UME 4Q07/08 Exploration Report Page 1 of 14 - Corporate-ir

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URUGUAY MINERAL EXPLORATION INC.
EXPLORATION REPORT
FOURTH QUARTER ENDED 31 MAY 2008
This report provides details of exploration activities during the fourth quarter of fiscal 2007/08
ending 31 May 2008.
1. HIGHLIGHTS
Isla Cristalina Belt: San Gregorio Near Mine Exploration Program
During the year the Company completed an initial assessment of the depth potential of the
existing deposits at San Gregorio and Arenal. As of May 31 2008, 12 holes had been drilled at
Arenal and six holes at San Gregorio.
At Arenal, the initial drilling tested for mineralization at depth south and southeast of the existing
pit. This program indicated that higher grade mineralization trended down plunge and drilling
during the fourth quarter focused on this area. The best result was reported in hole ALD086 with
10.45 meters at 4.46 g/t, including 1.05 meters at 28.94 g/t from 317.4 meters. This drill hole also
intercepted a second mineralized zone of 17.2 meters at 1.5 g/t from 431 meters. Two holes;
ALDD085 and ALDD082, were deepened in June to test the lower zone and the latter hole
encountered 5.8 meters at 4.05 g/t from 509.5 meters. Drilling in the first quarter of fiscal 2008/09
will further explore the deep mineralization and its potential for underground exploitation.
At San Gregorio, two holes were completed in the Rieles area. These results were reported in the
previous quarter. Additional infill drilling up dip is planned in the first half of fiscal 2008/09 after an
initial assessment of Arenal has been completed.
Drilling on the Polvorín intersected vein-like mineralization. The best results were hole PORC028
with 1.0 meter at 25.80 g/t, from a drill depth of 11 meters and hole PODD001 with 3.2 meters at
8.11 g/t, from a drill depth of 24.1 meters. Further drilling and modelling will be completed to
define the resource for mining with production targeted from Polvorín in the first half of fiscal
2008/09.
Generative exploration work was initiated at Los Castillos which lies along strike to the east of the
Arenal deposit. Initial geological mapping and exploration sampling have identified a number of
anomalous zones and a possible extension of the San Gregorio/Arenal structure. Work will
continue in this area to define targets for drilling in fiscal 2008/09. Other targets to be evaluated
over the next two quarters in this sector are the potential high grade veins at Esperanza and
Peru.
Isla Cristalina Belt: Zapucay District Exploration Program
Exploration drilling during the quarter focused on a number of prospects, including the structural
corridor between Zapucay and Argentinita, areas around the Zapucay deposit, and the Zaballa,
Tito Lopez, Laureles, Lavadero, Lilo and Tortoni prospects.
Drilling around the Zapucay deposit extensions was completed to augment the remnant resource
around the old mine site, and an in-house resource will be calculated from this recent drilling and
historic data.
Drilling to date south of Zapucay and on trend with Argentinita, has indicated that both deposits
are located within the same structural zone. We obtained access to the property that lies
between the two deposits and this is expected to be drilled in the first half of fiscal 2008/09. This
area is bounded by some of the better intercepts at Zapucay and Argentinita.
UME 4Q07/08 Exploration Report
Page 1 of 14
The Laureles, Lavadero, Lilo and Tortoni prospects were drill tested during the quarter with
limited success and no further work is planned on these prospects at this time.
Drilling at a number of other prospects, including Tito Lopez and Zaballa, is expected to
commence in the first half of fiscal 2008/09, once exploration permits are granted.
Isla Cristalina Belt: Regional Exploration Program
The focus of regional work in the Isla Cristalina belt is transitioning from prospecting to drilling
specific targets, including Veta Rodrigo, Harley Hernandez, Nueva Australia, Vaca Muerta,
Vichadero, Curtume, Cerro Chato and Cerrillada.
At Castrillón, definition drilling was completed over a strike length of approximately 300 meters,
confirming defined historical mineralization. Best results were hole CTRC055 with 5 meters at
9.97 g/t and hole CTRC055 with 6 meters at 5.37 g/t, from drill depths of 54.0 and 82.0 meters
respectively. Engineering has commenced to develop this project to feed the San Gregorio plant.
