7/14/2006 4:43:55 PM - Development of Mehdiabad Shareholder...

7/14/2006 4:43:55 PM - Development of Mehdiabad
Shareholder Comment: Given the polticial situation in Iran (and the Middle East), realistically very few banks will touch a project in Iran until the nuclear issue is resolved.

From recollection, the JV agreement did not encompass other metals at Mehdiabad such as copper. If the development of the main zinc / silver / lead project has to be put on hold pending a resolution of the nuclear issue, is it worthwhile UCL focussing on all these other issues that would normally have been taken care of in due course? For example:

(i) Incorporate the copper / barite resources into the JV;
(ii) Drill out these other resources;
(iii) Continue to drill out the zinc project as I understand it is still open in some directions.

I would have thought that a fully drilled project, defining the full extent of all resources, may improve the financing package once time comes to finance the project.

I would appreciate your comments on this.

Union Resources Reply: The project itself is not effected by Middle Eastern politics, only the company's share price.

Further drilling would be expensive, going under the mountains, and is not necessary as we have enough for 50 years and our peers now acknowledge Mehdiabad is the world's largest deposit.

7/14/2006 4:43:55 PM - Development of Mehdiabad
Shareholder Comment: Given the polticial situation in Iran (and the Middle East), realistically very few banks will touch a project in Iran until the nuclear issue is resolved.

From recollection, the JV agreement did not encompass other metals at Mehdiabad such as copper. If the development of the main zinc / silver / lead project has to be put on hold pending a resolution of the nuclear issue, is it worthwhile UCL focussing on all these other issues that would normally have been taken care of in due course? For example:

(i) Incorporate the copper / barite resources into the JV;
(ii) Drill out these other resources;
(iii) Continue to drill out the zinc project as I understand it is still open in some directions.

I would have thought that a fully drilled project, defining the full extent of all resources, may improve the financing package once time comes to finance the project.

I would appreciate your comments on this.

Union Resources Reply: The project itself is not effected by Middle Eastern politics, only the company's share price.

Further drilling would be expensive, going under the mountains, and is not necessary as we have enough for 50 years and our peers now acknowledge Mehdiabad is the world's largest deposit.