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Tuesday 16 December, 2008

Union Resources Ltd

MEHDIABAD PROJECT - UPDATE

RNS Number : 2001K
Union Resources Limited
16 December 2008
 



Union Resources Limited 


16 December 2008



MEHDIABAD PROJECT - UPDATE


The Mehdiabad Project is carried on by Union Resources Limited ('Union'), Iranian Mines and Mining Industries Development and Renovation Organization ('IMIDRO') and the company Itok GmbH ('Itok') through an incorporated Iranian joint venture company, Mehdiabad Zinc Company ('MZC'). Union has to date invested in excess of US$15 million on exploration and feasibility activities relating to the Project.  


As previously advised, IMIDRO purported to terminate several agreements governing the Project in December 2006.  Union stated then, and is still firmly of the opinion, that the agreements were invalidly terminated.  Since that time Union has been negotiating with the relevant Iranian parties in an effort to resolve the impasse and progress the Project.  Recently, Union has held talks with its Iranian counterparts.


It has come to Union's attention that the Managing Director of IMIDRO's wholly owned subsidiary Iran Mines Procurement and Supply Company ('IMPASCO') has been quoted in the international press as stating that an agreement has been reached for Union to build a zinc production plant and for an official contract governing the matter to be signed within the next two months.


As stated above, Union has been pursuing a resolution of the dispute. Following negotiations in May of this year Union and its Iranian counterparts entered into a memorandum of understanding. A second memorandum of understanding was entered into on 10 December which expands upon the first memorandum of understanding.


The memoranda of understanding provide for MZC to build a plant to process Mehdiabad ore, receive priority supply of the ore, and deal with related mining issues, with the Exploitation Licencto be held by IMIDRO or its nomineeProgress has been made in the negotiation of this matter, but several key issues remain to be resolved before a final binding agreement can be concluded, the most important of which are the transfer price of the ore and the effective control of the mining program. Possible solutions to these issues have been proposed and are currently under review by Union


Yours faithfully

 

UNION RESOURCES LIMITED


Dr Frank Reid

Managing Director 


For further information contact:


Enquires to:

 

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  




Bankside Consultants

Simon Rothschild / Louise Mason

0207 367 8888



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