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Union Resources Ltd (URL)

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Friday 28 October, 2005

Union Resources Ltd

Quarterly Report

Union Resources Limited
28 October 2005


SEPTEMBER 2005 QUARTERLY REPORT

MEHDIABAH ZINC PROJECT


Overview


The main focus of Union Resources Limited ('Union') is the Mehdiabad Base Metal
Project (the 'Project') located in Central Iran.


The Project moved into the bankable feasibility study ('BFS') stage late in
2004, following a successful exploration campaign that outlined a world class
zinc, lead and silver resource, comprising both oxide and sulphide ore.


Union hopes that construction of an open cut mine and the first stage of an
integrated processing plant designed to acid leach both the oxide ore and
sulphide concentrates to produce special high grade ('SHG') zinc ingots will
commence towards the later part of 2006.


The Project is owned and operated by the Mehdiabad Zinc Company ('MZC'), an
Iranian joint venture company between Union, a private partner Itok GmbH 
('Itok') and the Iranian Government.   Union has recently announced that it 
intends to acquire Itok's equity in the project and upon settlement Union will 
hold 50% of the shares in MZC and 50% of the equity in the Project.


An International Standard Bankable Feasibility Study report will be prepared by
Aker Kvaerner Australia ('AKAU') and is currently forecast for completion in
June 2006.   A program of work is in progress that AKAU feel is necessary before
the Project can be considered 'bankable' to international standards.  AKAU
expect to produce an interim 'Provisional Stage - BFS Report' by the end of
January 2006.


The 'Provisional Stage - BFS Report' will provide a critical review of the
Project economics that are required to enable Union, and in turn MZC, to state
that the Project development is definitely proceeding.  This in turn will allow
the various licences required to operate the Project to be obtained, whilst all
outstanding work required for the Bankable Feasibility Study is completed.


A limited infrastructure development program may commence following a positive '
Provisional Stage - BFS Report'.

A final signed bankable document will be produced when all licences and project
verification are completed.  Once the project is 'bankable', project financing
and the development of the open cut mine and the processing plant can commence.


Contact details

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

Website www.unionresources.com.au

Rob Murdoch - Managing Director

Michael Illet


Westhouse Securities LLP (Tel: 020 7601 6100)

Bill Staple

Richard Morrison


Bankside Consultants (Tel: 020 7367 8871)

Simon Rothschild  (07703 167 065)


Drilling Progress


Drilling ahead of the resource estimate for the Provisional BFS was completed in
July 2005.  The total drilling involved in resource estimation will be 49,322
metres of diamond coring.


A geotechnical program of 560 metres to establish the pit wall stability was
completed in August 2005.  A drilling program to provide drill core for sulphide
metallurgical and comminution testing, totalling 760 metres was completed in
September 2005.  A geotechnical program totalling 800 metres under the proposed
waste dump is in progress.  Further hydrological and geotechnical drilling is
envisaged.


MZC plan to keep one rig at site for the foreseeable future.


Drilling Results


1.       Zinc Resource



Significant drill intersections within the main zinc resource at Medhiabad were
as follows:



Hole 8402 (11,300E / 8,225N)

5.0m (145.0m - 150.0m) at 8.23% Zn, 3.62% Pb and 82 g/t Ag



Hole 8405 (10,725E / 8,950N)

63.0m (314.0m - 377.0m) at 8.2% Zn, 4.4 % Pb and 203 g/t Ag*

including 3.0m (333.0m - 336.0m) at 17.67% Zn, 2.70% Pb and 122 g/t Ag

9.0m (420.0m - 429.0m) at 4.10% Zn, 1.33% Pb and 44 g/t Ag

41.0m (445.0m - 486.0m) at 7.92% Zn, 2.33% Pb and 77 g/t Ag*

including 3.0m (447.0m - 450.0m) at 21.83% Zn, 6.15% Pb and 133 g/t Ag

* The core loss is thought to be due to cavities in the resource.  The
geotechnical consultants are addressing the extent and impact of the cavities on
the mine plan.


