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Re: News Release - Tuesday, November 18, 2008
ROCA -- MAX Molybdenum Mine Production Review and Outlook
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Vancouver, British Columbia: Roca Mines Inc. (ROK: TSX-V) ("Roca" or
"the Company") is providing a production review for its MAX Molybdenum
Mine and an outlook for ongoing operations. All dollar amounts are
stated in Canadian dollars unless otherwise indicated.
Overview and highlights:
- The MAX Molybdenum Mine has recently produced 245,754 lbs of
molybdenum during September 2008 and 187,979 lbs of molybdenum during
October 2008;
- The average price for molybdenum sales in the month of September was
US$25.35 per pound - sales in October will be based on average
November pricing;
- The Company has initiated a cost cutting plan to minimize
expenditures at the MAX, including delaying planned expansion works
and exploration programs;
- The MAX Molybdenum Mine is focused on maintaining current production
rates at the mine while preserving medium-term opportunities to
benefit from more robust commodity prices; and,
- The Company has re-purchased a total of 1,460,700 shares through the
facilities of the TSX Venture Exchange at an average price of $1.00.
MAX Molybdenum Mine Production Review
The Mine produces molybdenum contained in concentrates and has
recently achieved the following operating performance figures;
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MAX Molybdenum Mine Production Statistics 2008
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Month JUN-08 JUL-08 AUG-08 SEP-08 OCT-08
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Molybdenum Produced (lbs)(1) 112,555 138,125 137,330 269,331 187,979
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Average Head Grade (% Mo) 0.473 0.584 0.757 1.178 0.793
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Molybdenum Recovery (%) 94.1 93.6 94.1 95.8 94.8
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Mill Availability (%) 81 94 100 96 100
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Average Daily Throughput
(tpd) 399 388 292 375 382
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Notes: (1) molybdenum in concentrate
Molybdenum production in September and October were 90% and 63% of
targeted rates, respectively. Production to date for the month of
November is averaging approximately 80% of target. Average daily
throughput has been affected at various times by production challenges
in the underground mine including equipment availability. Planned
improvements to the underground ventilation system have recently
allowed for greater flexibility with underground equipment, and have
improved overall production and development conditions and rates.
The mine continues to benefit from a grade control program that has
reduced mine-dilution in general, however head grades in October were
lower than September due to local grade variations in the current
stope, resulting in lower concentrate production in October. Current
mapping and greater experience with the controls on mineralization are
expected to produce less dilution in the immediate future. Mill
availability and mill recoveries have been consistently excellent,
highlighting the opportunity to reach and continue at target production
levels when all aspects of the underground mine also operate as
planned.
Outlook
As a result of recent global economic uncertainty and declining
commodity prices, management has undertaken several initiatives to cut
costs at the MAX Molybdenum mine while continuing to operate under its
Phase I mine plan. Phase II expansion plans, including completion
capital spending for that expansion, are being minimized. Similarly,
exploration work at the Company's projects, including the MAX property,
will be limited to definition drilling where required. Management will
continue to operate the mine while it generates positive cash flow,
recognizing that the MAX Molybdenum Mine was originally designed to
operate at historic prices. Significant gains have also been realized
from the recent Canada-USA exchange rate and fuel cost reductions.
It remains management's belief that molybdenum prices should remain
significantly greater than historic values for the foreseeable future
due to i) production problems globally, ii) the reduction of by-product
production related to copper mines and iii) the inability of new mines
to achieve financing. In real terms, recent events have seriously
eroded the global supply of molybdenum and management believes that a
realization of supply and demand fundamentals in the medium-term will
result in positive changes to pricing.
In summary, production at the MAX Molybdenum Mine will be limited to
current target levels in an effort to preserve the molybdenum resource,
and the mine will be readied, with minimal additional cost, for a rapid
response to periods when greater margins on sales can be realized.
The Phase I mine plan for MAX will focus on the deposit's high-grade
zone containing 280,000 measured and indicated tonnes grading 1.95%
MoS2 (refer to T.N. Macauley's 43-101 compliant technical report dated
September 2004 available via SEDAR). Molybdenum oxide currently
trades in the US$10/lb. range.
Share Buyback Plan
Through October, the Company had repurchased a total of 1,460,700
common shares at an average price of $1.00 per share under its normal
course issuer bid. These shares have been returned to treasury and
cancelled, to leave a balance of 80,509,628 shares outstanding.
ROCA MINES INC.
"Scott Broughton"
Scott E. Broughton, P.Eng. - President & CEO
For further information contact:
Investor Relations
Tel: 604-684-2900
Fax: 604-684-2902
Email: info@rocamines.com
Web: www.rocamines.com
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
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Copyright (c) 2008 ROCA MINES INC. (ROK) All rights reserved. For
more information visit our website at http://www.rocamines.com/ or send
mailto:info@rocamines.com
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