KORAB RESOURCES LIMITED — Capital/Financing Update 2016

Feb 28, 2016

www.korab.com.au

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FPO SHARES Issued: 196 mln Market Cap: $9 mln ASX: KOR Last Price: AU¢ 4.4 BERLIN: C6S.BE Last Price: € 0.02

KORAB RESOURCES LIMITED KORAB HOUSE

Monday, 29 February 2016

MARKETING AND DEVELOPMENT PROGRESS UPDATE FOR GEOLSEC PHOSPHATE MINE

• Major fertiliser producer confirms after extensive testing that Geolsec rock is suitable for production of Double Super Phosphate (SP36) and NPK

• Furthermore, above tests show Geolsec rock is highly reactive, which independently confirms that Geolsec rock is also suitable for direct application on pastures and farms

• Additional expressions of interest for large supply contracts received from India, Indonesia, and East Asia

• Mine plan to expand phosphate rock annual production capacity finalised and lodged with the Northern Territory’s Department of Mines and Energy

• Unsolicited approaches received from large, well-established phosphate sector operators regarding joint venture and/or divestment

Korab Resources Ltd (“ Korab ”, or “ Company ”) ( ASX: KOR ) and its wholly owned subsidiary Geolsec Phosphate Operations Pty Ltd (“ Geolsec ”) are very pleased to advise that they have received confirmation from a major chemical fertilisers producer who has been conducting extensive tests on multiple samples of Geolsec rock that this rock is suitable for production of Double Super Phosphate (SP36) and NPK. The rock has also been shown to be highly reactive and suitable for direct application on pastures and farms in addition to the uses in production of chemical fertilisers.

Korab is further pleased to advise that it has received additional multiple expressions of interest for a supply of 80,000tpa-90,000tpa in 3 separate transactions of 20,000tpa-30,000tpa of various grades of Geolsec phosphate rock and one expression of interest for supply of 100,000tpa of Geolsec phosphate rock. The above expressions of interest, which in aggregate amount to up to 190,000tpa, are in addition to the 250,000 tonnes offtake reported on 12 November 2015.

In anticipation of this, and following a number of prior enquires and requests for large scale quotes, Korab has commenced work on the amended Mine Management Plan for the expansion of the annual production capacity of the Geolsec phosphate mine.

Korab is very pleased to report that this amended mine plan has now been finalised and that it has already been lodged with the Northern Territory Department of Mines and Energy.

As a result of our marketing and our assessment of the phosphate rock market segmentation we have expanded our range of available phosphate rock grades to include 36% P2O5, 32% P2O5 (benchmark Moroccan phosphate rock) and 28% P2O5. This has allowed us to target more diverse range of end-users and has resulted in securing our first offtake which was announced on 12 November 2015. As reported at the time, Korab had entered into a Heads of Agreement regarding an offtake for 250,000 tonnes of phosphate rock over 5 years and a potential equity transaction for the purchase of a stake in Geolsec Phosphate Operations by an unrelated party.

Towards the end of 2015, Korab has seen significantly more interest from distributors and larger phosphate rock consumers (including fertiliser producers) asking us to provide firm quotes and this

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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¢ 4.4 BERLIN: C6S.BE Last Price: € 0.02

KORAB RESOURCES LIMITED KORAB HOUSE

www.korab.com.au

trend appears to be continuing into the 2016. We have also recently seen increased frequency of requests for quotations from buyers representing direct application sector. It seems that the bottom of the phosphate rock market has been reached during 2015 and the market has already turned around.

During the recent months there has been signs of sector-wide consolidation and continued vertical integration of the phosphate sector with better quality deposits and small and medium phosphate mining operations (especially start-ups) being bought out by larger well-established operators and end-users.

It appears that this trend has now had an effect on Korab, with the Company receiving several unsolicited approaches from large, well-established phosphate market operators seeking to explore synergies arising from joint ventures as well as potential benefits to Korab and our shareholders arising from an early monetisation of the Geolsec project through its partial or total divestment.

These approaches are not related to, and are separate from the HoA reported on 12 November 2015. Discussion with these parties are at an early stage. They will be continued (notwithstanding our ongoing work on phosphate rock marketing and business development) in the interest of evaluating all available avenues to maximising early cashflow from the Geolsec phosphate mine.

INFORMATION ABOUT PHOSPHATE ROCK MARKET AND GEOLSEC PHOSPHATE DEPOSIT

Consolidation of the rock phosphate sector throughout 2015, and the rundown in available high grade rock output has led to increase in raw material prices towards the end of the 2015. Consolidation in the phosphate supply chain was seen during early 2015 continued into December quarter 2015, with chemical phosphate producers integrating with miners of phosphate rock thus removing big chunks of phosphate rock supply from the open market. This trend is likely to continue through 2016 thus contributing to further likely improvement in prices of rock phosphate.

Political aspects are also likely to play a role with analysts reporting that the interest in securing supplies phosphate rock from mines located in politically stable jurisdictions is at an all-time high. This is especially relevant at the time when political unrest continues to impact supply across key production areas in the Middle East and North Africa and is gradually moving closer to Morocco which is the main exporter of this crucial material.

Location of the Geolsec project (see Figure 2, Figure 3 and Figure 1), just south of the port of Darwin and within a short distance to majority of Asian ports gives Geolsec significant shipping advantage over phosphate producers located in Africa and the Middle East when supplying Indian, Asian, Australian and New Zealand buyers and distributors. Furthermore, being located next to transcontinental rail-way link and highway connecting Darwin to Queensland, NSW, Victoria and the Ord River agricultural region in WA, Geolsec has excellent access to the main agricultural regions in all Australian states.

Consequently, our primary overseas target markets for our phosphate rock are East Asian, Indian, Indonesian and New Zealand distributors, fertiliser manufacturers and end users (who also buy rock for direct application). Our primary domestic target markets for phosphate rock are fertiliser and other agrisupplies distributors as well as pastoralists, fruit growers, tree plantations and organic farms in Queensland, Victoria, New South Wales, South Australia and WA.

Geolsec can be used as direct application phosphate rock soil supplement which provides substantial ongoing benefits to the environment by improving soil fertility and improving nutritional quality of produce. More information about these market segments 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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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¢ 4.4 BERLIN: C6S.BE Last Price: € 0.02

KORAB RESOURCES LIMITED KORAB HOUSE www.korab.com.au

CONTACT:

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

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Figure 1 Strategic location of Darwin port. Geolsec phosphate mine is located 30 minute drive from Darwin suburbs.

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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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==> picture [96 x 89] intentionally omitted <==

FPO SHARES Issued: 196 mln Market Cap: $9 mln

ASX: KOR Last Price: AU¢ 4.4 BERLIN: C6S.BE Last Price: € 0.02

KORAB RESOURCES LIMITED KORAB HOUSE

www.korab.com.au

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Darwin Port
GEOLSEC
PHOSPHATE
MINE
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Figure 2 Location of Geolsec phosphate mine relative to East Arm Wharf at Darwin Port

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Port
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Figure 3 Location of Geolsec and Winchester relative to local infrastructure, roads and rail

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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¢ 4.4 BERLIN: C6S.BE Last Price: € 0.02

KORAB RESOURCES LIMITED KORAB HOUSE

www.korab.com.au

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 near 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 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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