KORAB RESOURCES LIMITED — Capital/Financing Update 2011

Jul 28, 2011

www.korab.com.au

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KORAB RESOURCES LIMITED KORAB HOUSE

Friday 29 July 2011

GEOLSEC APPROACHED BY ONE OF THE LARGEST JAPANESE TRADING COMPANIES IN RELATION TO SECURING OFF-TAKE AGREEMENTS FOR SUPPLY OF GEOLSEC ORGANIC PHOSPHATE

• KORAB/GEOLSEC APPROACHED IN RELATION TO SECURING OFF-TAKE AGREEMENTS TO SUPPLY 150,000 TPA OF ORGANIC PHOSPHATE ROCK & POTENTIAL PARTNERSHIP TO DEVELOP AND EXPAND PRODUCTION CAPACITY

• INDICATIVE PHOSPHATE OPERATING COSTS & PRICING

• DRILLING PROGRAM AT RUM JUNGLE TO INCREASE PHOSPHATE TONNAGE & TEST VARIOUS RARE EARTHS, COPPER & NICKEL TARGETS

Korab Resources, an Australian resource development and exploration company is very pleased to advise that Korab and it’s wholly owned subsidiary Geolsec Phosphate Operations P/L have been approached by a major trading house in relation to securing off-take agreements for supply of 150,000 tonnes per annum of Geolsec Organic Phosphate.

The company seeking to secure the 150,000 tpa off-take from Geolsec is one of the largest Japanese general trading companies (sōgō shōsha) with an annual turnover of US$129 Billion and with interests in food products, food materials, forest products, chemicals, energy, metals, minerals, power, infrastructure, finance, logistics, IT business, transportation, plant & industrial machinery and real estate.

The second aim of their approach to Korab is to explore potential for a partnership to develop and/or expand Korab’s Batchelor project’s production capacity.

This announcement is made as a matter of compliance with continuous disclosure obligations pursuant to Chapter 3 of ASX listing rules and section 674 of the Corporation Act. Discussions are confidential and incomplete. Further details will be provided to the market when appropriate.

ASX KOR Last price AU¢ 14.5

BERLIN C6S.BE Last price € 0.11

Issued capital 88 million shares

ABOUT GEOSLEC PHOSPHATE

Geolsec phosphate deposit is located at Rum Jungle in close proximity to the Darwin port (70 km by 4-lane Stuart Highway) allowing for easy access to most ports in Asia and Australia (see maps and photos on pages 4-8).

Local infrastructure includes road, rail, high-voltage power, potable water and piped gas. Geolsec project is located less than 2km from the regional centre of Batchelor. Geolsec phosphate deposit extends from surface to 40-120 meters depth (see diagram on page 6) and is located on Castlemaine hill with good access by all-weather road.

Korab intends to develop the Geolsec deposit as a simple quarrying operation with negligible environmental impact. Commencement of quarrying operations at Geolsec is conditional on receiving all required permits and approvals which have not yet been secured.

INDICATIVE CAPEX, OPERATING COSTS AND PRODUCT PRICING

Market capitalisation AU$ 13 million € 10 million

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CAPEX and start-up costs are estimated at between $200,000 and $300,000. Operating costs for Geoslec Phosphate Operations Pty Ltd are expected to be as follows:

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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www.korab.com.au

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KORAB RESOURCES LIMITED KORAB HOUSE

• Indicative operating cost for bulk, un-processed, un-ground phosphate rock ~ $30 per tonne.

• Indicative operating cost for un-processed, ground-up phosphate rock in 1 tonne bulk bags ~ $70 per tonne.

• Indicative operating cost for un-processed, ground-up phosphate rock in retail-size 15-20 kg bags ~ $100 per tonne.

Ground-up phosphate rock for direct application wholesales in Australia for between $450 and $750 per 1 tonne bag. Bagged ground-up rock phosphate for direct application retails for between A$1,000 and A$1,200 per tonne (packaged in 15-20kg bags). Bulk rock phosphate for chemical processing sells for between US$160-US$180 per tonne. Phosphate rock prices can move up or down depending on supply constraints and market demand (see diagram below). However, most analysts agree that phosphate rock is likely to be in short supply and prices are likely to increase over time.

Spot price of phosphate rock for chemical processing (last 5 years)

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ASX KOR Last price AU¢ 14.5

BERLIN C6S.BE Last price € 0.11

Issued capital 88 million shares Market capitalisation AU$ 13 million € 10 million

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DRILL PROGRAM TARGETING ADDITIONAL PHOSPHATE, BASE METALS & RARE EARTHS

Korab will be shortly undertaking drilling program at Rum Jungle. This program will include 50-60 reverse circulation and diamond drill holes at Geoslec and 20 drill holes at other locations. The aim of Geoslec program is to increase the tonnage of the available phosphate rock and to drill test several phosphate anomalies (see map on page 7). In conjunction with phosphate rock drilling program, Korab will complete number of drill holes to further test several nickel, copper and other base metals targets and to test dolomite breccias for rare earths mineralisation.

Completion of the Ashburton Downs exploration programs review (see ASX announcement dated 22 July) has been delayed by a week due to unplanned “distractions”. It is expected to be completed next week and results will be released to the market when appropriate.

BENEFITS OF ORGANIC PHOSPHATE ROCK

Organic farming is the fastest growing sector of the global economy. Australia is the largest organic producer globally with 12 million hectares under organic cultivation. Geolsec’s organic phosphate fertiliser is environmentally and nutritionally superior to chemical fertilisers and can be used on a wide variety of crops and pastures.

