Statement re OPERATIONS UPDATE

2 Aug 2007 07:00

OPERATIONS UPDATE -- River diversion completed to original specification and timetable. -- Higher grade ore now being mined. -- Production for the first quarter to August 31 2007 estimated at 21,000 ounces, with production for the full year expected to be 95,000 ounces The Diversion of the Arroyo Corrales was completed in July. The diversion canalhas been completed to the original specification and water is flowing asanticipated. The permanent northern flood protection dyke is 60% complete andalready affording adequate protection against moderate flood conditions and itwill be completed by 17 August, 2007. Construction of the southern floodprotection dyke has commenced and is expected to be completed by the end ofAugust. Temporary dykes have allowed the old water course to be dewatered andpit development to commence. Re-vegetation of the banks of the diversion canalhas commenced and is progressing as planned. The first ore from the expansionhas been mined and processed. Lower grade material was mined in June and July while the river diversion wasbeing completed. As a result, production for the first quarter 2007/8 isforecast to be 21,000 ounces. Production will recover in the following quarterin line with higher grades and is expected to be 95,000 ounces for the year to31 May, 2008. Qualified Person's Statement The information presented in this press release has been reviewed and verifiedby Mr John Sadek, Vice President Operations. Mr Sadek is the Qualified Personfor the purposes of the AIM Guidance Note on Mining, Oil and Gas Companies datedMarch 2006. He has a Bachelor of Engineering (Mining) from the University ofSydney and is a member of the AusIMM and SME. He has over 20 years ofinternational experience in mining. 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 success ofexploration activities; permitting time lines; the failure of plant; equipmentor processes to operate as anticipated; accidents; labour disputes; requirementsfor additional capital title disputes or claims and limitations on insurancecoverage. The Company disclaims any intention or obligation to update or reviseany forward looking statements whether as a result of new information, futureevents and such forward-looking statements, except to the extent required byapplicable law. The TSX Venture Exchange has not reviewed and does not accept responsibility forthe adequacy or accuracy of this news release. Editors note: Uruguay Mineral Exploration Inc. is a gold producer andexploration company focused on identifying and developing mineral opportunitiesin Uruguay. UME is a fully integrated mining company, possessing the skillsnecessary to explore and develop its discoveries. The Company operates the onlyproducing gold mine in Uruguay (San Gregorio), and is also the leading mineralexploration company in Uruguay having assembled an exploration portfolio basedon 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. For further information, please contact Uruguay Mineral Exploration IncTony Shearer, Chairman: +44 20 7602-1570; tonyshearer@btinternet.comDavid Fowler, CEO: 598 2 6016354; urumin@ume.com.uy Shared Value LtdEmily Bruning: +44 20 7321 5027; ebruning@sharedvalue.net Collins Stewart Europe LimitedChris Rollason: +44 20 7523 8308; crollason@collins-stewart.com Copyright Business Wire 2007