EXPLORATION - URUGUAY

PIEDRA ALTA TERRANE

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The Piedra Alta Terrane occupies the southwestern third of the country and hosts two imoportant granite-greenstone belts prospective for gold mineralization; La Florida and Arroyo Grande.  UME has one exploration project in the northern Arroyo Grande belt; Paso de Lugo and several in the southern Florida belt, most importantly; Mahoma and Crucera

Paso de Lugo

The Paso de Lugo Exploration project is located 225 kilometres northwest of Montevideo or 370km by road to the San Gregorio mine site.  The prospect is in the Arroyo Grande Belt focused on gold-quartz-pyrite veins hosted in a metavolcano-sedimentary sequence along an elongate northwest trending shear zone about 4km long.

Detailed mapping, sampling and ground magnetic surveys were completed in 2008-9 and a number of drilling targets were identified.  A short, first pass RC drilling program of about 1000m in 13 holes was completed on some of the targets.  Results were encouraging with the best hole, PDL-09-005 intersecting 4m @ 5.42g/t Au from 96m and several holes intersecting 10-25 meter wide zones @ 0.5-1 g/t. Follow up drilling is planned for FY 2012.

MAHOMA

The Mahoma gold project is located in the La Florida Belt about 140 kilometers northwest of Montevideo .  The Mahoma deposit was discovered and drilled during 1986-1990 by ST Joe Minerals (which later became American Resource Corporation).  A small mill was built and 15,000oz of gold from 3 separate open pits was produced from 1993 to1996. The Mahoma operation pre-dates the re-developed San Gregorio Mine and therefore gets credit for the first modern gold production in Uruguay.

Au bearing pyrite-galena-chalcopyrite quartz veins are hosted in sheared and deformed granodiorite intrusives and along contacts with meta-volcanics.  Surface sampling and historic drilling outlined a 1km x 2km zone of sub parallel anomalous veins or vein sets striking approximately East-West and dipping steeply to the south.  Data exists for around 20,000 meters of diamond and RC drilling that defines narrow, high grade quartz-pyrite veins with grades around 8 g/t Au.  The Bulk of historic mining was concentrated around one vein in particular with 500m of strike and 200 meters of down dip potential.

OMI owns the mineral rights at Mahoma and is working to define a resource and extension drilling program which will be initiated in January, 2012.  In the meantime desktop studies are underway evaluating alternatives for transport of ore from Mahoma to the San Gregorio Mill some 480km to the north that suggest a 2-3g/t economic cut-off.

The Company has completed 24 drill holes for 1,815 meters from an initial planned drill programme of approximately 3,000 meters, comprising 2,000 metres of RC pre-collars and 1,000 metres of diamond drilling. The drill programme is designed to generally confirm historical drill results for vein I, vein II and vein IIB. This work is expected to be followed by infill drilling to target an initial measured and indicated resource of 250,000 tonnes.

Drill Hole Plan

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Drill sections can be found at the pdf files below:

VIIEast_Section MHDD001

VIIEast_Section MHDD003

VIIEast_Section MHDD004

VIIEast_Section MHDD005

VIIEast_Section MHDD006

VIIEast_Section MHDD007

VIIEast_Section MHDD008

VIIEast_Section MHDD009

VIIEast_Section MHDD015

VIIEast_Section MHDD016

VIIEast_Section MHDD017

VIIWest_Section MHDD022

VIIWest_Section MHDD023

VIIWest_Section MHDD024

VIIWest_Section MHDD025

VIIEast_Section MHRC001

VIIEast_Section MHRC002

VIIEast_Section MHRC003

VIIWest_Section MHRC009

Crucera

The Crucera deposit is located in the Florida Belt about 110km NW of Montevideo or 430km by road from the San Gregorio mine site.  Gold mineralization is associated to a silica-pyrite-gold shear zone hosted in typical granite-greenstone rocks.  The shear has a NW trending strike of about 700m and dips moderately to the NE.

The deposit was initially identified and drilled by Minera San Jose in 1992 who even did some test mining (based on visual assessment of earthworks at site). In 2007 OMI completed about 4000m of follow up RC and diamond drilling which resulted in a NI 43-101 compliant indicated resource of 541K tonnes @ 2.46 g/t for 43 Koz Au, using a 0.5g/t cut off.

As with Mahoma basic feasibility work is being performed to determine whether the higher grade part of this resource can be trucked or railed to the San Gregorio Mill.  Conversion to a reserve is dependent on this evaluation.

RC Drilling Results 

Crucera Diamond Drilling Results