Rose Petroleum plc

£750,000 Raised


£750,000 Raised By Way Of A Convertible Loan Note

VANE Minerals Plc (AIM: VML)

("VANE" or "the Company")

£750,000 Raised By Way Of A Convertible Loan Note

VANE Minerals Plc ("VANE" or "the Company") is pleased to announce that it has raised £750,000 through a convertible loan note agreement with City Natural Resources High Yield Trust Plc and Geiger Counter Ltd, who have loaned £450,000 and £300,000 respectively.

The funds raised will be used to primarily accelerate the exploration and development programme for the Company's portfolio of uranium properties in Northern Arizona and South-eastern Utah and in addition to finance the construction of a mill at the Company's producing Diablito gold-silver mine, in Nayarit State, Mexico. This will be of great benefit to VANE, as in addition to eliminating scheduling bottle necks at the custom mill, this facility will greatly reduce overall costs, especially transportation costs.

The principal terms of the loan note are:

  • The note attracts interest at 8% per annum, paid quarterly
  • The loan note is convertible at the option of the holder at any time prior to the maturity date at a price of £0.12 per share, a premium of 33% to the share price of 9p on the day of issue (31st August 2006)
  • After the initial 24-month period, if the 20-day average closing price of the Company's shares at any time attains £0.18 or more, the Company may call the convertible loan note for conversion at the conversion price
  • The number of ordinary 10p shares to be issued upon conversion of the note are subject to proportional adjustment to reflect stock dividends, share splits, reverse share splits and other anti-dilutive events
  • Upon a change of control involving the acquisition of voting control or direction over 50% or more of the ordinary shares of the Company, City Natural Resource High Yield Trust Plc / Geiger Counter Ltd has the right to require the Company to repurchase their loan note, in whole or in part, at a price equal to 101% of the principal amount, plus accrued and unpaid interest thereon

Michael Spriggs, Chairman of VANE commented, "I am delighted to be able to announce our first fund raising undertaken since we achieved our quotation on AIM in May 2004. Whilst the monthly income generated by our Diablito mine has enabled us to achieve our principal objective of becoming a self-funding exploration company, these additional funds will crucially serve to accelerate the development of our uranium portfolio, at a time when the uranium market is very robust. The construction of our own mill at Diablito is also an important development for the Company because, as well as allowing us to make significant cost savings, it will streamline our operations and give us the potential for an increase in production, resulting in better cash-flows going forward."

About VANE Minerals:

VANE Minerals was founded by the former international exploration team of Freeport McMoRan Copper & Gold Inc., one of the world's largest producers of copper and gold. The team negotiated exclusive access to Freeport McMoRan's global exploration database, made up of 7,000 plus files generated over nearly 100 years of exploration and, following the review of these files, VANE is ideally placed to capitalise on project acquisition opportunities. The Company has assembled a highly qualified and experienced management team with a proven track record in exploration and development, who have spent their entire careers searching for and defining large scale mineral deposits.

The Company's principal objective, as set out at the time of its listing in June 2004, is to be a self-funding exploration company. As such, the initial focus has been to identify high grade gold-silver projects which can be brought into production as quickly as possible in order to provide revenue towards funding the development of potentially much larger projects. VANE is well on its way to achieving this objective as production began at the Diablito mine in Mexico in November 2005. The Company will use the revenue generated by this first producing mine to help fund development work across its attractive portfolio of gold, silver, copper and uranium assets in Mexico, Paraguay and the US.


VANE Minerals Plc Matthew Idiens +44 (0) 20 7667 6322

Parkgreen Communications Cathy Malins +44 (0) 20 7493 3713

Ambrian Partners Limited Richard Brown +44 (0) 20 7776 6417

Daniel Stewart & Co Dan Willmott +44 (0)20 7776 6550