KORAB RESOURCES LIMITED — AGM Information 2012

Nov 1, 2012

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KORAB RESOURCES LIMITED ACN 082 140 252

NOTICE OF ANNUAL GENERAL MEETING

AND

EXPLANATORY MEMORANDUM TO SHAREHOLDERS

A PROXY FORM IS ENCLOSED

Date of Meeting 30 November 2012

Time of Meeting 5:30pm WST

Place of Meeting BGC Centre, Plaza Level, Corner Howard St and The Esplanade, PERTH, WA

Please read the Notice and Explanatory Memorandum carefully.

If you are unable to attend the meeting please complete and return the enclosed proxy form in accordance with the specified instructions.

Korab Resources Limited ABN 082 140 252

Notice of Annual General Meeting

Notice is given that the 2012 Annual General Meeting of the Company will be held at the BGC Centre, Plaza Level, Corner of Howard Street and The Esplanade, PERTH, WA, on Friday 30 November 2012 at 5:30 pm WST.

Agenda

Business

An Explanatory Memorandum containing information in relation to each of the following resolutions accompanies the Notice of Annual General Meeting.

Annual Report

To receive and consider the financial statements of the Company for the year ended 30 June 2012, consisting of the Profit and Loss Statement, Balance Sheet, report of the Company and the reports of the Directors and auditors for the year ended 30 June 2012, a copy of which is available at www.korabresources.com.au.

Resolution 1 – Remuneration Report

The Company’s board is submitting its Remuneration Report to shareholders for consideration and adoption by way of a non-binding resolution.

To consider, and if thought fit, to pass the following non-binding resolution as an ordinary resolution:

“That the Remuneration Report for the year ended 30 June 2012 be adopted.”

Voting Prohibition Statement: A vote on this resolution must not be cast (in any capacity) by or on behalf of either of the following persons:

• (a) a member of the key management personnel, details of whose remuneration are included in the Remuneration Report;

• (b) a closely related party of such a member.

• However any of those persons may cast a vote on the resolution if:

• (a) the person does so as a proxy appointed in writing that specifies how the proxy is to vote on the proposed resolution; and

• (b) the vote is not cast on behalf of a person described in paragraphs (a) or (b) above.

If you appoint the Chairman of the Meeting as your proxy, the Company encourages you to direct the Chairman how to vote on this advisory Resolution. The Chairman, as one of the Key Management Personnel of the Company, is not permitted to cast any votes in respect of this advisory Resolution that arise from undirected proxies held unless the proxy expressly authorises the Chairman to do so.

Resolution 2 – Election of Director of the Company

To consider and, if thought fit, to pass without amendment, the following as an ordinary resolution:

"That, Mr Rodney Skeet be re-elected as Director of the Company.

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Korab Resources Limited

ABN 082 140 252

Notice of Annual General Meeting

Resolution 3: Ratify Issue of Shares and Options

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

"That for the purpose of Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 7,731,014 Shares at a deemed issue price of 8.1 cents each and 2,577,006 Options at a deemed issue price of 0.1 cents each, which were issued as consideration for the acquisition of 23,308,334 fully paid ordinary shares in Lugansk Gold Limited, on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice.”

Voting Exclusion:

The Company will disregard any votes cast on this resolution by a person who participated in the issue and an associate of that person (or those persons). However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or if it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 4: Ratify Issue of Shares

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

"That for the purpose of Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 5 million Shares at an issue price of $0.092 each on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice.”

Voting Exclusion:

The Company will disregard any votes cast on this resolution by a person who participated in the issue and an associate of that person (or those persons). However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form, or if it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 5 – Approval of 10% Placement Facility

To consider and, if thought fit, to pass the following, with or without amendment, as a special resolution :

"That, pursuant to and in accordance with Listing Rule 7.1A and for all other purposes, Shareholders approve the issue of Equity Securities up to 10% of the issued capital of the Company (at the time of the issue) calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions in the Explanatory Memorandum."

Voting Exclusion: The Company will disregard any votes cast on this Resolution by a person (and any associates of such a person) who may participate in the 10% Placement Facility and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of Shares, if this Resolution is passed.

However, the Company will not disregard a vote if:

• (a) it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

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Korab Resources Limited

ABN 082 140 252

Notice of Annual General Meeting

• (b) it is cast by the Chairman as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

By Order of the Board

Dated this 1st day of November 2012

Andrej K Karpinski Chairman

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Korab Resources Limited

ABN 082 140 252

Notice of Annual General Meeting

Explanatory Memorandum

Shareholders are referred to the Annexure A for the Explanatory Memorandum accompanying and forming part of this Notice of Meeting.

Capitalised terms which are not defined in this Notice of Meeting and Explanatory Memorandum are defined in Annexure B to the Explanatory Memorandum.

Entitlement to vote - Snapshot date

It has been determined that in accordance with Section 1074E(2) of the Corporations Act and regulation 7.11.37 of the Corporations Regulations 2001 (Cth), for the purposes of the Annual General Meeting, Company Shares will be taken to be held by the persons who are the registered holders at 5 pm WST on 28 November 2012 . Accordingly, Company Share transfers registered after that time will be disregarded in determining entitlements to attend and vote at the meeting.

How to vote

You may vote by attending the meeting in person, by proxy or by authorised representative.

