Graphics Mill and ImageUploader watermark

I have ImageUploader 3.5 and Graphics Mill 2.0.
When uploading I create 2 thumbnails 1 thumbnail is (120x90) for displaying multiple images on a single web page and the other (600x450) is for preview.

On the server I have Graphics Mill create a watermark using the DrawOnBitmap routine. (objWMBitmap.DrawOnBitmap objBitmap,0,0,,,,,,, CombineModeAlpha, CombineOpacity, InterpolationModeHighQuality)

My problem is that the uploader compresses the image and the second thumbnail (600x450) is compressed again by the DrawOnBitmap routine. Is there another way of adding a watermark without compressing it twice? What am I doing wrong?

I have the UploadThumbnail1JpegQuality parameter of the uploader set to 100.
The original jpg is 1.75MB
When not using the DrawOnBitmap routine, the image file size is ~160KB.
When using both ImageUploader and DrawOnBitmap the image file size is ~26KB.