UNION STAR METALS LTD — Capital/Financing Update 2011

Mar 27, 2011

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Australian Securities Exchange Limited (ASX) Announcement Corporate Update

28 March 2011

HIGHLIGHTS

• Promesa Limited (ABN 36 124 541 466) (Company) recently completed the acquisition of Peru Minerals S.A.C. (Peru Minerals) which represents an exciting opportunity for the Company to pursue an investment in gold assets.

• The Board of the Company has now made a decision to focus its endeavours on its investment in Peru Minerals and the 3 licenses it holds. This constitutes a change in the nature of the Company’s activities in terms of ASX Listing Rule 11.1.

• Pursuant to ASX Listing Rule 11.1.3 the Company will comply with all the requirements of Chapters 1 and 2 of the ASX Listing Rules before it proceeds with the change of focus. The recompliance will require a meeting of shareholders and lodgement of a prospectus. To this end, the Board proposes to convene a shareholder meeting to be held in late April or early May 2011.

• The Company has not yet determined the timing and nature of its proposed exploration activities for the Peruvian Project, but subject to receiving the required regulatory approvals, the Company anticipates finalising its strategy within the month and will advise the market accordingly.

• The Company is presently also assessing its options in relation to the potential disposal of its oil and gas interests. In the meantime, the Company will continue to maintain its oil and gas interests at the minimum level required to ensure their good standing.

• The Board of the Company will keep Shareholders and the market updated of its consideration of the matters outlined in this announcement.

Promesa Limited ABN 36 124 541 466 www.promesa.com.au address: Level 28, 140 St Georges Terrace, Perth WA 6000 / PO Box 994, Subiaco WA 6904 Phone: 08 9278 2766 fax: 08 9278 2525

A. Background

On 3 November 2010 the Company announced that it had executed a Heads of Agreement ( Heads of Agreement ) with Mineroil Energy SAC ( Mineroil ) and Pegasus Grupo SA (together, the Vendors ). The Heads of Agreement was executed by the parties on 29 October 2010, pursuant to which the Company agreed to purchase and the Vendor agreed to sell all of the shares in the capital of the Peruvian based company Peru Minerals.

Peru Minerals’ mining activities comprise three mining licences for Victoadal, Bacata and Santa Rosita ( Licences ) located in northern Peru ( Peruvian Gold Project ).

At a general meeting of the Company on 30 December 2010, shareholders unanimously approved, amongst other things, the issue of securities to the Vendors. The same day the Company executed and announced to the ASX that it had executed a share sale agreement ( Share Sale Agreement ) with the Vendors to formally record the terms for the acquisition of all of the shares in the capital in of Peru Minerals.

On 31 January 2011 the Company announced to the ASX that it had completed the acquisition pursuant to the Share Sale Agreement.

B.

Summary of the Peruvian Project

The Peruvian Project is situated in the northern end of the gold and copper rich Western Cordillera region in Peru. The Company considers that the Licences are prospective for gold, silver, copper and associated minerals.

The Licences comprise three to ten graticular blocks equating to 18 sq km, and are located in the Otuzco district, about 42 km north-east of Trujillo City. The Victoadal and Bacata licenses host the "Cerro Curunday” gold prospect, and are located in the province Otuzco, in the department of La Libertad, Trujillo.

The Licences are relatively close to world class deposits Yanococha, held by Newmont Mining Corporation and Lagunas Norte and Pierina, held by Barrick Gold Corporation.

The geological model that best fits the mineralization present in the Licences is that of a possible high-sulfidation epithermal deposit on the surface, which should include an upper zone of ore oxidized with gold and a lower zone of primary sulphide ores of gold-copper (with enargite), while the deeper zones may be typical of porphyry mineralization, which could also host significant gold-copper mineralisation.

Since late 2008, Mineroil (one of the Vendors) has been carrying out exploration work consisting of geological mapping, rock sampling, trenching and geophysics (magnetometer and induced polarization-resistivity).

An independent technical valuation of the Licences has been prepared by Malcolm Castle, Consulting Geologist, which contains information about each of the Licences. The independent technical valuation formed part of the notice of meeting dispatched to Shareholders on 30 November 2010 (Annexure A to that notice of meeting) and is available for inspection at the Company’s registered office.

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Bacata and Victoadal licences

On 21 December 2010 the Company announced to the ASX that epithermal gold mineralisation over a strike length of 1.8 km within the Bacata and Victoadal licences had been identified within the Cerro Currunday prospect. The alteration and gold mineralisation is believed to extend into the neighbouring licence to the south for 1 km.

The Bacata and Victoadal licences have classic gold/copper porphyry system geology of tertiary age dioritemonzonite granite intrusions in Mesozoic marine sediments.

