Trading Update

RNS Number : 3174V

Vane Minerals PLC

11 January 2013

 

11 January 2013

VANE Minerals plc (AIM:VML)

("VANE" or the "Company")

Trading Update

VANE is pleased to announce the following update on its activities:

URANIUM PROGRAMME

Wate Project

Wate Mining Company LLC has submitted the application to obtain a Mineral Lease on the Wate project to the Arizona State Land Department (ASLD).  The Wate project is held in Wate Mining Company LLC which is owned 50:50 by VANE Minerals (US) LLC and Uranium One Exploration, U.S.A. Inc.  VANE is the operator of Wate Mining Company LLC.

A Mineral Lease gives authority to develop the project contingent on obtaining environmental compliance permits from the Arizona Department of Environmental Quality (ADEQ).   VANE has concluded pre-application conferences with ADEQ and is making arrangements with environmental consulting firms to handle the permit application and permitting process with a goal of submitting the ADEQ applications by April 2013.  According to ASLD and ADEQ, the timing for approval is 12-18 months from application for both processes, which can run simultaneously.  VANE therefore anticipates that Wate Mining Company LLC will receive approval to commence development of the Wate project between April and October 2014. The Wate Project has a NI 43-101 compliant resource of 1.118m lbs eU₃O₈ at an average grade of 0.79% eU₃O₈.

Legal Update

On 8 January 2013, the U.S. District Court of Arizona issued an Order denying all but one of the U.S. Department of Interior's ("DOI") claims in their Motion to Dismiss the lawsuits challenging the withdrawal of lands on which VANE has substantial uranium properties. 

As previously announced, VANE joined this litigation in order to protect shareholder interests. These lawsuits had been combined into a single case that will proceed as a result of this Court Order.  The Judge outlined a Scheduling Order under which "oral arguments" will be heard on 1 March 2013, at which time further details on the litigation time frame may become available. 

VANE has filed a lawsuit, as principle, in the U.S. Court of Federal Claims seeking redress on financial losses as a result of the withdrawal of the lands where VANE held its mining claims on which it had invested substantially.  In order to proceed with this "damages" case, VANE was required to withdraw from its involvement in the U.S. District Court case.  In documents submitted to the Court, VANE represented that it invested US$8.5M in its uranium programme and that the U.S. Bureau of Land Management concluded that the withdrawal deprived VANE of at least one mine, with a net value of approximately $80M at the current uranium price.  As anticipated, the DOI has also filed a Motion to Dismiss and a date for the decision on this filing has not been set, but is expected to be in Q2 of 2013.  If the case is allowed to proceed, a ruling is not expected until at least Q3 of 2013.  Many of the DOI's arguments are the same as those filed in the District Court case and which were rejected as set out above.  It should be noted that although VANE had to withdraw from the District Court case, VANE would still benefit from a favourable decision.  

The Company continues to maintain that it followed established precedence in investing in its mining claims and was unaware that the DOI might take these lands without warning and without compensation for VANE's investment. Development of hard-rock minerals has long been undertaken through the unpatented mining claim system, which is the only avenue to obtain, control, and protect rights to develop hard-rock minerals on federal lands in the U.S. and has been and continues to be used extensively by corporations and individuals.  The Directors believe that the recent developments in the legal proceedings support VANE's position.

MEXICO

The Company's gold and silver operations at its joint venture in Mexico continue in line with expectations and an announcement regarding production in Quarter 4 2012 is expected to be made in February 2013.

COPPER PROGRAMME

The Directors have decided that the Company's U.S. Porphyry copper exploration programme is best advanced by seeking to attract external third parties to help finance the proposed programme. The targets developed by the programme require additional funding beyond the present funding capabilities of the Company. This is expected to be through direct finance into either the individual exploration targets or into AVEN Associates LLC, the Company's wholly-owned subsidiary that holds the copper assets. Such financing would allow the Company to accelerate its exploration programme over and above what is currently achievable by VANE's existing resources, both financially and operationally. This process is underway and further information will be announced as it becomes available. In the meantime, the proposed exploration programme has been paused whilst the search for an appropriate partner to help provide these additional resources continues.

NEW OPPORTUNITIES

Given the developments on the uranium assets and the opportunities provided to the Company by the decision to seek third party partners for the copper exploration programme, the Company has decided to seek new opportunities to help create shareholder value. Further information and updates in this regard will be announced as appropriate.

For further information, please contact:

VANE Minerals Plc	[phone]
David Newton CEO VANE Minerals plc Allenby Capital (Nominated Adviser & Joint Broker) Jeremy Porter/Alex Price Northland Capital Markets (Joint Broker) Louis Castro	[phone] [phone]
Bankside Consultants	[phone]

Simon Rothschild

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