A first round of exploration drilling was completed on the southern half of Veta Rodrigo
encountering anomalous mineralization. Best results were holes VRR003 with 4 meters at 2.42
g/t from 73.0 meters, VRRC008 with 7 meters at 2.39 g/t from 38.0 meters and VRRC010 with 2
meters at 62.35 g/t from 40.0 meters. The northern portion of the vein will be drilled once access
is obtained.
Deep drilling at Harley Hernandez and Nueva Australia is expected to take place in the first half of
fiscal 2008/09. These two prospects are believed to be the structural offset of the western
extension of the main San Gregorio structure.
Drill exploration permits were received for Curtume, and drilling will commence in the first half of
fiscal 2008/09, while Vaca Muerta will be drilled once permits are received.
Surface exploration over a 14 square km area near Vichadero has been completed and has
defined two gold soil anomalous areas. Drilling is expected to commence in the second quarter
of fiscal 2008/09 after targets are defined and permits received.
The Cerro Chato and Cerrillada targets, 20 kilometers to the west of Vichadero, have reported
encouraging anomalous surface samples over the quarter and are planned to be developed over
the next six months.
Southern Uruguay Exploration Program
Drilling commenced at Presidente Terra and 12 of the 51 planned holes of the 6,400 meter first
pass drill program were completed by the end of May. Results to-date are very encouraging with
anomalous mineralization encountered in the majority of the targets tested. Assays for the first
nine holes have been received and intercepts of plus 1g/t Au have been reported in six holes.
The best result was in hole PT-08-006 with 4.0 meters at 5.02 g/t, including 1.0 meter at 17.52 g/t
from a drill depth of 40.0 meters. The drilling program will continue over the next six months.
Presidente Terra is located near a regional north-west shear structure within the Don Feliciano
Belt. Anomalous mineralization extends for 10 kilometres along strike and is found along a
contact between granite and metasediments which is believed to be sheared. Mineralization also
occurs in metasediments and in quartz veining within the granites.
Drilling of previously defined targets at the Crucera/Casupa district, located at the eastern end of
the Florida Belt, has slowed as the Company continues to await access and exploration permits.
Mapping and sampling, however, continued during the quarter and have led to the discovery of
additional veins that are being developed into drill targets. Geophysics and soil sampling will be
used to define drill targets on these new veins with drilling to follow when permits are obtained.
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At Nueva Helvecia, a five-hole drill program is underway to test the remaining targets and will be
completed by the end of July.
Regional exploration programs continue in the Florida, Don Feliciano and Arroyo Grande belts.
Preliminary indications from the first pass exploration in the Arroyo Grande Belt, as well as the
Don Feliciano Belt, are encouraging. Property evaluation is ongoing in the Florida Belt near
Chamizo, Mahoma and Colla.
Lascano Project Exploration Program
A second round of drilling of 13 holes for 8,000 meters of diamond drilling commenced in April
2008. Two drill holes were completed during the quarter in the central anomaly near drill hole
LASDDH-002. They showed similar hydrothermal alteration and weak sulfide mineralization.
Assay results for these holes are pending.
Drilling will continue in July 2008 to complete the remaining eleven planned drill holes. Land
access agreements and exploration permits have been received for the first five holes.
Exploration permits have been filed for five of the remaining eight holes and land access
agreements are being negotiated. The objective of the drill program is to discover a major iron
oxide-copper/gold or porphyry copper deposit.
Permits and Drilling
The granting of permits and land access to explore prospects has been a challenge for the
Company in 2008/09 due to the more aggressive work program that the company has. Over the
last four quarters a number of permits have been granted and access to the properties has been
achieved. A number of prospects, however, still await either exploration permits or land owner
access to be granted. The Company has made a submission to the government to improve
permitting regulations over the medium term and committed additional resources to ensure that it
responds rapidly to all requests.
Mutual agreement has been reached to terminate the exploration drill management contract with
Patagonia Drill/Boart Longyear after the initial trial period of approximately 6 months.
Management of the drill fleet is once again under UME supervision and additional experienced
drilling staff have been hired. Production remains at levels achieved under the contract
management and it is our objective to increase safety and productivity within the drill group over
the next fiscal year.
