ROSE.L Regulatory News (ROSE)

VANE Minerals plc (AIM: VML)

("VANE" or the "Company")

Final Results for the year ended 31 December 2012

Financial highlights

·; Revenue increased by 56.6% to £5.76 million (2011: £3.68 million)

·; Maiden annual profit before tax of £0.05 million (2011: £1.53 million loss before tax)

·; Repayment of £500,000 of convertible loan stock with remaining £1 million of convertible loan stock re-negotiated for a further five years at a coupon of 8% and a conversion price of 1.25p per Ordinary Share

·; Cash balances of £0.53 million as at 31 December 2012 (2011: £2.30 million)

Mexico

Silver/gold production and milling

·; Increased revenues and profitability at operations level

·; 4,341 oz. Au and 85,241 oz. Ag produced in 2012 at a direct production cost of $682.33 equivalent per oz. Au; or $12.62 equivalent per oz. Ag (2011: 2,706 oz. Au and 73,384 oz. Ag produced at a direct production cost of $743.45 equivalent per oz. Au; or $16.23 equivalent per oz. Ag)

·; 32,070 tonnes processed in period (106.9% of target) (2011: 31,466 tonnes)

·; Average grades 6.07g/T Au and 121g/T Ag (2011: 4.4g/T Au and 131g/T Ag)

·; Average metal price received on sales of concentrates was $1,662/oz. gold and $30.7/oz. silver (2011: average prices of $1,617/oz. gold and $35.9/oz. silver)

·; Average recovery rate of 79% Au and 77% Ag (2011: 73% Au and 69% Ag)

U.S.A

Copper portfolio

·; Copper-molybdenum porphyry system successfully drilled at McGhee Peak. Two mineralised targets have been identified, located approximately one mile apart, within a clearly identified porphyry system, containing copper, molybdenum and zinc.

·; Property positions also established at Bouse, Lone Hills and Cherry Creek

·; Initial exploration work at Bouse has produced strong anomalous gold and copper values

·; Partner sought to help fund proposed exploration programme

Uranium portfolio

·; U.S. Government confirmed withdrawal of over 1 million acres of Federal lands from exploration and mining activity. VANE has initiated legal action seeking redress

·; VANE assumes management of Wate Mining Company LLC (Member companies VANE and Uranium One each holding 50%) which includes NI 43-101 compliant inferred resource of 1.118m Ibs eU3O8 at Wate breccia pipe project

·; Mineral Lease application filed with respect to the Wate Project

·; Remaining exploration programme placed on care and maintenance

·; Intention to sell assets announced

Post year-end Board changes

·; Matthew Idiens to replace David Newton as CEO

VANE also announces that the Annual General Meeting will be held at the offices of Allenby Capital Limited, 3 St Helen's Place, London EC3A 6AB on 28 June 2013 at 09.30 AM, notice of which will be posted to shareholders along with the report and financial statements on 5 June 2013. Copies of the report and financial statements and the notice of AGM will also be available from 5 June 2013 from www.vaneminerals.com in accordance with AIM Rule 20 and from the Company Secretary, VANE Minerals plc, Metic House, Ripley Drive, Normanton, WF6 1QT.

For further information, please contact:

CHAIRMAN'S STATEMENT

I am pleased to announce that 2012 was the year that VANE declared its maiden profit before tax. This is as a result of our Mexican subsidiary, Minerales VANE, making significant progress in increasing its financial contribution to the Group. During the course of 2012, the Company had 11 months of production from our joint venture with Met-Sin and one month of production from our 100%-owned Diablito Mine. As a result, grades and recovery rates improved leading to substantially more revenue being generated and this is reflected in the Company's financial results for the year. Minerales VANE is expected to continue to perform strongly, generating significant cash resources for the Group.

In January 2012, the U.S. Secretary of the Interior announced the anticipated withdrawal from uranium exploration and mining of one million acres of federal lands in northern Arizona where VANE holds substantial interests. VANE has since initiated legal proceedings against the U.S. Department of the Interior with a claim for damages caused by this decision. A resolution to these legal proceedings is expected later in 2013.

