Diamonds

Rivera Diamond Project (UME 100%)

The Cinco Rios diamonds project is located in the northern department of Rivera in Uruguay. The initial tenements were acquired in 2002 and covered prospecting areas of 45,610 hectares. UME now has 46,331 hectares under prospecting and exploration license.

Whilst all areas in the Rio de la Plata Craton are prospective the most prospective areas are along structural corridors and the intersection of these structural corridors. This area is the principal focus of UME‘s Cinco Rios‘s diamond project

The Rivera Diamond Project is located on the Archean- Paleoproterozoic Rio de la Plata Craton, which is a component of the southern part of the Brazilian Shield. This craton hosts kimberlites, related rocks and diamonds in both Brazil and Paraguay. The Company is exploring a structurally active area of northern Uruguay, from which micro-diamonds,chrome spinels and G9 and G10 garnets have been recovered by previous explorers.

UME‘s stream sampling programs during the period 2000-2004 have confirmed the presence of micro-diamond and chemically high interest chrome spinels and garnets from the Rivera region. During 2005, electron microprobe analysis at UWA in Perth, has identified several kimberlitic garnets, including one G10 garnet from a location which is approximately 3 kilometeres south of a previously recovered micro-diamond. The chemistry of several of the chrome spinels is indicative of derivation from the diamond stability field (DSF). These results confirm the potential for the presence of diamantiferous kimberlites in the Rivera region.

During 2006 the Company has initiated a follow-up stream sample program in the region.

The objectives of this program are to complete additional sampling in the area of microdiamond, pyrope garnet and DSF chrome spinel, and delineate areas for airbone geophysical surveys. In May 2006, Bell Geospace of Houston completed a Gradiometry (3D-FTG) and magnetic survey at Rivera for a total of 850 line kilometers. The results of this survey have been incorporated into the follow-up program which is ongoing.

Regional Programme

The Company’s diamond exploration database includes sample data from areas in southwest and southeast Uruguay. Following a review of electron microprobe data, these areas are considered to be of lower interest than northern Uruguay, which includes the Rivera Project. However, any potential magnetic anomalies identified from other Bell Geospace surveys flown for the Company on craton, will be investigated through heavy mineral sampling.

The Don Feliciano Mobile Belt includes Neo-proterozoic age granitic-gniess rocks. The belt may have a paleoproterozoic basement. Mobile belts host producing kimberlite and lamprophyre diamond mines in South Africa and Australia respectively. The diamond potential of the Don Feliciano belt will be investigated as part of the regional exploration program.

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