VANCOUVER — Uruguay Mineral Exploration (UME-V, UMEXF-O) saw its share price jump by 31% or 9.5¢ to 40.5¢ recently, as it released both promising drill hole intercepts and a prefeasibility study for its Arenal Deeps project. Arenal Deeps is the downdip extension of Uruguay Mineral’s Arenal open-pit gold deposit in Uruguay.
In a base-case scenario predicated on a gold price of US$740 per oz., Arenal Deeps returned a net present value of US$7.7 million and an internal rate of return of 41%.
Underground mine operating costs came in at US$18 per tonne assuming sublevel open stoping. Uruguay Mineral forecasts the life-of- mine cost per ounce of gold at US$570.
The prefeasibility study is based on proven and probable reserves of 1.7 million tonnes grading 1.94 grams gold per tonne for nearly 107,210 contained ounces. The project hosts 3.3 million tonnes grading 2.21 grams gold in the measured and indicated categories.
A preliminary schedule sees production starting in 2011.
Increasing the market punch of the prefeasibility study were strong drill results from Arenal Deeps. The best of the intercepts came from hole 108, which returned as much as 26.2 metres grading 13.75 grams gold.
Another three holes returned intercepts in the 14-to 24-metre range grading between about 2.5 and 5 grams gold. The four holes start at a down-hole depth of around 300 metres.
Uruguay Mineral has measured and indicated resources of 19.7 million tonnes grading 1.22 grams gold for 773,600 contained ounces in the Isla Cristalina belt of Uruguay, about 450 km north of the capital, Montevideo. The mineralized system that contains its reserves and resources is a 7-km-long shear zone.
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