Home | Business News | Browse by Publication | M | M2 Presswire

UME Quarterly Result Records Significant Milestone (part 2 of 2).

Article Excerpt
M2 PRESSWIRE-30 April 2004-Uruguay Mineral Exploration Inc.: UME Quarterly Result Records Significant Milestone (part 2 of 2)(C)1994-2004 M2 COMMUNICATIONS LTD

RDATE:04292004

Production inventories

Gold in dor?, gold in process and stockpiled ore are stated at the lower of average production cost which includes all direct and indirect costs, including amortization of equipment and facilities, and net realizable value.

Reclamation costs

The Company?s Uruguayan subsidiary records a liability for the estimated future costs to reclaim mined land , such as the rehabilitation and re-vegetation of waste rock areas, the covering up of tailings ponds and the treatment and discharge of residual cyanide solution, and the dismantling of plants, by recording charges to production costs for each tonne of ore mined over the life of the mine. The amount charged is calculated using the units-of-production method based on management?s estimation of reclamation costs and the ratio of ore mined to total proven and probable reserves. The accrued liability is reduced as reclamation expenditures are made. The Company?s estimate of its ultimate reclamation liability may vary from current estimates due to possible changes in laws and regulations and changes in cost estimates. The Company will accrue additional liabilities for further reclamation costs as and when evidence becomes available indicating that its reclamation liability has changed.

1. Significant Accounting Policies ? cont?d

Revenue recognition

Revenue from mining operations is recognized upon shipment of gold, when title has passed to the customer and collection of the sale is reasonably assured.

2. Inventory

February 29, May 31,

2004 2003 (audited) Finished goods $343,836 $ - Ore in stockpiles 315,738 - Work in progress 584,691 - Stores and consumables 3,410,969 - $4,655,234 $ -

3. Deferred Exploration and Mineral Properties

February 29, May 31,

[table omitted]

3. Deferred Exploration and Mineral Properties ? cont?d

(a) The Company has signed agreements on options to purchase certain prospecting and mineral exploration rights, according to the following details:

Name of Option Initial Premium and Balance Option Project Deadline Advance Payments Payments Due

Casupa (Note (i) 05/31/2001 $5,000 $30,000 Note (i) This project has been temporarily suspended by mutual consent.

(b) In addition to payments made on the properties listed in Note 3(a), option payments include $475,000 paid to shareholders of DAVINCO SA pursuant to an agreement dated May 14, 1997. This relates to...

View this article FREE - Now for a Limited Time, try Goliath Business News
Free for 3 Days!