Hole 8406 (11,350E / 8,225N)

19.0m (157.0m - 176.0m) at 6.205 Zn, 2.36% Pb and 12 g/t Ag

19.0m (176.0m - 195.0m) at 6.91% Zn, 1.74% Pb and 23 g/t Ag

including 3.0m (190.0m - 193.0m) at 13.05% Zn, 3.79% Pb and 39 g/t Ag



Hole 8409 (11,470E / 8,700N)

5.0m (99.0m - 104.0m) at 10.51% Zn, 2.69% Pb and 68 g/t Ag



Hole 8411 (10,960E /8,900N)

25.0m (234.0m - 259.0m) at 5.77% Zn, 4.29% Pb and 76 g/t Ag

14.0m (284.0m - 298.0m) at 4.35% Zn, 0.16% Pb and 5 g/t Ag

15.0m (298.0m - 313.0m) at 6.66% Zn, 0.21% Pb and 13 g/t Ag

22.0m (332.0m - 344.0m) at 7.42% Zn, 0.01% Pb and 18 g/t Ag



Hole 8414 (11,600E / 8,900N)

35.0m (131.0 - 166.0m) at 4.15% Zn, 1.02% Pb and 16 g/t Ag



Hole 8415 (11,360E / 8,315N)

18.0m (201.0m - 219.0m) at 11.57% Zn, 2.10% Pb and 39 g/t Ag

including 6.0m (204.0m - 210.0m) at 18.10% Zn, 3.00% Pb and 54 g/t Ag

27.0m (223.0m - 250.0m) at 20.80% Zn, 3.88% Pb and 15 g/t Ag

including 7.0m (224.0m - 231.0m) at 30.68% Zn, 5.10% Pb and 27 g/t Ag



Hole 8319 (11,300E / 8,400N)

19.0m (230.0m - 249.0m) at 9.39% Zn, 1.30% Pb and 32 g/t Ag

including 10.0m (230.0m - 240.0m) at 12.04% Zn, 1.50% Pb and 42 g/t Ag



Hole 8322 (11,600E /9,100N)

10.0m (138.0m - 148.0m) at 16.48% Zn, 1.235 Pb and 3 g/t Ag

including 5.0m (142.0 - 147.0m) at 22.345 Zn, 1.66% Pb and 3 g/t Ag




Hole 8324 - (11,580E / 9,050N)

9.0m (151.0n - 169.0m) at 12.75% Zn, 3.79% Pb and 9 g/t Ag

including 4.0m (152.0m - 156.0m) @ 20.40% Zn, 3.22% Pb and 4 g/t Ag



Hole 8326 - (11,600E / 9,000N)

 15.0m (122.0m - 137.0m) at 8.28% Zn, 1.915% Pb and 8 g/t Ag



Hole 8327 (11,600E / 8,900N)

23.0m (101.0 - 124.0m) at 8.83% Zn, 1.69% Pb and 18 g/t Ag

including 5.0m (111.0 - 116.0m) at 15.18% Zn, 2.72% Pb and 13 g/t Ag



Hole 8328 - (11,600E / 8,900N)

15.0m (98.0m - 113.0m) at 5.66% Zn, 1.05% Pb and 9 g/t Ag

including 4.0m (106.0m - 110..0m) at 9.22% Zn, 1.22% Pb and 7 g/t Ag



Hole 8329 (11,050E / 9,600N)

17.0m (341.0m - 358.0m) at 10.3% Zn, 3.00% Pb and 72.5 g/t Ag



Hole 8330 - (11,000E / 8,800N)

30.0m (218.0m - 248.0m) at 6.54% Zn, 2.21% Pb and 43 g/t Ag

including 7.0m (228.0 - 235.9m) at 9.03% Zn, 3.08% Pb and 40 g/t Ag

38.0m (248.0m - 286.0m) at 5.13% Zn, 1.85% Pb and 52 g/t Ag

including 4.0m (251.0m - 255.0m) at 9.94% Zn, 3.86%Pb and 43 g/t Ag



Hole 8410 - (11,500E /9,200N)

9.0m (184.0-193.0m) at 6.91 % Zn, 1.66% Pb and 9 g/t Au

10.0m (208.0-218.0m) at 12.91% Zn, 2.42% Pb and 12 g/t Ag

including 5.0m (209.0-214.0m) at 19.0% Zn, 3.48% Pb and 16 g/t Ag



2.       Lead Resource



Hole 8401 - (10,825E / 9,000N)

6.0m (120.0 - 126.0m) @ 6.1% Pb, 0.63% Zn and 73 g/t Ag



Hole 8411 - (10,960E /8,900N)

39.0m (195.0-234.0m) at 4.77% Pb, 1.30% Zn and 113 g/t Ag



Hole 8407 - (10,850E /8,900N)

7.0m (88.0-95.0m) at 4.00% Pb, 1.31% Zn and 104 g/t Ag



3.       Copper Mineralisation



During the quarter one hole drilled on the western side of the Zinc Resource
intersected thick high grade copper oxide mineralisation.