Total drill production for fiscal year 2007/08 is presented below.
Isla Cristalina Belt
Holes RC:
Holes DDH:
384
36
RC mts:
DDH mts:
42,357
10,125
Holes RC:
Holes DDH:
Holes:
66
6
492
RC mts:
DDH mts:
Meters:
8,366
2,873
63,721
Other Projects
Grand Total
2. GOLD PROJECTS - ISLA CRISTALINA BELT
A location map of the major prospects described below can be found at Exhibit 1 to this release.
Page 3 of 14
Minas De Corrales District (Arenal and San Gregorio)
Exploration during the quarter focused on:
• continued down plunge drilling of the Arenal deposit concentrating on offsets to previous
encouraging intercepts;
• drill testing at Rieles, part of the San Gregorio deposit, where encouraging results have been
reported. Follow up drilling is planned for the first half of fiscal 2008/09;
• drilling at the Polvorín prospect, which defined a small but higher grade gold mineralized zone.
Work is progressing to further define resources for mining;
• completing definition drilling at the Castrillón prospect to confirm and expand the historically
defined mineralization in this zone; and
• drill testing the footwall at San Gregorio and the NE structure south of the Santa Teresa pit,
obtaining limited success. No further drilling is planned for these targets at this time.
Arenal Deep Drilling:
A follow up drill program was designed and executed during the quarter to offset the better
intercepts reported from the down dip drill program. Drill holes ALDD083 through ALDD086 were
completed with significant results reported from hole ALDD086. The hole intersected two zones of
significant mineralization as shown below.
Hole ID
ALDD086
From
300.3 m
317.4 m
including
321.2 m
431.1 m
Intercept
14.6m @ 1.24g/t Au
10.45m @ 4.46g/t Au
(no top cut applied)
1.05m @ 28.94 g/t Au
17.20m @ 1.5 g/t Au
(Drill hole intercept, not true thickness, are composites using 0.5 g/t cut)
Two holes, ALDD085 and ALDD082, were re-entered in June to test for the deeper mineralization
and significant gold values were encountered in hole ALDD082, as reported below.
Hole ID
From
Intercept
ALDD082
509.5 m
5.8m @ 4.05g/t Au
(Drill hole intercept, not true thickness, are composites using 0.5 g/t cut)
These deeper intercepts indicate that an additional previously unknown shear carries significant
mineralization below the known mineralized body in this sector. The results are very encouraging
and drilling in the coming quarter will test this deeper zone to further evaluate it and its
relationship to the main structure.
A cross section of the down dip drilling at Arenal can be viewed at Exhibit 2 to this report.
San Gregorio and Rieles deep drilling:
Two holes from the down dip portion of the Rieles sector of the San Gregorio deposit were
completed in the fourth quarter though initial results were reported in the third quarter. Results are
reported again below.
Hole ID
From
Intercept
SGD005
SGD006
319.8 m
304.8 m
5.9m @ 2.39 g/t Au
3.0 @ 1.59 g/t Au
Drill hole intercept, not true thickness, are composites using 0.5 g/t cut)
Page 4 of 14
The significant intercept in SGD005 will be used with additional drill holes to remodel the resource
in this sector. Additional drilling is planned for the first half of fiscal 2008/09. Review of the other
higher grade intercepts in San Gregorio will be used to evaluate a possible underground
resource.
A cross section of the deeper drilling can be viewed at Exhibit 3 to this report.
Polvorín:
The Polvorín project, which is located 1km NW of the plant, was drilled during the quarter and
further defined a vein-like mineralization. The structural setting is complicated and further drilling
and modeling will be completed in the first quarter of fiscal 2008/09 to define the resource for
mining.
