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GOLD PRODUCTION – UME Nears 100,000 oz at Minas de Corrales

URUGUAY - Canada's URUGUAY MINERAL EXPLORATION (UME) expects gold production in 2005 of just under 100,000 oz at it...


URUGUAY – Canada’s URUGUAY MINERAL EXPLORATION (UME) expects gold production in 2005 of just under 100,000 oz at its Minas de Corrales operation in northern Uruguay, said company CEO Chris Clark.

Cash costs are forecast to drop by about half to US$150/oz gold once the high-grade Arenal deposit starts providing 100% of the feed to the San Gregorio treatment plant, expected by March 2005, he explained. The Arenal open pit came onstream in October 2004, replacing ore from San Gregorio mining operations. With grades of 3 g/t Au, it is almost double the grade of 1.6 g/t from depleted San Gregorio, which supported annual production around 60,000 oz. Once fully ramped up, Arenal is expected to provide 9,000 oz/month of gold.

The Arenal phase one pit has a life of three years. However, the company will redesign the pit to include a second phase after it completes an infill drill program this month, and assumes Arenal will have a five-year life. “We hope five years will be enough to find other deposits to continue production,” said Clark.

Five drill rigs are working on the property around the clock. The company will start evaluating other targets within a 5-km radius of the plant once the Arenal program is complete. UME is also re-evaluating the San Gregorio pits to see whether they can increase the operation’s life. Clark declined to name the project in eastern Uruguay where a sixth drill rig is currently operating.

Budgets have not been finalized yet for 2005 but Clark said capital costs would likely come in at less than US$2 million and exploration at US$5 million.

UME is the only metallic mining company operating in Uruguay. It also has the Rivera diamond project, the Islas Patrullas gold-copper project, the Lascano nickel-copper project and the Mal Abrigo nickel project in the country.


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