Re: News Release - Wednesday, November 25, 2009
Title: ROCA Targets Increased Production and
New Exploration at MAX
Vancouver, British Columbia: Roca Mines Inc. (ROK: TSX-V)
("Roca" or "the Company") announces that it intends to add
to the mine life and long-term value of the MAX Molybdenum Mine through
graduated expansion of the operation and systematic exploration to test newly
developed drill targets.
The Company continues to move toward its planned 1,000 tonnes per day (tpd)
production expansion to extend the mine life significantly. An exploration
program has been developed to test high-grade priority targets that were
recently identified close to existing mine development and for larger-scale
porphyry targets below MAX, evidence for which continues to be evaluated and
tested.
The Company remains highly leveraged to the price of molybdenum. Continuous
operations have been maintained at MAX such that the Company can readily
benefit from anticipated near-term improvement in price. Operating cash flows
have been used to improve infrastructure in the mine, mill and tailings
facilities, while the Company has remained debt-free. Cash costs of production
for the nine months ended May 31, 2009 were US$5.87 per pound of molybdenum. Financial
results for the year ended August 31, 2009 are being prepared and will be
reported on shortly.
1,000 tpd Expansion Update
The flexibility to expand the MAX operation has been a key objective of the
Company since the project was initially conceived and much of management's
early planning aimed to preserve the opportunity to build a sustainable,
long-life mine from the known resource. Management's plan to increase mine and
mill throughput to 1,000tpd will result in lower unit costs of production,
thereby making more of the known resource economic at current prices.
A resource estimate prepared in 2004 by T.N. Macauley, P.Eng., is summarized in
the following table;
MEASURED
|
INDICATED
|
MEASURED & INDICATED
|
Cutoff
% MoS2
|
Tonnes
|
Grade
% MoS2
|
Tonnes
|
Grade
% MoS2
|
Tonnes
|
Grade
% MoS2
|
0.10
0.20
0.50
1.00
|
27,870,000
9,340,000
1,010,000
260,000
|
0.21
0.35
1.01
1.95
|
15,070,000
2,010,000
370,000
20,000
|
0.18
0.41
0.77
1.87
|
42,940,000
11,350,000
1,380,000
280,000
|
0.20
0.36
0.94
1.95
|
Note: In
addition to the above, inferred resources total 8,900,000 tonnes averaging
0.16% MoS2 at the 0.10 cutoff, including 460,000 tonnes averaging
0.33% at the 0.20 cutoff. Original Assays were reported in MoS2. To
convert grade Mo = 0.59 MoS2
The underground mine is now in a position where scheduling for future
development waste rock can be managed and stored in existing underground
stopes; therefore, no new additions to the surface waste rock stockpile are required.
Also, expansion of the existing mill and concentrator can be achieved without
increasing the footprint of the plantsite area. These two key elements of the
expansion plan essentially allow for a doubling of the current production rate
without altering the footprint of the existing operation.
A permit amendment application seeks to add approximately 1.0ha to the
footprint of the existing tailings facility, involving only the downstream
portion of the tailings dams. There are no other requirements to add to the
physical size of the mine operations area. Furthermore, there are no
requirements to amend the mine's other operating permits. The expansion plan
has recently received notice from the BC Environmental Assessment Office
(BC-EAO) that the project application can proceed to review by the BC Ministry
of Energy, Mines and Petroleum Resources (BC-EMPR). A meeting of the West
Kootenay Mine Development Review Committee (WK-MDRC) will take place in early
December 2009 when the Company will present its detailed plans for the
expansion to a 1,000 tpd operation.
Production Review
Currently, the MAX mine continues to benefit from a grade control program that
aims to minimize mine dilution. Mapping and greater experience with the
controls on mineralization continue to reduce dilution within stoping areas. Several
operating efficiencies have been realized with the addition of 30 tonne trucks
to the production fleet, resulting in better equipment optimization and reduced
mining costs. Mill availability and mill recoveries have been consistently
excellent with minor production problems related to maintenance of the crusher
facility.
The Mine produces molybdenum contained in concentrates and has achieved the
following operating performance figures for the fourth quarter ended August 31,
2009;
MAX Molybdenum Mine
|
Recent Production Statistics
|
Month
|
JUN-09
|
JUL-09
|
AUG-09
|
Molybdenum Produced (lbs) (1)
|
195,445
|
207,339
|
174,443
|
Average Price for sales (US$/lb)
|
$12.28
|
$17.09
|
$14.12
|
Average Head Grade (% Mo)
|
0.67
|
0.64
|
0.57
|
Molybdenum Recovery (%)
|
96.2
|
96.4
|
96.5
|
Mill Availability (%)
|
99
|
98
|
89
|
Average Daily Throughput (tpd)
|
452
|
487
|
455
|
Notes: (1)
molybdenum in concentrate
Molybdenum production from September to date has been significantly less than
targeted, totaling approximately 345,000 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. This recent situation
highlights the current mine's dependency on a single producing stope and helps
to justify the development of multiple headings and multiple drawpoints
contemplated in the 1,000tpd plan.
