Quarterly Update
31 Ottobre 2008 - 9:47AM
UK Regulatory
Union Resources Limited
Company Announcements Office
Australian Securities Exchange
QUARTERLY ACTIVITIES STATEMENT FOR PERIOD ENDED 30 SEPTEMBER 2008
Background
Union Resources Limited ("Union" or "the Company") is focused on:
1. assessment of the Sandpiper Submarine Phosphate Project ("the Sandpiper
Phosphate Project") located off the coast of Namibia.
2. the development of the Mehdiabad Base Metal Project ("the Mehdiabad
Project") located in Central Iran; and
A. Sandpiper Submarine Phosphate Project
In June 2008 the Company signed a contract to acquire Namibian company Sea
Phosphates (Namibia) Pty Limited ("SPL"). SPL 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. The EPLs lie approximately
60km offshore from the coast of Namibia between Walvis Bay and Luderitz. . The
combined area of the EPLs is 200,000 ha.
Progress to date
The following occurred during the Quarter:
* In its announcement to the Australian Securities Exchange (ASX) on 20 June
2008 Union advised that it intended 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 was 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 would be
available within the next two months. During the Quarter Union completed
its re-analysis of the previous exploration and assay data previously
obtained by Gencor. In order to comply with ASX reporting requirements the
Company is attempting to obtain copies of the original Laboratory assays.
These were performed by a reputable company in the US, but it has taken
longer than anticipated to acquire the data. A programme of confirmatory
sampling is now planned.
* A review of the previous processing work was undertaken by Prayon, a
Belgian company recognised as a leader in Phosphoric acid technology. The
Prayon study 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 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 continued its evaluation of the technical and economic viability of
the Sandpiper 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 follows:
* 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
sea.
* 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.
B. Mehdiabad Base Metal Project
The Mehdiabad Project is carried on by 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 Mehdiabad
Project.
As previously advised, IMIDRO purported to terminate several agreements
governing the Mehdiabad 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 various Iranian parties in an
effort to resolve the impasse and progress the Mehdiabad Project. At the same
time, Union has been exploring the possibility of resolving the matter through
arbitration and has made initial preparations for instituting arbitration
proceedings should that become necessary
During the quarter Union continued to hold discussions with the relevant
Iranian parties in an effort to resolve the Mehdiabad Project dispute and
progress the Mehdiabad Project.
C. One (1) for Five (5) Non-Renounceable Rights Issue
The Company announced during the Quarter that it would 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, and that funds raised from the rights issue
would 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 Company's prospectus for the rights issue was subsequently despatched to
Shareholders in October.
D. Expenditure on Exploration Activity
Direct expenditure by the Company on exploration and other activities in
relation to the Sandpiper Phosphate Project during the quarter was $115,000.
E. Mining Production and Development
Through its strategic partner (Jan de Nul) the Company undertook preliminary
assessment of dredging feasibility and costs. The costs of this work were born
by Jan de Nul.
F. Post Balance Date Event
The Company advised ASX on 27 October 2008 that it had entered into a joint
venture agreement in relation to its Namibian Phosphate Project with Australian
company Bonaparte Diamond Mines NL and Namibian company Tungeni Investments cc.
Yours faithfully
UNION RESOURCES LIMITED
Dr Frank Reid
Managing Director
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.
Name of entity
Union Resources Limited
ABN Quarter ended ("current
quarter")
40 002 118 872 30 September 2008
Consolidated statement of cash flows
Cash flows related to operating Current quarter Year to date
activities (..3...months)
$A'000
$A'000
1.1 Receipts from product sales and - -
related debtors
1.2 Payments for (a)exploration and (115 ) -
evaluation - -
(b) development - -
(c) production (524) -
(d) administration
1.3 Dividends received
1.4 Interest and other items of a 26 -
similar nature received
1.5 Interest and other costs of -
finance paid
1.6 Income taxes paid -
1.7 Other (provide details if 8 -
material)
Net Operating Cash Flows (605) -
Cash flows related to investing
activities
1.8 Payment for purchases of: (a) - -
prospects
- -
(b)equity
- -
investments
(c)other fixed
assets
1.9 Proceeds from sale of: (a) - -
prospects
- -
(b)equity
- -
investments
(c)other fixed
assets
1.10 Loans to other entities - -
1.11 Loans repaid by other entities - -
1.12 Other (provide details if - -
material)
Net investing cash flows
1.13 Total operating and investing cash (605) -
flows (carried forward)
1.13 Total operating and investing cash (605) -
flows (brought forward)
Cash flows related to financing
activities
1.14 Proceeds from issues of shares, (19) -
options, etc.
1.15 Proceeds from sale of forfeited - -
shares
1.16 Proceeds from borrowings - -
1.17 Repayment of borrowings - -
1.18 Dividends paid - -
1.19 Other (provide details if - -
material)
Net financing cash flows (19) -
Net increase (decrease) in cash (624) -
held
1.20 Cash at beginning of quarter/year 1,180 -
to date
1.21 Exchange rate adjustments to item 5 -
1.20
1.22 Cash at end of quarter 561 -
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 266
included in item 1.2
1.24 Aggregate amount of loans to the parties included -
in item 1.10
1.25 Explanation necessary for an understanding of the transactions
Salaries and directors fees
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
Nil
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
Nil
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 100
4.2 Development -
4.3 Production -
4.4 Administration 400
Total 500
Reconciliation of cash
Reconciliation of cash at the end of the Current quarter Previous quarter
quarter (as shown in the consolidated
statement of cash flows) to the related $A'000 $A'000
items in the accounts is as follows.
5.1 Cash on hand and at bank 561 180
5.2 Deposits at call - 1,000
5.3 Bank overdraft - -
5.4 Other (provide details) - -
Total: cash at end of quarter (item 561 1,180
1.22)
Changes in interests in mining tenements
Tenement Nature of interest Interest Interest
reference at at end of
(note (2)) beginning quarter
of
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 security per security
(see note 3) (see note 3)
(cents) (cents)
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 898,373,543 898,373,543 Fully paid Fully paid
securities
7.4 Changes -
during
quarter -
(a) Increases
through
issues
(b) Decreases
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 246,040,340 246,040,340 Exercise price Expiry date
(description
and UCLOA UCLOA 9.82 31 March 2009
conversion
factor) 264,428,911 264,428,911 10.00 31 March 2009
UCLOB UCLOB 7.50 31 March 2009
90,000,000 - 2.00 31 March 2013
Unlisted - 2.10 31 March 2015
6,000,000 - 1.30 31 March 2015
Unlisted - By reference 31 March 2015
to
5,333,332 - 1 April 2009
Future market
Unlisted - 1 April 2009
price
1,333,333 -
2.00
Unlisted
2.00
1,333,333
Unlisted
1,500,000
Unlisted
1,500,000
Unlisted
7.8 Issued during -
quarter
7.9 Exercised -
during
quarter
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.
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.
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
END
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