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Warwick Grigor last night released a review on UCL.

Union Resources Limited UCL
Redefining itself as a low cost phosphate company
Market Data
Melbourne
Level 4 75-77 Flinders Lane Melbourne VIC 3000 Australia
Telephone +61 3 8688 9100 Facsimile +61 3 8688 9155
Sydney
Level 6 204 Clarence Street Sydney NSW 2000 Australia
Telephone +61 2 9263 2700 Facsimile +61 2 9267 0806
Investment Perspective: Union Resources NL (“UCL”) has
previously maintained a profile as an emerging zinc company with the
world class Mehdiabad zinc project in Iran, spending US$16.8m on
exploration and feasibility studies. Notwithstanding the technical
merits of the project, investor support and finance for a zinc project in
Iran is non-existent. Consequently, the Companyʼs focus is now on
phosphate, with Namibian offshore licences that have recently been
joint ventured with Bonaparte Diamond Mines NL (“BON”).
Sensibly, UCL and BON have combined their respective licences,
technical skills and databases to achieve a more rational and cooperative
project with better manageable financial risk.
It appears there is no issue with the size of the combined phosphate
resource – it lies in abundance. However, there are issues with
investorsʼ perceptions of technical and economic matters involved
with marine mining. Our work suggests that there are actually
significant advantages over land-based mining operations. Thus
there is great opportunity here for those who can appreciate them.
An operation producing 2.8 mtpa of saleable phosphate product
could generate cash flow from operations of $280m pa. on a
phosphate price of US$200/t. UCLʼs 42.5% equity would be $140m
or 15¢/share. The shares are clearly undervalued in the market by a
significant margin, even considering that there will be dilution for
financing. We expect progressive revaluation of the shares along
with the expanding information curve, with a share price ultimately
many times the current level.
As with many resource projects, the earlier movers in a cycle are
usually the winners that secure sales contracts, blocking
opportunities for late-comers. We believe that UCLʼs Namibian
project will be one of the early movers.
Share Price 0.5¢
12 Mth High/Low 0.3-4.4¢
Market Capʼn $4.5m
Issued Shares 913 million ordinary
Issued Options 600 mill. 31/3/09, 7.5-10¢
17 mill. various, 2¢
Cash Balance $0.26m (31/12/08)
Largest Shareholders HSBC Custody 35.5%
ANZ Nominees 15.4%
Switching the focus from zinc in Iran
to phosphate in Namibia.
Sensible co-operation on a regional
JV basis is encouraging.
The resource size is huge and will
support a multi-decade mine
Fundamentals on phosphate at US
$200/t are very impressive. It still
makes money at US$70/t.
The key is to get into production
before the competitors.
There is plenty of phosphate out
there. Investors should focus on the
earliest new mines, with the lowest
costs, because there is not enough
room for many new players. This
marine phosphate project has many
advantages