Voting in person

To vote in person, attend the meeting on the date and at the place set out above. The meeting will commence at 5:30 pm WST on Friday, 30 November 2012.

Voting by Proxy

A shareholder entitled to attend and vote has a right to appoint a proxy to attend and vote instead of the shareholder. A proxy need not be a shareholder and can be either an individual or a body corporate. If a shareholder appoints a body corporate as a proxy, that body corporate will need to ensure that it:

• appoints an individual as its corporate representative to exercise its powers at the meeting, in accordance with section 250D of the Corporations Act; and

• provides satisfactory evidence of the appointment of its corporate representative.

If such evidence is not received, then the body corporate (through its representative) will not be permitted to act as a proxy.

A shareholder that is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If no proportion or number is specified, each proxy may exercise half of the shareholder’s votes.

A Proxy Form accompanies this Notice and to be effective must be received at the Company’s registered office:

The Company Secretary Korab Resources Limited Suite 6 Level 1, 100 Mill Point Road, SOUTH PERTH WA 6951

OR by facsimile: (08) 9474 6266 (Australia) or + 61 8 9474 6266 (International)

by no later than 5:30 pm WST on Wednesday, 28 November 2012 .

Where the proxy form is executed under power of attorney, the power of attorney must be lodged in like manner as the proxy.

Questions and Comments by Shareholders at the Meeting

In accordance with the Corporations Act, a reasonable opportunity will be given to shareholders to ask questions about or make comments on the management of the Company at the meeting.

Similarly, a reasonable opportunity will be given to shareholders to ask the Company’s external auditor, Mann Judd questions relevant to:

• the conduct of the audit;

• the preparation and content of the auditor’s report;

• the accounting policies adopted by the Company in relation to the preparation of its financial statements; and

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Korab Resources Limited ABN 082 140 252

Notice of Annual General Meeting

• the independence of the auditor in relation to the conduct of the audit.

Shareholders may also submit written questions to Mann Judd if the questions are relevant to the content of Mann Judd audit report or the conduct of its audit of the Company’s financial report for the period ended 30 June 2012. Relevant written questions for Mann Judd must be received by mail at the registered office of the Company (PO Box 195, South Perth, WA 6951) or by facsimile, facsimile number +61 8 9474 6266 no later than 5:30 pm WST on 23 November 2012 . A list of the relevant written questions together with responses will be made available to shareholders attending the meeting. They will also be placed on the Company’s website.

The following details should be included with written questions:

• the Shareholder’s Name ; and

• either the Shareholder’s Security Reference Number (SRN) or Holder Identification Number (HIN).

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Korab Resources Limited

ABN 082 140 252

Annexure A

Introduction

This Explanatory Memorandum has been prepared to assist shareholders to understand the business to be put to shareholders at the forthcoming Annual General Meeting.

The Directors recommend shareholders read this Explanatory Memorandum in full before making any decision in relation to the resolutions. Please refer to Annexure B of this Explanatory Memorandum for definitions of capitalised terms in this Notice of Meeting and Explanatory Memorandum.

Business

The Annual Report 2012 (including the financial statements, Directors’ report and Auditor’s report for the financial year ended 30 June 2012) is available for review by members at www.korabresources.com.au and will be tabled at the Meeting. There is no formal resolution to accept the financial statements and reports, but provision will be made to members to question the Directors and the Auditor should they wish to do so.

1 Financial Report

The Corporations Act requires the following reports in respect of the year ended 30 June 2012 to be laid before the annual general meeting:

• (a) the reports of the Directors and auditors; and

• (b) the annual financial report, including the Company’s financial statements.

Neither the Corporations Act nor the Company’s constitution requires a vote of shareholders on the reports or statements. However, shareholders will be given ample opportunity to raise questions or comments of the Company’s management.

The financial report for consideration at the meeting will be the full financial report. Each shareholder can access the full financial report as part of the Annual Report at www.korabresources.com.au or request a printed copy by contacting the Company.

A reasonable opportunity will be given to the Company’s shareholders as a whole at the meeting to ask the Company’s auditor questions relevant to the conduct of the audit, the preparation and content of the auditor’s report, the accounting policies adopted by the Company in relation to the preparation of the financial statements and the independence of the auditor in relation to the conduct of the audit.

2 Resolution 1 – Remuneration Report

Under the Corporations Act, the Company is required to include, in the directors’ report, a detailed Remuneration Report setting out the prescribed information in relation to the remuneration of directors and executives of Korab and the Company’s remuneration practices.

Shareholders will be given reasonable opportunity at the meeting to ask questions and make comments on the Remuneration Report.

The Remuneration Report is required to be submitted for adoption by a resolution of shareholders at the meeting. The vote on this resolution is advisory only and does not bind the directors or the Company. However, the Board will take the outcome of the vote into consideration when reviewing remuneration practices and policies. From 1 July 2011 the advisory vote on the Remuneration Report under section 250R(2) of the Corporations Act 2001 has taken on

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Korab Resources Limited

Annexure A

additional significance. If there are two consecutive votes at the Annual General Meeting (AGM) against the Remuneration Report of 25% or more (Strikes), the second AGM at which the Strike occurs (Second Strike) will then consider whether the Board should be put up for re-election (Spill Resolution). If the Spill Resolution is passed then the Company is required to hold a Spill Meeting within 90 days of the Spill Resolution. It is at the Spill Meeting that the Directors (excluding the Executive Chairman) will be considered for re-election.

