Vane Minerals PLC VML Quarterly Update and Joint Venture Amendment

  Vane Minerals PLC (VML) - Quarterly Update and Joint Venture Amendment

RNS Number : 1430Q
Vane Minerals PLC
02 November 2012




                         VANE Minerals plc (AIM:VML)

                          ("VANE" or the "Company")

             VANE announces expansion of its Mexican operations &

   Mexico quarterly operations update - 1 July to 30 September 2012 ("Q3")

                                      

VANE is  pleased  to  announce  expansion of  its  Mexican  operations  and  a 
quarterly update on its operations in Mexico.

Highlights

Joint Venture

· VANE to commence development work on Joint Venture ("JV") mines other
than La Colorada in Q4 2012, with the aim of bringing additional mines into
production during 2013

· Met-Sin (JV partner controlled by the Ruiz family) to construct a 100tpd
(tonne per day) processing mill in La  Rastra solely at its own expense,  with 
construction expected to commence during 2013

· Any excess  production from JV  mines, over and  above that required  to 
adequately feed VANE's  existing SDA  Mill, may  be processed  through the  La 
Rastra mill, thus enabling production and JV revenues to increase

· As a result of this expansion the pre-tax profit from the JV will be
split between VANE and Met-Sin on a 50:50 basis (from the current 60:40
split) effective 1 January 2013



Quarterly Update on Mexican Operations



· As expected, due to the processing  of lower grade ore from Diablito  in 
June and  timing  issues  concerning revenue  recognition,  total  revenue  of 
US$1,385,889 was  generated  in  Q3  (Q2  2012:  US$2,772,286)  (Profits  from 
Diablito are 100% VANE as this project is outside of the JV)

· 7,995 tonnes  of ore processed  during Q3 (Q2  2012: 8,105 tonnes)  with 
average grades 5.36g/T Au and 105g/T Ag (Q2 2012: 5.70g/T Au and 127g/T Ag)

· Average recovery rate of  76.8% Au and 76.5% Ag  (Q2 2012: 80.6% Au  and 
77.8% Ag)

· 979 oz. Au and 19,100 oz. Ag  produced in Q3 (Q2 2012: 1,028 oz. Au  and 
22,147 oz. Ag) at a  direct production cost of $802  per oz. Au equivalent  or 
$14.5 per oz. Ag equivalent (Q2 2012: $763 per oz. Au equivalent or $13.9  per 
oz. Ag equivalent)

· 62.6 tonnes of concentrate (Q2 2012: 63.1 tonnes) and 38.4kg of  Merrill 
Crowe high grade precipitates held in inventory at period end

· All gold and silver sold unhedged

· VANE is confident that production grades and revenue for Q4 will
increase and be consistent with results achieved prior to the Q3 rainy season



David Newton, CEO of VANE, commented:  "The agreement with our joint  venture 
partner provides VANE with  a secure long term  future in Mexico and  enhances 
our ability to grow the joint venture business by increasing production in the
medium  term.  The  Q3  results  for  our  gold  and  silver  operations   are 
satisfactory as they take into account one month's production from lower grade
ore produced  by our  Diablito Mine  resulting in  operating expenses  on  two 
mines, but generating ore for stockpile to ensure against interruption in mill
feed."

Revenues for Q3  were lower than  in the  prior period, partly  due to  timing 
issues regarding revenue recognition, as a large concentrate shipment was made
at the end  of Q2, and  partly due to  a month of  processing lower grade  ore 
produced from the Diablito Mine ahead of its planned closure. This  production 
fed the Company's  SDA Mill during  the month  of June and  was recognised  as 
revenue in  Q3. This  production  facilitated the  build-up of  a  substantial 
inventory of JV ore from the La Colorada Mine ahead of the rainy season, which
can impact road conditions  and therefore the ability  of the JV to  transport 
ore to the SDA facility on a timely basis. The Company is pleased to  announce 
that this  action has  provided the  SDA Mill  with sufficient  feedstock  and 
ensured that there was no disruption from lack of ore during the rainy season.
Mining of the higher grade ore remaining  in the Diablito Mine referred to  in 
previous updates is underway and is  expected to be concluded within Q4,  when 
the mine will close.  The Diablito Mine  is owed 100% by  VANE so all  profits 
arising from  production belong  to VANE  and are  not shared  as per  the  JV 
agreement.

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.

For further information, please contact:

VANE Minerals Plc                                  +44 (0) 20 7667 6322
David Newton                                       

CEO VANE Minerals plc                              

                                                  +44 (0) 20 3328 5656

                                                  

Allenby Capital (Nominated Adviser & Joint Broker) 

Jeremy Porter/Alex Price                           +44 (0) 20 7796 8821



Northland Capital Markets (Joint Broker)

Louis Castro
                                                  

Bankside Consultants                               +44 (0) 20 7367 8888

Simon Rothschild





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MSCUASVRUUAARAA -0- Nov/02/2012 07:00 GMT