drbubb Posted April 15, 2011 Report Share Posted April 15, 2011 Roca Mines: Moly-mining and Gold exploration Max Mine & Foremore - Can they both be winners? ================================================ Roca has enjoyed some historical success when it started production on the Max Mine - but then suffered, when the mine had to be shut down Here's the Weekly chart for ROK.v / Roca Mines ... update (Note that the ROK.v price rose from $0.20 in mid-July 2005 to a high of $3.98 on Nov. 2, 2007) ROK.v : 12 months chart ... update ROK has : + A Molybdenum deposit in British Columbia with a small high grade core, surrounded by a larger lower grade deposit. With money raised in 2005-6, they put the deposit in production, and rode upwards a nice increase in Moly prices + Certain gold deposits (Foremore and 50% of Seagold) in British Columbia, that management have been contemplating to spinoff into a separate quoted company. After a long period of low prices, Moly prices shot up and became a big investor favorite in 2004-7. For example, a specialised fund was even set up by Sprott asset management to invest in Molybdenum-related companies. Roca was one of the very few companies moving into production, so it was a big beneficiary of the Moly mania. There was an initial peak in Moly prices at $47 in 2005, which had helped to trigger the Mania. Prices began a second rally in 2006-7, along with many other commodities. The second wave of price appreciation was reaching is end as ROK was going into full commercial production. By the time the company announced commercial production in April 2008, the Moly price had already made a second lower peak. Like many manias in the mining market, this one faded when the price of Mb began sliding. In fact Moly Oxide prices rose to a peak of $35 in 2007, and stayed in a narrow range of $32 to $35 through the first quarter of 2008. Copper peaked in June 2009, and Oil and most other commodities peaked a few weeks later. The financial crisis destroyed demand, and brought a rapid price slide in all commodities. My the end of 2008, Moly prices had fallen all the way back to under $10 - which was a level where Roca would struggle to breakeven. Roca achieved about 80% of its target production in 2008, and produced just over 1 million pounds of the metal, and revenues close to $19 million. Cash flow for the year was reported at $7.x million, but no profits were reported. The loss for the year 2008 was $xxx, or 3 cents a share. : : Updated chart#1 : #2 : thread Here's Thomson Creek Molybdenum (TC) ... update : 6mos / TC generally tracks the Moly price (TC has outperformed ROK.v by maintaining consistent production, and profits / TC MKtCap $1.98 Bn) Since the beginning of 2009, Moly prices have begun to make a jagged recovery. They have recently pushed back up over $16, and may be building a base now for a possible breakout over $20. As the chart at the top of the page shows, Roca's share price has been on a roller coaster ride since 2005. First, there was a period of remarkable prices rises, as Roca rode the Moly Mania for a 20-fold price increase from $0.20 to $3.98, peaking in Nov. 2007 - coinciding more-or-less with the $35 peak in Moly prices. But that big rally has been followed by a round-trip back to near $0.20, thanks to the big slide in Moly prices. The collapse in Moly prices brought a dive in all Moly related stocks. But Roca has failed to benefit from the subsequent recovery in Molybdenum Oxide prices. In theory, Roca has a cash cost of about $6 per pound, but it has been plagued with production problems. Press reports over the last three years mention: xxx, xxx, and xxx. And the latest situation is that Roca is now ready to restart production, and it may have enough cash on hand to do so, but there is very little margin for error. Link to comment Share on other sites More sharing options...
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