UNION STAR METALS LTD — Capital/Financing Update 2012

Oct 14, 2012

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South America’s Emerging Gold Explorer

PROMESA TRIPLES FOOTPRINT IN ALUMBRE DISTRICT

HIGHLIGHTS

• Promesa significantly expands exploration footprint around the Alumbre District concessions in Peru.

15 October 2012

• Farm-in agreements for Magdalena concessions increase holding by 27,330 ha.

• Magdalena concessions support exploration activity at Alumbre District and provide new exploration targets.

Level 28, 140 St Georges Terrace, PERTH WA 6000

PO Box 994, SUBIACO WA 6904

P: +61 8 9278 2766 F: +61 8 9278 2525 W: www.promesa.com.au

ABN 36 124 541 466 ASX Code: PRA

• Total portfolio area in Peru now comprises 38,536.5ha granted and a further 3,600ha under application.

The Company’s wholly-owned subsidiary, Peru Minerals S.A.C, (“Peru Minerals”) has entered into an agreement to acquire a farm-in interest in 33 concessions (refer to Figure 1 and Table 1) which surround the Alumbre District concessions.

The Magdalena concessions consolidate and expand the recent Alumbre, Chorobal and Chupon acquisition by a further 27,330 ha. These concessions are currently held by OBAN S.A.C and entitle Promesa to earn a 70% interest in these concessions (refer to Details of Agreements section). These concessions are located in a regional corridor of world class gold and copper mines, with characteristics similar to El Galeno, Conga and Tantahuatay, among others in the region.

Table 1 – Magdalena and Alumbre District Concessions

Concessions	Department	Concession Size
Alumbre District	La Libertad	1,206.5 ha
Magdalena (33 individual Concessions)	La Libertad	27,330.0 ha
Total – Alumbre District Area		28,536.5 ha

Contact

Ananda Kathiravelu Executive Director ananda@promesa.com.au

The Magdalena concessions, which are currently undergoing due diligence, will complement our existing concession holdings in the Alumbre District. The Company is currently working within the Alumbre District area and activity includes work on the Alumbre, Chorobal and Chupon concessions. The Magdalena concessions increase Promesa’s land holding in Peru to a total of 38,436.5ha granted with a further 3,600 ha under application.

Michael Sebbag Executive Technical Director michael@promesa.com.au

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Figure 1 – Magdalena concession plan with Alumbre District

Promesa Ltd – South America’s Emerging Gold Explorer

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Details of Agreement

Peru Minerals has entered into a farm-in agreement to acquire a 70% interest from the concession holder. The terms of the agreement are as follows:

• a) US$35,000 payable on the 30[th] November 2012;

• b) US$77,000 payable on the 31[st] January 2013;

• c) US$45,000 payable on 31[st] May 2013;

• d) US$60,000 payable on the 30[th] November 2013;

• e) US$120,000 payable on the 31[st] May 2014;

• f) US$295,000 payable on the 30[th] November 2014;

• g) US$100,000 payable 30[th] November 2015

• h) US$118,000 payable 30[th] November 2016

• i) The company will also be required to have completed an airborne geophysics program over the concessions within 1 year of the agreement becoming unconditional;

• j) 1,250,000 options to acquire shares in Promesa Ltd at an exercise price of AUD$0.20 and with an expiry date of 24 months from date the options are granted.

• k) If production on the concession commences, the concession holder will be entitled to receive a 2% Net Smelter Return (NSR) royalty in which event the interest of the concession holder will reduce to 10%.

The agreement is subject to completion of due diligence.

Magdalena Background

The Magdalena concessions incorporate the ground explored by Newmont Mining Corporation in 1994 as part of a regional exploration programme.

Between 1995 and 1998 Savage Resources Limited (“Savage”) (Pasminco Limited acquired Savage in 1999) undertook a significant exploration program within the area of the Chorobal, Alumbre and Magdalena concessions, which included stream sediment and rock chip sampling, geological mapping, geophysical studies and drilling program.

The Magdalena concessions were later acquired by OBAN S.A.C (“Oban”), which is the vendor of the Magdalena concessions. Oban has generated its own regional targets on the concessions, which will be reviewed and ranked by Promesa’s technical team against the Company’s current exploration targets in Peru.

Promesa’s plans to focus exploration activity on the Alumbre District concessions, secure in the knowledge that any extensions of mineralisation that might be present beyond the boundaries of the Alumbre district concessions, are likely to be located within the area of the newly acquired Magdalena concessions.

Promesa Ltd – South America’s Emerging Gold Explorer

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This new concession is in addition to the two agreements previously announced on 9 October 2012 to acquire Chorabal from vendor Mr Faustino Vauri Ccente and Chupon from vendor Mrs Morna Pilar Becerra.

On behalf of the Board,

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Ananda Kathiravelu Executive Director Promesa Ltd

About Promesa Ltd (ASX:PRA)

Promesa Ltd (“Promesa”, “the Company”) is a Perth based ASX listed Company, with a portfolio of exploration properties in Peru focused on precious and base metal commodities.

The Company’s projects are situated in the gold and copper rich Western Cordillera region in Peru. The concessions are considered prospective for Au, Ag, Cu and associated minerals. The concessions total 6 prospect locations with a total area of 38,436.5 ha.

Promesa provides investors access to an exciting and growing portfolio of exploration projects at discovery stage, including six projects in Peru, each offering a unique path way to discovery.

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr. Yvan Hurtado, a Member of The Australasian Institute of Mining and Metallurgy. Mr. Hurtado is a full-time employee of Peru Mineral S.A.C. Mr. Hurtado 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. Hurtado 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 – South America’s Emerging Gold Explorer

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