Rose Petroleum plc



VANE Minerals ahead of schedule and under budget

By Gareth Tredway /images/mineweb logo.jpg LONDON ( -- VANE Minerals, the company that listed on AIM in June 2004 and which is exploring and developing precious metals prospects in Latin America with the aid of the extensive Freeport Minerals database, has reported its full year results. The company s current market capitalisation is £32.15 million ($60 million); ticker symbol VML. The company raised £3.28 million ($6 million at current exchange rates) on its listing and at year-end had cash balances of £2.34 million. The cash raised is being applied to the detailed exploration and development of the company?s three main properties in Mexico; these are the Diablito (gold and silver) in Nayrit, Guadalcazar (gold) in San Luis de Potosi and Mina Charay (gold and silver) in the State of Sinaloa. Prudent management has resulted in the achievement of the prospectus? objectives within budget and ahead of schedule and the company expects to remain self-funding in these operations during the first half of this year while Diablito is brought into production, after which the company will become cash-generative. Diablito is expected to generate approximately $3 million a year. The company has also made application for gold-copper prospects in Paraguay and for uranium licences in North America. The agreement with FCX over the use of that company?s substantial exploration database, which contains over 7,000 files, has been extended by an additional year, to June 2006 and VANE intends to make use of the database in order to identify further exploration targets. A number have already been identified and evaluation is to be undertaken in the coming months. The resource at Diablito has been upgraded through the completion of a diamond drilling programme, giving revised resource estimates of 23,300t of measured, 11,700t of inferred and 65,000t of inferred resources at a grade of 0.39 ounces/t gold and 42.4 ounces/t silver, giving a marginal gold content with silver content of 39,000 ounces 1.2 tonnes) and 4.24 million ounces (131.9 tonnes) of silver. A mining plan is under initiation under the auspices of VANE and MGA Contratista Minera SA de CV. Initial production is scheduled for May of this year, two months ahead of the original schedule, with a daily design capacity of 50 tons. Guadalcazar, of which the exploration licence covers an area of more than 20 square kilometres, is recording satisfactory progress. Detailed geophysical and geochemical surveys have been completed, along with geologic mapping of limestones surrounding the Guadalcazar basin and are going further towards confirming the presence of a large hydrothermal gold deposit. Eight targets have been selected for drilling with a budget for 22 holes; drilling commenced on March 8; two holes have been completed and a third is underway. The initial drilling phase will complete eleven holes and the company expects to report the results of drilling and analysis by late April or in May. This deposit too is ahead of schedule and under budget. The company has secured an option to purchase Mina Charay, a gold-silver deposit that has the potential for rapid cash flow generation and for the presence of a large bulk mineable deposit. First phase diamond drilling (seven holes) has been completed, along with a reconnaissance survey, both of which indicate at least one well-mineralised vein structure on the property. Both are open to the west, along strike and down dip. New developments include the application for three large concessions in east central Paraguay over an area of 3,800 square kilometres and at least 22 gold or gold-copper anomalies have been identified. More detailed geochemical work is underway. The company has so far claimed seven properties and a further 28 properties have been targeted for acquisition. Some of these are believed to contain approximately 1% U3O8 giving ore to the value of roughly $400/tonne. With Diablito shortly to provide fresh cash flow, this company should be in a position to bring its best additional properties to book within a reasonable timeframe. Hopefully the air of mystery over the location of the uranium properties will soon be dispelled.