KORAB RESOURCES LIMITED — Capital/Financing Update 2011

Feb 22, 2011

www.korab.com.au

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KORAB RESOURCES LIMITED KORAB HOUSE

Wednesday, 23 February 2011

MELROSE GOLD MINES (MGH) UPDATE

Following successful completion of Korab Share Purchase Plan dated 24 January 20011 (the SPP) that has closed early and was heavily oversubscribed Korab Resources Ltd has agreed to transfer to Melrose Gold Mines Limited (MGH) on temporary basis contract personnel who managed Korab’s SPP. The aim of this is to provide support where appropriate, to assist in faster completion of the pre-IPO process and to co-ordinate the actual IPO.

MGH is currently in the process of finalising its IPO prospectus including various amendments which became necessary as a consequence of changes to some of the agreements between MGH and other parties. As reported at the end of January, MGH is aiming to complete this process in early March and would like to issue its IPO prospectus shortly after that. Korab’s contact personnel will assist in this process and will co-ordinate the actual IPO of MGH.

Korab is keen to assist in expediting the IPO’s of Melrose and Uranium Australia. Korab has joint venture arrangements over a number of projects. with either Melrose, or Uranium Australia, or both. Exploration programs at the projects which are subject to joint ventures with MGH or UAU will be put on hold pending the IPO’s of these two companies. Consequently, expediting the IPO’s processes will assist in fast-tracking of Korab’s own exploration at the projects being subject to joint ventures.

While the IPO’s of MGH and UAU are under way, Korab’ will continue development work on its quarrying and mining assets focusing on Geolsec phosphate project and Winchester magnesium project, both located at Rum Jungle within Pine Creek Orogen of the Northern Territory. More information about Geolsec and Winchester projects and their development potential can be sourced from Korab’s ASX announcements of 4 February 2011 and 8 February 2011 and from Korab’s website.

Updates regarding the IPO’s of Uranium Australia Limited (UAU) and Lugansk Gold Limited (LUG) will be provided shortly.

MELROSE GOLD MINES (MGH) PROJECTS AND THEIR PROGRAMS OF WORK

Melrose Gold Project (Eastern Goldfields, WA)

Uranium Australia 90% of uranium, Melrose 10% of uranium and 100% of all commodities other than uranium.

ASX KOR Last price AU¢ 32.5

• Mineral resource of 340,000 ounces AU in measured, indicated and inferred categories

• Deposits are located on granted mining leases

• Mineralisation open at depth and along strike

BERLIN C6S.BE Last price € 0.24

Issued capital 88 million shares

Market capitalisation AU$ 29 million € 21 million

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Melrose gold project is located in the Eastern Goldfields of Western Australia and contains a JORC code compliant resource of approximately 340,000 ounces of gold in measured, indicated and inferred categories (see table below).

(see table below).
JORC Code compliant	resource at Melrose (Above 0.5 g/t cut-off)
Category	Zone	Ore Mass (t)	Grade (g/t)	Ounces
Measured	Boundary	652,154	1.73	36,262
Indicated	Boundary	2,662,763	1.73	148,506
Inferred	Boundary	703,209	1.36	30,822
	Bungarra	2,144,332	1.56	107,385
	Stirling	404,000	1.31	17,000
TOTAL RESOURCE		6,566,458	1.61	339,975

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

In anticipation of the IPO, MGH has submitted to the Department of Mines and Petroleum program of works for a drilling program at the Melrose gold project. This program will consist of diamond and RC holes to be drilled within Boundary, Bungarra and Hurleys deposits. The aim of the program is to improve resource classification, test for extensions to know resource and to provide samples for metallurgical and geotechnical studies necessary for pit and process design. All necessary equipment and personnel are currently on stand-by and the program will commence either just prior to the listing of MGH on ASX or immediately after.

Ashburton Downs Project (Pilbara, WA)

Melrose 100% of gold, Korab 10% of uranium and 100% of all commodities other than gold and uranium, Uranium Australia 90% of uranium.

• Porphyry and hydrothermal gold and copper mineralisation

• Rock-chip samples assay up to 29 g/t

• Target anomalies extending over 27 km strike and are associated with a major fault

• Largest target anomaly is 10km by 3 km

Melrose and Korab intend to submit shortly program of works for extensive MMI sampling program at the Ashburton Downs copper/gold project where it owns 100% rights to gold. Ashburton Downs project where Korab and Melrose have a joint venture, is located in the Pilbara in Western Australia and has potential for hydrothermal gold and copper mineralisation associated with four large-scale alterations suggesting widespread hydrothermal activity. These alterations extend over a distance of 27 km. The largest of the anomalies has a surface expression of 10 km long by up to 3 km wide and is associated with a major fault structure. Past exploration has been limited to evaluation of the small area located in the vicinity of multiple outcropping gossans. Rock chip values from this area ranged up to 29 g/t gold. Diamond drilling in the vicinity intercepted volcanic hosted sulphides assaying up to 1.3% copper in multiple holes. All holes intersected ore minerals containing ankerite, chalcopyrite and pyrite. Rock-chip samples collected from nearby gossan/quartz vein assayed up to 10% copper. Diagrams showing anomalies and the locations of the samples are attached on page 4. Similarly to the Melrose diamond drilling program, all necessary equipment and personnel required for this MMI sampling program are currently on stand-by and the program will commence either just prior to the listing of MGH on ASX or immediately after.