The majority of VANE's uranium exploration assets are held within its joint venture with Uranium One. In consequence of this withdrawal of Federal lands, the joint venture decided to place all of these uranium exploration assets on a programme of care and maintenance, with the exception of Wate project which has a NI 43-101 Inferred Resource of 1.118M lbs eU3O8. VANE assumed operational control of this project during 2012 and successfully submitted a Mineral Lease application with approval expected during 2014.

Since the year end, VANE has announced that it is seeking to sell its uranium assets and we will announce further information at the appropriate time.

VANE has also announced 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 from VANE's existing resources. 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.

Post the year-end we announced that David Newton is stepping down as CEO from 31 July 2013 and we are pleased to announce that he is being replaced in that role by Matthew Idiens, a long-serving director of VANE.

 We would like to thank our investors for their continuing support. We look forward to updating you with our progress throughout the rest of 2013.

Rt Hon Earl of Kilmorey PC

4 June 2013

BUSINESS REVIEW

Review of Operations

Production of gold and silver from our Mexico business improved significantly throughout 2012 and this is reflected in the financial results for the year, with the Company declaring its maiden profit before tax. Production has focussed on ore from our joint venture with Met-Sin with this ore providing production for eleven months of the year. Throughout 2012, production from the joint venture came from the La Colorada concession, being one of a number of mines within the joint venture area, and revenues rose as a result of substantially higher grades being mined and recovery rates improving at our SDA Mill.

The copper exploration programme continued with targets being drilled at McGhee Peak, Peg Leg and Railroad Well and a clearly-identified copper porphyry system was successfully drilled at McGhee Peak. These assets are now held on a care and maintenance basis until third-party finance can be secured to continue with the programme.

Our uranium business has also been put on a programme of care and maintenance following the announcement by the U.S. Secretary for the Interior, Ken Salazar, that the most prospective Federal lands in northern Arizona were being withdrawn from new mining activity. Legal proceedings continue as VANE seeks compensation from the U.S. Department of the Interior for damages caused by this action.

Exploration, Mining and Milling Operations - Mexico

Minerales VANE SA de CV, VANE's 100% owned subsidiary of VANE Minerals plc, significantly improved its financial performance in 2012. Operations continue to be directed from the headquarters located in Acaponeta, Nayarit that include offices, living quarters and analytical facilities.

During the year, production originated largely from our joint venture with Met-Sin, located in La Rastra, Sinaloa. The joint venture has an area of interest covering some 1,500 square kilometres in southern Sinaloa. It includes three separate mining districts; La Rastra, Escuinapa and Rosario as well as four properties owned by Met-Sin. The Colorada concession is currently in production and this has been the source of all joint venture ore for the SDA Mill in 2012. Three additional concessions, Maria Fernanda, Valenzuela and Jorge Luis cover three partly developed high-grade veins that will be developed at the appropriate time.

An amendment to the terms of the joint venture was announced in November 2012, changing the main financial term of the joint venture to a 50:50 profit split. Met-Sin further stated that it will construct a 100-300 tpd (tonne per day) processing mill in La Rastra solely at its own expense, with construction expected to commence during 2013. Any excess production from joint venture mines, over and above that required to adequately feed VANE's existing SDA Mill, may be processed through the new La Rastra mill, thus enabling production and joint venture revenues to increase.

VANE announced previously that it intended to close its Diablito Mine during 2012 following the extraction of the remaining ore-grade material. During 2012, some 5,335 tonnes of ore were mined from Diablito, of which 2,748 tonnes were milled in June 2012. The remainder of the ore provides inventory should there be an interruption to supply from the joint venture mines. Diablito is not expected to be formally closed until later in 2013.

During the year, the SDA Mill treated 32,070 tonnes of ore (2011: 31,466 tonnes) and production averaged 2,672 tonnes per month (2011: 2,622 tonnes) or 106.9% of target (2011: 105%). Average grades of 6.07 g/T Au and 121 g/T Ag were achieved (2011: 4.4g/T Au and 131g/T Ag) with an average recovery rate of 79% Au and 77% Ag (2011: 73% Au and 69% Ag). 4,341 oz. Au and 85,241 oz. Ag were produced in total for 2012 (2011: 2,706 oz. Au and 73,384 oz. Ag) at a total production cost of $682.33 per equivalent oz Au and $12.62 per equivalent oz. Ag (2011: $743.45 per equivalent oz. Au or $16.23 per equivalent oz. Ag).

