Last Friday’s session was marked with a huge trading volume of 1.83M shares and a slight 1.3% advance in the price. AUN noted a day-high at $0.79, which can also be defined as resistance level for the stock. In case of a retreat, AUN could find support at $0.67 and $0.65 as the chart suggests.
For about a month no official announcements have been released by Aurcana Corporation. This implies the shares might be climbing speculatively, as there are no new developments to explain their performance. It is interesting to see whether AUN will be able to go up through the $0.79 level in the days to come.
Aurcana certainly has potential that might aid the future rise of the shares. Encouraging news came from the filed production and operating results for the third quarter of 2010. Aurcana reports a 72% increase in the gross profit and a 43% increase in the net revenues compared to the relevant quarter in 2009.
Last December, the company completed a $60M equity offering. A month ago, Aurcana began construction work at its Shafter silver mine, located in Texas. These are positive developments that might support the climb of the stock.
At the same time, negative factors also exist, which could lead to a bearish move of the shares. The mentioned financial report for Q3 of 2010 contains also unpleasant results: in comparison with the third quarter of 2009, the net income has fallen by 42% as the operating expenses have jumped up by 130%.
The ongoing construction work at Shafter and the extensive drilling at the company’s La Negra property are activities that will require substantial funding in the future. Besides, the Shafter mine is expected to start silver production not earlier than mid-2012 and till then it will not bring any revenue.