Hole 8416 (10,800E / 9,200N)

11.0m (98.0m - 109.0m) at 3.00% Cu, 0.05% Zn, 0.67% Pb and 36 g/t Ag

including 2.0m (103.0m - 105.0m)at 8.50% Cu, 0.03% Zn, 0.22% Pb and 16 g/t Ag

 82.0m (120.0m - 202.0m) at 2.28% Cu, 0.89% Zn, 0.88% Pb and 47 g/t Ag

including 3.0m (171.0m - 174.0m) at 5.73% Cu, 0.71% Zn, 1.24% Pb and 65 g/t Ag

and 9.0m (188.m - 197.0m) at 5.03% Cu, 1.82% Zn, 2.86% Pb and 48 g/t Ag

and 2.0m (199.0m - 201.0m) at 19.45% Cu, 1.21% Zn, 2.03% Pb and 57 g/t Ag



The high Cu intersections are supported by lesser magnitude Cu anomalism in
surrounding holes.   The extent of the very significant copper intersection in
this part of the fault zone will be further investigated.




Resource Estimate



The major effort this quarter (involving up to seven geologists on site), has
been to ensure that all the drill core sampling, geological and geotechnical
logging and interpretation was completed as quickly as possible following
completion of the resource drilling.  This work has been completed and data base
verification is now in progress for the finalisation for the block model to be
used for pit optimisation and for mine production planning.

Geological consultants Hellman and Schofield are expected to provide a new
resource estimate during November. The resource is expected to contain measured
and indicated mineralisation for the first 10 years production of a planned
30-year mine life.

The last resource estimate was calculated based on 36,000 metres of drilling.



Using a cut off grades of 2% Zn for the oxide ore and 3% for the sulphide ore.


Oxide Resource                 90 million tonnes @ 5.1% Zn (2% Zn cut off)
Sulphide Resource            159 million tonnes @ 6.2% Zn (3% Zn cut off)
Total                        249 million tonnes @ 5.8% Zn



The resource also contains lead and silver.



Mine Planning



Once the block model is finalised, Australian Mine Design and Development
(AMDAD) will complete an updated Whittle pit optimisation and mine production
schedule.  The mine plan for the Provisional Report is expected to be completed
by the end of November.



Geotechnical Studies



During the quarter, Coffey International carried out extensive geotechnical
studies at the site including pit wall stability and waste dump sterilisation
drilling and bulldozer test pitting under the proposed waste dump.



Zinc Recovery Variability Testing



During the quarter, over 1,000 separate samples were selected for compositing
laboratory samples for determination of zinc and manganese extraction and acid
consumption for the oxide deposit.  Also twenty-one sulphide composite samples
were tested for flotation response to ascertain zinc and lead recovery
variability. This program is required due to considerable variations in
metallurgical recovery observed across the resource in earlier metallurgical
test work.



The oxide samples are being tested at HRL Laboratories ('HRL') and Metcon is
testing the sulphide samples.  To date around 250 composite oxide samples have
already been tested by HRL.  The initial oxide results suggest that the zinc
extraction will average 70%, the same average indicated by earlier testwork on
drill core composites.  The study, when completed will allow mine scheduling to
ensure that the higher recoveries, more profitable portions of the resource are
mined as early as possible.



Oxide Metallurgical Testwork



During the quarter, the pilot plant studies on the oxide ore were carried out by
Tecnicas Reunidas ('TR') in Spain on two bulk samples of 7 tonnes each, one from
the eastern side, and one from the western side of the deposit.



Three separate pilot plants runs were completed. The studies confirmed that two
stage acid leaching of the oxide ore at 50 degrees Centigrade is the optimum
flowsheet for oxide ore leaching.  The tests indicated that the leaching and
settling characteristics of the leach residues and the neutralised residue were
good.   Filtration problems encountered with the second-stage leach residue,
which were probably due to silica occurring as a gel in the solutions, were
successfully solved by the introduction of counter current decantation ('CCD').
Counter current two-stage leaching will now be used followed by TR solvent
extraction process, as developed for the Skorpion Mine, to extract the zinc.




Sulphide Metallurgical Testing



Flotation locked cycle bulk sulphide metallurgical testing on crusher reject
samples is expected to commence during December.  Also, the production of an
initial 30 kgs of zinc concentrate for acid leaching of that concentrate at HRL
will commence in December.  Pilot plant testing of the sulphide ore is not
expected to be required.



