Orosur Mining Regulatory News (OMI)

22 Mar 2007 07:00

Uruguay Mineral Exploration Inc. (the "Company" or "UME") today announces thatit has signed a Farm-in Agreement (the "Agreement") giving it the option toacquire a 100% interest in exploration permits owned by DelcoSur S.A.("DelcoSur"), a Uruguayan-based mineral exploration company. DelcoSur's permitscover 51,668 hectares (516.6 sq km) in mineral tenements along the FloridaGreenstone Belt ("FGB") of Southern Uruguay. Upon execution, UME will receive exploration information on the tenements andwill pay DelcoSur USD 120,000 plus 20,000 non-transferable warrants to purchasecommon shares of UME, exercisable for a period of two years from the date ofissuance. UME is then required to spend USD 1,050,000 on exploration over threeyears to exercise its option to acquire 100% of the Delcosur tenements. Uponexercising this option UME will grant DelcoSur a 1% Net Smelter Return on metalsales resulting from production sourced from the DelcoSur tenements.Additionally, in the event that UME develops a mining operation on thetenements, it will issue DelcoSur or its nominees a further 350,000 nontransferable warrants to purchase Common Shares of UME, exercisable for a periodof two years from the date of issuance. The issue of warrants under the Agreement is subject to the approval of theTSXV. All warrants will be priced at a 20% premium over the 60 day averagetrading price prior to issuance. As part of the agreement, UME will also gain access to a significant historicgeological database containing additional information covering most of UME'sexisting projects within the FGB. This database contains several thousand metresof drill core from UME's Chamizo, Mahoma, and Cruzera properties. This is atimely acquisition as follow up drilling on a number of these UME properties isplanned to commence within the coming months. In addition to the projectspecific data, the historical data also includes regional scale informationimportant to understanding the key gold districts of the FGB. David Fowler, Chief Executive Officer of Uruguay Mineral Exploration commented:"The acquisition of the DelcoSur tenements and geological information will allowUME to accelerate its plans and better target its exploration investment in theFlorida Greenstone Belt. The Delcosur tenements complement UME's exisitingprojects in the Florida Greenstone Belt and a number of their projects are readyto drill over the next 6 months." Additional Information about the FGB and DelcoSur Projects The Florida Greenstone Belt, which measures 250 km in length and varies from 5to 30 km in width. The belt is believed to be Archean age. It is strongly goldanomalous with mineralization associated with veins and large shear zones. UME'spermits in the FGB include Cruzera, Mahoma, Chamizo, Mal Abrigo and Mirta. TheDelcoSur properties acquired include areas adjacent to existing UME explorationproperties and new project areas at Nueva Helvecia and the Tabarez Shear Zone.Some of the key DelcoSur exploration projects acquired by UME are describedbelow. Nueva Helvecia The Nueva Helvecia property is located in the central portion of the FGB. Thegeology consists of meta-sediments and volcanics intruded by porphyry and blackrhyolite dikes and a large gabbro stock. The entire package is interpreted to befolded into a large plunging antiform, which appears to be sheared along itsaxial plane to form the Hueva Helvecia Shear Zone (NHSZ). The NHSZ is coincidentwith two zones of in situ gold mineralization and anomalous gold soilgeochemistry between them over a linear zone at least two-kilometres in length. Located at the northwest end of the NHSZ is the High Grade Zone. This prospectconsists of what appear to be tension gash quartz veins hosted by maficvolcanics. Selected character samples collected by Peter Bambic, P.Geo., inconjunction with the preparation of a NI 43-101 Technical Report on the NuevaHelvecia property returned bonanza grade gold values including 106.8 and 238.2g/t Au. Located at the southern end of the NHSZ is the Campo Rovaina prospect. Historicdrilling conducted in 1997 by REA Gold Corp. intercepted 10 metres grading 3.2g/t Au (including 4.85 g/t Au over 5 metres ) at a vertical depth of 40 metres.A test trench was excavated across the surface projection of the drillintercept. Channel samples from the trench averaged 3.28 g/t Au using a one-gramcut off over a width of 12.8 metres. This mineralization is coincident with agold soil anomaly approximately 500 metres long and between 50 to 200 metreswide. The central portion of this gold soil anomaly is coincident with a300-metre long arsenic soil anomaly. Tabarez Shear The Tabarez Shear prospect is located at the eastern end of the FGB and bordersUME's Chamizo permit. Here the continuation of the favorable host rocks fromChamizo are truncated and drawn out within the large Tabarez Shear. This is adeformation zone upwards of several kilometres in width and traceable on theairborne magnetometer survey for nearly 100 km. This major north-northwesttrending shear zone is gold anomalous in stream sediment samples over a strikelength of 13 km. Soil geochemistry sampling over the central portion of the zoneby DelcoSur identified several coincident gold-arsenic anomalies up to onekilometre in strike length. These anomalies are coincident with groundmagnetometer low magnetic anomalies. This prospect has never been trenched ordrilled. Qualified Person Statement The information presented in this press release has been reviewed and verifiedby Mr. Dean Williams, Vice President Exploration for DelcoSur and a LicensedProfessional Geologist in the State of Utah. Mr. Williams is a Qualified Personas defined by NI 43-101. Mr. Williams has a Bachelor of Science in Geology fromthe Oregon State University, a double Masters of Business Administration fromthe University of Oregon and is a fellow in SEG. He has over 25 years ofinternational experience in exploration. Forward Looking Statements All statements, other than statements of historical fact, contained orincorporated by reference in this news release, including any information as tothe 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 theUnited States Private Securities Litigation Reform Act of 1995 and are based onexpectations estimates and projections as of the date of this news release.There can be no assurance that such statements will prove to be accurate, suchstatements are subject to significant risks and uncertainties, and actualresults and future events could differ materially from those anticipated in suchstatements. Forward-looking statements include, without limitation, statementswith respect to the future prices of commodities; currency fluctuations; theactual results of planned feasibility studies on the Company's projects; thetiming and amount of estimated future production; costs of production; expectedcapital expenditures; costs and timing of the development of the Company'sprojects; success of exploration activities; permitting time lines; the failureof plant; equipment or processes to operate as anticipated; accidents; labourdisputes; requirements for additional capital; delays in obtaining governmentapprovals, permits or financing or in the completion of development orconstruction activities; environmental risks; unanticipated reclamationexpenses, title disputes or claims and limitations on insurance coverage. TheCompany disclaims any intention or obligation to update or revise any forwardlooking statements whether as a result of new information, future events andsuch forward-looking statements, except to the extent required by applicablelaw. The TSX Venture Exchange has not reviewed and does not accept responsibility forthe adequacy or accuracy of this news release. Notes to Editors: Uruguay Mineral Exploration Inc. is a gold producer and exploration companyfocused on identifying and developing mineral opportunities in Uruguay. UME is afully integrated mining company, possessing the skills necessary to explore anddevelop its discoveries. The Company operates the only producing gold mine inUruguay (San Gregorio), and is also the leading mineral exploration company inUruguay 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) andCollins Stewart Europe Limited is its Nominated Adviser and Broker. \* TCONTACT: Uruguay Mineral Exploration Inc Tony Shearer, Chairman, 44 20 7602-1570 tonyshearer@btinternet.com or David Fowler, CEO, 598 2 6016354 urumin@adinet.com.uy or Shared Value Ltd Emily Bruning, +44 20 7321 5027 ebruning@sharedvalue.net or Collins Stewart Europe Limited Chris Rollason, +44 20 7523 8308 crollason@collins-stewart.com\* T Copyright Business Wire 2007