Rose Petroleum plc

Mining Weekly

1-September-2004

Miner in move to acquire Mexico gold-silver prospect

Miner in move to acquire Mexico gold-silver prospect

Resources group Vane Holdings has entered into an option agreement with Minera Pafex SA de CV to acquire the Mina Charay gold and silver prospect, in the State of Sinaloa, in western Mexico.

The prospect, which contains known gold and silver mineralisation, including the Mina del Padre and other veins, is located in the long-established San Blas mining district, in a part of the Rio Fuerte Valley known as 'The Buried Peaks' which represent the westernmost bedrock exposures of the Sierra Nevada Occidental Mountain range.

Vane has planned a drilling and sampling programme on the prospect to take place throughout October and November and expects to announce the results of this programme early in the new year.

The company is encouraged by early sampling results from the site which indicate significant grades of gold and silver.

The option agreement provides for payments of $5 000 a month up to December, and further incremental staged payments. Following the final payment of $2-million, in January 2007, Vane will own the prospect outright.

The option agreement can be terminated at any time by Vane, should it not wish to proceed with the acquisition and no further monthly or staged payments would be payable.

The geology of the Mina Charay region and of the prospect itself is characterised by a thick section of volcanics of Tertiary age.

Mina Charay occurs at the southwest foot of Cerro Del Mina, a conical hill composed of northwest dipping andesites.

The southern flank of this hill is cut by a steep fault zone believed to be the same structure that controls mineralisation at Mina Charay, particularly that of the strongly mineralised 'Veta de la Mina del Padre'.

That fault extends into a zone of brecciated andesites and rhyolites, which are intensely silicified, fractured and cut by a stockwork of quartz veinlets with concentrations of gold and silver, as well as geochemically anomalous values of lead, zinc, molybdenum and mercury.

Other veins, known to occur in the immediate area, some parallel with the Mina del Padre (Charay) vein, have not yet been explored.

The drilling programme at the company's Diablito property, in the State of Nayarit, Mexico, has now been undertaken and is progressing well.