KORAB RESOURCES LIMITED — Capital/Financing Update 2017

Apr 6, 2017

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KO R AB R ES O URCES LI M ITE D KORA B HOUSE w ww.kora b .com.au

7 April 2017 P ARTIAL L Y UNDE R WRITTE N RIGHTS ISSUE T O RAISE U P TO A PPROXI M ATELY $ 0.715 MI L LION

T he directors of Korab Re s ources Limit e d (ASX Cod e : “KOR”) ( Korab ) are plea s ed to formal l y announce a p artially underwritten one for six non-re n ounceable pro rata rights issue at an i s sue price of 1.9 cents per n ew Korab share to raise u p to approximately $0.715 m illion (befor e costs and e x penses) ( Rights Issue ).

T he issue pri c e for the Ri g hts Issue re p resents a di s count of ap p roximately 1 5 % to the vol u me weighte d a verage mar k et price of K o rab shares o n the 5 ASX trading days on which tho s e shares tra d ed up to an d i ncluding 6 A p ril 2017.

T he maximu m number of shares to be i s sued under t h e Rights Iss u e is 37,632, 2 67 (based o n the undilute d s hare capital of Korab as at the close o f trade on 6 April 2017 w ithout taking into account the impact of r ounding).

T he Rights I s sue is non-r e nounceable. This means that shareh o lders’ right t o subscribe f o r new Kora b s hares under the Rights Is s ue are not tr a nsferable.

R heingold In v estments Co r poration Pty Ltd (an entit y controlled b y Executive C hairman, An d rej Karpinski ) ( Underwriter ) has agreed to underwrite $300,000 w o rth of shares offered under the Rights I s sue for a fe e e qual to 1% o f the funds r a ised under the underwritte n portion of t h e Offer. As a result, the Rights Issue will r aise a minimum amount of approximat e ly $300,000 ( before costs and expense s ), subject to the terms an d c onditions of t he underwriti n g agreemen t . The Under w riter may engage sub-und e rwriters at its own cost an d e xpense.

Issued C apital

Shares: 226 mln Options: 4 mln Last Price: 2.2 cents ASX: KOR BERLIN: C6S.BE

P r ojects Winchester (NT) Magnesium carbonate (MgCO3) Geolsec (NT) Ph o sphate rock (P2O5)

Batchelor (NT) Au, Ag, Zn, P b , Ni, Cu, Co Mt. Elephant (WA) Au, Cu Bobrikovo (UKR) Au, Ag, Pb

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P roceeds fro m the Offer w ill be applied to the costs of the Offer, the Compan y ’s ongoing w orking capit a l r equirements, consistent w ith the strate g y disclosed to date and to reduce the Company’s d ebt (currentl y a pproximatel y $1.8 million ) . Korab’s str a tegy include s progressing Winchester magnesite d e posit toward s d evelopment as a direct shipping or e quarry, se c uring offtake and sale a greements f o r Winchester m agnesite q u arry and ex p loration and evaluation of other Korab’s properties. The Directo r s reserve th e d iscretion in r espect of thi s . The exact a llocation of a mounts will depend on ho w much is raised under th e O ffer and ho w much is underwritten (a s the Underwriter may off s et subscripti o n monies against the debt o wed to it).

S hares being offered under the Right s Issue will o nly be offer e d to registe r ed holders o f shares wit h r egistered ad d resses in Au s tralia or Ne w Zealand as a t 5 pm AWS T on Wednes d ay, 12 April 2 017 ( Eligible Shareholders ).

H olders of ex i sting options for Korab sh a res have be e n given notic e of their righ t to exercise their options i n o rder to be eligible to participate in the R i ghts Issue in respect of th e shares und e rlying their o p tions. T he Rights Issue will be conducted w ithout a pr o spectus in a ccordance w ith section 7 08AA of th e C orporations A ct 2001 (Cth) ( Act ).

F ull details of the Rights I s sue, includin g details of t h e underwriting, are set ou t in the Offer Memorandu m a nd Appendi x 3B lodged w ith ASX toda y . The Offer M emorandum will be sent t o Eligible Shareholders o n W ednesday, 1 9 April 2017.

