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Four merchant ships in the area recovered three rafts, and rescued the two Filipino crew members, said Gaston Jaunsolo, a spokesman for the navy.
The crew of the Stella Daisy, a Very Large Ore Carrier (VLOC) with a capacity of more than 260,000 tonnes, comprised 16 Filipinos and eight Koreans.
The search for the others continued.
The ship had issued an emergency call on Friday shortly before noon local time (14H00 GMT), saying it was taking on water, according to the navy.
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Because the ship was far off the Uruguayan coast -- some 2,000 nautical miles, or 3,700 kilometers, from Montevideo -- the navy organized a search by four merchant ships in the area, Jaunsolo told AFP in Montevideo.
He said the first ships to reach the scene had detected a "strong smell of fuel" and spotted debris, "an indication that the damaged ship had sunk," a statement from the navy said.
The ship, which is flagged in the Marshall Islands, had departed from a port in Brazil. Its intended destination was not immediately clear.
Brazil is sending an aircraft to assist in the search, officials said.