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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www.korab.com.au

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ASX KOR Last price AU¢ 14.5

BERLIN C6S.BE Last price € 0.11

Issued capital 88 million shares

Market capitalisation AU$ 13 million € 10 million

KORAB RESOURCES LIMITED KORAB HOUSE

Organic fertilisers based on ground-up rock phosphate such as GEOLSEC offer several advantages over chemically processed soluble fertilisers such as DAP, MAP or superphosphate:

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• Organic fertilisers slowly release nutrients into the soil matching the speed at which the nutrients are being absorbed by the plants.

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• Phosphate rock has the ability to restore microelemental and microbial soil balance which in turn leads to less reliance on artificial fertilisers and better crop yields.

• Plants grown on organic phosphate rock fertiliser have a better nutritional quality.

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• Because of phosphate rock's unique chemical composition, incorporation of phosphate rock into the soil enhances its biological activity and increases soil carbon (C) accumulation, leading to improved soil fertility and restoration of its physical and chemical properties.

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• Phosphate rocks for direct application can be more efficient than artificial fertilizers in terms of phosphorus (P) recovery by plants under certain conditions. Based on the unit cost of P, natural phosphate rock is usually the cheapest.

• Organic phosphate rock is a source of several nutrients other than P. Rock phosphates are usually applied to replenish soil P status, but phosphate rock also provides other nutrients not present in soluble fertilisers. Application of organic phosphate has a potential trigger effect on plant growth and crop yields as a result not only of phosphorus release but also because of phosphate rock's effect on increasing exchangeable calcium (Ca) and reducing aluminium saturation.

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• Use of organic phosphate instead of chemically processed phosphate avoids the serious environmental degradation caused by increased concentrations of fertilisers in the ground water, the rivers and the coastal waters. Use of organic phosphate rock reduces the risk of harmful accumulation of nutrients in the soil and reduces soil salinity problems

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• Phosphate rocks are natural minerals requiring minimum metallurgical processing. Their direct application avoids the production of polluting wastes such as phospho-gypsum and greenhouse gases, thus resulting in energy conservation and protection of environment from industrial pollution.

Geolsec, Batchelor and Green Alligator projects form the Rum Jungle group where Korab has 100% rights to all minerals other than gold and uranium and thorium and 10% rights to uranium and thorium. Uranium Australia Ltd (which is in the process of adopting new name “Polymetallica Minerals Ltd) has 90% rights to uranium and thorium. Melrose Gold Mines Ltd has 100% rights to gold.

CONTACT: Andrej K. Karpinski - Executive Chairman, in Australia: (08) 9474 6166

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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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www.korab.com.au

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KORAB RESOURCES LIMITED KORAB HOUSE

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 polymetallic exploration projects at Ashburton Downs and Tucker Creek in Western Australia and at Rum Jungle in the Northern Territory. 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 Australian Securities Exchange (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.

Korab’s Rum Jungle projects have unrivalled logistics & transport options

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----- Start of picture text ----- JAPAN----- End of picture text -----

ASX KOR Last price AU¢ 14.5

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----- Start of picture text ----- GEOLSEC----- End of picture text -----

BERLIN C6S.BE Last price € 0.11

Issued capital 88 million shares Market capitalisation AU$ 13 million € 10 million

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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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www.korab.com.au

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KORAB RESOURCES LIMITED KORAB HOUSE

Port of Darwin – 70 km by road or rail from Geolsec

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4-lane Stuart Highway from Geolsec, Batchelor and Green Alligator projects to Darwin

ASX KOR Last price AU¢ 14.5

BERLIN C6S.BE Last price € 0.11

Issued capital 88 million shares

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Market capitalisation AU$ 13 million € 10 million

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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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www.korab.com.au

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KORAB RESOURCES LIMITED KORAB HOUSE

Geolsec project and Winchester deposit locations – Google Earth image

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----- Start of picture text ----- 2 km70km to DarwinStuart HighwayBatchelor RoadRailway Line----- End of picture text -----

Geolsec phosphate deposit – cross section “SW-NE” (location of this cross-section is shown on surface map on page 7)

ASX KOR Last price AU¢ 14.5

BERLIN C6S.BE Last price € 0.11

Issued capital 88 million shares Market capitalisation AU$ 13 million € 10 million

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----- Start of picture text ----- HISTORICAL DRILL HOLES & LITHOLOGYMAJOR FAULT LINEPHOSPHATE ROCK50 Meters Vertical scaleexaggerated100%100 Meters----- End of picture text -----

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

www.korab.com.au

Geolsec project - Geolsec phosphate deposit surface outcrop, phosphate anomalies & location of the cross section “SW-NE” from page 6.

ASX KOR Last price AU¢ 14.5

BERLIN C6S.BE Last price € 0.11

Issued capital 88 million shares

Market capitalisation AU$ 13 million € 10 million

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----- Start of picture text ----- PHOSPHATEANOMALIES TO BEDRILL TESTEDOUTCROP OFGEOLSECNEPHOSPHATEDEPOSITSW----- End of picture text -----

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

www.korab.com.au

Korab’s Rum Jungle group of projects – geology, deposits, anomalies & infrastructure

ASX KOR Last price AU¢ 14.5

BERLIN C6S.BE Last price € 0.11

Issued capital 88 million shares Market capitalisation AU$ 13 million € 10 million

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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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