Rose Petroleum plc

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VANE ponders uranium spinoff

Growth Company Investor

Article Date: 19th June 2006

Latin American-focused VANE Minerals is contemplating floating its US uranium prospects, with a claimed potential resource exceeding seven million lbs.

AIM-quoted VANE, floated two years ago on the back of Mexican gold and silver projects from US group Freeport McMoRan's database, hopes to produce 2,500 oz of gold and 400,000 oz of silver this year from its Diablito mine in Mexico's Nayarit state. The expected £110,000-a-month income from this will be used to fund the Leeds-headquartered company's exploration projects, including Guadalcazar in Mexico, where a low-grade, 'sub marginal' deposit of four million oz has already been identified.

In addition VANE, which lost £928,000 last year, will in September start investigating 22 gold anomalies in Paraguay. This is a comparatively under-researched mineral province which VANE's veteran American mining boss Steven van Nort reckons is part of the 'Brazilian gold shield'.

More potentially exciting are the company's uranium prospects in Arizona and Utah. VANE has successfully claimed 19 targets on northern Arizona's 'Breccia Pipe' district, where four pipes have so far been confirmed with one showing a 1.78 per cent grade of uranium oxide in limited drilling.

Directors suggest each pipe could hold between one and six million lbs of uranium, whose price now stands near a historically high $45 a lb, boosted by the potential revival of nuclear power projects. van Nort and his colleagues, disappointed by a share price which has fallen from 23.75p last year to 10.25p today, say they are thinking of putting the uranium projects into a separate company and floating it off.

This possibility adds spice to the shares' speculative recovery prospects.

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Robert Tyerman