Rose Petroleum plc

Mexican gold & silver quarterly operations update covering the period 1 October to 31 December 2011 ("Q4")

6-February-2012

Mexican gold & silver quarterly operations update covering the period 1 October to 31 December 2011 ("Q4")

VANE is pleased to announce an operational update on its gold/silver operations in Mexico.

The Company announces increased revenues from its Mexican operations, brought on by higher than expected grades of gold and silver being produced and improved recovery from its joint venture mine at La Colorada. This has generated sufficient cash to cover all of the Company's costs (both its operational costs and its exploration costs) for Q4.

Highlights

  • Total revenue of US$2,692,093 generated in Q4
  • 7,802 tonnes of ore in total processed by SDA Mill during Q4 (Q3: 8,022 tonnes) with average grades 8.06 /T Au (Q3: 5.17g/T Au) and 127g/T Ag (Q3: 105g/T Ag)
  • Average recovery rate of 78.2% Au (Q3: 75.9%) and 70.9% Ag (Q3: 69.9%)
  • 1,352 oz. Au and 19,410 oz. Ag produced in Q4 at a direct production cost of $585 equivalent per oz. Au; or $10.8 equivalent per oz. Ag (Q3: 628 oz. Au and 18,724 oz. Ag produced at a direct production cost of $640 equivalent per oz. Au; or $14.6 equivalent per oz. Ag)
  • 68.6 tonnes of concentrate held in inventory at period end (Q3: 75.9 tonnes)
  • All gold and silver sold unhedged

The Company announced on 9 November 2011 its intention to close down its Diablito mine during the course of 2012. Ahead of this closure, work has now commenced to remove an identified 3,200 tonnes of higher grade ore from the mine. Of these 3,200 tonnes, it is expected that approximately 1,663 tonnes of high grade ore (17.9g/T Au and 1,801g/T Ag) will be processed through the Company's Merrill Crowe facility at the rate of 120 tonnes per month, with the remaining ore (2g/T Au and 200 g/T Ag) stockpiled.

Commenting today, David Newton, CEO of VANE said: "These results are very encouraging and underpin the Company's decision to switch its focus to ore produced at the La Colorada Mine. Whilst there can be no guarantee that these results will be replicated in the future, they demonstrate that if these production levels can be maintained then the Company's Mexican operations will continue to make a significant cash contribution to the total running costs of the Group."

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.