The vote may be held under any method allowed under the Company’s Constitution, for example a show of hands, poll or by direct vote. The vote is determined in the same way as any other vote held at a general meeting. There is no requirement to conduct a poll, although given the significance of the vote and the difficulty in being accurate on a show of hands, it may be prudent to hold a poll on the Remuneration Report.

The Spill Resolution will only be relevant to the 2013 AGM, and then only if there was a vote of 25% or more against the Remuneration Report at the 2012 AGM (First Strike). The Spill Resolution, if required to be put to the meeting, is voted on as any other resolution at the meeting. The proxy form will include the Spill Resolution, just as any other resolution for the meeting. If there is no Second Strike then the Spill Resolution will not be put to the meeting. Essentially the Spill Resolution in the Notice of Meeting will be ignored. The count will start again if a Second Strike does not occur at the AGM immediately following the First Strike. The Spill Resolution will pass, i.e. to put the Directors up for election, on a majority of 50%. The Spill Meeting must be held within 90 days of the Spill Resolution passing.

The Executive Chairman is not required to go up for re-election at the Spill Meeting. All other Directors who were Directors at the time of the Second Strike must go up for election at the Spill Meeting. The legislation allows for the company to retain 3 Directors (or 2 plus the Managing Director or Executive Chairman in case of the Company who combines the functions of Managing Director and Chairman of Directors under the Constitution), being the minimum number of Directors for a Public Company under the Corporations Act 2001. If all Directors are voted out, then the Directors that are retained to maintain the statutory minimum will be those with the most votes for their election. If there are two or more Directors with the same number of votes, then the Directors shall choose the Director to be retained. If none of the Directors (other than the Managing Director or Executive Chairman) who were a Director at the time of the Spill Resolution remain as a Director before the end of the 90 day period, then the Spill Meeting does not need to be held.

The voting by members of a Company’s Key Management Personnel (KMP) will be subject to specific exclusions from voting their personal interests or as proxy for third parties in respect to matters related to remuneration. The extent of the exclusions depends upon the capacity under which the KMP exercise the vote and the subject matter of the resolution. The exclusions also apply to the voting by certain relatives of, or entities controlled by, KMP. Key Management Personnel of the Company or the consolidated entity of which the Company is a part and their closely related parties, being: the spouse or a child of the KMP, a child of the KMP’s spouse (commonly referred to as a step-child), a dependant of the KMP or the KMP’s spouse, a member of the KMP’s family who may be expected to influence, or be influenced by the KMP, in the KMP’s dealings with the entity, a company controlled by the KMP are subject to various exclusions in respect to voting on matters related to remuneration.

KMP are defined under AASB 124 as: those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. The determination of who are KMP and a closely related party of the KMP will need to be made for each AGM, or any general meeting if remuneration matters are to be considered, effective at the date of the meeting. It will not be sufficient to rely upon the KMPs disclosed in the Company’s financial accounts as the KMPs may have changed since the balance date for the financial accounts.

The exclusions apply to the advisory vote on the Remuneration Report and resolutions connected directly or indirectly with the remuneration of the KMP. The legislation does not define

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Korab Resources Limited

ABN 082 140 252

Annexure A

“resolutions connected directly or indirectly with the remuneration of the KMP”, but the legislation does give examples, such as: the Spill Resolution, Director’s remuneration, Financial benefits to KMP. The voting exclusions in respect to the Remuneration Report only apply to companies that are required to put the Remuneration Report to the vote under Section 250R(2) of the Corporations Act.

The Chairperson is required to vote any directed proxies they hold on a poll.

The Chairperson, as one of the Key Management Personnel of the Company, is not permitted to cast any votes in respect of this advisory Resolution that arise from undirected proxies held, unless the proxy expressly authorises the Chairperson to do so, on the proxy form.

Proxies other than the Chairperson are permitted to cast votes as proxy in respect of this Resolution only if the proxies are directed, and if the person appointing the proxy is not a KMP or closely related party of a KMP.

3 Resolution 2 – Election of Director of the Company

Listing Rule 14.5 requires that an entity which has directors must hold an election of directors each year. The Constitution of the Company requires that one third of directors retires each year. If the number of directors who are subject to rotation is less than three, then that director who has been the longest in office since his/her election will retire by rotation.

Consequently, Mr. Skeet retires in accordance with the Constitution of the Company and the Listing Rule 14.5 and being eligible, he offers himself for election as Director of the Company.

Information about Mr Skeet is provided on page 5 of the Company’s 2012 Annual Report.

4 Resolution 3 – Ratify issue of Shares and Options

Subject to certain exceptions, none of which are relevant here, the Directors are restricted by Listing Rule 7.1 from issuing or agreeing to issue new securities in the Company in any 12 month period, which amount to more than 15% of the Company’s ordinary securities on issue, without Shareholder approval ("15% Limit").

Listing Rule 7.4 permits the ratification of previous issues of securities made without prior Shareholder approval, provided the issue did not breach the 15% threshold set by Listing Rule 7.1. The effect of such ratification is to restore a company's maximum discretionary power to issue further securities up to 15% of the issued capital of the company without requiring Shareholder approval.

The Directors seek ratification by the Company of this issue pursuant to Listing Rule 7.4, in order to limit the restrictive effect of Listing Rule 7.1 on any further issues of securities in the next 12 months.

