Rose Petroleum plc

Increase in NI 43-101 compliant resource statement at WATE Pipe, Arizona, USA

29-October-2010

Increase in NI 43-101 compliant resource statement at WATE Pipe, Arizona, USA

HIGHLIGHTS

  • 27% increase in NI 43-101 uranium resource at Wate Pipe project
  • Mineral Lease application continues

VANE Minerals Plc (the "Company") today provides an update on the NI 43-101 resource statement on the Wate breccia pipe located in northern Arizona. The project is held jointly by the Company's wholly-owned subsidiary, VANE Minerals (US) LLC ("VANE") and its joint venture ("JV") partner Uranium One Exploration U.S.A. Inc ("U1"). SRK Consulting (U.S.) Inc. ("SRK") has completed an updated resource estimate for the Wate breccia pipe, and is completing the updated NI 43-101 technical report.

SRK is reporting a CIM compliant resource estimate sufficient for NI 43-101 reporting as an Inferred resource for the Wate project that has been increased by 27% to 886,000 lbs eU3O8 at an average grade of 0.76% eU3O8.  The resource increase is based on positive recent drilling by VANE and some newly obtained historic drilling data.   The new data consists of annual progress reports of the previous property holder Rocky Mountain Energy ("RME") that include the drill intercepts (depth, length, and average grade of mineralization). The Inferred resource has been estimated using solely eU3O8 intercepts from the VANE drilling campaign while the shapes of mineralization have been constructed using both VANE and historic drilling intercepts. 

The JV's plan to verify the historic resource on the project that was developed by RME continues to be successful. The historic resource was calculated using 22 drill holes and is reported as:

Case     Tons   
Grade Pounds (U3O8)
Conservative    70,250 0.80%   1,124,000
Base     114,872    0.83%    1,916,863
Full    146,122   0.83%  2,416,863

Source: An Evaluation of the Wate Breccia Pipe Uranium Deposit and Appraisal of State Mineral Lease 11-52290, State of Arizona land department

VANE has so far verified 886,000 lbs eU3O8 by washing out 2 old holes and drilling 5 new holes to replicate the data which is not available. At this stage VANE is confident that the historic resource is reasonable and is very encouraged by the results of this latest resource update. With respect to the historic RME resource of 1.1M lbs, SRK stated, "We can support a 43-101 reportable Inferred resource of 886,000 lbs, based on the VANE data, and it is reasonable to assume that the historic RME estimate of 1.1M lbs U3O8 is achievable". The updated NI 43-101 report is being completed by SRK and will be posted on the Company's website.

The exploration program for the breccia pipe economic model is driven towards identifying 1M lbs U3O8 from surface drilling. At the present spot price of US$52.00 (on 25th October 2010) per pound U3O8, VANE believes the economics on a 1M lb deposit are sufficient to warrant progressing the project to development, as the project would be expected to break even if no additional resource were defined. However, the deep, narrow, cylindrical structure of the deposits carries inherent challenges with vertical delineation drilling. Historically, fan drilling from a development shaft sunk parallel to the pipe has resulted in expanding the resource significantly beyond that defined by vertical drilling. 

As defined in the joint venture agreement, VANE's JV partner, U1, is manager for development and as such, has commenced the work towards obtaining the mineral lease from the State of Arizona.

Kristopher K. Hefton, Chief Operating Officer VANE Minerals (US) LLC, BSc Geology, who meets the criteria of a qualified person under the AIM Rules - Guidance for Mining, Oil and Gas Companies, has reviewed and approved the technical information contained within this announcement. VANE Minerals, as operator of the joint venture, is responsible for the contents of this press release.

Steve Van Nort, CEO of VANE Minerals plc commented, "We are pleased that the Wate project is moving toward development.  Further to this, we are encouraged that, upon shifting our emphasis to state lands, our breccia pipe program is moving into a period of sustained drilling where we will evaluate a number of pipes and targets for additional discoveries. We feel that the Company is moving from a period of portfolio enlargement to portfolio development. We have built a strong exploration portfolio and now we are in position to advance those projects and create value.  We also believe that the recent increase in the spot and long-term prices of uranium to US$52.00 and US$62.00, respectively, and the projected demand forecasts will significantly influence further price strengthening, thus initiating the beginning of a positive era for the commodity. We are actively drilling our pipe portfolio and will be updating the market in due course".