UNION STAR METALS LTD — Capital/Financing Update 2011

Jun 2, 2011

PROMESA LIMITED

ACN 124 541 466 SUPPLEMENTARY PROSPECTUS

1. IMPORTANT INFORMATION

This Supplementary Prospectus is dated 2 June 2011 and is supplementary to the prospectus dated 24 May 2011 (Prospectus) issued by Promesa Limited (ACN 124 541 466) (Company).

This Supplementary Prospectus was lodged with the Australian Securities and Investments Commission (ASIC) on 2 June 2011. The ASIC does not take any responsibility for the contents of this Supplementary Prospectus.

This Supplementary Prospectus must be read together with the Prospectus. If there is a conflict between the Prospectus and this Supplementary Prospectus, this Supplementary Prospectus will prevail. Terms defined in the Prospectus have the same meaning in this Supplementary Prospectus.

This document is important and should be read in its entirety. Please consult your legal, financial or other professional adviser if you do not fully understand the contents.

A copy of this Supplementary Prospectus will be available on the Company’s website and the Company will send a copy of this Supplementary Prospectus to all Applicants who have subscribed for Securities in the Prospectus to the date of this Supplementary Prospectus.

2. CAPITAL STRUCTURE

The table setting out the capital structure of the Company following completion of the Offer in Section 3.5 of the Prospectus is replaced by the following table:

“SHARES Shares on issue as at date of the Prospectus Shares (not subject to any restriction) Shares (classified by ASX as restricted securities and to be held in escrow for 24 months from the commencement of official quotation, that is until 10 November 2011) Shares issued to the Vendors (subject to voluntary restriction agreements referred to at section 12.4 of this Prospectus and to be held in escrow for 12 months from the date of issue, that is until 31 January 2012) Shares now offered Total Shares on issue at completion of the Offer2

Number 50,727,499 3,312,500 40,000,000 20,000,000

114,039,999

This is a supplementary prospectus intended to be read with the prospectus dated 24 May 2011 issued by Promesa Limited (ACN 124 541 466).

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OPTIONS

OPTIONS
Listed Options on issue as at the date of the Prospectus Director Options on issue as at the date of the Prospectus Vendor Options on issue as at the date of the Prospectus (subject to voluntary restriction agreements referred to at section 12.4 of this Prospectus and to be held in escrow for 12 from the date of issue, that is until 31 January 2012) Caldwell Options (subject to voluntary restriction agreements referred to at section 12.4 of this Prospectus and to be held in escrow for 12 months from the date of issue, that is until 31 January 2012) Listed Options now offered Total Options on issue at completion of the Offer2	43,460,0013 3,300,0004 20,000,0005 20,000,0006 8,000,000
	94,760,001

Total Options on issue at completion of the Offer[2]

Notes:

1 Refer to Investigating Accountant’s Report for further information.

2 Assumes that the Offer is fully subscribed.

3 43,460,001 Listed Options exercisable at a price of $0.20 on or before 8 December 2012.

4 3,300,000 unlisted Director Options exercisable at a price of $0.20 on or before 31 December 2013.

5 20,000,000 unlisted Vendor Options exercisable at a price of $0.20 within 2 years from the date of issue (that is on or before 31 January 2013). The terms of the 20,000,000 Vendor Options provide that upon exercise for each Option that vests and is exercised the recipient will be issued one Share and a new Option which will be issued for no consideration to the Optionholder at the time of exercise, exercisable at a price of $0.20 within 1 year from the date of issue.

6 20,000,000 unlisted Caldwell Options exercisable at a price of $0.20 within 2 years from the date of issue (that is on or before 31 January 2013). The terms of the 20,000,000 Caldwell Options provide that upon exercise for each Option that vests and is exercised the recipient will be issued one Share.”

3. SOLICITORS REPORT ON LICENCES

(a) Section 5.1 in the Solicitors Report on Licences in Section 9 of the Prospectus is amended by deleting bullet points 16 and 17 of the Solicitors Report on Licences and substituting the following words at the end of the section:

• “ • By virtue of Article 7° of Statute N° 26505, Peru Minerals is obliged to enter into agreements with the owners of the lands located within the area where works on mining concessions are to be carried out before beginning the exploration activities.

In this sense, on March 11th, 2011, Peru Minerals entered into an “Authorization Agreement to carry out Mining Exploration Works” with the Peasant Community El Progreso, which, according to the same agreement, is the owner of the surface lands on which the Mining Concessions Victoadal, Santa Rosita 2008 and Bacata are located.

By virtue of this agreement, Peru Minerals was authorised to carry out exploration surveys in the area of the surface lands of the Peasant Community El Progreso. The exploration surveys consist of the following field stages: Geophysical Labours, Geochemical Labours, Geological Mapping, drilling of up to 20 drills with their corresponding constructions of accesses and platforms. This agreement is in effect from April 1st, 2011 to March 31st, 2014.

This is a supplementary prospectus intended to be read with the prospectus dated 24 May 2011 issued by Promesa Limited (ACN 124 541 466).

