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.
 

CEO David Newton and COO Kris Hefton will presenting at the 89th Minesite Forum to be held on Wednesday 16th May 2012 at the Merchant Taylors Hall,30 Threadneedle Street, London EC2R 8JB

Click HERE for directions
Closest Tube: Bank (2mins), Liverpool Street (5mins)

• £3.68 million revenue (2010: £2.56 million)
• £1.60 million loss after tax (2010: £2.1 million loss after tax¹)
• Raised £1.16 million before expenses in a successful fund raise during October 2011
• Cash balances of £2.30 million as at 31 December 2011 (2010: £2.75 million)

¹Restated, see note 3 in the full results (click on link below)

Operational Highlights

• Appointment of new Chief Executive Officer
• McGhee Peak commenced drilling in late 2011 and resulted in VANE successfully drilling into a clearly identified copper-molybdenum porphyry system. Yuma King and Granite Gap copper targets drilled with negative results
• Pre-feasibility work continues at the Wate uranium project
• High-grade uranium encountered at the Rose project
• Improved production with higher grades from Mexican gold and silver assets

Post-Period Highlights

• Diamond drilling programme initiated at McGhee Peak
• Drilling commenced at Peg Leg copper target
• Revenues arising from Mexican gold and silver production remain robust
• U.S. Secretary of the Interior, Ken Salazar, announces the withdrawal of northern Arizona federal lands from all new exploration and mining activity

David Newton, Chief Executive, commented:

“The year under review was one of progress for the Company, progress that has accelerated into the current year. The first drilling results from McGhee Peak were encouraging, whilst the qualities of our Mexican assets can now be demonstrated over a meaningful period. VANE is in a robust position both operationally and financially, with the downside risk mitigated by the cash flow generated in Mexico and the profile of our exploration assets strengthened.”

VANE also announces that the Annual General Meeting will be held at the offices of Allenby Capital Limited, Claridge House, 32 Davies Street, London W1K 4ND at 10:00 am on 31 May 2012, notice of which will be posted to shareholders along with the report and accounts by 20 April 2012

For a full copy of the annoucement please CLICK HERE 

• Diamond drill rig to complete initial programme at McGhee Peak
• Expanding drill programme at McGhee Peak with further holes planned
• Drilling commenced on next exploration target, Peg Leg
• Drill permits granted on two additional projects; Railroad and Lone Hills

As previously announced on 3 February 2012, the Company has completed two rotary exploration holes and partially drilled a third hole at McGhee Peak which have demonstrated a mineralised porphyry system. An attempt to re-drill the third hole, MP-1, reached a depth of 500 feet, but was unable to reach the desired depth due to poor ground conditions again being encountered. MP-1 intersected quartz-sericite alteration accompanied by disseminated pyrite and averaged 0.03% copper between 0 and 350 feet where the hole was lost due to heavy water flow and poor ground conditions. Offset hole MP-1A, adjacent to hole MP-1, intersected the same mineralized area from 0 to 350 feet and finally reached a depth of 500 feet, still in mineralization, but with heavy contamination of samples due to in-fall material. The hole was cased to 350 feet and will now be deepened by diamond drilling.

Following further assessment of the drilling to date, which clearly intersected a porphyry intrusion with encouraging alteration and vein-type copper, molybdenum, tungsten and zinc mineralisation, VANE has committed to a further drilling programme to explore this porphyry system. A diamond drill rig, which is more suitable for the encountered ground conditions, will be used for the follow-up drilling programme, during which hole MP-1A will also be completed. Contractors are being engaged to undertake the diamond drill programme whilst permits for this next phase of drilling are obtained from State authorities. Once permitted, each diamond drill hole is expected to take approximately 3-4 weeks to complete and analysis will be performed as drilling progresses.

In the meantime the rotary drill rig has been moved to VANE's next exploration target, Peg Leg, located in southern Arizona. An initial 2 hole drilling programme commenced on 12 March 2012.

Final drilling permits have now also been received for two additional drilling projects, Railroad and Lone Hills.

