VANE Minerals Announce Joint Venture

20 January 2011
VANE Minerals Announce Joint Venture

Ruiz Brothers agreement to provide expansion of Gold/Silver production in 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.”