The Company is exploring for gold, base metals and diamonds on the Rio de la Plata Craton and in the Dom Feliciano Mobile Belt, which defines the eastern limit of the craton. These major tectonic units comprise the Uruguayan portion of the Brazilian Shield which covers large areas of South America. The various rock associations and structures of the shield range in age from Archean to Neoproterozoic.

The Piedra Alta terrane and Nico Perez terrane which together constitute the Rio de la Plata Craton, are bounded by major subvertical shear zones. Nico Perez is the oldest terrane, and includes Archean granite-greenstone sequences, and granite-gneiss magmatic archean associations. Some of these associations were metamorphosed during the Palaeoproterozoic. This terrane is prospective for gold mineralization, and it includes the Isla Cristalina granite-greenstone inlier, within which is located the producing Minas de Corrales goldfield. The granite-greenstone sequence, known as the La China Complex, has a platform cover of metasediments which includes limestones and quartzites. The Company’s lead/zinc projects, namely Maria Albina and Retamosa, are located in the carbonate sequences.

Similar geological settings include the Birimian rocks of West Africa, the Yilgarn Block of Western Australia and the Atibiti Belt in Canada. UME’s main geological model is greenstone hosted quart-carbonate vien-shear deposits. Approximately 13% of historical world gold production has come from these types of deposits with more than 100 deposits containing 1 million ounces or more.

The Paleo-Proterozoic Piedra Alta terrane consists of granite-gneisses, as in the Florida Belt, and metavolcanic and metasedimentary belts injected by granites, as in the San Jose Belt and Arroyo Grande greenstone belts. These belts are prospective for gold, copper and nickel, and the Company has several exploration projects in this region.

The Neoproterozoic Dom Feliciano Mobile Belt was formed during the Dom Feliciano orogeny which was the main thermal event of the Brasiliano Cycle in South America. This mobile belt which extends from southern Brazil into Uruguay, consists of granitic-gneissic rocks, and hosts copper-gold mineralization in southern Brazil. The Company’s Texas and Presidente Terra gold and copper-gold projects are located in the Uruguayan portion of this belt. The Lascano nickel/copper project is located southeast of Treinta y Tres in the mobile belt.

A summary of previous and current exploration on the various projects, together with the project objectives for the 2006/2007 financial year is presented. Project information is updated quarterly. In addition to the individual projects which are described below, UME has an extensive country-wide geophysical and multi-element geochemical database.