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Uruguay Mineral Exploration Hedges 70% of its Gold Production

MONTEVIDEO, Uruguay--(BUSINESS WIRE)--August 22, 2008
Uruguay Mineral Exploration Inc ("UME" or "the Company") (TSX VENTURE:UME) (LSE:UGY) today announced that it has hedged 45,000 ounces of the 63,000 ounces of production anticipated for the nine-month period ending May 31, 2009. The forward price is $US 796.25 per ounce. The objective of this hedging is to provide greater certainty that cash from operations is available to drill all priority
gold exploration targets.

Commenting on the move, David Fowler, CEO, said: "We have taken the decision to hedge approximately 70% of our production over the next 9 months in light of the current markets for Junior exploration and production companies and the recent volatility in the gold price.
Increasing certainty of cash flow allows us to focus on our major objective of delivering value through our exploration programs."

"We continue to believe that exploration expenditure represents the best use of cash resources. Given our existing operations, any discovery near the mine or high-grade discoveries in the south have the potential to significantly improve our production profile and cash flow with minimal capital expenditure, therefore adding significant value for shareholders."

"Whilst we acknowledge that our share price, like many companies within the sector, has fallen to levels where we believe that it is significantly undervalued, maintaining cash balances and continuing to focus on exploration and acquisition will provide the greatest medium term benefit for all shareholders."

"Our exploration team has worked hard to get us in a position where we can realize significant value through discovery and they have generated quality targets near our San Gregorio operations and in southern Uruguay. In 2009 we expect to drill these targets including Arenal Deeps, Los Castillos, Presidente Terra, Casupa and Arroyo
Grande."

He concluded: "We remain confident in the potential of our exploration program for fiscal 2009. Over the past 2 years we have generated good quality targets near our San Gregorio operations and in southern Uruguay. Fiscal 2009 is the year where we plan to test the majority of these targets." Mr. Fowler concluded.

ENDS

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

Editors' note: Uruguay Mineral Exploration Inc. is a gold producer and exploration company focused on identifying and developing mineral opportunities in Uruguay. UME is a fully integrated mining company, possessing the skills necessary to explore and develop its discoveries. The Company operates the only producing gold mine in
Uruguay (San Gregorio), and is also the leading mineral exploration company in Uruguay having assembled an exploration portfolio based on gold, base metals (copper, nickel, lead, zinc) and diamond prospects.

Uruguay Mineral Exploration Inc. is quoted in Canada (TSXV) and London (AIM) and RBC Capital Markets is its Nominated Adviser and Broker.

Source: BUSINESS WIRE


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