Last checked at 5 Dec 2008 07:40
Production for the quarter ended November 30, 2008
Uruguay Mineral Exploration Inc. ("UME" or "the Company") (TSXV:UME)(AIM:UGY), a gold production and exploration company, announced today that its production for the quarter ended November 30, 2008 was 15,837 ounces with total production for the first half of the year of 32,276 ounces. This compares to budgeted production of 20,500 for the quarter and 36,800 for the first half of the year.
The majority of the high grade ore for the quarter was sourced, as planned, from the western end of the Arenal pit. The grade of the ore mined from this area was lower than that estimated by the resource model, causing the production shortfall. The majority of the remaining high grade Arenal ore, which will be mined in the second half of 2008/09, is located in the central portion of the orebody where mined grade has historically been consistent with resource grade.
As a result of the shortfall in production, UME's current mine plan estimates 75,000 ounces of production for fiscal 2009, compared with its original target of 80,000 ounces. The potential to improve the mine plan by adding additional Veta material is being evaluated. An updated forecast of full year production (including additional vein material) and cash costs will be provided by mid January 2009.
Gains resulting from cost savings and other initiatives implemented during the quarter mitigated a portion of the impact of the cash loss from production shortfalls. UME's cash balance at the end of November was $US 6.5 million compared to budgeted levels of $US 9.5 million. Despite lower production in the first half, the Company's objective is to end the 2009 financial year with a cash balance of approximately $US 10 million compared to the original budget of approximately $US 12 million.
The Company's current plan for the remainder of fiscal 2009 anticipates an improvement in results for the second half of the year to be derived from:
budgeted lower capital expenditure and exploration investment; budgeted higher revenues from increased production volumes; budgeted lower operating costs in the half due to lower strip ratios; and cost reductions resulting from significantly lower oil prices and an appreciation of the US dollar against the Uruguayan peso that have recently started to impact positively on operating costs. These cost reductions were not included in the Company's budget for fiscal 2009.In addition to developing new production sources to add to the mine plan, the Company is also implementing the following initiatives to further improve its financial results:
a significant reduction in the number of employees including a reduction in owner operator mining from seven to six days per week; and further reduction of exploration expenditure with funding priority will be given to near mine exploration.Exploration
Infill drilling at Arenal Deeps was concluded during November and reported the following encouraging results.
| HOLE ID | Au Intercept* | from (m) | ||
| ALDD092 | 5.00m @ 3.91g/t | 214.35 | ||
| ALDD093 | 9.40m @ 5.59g/t | 238.60 | ||
| includes 3.00m @ 10.10g/t | 239.60 | |||
| includes 1.00m @ 14.67g/t | 240.65 | |||
| ALDD093 | 2.05m @3.49g/t | 293.10 | ||
| ALDD094 | 1.60m @ 10.5g/t | 191.40 | ||
| ALDD094 | 1.00m @ 4.19g/t | 215.75 | ||
| ALDD096 | 7.90m @ 2.62g/t | 219.50 | ||
| includes 2.75m @ 5.54g/t | 220.60 | |||
| ALDD098 | 29.00m @ 3.85g/t | 300.05 | ||
| includes 10.40m @ 5.94g/t | 307.35 | |||
| includes 4.65m @ 5.39g/t | 321.40 | |||
| ALDD100 | 17.35m @ 1.61g/t | 292.00 | ||
| includes 4.15m @ 3.77g/t | 300.40 | |||
| ALDD100 | 17.40m @ 2.75g/t | 312.35 | ||
| includes 7.00m @ 4.63g/t | 313.35 | |||
| includes 1.00m @ 7.34g/t | 324.35 | |||
| ALDD100 | 1.20m @18.04g/t | 367.75 | ||
| ALDD100 | 2.85m @ 3.29g/t | 375.95 | ||
| ALDD101 | 20.15m @ 4.44g/t | 374.30 | ||
| includes 6.15m @ 6.86g/t | 374.30 | |||
| includes 7.45m @ 5.16g/t | 387.00 | |||
| ALDD101 | 5.15m @ 1.51g/t | 404.3 | ||
The table represents selective significant intercepts from the Arenal deep drill program. Other anamolous intercepts have been received from drill holes ALDD092 through ALDD101 but have not been reported here. Intercepts are calculated using 0.5 g/t cut-off and no capping of high grade values. Intercept thickness are down drill hole but are believed to be close to true thickness. QC data indicates that coarse grained gold or nugget effect may exist in this portion of the deposit. Further studies are underway at this time to confirm this and its effect.
