KORAB RESOURCES LIMITED — Capital/Financing Update 2015

Jul 5, 2015

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FPO SHARES Issued: 178.6 mln Market Cap: $6 mln ASX: KOR Last Price: AU¢ 3.2 BERLIN: C6S.BE Last Price: € 0.01

KORAB RESOURCES LIMITED KORAB HOUSE

www.korab.com.au

Monday, 6 July 2015

WINCHESTER MAGNESITE INVESTMENT AND POTENTIAL CORPORATE TRANSACTION APPROACH

As a matter of compliance with continuous disclosure obligations, Korab Resources Ltd (“ Korab ”, or “ Company ”) ( ASX: KOR ) is pleased to advise that it has received unsolicited approach from an unrelated party (“ Investor ”) regarding investment in Winchester project and a potential corporate transaction. Investor also expressed desire to take up the shortfall from the recently closed nonrenounceable rights issue. Korab is engaged in active discussions with the Investor. These discussions are at an early stage.

As previously advised to the market on 16 June 2015 and 22 June 2015, Korab is currently reviewing proposals from two other unrelated parties regarding funding, acquisition of equity in the Winchester project and offtake for the magnesite ore to be mined from Winchester quarry. No binding agreement has been entered into with respect to either of these two proposals. Korab is actively pursuing discussions with both proponents and with the Investor and will advise the market of the progress of the review of the proposals and discussions.

On Friday, 3 July 2015, Korab announced that following our review of the above proposals and our discussions with the proponents, Korab’s wholly owned subsidiary AusMag Pty Ltd has executed Deed of Termination and Release (“Release”) with Rescap Investments Pty Ltd thus regaining full control over the marketing/offtake rights to all of the magnesite ore to be quarried from the Winchester project.

Korab Resources Executive Chairman, Mr Andrej Karpinski, said the Company was very pleased to regain the full control over the output from Winchester project including the ability to transact the entire 1 million tonne annual capacity of the proposed Winchester magnesite quarry, which puts Korab in a much better commercial position.

BACKGROUND TO WINCHESTER MAGNESITE PROJECT

On 13 January 2015, Korab released the results of the pre-feasibility study into the development of Winchester as a DSO operation. Study results have shown potential for a low-CAPEX (AU$4 million), long-life mining operation capable of supplying up to 800,000 tonnes per annum of crushed direct shipping magnesite rock at a mine-gate cost of AU$$20-$30 per tonne (depending on annual output). Current magnesite FOB prices range between AU$80 and AU$110 per tonne. Full text of the report can be accessed through the link below.

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01590863

On 10 March 2015, Korab released the results of the expanded study into Winchester magnesite quarry and its potential earnings, costs, free cashflow, and net present value. This expanded study included the estimates of revenues and various additional material costs such as haulage, port charges, interest, debt repayment, royalties, overheads, etc. and evaluated the economics of Winchester quarry assuming its development as a direct shipping ore (DSO) operation. Results of the expanded study have shown that the project has very attractive economics combined with ability to potentially generate significant pre-tax earnings over project life starting with the first year of operations. Full text of the report can be accessed through the link below.

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01606646

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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: 178.6 mln Market Cap: $6 mln ASX: KOR Last Price: AU¢ 3.2 BERLIN: C6S.BE Last Price: € 0.01

KORAB RESOURCES LIMITED KORAB HOUSE

www.korab.com.au

This study assessed estimated potential of Winchester project supplying a direct shipping ore crushed on-site to 25mm and screened to separate fines (minus 6mm). No additional processing of magnesite rock is planned. The output from the quarry would consist of crushed magnesite rock with a waste stream consisting of waste rock and fines which would be stored on site. The estimated ratio of coarse saleable magnesite rock to fines was 80%. This study showed that there may be a market for magnesite fines in agriculture and feedstock production; however any potential revenue from sale of fines has not been included in this study.

Deposit is located approximately 85km south of Darwin, capital of the Northern Territory, less than a hundred meters from sealed road, and less than 5km from railway line. The deposit is a shallow, flat laying body covered by up to 5 meters of soil overburden. It can be quarried at a low cost by open cut method.

Winchester magnesite quarry has a potential to bring substantial economic and social benefits. In addition to providing royalty revenue stream for the government, the quarry would also directly benefit Territorians by supporting local businesses and providing jobs. Whilst there is no legal requirement to utilise local contractors and labour, local businesses and labour would be given preference as long as this would not have negative impact on the viability of the project.

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Figure 1 Winchester magnesite phosphate deposit located 85 km south of port of Darwin near town of Batchelor. Deposit is close to a highway, rail, water, gas, and power.

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Figure 2 Winchester deposit location relative to town of Batchelor, basic infrastructure and topography.

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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: 178.6 mln Market Cap: $6 mln ASX: KOR Last Price: AU¢ 3.2 BERLIN: C6S.BE Last Price: € 0.01

KORAB RESOURCES LIMITED KORAB HOUSE

www.korab.com.au

• 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 mine at Bobrikovo in Ukraine, Geolsec phosphate mine located 80km from Darwin in the Northern Territory of Australia and Winchester magnesite deposit located 75km from Darwin 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 Rum Jungle mineral field in the Northern Territory of 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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