A year ago, Aurcana Silver Corporation’s stock price in the Canadian Stock Exchange was $1.06 per share, up from prior year’s humble mark of $0.24 per share.

Things were looking up.

Aurcana, after all, had purchased Ouray Silver Mines, Inc. which owned the Revenue-Virginius mine just outside of Ouray. And, like other ventures before, it was going to resurrect mining in the San Juan Mountains.

“Reviving Ouray’s Mining Heritage” is the title on Ouray Silver Mines, Inc. website.

Tuesday, the stock was in free-fall, tumbling down to $0.375 at close of day after the company announced that there was “rock movement” in a portion of the mine that is a main conduit for personnel and materials.

“The rock movement which occurred in the #2 Alimak Raise,” the company’s November 23 press release stated, “which provided access to/from the stopping level for both men/materials as well as ore handing, will create a temporary material productivity limitation to underground production.”

The raise is critical to long-term operation, according to the company. Without it, underground transportation capacity has been reduced by 50%, and without the raise the mine has lost its “primary conduit for men and materials.”

Oh, and by the way, the press release throws in the tidbit that “based on the current cash resources available to the Company, management has decided to temporarily halt ongoing development activities other than those related to the completion of the #1 Raise hoist.

As a result, the company laid off employees early this week “consistent with the current objectives.” The number of employees laid off was not stated, but a source tells me the number is slightly more than 100.

Aurcana owns the Revenue-Virginius Mine and the Shafter-Presidio Silver Project, located in Texas.

In October 2020, Aurcana received credit approval for a loan from Mercuria Energy Group to the tune of $28 million. The loan, to be paid off within five years, was the financial engine necessary for OSM to start digging for profits.

The commitment of OSM, according to their website, “as a stakeholder and dedicated member of our community, is committed to acting with consideration for the best interests of our employees, the local community and the environment in every decision we make. We are dedicated to keeping our employees safe while producing responsibility.”

Thankfully, if the “rock movement” was dangerous, no one was injured or killed. The Revenue has carried that stain since 2014 when two miners went into an area where blast materials had been exploded during the previous work shift. Lacking proper ventilation, respiration equipment and warning, the two miners died from carbon monoxide poisoning. The Mine Safety and Health Administration fined the mine owner, who at the time was Silver Star Resources, $1.077 million. It was a record fine at the time for a non-coal mine.

In an October 22, 2020 press release, Kevin Drover, CEO of Aurcana noted that once funded, “this financing will be the key piece to fully fund the restart of commercial production at the Revenue Mine.”

The 60-month loan appears to have come with caveats. Included was a 12-month grace period with descending interest rates. Terms also stipulated that progress had to be made early.

“There is no guarantee the financing on the above terms and conditions,” the press release stated, “will be completed. The company forecasts 6 months to initial production for the Revenue Mine and 9 months to cash flow positive...demonstrating an economic viability to restarting of the mine.”

Instead of demonstrating viability, OSM, by its own admission, is having to backtrack with its operation due to “rock movement.”

To the average person, $28 million is a boat-load of cash. To Mercuria, it’s probably a drop in the bucket. Mercuria, according to its Wikipedia page, is “one of the world’s five largest independent energy traders and asset operators.” Based in Switzerland with 37 offices worldwide, it operates in 50 countries. Mercuria moves approximately 1.5 million barrels of crude and oil products daily.

Even with an operation that large, it appears it hasn’t forgotten about the terms of OSM’s loan.

It’s very possible that the loan leash they have on Aurcana and OSM is getting shorter by the day.

Alan Todd is a 35-year newspaper veteran who lives in Ouray County. He can be reached at alanrosstodd5@yahoo.com