David Newton, CEO of VANE, commented:

"Although it is frustrating not to have completed the third hole at McGhee Peak to target depth, our analysis of the drilling to date has given us sufficient confidence to commit to diamond drilling there. The rotary drilling has already discovered two mineralised targets within a clearly identified porphyry system relatively inexpensively. This is a promising development for VANE and we will continue our exploration there. There are a number of copper exploration targets within our license areas and we intend to remain active in attempting to identify further porphyry systems. "

Results to date from drill hole and surface geology/geochemistry/geophysics are encouraging, in that the presence of two mineralized targets within the same exploration property increases the chances of success. The discovery of a large mineralised porphyry system is the first step in VANE's copper exploration programme. This will be followed by vectoring within the large porphyry system to determine if economically viable higher grade mineralisation is present.

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

www.proactiveinvestors.co.uk/companies/stocktube/1034 

The Company announces increased revenues from its Mexican operations, brought on by higher than expected grades of gold and silver being produced and improved recovery from its joint venture mine at La Colorada. This has generated sufficient cash to cover all of the Company's costs (both its operational costs and its exploration costs) for Q4.

Highlights

• Total revenue of US$2,692,093 generated in Q4
• 7,802 tonnes of ore in total processed by SDA Mill during Q4 (Q3: 8,022 tonnes) with average grades 8.06 /T Au (Q3: 5.17g/T Au) and 127g/T Ag (Q3: 105g/T Ag)
• Average recovery rate of 78.2% Au (Q3: 75.9%) and 70.9% Ag (Q3: 69.9%)
• 1,352 oz. Au and 19,410 oz. Ag produced in Q4 at a direct production cost of $585 equivalent per oz. Au; or $10.8 equivalent per oz. Ag (Q3: 628 oz. Au and 18,724 oz. Ag produced at a direct production cost of $640 equivalent per oz. Au; or $14.6 equivalent per oz. Ag)
• 68.6 tonnes of concentrate held in inventory at period end (Q3: 75.9 tonnes)
• All gold and silver sold unhedged

The Company announced on 9 November 2011 its intention to close down its Diablito mine during the course of 2012. Ahead of this closure, work has now commenced to remove an identified 3,200 tonnes of higher grade ore from the mine. Of these 3,200 tonnes, it is expected that approximately 1,663 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 120 tonnes per month, with the remaining ore (2g/T Au and 200 g/T Ag) stockpiled.

Commenting today, David Newton, CEO of VANE said: "These results are very encouraging and underpin the Company's decision to switch its focus to ore produced at the La Colorada Mine. Whilst there can be no guarantee that these results will be replicated in the future, they demonstrate that if these production levels can be maintained then the Company's Mexican operations will continue to make a significant cash contribution to the total running costs of the Group."

Kristopher K. Hefton, Chief Operating Officer VANE Minerals (US) LLC, BSc Geology, 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. 

Drilling continues at McGhee Peak which is located on the Hillsboro-Chino-Tyrone-Bisbee porphyry mineral trend in southwest New Mexico. The drilling has discovered two mineralised targets located approximately one mile apart within a clearly identified porphyry system, containing copper, molybdenum and zinc.

Highlights

• Two rotary holes completed with a third being re-drilled

• Mineralised copper, molybdenum and zinc (Mo Zn Cu) porphyry system encountered

o Copper values in the range of 300-600 ppm

o Zinc values greater than 200 ppm

o Visible molybdenite encountered in hole subsequently lost due to caving and therefore being re-drilled

• Further drilling being undertaken to determine if economically viable higher grade mineralisation is present

David Newton, CEO of VANE, commented:

"These are encouraging results, showing a mineralised porphyry and confirming our geological theory that the porphyry systems that have been successfully discovered and mined at surface in this part of the U.S., also occur at depth. Further drilling is required over the coming months to confirm whether this porphyry has economic potential. This successful drilling result at what is only our third project on this very favourable mineral trend gives us confidence of further exploration success in our remaining projects. "

Three McGhee Peak holes have been drilled and are in various stages of completion. Holes MP-2 and MP-3 are located in the north target area approximately half a mile apart. Both holes intersected a silicified porphyry intrusion with encouraging alteration and vein-type copper, molybdenum, tungsten and zinc mineralisation.

