Dear Shareholders,

I recently attended the annual PDAC convention in Toronto and met with a number of shareholders. We always welcome the opportunity to directly answer questions and discuss company plans with our shareholders. We believe in being accessible, accountable and responsive.

As you are all likely aware, the McFaulds Lake property sale was successfully closed this past November with UC entering into a purchase agreement from Cliffs Chromite Far North for $6 Million for our interest in the properties. UC is now focusing all of its efforts in Mexico. We have a number of exciting properties and the ability to produce ongoing cash flow out of our La Yesca operations with a goal of achieving commercial production.

Management has initiated a production mill upgrade with an expenditure of approximately $300,000 to bring run rates up to consistency at La Yesca resulting in maximum revenues.  There is an additional expenditure of approx $200,000 planned on spare back up parts for the mill which will follow but will be taken from ongoing revenues produced at mill operations. The goal of the upgrade is to obtain the ability to claim commercial production and maximize revenue run rates for the company and its shareholders.

New precipitate handling and smelting procedures have also been implemented. As upgrades are completed and mill operations are improved to maximize run rates, it is very important that management can trust every element of the smelting and recovery process. The procedures have been implemented to ensure that this is the result and help move the company to commercial production status.

The company has hired a Senior Geologist to initiate mapping, channel samples and following potential drill programs to commence at the XORA and La Pinta concessions both within 2KM of the La Yesca Mill site. Following work on these two sites will be the Mar concession property to identify and delineate this resource. 

We continue to look for near term production assets that can be acquired for advantageous amounts within our current market conditions and we believe that unique opportunities will surface in this economy.

Mexico is one of the world’s largest silver and gold producers. UC Resources is rapidly advancing in Mexico to acquire an asset base of high quality silver and gold production assets with significant upside on their exploration potential. UC Resources plans to acquire quick to production assets, consisting of previous producing mines or tailings deposits, which can be rehabilitated and entered into production in reasonable time frames. We believe the silver market is poised for extreme growth.

Focusing on smart exploration combined with production and cash flow is in our opinion in the best interest of our shareholders.

Our plan is on track for 2012.

Yours truly,

Gary Monaghan