Prior to the issue of 7,731,014 Shares and 2,577,006 Options on 15 October 2012, the Company’s capacity to issue equity securities within the 15% Limit was 16,572,587 securities. Accordingly the issue of 7,731,014 Shares and 2,577,006 Options did not breach the 15% threshold set by Listing Rule 7.1. The following information is provided to Shareholders for the purposes of Listing Rule 7.5:

• (a) A total of 7,731,014 Shares were allotted at a deemed issue price of $0.081 each and 2,577,006 Options were allotted at a deemed issue price of $0.001 each on 15 October 2012.

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Korab Resources Limited ABN 082 140 252

Annexure A

(b) The Shares are fully paid ordinary shares that rank equally in all respect with existing Shares, the terms of which are already in the public domain. The Options are the same class and rank equally in all respect with existing options that were issued under the prospectus dated 19 July 2012, the terms of which are set out below:

• (i) Each Option shall entitle the Option holder, when exercised, to one fully paid ordinary share in the Company.

• (ii) The Options are exercisable wholly or in part at any time prior to 5.00 pm (WST) on the expiry date of 28 August 2014 (“Expiry Date”), and at an exercise price of $0.25.

• (iii) Options not exercised by the Expiry Date shall lapse.

• (iv) Each Option may be exercised by notice in writing to the Company, together with the payment for the number of Shares in respect of which the Options are exercised, at any time before the Expiry Date. Any notice of exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.

• (v) An Option does not confer the right to a change in exercise price or a change in the number of the underlying Shares over which the Option can be exercised.

• (vi) Shares issued upon exercise of the Options will be issued following receipt of all the relevant documents and payments and will rank equally in all respect with the then issued Shares.

• (vii) The Company will apply for quotation on ASX of the Options and following their exercise, for quotation of all Shares issued upon exercise of the Options.

• (viii) Subject to the Corporations Act, the Constitution and the Listing Rules, the Options are freely transferable.

• (ix) There are no participating rights or entitlements inherent in the Options and Option holders will not be entitled to participate in new issues of securities offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 10 Business Days after the issue is announced so as to give Option holders the opportunity to exercise their Options before the date for determining entitlements to participate in any issue.

• (x) If at any time the issued capital of the Company is reorganised, the rights of an Option holder are to be changed to the extent necessary to comply with the Listing Rules applying to a reorganisation of capital at the time of the reorganisation.

• (c) The Shares and Options were allotted to minority shareholders in Melrose and Lugansk for the purpose of acquiring their minority shareholdings in Melrose and Lugansk.

• (d) None of the allottees are Related Parties to the Company, or associates of the Company’s Related Parties.

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Korab Resources Limited

ABN 082 140 252

Annexure A

(e) No funds were raised as a result of the issue. The consideration for the Shares and Options were 23,308,334 fully paid ordinary shares in Lugansk Gold Limited.

(f) The identities of the vendors of the Lugansk shares acquired by Korab on 15 October 2012 in exchange for the 7,731,014 Shares and 2,577,006 Options are as follows:

Underlying Holder	Shares allotted on 15 oct 2012	Options Allotted on 15 oct 2012
MULLOWAY PTY LTD	2,372,848	790,950
OFFA PTY LTD	358,166	119,389
SERGIY ANTONENKO	5,000,000	1,666,667
	7,731,014	2,577,006

(g) The Company previously issued 9,283,913 Shares and 3,094,642 Options on 4 September 2012 to acquire shares in Lugansk and Melrose. This issue was ratified by Shareholders at the General Meeting held on 15 October 2012. The identities of the vendors of the Lugansk and Melrose shares acquired by Korab in exchange for the 9,283,913 Shares and 3,094,642 Options on 4 September 2012 and ratified by Shareholders at the General Meeting held on 15 October 2012 are as follows:

Purchase of Lugansk shares
Reg Line 1	Shares allotted on 4 September 2012	Options allotted on 4 September 2012
MR ANDREW RICHARDS	268,625	89,542
ELOHIM NOMINEES PTY LTD	15,000	5,000
FIONA MARY TEO	80,588	26,863
HSBC CUSTODY NOMINEES	1,199,041	399,681
MINERVA PROPERTY HOLDINGS	20,000	6,667
MR JAMES FRANCIS MCMAHON &	71,633	23,878
NUTSVILLE PTY LTD	1,074,498	624,583
SERGIY ANTONENKO	5,000,000	1,666,667
TUCKETT HOLDINGS PTY LTD	161,175	53,725
HSBC CUSTODY NOMINEES	419,366	139,789
	8,309,926	3,036,395

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ABN 082 140 252

Korab Resources Limited

Annexure A

Purchase of Melrose shares
Reg Line 1	Shares allotted on 4 September 2012	Options allotted on 4 September 2012
ELOHIM NOMINEES PTY LTD	7,500	2,500
MINERVA PROPERTY HOLDINGS	10,000	3,334
TUCKETT HOLDINGS PTY LTD	106,567	35,523
IE PROPERTIES PTY LTD	799,250	-
HAWKER GEOLOGICAL SERVICES	50,670	16,890
	973,987	58,247

• (h) No further securities will be issued by the Company to the persons listed above in sections f) and g) in relation to the purchase of their shares in Melrose and Lugansk.

