KORAB RESOURCES LIMITED — Capital/Financing Update 2011

Oct 23, 2011

www.korab.com.au

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KORAB RESOURCES LIMITED KORAB HOUSE

Monday, 24 October 2011

KORAB INTERCEPTS 163 METRES OF SULPHIDES AT BATCHELOR PROJECT NEAR RUM JUNGLE

• 140 METRE INTERVAL OF ULTRAMAFICS WITH VISIBLE DISSEMINATED SULPHIDES INTERCEPTED IN DIAMOND DRILL HOLE

• 23 METRE INTERVAL OF BLACK SHALES WITH LARGE QUANTITIES OF VISIBLE VEIN SULPHIDES AND PYRITE INTERCEPTED BELOW ULTRAMAFICS

• HOLE TERMINATED IN MINERALISATION AT 234 METRES AFTER INTERCEPTING 163 METRES OF SULPHIDE MINERALISATION. MINERALISATION REMAINS OPEN AT DEPTH

• CORE WILL BE SCANNED USING HYLOGGER SCANNER OPERATED BY NORTHERN TERRITORY GEOLOGICAL SURVEY PRIOR TO ASSAY TESTING

• MICROSCOPIC MINERALOGICAL ANALYSIS CONFIRMS THAT PENTLANDITE (NICKEL), CHALCOPYRITE (COPPER) AND PYRRHOTITE (IRON) ARE THE DOMINANT METAL BEARING MINERALS

ASX KOR Last price AU¢ 18.5

BERLIN C6S.BE Last price € 0.14

Issued capital 88 million shares

Market capitalisation AU$ 16 million € 12 million

• REVERSE CIRCULATION DRILLING PROGRAM TO COMMENCE ON TUESDAY TO TEST OTHER NICKEL/POLYMETALLIC ANOMALIES DISCOVERED BY ROCK-CHIP, SOIL SAMPLING AND RC DRILLING

• NOTICE RECEIVED FROM NT DEPARTMENT OF RESOURCES THAT GEOLSEC DRILLING PROGRAM APPROVAL IS READY TO BE GRANTED. GEOLSEC DRILLING TO COMMENCE FOLLOWING COMPLETION OF THE CURRENT PROGRAM

Korab is pleased to advise the market that it has intercepted approximately 163 metres of visible disseminated sulphides (see Figures 1 and 2) in diamond drill hole KODD11-004 drilled at “Siltstone” nickel/polymetallic anomaly located near the town of Batchelor in the Northern Territory.

Hole was drilled as a HQ diameter diamond tail from the end of RC hole KORC10-004 (drilled in 2010). Tie-in was at 60 metres and bottom of the hole was at 234 metres. Mineralisation extends from 71 metres depth to the bottom of the hole and remains open at depth.

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LEVEL 1, SUITE 6, 100 MILL POINT ROAD, SOUTH PERTH, WA, 6151 AUSTRALIA PO BOX 195, SOUTH PERTH, WA, 6951 AUSTRALIA TEL (08) 9474 6166 FAX (08) 9474 6266 ACN 082 140 252

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KORAB RESOURCES LIMITED KORAB HOUSE

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Figure 1. Visible sulphide mineralisation in diamond core from hole KODD11-004

ASX KOR Last price AU¢ 18.5

BERLIN C6S.BE Last price € 0.14

Issued capital 88 million shares

Market capitalisation AU$ 16 million € 12 million

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Figure 2. Visible sulphide mineralisation in diamond cores of hole KODD11-004

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LEVEL 1, SUITE 6, 100 MILL POINT ROAD, SOUTH PERTH, WA, 6151 AUSTRALIA PO BOX 195, SOUTH PERTH, WA, 6951 AUSTRALIA TEL (08) 9474 6166 FAX (08) 9474 6266 ACN 082 140 252

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KORAB RESOURCES LIMITED KORAB HOUSE