Southwest USA Copper Exploration

During 2012, the Company drilled its copper exploration targets at McGhee Peak, Peg Leg and Railroad. The drilling results at McGhee Peak confirmed that VANE had drilled into a clearly identified copper-molybdenum porphyry system that contains two mineralised zones, located approximately 1 mile apart. A follow-up diamond drilling programme is now required in order to determine whether or not this porphyry system contains economically viable grades of these metals.

This is an extremely exciting development for VANE, not only because of what might be discovered at McGhee Peak, but also because the discovery of this porphyry system provides confidence in the exploration techniques that VANE has been utilising in its exploration programme. Since the year end, VANE has announced that the Company's U.S. porphyry copper exploration programme, including the proposed diamond drilling programme at McGhee Peak, 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. 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.

Uranium Exploration in the USA

The Company's uranium programme is led by the joint venture project with Uranium One Exploration U.S.A. Inc. (U1) in northern Arizona. All of the Company's uranium assets are currently held on a care and maintenance basis, other than set out below.

The most significant asset within the joint venture is the Wate Project which has a NI 43-101 compliant resource of 1.118m lbs eU3O8 with an average grade of 0.79% eU3O8. Ownership of the project is 50:50 between VANE and U1 and will remain 50:50 assuming that all development costs are split equally between the parties. The original joint venture agreement stated that VANE would manage the exploration stage of the project, but that on proving a NI 43-101 compliant resource of at least 1 million lbs eU3O8, U1 would take over the management of the project for the pre-development and development stages as the project is advanced towards production. However, VANE and U1 have now agreed (as announced on 6 June 2012) that the management of the pre-development and development stages of the Wate Project will be transferred to VANE with immediate effect. Following the transfer of the management of the Wate Project to VANE, an application has been submitted to obtain a Mineral Lease on the Wate project to the Arizona State Land Department (ASLD). 

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. 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 during 2014.

Legal Update

As previous announced, VANE has filed a lawsuit, as principal, in the U.S. Court of Federal Claims seeking redress on financial losses as a result of the withdrawal of the Federal lands where VANE held its mining claims on which it had invested substantially. In documents submitted to the Court, VANE represented that it invested US$8.5M in its uranium program and that the U.S. Bureau of Land Management acknowledged that the withdrawal deprived VANE of at least one mine, with a net value of approximately $80M. This claim was dismissed by the U.S. Court of Federal Claims on 30 May 2013 owing to a legal technicality regarding the filing of the original complaint and the company plans to re-file its claim forthwith. .

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.

FINANCIAL REVIEW

Revenue

Revenue for the year has been generated from both the Diablito Mine and the La Colorada concession joint venture mine. La Colorada accounted for the majority of this revenue with Diablito supplying ore for processing solely in the month of June. The Income Statement reports total revenue for the year ended 31 December 2012 of £5,759,225 (2011: £3,678,126). Revenue from the Met-Sin joint venture have remained robust due to consistent grades being achieved which were matched by improved recovery rates.

Income Statement

The Group reported a net loss after tax of £542,619 or 0.12p per share for the year ended 31 December 2012 (2011: net loss after tax of £1,603,980 or 0.46p). The Group reported a gross profit of £1,707,977 (2011: £569,522) after charging profit share payments due under the terms of the joint venture of £1,428,558 (2011: £633,996) and depreciation of £379,954 (2011: £653,281).

There has been no impairment of intangible exploration and evaluation assets during the year (2011: £nil). Impairment of property, plant and equipment resulted in a charge of £nil (2011: £457,131) relating to impairment of the Diablito Mine.

Other operating income of £55,435 relates to administrative services provided by the Group. Other operating income in 2011 of £109,691 related to the 50 per_cent. uplift on capital expenditure incurred on the La Colorada concession under the terms of the Met-Sin joint venture of which there has been no expenditure in the current year.

Other gains and losses of £15,000 (2011: £nil) represents the gain on disposal of the Group's available-for-sale investment in Darley Energy plc, a mining and exploration company which was impaired in full at 31 December 2011.

Investment income representing interest received on the Group's cash balances was £5,959 (2011: £939).

Balance Sheet

Total investment in intangible assets at 31 December 2012 was £5,254,481 (2011: £4,865,067) reflecting the Group's continued investment in its mineral exploration programme, including the Wate Mining joint venture.

