KORAB RESOURCES LIMITED — Capital/Financing Update 2018

Jul 24, 2018

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K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

24 Jul y 2018

Issued Capital Issued Shares: 303 MLN Last Price: 3.0 cents Capitalisation: $9 MLN

Listi n g Codes ASX: KOR BERLIN: C6S

GE O LSE C PHO S PHA T E QU A RRY S UB-L E ASE

Korab Resources L t d (“ Korab ”, o r “ Company ” ) ( ASX: KOR ) and its su b sidiary Geolsec Phosphat e Opera t ions Pty Ltd (“ Geolsec ”) are very pl e ased to advise that the Geolsec has executed a n agree m ent with Gr e entogofuel Limited (“ Miner ”) to sub-le a se the Geol s ec phosphat e quarry. Th e transa c tion is bindin g on both par t ies.

The t r ansaction covers the Ge o lsec Projec t consisting o f a granted mineral lea s e ML 2736 2 (“ Tenement ”). ML 27362 was gr a nted on 22 April 2010 for a period of 25 years and c a n be renewe d multiple times. It is located near t he town of B atchelor som e 75 km sout h from Darwi n along Stuart Highw a y and Batch e lor Highway ( for location s e e Figure 1). The Teneme n t is accessible year round .

The te r ms of the tra n saction are a s follows:

D irectors

Andrej K. Karpinski Ex e cutive Chairman Director

Rodney H. Skeet Non-e x ecutive Director (Independent)

Daniel A. Smetana Non-e x ecutive Director (Independent)

Anthony G. Wills Non-e x ecutive Director (Independent)

Projects

Winchester (Rum Jungle, NT) Magnesium carbonate (MgCO3)

Geolsec (Rum Jungle, NT) Phosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, P b , Ni, Cu, Co, Sc, Mn Mt. Elephant (Ashburton, WA) Au, Cu

Karratha (Pilbara, WA) Au, Co, Cu

Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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In exchange to ha v ing the righ t s to quarry the phospha t e rock, and explore the Tenement for additional phosphat e rock, the Mi n er will pay Geolsec:

1. Fixed fee of $20,000 pe r month.

2. Gross royalty of $2/tonn e of phosphat e rock remov e d from the T e nement. 3. Interim Ad d itional Royalt y of $5/tonne of phosphate rock remove d from the Te n ement.

The term of the agr e ement is for a period fro m 21 July 201 8 (“Commen c ement Date”) until the dat e when the Teneme n t expires or otherwise c e ases. Geols e c can terminate the agreement at it s discre t ion if the Min e r does not a c hieve the mi n imum produ c tion level of 6 0,000 tonne s of phosphat e rock q u arried and r e moved from t h e Tenement in any contin u ous 2 year p e riod.

Miner w ill be respo n sible for all T enement mai n tenance cos t s including r e nt, local gov e rnment rates, statut o ry reporting, e tc.

Miner w ill also be r e sponsible for all phosphat e quarry permitting, prepar a tion and sub m ission of an y mine m anagement plans in res p ect of the p h osphate roc k , obtaining a ny required a uthorisations, quarry developmen t , quarry ope r ations, phos p hate rock sales, payment of statutory r o yalties levie d by the Northern Territory govern m ent, phosph a te rock mark e ting and shi p ping, and th e rehabilitatio n of the T enement, et c .

Geols e c will retain a ll property ri g hts in the T e nement and will retain th e rights to ex p lore for other comm o dities within the Tenem e nt and to d evelop any discoveries o f all minerals other tha n phosp h ate rock.

If any Gross Royalty will be pay a ble by the M iner in any p articular mon t h, $10,000 o f the $20,00 0 Fixed Fee payable by the Miner for that part i cular month w ill count to w ards the am o unt of Gros s Royalt y due for that month. Any F ixed Fees paid in other months will not b e affected.

Interi m Additional R oyalty will b e initially payable by the M iner for a p eriod of 5 y e ars from th e Commencement Date. At the en d of the 5 year period Geol s ec will advis e the Miner o f any amount s that w e re paid or are payable b y Geolsec in respect of a n y third parti e s claims (if a ny) regardin g phosp h ate rock pro d uction, and a ny surplus a m ount over and above thes e claims (if a n y) will be split 50-50 between Geolsec and the M iner. If no c l aims were p a id or are pa ya ble by Geol s ec at the en d of the 5 year initial p eriod, the Mi n er will no lon g er be requir e d to pay the Interim Additi o nal Royalty t o Geols e c. This t r ansaction w a s envisaged in Korab’s p r ior ASX announcements a nd is in ke e ping with th e divest m ent strategy announced p r eviously by K orab.

