ROK: TSX.V
VANCOUVER, Jan. 29 /PRNewswire-FirstCall/ - Roca Mines Inc. (ROK: TSX-V) ("Roca" or "the Company") has released its financial results for the three months ended November 30, 2009, including production and sales from the MAX molybdenum mine located in British Columbia, Canada. All dollar amounts are stated in Canadian dollars unless otherwise indicated.
Overview and highlights:
- Production revenues of $3.1 million for the three months ended
November 30, 2009 on sales of 368,092 lbs of molybdenum;
- Operating cash flows of $518,025 for the three months ended November
30, 2009;
- Cash costs of Cdn$10.89 (US$10.22) for the period;
- Average molybdenum recoveries of over 95%; and
- Molybdenum in concentrate production of 362,633 lbs.
MAX Molybdenum Mine - Production Results and Concentrate Sales
Revenues of $3.1 million for the three months ended November 30, 2009 result from shipments during the period and reflect final and/or estimated final pricing at November 30, 2009. The Company sells its concentrates to a UK-based buyer with sales revenues based on average prevailing molybdenum oxide prices subsequent to delivery. Sales for the period ended November 30, 2009 reflect an adjustment of approximately $565,000 for lower than expected settlements on shipments made through August 31, 2009, due to lower final pricing of molybdenum in the settlement period.
The table below is a summary of the average operating statistics for the quarter ended November 30, 2009:
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MAX Mine Statistics Q1-2010
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SEPT '09 OCT '09 NOV '09 TOTAL
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Molybdenum Produced (lbs)(1) 197,747 83,745 81,141 362,633
Average Head Grade (% Mo) 0.65 0.31 0.27
Molybdenum Recovery (%) 96 95 96
Mill Availability (%) 94 96 98
Average Daily Throughput (tpd) 486 416 478
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Notes: (1) molybdenum contained in concentrate
Molybdenum production for the first quarter has been significantly less than targeted, totaling approximately 362,633 lbs, due primarily to oversize muck that occurred in the stope being mined at that time. Oversize muck requires additional handling, and grade control of this material is difficult resulting in dilution to the mill head grade. A review of these problems highlights that the latest production blast undercut several previously unmapped geological structures and caused the oversize muck. New development plans and future stoping methods will minimize the possibility of such an occurrence on the next levels of the mine.
Cash costs of production during the first quarter were higher than previous quarters, as a result of the lower average grades received at the mill during September through November. Cash costs averaged $10.89 per lb (US$10.22) of molybdenum sold during the first quarter.
Financial Results
The information in this news release and the selected financial information should be read in conjunction with the interim consolidated financial statements, and management discussion and analysis, for the period ended November 30, 2009, which will be available at Roca's website at www.rocamines.com.
During the three months ended November 30, 2009, the Company recorded production revenues of $3,076,940 and a net loss of $1,365,842 on significantly reduced head grades over prior periods. Despite much higher revenues of $8,310,517 for the three months ended November 30, 2008, the Company also recorded significant losses of $5,121,724 due to the higher depletion charges. The lower grades mined, combined with significantly lower molybdenum prices, reduced cash flows from operations to $518,025 versus $6,289,717 in the first quarter of the previous fiscal year. General and administrative expenses have decreased this year as the Company continues to strive to cut costs in times of lower production and molybdenum prices.
Summary Consolidated Statements of Operations and Loss
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Three months ended Three months ended
November 30, 2009 November 30, 2008
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Total Revenues 3,076,940 8,310,517
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Cost of sales (4,009,814) (4,712,748)
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Write-down of inventory - (434,587)
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Depletion, amortization, accretion (624,782) (10,992,237)
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Mining Loss (1,985,750) (7,829,055)
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G&A, Stock-based comp., write-offs (428,094) (495,154)
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Loss from Operations (1,985,750) (8,324,209)
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Exchange gain (loss) and other
income (loss) (101,721) 449,880
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Income and mining tax recovery
provision 721,629 2,752,605
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Net Loss for the Year (1,365,842) (5,121,724)
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Loss per Share - Basic and Diluted (0.02) (0.06)
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Outlook
It remains management's belief that recent global events have seriously eroded the supply of molybdenum and management contends that a realization of supply and demand fundamentals in the medium-term will result in positive changes to pricing. It is therefore management's goal to accelerate production at MAX to 1,000 tpd to reduce unit costs and preserve the opportunity to produce concentrates in an appreciating price environment.
Exploration work at the Company's various projects has been limited recently to preserve cash resources. The Company has recently received recommendations from its various geological advisors to advance diamond drill programs at both the Nuevo Milenio gold/silver project and the MAX molybdenum project; however, expenditures towards mine expansion and operating efficiencies continue to be management's priority.
ROCA MINES INC.
"David Skerlec"
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David J. Skerlec - Chief Financial Officer
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
SOURCE Roca Mines Inc.
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