• (i) None of the persons listed above in section f) and g) is a related party of the Company, a subsidiary of the Company, or a substantial holder. None of the persons listed above in sections f) and g) is an associate of related party, a subsidiary, or a substantial holder. Consequently, Listing Rule 10.1 does not apply to this transaction.

• (j) The number of shares issued to each of the persons listed above in sections f) and g) was arrived at through arms-length negotiations with each of the persons.

Recommendation of Directors

If Resolution 3 is passed, the 15% Limit imposed by Listing Rule 7.1 will be renewed to the extent of the ratification. The Directors of the Company unanimously recommend that Shareholders vote in favour of Resolution 3 to maximise the Company’s flexibility to issue additional securities going forward.

5 Resolution 4 – Ratify issue of Shares

Listing Rule 7.1 provides that the prior approval of Shareholders is required for an issue of equity securities.

Subject to certain exceptions, none of which are relevant here, the Directors are restricted by Listing Rule 7.1 from issuing or agreeing to issue new securities in the Company in any 12 month period, which amount to more than 15% of the Company’s ordinary securities on issue, without Shareholder approval ("15% Limit").

Listing Rule 7.4 permits the ratification of previous issues of securities made without prior Shareholder approval, provided the issue did not breach the 15% threshold set by Listing Rule 7.1. The effect of such ratification is to restore a company's maximum discretionary power to issue further securities up to 15% of the issued capital of the company without requiring Shareholder approval.

The Directors seek ratification by the Company of this issue pursuant to Listing Rule 7.4, in order to limit the restrictive effect of Listing Rule 7.1 on any further issues of securities in the next 12 months.

Prior to the issue of 5 million Shares under Resolution 4, the Company’s capacity to issue equity securities within the 15% Limit was 6,264,567 securities. Accordingly the issue of 5 million Shares

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Korab Resources Limited

ABN 082 140 252

Annexure A

did not breach the 15% threshold set by Listing Rule 7.1. The following information is provided to Shareholders for the purposes of Listing Rule 7.5:

• (a) A total of 5 million Shares were allotted to Genus Dynamic Gold Fund managed by Baker Seel Capital Managers LLP at an issue price of $0.092 each on one date, 30 October 2012.

• (b) The Shares allotted under Resolution 4 are fully paid ordinary shares that rank equally in all respect with existing Shares, the terms of which are already in the public domain.

• (c) The allottee is not a Related Party of the Company, or an associate of the Company’s Related Parties.

• (d) Funds of $460,000 were raised by the issue of the Shares which will be used to fund exploration evaluation and development of the Bobrikovo project (Ukraine), and the Melrose project in WA.

Recommendation of Directors

If Resolution 4 is passed, the 15% Limit imposed by Listing Rule 7.1 will be renewed to the extent of the ratification. The Directors of the Company unanimously recommend that Shareholders vote in favour of Resolution 4 to maximise the Company’s flexibility to issue additional securities going forward.

6 Resolution 5 – Approve 10% Placement Facility

• 6.1 Listing Rule 7.1A enables eligible entities to issue Equity Securities up to 10% of its issued share capital through placements over a 12 month period after the annual general meeting ( 10% Placement Facility ). The 10% Placement Facility is in addition to the Company's 15% placement capacity under Listing Rule 7.1.

An eligible entity for the purposes of Listing Rule 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation of $300 million or less. The Company is an eligible entity.

The Company is now seeking shareholder approval by way of a special resolution to have the ability to issue Equity Securities under the 10% Placement Facility.

The exact number of Equity Securities to be issued under the 10% Placement Facility will be determined in accordance with the formula prescribed in Listing Rule 7.1A.2 (refer to Section 5.2(c) below).

The Company may use the 10% Placement Facility to fund ongoing exploration on its existing projects, according to results and capital needs (in particular to fund exploration evaluation and development of the Bobrikovo project (Ukraine), the, Batchelor project in the Northern Territory, and the Melrose project in WA), or acquire new resource assets.

If and when the Company does utilise the 10% Placement Facility within the 12 months following the AGM, assuming Resolution 5 is passed, the Company will be required to give ASX details of who the allottees are and how many Equity Securities they each received. In addition the Company will be required to release by way of ASX announcement the information set out in Listing Rule 3.10.5A, namely:

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Annexure A

(a) details about the dilution to the existing Shareholders caused by the issue of Equity Securities under the 10% Placement Facility;

(b) if cash is raised, an explanation why a pro rata issue or other type of issue allowing existing shareholders to participate was not adopted instead of or as well as using the 10% Placement Facility;

(c) details about any underwriting and underwriting fees paid, and

(d) details about any other fees or costs incurred in connection with the issue of Equity Securities under the 10% Placement Facility.

The Directors of the Company believe that Resolution 5 is in the best interests of the Company and unanimously recommend that Shareholders vote in favour of this Resolution.

6.2 Description of Listing Rule 7.1A

(a) Shareholder approval

The ability to issue Equity Securities under the 10% Placement Facility is subject to shareholder approval by way of a special resolution at an annual general meeting.

(b) Equity Securities

Any Equity Securities issued under the 10% Placement Facility must be in the same class as an existing quoted class of Equity Securities of the Company.

The Company, as at the date of the Notice, has on issue two classes of quoted Equity Securities, namely Shares and Options expiring 28 August 2014.

