SUMMARY
   Qeshm Union Itok International (QUIZ) in conjunction with the Geological Survey of Iran through a Joint Venture, has spent approximately 16 months exploring terrain prospective for porphyry copper mineralisation over five (5) areas in the Kerman and East Azarbaijan Provinces in Iran.
   The exploration was undertaken during several field expeditions from June 1999 through to July 2000 using experienced Iranian and Australian geologists provided by QUJI.
   Whilst exploration did identify a number of areas at surface exhibiting porphyry copper alteration, it did not verify significant amounts of associated copper mineralisation. In addition, other styles of mineralisation (skarn, granite hosted mesothermal) located were considered too small for the Joint Venture.
   The most exciting areas in East Azarbaijan are those already held under tenure by other companies/landholders. Attempts to locate and discuss exploration options on these tenements with the landholders failed and as such, no work could be undertaken in examining these areas for their real potential to host porphyry copper mineralisation.
   From the work undertaken to date within both the Kerman and East Azarbaijan Project Areas, it is clear that the potential for locating economic mineralisation at surface or shallow depth is limited. In its search for porphyry copper mineralisation, QUII's exploration criteria has been to locate economic mineralisation at surface without the need for complex and expensive exploration techniques and significant budgets. As such, no further work is recommended within the current GSI Joint Venture areas.
  
  
  
   1. BACKGROUND
   Qeshm Union Itok International (QUII), a 50 owned subsidiary of Union Capital Limited (previously Union Mining NL), entered into a Memorandum of Understanding (MOU) with the Geological Survey of Iran (GSI) to undertake porphyry copper exploration over five (5) areas in Iran, totaling some 1730 km2 (Appendix I). Four of the five areas, totaling 1,032 km2-, are located in the Kerman central Iran with the remaining area totaling some 598 km2 located in East Azarbaijan in NW Iran (Figures 1 and 2).
   The MOU (Appendix I) relates to a 12 month period commencing 15 March 1999, whereby QUII will explore the five areas jointly with the GSI with a minimum QUII expenditure commitment of US$45/km2 on direct exploration costs.