KORAB RESOURCES LIMITED — Capital/Financing Update 2012

Oct 29, 2012

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KORAB RESOURCES LIMITED KORAB HOUSE

www.korab.com.au

30 October 2012

KORAB PLACES 5 MILLION SHARES TO AN OFFSHORE GOLD FUND

Korab Resources Limited (ASX:KOR, “Korab” or “the Company”) is pleased to announce it has agreed to issue 5 million shares to an offshore gold fund. The shares will be issued at 9.2 cents per share representing an 8.2% premium to Korab’s closing share price.

Korab will principally use the proceeds from the placement to advance mining and exploration activities at the Bobrikovo gold project in Ukraine, which boasts a JORC resource of over 2 million ounces of gold* with significant scope for growth. Funds will also be utilised to fund exploration and evaluation work at the 340,000 ounce* Melrose gold project in Western Australia, and to meet ongoing working capital requirements.

The Placement is being completed pursuant to the Company’s 15 per cent capacity under ASX Listing Rule 7.1.

ISSUED CAPITAL 118 MLN shares 39 MLN options

JORC COMPLIANT GOLD RESOURCE 2.38 MLN ounces

ABOUT BOBRIKOVO GOLD PROJECT

The Bobrikovo gold mine is located in Eastern Ukraine in the Lugansk Oblast (Province). Korab’s 100% owned subsidiary, Lugansk Gold Limited has been mining and stockpiling oxide ore and has commenced the development of the processing plant and other mine infrastructure. It is planned to develop the project as a simple open cut mine processing ore into concentrate using low‐cost gravity‐based plant. The concentrate is most likely to be smelted on site to produce doré bars.

As announced to ASX on 15 October 2012, grade reconciliation work completed on the mineral resource mined at Bobrikovo has shown the actual overall gold grades of material mined exceed gold grades predicted by the block model by 38%. This variation is even higher for what was considered to be the low‐grade zone of the resource mined. Grade reconciliation work conducted by the Company on the material mined from open pit levels 1 and 2 has shown that the mined grade of the low‐grade rock is approximately 2.60 g/t Au which is 62% higher than the 1.6 g/t Au grade predicted by the block model. Grade reconciliation work also confirmed the mined grade of high‐grade rock is approximately 4.8 g/t Au which is consistent with gold grades predicted by the block model.

As announced to ASX on 8 October 2012, the mineral resource at the Bobrikovo gold mine was upgraded to 2.041 million ounces contained in 37 million tonnes grading 1.71 g/t Au at cut‐off grade 0.5 g/t Au*. The deposit is open at depth and along strike. Korab has completed the planning of a drilling program, to test for extensions of the mineralisation below the open pit. This program is fully permitted and Korab is currently in the process of securing drill rigs.

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

The Company is also in the final stages of planning a second drilling program to test the gaps in the known mineralisation where no holes were drilled to date but where geochemical anomalies and geophysical analyses suggest the potential for continuity of the gold mineralisation (see diagram on page 2 for drill targets). Planning and design of this second program is nearing completion and when completed it will be submitted for government approval.

Metallurgical Test Results

Following enquiries from numerous shareholders, Korab re‐stated on 15 October 2012 the results of the extensive metallurgical testing completed between 1975 and 2005 on oxide and fresh rock samples from Bobrikovo. These tests were completed by independent accredited

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* See Appendix A for detailed mineral resource statement.

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laboratories and by various processing plants. Test sample sizes ranged up to 10,000 tonnes of ore. All tests have shown very good recoveries of gold to concentrate, or doré bars ranging from 60% recovery for gravity processing to 98% for combination of gravity and chemical processing.

ISSUED CAPITAL 118 MLN shares 39 MLN options

JORC COMPLIANT GOLD RESOURCE 2.38 MLN ounces

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ABOUT MELROSE GOLD PROJECT

Melrose gold project is located in the Eastern Goldfields of Western Australia. The project is located 70km north east of Leinster and 45km east of the Bronzewing mine and associated processing infrastructure. The project hosts a mineral resource containing 339,975 ounces of gold in three deposits (Bungarra, Boundary and Stirling) located in close proximity*.

Korab has been undertaking significant metallurgical test work of core samples from diamond holes drilled in late 2011. The test work program has been designed to assess potential for a simple open cut bulk mining and heap leaching operation at the Bungarra and Boundary gold deposits.

As announced to ASX, results to date show gold recoveries above 87% at a crush size of 8 mm (after 120 hours) at the Bungarra and Boundary deposits. Importantly, the testwork at both deposits has shown a low consumption of lime and cyanide, indicating that the project may be amenable to heap leach processing. Potential also exists for conventional carbon in leach plant processing with gold recoveries exceeding 99% after 24 hours using cyanide leach at 106 micron grind size. Agglomeration tests have shown very high percolation rates with good‐to‐excellent pellet quality. Samples from Bungarra and Boundary are currently undergoing column leach testing.

-ENDS-

* See Appendix A for detailed mineral resource statement.

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FOR FURTHER INFORMATION, CONTACT : Andrej Karpinski Executive Chairman (08) 9474 6166

APPENDIX A

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 1 g/t au cut off grade

ISSUED CAPITAL 118 MLN shares 39 MLN options

JORC COMPLIANT GOLD RESOURCE 2.38 MLN ounces

Resource by category
At 1 g/t Au cut-off	VOLUME	ORE_MASS	AU_CONTENT	AU_MASS	AU_MASS
	[1000m3]	[1000t]	[g/t]	[t]	[Mln oz.]
Measured	382.132	955.331	3.046	2.910	0.094
Indicated	2,909.636	7,274.089	2.792	20.313	0.653
Inferred	3,878.147	9,695.367	2.778	26.929	0.866
Total	7,169.915	17,924.786	2.798	50.152	1.612

Totals may differ due to rounding

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

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

Category	Tonnes	Gradeg/t Au	Gold 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

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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.

ISSUED CAPITAL 118 MLN shares 39 MLN options

JORC COMPLIANT GOLD RESOURCE 2.38 MLN ounces

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