(c) Formula for calculating 10% Placement Facility

Listing Rule 7.1A.2 provides that eligible entities which have obtained shareholder approval at an annual general meeting may issue or agree to issue, during the 12 month period after the date of the annual general meeting, a number of Equity Securities calculated in accordance with the following formula:

(A x D) – E

• A is the number of shares on issue 12 months before the date of issue or agreement:

• (A) plus the number of fully paid shares issued in the 12 months under an exception in Listing Rule 7.2;

• (B) plus the number of partly paid shares that became fully paid in the 12 months;

• (C) plus the number of fully paid shares issued in the 12 months with approval of holders of shares under Listing Rule 7.1 and 7.4. This does not include an issue of fully paid shares under the entity's 15% placement capacity without shareholder approval;

• (D) less the number of fully paid shares cancelled in the 12 months.

Note that A is has the same meaning in Listing Rule 7.1 when calculating an entity's 15% placement capacity.

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• D is 10%

• E is the number of Equity Securities issued or agreed to be issued under Listing Rule 7.1A.2 in the 12 months before the date of the issue or agreement to issue that are not issued with the approval of shareholders under Listing Rule 7.1 or 7.4.

(d) Listing Rule 7.1 and Listing Rule 7.1A

The ability of an entity to issue Equity Securities under Listing Rule 7.1A is in addition to the entity's 15% placement capacity under Listing Rule 7.1.

At the date of this Notice, the Company has on issue 118,214,927 Shares and 39,482,300 listed Options and therefore has a capacity to issue:

• (i) 17,732,239 Equity Securities under Listing Rule 7.1; and

• (ii) subject to Shareholder approval being obtained under Resolution 5, 11,821,492 Equity Securities under Listing Rule 7.1A.

The actual number of Equity Securities that the Company will have capacity to issue under Listing Rule 7.1A will be calculated at the date of issue of the Equity Securities in accordance with the formula prescribed in Listing Rule 7.1A.2 (refer to Section 7.2(c) above).

(e) Minimum Issue Price

The issue price of Equity Securities issued under Listing Rule 7.1A must be not less than 75% of the VWAP of Equity Securities in the same class calculated over the 15 Trading Days on which trades in those securities were recorded immediately before:

• (i) the date on which the price at which the Equity Securities are to be issued is agreed; or

• (ii) if the Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.

(f) 10% Placement Period

Shareholder approval of the 10% Placement Facility under Listing Rule 7.1A is valid from the date of the annual general meeting at which the approval is obtained and expires on the earlier to occur of:

• (i) the date that is 12 months after the date of the annual general meeting at which the approval is obtained; or

• (ii) the date of the approval by shareholders of a transaction under Listing Rules 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking),

or such longer period if allowed by ASX ( 10% Placement Period ).

6.3

Listing Rule 7.1A

The effect of Resolution 5 will be to allow the Directors to issue the Equity Securities under Listing Rule 7.1A during the 10% Placement Period in addition to or without using the Company’s 15% placement capacity under Listing Rule 7.1.

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Korab Resources Limited

ABN 082 140 252

Annexure A

Resolution 5 is a special resolution and therefore requires approval of 75% of the votes cast by shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate Shareholder, by a corporate representative).

6.4 Specific information required by Listing Rule 7.3A

Pursuant to and in accordance with Listing Rule 7.3A, information is provided in relation to the approval of the 10% Placement Facility as follows:

Minimum issue price

• (a) The Equity Securities will be issued at an issue price of not less than 75% of the VWAP for the Company's Equity Securities over the 15 Trading Days immediately before:

• (i) the date on which the price at which the Equity Securities are to be issued is agreed; or

• (ii) if the Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.

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ABN 082 140 252

Korab Resources Limited

Annexure A

Risk of economic and voting dilution

• (b) If Resolution 5 is approved by Shareholders and the Company issues Equity Securities under the 10% Placement Facility, the existing Shareholders' voting power in the Company will be diluted as shown in the below table. There is a risk that:

• (i) the market price for the Company's Equity Securities may be significantly lower on the date of the issue of the Equity Securities than on the date of the Meeting; and

• (ii) the Equity Securities may be issued at a price that is at a discount to the market price for the Company's Equity Securities on the issue date or the Equity Securities are issued as part of consideration for the acquisition of a new asset,

• which may have an effect on the amount of funds raised by the issue of the Equity Securities.

The table below illustrates different possible dilution scenarios for Shareholders, if Shares are issued. (The table ignores the exercise of any existing options and does not address the possible issue of options under the 10% Placement Facility). The table below assumes a current issue price of $0.086 (which is close to the closing share price as at the day before the date of this Notice of Meeting), and shows the effect on the three different scenarios below if a 50% increase in that price occurs, and a 50% decrease in that price occurs. All partial numbers over 0.5 have been rounded up. The three different scenarios in the table below show variable “A” (as referred to in the formula in Listing Rule 7.1A.2) as:

• Scenario 1: the number of fully paid ordinary shares on issue, at the three different assumed issue prices;

• Scenario 2: an increase of 50% of the current number of fully paid ordinary shares on issue, at the three different assumed issue prices; and

• Scenario 3: double the current number of fully paid ordinary shares on issue (this is possible if for example the Company conducts a capital raising within the next 12 months by way of an entitlements issue to shareholders, where shareholder approval is not required under Listing Rule 7.2, or it could occur with shareholder approval under Listing Rule 7.1 being obtained during the next 12 months following the AGM), at the three different assumed issue prices.