Hole MP-2 intersected anomalous copper values in the range of 300-600 ppm to a depth of about 380 feet. Higher zinc values greater than 200 ppm were found below a depth of about 580 feet. This hole (MP-2) is presently being deepened in order to pursue visible Mo-Zn-Cu mineralization observed near the depth of 1,300 feet. Hole MP-3 also intersected the underlying porphyry body. Assay results are pending from this hole, which showed visible indications of zinc and weak molybdenum mineralisation to its completed depth of 1,508 feet.

Hole MP-1, located approximately 1 mile to the south, was designed to test the southern mineralised target area. The hole was lost at a depth of 360 feet. Encouraging alteration with anomalous copper and visible molybdenite was encountered before bad ground conditions prevented continuation of the hole. A plan is in effect to re-drill the hole in order to test the projected porphyry target below 1,000 feet.

Results to date from drill hole and surface geology/geochemistry/geophysics are encouraging, in that a larger mineralised porphyry system encompassing both the north and south target areas is indicated. The discovery of a large mineralised porphyry system is the first step in VANE's copper exploration program. This will be followed by vectoring within the large porphyry system to determine if economically viable higher grade mineralisation is present.

The rotary drill currently working at McGhee Peak will be moved to our next copper target once the re-drilling of hole MP-1 is completed as additional drill holes will require permitting. Permitting of the additional holes at McGhee Peak is underway and bids on the diamond drilling required for the vectoring holes are being evaluated.

Kristopher K. Hefton, Chief Operating Officer VANE Minerals (US) LLC, BSc Geology, 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. 

Contact details:

VANE Minerals plc

David Newton, Chief Executive, +44 (0) 20 7667 6322

Allenby Capital (Nomad and Joint Broker)

Jeremy Porter / Alex Price, +44 (0) 20 3328 5656

Northland Capital (Joint Broker)

Louis Castro, +44 (0) 20 7796 8800

Bankside Consultants

Simon Rothschild, +44 (0) 20 7367 8888
 

Following this transaction, Sir Richard Needham is interested in 2,330,000 Ordinary Shares representing 0.53% of the Company's issued share capital. 

Click HERE to see a statement by Senators and Congressmen denouncing the Obama administration’s decision to ban uranium mining in northern Arizona.

Highlights

• Two additional deep holes completed with the following main mineralised intercepts:
  
  • Hole 11-R-5; 1445.5 - 1458.0ft (12.5ft) averaging 1.82% eU3O8
  • Hole 11-R-6; 1521.0 - 1542.5ft (21.5ft) averaging 0.09% eU3O8
• Mineralisation in excess of +1% eU3O8 has now been encountered on the project over a horizontal distance of 145ft and vertical extent of 260ft

David Newton, CEO of VANE Minerals said "These are promising drilling results, particularly when coupled with the results of the previous drilling on the project. Further drilling will continue at Rose with the aim of establishing an NI 43-101 compliant resource, which will add to our existing resource of 1.118m pounds at our Wate project."

Background

The Company has now completed five deep holes on the project and, combined with historic drilling consisting of three deep holes, the results continue to be very encouraging. To date, 6 of the 8 deep holes have encountered +1% grade uranium mineralisation extending for over 260ft vertically and horizontally, 145ft in an east-west direction and 100ft in a north-south direction. However, within this drill area is a gap of about 100ft x 60ft which is untested and it now appears that the drilling has only tested a small portion of the east and north parts of the pipe leaving the west and south part of the pipe left to explore.

The mineralised intervals have been encountered over significant distances that, if continuous, would be sufficient to develop economic resources. Additional drilling is required to prove the continuity of the ore-grade mineralisation to establish NI 43-101 compliant resources. The drilling programme has been suspended for the winter season and interpretive work continues with a view to planning the next phase of drilling subject to mutual agreement with U1.