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20 P R OWSE STRE E T, WEST PE R TH, WA, 600 5 , AUSTRALIA PO B OX 1958, WE S T PERTH, W A , 6872, AUST R ALIA TEL ( 08) 9474 6166 FAX (08) 93 2 2 6333 ACN 082 140 252 PAGE 1

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Issued Capital Issued Shares: 303 MLN Last Price: 3.0 cents Capitalisation: $9 MLN

Listi n g Codes ASX: KOR BERLIN: C6S

D irectors

Andrej K. Karpinski Ex e cutive Chairman Director

Rodney H. Skeet Non-e x ecutive Director (Independent)

Daniel A. Smetana Non-e x ecutive Director (Independent)

Anthony G. Wills Non-e x ecutive Director (Independent)

Projects

Winchester (Rum Jungle, NT) Magnesium carbonate (MgCO3) Geolsec (Rum Jungle, NT) Phosphate rock (P2O5)

Batchelor (Rum Jungle, NT) Au, Ag, Zn, P b , Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu Karratha (Pilbara, WA) Au, Co, Cu Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

On 2 6 March 201 8 , (“REVIEW OF OPERA T IONS WITH THE AIM O F DISPOSA L OF OTHE R PROJ E CTS TO A L LOW KOR A B TO FOC U S ON WIN C HESTER MA GNESIUM CARBONAT E PROJ E CT AND R E LATED AS S ETS”), Korab reported t h at it has c o mmenced a review of it s operat i ons and proj e cts located i n Western Au s tralia, and U k raine.

On 1 7 April 201 8 , (“KORAB TO FAST TRACK TH E DEVELOP M ENT OF W INCHESTE R MAG N ESIUM CA R BONATE D E POSIT”), Korab reported that it has decided to f ast track th e development of the Winchester m agnesium c a rbonate dep o sit located near Darwin i n the Norther n Territory and that it decided t o add the G e olsec Phos p hate Project to the revi e w of Korab’ s operat i ons and projects with th e aim of su b -leasing the Geolsec ph o sphate qua r ry to another operat o r while retai n ing the owne r ship of the p r oject and the mining lease w ithin which it is located.

This t r ansaction will generate a n immediate cashflow wit h potential ro y ally stream a nd will allo w Korab and its wholly owned sub s idiary AusM a g Pty Ltd to concentrate on the devel o pment of th e Winch e ster Magnesium Carbona t e (Magnesit e ) Project, als o located ne a r batchelor i n the Norther n Territory (for locatio n see Figure 1).

As ad v ised on 29 M a y 2018, duri n g June and J uly, 2018 Ko r ab undertoo k a series of visits, and face - to-fac e meetings and negotiation s regarding t h e Wincheste r Project with multiple parti e s in Australi a and o v erseas. Kora b has met wit h several trading houses, processors, en d users, and o ther potential partne r s. Meetings w ent very we l l and their in t erest in raw m aterial and p rocessed m a terial appear s greate r than expect e d by Korab p rior to the vi s its and meeti n gs. Several p roposals we r e received a s well a s multiple requests for bul k samples. Discussions ar e ongoing an d no final ter m s have bee n agree d with any of t h e parties at the date of thi s report. Korab will advise t h e market if a nd when suc h agree m ents are sig n ed.

More d etailed operations updat e regarding the progress of the devel o pment of t h e Winchester Projec t will be provi d ed shortly to the market in a separate r e port.

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Figure 1 Location of Geolsec Project

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20 P R OWSE STRE E T, WEST PE R TH, WA, 600 5 , AUSTRALIA PO B OX 1958, WE S T PERTH, W A , 6872, AUST R ALIA TEL ( 08) 9474 6166 FAX (08) 93 2 2 6333 ACN 082 140 252

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K O RA B R E SO U RC E S LIMI T ED KORAB H OUSE www.korab.co m .au

INVE S TOR CONTACT:

Andrej K. Karpinski, Executive C h airman - Aus t ralia: (08) 94 7 4 6166, Inter n ational: +61 8 9474 6166

Issued Capital Issued Shares: 303 MLN Last Price: 3.0 cents Capitalisation: $9 MLN

