Hey all,Ive just had my 2 minutes of fame, lol. Rob answered my...

Hey all,

Ive just had my 2 minutes of fame, lol. Rob answered my question on the UCL website shareholder feedback section.

I have posted the question and his answer below

Cheers



5/3/2006 8:39:21 AM - Increasing zinc prices
Shareholder Comment: Hi Rob

I have been a long term investor in UCL since 2001 and have enormous confidence in the company fullfilling their mission of developing the largest undeveloped zinc mine in the world. I have a question in relation to the zinc price. When I attended the semainar in Melb last year,we were told that the NPV of the project would be $2 billion based on current zinc price. What zinc price did you use to calculate that? Obviously this figure would be a few fold higher now using zinc price as the only variable and keeping everything else constant. With the sudden surge in the zinc spot price and the diminishing zinc inventory levels, what is your take on the future zinc price? I dont think even the most optimistic sinc supporter a year ago would have predicted the current price. If zinc prices can be sustained at current levels, which of course will result in a higher NPV will this speed up the financing stage of the project? Will financing involve a balance of debt and equity or majority debt? It is quite deplorable that the project's true value is not even remotely reflected in the share price. The whole Iran saga has been completely blown out of proportion by the US and the media.

Keep the great work

Best regards

Carlo

Union Resources Reply: Dear Carlo

Thanks for the question. We have not bothered to calculate the NPV based on the current zinc price, it would be extremely high.

For those interested in doing their own caluclation we have given in the March quarterly report the operating cost of $US 291 per tonne of zinc after lead and silver credits and the production will be up to 400,000 tonnes of zinc metal per annum once fully operation.

Long term zinc price I have heard are around $US 1700 per tonne and on that basis, the NPV is well in excess of $US 1 billion anyway.

The challenge now is finding the capital cost for development. This will not be easy as it may cost around $US 1.6 billion to develop the project.

The financing will most likely be a combination of equity and debt, and there should be more information on that aspect as the project proceeds.

KIND WISHES

ROB