UNION STAR METALS LTD — Capital/Financing Update 2012

Oct 8, 2012

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South America’s Emerging Gold Explorer

PROMESA EXPANDS EXPLORATION FOOTPRINT IN PERU

HIGHLIGHTS

• Promesa expands exploration foot print with option and farm-in agreements for Chorobal and Chupon concessions.

• Geochemistry and mapping at Alumbre completed.

• Promesa portfolio comprises 11,106.5 ha granted and a further 3,600 ha under application.

9 October 2012

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

Directors

Solomon Majteles - Chairman Ananda Kathiravelu – Executive Director Michael Sebbag – Executive Director Alejandro Calderon – Executive Director Mario Bolivar - Non Executive Director Timothy Wise - Non Executive Alt Director

Contact

Ananda Kathiravelu Executive Director ananda@promesa.com.au

• Completion of deep Magnetics and Induced Polarisation geophysics program at Alumbre and Quinual.

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Figure 1 – Map of Peru showing Promesa Prospects

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, as illustrated in Figure 1 with a total area of 11,106.5 ha.

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Promesa Ltd (“Promesa”, “the Company”) is a Perth based ASX listed Company, with a substantial portfolio of exploration properties in Peru focused on precious and base metal commodities. The Company is pleased to announce the expansion of its exploration foot print around the Alumbre concession located 70km southeast of the city of Trujillo, in the north of Peru.

The Company’s wholly-owned subsidiary, Peru Minerals S.A.C, (“Peru Minerals”) has entered into an agreements to acquire two mining concessions (refer Table 1) adjoining Promesa’s Alumbre concession. The Chorobal and Chupon concessions consolidate the recent Alumbre acquisition by a further 1,206 ha. These concessions are currently held by two private concession holders and entitle Promesa to earn interests in these concessions (refer to Details of Agreements section). These projects 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, refer Figure 2.

Table 1 – Alumbre District Concessions

Concessions	Department	Concession Size(ha)	Attitude(mRL)
Alumbre	La Libertad	200	3000-3500
Chorobal	La Libertad	208.25	3000-3500
Chupon	La Libertad	798.25	3000-3500
Total – Alumbre District Area		1,206.5 ha

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Figure 2 – Regional Map of Major Projects in Peru in relation to Alumbre

The Chorobal and Chupon concessions complement our existing concession holdings in the Alumbre District (refer Figure 3). The Company is currently working within the Alumbre District area and activity includes work on the Chorobal and Chupon concession. These concessions increase Promesa’s land

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holding in Peru to a total of 11,106.5 ha granted, with a further 3,600 ha under application at Olleros in central Peru.

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Figure 3 – Concession Plan - Alumbre District

Details of Agreement

Chorobal Agreement

Peru Minerals has entered into an option agreement to acquire a 100% interest from the concession holder. The terms of the agreement are as follows:

• a) US$100,000 payable on execution of the agreement;

• b) US$100,000 payable 12 months after execution of the agreement and allotment of shares in Promesa to the value of US$150,000 (based on the 5 day average share price of Promesa). The company will also be required to have commenced surface geology, geophysics and geochemical studies.

• c) US$100,000 payable 24 months after execution of the agreement and allotment of shares in Promesa to the value of US$150,000 (based on the 5 day average share price of Promesa). The company will also be required to have commenced drilling on the concession;

• d) US$200,000 payable 36 months after execution of the agreement and allotment of shares in Promesa to the value of US$200,000 (based on the 5 day average share price of Promesa). The company will also be required to have completed 2,000m of drilling.

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• e) US$500,000 payable 48 months after execution of the agreement and allotment of shares in Promesa to the value of US$500,000 (based on the 5 day average share price of Promesa). The company will also be required to have completed a JORC compliant resource estimate.

• f) If production on the concession commences, a 2% Net Smelter Return (NSR) royalty will be payable to the concession holder. Peru Minerals has the right to cancel the NSR royalty by payment of US$3,000,000 to the concession holder.