Scenarios		Possible issue of shares	Possible issue of shares
		50% decrease in assumed current issue price - $0.043	assumed current issue price - $0.086	50% increase in assumed current issue price - $0.129
Scenario 1 118,214,927	Dilution caused by use of entire 10% Placement Facility	11,821,492 shares	11,821,492 shares	11,821,492 shares
	Funds raised	$508,324	$1,016,648	$1,524,972

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Korab Resources Limited ABN 082 140 252

Annexure A

Scenario 2 177,322,390 Shares	Dilution caused by use of entire 10% Placement Facility	17,732,239 shares	17,732,239 shares	17,732,239 shares
	Funds raised	$762,486	$1,524,972	$2,228,458
Scenario 3 236,429,854 Shares	Dilution caused by use of entire 10% Placement Facility	23,642,985 shares	23,642,985 shares	23,642,985 shares
	Funds raised	$1,016,648	$2,033,296	$3,049,945

The table has been prepared on the following assumptions:

(i) The Company issues the maximum number of Equity Securities available under the 10% Placement Facility.

(ii) The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.

(iii) The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 10% Placement Facility, based on that Shareholder’s holding at the date of the Meeting.

(iv) The table shows only the effect of issues of Equity Securities under Listing Rule 7.1A, not under the 15% placement capacity under Listing Rule 7.1.

(v) The issue of Equity Securities under the 10% Placement Facility consists only of Shares. If the issue of Equity Securities includes Listed Options, it is assumed that those Listed Options are exercised into Shares for the purpose of calculating the voting dilution effect on existing Shareholders.

(vi) The issue price is $0.086, being the closing price of the Shares on ASX on 24 October 2012 when this Explanatory Memorandum was prepared.

Period within which the 10% Placement Facility can be implemented

• (c) The Company will only issue and allot the Equity Securities during the 10% Placement Period. The approval under Resolution 5 for the issue of the Equity Securities will cease to be valid in the event that Shareholders approve a transaction under Listing Rule 11.1.2 (a significant change to the nature or scale of activities or Listing Rule 11.2 (disposal of main undertaking).

Purpose for which the 10% Placement Facility may be implemented

• (d) The Company may seek to issue the Equity Securities for the following purposes:

(i) non-cash consideration for the acquisition of the new resources assets. In such circumstances the Company will provide a valuation of the non-cash consideration as required by Listing Rule 7.1A.3; or

(ii) cash consideration. In such circumstances, the Company intends to use the funds raised towards an acquisition of new assets (including expense associated with such

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Korab Resources Limited

ABN 082 140 252

Annexure A

acquisition), continued exploration and expenditure on the Company’s current assets and/or general working capital.

The Company will comply with the disclosure obligations under Listing Rules 7.1A(4) and 3.10.5A upon issue of any Equity Securities.

Allocation policy when the 10% Placement Facility may be implemented

• (e) The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the 10% Placement Facility. The identity of the allottees of Equity Securities will be determined on a case-by-case basis having regard to the factors including but not limited to the following:

(i) the other methods (and time constraints which may be applicable in relation to raising funds) that are available to the Company, including but not limited to, a rights issue or other issue in which existing security holders can participate;

• (ii) the effect of the issue of the Equity Securities on the control of the Company;

• (iii) the financial situation and solvency of the Company; and

• (iv) advice from corporate, financial and broking advisers (if applicable).

The allottees under the 10% Placement Facility have not been determined as at the date of this Notice but may include existing substantial Shareholders and/or new Shareholders who are not related parties or associates of a related party of the Company.

Further, if the Company is successful in acquiring new resources assets, it is likely that the allottees under the 10% Placement Facility will be the vendors of the new resources assets.

Prior Approvals under Listing Rule 7.1A:

• (f) The Company has not previously obtained Shareholder approval under Listing Rule 7.1A.

Voting Exclusions:

• (g) A voting exclusion statement is included in the Notice. At the date of the Notice, the Company has not approached any particular existing Shareholder or security holder or an identifiable class of existing security holder to participate in the issue of the Equity Securities. No existing Shareholder's votes will therefore be excluded under the voting.

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Korab Resources Limited

ABN 082 140 252

Annexure B

Definitions

The meanings of capitalised terms used in this Notice of Meeting and Explanatory Memorandum are set out below:

$ means an Australian dollar.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited (ACN 008 624 691) and where the context permits the Australian Securities Exchange operated by ASX Limited.

ASX Listing Rules and Listing Rules mean the official listing rules of ASX.

Board means the board of Directors.

Company or Korab means Korab Resources Limited ABN 082 140 252

Constitution means the Company’s constitution

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

Explanatory Memorandum means the explanatory memorandum to the Notice.

Meeting has the meaning given in the introductory paragraph of the Notice.

Notice means this Notice of Annual General Meeting.

Proxy Form means the proxy form attached to the Notice.

Remuneration Report means the remuneration report contained in the Company’s Annual Report 2012.

Resolution means a resolution contained in the Notice.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a shareholder of the Company.

10% Placement Facility means the placement facility the subject of Resolution 5, pursuant to Listing Rule 7.1A.

