KORAB RESOURCES LIMITED — Capital/Financing Update 2016

Nov 10, 2016

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KORAB RESOURCES LIMITED KORAB HOUSE

www.korab.com.au

11 November 2016

RUM JUNGLE TENEMENT GRANT OFFER

Korab Resources Ltd (“ Korab ”, or “ Company ”) ( ASX: KOR ) is pleased to advise that it has received an offer of grant of the exploration lease covering cobalt (Co), lithium (Li) and zinc/silver/lead (Zn-AgPb) prospective area near the Rum Jungle Granitic Complex. The Exploration Licence EL31341 covers 6,545 ha and will be granted for an initial period of 6 years upon payment of first year’s rent. EL31341 is located 70km south of Darwin near the town of Batchelor in the Northern Territory. See Figure 1 for details.

Zinc, Silver and Lead

On 24 August, 2016 Korab reported that it has received information regarding historical drilling intercepts of high grade zinc, lead and silver mineralisation within Korab’s exploration ground near Batchelor town. This information indicated that the zinc intercepts occur in the same rock layers as the Woodcutters zinc, lead and silver mine and are of similar tenor.

Woodcutters Zn-Ag-Pb base metal deposit is situated in the Palaeoproterozoic Pine Creek Orogen, immediately adjacent to the Stuart Highway 70 km south of Darwin. The deposit was discovered by drill testing of a soil geochemical anomaly. Open pit mining commenced in 1985 and was followed by underground development in late 1986. The mine closed in May 1999. Life of mine ore production totalled 4.65 million tonnes at 12.28% Zn, 5.65% Pb, and 87 g/t Ag.

Issued Capital

Shares: 213 mln Options: 4 mln Last Price: 2.3 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate (MgCO3)

Geolsec (NT) Phosphate rock (P2O5) Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu Bobrikovo (UKR) Au, Ag, Pb

At Woodcutters, base metal mineralisation occurs along two north-striking vertical faults, 1 and 5 Faults, which cut the axis of the Woodcutters Anticline (see Figure 2). Orebodies along the faults are referred to as 1 and 5 orebodies respectively. Both orebodies have limited strike length but substantial depth dimensions. Coomalie Dolomite underlies Whites Formation at approximately 800 m below the pit. The bulk of 1 and 5 orebodies occur as vertical shoots above a thrust that dips west and is parallel to bedding. Eastward thrust displacement along the 300 Shear is less than 50 m. The Woodcutters orebody dips moderately west below the 300 Shear where it is referred to as the C Zero orebody.

Korab undertook review of the historical exploration data (including drilling logs and assays) and studied several Zn-Ag-Pb mineralisation models for Woodcutters area to assess the potential for Batchelor project to hold viable zinc mineralisation. This assessment work was undertaken in parallel with the ongoing work on the development of the magnesium carbonate Winchester mine. Overview of the mineralisation model and a brief description of the Woodcutters deposit is provided in the following paragraphs. Detailed report of the historical exploration data including drill and other geochemical data sets for the Batchelor base metals corridor (see Figure 3) will be released shortly.

All mineralisation models reviewed recognise the structurally controlled nature of the Woodcutters deposit. The following is a structural model based on the results of the Woodcutters pit mapping, incorporating regional structure, and previous geological investigations:

1. Regional east-west compression of the Barramundi Orogeny initially formed north-striking open folds (e.g. Woodcutters Anticline).

2. Synchronous updoming of the Rum Jungle basement complex resulted in fold tightening, differential flattening, plunge reversals and curving of the Woodcutters anticlinal axis to the southwest.

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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

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1. Dome-related east-south-east/west-north-west compression resulted in sinistral transpressional movement along the north-striking 1 and 5 Faults, and associated small scale disharmonic folding. Sinistral transpressional movement along 1 Fault displaced the axis of the Woodcutters Anticline to the south. Transpressional faulting locally rotated the axis into north-south alignment and tightened the anticline.

2. Lamprophyre dykes intruded dilational parts of the 1 and 5 Faults and also the north-northwest-striking dilational riedel shears (intrusion was probably synchronous with inferred granite intrusion and updoming beneath the Rum Jungle Complex).

