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Roca Mines - ROK on venture exchange



February 03, 2007 – Comments (8)

Roca -- British Columbia's next new mine.

Roca began operations about 5 years ago as a junior explorer, and is posed to open the MAX Molybdenum mine later this spring.

An agreement to acquire the Max Molybdenum Project was made in 2004. The project previously had work expenditures of $14.9 million spent by Newmont Mines and Esso Minerals Canada from 1975 to 1982. Poor molybdenum prices led to its "demise."

In 2004 over 1100 meters of drill results confirmed high grade mineralization, -- grades that are an order of magnitude greater than many operating mines -- and the fast track was born. By August 2004 they had acquired 100% interest in crown grants, mining leases, mineral claims contiguous to the original MAX claims and original data detailing previous exploration. By September the mineral resource had been brought up to 43-101 compliant.

In 2005 the company decided to go for a small, fast-tracked mine. In November 2005, working with the mining friendly government of British Columbia, a permit was granted which allowed for the development and operation of an underground mine and onsite concentrator.

By August 2006 the acquisition of Max Molybdenum was complete. In order to fast track production, the company has made use of existing production-sized underground access to the deposit. They have completed the purchase of 1000 tone per day mill and concentrator.

The fast track has not been without a few bumps. Revelstoke had record high snow fall this year, the annual average, 21 feet, had fallen by December leading to construction problems and some delays, making the project fall about 4 months behind schedule. But, the plan was also changed from 500 tonnes per day to 1000 tonnes per day or doubling the planned production.

The numbers work out to about 3 million pounds of molybdenum production planned for 2007, and that can be completed in roughly 150 days, leaving opportunity to potentially increase production. At today's prices, 3 million pounds of molybdenum fetches about $75 million.

Additionally, Roca has other properties for potential development, the Foremore VMS-Gold Project, which has an exploration program for 2007 to investigate the Northern Zone which shows precious and base metal grades within the edges of the system drilled so far. The SeaGold Property is an early stage exploration project covering 40 square kilometers 35 km north of Barrick Gold's Eskay Creek gold/silver mine.

Roca's market cap is a mere $82 million.

Roca is a value-priced cash cow ready to roll.

8 Comments – Post Your Own

#1) On February 06, 2007 at 1:45 AM, Greshm (85.65) wrote:

Hey D, Greshm here:

Saw your feedback on my latest 3: SSRI, PAAS & PLM. I truly value your criticism and sharp pencil applied to those. Glad it appears to have *ID'd* PAAS for you. We'll see what happens to our *short* on that one. In the near-term, I'm betting on a crowd shift to take some profits there and in most of the PM stocks and miners. Most likely won't be a long-lived correction though (even though it SHOULD be when you look at some of these stocks). So getting out with a 5 point accurate pick gain on CAPS might be a squeaker.

I'm a *macro guy* so am curious why you have become a bit more bearish on Cu? What's your thinking there? I don't necessarily have a frim position on it right now. Still thinking long and hard about it. Almost every day right now (this feels like *one of those times*). Copper didn't necessarily correct with some of the commodities--esp. PM's--last Spring and Summer as might have been expected...that is, until these past few months when others had bottomed and THEN Cu fell out of bed.

Conventional thinking is, I think, that Cu is a highly cyclical raw material. So, if some global economic weakness is coming, then Cu would possibly signal that. And I have speculated of late (in some CAPS commentary etc.) that I think the surprise of 2007 might be the US Central Bank raising rates another time or two. Of course, Nickel and Zinc sure aren't correcting. I'll go look, I think I've just read some data on Cu stockpiles @ the LME and in China that may shed some light. Maybe...

I know next-to-squat about Moly.

I do know the fundamentals for the Catalysts, i.e., Platinum and Palladium, look good. You might have noticed two short-term picks in that arena I added recently: SWC & PAL. One going each direction since...

