SAN GREGORIO OPERATION

HISTORY

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In 1997 UME commenced exploration in the Minas de Corrales goldfield area, within the Isla Cristalina Belt. Over the following five years the Company discovered a number of resources close to the San Gregorio mine including Castrillón and Sobresaliente.

UME acquired the San Gregorio operation, including the gold processing plant, from Crystallex International Corporation in October 2003. This followed the discovery of the Arenal deposit, four kilometres from the processing plant.

The Minas de Corrales goldfield containing the San Gregorio operation produced over 90,000 ounces of gold from the mid 1880's to 1914, the majority of which has come from the San Gregorio deposit. Gold prospecting and mining activities in the Minas de Corrales goldfield date back to the 19th century. Between 1895 and 1914, underground mining took place at San Gregorio, yielding 64,300 ounces of gold. Mining occurred throughout the 100 kilometres long Isla Cristalina greenstone belt where there are many old workings.

The mine lay dormant from 1914 to 1936, when it was operated by a local Uruguayan company for seven years, producing approximately 6,000 ounces. Exploration work began again at San Gregorio in the mid 1980’s and extensions to the existing deposit were defined. The San Gregorio project is a shear hosted gold deposit which was put into production in 1997.