asx release 28 april 2008 asx code: umc quarterly · pdf file1. pilbara iron ore project . 1.0...

ASX Release 28 April 2008 ASX Code: UMC

QUARTERLY REPORT

Third Quarter Period Ending 31st March 2008

HIGHLIGHTS: IRON ORE – Pilbara Iron Project (UMC 100%)

• The Company completed a further 670 metres of diamond drilling during the quarter at the Railway prospect.

• The results demonstrate that high grade Marra Mamba type iron ore mineralisation

has now been intersected over a 1.5 km north-south strike and a 1.4 km east-west extent.

• The high grade mineralisation is between 20 and 40 metres average thickness, appears

to be largely flat lying and lies beneath 20 to 40 metres of quaternary cover. • The high grade intersections all have corresponding very low levels of Si02, Al2O3 and

P, establishing the mineralisation to be a direct shipping ore. • RC drilling to establish a JORC resource commenced in early April. • A pre-feasibility study was commissioned during the quarter to investigate production

options for the Railway Prospect discovery. • Fourteen additional exploration targets have been identified within the Company

tenements for follow up work. BAUXITE – Kimberley Bauxite Project (UMC 25%; 75% Hydro) • Exploration for the Kimberley bauxite project is advanced, with drilling of new

bauxite targets expected for the next quarter.

Please direct enquiries to:

Matthew Hogan - Phone (08) 9481 0911 Barry Fehlberg - Phone (08) 9481 0911 Chief Executive Officer / Director Executive Director Exploration

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(MAICD) BSC (HONS)

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1. PILBARA IRON ORE PROJECT 1.0 Background The main geological target of the drilling conducted during the quarter at the Railway Prospect is the highly prospective Marra Mamba Formation that surrounds the Milli Milli anticline, as outlined in blue in Figure 2. The Marra Mamba Formation (Mt Newman member) is host to a number of major iron ore deposits within a 50km radius of the UMC tenements. These include: • the BHPB Area C deposit with a measured resource (1990) of 880mt @ 62.6% Fe.(1) • the Hope Downs deposit with a proved resource (1998) of 512 mt @ 61.6% Fe.(2) • the West Angelas deposit with a measured resource (1990) of 700 mt @ 60.7% Fe.(1) • the Marandoo deposit with a measured resource (1990) of 340 mt @ 62.6% Fe. (1) These deposits are high demand Pilbara Marra Mamba iron ore types with very low impurities. They are direct shipping ores that do not require beneficiation. The Company believes the newly discovered Railway Prospect mineralisation to be of this type. (1) BIF – Derived Iron Ores of the Hammersley Province , Hamsworth R.A. Et al, 1990 “Geology of the Mineral Deposits of Australia and

Papua New Guinea pp 617-642, The Australasian Institute of Mining and Metallurgy, Melbourne” (2) Hope Downs iron ore deposits, Paquay, R.D 1998 “Geology of Australian and Paua New Guinea Mineral deposits, pp 381-386, The

Australasian Institute of Mining and Metallurgy, Melbourne” 1.1 Railway Prospect – Juna Downs Eleven diamond drill holes totalling 670m were completed at the Railway Prospect during the quarter. (Holes UI 194 to UI 203, diamond tail to UI 038 – for locations see Figure 3). Significant assay results for all Diamond and RC+ holes are presented in Table 1. The high grade intersections all have corresponding very low levels of Si02, Al2O3 and P, confirming the mineralisation to be high grade direct shipping Marra Mamba ore.

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RC Drilling at the Railway Prospect – April 2008 Sampling Operations at the Railway Prospect – April 2008

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Table 1 RAILWAY ROSPECT

High Grade Diamond Drill and RC Results Summary * New Result

North – South Section 672675mE Hole No From To Width m Fe % SiO2 % Al2O3 % P % UI 048 21 25 4m 61.6%Fe 3.5 1.7 0.06

North – South Section 673080mE Hole No From To Width m Fe % SiO2 % Al2O3 % P %

UI 031 50 55 5m 60.1%Fe 4 3.2 0.06

UI 031 74.6 98.5 23.4m 63.2%Fe 2.3 1.32 0.04

UI 032 46 59.7 13.7m 59.1%Fe 3.9 2.64 0.06

UI 033 43 63.9 20.9m 62.2%Fe 2.4 1.63 0.05

UI 033 77 84.5 7.5m 58.1%Fe 6.6 2.53 0.08

UI 034 40.7 76.7 36m 63.2%Fe 2.1 1.39 0.06

UI 035 35 55 20m 61.1%Fe 3.3 1.7 0.07

UI 038 29 59.5 30.5m 58.5%Fe 3.2 2 0.07

UI 194 65.6 85.6 20m 61.5%Fe 3.2 2.2 0.06

UI 196 * 39 48 9m 62.4%Fe 2.2 1.6 0.05

North – South Section 673875mE

UI 199 * 43.9 60.17 15.7m 58.1%Fe 3.4 3.1 0.08

UI 202 * 63.7 72.7 9m 60.4%Fe 3.9 2.3 0.04

UI 203 * assays awaited

North – South Section 674275mE

UI 201 * 55.7 68.3 12.64m 60.6%Fe 2 1.8 0.04 NOTE: Hole UI 199, 201, 202 have thick iron ore intersections as below