Core recovery was close to 100% along the whole length of the hole. KORDD11-004 has intercepted 140 metre interval of ultramafic rocks with visible disseminated sulphides from 71 metres to 211 metres. Below the ultramafics, the hole has intercepted 23 metre interval of black shales rich in visible vein sulphides and pyrite. In total, 163 metre interval of visible sulphide mineralisation was intercepted before KORDD11-004 was terminated at 234 metres, still within sulphide mineralisation which remains open at depth. Hole has been surveyed to determine its true orientation and results will be reported when available. Core will be scanned using HyLogger scanning system operated by the Northern Territory Geological Survey. HyLogger allows for quick and precise determination of minerals within the core along the whole length of core. Core samples will also be sent for assay testing and results will be reported to the market when available. Pending the receipt of results from HyLogging and assay tests, Korab will commence on Tuesday reverse circulation (RC) drilling program to test other polymetallic anomalies within Batchelor and Green Alligator projects.

Microscopic mineralogical and petrological analysis of the samples by Pontifex and Associates (2009/2010) confirms that pentlandite is the main source of the nickel minerals and chalcopyrite is the dominant copper mineral. The other main mineral is pyrrhotite. (see Figure 3).

ASX KOR Last price AU¢ 18.5

BERLIN C6S.BE Last price € 0.14

Issued capital 88 million shares

Market capitalisation AU$ 16 million € 12 million

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Figure 3. Reflected light (RL)/polished section (PS). Magnification (x500). Composite sulphide grain of greyish-brown pyrrhotite incorporating cream coloured partly flame-like intergrowths of pentlandite, locally with sparse yellowish chalcopyrite.

Presence of pentlandite, chalcopyrite and pyrrhotite at “Siltstone” is of special interest to Korab. Pentlandite, chalcopyrite and pyrrhotite are the dominant minerals at Voiseys Bay complex in Canada. Furthermore, relative ratios of nickel, cobalt, copper and other metals in assayed samples from “Siltstone” resemble the relative ratios of these metals at Voisey's Bay Mine. Whilst the assayed grades of samples from Korab holes drilled in 2010 are lower than ore-grade material (see Figure 4 for typical grades of major nickel deposits) the presence of elevated nickel/polymetallic mineralisation across drill intervals exceeding 100 metres in multiple holes, the lateral extent of the elevated nickel values in soil and rock chips over an area exceeding 1,200 metres in length, all indicate potential for a significant nickel/polymetallic deposit.. Importantly, Korab has discovered nickel/polymetallic

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LEVEL 1, SUITE 6, 100 MILL POINT ROAD, SOUTH PERTH, WA, 6151 AUSTRALIA PO BOX 195, SOUTH PERTH, WA, 6951 AUSTRALIA TEL (08) 9474 6166 FAX (08) 9474 6266 ACN 082 140 252

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KORAB RESOURCES LIMITED KORAB HOUSE

mineralisation in a geological unit which historically, has not been considered to be nickeliferous and hence has received very little (if any) attention by explorers targeting nickel.

Pentlandite is usually found within the lower margins of mineralised layered intrusions, such as the Voiseys Bay intrusive complex in Canada, the Bushveld igneous complex in South Africa and various others. Pentlandite is also the principal ore mineral in Kambalda type komatiitic nickel ore deposits in the Yilgarn Craton of Western Australia. Similar deposits exist at Nkomati, Namibia, in the Thompson Belt, Canada, and in Brazil. Pentlandite, chalcopyrite and PGEs is the dominant mix in the giant Norilsk nickel deposit in Russia while pentlandite-pyrite-pyrrhotite is the dominant mix at Sudbury deposit in Ontario, Canada.

