Roca Mines Inc. (CVE:ROK), (PINK:ROCAF) suffered a very heavy blow on the stock markets. This was triggered by the next in a row disappointing piece of news related to the company’s primary project – the MAX Molybdenum mine situated in British Columbia.
During Monday’s session, ROK slumped to a never-seen-before low of $0.035, and closed at $0.040 loosing two-thirds from its value within a single day. Evidently, it came as a result of the strong investors’ reaction to yesterday’s company announcement. Roca was unhappy to inform about ceasing its mine program and mine production at the MAX mine.
Traders punished the company shares immediately and made Roca’s stock one of the biggest losers on the Canadian TSX Venture Echange (CVE). ROK was the top price percentage decliner on the CVE market with its 66.7% price-fall.
Monday’s session was remarkable with the large trading activity too. The negative move of the shares was confirmed by a 3.4M turnover. This surpasses 31 times the average daily volume of 110.5 thousand shares, and marks a record for the last 2.5 years.
It is not the first time Roca has been having troubles with its MAX property. The Mine had a sustained shut-down due to instability in September 2010. The production was resumed in the start of this August, only to be suspended again yesterday.
What probably gives some hope, is the company’s determination to arrange a “capital plan to resume production at higher throughput levels and lower unit costs”, as stated in Monday’s release.
Unfortunately, the company’s fundamentals do not provide investors with similar hope. The latest financials reveal:
- At the end of May, Roca had less than $1.2M in cash;
- The corporation recorded a net loss of almost $1M for the quarter ended May 31, 2011;
- No revenue was realized for the mentioned three-month period due the problems with the MAX mine. For reference, Roca had made earnings exceeding $6.27M during the relevant quarter in 2010.
As it seems, the company will have to secure perhaps additional funds in order to fulfill successfully the above-mentioned capital plan. Of course, the hope for a positive turn-around remains. Investors are awaiting the mine to restore its production process. In case this cannot be achieved, Roca could possibly try to acquire a more prospective mineral project which will not bring the corporation so many troubles.
