UNION STAR METALS LTD — Capital/Financing Update 2011

Dec 27, 2011

28th December 2011

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DRILLING AND EXPLORATION UPDATE - CERRO CURUNDAY PROJECT PERU

HIGHLIGHTS

• Eight holes have been completed at Cerro Curunday gold project. A total of 2,026.5m has been drilled. Holes 1 to 7 hit the oxide zone and pushed through to the sulphide zone. Hole 8 has been drilled in the creek bed to test the Induced Polarisation (IP) anomaly targets.

• Ongoing delays are being experienced in receiving assay results due to a backlog at the Lima laboratory. Remaining drill cores may need to be sent to an alternative incountry laboratory or to Chile and/or Canada to speed up turnaround times.

South American focused gold explorer Promesa (ASX:PRA) advises that it has completed drilling diamond holes CU001, 2, 3, 4, 5, 6, 7 and 8 (CU028 in Figure 1). Please refer to the attached map for drill hole locations. Drill hole depths to date for CU001 to 8 are shown below:

Drill Hole Number	Drill Depth
CU001	358.2m
CU002	335.3m
CU003	274.0m
CU004	201.9m
CU005	200.4m
CU006	202.5m
CU007	203.8m
CU008	250.4m
Total	2,026.5m

The aim of the program is to test a series of gold-bearing zones identified by channel sampling and rock chip sampling along a 2.1km strike length of epithermal gold mineralisation. All drilling is being undertaken using diamond drilling from the surface to enable detailed logging and sampling.

Current drilling times are much improved due to the shallower hole depth, increased supply of water, improved drilling practices and optimised mud weights.

Promesa Ltd ACN 36 124 541 466 www.promesa.com.au Level 28, 140 St Georges Tce, Perth WA 6000 / PO Box 994, Subiaco, WA 6904 Phone +61 8 9278 2766 Fax +61 8 9278 2525

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The ground conditions and the type of host rock environment encountered support the targeting of this location for the first phase of the drilling programme.

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Figure 1 – Cerro Curunday Drill Plan

The geology observed by our geological team on site confirms that the diamond core obtained from the holes CU004, 5, 6 and 7 has similar features to the first three holes drilled.

These holes represent a shallow marine sedimentary siliciclastic sequence of interlayered quartz sandstones and siltstones belonging to Cretaceous Chimu Formation. This presents consistently as advanced argillic, chloritic and silicification in the main alterations and the morphology of the potential ore body is an important stockwork, with moderate to strong intensity mineralisation by pyrite, enargite and chalcopyrite presenting as copper sulphides and there are traces of galena and sphalerite (Pb and Zn sulphides).

Drilling has been completed on the eighth diamond drill hole (CU028) which is achieved a depth of 205.0m. The eight drill hole is located between the Curunday and Las Haucas area at a creek bed drill pad location as illustrated in Figure 1. This will test a potential IP (Inducted Polarisation) target developed as part of early field level exploration work.

The core is currently being logged, cut and sampled with samples being sent to laboratory testing facilities in Lima. As previously flagged, there have been ongoing delays in the delivery of assay results from the laboratory due to a backlog of samples

Promesa Ltd ACN 36 124 541 466 www.promesa.com.au Level 28, 140 St Georges Tce, Perth WA 6000 / PO Box 994, Subiaco, WA 6904 Phone +61 8 9278 2766 Fax +61 8 9278 2525

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having been sent to the laboratory by other mining companies. This is indicative of the increased exploration, mining and drilling activity in Peru.

The assay results from the first set of drill holes will be published as soon they are received and proper QAQC checks have been completed. Turnaround times for assay results have been slower than forecast, and alternative in-country laboratories are being considered, in addition to the possibility of sending samples to laboratories in Canada and/or Chile for testing.

Additionally, field level exploration continues to develop a better understanding of the Cerro Curunday and Las Huacas project areas. This has included channel sampling and mapping of the eastern slope of Cerro Curunday and field sampling and mapping of the western slope of Curunday, towards the Las Huacas project area.

Further updates will be provided in due course.

For further information please visit our website at www.promesa.com.au or contact:

Ananda Kathiravelu Executive Director Promesa Limited Tel: +61 8 9278 2766 Email: ananda@promesa.com.au

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr. Rene Lugo, a Member of The Australasian Institute of Mining and Metallurgy. Mr Lugo is a full-time employee of Peru Mineral S.A.C. Mr Lugo has sufficient experience which is relevant to the styles of mineralisation and types of deposits under consideration and to the activity 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. Rene Lugo consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Promesa Ltd ACN 36 124 541 466 www.promesa.com.au Level 28, 140 St Georges Tce, Perth WA 6000 / PO Box 994, Subiaco, WA 6904 Phone +61 8 9278 2766 Fax +61 8 9278 2525