The locked cycle testing will not be fully completed in time for the Provisional
Report, but the latest information available at the time that the report is
prepared will be used.  Unfortunately, the start of this work had to be delayed
until the recent drilling was completed to give coverage of the whole deposit.
Further, the core from the two metallurgical holes recently completed is
required to supplement the earlier sulphide samples to provide a sufficient
sized sample for testing.  This core is currently en route to Australia.



Batch testing in 2004 indicated an encouraging recovery of zinc to a 30-40% zinc
concentrate for leaching on site.



Comminution Testing



Samples from the two metallurgical holes will initially be used for a series of
comminution tests to confirm the crushing and grinding circuit design data,
during November and December.  A three stage crushing circuit followed by ball
milling is the selected comminution circuit.



Process Plant Design



A recent meeting of the various experts involved in the metallurgy and plant
design for the Project have recommended that an 'Integrated Oxide: Sulphide
Processing Plant' be considered subject to the mine production plan



Plant dimensioning and evaluation of the integrated flow sheet is now in
progress ahead of the actual plant design scheduled to commence in November.
AKAU has already produced several Metsim models that show the advantage of this
approach.



Infrastructure



A number of plant site options are under consideration at this time. The
selection process involves AKAU and their consultants, local MZC personnel and
various Government authorities and stakeholders in the Project.



The major infrastructure issue for the Project is access to adequate water for
processing.  The Project is in an arid environment where water resources are
limited and highly controlled by a provincial authority. MZC has submitted an
application to the authority for an allocation of water in line with the
requirements of the Project.  The authority has indicated that MZC can access
the aquifer at the mine site, which has been found of good quality and will
provide sufficient supply during construction, but inadequate for processing.



MZC is currently negotiating access to a fresh water supply line that will pass
within 40 km of the proposed plant site, but no allocation can be expected until
MZC can confirm to the Authority that MZC is definitely proceeding with
development.  MZC expects to be able to do this once the Provisional Stage - BFS
Report has been reviewed in 2006.   An alternative to be studied is the use of
grey water from the City of Yazd, located 90 kms from the site.



As the Project is likely to provide up to 10,000 jobs either directly or
indirectly and provide considerable foreign investment into an undeveloped area,
it is likely that the application will be seriously considered once development
can be confirmed to the Provincial Government.




Environmental Studies



Baseline fauna, flora, land ownership and climate studies are in progress using
Iranian consultants working under the supervision of Golder Associates.  Soils,
waste dumps and residue characterisation is being conducted by Australian
consultants.



The Project is located in a fauna reserve.  Whilst mining is a permitted
activity, the processing plant may require special permission to be built inside
the reserve.  If permission is not granted, an overland conveyor may be needed
to convey material to a plant site outside the reserve.



Once the base line environmental studies are completed, an Environmental Impact
Study can be submitted to the provincial environmental authority seeking
approval to locate the processing plant inside the fauna reserve.



The environmental program is to World Bank Standards.



ACQURING THE ITOK INTEREST



Union has announced that has entered into an agreement to acquire all the
interests of Itok GmbH in MZC for 110 million shares in UCL.   This acquisition
will allow Union to immediately own 50% of the issued shares in MZC and hence
have a 50% interest in the Project.  It opens the way for Union to take a
controlling stake in the Project in the event that the Government does not
contribute to the development.



Union will have a further obligation to issue a total of 190 million shares if
and when future project milestones are reached, subject to any shareholder
approvals or regulatory approvals required at that time.



PROTECTING UCL INVESTMENT



An application for protection of up to US$600 million investment in this project
by Union is being considered by the Iranian authorities under a Foreign
Investment Promotion and Protection Application ('FIPPA').  A recent meeting
with the authority indicated that Union file is now complete and can be sent to
the FIPPA board for a ruling.  Once obtained UCL will be entitled to add ex
appropriation insurance to its current war and abandonment insurance policy.



AIM LISTING



Union was admitting to trading on the Alternative Investment Market of the
London Stock Exchange on 14th October 2005.  Union's shares and listed options
can now be transferred to and be traded on this market.  Union anticipates a
gradual migration of ASX registered stock to the AIM market.  However, Union
sees the main advantage of the AIM listing coming when the company seeks to
raise the equity capital required to develop the mine and process plant at
Mehdiabad.  At that stage Union expects European and Middle Eastern based
investors to provide the bulk of the funds required.



OTHER INVESTMENTS



During the quarter Union disposed of its interest in listed explorer Gold Aura
Limited through an in species distribution to its shareholders.



