Rose Petroleum plc

Interim Results to September 2005


The following is the Highlights and Chairman's Statement extracted from the Vane Minerals Interim Results to June 2005 which are now available for download.

Click here to download the full document in .pdf format


  • All work programmes proceeding under budget

  • Diablito gold-silver mine underground development and construction of ore production stopes commenced

  • Phase I drilling programme completed at prospective Guadalcazar gold prospect in Mexico

  • Phases II & III drilling programmes completed at Mina Charay gold-silver prospect in Mexico

  • Mineral Investigation Permits covering 3,445 square kilometres granted in Paraguay

  • As at 30th June the Group had cash balances of £1.53m

  • Exciting uranium prospects acquired in North America
Post Period End Highlights:

  • Agreement signed on Choix Copper prospect in Mexico, containing many surface samples assaying between 1-3% copper
  • Diablito second phase development continues and ore production commenced

Chairman?s Statement

I am pleased to present this review of your Company?s activities for the six months to 30th June, 2005.

In January, we announced a further extension, to 30 June 2006, of the agreement with Freeport- McMoRan Copper and Gold Inc. which gives VANE exclusive access to Freeport?s global exploration database (excluding Indonesia). This provides one of the cornerstones of VANE Minerals? (?VANE? or the Company?) exploration strategy: over 85% of the Freeport files have now been examined and a number of attractive potential prospects are being pursued.

In addition to project generation from both the database and from VANE?s highly experienced team of geologists - as well as general corporate activity - exploration and development work during the first half of 2005 focused on six projects in Mexico, the US and Paraguay.


Mining operations commenced during the period at the high-grade Diablito gold-silver project, located in Nayarit, west-central Mexico. VANE Minerals had determined the early generation of cash flow from this operation as a primary strategic objective for the Company.

A haulage/development tunnel has been driven into the Diablito vein, to produce ore for mill testing in order to subsequently generate positive cash flow and thus contribute to covering development costs. The tunnel has been extended 200 metres from the portal and stope development/mining of the 13,000 tonnes situated above the tunnel is now underway.

The first 330-tonne test shipment has been successfully concentrated at the Cosala mill, and 11 dry tonnes of concentrates have been delivered to the Torreon smelter. Under the revised milling/smelting arrangement, VANE will be mining a larger tonnage of slightly lower grade ore than originally scheduled. This material will be shipped a shorter distance, now only 350 km, from the mine to the Cosala mill and a much smaller tonnage of concentrate will be trucked the remaining 750km, from the mill to the Torreon smelter. The net financial result will differ only slightly from that expected originally from transporting the higher grade flux ore a greater distance, 1,350 km, from the mine to the Nacozari smelter.

We are pleased with the progress now being made. A further 1,300 tonnes of ore have been transported to the Cosala mill for processing. The mining contractors are currently working three faces of ore, so that the target production of 1,875 tonnes per month is now achievable and there will now be regular shipments of ore and concentrates to the Cosala mill and the Torreon smelter respectively.


Evaluation of the Guadalcazar project in San Luis Potosi, Mexico, continued during this period. This is an opportunity from the Freeport database. On completion of the initial geological appraisal, a 12-hole diamond drilling programme was carried out. From the 1,222 metres drilled, samples of sawn drill core were analysed for gold, silver, tin and mercury. Although the analysis did not indicate economic viability, the gold and silver values (and particularly mercury) were found to be consistently anomalous. These results have directed us towards a number of additional targets which we plan to drill this autumn.

Mina Charay

The Mina Charay Project near Los Mochis, Sinaloa, Mexico, continues to provide very encouraging results. An initial seven-hole drilling programme confirmed very strong gold mineralisation locally, in a structurally complex vein system.

A detailed ground geophysical survey (self-potential) was then carried out prior to a second round of drilling which began in March. This, together with a third round of drilling, completed a 27 hole programme, which was finished by the end of June. The nearly vertical vein system was intersected in 19 of the 27 inclined holes, providing 32 mineralised intercepts over a strike length of some 240 metres. The mineralised intercepts averaged 1.7 metres in width and contained an average of 13 g/t gold and 93 g/t silver. While the deepest intercepts of the vein system are some 50 metres below surface, the system remains open at depth.

The drilling and analytical data being evaluated by IMC of Tucson, Arizona, will provide the basis for a resource estimate and another small round of drilling which may be required to complete a preliminary feasibility report.


The Choix copper prospect in Sinaloa, Mexico, was acquired after the period under review in July 2005, following a prospect examination and a review of previous work done by Cambior Corporation. Choix is an undrilled copper target located at the southern end of the prolific Arizona-Mexico porphyry copper belt. Despite easy access and outcrops showing strong (1% to 3%) copper mineralisation, the area appears to have never been systematically evaluated or drilled. Field work - including mapping and sampling, followed by drilling - is scheduled to commence in September.

Paraguay Project

Despite its geological prospectivity, Paraguay is significantly under-explored in comparison with its South American neighbours. Having applied for the mineral rights to three large blocks of land in south-eastern Paraguay in November 2004, three Investigation Permits for gold exploration were finally issued by the Government in July 2005. Preliminary field investigations have confirmed observations made during a previous exploration programme that detrital gold exists in a number of streams. The Company now expects to move ahead with systematic stream and soil sampling to define drilling targets.

Uranium Programme

VANE?s entry into uranium exploration is a reflection of the Company?s belief in the renewed strength of the uranium market and growing predictions of long-term supply shortages. The Company has identified a number of high-quality projects in the south-western US. Including a number of previously drilled properties, 17 target areas have been acquired in the breccia pipe district of northern Arizona. Advanced negotiations are underway to acquire additional attractive properties in southern Utah, at least two of which are believed to contain a defined uranium resource.

In addition to our aggressive programme of property acquisition, work is in progress to utilise satellite imagery to define targets in areas not previously considered conducive to the recognition of pipe structures and to develop geochemical techniques to recognise mineralised breccia pipes.


VANE Minerals remains on course towards achieving the strategic goals set at the time of listing on AIM in June, 2004. Exploration work is proceeding on schedule for all of our properties in Mexico as well as in Paraguay and the US. With an excellent portfolio of projects and dedicated field teams we anticipate further busy and successful operations in the months ahead.

At the end of June 2005, the Company?s cash resources stood at £1.53 million. The rate of Group expenditure meanwhile is currently running at £143,000 per month. The move towards development and production of saleable concentrate at Diablito is therefore very gratifying. Production is now expected to increase rapidly in the coming months and, with the redefined ore sales procedure, to provide a secure and growing source of cash flow which it is anticipated will substantially offset exploration spending.

The movement in VANE Minerals? share price in recent months has reflected volatile conditions in the AIM market. This period has seen an unprecedented flow of new listings, keen competition for funds and ever closer market scrutiny. Under these conditions, your Company?s market performance can be judged as encouraging. Underpinned by solid institutional support, we are confident the share price will progressively reflect more accurately the growing importance of the many attractive projects which are advancing satisfactorily.

Michael Spriggs, Chairman

2nd September 2005