16 September 2008
Union Resources Limited
Phosphate Project Update and Rights Issue
1. Namibian "Sandpiper" Phosphate Project Update
On 20 June 2008 Union Resources Limited ("Union" or "the Company") announced
that it had acquired a Namibian company, Sea Phosphates (Namibia) Pty Limited
("SPL"), which holds two Exclusive Prospecting Licences nos. 3414 and 3415
("the EPLs") issued by the Namibian Ministry of Mines and Energy for Phosphates
and Precious Stones.
In the announcement, Union advised that it intends to confirm the drilling
results previously obtained by Gencor in respect of the EPLs, and that an
analysis of the previous exploration and assay data is currently being
conducted by an independent expert to bring it up to the standards required by
the JORC Code. The Company further advised that it anticipated this data to be
available within the next two months.
Progress to date
* Union's re-analysis of the previous exploration and assay data has been
completed. Pending recovery of certain original documentation from the
original sampling including original assay returns and survey data, the
data will be published. Union is still in the process of recovering these.
In the event that this proves difficult, a sub-program of confirmatory
sampling is planned.
* A review of the previous work has been undertaken by Prayon, a Belgian
company recognised as a leader in Phosphoric acid technology. Prayon has
confirmed that the Sandpiper material produces acceptable Merchant Grade
Acid without significant modification of standard phosphoric acid circuits.
A tendency to foam is controlled and improved filtration characteristics
are achieved by addition of flocculants and crystal habit modifiers that
will not add significantly to operating costs. This indicates that the
material should be marketable.
* Union has entered into a Memorandum of Understanding ("MOU") with Jan de
Nul, a major Belgian dredging company to undertake work on the submarine
recovery of phosphate material from the Sandpiper deposit. Jan de Nul has
indicated that it is technically feasible to recover the material and under
the terms of the MOU Jan de Nul will undertake the preliminary economic
evaluation of the dredging operation at its own cost. In return, Union has
agreed to give Jan de Nul priority on any dredging contracts for Sandpiper,
subject to normal competitive bidding processes.
* Union is evaluating various strategic options to ensure maximum value and
security for the Sandpiper Project. Details will be released if and when
the opportunities are realised.
* Union continues its evaluation of the technical and economic viability of
the Project. This work falls into 3 major areas - recovery from the sea
floor, shipping to land, and land-based handling upgrading of run of mine
material to saleable rock phosphate. To date Union has progressed as
* Submarine recovery - Union has entered into an MOU with Jan De Nul as
referred to above. It is clear that the recovery of the material is
technically feasible, and currently Union's management is optimistic that
economic recovery will be possible. Indications are that a 3 million dry
ton per annum production rate could be reasonably achieved in a 4 month
dredging campaign. This would allow optimisation of campaign timing to suit
the best weather. Initial indications are that between 230 to 270
operational days per annum would be available for dredging.
* Upgrading: The original samples provided to Prayon were upgraded from
approximately 17% P2O5 to 27% P2O5 by simple screening and
hydro-cycloneing. As part of the ongoing evaluation this will be confirmed.
Union also intends to evaluate whether this operation can be conducted at
* Union has started to model other land-based costs based on the operational
constraints of the marine operation. This includes the material handling
requirements, storage and working capital requirements.
2. One (1) for Five (5) Non-Renounceable Rights Issue
The Company will undertake a one (1) for five (5) non-renounceable rights issue
at $0.011 (1.1 cents) per share to raise up to approximately $2 million.
Eligible shareholders will be offered the opportunity to purchase one share for
every five shares held by them.
Funds raised from the rights issue will be expended solely on the Sandpiper
Phosphate Project, other than funds allocated for working capital which will be
used to fund the Company's general administrative expenses. The funds raised
will be used:
1. to carry out subsurface sampling sufficient to confirm the results
previously obtained by Gencor and to determine the parameters of the
2. to collect further geotechnical information to feed into the dredging
3. to pay the US$500,000 cash settlement sum to the vendor of the EPLs; and
4. for working capital generally.
A timetable for the rights issue will be announced shortly.
UNION RESOURCES LIMITED
Australia: Union Resources Limited
Dr Frank Reid - Managing Director
Phone: +61 07 3833 3833
London: Hanson Westhouse Limited
Bill Staple or Martin Davison
0207 7601 6100
Simon Rothschild / Louise Mason
0207 367 8888