Wonganoo Project (Eastern Goldfields, WA)

Melrose 100% of gold, Uranium Australia 100% of all commodities other than gold.

ASX KOR Last price AU¢ 32.5

BERLIN C6S.BE Last price € 0.24

Issued capital 88 million shares

Market capitalisation AU$ 29 million € 21 million

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• High grade zone of gold anomalism extending over 1.5 km confirmed by shallow drilling and soil sampling

At Wonganoo project (adjoining the Melrose project) a wide zone of soil gold anomalism has been drilled to assess potential for additional resource in proximity to the Melrose gold deposits. This drilling program has discovered high grade gold mineralisation extending over 1.5 km strike length with similar tenor to the nearby Bronzewing gold mine . This target will be drilled in the first 3 months after listing of MGH on ASX following the completion of the diamond and RC drilling program at Melrose deposits.

Darlot East Project (Eastern Goldfields, WA) Melrose 100% of all commodities.

• Wide zone of gold anomalism conformed by first-pass drilling and lag sampling indicates potential for structurally controlled deposits formed synchronously with the 3 million ounce Darlot gold deposit located just 3km due west

Another gold exploration project is Darlot East project located near Leinster in the Eastern Goldfields. The project is located just 3 km east of the Darlot and Centenary gold mines. At the Darlot East project independent

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

consultants have identified exploration targets for structurally controlled deposits that formed synchronously with the 3 million ounce Darlot gold deposit. Previous work which included first-pass drilling, rock-chip and soil sampling has confirmed a wide zone of gold anomalism. This target will be drilled in the first 3 months after listing of MGH on ASX following the completion of the diamond and RC drilling program at Melrose deposits.

Rum Jungle Projects (Pine Creek, NT)

Melrose 100% of gold, Korab 10% of uranium and 100% of all commodities other than gold and uranium, Uranium Australia 90% of uranium.

• Massive auriferous pyrite with drill intercepts of 7.1m at 45.2 g/t Au, 11m at 12.1 g/t Au, Au

• Two other anomalies present within 10 km distance with drill intercepts of 11 meters at 6.4 g/t Au, 7m at 8.53 g/t Au, 12 meters at 2.98 g/t

• Several geochemical anomalies that have not been drilled indicate wide-spread gold mineralisation

Other MGH exploration projects are located at Rum Jungle within the Pine Creek orogen in the Northern Territory. Rum Jungle projects include the Sundance gold mine where shallow oxidised ore was removed for toll treatment in a relatively high grade open-cut operation with a mined grade of 10.7 g/t gold. Primary ore which was intersected in drilling below the open-cut pit comprises massive auriferous pyrite. Drill samples below the pit include 7.1 meters at 45.2 g/t Au and 11 meters at 12.1 g/t Au . Sundance is located on granted mining leases. Drill samples from the area to the east of Sundance pit include intercepts of 11 meters at 6.4 g/t Au , 7 meters at 8.53 g/t Au , 12 meters at 2.98 g/t Au and 7 meters at 2.56 g/t Au . This and other targets at Rum Jungle projects will be drilled within 6 months after the listing of MGH on ASX.

MELROSE GOLD MINES (MGH) IPO PRIORITY OFFER

ASX KOR Last price AU¢ 32.5

Korab shareholders wishing to apply for MGH shares to be issued under the IPO prospectus will have priority ahead of other applicants. The priority IPO ratio has been determined as greater of $2,000 worth of MGH shares, or 1 MGH IPO share for each 6 Korab shares. Korab has approximately 1,460 shareholders, including 1,300 shareholders who hold fewer than 60,000 Korab shares each. These shareholders will be entitled to apply for 10,000 MGH IPO shares each (or $2,000 worth of MGH shares per shareholder). In aggregate this represent approximately 13 million MGH shares. The remaining Korab shareholders who hold in aggregate approximately 68 million Korab shares will be entitled to apply for approximately 11.3 million MGH shares. In total, Korab shareholders will be able to apply on priority basis for approximately 24.3 million shares in the IPO of MGH. MGH plans to issue between 25 and 27 million shares at 20 cents each to raise between $5 million and $5.4 million. Consequently, should all Korab shareholders decide to take advantage of their priority offer, it is possible that a small number of IPO shares would be left available for non-Korab investors.

CONTACT

Andrej K. Karpinski - Executive Chairman, in Australia: (08) 9474 6166, International: +61 8 9474 6166

ABOUT KORAB RESOURCES LIMITED

BERLIN C6S.BE Last price € 0.24

Issued capital 88 million shares

Market capitalisation AU$ 29 million € 21 million

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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. 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

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

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.

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Ashburton Downs Project – Anomalies

ASX KOR Last price AU¢ 32.5

BERLIN C6S.BE Last price € 0.24

Issued capital 88 million shares

Market capitalisation AU$ 29 million € 21 million

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Ashburton Downs Project – Sample Locations

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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