Property, plant and equipment at 31 December 2012 was £688,756 (2011: £944,953) reflecting the continued depreciation of the Diablito Mine and Ore processing mill.

Trade and other receivables of £702,541 (2011: £386,799) primarily represents amounts due in relation to trade receivables and VAT recoverable.

Cash and cash equivalents at 31 December 2012 were £529,367 (2011: £2,299,546). During the year the Group repaid £500,000 of its convertible loan notes and renegotiated the repayment terms of the remaining £1,000,000.

Trade and other payables of £688,005 (2011: £793,530) primarily represents amounts due in relation to trade payables.

Provision for decommissioning of the Diablito Mine has now been treated as a current provision as the restoration of the site is expected to take place within the next twelve months.

Significant equity events

During the year ended 31 December 2012, £190,004, being the equity component of all convertible loan notes redeemed, was transferred from other reserves to retained deficit.

Going concern

The Directors have set out in note 3 to the financial statements their consideration of the future financing requirements of the Group and, having made appropriate enquiries and having examined the major areas which could affect the Group's financial position, the Directors are satisfied that the Group has adequate resources to continue in operation for the foreseeable future. For this reason, they consider it appropriate to adopt the going concern basis in preparing the financial statements. This assessment has been carried out in the light of the guidance issued to the Directors by the Financial Reporting Council.

RISKS AND UNCERTAINTIES AND RISK MANAGEMENT

There are a number of potential risks and uncertainties which could have a material impact on the Group's long term performance and could cause actual results to differ from expected and historical results.

Non-financial risks

·; Overseas territories experience varying degrees of political instability. There can be no assurance that political stability will continue in those countries where the Group currently has, or in future will have, operations. Political instability or changes in government law or policies could materially affect the rights and title to the interests held by the Group, and the operations and financial condition of the Group could be adversely affected.

·; The U.S. Department of Interior has issued a 20-year withdrawal from mineral entry on approximately 1,000,000 acres in the northern Arizona's uranium breccia pipe district. This order prevents work on our claims located on Federal lands. State of Arizona lands, on which the Group is now focusing its efforts, are unaffected by this withdrawal.

·; The geographic locations of the Group's operations can present logistical difficulties in the installation, operation and maintenance of equipment related to the activities of the business. The Group currently generates its income from activities at the La Colorada mine and is at risk of any disruption to mining or milling activities for reasons beyond the Group's control. The Group has excellent relationships with mining contractors operating at the mine and has access to alternative contractors if required.

·; The Group's operations are such that minor and major injuries as well as fatalities could occur which could result in the temporary closure of the Group's operations.

·; In certain overseas territories the Group is unable to obtain the comprehensive level of insurance cover that would be available in the United Kingdom.

Financial risks

·; There is a risk that the carrying value of the Group's assets will not be recovered through future revenues, leading to significant impairment losses. The Group manages the recoverability of its assets and assesses the economic viability throughout the exploration, development and production phases.

·; The activities of the Group are subject to fluctuations in prices and demand for minerals, which are volatile and cannot be controlled. The Group sells all its concentrates to the only third party smelter in Mexico currently accepting custom concentrates. In addition to the risks of having a single outlet for concentrates, the Group is restricted to the commercial charges of those parties and the availability of capacity and continuity of labour. However, the Group's cyanide leach plant, the Merrill Crowe facility, is operational and in the future the Group has the option of processing its concentrates through this facility should it be required. This alleviates any potential bottleneck at the smelter and provides the Group with the option of processing its own concentrates to produce high-grade zinc precipitates which can then be sold to a wider market.

·; Changes in the U.S. mining laws may affect future operations in that royalties on minerals extracted from federal lands may be imposed.

·; Funds are maintained by the Group in GBP, MXN and USD. There is a risk that purchasing power in Mexico and the U.S. is lost though foreign exchange translation. The Group considers its foreign exchange risk to be a normal and acceptable business exposure and does not hedge against the risk.

·; There is a risk that there will be insufficient funds to meet all corporate, development and production obligations and activities and continue as a going concern into the foreseeable future. The Group manages liquidity risk by maintaining adequate cash reserves and monitoring forecast and actual cash flows. Management regularly reviews the Group's cash flow projections and forecasts.

