re: ann report out q and a from website

Hi All
Further to my earlier post here re cash in hand and equity position here is copy of my latest post to UCL website and Rob's responses. As you can see I had some questions re cash needs and equity position. Evidently Rob didn't feel he could respond in any detail but the last response was the one I was most interested in and gave me a little comfort.
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Hello Rob.

I have had opportunity to read through the Annual Report and consider our current capital position. By way of background to my questions I took particular note that resolution of ownership of MZC is expected to see UCL granted over 40% of the project. The report claims that UCL has expended roughly AUS$19 million of legitimate earn in expenditure. This figure would be over 50% of total earnin expenditure including the 50% credit given to the govt partner. Additionally that the next phase is expected to cost US$10mill and we have cash in hand of approx AU$5.3 mill.

My questions are:

i. If we are granted 40% or so of MZC then we will not have sufficient cash in hand to see us to the end of the finance phase. What do you consider to be the most likely way of raising funds for this phase and when?

ii. If there is an additional capital raising/placement soon, at current prices it would lead to a very low issue price and a further bloating of UCL's capital/share structure. What are the company's/board's current thoughts on a consolidation of shares?


ii. If we are granted 40% or so of MZC when our legitimate earn in expenditure is substantially higher (perhaps greater than 50%) what will happen to the balance of our earn in expenditure? Will it be ignored? Written off? Or will it be counted as credit to the finance phase?

Thanks for your attention.


Union Resources Reply:


Thank you for your queries:

1. We will make announcements regarding any future financing at the appropriate time.

2. There are no plans for any consolidation at this time.

3. Most of the additional expenditure should ultimately be converted to equity, but it may take some time to happen.

Regards ROB