UI 199 39.8 67.8 28m 56.4%Fe 4.6 3.86 0.07 UI 201 36.2 68.2 32m 56.5%Fe 4.07 4.12 0.04 UI 202 41.1 91.1 50m 53.0%Fe 7.2 3.5 0.04

Note: 3.4m core loss in centre of intersection

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COMMENT The results demonstrate that high grade iron ore mineralisation has now been intersected over a 1.5 km north-south strike and a 1.4 km east-west extent. The mineralisation which is between 20 and 40 metres average thickness, appears to be largely flat lying and lies beneath 20 to 40 metres of quaternary cover (See Figure 3, Figure 4). Figure 3 outlines the boundary of the expected resource drill out area. Approximately 120 holes are estimated to be required to complete a 100metre by 160metre drill out pattern, which will provide sufficient information for an initial JORC resource calculation. Ausdrill Northwest Pty Ltd commenced RC drilling with two rigs on the 8th April. Over 50 holes totalling some 4300 metres of drilling had been completed by 23rd April. Drilling with two rigs continues. Visual evidence of iron ore mineralisation is widespread as expected. Assay turnaround time for individual batches is around three to four weeks per batch, and results will be released in due course. A full exploration camp to facilitate the drilling and regional exploration program has been completed and is now occupied by both Company and contract personal. 1.2 FOURTEEN NEW EXPLORATION TARGETS IDENTIFIED An evaluation of the Companies tenements by Geological Consultants at Prodetheus have identified fourteen exploration targets (excluding Railway) for follow up work (See Figure 5, Figure 6). These include: Four high priority Marra Mamba targets (including Jumbo Junction) A large Channel iron deposit target Seven further Marra Mamba targets Two Brockman iron ore targets Low level geophysical surveys and ground geophysics have been commissioned to outline detailed drill targets. The Company believes that the identification of these exploration targets provides an expanded potential for many new iron ore discoveries within the Company tenements.

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1.3 PRE-FEASIBILITY STUDY COMMISSIONED

The Company has progressed economic production studies by commissioning a pre-feasibility study to investigate transport and shipping options for the Railway Prospect. The study is being prepared by Prodetheus International Limited.

The study is modeling an initial 2 million tonne-per-year open-cut operation possibly expanding to a 5 or 10 million tonne a year operation after that. The drilling plan for 2008 is to move as rapidly as possible to define a sizeable resource base to underpin a possible 10 million tonne per year iron ore business.

The Railway Prospect, together with Jocelyn, Camp Hill, and Camp Hill West are highly strategic assets in the current environment. The Company tenements are surrounded on all sides by the majors, with Rio’s Yandicoogina, Hope Downs and West Angelas railway line running through the Company leases. BHP Billitons Area C railway is 20km east and Fortescue’s Cloud Break railway further north-east again. This provides the Company with an opportunity to discuss an access agreement with either RIO, BHP Billiton or Fortescue Metals Group regarding rail infrastructure.

2.0 KIMBERLEY BAUXITE/ALUMINA REFINERY JOINT VENTURE PROJECT Work on the bauxite project continues under the Joint Venture agreement signed on 13th November 2007 with Hydro Aluminium AS of Norway, in which Hydro acquired a 75% interest in all UMC bauxite tenements. The joint venture has five phases which are as follows:

• Phase 1 and Phase 2 of the venture involves ongoing exploration. Expenditure for these two

phases is split 75% Hydro and 25% UMC. This work includes beneficiation, exploration and drilling to prove up enough bauxite at a commercial grade to support the development of an Alumina refinery.

• Phase 3 of the project is a Bankable Feasibility Study for a bauxite mine and associated

Alumina refinery. Hydro will fund between 90% and 94% of the BFS costs. • Phase 4 of the project is the execution phase which includes the construction of the Bauxite

mine and the Alumina Refinery and the associated infrastructure, Hydro/UMC will jointly finance any such development in the 75/25 equity split, with both parties having the joint responsibility for arranging project financing.

Phase 5 is the operational phase of the Bauxite Mine and Alumina Refinery. During this phase, Hydro will provide full off-take purchase of UMC’s share of any alumina production

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Hydro UMC Joint Venture Bauxite Project Areas

2.1 MITCHELL PLATEAU SOUTH-PROGRAM

A widespread reconnaissance drilling program is planned for the Mitchell Plateau South project area during the field season 2008. This will commence in May, subject to weather conditions.