Listi n g Codes ASX: KOR BERLIN: C6S

D irectors

ABOU T KORAB R E SOURCES

Korab Resources Ltd is an intern a tional minin g and exploration company with operatio n s in Australi a and E urope. Kora b ’s projects i nclude Winc h ester magn e sium carbo n ate deposit and Geolse c phosp h ate rock deposit at Batch e lor in the Northern Territor y of Australia as well as a g old and silver deposit at Bobriko v o in easter n Ukraine. T h e Company also explor e s for gold and copper at Ashbu r ton Downs/ M t. Elephant i n Western Au s tralia, and f o r gold, copp e r, lithium, tin, and tantalu m at Karratha, and M a rble Bar/Nullagine in We s tern Australia. Korab als o explores fo r gold, cobalt, silver, lead, zinc, c o pper, nickel, lithium, and tin at Batch e lor and Gre e n Alligator in the Norther n Territory. More inf o rmation ab o ut Korab’s p rojects can be sourced from Korab ’ s website at www. k orab.com.au. Korab Res o urces Ltd is listed on A u stralian Sec u rities Excha n ge, which i s Korab’s home market. Korab’s s h ares are tra d ed on Austr a lian Securiti e s Exchange (ASX) and o n the Berlin Stock Ex c hange (Börs e Berlin).

DISC L AIMER AND CAUTIONAR Y STATEME N T

Andrej K. Karpinski Ex e cutive Chairman Director

Ex e cutive Chairman Forwa r d-looking statements are s tatements that are not historical facts. W ords such a s “expect(s)”, Director ” “expe c ted”, “feel(s) , “believe(s)”, “will”, “may”, “anticipate ( s)”, “should” , “envisage(s ) ” and similar Rodney H. Skeet expre s sions are int e nded to iden t ify such forward-looking information. T h is informatio n includes, but Non-e x ecutive Director is not limited to s tatements r e garding futu r e exploratio n results, re s ources, or r eserves, an d (Independent) produ c tion. Anyone reading this report is cau t ioned not to place undue reliance on these forward Daniel A. Smetana lookin g statements. All of such s t atements are subject to ri s ks and unce rt ainties (man y of which ar e Non-e x ecutive Director (Independent) difficul t to predict and which ge n erally are b e yond the co n trol of the C ompany) that could caus e actual results to dif f er materially from those e xpressed in, or implied or projected b y , the forward - Non-e Anth x ony G. Wills ecutive Director lookin g information and stateme n ts. These ri s ks and unc e rtainties incl u de, but are not limited to: (Independent) those relating to th e interpretati o n of exploration results (including drill r esults), the geology, grad e and c o ntinuity of mi n eral deposit s and conclusions of econo m ic evaluatio n s; risks relating to possibl e variati o ns in reserv e s, grade, min i ng dilution, o r e loss, and r e covery rates; risks relating to changes i n projec t financial an d technical p a rameters; ri s ks relating t o the potenti a l for delays in exploratio n Projects programs, project e v aluation/revi e w, completi o n of feasibilit y studies and project development; risk s relate d to commodity prices and f oreign exch a nge rate fluctuations; risks related to failure to secur e Winchester adequ a te financing on a timely b asis and on acceptable t e rms; risks re l ated to dela y s in obtainin g (Rum Jungle, NT) Magnesium carbonate (MgCO3) gover n mental, or ot h er permits a n d approvals; risks related to security of tenure; and o ther risks an d Geolsec uncert a inties relate d to the Com p any’s prosp e cts, properti e s and busin e ss strategy. Any forward (Rum Jungle, NT) lookin g information contained in this report is provided a s of the dat e of this rep o rt. Except a s Phosphate rock requir e d under applicable listing r ules and se c urities laws, t he Company does not int e nd, and doe s (P2O5) not as s ume any obl i gation, to up d ate this forw a rd-looking in f ormation. Pil b ara East an d Pilbara West Batchelor projec t s are considered to be of early stage, gr a ss roots exploration statu s .

Batchelor (Rum Jungle, NT) Au, Ag, Zn, P b , Ni, Cu, Co, Sc, Mn

Mt. Elephant (Ashburton, WA) Au, Cu

Karratha (Pilbara, WA) Au, Co, Cu

Marble Bar/Nullagine (Pilbara, WA) Au, Co, Cu, Li

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20 P R OWSE STRE E T, WEST PE R TH, WA, 600 5 , AUSTRALIA PO B OX 1958, WE S T PERTH, W A , 6872, AUST R ALIA TEL ( 08) 9474 6166 FAX (08) 93 2 2 6333 ACN 082 140 252

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