The Cerro Curunday prospect shows evidence of quartz veins, hydro thermal breccias and stockworks with advanced argillic and phyllic pervasive alteration haloes that correspond to the right environment for epithermal high sulphidation and porphyry style deposits.

Santa Rosita Licence

The Santa Rosita Licence is considered a strategic land holding being positioned to the south and east of Barrick Gold Corporation’s interest in the area at the northern end of the gold and copper rich Western Cordillera in the Peruvian Andes.

The Santa Rosita licence lies in a geological setting of sedimentary, volcanic and intrusive rocks of Jurassic (Mesozoic) age. The intrusive rocks are basic to acid in composition from diorite to grandiorite to monzonite. The sedimentary rocks forming the Chicama Formation comprise of a sequence of shale and sandstone, located within an epthermal metallogenic zone and the association of Calipuy volcanics and granitic intrusions highlight that significant potential exists for the discovery of a new epithermal gold deposit in the licence area.

The mineralisation within the Santa Rosita licence is associated with pyrite, chalcopyrite disseminated in veins of silica and gold in quartz veins with sulphides. In addition, other sulphide minerals and alteration include arsenopyrite, geothite and limonite. Further, macroscopic observation of the rock samples taken in the Santa Rosita license demonstrate the existence of hydrothermal alteration in the following order of abundance; propylitic, silica, argillic and potassic alteration.

Fluid inclusion work on the Santa Rosita licence has shown and supports the conclusion that the fracture filling within the Santa Rosita licence is the result of being in a porphyry system.

Exploration activities

A field campaign was commenced in late January 2011 on the Licenses holding the Cerro Curunday prospect (namely, Victoadal and Bacata). The work commenced includes further channel trench and rock chip samples. The work will take approximately 6 weeks and initial results are expected in April 2011.

A database of samples is being collected for the Santa Rosita licence.

The Company is currently formulating a strategy for the timing and nature of proposed exploration activities for the Peruvian Project including potentially undertaking an aggressive diamond drilling program on the Victoadal and Bacata licences.

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C. Escrow securities issued to the Vendor

The consideration issued to the Vendors upon completion of the Share Sale Agreement included the following securities:

• (a) 40,000,000 shares ( Vendor Shares ); and

• (b) 20,000,000 options exercisable at $0.20 within 2 years of the issue date ( Vendor Options ) to the Vendors (on exercise of the Vendor Options the Company must issue 20,000,000 Shares and a new option will be issued for no consideration to the option holder for each option exercised at the time of exercise, exercisable at a price of $0.20 within 1 year from the date of issue).

20,000,000 options exercisable at $0.20 within 2 years of the issue date were also issued by the Company to Caldwell in connection with completion of the Share Sale Agreement ( Caldwell Options ).

ASX has advised that the Vendor Shares, Vendor Options and the Caldwell Options are classified by ASX as restricted securities and will be required to be held in escrow.

The Vendors and Caldwell have entered into restriction agreements in respect of the Vendor Shares, Vendor Options and Caldwell Options to hold them in escrow from a period of 12 months from the date of their issue.

D. Change to Board of Directors

The Share Sale Agreement provided that upon completion of the of the acquisition of Peru Minerals the Vendors will be entitled to appoint 2 members out of 4 directors to the board of the Company.

On 31 January 2011 the Company announced to the ASX that upon completion of the acquisition of Peru Minerals it had appointed:

• (a) Mario Enrique Camacho Bolviar; and

• (b) Alejandro Calderon Chatet.

The Company also announced the retirement of Mr John Pritchett and Dr Phillip Rodionoff effective 31 January 2011.

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E. Key Steps

The Board of the Company proposes to convene a general meeting of Shareholders within the next month.

Once it has resolved its exploration strategy, it will provide further details to the market.

The Company’s securities will be suspended on and from the date of the general meeting of Shareholders until the date the ASX is satisfied the Company has recomplied with Chapters 1 and 2 of the ASX Listing Rules and is accordingly re-listed on the ASX.

By Order of the Board Promesa Limited

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

Ananda Kathiravelu Executive Director Promesa Limited Telephone: +61 8 9278 2766

Email: ananda@promesa.com.au

The information in this Report that relates to Exploration results is based on data/reports supplied by Mineroil Energy SAC and its consultants and is compiled by Harjinder Kehal. Harjinder Kehal is a member of the Australasian Institute of Mining and Metallurgy and is a Consultant Geologist with over 25 years experience.

Harjinder Kehal has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity for 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. Harjinder Kehal consents to the inclusion in the report of the matters based on his information in the form and context in which it is used.

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