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| | Tue Dec 8, 2009
ROCA Reports Annual Results
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| | Vancouver, British Columbia: Roca Mines Inc. (ROK: TSX-V) ("Roca" or "the Company") has released its financial results for the annual period ended August 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.
Overview and highlights:- Production revenues of $26 million for the year ended August 31, 2009 on sales of 2,366,321 lbs of molybdenum;
- Operating cash flows of $8.7 million ($0.10/share) for the year ended August 31, 2009;
- Q4 molybdenum prices significantly boosted the company's treasury since Q3 end;
- Cash costs of approximately Cdn$7.30 (US$6.65) for the year;
- Average molybdenum recoveries of approximately 95%; and
- Molybdenum in concentrate production of 2,374,355 lbs.
MAX Molybdenum Mine - Production Results and Concentrate Sales
Revenues of $26 million for the year ended August 31, 2009 result from shipments during fiscal 2009 and reflect final and/or estimated final pricing at August 31, 2009. The Company sells its concentrates to a UK-based buyer with sales revenues based on average prevailing molybdenum oxide prices subsequent to delivery.
The table below is a summary of the average operating statistics by quarter for the fiscal year ended August 31, 2009:
MAX Mine Statistics |
Fiscal Year Ended August 31, 2009 |
|
Q1 |
Q2 |
Q3 |
Q4 |
Molybdenum Produced (lbs) 1 |
679,697 |
451,130 |
666,301 |
577,227 |
Average Head Grade (% Mo) |
1.0 |
0.7 |
0.7 |
0.6 |
Molybdenum Recovery (%) |
95.6 |
95.1 |
95.4 |
96.4 |
Mill Availability (%) |
97.0 |
97.7 |
98.1 |
95.3 |
Average Daily Throughput (tpd) |
372 |
425 |
464 |
465 |
Cash costs per lb molybdenum ($Cdn) |
7.07 |
9.23 |
6.02 |
7.67 |
Notes: (1) molybdenum contained in concentrate
Cash costs averaged $7.07 per lb (US$5.70) of molybdenum sold during the first quarter ended November 30, 2008. A rockfall occurred during the second quarter which impacted the immediate availability of production ore from December 12, 2008 to January 8, 2009. Cash costs of production during the second quarter ended February 28, 2009 were higher than the first quarter as result of substantially lower operating efficiencies given the shutdown. Cash costs averaged $9.23 per lb (US$7.30) of molybdenum sold during the second quarter ended February 28, 2009.
During the third quarter ended May 31, 2009 molybdenum oxide prices averaged US$9.10/lb and production was curtailed to operate at breakeven. Despite low throughput in April (when oxide prices hit a five year low of US$7.83/lb) cash costs during the third quarter decreased over the prior quarter, averaging $6.02/lb (US$5.50). During the fourth quarter ended August 31, 2009 cash costs increased over the prior quarter due to lower head grades delivered to the mill, averaging $7.67/lb (US$7.00/lb). For the year ended August 31, 2009 cash costs per lb averaged $7.29 (US$6.65) 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 audited consolidated financial statements, and management discussion and analysis, for the year ended August 31, 2009, which will be available at Roca's website at www.rocamines.com.
During the three months ended August 31, 2009, the Company recorded revenues of $8,797,479 and net income of $3,065,117 compared to $12,509,316 in revenues and a net loss of $2,058,422 in the fourth quarter of the prior fiscal year. Cash flows from operations totaled $2,309,416 during the fourth quarter ended August 31, 2009 versus cash flow from operations of $6,067,810 during the fourth quarter ended August 31, 2008 reflecting much higher prices for molybdenum concentrates in the prior year. The Company recorded net income versus a loss in the prior year largely because of substantially lower depletion in the fourth quarter of the current fiscal year.
For the year ended August 31, 2009, the Company recorded production revenues of $25,959,489 and a net loss of $18,448,087 the most significant charge being depletion, amortization and accretion costs of $36,765,811. Until June 1, 2009 the Company was depleting capital start-up costs of approximately $55 million over the Phase I mine plan. As of June 1, 2009, upon a decision to advance the Company's Phase II mine plan, all capital costs for development and equipment available for use are now being amortized over the estimated Phase II mine life on a unit of production basis. Depletion costs going forward will be materially lower than past quarterly and annual periods.
Cash flows from operations of $8,672,503 and net proceeds from financing activities of $1,052,471 were invested in equipment upgrades, mine development and underground maintenance, ultimately allowing the Company to return to positive cash-flow in the past three quarters of the year. The Company had reached commercial production in April of 2008 recording pre-commercial sales of $10,326,471, revenues of $18,785,083 and a net loss of $2,493,151 during the year ended August 31, 2008. General and administrative expenses increased by approximately 26% over 2008, reflecting the Company's transition from development-company to producer.
Summary Consolidated Statements of Operations and Loss
|
Year ended
August 31, 2009 |
Year ended
August 31, 2008 |
Total Revenues |
25,959,489 |
18,785,083 |
Cost of sales |
(17,348,348) |
(7,872,063) |
Depletion, amortization, accretion |
(36,765,811) |
(12,472,155) |
Mining Loss |
(28,154,670) |
(1,559,135) |
G&A, Stock-based comp., write-offs |
(1,858,680) |
(3,800,186) |
Loss from Operations |
(30,013,350) |
(5,359,321) |
Foreign Exchange gains and other income |
706,986 |
74,161 |
Income and mining tax recovery provision |
10,858,277 |
2,792,009 |
Net Loss for the Year |
(18,448,087) |
(2,493,151) |
Loss per Share -- Basic and Diluted |
(0.21) |
(0.03) |
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"
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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| | You can view the Previous News Releases item: Wed Nov 25, 2009, ROCA Targets Increased Production and New Exploration at MAX
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