Although Uruguay Mineral Exploration‘s (UME-V) net profit for the year ending May 31, 2007 was US$14.5 million, the companys cash costs for gold production rose to US$294 per oz. from US$210.
Cash costs are expected to increase further in 2008 to an estimated US$345 per oz.
That news didnt upset shareholders. Uruguay Minerals stock rose nearly 10%, or 29, in Toronto today to $3.29 per share on a trading volume of 103,000 shares similar to the 30- basic earnings per share the company gained over the year.
The company produced 96,000 oz. gold from its San Gregorio open pit operations in Uruguay, where production was slightly lower in the first half of the year due to a pit wall slip in 2006, which delayed access to higher-grade ore.
From the exploration end, Uruguay Minerals increased San Gregorio reserves by 31,000 oz. gold to 353,000 oz. and measured and indicated resources by 226,000 oz. to 885,900 oz. gold.
The company also added 12 geologists to its exploration team in mid-May, bringing to total to 30. Uruguay Minerals has been bringing in outside experts on structure, geophysics, petrology, geochemistry and quality control to challenge the companys ideas and accelerate progress.
Uruguay Minerals has budgeted US$7 million for exploration in 2007-2008 to be spent on its 7,000 sq. km of land.
In the annual report, chairman Tony Shearer said that while the company has not yet found the “big ounces,” it has added smaller deposits to resources and continues to look for more.
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