MONTEVIDEO, URUGUAY, December 11 /CNW/ - Uruguay Mineral Exploration Inc (TSX VENTURE:UME) (LSE:UGY) ("UME", "the Company"), announces its intention to make a Normal Course Issuer Bid ("NCIB") for its common shares ("Common Shares") through the facilities of and subject to the approval of the TSX Venture Exchange.
The Board would activate the NCIB if adequate stock became available at a price that it regarded as attractive, and in these circumstances the NCIB would be funded from the Company's existing cash resources. Given the strength of the Company's financial position, the NCIB would not compromise either the funding of the Company's aggressive exploration programmes or the continuance of the Company's dividend policy.
In such circumstances, the Company intends to buy back over a twelve month period up to the equivalent of C$ 2 million (approximately GBP 973,000 at the current exchange rate) of its Common Shares at market price. Any such purchases would not exceed 5% of the total issued and outstanding shares of the Company. The Company intends to cancel any shares purchased under the NCIB.
Tony Shearer, Chairman of the Board, commented: "The objective of the NCIB is to increase shareholder value by acquiring shares at a price that the Directors believe is significantly lower than the Company's fair value. The Company has a strong Balance Sheet with low gearing, substantial cash flow generation from current production levels, and significant exploration prospects. The purchase of shares represents an attractive opportunity and a sensible use of a portion of available funds for the benefit of all shareholders."
Subject to the approval of the TSX-V, the NCIB will begin after the release of the Second Quarter Results of the 2007/2008 financial year on January 9th, 2008 and will end twelve months thereafter on January 8th 2009, observing the purchasing restrictions during "black out" or "close" periods and will be performed through WH Ireland Stockbrokers Limited as independent brokers.
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.