Hole ID
From
PORC022
PORC024
PORC024
PORC028
PORC028
PORC029
PORC030
PODD001
Intercept
96.0 m
49.0 m
66.0 m
11.0 m
14.0 m
17.0 m
3.0 m
24.1 m
6.0 m @ 1.20 g/t Au
8.0 m @ 1.18 g/t Au
4.0 m @ 4.67 g/t Au
1.0 m @ 25.80 g/t Au
9.0 m @ 2.49 g/t Au
4.0 m @ 1.4 g/t Au
9.0 m @ 4.36 g/t Au
3.2 m @ 8.11 g/t Au
Los Castillos (The Gap):
Generative exploration work continues in this sector which lies between the Arenal deposit and
Laureles. Even though this area is along strike to the east of Arenal, it has seen limited historical
work. Geologic mapping and exploration sampling have identified a number of anomalous zones
and a possible extension of the San Gregorio/Arenal structure. Work will continue in this area to
generate targets for drilling in the 2008/09 fiscal year. The best results received from this sector
are presented below.
Type
Float
Outcrop
Float
Sample Type
Rock
Rock
Rock
Rock
QZV
QZV
QZV
Lab
MSG
MSG
MSG
Au g/t
36.47
2.59
1.98
Other nearby areas that are expected to be further evaluated in the first half of fiscal 2008/09 are
the potentially high grade veins at Esperanza and Peru.
Zapucay District
Exploration drilling in this district concentrated on a number of prospects including defining the
remnant resource around the Zapucay pit:
• drilling of the Zapucay deposit extensions has been completed;
• the Laureles, Lavadero, Lilo, and Tortoni prospects were all drill tested during the quarter with
limited success. No further work is planned on these prospects at this time.
Results reported in the last quarterly exploration report together with historic data were used to
redefine the remaining resource at the Zapucay mine site. This small resource will be mined in
the coming years.
Drilling to date has indicated that the Argentinita and Zapucay deposits are located within the
same structural zone. Access has been granted to explore the last property that lies between the
deposits along strike and this area will be drilled in the first half of fiscal 2008/09. Similar
Page 5 of 14
mineralization is expected to be encountered, and if confirmed, would tie the entire system
together.
Exploration permits are pending on a number of other prospects in the district, including Tito
Lopez and Zaballa. Permits are expected to be received in the first half of fiscal 2008/09.
Western Isla Cristalina Belt
• The southern half of the Veta Rodrigo prospect was drill tested.
•
The Castrillón prospect has been drilled and an in-house resource will be completed. Drilling
on the extension of the vein system will be completed in first quarter of fiscal 2008/09.
Veta Rodrigo:
A first round of exploration drilling was completed on the southern half of Veta Rodrigo.
Anomalous mineralization was encountered and drilling is expected to continue once access is
obtained for the northern portion of the vein. The most significant results are presented below.
Hole ID
From
VRRC001
VRRC003
VRRC004
VRRC008
VRRC010
Including
VRRC011
VRRC011
30.0 m
73.0 m
101.0 m
38.0 m
40.0 m
40.0m
53.0 m
58.0 m
Intercept
1m @1.29g/t Au
4m @ 2.42g/t Au
4m @ 1.04g/t Au
7m @ 2.39g/t Au
2m @ 62.35g/t Au
1m @ 122.00 g/t Au
3m @ 0.99g/t Au
2m @ 0.96g/t Au
Castrillón:
Definition drilling has been completed on the Castrillón prospect to confirm the grade and
continuity of the mineralization. Results are being used to calculate an in-house resource
estimate and mine plans are being developed to move the project to exploitation.
Hole ID
From
CTRC037
CTRC048
CTRC048
CTRC049
CTRC050
CTRC051
CTRC052
CTRC053
CTRC055
CTRC056
CTRC057
CTRC065
CTRC066
CTRC067
CTRC068
CTRC070
Intercept
94.0 m
13.0 m
22.0 m
25.0 m
27.0 m
13.0 m
18.0 m
64.0 m
54.0 m
82.0 m
105.0 m
10.0 m
16.0 m
44.0 m
14.0 m
19.0 m
1m @ 1.36g/t Au
2m @ 0.89g/t Au
3m @ 3.2g/t Au
4m @ 2.85g/t Au
3m @ 3.19g/t Au
7m @ 1.17g/t Au
2m @ 1.37g/t Au
4m @ 5.20g/t Au
5m @ 9.97g/t Au
6m @ 5.37g/t Au
3m @ 1.35g/t Au
4m @ 2.99g/t Au
3m @ 7.75g/t Au
3m @ 1.24g/t Au
5m @ 3.57g/t Au
7m @ 1.33g/t Au
Additional drilling along strike of the deposit to the north and south will be done during the first
quarter of fiscal 2008/09.
