Joint Venture Agreement, Mexi
VANE Minerals plc (AIM:VML)("VANE" or the "Company")
Joint Venture Agreement
Expansion of Gold/Silver Production, Mexico
Highlights
· Joint Venture agreement signed with Ruiz Brothers
· 1,132.7 tonne bulk test sample from the La Colorada vein successfully processed at VANE's mill in San Dieguito de Arriba (the "SDA Mill")
· Stockpiled La Colorada ore at SDA Mill used as mill feed throughout November amounting to a throughput of 2,719 tonnes, producing 26.04 tonnes of concentrates which averaged 176.4 g/T gold and 15,602 g/T silver
· Fourth concession added to joint venture ("JV")
Joint venture agreement
The board of VANE (the "Board") is pleased to announce that, following the signing of a memorandum of understanding as announced on 7 June 2010, its wholly owned subsidiary, Minerales VANE SA de CV ("MV"), has entered into the joint venture agreement (the "Agreement") with Jose and Hector Ruiz in the La Rastra gold-silver district. Under the terms of the Agreement, an area of interest is specified within which development rights to four properties have been secured with additional acquisition opportunities having already been identified. Further to VANE's press release of 6 October 2010, which stated three concessions, a fourth concession, La Valenzuela (74.9 hectares), has been added to the JV. The concession has an existing adit which provides access to the lower level as well as the upper workings along the La Valenzuela vein. There are presently four high-grade mines on the concessions that are planned for development and the gold-silver ore from these mines and any newly acquired projects within the area of interest, will be processed at MV's SDA Mill.
Under the terms of the Agreement, any net profits generated by these high-grade mines will be split on an 80:20 basis in VANE's favour until such time as VANE has recovered 150% of any outlaid development/capital costs incurred by it in connection with, amongst other things, upgrading the mining and transportation equipment at these mines as well as the development of resources and the construction of a new mill if warranted. Thereafter, any net profits will be split on a 60:40 basis in VANE's favour.
The area covered by the Agreement is located in the southern part of the State of Sinaloa, Mexico, approximately 100 km north of the SDA Mill and includes an area of interest of approximately 1,500 square kilometers, including the historically significant mining districts of La Rastra, El Rosario and La Escuinapa. The Ruiz brothers control and have four concessions, La Colorada (14 hectares), La Valenzuela (74.9 hectares), Maria Fernanda (72 hectares) and Jorge Luis (11.9 hectares) and have contributed these to the joint venture. VANE's wholly-owned subsidiary, Minerales VANE SA de CV, will oversee the exploration and mine planning, provide project financing and make available its SDA Mill (flotation/cyanide processing plant) near Acaponeta, Nayarit, Mexico. The Ruiz brothers will be responsible for mining and the transport of the ore from the mines to the SDA Mill.
Successful processing of bulk test sample
As announced on 6 October 2010, a 1,132.7 tonne bulk test sample from La Colorada vein was successfully processed at the SDA Mill. Following that test, stockpiled La Colorada ore at the SDA Mill was used as mill feed throughout November and amounted to a throughput of 2,719 tonnes which produced 26.04 tonnes of concentrates which averaged 176.4 g/T gold and 15,602 g/T silver.
With the Agreement now in place, the Board anticipates that upgrades to the Ruiz's mining and transportation equipment can be made quickly and, when complete, will enable both the rehabilitation of the lower Salto tunnel and the projected production of high-grade ore from the La Colorada vein system to proceed as planned.
Commenting today, Steve Van Nort, CEO of VANE said: "We are pleased that the formal joint venture agreement has now been signed so we can rapidly move forward with our goal to increase production from our existing concessions. In addition, we will also look to increase our land position and resource base in the region. We look forward to updating shareholder on progress in 2011, including revenues from the mill and news regarding our low-cost precious metals exploration/development program in the surrounding region."
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.
For further information, please contact:
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VANE Minerals Plc |
+44 (0) 20 7667 6322 |
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Matthew Idiens Allenby Capital Brian Stockbridge/Alex Price
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+44 (0) 203328 5656 |
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Threadneedle Communications |
+44 (0) 20 7653 9850 |
Laurence Read/ Beth Harris
Further detail on the agreement with the Ruiz brothers and exploration potential
The Agreement will initially focuses on four concessions currently controlled by the Ruiz brothers, of which, La Colorada, is currently in production. In addition, exploration and mine planning of the additional concessions will be examined.
Within the four concessions, a number of precious metal veins and vein systems are known and have been partially developed:
· La Colorada concession (14 hectares) - includes the following workings: Salto, La Camichin, 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.
· La Valenzuela concession (74.9 hectares) - adit provides access to the lower level as well as the upper workings along the La Valenzuela vein.
Although several ore shoots have been intersected in the La Colorada drift, current production is from a 2-meter wide vein which extends upwards to the La Escondida drift, 15 meters above. The Board believes that the potential below the La Colorada drift is encouraging based on historic drill results obtained in 2006. Sampling of the La Colorada drift indicates another ore shoot which has yet to be fully explored or mined but which would be accessible by advancing the lowermost Salto tunnel 200 meters to the north along the La Colorada vein. Mapping and sampling will be carried out to determine the location of all of the underground workings and the best method to access the known ore shoots to expand production. Diamond drilling will be carried out as necessary.
The Saltito vein system, which is next targeted for production, on the Maria Fernanda concession, exhibits numerous shallow mine workings over a 500+ meter strike length. Historic drilling (2006) has given indications of mineralization extending to depth. Mineralogy and grades are projected to be similar to the ore being produced at La Colorada. Mapping and sampling will be carried out to determine the best method of accessing and developing the ore shoots currently indicated from shallow underground workings. Diamond drilling will be carried out as necessary.
Historic mapping from the La Valenzuela vein indicates two ore shoots extending from the upper Jorge Luis drift to 40 meters below the La Valenzuela drift, a vertical difference of 115 meters in which a non-compliant NI43-101 resource of 43,000 tonnes at 6.8 g/T Au (9,400 oz. Au) and unspecified silver has been inferred. Mapping and sampling will be carried out to determine the best method of accessing and developing the ore shoots currently indicated from the underground workings. Diamond drilling will be carried out as necessary.
Within the 1,500 km2 area covered by the Agreement numerous other precious metal vein targets exist as per the "Geological-Mining Monograph of the State of Sinaloa" published by the Consejo de Resursos Minerales and the Board anticipates that these will be explored and evaluated in the course of the joint venture. VANE's and the Ruiz brothers' intention is to develop several additional projects that will be capable of each supplying 50+ tonnes of ore/day which, the Board believes, would in turn justify the construction of an additional mill in a location more central to the mines. Concentrates from that mill would then be processed by leaching and Merrill Crowe precipitation at the SDA Mill.
This information is provided by RNS
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