Ann: Response to ASX Price Query , page-2

This is very very interesting to those of us who have been around for a long time. Mehdiabad is or at least was the largest undeveloped zinc resource in the world, it is one of only 2 major sites at bankable stage and ready to move to production. It should be a major value asset for UCL indeed a company maker but the Iranian authorities have proven themselves eminently UNtrustworthy in dealings over many years now.

This does appear to be a breakthrough although UCL is rightly cautious. For the benefit of new shareholders the rights to exploit Mehdiabad are held in an Iranian company, MZC. The Iranian authority has 48% of MZC and UCL most of the rest with a small share to another local company. Imidro have resisted issuing the necessary permits and support to MZC to move ahead with developing the asset and instead have been using it to keep some unhappy local artisanal zinc smelters happy after a major zinc mine collapsed 2 years ago. Basically they have been scraping some of the near surface zinc out to supply the artisans.

Mehdiabad is rich but has some complexites and MZC holds all the IP, the Iranians can't effectively exploit it without redoing all the studies which is years of work. That Imidro has now tendered out their share of MZC suggests they are finally ready to actually do something via MZC and the comments that they are discussing an MOU with MZC shareholders to resolve the dispute is a major move forward. Or it should be but they are difficult to trust, the difference this time is the potential transfer of their interest to a commercial party which looks like it could be the game changer.

If this development follows through, which will take time, it will become a major breakthrough for UCL and the $80 mill m/c I've suggested is fair on back of the Namibian project will be multiplied.