ASX KOR Last price AU¢ 18.5

BERLIN C6S.BE Last price € 0.14

Issued capital 88 million shares Market capitalisation AU$ 16 million € 12 million

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Figure 4. Grades of major nickel deposits versus tonnage of resource

HISTORY OF “SILTSTONE” NICKEL/POLYMETALLIC ANOMALY

In 2010, as part of an evaluation of multiple widespread zones of nickel, cobalt, copper, lead and zinc anomalism at Korab’s Batchelor project located 70km south of Darwin in the Northern Territory,

LEVEL 1, SUITE 6, 100 MILL POINT ROAD, SOUTH PERTH, WA, 6151 AUSTRALIA PO BOX 195, SOUTH PERTH, WA, 6951 AUSTRALIA TEL (08) 9474 6166 FAX (08) 9474 6266 ACN 082 140 252

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KORAB RESOURCES LIMITED KORAB HOUSE

Korab has drilled a number of reverse circulation holes to test various polymetallic anomalies (with nickel being the major metal) stretching over a distance of several kilometres.

The largest of these anomalies, “Siltstone”, covers an area of approximately 1,200 metres long by 270 metres wide (see Figure 5). “Siltstone” has significantly elevated nickel, cobalt, vanadium, copper and titanium values in soil and rock chip samples. Korab’s RC drilling program completed between September and November 2010 at “Siltstone” intercepted predominantly nickel anomalism over wide intervals in two holes.

Hole KORC10-002 intercepted 48 metres of ultramafics containing elevated nickel from surface. Hole KORC10-001 drilled 50 m to the south of KORC10-002 intercepted 102 metres of ultramafics containing elevated nickel from surface. Holes KORC10-003 and KORC10-004 did not reach the ultramafic target. Analysis of geochemistry and drill log data from 2010 drilling program suggested that the ultramafic unit hosting the nickel/polymetallic mineralisation deeps to the south-south/east. Hole KODD11-004 has confirmed this theory intercepting the ultramafics at 71 metres depth at a distance of 150 metres to the south from KORC10-002 and 100 metres south of KORC10-001 (see Figure 5).

ASX KOR Last price AU¢ 18.5

BERLIN C6S.BE Last price € 0.14

Issued capital 88 million shares

Market capitalisation AU$ 16 million € 12 million

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Figure 5. 'SILTSTONE" anomaly with drillhole locations and structural features

Following the completion of the diamond drilling program Korab will commence on Tuesday an RC drilling program at a nearby anomaly where elevated nickel/copper values coincide with a buried conductor evident from electromagnetic survey. More information will be provided to the market when appropriate. For details of previous drilling at “Siltstone” please see ASX announcements dated 25 October 2010, 1 November 2010, 18 November 2010 and 22 November 2010 and 1 January 2011 (links are provided below):

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LEVEL 1, SUITE 6, 100 MILL POINT ROAD, SOUTH PERTH, WA, 6151 AUSTRALIA PO BOX 195, SOUTH PERTH, WA, 6951 AUSTRALIA TEL (08) 9474 6166 FAX (08) 9474 6266 ACN 082 140 252

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http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01111493 http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01116029 http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01122183 http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01123158 http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01147117

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Figure 6. Drilling and core logging at “SILTSTONE”

GEOLSEC DRILLING

ASX KOR Last price AU¢ 18.5

BERLIN C6S.BE Last price € 0.14

Issued capital 88 million shares

Market capitalisation AU$ 16 million € 12 million

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Korab has received notice from the NT Department of Resources that the permit for the Geolsec drilling program is ready to be issued. Because Geolsec is easily accessible during the wet season it will be drilled following the completion of the current drilling program which is targeting anomalies located at sites not easily accessible during the wet season (eg. Siltstone). The aim of Geoslec program is to increase the tonnage of the available phosphate rock and to drill test several phosphate anomalies discovered by Korab through systematic evaluation of the Castlemaine Hill where Geolsec is located. This evaluation commenced in 2008 and has lead to discovery of several phosphate anomalies based on radiometric surveys, auger drilling, soil sampling and rock chip sampling. The lateral extent and the footprint of the phosphate anomalies which will be drill tested significantly exceeds the footprint of the Geolsec deposit (For plan view of all phosphate anomalies plotted over geology and auger drilling results see Figure 7).