3. The 1 and 5 orebodies formed two en-echelon vertical shoots where the transpressional faults intersect the locally domed axis of the Woodcutters Anticline.

4. Mineralised north-north-west quartz veins striking north-north-west intruded riedel shears that formed adjacent to the transpressional faults.

5. The S36 orebody formed in a dilational hinge zone of an anticlinal drag fold related to transpressional movement of 1 Fault.

6. Small scale reverse and thrust faulting (focussed on the 1 and 5 Faults) displaced, and in places deformed, the mineralisation (the 300 Shear displaces the orebodies at depth).

7. The northwest sinistral faults displaced the calcareous dyke.

Exploration model for Zn/Pb/Ag mineralisation within the project area based on the results of the Woodcutters structural study includes the following:

1. Proximity to regional scale basement domes.

2. The intersection of regional scale anticlines and transpressional fault zones.

3. Localised fault-induced changes in the orientation of anticlinal axis or changes in plunge directions.

4. Presence of fault-related medium to small scale folds, especially disharmonic folds.

5. Fault (shear) zones containing deformed lamprophyre dykes or sulphidic quartz veins.

6. Localised fault bends and dilational fault jogs.

7. Fault zones with associated cross cutting mineralised quartz vein arrays.

Issued Capital

Shares: 213 mln Options: 4 mln Last Price: 2.3 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate (MgCO3)

Geolsec (NT) Phosphate rock (P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu Bobrikovo (UKR) Au, Ag, Pb

All of these features are present within the base metals corridor at Korab’s Batchelor/Rum Jungle project together with reported high grade drill intercepts and soil anomalies strongly supporting significant potential for a Woodcutter’s style Zn-Ag-Pb deposit.

Lithium

On 19 October 2016, Korab reported that it has commenced exploration for lithium at the Batchelor project following discoveries of lithium mineralisation and pegmatite swarms by Core Exploration, Liontown Resources and Lithium Australia to the north-west from Batchelor project, and the recent “pegging” activity by Core Exploration to the west and north-west from Korab ground (see Figure 1). For details of other companies’ exploration results see ASX reports by Core Exploration, Liontown Resources and Lithium Australia over the last few months.

Finniss project (where lithium and pegmatites were reported by Core Exploration, Liontown Resources and Lithium Australia) and Batchelor project are both located within the western part of the Pine Creek Orogen (PCO) just south of Darwin in the Northern Territory. Finniss project area is located on the west and north west sides of the Rum Jungle Complex (which comprises Rum Jungle and Waterhouse granitic domes consisting of peraluminous granites), and Batchelor project is located on the south, south east and east sides. According to Northern Territory Geological Survey (NTGS) reports, lithium mineralisation in the area is related to tin and tantalum occurrences and occurs primarily in pegmatite dykes and sills within the Burrell Creek Formation of the Finniss River Group. Whilst government reports show presence of tin within Korab’s ground and NTGS reports

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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

pegmatite and quartz being present at surface and at depth within the area (quartz is often what remains from pegmatite after a prolonged weathering process), historical exploration by previous tenement holders was limited to other metals. Consequently, they have not tested the pegmatites for tin or lithium and have not followed-up these previously discovered occurrences. Korab has in the past primarily targeted nickel, copper and PGM in the area. Consequently, most of our exploration was limited to sampling and drill testing mafic and ultramafic units within the area. As a result there are very few drill holes on Korab’s ground which have been assayed for tin and we are not aware of any drill or rock chip samples which have been assayed for lithium.

Notwithstanding the above, our review of the geology of the area of interest and of the geological setting of the recent lithium discoveries to the north-west suggests sufficient potential for lithium mineralisation to warrant a further examination. As part of the initial phase of the exploration, Korab will continue detailed review of historical exploration data, surface and downhole geochemistry, RAB, RC and diamond core drill logs and outcrop mapping. Korab will also undertake its own mapping and sampling program. Proximity of the rocks within Korab’s ground (which are shown to be the main lithium hosting rocks at Finniss project) to S-type granites of the Rum Jungle and Waterhouse granitic domes further enhances this potential. According to NTGS and USGS reports, S-type granites are often associated with LCT pegmatites and multiple wide-spread pegmatite dykes and outcrops have been reported by NTGS near the margins of these granitic domes. The LCT pegmatites are typically associated with late tectonic peraluminous granites are some distance from the source and their emplacement is controlled at least in part by shear zones. Quartz and feldspars are the dominant minerals that crystallize from granitic melts, and the rare elements are highly incompatible in these minerals. Thus, extreme fractionation resulting from extended crystallization of quartz and feldspars can generate very high concentrations of rare elements in residual melts. Similarly, individual pegmatites also consist largely of quartz and feldspar, and the rare elements are concentrated in small volumes. The ionic radius of Li is much smaller than that of the other alkali metals, and Li partitions into micas, cordierite, and amphiboles via coupled substitution reactions.