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20 PROWSE S TREET, WEST PERTH, WA, 60 0 5, AUSTRALIA PO BOX 1958 , WEST PERTH, WA, 6872, AUS T RALIA TEL (08) 9474 6166 FAX (08 ) 9322 6333 ACN 082 140 2 52

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			KOR ABR ESO UR CES LIM ITED	KOR ABR ESO UR CES LIM ITED	KOR ABR ESO UR CES LIM ITED
			KORAB HOU SE
			w ww.korab .com.au
			T he anticipate d timetable fo r the Rights Is sue is as foll ows:
			E VENT	D ATE
			A nnounceme nt of Rights Issue– Offer Memorandum , ASX	F riday, 7 April 2017
			A ppendix 3Ba nd Cleansing Notice lodge d with ASX
			N otice to Sha reholders– notice of Offe r sent to Shar eholders	M onday, 10A pril 2017
			c ontaining info rmation requ ired by Appen dix 3B
			E x date– the date on which Shares com mence tradin g without	T uesday, 11A pril 2017
			t he entitlemen t to participat e in the Offer
			R ecord Date – the date for determininge ntitlementso f	5 :00pm AWST on Wednesd ay,
			S hareholders to participate in the Offer	1 2 April 2017
			O ffer Memora ndum sent t o Shareholde rs– despatc h of Offer	W ednesday,1 9 April 2017
			M emorandum and Accepta nce Forms –O ffer opens fo r
			a cceptance
			C losing Date – the last day for receipt of Acceptance Forms	5 :00pm AWST on Monday,	1
				M ay 2017
			D eferred sett lement tradin g commenc es– New Sh ares	T uesday, 2 Ma y 2017
			c ommence qu otation on AS X on deferred settlementb asis
			S hortfall noti fication date	T uesday, 2 Ma y 2017
			I ssue date–a llotment ofN ew Shares.	T hursday, 4M ay 2017.
			E xpected com mencement of normal tr ading in New Shares	F riday, 5 May 2017
			o n ASX
			D espatch of h olding state ments to Sha reholders w ho	M onday, 8 Ma y 2017
	C apital		a ccepted the Offer

Issued C apital

Shares: 226 mln Options: 4 mln Last Price: 2.2 cents ASX: KOR BERLIN: C6S.BE

K orab reserves the right to amend t h is timetable subject to t h e Listing R u les and the terms of th e u nderwriting a greement.

K orab gives notice under s e ction 708AA ( 2)(f) of the A c t that:

P r ojects Winchester (NT) Magnesium carbonate (MgCO3) Geolsec (NT) Ph o sphate rock (P2O5)

Batchelor (NT) Au, Ag, Zn, P b , Ni, Cu, Co Mt. Elephant (WA) Au, Cu Bobrikovo (UKR) Au, Ag, Pb

• (1) the securitie s being offere d under the R ights Issue w ill be offered f or issue without disclosur e to investors u nder Part 6D . 2 of the Act;

• (2) as at the dat e of this announcement Korab has com p lied with the p rovisions of C hapter 2M of the Act as th e y apply to K o rab and section 674 of the Act;

• (3) as at the dat e of this announcement th e re is no infor m ation that is excluded information under section 708 A A(8) and (9) o f the Act tha t has not alre a dy been disclosed to inve s tors generall y or in the Offer Memorandum and Appendix 3B lodged with ASX to d ay;

• (4) the potential effect the Ri g hts Issue will have on the c ontrol of Kor a b’s undilute d share capit a l will depend o n the extent shareholders take up their entitlements. If all shareh o lders take u p their entitle m ents in full the Rights Is s ue will have no effect o n the control of Korab. N o shareholder c urrently has 20% or more voting powe r (the voting p ower of the c urrent largest shareholder i s 17.27%) a n d no shareh o lder will exc e ed 20% voti n g power as a result of th e

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20 PROWSE S TREET, WEST PERTH, WA, 60 0 5, AUSTRALIA PO BOX 1958 , WEST PERTH, WA, 6872, AUS T RALIA TEL (08) 9474 6166 FAX (08 ) 9322 6333 ACN 082 140 2 52

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KO R AB R ES O URCES LI M ITE D KORA B HOUSE w ww.kora b .com.au

