VANCOUVER, Nov. 25 /PRNewswire-FirstCall/ -- 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 Tonnes Grade Tonnes Grade Tonnes Grade % MoS(2) % MoS(2) % MoS(2) % MoS(2) ------------------------------------------------------------------------- 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 ------------------------------------------------------------------------- Note: In addition to the above, inferred resources total 8,900,000 tonnes averaging 0.16% MoS(2) at the 0.10 cutoff, including 460,000 tonnes averaging 0.33% at the 0.20 cutoff. Original Assays were reported in MoS (2). To convert grade Mo = 0.59 MoS(2)
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;
1. 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. 2. 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 --------------------------------------------------------------- 3. 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 The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Roca Mines Inc.
CONTACT: Investor Relations, Tel: (604) 684-2900, Fax: (604) 684-2902,
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