SOURCE: U Mining Resources Inc.

February 28, 2008 10:45 ET

U Mining Resources Inc. Provides Updates on Agreement With the Republic of Guinea

Mining Concession Will Include a State Guarantee of at Least 3 Billion Tons of Iron Ore Reserves

NEW YORK, NY--(Marketwire - February 28, 2008) - U Mining Resources Inc. (PINKSHEETS: UMNG) today provided updates on the BOOT (Build-Own-Operate-Transfer) Agreement between its majority-owned subsidiary Comitrag S.A. and the Republic of Guinea.

As per the terms of the Agreement, the Government of Guinea will grant Comitrag a Mining Concession for the exploration, development and production of a world-class iron ore resource located in Guinea. Significant portions of this world-class iron ore resource are currently being developed by a major mining and extraction company, under the terms of a previously issued agreement by the Republic of Guinea. Revenues generated from the production and sale of iron-ore under this additional and markedly smaller concession, are earmarked by the government to fund the initial stages of its planned infrastructure upgrade. This upgrade will include the construction and redevelopment of a major railroad line and mineral seaport. Under the terms of the Agreement, Comitrag -- a majority-owned subsidiary of U Mining Resources -- will be responsible for the management and operation of these scheduled infrastructure projects (hereinafter collectively referred to as the "Project").

The purpose of this update is to provide our shareholders with a better understanding of the planned financing for the BOOT Agreement, which is being structured by leveraging the Mining Concession.

Phase 1 : Financial Commitment of $ 7.5 million

--  The initial investment of $ 7,500,000 will be allocated to Comitrag
    (75%-owned by U Mining) upon signature of the BOOT Agreement.  The
    investment will be structured as a 5-year loan bearing interest at prime +
    4% and subrogated by the following two formal guarantees: (1) a 10%
    ownership interest in Comitrag, in the event that the loan agreement is not
    reimbursed within the 5-year period; and (2) 10,000,000 preferred shares of
    U Mining, again if the loan would not be reimbursed within 5 years.
    
--  The proceeds will be utilized to achieve a series of surveys and
    geological reports, which involve airborne measurements that will assist in
    the quantification of the iron ore resources and concentrations. Secondly,
    some of the proceeds will be attributed to the Seaport of Matakang
    feasibility studies and the geotechnical itinerary tracing of the railroad
    track from the mining concession to the existing national railroad.
    
--  The three sources of potential revenue from the BOOT Agreement are:
    (1) Mining Concession; (2) Railway concession; and (3) Port infrastructure
    and management concession.  Based on the terms of the Agreement with the
    Republic of Guinea, U Mining will earn a portion of the potential revenue
    in exchange for its expertise and assistance in securing international
    funding for the Project.
    
--  Comitrag has been involved in this Project for over 5 years and has
    been pooling a group of Companies with each having a separate vested
    interest in different parts of the global Project.  Thus, the complete BOOT
    Agreement is structured to effectively utilize the strength and
    capabilities of all the involved entities, whether it is the Mining group
    being established by U Mining's team, or the international firms involved
    in engineering, infrastructure development, forestry, environmental impact
    studies and financing.
    
--  Comitrag and U Mining have been working diligently to produce a strong
    BOOT Agreement and have been exchanging information on a constant basis
    with the authorities in Guinea to ensure ratification of the final binding
    agreement, which is scheduled to be signed by mid-March 2008.
    
--  The first phase of the Project covers 12 to 15 calendar months from
    the signature of the agreement. A financial committee will be appointed and
    responsible for the administration of the funds and sub-contractual
    management.
    

Phase 2: Financial Leverage and Operations

--  Following phase 1 completion of the various geological studies and
    reports, the simultaneous construction of the Mineral Seaport and mining
    camp will occur. The scale of the Seaport infrastructure will be determined
    by the results obtained from the evaluation of the Mining Concession.
    
--  Construction of a double track railway between the Seaport and the
    Mining Concession.
    
--  Based on the fact that the State guarantees the Investor an iron ore
    reserve of at least three (3) billion tons for the whole duration (i.e. 60
    years) of the BOOT Agreement, Comitrag and the Government authorities will
    be soliciting the participation of world class banks and financial
    institutions to finance the development of the infrastructures based on the
    revenues from the extraction and sale of the iron ore reserves.
    
--  Public tender offers will be placed with world-class companies for the
    execution of specific Project-related tasks and activities.
    

In conclusion, the management of U Mining indicated the following: "Pursuant to the signature of the BOOT Agreement, new directors and officers with skills and expertise specific to project management will join the Company as soon as it is cost-prohibitive.

"Management would again like to thank its shareholders for their support, and reaffirm our belief that U Mining's valuation and credibility will increase considerably following the acquisition and commencement of this world class project."

About the Mining Concession

The Mining Concession covers a 55-km-long zone in the Simandou Mountain Range. Drill assays from previous exploration programs on the Simandou Range indicated a high-grade hematite, with a concentration of over 67% Fe (Iron), and an estimate of over 3 billion metric tons of iron ore resources. In fact, the nearby Pic de Fon iron ore deposit has an estimated 1.2 billion metric tons of iron ore at a grade of about 65% to 68% iron (Source: Guinea Ministry of Mines and Geology, 2005d). It is this fact, together with the previous tests done in the area, that has lead U Mining and its team to believe that this Mining Concession will soon be regarded as a world-class iron ore resource, and the Simandou region home to Africa's largest iron ore deposits.

To be added on the Company's mailing list, please speak with the Investor Communications Representatives at U Mining's Investor Relations firm Equiti-trend Advisors. Reps are available from 9:30 a.m. to 5:30 p.m. EST daily by calling (800) 953-3350. Interested investors are also encouraged to visit the Company's corporate website regularly for updates at www.umining.com.

Forward-Looking Statements

Please be advised that statements made herein, other than historical data, constitute forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those stated or implied by such forward-looking statements. The potential risks and uncertainties include, among others, potential volatility in the company's stock price, increased competition, customer acceptance of new products and services offered by the company, and uncertainty of future revenue and profitability and fluctuations in its quarterly operating results. Please also be advised that the company's stock is not currently registered with the Securities and Exchange Commission.

Contact Information

  • Contact:

    Equiti-trend Advisors
    (800) 953-3350 U.S. & Canada
    (858) 436-3350 Local