Rose Petroleum plc

Dow Jones


DJ VANE Minerals Ups Diablito Gold, Silver Resource


Edited Press Release

LONDON (Dow Jones)--VANE Minerals Friday announces that its 100% owned Mexican subsidiary, Minerales VANE SA de CV has substantially increased the silver and gold resource at its wholly-owned high grade Diablito silver-gold mine, in Nayarit State, Mexico.

As of 1st August 2006 the JORC compliant resource has increased by approximately 52% net of production to 141,277 tonnes containing 6.07grams per tonne ("g/t") gold ("Au") and 684 grams per tonne silver ("Ag").

The resource is allocated as follows: Measured and Indicated 110,077 tonnes at an average grade of 7.20 g/t Au and 747 g/t Ag; Inferred 31,200 tonnes at an average grade of 2.10 g/t Au and 461.7 g/t Ag.

VANE management believe that the new resource would justify an increase in daily production from 50 to 75 tonnes per day ("tpd").

As announced on Sep. 4, 2006, the drilling programme, which was undertaken to further define and extend the resource, consisted of 20 diamond drill holes drilled from the surface, both inclined and vertical, within the Diablito concession.

This drilling has increased the Diablito resource by approximately 52% from 93,000 tonnes to a total of 141,277 tonnes, having an average grade of 6.07 g/t Au and 684 g/t Ag.

The Diablito mine commenced production in November 2005 at a daily rate of 50 tonnes per day and is currently generating US$420,000 of gross revenue per month. A total of 17,659 tonnes have been mined to 1st August 2006. VANE now has the option of either increasing daily production from 50 to 75 tpd or extending mine life by some three years at the current rate of production.

The Company remains on track to construct its own mill and flotation plant close to the Diablito mine site which will serve to dramatically reduce transportation costs and remove the current reliance on third party toll milling arrangements (refer to the Interim report, Sep. 12, 2006). The plant will have a target capacity of 100 tpd, which allows for a further potential increase in daily production, should this be appropriate. The facility is expected to be operational by mid 2007.

Michael Spriggs, Chairman, said: "The increase in the resource at Diablito confirms our confidence in the presence of additional resources at the property and we will look to build on this further by looking closely at the other areas of interest. The ramp up in production, aided by the construction of our own plant, will significantly boost our cash flow and will continue to provide important revenue for the exploration and development of our other projects in Mexico, Paraguay and the U.S."

Exploration continues in an effort to identify additional measured resources.