The following details the mineralised intercepts of 0.05% eU3O8 or higher in the two holes completed:

Kristopher K. Hefton, Chief Operating Officer VANE Minerals (US) LLC, BSc Geology, 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. VANE Minerals, as operator of the project, is responsible for the contents of this press release.

www.proactiveinvestors.co.uk/companies/stocktube/948 

The remaining 15% of the value, amounting to approximately $168,000, net of sales tax, is expected to be received in December 2011.

In addition, a further 76 tonnes of concentrate from milling which occurred in October 2011, has been shipped to the smelter. These concentrates have a projected value of more than $750,000, net of sales tax, and payment of 85% of value is scheduled to be received by 20 November 2011.

David Newton, CEO commentated: ‘Management would like to reiterate their confidence in the on-going operations of the Company. With an experienced Board and opportunities for growth, we look to the future with increasing confidence.’
 

• 1,560 tonnes of ore mined from Diablito Mine in the Period at an average cash cost of $69/tonne(T)
• 5,560 tonnes of ore mined from La Colorada Mine in the Period (part of the Company’s Joint Venture (“JV”) with Ruiz Brothers (“Ruiz”)) at an average cash cost of $67/T
• 8,022 tonnes of ore in total processed by SDA Mill during the Period
  • 2,706 tonnes of ore processed from Diablito with average grades 1.96g/T Au and 169g/T Ag at an average cash cost of $25/T milled
  • 5,316 tonnes of ore processed from La Colorada with average grades 5.17g/T Au and 105g/T Ag at an average cash cost of $24/T milled
• Grades of up to 12.6g/T Au and 258g/T Ag realised from La Colorada post-Period
• Average recovery rate of 75.9% Au and 69.9% Ag; improving as a result of addition of second vertical cell at SDA mill
• Peñoles smelter resumed normal operations following temporary closure in September due to overstocking 
• Total revenue of US$433,691 generated in the three months to 30 September 2011.  In addition, due to the temporary closure of the Peñoles smelter, the Company had a concentrates inventory awaiting smelting of approximately $1.0 million* as at 30 September 2011 (which has been smelted and the revenue accounted for post Period)
• Merrill-Crowe recovery facility operational with third-party concentrate/ore being sourced
• All gold and silver sold unhedged
• Decision taken to close Diablito Mine during 2012

• La Colorada concession (14 hectares) - includes the following workings: Salto, La Camichina, Campo Ancho, La Colorada, and La Escondida workings located at different elevations along the same vein(s) system. These workings have opened the principal vein structure intermittently over a horizontal distance of 400 meters and a vertical distance of 130 meters;
• Maria Fernanda concession (72 hectares) - includes two separate veins, Saltito, which has numerous shallow workings along a strike length of more than 500 meters and the largely unexplored Papayal vein;
• Jorge Luis concession (11.9 hectares) - covers the upper level workings along the La Valenzuela vein 75 meters above La Valenzuela tunnel; and
• La Valenzuela concession (74.9 hectares) - adit provides access to the lower level as well as the upper workings along the La Valenzuela vein.

Therefore the total number of Ordinary shares in the Company with voting rights is 442,923,658.

The above figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Services Authority's Disclosure and Transparency Rules. 

Highlights

• Three deep holes completed with the following main mineralised intercepts:
  • Hole 11-R-1; 1295.5 – 1394.5ft (99.0ft) averaging 0.06% eU₃O₈
  • Hole 11-R-2; 1436.5 – 1439.5ft (3.0ft) averaging 16.45% eU₃O₈
  • Hole 11-R-3; 1429.5 – 1439.0ft (9.5ft) averaging 0.64% eU₃O₈
• Mineralisation in excess of +1% eU₃O₈ has been encountered on the project over a horizontal distance of 100ft and vertical extent of 250ft
• Vertical extent of known mineralisation of 0.05% eU₃O₈ or greater expanded to 700ft

David Newton, CEO of VANE Minerals said "We are encouraged by these drilling results and the mineralisation that has been encountered. Further drilling will continue at Rose with the aim of establishing an NI 43-101 compliant resource, which will add to our existing resource of 1.118m pounds at our Wate project."