CORPORATE SOCIAL RESPONSIBILITY

Employee recruitment and retention

Although the Group had no quantitative target for the number of employees it needs or retains, this metric is closely monitored. The Group has an excellent record of retaining key staff.

Health and safety

It is the objective of the Group to ensure the health and safety of its employees and of any other persons who could be affected by its operations. It is the Group's policy to provide working environments which are safe and without risk to health and provide information, instruction, training and supervision to ensure the health and safety of its employees.

Significant relationships

The Company enjoys good relationships with all of its suppliers, professional advisers and joint venture partners.

Key performance indicators

There are a number of key performance indicators that are reviewed regularly by the Board as set out below in respect of 2012.

Emphasis of matter - Going concern

The financial statements include an emphasis of matter from the Group's auditors, Baker Tilly UK Audit LLP, in relation to the Group's ability to continue as going concern. The directors believe there is uncertainty over whether the Group will generate sufficient funds to meet its liabilities as they fall due and are exploring other options such as the probable sale of non core assets and may also consider raising further funds from the market if the circumstances are appropriate at the time. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Groups ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

FUTURE DEVELOPMENTS

Your Board, management and dedicated exploration team continue to investigate and evaluate new opportunities designed to improve share price and, ultimately, shareholder value. The Company will continue to invest in its gold and silver operations in Mexico and intends to open additional mines in the next 12 months. The Directors will seek to progress the sale of its uranium assets, identify a partner to finance its copper exploration programme and consider corporate acquisitions

We would like to thank all shareholders for their continued support.

D J Newton

Chief Executive Officer

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2012

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2012

 CONSOLIDATED BALANCE SHEET

 As at 31 December 2012

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2012

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2012

1. GENERAL INFORMATION

VANE Minerals plc (the 'Company') is domiciled and incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is Metic House, Ripley Drive, Wakefield, WF6 1QT.

The nature of the Group's operations and its principal activities are the evaluation and acquisition of mineral exploration targets, principally gold, silver, copper and uranium targets in the United States, and the development and operation of mines in Mexico.

The financial statements are presented in pounds sterling as this is the currency in which funds from financing are generated and in which receipts are usually retained. Foreign operations are included in accordance with the policies set out in note 3.

As permitted by section 408 of the Companies Act 2006, the parent company's income statement and statement of other comprehensive income have not been included in these financial statements.

2. BASIS OF PREPARATION

The financial information set out above is abridged and does not constitute the Company's statutory financial statements for the year ended 31 December 2012. The financial information has been extracted from the financial statements for the year ended 31 December 2012, which have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the European Union, and were approved by the board on 4 June 2013 and on which the auditors' have reported without qualification.

The auditor's report on the financial statements is unqualified but did contain an emphasis of matter statement under section 495 of the Companies Act 2006.

The statutory financial statements for the year ended 31 December 2012 will be posted no later than 5 June 2013 to shareholders and, once approved, will be delivered to the registrar of Companies following the Annual General Meeting on 28 June 2012.

3. SEGMENTAL INFORMATION

For management purposes, the Group is organised into two operating divisions, the USA and Mexico. These divisions are the basis on which the Group reports its segment information.

Segment information about these divisions is presented below. The tables show the geographic segmentation of the Group. Activities in Mexico are currently concerned with gold and silver mining. Activities in the USA are split between research for further gold, silver and copper properties, and research and evaluation of potential uranium properties.

3 SEGMENTAL INFORMATION (CONT'D)

Income statement

Employees

The average numbers of employees for the year for each of the Group's principal divisions were as follows:

3 SEGMENTAL INFORMATION (CONT'D)

Balance Sheet

All the assets of the Group relate to the mining operations in Mexico and research, evaluation and mining in the USA. The business segmentation effectively follows the geographic segmentation given above. The Group's revenue was generated from two customers.

4. PROFIT/(LOSS) BEFORE TAXATION

 The profit/(loss) for the year has been arrived at after charging/(crediting):

5. LOSS PER ORDINARY SHARE

Basic loss per Ordinary Share is calculated by dividing the net loss for the year attributable to owners of the parent company by the weighted average number of Ordinary Shares in issue during the year. The calculation of the basic and diluted loss per Ordinary Share is based on the following data:

Due to the losses incurred in 2012 and 2011, there is no dilutive effect from the existing share options or convertible loan notes.