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• The permits, licences and authorisations Peru Minerals has to obtain before undertaking the exploration activities on the lands located within the area of the Mining Concessions are those detailed below:

• Approval of an Environmental Survey according to the category that corresponds.

• Certificate of Inexistence of Archaeological Remains (CIRA).

• Communicate the beginning of the mining exploration activities to the General Office of Mining Environmental Issues of the Ministry of Energy and Mines.

• Communicate the beginning of mining exploration activities to the Environmental Assessing and Supervising Organism of the Ministry of the Environment.

Regarding the mining concession Victoadal , we can state that Peru Minerals has complied with obtaining the necessary regulatory approvals and requirements to begin the exploration activities, which are detailed below :

• Approval of Category I Environmental Impact Statement

• Communicated the beginning of mining exploration activities to the General Office of Mining Environmental Issues of the Ministry of Energy and Mines.

• Communicated the beginning of mining exploration activities to the Environmental Assessing and Supervising Organisation of the Ministry of the Environment.

In addition, an Authorization for Hydric Use Surveys has been obtained.

The CIRA has not been obtained but it has undertaken an Archaeological Survey that concludes that there are no archaeological evidences on the surface level, without prejudice to this, the documentation is being prepared to request the Ministry of Culture to issue the CIRA.

• Regarding Bacata, to date proceedings are being carried out to obtain the approval of an Environmental Impact Survey with the appropriate categorisation from the General Office of Mining Environmental Issues.

• As to Santa Rosita 2008, no exploration activities have been foreseen until 2012 so no permit, licence or authorisation has been requested so far.

• We next detail the pending permits, licences and authorisations for each concession:

• a) Regarding the mining concession Victoadal, the obtainment of the CIRA is pending.

• b) Regarding the mining concession Bacata, the following is pending:

  • Approval of an Environmental Survey with according to the corresponding category.

  • A CIRA.

  • Communication of the beginning of the mining exploration activities to the General Office of Mining Environmental Issues of the Ministry of Energy and Mines.

  • Communication of the beginning of mining exploration activities to the Environmental Assessing and Supervising Organism of the Ministry of the Environment.

• c) Regarding the mining concession Santa Rosita 2008, since no explorations have been foreseen in this area until 2012, no permits, licences or authorizations are pending of obtainment.

This is a supplementary prospectus intended to be read with the prospectus dated 24 May 2011 issued by Promesa Limited (ACN 124 541 466).

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• Peru Minerals is taking the steps to obtain:

• CIRA for Victoadal and Bacata.

• A Environmental Impact Survey for Bacata.

• Upon obtainment of the approval of the Environmental Impact Survey for Bacata, the beginning of the mining exploration activities must be communicated to the General Office of Mining Environmental Issues of the Ministry of Energy and Mines and to the Environmental Assessing and Supervising Organisation of the Ministry of the Environment.

The corresponding Environmental Impact Survey for Bacata duly approved shall be obtained within approximately two or three months; the company Compumet E.I.R.L has been hired to carry out this proceeding.

The obtainment of the CIRA takes approximately two or three months and to date the documents to be submitted to the Ministry of Culture for the issue of the CIRA are being prepared for Victoadal and Bacata.”

• (b) Section 5.2.1 b) in the Solicitors Report on Licences in Section 9 of the Prospectus is amended by deleting the second paragraph and substituting the following words in its place:

“ In order to commence exploration or exploitation mining activities a mining concessionaire, if required due to the nature and location of the activities to be undertaken on the mining concession, must:”

• (c) Section 5.2.1 B) second paragraph in the Solicitors Report on Licences in Section 9 of the Prospectus is amended by deleting the first point and substituting the following words in its place:

“Take the steps to obtain from the Ministry of Culture (MC) the statements, authorisations or certificates necessary to undertake the mining activities. Refer to section 7 of this report for further details of this requirement.”

• (d) Section 7 in the Solicitors Report on Licences in Section 9 of the Prospectus is amended by deleting the second paragraph.

• (e) Section 7 in the Solicitors Report on Licences in Section 9 of the Prospectus is amended by deleting the sixth paragraph and substituting the following words in its place:

“There is no obligation on a concessionaire to carry out searches or excavations to find out if there are objects or sites that compose the Nation’s Cultural Heritage within the area of a mining concession. However, it is necessary, prior to any work involving excavation of the soil or soil movements, to request a CIRA from the MC.”

• (f) Section 7 in the Solicitors Report on Licences in Section 9 of the Prospectus is amended by deleting the seventh paragraph and substituting the following words in its place:

“The CIRA certifies that the surface of a certain area does not contain archaeological remains and it only proceeds for objects that are not archaeological heritage of the Peruvian State. The CIRA represents the authorisation of the MC to commence works.”

• (g) The second paragraph of Section 8 B) in the Solicitors Report on Licences in Section 9 of the Prospectus is amended by deleting the paragraph designated “(b)”, being the second point of that paragraph.

