KORAB RESOURCES LIMITED — Capital/Financing Update 2014

May 29, 2014

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KORAB RESOURCES LIMITED KORAB HOUSE

www.korab.com.au

Friday, 30 May 2014

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OPERATIONS UPDATE

KEY POINTS

• MARKETING OF GEOLSEC PHOSPHATE ROCK PROGRESSING WELL WITH ADDITIONAL ENQUIRIES RECEIVED FROM OVERSEAS FOR A MULTI-YEAR AGREEMENTS TO SUPPLY BETWEEN 225,000 AND 250,000 TONNES PER YEAR

• NEGOTIATIONS REGARDING SALE OF ORE FROM BOBRIKOVO PROGRESSING WELL AND ARE CLOSE TO COMPLETION

• ASSAYING OF CORE SAMPLES FROM BOBRIKOVO DRILLING PROGRAM IS PROGRESSING

• REVIEW OF PROPOSAL TO DEVELOP WINCHESTER MAGNESITE PROJECT AS A DIRECT SHIPPING ORE MINE IS CONTINUING

This is an operations update by Korab Resources Ltd (“Korab”, or “Company”) (ASX: KOR) and its subsidiaries (“Korab Group”).

MARKETING OF ROCK PHOSPHATE FROM GEOLSEC PROJECT (NORTHERN TERRITORY)

Korab has been continuing the marketing of the Geolsec rock phosphate (“ RP ” or “ phosphate ”) after the receipt of the permit to mine (which was announced to the market in January 2014).

Korab is pleased to announce that it has received an unsolicited enquiry from one of the major Asian phosphate distributors for a supply of rock phosphate from Geolsec at a rate of 225,000-250,000 tonnes per year of direct shipping phosphate rock over a multiyear period. Korab is currently negotiating the final terms of this potential transaction.

Location of the Geolsec project, just south of the port of Darwin and within a short distance to majority of Asian ports (see map on the left) gives Geolsec significant advantage over phosphate producers located in Africa and the Middle East. Furthermore, being located next to transcontinental rail-way link and highway, Geolsec has excellent access to the main agricultural regions in all Australian states.

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In addition to the above potential multi-year

Figure 1 Location of Geolsec and Batchelor Projects

20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252

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KORAB RESOURCES LIMITED KORAB HOUSE

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sale agreement, Korab was asked to submit a Framework Agreement to Supply Rock Phosphate (as advised in the March Quarterly Report). This agreement was submitted by Korab Group following the end of the quarter and is still being reviewed by the potential RP buyers with some of the terms still being negotiated. The Agreement envisions supply of up to 20,000 tonnes of RP per annum for 3 years with an option to renew for further 3 years.

Korab will advise the ASX regarding the progress of the marketing of the RP as and when required.

Geolsec Project Background

The primary target markets for the sales of the direct shipping phosphate rock, ground-up phosphate rock and phosphate rock blends are plantations and pastoralists around Darwin (NT), mango growers in Ord River (WA), as well as organic farmers in SA, Eastern States and WA and Asian distributors and end users. More information about Geolsec’s benefits and the benefits of direct application of phosphate rock to soils is available from Korab website at www.korabresources.com.au/geolsec

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Figure 2 Geolsec’s location near Batchelor. Deposit is close to a highway, rail, water, gas, and power. This makes the Geolsec arguably the best located rock phosphate project in Australia.

Geolsec rock phosphate deposit is located approximately 3km west of the town of Batchelor and approximately 70km from Darwin. The project is accessible by sealed road all year round and is located near trans-continental highway linking Darwin with Adelaide, the national rail and road network, high-voltage power and a gas pipeline giving it the best logistics of any phosphate rock project in Australia. The deposit outcrops on a hill with no pre-strip required and can be mined using a low-cost open cut method utilising Vermeer-type continuous miner, excavator, or front-end loader and trucks.

Geolsec aims to supply environmentally-friendly organic fertiliser to the agricultural sector in the Northern Territory and beyond and thus support expansion of sustainable agriculture. Geolsec direct application RP has a potential to provide substantial ongoing benefits to the environment by improving soil fertility and improving nutritional quality of produce grown on fields fertilised with RP and rock dust products. Rock phosphate is usually applied at a rate of between 560kg and 2,250kg

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20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252

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KORAB RESOURCES LIMITED KORAB HOUSE

www.korab.com.au

per hectare per year depending on acidity (Ph level) of the soil, the initial P content and the targeted P content in the soil.