Union expects to complete the sale of its indirect interest in ETPI to be
completed shortly.



The mineral resources information in this Report is based on, and accurately
reflects, information compiled by Mr Ken Chapple who is a Corporate Member of
the Australasian Institute of Mining and Metallurgy.  Mr Chapple has the
relevant experience in relation to the mineralisation being reported upon to
qualify as a Competent Person as defined in the Australasian Code for Reporting
of Identified Mineral Resources and Ore Reserves.


                          QUARTERLY FINANCIAL REPORT



                   Mining exploration entity quarterly report


Name of entity
Union Resources Limited


ABN                                                              Quarter ended ('current quarter')
40 002 118 872                                                   30/9/05




CONSOLIDATED STATEMENT OF CASH FLOWS


                                                        Current quarter      Year to date (3.months)

Cash flows related to operating activities              $A'000               $A'000


1.1    Receipts from product sales and related debtors                     0                        0


1.2    Payments for     (a)  exploration and evaluation              (2,520)                  (2,520)

                                                                           0                        0
                               (b)  development
                                                                           0                        0
                               (c)  production
                                                                       (371)                    (371)
                               (d)  administration
1.3    Dividends received                                                  0                        0
1.4    Interest and other items of a similar nature                       25                       25
       received
1.5    Interest and other costs of finance paid                            0                        0
1.6    Income taxes paid/refunded                                        122                      122
1.7    Other Bonds


       Net Operating Cash Flows                                      (2,744)                  (2,744)


       Cash flows related to investing activities
1.8    Payment for purchases of:          (a) prospects                    0                        0

                                           (b) equity                      0                        0
       investments
                                                                           0                        0
                                             (c) other
       fixed assets

1.9    Proceeds from sale of:     (a) prospects                            0                        0

                                             (b) equity                    0                        0
       investments
                                                                           0                        0
                                             (c) other
       fixed assets

1.10   Loans to other entities                                             0                        0
1.11   Loans repaid by other entities                                      0                        0
1.12   Other                                                               0                        0


       Net investing cash flows                                          (0)                      (0)
1.13   Total operating and investing cash flows
       (carried forward)                                             (2,744)                  (2,744)
                                                                     

       Cash flows related to financing activities


1.14   Proceeds from issues of shares, options, etc.                          5,534               5,534
1.15   Proceeds from sale of forfeited shares                                     0                   0
1.16   Proceeds from borrowings                                                   0                   0
1.17   Repayment of borrowings                                                    0                   0
1.18   Other - Share applications                                                 0                   0
1.19   Issue costs                                                             (28)                (28)
       Net financing cash flows                                               5,506               5,506




       Net increase (decrease) in cash held                                   2,762               2,762


1.20   Cash at beginning of quarter/year to date                              1,798               1,798
1.21   Exchange rate adjustments to item 1.20
1.22   Cash at end of quarter                                                 4,560               4,560



Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related
entities

                                                                              Current quarter

                                                                              $A'000


1.23      Aggregate amount of payments to the parties included in item 1.2                          95


1.24      Aggregate amount of loans to the parties included in item 1.10                             -


1.25      Explanation necessary for an understanding of the transactions
          Consultancy Fees, Directors Fees, Salaries and Reimbursement of Expenses.



Non-cash financing and investing activities

2.1    Details of financing and investing transactions which have had a material effect on consolidated
       assets and liabilities but did not involve cash flows




2.2    Details of outlays made by other entities to establish or increase their share in projects in
       which the reporting entity has an interest


Financing facilities available

Add notes as necessary for an understanding of the position.


                                                                     Amount available          Amount used
              
                                                                          $A'000                    $A'000
3.1     Loan facilities                                                           -                        -


3.2     Credit standby arrangements                                               -                        -





Estimated cash outflows for next quarter

                                                                        $A'000
4.1   Exploration and evaluation                                                                       3,717


4.2   Development                                                                                          -


      Total                                                                                            3,717


Reconciliation of cash

Reconciliation of cash at the end of the quarter               Current quarter          Previous quarter
(as shown in the consolidated statement of cash
flows) to the related items in the accounts is as                     $A'000                   $A'000
follows.

5.1   Cash on hand and at bank                                         4,515                     1,753
5.2   Deposits at call

                                                                           -
5.3   Bank overdraft

                                                                           -
5.4   Other Bank Guarantee                                                45                        45
      Total: cash at end of quarter (item 1.22)                        4,560                     1,798



Changes in interests in mining tenements


                                             Tenement       Nature of interest            Interest at   Interest at
                                             reference                                    beginning of  end of
                                                            (note (2))                    quarter       quarter

6.1    Interests in mining                      -                             -             -            -
       tenements relinquished,
       reduced or lapsed




6.2    Interests in mining                      -                             -             -            -
       tenements acquired or
       increased




Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights
together with prices and dates.