Over the last 2 years Korab has received number of offers from domestic and overseas entities to enter into offtake agreements as well as various long term supply arrangements. The Company has also received offers to enter into joint venture arrangements where Geolsec project would be developed by a third party with Korab receiving royalty payments. All of these discussions remain incomplete. Korab is evaluating these options and opportunities with the aim of maximising long term shareholder value.

LEVEL 1, SUITE 6, 100 MILL POINT ROAD, SOUTH PERTH, WA, 6151 AUSTRALIA PO BOX 195, SOUTH PERTH, WA, 6951 AUSTRALIA TEL (08) 9474 6166 FAX (08) 9474 6266 ACN 082 140 252

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OUTLINE OF KNOWN GEOLSEC MINERALISATION

ASX KOR Last price AU¢ 18.5

BERLIN C6S.BE Last price € 0.14

Issued capital 88 million shares Market capitalisation AU$ 16 million € 12 million

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Figure 7. Geolsec project showing outline of known phosphate mineralisation and all first order radiometric and geochemical anomalies (marked in red) to be drilled. Anomalies are displayed on local geology and geochemical test results from auger drilling (blue dots)

LEVEL 1, SUITE 6, 100 MILL POINT ROAD, SOUTH PERTH, WA, 6151 AUSTRALIA PO BOX 195, SOUTH PERTH, WA, 6951 AUSTRALIA

TEL (08) 9474 6166 FAX (08) 9474 6266 ACN 082 140 252

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KORAB RESOURCES LIMITED KORAB HOUSE

Batchelor, Geolsec and Green Alligator projects form the Rum Jungle projects where Korab has 100% rights to all mineral other than gold, uranium and thorium and 10% rights to uranium and thorium. Polymetallica Minerals Ltd has 90% rights to uranium and thorium. Melrose Gold Mines Ltd has 100% rights to gold. The projects are located 70 km by 4-lane Stuart Highway from the capital of the Northern Territory, Darwin and less than 2km from the regional centre of Batchelor (see Figure 8). Local infrastructure includes high voltage power, gas pipeline, transcontinental railway line, major highway, and potable water.

CONTACT: Andrej K. Karpinski - Executive Chairman Telephone: (08) 9474 6166

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60 KM
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Korab’s
Projects
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Figure 8. Location of Korab projects relative to Darwin and Batchelor (A)

ASX KOR Last price AU¢ 18.5

BERLIN C6S.BE Last price € 0.14

Issued capital 88 million shares

Market capitalisation AU$ 16 million € 12 million

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ABOUT KORAB RESOURCES LIMITED

Korab Resources Ltd is an Australian mining and exploration company based in Perth with operations in Australia and Europe. Korab’s quarrying and mining projects include rock phosphate and magnesium. The company also manages exploration projects in Western Australia and the Northern Territory where it is exploring for rare earths, nickel, copper, other base metals, iron ore and phosphates. More information about Korab’s projects can be sourced from our website at www.korabresources.com.au Korab’s shares are listed on Australian Securities Exchange (ASX) and trade on ASX and on the Berlin Stock Exchange (Berliner Börse).

Competent Person: The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Andrew Hawker, who is an independent geological consultant and is a member of The Australasian Institute of Mining and Metallurgy. Andrew Hawker has in excess of 5 years experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which 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’. Andrew Hawker consents to the inclusion in the report of the matters based on his information in the form and context in which it appears .

LEVEL 1, SUITE 6, 100 MILL POINT ROAD, SOUTH PERTH, WA, 6151 AUSTRALIA PO BOX 195, SOUTH PERTH, WA, 6951 AUSTRALIA TEL (08) 9474 6166 FAX (08) 9474 6266 ACN 082 140 252

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