KORAB RESOURCES LIMITED — Capital/Financing Update 2015

Dec 23, 2015

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FPO SHARES Issued: 196 mln Market Cap: $9 mln ASX: KOR Last Price: AU¢ 4.5 BERLIN: C6S.BE Last Price: € 0.03

KORAB RESOURCES LIMITED KORAB HOUSE

www.korab.com.au

Thursday, 24 December 2015

TERM SHEET SIGNED FOR A CONVERTIBLE NOTE

Korab Resources Ltd (“ Korab ”, or “ Company ”) ( ASX: KOR ) is pleased to advise that it has executed a term sheet with an unrelated party for a loan of $250,000 by way of a convertible note to provide the Company with greater flexibility in our discussions with various parties regarding Winchester magnesite project and to allow us to progress sales of phosphate rock from Geolsec quarry to various buyers.

The Company has previously advised the market regarding Heads of Agreement and Memorandum of Understanding regarding Winchester and Geolsec. This additional funding will place the Company in a stronger position to maintain progress with these previously announced transactions without an undue pressure.

On 4 November 2015, the Company advised that its wholly owned subsidiary AusMag Pty Ltd (“AusMag”) has entered into Heads of Agreement (“HoA”) for an offtake of 1.5 million tonnes of magnesium carbonate rock (magnesite) with an unrelated Australian company. This HoA also covered sale of an equity interest in AusMag to the same party for $6 million, and the party providing assistance with funding of the capital expenditure and working capital of the project, assistance with the development of the quarry, assistance with its operations, and assistance with marketing of the output.

On 12 November 2015, the Company advised that its wholly owned subsidiary Geolsec Phosphate Operations Pty Ltd (“ Geolsec”) has entered into HoA for an offtake of 250,000 tonnes of phosphate rock with DPA Oceania Pty Ltd (“DPA”) and a sale of no more than 50% equity interest in Geolsec to DPA for $4 million in cash. The HoA also covered DPA providing assistance with the expansion and further development of the quarry, and the management of its operations.

On 8 December 2015 the Company advised that AusMag has entered into a Memorandum of Understanding (“MOU”) with interests associated with Chinese steel industry. This MoU addressed the funding for AusMag for the development, operation and commencement of production of magnesium carbonate from the Winchester mine, offtake agreements with Chinese steel industry, and listing of AusMag on Shanghai, Hong Kong, or other suitable stock exchange.

By way of a background, Korab has previously announced very attractive results of prefeasibility study conducted on Winchester magnesite project.

Winchester is located on a granted mining lease in close proximity to Darwin, with direct access to major roads, rail and sea freight. The Geolsec phosphate quarry is situated approximately 5 kilometres from Winchester on a separate granted mining lease.

Both projects have a potential to generate significant revenue streams from simple quarry operations with no processing other than crushing and screening. Geolsec project is fully permitted and is currently capable of producing and shipping phosphate rock.

Winchester project, in addition to having significant revenue potential requires low capital expenditure and working capital. Details of the Winchester project’s capital expenditure, operating costs and current status are available from previous announcements dated 4 November, 2015 and 8 December, 2015.

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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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FPO SHARES Issued: 196 mln Market Cap: $9 mln ASX: KOR Last Price: AU¢ 4.5 BERLIN: C6S.BE Last Price: € 0.03

KORAB RESOURCES LIMITED KORAB HOUSE

www.korab.com.au

The loan which is the subject of the above term sheet has a period of 6 months, with the interest payable monthly and the principal to be repaid at maturity. At Korab’s absolute discretion, the Company may elect to issue Korab shares in lieu of payment of interest and/or principal. In the event that the Company were to elect to issue shares in lieu of an interest payment, these shares would be issued at the lesser of $0.04 per share or at a price which would be at a 20% discount to 7 day VWAP calculated over 7 days on which Korab shares traded immediately preceding the interest payment date.

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 polymetallic deposits at Batchelor in the Northern Territory and holds shares in a company which explores for gold and copper at Ashburton Downs in Western Australia. 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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