MAX Exploration Advisory Board Meeting
On October 26th, 2009 Roca's Exploration Advisory Board, including; Dr. Nick
Carter, P.Eng., Mr. Don Davidson, P.Geo, Mr. Terry Macauley, P.Eng., and Mr.
John Baker, met at the MAX Mine with management and mine technical staff. The
purpose of the meeting was to review the following;
- Recent and historic drill data that has been
recently compiled in a 3-D model using Vulcan Software;
- New underground mapping and sampling; and,
- Data from recently completed University of
Alberta research focused on the MAX deposit.
The
Exploration Advisory Board made several observations and conclusions that
reflect the exploration potential of high-grade targets that occur close to
existing underground development and the potential of a larger-scale porphyry
deposit at depth. The two target types have different implications for the
future of the MAX mine.
The identification of new higher-grade zones will, if defined, add to the total
high-grade tonnes available to the mine in the near-term, effectively
increasing the mine life beyond the planned expansion life, whereas, the
identification of a larger porphyry system at depth could offer significant
opportunities for larger mine development beyond the scale of planned
operations.
MAX High-Grade Mine Exploration Potential
The Advisory board has made the following comments to Roca's Management after
their recent site visit;
- Within the larger footprint of the known MAX
deposit, there is a previously unrecognized preferred NE-SW structural
control to the high-grade mineralization. This orientation is sub-parallel
to much of the historic drilling at the site; resulting in actual mine
grades exceeding predicted block model grades and therefore indicating
potential for expanding the high-grade portion of the known resource.
- In addition to a predicted vertical extension of
the current HG Zone, two additional high-grade zones (Ethyl and Z) have
been interpreted using Vulcan 3-D to view historic wide-spaced drilling.
These new zones are located along the key structural trends and flank
current mining operations to the SW and NE respectively. All three zones
are open to depth and offer potential for significant new high-grade
resources accessible from the current underground mine plan. These
vertical zones may also provide indicators for the existence of a larger
porphyry deposit at depth. Selected examples of drill intercepts from
these zones include:
Zone
|
DDHole Number
|
Interval (m)
|
Mo (%) Assay
|
Ethel zone
|
78-05A
|
31.7
|
1.515
|
Z zone
|
81-42
|
18.0
|
0.694
|
|
includes
|
6.6
|
1.198
|
|
07-05
|
171.0
|
0.104
|
|
includes
|
24.5
|
0.389
|
|
And
|
40.5
|
0.126
|
|
includes
|
10.5
|
0.329
|
-
- The MAX deposit hydrothermal system is complex,
and is now believed to consist of at least five intrusive phases, with
multiple repetitive pulses of mineralization. Unidirectional
Solidification Texture (UST), an indicator of this rhythmic style of mineralization,
is well represented in underground exposures.
MAX Large-Scale Exploration Potential
The bulk of the mineralization at the HG, Ethel & Z zones comprises
vertically persistent, sheeted and stockwork silica zones associated with
quartz diorite to granodiorite dikes. These dikes invade Lardeau Group rocks
along key geological structures that are pre-, inter- and post-mineral. These
dikes may represent the apophyses of a larger porphyry deposit at depth. It is
postulated that the larger deposit may have been cut by a late and relatively
barren phase encountered in earlier drilling and located mainly to the North of
the deep porphyry targets.
Previous drilling in areas peripheral to and principally above the large-scale
target area has produced wide intersections of low grade Mo with scattered
higher-grade intercepts, suggestive of a halo around/above a previously
undetected mineralized porphyry target. This may occur in an arcuate shape around the south flank of
the strong potassic core and its potential is supported by the following
observations:
- A fragment (or xenolith) of well mineralized
intrusive within barren granodiorite was observed in drill hole MX07-03;
- Disseminated molybdenite has recently been
observed in intrusive rocks at the 805 mine level, currently below the Z
zone described previously; and,
- Strong quartz stockwork with molybdenite in
biotite hornfels has been observed adjacent to the Ethel zone (Drill Hole
MX07-01).
Exploration
Review Board Recommendations
The Review Board members have recommended an ongoing diamond drill program from
various underground stations, with a focus on three key elements:
- Development and exploration drilling below the
825m level with holes oriented normal to the 210 degree structural control
in order to expand and confirm the high grade resource potential in the
new zones;
- An initial exploration drilling program of 1500m
above and below the 960m adit level for both the Ethel and Z zones; this
will be staged as mine development proceeds downwards, however
opportunities exist now for drill stations to test the upper portions of
both zones; and,
- Deep drilling to explore the potential for a
larger porphyry deposit at depth with two initial holes totaling 1500m.
Outlook
It remains management's belief that molybdenum prices should remain
significantly greater than historic values given economic recovery in North
America and Europe will result in a renewed demand for the metal. Current
production and supplies are limited, resulting in the potential for dramatic
rise in prices in 2010 and beyond. Management is committed to its plans for
expansion, to maximize the mine's profitability during that period, and to
position the operation as a long-term, low-cost producer.
Scott Broughton, P.Eng. is the NI43-101 qualified person responsible for the
preparation of this news release.
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.
Copyright �
2009 ROCA MINES INC. (ROK) All rights reserved. For more information visit our
website at http://www.rocamines.com/ or send
email to info@rocamines.com ..