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Thursday 27 October, 2005

Union Resources Ltd

Re Agreement with Itok

Union Resources Limited
27 October 2005



UNION RESOURCES LIMITED


27 October 2005


AGREEMENT WITH ITOK


Union Resources Limited ('Union' or the 'Company') is pleased to announce that
it has signed an agreement with Itok GmbH ('Itok') to acquire all the shares,
expenditure incurred and future rights held by Itok in the Mehdiabad Zinc
Company ('MZC') and the Mehdiabad Zinc Project (the 'Project'), in Iran.   Itok
is a shareholder in MZC and a participant in the Project in joint venture with
Union and the Iranian Government Company IMPASCO (the 'Government').



This watershed agreement will allow Union to achieve 50% equity in MZC and make
the Company an equal partner with the Government in the Project.



To acquire the interest, Union will pay Itok US $ 500,000 in cash and will issue
to Itok 110 million Union shares at settlement.  The settlement is agreed to
take place within 30 days.  In exchange Itok will assign to Union under Iranian
Law all its shares and expenditure claims under the existing Earn-in
Arrangements.



As the Project advances there are two key milestones which, if and when they are
reached, will require Union to issue additional shares to Itok. Upon each
milestone being achieved Union will issue the additional shares to Itok in
accordance with any shareholder approval required and the statutory requirements
existing at the time.



The first milestone occurs should Union produce a Provisional Bankable
Feasibility Study setting out the Project engineering and economics. Once this
milestone is achieved, then Union will issue to Itok a further 40 million
shares.



At this time the Government will have to elect to contribute to further
expenditure or dilute their interest.   If the Government does not elect to
contribute then the opportunity will exist for Union to continue to fund the
Project thereby achieving a majority position under the Basic Joint Venture
Agreement signed in 1999.



Following review of the Provisional Bankable Feasibility Study, Union expects to
commence some early construction and development work in parallel with the
finalisation of the bankable feasibility study.  The finalisation of the study
following the Provisional Bankable Feasibility Study is likely to include mostly
verification and the issue of the various licences required for final
development.



The second milestone occurs should Union produce a final signed Bankable
Feasibility Study which includes all required environmental, exploitation and
water licences being issued.  If and when this milestone is reached, Union will
then issue to Itok an additional 150 million shares.



Rob Murdoch, Managing Director of Union commented, 'The signing of this
agreement is a major step forward for the Company and the Project. It will
provide Union upon settlement with 50% of the shares in MZC and a 50% interest
in the Project.  It will remove complications relating to Union's minority
equity position in the project and provide a clear way forward for the
investment of additional funding that the Project will require. It will also
provide Union with a new major shareholder, Itok, whose considerable experience
and influence in Iran will greatly assist with progressing the Project.'



For further information:

Union Resources Limited (Tel: 00 61 7 3833 3833)

Rob Murdoch - Managing Director

www.unionresources.com.au

Westhouse Securities LLP (Tel: 020 7601 6100)

Bill Staple
Richard Morrison





                      This information is provided by RNS
            The company news service from the London Stock Exchange