KORAB RESOURCES LIMITED — Interim / Quarterly Report 2012

Apr 30, 2012

www.korab.com.au

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KORAB RESOURCES LIMITED KORAB HOUSE

30 April 2012

MINING ENTITY QUARTERLY ACTIVITY REPORT Quarter Ending 31 March 2012

HIGHLIGHTS

• Unveiled asset development strategy that refocuses on the Company’s original corporate model and capitalises on management team’s strengths

• Announced $1.78 million placement to advance asset development strategy

• Lugansk Gold and Melrose Gold Mines advised Korab they would not seek admission to the ASX.

OPERATIONS – EXPLORATION AND DEVELOPMENT

RUM JUNGLE PROJECTS

No substantial field work was completed at Rum Jungle projects during the quarter. Korab has continued discussions with several parties (local and overseas) regarding exploration and development options for Rum Jungle assets. These discussions are incomplete.

During the quarter Korab commenced review of past exploration and development work at Geolsec, Winchester, Siltstone, White Bomb, Sundance, and Coomalie Creek with the intention to rationalise company’s exploration and development efforts. As a result of this review priority will be given to Geolsec and Winchester deposits ahead of the less advanced Siltstone, White Bomb, Sundance, and Coomalie Creek prospects.

LUGANSK GOLD

No substantial exploration or development work was carried out at Bobrikovo project during the quarter. During the quarter Lugansk Gold Ltd prepared exploration program to test for extensions to the known mineralisation. This program will commence in the June quarter.

MELROSE GOLD MINES

No substantial field work was carried out at Melrose during the quarter. Core samples from the diamond drilling program, completed in the December 2011 quarter have been sent for metallurgical testing. Tests will include assays, metallurgy test work, and amenability to heap leaching.

The assays will be available in the current quarter, while full results are expected to be available within 3-4 months.

The testing process will allow Korab to assess the possibility of developing the three gold deposits at the Melrose project as a heap leach operation.

OPERATIONS – CORPORATE

During the period, Korab was separately advised by the boards of Lugansk Gold Ltd and Melrose Gold Mines Ltd that the companies would no longer seek admission to the ASX. As a consequence of these events, Korab undertook an extensive review of its operations and

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LEVEL 1, SUITE 6, 100 MILL POINT ROAD, SOUTH PERTH, WA, 6151 AUSTRALIA PO BOX 195, SOUTH PERTH, WA, 6951 AUSTRALIA TEL (08) 9474 6166 FAX (08) 9474 6266 ACN 082 140 252

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www.korab.com.au

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KORAB RESOURCES LIMITED

KORAB HOUSE

announced it would refocus on its original corporate model. Subsequently, the Company completed a $1.78 million capital raising to progress this strategy.

CANCELLED IPOS

During the quarter Korab was separately advised by both Melrose Gold Mines Ltd and Lugansk Gold Ltd that they would no longer seek admission to the ASX. As a consequence of this, the entitlements to the in-specie distributions approved by Korab shareholders in 2010 have lapsed. The challenging state of the IPO market had impeded Melrose Gold Mines Ltd ability to raise minimum funds to successfully list on the ASX. Similarly, Lugansk Gold Ltd has failed to attract sufficient interest from brokers and institutional investors during several rounds of pre-IPO marketing. Korab owns 68 per cent of Lugansk and 96 per cent of Melrose and is currently working with minority shareholders in Lugansk and Melrose to achieve optimum outcome for all stakeholders.

ASSET DEVELOPMENT STRATEGY

Following a comprehensive review of Korab’s operations and outcomes over the past 36 months, the Company announced on March 19 it would refocus on its original corporate model – to build a resource house that locates, acquires, advances and crystallises value from resources projects.

Korab’s Board carefully considered the Company’s core strengths and concluded that this strategy would better utilise the strengths of the management team, who has a track record of identifying and acquiring undervalued resources assets to which the Company is able to add significant value for the benefit of Korab shareholders.

CAPITAL RAISING

Korab undertook a $1.78 million placement of 13.2 million shares at 13.5 cents per share, following strong interest from new and existing institutional and sophisticated shareholders. The raising, announced on 23 March, was pursuant to Korab’s 15 per cent capacity.

The proceeds will be used to advance mining and exploration activities at the Bobrikovo gold project in Ukraine, continue exploration and development at the Melrose gold project in the Eastern Goldfields of Western Australia (included the aforementioned metallurgical testing of ore), and exploration and development of the Geolsec phosphate project in the Northern Territory. Funds will also be used to reduce debt and meet ongoing working capital requirements.

Subsequent to the quarter, Korab announced on 3 April that it resolved to offer all shareholders of Korab a loyalty option. The loyalty option will be offered on the basis of one loyalty option for every three Korab shares held at the record date, at a price of 0.5 cents per loyalty option. These will have an exercise price of 25 cents per share, expiring two years from the date of issue.

The loyalty option offer is intended to give existing shareholders an opportunity to participate in the future upside of the Company as it progresses its asset development strategy. Korab expects to dispatch the prospectus to shareholders in May 2012.

DECISION ON ENERGY ASSETS

In January, Korab announced it was evaluating whether to acquire a controlling interest in a number of energy assets in Ukraine and Russia. No decision has been made at this time regarding these potential acquisitions.

-ENDS-

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LEVEL 1, SUITE 6, 100 MILL POINT ROAD, SOUTH PERTH, WA, 6151 AUSTRALIA PO BOX 195, SOUTH PERTH, WA, 6951 AUSTRALIA TEL (08) 9474 6166 FAX (08) 9474 6266 ACN 082 140 252

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

FOR FURTHER INFORMATION, CONTACT: Andrej Karpinski Executive Chairman (08) 9474 6166

Adrian Watson FTI Consulting (08) 9386 1233 or 0419 040 807 adrian.watson@fticonsulting.com

LEVEL 1, SUITE 6, 100 MILL POINT ROAD, SOUTH PERTH, WA, 6151 AUSTRALIA PO BOX 195, SOUTH PERTH, WA, 6951 AUSTRALIA TEL (08) 9474 6166 FAX (08) 9474 6266 ACN 082 140 252

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