All first pass drill holes necessary to estimate a resource have been completed and Golder Associates of Santiago has been contracted to complete an independent resource estimate by March 2009.
The Los Castillos sector, located seven kilometers from the Minas de Corrales Plant, is interpreted to be the eastern offset extension of the Arenal structure. Sampling and mapping have defined a prospective anomalous area 800 meters long capable of hosting a bulk mineable target. The prospecting permit for this area has now been received and land access agreements have been negotiated. This target has the potential to deliver a significant Arenal style resource. Drilling is planned to commence early in January. A first pass drill program of approximately 1,000 meters is expected to be completed on Madre Con Hijos over the coming weeks.
Full details of production, financial performance, and exploration activities for the second quarter will be reported by mid January, 2009.
Forward Looking Statements
All statements, other than statements of historical fact, contained or incorporated by reference in this news release, including any information as to the future financial or operating performance of the Company, constitute "forward-looking statements" within the meaning of certain securities laws, including the "safe harbour" provisions of the Securities Act (Ontario) and the United States Private Securities Litigation Reform Act of 1995 and are based on expectations estimates and projections as of the date of this news release. There can be no assurance that such statements will prove to be accurate, such statements are subject to significant risks and uncertainties, and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements include, without limitation success of exploration activities; permitting time lines; the failure of plant; equipment or processes to operate as anticipated; accidents; labour disputes; requirements for additional capital title disputes or claims and limitations on insurance coverage. The Company disclaims any intention or obligation to update or revise any forward looking statements whether as a result of new information, future events and such forward-looking statements, except to the extent required by applicable law.
Qualified Person's Statement
The technical information presented in this press release has been reviewed and verified by Mr John Sadek, Vice President Operations and a Mining Engineer, and Mr. George Schroer Vice President Exploration and a Certified Professional Geologist. Mr. Sadek and Mr. Schroer are the Qualified Persons for the purposes of the AIM Guidance Note on Mining, Oil and Gas Companies dated March 2006. Mr Sadek has a Bachelor of Engineering (Mining) from the University of Sydney and is a member of the AusIMM and SME. He has over 20 years of international experience in mining. Mr. Schroer has a Masters of Science in Geology from Colorado State University and is a member of SEG and AIPG. He has over 20 years of international experience in exploration.
ENDS
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
Editors' note: Uruguay Mineral Exploration Inc. is a gold producer and exploration company focused on identifying and developing mineral opportunities in Uruguay. UME is a fully integrated mining company, possessing the skills necessary to explore and develop its discoveries. The Company operates the only producing gold mine in Uruguay (San Gregorio), and is also the leading mineral exploration company in Uruguay having assembled an exploration portfolio based on gold, base metals (copper, nickel, lead, zinc) and diamond prospects.
Uruguay Mineral Exploration Inc. is quoted in Canada (TSXV) and London (AIM) and RBC Capital Markets is its Nominated Adviser and Broker.
For further information, please contact:
Uruguay Mineral Exploration IncTony Shearer, Chairman: +44 (0)20 7602 1570; tonyshearer@btinternet.comDavid Fowler, CEO: + 598 2 6016354; urumin@ume.com.uy
Investor Relations in North AmericaSusan Borinelli, Breakstone Group: +1 646-330-5907; sborinelli@breakstone-group.com
RBC Capital MarketsAndrew Smith: +44 (0) 20 7029 7882; andrew.smith@rbccm.comSarah Wharry: +44 (0)20 7653 4667; sarah.wharry@rbccm.com
Copyright Business Wire 2008