Background

The Company has completed three deep holes on the project indicating very encouraging results. Two of the three holes completed encountered +1% grade uranium mineralisation confirming previous historic drilling results at those grades. However, Hole 11-R-2 encountered an interval with a radiometric grade average of 16.45% eU₃O₈ with a maximum of 47.88% eU₃O₈, which is a substantially higher radiometric grade than had previously been encountered on any of the VANE breccia pipe projects.

The drill hole results, combined with data from previous drilling indicates that the pipe centre is easterly from all holes drilled to date. The +1% eU₃O₈ intervals in holes 11-R-2 and 11-R-3 are at the same depth (±1435ft) and approximately 60ft apart horizontally. Additionally, the current drilling verifies +1% eU₃O₈ mineralisation over a horizontal distance of 100ft and a vertical extent of 250ft when incorporating historic drilling. The vertical extent of mineralisation at grades 0.05% eU₃O₈ and higher has been increased to over 700ft. The mineralised intervals have been encountered over significant distances that, if continuous, would be sufficient to develop economic resources. Additional drilling is required to prove the continuity of the ore-grade mineralisation to establish NI43-101 compliant resources. The drilling programme is continuing with a view to establishing a resource.

The following details the mineralised intercepts of 0.05% eU₃O₈ or higher in the three holes drilled:

Hole 11-R-1
1295.5-1394.5ft – 99.0ft – 0.06% eU₃O₈ (max. 0.19% eU₃O₈)

Hole 11-R-2
1240.0-1247.5ft – 7.5ft – 0.15% eU₃O₈
1417.5-1421.0ft – 3.5ft – 0.46% eU₃O₈ (max. 0.88%)
1436.5-1439.5ft – 3.0ft – 16.44% eU₃O₈ (max. 47.88% eU₃O₈)
1445.5-1448.0ft – 2.5ft – 0.09% eU₃O₈
1457.0-1458.0ft – 1.0ft – 0.09% eU₃O₈

Hole 11-R-3
1072.0-1076.5ft – 4.5ft – 0.08% eU₃O₈
1099.0-1104.0ft – 5.0ft – 0.07% eU₃O₈
1172.0-1175.5ft – 3.5ft – 0.11% eU₃O₈
1429.5-1439.0ft – 9.5ft – 0.64% (max. 4.28% eU₃O₈)
1457.0-1458.5ft – 1.5ft – 0.08% eU₃O₈
1468.5-1470.0ft – 1.5ft – 0.09% eU₃O₈
1490.0-1491.0ft – 1.0ft – 0.12% eU₃O₈

Under the terms of the agreement with U1, VANE will manage the exploration of the Rose project and all expenditures will be shared equally with U1. Upon outlining a 1.0 million pounds eU₃O₈ NI43-101-compliant resource, VANE will make a cash payment of US$250,000 to U1. U1 will then assume management of the project and upon securing a mineral lease from the State of Arizona, VANE will make a final payment of US$250,000 to U1 in order to acquire a 50% interest in the Rose Project. The Rose Project is operated separately from the existing VANE-U1 joint venture.

Kristopher K. Hefton, Chief Operating Officer VANE Minerals (US) LLC, BSc Geology, 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. VANE Minerals, as operator of the project, is responsible for the contents of this press release.
 

Application has been made to the London Stock Exchange for the 116,000,000 Placing Shares of 0.1p each to be admitted to trading on AIM and Admission and dealings is expected to occur at 8.00am on 27 October 2011.

Following admission of the 116,000,000 Placing Shares, the total issued share capital of the Company will be 442,923,658 ordinary shares of 0.1p each. This figure may be used by shareholders to determine if they are required to notify their interest in, or a change to their interest in, the Company under the FSA's Disclosure and Transparency Rules.

