UNION STAR METALS LTD — Capital/Financing Update 2012

Jan 17, 2012

18th January 2012

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DRILLING AND EXPLORATION UPDATE - CERRO CURUNDAY PROJECT PERU

HIGHLIGHTS

• Ninth drill hole has been completed at Cerro Curunday for a total of 2,276.8m.

• Drilling has been suspended to allow for assays and QAQC processes catch up with the drilling and exploration program.

• Ongoing delays are being experienced in receiving assay results due to a backlog at the Lima laboratory. Remaining drill and field samples have been sent to an alternative incountry laboratory to speed up turnaround times.

• The first set of assay results are expected to be reported in early February 2012.

• Grass roots field level exploration activity is ongoing within the La Liberated region.

South American focused gold explorer Promesa (ASX Code: PRA) advises that it has decided to suspend drilling at the completion of the ninth drill hole. A total of 2,276.8m has been completed to date at Cerro Curunday project area. The aim of the suspension is to allow for drill and field sampling assay results and QAQC processes to catch-up with the drilling and field mapping programs.

Drilling has been completed on the ninth diamond drill hole (CU09) which has achieved a depth of 250.3m. The ninth drill hole is located on the slope of Curunday targeting veinlets observed from recently field mapping activity. Please refer Figure 1 of the attached map for drill hole locations. Drill hole depths to date for CU001 to 9 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
CU009	250.3m
**Total **	**2,276.8m **

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 aim of the Curunday drilling 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.

The diamond drill rig will be demobilised until the drilling result and mapping information has been analysed to determine the next stage of exploration activity within the project area.

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Figure 1 – Cerro Curunday Drill Plan

As previously flagged, there have been ongoing delays in the delivery of assay results from the laboratory due to a backlog of samples having been sent to the laboratory by other mining companies. This is indicative of the increased exploration, mining and drilling activity in Peru. A second laboratory has been sourced to accelerate assaying of samples from the current drilling and field level exploration activity at Curunday and La Huacas areas.

Grass roots field level exploration programs and mapping activity within the Promesa 6600 ha concession (refer to Figure 2) in La Liberated region is also ongoing and will

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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assist in developing an understanding of the regional geology and will assist in outlining new exploration targets of interest.

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Figure2 Promesa Land Concession Holding in La Libertad Department in Peru

Promesa has been active in evaluating new projects to complement existing exploration activity within Peru.

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