Rose Petroleum plc

World Gold

13-September-2004

Freeport database and London expertise come together

VANE Holdings plc listed in early June at £0.11/share and after a placing that raised £3.705 million the company had a market capitalization of just over £16 million. Seymour Pierce acted as both nominated adviser and broker. Shares have since traded down to the £0.08-0.09 level. Commerzbank AG holds 9% of the issued share capital.

Vane is essentially an exploration company whose primary asset is an agreement that gives it access to Freeport-McMoRan?s global exploration database, containing over 7,000 projects outside of Indonesia. The agreement is initially for two years running to mid- 2005, and is renewable annually. The agreement gives Freeport- McMoRan a one-time option at the time of reserve announcement and/or when any target goes into ?formal feasibility? to become an equity partner with a participating interest of up to a 25% by paying two times the incurred exploration costs in proportion to the interest acquired.

The key person within Vane is founder and chief executive Steven Van Nort, who was previously senior vice-president of explorationmetals at Freeport McMoRan and manger of the major?s worldwide exploration activities.

To date approximately 75% of Freeport's files have been reviewed and several prospects have been identified. Vane has already obtained an option over mineral rights at a property in Guadalcazar, Mexico.

Guadalcazar is an early stage exploration property consisting of a large, newly-recognised hydrothermal gold system which the company believes has the potential to define a large gold deposit. Discovery dates back to late 1940?s by the U.S. Geological Survey, although the occurrence, which was described by the USGS as an alluvial deposit, was determined to be uneconomic.

Gold and silver is found in association with tin and mercury.

Speaking to World Gold, executive director, Matthew Idiens, explained that the programme for Guadalcazar would involve geophysical and gravity surveys to determine drill targets followed by 4-5 months of drilling through until the first quarter of 2005.

The exploration at Guadalcazar will be funded internally and from cash generated by the exploitation of a small, but very high grade, vein deposit at Diablito, located in the State of Nayarit, west-central Mexico. Diablito, which was introduced by contacts of the directors, is expected to be in production within 6 months.

The ore is a high grade flux, with average gold and silver grades of 15 g/t and 53 g/t respectively, which can be directly transported to a smelter.

Results of a drilling programme at Diablito are due ?imminently?.

In August, Vane added to its portfolio with an option agreement over the Mina Charay gold and silver prospect in the State of Sinaloa in western Mexico. The prospect, which contains known gold and silver mineralization, including the Mina del Padre and other veins, is located in the long established San Blas Mining District.

A steep fault zone is believed to be the structure that controls mineralization at Mina Charay. One 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. Vane intends to undertake a sampling and drilling programme throughout October and November this year.

Option payments will increase up until January 2007 and will total almost US$3 million. In addition to London-based Mr Idiens, Vane also has veteran UK mining analyst Michael Spriggs as the non-executive chairman.