I had been following ROK after catching-up with you via your Stockhouse blogs & commentary these past weeks. A VERY NICE looking chart this one shows for the last year. And a nice entry-point right about now which this one doesn't seem to often offer (hope there isn't something else lurking under the surface that we'll find out about only later!). I look at a lot of charts and the trend in ROK is very interestingly similar to a few others I watch. Makes me wonder what a *dwot-type-analysis* would reveal about those others.

Got your email heads-up (thanks for including me) about your shift from NTO/NNO to ROK so I'll try to reply there with follow-ups about:

Cu LME and China stockpiles;

Other PM & metals stocks looking curiously similar to ROK's chart;

And another misc. tid-bit or two.

Thanks for all your work. Oh, oh. Two other things I need to follow-up with as well: A *macro-boy's* discussion of the Goldman-Sachs indicator and beginning a discussion on writing Covered Calls. I have a feeling you might find the tactic helpful. I've been using it lately and so far, has been a real benefit to my portfolio. Very mathematical and probabilistic and I gotta think you'll be *all over it* for that. Esp. considering your womanly shopping-like habits in your early foray into stocks! Locking-in profits and annualizing etc. Look for it via email, Greshm.

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#2) On February 06, 2007 at 10:04 AM, dwot (28.81) wrote:

The thing that I saw on copper that got me concerned was everything I was reading was saying the market can increase at 3% and it actually increased at 6% last year. When I look around, I see new projects planned everywhere, so I'm believing that the market is responding faster than people expect to fill the demand. I'm just watching copper until I think it has settled, and I don't think it has settled at all.

I do not see a weak market for demand, but rather one that is increasing supply faster.

I think the fundamentals on Moly are better than copper. Moly is growing for the same types of reasons copper is growing, but then it is increasing because of pipeline failures, and had they added more moly, that probably would not have happened. Indeed, peak oil and environmental concerns are driving new applications for moly, so it is the new applications and greater recognition of the anti-corrosive properties that I think makes moly's fundamentals better.

I've been talking to IR at Roca and he's been great answering my questions. Right now is an excellent entry for Roca. From a risk management point of view, I've done a no-no with Roca, I've got about 25% of my portfolio in it right now, but I really like the fundamentals.

I've got ELR as my platinum, over 80 million ounces in resource, but good resource, all about 5g/t or better levels and high Rhodium and Platinum levels. I've seen some with total crap yields like 1-2 g/t and the same resource, but mostly palladium, like Anooraq.

Here's some other picks to check out, ADI on venture. I notice that they are working on marketing their stock right now, I see them registered at an investment forum later this month. These guys have started two billion dollar companies, one was Bema.

AGQ on venture, their goal this year is to identify 100 million oz resource of silver in Mexico and from looking at their properties, I think that is very doable, and I like David Cohen, NNO CEO, and chairman at ELR and he's on the board on this one.

I have some OLE, very happy with that pick right now, what, up 50% in a couple weeks. I think the one property could eventually be shown to have 10 million oz of gold, at least I think that's the speculation that is driving this one.

BLV has some big nickel numbers.

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#3) On February 07, 2007 at 12:18 AM, Greshm (85.65) wrote:

Well, if *Roca's market cap is a mere $82 million* some of these are flying below radar! We're talking SMALL caps here now aren't we...

That OLE chart: Maybe I'll be wrong but I think I'd be taking some serious profits on it. Obviously some news...something or someone has spiked that one and probabilities say *take the money and run!* But I've been *wronger* before. I can't find the news if it exists but I didn't search too hard [finding data and quotes on it isn't exactly easy is it?]. Could just as likely be a short-squeeze or manipulation as anything else so I'd be committing an even bigger *no-no* if I chased that one here.

BLV has had a steep run lately as well so I'll be putting it on the simmer burner for further research etc. Nickel is something else these days, huh?

The others, with the exception of ROK [which I picked-up some of today on the recent weakness and had been reading about since I read your earlier posts of the last month or earlier--thank you very much], I'll need to dive-into further and let those near-term charts settle-down a bit.

Thanks as always D, look for that email of promised items from me shortly. Greshm

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#4) On February 07, 2007 at 10:03 AM, dwot (28.81) wrote:

Thank you my friend.