This is a supplementary prospectus intended to be read with the prospectus dated 24 May 2011 issued by Promesa Limited (ACN 124 541 466).

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• (h) Section 10 entitled “Consent” in the Solicitors Report on Licences in Section 9 of the Prospectus is deleted in its entirety.

• (i) Paragraph d) entitled “Current Status” under heading the entitled “Victoadal (Code 0104360087)” of the Schedule in the Solicitors Report on Licences in Section 9 of the Prospectus is amended by inserting the following words after the words “Mining Titled Right”:

“being a mining concession created by a Resolution granting it, and recorded by The Mining Public Registry in the Book of Mining Rights.”

• (j) Paragraph d) entitled “Current Status” under heading the entitled “2. SANTA ROSITA 2008 (Code 010653508)” of the Schedule in the Solicitors Report on Licences in Section 9 of the Prospectus is amended by inserting the following words after the words “Mining Titled Right”:

“being a mining concession created by a Resolution granting it, and recorded by The Mining Public Registry in the Book of Mining Rights.”

• (k) Paragraph d) entitled “Current Status” under heading the entitled “3. BACATA (Code 630007309)” of the Schedule in the Solicitors Report on Licences in Section 9 of the Prospectus is amended by inserting the following words after the words “Mining Titled Right”:

“being a mining concession created by a Resolution granting it, and recorded by The Mining Public Registry in the Book of Mining Rights.”

4. RISK FACTORS

Section 10.2 of the Prospectus is amended by inserting the following words at the end of the section :

“Regulatory authorisations and agreements with private landowners or indigenous communities

The operations and proposed activities of the Company and its subsidiary Peru Minerals are subject to extensive laws and regulations relating to numerous matters, including various licence approval and communication conditions pertaining to the environment, taxation, social and labour relations, successful land claims, heritage, and other matters. Accordingly, the Company’s and Peru Minerals’ operations and proposed activities may require certificates, licences, approvals and permits from regulatory authorities and well as agreements with private landowners or indigenous communities to authorise those operations and proposed activities. Further detail regarding these matters is set out in the Solicitors Report on Licences in Section 9 of this Prospectus.

Obtaining the necessary certificates, licences, approvals and permits from regulatory authorities, or agreements with private landowners or indigenous communities can be a time consuming process. There is also a risk that the Company and its subsidiary Peru Minerals may not obtain these certificates, licences, approvals and permits from regulatory authorities, or agreements with private landowners or indigenous communities, on acceptable terms, in a timely manner or at all. The costs and delays associated with obtaining, and complying with, necessary certificates, licences, approvals and permits from regulatory authorities, or agreements with private landowners or indigenous communities could materially delay or restrict the Company from proceeding with the exploration or

This is a supplementary prospectus intended to be read with the prospectus dated 24 May 2011 issued by Promesa Limited (ACN 124 541 466).

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development of a prospect. Any failure to comply with applicable laws and regulations or certificates, licences, approvals and permits from regulatory authorities, or agreements with private landowners or indigenous communities, even if inadvertent, could result in material fines, penalties or other liabilities.

Depending upon the ongoing results of the proposed drilling program, Peru Minerals may also need to obtain further authorisation from the Peasant Community El Progreso.

Before undertaking the exploration activities (such as the drilling contemplated in stage one of exploration programme) on the lands located within the area of the Victoadal and Bacata licences Peru Minerals is required to obtain:

• (a) Certificate of Inexistence of Archaeological Remains (CIRA) in respect of the Victoadal and Bacata licences; and

• (b) an Environmental Impact Statement/Survey with the appropriate category in respect of the Bacata licence,

as outlined in Section 9 of the Prospectus in the Solicitors Report on Licences.

Peru Minerals is in the process of obtaining the CIRA in respect of the Victoadal and Bacata licences, and the approval of an Environmental Impact Statement/Survey for the Bacata licence, and does not anticipate that these approvals will prejudice the commencement of stage one of the proposed drilling programme outlined in the Prospectus.

Upon commencing exploration activities within the area of the Bacata licence the Peru Minerals is required to provide the required communications to the General Office of Mining Environmental Issues of the Ministry of Energy and Mines, and the Environmental Assessing and Supervising Organisation of the Ministry of the Environment.

In due course, and before the commencement of the exploration activities in 2012 as outlined in this Prospectus within the area of the Santa Rosita licence, Peru Minerals will need to obtain the necessary permits, licences and authorisations to commence those activities as outlined in the Section 9 of the Prospectus in the Solicitors Report on Licences. ”

5. DIRECTORS’ AUTHORISATION

This Supplementary Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

In accordance with Section 720 of the Corporations Act, each Director has consented to the lodgement of this Supplementary Prospectus with the ASIC.

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Solomon Majteles, Chairman For and on behalf of Promesa Limited

This is a supplementary prospectus intended to be read with the prospectus dated 24 May 2011 issued by Promesa Limited (ACN 124 541 466).

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