The MAX Molybdenum Project - "a Company-builder"

Fast-tracked high-grade mine...large-scale deposit...outstanding bluesky.
In 2003, with molybdenum prices on the rise, Roca began a series of negotiations which lead to the acquisition and consolidation of a 100% interest in a molybdenite deposit known as the Trout Lake Deposit, located 60 kilometres southeast of Revelstoke, British Columbia. Now renamed, the MAX Molybdenum Deposit ("MAX") is distinguished amongst others by its significant high-grade resources within a much larger deposit (see current resources in the following table and by reading the MAX Molybdenum Project 43-101 Technical Report).



MAX Molybdenum 43-101 Compliant Resource Estimate

Cutoff Grade (% MoS2)	Measured		Indicated		Measured + Indicated
	Tonnes	Grade (% MoS2)	Tonnes	Grade (% MoS2)	Tonnes	Grade (% MoS2)
0.10	27,870,000	0.21	15,070,000	0.18	42,940,000	0.20
0.20	9,340,000	0.35	2,010,000	0.41	11,350,000	0.36
0.50	1,010,000	1.01	370,000	0.77	1,380,000	0.94
1.00	260,000	1.95	20,000	1.87	280,000	1.95

In addition to these estimates, 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.

MAX has been the subject of a significant exploration and engineering program conducted by Newmont Mines Ltd. and Esso Minerals Canada Ltd. in the late 1970's and early 1980's. Despite the extent and quality of the previous work, the project was never put in production by the joint venture.

Fast-track Mining Opportunity

As a result of previous operators' $15 million effort at MAX, the project boasts a large production-sized access adit and a comprehensive geological, engineering and environmental database. The high-grade zones and existing access at MAX provide an opportunity for fast-tracked production.

Roca retained Hatch Associates Ltd., to conduct independent engineering studies and preliminary economic assessments for a 500 tonne per day operation at the MAX Project (MAX Molybdenum Project Preliminary Assessment). These preliminary economic cost estimates and financial models were further refined by Roca and its consultants resulting in the filing of an application for a British Columbia "Small Mines Permit" in the name of Roca's wholly-owned operating subsidiary, FortyTwo Metals Inc.

In November 2005, FortyTwo Metals was granted a production permit from the British Columbia Ministry of Energy, Mines and Petroleum Resources. Initial production will focus on the rich, "HG Zone" within the centre of the "B-Zone" to produce a readily saleable premium specification concentrate.

Roca Mines Inc.'s wholly owned subsidiary, FortyTwo Metals Inc., purchased a 1,000-tonne-per-day mill and concentrator and related equipment for the MAX molybdenum project. The mill which was located approximately 380 highway kilometres (230 miles) south of the MAX site was dismantled and moved to the MAX site. The mill acquisition included buildings, crushing, grinding & flotation circuits along with complete engineering drawings. This will allow for rapid reconstruction at the MAX site.

The initial phase of mining is expected to produce approximately 1.5 million lbs of contained molybdenum from each production run of 72,000 tonnes. Within the first 6 months of production commencement, Roca intends to complete back-to-back production runs resulting in the production of approximately 3.0 million lbs of contained molybdenum. Annual operating cash costs (mine, mill and overhead) are estimated at US$5.00/lb. of molybdenum produced (approximately $100/tonne). Payback of start-up capital is approximately 4 months from mill startup. Roca plans to recover much of the 260,000 tonnes of 1.95% MoS₂ within the first year of production, and to make expansion decisions based on prevailing molybdenum prices during 2008 and beyond.

Expansion potential - Large-scale Mining

With total cash costs conservatively estimated at US$100/tonne, the high grade zones within the deposit (see MAX Display Section) provide compelling economics down to a price of $5 for contained molybdenum in oxide, a luxury most pure molybdenite porphyry deposits do not share. Many metals analysts see molybdenum prices staying well above the $10-$15 per pound range for many years to come. Roca is advancing further phases of mine development allowing for rapid expansion of the operation using internally generated cash-flow.


Exploration and Bluesky

The global measured and indicated resource, 42,940,000 tonnes grading 0.20% MoS₂ at a 0.10% MoS₂ cutoff contains in excess of $3 billion contained metal value (at $30/lb molybdenum, not including any inferred resources) and remains open at depth. Future exploration will focus on expanding this resource both at depth and in areas surrounding the main deposit. An advisory board of porphyry molybdenum experts has been formed to guide the Company with further exploration plans at MAX.

Several molybdenum deposit experts have pointed to the similarities between the MAX deposit and the URAD deposit (the uppermost deposit associated with the famous +700 million tonne Henderson deposit) owned and operated by Climax Molybdenum Company. Henderson has operated since 1976 as a primary molybdenum mine, producing over 37 million lbs. of molybdenum in 2006.

Climax started mining the relatively small (approx. 13.7 million tons of .35% MoS₂) URAD orebody while geologists theorized that the deposit was an offshoot of a larger and deeper deposit. After several years of exploration, a 1965 deep drillhole tagged what is now the Henderson deposit within Red Mountain. Forty years later, the Henderson mine is operating at over 30,000 Tpd, producing nearly 10% of the world's molybdenum, and is one of the largest underground mines in the world.

Could the 50 million tonne MAX deposit be an upper offshoot of something much bigger lurking under Trout Mountain?


Exploration scale comparison: MAX vs. Urad/Henderson


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