URUGUAY - Calgary-based URUGUAY MINERAL EXPLORATION expects gold production in 2005 of just under 100,000 oz from 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 of gold once the high-grade Arenal deposit starts providing 100% of the feed to the San Gregorio treatment plant, expected by March 2005.
The Arenal open pit came on-stream 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 Au from depleted San Gregorio, which supported around 60,000 oz/y of gold production.
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, so it assumes Arenal will have a five-year life, Clark continued. "We hope five years will be enough to find other deposits to continue production."
Five drill rigs are working on the property around the clock and 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.
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, also in Uruguay.
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