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| | Wed Jul 29, 2009
ROCA Reports Third Quarter Results
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| | Vancouver, British Columbia: Roca Mines Inc. (ROK: TSX-V) ("Roca" or "the Company") has released its unaudited financial results for the three and nine month periods ended May 31, 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.
Highlights:
- Production revenues of $5.6 million and $17.2 million for the three and nine month periods ended May 31, 2009;
- Positive cash flows from operations of $1.0 million ($0.01/share) and $6.4 million ($0.075/share) for the three and nine month periods ended May 31, 2009 respectively;
- Cash costs of Cdn$6.36 (approx. US$5.26) and Cdn$7.04 (approx. US$5.87) per lb of molybdenum produced during the three and nine months ended May 31, 2009;
- Q1 through Q3 average molybdenum recoveries of approximately 95%; and
- Q1, Q2 and Q3 molybdenum in concentrate production of 679,697 lbs, 451,130 lbs and 666,301 lbs respectively.
Production Results and Concentrate Sales
The Company announced that it had achieved its commercial production targets on April 12, 2008 at its MAX molybdenum mine located in BC, Canada. The mine became BC's first new metal mine in a decade and the newest primary molybdenum mine in Canada.
Revenues of $17.2 million for the nine months ended May 31, 2009 result from concentrate sales during September 2008 through May 2009 and reflect final and/or estimated final pricing at May 31, 2009. The Company sells its concentrates to a UK-based buyer with sales revenues based on average prevailing molybdenum oxide prices subsequent to delivery. The Company has no hedging program nor has it sold forward any of its production.
The table below is a summary of the operating statistics for the three months ended May 31, 2009:
MAX Mine Statistics |
Q3-2009 |
|
MAR '09 |
APR '09 |
MAY '09 |
TOTAL |
Molybdenum Produced (lbs) 1 |
254,190 |
137,480 |
274,631 |
666,301 |
Average Head Grade (% Mo) |
0.84 |
0.50 |
0.86 |
|
Molybdenum Recovery (%) |
95.8 |
94.9 |
95.4 |
Mill Availability (%) |
99.9 |
99.7 |
94.8 |
Average Daily Throughput (tpd) |
473 |
433 |
486 |
Note 1: molybdenum contained in concentrate
During the third quarter ended May 31, 2009 molybdenum oxide prices averaged US$9.10/lb and production was curtailed to operate at breakeven levels while milling lower grade ore. Despite low throughput and grade in April (when oxide prices hit a five year low) cash costs during the third quarter decreased over the prior quarter, averaging Cdn$6.36/lb (US$5.26) versus Cdn$9.35 per lb (US$7.57) of molybdenum during the second quarter ended February 28, 2009. For the nine months ended May 31, 2009 cash costs averaged Cdn$7.04 (US$5.87) per lb of molybdenum sold.
Financial Results
The information in this news release and the selected financial information should be read in conjunction with the unaudited financial statements, and management discussion and analysis, for the three and nine months ended May 31, 2009, which will be available at Roca's website at www.rocamines.com.
During the nine months ended May 31, 2009, the Company recorded production revenues of $17,162,010 and a net loss of $21,460,930, the most significant charge being depletion, amortization and accretion costs of $35,852,385 (the Company has been amortizing capital start-up costs of approximately $55 million over the Phase I mine plan of only 183,974 tonnes). Cash flows from operations totalling $6,363,087 and a $2.5 million equity issuance completed during the second quarter were invested in equipment upgrades, mine development and underground maintenance, ultimately allowing the Company to return to positive cash-flow. The Company had only recently declared commercial production in April of 2008 recording revenues of $6,275,767 and a net loss of $336,993 during the nine months ended May 31, 2008. General and administrative expenses increased by approximately 33% over 2008, reflecting the Company's transition from development-company to producer.
During the three months ended May 31, 2009, the Company recorded production revenues of $5,584,156 and a net loss of $9,610,888 versus revenues of $6,275,767 and earnings of $1,516,846 for the three months ended May 31, 2008. Molybdenum oxide prices averaged US$9.10/lb in the third quarter of 2009 versus over US$32/lb in the third quarter of 2008. Despite molybdenum prices at five-year lows, the Company was able to maintain positive operating cash flow of $1,013,263 (2008- $2,232,709).
While the Company had positive operating cash flow for the third quarter, prices for molybdenite concentrates were significantly lower than past periods. At May 31, 2009, those circumstances lent significant doubt as to the ability of the Company to continue as a going concern. Cash and cash equivalents at May 31, 2009 amounted to $77,057. Subsequently, molybdenum oxide prices have increased to approximately US$15/lb from a low of US$7.83 in April. This price increase will improve cash operating margins and should have a significant and positive impact on the Company's financial position in the fourth quarter.
Summary Consolidated Statements of Operations and Loss:
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Nine months ended May 31, 2009 |
Three months ended
May, 31, 2009 |
Revenues |
17,162,010 |
5,584,156 |
Operating expenses |
(12,709,891) |
(4,226,278) |
Recovery (write-down)of inventories |
(1,017,425) |
685,363 |
Depletion, amortization, accretion |
(35,852,385) |
(16,432,596) |
Mining Loss |
(32,417,691) |
(14,389,355) |
G&A, Stock-based comp., write-offs, credits |
(1,335,037) |
(397,819) |
Loss from Operations |
(33,752,728) |
(14,787,174) |
Other expenses and losses (income and gains) |
(671,840) |
54,467 |
Losses before taxes |
(33,080,888) |
(14,841,641) |
Income and mining tax recovery |
11,619,958 |
5,230,753 |
Net Loss for the Period |
(21,460,930) |
(9,610,888) |
Loss per Share -- Basic and Diluted |
(0.25) |
(0.11) |
Scott E. Broughton, P.Eng, is the qualified person responsible for the technical content of this news release under National Instrument 43-101.
ROCA MINES INC.
"David Skerlec"
David J. Skerlec - Chief Financial Officer
For further information contact:
Investor Relations
Tel: 604-684-2900
Fax: 604-684-2902
Email: [email protected]
Web: www.rocamines.com
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. |
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