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Bobrikovo Gold and Silver Project (Ukraine)

In the March Quarterly Report Korab discussed the potential toll treatment of stockpiled ore and a potential sale of ore to unrelated third parties. The negotiations for the sale of ore have been progressing very well and are nearing completion with both sides agreeing as to the majority of the terms with one item still outstanding but likely to be agreed shortly. Under this agreement, the third party will buy the ore at mine gate for a fixed price per gold contained and will be solely responsible for logistics, transportation and processing. The Company will advise ASX of the progress of this agreement as and when required.

In addition to the above sale of ore transaction, a second arrangement with another party is currently being evaluated (as disclosed in the March Quarterly Report). It envisages that a third party would toll-treat the ore being paid for its services through a share of the gold recovered with this party being also solely responsible for logistics, transportation and processing.

These armaments are non-exclusive and can run in parallel. Each of these arrangements has a potential to result in Bobrikovo project starting to generate cashflow without cash outlay by Korab Group, and to allow Korab to monetize the significant value locked in the stockpile of ore mined over the last 4 years by Korab Group and stockpiled on site.

The cores from the drilling program - which was completed following the end of the March quarter and which was targeting potential extensions of near-surface high-grade gold and silver mineralisation discovered in historical drilling (details of which were released to ASX on 4 February 2013) - are being processed and assayed. This is taking longer than expected and consequently the results have not yet been received. Results of the assays will be reported to the market as required and when available.

Direct Shipping Ore (DSO) Mining Operation at Winchester Magnesite Deposit at Batchelor Project (Northern Territory)

As advised in the March Quarterly Report, Korab Group is evaluating a proposal to establish a direct shipping ore (DSO) magnesite mining operation to supply a production facility which would produce magnesium oxide (“ MgO ”) and MgO-based building materials and prefabricated housing and which would be located overseas (close by ship from Darwin).

It is envisaged that Korab would hold an equity stake in the above facility in exchange for providing guaranteed supply of high grade magnesite ore on a long term contract advantageous to both sides. The proposed operation would be supplied with high-quality, high-grade raw magnesite from Winchester deposit located near Batchelor (see map on Page 1) and would take advantage of Batchelor’s close proximity to Darwin port and shipping lanes.

The design of the open pit and the full design of the mine plan were completed by the previous owners of the deposit as part of their feasibility study to commence production of magnesium metal. In 2012 Korab engaged Bateman-Tenova to review and undertake an update of this feasibility study. The review had shown that DSO magnesite mine that would supply a processer based offshore would be profitable.

The review of the feasibility study and of the test mining of the magnesite at Batchelor (see the photo on next page) have both shown that the mining costs would be at the lower end of the scale making this one of the lowest-cost DSO magnesite operations and therefore an attractive proposition with

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20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252

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KORAB RESOURCES LIMITED KORAB HOUSE

www.korab.com.au

potentially significant profit margin. The review is continuing and ASX will be advised as and when required about the progress of this evaluation.

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Winchester magnesite deposit is a flat-laying, oval-shaped body which can be mined using open cut. It has a very low strip ratio as evidenced by the photo below showing test mining of magnesite ore (white rock). The deposit extends from about 6m depth down.

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Figure 3 Test mining of magnesite at Winchester deposit. Deposit has only few meters of overburden and a low strip ratio.

• END-

CONTACT:

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

ABOUT KORAB RESOURCES

Korab Resources Ltd is an international mining and exploration company with operations in Australia and Europe. Korab’s projects include gold and silver deposit at Bobrikovo in eastern Ukraine, Geolsec phosphate rock deposit and Winchester magnesite deposit at Batchelor in the Northern Territory of Australia. The Company also explores for gold and copper at Ashburton Downs in Western Australia and for polymetallic deposits at Batchelor in the Northern Territory. More information about Korab’s projects can be sourced from Korab’s website at www.korab.com.au. Korab’s shares are traded on Australian Securities Exchange (ASX) and on the Berlin Stock Exchange (Berliner Börse) through Equiduct electronic trading platform.

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20 PROWSE STREET, WEST PERTH, WA, 6005, AUSTRALIA PO BOX 1958, WEST PERTH, WA, 6872, AUSTRALIA TEL (08) 9474 6166 FAX (08) 9322 6333 ACN 082 140 252

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