SUMMARY UMC is continuing to progress its Pilbara Iron Ore Project with active drilling now underway at Railway, and exploration drilling planned for numerous other targets on the Company leases. Logistical planning for the Kimberley bauxite/alumina project exploration is well underway for the forthcoming field season. The Board continues to be encouraged by the ongoing positive results from the Pilbara Iron Ore Project and has a strong belief in the future potential of the Company. Notes on Assaying. The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Barry Fehlberg, who is a Member of The Australasian Institute of Mining and Metallurgy and is a full time employee of the Company. Mr Fehlberg has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.. Mr Fehlberg consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Appendix 5B Mining exploration entity quarterly report

+ See chapter 19 for defined terms. 30/9/2001 Appendix 5B Page 1

Rule 5.3

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

UNITED MINERALS CORPORATION NL

ABN Quarter ended (“current quarter”)

65 107 061 343 31 MARCH 2008

Consolidated statement of cash flows Cash flows related to operating activities

Current quarter $A’000

Year to date (9 Months)

$A’000 1.1 Receipts from exploration expenses reimbursed

- 1,162

1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration

(689)

- -

(271)

(2,859)

- -

(926)

1.3 Dividends received - -1.4 Interest and other items of a similar nature

received 114 317

1.5 Interest and other costs of finance paid - -1.6 Income taxes paid - -1.7 Other - GST Refund/(Paid) 18 (22)

Net Operating Cash Flows

(828) (2,328) Cash flows related to investing activities 1.8 Payment for purchases of:

(a) prospects (b) equity investments (c) other fixed assets

-

- (213)

-

- (323)

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 82 821.12 Other (Bonds) 15 15 Net investing cash flows (116) (226)

1.13 Total operating and investing cash flows (carried forward)

(944) (2,554)

1.13

Total operating and investing cash flows (brought forward)

(944)

(2,554)

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+ See chapter 19 for defined terms. Appendix 5B Page 2 30/9/2001

Cash flows related to financing activities

1.14 Proceeds from issues of shares, options, etc. 1,473 2,357 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

1,473

2,357

Net increase (decrease) in cash held

529

(197)

1.20 Cash at beginning of quarter/year to date 6,825 7,5511.21 Exchange rate adjustments to item 1.20 - -

1.22 Cash at end of quarter 7,354 7,354

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

146

1.24

Aggregate amount of loans to the parties included in item 1.10

-

1.25

Explanation necessary for an understanding of the transactions

Executive Salaries and Director 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

-

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 $A’000

Amount used $A’000

3.1 Loan facilities

- -

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3.2 Credit standby arrangements

- -

Estimated cash outflows for next quarter

$A’000 4.1 Exploration and evaluation

1,500

4.2 Development

-

Total

1,500

Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.

Current quarter $A’000

Previous quarter $A’000

5.1 Cash on hand and at bank 684

1,357

5.2 Deposits at call - -

5.3 Bank overdraft - -

5.4 Other (Bank Bills) 6,670

5,468

Total: cash at end of quarter (item 1.22) 7,354

6,825

Changes in interests in mining tenements Tenement

reference Nature of interest (note (2))

Interest at beginning of quarter

Interest at end of quarter

6.1 Interests in mining tenements relinquished, reduced or lapsed

N/A

6.2 Interests in mining tenements acquired or increased

N/A

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+ See chapter 19 for defined terms. Appendix 5B Page 4 30/9/2001

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 per

security (see note 3) (cents)

Amount paid up per security (see note 3) (cents)

7.1 Preference +securities (description)

N/A

7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions

N/A

7.3 +Ordinary securities

113,540,976 113,540,976

7.4 Changes during quarter (a) Increases through issues/and option conversions (b) Decreases through returns of capital, buy-backs

6,267,652

6,267,652

Options conversion refer below

7.5 +Convertible debt securities (description)

N/A

7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted

N/A

7.7 Options (description and conversion factor)

34,625,692 250,000 1,750,000 2,150,000 500,000 450,000

Quoted Not Quoted Not Quoted Not Quoted Not Quoted Not Quoted

Exercise price $0.20 $0.30 $0.30 $0.75 $1.25 $1.45

Expiry date 31 July 2008 31 July 2008 31 July 2009 31 July 2010 31 July 2010 31 July 2010

7.8 Issued during quarter

450,000

Not Quoted

$1.45

31 July 2010

7.9 Exercised during quarter

5,867,652 150,000 150,000 100,000

Quoted Not Quoted Not Quoted Not Quoted

$0.20 $0.25 $0.30 $0.45

31 July 2008 31 July 2008 31 July 2009 31 July 2009

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7.10 Expired during quarter

100,000 250,000

Not Quoted Not Quoted

$0.75 $0.75

31 July 2010 31 July 2010

7.11 Debentures (totals only)

N/A

7.12 Unsecured notes (totals only)

N/A

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.

Sign here: ............................................................ Date: 28/4/2008

(Director/Company Secretary) Print name: Matthew Vernon Hogan 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.

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asx release 28 april 2008 asx code: umc quarterly · pdf file1. pilbara iron ore project . 1.0...

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