Q3 operational and production update
Rose Petroleum plc (AIM: ROSE)
("Rose" or the "Company")
Operational and production update for 1 July to 30 September 2013 ("Q3")
Rose announces an update from its oil and gas division and gold and silver operations in Mexico, which are operated by its wholly-owned subsidiary, Minerales VANE S.A. de C.V. ("MV"), together with an update on the activities of its wholly-owned subsidiaries AVEN Associates LLC and VANE Minerals (US) LLC in relation to copper and uranium.
Highlights
Oil and Gas
· Additional licence applied for in Western Europe
Mexican operations
· 1,387oz. Au and 21,059 oz. Ag produced in Q3 (Q2 2013: 1,572.5 oz. Au and 16,613 oz. Ag)
· 10,196 tonnes of ore processed during Q3 (Q2 2013: 9,093 tonnes) with average grades 5.88 g/T Au and 94.3 g/T Ag (Q2 2013: 5.96 g/T Au and 93.3 g/T Ag)
· Average recovery rate of 81.1% Au and 71.6% Ag (Q2 2013: 81.8% Au and 75.6% Ag)
· Total revenue for Q3 of US$2,419,167 (unaudited) (Q2 2013: US$2,117,993)
· Direct production cost of $760.07 per oz. Au equivalent or $12.49 per oz. Ag equivalent (Q2 2013: $626.70 per oz. Au equivalent or $9.83 per oz. Ag equivalent)
· 49.3 tonnes of concentrate held in inventory at period end (Q2 2013: 30.6 tonnes)
· SDA Mill operated at 113% of capacity
· All gold and silver sold unhedged
· Diablito Mine undergoing closure and reclamation at period end
Copper and uranium
· AVEN Associates LLC - discussions are ongoing with parties interested in participating in the programme
· VANE Minerals (US) LLC - discussions are ongoing with potential buyers. Judgments on the legal claims against the U.S. Department of Interior pertaining to the withdrawn federal lands are pending
Commenting today, Matthew Idiens, CEO of Rose said: "The results from our Mexico operations continue to be solid despite pressure on precious metals prices during the period and we are confident that our Mexican business will continue to make a positive cash contribution. In Q3, MV generated a net profit of US$502,801 (unaudited) of which US$145,263 was invested in fixed assets in Mexico.
I am also pleased with the interest being shown in our copper and uranium divisions. Although there can be no guarantee that we will be able to secure a partner, discussions continue. I am encouraged by the progress being made in our oil and gas division where we are building on the momentum we have created. We look forward to making further announcements at the appropriate time."
Oil and Gas
Following the announcements on 5 August 2013 outlining the Company's entry into a conditional sale and purchase agreement covering approximately 635,000 acres in Western Europe and, subsequently on 3 September 2013, in relation to the appointment of the new technical team for oil and gas, the team has been reviewing numerous opportunities and has identified and made an application for an additional license in Western Europe. The Board anticipates being able to update the market in the coming months on activities.
Quarterly update on Mexico operations
The revenue generated in Q3 originated primarily from the Company's joint venture with MET-SIN. Production decreased and costs of production increased from those in Q2 2013 which was caused by the throughput of lower grade Diablito ore which has a higher cost base. SDA Mill throughput during the quarter consisted of: Diablito ore (100% Minerales VANE) - 658 tonnes which produced 11.47 tonnes of concentrate; La Colorada ore (MET-SIN JV) - 8,242 tonnes which produced 144.42 tonnes of concentrate; and Diablito ore (third party agreement as mentioned in H1 Interim Report released on 3 September 2013) - 1,296 tonnes which produced 36.74 tonnes of concentrate.
Improved efficiency at the SDA Mill resulted in production of 113% of capacity and the board of ROSE (the "Board") anticipate that this will continue in Q4. The Board also expects production grades and revenue for Q4 to increase and be consistent with results achieved prior to the Q3 rainy season with Q4 production being focused solely on our activities from our joint venture with MET-SIN, assuming stable metal prices.
As the Company moves towards 2014, the Minerales VANE team is in the process of developing its programme to bring additional production on line in the La Rastra District to assure continued revenue from its JV with MET-SIN. In addition, the Company continues to evaluate other opportunities in Mexico.
Copper and Uranium
The Company's copper and uranium programmes have been placed on a care and maintenance basis.
The Company is encouraged by the interest shown in its copper programme and believe a partner will come on board to enable exploration drilling to resume. Care and maintenance activities on the Company's copper and uranium programmes consist of continual evaluation of its portfolio of targets and maintaining its land positions.
The Company holds in its portfolio approximately 100 high-priority uranium targets on state lands ranked according to exploration potential. This will assist with the transition to exploration drilling for a buyer of/ investor in these assets.
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:
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Rose Petroleum Plc Matthew Idiens CEO
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+44 (0) 20 7225 4595 |
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Allenby Capital (Nominated Adviser & Broker) Jeremy Porter/Alex Price |
+44 (0) 20 3328 5656 |
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This information is provided by RNS
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