Rights Issue (as applicati o ns for shortf a ll in excess o f entitlement s will be scal e d back to th e extent it would cause a s h areholder to exceed 20% voting powe r ). The Right s Issue is als o partially und e rwritten by r e lated party, Rheingold In v estments Co r poration Pty Ltd (an entit y controlled b y Executive C hairman, Andrej Karpins k i, ( Underwriter ) and if n o shareholder takes up their entitlement s under the Rights Issue, t h e Underwrit e r and its ass o ciates (bein g Andrej Karpi n ski and Rheingold Invest m ents Corporation Pty Ltd as trustee for the Rubico n Superannuation Fund) to o k up their e n titlements in full and the U nderwriter t o ok up the full underwritten amount of n e w shares, t h e number of shares held by the Unde r writer and it s associates w ould increas e from 39,00 0 ,000 to 61,289,474 and t he percenta g e of the tot a l issued share capital of K o rab controlled by the Un d erwriter and its associate s will increas e from 17.27 % to a maxi m um of 24.7 1 %. On 21 M arch 2017 t h e Company has called a General Me e ting of Kora b shareholders to be hel d on 28 Apri l 2017 to ap p rove (amon g others) a res o lution to con v ert loans tot a lling $471,00 0 to Korab sh a res at an iss u e price of 1. 9 cents each. I f this resoluti o n is approve d , this will res u lt in Korab is s uing 24,789, 4 74 shares n o later than 3 M ay 2017. T h is will results in the perce n tage of the t o tal issued s h are capital of Korab controlled by the U n derwriter an d its associat e s being 22. 4 8% if no sha r eholder take s up their entitlements unde r the Rights I s sue, the Underwriter and i ts associates (being Andr e j Karpinski a n d Rheingold Investment s Corporation Pty Ltd a s trustee for the Rubico n Superannuation Fund) to o k up their e ntitlements in full, the U n derwriter to o k up the full underwritten amount of n e w shares, and the resoluti o n to convert loans totalling $471,000 t o Korab share s at an issu e price of 1. 9 cents each was approv e d by share h olders at th e General Meeting to be hel d on 28 April 2 017.

Issued C apital

Shares: 226 mln Options: 4 mln Last Price: 2.2 cents ASX: KOR BERLIN: C6S.BE

(5) The consequences of the p otential effe c t on control o f Korab refer r ed to in para g raph 4 abov e will be an in c rease in the voting powe r of the parties referred to in those par a graphs by a n amount equ a l to the perc e ntage incre a se in their c o ntrol of Kora b ’s undiluted share capital. As a result, the maximum control that a ny of the par t ies (in this c a se, the Und e rwriter and it s associates) w ill have post the Rights I s sue is 24.71 % (based on the issued s h are capital of Korab as at the date of t h is notice). H o wever, this w ill only occ u r in the situation where n o shareholders (with the e xception of the Underwriter and its associates) t ake up their entitlements under the Ri g hts Issue. N o twithstandin g this, the Bo a rd consider s that such a n effect is acc e ptable in the circumstanc e s as it would occur wher e eligible shar e holders hav e had an equit a ble opportun i ty to particip a te in the Rights Issue.

S hareholders with queries c oncerning th e Rights Issu e should cont a ct Andrej Ka r pinski on (08 ) 9474 6166. - E N D-

F OR MORE I N FORMATIO N CONTACT: A ndrej K Kar p inski, Executive Chairman - Australia: (08) 9474 6166, International: +61 8 9474 6166

P r ojects

Winchester (NT) Magnesium carbonate (MgCO3) Geolsec (NT) Ph o sphate rock (P2O5)

Batchelor (NT) Au, Ag, Zn, P b , Ni, Cu, Co Mt. Elephant (WA) Au, Cu Bobrikovo (UKR) Au, Ag, Pb

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A BOUT KOR A B RESOUR C ES

K orab Resou r ces Ltd is a n internationa l mining and exploration c o mpany with o perations in Australia an d E urope. Korab’s projects i n clude Winc h ester magne s ium carbonate deposit a n d Geolsec p h osphate roc k d eposit at Ba t chelor in the N orthern Territory of Austr a lia as well as a gold and s i lver deposit a t Bobrikovo i n e astern Ukraine. The Co m pany also e x plores for cobalt, gold, copper, nickel, z inc, lead, silver and other m inerals at B a tchelor in th e Northern Te r ritory, and fo r gold and co p per at Mt El e phant in Western Australia. M ore inform a tion about K orab’s proje c ts can be s o urced from Korab’s web s ite at www. k orab.com.au. K orab’s shar e s are traded on Australi a n Securities Exchange (ASX) and on t he Berlin St o ck Exchang e ( Berliner Börse) through E q uiduct electr o nic trading pl a tform.

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20 PROWSE S TREET, WEST PERTH, WA, 60 0 5, AUSTRALIA PO BOX 1958 , WEST PERTH, WA, 6872, AUS T RALIA TEL (08) 9474 6166 FAX (08 ) 9322 6333 ACN 082 140 2 52

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