Defined terms in this announcement should be taken to have the same meaning as set out in the circular which was posted to shareholders on 29 September 2011. 

As at the date of this announcement, the Company's issued share capital consists of 326,923,658 Ordinary Shares. The Company does not hold any Ordinary Shares in Treasury.

On 29 September 2011, the Company announced that it was issuing a further 116,000,000 new Ordinary Shares pursuant to a placing, conditional on shareholder approval and admission of these new Ordinary Shares to trading on AIM ("Admission"). On Admission, the Company's issued share capital will consist of 442,923,658 Ordinary Shares and Mr Idiens shareholding will represent 3.34% of the Company's issued share capital as enlarged by the Placing.

Grant of options

The Company has granted a total of 11,600,000 new share options to subscribe for ordinary shares of 0.1p each in the Company ("Ordinary Shares") (the "Options"). Included within this grant are the following directors of the Company or its subsidiaries:

* a director of VANE's wholly owned subsidiary, Minerales VANE SA de CV

The exercise price on all the Options is 1.125p, being the closing mid-market price on the day immediately preceding this announcement. The Options granted to Matt Idiens and David Newton, together with 2,100,000 of the balance of the Options being granted to key employees of the Company, shall vest in three equal annual tranches commencing 1 September 2012. The balance of the Options, namely 2,700,000 (including those Options granted to Sir Richard Needham, Luis Perez Agosttini and Kris Hefton), shall vest in full on 1 September 2012. The Options will expire on 30 September 2021.

Following the grant of the Options, the directors of the Company or its subsidiaries will be interested in the following number of shares and options in the Company:

* a director of VANE's wholly owned subsidiary, Minerales VANE SA de CV

** subject to the approval of the proposed placing announced on 29 September 2011 at the General Meeting to be held on 26 October 2011

*** 1,000,000 of the shares held by Sir Richard Needham are subject to the approval of the proposed placing announced on 29 September 2011 at the General Meeting to be held on 26 October 2011

Re-pricing of options

The Company currently has outstanding options over 14,500,000 ordinary shares, representing 4.44 per cent. of the Company's current issued share capital (the "Existing Options").  The Existing Options were granted to directors and other employees between 25 May 2004 and 20 July 2009 pursuant to the Company's existing share option scheme.  The Existing Options have exercise prices of 10p and 11p, compared with a mid market price at close on the day preceding this announcement of 1.125p.  3,000,000 of the Existing Options previously expired on 24 May 2014 with the remaining 11,500,000 expiring on 25 May 2014. All Existing Options now expire on 30 September 2021.

11,750,000 of the Existing Options are held by directors of the Company, namely Sir Richard Needham, Matt Idiens and Kris Hefton, and also by Luis Perez Agosttini, a director of VANE's wholly owned subsidiary, Minerales VANE SA de CV.  As recognition of the work of those directors and, in view of the low level of salaries currently charged by those directors, the Company has decided to reduce the exercise price on all the Existing Options to 1.125p, being the closing mid market price on the day immediately preceding this announcement.

The re-pricing and extension of the Existing Options (the "Transaction") is deemed a related party transaction under the AIM Rules for Companies.  David Newton, Steven Van Nort and Levitt Clark Arnold, being the independent directors, having consulted with Allenby Capital Limited, as the Company's nominated adviser, consider that the terms of the Transaction are fair and reasonable in so far as the Company's shareholders are concerned.