Page 6 of 14
Deep drilling along the structural zone at Harley Hernandez and Nueva Australia is planned for
the first half of fiscal 2008/09. These two prospects are believed to be the structural offset of the
western extension of the main San Gregorio structure.
Eastern Half Isla Cristalina Belt
• First pass mapping and sampling program was completed at Vichadero. Two anomalous
zones have been defined and these are expected to be drilled in second quarter of fiscal
2008/09.
•
Cerro Chato and Cerrillada are presently in first pass mapping and sampling stage and initial
results are encouraging.
•
Vaca Muerta is drill ready and awaits an exploration permit.
•
Curtume is drill ready. The exploration permit has been received and drilling is expected to
commence in the first half of fiscal 2008/09.
Vichadero:
A detailed follow up soil sampling program has been completed at Vichadero, results of which are
pending. Some 3,480 soil samples have been reported to date, of which 74 exceed >50 ppb Au.
These samples define two anomalous areas associated with quartz veins, which have a
predominant orientation which corresponds with the pattern defined by the ground magnetic
survey. These areas are expected to be drill tested once all geochemical information is received
and evaluated.
Of the 205 rock chip samples collected last month, 14 reported results above 0.5 g/t Au as
presented below.
Sample Number
14568
14569
14618
14621
14622
14623
14627
14629
14780
14787
14788
32454
32469
32470
Au g/t
2.37
1.92
0.94
2.26
0.88
0.77
1.84
1.11
1.26
0.76
1.33
0.55
0.69
1.07
Other anomalous elements reported from the area are Bi, Mo, and W, with copper oxide staining
reported locally.
The Cerro Chato and Cerriallada prospects, located 20 kilometers to the west of Vichadero, are
similar to Vichadero and have reported anomalous surface samples during the last quarter. Work
will continue to develop targets for drilling over the next six months.
Page 7 of 14
3. GOLD PROJECTS - DON FELICIANO AND FLORIDA BELTS
Presidente Terra
A drill program designed to test surface geochemical anomalies as well as associated
geophysical anomalies commenced on the property in late April 2008. Three main geologic
targets will be tested: the quartz veins hosted in granites, the western contact (shear zone)
between the granite and meta-sediments, and the quartzites to the west of the contact. The first
pass drill program consists of an estimated 51 drill holes totaling 6,400 meters to test the
southern and northern two thirds of the property.
Twelve holes were completed by the end of May 2008 totaling 1,550 meters in the southern third
of the property. All the drill holes have intercepted the structural/vein targets within the granite
host. Results for the first nine holes have been received and report gold mineralization
associated with the quartz veins and alteration in six of the nine holes, as presented below.
Hole ID
PT-08-001
PT-08-002
PT-08-003
PT-08-005
PT-08-006
including
PT-08-007
PT-08-007
PT-08-007
PT-08-007
From
36.0 m
31.0 m
30.0 m
73.0 m
40.0 m
43.0 m
29.0 m
42.0 m
48.0 m
60.0 m
Intercept
4.0 m @ 1.31 g/t Au
5.0 m @ 1.60 g/t Au
1.0 m @ 1.55 g/t Au
2.0 m @ 3.11 g/t Au
4.0 m @ 5.02 g/t Au
1.0 m @ 17.52 g/t Au
5.0 m @ 0.66 g/t Au
4.0 m @ 1.82 g/t Au
2.0 m @ 0.67 g/t Au
2.0 m @ 2.15 g/t Au
Results to date have been very encouraging with anomalous mineralization being encountered in
the bulk of the targets tested. Core drilling is planned for the second quarter of fiscal 2008/09 to
better define the geologic controls to mineralization. Drilling will also test the shear contact
between the granite and meta-sediments as well as the quartzite west of the contact. Drilling will
progress to the northern third of the project, where there is evidence of historic underground
mining.
