Rochester Resources Ltd.: President's Letter to Shareholders
Thu Jan 21, 10:05 AM
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VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 21, 2010) - Rochester Resources Ltd. (TSX VENTURE: RCT.V)(FRANKFURT:R5I) is pleased to provide an update from President and CEO Eduardo Luna.
After my first year as President and CEO of Rochester Resources Ltd., I am pleased to provide an update of the Company's accomplishments and progress made at our Mina Real Project in Mexico over the past year.
We are now beginning to achieve real success and have shown continuous improvements in all aspects of our operations over the last four months. I believe that our projects have the potential to develop into a world class mining asset.
We have spent the past year reorganizing our operations and re-prioritizing our efforts. Some of the achievements made over this past year have been:
- Operations are cash flow positive
- Over the past four months, silver and gold production measured as gold equivalent ounces has steadily increased while production cost per equivalent ounce of gold has been decreasing
- Silver recovery has increased from 49% to 70% on average; once product concentration in the Falcon system is further refined, recovery rates could reach over 80%
- We have assembled a first rate team of Mexican operating, technical and administrative staff.
- Over 8km of drift development has been completed at Tajos Cuates and Florida
- A new filtering system for mine tailings has been installed which allows us to fully meet our environmental obligations now and in the future
- The systematic underground development of Tajos Cuates will facilitate the definition of ore resources and allow longer term production planning
The Company recently announced the closing of a private placement of over $12.4 million which will be used to fund a systematic exploration and development program on the Company's two projects, Mina Real and Santa Fe.
We have two main objectives moving forward: firstly, to increase production to a level that will generate significant positive cash flow to allow Rochester to develop the entire district; and, secondly, but most importantly, to implement an aggressive exploration program consisting of both diamond drilling and drift development with the goal of generating significant NI 43-101 compliant resources from a number of sources.
Some of the key highlights of our 2010 work program will consist of:
Diamond drilling program:
- Planned 22000 metres of diamond drilling to be completed in 2010
- Approximately 5 km of access roads will be built to reach drill sites
- Approximately 15,000 samples will be taken and analyzed
Proposed Drifting Program:
- Florida: 2,530 m
- Tajos Cuates: 2,590 m
- Macedo: 1,550 m
- Mine infrastructure: 2,530 m
Regional geological studies:
- Systematic collection of more than 3,000 samples for geochemical analysis
- Continued structural studies by Dr. Tony Starling
- Regional geologic evaluation using satellite imaging technology
- A thorough program of Fluid Inclusions determinations to identify vectors within the vein structures towards most favourable areas for precious metal deposition
- Evaluation of geophysical techniques which may be applicable to assist in the regional exploration
Our first priority for exploration and development will be at Florida NW, where we have developed a crosscut to cut the continuity of the rich zones of the Florida I, II and III veins, NW from the intrusive. Florida NW has grades similar to those encountered in the Florida SE system. Expectations are that the potential average grade may be around 9 g/t gold and 250 g/t silver. We feel that this area will expose a number of faces and will enable us to increase our production accordingly.
Second, we will continue mining and development work at Tajos Cuates and Macedo, and will begin processing some of the higher grade mineralized material when additional production capacity is available. The Company continues to add to available mineralized material at Tajos Cuates with average grades of 2.5 Au g/t and 350 Ag g/t over widths of 1.2 to 3.5 m. The mill expansion, to 300 tonnes per day production capacity, is complete other than the acquisition and installation of liners for the new ball mill and the building of some piping and launders. It is anticipated that production at 300 tpd will be reached by mid 2010.
Third, a regional exploration drill program will begin at Florida, Macedo and Santa Fe with the goal of defining significant NI 43-101 compliant resources by late 2010 or early 2011.
Lastly, an exploration program to follow up on apparent similarities between the Mina Real District and the Bolanos District as suggested by Dr. Tony Starling will be carried out. One aspect of this is to examine the possibility that some of the Mina Real veins may change in character and grade with depth.
Now with the financial resources in place to execute our plans, the Company feels confident we have defined the proper short and medium term programs to execute effectively. The district has enough potential to turn potential resources into proven reserves and to take the operation to production rates significantly higher than current levels.
We expect to be in a position to finish the first stage of exploration and development, ramping up the plant to produce the targeted 26,000 gold equivalent ounces per year. The second stage expansion will be to continue increasing the production level up to 700 tonnes a day, with an annual target production of 56,000 to 60,000 gold equivalent ounces. This will be dependent on the outcome of the exploration. A full detailed exploration and development program outline will follow shortly.
The Company remains confident in the Mina Real Project and the potential of significant additional discoveries. This remains the goal of the Company, to fully develop the project area through a well funded, systematic exploration and development programs.
I would like to take this opportunity to thank all employees of Rochester Resources, for their hard work and dedicated service; in particular Dr. Alfredo Parra who is stepping down as COO and as a Director of the Company to pursue other opportunities; to our shareholders for their loyal support and patience; and to our directors and officers who have maintained strong belief and focus in what we are trying to accomplish. We look forward to a prosperous 2010 as we continue to explore and develop our projects and implement strategies to increase shareholder value.
Eduardo Luna, President and CEO
About Rochester Resources Ltd.
Rochester represents a pure-play in the exploration and development of high-grade gold and silver properties located in Nayarit, Mexico. The Company is a niche player in Mexico which has assembled an attractive portfolio of properties in the Sierra Madre Occidental Range. This is the largest epithermal precious metal region in the world, hosting the majority of Mexico's large tonnage gold and silver deposits. Current production helps generate cash flow and helps fund our ongoing exploration and development. Rochester is well positioned to advance its Projects and can very quickly become a significant player in Mexico. Rochester has a strong senior management team based in Mexico, a workforce in place to advance its projects through to mine development, and strong financial backing to implement and advance our work programs.
Forward Looking Statements
This Company Press Release contains certain "forward-looking" statements and information relating to the Company that are based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitations, competitive factors, general economic conditions, customer relations, relationships with vendors and strategic partners, the interest rate environment, governmental regulation and supervision, seasonality, technological change, changes in industry practices, and one-time events. In addition, the Company has not conducted an independent feasibility study on the Mina Real project which may increase the risk that the planned operations are not economically viable. Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein.
Neither 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.
Rochester Resources Ltd.