Rose Petroleum plc

Quarterly operations update, Q1 2012

14-May-2012

Mexican gold & silver quarterly operations update covering the period 1 January to 31 March 2012 ("Q1")

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

The Company announces that the increased revenue from its Mexican operations experienced in Q4 2011 has continued throughout Q1.

Highlights

  • Total revenue of US$2,612,564 generated in Q1 (Q4 2011: US$2,692,093)
  • 8,113 tonnes of ore in total processed by SDA Mill during Q1 (Q4 2011: 7,802 tonnes) with average grades 6.87g /T Au and 156g/T Ag (Q4 2011: 8.06g/T Au and Q4 2011: 127g/T Ag)
  • Average recovery rate of 80.3% Au and 77.0% Ag (Q4 2011: 78.2% Au and 70.9% Ag)
  • 1,180 oz. Au and 26,164 oz. Ag produced in Q1 at a direct production cost of $582 equivalent per oz. Au; or $10.7 equivalent per oz. Ag (Q4 2011: 1,352 oz. Au and 19,410 oz. Ag produced at a direct production cost of $585 equivalent per oz. Au; or $10.8 equivalent per oz. Ag)
  • 70.8 tonnes of concentrate held in inventory at period end (Q4 2011: 68.6 tonnes)
  • All gold and silver sold unhedged

The Company announced on 6 February 2012 that in addition to the normal production from the La Colorada Mine, work had now commenced to remove an identified 3,200 tonnes of higher grade ore from the Diablito Mine ahead of its planned closure later in 2012. Of these 3,200 tonnes, it is expected that approximately 1,600 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 80 tonnes per month, with the remaining ore (2g/T Au and 200 g/T Ag) stockpiled. The first revenue from this additional production is expected to be recognised in Q2 2012.

Commenting today, David Newton, CEO of VANE said: "Q1 production continues to meet forecasts and our in-house evaluation work during the period indicates security of production moving forward. Our Mexican operations continue to fund our copper and uranium exploration programs on which we will provide updates as appropriate."

Kristopher K. Hefton, BSc Geology, Chief Operating Officer VANE Minerals plc 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.