. We want to see the company deliver good numbers from Shafter before we make Aurcana our largest holding once again.