OPERATIONS

SAN GREGORIO OPERATION

FUTURE DEVELOPMENTS

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UME's overall strategy is to build the resources and reserves to maintain and then increase gold production. At San Gregorio, the strategy is the following:

• Short-term Exploration and Development: maximise production from San Gregorio with a production target of 100,000 ounces per annum. To achieve this goal, we aim to define and develop high grade resources to blend with existing resources to maintain production levels over a 3 year time frame.

• Medium-term Exploration and Development: discover and define 2.5 million ounces of new resources over a five year period. At San Gregorio, targets to achieve this include:
  
  
  • Near mine exploration in the San Gregorio District in an effort to develop a 10 year mine plan which would require reserves of 700,000 ounces
    
    
  • Discover and define high grade resources throughout Uruguay that could be transported to the San Gregorio operation or any new processing facility that may be developed.

To support the accelerated development for defining new resources, UME is currently analyzing the viability of the following alternatives:

• Expand production at San Gregorio by 50% to 1.9 million tonnes per annum. The additional throughput would offset lower grades and allow production to be maintained.
  
  
• Build a heap leach operation with the capacity to process 750,000 tonnes per annum of lower grade ore.
  
  
• Establish an underground mining operation to a depth of 400 meters.