MercoPress. South Atlantic News Agency

Surface drilling company confirms magnetite project in Uruguay

Fernando Puntigliano, General Manager of Minera Aratirí, subsidiary of Indian owned Zamin Resources

Cougar Metals NL announced it has entered into a memorandum of understanding with Indian owned UK based Zamin Ferrous Resources to provide 75,000 metres of surface drilling at the resource company’s magnetite project in Uruguay.

The drilling program is scheduled for completion by December 31, 2010 and is expected to generate 7 million US dollars in additional revenue for the company.

In order to complete the work the mineral resource company has agreed to advance Cougar 2 million USD by way of an interest free loan to acquire the drilling rigs needed.

Cougar Metals says the drilling program provides further exposure to the iron ore sector in South America and underpins a major expansion of the company’s drilling business. Cougar Metals posted a loss for the 2009 financial year.

In related news farmers near the Valentines mine area in eastern Uruguay told the government they are worried about the effects of the Zamin Ferrous Resources iron ore project to their crops and livelihoods.

Minera Aratirí, the unit of the UK-based Zamin Ferrous operating South America, which mines iron ore in Brazil and is looking to expand to Peru and Uruguay, said it has plans to invest 1.5 billion in the project in the Treinta y Tres and Florida departments.

However small-scale farmers said in a joint statement that they considered the company “an imminent threat” that could hurt vital water sources that sustain their farming and livestock businesses.

Aratirí´s general manager, Fernando Puntigliano, said the company estimates extraction will begin in 2013, and will generate 4,000 direct and indirect jobs.

Some farmers had refused to go to a town hall meeting with Puntigliano because government authorities were not present, and no objective information was available to them about the mine, according to local reports.