Information  X 
Enter a valid email address

Union Resources LTD (URL)

  Print      Mail a friend

Thursday 06 December, 2007

Union Resources LTD

Business Update

                            Union Resources Limited                            

                                Business Update                                

 1. Mehdiabad Project Earn-In
 2. EFIC Claim
 3. Rt Hon Lord Lamont of Lerwick - Appointment as Director

 1. Mehdiabad Project Earn-In
Union Resources Limited ("Union" or "the Company") is focused on the
development of the Mehdiabad Zinc-Lead-Silver Project located in Central Iran
("the Project").

The Project is carried on by Union, the Iranian Government body Iranian Mines
and Mining Industries Development and Renovation Organisation ("IMIDRO") and
Iranian company Itok GmbH ("Itok") through an incorporated Iranian joint
venture company, Mehdiabad Zinc Company ("MZC").

On 7 December 2006 Union announced that IMIDRO had purported to terminate the
agreements governing the Project. At that time, and subsequently, Union has
asserted that the purported termination of the Agreements is invalid.
Subsequent to receipt of the purported termination notice Union has endeavored,
and continues to endeavor, to negotiate a settlement of the dispute in order
that development of the Project can continue.

One of the Project agreements which IMIDRO purported to terminate was the
"Basic Agreement" between Union, IMIDRO and Itok. The Basic Agreement provides
that upon Union and Itok contributing US$10million in project expenditure
between them they shall be entitled to that proportion of 50% in the Project
represented by their expenditure. Further, IMIDRO must then elect whether to
contribute equally with Union and Itok in respect of further Project
expenditure, or have its 50% equity in the Project diluted in proportion to
further Project expenditure contributed by Union and Itok.

Union has now received notification that Project expenditure by it and Itok of
US$9,695,992 and US$463,179.19 respectively has been approved by the MZC Board.
Whilst the sum of $US$9,695,992 represents only part of what Union claims is
its legitimate Project expenditure, the significance of the MZC Board's
determination is that it constitutes formal recognition that Union and Itok
have met their initial "earn-in" expenditure commitment under the Project
agreements. The effect of this is that Union is entitled to have its Project
expenditure through MZC converted to an approximately 47.7% equity in MZC (with
Itok entitled to an approximately 2.3% equity). This will prove to be of
significant benefit if a resolution of the current dispute can be achieved.

 2. EFIC Claim
At the same time it announced the purported termination in December 2006, Union
advised that it currently held a political risk insurance policy in respect of
its investment in Iran ("the Policy") and had notified the Australian
Government Export Finance and Insurance Corporation ("EFIC") of the purported
termination. The limit of liability under the Policy is US$4.5million.

Union advises that due to time limits for lodging a claim under the policy the
Company has now lodged a claim for compensation under the Policy arising out of
the expropriation of Union's interest in the Project, evidenced by the
purported termination of the relevant Project agreements and the subsequent
refusal by the relevant Iranian parties to negotiate a settlement of the
dispute. Although Union is continuing to endeavor to negotiate a settlement of
the dispute it nevertheless believes it has grounds for lodging a claim under
the Policy. Union will provide all reasonable assistance to EFIC as it (EFIC)
assesses Union's claim.

 3. Rt Hon Lord Lamont of Lerwick - Appointment as Director
The Company previously advised that the Rt. Hon. Lord Lamont of Lerwick had
agreed to become a director of the Company, subject to his appointment being
approved by the Company's shareholders at the Company's annual general meeting
held on 23 November 2007.

The Company is very pleased that Lord Lamont was duly elected as a director of
the Company at the annual general meeting. The Union Board is of the view that
Lord Lamont's combined business, political and financial experience and acumen
will be of great benefit to the Company.

Lord Lamont is a British citizen and lives in London in the United Kingdom. He
worked as an investment banker in London before entering Politics. He entered
the British Parliament in 1972 and became Parliamentary Under Secretary of
State in 1979 under Prime Minister Margaret Thatcher. He was appointed to the
British Cabinet in 1979 before serving as Chancellor of the Exchequer in the
John Major Government from 1990 to 1993. Lord Lamont is the current Chairman of
the British Iranian Chamber of Commerce and is a director of Balli Group Plc,
which has extensive interests in Iran. He is also Chairman of Jupiter Adria Plc
and the East European Food Fund, and a director of RAB Capital Plc.

Any further disclosures as required under Schedule 2 Paragraph (g) of the AIM
Rules for Companies will be made in due course.

For further information contact:

Australia: Union Resources Limited
Frank Reid - Managing Director
Phone: +61 07 3833 3833

London: Hanson Westhouse Limited
Louis Castro or Martin Davison
0207 7601 6100

Bankside Consultants
Simon Rothschild or Louise Mason
020 7367 8888