Issued Capital

Shares: 213 mln Options: 4 mln Last Price: 2.3 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate (MgCO3)

Geolsec (NT) Phosphate rock (P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu Bobrikovo (UKR) Au, Ag, Pb

Within the Pine Creek Orogen the target mineralization is associated with granitic intrusives. The majority of deposits are found in quartz veins and pegmatite dykes hosted by Early to Middle Proterozoic metasediments. The metasedimentary rocks are interbedded shale, sandstone, conglomerate and flyshoid sediments of the Burrell Creek Formation of the Finniss River Group.. The pegmatites intrude the metasediments and have originated from the S-Type Two Sisters Granite which forms a large discordant batholith in the western portion of the Bynoe district. Likewise, quartztourmaline veins are fairly common at the margins of the Rum Jungle Complex and in the surrounding metasediments.

The majority of the Finniss pegmatite veins are zoned, lenticular in shape, irregular in distribution and intrude at least in part along the foliation and bedding planes of the country rock. The pegmatite dykes and quartz veins have preferentially intruded the less competent shale units of the Burrell Creek Formation. In outcrop, the pegmatite dykes are weathered to quartz rubble, kaolinitic clay and muscovite. Tertiary processes have leached and intensely weathered the pegmatites to depths in excess of 20 m. The decomposed nature of the pegmatites provided easy exploitation by tin miners at the turn of last century but has hindered an understanding of their petrology, chemistry and morphology. The bulk mineralogy of unweathered pegmatite consists of microcline, perthite, K- feldspar, albite, muscovite and quartz. Minor components include cassiterite, tantalite-columbite, amblygonite, magnetite, zircon, ilmenite, garnet and tourmaline. In outcrop, primary mineralogy is preserved only in quartz-rich samples that either consist solely of quartz and muscovite, or consist of feldspar that is protected from decomposition by quartz-mica shielding. Feldspar is otherwise reduced to kaolin. At surface, veins and dykes of pegmatite at the Rum Jungle Complex appear to consist mainly of microcline and quartz, with small but varying amounts of muscovite. NTGS and the Commonwealth Bureau of Mineral Resources further report that there is also increased level of

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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

tungsten and reported presence of tourmaline in drill cuttings taken from this area providing further evidence of the area’s prospectivity.

Issued Capital

New EL31341

Shares: 213 mln Options: 4 mln Last Price: 2.3 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate (MgCO3) Geolsec (NT) Phosphate rock (P2O5) Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co Mt. Elephant (WA) Au, Cu Bobrikovo (UKR) Au, Ag, Pb

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Figure 1 Tenement locations on geology, tin, lithium and pegmatites

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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

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Issued Capital

Shares: 213 mln Options: 4 mln Last Price: 2.3 cents

ASX: KOR BERLIN: C6S.BE

Projects

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Figure 2 Cross section of Woodcutters zinc/silver/lead deposit (Goulevitch 1998)

Winchester (NT) Magnesium carbonate (MgCO3)

Geolsec (NT) Phosphate rock (P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu Bobrikovo (UKR) Au, Ag, Pb

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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

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Figure 3 Base metals corridor at Batchelor

Issued Capital

Shares: 213 mln Options: 4 mln Last Price: 2.3 cents

ASX: KOR BERLIN: C6S.BE

Projects

Winchester (NT) Magnesium carbonate (MgCO3)

Geolsec (NT) Phosphate rock (P2O5)

Batchelor (NT) Au, Ag, Zn, Pb, Ni, Cu, Co

Mt. Elephant (WA) Au, Cu

Bobrikovo (UKR) Au, Ag, Pb

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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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