• The Company proposes to raise £1,160,000 (before expenses) by way of a conditional placing of 116,000,000 new Ordinary Shares of 0.1 pence each at a price of 1 pence per share
• Placing Shares have been conditionally placed with institutional and other investors and certain Directors, subject, inter alia, to the passing of the Resolutions at the General Meeting and Admission
• Subject to approval by Shareholders at a General Meeting to be held at 10.00 a.m. on 26 October 2011
• The net proceeds of the Placing will be used to accelerate the Company’s planned copper porphyry exploration programme in the southern United States; enable the Company to bring additional sources of ore online in Mexico for processing at its SDA mill; support its uranium exploration programme; and investigate possible asset acquisition
• Interim results for the six months to 30 June 2011 announced today

• £1,240,651 Revenue, increased 18.45% (H1 2010 £1,047,423)
• £1,559,977 Loss, representing (0.48) pence per share
• £1,525,014 Group-wide cash balance at period end

• Increased revenues at operations as a result of processing ore from the Ruiz joint venture
• 17,008T (105% of target) total ore production
• Average metal price received on sales of concentrates was $38.09/oz silver and $1,525.41/oz gold (up from the 2010 average prices of $1,204.09/oz gold and $19.43/oz silver)
• Diablito Mine expected to close mid-2012, on time and on budget
• Expansion of Rosario JV with higher grade ore

• Permitting finalised for McGhee Peak project. Railroad expected to have permitting finalised in near future
• Property positions also established at Bouse, Peg Leg, Lone Hills and Cherry Creek

• Drilling phase successfully completed on Wate deposit
  • Grade increased from 0.70% eU₃O₈ to 0.79% eU₃O₈ and inferred resource delineated at 1.118m Ibs eU₃O₈

• David Newton appointed as Chief Executive Officer
• Completion of cyanide leach/Merrill Crowe plant.
• Renewal agreement with Freeport-McMoRan Copper and Gold Inc. for access to the Freeport databank extended to 30 June 2013
• JV and option agreement signed with Uranium One Americas Inc. in relation to Rose uranium breccia pipe project
  • Drilling commenced
  • 620 feet of vertical extent of known mineralization; historic grade results in excess of +1% eU₃O₈

Highlights

• Property positions established on 6 targets; New Mexico and Arizona
  • Target development underway in two additional areas
• Drilling at McGhee Peak target to commence shortly with completion expected Q4 2011
  • Railroad target to be drilled subsequently

VANE has focused its porphyry copper exploration operations in the Southwest Copper Porphyry Province of the USA, an area that contains one of the highest known density of porphyry copper deposits in the world, with individual porphyry copper deposit gross values of between $2.2B and $40B.

The Company has developed a pipeline of exploration drilling targets with an ongoing stream of projects being identified through the compilation of various geologic criteria; major mineral/deposit trends, mineral clusters at the edge of cover rocks, wide-spread areas of post mineral cover rocks, gravity data suggesting shallow cover rocks, Freeport-McMoRan data base, and NURE geochemistry. As of today the following land positions have been established, Railroad, McGhee Peak, Bouse, Peg Leg, Cherry Creek and Lone Hills, within the copper quadra-lateral of southwest New Mexico and southern Arizona. These areas are well known for the occurrence of bulk-disseminated copper-molybdenum deposits.

The Company currently has a drilling permit issued for its McGhee Peak property, with the Railroad property expected to be permitted in the near future. Drilling at McGhee Peak will begin shortly and, following completion of drilling scheduled in Q4 2011, the rig will be moved to Railroad. VANE's objective is to have a pipeline of projects capable of supporting the drilling of at least a target per quarter. Further areas have also been identified within Arizona and New Mexico and VANE is working to secure these new prospective areas in order to begin the permitting process.

VANE recently extended its Agreement with Freeport-McMoran Copper and Gold Inc. to 30 June 2013, which provides access to Freeport's extensive domestic and international exploration files which provide valuable information used in the target selection process.

David Newton, CEO, commented: "Within VANE's sphere of activities, the copper-porphyry exploration portfolio is one of the most exciting activities we are undertaking. Our primary objective is to identify which of these targets might hold significant amounts of copper in order potentially to delineate a major new copper-molybdenum deposit in one of the richest regions of the world for such mineralization. One of my key objectives as the new CEO of VANE is to drive forward the copper porphyry program and ensure that our Mexican precious metals production operations are maximized, thus allowing us the opportunity to discover a new porphyry copper system."