Trading Day means a trading day within the meaning of the ASX Listing Rules.

VWAP means volume weighted average price of Shares

WST means Western Australian Standard Time.

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Korab Resources Limited

ABN 082 140 252

Proxy Form

The Company Secretary, Korab Resources Limited

By delivery: By post: Suite 6, Level 1 PO Box 195 100 Mill Point Road South Perth, WA, 6951 SOUTH PERTH WA 6951

By facsimile:

Australia – (08) 9474 6266 International - +61 8 9474 6266

I/We (name of shareholder) ..................................................................................................................................................

of (address) ..........................................................................................................................................................................

being a member/members of Korab Resources Limited hereby APPOINT

The Chairman of the Meeting OR ( mark with ‘X’ )

( Write in this box the name of the person you are appointing if this person is someone other than the Chairman of the Meeting.)

or failing that person then the Chairman of the Annual General Meeting as my/our proxy to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 30 November 2012 at 5:30 pm WST at the BGC Centre, Plaza Level, Corner of Howard Street and The Esplanade, PERTH, WA and at any adjournment of the meeting.

IMPORTANT : The Chairman of the Meeting intends to vote undirected proxies in favour of resolution 1. If the Chairman of the Meeting is your nominated proxy, or may be appointed by default, unless you  indicate otherwise by ticking either the “for”, “against” or “abstain” box in relation to Resolution 1, you will be authorising the Chairman to vote in accordance with the Chairman’s voting intentions on Resolution 1 even if Resolution 1 is connected directly or indirectly with the remuneration of a member of the Company’s Key Management Personnel.

For Against Abstain Resolution 1: Remuneration Report (advisory only) Resolution 2: Election of Director Resolution 3: Ratify issue of Shares and Options Resolution 4: Ratify issue of Shares Resolution 5: Approve 10% Placement Facility

If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your shares are not to be counted in computing the required majority on a poll. This Proxy is appointed to represent…………% of my voting right, or if 2 proxies are appointed Proxy 1 represents ………….% and Proxy 2 represents ………………..% of my total votes. Note, if a specific proportion of the shareholder’s voting rights is not specified then each proxy may exercise half of the shareholder’s voting rights. My total voting right is …………………shares.

Signed this …………..day of ……………………….. 2012 By:

IF THE SHAREHOLDER IS AN INDIVIDUAL OR JOINT HOLDER

Signature: _____

Name: _________

Signature: _____

Name: _________

IF THE SHAREHOLDER IS A COMPANY

Affix common seal (if required by Constitution)

Director/Sole Director and Secretary

Director/Secretary

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Korab Resources Limited ABN 082 140 252

Proxy Form

INSTRUCTIONS FOR APPOINTMENT OF PROXY

1. A shareholder entitled to attend and vote is entitled to appoint no more than two proxies to attend and vote at this Annual General Meeting as the shareholder’s proxy. A proxy need not be a shareholder of the Company.

2. Where more than one proxy is appointed, each proxy may be appointed to represent a specific proportion of the shareholder’s voting rights. If such appointment is not made then each proxy may exercise half of the shareholder’s voting rights. Fractions shall be disregarded.

3. The proxy form must be signed personally by the shareholder or his attorney, duly authorised in writing. If a proxy is given by a corporation, the proxy must be executed under either the common seal of the corporation or under the hand of an officer of the Company or its duly authorised attorney. In the case of joint shareholders, this proxy must be signed by at least one of the joint shareholders, personally or by a duly authorised attorney.

4. If a proxy is executed by an attorney of a shareholder, then the original of the relevant power of attorney or a certified copy of the relevant power of attorney, if it has not already been noted by the Company, must accompany the proxy form.

5. To be effective, forms to appoint proxies must be received by the Company no later than 48 hours before the time appointed for the holding of this General Meeting, that is by 5:30 pm WST on 28 November 2012 by post or facsimile to the respective addresses stipulated in this proxy form.

6. If a person present at a general meeting represents personally or by proxy, attorney or representative more than one member, on a show of hands the person is entitled to one vote only even though he or she represents more than one member.

7. A joint holder may vote at a meeting either personally or by proxy, attorney or representative as if that person was the sole holder. If more than one joint holder tenders a vote in respect of the relevant shares, the vote of the holder named first in the register who tenders a vote, whether in person or by proxy, attorney or representative, must be accepted to the exclusion of the votes of the other joint holders.

8. Unless the proxy form provides differently, the proxy has the same rights to speak, demand a poll, join in demanding a poll or act generally at the meeting as the member would have had if the member was present.

9. Unless otherwise provided in the proxy form, an appointment will be taken to confer authority:

10. (a) even though the instrument may refer to specific resolutions and may direct the proxy, attorney or representative how to vote on those resolutions, to do any of the following acts: (1) to vote on any amendment moved to the proposed resolutions and on any motion that the proposed resolutions not be put or any similar motion;

    • (2) to vote on any procedural motion, including any motion to elect the chairperson, to vacate the chair or to adjourn the meeting; and

    • (3) to act generally at the meeting; and

11. (b) even though the instrument may refer to a specific meeting to be held at a specified time or venue, where the meeting is rescheduled or adjourned to another time or changed to another venue, to attend and vote at the re-scheduled or adjourned meeting or at the new venue.

12. It is the Chairman’s intention to vote in favour of all the resolutions.

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