Rose Petroleum plc

Mexico quarterly operations update - 1 January to 31 March 2013 ("Q1")

13-May-2013

Mexico quarterly operations update - 1 January to 31 March 2013 ("Q1")

VANE announces a production update from its gold and silver operations in Mexico which are operated by its wholly-owned subsidiary, Minerales VANE S.A. de C.V.

Highlights

  • 1,139 oz. Au and 19,380 oz. Ag produced in Q1 (Q4 2012: 1,154 oz. Au and 17,830 oz. Ag)
  • 8,697 tonnes of ore processed during Q1 (Q4 2012: 7,856 tonnes) with average grades
  • 5.62g/T Au and 97g/T Ag (Q4 2012: 6.36g/T Au and 96g/T Ag)
  • Average recovery rate of 78.4% Au and 77.1% Ag (Q4 2012: 79.5% Au and 77.7% Ag)
  • Total revenue for Q1 of US$1,924,656 (Q4 2012: US$2,411,318)
  • Direct production cost of $782 per oz. Au equivalent or $14.5 per oz. Ag equivalent (Q4
  • 2012: $688 per oz. Au equivalent or $13.2 per oz. Ag equivalent)
  • 38.3 tonnes of concentrate and 38.4kg of precipitates held in inventory at period end (Q4
  • 2012: 34.9 tonnes and 38.4kg of precipitates)
  • All gold and silver sold unhedged

Revenues for Q1 were in line with the guidance previously announced. All of the revenue generated in Q1 originated from our joint venture with MET-SIN.

Costs of production increased from those in Q4 2012 due to the cumulative effect of temporarily lower gold grades from ore produced while completing mine development work, decreasing metal prices, and the impact of foreign exchange due to the appreciation of the Mexican Peso against the US Dollar. Gold grades have now improved since completion of development work post period end and these should be reflected in the results for Q2 2013.

Commenting today, David Newton, CEO of VANE said: "The increase in tonnes of ore processed is encouraging and demonstrates consistency of production. Despite the recent decline in commodity prices, we are confident that our Mexican business will continue to make a positive cash contribution."

Kristopher K. Hefton, BSc Geology, Chief Operating Officer VANE Minerals plc who meets the criteria of a qualified person under the AIM Rules - Note for Mining and Oil & Gas Companies, has reviewed and approved the technical information contained within this announcement.