LONDON, March 22 /CNW/ - Uruguay Mineral Exploration Inc. (the "Company" or "UME") today announces that it has signed a Farm-in Agreement (the "Agreement") giving it the option to acquire a 100% interest in exploration permits owned by DelcoSur S.A. ("DelcoSur"), a Uruguayan-based mineral exploration company. DelcoSur's permits cover 51,668 hectares (516.6 sq km) in mineral tenements along the Florida Greenstone Belt ("FGB") of Southern Uruguay.
Upon execution, UME will receive exploration information on the tenements and will pay DelcoSur USD 120,000 plus 20,000 non-transferable warrants to purchase common shares of UME, exercisable for a period of two years from the date of issuance. UME is then required to spend USD 1,050,000 on exploration over three years to exercise its option to acquire 100% of the Delcosur tenements. Upon exercising this option UME will grant DelcoSur a 1% Net Smelter Return on metal sales resulting from production sourced from the DelcoSur tenements. Additionally, in the event that UME develops a mining operation on the tenements, it will issue DelcoSur or its nominees a further 350,000 non transferable warrants to purchase Common Shares of UME, exercisable for a period of two years from the date of issuance.
The issue of warrants under the Agreement is subject to the approval of the TSXV. All warrants will be priced at a 20% premium over the 60 day average trading price prior to issuance.
As part of the agreement, UME will also gain access to a significant historic geological database containing additional information covering most of UME's existing projects within the FGB. This database contains several thousand metres of drill core from UME's Chamizo, Mahoma, and Cruzera properties. This is a timely acquisition as follow up drilling on a number of these UME properties is planned to commence within the coming months. In addition to the project specific data, the historical data also includes regional scale information important 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 allow UME to accelerate its plans and better target its exploration investment in the Florida Greenstone Belt. The Delcosur tenements complement UME's exisiting projects in the Florida Greenstone Belt and a number of their projects are ready to 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 5 to 30 km in width. The belt is believed to be Archean age. It is strongly gold anomalous with mineralization associated with veins and large shear zones. UME's permits in the FGB include Cruzera, Mahoma, Chamizo, Mal Abrigo and Mirta. The DelcoSur properties acquired include areas adjacent to existing UME exploration properties and new project areas at Nueva Helvecia and the Tabarez Shear Zone. Some of the key DelcoSur exploration projects acquired by UME are described below.
Nueva Helvecia
The Nueva Helvecia property is located in the central portion of the FGB. The geology consists of meta-sediments and volcanics intruded by porphyry and black rhyolite dikes and a large gabbro stock. The entire package is interpreted to be folded into a large plunging antiform, which appears to be sheared along its axial plane to form the Hueva Helvecia Shear Zone (NHSZ). The NHSZ is coincident with two zones of in situ gold mineralization and anomalous gold soil geochemistry 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 prospect consists of what appear to be tension gash quartz veins hosted by mafic volcanics. Selected character samples collected by Peter Bambic, P.Geo., in conjunction with the preparation of a NI 43-101 Technical Report on the Nueva Helvecia property returned bonanza grade gold values including 106.8 and 238.2 g/t Au.
Located at the southern end of the NHSZ is the Campo Rovaina prospect. Historic drilling conducted in 1997 by REA Gold Corp. intercepted 10 metres grading 3.2 g/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 drill intercept. Channel samples from the trench averaged 3.28 g/t Au using a one-gram cut off over a width of 12.8 metres. This mineralization is coincident with a gold soil anomaly approximately 500 metres long and between 50 to 200 metres wide. The central portion of this gold soil anomaly is coincident with a 300-metre long arsenic soil anomaly.
Tabarez Shear
The Tabarez Shear prospect is located at the eastern end of the FGB and borders UME's Chamizo permit. Here the continuation of the favorable host rocks from Chamizo are truncated and drawn out within the large Tabarez Shear. This is a deformation zone upwards of several kilometres in width and traceable on the airborne magnetometer survey for nearly 100 km. This major north-northwest trending shear zone is gold anomalous in stream sediment samples over a strike length of 13 km. Soil geochemistry sampling over the central portion of the zone by DelcoSur identified several coincident gold-arsenic anomalies up to one kilometre in strike length. These anomalies are coincident with ground magnetometer low magnetic anomalies. This prospect has never been trenched or drilled.
Qualified Person Statement
The information presented in this press release has been reviewed and verified by Mr. Dean Williams, Vice President Exploration for DelcoSur and a Licensed Professional Geologist in the State of Utah. Mr. Williams is a Qualified Person as defined by NI 43-101. Mr. Williams has a Bachelor of Science in Geology from the Oregon State University, a double Masters of Business Administration from the University of Oregon and is a fellow in SEG. He has over 25 years of international experience in exploration.
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, statements with respect to the future prices of commodities; currency fluctuations; the actual results of planned feasibility studies on the Company's projects; the timing and amount of estimated future production; costs of production; expected capital expenditures; costs and timing of the development of the Company's projects; 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; delays in obtaining government approvals, permits or financing or in the completion of development or construction activities; environmental risks; unanticipated reclamation expenses, 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.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.
Notes to Editors:
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 Collins Stewart Europe Limited is its Nominated Adviser and Broker.