It is actually my husband's account that I had in the OLE and I reduced it by 2/3rds today. What's left is free...

Part of the reason OLE took off was because of institutional buying I believe. But, it may also be nuts to sell because speculation is that the one property by the time they finish exploring it could have in the range of 10 million ounces of gold. Some go on and on about what could have been if their stock keeps going up and they got out. I don't, I see it that there is always another good pick.

Now to figure out what to buy. I got him into Roca higher than it is today and I don't think he'll be very happy if I get him more.

Check out BLV more, I do think that one will take off this year. I think they've got some very nice nickel properties, with big nickel numbers that they will be drilling.

Con-man or truth, you decide, but I was talking with the gentleman at their booth and he was telling me the property was littered with old pick and axe mining sites from the 1800s. They basically had to stop when they got deep enough that they were below the water table, which isn't that deep, and in the 1800s you had to have high nickel. They've got the funds for drilling, the old miners have defined the targets.

I have to say, I'm very pleased with my picks this past month, ADI on venture, AGQ on venture, CRD on venture, ELR on Toronto I've had since the fall, MLM on venture, WAR on venture. Not sure on VIT or TAM, but I think TAM has very good potential as well. I may gotten in at a bad place in the parabola on VIT. I also got some OXIHF - OTC, PBT venture, and BML. I think BML is holding some good properties, but after thinking about it, I'm not so sure they have the management to make those properties perform.

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#5) On February 07, 2007 at 12:46 PM, Greshm (85.65) wrote:

Well, if that OLE goes-up another $1 or something...I'm not sure you'll be calling me your *friend* still! It has been taking about a 10% correction today. I'm like you, I would've taken that 2/3 off the table now and let the rest RIDE. If the darned stock is @ $5 a year from now, there will be the occasional thought of *what if I had only...* but I prefer THAT regret over the *other* and dreaded one: Will this stock EVER pop again so I can get-out even? [as you sit on a very sudden 30% or 40% loser]. Of course, if you're cost basis was low enough, that chart does look pretty strong down between 1.75 and 2. I'll be keeping my eye on it and thank you for pointing-it-out. I haven't watched enough of these ultra-small caps on the VEN to know how to tell what kinda volume is driving them on a big move. I'll be trying to dicern that going forward. OLE did have those two days this week of 250K and 500K in volume. That WOULD seem to indicate institutional activity. And today could then be a whole slew of folks taking some profits [somewhat like you] who've been sitting on it for months or longer. We'll find-out won't we?

Yes, you've had a nice month or so. Congratulations. That friend of yours was spot-on about thinking you might enjoy the market, huh? How was it that you ended-up *drilling down* on mining stocks? I mean, I know you watch other stuff but you really seem to have been captivated by the mining sector. Was that a surprise to you? Would you have predicted that a year ago?

More later, enjoy the action, Greshm.

PS: Tell your husband, *shhh, quiet dear, trust me!*

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#6) On February 07, 2007 at 8:52 PM, dwot (28.81) wrote:

If the stock is $5 a year from now I couldn't care a less. I sold at $3.95. $5 would be up 27%. I'm betting I can find 27% somewhere else. Now if it was at $10... Right now with selling, the cost basis on the rest is about 10 cents.

I may have ended up in mining stocks because of looking around stockhouse, which led me to evaluate one stock, and then another, and so on. But, I'm not sure if it was also where I was finding value. I find it interesting that I started mostly in the Nasdaq last summer, took a ride up and around Sept-Oct I started switching to mining.

Venture was at a a low October 4th, about when I started moving over there, and it is up 29% since that low.

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#7) On February 07, 2007 at 8:57 PM, Greshm (85.65) wrote:

Good observation about that Venture timing and October. Today most large cap PM stocks took a little profits but watching many of your Venture small caps...they stayed strong. That says something.

Just emailed you.


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#8) On February 17, 2007 at 11:58 AM, dwot (28.81) wrote:

Does <b>bold</b> work?

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