Exploration permits and access are still pending for the central third of the property and
negotiations with land owners are in progress. Access is expected to be received during the
second quarter of the 2009 fiscal year.
A map of the planned drill holes at Presidente Terra can be viewed at Exhibit 4 to this report.
Volcadero
Volcadero is located in the northern area of the Don Feliciano Belt, 50 kilometers north of
Presidente Terra. An eight hole 965 meter drill program was completed on the property in March
2008. The program was designed to test anomalous gold mineralization associated with quartz
veins, over an area of 1 kilometer by 300 meters.
Zones of quartz, sericite and pyrite mineralization have been encountered and are reported to be
up to 16 meters wide in drill hole intercepts. However, only short intercepts of weak gold
mineralization were reported in seven of the eight drill holes.
Check analysis is being completed at an independent lab to confirm some anomalous silver
results. No further drilling is planned for this prospect.
Page 8 of 14
Crucera
The Crucera vein deposit is one of a number of vein deposits that are currently being explored
and developed in the Crucera/Casupa district of the Florida Belt. The district lies in the eastern
end of the Piedra Alta terrain and covers an area of 20 by 5 kilometres.
Extension drilling of the known mineralization has been delayed due to land access issues. Legal
proceedings are underway to gain access to this extension of the mineralized system.
Mapping and sampling in the district have continued and have led to the discovery of a parallel
vein system known as Cabrera, approximately 3 km northwest of Crucera. The vein set is similar
in size and strike length to Crucera and preliminary surface results report grades up to 2.2 g/t
from outcrop. Exploration mapping and sampling continue in the district.
Drilling is expected to commence on the extensions of Crucera once access permits are received.
Drilling on Cabrera will commence once all preparatory exploration work is completed and
permits are granted.
Casupa
The Casupa property is part of the Crucera-Casupa district and its vein systems are located less
than 17 kilometers south of Crucera. The development of drill targets in the Casupa district has
been concentrated around the Madre con Hijos vein, the Central vein and the San Juan vein
systems. A number of other veins have been identified and will also be worked up as drill targets.
Soil and geophysical surveys are presently underway in areas where land access has been
granted. The district continues to return significant analytical results from rock chip sampling of
the vein systems. Anomalous results for the quarter are presented below.
Sample
EX13740
EX14029
EX14159
EX14033
EX13734
EX13726
EX13724
EX13727
EX14164
EX14156
Project
Chamame
Chamame
Chamame
Chamame
Chamame
Chamame
Chamame
Chamame
Chamame
Chamame
Au g/t
7.85
6.35
4.07
3.36
3.09
2.55
2.13
1.51
1.40
1.03
Sample
EX13744
EX14160
EX15553
EX14076
EX14157
EX14036
EX14101
EX14115
EX14245
EX14114
Project
Chamame
Chamame
Chamame
Chamame
Chamame
Chamame
Cabrera
Cabrera
Cabrera
Cabrera
Au g/t
0.77
0.75
0.72
0.68
0.65
0.53
2.24
1.22
1.01
0.57
Drilling of these vein systems is planned once all preparatory work is finished and exploration
permits are granted, which the Company expects to occur in the first half of the fiscal year.
A map of the veins identified in the Casupa/Crucera district can be found at Exhibit 5 to this
report.
Nueva Helvecia
Under a farm in agreement with Delcosur S.A. UME is earning a 100% interest in the Nueva
Helvecia property, located in southern Uruguay. Drilling has failed to identify significant
mineralization to date. A review of the drill data and structural interpretation of the geologic
setting have defined a number of targets that are presently being tested on the property, with a
program of five holes.
Page 9 of 14
Generative Programs
Work continues throughout the country in generating new projects and properties. Active
programs are presently exploring properties in the Arroyo Grande, Florida and Don Feliciano
belts.
Preliminary indications from the initial first pass exploration are encouraging in the Arroyo Grande
Belt as well as in the southeastern portion of the Don Feliciano Belt. Property evaluation is
ongoing in the Florida Belt near Chamizo, Mahoma and Colla, and at Texas in the Don Feliciano
mobile Belt.
