As announced this morning....Union Resources Limited (UCL)...

As announced this morning....

Union Resources Limited (UCL) announces that the Company has undertaken a review of the
economics of the Mehdiabad Zinc Project subsequent to the completion of Phase 2 of the
Bankable Feasibility Study (BFS).
The review has shown that the operating cost estimates resulting from the Phase 2 Study are
in line with previous operating cost projections for the project.
The operating cost to produce a tonne of zinc metal over the life of the mine is in the order of
US$600 per tonne, around 50% of the current LME zinc metal price.
Phase 2 supports the concept of the initial plant development being a 160,000 tonne per
annum zinc metal production Oxide Plant processing around 4 million tonnes of oxide ore per
annum. This plant would be followed by a 340,000 tonne per annum zinc metal production
Sulphide Plant some five years later. It is envisaged that the later plant may be developed in
two stages, with an initial duplication of the initial 160,000 tonne cell house.
A review of the capital cost for the Oxide Plant has given a capital estimate of around US$400
million. Mine development and infrastructure costs are expected to be around US$100
million, giving a total cost of US$500 million before contingencies.
UCL remains confident that the development of the Project can be funded upon the
successful completion of the BFS.
The Net Present Value based on current zinc prices over the life of the mine for the whole
project (inclusive of the Sulphide Plant as well) is in excess of US$1000 million using 12% per
annum discount factor. The Internal Rate of Return is well above 20% based on current zinc
prices.
UCL current market capitalisation represents less than 5% of UCL minimum share of the NPV
at current zinc prices.