                                    Total number          Number quoted        Issue price  Amount paid up per
                                                                               per security security (see note 3)
                                                                               (see note 3) ($)
                                                                               ($)
7.1    Preference
       +securities
       (description)                          -                    -            -                      -
7.2    Changes during
       quarter

       (a)  Increases
       through issues

       (b)  Decreases
       through returns of
       capital,
       buy-backs,
       redemptions
7.3    +Ordinary                    684,594,266          684,594,266 (refer         (refer appendix A
       securities                                                    appendix A         attached)
                                                                     attached)

7.4    Changes during
       quarter
                                         10,000               10,000        $0.10                  $0.10
       (a)  Increases
       through issues     Conversion of UCLOA   Conversion of UCLOA
                          options               options



                          7,000,000             7,000,000
                                                                            $0.03                  $0.03
                          76,000,000            76,000,000
                                                                            $0.03                  $0.03
                          101,430,711           101,430,711
       (b)  Decreases                                                       $0.03                  $0.03
       through returns of
       capital, buy-backs
7.5    +Convertible debt
       securities
       (description)                          -                    -            -                      -
7.6    Changes during
       quarter

       (a)  Increases
       through issues                         -                    -            -                      -

       (b)  Decreases
       through securities
       matured, converted                     -                    -            -                      -
7.7    Options                                                           Exercise            Expiry date
       (description and                                                     price
       conversion factor)

                          One ordinary   share  One ordinary share
                          for each option held  for each option held



                                      4,000,000            4,000,000        $0.10
                                                                                          March 31, 2006
                                 Unlisted UCL03       Unlisted UCL03



                                    246,050,340          246,050,340      $0.0982
                                                                                          March 31, 2009
                                   Listed UCLOA         Listed UCLOA



                                    101,430,711          101,430,711        $0.10
                                                                                          March 31, 2009
                                   Listed UCLOB         Listed UCLOB


7.8    Issued during                 14,000,000           14,000,000      $0.0982         March 31, 2009
       quarter
                                   Listed UCLOA         Listed UCLOA

                                    101,430,711          101,430,711        $0.10         March 31, 2009

                                   Listed UCLOB         Listed UCLOB
7.9    Exercised during
       quarter
                                         10,000               10,000        $0.10         March 31, 2009

                                   Listed UCLOA         Listed UCLOA
7.10   Expired during
       quarter

7.11   Debentures

       (totals only)                          -                    -
7.12   Unsecured notes
       (totals only)
                                              -                    -

Compliance statement



1       This statement has been prepared under accounting policies, which comply
with accounting standards as defined in the Corporations Act or other standards
acceptable to ASX (see note 4).



2       This statement does give a true and fair view of the matters disclosed.



Robert Murdoch - Managing Director

October 28th, 2005



Notes



1       The quarterly report provides a basis for informing the market how the
entity's activities have been financed for the past quarter and the effect on
its cash position.  An entity wanting to disclose additional information is
encouraged to do so, in a note or notes attached to this report.



2       The 'Nature of interest' (items 6.1 and 6.2) includes options in respect
of interests in mining tenements acquired, exercised or lapsed during the
reporting period.  If the entity is involved in a joint venture agreement and
there are conditions precedent which will change its percentage interest in a
mining tenement, it should disclose the change of percentage interest and
conditions precedent in the list required for items 6.1 and 6.2.



3       Issued and quoted securities The issue price and amount paid up is not
required in items 7.1 and 7.3 for fully paid securities.



4       The definitions in, and provisions of, AASB 1022: Accounting for
Extractive Industries and AASB 1026: Statement of Cash Flows apply to this
report.



5       Accounting Standards ASX will accept, for example, the use of
International Accounting Standards for foreign entities.  If the standards used
do not address a topic, the Australian standard on that topic (if any) must be
complied with.



Appendix A - Ordinary Shares


Description                                        Number             Issue Price
                                                                           $
Opening Balance                                           500,153,555
Prospectus                                                101,430,711      $0.0300

Placement - Arran Venture                                   7,000,000      $0.0300

Placement - Lundin Mining AB                               76,000,000      $0.0300

Conversion UCLOA options to Shares                             10,000      $0.1000


Total                                                     684,594,266


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