4. OTHER METALS
Lascano Geophysical Anomaly
The Lascano exploration target is composed of three large circular geophysical features which
are each approximately 20 kilometres in diameter. The anomalies were defined by an airborne
geophysical survey flown in 2005 by Bell Geospace. The geophysical features are composed of
both high and low gravity gradient and magnetic anomalies which form the three separate circular
patterns. Drilling to date has explored the central geophysical anomaly.
A second round of drilling on the Lascano geophysical anomaly started in April 2008, using
UME’s UDR 200 drill rig. Two holes have been completed in the central anomaly near drill hole
LASDDH-002. Both holes were lost before target depths were achieved though they did cut the
anomalous horizon defined in LASDDH-002. Alteration and weak sulfide mineralization was
encountered in both holes and assay results are pending. LASDDH-006 is located 270 meters to
the east-southeast and LASDDH-007 is located 770 meters to the southwest of LASDDH-002.
Drilling was suspended after the completion of drill hole LASDDH-007, due to the imminent arrival
of the Boart Longyear machine in July 2008. This machine is larger and should be able to drill
holes to a greater depth than the UDR 200. Drilling will continue on the property in July 2008 to
complete the eleven planned drill holes. Three step out drill holes are planned around LASDDH002 and eight additional drill holes will test other geophysical targets in the central anomaly.
The drill program is designed to explore the anomalous alteration and weak copper mineralization
defined in hole two of the 2007 campaign. Mineralization and alteration are suggestive of an Iron
Oxide-Copper-Gold (IOCG) or porphyry copper system and the objective of the drill program is to
discover one of these types of systems. Drill sites have been selected with the use of 3D
magnetic and gravity geophysical models and the holes are designed to test possible structural
settings which may host higher grade results.
Base Metal Properties
A number of groups are presently interested in the base metal properties and have signed
confidentiality agreements and are reviewing the data. One group has completed a property visit
with two other groups scheduled property reviews in July and August 2008.
GeoDiscovery, the nickel exploration consultancy, has developed a program to advance
exploration on the Mal Abrigo/Cerros Negros and Carpintería nickel properties. Field exploration
work was completed in March. A preliminary report on the properties’ exploration potential,
received in early July 2008, stated that Carpintería has the most potential for hosting a nickel
deposit. A number of groups have signed confidentiality agreements and reviewed the data.
One company has shown strong interest in both the lead/zinc as well as the nickel properties and
advanced discussions are underway.
Diamond Exploration
Diamond exploration activities have been suspended until exploration permits are granted and
land access agreements finalised. A number of additional targets have been identified for drill
Page 10 of 14
testing. Exploration permits are expected to be granted during the first half of fiscal 2008/09. An
access agreement with one forestry group has been signed and will allow work to commence
once permits are granted.
A confidentiality agreement has been signed with one party specializing in diamond exploration,
and a data review has been completed.
5. OTHER ACTIVITIES
Drilling
The Company presently runs a fleet of five UME owned exploration drill rigs. Productivity
increased significantly under the management and guidance of Patagonia Drill of Argentina.
Patagonia was purchased by Boart Longyear in early 2008 and has decided to stop providing
management services. UME has taken over management of the machines once again and has
kept production at a level similar to that achieved under Patagonia. UME has augmented the drill
management staff with a number of more experienced individuals. The long term goal is to
increase safety and productivity of the drill fleet. Under the present plan the drill rigs and staff will
be moved into their own company to better manage business opportunities and personnel.
Acquisition
UME is presently evaluating opportunities across South America. The objective is to acquire a
property that has the potential to produce 500,000 ounces or more and be put into production
within two to three years.
A number of advanced exploration targets located in Argentina, Brazil, Chile, and Peru are
presently under review.
6. EXHIBITS
Exhibit 1: Isla Cristalina Generalized Geology and Major Prospects
Page 11 of 14
Exhibit 2: Arenal Section Looking WNW
Exhibit 3: Cross Section Rieles Looking West
Page 12 of 14
Exhibit 4: Map of the Planned Drill Holes at Presidente Terra
Page 13 of 14
Exhibit 5: Map of the Veins Identified in the Casupa/Crucera District
Page 14 of 14

UME 4Q07/08 Exploration Report Page 1 of 14 - Corporate-ir

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