KORAB RESOURCES LIMITED — Capital/Financing Update 2012

Dec 30, 2012

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KORAB RESOURCES LIMITED KORAB HOUSE

www.korab.com.au

31 December 2012

WINCHESTER MAGNESIUM DEPOSIT SALE

Korab Resources Ltd (ASX: KOR) (“Korab” or “Company”) is pleased to advise that it has executed a Short Form Agreement to sell the Winchester magnesium deposit (the Assets) for up to $33.2 million in cash and royalties to Augur Investments Oü, a diversified Estonian investment company with interests in mining, infrastructure and commercial property development.

The Company negotiated sale price of $2 per tonne of JORC code compliant magnesite resource. The current resource base consists of an indicated resource of 12.2Mt at 43.1% MgO and an inferred resource of 4.4Mt at 43.6% MgO.

JORC COMPLIANT GOLD RESOURCE 2.38 MLN ounces*

ISSUED CAPITAL 123 MLN shares 44 MLN options

$16.6 million of the consideration ($1 per tonne of resource) will be payable on completion of the sale and an additional $1 per tonne per tonne of resource ($16.6 million) will be payable as a royalty on each tonne of magnesite mined from the deposit. The amount of royalties will be capped at $16.6 million. The agreement is binding upon the parties but is subject to the following conditions precedent to be fulfilled by 31 March 2013:

1. Korab obtaining all regulatory and other approvals necessary for the sale of the Assets including the consent of the Minister under the Northern Territory Mineral Titles Act ; and

2. Buyer confirming by written notice to Korab that no information has arisen as a result of their due diligence enquiries in relation to the Assets which could be materially adverse to the operation of a magnesite mining project.

WINCHESTER MAGNESITE PROJECT (100% KORAB)

The Winchester magnesite deposit is located within the Batchelor project, 70km south from Darwin in the Northern Territory, with access to excellent basic infrastructure and logistics such as rail, gas, a sealed highway and high voltage power. Previous drilling at Batchelor to a depth of 100m outlined a high grade zone of magnesium mineralisation 7.5km long and 500m wide. Mineralisation is open at depth. Close spaced drilling over the area 550m by 300m, which covers less than 5% of the mineralised zone, outlined an indicated resource of 12.2Mt at 43.1% MgO and an inferred resource of 4.4Mt at 43.6% MgO.

-ENDS-

FOR FURTHER INFORMATION, CONTACT :

ACN 082 140 252 Level 1, Suite 6 100 Mill Point Rd, South Perth, WA, 6151 Australia PO Box 195, South Perth, WA, 6951 Australia Tel (08) 9474 6166 Fax (08) 9474 6266

Andrej Karpinski Executive Chairman (08) 9474 6166

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*** see Appendix A on page 2 for details**

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APPENDIX A

WINCHESTER MINERAL RESOURCE STATEMENT

Indicated resource of 12.2 Mt at 43.1% MgO Inferred resource of 4.4 Mt at 43.6% MgO

BOBRIKOVO MINERAL RESOURCE STATEMENT AT VARIOUS CUT‐OFF GRADES

- Current mineral resource above 0.5 g/t au cut off grade

Resource by category
At 0.5 g/t Au cut-off	VOLUME	ORE_MASS	AU_CONTENT	AU_MASS	AU_MASS
	[1000m3]	[1000t]	[g/t]	[t]	[Mln oz.]
Measured	664.130	1,660.321	2.053	3.409	0.110
Indicated	2,909.636	7,274.089	2.792	20.313	0.653
Inferred	11,263.358	28,158.399	1.412	39.749	1.278
Total	14,837.124	37,092.809	1.711	63.471	2.041

Totals may differ due to rounding

- Current mineral resource above 2 g/t au cut off grade

JORC COMPLIANT GOLD RESOURCE 2.38 MLN ounces*

ISSUED CAPITAL 123 MLN shares 44 MLN options

Resource by category
At 2 g/t Au cut-off	VOLUME	ORE_MASS	AU_CONTENT	AU_MASS	AU_MASS
	[1000m3]	[1000t]	[g/t]	[t]	[Mln oz.]
Measured	188.577	471.443	4.720	2.225	0.072
Indicated	1,289.213	3,223.033	4.559	14.694	0.472
Inferred	1,409.386	3,523.466	5.118	18.034	0.580
Total	2,887.177	7,217.942	4.843	34.953	1.124

Totals may differ due to rounding

MELROSE MINERAL RESOURCE STATEMENT

Current mineral resource above 0.5 g/t au cut-off grade

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----- Start of picture text ----- Category Tonnes Grade g/t Au Gold OuncesMeasuredBoundary 652,154 1.73 36,262IndicatedBoundary 2,662,763 1.73 148,506InferredBoundary 703,209 1.36 30,822Bungarra 2,144,332 1.56 107,385Stirling 404,000 1.31 17,000Total Resource 6,566,458 1.61 339,975----- End of picture text -----

Competent Person: The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled and reviewed by Andrew Hawker, who is a principal geological consultant for HGS Australia Exploration Services 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.

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