| ||Mon Oct 3, 2011|
ROCA - MAX Molybdenum Production to be Suspended
| ||Vancouver, British Columbia: Roca Mines Inc. (TSX-V: ROK) ("Roca" or "the Company") provides the following update for the MAX Molybdenum Mine.|
As described in previous news, head grades observed at the MAX Mine for July, August and September 2011 are effectively at the current breakeven level for the operation at 500 tpd throughput and current oxide prices in the US$14 range. These grades are below target based on previous sampling and resource estimates however, management now considers they represent the best available grades in the area under current development. Other zones within the deposit may provide better grades, but these lie outside the reach of the existing mining operation and current development.
While management remains enthusiastic about the molybdenum resource contained at the MAX Mine, the operation is not sustainable under current economic conditions and available grades. As a result, the mine development program will immediately cease and mine production will be suspended after the remaining 725L stope material has been processed through October 2011.
The MAX Mine was initially conceived as a small high-grade mine that would expand production over time and from cash flow, ultimately lowering unit costs. While a significant amount of work and investment has been completed towards the permitted Phase II, 1,000 tpd operation, these throughput rates have yet to be achieved.
Roca's management and consultants continue to evaluate various project alternatives towards reaching the Phase II expansion targets of the operation. The evaluation includes updating capital cost estimates for additional mining equipment, installation of a backfill system, additional underground development and completing expansion of the existing mill complex. A capital plan to resume production at higher throughput levels and lower unit costs will be completed shortly. Management believes this could allow for a sustainable operation at current grades and molybdenum oxide prices, while also preserving the opportunity to benefit from any increase in molybdenum prices in the future.
Scott Broughton, P.Eng. is the 43-101 qualified person responsible for the preparation of this news release.
ROCA MINES INC.
Scott E. Broughton - President and CEO
For further information contact:
Email: [email protected]
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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