Chupon Agreement

Peru Minerals has entered into a farm-in agreement to acquire an 80% interest from the concession holder. The terms of the agreement are as follows:

• g) US$90,000 payable on execution of the agreement;

• a) US$50,000 payable 12 months after execution of the agreement;

• b) US$50,000 payable 24 months after execution of the agreement together with the grant of 100,000 options to acquire shares in Promesa at an exercise price of AUD$0.20 and with an expiry date of 12 months from date the options are granted;

• c) US$100,000 payable 36 months after execution of the agreement together with the grant of 200,000 options to acquire shares in Promesa at an exercise price of AUD$0.25 and with an expiry date of 12 months from date the options are granted;

• d) US$200,000 payable 48 months after execution of the agreement together with the grant of 300,000 options to acquire shares in Promesa at an exercise price of AUD$0.30 and with an expiry date of 12 months from date the options are granted;

• e) US$300,000 payable 60 months after execution of the agreement together with the grant of 300,000 options to acquire shares in Promesa at an exercise price of AUD$0.35 and with an expiry date of 12 months from date the options are granted;

• f) Peru Minerals has the right to acquire the remaining 20% of the concession by a further payment of US$3,000,000.

• g) If production on the concession commences, a 2% Net Smelter Return (NSR) royalty will be payable to the concession holder.

Chorobal and Chupon background

Chorobal was explored in 1994 by Newmont Mining Corporation which carried out regional exploration. Between 1995 and 1998 Savage Resources Limited (“Savage”) (Pasminco Limited acquired Savage in 1999) had undertaken a significant exploration program within the area of the Chorobal and Alumbre concessions, which included stream sediment and rock chip sampling, geological mapping, geophysical studies and a combined reverse circulation (RC) and diamond (DH) drilling program. Savage identified two types of mineralised systems within the Chorobal and Alumbre concessions:

• An epithermal low sulphidation Au-Ag bearing quartz vein system on the Chorobal concession; and

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• Disseminated stockwork related Au – Cu – Mo mineralisation on the Alumbre concession, which has been the subject of earlier announcements.

Both types of mineralisation were drilled by Savage with a 39 hole program, details of which will be the subject of a separate ASX release when a more detailed understanding of data is gained.

The low-sulphidation epithermal vein system, which has a total strike length of approximately 8km, occurs in a northwest trend corridor and is approximately 1.5km wide in an east west direction. This vein system varies between 1 and 10 metres in width, with pinching and swelling up to 15 m vertically and horizontally in some areas. The six main veins mapped are named Chorobal, Libertad, Yoques, Lady Victoria, Giant and Western. They range in strike length between 400 to 650m.

The acquisition of the Chupon concession supports our regional strategy in the Alumbre District, which comprises the Alumbre, Chupon and Chorobal concessions. The Chupon concession is considered to be the centre of a potential epithermal complex. The silica cap illustrated in Figure 4 has a radius of alteration of 4.5 x 2.5km. Field work has indicated that this consists of solid silica with oxides of limonite and box work, in layers of low permeable material with a variable width ranging from 40m to 80m, with a geometric spread towards the eastern and western face of the Chupon Hill.

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Figure 4 – Chupon Concession

The geochemical sampling demonstrates a good geochemical contrast, with values in the volatile elements (Se, Te, As, Sb and Ba) which could represent the top of the epithermal centre.

Based on current field work and historical reports by Savage (which had recommended further drilling be undertaken after the initial drilling), further exploration will be carried out to target the potential porphyry system, which was not verified by Savage in 1998.

Work to be undertaken by Promesa’s geological team in Peru, coupled with historical work supported by the geophysics program, will potentially define the porphyry system in the area.

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Current update of activity

Val d'Or Geofisica (Peru) S.A. has recently completed a geophysical survey over a total linear length of 9.7km at the Alumbre District and 9.2km at the Quinual prospect, to an approximate depth of 600m. The geophysical survey was carried out concurrently with mapping and sampling, which is continuing on these prospects.

The Company anticipates that the combination of the field sampling, mapping and geophysics work will lead to a drilling program in the Alumbre District in late 2012 to early 2013.

On behalf of the Board,

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Ananda Kathiravelu Executive Director Promesa Ltd

About Promesa Ltd (ASX: PRA)

Promesa Ltd is an ASX listed Company domiciled in Perth with a substantial portfolio of exploration properties in Peru. The Company is focused on precious and base metal commodities.

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.

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